California Senate Bill 50 has the potential to create thousands of jobs, billions of dollars in revenue, and solve the affordability crisis that is facing millions of Californias; it would force California communities to permit more construction. According to most analysts, California needs to create between 2 and 3.5 million new housing units (The ratio of homes to people in California is 3.58:10); this is 49th in the country.
The natural result of the housing shortage is that many people purchase homes further away from their “hub” (the location where most of someone’s personal activities take place, e.g., work, gym, other leisure activities, etc.), which in turn leads to long commutes and excessive traffic jams (if time is money, you can see how traffic jams can become a bigger problem than just being inconvenient). These issues could, in theory, be solved if we simply built more houses (though this would negatively impact housing prices); however, many regulators and neighborhoods attempt to shut down new construction proposals for a myriad of reasons.
SB50 would loosen local restrictions on new construction, allowing developers to build more, denser, properties in California. The net result is that homeowners would be allowed to build dwelling units on their properties, and companies could build small apartment complexes without getting shutdown by local interests. To cut to the chase, SB50 would remove single-family dwelling zoning classifications in most neighborhoods; thus, wealthy neighborhoods would now have to allow builders to construct large apartment complexes. Not to beat a dead horse, but as supply rises to meet demand, the equilibrium price will naturally drop from where it was if supply was low previously.
To be clear, this change will not occur overnight and the change will not be night and day. It would simply prevent the exclusive, wealthy neighborhoods from prohibiting multifamily housing. While there are plenty of arguments against SB50, the net result will be cheaper housing.
At the Chernov Team we understand that knowledge is power, and knowledge of how potential bills will impact the housing market is powerful knowledge indeed. At the Chernov Team we know that whoever comes to the table most prepared leaves with the most, and the Chernov Team always leaves the table with the most.