California Just Passed the First State Social Housing Legislation in the US

Earlier this month, California passed a bill requiring the state to produce a study and recommendations on expanding the state’s social housing sector. Organizers hope it will be the first step in providing de-commodified shelter on a large scale.

Hundreds of renters gathered at the state capitol in Sacramento, California, on April 24, 2023, to voice their support for SB 555 and stronger tenant protections. (Courtesy of Anya Svanoe)

On October 7, California governor Gavin Newsom signed into law Senate Bill 555, the Stable Affordable Housing Act of 2023. The legislation commits the state of California to producing a study on the prospects for creating “a robust sector of social housing that offers below-market rents affordable to households of all income levels who are unable to afford market rents and that is permanently shielded from the speculative market.”

Introduced by Sen. Aisha Wahab, the bill emerged from five years of discussions among tenant organizations, unions, and other members of the Housing Now! coalition.

SB 555 embeds a definition of social housing in state law and sets in motion a public process “to identify tools to help achieve the state’s goals for lower and moderate-income housing by creating social housing through both new production and preservation of existing units.” The resulting California Social Housing Study, to be completed in 2026, will include recommendations to the state legislature for creating social housing at the scale needed.

The legislation is the first of its kind at the state level. It reflects a growing view that private, for-profit development is failing to address the state’s worsening housing crisis — and suggests an alternative, de-commodified vision of housing based on democratic control and meeting human needs for shelter.

A Statewide Vision for Social Housing

As rents continue to soar across the state, evictions surge, and the unhoused population swells, Californians have debated what the root of the problem is. Many have focused on the failure of cities to permit new housing construction and of the private market to build enough housing.

But tenant advocates note that market-rate housing construction has proceeded apace — between 2013 and 2022, California overproduced market-rate housing by more than two hundred thousand homes, 43 percent more than its official target; by contrast, housing production lagged the state’s target for the lowest-income households by 50 percent. Even more damning for the supply-side diagnosis, much of the high-rent housing produced is lying vacant, held for its value not as shelter, but as investment vehicles. A 2020 report found that Los Angeles, for instance, had more than one vacant residential unit for every unhoused person.

When policymakers attribute the shortage of affordable housing to a lack of supply on the market, they are led to propose solutions that prioritize building more market-rate housing. That view leads some “YIMBY” (Yes in My Backyard) advocates to view social housing “mostly as a countercyclical project, because we [understand] if another recession like 2008 happens, rates of private home construction would plummet.” But understanding that the problem is to a large extent rooted in speculation points to a very different solution: creating a sector of housing that is shielded from the market, to serve those whose needs for shelter profit-driven investors and corporate landlords will not meet even as the market supply of housing increases.

With the passage of SB 555, the state of California has officially embraced the view that speculation is a major source of the housing crisis:

The private housing market has failed to meet the needs of the vast majority of California residents, who are unable to afford market rents. Increasingly, housing speculation and financialization in the rental market is driving rents higher, even as new market-rate housing is produced.

Given the extent to which housing has been commodified — diverted from its role in meeting human needs into an investment vehicle — the bill proposes a bold vision for ending the crisis: meeting the state’s target of building 1.4 million units of below-market-rate housing by 2030 through creating social housing that is “permanently shielded from the speculative market.”

Since its birth in “Red Vienna” in the wake of World War I, countries from Chile to Finland to Singapore have developed a variety of models of and approaches to social housing. SB 555 defines social housing not on the basis of any specific policy model, but in terms of who owns it, who can live in it, and the rights and protections its residents have.

Specifically, the bill defines social housing as housing that

  1. is “owned and managed by a public agency, a local authority, a limited-equity housing cooperative, or a mission-driven nonprofit entity solely for the benefit of residents and households unable to afford market rent”
  2. accommodates a mix of households, from those with the lowest incomes to “moderate-income households unable to afford market rent”
  3. provides its residents with strong protections against eviction, unaffordable rent increases, and other abuses
  4. is permanently protected from privatization
  5. provides residents with “the right to participate directly and meaningfully in decision-making affecting the operation and management” of their homes.

The bill tasks the state’s housing department with running a public process culminating in a California Social Housing Study, including recommendations to the legislature, to be completed by December 31, 2026. The study will examine “the range of models for creating social housing that are currently in practice, or that public agencies or mission-driven nonprofit entities plan to implement both inside and outside California” with the aim of making recommendations to the legislature on how to scale up social housing within the state.

“Our vision for social housing gained ready acceptance by members of the legislature who are looking for real solutions to the growing homelessness crisis,” said Andrés Ramos with Public Advocates, one of the organizations that helped draft the bill. “With social housing, keeping people affordably in their homes is baked into the cake.”

