2023 was a busy year for California housing legislation with steps by Governor Newsom as well as local Mayors cutting red tape to streamline housing production. Even with these efforts, California and US housing markets continue to see an unprecedented lack of available units and cost burdens that are reaching their highest levels in years. What had been an issue confined to coastal markets and high-growth areas is now settling in nationally.
Across California, our teams continue to evaluate the most effective ways to assist clients deliver units in line with budgets and schedules. Bills that took place in January 2024 including AB 1633, SB 423, and SB 684 will continue to ease bureaucratic hurdles and offer more buildable sites, but in the current climate, what works best? We thought we’d look at a few of the most used strategies.
CEQA’s Class 32 Infill Category Exemption
Many of BSB’s projects fall on tight, urban infill sites where they are subject to California Environmental Quality Act (CEQA) regulations. The Class 32 Infill Category Exemption, which removes the EIR process for sites of 5 acres or less, has been used to reduce the entitlement process for residential, commercial, and mixed-use projects from years to months. While the following conditions must be met and some studies, such as noise or parking, may still be required, the exemption helps clients move more efficiently through entitlements and removes what has sometimes been used as a bureaucratic hurdle, from NIMBY groups hoping to kill projects by bogging them down in review processes.
- The project is consistent with the applicable general plan designation and all applicable general plan policies as well as with applicable zoning designation and regulations.
- The proposed development occurs within city limits on a project site of no more than five acres substantially surrounded by urban uses.
- The project site has no value as habitat for endangered, rare or threatened species.
- Approval of the project would not result in any significant effects relating to traffic, noise, air quality, or water quality.
- The site can be adequately served by all required utilities and public services.
California State Density Bonus
California’s state-mandated Density Bonus law has been available for decades, but in recent years has been put to more productive use in making projects economically viable. Once only applicable to affordable and senior housing types, it also has been recently expanded to include developments for disabled veterans, foster youth, homeless individuals, and even college students.
Key to BSB’s use of the density bonus has been a holistic evaluation of other potential incentives, which can range from one to up to four. These tools, which depend on the base density rather than total units, include reduced parking requirements, reduced setbacks, and minimum square footage requirements. Because they can be applied to projects at multiple income categories ranging from very low to moderate and senior, they can sometimes prove even more helpful to a project’s economic viability than the addition of the extra units.
CA Housing Accountability Act “Builder’s Remedy”
A final piece of legislation that is being increasingly evaluated as an option on our projects is the Builder’s Remedy provision, a subsection of the California Housing Accountability Act enacted in 1990. Considered by some as a radical approach that takes discretionary power away from cities, the legislation allows automatic approval to certain types of housing if the local entity is out of compliance with housing element law. For many years the provision was not well enforced, but with more than 200 jurisdictions currently out of compliance it offers a path forward if an affordable housing project is otherwise denied on the grounds that it is inconsistent with zoning and/or General Plan standards. Santa Monica famously had sixteen projects proposed by developers using the Builder’s remedy totaling over 4,500 new units with more than 800 designated as affordable for low-income households. Most of these projects have continued to move forward in a fast-track approval deal but the awareness by jurisdictions as well as developers of its potential was the lasting effect of the ordeal.
