Expanded Streamlining Opportunities for Developers of California Starter Home Projects

Streamlining Now Available for More Residential Sites

SHRA approvals are available for multifamily residential zoned lots up to 5 acres and vacant single-family zoned lots up to 1.5 acres, in each instance substantially surrounded by qualified urban uses. This means that practically all residentially zoned lots that meet the maximum site size and other requirements of the SHRA can qualify for fast-track approval under the SHRA, which requires local agency approval or denial within 60 days following a complete application and "deemed approval" if action is not taken within that time. Any denial must be based upon a written finding based upon a preponderance of the evidence that the project would have a specific adverse impact upon public health and safety and for which there is no feasible method to satisfactorily mitigate or avoid such impact.

Smarter Parcel and Unit Size Rules

Minimum newly created parcel sizes are 600 square feet for multifamily sites and 1,200 square feet for single-family sites, but local agencies can allow even smaller parcels. The SHRA retains the maximum average housing unit size of 1,750 net habitable square feet, but now provides a new, helpful definition of "net habitable square feet" that is similar to the statutory definition of "habitable space" in the California Building Code and will eliminate ambiguity and offer a greater degree of regulatory certainty.³

Flexible Subdivision Design

The amended SHRA now incorporates a "remainder parcel"⁴ into the SHRA's streamlining framework. A leftover parcel with existing buildings or uses not exclusively serving the project will not count against the SHRA's 10-parcel limit and is excluded from the density calculation requirements otherwise applicable to starter home projects.⁵ This permits the continuation of valuable structures and uses while maximizing new housing potential on the balance of the project site. The SHRA project remains exempt from additional minimum requirements on parcel size, width, depth, dimensions and now frontage as well, beyond the minimum lot sizes required by the SHRA. SHRA also places curbs on local imposition of FAR standards. Although not prohibited by the SHRA, it remains unclear whether SHRA projects may also take advantage of any density bonus, concessions or waivers under the State Density Bonus Law.

Accessory Dwelling Units

Under the SHRA, local agencies may – but are not required to – permit accessory dwelling units (ADUs) and junior ADUs (JADUs) on SHRA parcels. If a local agency does permit such ADUs/JADUs, they are not counted against the 10-dwelling-unit limit. Therefore, in addition to 10 total dwelling units on 10 parcels and one remainder parcel, the SHRA project could potentially include as many ADUs and/or JADUs as would otherwise be permissible under applicable law.

Flexible Ownership Structures

In addition to permissible parcel ownership structures of fee simple, part of a common interest development or ownership by a community land trust, qualifying ownership now includes a tenancy in common (TIC). The use of TIC has seen increasing popularity among younger and first-time homeowners in other housing contexts.

No Special Labor Requirements

Unlike streamlining provisions in some other housing laws, the SHRA does not impose any specialized labor or prevailing wage requirements.

No Special Affordability Requirements

Unlike streamlining provisions in some other housing laws, the SHRA does not impose any special affordable housing requirements beyond compliance with any local inclusionary housing ordinance.

No Requirement for Local Implementing Ordinance

Although a local agency may adopt a local ordinance to implement the SHRA (and such ordinance is not considered a project under CEQA), the SHRA does not mandate any such ordinance, so a qualifying project must be reviewed by local agencies even in the absence of any local ordinance. Because the SHRA is part of the Subdivision Map Act, any local implementing ordinance cannot conflict with the provisions of the SHRA.

Urban Location

Eligible sites must be located in urban areas and be "substantially surrounded"⁶ by "qualified urban uses"⁷

Environmental Exclusions

Properties in prime farmland or farmland of statewide importance, very high fire hazard zones, special flood hazard areas or wetlands, earthquake fault zones, hazardous waste sites, protected species habitat, or other specified unique and sensitive environmental areas are ineligible.

Infrastructure

Newly created SHRA parcels must be served by public water and municipal sewer systems.

No "Double Dipping"

Sites previously subdivided under the SHRA or SB 9 (urban lot split) are ineligible. However, properties that were previously subdivided pursuant to the broader Subdivision Map Act remain eligible for further subdivision under the SHRA.

No Displacement

Development of the SHRA project cannot entail the demolition or alteration of 1) housing subject to recorded covenants, ordinances or laws restricting rent to affordable levels, 2) housing subject to rent or price control through local public entity's police power, 3) housing occupied by tenants within five years preceding application, including demolished housing or units vacated prior to application, or 4) property where the owner exercised Ellis Act withdrawal rights within 15 years before application.

Minimum Density Requirements

Minimum density requirements are dependent upon whether or not the site is listed in the local Housing Element. The proposed subdivision must satisfy the residential density identified in the Housing Element or, if not listed, the greater of 1) 66 percent of the density specified in the local zoning code or 2) 66 percent of the identified "Mullin" density. In most metropolitan jurisdictions, the Mullin density is 30 du/ac, which results in a minimum density requirement of 19.8 du/ac.

Other Applicable Development Standards

For vacant single-family lots, height limits equal to existing zoning may be imposed. For projects of three to seven units, local agencies shall not impose a floor area ratio (FAR) standard of less than 1.0 and for projects of eight to 10 units, local agency shall not impose a FAR standard of less than 1.25. The proposed subdivision must conform to all applicable objective requirements of the Subdivision Map Act that do not conflict with the SHRA and approval of the subdivision may be conditioned upon completion of a residential structure in compliance with applicable provisions of the California Building Standards Code.

Sale and Lease Restrictions

To prevent speculative land banking, subdivided parcels can be sold, leased or financed separately only if they contain a completed or existing residential structure, are reserved for common areas or are the last undeveloped parcel. Local agencies may grant exceptions to these rules by ordinance or map condition.