SB 827 moves in the right direction

gavel and legislationUpdate: On April 17, SB 827 died in the Assembly Transportation and Housing committee. We expect new bills in the next legislative session will attempt to address the same issues, and we are hoping for an inclusive drafting process where the opposing sides can find more common ground. We're looking forward to working towards a proposal that is powerful, durable, and fair.

As mentioned in our March blog post, people everywhere are talking about SB 827, Senator Scott Wiener’s bill that would allow much more housing near transit throughout California. That blog post offered a set of five key recommendations to improve the bill.

On April 9, Sen. Wiener and his co-authors made a set of amendments that narrows the scope of the bill, addressing some of the concerns we and others have raised. It now does more to achieve traffic and climate benefits, and requires construction of affordable housing in developments of 10 units or more.

It also includes a key recommendation that only TransForm has put forward, based on our 10 years of experience with the GreenTRIP program. The bill now requires developers to provide a monthly transit pass to all new residents in “transit-rich bonus” housing developments. This provision can have multiple benefits — increased transit use and revenue for local transit agencies, decreased driving and climate emissions, decreased vehicle ownership and parking demand, and more money in residents’ pockets.

The most powerful aspect of the amendments is how it scales back, dramatically, the proposed height limitations. The maximum height under the bill goes from 85 feet to 55 feet. But even greater impact is that those exemptions from local height requirements now only apply to major transit stops (i.e. rail stations and most ferry stations), and no longer to bus stops.

The bill is moving in a positive direction, with amendments that add benefits for climate and affordability and increase its sensitivity to local context. Still, the process is feeling rushed and opaque. Below we compare our previous recommendations to the amendments, and note where we think additional progress should be made.

Comparing our recommendations to the April 9 amendments

Our recommendations fell into five categories.

  • Ensuring affordability and equity
  • More inclusive conversations about improvements
  • Greater sensitivity to local context
  • Ensuring climate and traffic benefits
  • Clearer understanding of the bill’s geography and impact

Ensuring affordability and equity

Value capture to increase affordable housing stock. There are several ways to capture the value of upzoning to increase affordable housing. Ideally the authors would have started this process in dialogue with affordable housing advocates, and considered pivoting off of existing mechanisms, such as density bonus law. By failing to do that the bill made some enemies out of potential allies, and painted itself into a corner, where inclusionary zoning was the only workable way to tack on an affordability requirement.

That said, the April 9 amendments finally include an inclusionary requirement that, appropriately, accounts for the size of the development. Larger developments, of 51 units or more, will need to offer 20 percent of units for low-income households, or 10-11 percent for very low income households, or 40 percent of units affordable to moderate income. For units between 10 and 50, the amendments require lower percentages of affordable units. No affordability is required in developments of 1-9 units.

The variance by size reflects market realities — larger developments have greater potential for significant profit and can generally subsidize a greater number of affordable units.

What these inclusionary requirements do not do is account for local real estate values. In low-rent areas, these provisions may dissuade developers from using the transit-rich housing bonus, reducing the bill’s efficacy in increasing production of market-rate housing. However, we expect that areas near transit will generally continue to escalate in value over time. By requiring affordability even in low-rent areas, the bill now promotes income diversity for the long-term, even as rents and home values escalate. If we are to err, let’s err on the side of affordability.

Stronger, enforceable renter protections. The new amendments also include important clarifications that strengthen tenant protections if a building is demolished. These include a provision for no net loss of affordable units, which we and others suggested. They also include long-term rent protection with the following language:

“The development proponent shall provide all eligible displaced persons who enter into a new lease for a unit in the development a lease at the base rent with rent stabilization at the applicable base rent for the duration of their occupancy in the unit, regardless of the length of the initial lease.”

The bill will now ban demolitions on any parcel where there has been an Ellis Act eviction in the last five years. This should eliminate the incentive for property owners to buy and/or vacate buildings just to rebuild more lucrative apartments. The Ellis Act has been a tool for displacement in high-rent areas, so this a promising change.

TransForm does not have deep expertise on displacement protection mechanisms. We are still in conversation with our affordable housing and community partners about the impacts of these amendments and what more may be needed.

More inclusive conversations about potential improvements

There is still no open forum (other than Twitter) to elucidate different options and debate key provisions of the bill. Productive, rational debate is only getting harder to do as the legislative calendar kicks into full gear (the bill is expected to to be heard in its first committee hearing on April 17). Progress is happening, but piecemeal amendments gleaned from a fragmented debate make it hard to get all the details right. And as mentioned above, the political damage that was done by not having a more consultative drafting process at the outset may be irreparable in this legislative session.

Greater sensitivity to local context

TransForm suggested five strategies under this recommendation. There was some important movement on some strategies, but not (yet) others.

  • Vary requirements according to the size of the proposed development. We had specifically called out the difficulty with implementing a one-size-fits-all inclusionary policy, and are pleased to see the new requirement tailored by size of development.
  • Different treatment for different land uses. The bill still does not consider whether heights on some land use types (such as existing commercial corridors and transit station parking lots) could be higher than other land use types (such as single-family home neighborhoods). The new amendments do increase sensitivity to local context in a simple and rather elegant way that we didn’t suggest or predict.

    First, the April 9 amendments reduce maximum height limitations from no less than 85 feet to no less than 55 feet within ¼ mile of major transit stops. In areas that are ¼ mile to ½ mile from transit, it is reduced to 45 feet. The provision that allowed greater heights on wider streets has been removed.

