2023 California Legislation Update: A Continued Focus on Land Use Laws to Promote Housing Production
In recent years, California’s housing crisis has been the primary focus of land use legislation, with over 100 substantial housing-related land use bills enacted since 2016. The 2023 legislative session continued this trend, with Governor Gavin Newsom signing a package of 56 housing-related bills on October 11, 2023, most of which address land use issues.
The 2023 legislative session produced several major land use bills intended to streamline entitlement procedures to promote housing production. These include SB 4, which allows a religious institution or independent institution of higher education to build a housing development project on its property “by right” under certain circumstances. SB 423 extends the sunset date of SB 35 and makes numerous substantive changes to the law. AB 1633 extends the Housing Accountability Act to cover a local government’s refusal to adopt an exemption under the California Environmental Quality Act (“CEQA”) and its decision to require further study rather than certify an environmental impact report, adopt a negative declaration or approve other CEQA documents. AB 1287 amends the Density Bonus Law to allow density bonus projects to further increase the density bonus and to include moderate-income units in a rental project for additional density. Separate Client Alerts on these bills can be accessed at the following links: SB 4, SB 423 (Part I / Part II / Part III), AB 1633 and AB 1287.
This Client Alert examines the other important housing-related land use bills that were signed into law this year and are listed below.
The legislature’s efforts this year are notable for the wide range of areas that produced substantial legislation. We have selected the most significant bills to summarize, which are grouped in the following areas:
Density Bonus Law
SB 713: Density Bonus Law Preempts Any Local Ordinance Enacted by Initiative.
AB 323: Sale of Density Bonus Units to a Nonprofit Housing Organization.
Parking Requirements
AB 1317: Certain Residential Properties Must Unbundle Parking from the Price of Rent.
AB 894: Local Agencies Must Approve Shared Parking Agreements for Underutilized Parking.
Entitlement Streamlining
SB 684: Streamlined Approval Processes for Development Projects of 10 or Fewer Residential Units.
AB 835: State Fire Marshal to Research Standards for Single-Exit Multifamily Buildings.
CEQA
AB 1307: Noise Generated by Residential Project Occupants and Their Guests Is Not a Significant Impact.
SB 69: Expanded CEQA Noticing Requirements.
AB 1449: New CEQA Exemption for Certain Affordable Housing Projects.
AB 356: No Consideration of Aesthetic Effects for Specified Dilapidated Building Refurbishment Projects.
SB 91: CEQA Exemption for Conversion of Transient Structures to Supportive or Transitional Housing Made Permanent.
Surplus Land Act
SB 747 and AB 480: Amendments to Surplus Land Act.
AB 1734: Surplus Land Act Exemption for the City of Los Angeles.
SB 240: Surplus State Real Property and Affordable Housing for Formerly Incarcerated Individuals.
Enforcement and Litigation
SB 439: Special Motion to Strike Created for Challenges to 100% Affordable Housing Projects.
AB 821: Zoning Consistency For Non-Residential Projects.
AB 1114: Permitting After Entitlements.
AB 1485: Housing Element Enforcement.
Accessory Dwelling Units
AB 1033: Local Ordinances May Allow Separate Conveyance of Accessory Dwelling Units.
AB 976: Owner-Occupant Requirements are Prohibited.
AB 1332: Local Agencies Must Create an Accessory Dwelling Unit Preapproved Plan Program.
Adaptive Reuse
AB 1490: Adaptive Reuse for 100% Affordable Housing Projects.
AB 529: Prohousing Policy and State Building Standards for Adaptive Reuse.
Housing Replacement
AB 1218: Expansion of Prohibitions on Demolition of Protected Units.
These bills go into effect on January 1, 2024, except for AB 1307 (which took effect September 7, 2023) and SB 684 (which takes effect on July 1, 2024).
Density Bonus Law
SB 713 (Padilla): Density Bonus Law Preempts Any Local Ordinance Enacted by Initiative.
