A partial solution to Fresno’s housing crunch may be at hand, hiding in plain sight

A partial solution to Fresno’s housing crunch may be hiding in plain sight. Look no further than the city’s empty retail stores, strip malls and office complexes.

California legislators and Gov. Gavin Newsom did their part. Two landmark housing bills that streamline and incentivize the conversion of vacant properties located on commercially zoned land into residences were signed into law last week and take effect in July.

Now, enterprising home-builders need to do theirs.

The companion bills give developers two options for transforming underutilized retail and office space into high-density housing with significantly less hassle. Assembly Bill 2011 even goes so far as to bypass the authority of local governments to oppose such projects provided a certain number of affordable units are built. Some would even be exempt from environmental reviews.

Senate Bill 6, meanwhile, allows for market-rate housing on commercially zoned property without requiring a rezoning. To invoke the law, applicants must commit to “skilled and trained” workforce requirements and pay prevailing wages to workers.

Both measures represent a bold lawmaker response to California’s housing shortage, which has both driven up home prices and contributed to the homeless crisis. During the signing ceremony, Newsom said the two laws help reconcile the state’s “original sin” of housing affordability.

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In Fresno, the issue isn’t so much an original sin as one of recent vintage. The city used to be an affordable place to buy or rent a home. Now, gradually but also somewhat suddenly, it isn’t. Not when only 37% of residents can afford the median apartment.

The response by Fresno Mayor Jerry Dyer and the City Council has been to set aside $40 million in federal aid from this year’s budget toward affordable housing initiatives. About $15 million of that has been allocated.

The city is also beginning to see the first wave of higher-density affordable housing projects along FAX’s (somewhat) rapid transit Q bus line, a result of mixed-use zoning designations created by the 2035 general plan update.

State housing laws trump city planning

But AB 2011 and SB 6 are different in that they radically re-imagine what California cities could look like. And they do so in a way that potentially upends decades of city planning while stripping away local control over how residential and commercial areas mix.

Plus there are financial ramifications, considering that stores and office buildings generate more tax revenue for local governments than apartments do.

With that in mind, I reached out to Dyer and Fresno City Council President Nelson Esparza to gauge their impressions of the new housing laws. I half expected both to be less than enthused.

Except that’s not the response I got.

“We are supportive of any legislation that is focused on improving the housing crisis,” Dyer said via email. “The intent of SB 6 and AB 2011 is to find creative ways to create more housing while having to work within a political system. The goal is to expedite housing and make it easier for local government to do so. As a mayor I appreciate that.”

Esparza also gave his thumb’s up, mentioning that he wrote a letter of support of SB 6 at the request of its author, state Sen. Anna Caballero (D-Salinas).

During last week’s marathon council meeting featuring several housing initiatives, Dyer revealed the owners of Manchester Center plan to convert parts of the partially occupied central Fresno shopping mall into 500 to 600 market-rate residential units over several phases.

Esparza, whose district includes Manchester Center, said he is supportive of such projects and believes the new laws will only encourage more.

“Seemed like another tool to help communities across the state add housing units en masse,” Esparza said via text.

There you have it, Fresno-area developers. The green light from both the mayor and council president to build desperately needed housing where past-their-shelf-life retail and office spaces currently stand.

What more encouragement do they need?

‘Create more opportunities for developers’

Of course it’s not that simple. To qualify for the quick approval process stipulated by AB 2011, for example, affordable housing projects must be built along commercial corridors with public transit.

Another factor is the low vacancy rate for commercial properties in Fresno. That figure currently sits at 2.53%, according to a midyear report by Colliers. In 2012, the vacancy rate was over 8%.

AB 2011 and SB 6 are supported by the Fresno Housing Authority whose chief real estate officer, Michael Duarte, said Fresno County needs nearly 36,000 affordable housing units to meet the current demand.

“These laws will create more opportunities for developers like us to design quality housing that fits the context of neighborhoods, supports families, strengthens neighborhoods and builds vibrant communities,” Duarte said.

A few private developers whom I reached out to said they were not aware of the new laws, but sounded intrigued when presented the details.

“I think it’s wise,” said Mehmet Noyan, who builds commercial properties including the Palm Bluffs Business Park in northeast Fresno. “We’ve got to re-purpose some of these malls and big box stores that are struggling.”

Solving California’s housing crunch will require every available tool. State lawmakers just provided two that didn’t previously exist, with the blessing of Fresno city leaders. Now it’s up to developers to wield them.