The 2023 legislative session culminated in Governor Newsom signing dozens of land use bills. This post discusses the most important.
The Legislature continued its multifaceted approach to addressing the housing crisis, with the Governor signing 56 housing bills. The most important include expansions of SB 35 and the Housing Accountability Act.
Housing bills discussed herein: SB 4, 423, 439, 684, 713; AB 281, 323, 343, 976, 1033, 1114, 1218, 1332, 1486, 1490, 1633; SCA 2
CEQA legislation was fairly targeted this year. Several CEQA exemptions were established and extended. Other bills updated notice requirements, and the legislature once again stepped in to fix a problem arising from CEQA litigation over expansion of the UC Berkeley campus.
CEQA bills discussed herein: SB 91, 149, 272, 406; AB 356, 1307, 1449
Other land use bills included a test bill to require unbundling of parking in select pilot counties and a requirement to start planning for sea level rise in local coastal programs.
Other land use bills discussed herein: AB 516, 821, 894, 1287, 1308, 1317
2023’s Housing Bills
Expanding and Extending SB 35 Provisions – SB 423
SB 423 extends and expands SB 35, the 2017 bill that provided a streamlined, ministerial approval process for certain qualifying housing projects providing specified percentages of affordable units and satisfying objective development standards. In addition to extending SB 35’s sunset date to January 1, 2036, the new law also makes SB 35 potentially applicable to projects in the coastal zone.
The bill will also expand SB 35 by prohibiting local governments from requiring, prior to approving a qualifying development, compliance with any standards necessary to receive a post-entitlement permit or other information that is not directly related to determination if the housing project is consistent with applicable objective planning standards. Finally, the bill makes changes to SB 35’s labor wage requirements, including by removing the skilled-and-trained workforce requirement for some projects that fail to receive sufficient bids.
Since the Attorney General created a Housing Strike Force in 2021, the Department of Housing and Community Development (“HCD”) and the Attorney General’s office have been increasingly aggressive in enforcing and defending California’s housing laws. In some cases, this has led to high-profile litigation with cities, including Elk Grove, and both state and federal lawsuits out of Huntington Beach. AB 434 and AB 1485 broaden the statutory authority and direction for that enforcement.
AB 434 broadens the list of housing laws for which HCD is directed to monitor compliance, including provisions of the Permit Streamlining Act, last year’s SB 6 – the Middle Class Housing Act (see our coverage here), 2021’s SB 9 requiring ministerial approval of urban lot splits (see our coverage here), as well as several of the bills passed this year. AB 1485 grants the Attorney General an unconditional right to intervene in any lawsuit filed under the same statutes. Taken together, the bills signal that the state is likely to continue and expand its aggressive efforts to enforce state housing laws.
Prohibition on CEQA Stall under the Housing Accountability Act – AB 1633
The Housing Accountability Act (“HAA”) is a multifaceted law that, in part, restricts municipalities’ ability to delay and deny housing projects that are consistent with applicable objective development standards. AB 1633 seeks to close a loophole in the law, under which agencies were seemingly allowed to delay an HAA project by refusing to adopt a legally compliant CEQA document. The issue came to a head during permitting of the 469 Stevenson Street project in San Francisco. The agency’s refusal to certify a completed EIR for the project, and require further study, drew the ire of both HCD and YIMBY Law, a nonprofit housing advocacy organization that eventually sued over the delay. That case is currently on appeal.
AB 1633 is intended to help prevent CEQA stall, by making an agency’s failure to certify a legally adequate CEQA document, or to acknowledge that a project is exempt from CEQA, a “denial” under the HAA. The bill should provide qualifying projects with a remedy for agency demands for unnecessary further studies. However, the bill does not affect how long the agency has to prepare the environmental document in the first instance. For projects requiring an EIR, the applicant must already have an allegedly valid EIR completed in order to invoke the provisions of AB 1633.
Anti-SLAPP Style Motion for Litigation Targeting Affordable Housing Projects – SB 439
Sometimes litigation over housing projects can drag on for excessively long periods of time. And even if the project proponent ultimately prevails, they can still be out hundreds of thousands of dollars in legal fees (whereas if petitioners prevail they are often entitled to recover their legal fees). SB 439 takes a step toward addressing this imbalance by creating a special motion to strike, similar to a special motion to address a strategic lawsuit against public participation, or Anti-SLAPP motion, which would allow the project proponent to dispense with particularly frivolous suits targeting affordable housing project.