    Additionally, and this is key, it leaves local heights intact within ½ a mile of bus corridors, while still waiving parking and density restrictions everywhere it applies.

    These concessions will likely reduce the risk of backlash we feared when we imagined eight-story buildings springing up in single family home areas. 
  • Consider “Missing Middle” housing types. Our recommendations had noted how Dan Parolek of Opticos and others have put forward “missing middle” designs that get over 80 units per acre with 25- to 35-foot buildings, which is typical of single family home areas. Yet most areas have strict limits on the number of units per lot (densities) as well as requirements for more parking that often make additional units infeasible. The bill still exempts “transit-rich housing” projects from maximum densities and parking requirements, which should pave the way for more quads, triplexes, and other “missing middle” housing types. These are also the cheapest kind of dense housing to build, which might help spur production in the short term.
  • Place a maximum unit size on developments. One of the unintended consequences of the bill could still be vertical McMansions, especially in areas with high land costs and small lot sizes. The amendments did not include a maximum unit size, but the authors have signaled interest in this provision.
  • Refine criteria for transit capacity. There are many ways to look at transit capacity in a more granular way. For example, MTC’s 2005 Transit-Oriented Development Policy, has different requirements for zoning based on transit types — BART, light rail, bus rapid transit, ferry, etc. The amendments did clarify transit frequencies to reduce ambiguity, but did not refine criteria based on transit capacity. The authors also seem interested in this provision, and further amendments may be forthcoming.

Ensuring climate and traffic benefits

Traffic congestion is often a big reason communities rise up against new development. Besides locating near transit, we suggested three strategies with strong empirical evidence that they reduce vehicle trips from residential developments.

Expand on SB 827’s exemption from parking minimums — explore parking maximums. The original bill exempted transit-rich housing projects from parking minimums. Building parking is expensive and takes space and money that could be used to build more units or lower rents. Just as importantly, availability of on-site parking increases vehicle ownership and driving. Parking maximums could help neighborhoods from getting clogged with (more) traffic.

With the April 9 amendments, if a proposed project is outside of a 1/4 mile of a major transit stop, the local jurisdiction may enforce a parking minimum of 0.5 spots per unit. This will certainly mollify some local concerns of parking overflow, especially where parking is already scarce. And this doesn’t require 0.5 spots per unit, it simply allows the local jurisdiction to do so. Many cities in California still have parking requirements of 1-2 or more spaces per unit near transit, so it’s an improvement on the status quo in most places.

We’d have preferred that they continued to fully exempt projects from parking minimums. We believe per capita vehicle ownership will start to decline in areas near transit, especially with the rise of services like TNCs (Uber, Lyft etc.,) the fast-growing bike share and car share markets, and the eventual introduction of autonomous vehicles.

Yet we are intimately familiar with the difficult politics of parking, so we can see why the authors made this amendment. At least it differentiates by distance from transit and still fully exempts projects that are closer than ¼ mile.

TransForm also has a new suggestion: companion legislation to help local jurisdictions set up parking benefit districts, and other interim strategies to manage the transition period when parking scarcity may be a serious problem, before transit improvements and greater use of shared autonomous mobility services begin to bend the curve on parking demand.

Providing on-site transportation amenities for residents. As mentioned above, we are thrilled that the authors included free resident transit passes as a requirement for transit-rich housing projects. Our research shows that residents’ proximity to transit — especially for higher income households — does not ensure they will use it. The transit passes will increase mobility and reduce costs for residents with limited means, and will promote sustainable choices for those who could choose to drive. We look forward to working with the authors to ensure the provision is clear (e.g. what to do in areas that have several transit agencies in proximity to the proposed project), and enforceable.

Maximizing affordability. We know that higher income households near transit drive more than twice as much and own twice as many vehicles as low-income households near transit. So we are very pleased to see the new inclusionary requirement in the bill.

A clearer understanding of the bill’s geography and impact

By eliminating the street width provisions, the amendments make it much easier to delineate the geographical impacts of the bill. We’re looking forward to seeing updated maps and models to get a better sense of how these and future amendments would play out. The powerful tools to create such analysis include:

  • UrbanFootprint, which in just a few hours of work created data-driven scenarios for the effects of SB 827 surrounding three BART stations. The tool could clarify the impact of these and future amendments, and help create a more informed debate about overall housing capacity.
  • TransForm’s GreenTRIP Connect tool can inform the conversation with instant location-based projections on the climate and financial impacts of various parking ratios, on-site transportation strategies, and affordability levels. Our original blog had a quick test of a location in Fremont, showing how new development could bring higher than the county average Vehicle Miles Traveled and greenhouse gas emissions, per household. If we look at that a parcel near the Fremont BART Station and factor in 20 percent affordable units, .5 parking spaces per unit, and free transit passes, we see a projected reduction in per household driving of over 40 percent from the combination of those three provisions.

Both sets of amendments (those made yesterday, and those from February) have made major improvements to SB 827. The latest round allays some of our concerns about direct displacement, affordability, traffic and climate impacts, and the risk of a massive political backlash.

Still, we believe the bill can better account for varied contexts across the state. We especially feel we should have the conversation about differentiating between land use types and that there is more work to do to ensure the enforceability of displacement provisions.

SB 827 is getting better. And since we have been saying, “let’s study this bill carefully and have an inclusive conversation about its impacts,” we look forward to doing just that in the coming days. We’ll continue talking with our allies on both sides of the issue, and being a constructive resource for the bill’s authors and co-sponsors as they work to strengthen it.



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