California Housing Bills Impacting 2019

2019 welcomed a host of new bills in California aimed at the development of housing. Here’s a summary.

AB 2923: Transit-Oriented Development on BART-Owned Land (Chiu and Grayson)

This legislation requires the BART Board of Directors to adopt new transit-oriented development (TOD) zoning standards for each station. The legislation applies to BART parking lots and vacant BART-owned land and aims to simplify the process by which BART can develop land it owns. The TOD standards, applicable to an eligible TOD project, would establish minimum local zoning requirements for height, density, parking, and floor area ratio only. The bill requires affected local jurisdictions to adopt a local zoning ordinance that conforms to the TOD zoning standards within two years of BART’s adoption of the TOD standards or by July 1, 2022 if no such local standards are adopted. CEQA does apply to BART’s approval of TOD zoning standards with BART as lead agency. The bill does not subject a development application to two separate sets of zoning standards but, rather, requires the local agency to adopt zoning standards in conformance with the BART-adopted TOD standards. Where local zoning remains inconsistent with the TOD zoning standards after July 1, 2022, the BART-adopted TOD zoning standards will become the local zoning for any BART-owned parcels that are within ¹/₂ mile of any existing or planned BART station entrance. In addition, the legislation requires a TOD developer to adhere to any applicable local design standards, so long as those standards do not prohibit the minimum height, minimum density, minimum floor area ratio, and maximum parking allowances required by the TOD zoning standards. Expect to see a lot of local jurisdictions wrestling for control through a wave of new local zoning ordinances throughout the Bay Area.

AB 2753: State Density Bonus Application Revisions (Friedman)

This legislation amends the State Density Bonus Law (Government Code Section 65915) to require local agencies to provide determinations to developers regarding: 1) the amount of density bonus for which a development is eligible; 2) any parking ratios requested by the applicant for which the development is eligible; and 3) whether the applicant has provided sufficient information for the local agency to make a determination as to any incentives, concessions, or waivers/reductions in development standards requested by the applicant. The bill would require the local agency to make such determination based on the development project at the time the application is deemed complete and require that the local agency adjust the amount of the density bonus and parking ratios awarded in the event of project alterations during the entitlement process. Note that this bill applies to all cities, including charter cities, such as the City of Oakland.

AB 2372: State Density Bonus Law and Floor Area Ratio Bonus (Gloria)

This legislation adds Government Code Section 65917.2 and authorizes cities or counties to grant a developer of an “eligible housing development” under the State Density Bonus Law (found at Government Code Section 65915) a floor area ratio bonus in lieu of a density bonus calculated on the basis of dwelling units per acre and based on a formula outlined in the new statute. This is an opt-in approach that local agencies can employ to allow for the construction of more, smaller units on a parcel of land than current law allows. Government Code Section 65917.2 now defines “eligible housing development” as a multi-family housing development with 5 or more residential units that provides at least 20 percent affordable units, is located within a transit priority area or a half-mile from a major transit stop, meets requirements for the replacement of existing units, and complies with height requirements applicable to the underlying zone. The law further prohibits a local agency from imposing parking requirements in excess of specified parking ratios. Increasing the allowable residential floor area that can be used for units will encourage smaller and, thus, potentially less expensive housing units to be constructed.

SB 1227: Density Bonus for Student Housing (Skinner)

This bill amends the State Density Bonus Law to apply to the construction of student housing. It allows student housing projects where at least 20 percent of the units are affordable for lower income students to receive a 35 percent density bonus. The law also provides that the development must grant priority to those students experiencing homelessness. The density bonus for student housing will be calculated based on the number of beds instead of units and requires the units be subject to a recorded affordability restriction of 55 years. This statute applies to all cities including charter cities.

AB 3194: Amendments to the Housing Accountability Act (Daly)

The Housing Accountability Act (HAA) strictly limits local agencies’ authority to reject or restrict housing development projects that comply with applicable objective general plan, zoning, and subdivision standards unless findings related to the project’s specific adverse impacts to the public health and safety are made. The Legislature enacted significant reforms to the HAA in 2017. AB 3194, a “clean up” bill, provides three additional major revisions to the HAA as follows: 1) a proposed project is not considered inconsistent with applicable zoning standards, and shall not require a rezoning, if the project is consistent with objective general plan standards even if the local agency’s adopted zoning for the project site is inconsistent with the general plan; 2) if the zoning is consistent with the general plan, a local agency may require a proposed project to comply with the objective standards of that zoning, but those standards must be applied to allow development at the density permitted on the site by the general plan; and 3) the Legislature declared its intent that a “specific, adverse impact on the public health and safety” will “arise infrequently” bolstering a project’s chances of approval given the difficulty in making fairly onerous findings.

