Transit and Housing

AB 2097 and AB 2011 Help Transit Agencies to Continue to Build Affordable Transit-Oriented Housing

By Jacob Herson
Managing Editor
Transit California  

In September 2022, Governor Newsom signed two bills into law aimed at addressing the housing affordability crisis. Assemblymember Laura Friedman’s (D-Glendale) AB 2097 went into effect on January 1, 2023, eliminating minimum parking requirements within half a mile of major transit stops. Assemblymember Buffy Wicks’(D-Oakland) AB 2011 will go into effect July 1, 2023, accelerating the production of approximately two million units of affordable and mixed-income housing along transit-friendly commercial corridors.

Assemblymember Friedman told Transit California: “So much of California’s land is dedicated to parking. In Los Angeles County alone, we have over 101 square miles of surface parking lots — that is three more square miles than the city of Sacramento. It comes down to the nexus between high-quality transit, housing, climate, and the environment that needed to be addressed and still needs to be explored further.”

The Assemblymember continued: “For buildings to not have forced parking minimums reduces our reliance on building infrastructure for cars. And that means more room for homes. It also reduces costs for businesses, because they were also required to provide parking.”

The successful passage of AB 2097 was the result of a two-year effort that began with the unsuccessful AB 1401 in 2021. “Because the idea that we had too much parking was already out there through the work on the first iteration of the bill, we had by then built a coalition of organizations that wanted us to reduce parking requirements,” she explained. “Abundant Housing LA, SPUR, CAYIMBY, Bay Area Council, and the Council of Infill Builders all sponsored the successful bill.”

Friedman continued: “A lot of people — developers and potential homebuyers — felt this was right. People shared stories about how when looking to rent a place, rent would sometimes be cheaper if they did not require a parking space. They made decisions based on what was available and what suited their situation.” The Assemblymember cited innovations like rideshare services, shared car services, and autonomous vehicles as changing the way people think about parking as a land use and its cost.

“Whereas there was once a time when that house in the suburbs with the white picket fence and a solo drive for the commute was the status quo, that’s no longer the case,” she said. “Developments are much more communal now, and many people work from home.”
 
Mandatory parking requirements raise the cost of housing production. According to Friedman, a parking garage costs $24,000 to $34,000 per space to build, a cost passed on to homeowners or renters regardless of whether they own a car. Developers can now decide the amount of parking appropriate for their project. “Reducing the overall cost of housing frees up housing at many different levels,” the Assemblymember explained. “So even if you're building middle-class housing or luxury housing, people moving into those new developments frees up housing stock for other people.”

Friedman said that as Chair of the Assembly Transportation Committee and a member of the Assembly Budget Committee, “I try to do as much as I can to promote transit and alternatives to solo car use and the gas combustion engine. If people are going to opt for transit over cars, we need public options to be efficient and reliable. So the importance of high-quality transit is absolutely important and defined in the bill, which requires stops every 15 minutes during certain hours for developments to not be subject to parking minimums.”

Assemblymember Wicks explained her pursuit of AB 2011 as an opportunity to address five issues at once: “Lack of land zoned for housing; city processes that make it difficult to get housing approved (even if it is zoned); the CEQA process that makes it very easy for a single person or interest group to block new housing — even if it’s demonstrably better for the environment than building it elsewhere; the need for infill housing to combat the threat of climate change; and a lack of construction workers because the low wages are not enticing for such a challenging, risky job.”

The Assemblymember said the bill was able to succeed thanks to “a longstanding coalition of pro-housing advocates that have supported previous legislation like this, including YIMBY groups, landlord groups, developers, some environmentalists, and equity groups. To that we were able to add the Carpenters, who brought us the proposed labor language that guarantees great wages, protections from wage theft, and opportunities from apprentices.” The coalition also won the support of Service Employee Internation Union (SEIU) and California School Employees Association (CSEA), which together represent “over a million lower-income workers who have a profound need for affordable housing.”

