California governor signs bill to ease parking requirements and create more affordable housing

On Friday California Governor Jerry Brown signed into a law a bill that will help create more affordable housing by easing parking requirements for developers.

The legislation, Assembly Bill (AB) 744, Planning and Zoning: Density Bonus, will allow developers to request reduced minimum parking requirements within affordable housing projects. It also amends the parking ratio for affordable housing and senior housing to require no more the 0.5 parking spaces per unit, and amends the ratio for special needs housing to require no more than 0.3 parking spaces per unit.

Developers seeking to use these ratios must meet established guidelines regarding percentage of affordable units in the project, distance and access to a transit stop, availability of paratransit services, and access to fixed bus route services. The emphasis on transit access will bolster other efforts to make public transportation and active transportation options safer, more convenient, and more accessible for low-income families.

“AB 744 will enable a new wave of affordable housing development that was not previously feasible,” said Meea Kang, President of Domus Development and a Steering Committee member of LOCUS. “Real estate developers have long strived to build the affordable housing our communities demand, but parking restrictions and their ensuing construction costs have made these projects extremely difficult to finance. By lowering these restrictions, AB 744 will help California maintain its affordable housing capacity as our population grows and becomes increasingly diverse.”

The average above-ground parking space costs $24,000 to build. Below-ground parking spaces cost even more, at an average of $34,000 a piece. Regulations that require developers to build a minimum number of parking spaces — even if there is no market demand for them — can significantly increase a project’s costs. In the Bay Area, an estimated 31 percent of parking spaces at affordable housing developments go unused.

AB 477 was supported by a coalition of over 60 organizations and individuals, including Domus Development, LOCUS, Smart Growth America’s coalition partners Local Government Commission and TransForm, as well as Author Assemblymember Ed Chau, AARP, the American Planning Association, California Council for Affordable Housing, California Economic Summit, Enterprise Community Partners, Professor Donald Shoup of UCLA, Jeffery Tumlin of Nelson Nygaard, and Ethan Elkind of the Council of Infill Builders.

Easing parking minimums at affordable housing projects are a straightforward way for states to make these projects more financially feasible for developers and allows developers to put funds toward building more homes, rather than more parking spaces. A standard housing subsidy can fund roughly 6.5 times more units with no parking than units with two allocated spaces.

By signing AB 744 into law, California is setting a model for other states to follow in terms of innovative ways to build more affordable housing. For more information about the new legislation, see the full bill text or a fact sheet from the California legislature.