While the motion must be filed within 60 days of when the lawsuit is filed (unless the court allows it to be filed later), the law recognizes that a court might need to wait for the administrative record to be prepared before it can rule on such a motion. And a petitioner must only show that there is a probability that they are prevail in order to survive the motion. However, a defendant prevailing on such a motion will be entitled to recover their attorney’s fees, which is a notable development. The law only makes the new motion available in cases involving 100% affordable projects. However, if the Legislature expands the realm of projects qualifying for such motions, this could be a significant change to what many criticize as an asymmetric and inequitable incentive structure in which only petitioners can recover the high costs of CEQA litigation.
The Legislature has become increasingly aggressive about encouraging cities to permit and facilitate construction of ADUs as a means to multiply existing housing stock. This year saw three bills furthering that effort.
AB 1332 requires agencies to develop a program for preapproval of ADU plans. Some jurisdictions, including the City of Sacramento, already have such programs. But this bill should help to further streamline the already-ministerial process for ADU permitting in the rest.
AB 976 prohibits agencies from imposing owner-occupancy requirements, such as only allowing ADUs on properties where the owner lives in the main house.
Lastly, AB 1033 allows, but does not require, cities and counties to permit ADUs to be separately sold from the parcel’s primary residence.
Adaptive Reuse for Extremely Affordable Housing – AB 1490
AB 1490 provides an expedited approval process for adaptive reuse of existing buildings on infill parcels into extremely affordable housing projects by local government agencies, provided certain conditions are met. Qualifying projects become an “allowable” use on such sites, and the agency can only deny such a project if it finds that it would have an adverse effect on public health and safety. Qualifying projects must reserve 100% of the units for lower income households, with at least 50% units reserved for very low-income households. The bill also provides such projects with certain benefits and exemptions, which may include waiver from curing of any preexisting deficit of or conflict with certain development standards.
Streamlined Approval of Projects of 10 or Fewer Units on Urban Lots – SB 684
SB 684 is the latest in the Legislature’s effort to require ministerial permitting of small, infill residential projects. In 2022, the Legislature passed SB 9, requiring ministerial approval of urban lot splits, with up to two units (plus ADUs) on each resulting parcel.
This new enactment provides a streamlined, ministerial approval process for approval and subdivision of a housing project with 10 or fewer units on multifamily zoned parcels of five acres or less and substantially surrounded by qualified urban use that meets certain minimum density requirements. By designating these ministerial approvals, qualifying projects would not be subject to CEQA. The bill would also relax public hearing requirements, and expedite permitting timelines. The bill may also exempt such projects from additional, listed development standards.
Prohibiting Appeal of Post-Entitlement Permits – AB 1114
AB 1114 is one of a handful of bills introduced in 2023 to target a San Francisco-specific problem. Assemblymember Haney, who formerly sat on the San Francisco Board of Supervisors, found that it can take almost two years for San Francisco housing projects to receive building permits, partly because it is the only city in California where one person can appeal a building permit after a project has already been approved at the planning level.
The bill should put an end to that practice. It prohibits local agencies from subjecting post-entitlement permits to any appeals or additional hearings once they are found to be compliant with applicable permit standards. Though San Francisco may have inspired the bill, the prohibition will apply statewide.
Additional housing bills of note:
- AB 1218 – Makes various changes to the limitation on demolition of existing units from SB 330.
- SCA 2 – If approved by voters in November, this 2022 bill would repeal Article 34 of the California Constitution, which currently prohibits municipalities from developing affordable housing projects absent express voter approval.
- AB 281 – Requires special districts to comply with timeframes for processing post-entitlement phase permits, similar to those already in place for cities and counties.
- SB 4 – Makes approval of affordable housing projects on land owned by a private, nonprofit college or a religious institution ministerial and thus, not subject to CEQA.
- AB 323 – Closes a loophole that enabled affordable, deed-restricted for-sale residential units to be sold to investors, who then rented them out.
- SB 713 – Affirms that the Density Bonus Law provisions supersede any conflicting local laws, including any development standards adopted by local initiative or referendum power.
2023’s CEQA Bills
CEQA Administrative Record Updates and Expanded Judicial Streamlining – SB 149
SB 149 created provisions meant to reform CEQA’s administrative record process and expanded existing law that provides judicial streamlining for certain projects. SB 149 took effect immediately upon the Governor’s signature on July 10, 2023 as an urgency statute. Most noteworthy, the new law empowers public agencies to deny a petitioner’s request to prepare the administrative record; however, the public agency or real party in interest must then bear the costs of preparation and certification. SB 149 also makes four new classes of infrastructure projects eligible for judicial streamlining: energy-related projects, transportation-related projects, water-related projects, and semiconductor projects.
See Downey Brand’s previous article on SB 149 for more information.
