California Enacts New Law To Tackle Growing Housing Crisis, But Not Without Controversy | Sheppard Mullin Richter & Hampton LLP

September 16e, just after surviving California’s latest recall effort, Gov. Gavin Newsom signed legislation to address the statewide housing crisis – a critical issue leading up to last week’s election. The series of bills, Senate Bills (SB) 8, 9 and 10 and Assembly Bill (AB) 1174, associated with the recently announced California return plan, offer the potential to ” increase the production of housing, rationalize permits and promote density closer to the main employment centers. .

While California’s housing deficit is undeniable, there is very little consensus on how to tackle the crisis. For example, nearly 250 municipalities across the state opposed Newsom’s latest wave of signings. Led by the League of California Cities, local governments objected that the laws would undermine the policing power of a local government, the source of authority for local planning and control of land use. There are also concerns that these bills may be a major push towards the elimination of single-family zoning statewide. [1]

Below is a summary of recently passed legislation to address California’s ongoing housing crisis.

Senate Bill 8

SB 8 expands the provisions of the 2019 Housing Crisis Act[2] until 2030. The Housing Crisis Law of 2019, which was due to expire in 2025, was enacted to revive the production of housing by aspeeding up the approval process for housing projects, reducing the ability of local governments to relocate, limiting fee increases on housing applications and implementing accountability provisions.

Senate Bill 9

SB 9, the California Housing Opportunity and More Efficiency (HOME) Act, is the group’s most controversial bill. The source of most of the controversy is SB’s permission for an owner to divide a single family lot into 2 lots and place up to 2 units on each newly created lot – giving a potential of up to 4 units. on currently limited properties. to single-family homes. SB 9 also requires cities and counties in California to approve development proposals that meet specified size and design standards.

The governor’s office says these provisions will expand housing options for people of all incomes, create more opportunities for homeowners to add units to their existing properties, while preventing the relocation of existing tenants and protecting property owners. historic neighborhoods, fire-prone areas and quality. However, opponents believe SB 9 undermines the ability of local governments to responsibly plan the types of housing communities need, bypasses the local government review process, and silences community voices. There is also speculation that a space that once housed a single house could ultimately carve out 4 comfortably.

SB 9 is broad, but the main takeaways are identified below.[3]

  • Access to affordable housing is a concern of the whole state, not a municipal affair; therefore, SB 9 applies to all counties and cities, including charter cities.
  • SB 9 requires ministerial approval of a housing development application, including a plot plan, which divides a plot into 2 separate plots and contains no more than 2 residential units on each lot without a hearing if the following conditions are met :[4]
    • The plot is in a single family residential area.
    • If the subdivision is located in a city, at least part of the parcel boundary must be in an urbanized area or urban cluster, as designated by the United States Census Bureau. Or, if the development is in an unincorporated part of a county, the parcel must be entirely within the boundaries of an urbanized area or urban cluster, as designated by the United States Census Bureau.
    • The split gives 2 plots of roughly equal area. A parcel cannot be less than 40% of the area of ​​the original lot.
    • Each new lot must be at least 1,200 square feet in area.[5]
    • The project will not demolish more than 25% of the existing exterior structural wall, unless this is permitted by a local ordinance.
    • A proposed project or a sharing of property does not result in the demolition or modification:
      • Affordable or rent-controlled housing;
      • Market-priced housing that has been occupied by a tenant for the past 3 years;
      • The landlord has exercised the right to withdraw a dwelling from the rent or lease within the past 15 years; Where
      • The property is classified as a historic monument or is located in a historic district.
    • Any unit created as a result will not be used for short term rentals and must be rented for longer than 30 days.
    • The owners have signed an affidavit stating that they will occupy 1 of the units as their primary residence for at least 3 years after the property is split or units added.[6]
    • The project adheres to objective zoning and design review standards established by the local government.
    • The division of the lot complies with all applicable objective requirements of the Plans of Subdivision Act.
    • The subdivided parcel was not part of a previous subdivision using the urban lot division process permitted under SB 9.
  • Under SB 9, local governments and officials are prohibited from doing the following:
    • Impose objective zoning standards, objective subdivision standards and objective design standards that would have the effect of physically preventing the construction of a maximum of 2 units of at least 800 square feet of floor area.
    • Require a setback for an existing structure or a structure built in the same location and to the same dimensions as an existing structure. However, a local government may require a setback of up to 4 feet from the side and rear lot lines.
    • Deny a development request unless it can be concluded that the proposed project would have a “specific negative impact” on “public health and safety or the physical environment” and there is no ‘feasible and satisfactory mitigation options.
    • Impose regulations that require right-of-way assignments or the construction of off-site improvements for parcels created as a condition of issuing a parcel plan for an urban lot division.
    • Impose additional occupancy standards by the owner, other than those provided for in this subdivision, on a divided urban lot.
    • Require correction of non-compliant zoning conditions.
  • A local government may require one of the following conditions when considering an application for an urban lot split:
    • The easements required for the provision of public services and equipment;
    • Provision of access for each lot to the public right-of-way; and
    • Off-street parking up to 1 space per unit, except in specified cases;
    • Limitations of use for residential purposes only.
  • SB 9 extends the limit on the additional time period that can be provided for the use of provisional cards from 12 to 24 months.[7]

