Citing the need to address the twin crises of housing affordability and climate change in California, Governor Gavin Newsom signed a bill that prohibits local governments from mandating parking spaces as part of the most developments close to public transport stops.
Critics say the new law could backfire, but supporters argue that by eliminating a costly element of new projects, Assembly Bill 2097 will result in lower-cost housing in urban centers, an advantage in a state with rising house prices, rents and a growing homeless population.
“This is one of the biggest land use reforms in the country,” said Michael Manville, a professor of urban planning at UCLA’s Luskin School of Public Affairs, adding that only Oregon had does something similar.
In signing the bill Thursday, Newsom also highlighted its potential environmental benefits. With more housing in neighborhoods within walking distance with public transit, he said climate change-inducing car trips would be reduced.
“Housing solutions are also climate solutions,” the governor said.
When the bill, drafted by MLA Laura Friedman (D-Glendale), takes effect in January, parking minimums will no longer be allowed for housing, retail and other commercial developments within a half -mile from public transit stops.
Cities can mandate parking for hotel developments, and developers can always build parking spaces for any type of project if they wish.
Although the bill is not limited to housing projects, much of the debate has focused on the impact of AB 2097 on affordability given the housing crisis in the Golden State.
A large body of research indicates that the addition of new housing – even at market rates – puts downward pressure on house prices and rents regionally, although what is happening in the blocks next to a new development is less clear.
Property developers say it can cost tens of thousands of dollars for each parking space, and parking requirements have forced them to kill projects altogether or build fewer homes than they otherwise could.
“This bill will give developers the opportunity to reduce costs for tenants,” Friedman said. “It gives tenants more options and allows them to choose for themselves if they want to have fewer cars and use public transport for a reduced rent.”
The effects of the new law may be minimal at first, in part because banks may initially be skeptical of lending to projects without parking. But in the long term, Manville said he expects this will lead to more housing supply and cheaper units for those who don’t want a parking space.
Michael Schneider, executive director of Streets for All, said he hopes developers take advantage because people need to be enticed to use the Los Angeles subway system, which is undergoing a multi-billion expansion, including the extension of the Purple Line (D) to connect the Westside to downtown LA
“We were telling people yes, we’re building this very expensive subway that can get you downtown in 15 minutes, but we’re also encouraging you to drive and make driving super convenient,” he said. “And whether or not you own a car, the cost of building a parking space will be included in your rent.”
Some developers are interested in using the new law – to some extent.
Ken Kahan, president of California Landmark Group apartment developer in Los Angeles, said he probably wouldn’t build projects without parking because many Angelenos still want or need a car in a city with an often frustrating public transportation system.
But if he’s planning a project adjacent to major transit and the tenants are likely young adults used to Uber, trains and buses, he can build far fewer stalls than he otherwise would.
Kahan said he would then rent the apartments without parking for less than the apartments with parking, which would be financially possible because the project would cost less to build.
“I can provide a cheaper apartment… [and] I can still make the same comeback,” Kahan said.
As the bill progressed through the Legislative Assembly, some feared it would inadvertently have a negative effect on affordable housing.
Indeed, state and some local governments have implemented density bonus programs that allow developers to build less parking and more units if they include below-market homes in their projects.
In Los Angeles, according to the city’s planning department, a city-state density program has led to nearly 73,500 housing units being approved since 2015, including 15,256 affordable units.
“Nearly every project that has made these units possible has taken advantage of parking incentives,” Los Angeles Mayor Eric Garcetti wrote in a letter opposing AB 2097.
The mayor warned that the bill would remove those incentives to build affordable housing and potentially lead to less below-market housing.
In a nod to these concerns, AB 2097 was amended to allow cities to impose parking minimums near public transit if they found that the lack of parking requirements affect the city’s ability to meet the state’s low-income housing targets.
But Garcetti wrote the amendments didn’t go far enough and he worried the process of reimposing parking requirements would be too cumbersome and “unworkable in a city the size of Los Angeles.”
Proponents of the bill say those fears are overblown to begin with.
Kahan, the Los Angeles developer, has used density bonus programs to build mixed-income projects and said the new law is unlikely to cause him to use them less.
That’s because the programs allow him to build more units overall at market price, which he said is a bigger financial benefit than parking breaks.
“The biggest and most important carrot is the number of units,” Kahan said.
UCLA’s Manville said many developers think the same way because more units equals more revenue.
In 2019, San Diego eliminated parking requirements near public transit, but the number of affordable units built through density bonus programs has increased, according to a study by Manville and the developer and assistant professor of USC, Mott Smith.
Manville said that before San Diego scrapped parking requirements, for-profit and nonprofit developers likely couldn’t build all of the density bonus units they were entitled to because the required parking spaces cost too much. expensive or just couldn’t fit in small lots.
If a similar trend occurs statewide, it could mean more homes for lower-income Californians.
“The parking requirements have been an absolutely slow-moving disaster,” Manville said. “We are turning around.”
Times writer Rachel Uranga contributed to this report.
Los Angeles Times