Under SB 423, all the provisions of SB 35 will be extended until 2036 and expanded to cover mixed-income housing developments.
In September 2017, the state enacted SB 35 to increase affordable housing. There is potential disagreement between the state’s requirements and the desires of the local community.
To be eligible for streamlining, the project must meet all of the following criteria: Affordability: At least 50% of the proposed residential units must be dedicated as affordable to households at 80% AMI for either rental or ownership projects.
The Housing Accountability Act bars cities from rejecting projects or decreasing density based on “objective standards.” Furthermore, the state has recently upped the density bonus — a reward system that enables a developer to expand the maximum allowable development on a site — depending on the project’s scale. Thanks to AB 1763 and AB 2345, developers can now receive a 50% density bonus or, if constructing a 100% affordable project, an 80% density bonus, leading to more units on less land.
With these restrictions, California currently holds the second-lowest homeownership rate in the United States, and many renter households are facing substantial rent burdens. Butler strongly advocates for changes in housing development regulations to address the dwindling supply. Local governments are constrained and must adhere to the specified timeline for SB 35 projects. The affordable apartments enabled developers to submit their application under the provisions of SB 35. This law, authored by state Sen. Scott Wiener of San Francisco, aims to promote the creation of new affordable housing units by eliminating the influence of local politics from the approval process.
The state has clearly expressed its concern about the housing crisis, attributing the lack of construction in California primarily to obstacles created by local governments. In response, the legislature is seeking to limit the ability of local governments to reject or hinder housing development projects, utilizing the Housing Accountability Act and offering incentives for builders in the form of density bonuses.
New housing construction has been minimal throughout the state, prompting Sacramento politicians to pursue more assertive legislation. Due to these constraints, California currently holds the second-lowest homeownership rate in the United States, and numerous renting households are grappling with substantial rent burdens. Butler strongly advocates for revising housing development regulations to address the dwindling supply.
The Housing Accountability Act, amended in 2017, prevents cities from rejecting or decreasing density for projects based on “objective standards.” Furthermore, the state has recently raised the density bonus, which allows developers to increase maximum allowable development on a site based on project scope. With AB 1763 and AB 2345, developers can now receive a 50% density bonus or up to 80% if creating a 100% affordable project, enabling more units on less land. Consequently, California currently has the second-lowest homeownership rate in the United States, and many renter households are struggling with high rent burdens.
It is essential for housing development regulations to adapt to the declining supply. Local governments are constrained by set timelines for SB 35 projects and must adhere to them. If an SB 35 proposal is submitted and qualifies for approval, the city must respond within 60 to 90 days and provide a list of all inconsistencies with “objective” zoning and design review standards. Within 180 days of submission, a design review/public oversight meeting must be held to thoroughly assess the development.
The state has allocated specific housing targets to each region, which are then broken down into goals for individual cities in terms of land allocation for housing. The state also prohibits the imposition of arbitrary conditions on proposed developments and takes legal action against cities that fail to meet its standards. While the statewide goal was 180,000 units annually in recent years, it has been reduced to 148,000 due to declines in population. SB 423 extends the provisions of SB 35 and broadens them to promote the development of mixed-income housing. SB 35, enacted in 2017 and set to expire in 2026, has led to the creation of numerous new subsidized affordable homes throughout California. SB 423 extends SB 35 until 2036, ensuring that the law continues to lower housing costs by expediting the construction of new affordable and mixed-income homes in areas where they are most needed.
To achieve its housing objectives, the state has distributed quotas to each region, which were later translated into objectives for each city, specifying the land to be allocated for housing. The state also prohibits arbitrary conditions on proposed developments and takes legal action against cities that fail to meet its standards. In recent years, the statewide goal was 180,000 units annually, but due to recent population declines, the state has reduced the goal to 148,000. However, California continues to significantly undershoot, with the 2023-24 budget estimating the construction of 109,000 units in 2023. The budget allocates nearly $15 billion to housing production, but the state requires at least $90 billion annually in private and public investment to achieve its goal of 148,000 units, assuming there is sufficient land and other resources to support that level of construction.
Under SB 423, cities will be required to approve a housing development application if the project meets the following criteria:
– The project is situated on an urban infill site, with 75% of the lot bordering other developed parcels of land.
– The site is zoned for residential or mixed uses in the jurisdiction’s general plan and aligns with objective design standards.
– Developers pay prevailing wage on projects with more than 10 units.
– For projects with 50 units or more, the developer must offer healthcare benefits.
– For projects over 85 feet, the developer must prioritize hiring a skilled and trained workforce.
– When available, developers must hire workers participating in an apprentice program.
– The site is not located in farmland, wetlands, a very-high fire risk zone, a hazardous waste site, floodplains and floodways, a habitat for protected species, or land under a conservation plan or easement.
– The project complies with all other relevant objective laws and ordinances, such as zoning rules and environmental safety rules.
The amount of affordable housing required for an SB 35 project is determined by the jurisdiction’s compliance with its RHNA-allocated targets. If a city is “short” on housing in any income category, SB 35 provides a streamlined approval process for housing projects addressing the housing gap for that income category.
SB 423 passed the State Senate on 5/31/23 with a 29-5 vote. It passed the Assembly on 9/7/23 with a 52-8 vote. It passed the State Senate in a concurrence vote on 9/11/23. SB 423 was signed into law by Governor Newsom on 10/11/23.
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