California's SB9 Housing Bill Starting To Sound Like Prop 13

That rumbling you hear in the residential real estate market is SB9—either a silver bullet or a boogeyman, depending on where you stand.

Senate Bill 9 is the latest law with the potential to reshape California. The handiwork of State Senator Scott Wiener, the bill overrides local zoning regulations to allow the development of rental properties in single-family neighborhoods. It limits rentals to four units per lot and imposes other restrictions with a stated aim of preventing real estate investors from squeezing profits out of leafy enclaves.

But SB9, in its potential for unintended consequences, is beginning to take on the feel of Prop 13, the law Californians passed by referendum in the late 1970s that struck a fundamental chord among voters, limited property taxes and touched off the Reagan Revolution. Prop 13 spared homeowners any significant property tax hikes, as intended, but also pushed local economic development to adjust by shifting too hard toward the sales taxes to be collected from strip malls, auto dealerships and the like.

Cities throughout the state are trying to slip SB9’s punch altogether, setting new design standards that would render rental units economically infeasible, or forwarding far-fetched claims about wildlife preservation.

Dismiss that as disingenuous NIMBYism if you’re looking for an easy out.

Anyone looking for a better understanding, however, should think again as Wiener and other self-described progressives cast SB9 in moralizing tones.

Housing is so expensive, they say—and California’s economy is so inequitable—that we must allow rental properties everywhere, local preferences or laws be damned.

Reserve some circumspection, also, for the American Enterprise Institute and other self-described conservatives who tend to cast SB9 in the lecturing tones of market orthodoxy. They see it as a breakthrough in individual property rights.

Read the rest of this piece at The Real Deal.

Jerry Sullivan is a senior editor at The Real Deal. You can follow him @SullivanSaysSC

Photo credit: Los Angeles by Kevin under CC 2.0 License.