Governor Signs Long-Awaited Affordable Housing on Faith and Higher Education Lands Act of 2023

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After several legislative fits-and-starts over the past few years, the California Legislature finally came to consensus on Senate Bill 4 (SB 4), which many had referred to as the “Yes In God’s Backyard” or “YIGBY” bill, and the Governor signed SB 4 on October 11, 2023.  SB 4 requires ministerial approval (approval without discretionary permits or review under the California Environmental Quality Act) of certain development applications for 100 percent affordable housing on land owned by an independent institution of higher education or a religious institution.  In effect, SB 4 streamlines the building process for faith-based institutions and certain colleges by providing a process that allows them to build qualifying housing projects regardless of zoning restrictions if certain requirements are satisfied.

To be eligible for streamlining under SB 4, the developer, project, and site must meet numerous criteria.

Developer.  Although the land must be owned by a religious institution or independent institution of higher education, the applicant must be a “qualified developer,” which includes:

  • Local public agencies such as cities, counties, housing authorities, and other public entities authorized to develop or operate affordable housing;
  • A nonprofit corporation, a limited partnership in which a managing general partner is a nonprofit corporation, or a limited liability company in which a managing member is a nonprofit corporation which, at the time the application is submitted, owns or manages property that has a welfare exemption under the state tax code;
  • A developer that contracts with a nonprofit corporation that has received a welfare exemption under the state tax code for properties intended to be sold to low-income families with a zero-interest rate loan; or
  • A developer that the religious institution or independent institution of education has contracted with before to construct housing or other improvements to real property.

Project.  In addition to being developed by a qualified developer, the project must meet the following criteria:

  • Affordability.  100 percent of the units, exclusive of the manager unit(s), must be affordable to lower-income households, except that up to 20 percent of the units can be affordable to moderate-income households and 5 percent of units can be for staff of the institution owning the land.
  • Use.  In addition to residential uses, the following ancillary uses are permitted:
    • In a single-family residential zone, childcare centers and facilities operated by community-based organizations for the provision of recreational, social, or educational services for use by the residents of the development and members of the local community in which the development is located; and
    • In all other zones, the development may include commercial uses that are permitted without a conditional use permit or planned unit development permit;

Further, any religious institutional use, or any use that was previously existing and legally permitted by the city or county on the site, can remain or be accommodated in the project if the following criteria are met:

    • The total square footage of nonresidential space on the site does not exceed the amount previously existing or permitted in a conditional use permit;
    • The total parking requirement for nonresidential space on the site does not exceed the lesser of the amount existing or of the amount required by a conditional use permit; and
    • The uses abide by the same operational conditions as contained in an applicable conditional use permit.
  • Density and Height.  The following density and height standards apply to SB 4 projects:
    • If the project is in a zone that allows residential uses, including in single-family residential zones, the allowed density is the density appropriate to accommodate housing for lower income households under Housing Element Law and the height limit is one story above the maximum height otherwise applicable to the parcel.
    • If the local government allows for greater residential density on the project site or on an adjoining parcel, than stated above, the greater density or building height applies.
    • A project in a zone that allows residential uses is also eligible for a density bonus, incentives, or concessions, or waivers or reductions of development standards and parking ratios, pursuant to the State Density Bonus Law.
    • If the project is in a zone that does not allow residential uses, the project is allowed a density of 40 units per acre and a height of one story above the maximum height otherwise applicable to the parcel, except that if local standards allow for greater residential density or heights on the project site or adjacent parcels, the greater standard applies.
  • Parking.  Except if the project site is within one-half mile of transit or there is a car share vehicle within one block of the site or state or local law allows less, the project must provide off-street parking of up to one space per unit (unless applicable state or local law provides for a lower standard).
  • Other Development Standards.  The project must comply with the local jurisdiction’s objective standards not in conflict with SB 4.  Notably, if the project is consistent with all objective subdivision standards, an application for a subdivision map also is exempt from the California Environmental Quality Act.
  • Replacement Units.  If the project would demolish existing residential units or is located on a site where residential units have been demolished in the last five years, then the project must meet the replacement unit requirements in Government Code section 66300, subdivision (d).
  • Prevailing Wage.  SB4 requires prevailing wages for projects over 10 units and requires specified labor standards on projects over 50 units.  Specifically, for projects over 50 units, SB 4 incorporates the identical prevailing wage and other labor standards as AB 2011.  (See our client alert on AB 2011, available here.)
  • Safety Features.  The developer of an SB4 project must conduct any hazardous materials remediation necessary to reach a level of insignificance and include MERV 13 filters in the regularly occupied areas of buildings within 500 feet of a freeway.
  • Tribal Consultation.  For a vacant site, the developer of an SB4 project must conduct tribal consultation and mitigate any potential adverse impacts to tribal cultural resources (if the project would adversely affect tribal cultural resources and the effect cannot be mitigated, then the project cannot use SB 4).  