By making it easier to build both affordable housing and market-rate housing, which carries a 15 percent requirement for affordable housing, the law aims to increase the overall supply and lower the unit cost. “AB 2011 is all about getting more housing near job centers — specifically along the linear ‘commercial corridors’ that are perfect for transit,” said the Assemblymember.

“And providing transit will be essential to making sure that the new residents can get to their jobs and meet other needs without being car-reliant. That’s why we’ve started coordinating with Asm. Friedman to support her efforts to increase investment in transit,” said Wicks.

The new laws help transit agencies that have already been working to develop affordable housing, like San Francisco Bay Area Rapid Transit (BART) and Sacramento Regional Transit (SacRT).

“The BART Board of Directors was proud to support both AB 2011 and AB 2097 last year,” said Amanda Cruz, Director of Government and Community Relations. “We understood that these proposals would bolster our efforts to maximize the number of homes we could build on our own land, and they would also incentivize producing more housing on other lands in proximity to our stations.”

Since 1993, over 4,000 homes have been delivered on BART property, with another 300 under construction and 1,600 approved. About 33 percent of these homes are affordable to lower-income households (80 percent area median income or less), according to the agency.

In response to the 2018 passage of AB 2923, the BART Board adopted goals to produce 20,000 new homes and 4.5 million square feet of commercial space on its property by 2040. The bill enabled transit-oriented development (TOD) through land-use zoning on BART-owned property in collaboration with local jurisdictions. El Cerrito Plaza will be the first project to utilize project streamlining provisions in AB 2923, but BART believes its planned projects in the coming years will be accelerated as a result of this legislation. 

In 2020, the BART Board adopted a financial return framework for TOD that enables it to provide a land value discount of 30 to 60 percent from Fair Market Value to developments with at least 35 percent affordable housing, with greater discount provided to projects serving lower incomes.

BART currently has an affordable housing policy that requires 20 percent of its developments per station to be affordable housing. The agency also has a TOD policy that sets a goal of 35 percent of homes on BART-owned land being affordable. Of the planned 20,000 homes by 2040, 7,000 would be income-restricted, taking the agency above its 35 percent goal. The agency has an interim goal to build 7,000 homes on its property by 2025, with 2,450 of these affordable to lower-income households.

At its current pace, BART says it will fall just short of its 2025 housing production goal, and is further behind on its affordable housing goal. The agency says it will likely meet its goal with entitlements, but construction cost escalations coupled with a shortage in affordable housing subsidies will make it difficult for BART’s partner developers to build these planned and approved homes in the next two years.

The following projects are currently in progress:

• West Oakland Station TOD: 31% of all homes will be affordable (entitled and approved).
• Lake Merritt Station TOD: 30% of homes will be affordable (entitled and approved).
• El Cerrito Plaza Station TOD: 49% of homes envisioned as affordable (planned).
• North Berkeley Station TOD: 50% of homes envisioned as affordable (planned).

“In addition to developing its own land, BART is an active partner with cities and developers to advance planning and development of new housing near stations,” said Cruz. “BART has partnered with affordable housing developers in every round of state Affordable Housing and Sustainable Communities (AHSC) grant applications, which fund needed affordable housing and nearby supportive transportation improvements.”

Cruz continued: “We have worked for many years with local jurisdictions on their station area plans to advocate for more higher-density housing, especially affordable housing where its residents are more likely to be transit-dependent, on and around our stations. We have also worked with them to improve pedestrian and bike improvements to better connect local riders to BART.”

BART has been able to draw on a range of funding sources. These include $49 million from the 2022 cycle of the state's Transit and Intercity Rail Capital Program (TIRCP) for TODs at El Cerrito Plaza, West Oakland, and Lake Merritt Stations. “TIRCP funds will allow BART to leverage additional funding sources and keep design and construction work progressing as quickly as possible,” said Cruz. “Some of the projects that will be funded by the grant include a parking garage, bike station, cycle tracks, bus shelters, and new wayfinding.”

