The Biden administration is encouraging the conversion of empty office space to affordable housing

Associated Press – October 27

The Biden administration is launching a multi-agency effort to encourage states and cities to convert more empty office buildings into housing units, with billions of federal dollars available to help spur such transitions. The new initiative involves the departments of Housing and Urban Development and Transportation, the General Services Administration, and the Office of Management and Budget. Several of the new measures will be designed to specifically encourage the creation of new affordable housing units near transportation hubs.

As discussed in our recent alert, there have also been legislative efforts in California to encourage commercial-to-residential projects. As part of a suite of housing bills approved during the latest legislative session, Governor Gavin Newsom signed AB 529 (Gabriel and Haney) into law on October 11, 2023. AB 529 requires the California Department of Housing and Community Development to convene a working group, including the California Building Standards Commission, Energy Commission, State Fire Marshal, Public Utilities Commission, and other stakeholders to “identify challenges to, and opportunities to help support, the creation and promotion of adaptive reuse residential projects statewide while not reducing minimum health and safety standards, including identifying and recommended amendments to state building standards.”

News

State report critiques San Francisco for glacial and expensive permitting process for new housing

CBS News – October 25

A recent report from the state reveals the bureaucratic and costly permitting process builders face when it comes to constructing new housing in San Francisco. The report issued last week by the California Department of Housing and Community Development (HCD) is calling out San Francisco. So far this year, San Francisco has permitted less than one home per day, leaving the city falling far short of its Regional Housing Needs Allocation (RHNA) goals for building new houses.

That shortfall could in turn result in additional streamlined ministerial (i.e., no CEQA) housing project approvals. As discussed in our recent alert, Governor Gavin Newsom signed SB 423 (Wiener) into law, which goes into effect on January 1, 2024. As explained therein, SB 423 specifically targets San Francisco by increasing the frequency of its RHNA reporting period to every year, beginning in 2024. If HCD determines that San Francisco has not made sufficient progress toward its above-moderate income RHNA by that deadline, projects designating at least 10% of the units as affordable to lower-income households (versus 50%) would qualify for streamlined ministerial approval under SB 35, provided that all other applicable requirements would be met.

Court orders stay in California’s housing lawsuit against Huntington Beach

Daily Pilot – November 7

San Diego Superior Court Judge Katherine Bacal ruled last Thursday that California’s lawsuit against Huntington Beach for violating state housing law must be stayed until a related federal lawsuit against the state filed by City Attorney Michael Gates is decided. This means that in the meantime, the state cannot levy penalties against Huntington Beach related to a non-compliant housing element, Gates said. In March, California Attorney General Rob Bonta and the Department of Housing and Community Development filed suit against the city for not accepting new applications for accessory dwelling units. A month later, that suit was amended after the City Council’s conservative majority voted against approving a state-compliant draft housing element. The state’s lawsuit against the city has now been put on hold, however, pending a federal lawsuit filed by the city. In it, Gates argues that state housing laws violate Huntington Beach’s rights, particularly as a charter city, to zone property.

‘Mansion tax’ prevails in court as judge dismisses lawsuit challenging Measure ULA

Los Angeles Times – October 25

An L.A. County judge has dismissed a lawsuit challenging L.A.’s “mansion tax,” marking the end of a months-long legal challenge that sought to declare the measure unconstitutional. The transfer tax known as Measure ULA was passed in November and took effect April 1, bringing a 4% charge on all residential and commercial real estate sales in the city above $5 million and a 5.5% charge on sales above $10 million, pumping millions into housing and homelessness-prevention efforts. The legal battle — which was headed by two main groups: Newcastle and Howard Jarvis Taxpayers Assn. — became a national conversation, as other cities looked to L.A. to see how it would implement such a tax.

Proposed San Diego Hillcrest Neighborhood Focus Plan could result in 30-story high rises

NBC San Diego – October 31

City planners are mulling a plan to attract more development to the Hillcrest area, with some high-rises potentially reaching 30 stories, which could increase the community's population by as many as 50,000 residents. The city's recently released Hillcrest Focus Plan Community Discussion Draft would amend the Uptown Community plan, and, if adopted by community developers, transform the community, which, according to the city, is already one of the "more intensely developed neighborhoods in Uptown."