By Valeria Escalante Troesh, Esq. and Matthew R. Silver Esq., attorneys at Silver & Wright LLP

The Problem

It is no secret that California is in the middle of a housing crisis.

The median price to buy a house in California was reported at more than $575,000 statewide – skyrocketing to more than $850,000 in the San Francisco Bay Area, which is more than four times the national median, according to the January 2020 statistics from the California Association of Realtors.

Additionally, California has the highest percentage in the country of households that spend more than 30% of their monthly income on housing – or cost burdened – as reported by the Harvard Joint Center for Housing Studies.

On top of that, the state has been unable to keep up with its constantly-growing population and was ranked 37th in housing permits per capita in 2018, from the U.S. Census.

More and more people are moving to California and finding they are unable to afford or even find housing. This, and other factors, has resulted in California contributing to 25% of the national homeless population, despite only having 12% of the country’s population. Despite the massive efforts by cities and counties to provide supportive housing options for those experiencing homelessness, in Los Angeles County alone around 150 people sink into homelessness each day, according to the Los Angeles County Homeless Services Authority.

Furthermore, the recent Supreme Court decision to deny a petition to review the 9th Circuit’s Martin v. City of Boise decision finalizes the protection of people experiencing homelessness to sleep in public spaces if there are not enough shelter beds provided.

With the mounting cost of simply living in California, the cost of developing or renovating California properties can often seem insurmountable. Tack on the extensive and costly California Environmental Quality Act (CEQA) review process, developers and landlords are less inclined to build new properties or ensure their properties stay up to code.

Hundreds of properties have been abandoned and become run-down over the years. These neglected homes or hotels often perpetuate crime and can even carry health and safety dangers. These deserted properties can damage the surrounding neighborhood and businesses by creating the appearance of a dangerous area, making community members feel unsafe and less likely to visit the area.

Oftentimes, cities and counties are blamed for not providing enough resources for individuals experiencing homelessness, the rising cost of housing and any neglected properties that are negatively affecting local communities.

Cities are called on to carry the burden of repairing and restoring a property when the owner does not respond to code violations. Cities must expend already-stretched time and resources bringing these properties up to code.

Fortunately, cities and counties have the ability to use California’s Senate Bill 450 (SB 450), which went into effect on January 1, to combat all of these issues while also wisely stewarding taxpayer dollars.

The Solution

Cities and counties will benefit from recreating these run-down properties into spaces that can improve the local community, while involving developers into the process to alleviate taxpayer money.

SB 450 offers an exemption to motel, hotel or hostel conversion projects from complying with CEQA as long as the project provides residents with supportive or transitional services. These services could include medical care, substance abuse treatment, or employment assistance, among others.

This law essentially allows run-down and neglected properties to be converted into useful and altruistic services without contractors or developers needing to clear a costly CEQA review.

These neglected and substandard properties can prevent a community from thriving economically and create health and safety risks for occupants and neighbors. SB 450 incentivizes owners and developers to invest in and revitalize such properties while also creating spaces and housing for people experiencing homelessness. One solution for two weighty problems.

Without local incentives such as SB 450, public agencies are often the only parties who step up to ensure remediation of these substandard properties to protect the community through their policing and code enforcement laws. If those local measures fail, public agencies can consider the use of receiverships under State law to obtain a court appointed third party to fix the properties.

With SB 450, not only are incentives improved for community partners to remedy the properties before public agencies are forced to intervene, but State law also helps streamline remediation if a receivership becomes necessary. Receivers now have an opportunity to remediate problem properties with use of SB 450’s waiver of CEQA review or, if the property is sold, utilize the property for conversion with SB 450’s cost savings. If public agencies enact programs for applying for SB 450’s waiver, these once-overwhelmingly dilapidated properties can be given a new life and complete the transition from a blight and danger to a functioning contributor to the community.

To that end, public agencies must ensure they have the proper guidelines, staff training, and resources to implement a program to fully leverage this opportunity. They should seek legal guidance to create clear programs that outline when the CEQA exemption exists, how it functions, and how to properly market this program to developers. While there may be administrative work and costs associated with developing a local program, these efforts will be outweighed by the overwhelming benefits of encouraging conversion projects to improve the community.

If properly employed by public agencies, SB 450 could offer a viable and cost-effective solution that lifts this burden off of them and gives new opportunities to neighborhoods, communities, residents in need, and properties that have sunk into disrepair.

Silver & Wright LLP attorneys deliver municipal legal services, specializing in receiverships, nuisance abatement, public safety, and public agency litigation defense. Leveraging their unique experience, cutting-edge legal concepts, and effective use of existing laws, they empower their clients to secure compliance, improve their communities and recover costs where allowed by law. They help cities and counties throughout California increase public safety, combat blight, and save funds. Silver & Wright’s passion for code enforcement is reflected in their volunteer service and local advocacy.

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