Proposition 1C funded improvements at numerous completed TOD projects on BART land including San Leandro and MacArthur stations.

BART was also able to secure, with support from Senator Nancy Skinner and Assemblymember Wicks, a $1 million member budget request in the Fiscal Year 2022-23 State Budget for station area and access improvements at El Cerrito Plaza Station, in preparation for building TOD. These improvements will include new passenger loading areas, new wayfinding and digital transit information signage, reconfigured bus lanes, improved bicycle and pedestrian access, new bicycle parking, and new public spaces including a plaza and paseo.

AHSC has funded multiple BART projects including San Leandro Senior Housing, Coliseum Connections, Mandela Station (West Oakland), and Lake Merritt Chinatown Senior Housing. It has also funded critical station access and transit improvements at many BART stations to ensure greater connectivity to BART from nearby areas.

Local jurisdictions have also contributed funding through various mechanisms. The City of Oakland invested over $20 million in the Coliseum Connections project and led construction of the Fruitvale Transit Village Phase II housing (Casa Arabella and Casa Sueños). The City of Berkeley has pledged $53 million in local Measure O and housing trust fund dollars to ensure the North Berkeley and Ashby TODs include at least 35 percent affordable housing.

Sacramento Regional Transit (SacRT) has also been working to develop affordable housing. SacRT partnered with the Sacramento Housing and Redevelopment Agency to support the new Mirasol Village in the River District. The agency sold property at its Royal Oaks Station to CHW for the development of 120 affordable housing units. SacRT also partnered with Downtown Railyard Venture LLC on an AHSC grant to build the future Railyards station, which will support USA Property Fund Inc.’s TOD, including 69 affordable units, as well as other TOD in the surrounding Railyards development. SacRT sold its La Valentina Station parking lot to SHRA, who partnered with Domas Development to build 81 affordable units in 2012. The agency also provided easements in the La Valentina station to the developer as part of the joint development for the award-winning project.

SacRT received a $17 million Transformative Climate Communities grant to support the development in the River District. The City of Sacramento provided a $4 million loan to support the development on Arden Way on a state surplus property. In 2018, the City of Sacramento passed a TOD ordinance, restricting uses within a quarter and half-mile of transit stations. SacRT has been partnering with the City of Sacramento and Sacramento Area Council of Governments to seek funding to conduct infrastructure assessments at other potential housing sites.

Looking to the future, Cruz said: “A dedicated stream of funding support for larger projects on public land would greatly reduce the amount of time needed to bring housing online. BART’s average parcel size is five acres, and affordable housing must be delivered in multiple phases due to funding constraints. As development of public land is critical to addressing our housing crisis and land next to transit stations is low-hanging fruit, we would appreciate support from the region, state, and federal government to streamline its production. We appreciate changes that were made,” added Cruz.

BART advocated making transit agencies or special districts eligible recipients of Infill Infrastructure Grant dollars. “BART is often reliant on its local government partners to sponsor applications, and they do not always have the capacity to do so,” said Cruz. “Moreover, to build its TODs, BART often must reconfigure costly transit infrastructure but is not eligible for this fund source that is explicitly structured to support this.”

Cruz continued: “To that point, we support amending the Surplus Land Act with the goal of ensuring that BART can maximize the number of units on a property by working with our developer partners to creatively integrate BART’s infrastructure and operational needs into our TOD projects throughout the development process. A standard ‘bid’ format does not enable this approach, as it must be contemplated and solved during the project design and not as part of the initial selection.” Cruz said: “This will result in a greater number of homes overall, and better designed developments.”

BART and SacRT have been working for years to develop affordable housing as part of their TODs, and the new legislation will help spur their and others’ efforts forward. As Cruz points out, more will need to be done to accelerate solutions to California’s housing affordability crisis.