SB 713 amends the state Density Bonus Law’s definition of “development standards” to include any standard that is enacted by the local government’s electorate through an initiative or referendum. SB 713 confirms a technical assistance letter issued by the state Department of Housing and Community Development that the state Density Bonus Law applied to height limits in a local voter initiative (the San Diego Coastal Height Limit Overlay Zone). As a result of SB 713, the incentives, concessions and waivers in the Density Bonus Law will be available to supersede restrictive development standards in voter-approved initiatives or referenda.
AB 323 (Holden): Sale of Density Bonus Units to a Nonprofit Housing Organization.
AB 323 imposes additional requirements on the developer of for-sale housing in a project that uses the Density Bonus Law, specifying that the developer must sell the unit to an individual who meets the income requirements or, if the unit is not sold within 180 days after the project’s certificate of occupancy is issued, to a non-profit that meets certain requirements. The non-profit must be a tax-exempt affordable housing corporation based in California and whose board members live in California. In reselling the unit, the non-profit must retain a repurchase option that requires the purchaser to first offer the non-profit the opportunity to repurchase the property in the event of certain sales.
AB 323 also prohibits a developer who sells a unit constructed pursuant to a local inclusionary zoning ordinance (regardless of whether the Density Bonus Law was used) to anyone other than an individual meeting the income qualifications or a non-profit that meets the requirements described above. AB 323 prescribes civil penalties of up to $15,000 for each violation of this prohibition.
Parking Requirements
AB 1317 (Carrillo): Certain Residential Properties Must Unbundle Parking from the Price of Rent.
AB 1317 requires certain residential projects in specified counties to lease parking separately from the lease of the residential unit. This bill applies to residential property that (i) is issued a certificate of occupancy on or after January 1, 2025, (ii) consists of sixteen or more units, and (iii) is located in any of the following counties: Alameda, Fresno, Los Angeles, Riverside, Sacramento, San Bernardino, San Joaquin, Santa Clara, Shasta, or Ventura. Parking may not be included in any residential rental agreement and the property owner and tenant must execute a separate rental agreement or addendum for the parking space. If a tenant fails to pay the parking fee by the forty-fifth day after payment is due, the property owner may revoke the tenant’s right to lease that parking space. A tenant’s failure to pay the parking fee for a separately leased parking space, however, is not a basis for an unlawful detainer action. AB 1317 also provides tenants with a right of first refusal to parking spaces that become available on the property. If no parking spaces are available at the start of the term and new parking spaces are subsequently built or become available for the property, the tenant will have the right of first refusal to an available parking space. If there are excess parking spaces not leased by tenants, then the landlord may rent the parking space to off-site residential users on a month-to-month basis.
AB 1317 does not apply to one-hundred percent affordable housing projects, developments that receive low-income tax credits or are financed with tax-exempt bonds, and residential properties with individual garages that are functionally part of the unit, such as townhouses and row houses.
AB 894 (Friedman): Local Agencies Must Approve Shared Parking Agreements for Underutilized Parking.
AB 894 requires local agencies to ministerially approve shared parking agreements to meet parking requirements. A local agency must approve a shared parking agreement and allow the shared parking spaces to satisfy parking requirements in new or existing developments if the parking agreement (i) uses underutilized (20% or more unoccupied) parking, (ii) includes a parking analysis using peer-reviewed methodologies (e.g., ULI, ICSC, NPA), (iii) secures long-term provision of parking or allows for periodic review and approval, (iv) involves parking located on the same or contiguous parcels, and (v) does not require more than 2,000 feet of travel by the shortest walking route or, if more than 2,000 feet of travel is necessary, provides shuttles or other accommodations. Local agencies may also require proof of execution of the agreement as a condition for approval of the project. This bill provides additional requirements for new development using state or public funds.
Entitlement Streamlining
SB 684 (Caballero): Streamlined Approval Processes for Development Projects of 10 or Fewer Residential Units.
