SB 10 FAILS, SO DENSITY ADVOCATES TRY NEW MEASURE

 

CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, MAY 23, 2025, OR THEREAFTER

BY THOMAS D. ELIAS
“SB 10 FAILS, SO DENSITY ADVOCATES TRY NEW MEASURE”

 

Make no mistake, the newly proposed law commonly known as SB 79 is purely a result of the failure of the 2021 SB 10, which aimed to make housing in areas around transit stops (both bus and train) far more dense.

 

Said Gov. Gavin Newsom in a 2021 signing statement for SB 10, which allowed local governments to upzone land near transit stops for as many as ten units per parcel even in areas previously zoned single family:

 

“This bill has the potential to increase housing development at a time when the state is experiencing a significant shortage of the units needed to meet the needs of Californians.”

 

It did not. Exact figures for how many units have been built under SB 10 are hard to find, but the number is not high.

 

He does not say so, but that’s why SB 10 author Scott Wiener, the Democratic San Francisco state senator who has spearheaded many recent housing density bills, is back with the new measure, SB 79.

 

Where it was up to local government to upzone in transit zones under SB 10, the new measure would create automatic upzoning to multifamily uses near “major transit stops” on any site already zoned for residential, mixed use, commercial or light industrial development, up to specific heights of 45, 55, 65 and 75 feet.

 

Early versions of the bill also contained no prohibition on applying it in known fire zones. Other laws, however, can be used to regulate that.

 

Depending on things like ceiling heights, this bill potentially could make seven-story structures routine, since buildings average between 10 and 14 feet per floor.

 

Upzoned areas might often overlap, too, with the long-term outcome possibly becoming long strips of high-rise development, regardless of any neighborhood’s previous character.

Unlike under SB 10, such upzoning would be automatic, eliminating most local government authority over high-rise development.

 

Density bonuses already in use in many California developments would also apply to these new buildings.

 

No one yet knows whether builders would be any more receptive to putting up new SB 79 projects than they have been to using the existing SB 10.

 

One background document from Wiener’s office claims that “Building more homes near transit reduces transportation and housing costs for families and promotes environmental sustainability and economic growth, and reduces traffic density.”

 

This may be the first time anyone has tried to claim that erecting an unknown, unlimited number of four, five, six and seven-story apartment buildings and condominiums might somehow cut traffic.

 

Wiener also says his measure should making permitting fast for such projects, calling the new process “ministerial;” essentially not subject to things like public hearings, city council votes or local ballot questions.

 

The Livable California organization, a frequent Wiener opponent, points out a few other realities: One is that upzoning has not been shown to increase either housing supply or affordability, but often raises land values, thus making existing housing more expensive.

 

The group also notes that public transit now is mostly used by lower income persons, casting doubt on the assumption that new buildings in transit-thick areas would necessarily raise ridership significantly.

 

And it says this would be yet another nail in the coffin of local government authority.

 

One letter to a newspaper recently claimed the new plan would also harm housing affordability, claiming some sites it covers currently are occupied by low-income units, sometimes defined as being for persons with income below 81 percent of the median level for any area.

 

“There would be zero net gain in affordable housing from this,” said the letter writer.

 

Despite these flaws, current prospects for Wiener’s latest effort look good, with Newsom virtually certain to sign it if it passes the Legislature. It’s difficult to find a single housing density measure he has vetoed, the lone possible exception being one that would have made undocumented immigrants eligible for state down payment assistance.

 

So there’s a solid chance SB 79, passed 6-2 by the Senate Housing Committee, also becomes law soon. If this bill should fail to produce more density – and fast – it will be clear that even developers realize most Californians want to be surrounded by open space, no matter what their politicians might believe.

 

-30-
Elias is author of the current book The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government's Campaign to Squelch It, now available in an updated third edition. His email address is tdelias@aol.com

 

Suggested pullout quote: “There’s a very good chance SB 79…becomes law soon.”

A GIVEAWAY CALIFORNIA MUST EXPAND

 

CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, MAY 20, 2025, OR THEREAFTER

BY THOMAS D. ELIAS

“A GIVEAWAY CALIFORNIA MUST EXPAND"

 

It’s very rare for a giveaway program to more than double and nevertheless merit plaudits.

 

But that is the case with Gov. Gavin Newsom’s current plan to up California’s film and TV tax credit program from the current $330 million a year to $750 million. 

