California Passes New Laws To Combat Growing Housing Crisis, But Not Without Controversy | Sheppard Mullin Richter & Hampton LLP

September 16NSShortly after surviving California’s recent recall, Governor Gavin Newsom signed a bill aimed at addressing the nationwide housing crisis – a critical issue in the run-up to last week’s elections. The series of bills, Senate Bills (SB) 8, 9, and 10 and Assembly Bill (AB) 1174, tied to the recently announced California Comeback Plan, hold the potential to expand housing production, streamline permits, and bring density closer to major ones Promote employment centers.

While the housing shortfall in California is undeniable, there is very little consensus on how to tackle the crisis. Case in point, the nearly 250 parishes across the state opposed Newsom’s recent series of signatures. Led by the League of California Cities, local governments argued that the laws undermined the police force of a local government, the source of authority for local planning and land-use control. There is also concern that these bills represent a major push towards the abolition of single-family home zones across the country. [1]

Below is a summary of recently passed laws to combat the ongoing California real estate crisis.

Senate Act 8

SB 8 expands the provisions of the Housing Crisis Act of 2019[2] until 2030. The Housing Crisis Act of 2019, which should come into force in 2025, was enacted to reduce housing production from aAccelerate the approval process for housing projects, limit local governments’ ability to access the Downzone, limit fee increases on housing applications and implement accountability provisions.

Senate Act 9

SB 9, the California Housing Opportunity and More Efficiency (HOME) Act, is the most controversial bill in the league. The main source of the controversy is SB’s approval for a property owner to split a single family property into 2 lots and place up to 2 units on each newly created lot – resulting in a potential of up to 4 units on currently limited lots for single family homes. SB 9 also requires cities and counties across California to approve development proposals that meet certain size and design standards.

The governor’s office claims these provisions will expand housing options for people of all income levels, create more opportunities for homeowners to add units on their existing land, while preventing the eviction of existing tenants and protecting historic neighborhoods, fire-prone areas, and environmental quality. Opponents believe, however, that SB 9 undermines local governments’ ability to responsibly plan the types of housing that communities need, bypass the local government’s review process, and silence community voices. There is also speculation that a room that once housed a single home could eventually be a comfortable size of 4.

SB 9 is extensive, but the key takeaways are outlined below.[3]

  • Access to affordable housing is a national concern, not a municipal concern; therefore SB 9 applies to all counties and cities, including the charter cities.
  • SB 9 issues the ministerial approval of an application for residential development, including a parcel map that divides a parcel into 2 separate parcels and does not contain more than 2 residential units on each property without a hearing, if the following requirements are met:[4]
    • The plot is located in a single-family residential area.
    • If the housing estate is within a city, at least a portion of the property lines must be in an urbanized area or urban cluster designated by the United States Census Bureau. If the development is in an unregistered part of a county, the property must be entirely within the boundaries of an urbanized area or urban cluster as determined by the United States Census Bureau.
    • The division leads to 2 parcels with approximately the same plot area. A parcel cannot be less than 40% of the parcel area of ​​the original parcel.
    • Every new plot of land must be at least 1,200 square meters.[5]
    • The project will not demolish more than 25% of the existing external wall unless permitted by local ordinance.
    • A proposed project or division of land does not result in the demolition or modification of:
      • Affordable or rent-linked housing;
      • Market price apartments that have been occupied by a tenant in the past 3 years;
      • The property owner has exercised his tenancy or lease right within the last 15 years; or
      • The property is a listed building or is in a historic district.
    • A unit created in this way is not used for short-term rentals and must be rented for more than 30 days.
    • Owners have signed an affidavit stating that after dividing or adding units, they will have one of the residential units as their primary residence for at least 3 years.[6]
    • The project adheres to the objective zoning and design review standards set by the local government.
    • The division of tickets complies with all applicable objective requirements of the Subdivision Map Act.
    • The parcel to be subdivided was not part of an earlier subdivision with the procedure for subdividing land permitted under SB 9.
  • According to SB 9, local governments and officials are prohibited from doing the following:
    • Imposing objective zoning standards, objective subdivision standards, and objective design standards that would physically preclude building up to 2 units with a floor area of ​​at least 800 square feet.
    • Requiring setback for an existing structure or a structure erected in the same location and with the same dimensions as an existing structure. However, a local government may require a kickback of up to 4 feet from the side and rear property lines.
    • Rejection of a development application unless it can be determined that the proposed project would have “specific, adverse effects” on “public health and safety or the physical environment” and there are no workable and satisfactory containment options.
    • Imposition of regulations that require the allocation of rights of way or the construction of off-site developments for the resulting parcels as a condition for the issuance of a parcel plan for an urban parcel division.
    • Imposition of additional usage standards for owners not provided for in this subdivision on an urban parcel.
    • Requires correction of non-compliant zone conditions.
  • A local government may require one of the following conditions when considering an application for an urban land division:
    • Easements necessary for the provision of public services and facilities;
    • Providing access to public right of way for each lot; and
    • Off-street parking of up to 1 space per unit, except in specific cases;
    • Restrictions on use for residential use only.
  • SB 9 extends the limit on the additional period that can be allocated for the use of provisional cards from 12 to 24 months.[7]

Senate Act 10

SB 10 is establishing a voluntary process for local governments to gain access to an optimized zoning process for new apartment buildings near transit areas or in urban backfill areas with up to 10 units per parcel. The legislation simplifies the CEQA requirements for upzoning and gives local governments another tool to voluntarily increase density and provide affordable rental options for more parts of California.

SB 10 has drawn much less resistance than SB 9.

Assembly Act 1174

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

California Housing Accelerator

Prior to the recall elections, Governor Newsom signed SB 129, a bill that mirrors most of the 2021-22 state budget deal. This budget includes the largest stimulus package in California history – a $ 100 billion comeback plan for California.[8]

September 16NSIn conjunction with the string of housing laws passed, California announced the California Housing Accelerator – a $ 1.75 billion component of the California comeback plan. The California Housing Accelerator Fund is designed to accelerate the construction of affordable apartment buildings in projects stalled by restrictions on supplies of tax-exempt bonds and tax credits for low-income residential real estate. Housing authorities expect the fund to support 90 shovel-ready projects by the end of the year, creating between 6,300 and 7,200 low-income housing units – including 1,200 housing units for the homeless. The California Housing Accelerator Fund beneficiaries have not yet been selected.

While these bills were going into effect, state lawmakers were unable to propose two other high profile housing laws – SB 6 and SB 15 – that would have made it easier to convert abandoned shopping malls into residential buildings.


[1] It’s interesting to note that Sacramento officials are aiming to make the California capital one of the first in the country to abolish traditional single-family zoning. Portland, Oregon and Minneapolis, Minnesota have issued similar ordinances in recent years. Oregon has passed a law that removes traditional single-family zoning across the country. [2] See previous article on Housing Crisis Act 2019 here. [3] SB 9 does not apply to properties in earthquake fault zones and within the fire hazard zone “very high”, unless the development follows the state reduction rules. [4] Government Code § 65852.21, Govt. Code of law § 66411.7. [5] A local authority may by ordinance stipulate a smaller minimum lot size subject to ministerial approval under this subdivision. [6] Some requirements do not apply if the applicant is a “Community Land Trust” or a “Qualified Not for Profit”. [7] Government Code Section 66452.6. [8] California Comeback Plan invests an unprecedented $ 22 billion The California Comeback Plan is the most significant residential investment in California history, with $ 10.3 billion in housing and over $ 12 billion in housing.

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