gov. Referring to the need to address California’s twofold crisis of housing affordability and climate change, Gavin Newsom signed a bill banning local governments from requiring parking as part of most developments near transit stops.
Critics say the new law could backfire, but supporters argue that by eliminating a costly chunk of new projects, Assembly Bill 2097 will result in cheaper housing in urban centers, a plus in a state with skyrocketing house prices, rents and a growing homeless population. population.
“This is one of the biggest land-use reforms in the country,” said Michael Manville, a professor of urban planning in UCLA’s Luskin School of Public Affairs, adding that only Oregon has done something similar.
When signing the bill Thursday, Newsom also highlighted the potential environmental benefits. With more homes in walkable neighborhoods with public transportation, he said car journeys that cause climate change will be reduced.
“Housing solutions are also climate solutions,” says the governor.
When the bill, authored by Assemblywoman Laura Friedman (D-Glendale), goes into effect in January, there will be no parking minimums for homes, shops and other commercial developments within half a mile of public transit stops.
Cities can impose parking for hotel developments and developers can still build parking spaces for any type of project if they wish.
While the bill isn’t limited to housing projects, much of the debate has centered on AB 2097’s impact on affordability, given the Golden State’s housing crisis.
A large body of research indicates that adding new housing — even market-based — exerts downward pressure on house prices and rents at the regional level, although it is less clear what happens in the blocks next to new development.
Housing developers say it can cost tens of thousands of dollars for each parking stall, and parking requirements have forced them to halt projects altogether or build fewer homes than they otherwise could.
“This bill gives developers the flexibility to lower costs for tenants,” Friedman said. “It gives renters more options and allows them to choose whether they want to have fewer cars and use public transportation for a lower rent.”
The effects of the new law may be minimal initially, in part because banks may initially be skeptical about extending loans to projects without parking. But in the long run, Manville expects it to lead to an increase in 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 will benefit because people should be encouraged to use the Los Angeles subway system, which is undergoing a multi-billion dollar expansion, including the extension of the Purple Line, also known as the D. line, to connect the Westside to downtown LA
“We told people yes, we are building a very expensive subway that can get you downtown in 15 minutes, but we also encourage you to drive and make it super easy to ride,” 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 apartment developer California Landmark Group in Los Angeles, said he probably won’t build projects without parking, as many Angelenos still want or need a car in a city with an often frustrating transit system.
But if he’s planning a project that borders on major transit, and tenants are likely to be younger adults used to taxi services like Uber, trains, and buses, he can build significantly fewer stalls than he would otherwise.
Kahan said he would then rent the apartments without parking for less than the apartments with parking, something that would be financially feasible as the project would cost less to build overall.
“I can offer a cheaper apartment … [and] I can still make the same return,” Kahan said.
As the bill snaked through the legislature, some expressed concern that it could… accidentally have a negative effect on affordable housing.
That’s because the state and some local governments have established density bonus programs that allow developers to build fewer parking spaces and more units if they include a number of below-market homes in their projects.
In Los Angeles, according to the city’s planning department, a city and state density program has resulted in the approval of nearly 73,500 homes since 2015, including 15,256 affordable homes.
“Almost all the projects that have made these units possible have benefited from parking incentives,” Los Angeles Mayor Eric Garcetti wrote in a letter to AB 2097.
The mayor warned that the bill would remove those incentives to build affordable units and potentially lead to fewer homes under the market.
In a nod to such concerns, AB 2097 was amended to allow cities to impose parking minimums near transit if they felt the lack of parking requirements would lead to harm the city’s ability to meet state goals for low-income housing.
But Garcetti wrote that the changes didn’t go far enough and he feared the process of resetting parking requirements would be too cumbersome and “unfeasible in a city the size of Los Angeles.”
Proponents of the bill say such fears are exaggerated to begin with.
Los Angeles developer Kahan has used the density bonus programs to build mixed-income projects, saying: the new law probably won’t make him use them less.
That’s because the programs allow him to build more market-compliant units overall, which he called a greater financial benefit than parking interruptions.
“The biggest and most important root is the number of pieces,” says Kahan.
UCLA’s Manville said many developers think the same way, as more units equals more revenue.
In 2019, San Diego eliminated parking requirements near transit, but the number of affordable units built through density-bonus programs increased, according to a study by Manville and developer and adjunct USC professor Mott Smith.
Manville said that before San Diego tightened parking requirements, for-profit and non-profit developers probably couldn’t build all the density bonus units they were entitled to because required parking spaces were too expensive or simply didn’t fit on small lots.
If a similar trend plays out statewide, it could mean more homes for the lowest-income Californians.
“Parking requirements have been an absolute slow-moving disaster,” Manville said. “We’re turning the ship around.”
Times staff writer Rachel Uranga contributed to this report.