 

This plan seems about the only way to assure that California will remain the preeminent place to make and refine the cultural and entertainment content that represents America most in the world marketplace of ideas.

 

It also seems the only way to make sure most of the ancillary jobs that accompany actual film and television production also stay home. For there is no guarantee the post-production facilities which now dot the Southern California landscape with film editing shops, sound editing studios and composers’ quarters – among other items including costume rental shops, caterers and many more – will stay here forever when movies are being made in faraway locations as disparate as Georgia and British Columbia, to name just two places whose tax credits currently top California’s.

 

One of the main draws for businesses moving to other states has long been the property tax exemptions they are offered by many states – no levies for the first 10 years or so in Texas, for just one example.

 

The pull of tax credits is just as influential for entertainment production. Filmmakers don’t have to move, not when California contains almost every kind of location, but they will when other states and some Canadian provinces make it worth their while. Here are some of the latest numbers:

 

English language scripted films and TV shows being filmed in the Los Angeles area fell by 19.7 percent in 2023 compared with the previous year, reports Film LA, which tracks regional production. California’s share of the world’s productions fell from 22 to 18 percent during that short time.

 

This is no formula for continuing dominance of an industry once completely synonymous with California. Right now, this state’s biggest competitors include Georgia, North Carolina, New York and several Canadian provinces like British Columbia and Ontario, where late-model, high-tech studios have been built in both Vancouver and Toronto.

 

So now comes Newsom with a necessary move. He seeks to more than double what the state has lately offered. Do those offers matter?

 

“You follow the money,” actor-director Ben Affleck told a reporter when explaining a few years ago why he filmed “Live by Night” in Georgia. Tax credits and incentives sometimes cover as much as one-third of production costs in an industry where profits are not guaranteed. For the states, this can produce new jobs and more government revenue without the environmental problems of factories and warehouses.

 

What’s more, California’s current $330 million is puny beside what other states spend. Georgia, for example, plans to give $1.08 billion in movie and TV tax credits this year, rising to $1.28 billion in 2028.

 

So if California legislators balk at what Newsom now proposes, they just might doom California filmmaking to dinosaur status.

 

Don’t bet on that happening. The current proposal calls for production companies to get back 35 percent of what they spend for costs incurred inside California. This includes short TV shows as well as full-length films. Even animated shows are included, so long as their budgets are over $1 million.

 

John Prabhu, a partner at LA North studios and a supporter of the boost in tax credits, told Daily Variety that “Not a day goes by when someone fails to knock on our door…Before it’s too late California must intervene so we don’t lose the entertainment industry for good along with the quality jobs it provides.”

 

The bottom line is that when entertainment production leaves the state, money departs, along with jobs and talented professionals. That’s why the expanded film credit is needed now, with the strong likelihood it will have to be bumped up further every year for the foreseeable future.

 

It’s OK to criticize Newsom on a lot of fronts. But he occupies the high ground on this one and whoever succeeds him in 2028 will have to act similarly.

 

-30-

Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough, The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net

 

Suggested pullout quote: “If California legislators balk at what Newsom now proposes, they just might be dooming California filmmaking to dinosaur status.”

 

TRAMPLED RIGHTS, LOST RESPECT: WHERE’S THE OUTRAGE?

 

CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, MAY 16, 2025 OR THEREAFTER

 

BY THOMAS D. ELIAS
“TRAMPLED RIGHTS, LOST RESPECT: WHERE’S THE OUTRAGE?”

 

America is now a country where lawful residents can be grabbed from streets and sidewalks by black-masked operatives for government agencies acting without warrants and sent to prisons in foreign countries.

 

It’s also where the voter-established California Coastal Commission, despised by the current president, can tell an oil company to cease making changes on ocean-bottom pipelines – and then see the order ignored. This is still playing out near Gaviota in Santa Barbara County, but for sure at least some respect for legal authority has been lost.

 

It’s a country whose president sought impeachment for judges whose decisions he does not like, while his appointees sometimes pick and choose which legal rulings to heed.

 

It’s also where a non-elected “official” heading a quasi-government agency called the Department of Government Efficiency could fire hundreds of workers from the Social Security Administration, making citizen dealings virtually impossible with an agency serving more than 70 million Americans until someone said “Oops” and a partial emergency fix followed.

 

At the same time, decades of formal assurances that tax filings will be confidential were reversed with no notice, to make deportations easier. Never mind that no one will ever trust the IRS in the same way again.

