The Legislature Gives the SB 35 Streamlined and Ministerial Approval Process a Boost

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The Legislature Gives the SB 35 Streamlined and Ministerial Approval Process a Boost

Hailed by many as a landmark housing bill, the State Legislature enacted Senate Bill (SB) 35 in 2018 to help address the State’s housing crisis by facilitating the approval of qualified housing development projects.  SB 35 provides a streamlined, ministerial approval process for housing development projects that meet specified requirements.  

Having already received a boost from the court system earlier this year (see our prior post “SB 35 Works, Increasing Affordable Housing Production,” dated May 26, 2021), SB 35 recently received another boost, this time from the legislature, when Governor Newsom signed Assembly Bill (AB) 1174 into immediate effect (as it was enacted as an urgency measure).  On the same day, the Governor also signed SB 8, 9, and 10 (see our prior post on SB 8 here and on SB 9 and 10 here), also aimed at easing the housing supply crisis.  Together with a recent funding commitment to fight homelessness and add housing, these bills evidence the legislature’s strong support for housing.

AB 1174 enacts mostly technical changes that clarify processes that follow an SB 35 approval (e.g., approval effective period, subsequent modifications and permits, etc.).  In certain instances, AB 1174 applies retroactively to approved SB 35 projects.  The most noteworthy provisions of AB 1174 are summarized below. 

SB 35 Project Approval Effective Period

AB 1174 makes the following clarifications and revisions regarding the effective period of SB 35 approvals:

  • Clarifies that, in order for an SB 35 approval to be protected from expiration indefinitely, the project must include both (a) public investment in housing affordability, beyond tax credits, and (b) at least 50 percent of the units affordable to lower income households.  Further, clarifies that, for projects that do not meet both of the above criteria, an SB 35 approval remains valid for three years from the date of the final action on the approval. 
  • Revises the provision of SB 35 requiring commencement of vertical construction for an approval to remain valid to instead require only that construction activity, including demolition and grading activity, on the development site has begun.
  • Provides that if the development proponent requests a modification to a development that has been approved pursuant to SB 35, then the time during which the approval will remain valid is extended for the number of days between the submittal of the modification request and the date of its final approval, plus an additional 180 days to allow time to obtain a building permit.  If litigation is filed relating to the modification request, the time is further extended during the pendency of the litigation.  However, these required extensions apply only to the first request for a modification submitted by the development proponent.
  • Provides that these amendments apply retroactively to developments approved prior to January 1, 2022.

Modifications to SB 35 Approved Projects

Except in certain enumerated situations, when a project proponent with an SB 35-approved project requests a modification prior to the issuance of the final building permit, a local government can apply only the objective planning standards in effect when the original SB 35 application was submitted, unless the modification changes the total square footage or number of units by 15 percent or more (or 5 percent or more if the application of the objective standard is necessary to avoid a significant, adverse health and safety impact).  

AB 1174 clarifies the situations in which the local government can apply updated objective standards as follows:

  • Clarifies that underground space is not included in the calculation of the square footage for purposes of determining whether a construction change of 15 percent (or five percent, if applicable) or more has occurred.
  • Allows updated objective building standards contained in the California Building Standards Code to be applied only to modification applications submitted prior to the first building permit application rather than to all modifications.  This amendment applies retroactively to modifications submitted prior to January 1, 2022.
  • Requires a local government, unless agreed otherwise by the applicant, to consider an application for a subsequent permit (e.g., demolition, grading, encroachment, and building permit and final maps) based only upon the objective standards in state or local laws that were in effect when the original development application was submitted.  This amendment applies retroactively to subsequent permit applications submitted prior to January 1, 2022.

Affordable Rent for the Vallco Project

AB 1174 also expands the definition of “affordable rent” solely for SB 35 projects submitted prior to January 1, 2019, that include 500 or more units with 50 percent of those units set aside as specified affordable income levels.  This amendment likely applies only to one SB 35 project—the 2,402-unit project approved for the former Vallco Fashion Mall site in Cupertino (see our prior post “Santa Clara County Trial Court Upholds Another Housing Project Using SB 35,” dated May 11, 2020).  Despite its likely limited application, the legislature’s willingness to include this provision shows its continued support for SB 35 projects and housing in general.

For additional information on AB 1174 and SB 35 and how these might apply to your project, please contact a member of Cox Castle’s Land Use team.

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