To encourage smaller developments and homeownership and to address “missing middle” housing, SB 684 creates a streamlined approval process for qualifying infill projects in urban areas that include 10 or fewer lots and 10 or fewer housing units. SB 684 creates a new subdivision process that requires the local government to consider the subdivision “without discretionary review or a hearing”. The proposed subdivision must be on land zoned for multifamily residential development, be no larger than five acres, be substantially surrounded by urban uses, and within an incorporated city or an urbanized area of a county with a population greater than 600,000 people. The housing units must be constructed on fee simple lots, be part of a common interest development or housing cooperative or owned by a community land trust. Proposed units cannot exceed 1,750 square feet. Projects developed under SB 684 are not required to include affordable units, pay prevailing wages or meet other construction labor standards.
In addition, if the proposed development is on a site identified in a jurisdiction’s housing element, it must result in at least as many units as projected for that site. If not identified in a housing element, the development must result in at least as many units as the underlying maximum allowable residential density.
Local governments have 60 days to approve an application and cannot impose objective standards that (i) preclude development at the prescribed density, (ii) are below specified floor area ratios, (iii) require setbacks between units or side and rear setbacks greater than those permitted under SB 9, or (iv) require enclosed or covered parking. Local governments can only deny an application by making a finding that the proposed development would have a specific, adverse impact on public health and safety, which is a difficult finding to make.
SB 684 goes into effect July 1, 2024.
AB 835 (Lee): State Fire Marshal to Research Standards for Single-Exit Multifamily Buildings.
Current state law requires that apartment buildings over three stories have two stairwells, or “means of egress.” Having two stairwells results in extra floor area dedicated to the second stairwell, effectively limiting the development potential of many infill lots and increasing construction costs. Originally adopted for fire safety, the requirement has become obsolete with modern building codes and fire safety requirements. Numerous other countries, and cities such as New York City and Seattle, currently permit construction of single-stair buildings above three stories (generally up to 10 stories). AB 835 requires that the State Fire Marshal research standards for single-exit, single stairway apartments in buildings above three stories and report on new building codes that could permit such structures.
AB 835 expires on January 1, 2028.
CEQA
AB 1307 (Wicks): Noise Generated by Residential Project Occupants and Their Guests Is Not a Significant Impact.
AB 1307 clarifies that the effects of noise generated by occupants of residential projects and their guests on human beings is not a significant environmental effect. This bill is a direct response to the recent ruling in Make UC A Good Neighbor v. Regents of University of California (2023) 88 Cal.App.5th 656, which invalidated an environmental impact report for a student housing project over this issue.
As an urgency statute, AB 1307 took effect on September 7, 2023.
SB 69 (Cortese): Expanded CEQA Noticing Requirements.
SB 69 adds a new filing requirement for notices of determination and notices of exemption. In addition to filing the notice with the county clerk for the county in which the project is located, the local agency must file the notice with the State Clearinghouse in the Office of Planning and Research to commence the applicable CEQA statute of limitations period. SB 69 also requires the county recorder and the State Clearinghouse to post the notices on their websites within 24 hours.
AB 1449 (Alvarez): New CEQA Exemption for Certain Affordable Housing Projects.
AB 1449 creates a new CEQA exemption for affordable housing projects meeting specific requirements, which include: (i) the project consists of residential uses or a mix of residential and nonresidential uses with at least two-thirds of the square footage of the project designated for residential use, (ii) all of the residential units within the project, exclusive of any manager’s units, are reserved for lower income households, (iii) compliance with specified construction labor standards (i.e., prevailing wages) incorporated from AB 2011, and (iv) compliance with various site eligibility requirements.