 

Any of these actions might normally draw equally or similarly forceful reactions of some kind under Isaac Newton’s Third Law of Motion. That law, long fundamental in both physics and politics, says “For every action, there is an equal and opposite reaction.”

 

California saw this in a big way during the Vietnam War, when for every draftee sent off to fight in the jungles of Southeast Asia, at least one and often more persons took to the streets in myriad protests fueled by outrage.

 

There has been no similarly organized anger today, not even when millions of Americans lost trillions of dollars in value from their 401Ks and other investment accounts due to an on-again, off-again tariff war started by a president using powers many lawyers say he does not possess.

 

Several pundits postulate that when 3.5 percent or more of this nation’s citizens protest government actions, members of Congress from both major parties feel sufficiently threatened to begin opposing or at least questioning the policies drawing public ire.

 

That has not come near happening this year. Major cities saw large rallies in both early and late April, including one that stretched 20 blocks through lower Manhattan and another where Vermont Sen. Bernie Sanders drew more than 36,000 in Los Angeles.

 

But overall crowds numbered fewer than 2 million each day, according to most unofficial estimates. That was exponentially short of the approximately 13 million that would make up 3.5 percent of Americans.

 

Any rage voiced fell far short of what it took to drive ex-President Lyndon Johnson from office over Vietnam, for one example of impactful public outrage.

 

Some of the most angry now advocate a literal interpretation of Newton’s Third Law of Motion, saying that whenever masked agents capture legal residents on city streets, beefy young men should physically accost those agents.

 

But answering violence with violence never works in this nation; even the wild demonstrations at the 1968 Democratic Party convention in Chicago produced no policy change until years of nonviolent protests followed in myriad other locations.

 

To be effective this time, popular protests could be staged outside IRS offices, health clinics and research laboratories shut down by fiat even though their funding was supposedly guaranteed via acts of Congress signed by previous presidents.

 

Even these would not accomplish much unless they were constant and very large, perhaps closing down major streets for days or weeks at a time.

 

President Trump has loudly justified some of his most questionable moves this year as mandated by a significant national majority in the last presidential election. Yet, Trump won election by fewer than 1.6 percent of the total vote, falling short of an overall majority popular vote.

 

Which means that even if there were a mandate, it was given by fewer than half of American voters, scarce justification for the scale of changes now seen in the character of American life and public affairs.

 

-30-

    Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough, The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net

ABANDONED IRS SECRECY COULD COST U.S., CALIFORNIA BILLIONS

 

CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, MAY 13, 2025 OR THEREAFTER

BY THOMAS D. ELIAS
“ABANDONED IRS SECRECY COULD COST U.S., CALIFORNIA BILLIONS”

 

It seemed simple enough the other day when the Internal Revenue Service issued a brief statement saying it will now share addresses and other tax return data with immigration enforcement agencies.

 

This marked the first time the IRS has explicitly broken a promise of confidentiality (except when federal criminal warrants have been issued) for all tax information submitted to it.

 

It might cost the federal treasury billions of dollars, not to mention messing up longstanding sources of Social Security cash and state tax revenue.

 

For one of the dirty little secrets of undocumented immigrants is that millions of them have yearly filed tax returns just like U.S. citizens and other legal residents. They have also contributed billions of dollars over many decades to Social Security accounts they will never be able to access, as payments have never been available to the undocumented.

 

This means whatever they contribute goes toward paying everyone else, one factor that has staved off bankruptcy for the Social Security system many years longer than was predicted by some in the later years of the 20^th Century.

 

It’s not that illegal immigrants have always filed tax returns completely identical to those of citizens. For one thing, most of the undocumented file tax returns using individual taxpayer identification numbers rather than Social Security numbers, as most citizen taxpayers do.

 

California was home to about 1.8 million unauthorized residents in 2022. Those immigrants made up about 7 percent of the state’s work force and accounted for at least half of all farm workers, according to the Pew Research Center.

 

But immigrant rights groups say fear is rampant today among the undocumented – and even among many who hold valid visas. They have seen individuals seized on sidewalks and sent quickly to detention centers thousands of miles away.

 

Now many who have filed and paid both federal and state taxes wonder whether they should keep doing so. No one knows yet the precise number of unauthorized residents who let the April 15 tax deadline go by without responding.