Sea Level Rise Plans – SB 272
SB 272 requires local governments within the coastal zone or within the San Francisco Bay to develop a sea level rise plan that includes adaptation strategies and recommended projects. The Coastal Commission and the San Francisco Bay Conservation and Development Commission (BCDC) are required to prepare guidance on sea level rise plans for local governments within their respective jurisdictions by December 31, 2024. The sea level rise plans will be incorporated as part of either a local government’s local coastal program, subject to approval by the Coastal Commission, or a subregional San Francisco Bay shoreline resiliency plan, subject to approval by BCDC, depending on the jurisdiction. Local governments that receive approval will be prioritized for funding, upon appropriation by the Legislature, for the implementation of sea level rise adaptation strategies and recommended projects included in sea level rise plans.
Unamplified Noise from People Not a CEQA Impact – AB 1307
In a direct response to the recent appellate decision in Make UC a Good Neighbor v. Regents of University of California (2023) 88 Cal.App.5th 656 (Make UC a Good Neighbor), which invalidated an EIR for a UC Berkeley student housing project by finding it did not adequately analyze the noise impacts generated by students, AB 1307 clarifies that the noise generated by occupants and guests of residential projects on human beings is not a significant environmental effect for purposes of CEQA. This bill also clarifies that institutions of public higher education (as defined), are not required to consider alternatives to the location of the proposed project in an EIR for a residential or mixed-use housing project, if: (1) the project site is 5 acres or less in area and is substantially surrounded by qualified urban uses, and (2) the proposed project was already evaluated in the EIR for the most recent long-range development plan for the applicable campus.
Make UC a Good Neighbor is currently pending review by the California Supreme Court, though AB 1307 limits the issues the high court will need to resolve.
Additional CEQA bills of note:
- AB 356 – Extends existing law that allows lead agencies to waive consideration of aesthetic impacts for projects that refurbish, convert, or replace derelict buildings until January 1, 2029. (See Pub. Resources Code, § 21081.3.)
- AB 1449 – Exempts from CEQA a public agency’s entitlement, lease, conveyance, purchase, financial assistance or encumbrance for certain affordable housing projects. It further exempts any action to facilitate those actions and any rezoning, specific plan amendments, or general plan amendments required for the projects. (See Pub. Resources Code, § 21080.40.)
- SB 91 – Extends indefinitely existing law that exempts from CEQA certain 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. (See Pub. Resources Code, §21080.50.) It further extends by one year existing CEQA streamlining provisions for Environmental Leadership Transit Projects located within Los Angeles County. (See Pub. Resources Code, § 21168.6.9.)
- SB 406 – Exempts from CEQA actions taken by a local agency not acting as the lead agency to provide financial assistance or insurance for the development and construction of residential housing. (Pub. Resources Code, § 21080.10.)
2023’s Other Land Use Bills
Resolving Inconsistencies Between General Plan and Zoning – AB 821
The HAA contains a provision governing how to resolve instances where a jurisdiction’s general plan requirements are inconsistent with its zoning requirements, but it only applies to housing development projects. AB 821 governs how such conflicts are resolved for projects falling outside the scope of the HAA.
AB 821 provides that the agency should apply the objective general plan standards, but not any inconsistent zoning standards. Unlike the HAA’s approach, AB 821 also permits the agency to amend the zoning ordinance to be consistent with the general plan within 180 days of receipt of a development application, in which case it may apply the revised zoning standards as well.
Pilot Program to Require Unbundled Parking – AB 1317
When an apartment building contains off-street parking, tenants are typically given free access as part of the lease. Unbundling parking is a policy that separates the housing cost from the parking cost, allowing residents to choose the number of parking spaces they want, and pay accordingly. Many believe this market-based approach incentivizes households to live car-free, or give up their second vehicle.
AB 1317 will require most new housing projects of at least 16 units with off-street parking to unbundle the parking. It will only apply in ten test counties (Alameda, Fresno, Los Angeles, Riverside, Sacramento, San Bernardino, San Joaquin, Santa Clara, Shasta, Ventura). However, the bill is expressly intended to be a pilot program to assess the potential benefits. As such, one can reasonably expect to see more requirements of this nature over time, at both the state and local level.
Additional land use bills of note:
- AB 1308 – Prohibits agencies from increasing parking requirements as a condition of approval on single family home renovation or construction.
- AB 1287 – Makes various changes to the Density Bonus Law, including creating a “Middle Income Bonus Program” within the statute, available when existing bonuses have already been maxed-out.
- AB 894 – Allows a facility with underutilized parking to enter an agreement to let another facility make use of the unused spaces for its own parking obligations.
- AB 516 – Expands requirements for local agencies to track, report, and sometimes refund fees collected under the Mitigation Fee Act as progress is made on the project the fees are intended to fund.