Governor Newsom Signs Newsworthy Housing Legislation Addressing State’s Housing Supply Crisis
Governor Newsom Signs Newsworthy Housing Legislation
Addressing State’s Housing Supply Crisis
Late last week, Governor Newsom signed two housing bills that could be considered a fundamental shift away from single-family zoning in California: Senate Bills (SB) 9 and SB 10. Authored by Senators Atkins and Wiener, respectively, these bills will make it easier to increase density on properties zoned for single-family homes and properties located near transit. Although not a panacea for the state’s housing supply crisis, as some pundits have noted, this legislation is a further step in the state’s efforts to identify opportunities for increased housing supply, even if those opportunities upend traditional notions of land use planning and local government control.
SB 9 establishes a ministerial approval process for housing development projects containing no more than two residential units per parcel within a single-family residential zone, so long as the property does not have certain enumerated environmental sensitivities (e.g., fire risk, flooding, habitat, hazardous materials, historic resources, etc.) and subject to certain protections for existing rental and affordable units. SB 9 further establishes a ministerial approval process for parcel maps for “urban lot splits” that create no more than two parcels, subject to similar restrictions as well as an owner occupancy requirement. Together, these provisions could authorize up to four units per existing single-family lot.
The distinction between a ministerial approval and a discretionary approval is significant. Unlike a discretionary approval, a ministerial approval typically involves little governmental processing and does not trigger the need for environmental clearance under the California Environmental Quality Act (CEQA), which can be costly and time consuming. Nevertheless, SB 9 maintains some amount of local government control by authorizing the local government to review the proposed housing developments and lot splits to ensure they meet objective development standards, including building code requirements, provided that the imposition of these standards does not have the effect of physically precluding the construction of projects otherwise authorized by SB 9.
Two Homes On One Parcel
To be eligible for ministerial approval of two homes on a single-family zoned lot, a proposed development must meet the following requirements (many of which stem from SB 35 (2018), the predecessor of many recent housing streamlining bills):
- The development must be located on a parcel within a city or an urbanized area or urban cluster in a county;
- The parcel must not be prime farmland or farmland of statewide importance or zoned or designated for agricultural protection or preservation by a local ballot measure; wetlands; within a very high fire hazard severity zone (within some exceptions); a hazardous waste site; within a delineated earthquake fault zone; within a 100-year flood zone; within a regulatory floodway; identified for conservation in an adopted natural community conservation plan, habitat conservation plan, or other adopted natural resource protection plan; habitat for protected species; or under a conservation easement.
- The development would not require demolition or alteration of affordable housing, housing subject to rent control, or housing occupied by a tenant in the last three years;
- The development must not be a parcel on which an owner has withdrawn housing from rent under the Ellis Act within the last 15 years;
- The development must not include the demolition of more than 25 percent of existing exterior structural walls, unless a local ordinance allows more demolition or the site has not been occupied by a tenant in the past three years;
- The parcel must not be within a historic district or included on the State Historic Resources Inventory, or designated or listed as a city or county landmark or historic property or district pursuant to a city or county ordinance; and
- If the development creates a rental unit, it must be rented for a term that exceeds 30 days.
In addition to requiring that housing development projects for two units on a single-family lot must be approved ministerially, SB 9 allows qualifying urban lot splits to be approved ministerially pursuant to a parcel map. To qualify, the lot must meet several criteria, including many of the same criteria for constructing two units, described above. Additional criteria include:
- The lot split must not create more than two new parcels, where one of the parcels is no smaller than 40 percent of the area of the original parcel;
- The lot split must not create parcels smaller than 1,200 square feet except if a local agency adopts a smaller minimum lot size;
- No sequential lot splits on the same parcel and no lot split if the owner of the parcel being subdivided (or someone working in concert with that owner) has subdivided an adjacent parcel pursuant to SB 9;
- The lot split must conform to all applicable objective requirements of the Subdivision Map Act, except that there can be no requirement for right-of-way dedication or off-site improvements;
- The lot split must be limited to residential uses; and
- The applicant must live in one of the housing units as a principal residence for a minimum of three years, except if the applicant is a community land trust or qualified nonprofit corporation.
For SB 9 lot splits, a local agency can require (1) easements for public services and facilities and (2) that parcels have access to or adjoin the public right-of-way. But a local agency cannot require the correction of existing nonconforming zoning conditions.