The bill’s site requirements include the project being located on a legal parcel in any of the following locations: (a) in a city where the city boundaries include some portion of either an urbanized area or urban cluster, or, if in an unincorporated area, the legal parcel or parcels are wholly within the boundaries of an urbanized area or urban cluster, (b) within one-half mile walking distance to either a high-quality transit corridor or a major transit stop (i.e., rail, bus rapid transit or ferry station, or the intersection of two bus routes with a frequency of service interval of 15 minutes or less during peak periods), (c) in a very low vehicle travel area (defined as an urbanized area, as designated by the United States Census Bureau, where the existing residential development generates vehicle miles traveled per capita that is below 85 percent of either regional vehicle miles traveled per capita or city vehicle miles traveled per capita), or (d) “proximal to six or more amenities” listed in the bill. Proximal to an amenity means (i) within one-half mile of a bus station or ferry terminal, and (ii) within one mile, or for a parcel in a rural area (as defined), within two miles, of a supermarket or grocery store, public park, community center, pharmacy or drug store, medical clinic or hospital, public library, or school that maintains a kindergarten or any of grades 1 to 12, inclusive. If the lead agency uses this exemption, it must file a notice of exemption with the county clerk of the county in which the project is located and the Office of Planning and Research.
AB 1449 expires on January 1, 2033.
AB 356 (Mathis): No Consideration of Aesthetic Effects for Specified Dilapidated Building Refurbishment Projects.
Existing law, until January 1, 2024, eliminates consideration of aesthetic effects under CEQA for specified projects involving the refurbishment, conversion, repurposing, or replacement of an existing abandoned, dilapidated, or vacant (for more than one year) building. AB 356 extends this law until January 1, 2029. If the lead agency determines that it is not required to evaluate the aesthetic effects of a project under this law, it must file a notice with the county clerk of the county in which the project is located and the Office of Planning and Research.
SB 91 (Umberg): CEQA Exemption for Conversion of Transient Structures to Supportive or Transitional Housing Made Permanent. Public Resources Code Section 21080.50, which exempts from CEQA projects related to the conversion of a structure with a certificate of occupancy as a motel, hotel, residential hotel, or hostel to supportive or transitional housing that meet certain requirements, was set to expire on January 1, 2025. SB 91 extends that exemption indefinitely.
Surplus Land Act
SB 747 (Caballero) and AB 480 (Ting): Amendments to Surplus Land Act.
The Surplus Land Act (“SLA”) establishes complex procedures and priorities governing a local government’s disposition of surplus property. The SLA requires all local agencies to offer surplus land for sale or lease to affordable housing developers and certain other entities before selling or leasing the land to any other individual or entity. SB 747 and AB 480 make numerous changes to the SLA, primarily by clarifying and expanding exemptions to the SLA.
The SLA permits local agencies to declare certain categories of surplus land as “exempt surplus land,” which provides for a more streamlined process by eliminating certain procedural steps. To dispose of exempt surplus land, a local agency must submit a resolution with written findings supporting the exemption to the state Department of Housing and Community Development (“HCD”) for review. After HCD concurs that the land qualifies as exempt surplus land, the local agency is free to sell or lease the land. By comparison, the disposition of non-exempt surplus land requires the local agency to submit documents to HCD twice during the process for its review and approval and requires additional public noticing.
SB 747 and AB 480 modify several categories of “exempt surplus land.” For example, the current exemption that is based on square footage or lot size has been expanded to exempt surplus land that is less than one-half acre in area. The exemption for leasing property has been expanded to cover leases for a term of less than 15 years, inclusive of extension or renewal options (increased from 5 years) and entered into after January 1, 2024 and leases for land on which no development or demolition will occur. The current exemption for land that a local agency transfers to another agency has also been expanded to allow for a local agency to transfer land to a third-party intermediary for future dedication to the receiving agency pursuant to a legally binding agreement. The exemption for property subject to valid legal restrictions that prohibit housing has been clarified to include: (i) existing constraints under ownership rights or contractual obligations that prevent the use of the property for housing, if they were agreed to prior to September 30, 2019; (ii) conservation or other easements or encumbrances that prevent housing development; (iii) existing leases or other obligations or restrictions agreed to prior to September 30, 2019; and (iv) restrictions imposed by a source of funding a local agency used to purchase a property under certain circumstances.
SB 747 and AB 480 also add new categories of exempt surplus land, including (i) land owned by a public-use airport on which residential uses are prohibited, (ii) land transferred to a community land trust under certain circumstances, and (iii) land developed for commercial or industrial uses or for the sole purpose of investment or generation of revenue if the agency meets several conditions, including adoption of a land use plan or policy that meets specified minimum residential designations.