 

If they all stopped filing, California would lose an estimated $8.5 billion in state income tax money that’s usually paid in simultaneously with federal taxes that go to the IRS. Losing another $8-plus billion from a budget that has been strapped for several years, as state general fund has gotten by partly with gimmicks and borrowing from funds earmarked for specific purposes, would likely cause major cuts to state programs from parks to public hospitals and schools.

 

“This will be detrimental not just to California, but in many other states,” said one pro-immigrant activist.

 

California’s senior U.S. senator, Alex Padilla, called the retreat from secrecy “a complete betrayal of the federal government’s decades-long commitment to never weaponize taxpayer information for political purposes…(It) could cost billions in lost tax revenue for states and the federal government.”

 

But some who considered not paying taxes this year out of fear soon realized that any information they suddenly withheld would not offer them much protection. That’s because the IRS has years of older returns on hand, most containing similar information.

 

Immigrant advocates say this led a healthy percentage of undocumented taxpayers to go ahead and file anyway, figuring they might use the filing in later immigration court hearings as proof of voluntary positive contributions to this country. Such an argument does not figure to spare deportation for those nabbed by federal immigration agents.

 

Then there’s the cost of the deportations themselves. The Washington, D.C.-based American Immigration Council said in a springtime report that the cost of a comprehensive mass deportation operation of 13 million of the undocumented would cost the federal government at least $315 billion. If deportations were conducted at 1 million a year, the group said costs would come to at least $88 billion per year.

 

Those costs are unrelated to lost income tax revenues, which may already be felt at the IRS itself, where about 5,000 agents have resigned or retired this year, while 7,000 probationary employees were laid off.

 

Nor does anyone know how many “mixed” families featuring both legal residents and the undocumented have opted out of paying taxes.

 

-30-

    Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough, The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net

WINTER FIRESTORMS CAN GIVE HOUSING BILLS A FRESH START

 

CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, MAY 9, 2025 OR THEREAFTER

BY THOMAS D. ELIAS
“WINTER FIRESTORMS CAN GIVE HOUSING BILLS A FRESH START”

 

By almost any measure, the spate of housing bills adopted by California lawmakers over the last five years has failed.

 

But the January firestorm that swept through large parts of Los Angeles County may give them new life. Those fires, ranging across portions of a 40-mile stretch on the south slope of the Santa Monica and San Gabriel mountains, destroyed more homes and apartments than any fire California had seen before.

 

The preeminent goal of the new laws is to make housing in this state more dense. They have not done that on a large scale. But the fires essentially created large new blank canvasses where the aims of the new housing laws may receive a definitive test. If the sudden appearance of thousands of acres of eminently buildable land doesn’t create denser housing than ever before, it’s hard to see what might.

 

Taken together, the destruction of at least 10,000 homes and apartments across the heart of California’s largest urban area thus represents an ultimate test for the social engineering attempted since 2020. If the area isn’t densified now, proponents of that kind of housing will probably have to change their tactics.

 

Their aim has long been, as Democratic state Sen. Scott Wiener of San Francisco puts it, to “end single-family zoning as we’ve known it.”

 

Noplace in California and possibly the nation was more devoted to sprawling single-family homes than the pre-January Pacific Palisades district of Los Angeles city. The new state laws barely touched it.

 

No large new apartment buildings or condominiums ever rose along the area’s main street, the storied Sunset Boulevard. The largest apartment buildings there had two floors, with a few higher-rise condos slotted in spots invisible from that street. Almost no new multi-family buildings went up in the Palisades, no matter what requirements might have been imposed by new laws.

 

Here's the record to date of some of two such laws: The 2021 SB 9 allows homeowners to split their lots and build at least four units where formerly there was one. By mid-2024, the Terner Center for Housing Innovation at UC Berkeley found that fewer than 500 homeowners had successfully applied for such lot splits. ​

 

The 2022 AB 2011 was supposed to let developers easily convert empty office parks and unused parking lots into housing, but by the end of 2024, very few such projects had been approved.

 

Similarly, the 2021 SB 10, allowing for multi-unit development near rapid transit stops had produced very little. 

 

So it looked as if Californians are not eager to densify, even if that’s what some Democrats who dominate in Sacramento want.

 

Now an entirely new urban opportunity exists. Yes, the majority of single-family homeowners will rebuild. But many homes in both Pacific Palisades and Altadena, the other January fire focus, had been owned by folks who purchased their properties in the 1960s and 1970s. Many are now well past 70 years old with little desire to rebuild, as most of their younger neighbors plan.