Building the Movement for Social Housing

The organizations that led the push for SB 555 were Housing Now!, Tenants Together, the Alliance of Californians for Community Empowerment (ACCE), and Public Advocates Inc., but the coalition that passed the bill was much larger. It included over eighty tenant organizing groups, community land trusts, faith groups, housing and climate policy organizations, and labor unions. The sole recorded opposition came from the California Association of Realtors, along with the City of Huntington Beach.

Importantly, the last few years have seen large segments of organized labor come around to the idea of social housing. The cost of housing in California has been an issue in strikes, including the Oakland teachers‘ strike in 2019, this year’s Los Angeles school workers’ strike, the University of California academic workers‘ strike in 2022, and the Los Angeles hotel workers’ ongoing strike, among others. (One of the iconic images from the United Auto Workers strike at University of California, Berkeley, was a banner proclaiming “End Rent Burden.”) The California Federation of Labor, AFL-CIO, supported SB 555, as did a number of statewide labor councils and unions.

Many of these labor organizations and others came together this year with ACCE, United Teachers of Los Angeles (UTLA), and AFSCME 3299 to form California Common Good, a group attempting to get unions organized around “common good” housing demands. Organizers are focusing on the rising cost of rent. As one union leader said at the group’s kick-off meeting in January, “What we win at the bargaining table, our members give back to their landlords.” With the push for social housing, unions hope to build affordable homes that serve primarily to give working-class people shelter rather than line the pockets of landlords and real estate developers.

Tenant organizing is also at an all-time high in California. “More and more local tenant organizing groups are connecting the long-term fight for social housing to their immediate struggles for protection against eviction and unaffordable rent hikes,” said Shanti Singh of Tenants Together. On April 24, hundreds of tenants from all over the state converged on the state capitol in Sacramento to demand “housing as a human right.” Chanting “Tener un techo/Es un derecho” (having a roof is a right) as they marched around the statehouse, they afterward made visits with dozens of legislators to voice their support for SB 555 and several other bills (including a bill to close loopholes in a 2019 tenant protection law, which the governor also signed).

The coalition of supporters also included groups that have worked to pass ballot measures to fund social housing at the local level. In particular, the United to House LA coalition passed at the ballot a transfer tax on high-end real estate sales. The measure will dedicate 22.5 percent of revenues to “alternative models of permanently affordable housing,” using a definition very similar to SB 555’s. San Francisco, Oakland, and other California cities have also taken steps to promote social housing at the ballot.

SB 555 did not pass without some compromises. It originally set a ten-year goal of 1.2 million new units of social housing and called for a concrete social housing plan, rather than just a study. The timeline for the study’s completion was also delayed by two years.

The Road Ahead

In the coming year, the state’s Department of Housing and Community Development (HCD) will begin the public process to implement SB 555 by creating the first-ever California Social Housing Study. Organizers hope the state’s assessment of social housing will not only bolster local social housing campaigns, but also feed into the national movement for social housing. “California’s study — and the organizing behind it — promises to boost the push for social housing in states across the U.S., and ultimately at the federal level,” said Andreina Kniss of the Alliance for Housing Justice.

But the leadership of Housing Now!’s social housing campaign sees strategic value in the passage of this legislation that goes beyond the study and legislative recommendations themselves. By committing itself to identifying “tools to help achieve the state’s goals for lower and moderate-income housing by creating social housing through both new production and preservation of existing units,” California has officially started down a path they hope will eventually lead to the provision of democratically controlled housing as a basic human right.

This commitment has symbolic value, which organizers hope to use to further popularize the idea of social housing. The public process also offers the opportunity to organize tenants and workers across the state, as the law requires HCD to “enlist in the development of the study broad participation of residents unable to afford market rents.”

A priority for organizers moving forward will be connecting the statewide campaign for social housing to local campaigns, especially those that heighten the visibility of housing speculation by targeting the speculators themselves. In San Francisco, members of the Veritas Tenants Association, with support from Housing Rights Committee, are on a rent strike against the city’s largest private landlord. ACCE itself has organized tenants in San Diego properties owned by Blackstone, which is also a target of AFSCME 3299 and other unions who are demanding that the University of California divest their pension funds from the private equity giant.

Organizers believe that bringing attention to these market players will not only drive a wedge between them and corporate politicians, but also heighten the popular demand to remove housing from the control of real estate speculators.

“In the end, passage of the state bill is just a tool for building the power it will take to challenge the dominance of real estate and financial capital in our homes and communities,” said Amy Schur of ACCE. “The impetus for transformative change will come from local organizing that unites millions of residents and workers around this demand.”