Site.  The site must be a legal parcel and meet the following criteria:

  • Owned by the institution on or before January 1, 2024;
  • In a city that includes some portion of either an urbanized area or urban cluster, or, for unincorporated areas, wholly within the boundaries of an urbanized area or urban cluster;
  • Adjoin parcels developed with urban uses on at least 75 percent of its perimeter; and
  • Not be any of the following:
    • Located on a parcel meeting any of the criteria in Government Code Section 65913.4, subdivision (a)(6)(B) through (a)(6)(K);
    • Located on a parcel where any of the following apply:
      • The development would require the demolition of deed-restricted affordable housing, housing subject to local rent or price control, or housing that has been occupied by tenants within the past 10 years;
      • The site was previously used for housing that was occupied by tenants that was demolished within 10 years before the development proponent submits an application under this section;
      • The development would require the demolition of a historic structure that was placed on a national, state, or local historic register; or
      • The property contains housing units that are occupied by tenants, and units at the property are, or were, subsequently offered for sale to the general public by the subdivider or subsequent owner of the property.
    • Adjoined to a site where more than one-third of the square footage on that site is dedicated to light industrial use;
    • Located within 1,200 feet of a site that is used for heavy industry or the most recent permitted use was a heavy industrial use; or
    • Located within 1,600 feet of a site that has a Title V industrial use or where the most recent permitted use was a Title V industrial use, except that for a site where multifamily housing is not an existing permitted use, the housing units on the development site cannot be located within 3,200 feet of a facility that actively extracts or refines oil or natural gas.

SB 4 also includes requirements for a local agency’s action on an SB 4 application.  Among other requirements, a local agency must timely inform an applicant in writing, with an explanation, if a project conflicts with any objective planning standards.  If an agency fails to timely issue such documentation, the project is deemed to satisfy the required objective planning standards.  A local agency can conduct design review of an SB 4 project, but such review must be focused on assessing compliance with the criteria for streamlined, ministerial review of projects and objective design standards in place when the application was submitted.  Additionally, such design review must be conducted quickly—within 90 days for projects with 150 or fewer units and 180 days for projects with more than 150 units.  Finally, SB 4 imports certain requirements from Government Code section 65913.4, including provisions regarding the life of approvals, project modifications, subsequent permits, and necessary public improvements.

The law sunsets on January 1, 2036.

Developers should be aware that there are several constraints to the use of SB 4.  For example, independent institutions of higher education for purposes of SB 4 do not include public higher educational institutions like the California State University, University of California, and California Community College systems, which educate most college students graduating from California high schools.[1]  In addition, even with a streamlined entitlement process there are significant barriers to scaling the development of affordable housing on these sites.[2]  One notable study found that roughly 171,000 acres of land throughout the state would be eligible for development under SB 4, but development on that land could be hampered by the complexity of obtaining financing for affordable housing and the lack of technical expertise in developing housing.[3] 

Perhaps more importantly, the lengthy requirements for both a project site and the project itself likely will limit the utility of SB 4.  In particular, the requirement to pay prevailing wage may be burdensome for non-profit institutions that may not have large budgets for housing projects.  Only time will tell whether SB 4 is a useful tool in the fight to increase housing production or just another well-intentioned but convoluted law that ultimately fails to produce a meaningful amount of affordable housing. 

Please feel free to contact any of the authors if this client alert if you would like further information on how to navigate SB4’s opportunities and constraints.

[1] Public Policy Institute of California, Geography of College Enrollment in California (Sept. 21, 2021). Available at https://www.ppic.org/blog/geography-of-college-enrollment-in-california/.  Housing on public university property is addressed by SB 886, another bill sponsored by Senator Wiener and signed into law this legislative session.

[2] Terner Center for Housing Innovation, The Housing Potential for Land Owned by Faith-Based Organizations and Colleges, Website Summary (Aug. 30, 2023). Available at https://ternercenter.berkeley.edu/blog/faith-based-and-college-land-housing/.

[3] Terner Center for Housing Innovation, The Housing Potential for Land Owned by Faith-Based Organizations and Colleges (Aug. 30, 2023), pp. 10–11. Available at https://ternercenter.berkeley.edu/wp-content/uploads/2023/08/Faith-Based-and-College-Lands-Housing-2023-.pdf.

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