Governor Signs Two Job Creator Bills

Governor Edmund G. Brown Jr. signed two California Chamber of Commerce-supported job creator bills yesterday.

  • SB 936(Hertzberg; D-Van Nuys) encourages creation of small business by expanding their access to loans, which helps them grow.
  • SB 1069(Wieckowski; D-Fremont) creates and expedites additional housing supply by streamlining the permitting process for Accessory Dwelling Units (ADUs) through reduced parking requirements, expedited procedural processes, and allowing ADUs to be constructed within existing structures.

SB 936: Loan Access

SB 936 (Hertzberg; D-Van Nuys) encourages the creation of small business by increasing the funds available in the small business financial assistance act administered by the Governor’s Office of Business and Economic Development (GO-Biz).

The increased funding will expand the availability of loans through the Infrastructure and Economic Development Bank’s (IBank) California Small Business Loan Guarantee Program.

The loan guarantee program helps businesses create and retain jobs. It promotes statewide economic development by supporting loans issued to small businesses that otherwise would not qualify. Small businesses establish a favorable credit history with a lender under this program and then are able to obtain future loans on their own. The program has been in place since 1968 with almost no defaults.

SB 936 increases the IBank’s ability to leverage state and federal funding, thus incentivizing private lending and economic investments. The loan guarantee program uses state and federal funding to create a loan loss reserve, which reduces the risk of lending to small businesses.

SB 1069: Increases Housing Supply

The housing shortage in California has reached crisis levels. The average California home currently costs about 2.5 times the national average home price.

The average monthly rent in California is 50% higher than the rest of the nation and even higher in cities such as San Francisco, San Jose, Oakland and Los Angeles. Average rents in all four of these cities are among the top 10 most unaffordable in the nation. San Francisco’s average rent is the highest in the United States, at an average of $3,500 per month.

In a seminal 2015 publication, California’s High Housing Costs: Causes and Consequences authored by the State Legislative Analyst’s Office, data clearly show that the lack of affordable housing, particularly in coastal California, is one of the biggest drivers of institutional and generational poverty cycles. The analysis found that the bottom 25% of income earners are spending 67% of their income on housing. This is clearly not acceptable or sustainable.

The inability of the traditional housing delivery system to meet demands has resulted in increased competition for fewer available homes, rising prices, overcrowding, community dislocation, and adverse environmental impacts caused by longer commutes and more traffic congestion. California families are hurting and the state’s economy is slowing down. Innovative solutions are needed to make a dent in this crisis.

ADUs are the only widely supported approach to get thousands of low-cost units on the market fast. ADUs provide lower cost and low-carbon footprint homes in existing neighborhoods consistent with architectural traditions. ADUs are great for low- and middle-income renters, and small families, and align with state climate change goals. Studies demonstrate that ADUs cost less to build and rent for less than new market rate housing, making ADUs affordable by design.

Santa Cruz, Berkeley, Oakland and San Francisco have already approved legislation to facilitate the development of ADUs. The states of Hawaii and Massachusetts are considering similar bills. With simple policy changes, such as reduced process, parking and lot coverage requirements, California can vastly increase the state’s housing stock. There are approximately 1.5 million single family homes in the Bay Area. If just 10% of households adopted ADUs, the area would increase its housing stock by 150,000 units.

SB 1069 amends existing State Second Unit Enabling law to further simplify the process of ADU adoption for residents by reducing parking requirements, streamlining the permitting process, and allowing ADUs by permitting building within existing structures. State and local laws should enable residents to quickly and easily provide a home to someone in their community rather than set up barriers that make this impossible.

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The California Chamber of Commerce is the largest, broad-based business advocate to government in California, working at the state and federal levels to influence government actions affecting all California business. As a not-for-profit, we leverage our front-line knowledge of laws and regulations to provide affordable and easy-to-use compliance products and services.