The bills also create an exemption for dispositions that will result in a project with at least 25 percent of units restricted to low-income households, so long as the surplus land is sold through the local agency’s open, competitive solicitation process or an open, competitive bid. The development must be at least 10 acres and have the greater of (i) not less than 300 residential units, or (ii) the lesser of (a) the number of residential units equal to 10 times the number of acres of the surplus land, or (b) 10,000 residential units.
Similarly, the bills create a new category of exempt surplus land for mixed-use developments that (i) restrict at least 25 percent of the residential units to low-income households, (ii) have at least 50 percent of the floor area of new construction designated for residential use, and (iii) are not located in an urbanized area.
SB 747 and AB 480 also specify that for certain categories of exempt surplus land, the local agency may issue a 30-day notice of findings that is available for public comment instead of taking action at a public meeting.
Notably, AB 480 amends certain sections of the SLA that SB 747 does not address, including the section that governed those situations in which a local agency, as of September 30, 2019, has entered into an exclusive negotiating agreement or legally binding agreement to dispose of property. In those circumstances, the SLA as it existed on December 31, 2019 (i.e., before changes to the SLA enacted by the landmark bill AB 1486) applies to the disposition of the property provided the disposition is completed by December 31, 2027. Prior to AB 480, the date for completion was either December 31, 2022, or December 31, 2024, depending upon where the property was located.
Finally, a local agency must send out a Notice of Availability (NOA) before “participating in negotiations” to sell or lease surplus land. SB 747 and AB 480 clarify what “participating in negotiations” under the SLA means. In addition to the items that are currently excluded from “participating in negotiations,” the bills add the following exclusions: (i) issuing a request for proposals or qualifications to entities under certain circumstances, (ii) negotiating a lease, exclusive negotiating agreement, or option agreement under certain circumstances, and (iii) negotiating with a developer to determine if the local agency can satisfy disposal exemption requirements.
AB 1734 (Jones Sawyer): Surplus Land Act Exemption for the City of Los Angeles.
AB 1734 creates a special exemption from the Surplus Land Act for the City of Los Angeles where the disposition is for use as: (i) a low barrier navigation center, (ii) supportive housing, (iii) transitional housing for youth and young adults, or (iv) 100% affordable housing. To qualify for this exemption, the city’s housing element must comply with state law and the city must be designated prohousing by the state Department of Housing and Community Development. AB 1734 specifies that if Los Angeles disposes of land that qualifies under the criteria above and the development it not a public work in its entirety, prevailing wages must be paid and other labor standards satisfied. If the city disposes of land involving construction or rehabilitation of 40 or more housing units, the work must be subject to a project labor agreement. AB 1734 imposes civil penalties on the city for violations in the amount of 30% of the greater of the final sale price or the fair market value of the land in the case of a sale for the first violation, which is increased to 50% for subsequent violations.
AB 1734 sunsets on January 1, 2034.
SB 240 (Ochoa Bogh): Surplus State Real Property and Affordable Housing for Formerly Incarcerated Individuals.
Disposition of surplus land owned by the State of California, although not covered by the SLA, has its own statutory procedures and requirements. Currently, prior to disposing of state-owned property to a private entity or individual, the state Department of General Services (“DGS”) must first offer the property to “potential priority buyers.” “Potential priority buyers” are local agencies and nonprofit affordable housing sponsors that intend to use the property for open space, public parks, affordable housing projects, or local government-owned facilities. SB 240 adds an additional category to the current list of “potential priority buyers” to include local agencies and nonprofit affordable housing sponsors that intend to utilize surplus property to house formerly incarcerated individuals.
“Potential priority buyers” must notify DGS of their interest in surplus state property within 90 days of DGS posting availability of the property on its website. In its notification to DGS, the “potential priority buyer” must demonstrate, to the satisfaction of DGS, that the property, or a portion thereof, will be used for one of the stated purposes. If title is transferred from the state to an agency or nonprofit for housing formerly incarcerated individuals, a regulatory agreement must be recorded on the property mandating continuous use for that purpose for at least 40 years.