SB 765: Amendments to SB 35 (Wiener)

SB 35, the controversial streamlining law enacted in 2017, requires local agencies grant streamlined, ministerial approval to housing projects that meet the local agency’s objective standards, commit to provide prevailing wage labor, and provide a specified amount of affordable housing, among other criteria. One provision in SB 765, which amends Government Code Section 65913.4, now explicitly states that the California Environmental Quality Act (CEQA) does not apply to the agency’s determination of whether an application for a development is subject to the streamlined ministerial approval process. The amendment also requires a proposed project be consistent with objective subdivision standards. SB 765, in addition to the Housing and Community Development Department’s SB 35 Guidelines, should clarify some of the points of confusion in the original legislation.

SB 828 and AB 1771: Amendments to the RHNA Process (Wiener and Bloom)

This bill amends a number of Government Code sections related to the Regional Housing Needs Assessment (RHNA) process to require the use of more data to more accurately and fairly reflect job growth and housing needs, with an emphasis on fair housing goals. The RHNA process identifies the total number of housing units and income levels that each jurisdiction must accommodate in its housing element. These amendments revise the data that the council of governments (the entities that determine RHNA targets, such as ABAG, here in the Bay Area) must provide to the State Department of Housing and Community Development (HCD) as part of the RHNA process. The RHNA process has been the subject of criticism that some jurisdictions are allocated low RHNA numbers for political reasons. To counter this criticism, this law now adds more transparency regarding the council of governments’ methodology and back-up materials relied upon by allowing for increased public comment. The legislation also affords local governments an opportunity to appeal RHNA targets. Additionally, the law prohibits a council of governments from using prior underproduction of housing or stable population numbers as the basis for a reduction in a local agency’s share of the RHNA.

AB 2263: Parking Reductions for Historic Reuse Projects (Friedman)

This bill adds Section 18962 to the Health and Safety Code and requires parking reductions for a development project in which a designated historical resource is being converted or adapted for reuse. For projects converting or adapting a designated historical resource to a residential use that is located within a half-mile of a major transit stop, an agency may not require the project to provide parking spaces greater than the number of parking spaces that existed on the project site at the time the project application was submitted. For a project converting or adapting a designated historical resource to a nonresidential use, a local agency shall provide a 25 percent reduction in the amount of parking spaces that would otherwise be required Since many historic sites have limited parking and little to no room to add new parking, this bill will incentivize the reuse and protection of historic resources.

AB 2162: “By Right” Supportive Housing (Chiu and Daly)

This bill amends Government Code Section 65583 and requires supportive housing to be considered a use allowed “by right” in zones where multifamily and mixed uses are permitted (including nonresidential zones permitting multifamily uses), provided the proposed housing development meets specified criteria. Supportive housing assists the resident in retaining affordable housing, improving the resident’s health status and ability to live and work in the community. The law requires a local government to approve, within requisite timeframes, supportive housing developments that comply with specified requirements. The law prohibits the local government from imposing any minimum parking requirement for units occupied by supportive housing residents if the development is located within a half-mile of a public transit stop and also expands the exemption for ministerial approval under CEQA.

AB 2913: Extension of the Duration of Building Permits (Wood) 

This legislation amends the Health and Safety Code and extends the duration of a building permit from six months (180 days) to 12 months, as long as construction has started and has not been abandoned. If the permit does expire, the developer may obtain approval from the local building official for one or more six-month extensions. The law also provides that a permit is subject to the building standards in effect on the date of original issuance. This should provide more certainty to developers whose projects are delayed, often for reasons beyond their control.

SB 1333: Planning Requirements for Charter Cities (Wieckowski)

Amendments to various Government Code sections will now require charter cities (those governed by a city charter document rather than by general law) to be subject to planning laws that previously only applied to general law cities. These include laws related to general plan amendment processing, accessory dwelling unit permitting, and the preparation of housing elements, as noted above. Additionally, the new law now requires a charter city’s zoning ordinances to be consistent with its adopted general plan, which, while it would seem obvious, is reflective of the fact that approximately 25 percent of the state’s 121 charter cities have adopted zoning and subdivision consistent with the cities’ general plans.

Notes

Recently, HCD promulgated official guidelines for the implementation of SB 35, which will have significant weight for those applicants and local agencies interpreting this significant state law. HCD has published its SB35 guidelines here. Attorneys within the Wendel Rosen land use practice group have assisted developers and a local agency with the processing and implementation of a large-scale SB 35 project since the legislation’s adoption.

We believe the slate of new housing laws effective as of the first of 2019 signal the legislature’s strong desire to fast-track the processing, review and approval of eligible projects in an attempt to provide more affordable housing to the state’s residents. Much of the new legislation is aimed at up-zoning areas in close proximity to public transit, signaling the Legislature’s further commitment to reducing excessive commute times for workers forced to live far from job centers due to the high and burdensome cost of housing.