SB 9 Proposals Must Meet Objective Standards Unless the Standards Would Be Inconsistent With SB 9’s Requirements
SB 9 permits a local agency to impose objective zoning, subdivision, and design review standards on an SB 9 proposal unless they would be inconsistent with SB 9’s requirements. For example, local jurisdictions cannot impose a standard that would physically preclude two units of at least 800 square feet. Additionally, no setback can be required for an existing structure or one constructed in the same footprint as an existing structure. Otherwise, the maximum setback that can be required from side and rear lot lines is four feet. A local agency does not have to permit an accessory dwelling unit or junior accessory dwelling unit on parcels that propose both two houses per lot and a lot split.
A local agency can require off-street parking of up to one space per unit except if the parcel is within one-half mile walking distance of either a high-quality transit corridor or a major transit stop or there is a car share vehicle located within one block of the parcel. In such cases, no off-street parking can be required.
While the Coastal Act still applies, a local agency is not required to hold public hearings for coastal development permit applications for a project that meets SB 9’s requirements.
Local Agencies Cannot Easily Deny An SB 9 Proposal
Under SB 9, a local agency can deny a proposed project or lot split only if a building official makes a written finding, based upon a preponderance of the evidence, that the proposal would have a specific, adverse impact on public health and safety or the physical environment and there is no feasible method to mitigate or avoid that impact. Similar findings are required under the Housing Accountability Act, and these findings make it difficult for local governments to deny residential projects, often helping projects facing NIMBY opposition to obtain approvals.
SB 10 authorizes local governments, including charter cities, to adopt an ordinance to zone any parcel for up to ten units of residential density per parcel, at a height specified in the ordinance, if the parcel is located in a “transit-rich area” or an “urban infill site” without triggering review of the rezoning under CEQA.
A transit-rich area is defined as a parcel within one-half mile of a major transit stop or on a high-quality bus corridor. An urban infill site is defined as a site with a general plan or zoning designation that permits residential or mixed use (with at least two thirds of the square footage of the development designated for residential use) in an area meeting certain Census Bureau definitions of urbanization that has urban uses developed on at least 75 percent of its perimeter.
A city or county can adopt an ordinance pursuant to SB 10 regardless of local restrictions on adopting zoning ordinances, including local initiatives, except where a parcel is located in a high or very high fire hazard severity zone according to the Department of Forestry and Fire Protection (with certain exceptions) or where a local initiative designates publicly owned land for open-space or park or recreational purposes. An ordinance under these provisions must be adopted before January 1, 2029, but can remain in effect after this date.
Under SB 10, a zoning ordinance must abide by specified requirements, including the following:
- It must clearly demarcate the areas that are subject to the ordinance;
- It must be consistent with the city or county’s obligation to affirmatively further fair housing, according to a finding by the legislative body;
- If it supersedes any zoning restriction established by local initiative, it must be adopted by a two-third vote of the members of the legislative body; and
- It must not reduce the density of any parcel subject to the ordinance, nor is the legislative body allowed to subsequently reduce the density of any parcel subject to the ordinance.
Notably, a project consisting of more than 10 units on parcel(s) zoned pursuant to an SB 10 ordinance cannot be approved ministerially or subject to a CEQA exemption, notwithstanding any other law allowing that (e.g., SB 9, SB 35, etc.). In sum, SB 10 facilitates local agencies implementing higher-density zoning, but projects in those zones still face the risks of the typical approval process.
While SB 9 and SB 10 received a lot of media attention, it is unclear how much housing they will produce. According to a study by the Terner Center for Housing Innovation at the University of California at Berkeley, after accounting for physical capacity and financial feasibility, SB 9 will enable new development on just 5.4 percent of current single-family parcels. Nonetheless, the Terner Center projected that SB 9 could enable the creation of approximately 700,000 new homes that would otherwise not be market feasible. SB 10, which requires a rezoning approval, likely will be most used by jurisdictions that already support transit-oriented development. Nevertheless, these bills are a step in the right direction of making it easier to construct housing in California. It remains to be seen how much backlash they will generate, including whether they become a talking point for supporters of a contemplated statewide initiative that proposes to allow local land use regulations to supersede conflicting state laws.