TRC: California’s Legislative Initiatives Might Provide Positive Tailwind
By M. Marin
NYSE:TRC
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State legislative initiatives…
As Tejon Ranch Company (NYSE:TRC) advances its real estate development strategy, California legislative initiatives might provide a positive tailwind, in our view. California Assembly Bill (AB) 1449 aims to exempt certain affordable apartment developments from review by the California Environmental Quality Act (CEQA). Specifically, the bill is expected to “exempt from CEQA certain actions taken by a public agency related to affordable housing projects, as defined, if certain requirements are met” until January 1, 2033. To qualify for exemption, projects need to be located in densely populated urban areas and include a number of units for residents who earn less than 80% of the median income in the local market, among other requirements. In addition, California governor Gavin Newsom has established the Housing Accountability Unit to facilitate the state’s goal of adding affordable housing.
… designed to address state’s severe shortage of housing, particularly affordable housing…
These initiatives are designed to address the state’s severe shortage of housing, particularly affordable housing. According to the National Low Income Housing Coalition, there is a statewide shortage of affordable and available rental homes for people with incomes at or below the poverty guideline or 30% of the local area median income (AMI). More and more Californians view the housing shortage as an issue, according to the Public Policy Institute of California (see chart below). There is a shortage of housing in the greater Los Angeles metropolitan region overall, just as there is in the state generally and housing prices continue to increase. TRC’s land is the only major area close to Los Angeles where infrastructure is possible and one of the few real estate development companies with scale.
… TRC believes its development plans fulfill important needs, including adding housing, jobs…
Management believes that its development plans fulfill important needs, including addressing the need for more housing in California, as noted, as well as job creation and responsible development that is coordinated with conservationist goals. The company is developing a multi-family residential complex, adjacent to the Outlets at Tejon, and development Phase 1 includes 228 of the planned 495 residential units.
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