2020 Housing Legislation Summary
This past legislative session started out with high hopes and promises that the California Legislature would deliver to the Governor a raft of new housing bills to address the state’s housing supply shortage. Unfortunately, with the COVID emergency dominating the 2020 legislative session, few housing bills made it across the finish line.
Nonetheless, some housing legislation did emerge after the close of the legislative session that has since been signed by the Governor and may be of assistance to residential developers. These new housing laws from the most recent legislative session include modifications to SB 35, increased density bonuses for affordable projects, and extensions of certain housing entitlements. Below are brief summaries of the key housing laws approved by the Governor in 2020. Unless otherwise noted, these new laws will take effect on January 1, 2021.
AB 831 (Grayson) and AB 168 (Aguiar-Curry) – AB 831 and AB 168 amend SB 35, which was adopted in 2017 to streamline the approval process for infill housing projects. As urgency legislation, these changes are effective immediately.
Some of the changes to SB 35 are in response to the 2019 case Ruegg & Ellsworth v. City of Berkeley, in which the Alameda County Superior Court ruled that a mixed-use project in Berkeley was not eligible for SB 35 streamlining. The court found that the project’s destruction of a shellmound asserted to be located on the site was tantamount to the demolition of an historic structure, making the project ineligible under SB 35. The court also found that the two-thirds residential requirement in SB 35 is intended to apply to the site on which the development project is located, rather than to the development project itself.
The primary changes to address these rulings and other key changes made by AB 831 and AB 168 include:
- requiring that a developer of an SB 35 project submit a notice of intent in the form of a preliminary application pursuant to last year’s SB 330, and providing that the development application must comply with objective standards in effect at the earlier of the notice of intent or the application;
- requiring that the local agency engage in scoping consultation with Native American tribes, which can render a project ineligible for SB 35 streamlining if an agreement with tribes regarding treatment of tribal cultural resources cannot be reached;
- clarifying that a development subject to the streamlined, ministerial approval process created by SB 35, and the site on which it is located, must be zoned for residential use or mixed-use development, and at least two-thirds of the square footage of the development (as opposed to the site) must be designated for residential use;
- requiring a local government to approve a development proponent’s proposed modification to an SB 35 project if the modification is consistent with the objective planning standards that were in effect when the original development application was submitted, provided that a local government may apply new standards if (i) the number of units or square footage increases by more than 15 percent, or (ii) number of units or square footage increases by more than five percent and the new standard is necessary to avoid a specific, adverse public health or safety impact; and
- prohibiting a local government from exercising its discretion over public improvements (including bike lanes, sidewalks, transit stops, driveways, streets, utilities, etc.) necessary to implement an SB 35 project in a manner that would inhibit, chill, or preclude the project, and requiring the local government to review such public improvement based upon the objective planning standards that were in effect when the original project application was submitted.
AB 2345 (Gonzalez) – AB 2345 makes certain changes to the state’s Density Bonus Law. Changes include:
- adds density bonuses of 38.75 to 50 percent for projects that provide 12 to 15 percent very low income units, 21 to 24 percent lower income units, or 41 to 44 percent moderate income units;
- reduces the percentage of lower income units required to qualify for additional incentives or concessions from 20 to 17 percent for the second incentive or concession and from 24 to 20 percent for the third incentive or concession; and
- reduces parking requirements from 2 to 1.5 per dwelling unit for two- and three-bedroom units and clarifies the income requirements to qualify for the 0.5 parking space maximum for projects near transit.
AB 2345 also requires that additional information on density bonuses be included in annual reports to the Department of Housing and Community Development.
AB 725 (Wicks) – AB 725 imposes new requirements for housing elements regarding the identification of land suitable to provide for the jurisdiction’s fair share of the regional housing need, starting January 1, 2022. Specifically, AB 725 requires metropolitan jurisdictions to allocate (i) at least 25 percent of the jurisdiction’s share of the regional housing need for moderate income housing to sites with zoning that allows at least four units of housing, but not more than 100 units per acre; and (ii) at least 25 percent of the jurisdiction’s share of the regional housing need for above-moderate income housing to sites with zoning that allows at least four units of housing. Existing law does not place such restrictions on the zoning for sites identified as suitable for moderate or above-moderate income housing.
AB 1561 (Garcia) – AB 1561 provides a statewide extension for certain housing entitlements to facilitate the recovery of the housing industry during the pandemic-induced recession and ongoing housing crisis. In particular, AB 1561 extends by 18 months the otherwise applicable time for the expiration, effectuation, or utilization of housing entitlements that were in effect on March 4, 2020 and are set to expire before December 31, 2021. The 18-month extension is calculated from the date the entitlements would otherwise expire. “Housing entitlement” is defined broadly to include legislative, adjudicative, or administrative approvals, permits, or other entitlements issued by a state or local agency. However, it explicitly excludes development agreements; tentative maps that are extended pursuant to the extension provisions of the Subdivision Map Act on or after March 4, 2020; SB 330 preliminary applications; and SB 35 applications. While AB 1561 does not preclude a city or county from independently granting entitlement extensions, it clarifies that it does not apply to any housing entitlement that a state or local agency extends by at least 18 months on or after March 4, 2020, but before January 1, 2021.
Additionally, AB 1561 provides other amendments, which include:
- authorizing the Department of Housing and Community Development to require a local government’s housing element to include an analysis of governmental constraints upon the development of housing for persons with a characteristic identified in the Unruh Civil Rights Act (sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, sexual orientation, citizenship, primary language, or immigration status); and
- extending the otherwise applicable timeframe for a Native American tribe to respond to a lead agency request for consultation pursuant to AB 52 by 30 days for any housing development project application completed between March 4, 2020, and December 31, 2021.
AB 1851 (Wicks) – AB 1851 reduces parking requirements for housing development projects that are located on one or more contiguous parcels that are owned by a religious institution, qualify as being near co-located religious-use parking, and qualify for a density bonus under the state’s Density Bonus Law. Among other things, this bill also allows the remaining religious-use parking spaces to count toward the parking required for the housing development project. The bill also prohibits a local agency from denying a proposed religious institution affiliated housing development project solely on the basis that the project will reduce the total number of parking spaces available at the place of worship, provided that the total reduction does not exceed 50 percent of existing spaces.
Although the 2020 legislative session was not a blockbuster year for housing supply legislative fixes, the California Legislature did give residential developers a few useful tools for permit streamlining and other relief. The pandemic was simply too much of a justifiable distraction for the legislation many of us expected or hoped to see. We anticipate that the Legislature will reconsider in the next legislative session some of the bills that did not cross the finish line this year. With the pandemic still raging in many regions of the state, however, it is far from certain the 2021 legislative session will be much different from the 2020 session.