Most residents are aware there is a shortage of affordable housing here in California. To address the problem, Gov. Newsom signed a bill into law on Sept. 28 designed to encourage more affordable housing developments across the state. With the possible slow of development in other types of builds due to current events, this bill may redirect efforts into helping alleviate the need for housing.
One of the issues with housing developments is that developers can only put so many units on a plot of land. This new law allows then to increase that number by 50%, which is an increase of the former 35%. In addition, the law reduces the maximum number of parking spaces required for certain projects. Local governments can give additional waivers to developers who put their 100% affordable housing projects within one-half mile of mass transit.
The estimates indicate that with these new incentives, around 195,000 new homes can be built within the next five years. Approximately 47,000 of them could ultimately be occupied by individuals and families with incomes classified as “very low.” Considering that California is facing a housing shortage of approximately 3.4 million homes going into 2021, this may not seem like a lot, but it will nevertheless give many people the housing they need.
Developers and investors looking to branch out into affordable housing developments may find good reason to do so within this new law. However, for those who have not worked in this sector of real estate may find it different from other ventures. As such, it would be advantageous to consult with an experienced attorney in order to gain an understanding of the laws, rules and regulations that apply to these types of projects before moving forward.