 

Significant numbers of former single-family properties are available to new buyers, including developers. Some fire-vacated lots have already been sold. They are eligible for at least four units each under SB 9.

 

Some two-floor apartment buildings in Pacific Palisades also burned. Many fronted on Sunset, where transit stops abound, so those properties could see multi-story development, despite an SB 10 provision letting local officials decide whether or not to upzone fire areas.

 

 

If such development does not happen there, it may never happen anywhere, as huge profits seem likely for opportunistic developers. If the January fires were truly 100-year firestorms, no similarly sized fire is likely there for many years.

 

This sets up a litmus test for major housing laws Sacramento has pushed on the rest of California, complete with demands for dense new building in every city as part of an attempt to meet the state’s housing shortage.

 

If it doesn’t happen in the January fire zones, lawmakers should change their priorities and begin paying attention to more rural vacant areas in deserts and other areas where land is cheaper even if it means commutes would be longer.

 

-30-

    Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough, The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net

CAN NEWSOM’S TARIFF RESISTANCE REBOOT HIS CAMPAIGN?

 

CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, MAY 6, 2025, OR THEREAFTER

BY THOMAS D. ELIAS
“CAN NEWSOM’S TARIFF RESISTANCE REBOOT HIS CAMPAIGN?”

 

At this peculiar lame duck period in the political career of Gov. Gavin Newsom, almost anything he does – even if it’s merely pursuing a routine duty of his current office – will be evaluated in terms of his obvious yet still unstated desire to become president.

 

But from the moment last summer when former President Biden exited last year’s race until this month, there was only one word to accurately describe Newsom’s putative campaign – supine.

 

Prior to Biden’s exit, Newsom was probably America’s second most prominent Democrat, the leading Biden surrogate and one who traveled the country trying to impress other national Democrats with both himself and Biden.

 

But once Biden handed off the Democratic nomination to Newsom’s longtime friend, fellow Willie Brown protégé and political stablemate Kamala Harris, the California governor seemed to disappear into a long sulk. He played virtually no part in the fall campaign, and for months did not lead any form of resistance to the sometimes dictatorial presidency of Republican Donald Trump, who cannot run for president a third time in 2028 but nevertheless suggests there may be ways for him to get another term.

 

Rather than oppose Trump, Newsom blasted his own party’s “toxic” attitudes – not necessarily inaccurate as national Democrats until lately had mostly sat by and watched Trump’s many moves.

 

Now Newsom may have a mechanism to re-launch himself into the national picture for 2028 while becoming possibly the prime Democratic spokesman for the remaining three years-plus of Trump’s current term.

 

It came via the mid-April announcement of a California lawsuit challenging the legality of Trump’s on-again, off-again, partially on-again tariffs, which could potentially cost California farmers, merchants and manufacturers tens of billions of dollars in sales.

 

Loss of that much income and the state taxes it produces would heavily impact future state budgets, cutting into virtually all programs from Medi-Cal to policing and fire protection, regardless of budgetary gimmicks.

 

Trump’s tariff actions, taken under the International Emergency Economic Powers Act of 1977, set 10 percent baseline import taxes on virtually anything originating abroad, with higher levies on goods from China, Canada and Mexico. There are also specifically higher taxes on certain products like autos and aluminum.

 

Newsom’s lawsuit – the first of the 15 legal actions the state has taken against the new Trump administration that names him as lead individual plaintiff – claims the law Trump cites does not give him unilateral power to set up tariffs or take them down. That power, many legal scholars believe, belongs to Congress, which has shown even less fight than Newsom’s early campaign.

 

“No state is poised to lose more than California,” Newsom said. That’s not counting stock market losses resulting from Trump’s moves. “That’s why we are asserting ourselves..,” he added.

 

Newsom’s action made California the first state to formally challenge Trump’s tariffs, although other states have joined in on most other California lawsuits against Trump this year.

 

When Trump lawyers quickly petitioned to have the tariff case moved from California to an East Coast courtroom, Newsom immediately riposted “You scared?”

 

“We’re the first mover,” Newsom said. “That’s what California does.”

 

Official descriptions of the law Trump uses as his authority note that no other president has tried to claim it gives them such power. But Trump seems to operate on the theory that powers seized and not firmly resisted somehow become legitimized.

