Limited Local Control, Affordable Housing Incentives and More
In what is shaping up to be an annual exercise, COVID-19 notwithstanding, the California Legislature has again enacted new laws to encourage housing development in the state. The new housing laws, among other things, relaxes regulations, streamlines development procedures, increases incentives for the construction of affordable housing projects and further limits local control over housing development.
Here are critical components of the new legislation that agencies need know to stay in compliance and best serve their communities. All laws go into effect on Jan. 1, 2021, unless otherwise noted.
Planning and Zoning Law – Annual Report re: General Plan
California’s Planning and Zoning Law requires a local jurisdiction to adopt a general plan. The jurisdiction’s “planning agency” (usually, its planning commission) must report annually to the State on plan implementation. New amendments to Government Code section 65400 add to the list of subjects that the report must address. Reports must include:
- Compliance with Native American tribal consultation and related protections as of Sept. 25, 2020 under Assembly Bill 168.
- Density-bonus applications and approvals per AB 2345.
Housing Accountability Act
California’s Housing Accountability Act has long limited local discretion to deny, condition or delay certain housing projects. Amendments to the HAA in 2019 allow an applicant to vest its right to proceed under a given set of rules even earlier by submitting a “preliminary application.” New amendments to GC section 65589.5 further refine how a preliminary application is handled.
As of Sept. 25, 2020, the HAA under Senate Bill 1030:
- Allows the developer to skip submission of a preliminary application to have “complete application” deemed complete with full application.
- Excludes a local-bonus increase in units from triggering resubmittal of preliminary application.
California’s accessory dwelling unit law has been on the books for decades, but interest in the law increased significantly in 2017 when the Legislature made approvals of certain ADUs mandatory. The Legislature continues to amend the law and reduce local control over ADU development in nearly every legislative session. New amendments continue this trend.
Changes to the ADU law under AB 3182:
- Deems ADU an application approved if the local agency fails to act on a complete application by the 60-day deadline.
- Expands situations in which an owner may develop both a junior ADU and an ADU on the same lot as a single-family dwelling: Before, a lot could only have a JADU and a small detached ADU under GC section 65852.2 (e)(1)(B); now, a lot can also have a JADU and a converted ADU under section 65852.2 (e)(1)(A).
SB 35 Ministerial Streamlining for Certain Multifamily Projects
In 2018, SB 35 created a new streamlined, ministerial approval process for certain multifamily projects under GC section 65913.4. New amendments incorporate SB 330’s new preliminary application into the SB 35 process, give developers even more flexibility in changing their project after approval and further limit the use of government property in connection with a streamlined project.
- As of Sept. 25, 2020 AB 168:
- Requires an applicant seeking SB 35 streamlining to first submit a preliminary application as a “notice of intent;” local government must undertake scoping consultation with Native American tribes based on the notice (CEQA doesn’t apply to the consultation); applicant may proceed with full application if no tribal cultural resource would be affected.
- Sets the time for early vesting for SB 35 streamlining at submission of a preliminary application “notice of intent.”
- And as of Sept. 28, 2020, AB 831:
- Allows a developer to modify a project that has already been approved under SB 35 streamlining if the final building permit hasn’t issued. Modification just has to be consistent with development standards that applied to original application, with limited exceptions certain changes to unit count and total floor area. Current building code applies.
- Limits local government discretion over use of government property for public improvements needed for a streamlined project.
- Clarifies the requirement that two-thirds of a mixed-use project be dedicated to residential use. In response to an SB 35 lawsuit, the new amendments clarify that an SB 35 project must be both zoned for residential use or mixed-use development and, separately, have at least two-thirds of the square footage of the development designated for residential use.
Density Bonus Law
California has long had a mandatory Density Bonus Law that requires local jurisdictions to grant liberal density bonuses. New amendments give developers a right to even higher bonuses, lowers the thresholds to qualify for other developer incentives and concessions and adds parking exemptions for religious institutions.
Under AB 2345 the Density Bonus Law:
- Requires the density-bonus units to be affordable in a 100-percent-affordable project, not just the non-bonus units (before, only the non-bonus units had to be affordable).
- Lowers the lower-income threshold to qualify for two incentives or concessions from 20 to 17 percent; and lowers the threshold to qualify for three from 30 to 24 percent.
- Increases the maximum bonus from 35 to 50 percent.
- Allows a project that receives a density waiver to also receive other waivers and reductions of development standards (previously prohibited) — at the city or county’s discretion.
- Refines the way distance from a major transit stop is calculated and makes technical changes to definition of “major transit stop.”
- Decreases parking ratio for certain units in density-bonus projects and prohibits parking requirements for certain transit-oriented developments or senior projects.
Note: A city or county with a density-bonus ordinance or housing program, or both, that allows for greater density bonuses than what the current Density Bonus Law requires is exempt from these new changes in AB 2345. Cities should consider whether they want to exceed the requirements of the current Density Bonus Law now, before the end of the year, to become exempt from the new changes.
AB 1851 restricts local agencies’ ability to require religious institutions replace existing parking spaces designated for places of worship, when that parking is instead made available to develop a housing development project.
Last year’s SB 330 introduced a new preliminary application as a way to vest rights and lock in applicable rules even earlier in the development process. An amendment to GC 65941.1 via AB 168 creates a new limited exception to the early vesting that comes with a pre-app by leaving a project subject to post-pre-app historic listings.
As of Sept. 25, 2020, the preliminary application statute allows a tribal cultural resource to be listed on a historic register after preliminary application is submitted, and the new listing does not count as a change in applicable regulations; it applies to the project.
AB 1561 changes the Housing Element Law provisions of GC 65583 governing the assessment of housing needs and the inventory of resources and constraints. Starting in 2024, at the discretion of HCD, the Housing Element’s analysis of constraints on the maintenance, improvement or development of housing may also address constraints on housing for persons due to their sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, sexual orientation, citizenship, primary language or immigration status.
Certain entitlements under GC 65914.5 are extended and Native American Tribes have more time to comment on certain projects. Specifically:
- In response to COVID-19 and to ensure uniformity across the State, the life of “housing entitlements” that were in effect before March 4, 2020 and expire before Dec. 31, 2021 are automatically extended by 18 months. If a local jurisdiction has adopted its own extension that is 18 months or longer before AB 1561 becomes effective, the entitlement will not be eligible for an additional extension under AB 1561.
- “Housing entitlement” is defined to include most approvals, permits or other authorizations for a housing project. It does not include a development agreement or preliminary application.
- Under CEQA, the time for California Native American Tribes to respond to a lead agency’s consultation request for housing development projects is extended to 60 days when the project application is completed between March 4, 2020, and Dec. 31, 2021.