The lack of affordable housing in California – particularly in the Los Angeles and San Francisco areas – has long been a problem. State lawmakers have been attempting to tackle it via legislation that would provide more and lower-priced housing within a finite amount of space.
Last month, Gov. Gavin Newsom signed two bills into law that will allow commercial property owners to convert vacant and underutilized buildings in areas zoned for commercial properties into affordable housing. These include strip malls, office buildings and big chain stores that have been sitting empty or far from fully rented — costing the owners money and becoming a target for vandalism and other crime.
The two pieces of legislation, Assembly Bill 2011 and Senate Bill 6, have been stalled in Sacramento as developers, unions and affordable housing advocates fought for their interests. Housing advocates are calling the laws a “game changer” and a “huge deal.” The projects will also provide considerable job opportunities in the construction industry at union-level wages.
Vacant properties are in urban and rural areas throughout the state
While the new laws, which take effect next July, will no doubt impact commercial properties that have been losing money in urban areas, there are a number of properties as well as parking lots in more rural areas of the state that have sat vacant as retailers have moved online and many office workers have begun working remotely.
The two laws have requirements regarding wages and the hiring of union workers as well as environmental standards. There are also restrictions on the number of units that can be offered for sale vs. rental and to ensure that housing is available for people at various income levels – including those who can’t currently afford to rent their own homes.
It’s crucial for commercial property owners, developers and investors to understand the new laws. Having experienced legal guidance can help you make the most of the opportunities they offer and avoid unnecessary legal issues.