If more than one public agency expresses interest in the property, priority must be given to the public agency that intends to use the surplus land for affordable housing or housing for formerly incarcerated individuals. If the property is not transferred for those purposes, the priority will be given to the local agency that intends to use the property for open space, public parks, or development of local government-owned facilities. If more than one local agency requests to use the property for affordable housing or to house formerly incarcerated individuals, DGS must transfer the property to the local agency offering the greatest number of units.
If the surplus property is not sold to a “potential priority buyer” within 60 days of authorization of the sale, DGS is authorized to proceed with a sale to private entities or individuals. If no local agency or nonprofit affordable housing sponsor is interested in the property, the disposal of the surplus property to private entities or individuals must be completed through a public bidding process designed to obtain the highest, most certain return for the state from a responsible bidder.
SB 240 also creates a CEQA exemption for the development of surplus land by a local agency or nonprofit affordable housing sponsor for an affordable housing project acquired pursuant to this law.
Enforcement and Litigation
SB 439 (Skinner): Special Motion to Strike Created for Challenges to 100% Affordable Housing Projects. SB 439 creates a new Code of Civil Procedure section that authorizes a developer defending a lawsuit to file a special motion to strike all or a part of any lawsuit, including one filed under CEQA, that challenges a “priority housing development project,” which is defined as a development in which 100 percent of the units, exclusive of any manager’s units, will be reserved for lower income households for at least 55 years. To survive the motion, the plaintiff must establish that there is a “probability that the plaintiff will prevail on the claim.” If the developer’s motion to strike is successful, it will be entitled to recover attorneys’ fees and costs.
AB 821 (Grayson): Zoning Consistency For Non-Residential Projects.
Government Code Section 65860 requires consistency between a local agency’s zoning ordinance and its general plan and authorizes a resident or property owner to file a lawsuit to enforce such consistency. In most instances, however, practical considerations make the litigation remedy available to developers a non-starter. As a result, local agencies could often ignore the consistency “requirements” of state law.
In 2018, the Legislature amended Housing the Accountability Act (“HAA”) to address this inconsistency situation for “housing development projects,” which include mixed-use projects where at least two-thirds of the project’s square footage consists of residential use. Under the HAA, subject to certain requirements, a proposed “housing development project” may not be denied on the grounds that the property’s zoning is inconsistent with the local agency’s general plan, as long as the project is consistent with the “objective general plan standards and criteria.”
AB 821 provides, in limited circumstances, protection against zoning inconsistency to development applications for projects that are not covered by the HAA. Those include commercial, industrial, and retail projects, as well as housing projects that do not fall within the HAA’s definition of a “housing development project.” For example, with AB 821, a mixed-use project where less than two-thirds of the project’s square footage consists of residential use will get the benefit of not always requiring strict consistency between the general plan and zoning.
The limited circumstances under which AB 821 applies are those where (i) a general plan amendment makes a property’s zoning inconsistent with the general plan and (ii) a development application is received that is consistent with the general plan but not the zoning. In those cases, the local agency is required to either (i) amend the zoning to be consistent with the general plan within 180 days of the filing of the development application, or (ii) process the application using the objective standards of the general plan, but not those of the inconsistent zoning. With the second option, the objective general plan standards must be applied to allow density as proposed by the application, provided that density is consistent with the objective general plan standards. AB 821 specifically applies to charter cities.
AB 1114 (Haney): Permitting After Entitlements.
In 2022, the legislature enacted timelines and procedures that cover local government approval of building permits and other permits and approvals needed after the entitlement process is complete. “Postentitlement phase permits” are defined in Section 65913.3(j)(3) and consist of nondiscretionary permits and review procedures that (i) are needed after the entitlement process, (ii) are required or issued by the local agency, and (iii) relate to the construction of projects that are at least two-thirds residential.
