RegComm Recap —Student Housing Legislation and the Fire Insurance Crisis
On Tuesday, April 9, HAC's Regulatory Committee hosted a powerful double-header featuring Ryan Lenney from the Student HOMES Coalition and Michael Gunning of the California Building Industry Association, illuminating two critical barriers to housing production in California.
California's Student Housing Emergency: From Crisis to Action
Ryan Lenney painted a stark picture of the housing crisis facing California's college students. While tuition costs dominate headlines, the hidden housing emergency has reached breaking point across the state's public higher education system.
The Alarming Reality:
Campus Housing Gap: Only 35% of UC students and a mere 14% of CSU students have access to on-campus housing, while just 14 out of 116 community colleges offer any student housing at all.
Zoning Barriers: Nearly half (50%) of land surrounding California's largest colleges is zoned exclusively for single-family homes, with only 15% allowing multifamily development.
Housing Insecurity Epidemic: Student homelessness has reached crisis levels—20% of community college students, 11% at CSUs, and 4% at UCs report experiencing homelessness during their studies.
Financial Strain: For many students, housing costs now exceed tuition, creating an impossible financial burden that threatens educational access.
Student HOMES Coalition's 2025 Legislative Solutions:
The coalition is advancing a comprehensive legislative package aimed at structural reform, tackling both supply and affordability:
AB 357 (Alvarez): Cuts through red tape by exempting campus housing from Coastal Commission review, accelerating construction timelines and reducing costs.
AB 893 (Fong): Creates "Campus Development Zones" within a half-mile radius of public colleges, providing streamlined approvals for affordable student-oriented housing.
AB 648 (Zbur): Strengthens state authority over land use decisions for community college housing development.
SB 685 (Cortese): Launches an innovative pilot program providing last-dollar financial aid specifically targeting homeless CSU students.
Ryan emphasized that the coalition's approach goes beyond band-aid solutions to address the root causes of the student housing crisis.
Fire Insurance: The Invisible Housing Crisis
Michael Gunning delivered a sobering assessment of California's deteriorating fire insurance market—a challenge that threatens housing development even in areas far from wildfire zones.
A Perfect Storm:
Market Retreat: Major insurers are limiting coverage or exiting California entirely as wildfire risks, climate change impacts, and post-COVID claims surge.
Cost Explosion: A combination of factors—including skyrocketing construction costs, expensive car repairs (affecting overall insurer profitability), and rising reinsurance premiums—has driven coverage costs to unsustainable levels.
Regulatory Constraints: California's insurance regulations, particularly Prop 103, limit insurers' ability to price risk accurately, intensifying market dysfunction.
Fair Plan Strain: The state's insurer of last resort is being pushed far beyond its original purpose, creating additional instability.
The Development Impact:
Gunning's most alarming point was simple yet profound: you cannot build housing without insurance. Without intervention, even projects in low-risk urban areas face mounting challenges securing necessary coverage.
Challenging Questions Ahead:
The discussion raised critical questions for policymakers and housing advocates:
Is rebuilding in high-risk fire zones ethically justifiable, and who should bear those costs?
How can California balance risk management, affordability, and resilience?
Should the state establish a Resilience Fund to backstop insurance markets when private options fail?
While the path forward remains unclear, one thing is certain: California's twin crises of housing shortages and insurance challenges require urgent, coordinated solutions.
What's Next
HAC's Regulatory Committee continues to bring together diverse stakeholders to tackle the complex web of challenges affecting housing production across California. Stay tuned for future sessions and opportunities to engage with these critical policy discussions.