 

If Newsom’s lawsuit wins, it would very likely force a congressional vote to either adopt and legalize Trump’s tariffs or dump them. Either way, Newsom aims to put every member of Congress on the record about tariffs, rather than letting politicians of both parties moan about how powerless they’ve been.

 

Forcing such a vote would give Newsom a claim on being politically savvy and powerful enough to force changes in Washington, D.C. even as a lame duck.

 

It’s precisely the kind of political ammunition Newsom has sought as he blasted party mates while conducting dialogs with Trump supporters on his own podcasts. 

 

His clear hope is that this and subsequent moves to resist Trump will give him the staying power to remain prominent through nearly two years of political exile between the end of his term in early 2027 and the 2028 election.

 

-30-

 

Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough, The   Most Promising Cancer Treatment and the Government’s Campaign to Squelch It" is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net

OFFICE-TO-HOUSING CONVERSIONS NOW TAKING OFF

 

SOUTHERN CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, MAY 2, 2025 OR THEREAFTER

BY THOMAS D. ELIAS

“OFFICE-TO-HOUSING CONVERSIONS NOW TAKING OFF”

 

Conversions of billions of square feet of unused office space to dwelling units are starting to take off all around California. Except, that is, in the state’s densest city, San Francisco.

 

But that is likely to change soon, with Wells Fargo Bank’s longtime headquarters tower now for sale, along with two largely-unused office towers the federal government seeks to dispose of.

 

All three skyscrapers are among obvious candidates for repurposing in a local office market where more than one-third of existing space is currently unused. That’s in spite of moves by some high-tech firms to force workers back into offices fully five years after they were told to begin working from home during the depth of the Covid-19 pandemic.

 

Moves to compel highly skilled white collar workers back into offices fulltime have not worked well because many workers found they like home offices better than cubicle-filled spaces that lack soul. Also contributing to resistance: the fact that a healthy share of workers took advantage of work-at-home edicts to move their homes to less expensive locations with more open space than Silicon Valley can offer. The net result has been a rash of resignations sending a message to executives, who backed off a bit, now usually only asking workers to come in at least one or two days per week, not fulltime.

 

Meanwhile, the office space conversion bandwagon appears to be gaining speed in many markets. Nationally, the number of apartments and condominiums converted from office space reached a record high of 70,700 units last year, up from about 20,000 the previous year. The newer figure was developed by the RentCafe website, which has tracked this phenomenon from its start.

 

Across California, 5,892 apartments of varying sizes were in the conversion pipeline as of March 1, this coming after about 4,000 converted units went on the market last year.

 

These units provide ongoing income vital to the bottom lines of real estate investment trusts that long concentrated on high-rise commercial properties. It’s vital because most REITs saw their share values drop precipitously during the pandemic and have not since come close to recovering from the lost or reduced leases they suffered during the main Covid years.

 

Now Los Angeles, which saw about 12,000 units converted in the first few years of this trend, has 4,388 apartments in the development pipeline, enough space for about 13,000 residents, given California’s average household size of 2.86 persons.

 

Smaller cities have also become active in conversions since state legislators passed a couple of laws in 2023 making it easier for such projects to get building permits.

 

Long Beach currently has 420 units permitted, double the number in San Francisco, where demand for apartments dropped when the city lost populace as sent-home workers moved to cheaper digs in distant suburbs like Tracy and Petaluma. But the soon-to-be-available office towers seemingly begging for conversion might spark interest from young professionals who fancy living in the city’s downtown.

 

Goleta, near Santa Barbara, now has hundreds of conversion apartments in its pipeline, outpacing San Diego, where the idea has not yet caught on.

 

It’s clear some major markets have not yet adjusted to the new state-mandated permitting processes, but when that inevitably happens in places like San Jose and Fresno, living in converted office space promises to become a Generation Z fad.

 

That’s because units converted from office space are far cheaper to develop than new construction, while also leaving the character of neighborhoods intact and traffic flowing at previous levels, rather than causing new crowding.

 

The number of units now completed or underway debunks naysayers who claimed when the idea first arose that conversions would be more difficult to get permitted than new buildings.

 

That was never true, but is especially false since passage of a 2023 state law making permits administrative, with almost automatic approvals.

 

The bottom line: Office conversions, first recommended by this column in April 2020, are now the wave of the present and future in California and many other places. They can also be a boon to first-time home buyers, renters and current building owners.

 

 

 

   -30-

 

 

 

    Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net.