For the most part, AB 1114 tightens the procedural handling of the local agency review of applications for postentitlement phase permits. It also provides, among other things, that once an application is determined to be complete (i.e., it contains all the information required on a list posted by the local agency at the time the application is submitted), neither appeals nor additional hearings are allowed. Permits for minor and standard excavation, grading, and off-site improvements continue to be included within the definition of postentitlement phase permits, with the local agency continuing to be allowed to “identify” the standard for designating permits as “minor” or “standard.” Importantly, AB 1114 also clarifies that postentitlement phase building permits also include all building permits and other permits issued under either the California Building Standards Code (Title 24 of the California Code of Regulations) or any applicable local building code for the construction, demolition, or alteration of buildings, whether discretionary or nondiscretionary.
AB 1485 (Haney): Housing Element Enforcement.
Under California’s Code of Civil Procedure, a court may allow a “nonparty” to an action to join in that action (“intervene”) if the nonparty can show that it has either (i) an unconditional right to intervene, or (ii) an interest in the action that is not adequately represented by the existing parties. AB 1485 grants the state Department of Housing and Community Development (“HCD”) and the Attorney General the “unconditional right” to intervene in any action brought by any party to enforce a wide array of state housing laws listed under Government Code Section 65585(j), including the Housing Element Law, Density Bonus Law, the Housing Accountability Act, and the Housing Crisis Act. The practical effect of AB 1485 is that if, for example, a developer brought an action against a local agency to enforce the Housing Accountability Act, the court would be required to allow HCD and/or the Attorney General to intervene to support the developer in that action without demonstrating that they had an interest in the case that the developer could not adequately represent.
Accessory Dwelling Units
AB 1033 (Ting): Local Ordinances May Allow Separate Conveyance of Accessory Dwelling Units.
AB 1033 permits local agencies to adopt an ordinance that allows for the separate conveyance of the primary dwelling unit and an accessory dwelling unit (ADU) as condominiums. A local ordinance must require (i) the conveyance to comply with the Davis-Stirling Common Interest Development Act, the Subdivision Map Act, and any objective requirements of a local subdivision ordinance, (ii) recordation of the condominium plan, (iii) safety inspection of the ADU, (iv) consent of all lienholders, which must be recorded, (v) consumer protection notices, (vi) utility provider notification, and (vii) if the ADU is located within an existing homeowners association, approval of the association. A local ordinance may also require a new or separate utility connection for the ADU.
AB 976 (Ting): Owner-Occupant Requirements are Prohibited.
This bill prohibits local agencies from establishing owner-occupant requirements (of either the primary dwelling unit or accessory dwelling unit) for ADU permit applications. The bill also allows local agencies to require that the property be rented for a term of 30 days or longer, thereby prohibiting short-term rentals of ADUs.
AB 1332 (Carrillo): Local Agencies Must Create an Accessory Dwelling Unit Preapproved Plan Program.
To encourage ADU development, AB 1332 requires all local agencies to develop a program for preapproved ADU plans by January 1, 2025. This bill allows individuals and organizations to submit plans for preapproval and the local agency must approve or deny the plan pursuant to the ADU standards established by the state ADU law, Government Code Section 65852.2. Preapproved ADU plans must be posted on the local agency’s website, effectively creating a catalog of preapproved ADU plans for residents interested in building an ADU to choose from. Local agencies may also add ADU plans to the program that was developed by the local agency itself and plans that were preapproved by other local agencies.
This bill also provides that a detached ADU plan that (i) has been preapproved by the local agency’s program, or (ii) is identical to a plan used in an application for a detached ADU approved by the local agency within the current triennial California Building Standards Code rulemaking cycle is subject to an expedited ministerial application approval process. The local agency must approve or deny the application within 30 days – half the time required under Government Code Section 65852.2.
Adaptive Reuse
AB 1490 (Lee): Adaptive Reuse for 100% Affordable Housing Projects.
