SB 10: Using New State Law for Housing Equity

For M-Lab, my firm’s research blog, I wrote an analysis of SB 10 - a new California law that allows cities to permit up to 10 housing units on any parcel.

My work focused on using this tool for housing equity, looking at the big question of how density relates to equity, and what increasing density means for a city’s plans for equity:

For some of these properties, SB 10 may provide enough of a rent increase (or be combined with other state or local affordable housing incentives) to jump that gap and provide new residential units. If a jurisdiction decides to go forward with SB 10 to get housing units, the question then becomes: what impact will these units have on the existing community?

The use of the term “rent gap” in this context is intentional. The concept was initially developed in 1979 to describe the disparity between current rental income of a property and its potential rental income if redeveloped. Rent gap theory is linked to gentrification: if a landlord can justify redevelopment costs with eventual rent increases, they will go for it even if it involves changing the area.

There is no reason, however, for redevelopment to necessitate gentrification. In areas that are already exclusive and gentrified, more residential units are a way to give new people access to exclusive amenities (such as high-performing school districts or pristine parks) without dramatically affecting the existing community. For these areas - many of which are losing population despite their high desirability because it is just so expensive to live there - more residents can support the services and amenities with their tax dollars.

In areas that are at active risk of gentrification, SB 10 can alleviate development pressure by creating more units for incoming residents while supporting the retention of existing community members. This allows for more housing choice within a community, so that an empty-nester can stay close to their friends and family as they move out of a larger house, or a wealthy newcomer can live next to a less-well-off neighbor without causing their eviction.

If you’re interested in housing, density, and equity - check out the blog! And let me know what you think.