Governor Newsom Signs Groundbreaking Laws: AB 812 and AB 590
Governor Newsom Signs Groundbreaking Law (AB 812) Promoting Affordable Housing for Artists Working in Cultural Districts
On October 11th, Governor Gavin Newsom signed Assembly Bill 812 which was authored by Assemblymember Tasha Boerner and allows local governments to reserve affordable housing in cultural districts for artists at risk of being displaced by rising housing costs. The first of its kind in the state, AB 812 provides a tool for local governments whose jurisdictions include either a state or locally-designated cultural district and who recognize the need to retain the artists and cultural workers who make these neighborhoods unique.
“Artists are the lifeblood of our cultural communities and help preserve the cultural footprint of the region,” says Assemblymember Boerner. AB 812 authorizes local governments to set aside up to 10% of deed-restricted housing units within a locally-designated cultural district and up to one-half mile from a state-designated cultural district for eligible creative workers whose households qualify as moderate-income, lower income, very low-income, or extremely low-income. “This prevents artists from having to move away from the neighborhoods they contribute so much to, simply because they can no longer afford to live there,” continues Boerner. AB 812 establishes that the need for this tool is a state level concern but leaves control and implementation within the authority of California cities and counties.
“The passage of AB 812 is a groundbreaking win for California’s arts and culture sector,” says Julie Baker, CEO of California Arts Advocates, which sponsored the bill. While the creative economy generates over 7.25% of the state’s economy, California ranks 32nd in the nation in per capita state investment in arts and culture. A significant number of California’s creative workers and self-employed qualify for affordable housing and often lack access to traditional social safety nets. A 2021 survey by the city of Berkeley found that while most working artists and cultural workers are highly educated, 60% have low, very low, or extremely low income, and many are experiencing displacement pressures due to increasing housing prices in cultural communities. While California recognized its artists as “essential” and declared them the state’s “second responders” in 2019, this new law helps educate state and local decision makers that many artists are part of the vulnerable class of low-earning California workers that should be considered when producing workforce housing.
This is especially true in cultural districts where a density of artists and cultural activities vitalize a neighborhood, often leading to physical and social improvements that increase property values and costs. Cultural zones are increasingly becoming a go-to strategy for local economic development, as they are found to promote cultural equity, boost tourism dollars, encourage more local visitors, increase property values, and generate more money for the region and state. The state has fourteen districts formally designated through the California Cultural District Program and administered through the California Arts Council and there are an estimated hundreds of locally-designated cultural districts. Nationwide, artists are rent-burdened in 80% of cultural districts, which threatens to push out the very core of a cultural district itself. “Keeping neighborhoods affordable to the culture bearers in our local communities and avoiding the displacement of artists protects our cultural heritage, and it creates robust economic zones,” says Baker, “without them, the special culture of the place leaves with them, dispersed and diluted and a cultural district is no longer a cultural district if those people who made it cannot afford to live and work there themselves.”
AB 812 does not prioritize artists over other Californians needing access to affordable housing. The law allows local agencies who are requiring a residential development in a cultural district to provide a certain percentage of affordable housing units to reserve up to 10% of those units for artists who are verified and eligible, as long as the agency is also meeting the conditions required by local tenant and anti-displacement protections. AB 812 was passed by the Senate on September 13th and the Assembly on September 14th.
Governor Newsom signed AB 590 into law – paving the way to advance payments for nonprofits with state grants and contracts
Responding to unanimous support from the Legislature and from nonprofit, philanthropic, and business leaders from all over California, Governor Newsom signed AB 590 into law – paving the way to advance payments for nonprofits with state grants and contracts.
As you most likely know, the California Nonprofit Contracting Coalition brought a package of seven bills this year to the Legislature as the California Nonprofit Equity Initiative. More than 550 nonprofit, philanthropic, and community leaders signed on to support the bills, which sought various improvements to how state government contracts with nonprofits.
AB 590, authored by Assemblymember Gregg Hart (D-Santa Barbara), was a priority because it strongly impacts the access and ability of nonprofits to partner with the state or successfully pursue grant funding. What on its face may look like a minor technical change, authorizing advance payments to nonprofits signing government contracts is a major equity advancement! With upfront funds, nonprofits won’t be forced to float significant expenses until reimbursed or to take on high interest loans to get new programs going. With that barrier lifted, AB 590 will enable more nonprofits – particularly those in rural, poor, and people-of-color communities – to partner with state government.
We applaud Assemblymember Hart who authored this bill and fought for it every step of the way, CalNonprofits’ fellow bill co-sponsors United Ways of California and California Council of Community Behavioral Health Agencies for their tireless advocacy and leadership, and we thank Governor Newsom for signing it.
Prompt Payments vetoed
Unfortunately, the Governor vetoed SB 557 – Senator Monique Limón’s bill to address inequities in the state’s Prompt Payments Act. The Governor’s veto is terribly disappointing. Nonprofits often wait months for payments due from the state, and payments can get held up for weeks based on discrepancies of less than five cents. It is so obviously fair that nonprofits should get paid on time. Our thanks and admiration to Senator Limón for authoring the bill and getting it to the Governor’s desk.
Throughout this legislative session, hundreds of nonprofit and community leaders have called and emailed their legislators in support of the bills, and dozens of nonprofit folks testified at hearings, both in-person and remote. We greatly appreciate their commitment and support.