AB 1490 requires a local government to allow an “extremely affordable adaptive reuse project” that meets certain qualifications, even if the use is inconsistent with the local agency’s general plan, specific plan, zoning ordinance, or other regulations. Generally, an adaptive reuse project converts an existing commercial building to multifamily residential use. An “extremely affordable housing project” is defined as a project that meets the following criteria: (i) it is a housing development project (i.e., it consists of residential units only, mixed-use with at least two-thirds of the floor area designated for residential use, or transitional or supportive housing), (ii) it involves the retrofitting and repurposing of a residential building or commercial building that currently allows temporary dwelling or occupancy (i.e., hotels and motels), (iii) the development will be entirely within the envelope of the existing building, and (iv) it is 100% affordable (except for any managers’ units) to low-income households, with at least 50% of the units dedicated to very-low income households.
The project must also meet certain site-related requirements. The project (i) must be located on an infill parcel, (ii) cannot be on a site or adjoined to any site where more than one-third of the square footage on the site is dedicated to industrial uses, (iii) cannot eliminate existing open space, and (iv) for developments of 50 units or more, there must be onsite management services. An infill parcel must have at least 75 percent of the perimeter of the site adjoining parcels that are developed with urban uses and the parcel must be within one-half mile of a major transit stop.
A project that meets all these requirements will be an “allowable use” notwithstanding any conflict with the local agency’s general plan, specific plan, zoning ordinance, or other regulations. Furthermore, local agencies may not “impose or require the curing” of any of the following zoning standards: (i) maximum density, (ii) maximum floor area ratio, (iii) any requirement to add additional parking, and (iv) any requirement to add additional open space. A local agency may apply objective design standards so long as the design standards do not affect the foregoing zoning standards.
AB 1490 provides that a project that meets its requirements will, for purposes of the Housing Accountability Act (the “HAA”), be deemed to be compliant with “an applicable plan, program, policy, ordinance, standard, requirement, or other similar provision,” and therefore eligible for the benefits of the HAA.
AB 1490 requires the local agency to provide a written determination as to whether the project conflicts with objective planning standards and objective design review standards (i) within 60 days or less if the development contains 150 or fewer housing units, or (ii) within 90 days or less if the development contains more than 150 units. If the local agency fails to respond within these timeframes, the application will be deemed to be in compliance with the applicable development standards and requirements.
AB 529 (Gabriel): Prohousing Policy and State Building Standards for Adaptive Reuse.
Currently, a jurisdiction that has been designated as “prohousing” can receive additional points and other preferences in the scoring of competitive housing, community development, and infrastructure programs. Under existing law, “prohousing local policy” is a local policy that facilitates the planning, approval, or construction of housing, which may include local financial incentives for housing, reduced parking requirements for sites that are zoned for residential development, the adoption of zoning allowing for use by right for residential and mixed-use development and numerous other policies. AB 529 expands that definition to include the facilitation of the conversion or redevelopment of commercial properties into housing, including through the adoption of an adaptive reuse ordinance. Additionally, AB 529 requires HCD to create a working group that identifies challenges and opportunities to help support adaptive reuse projects, which may include proposing amendments to state building standards.
Housing Replacement
AB 1218 (Lowenthal): Expansion of Prohibitions on Demolition of Protected Units.
The Housing Crisis Act of 2019, among other things, prohibits certain cities or counties from approving a housing development project (as defined) that will require the demolition of occupied or vacant protected units, unless specified conditions are met, including replacement of the protected units. AB 1218 expands this prohibition to the approval of non-residential projects (i.e., commercial projects) that (i) will require the demolition of occupied or vacant protected units, or (ii) are located on a site where protected units were demolished in the previous five years, unless the project will replace all existing protected units and protected units demolished on or after January 1, 2020. AB 1218 requires that the development project must ensure that the replacement housing is developed prior to or concurrently with the development project and may: (i) replace protected units offsite within the same jurisdiction as the project site, and (ii) contract with another entity to develop the required replacement housing. Industrial projects that meet the following requirements are not subject to the replacement obligations: the project must be entirely in a zone that does not allow residential uses and the existing residential units must be nonconforming uses.
Please contact any of the authors of this Client Alert if you would like further information on these bills.