A Closer Look at the Avalanche of New California Housing Production Laws

• Jurisdiction: California,United States
• Author: by Chelsea Maclean
• Publication year: 2018
• Citation: Vol. 27 No. 1

A Closer Look at the Avalanche of New California Housing Production Laws

by Chelsea Maclean^*

INTRODUCTION

California legislators unleashed an avalanche of more than 130 bills last year, responding to the statewide housing crisis. Housing advocates have argued, backed by staggering statistics, that California's local land use approval process has slowed housing production and made it more expensive.¹ After vetoing housing bills in the past, Gov. Jerry Brown approved 15 housing bills for the first time in his tenure on September 29, 2017.² Some of these laws streamline entitlement processing by reducing local agencies' discretionary approval rights. These laws provide political "cover" to decision-makers in development-friendly jurisdictions looking to approve projects in the face of vocal community opposition. They also increase the ability to enforce development rights in less friendly jurisdictions where decision-makers oppose new development. More generally, other laws promote the statewide goal to encourage housing production now that the lack of housing supply is reaching emergency levels.

Each new law is summarized below, grouped into five categories: (I) Enforceability, (II) Streamlining and Other Incentives, (III) Housing Element Law Amendments, (IV) Funding and (V) Other.

I. ENFORCEABILITY

SB 167 (Skinner)/AB 678 (Bocanegra)³ and AB 1515 (Daly) Housing Accountability Act amendments. These laws strengthen the Housing Accountability Act (HAA), also known also known as the "Anti-NIMBY (Not In My Back Yard) Act." The HAA limits the ability of local agencies to deny or make infeasible qualifying housing developments without making specified findings that require analyses of the environmental, economic and social effects of the action. SB 167/AB 678 strengthens the HAA by increasing the standard of proof required for a local government to justify a denial of low- and moderate-income housing development projects. AB 1515 expands the range of housing projects covered by the HAA if the project is consistent with local planning rules. Amendments to the HAA include the following:

• Increased Eligibility for Mixed-Use Projects. The HAA previously limited the kinds of mixed-use projects which qualified for the Act's protections. Under the revised HAA, a mixed-use project qualifies if at least two-thirds of its square footage is designated for residential use.⁴
• Tightening the Definition of "Objective Standards." Some anti-housing jurisdictions have attempted to avoid the HAA by claiming that a project does not comply with the jurisdiction's "objective" standards and criteria. The amended HAA establishes a very favorable standard for housing developers and advocates: A project must be considered consistent with objective standards as long as "there is substantial evidence that would allow a reasonable person to conclude" that a project complies.⁵ If a local government determines that a project does not comply with the jurisdiction's objective standards, it must inform applicants of the basis for this conclusion on a specific timeline,⁶ and if the local government fails to do so, the project is deemed to be consistent.⁷ The new law also clarifies that a project's eligibility for a bonus under California's Density Bonus Law does not render it inconsistent with the local jurisdiction's objective standards.⁸
• Jurisdictions Can Apply Only Those Standards in Effect at the Time the Application Is Complete. Some jurisdictions have attempted to adopt new objective standards to circumvent the HAA. The revised act clarifies that, for affordable housing projects as well as market-rate projects, changes to the zoning ordinance or general plan made after the date the application was deemed complete cannot be a basis for project disapproval.⁹
• Increasing the Burden on Jurisdictions that Reject Housing. Any local government that disapproves or reduces the size of a housing development project must now meet the more demanding "preponderance of the evidence" standard—rather than the more deferential "substantial evidence" standard—in proving that it had a permissible basis under the HAA to reject the project or reduce its density.¹⁰

