Major Reforms to Housing Accountability Act Come to California: New Law Increases Developers' Ability to Secure Approvals for Housing Development Projects

• Publication year: 2018
• Author: Jennifer L. Hernandez and Daniel R. Golub

Major Reforms to Housing Accountability Act Come to California: New Law Increases Developers' Ability to Secure Approvals for Housing Development Projects

Jennifer L. Hernandez and Daniel R. Golub

Jennifer L. Hernandez

Jennifer Hernandez leads the Holland & Knight West Coast Land Use and Environmental Law Practice Group, is the only lawyer ranked in the top tier of California's land use and environmental practitioners by Chambers USA, and was named the best environmental litigator in the SF Bay Area by Best Lawyers. She advises developers, investors, sellers, and agencies in land use and environmental law, emphasizing resolving federal, state and local agency approvals, and securing community and political support for complex development projects, including urban infill and brownfields projects, master planned communities, and other mixed use, retail, industrial and commercial projects.

Daniel R. Golub

Daniel R. Golub is an associate with Holland & Knight's West Coast Land Use and Environmental Law Practice Group, where his practice focuses on California housing law, land use and environmental litigation, and planning & zoning law. Dan is a former clerk to United States District Court Judge Jon S. Tigar and the former Deputy Director of Land Use, Planning and Development in the Office of the Manhattan Borough President in New York City.

I. INTRODUCTION

California Gov. Jerry Brown on Sept. 29, 2017, signed into law two bills, SB 167/AB 678 (Sen. Nancy Skinner/Assembly Member Raul Bocanegra), and AB 1515 (Assembly Member Tom Daly) that significantly reform California's Housing Accountability Act (HAA or Act), which is codified in the California Government Code at section 65589.5. These reforms are among the most important of several housing bills signed by the Governor that the California state legislature enacted in the closing days of the 2017 session. Effective January 1, 2018, these laws significantly increased the ability of housing developers and housing advocates to secure the approval of much-needed housing projects throughout the state.

II. BACKGROUND ON THE HOUSING ACCOUNTABILITY ACT

The California legislature found and declared nearly thirty years ago that a lack of housing "is a critical problem that threatens the economic, environmental, and social quality of life in California," and that "[t]he excessive cost of the state's housing supply is partially caused by activities and policies of many local governments that limit the approval of housing, increase the cost of land for housing, and require that high fees and exactions be paid by producers of housing."¹ The legislature first attempted to combat this trend in 1982, by enacting the Housing Accountability Act. The Act protects two types of housing development projects, as described in greater detail below.

A. Developments That Comply with All "Applicable, Objective General Plan, Zoning, and Subdivision Standards and Criteria"

If a housing development project complies with all of a local government's objective zoning, general plan and subdivision standards, the local government may not disapprove the project—or even reduce its density or impose any conditions comparable to a density reduction—unless the agency finds that the project would have an unavoidable impact on public health or safety that cannot be feasibly mitigated in any way other than rejecting the project or reducing its size.² This "public health and safety" exception is narrow: the impact must be a "specific, adverse impact," which the statute defines a "significant, quantifiable, direct, and unavoidable impact, based on objective, identified written public health or safety standards, policies, or conditions as they existed on the date the application was deemed complete."³ The HAA protects projects that comply with objective standards regardless of whether the project contains any affordable housing.⁴

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In the leading case interpreting the HAA, Honchariw v. County. ofStanislaus ("Honchariw I'),⁵ the California Court of Appeal for the Fifth District held that the HAA's emphasis on "objective" standards is intended to "take[e] away an agency's ability to use what might be called a 'subjective' development 'policy' (for example, 'suitability')" as a legitimate ground for rejecting or reducing the size of a housing development project.⁶ In doing so, the HAA "imposes 'a substantial limitation' on the government's discretion to deny a permit,"⁷ particularly on the many jurisdictions that require zoning-compliant housing developments to seek discretionary approvals that involve subjective determinations such as whether the project will be "harmonious" with or "detrimental" to neighboring uses.

B. Developments That Contain a Minimum Amount of Affordable Housing

There is a different standard for an agency to reject proposed developments that contain a minimum amount of affordable housing. The threshold quantities of affordable housing to trigger this standard are either 20 percent of units being set aside for lower-income households or 100 percent of units being set aside for moderate- or middle-income households. The HAA protects these types of projects even if they do not comply with all applicable objective general plan, zoning and subdivision standards. For example, affordable housing projects that require a zoning change are protected by the Act.

Local governments may not disapprove or reduce the size of qualifying affordable housing projects unless one of the following five specific circumstances exist: (1) the jurisdiction has an approved Housing Element and has met or exceeded its share of its Regional Housing Need Allocation ("RHNA") for the income category proposed for the project, (2) the project would cause an unavoidable impact on public health or safety that cannot be mitigated in any way other than rejecting the project or reducing its size, (3) rejecting or reducing the size of the project is necessary to comply with federal or state law, (4) the area is zoned for agriculture or resource preservation, and there are not adequate water or wastewater facilities to serve the project, or (5) the project is inconsistent with both the jurisdiction's zoning ordinance and general plan land use designation. Other specific criteria also apply.⁸ In most circumstances, a local government cannot reject or reduce the size of a qualifying affordable housing project that will contribute to meeting the local government's RHNA deficits—even a project that violates applicable objective zoning rules—as long as the project complies with the applicable general plan land use designation and would not have any unavoidable public or safety impacts.

C. Consequences of Denial or Reduction of Size

If a jurisdiction denies or reduces the size of either an objectively compliant or affordable housing project without a valid basis under the Act, a very broad range of plaintiffs can sue to enforce the HAA. The project applicant can bring an action to challenge the government's decision, but even if the developer declines to sue, any "person who would be eligible to apply for residency" can also bring an action to enforce the act.⁹ In addition, any "housing organization" can challenge an improper project disapproval. A "housing organization" is defined as any:

trade or industry group whose local members are primarily engaged in the construction or management of housing units or a nonprofit organization whose mission includes providing or advocating for increased access to housing for low-income households and have

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