Senate Bill 10

SB 10 establishes a voluntary process for local governments to access a streamlined zoning process for new collective housing near public transport or in infill urban areas, with up to 10 units per plot. The legislation simplifies CEQA’s requirements for overzoning, giving local governments another tool to voluntarily increase density and provide affordable rental opportunities to more of California.

SB 10 attracted much less opposition than SB 9.

Assembly Bill 1174

AB 1174 is an emergency measure that changes the existing streamlined ministerial approval process for housing development in jurisdictions that have not yet made sufficient progress in allocating their regional housing needs.

California Housing Accelerator

Ahead of the recall election, Governor Newsom signed SB 129, legislation that mirrors the majority of the state’s 2021-2022 budget deal. This budget includes the largest economic stimulus package in California history – a $ 100 billion California return plan.[8]

September 16e, in conjunction with the series of housing bills passed, California announced the California Housing Accelerator, a $ 1.75 billion component of the California Comeback Plan. The California Housing Accelerator fund is intended to accelerate construction of affordable multi-family units in projects stalled due to constraints on the supply of tax-exempt bonds and tax credits for low-income housing. Housing officials expect the fund to support 90 projects ready to go by the end of the year, creating between 6,300 and 7,200 social housing units, including 1,200 units for the homeless. Recipients of the California Housing Accelerator funds have not yet been selected.

Although these bills were enacted, the state legislature was unable to advance 2 other high-profile housing bills – SB 6 and SB 15 – which would have facilitated the transformation of the centers. abandoned commercial buildings in apartment buildings.


[1] Interestingly, Sacramento officials are aiming to make the California capital one of the first in the country to eliminate traditional single-family home zoning. Portland, Oregon and Minneapolis, Minnesota have passed similar ordinances in recent years. Oregon passed a law eliminating traditional zoning for single-family homes statewide.

[2] See the previous article on the 2019 Housing Crisis Law here.

[3] SB 9 does not apply to properties located in seismic fault zones and in the “very high” fire risk zone, unless the development complies with state mitigation rules.

[4] Govt. Code § 65852.21, Gouv. Code § 66411.7.

[5] A local agency may by ordinance adopt a smaller minimum lot area subject to ministerial approval under this subdivision.

[6] Certain requirements do not apply if the applicant is a “community land trust” or a “qualifying not-for-profit corporation”.

[7] Govt. Code § 66452.6.

[8] California Comeback Plan invests unprecedented $ 22 billion in housing and homelessness, expected to lead to more than 84,000 new affordable homes statewide, including more than 44,000 new homes and treatment beds for people leaving homelessness. The California Comeback Plan marks the largest housing investment in California history with $ 10.3 billion proposed for housing and more than $ 12 billion for the homeless.

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