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• Increased Availability of Attorney's Fees. California's Fifth District Court of Appeal had interpreted the Act to authorize an award of plaintiff's attorneys' fees only when a local government rejects an affordable housing proj-ect.¹¹ The revised HAA overrules this interpretation by making attorneys' fees available—and presumptively required—regardless of whether the project contains affordable housing.¹²
• Increased Fines and Increased Authority for Court to Order Projects to Be Approved. The Act previously limited the circumstances under which a court could issue fines or directly order a local government to approve a project.¹³Under the revised HAA, after a successful court challenge, a court must issue an order compelling compliance with the HAA, and any local government failing to comply within 60 days must be fined a minimum of $10,000 per housing unit.¹⁴ If an agency does not comply with a court order within 60 days, the amended statute authorizes the judge to order the jurisdiction to approve the project rather than merely ordering it to comply with the Act.¹⁵ If a local jurisdiction acted in bad faith when rejecting the housing development, the applicable fines must be multiplied by five.¹⁶

AB 72 (Santiago/Chiu) HCD oversight. This law strengthens the ability of the California Department of Housing and Community Development (HCD) to enforce housing laws that require local governments to achieve housing goals.

• Increased HCD Oversight of Local Agency Compliance with Housing Element Law. The amended law requires HCD to review any action or failure to act by a local agency that it determines is inconsistent with an adopted housing element, and to issue findings on whether the action or failure to act substantially complies with the housing element.¹⁷ If HCD finds that the agency's action or failure to act does not substantially comply with the housing element, HCD may, after allowing no more than 30 days for a local agency response,¹⁸ revoke its findings until it determines that the agency has come into compliance with the housing element.¹⁹
• HCD Obligation to Report Violation to Attorney General's Office. The law requires HCD to notify the agency and authorizes HCD to notify the Attorney General that the agency is in violation of state law if HCD makes certain findings of noncompliance or a violation.²⁰

II. STREAMLINING AND OTHER INCENTIVES

SB 35 (Weiner) "By Right" Approval Processing.

This law streamlines the approval process for infill developments in local communities that have failed to meet their regional housing needs.

• Ministerial Approval Processing. The law authorizes a development proponent to submit an application for ministerial processing where a multifamily housing development satisfies specified planning objective standards and specified criteria.²¹ The law includes a long list of qualifying criteria, including payment of prevailing wages, use of a "skilled and trained workforce," and consistency with objective development standards.²² The law will apply only if a housing production report (the first reports were due April 1, 2018²³) reveals that a city is not achieving affordable housing targets.²⁴ The law requires a local government to notify the development proponent in writing within 90 days of submittal (for projects of more than 150 units) if the local government determines that the development conflicts with any of those objective standards; otherwise, the development is deemed to comply with those standards.²⁵ Design review or other public oversight of the development may still be conducted, but must "be objective and be strictly focused on assessing compliance with criteria required for streamlined projects, as well as any reasonable objectives design standards published and adopted by ordinance or resolution by a local jurisdiction before submission of a development application, and shall be broadly applicable to development within that jurisdiction."²⁶ The design review or public oversight process must be completed within 180 days (for projects of more than 150 units) of the development submittal.²⁷
• Limitations on Local Government Imposition of Parking or Other Requirements for Qualifying Projects. The law limits the authority of a local government to impose parking standards on a streamlined development approved pursuant to SB 35 in one of four instances.²⁸ The law also prohibits a local government from adopting any requirement that applies to a project solely or partially on the basis that the project receives ministerial or streamlined approval pursuant to SB 35.²⁹
• Limitations on Approval Expiration. The law provides that if a local government approves a project pursuant to that process, that approval will not expire if more than 50 percent of the units are affordable.³⁰ The approval of a project that contains fewer than 50 percent affordable units expires automatically after three years, unless that project qualifies for a one-time, one-year extension of that approval.³¹ Separately, the law provides that an approval shall remain valid for three years from the date of the final action establishing that approval and shall remain valid thereafter so long as vertical construction of the development has begun and is in progress; it also authorizes a discretionary one-year extension.³²

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• Local Government Housing Production Reporting. The law requires local governments to include in the annual general plan report specified information regarding units of net new housing (including rental housing and forsale housing) that have received a completed entitlement, building permit, or certificate of occupancy.³³ Local governments must report on the housing produced pursuant to SB 35's requirements.³⁴

SB 540 (Roth) Workforce Housing Opportunity Zones. This law streamlines the environmental...