New State Housing Supply Legislation on the Horizon:
Déjà Vu All Over Again?
Despite a promising start, last year’s state legislative session was a relative bust for housing legislation as the Legislature justifiably focused on the pandemic in 2020. Although we expect the Legislature will continue to grapple with legislative relief measures to address COVID concerns, there is some potentially promising housing supply legislation on the horizon for the 2021-2022 session.
Below is a summary of recently introduced state housing supply legislation to watch this session. Perhaps not surprisingly, the theme for this year’s housing legislation seems to be, “If at first you don’t succeed, try, try again.”
SB 6 (Caballero, Eggman, and Rubio): SB 6 is a reintroduction of last year’s proposed Neighborhood Homes Act (SB 1385, Caballero). SB 6, also referred to as the Neighborhood Homes Act, would provide that housing development projects are an allowable use on a “neighborhood lot,” which is defined as a parcel within an office or retail commercial zone that is not adjacent to an industrial use. Minimum densities would be 15 units per acre for incorporated cities within nonmetropolitan counties and for nonmetropolitan counties that have micropolitan areas, 10 units per acre for unincorporated areas in other nonmetropolitan counties, 20 units per acre for suburban jurisdictions, and 30 units per acre for jurisdictions in metropolitan counties. Projects also would have to have a minimum percentage of affordable housing, which the bill does not yet specify. Housing development projects would remain otherwise subject to local zoning, parking, design, and other ordinances and to state laws such as the Housing Accountability Act, California Environmental Quality Act (CEQA), prevailing wage law, and other housing, environmental review and labor law requirements. SB 6 also establishes requirements for housing development projects on neighborhood lots to obtain streamlined, ministerial processing pursuant to SB 35.
SB 7 (Atkins): SB 7 is a reintroduction of last year’s SB 995 (Atkins). This bill would reenact with certain changes (including changes to greenhouse gas reduction and labor requirements) the Jobs and Economic Improvement Through Environmental Leadership Act of 2011, which provides for streamlined judicial review of “environmental leadership development projects.” SB 7 would authorize the Governor until January 1, 2024, to certify projects that meet specified requirements for streamlining benefits shortening CEQA litigation to 270 business days from the filing of the administrative record, to the extent feasible. Notably, SB 7 would add a new category of qualifying housing development projects representing investment of at least $15 million (as compared to the required $100 million investment for other qualifying projects) and meeting certain conditions as projects eligible for certification. In addition, SB7 would streamline environmental review under CEQA by requiring lead agencies to prepare a master environmental impact report (EIR) for a general plan, plan amendment, plan element, or specific plan for housing projects where the state has provided funding for the preparation of the master EIR. The bill would allow for limited review of proposed subsequent housing projects that are described in the master EIR if the use of the master EIR is consistent with CEQA.
SB 8 (Skinner): As introduced, SB 8 makes only one typographical change to the definition of “development standard” for purposes of the Density Bonus Law. SB 8 most likely is a “spot bill” awaiting more substantive amendments later in the session. SB 8 could serve as the vehicle for a reintroduction of last year’s SB 1085 (Skinner), which would have made a variety of changes to the Density Bonus Law, including for example:
- requiring a city or county to grant one incentive or concession for a student housing development project that will include at least 20 percent of the total units for lower income students;
- allowing a parking reduction for housing developments that include at least 40 percent moderate income for-sale housing and are within one-half mile of a major transit stop; and
- removing a specified adverse impact on the physical environment from the list of reasons that a city or county may deny a concession or incentive or refuse to waive or reduce a development standard that physically precludes the construction of a development that meets the density bonus criteria.
SB 9 (Atkins): SB 9 is a reintroduction of last year’s SB 1120 (Atkins). Like SB 1120, SB 9 would make approval of qualifying housing developments containing two residential units on a parcel within a single-family residential zone in an urban area ministerial, without discretionary review or hearing. In order to qualify, the housing development would have to meet certain criteria, including that it (i) would not require demolition or alteration of housing that is subject to a recorded covenant, ordinance, or law that restricts rents for affordable housing; (ii) does not allow for the demolition of more than 25 percent of the existing exterior structural walls, except as provided; and (iii) is not located within a historic district, is not included on the State Historic Resources Inventory, or is not within a site that is legally designated or listed as a city or county landmark or historic property or district. This bill also would require a city or county to ministerially approve a parcel map or tentative and final map for an urban lot split that meets certain requirements. Jurisdictions still could impose objective zoning, subdivision, and design review standards, provided that these standards would not physically preclude the construction of up to two units. By specifying these housing development proposals and urban lot splits as ministerial, approval of these actions would be exempt from CEQA review.
SB 10 (Wiener): SB 10 (Wiener) is a reintroduction of last year’s SB 902 (Wiener). This bill would authorize a local government to pass an ordinance to zone any parcel for up to 10 units of residential density per parcel, at a height specified in the ordinance, if the parcel is located in a transit-rich area, a jobs-rich area, or an urban infill site, as those terms are defined. This authorization would apply notwithstanding any local restrictions, including restrictions enacted by a local voter initiative, that limit the legislative body’s ability to adopt zoning ordinances. The bill would require the Department of Housing and Community Development, in consultation with the Office of Planning and Research, to determine jobs-rich areas and publish a map of those areas every five years, commencing January 1, 2022, based on specified criteria. The bill would preclude ministerial or by right approval of any residential or mixed-use residential projects consisting of more than 10 new residential units on one or more parcels rezoned pursuant to the authority granted under SB 10.
SB 15 (Portantino): SB 15 (Portantino) is a reintroduction of last year’s SB 1299 (Portantino). This bill requires the Department of Housing and Community Development to administer a program to provide grants to local governments that rezone idle sites used for a big box retailer or a commercial shopping center to allow the development of workforce housing as a use by right. The bill defines “idle” to mean at least 80 percent of the leased or rentable square footage of the big box retailer or commercial shopping center site is not occupied for at least a 12-month calendar period. The local government would have to rezone the sites to permit workforce housing and approve workforce housing projects that comply with specified labor requirements. The grants generally would be calculated as seven times the average amount of annual sales tax and use tax revenue generated by the idle sites in the seven years prior to application.
The California Legislature remains motivated to address the state’s housing supply and affordability crisis, yet is justifiably distracted by the lingering pandemic and events at the national level. With so many other pressing concerns, it remains to be seen whether the state Legislature can muster the necessary political support to pass meaningful legislation to address housing needs.