Last week, Senator Nancy Skinner (D-Berkeley) introduced SB 330—the Housing Crisis Act of 2019. Unlike other housing-related bills introduced this legislative session, this bill would declare a statewide housing emergency. Through January 2030, the proposed legislation’s multipronged approach would streamline project approvals, freeze zoning controls once an application is deemed complete, restrict the assessment of fees to 2018 levels, limit new legislation that would impede residential development, suspend the applicability of certain development standards, and create new minimum standards for occupied substandard buildings. Most of these provisions would only apply in cities and counties with high rents and low vacancies, although the specific thresholds have not been defined yet.
The legislation attempts to streamline project approvals by limiting the number of “de novo” public hearings and requiring that a decision on the project be made at one of up to three hearings. This 3-hearing limit would eliminate the possibility of endless hearings and continuances, thereby reducing some of the risk associated with bringing a large and controversial housing development before the Planning Commission. Although it is unclear whether or not the 3-hearing limit also includes appeals, if it does, then this provision could have an even more profound effect on the approval process, especially in cities like San Francisco where there are multiple avenues for appealing a project.
To keep cities from delaying the third and final hearing, another streamlining provision would require cities to act on an application within 1 year after it is deemed complete. Although this may be a helpful provision to point to if it looks like the review process will exceed 1 year, it is unclear how effective it would be without a corresponding change under CEQA, which tends to drive the overall approval timeline.
The legislation’s proposed vesting of zoning controls is arguably the most aggressive provision. It prohibits any city or county from enforcing any changes in the zoning controls or the general plan after an application is deemed complete. This is much sooner than most other methods of establishing vested rights, which usually occur after project approval with a vesting tentative map or development agreement, or after construction begins for projects without those entitlements. This would also have the benefit of simplifying grandfathering issues.
Aside from the streamlining and vesting provisions, the legislation also:
- Freezes fees and exactions at the rates applied as of January 1, 2018;
- Eliminates any fees assessed against units that are affordable to households with incomes at or below 80% AMI;
- Requires cities to make a determination about the historic status of the site when the application is deemed complete;
- Prohibits the enforcement of parking requirements;
- Prohibits changes to the zoning or general plan classifications that would reduce the intensity of residential development permitted, including height, density, FAR, and open space;
- Prohibits design standards that would be more costly than those in effect as of January 1, 2018;
- Prohibits development moratoriums and caps on the number of discretionary permits for housing; and
- Requires the State to develop minimum health and safety building standards that would allow occupied substandard buildings to be deemed complaint with the Building Code for 7 years.
In an effort to avoid displacement, the bill would place an outright ban on the demolition of rent control units or Section 8 housing, while prohibiting the demolition of affordable housing units unless tenants are offered relocation benefits and the right of first refusal for units in the new development.
In introducing the legislation, Senator Skinner pointed out that California is ranked 49th out of the 50 states in terms of housing units per capita, and that the housing crisis is costing the State an estimated $140 billion a year in lost economic output. Just to keep up with current population growth, California needs an estimated 180,000 additional units of housing each year. And according to the California Department of Housing and Community Development, production has fallen far short, with an average of less than 80,000 new housing units being developed annually over the last 10 years. Although SB 330 would address some of the issues that are fueling the housing crisis, it may not go far enough.
Authored by Reuben, Junius & Rose, LLP Attorney Sabrina Eshaghi
The issues discussed in this update are not intended to be legal advice and no attorney-client relationship is established with the recipient. Readers should consult with legal counsel before relying on any of the information contained herein. Reuben, Junius & Rose, LLP is a full service real estate law firm. We specialize in land use, development and entitlement law. We also provide a wide range of transactional services, including leasing, acquisitions and sales, formation of limited liability companies and other entities, lending/workout assistance, subdivision and condominium work.