California plans to close malls and stores for new housing | Business
SACRAMENTO, Calif .– California state lawmakers grapple with a particularly 21st-century problem: what to do with the growing number of malls and big-box retailers left empty by consumers shifting their purchases to the Web.
One possible response in crowded California cities is to build housing on these sites, which already have ample parking and are close to existing neighborhoods.
But local zoning laws often do not allow housing in these locations. Changing the zoning is such a problem that many developers don’t bother to try. And it is often not worth it for local governments to change designations. They would prefer to find new retailers because sales taxes generate more revenue than residential property taxes.
However, with a persistent housing shortage pushing prices to record highs, state lawmakers are set to pass new laws to get around these hurdles.
A bill that cleared the state Senate last week would allow developers to build homes on most commercial sites without changing zoning. Another proposal would pay local governments to change zoning to allow developers to build affordable housing.
“There has always been an incentive to drive out retail and a deterrent to building housing,” said Sen. Anthony Portantino, a Los Angeles-area Democrat who drafted the bill to pay local governments. “There are more dormant and vacant businesses than ever. “
If successful, it is believed that California would be the first state to allow multi-family housing on commercial sites statewide, said Eric Phillips, vice president of policy and legislation for the California branch of the American Planning Association. Developers who use the law should always obey locally approved design standards. But Phillips said the law would limit the ability of local governments to reject projects.
This is why some local leaders oppose the bill, arguing that it undermines their authority.
“City leaders have the local knowledge to discern when and which sites are suitable for reassignment and which are not.” wrote Mike Griffiths, Torrance City Council member and founder of California Cities for Local Control, a group of 427 mayors and council members.
It’s a familiar battle in California. While almost everyone agrees that there is a shortage of affordable housing, state and local leaders face different political pressures that often derail ambitious proposals. Last year, a bill that would have bypassed local zoning laws to allow developers to build small apartment buildings in areas reserved for single-family homes died in the state Senate.
Senator Anna Caballero, Democrat of Salinas and author of this year’s zoning proposal, said her bill was not a mandate. Developers could choose to use the bill or not. The Senate approved Measure 32-2, sending it to the State Assembly for consideration.
“It’s always a challenge when you try to make housing affordable, because there are strong interests that don’t want to negotiate and compromise, and we are working very hard to try to overcome that,” he said. she declared. “I try to give the local government as much flexibility as possible because the more you start telling them how they should do it, the harder it becomes for them to actually do it. “
Even before the pandemic, big box retail stores were struggling to adjust as more people started buying things online. In 2019, after buying Sears and Kmart, Transformco closed 96 stores across the country, including 29 in California.
The pandemic, of course, has accelerated this trend, prompting big retailers like JC Penney, Neiman Marcus and J. Crew to file for bankruptcy. Analysis by investment firm UBS shows that online shopping will reach 25% of all retail sales by 2025. Analysis predicts that up to 100,000 stores across the country could close.
Local governments and California developers are already trying to redevelop some retail locations. In Salinas, a town of about 150,000 people near the Monterey Peninsula, city officials are working to rezone a closed Kmart. In San Francisco, developers recently announced plans to build nearly 3,000 homes in the parking lot surrounding the Stonestown Mall, a sprawling 40-acre site that has lost some retail tenants in recent years.
Yet the idea of repurposing shopping malls has divided unions and affordable housing advocates, pitting one of the Democratic Party’s main supporters against supporters of one of their main political goals.
Housing advocates like the idea, but they don’t like the way Democrats want it to be. Both of the Legislative Assembly’s proposals would require developers to use a “skilled and trained” workforce to construct the units. This means that a certain percentage of workers must be registered or have completed a state-approved apprenticeship program.
The developers said that while there are plenty of skilled workers available in areas like San Francisco and Los Angeles, these workers are scarce in more rural parts of the state, potentially delaying projects in those areas.
California needs to build about 180,000 new homes per year to meet demand, according to the state’s latest housing assessment. But it has only managed around 80,000 a year for the past decade. This is one of the reasons the state’s median selling price for single-family homes hit a record high of $ 758,990 in March.
“At a time when we’re trying to ramp up production, we don’t think we should limit who can do the job,” said Ray Pearl, executive director of the California Housing Consortium, a group that includes affordable housing developers.
Robbie Hunter, president of the State Building and Construction Trades Council of California, dismissed this argument as simply being greedy developers trying to maximize their profits.
He said no construction projects in California have been delayed due to a lack of workers, adding, “We do every job.”
“When there is a demand for workers, we increase with the demand,” Hunter said.
The unions seem to be winning. A bill in the state assembly that did not initially require a “skilled and trained” workforce was blocked in committee because it lacked sufficient support.