In the first part of the Housing New Law Guidance series from Best Best & Krieger LLP (BBK), we cover important new housing legislation for 2024 related to adaptive reuse projects, density bonus and accessory dwelling units (ADUs). Below we provide takeaways and analyses of AB 1490, AB 529, SB 713, AB 976, AB 1033, AB 671 and AB 1332.

ADAPTIVE REUSE PROJECTS

AB 1490

This Bill expands adaptive reuse of an existing structure for affordable housing by adding Government Code section 65913.12. This section allows a reuse project that is 100% affordable housing to proceed even if it conflicts with pre-existing policies. For a project to qualify, the project must meet the following criteria:

• The development must be a multifamily housing development project and must retrofit an existing residential or commercial building that already allowed occupancy of residential units on an infill parcel without eliminating any existing open space. It cannot be located on or adjoined to any site where more than one-third of the space is dedicated to industrial use. The units must be 100% affordable and meet certain affordability requirements, and the development must provide an onsite manager if it is 50 units or more. 
• If a local agency finds the proposed project to be conflicting with the objective design review standards, the public agency must provide the developer with written findings and an explanation for the denial within the deadlines set forth on Government Code section 65913.12(c)(2). 

AB 529

This Bill requires that the Department of Housing and Community Development convene a working group by the end of 2024 to identify challenges and opportunities to help support the creation and promotion of adaptive reuse residential project statewide. This Bill does not create any requirements for local agencies.
 
DENSITY BONUS

SB 713

Three Density Bonus bills were signed but only SB 713 is effective as it chaptered out the other bills.

Every city is required to adopt an ordinance that specifies how compliance with Section 1.3 of SB 713 will be implemented. The Bill amends the state Density Bonus Law (Government Code 65915) as follows:

• Removes “incentives or concessions” and “waivers or reductions of development standards” from the list of things for which a city may require reasonable documentation. Also, it clarifies that a for-sale affordable unit must be sold to the occupant(s). 
• It requires the city and applicant to ensure that the for-sale affordable unit is sold to a qualified nonprofit if it was not sold to an income-qualified person/family within six (6) months of the certificate of occupancy. There needs to be evidence that the nonprofit is a bonafide 501(c)(3) based in California, with all board members residing in California, and primarily engaged in affordable housing. It also increases the number of incentives authorized for qualifying projects under Subd. (d)(2)(D)&(F). 
• The Bill amends the definition of development standard on Subd. (o), para. (2), by adding that it applies to any regulation that is adopted by the local government. It also adds new Subd. (v) for “additional density bonus.” 

We recommend cities update their existing ordinances to incorporate these changes or adopt an ordinance incorporating the state Density Bonus Law by reference.

ACCESSORY DWELLING UNITS 

AB 976 and AB 1033 | AB 671 and AB 1332

AB 976 and AB 1033 amended Government Code section 65852.2 concerning owner-occupancy and condominiums. Furthermore, AB 671 and AB 1332 involve CalHOME Program funds for ADU/JADU projects and add a new requirement for local agencies to preapprove ADU plans. The following are the Bills’ highlights:

• Local agencies may no longer require owner-occupancy for ADUs. The amendment can be found on Government Code section 65852.2(a)(8, (a)(4). 
• Local agencies may allow ADUs to be conveyed separately from the primary dwelling as condominiums following certain conditions set forth in Government Code section 65852.26. AB 1033 provides a new exception that authorizes — but does not require — local agencies to allow the separate sale or conveyance of the primary dwelling and the ADU as condominiums. If interested, local agencies must amend their ADU ordinances to reflect the requirements provided in Government Code section 65862.2(a)(10)(A)-(H). 
• AB 671 adds the construction, repair, reconstruction or rehabilitation of ADUs and JADUs to the list of authorized uses for CalHOME Program funds. The Bill also specifies that no rule implementing the program can preclude ADUs or JADUs from being conveyed to qualified low-income households on separate parcels created in accordance with the Subdivision Map Act. Finally, the Bill also allows CalHOME Program funds to be used for a variety of expenses related to the real property. 
• AB 1332 adds Government Code section 65852.27 that requires local agencies to develop a program for the preapproval of ADU plans by January 1, 2025, and it delineates the program’s compliance requirements. The Bill also sets guidelines for the approval or denial of an application for a detached ADU under Government Code section 65852.27(b)(1)-(2).

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