Potential Expansion of All-Electric Building Requirements

| Kaitlin Sheber
renovations

Last week, Supervisor Mandelman introduced all-electric legislation that would require many buildings undergoing “major renovations” to convert to all-electric. The legislation would expand the City’s current prohibition on new construction of mixed-fuel buildings, which has been in place since 2021.

Under the proposed ordinance, after January 1, 2026, the Building Official can only accept permit applications to conduct major renovations for all-electric buildings or buildings that will be converted to all-electric.  Should this legislation be approved, those seeking to perform major renovations that do not fall under one of the five exceptions below have until January 1, 2026 to submit and have DBI accept a building permit application, or the project will be subject to the new all-electric building requirements.

The legislation provides for the following exceptions to the all-electric requirement:

  1. Where it is physically or technically infeasible to convert to all-electric design;
  2. Projects that retain gas to serve a restaurant;
  3. Change of use projects from nonresidential to residential units. This exception expires after January 1, 2031;
  4. Where the building replaced or upgraded a major system fueled by natural gas within the last 5 years; or
  5. 100% affordable housing projects until January 1, 2027. Between January 1, 2027 and January 1, 2028, 100% affordable projects where the cost of converting to all-electric conflicts with the project’s ability to meet its housing goals will be exempt. This exception expires after January 1, 2028.

As we previously reported, the Ninth Circuit earlier this year struck down similar legislation in the City of Berkeley that prohibited the use of natural gas in newly constructed buildings, finding that the law was preempted by the Energy Policy and Conservation Act (“EPCA”). This proposed legislation would provide a carveout consistent with the Ninth Circuit’s decision, amending the definition of all-electric buildings to include buildings with natural gas infrastructure solely dedicated to serve appliances covered by the EPCA and that comply with the Department of Building Inspection’s design guidelines for electric-ready buildings. This new language appears to address the preemption issue for all-electric legislation.

The legislation is under consideration by several legislative bodies and is subject to change. We will continue to monitor as the City considers this proposed legislation.

 

Authored by Reuben, Junius & Rose, LLP Attorney, Kaitlin Sheber.

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.

AB 130 – A Seismic Shift For CEQA?

| Andrew J. Junius and Melinda Sarjapur
AB 130

The big news this week is the signing of the California budget, which includes an important reform of CEQA as it applies to infill housing projects.  In recent years, the California legislature has been slowly chipping away at CEQA by creating a variety of streamlining programs that make certain types of housing approvals ministerial and therefore exempt from environmental review (ex: SB 423 / SB 2243 / AB 2162 / SB 684).  While these new laws were a great starting point in removing the CEQA barriers that have stymied housing production for decades (and provide useful project streamlining and other benefits), they are complex and limited to specific project types or locations, leaving out many urban infill sites.

AB 130, signed into law by the Governor on Monday, reaches directly into CEQA and creates a broad new statutory exemption that applies to urban infill housing development projects.  However, it is important to understand that AB 130 is not a project streamlining program.

The new law adds section 21080.66 to the Public Resources Code.  To qualify for this exemption, the project site must:

  • Not be more than 20 acres in size (for Builder’s Remedy or certain emergency shelter projects, 5 acres);
  • Be located within the boundaries of an incorporated municipality, or an urban area as defined by the US Census Bureau;
  • Has been previously developed with an urban use; have at least 75% of the perimeter of the site adjoining with urban uses; or have 75% of the area within a quarter-mile radius of the site be developed with urban uses;

Once the site qualifies, the project will qualify for this exemption if it meets the following criteria:

  • The project is consistent with the applicable general plan and zoning ordinance, including applicable local coastal programs.  Use of the state density bonus cannot be asserted as grounds for inconsistency.  Importantly, this consistency determination is not left to technical details and the city planners.  “If there is substantial evidence that would allow a reasonable person to conclude that the housing development project is consistent” with local zoning and planning laws, it will be considered consistent;
  • It must be dense enough; at least 1/2 of the applicable density set for in Government Code 65583.2(c)(3)(B) must be provided – this is typically 30 du/acre for metropolitan jurisdictions;
  • The site meets environmental screening criteria provided under SB 35/423, including generally that it not be located on a site that is in certain environmentally-sensitive areas of the Coastal Zone; prime farmland; wetlands; a high fire hazard severity zone; a hazardous waste site (unless cleaned); a delineated earthquake fault zone; a special flood hazard area; a regulatory floodway; subject to a community conservation plan or conservation easement; or contain a habitat for protected species;
  • Cannot require demolition of an historic resource listed on a national, state, or local historical register before the date that an SB 330 preliminary application was submitted;
  • If located within 500 feet of a freeway, certain design and air filtration requirements apply; and
  • No portion of the project can be designated for use as a hotel, motel, bed-and-breakfast Inn, or other transient lodging.

AB 130 does require tribal consultation.  This has been an issue in the implementation of SB 423 (formally SB 35).  The weakness of SB 423 was that the tribal consultation process was not structured enough to provide a clear ending to that process or guideposts for required mitigating conditions.  AB 130 attempts to solve that problem by including clear, statutory deadlines that are either met within a specific reasonable time frame or default mitigation measures would be imposed allowing the development to qualify for exemption.

Certain labor standards apply.  100% affordable projects must pay construction workers prevailing wages.  Projects greater than 85 feet in height must pay prevailing wages and utilize a skilled and trained (union) workforce.  And in San Francisco specifically, projects with 50 units or more are generally required to pay construction workers prevailing wages, even if they are less than 85 feet in height.

The new legislation allows for CEQA exemption only.  On its own, it would not provide for a streamlined design review process, increase in allowable density or reduction of applicable development standards as is the case with some other recent state-law housing programs.  However, it can be combined with state density bonus and the Housing Accountability Act to increase density and reduce local discretion.

For decades, CEQA has been a major, and in many cases fatal, barrier to the construction of needed housing.  AB 130 may finally break through and free infill projects from this burden.

AB 130 was signed into law on June 30, 2025 as part of the state budget legislation and is currently in effect.  Also signed into law on Monday were other helpful CEQA changes that we will be reporting on in the coming weeks.

 

Authored by Reuben, Junius & Rose, LLP Partners, Andrew J. Junius and Melinda Sarjapur.

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.

AG Instructs Localities to Permit EV Stations

| Tara Sullivan
charging

If you own an electric vehicle, one main concern is finding a public charging station.  While California has lead the nation with the number of electric vehicles sold (25.1% of all vehicle sales as of January 2025), and also leads with the number of chargers in the state (178,549 public & shared chargers as of March 2025), getting an electric vehicle (“EV”) charging station approved has proven to be a challenge.  The biggest roadblock EV charging station companies face are local jurisdictions and their Planning-Zoning codes.

As a refresher, the state legislature passed laws that mandated local jurisdictions create a streamlined approval process for EV charging (AB 1236 (Chiu, 2015) and AB 970 (McCarty and Chiu, 2021) adding Sections 65850.7 and 65850.71 to the California Government Code (together referred to as “charging streamlining laws”)).

Many jurisdictions have implemented a streamlined permit review system through their building & permitting departments.  Others, such as San Francisco, have updated their Planning codes to allow certain sites, such as former gas stations, to be converted to EV charging sites.

However, the majority of jurisdictions throughout the state either do not have EV charging stations in their Planning-Zoning codes, require a Conditional Use permit or other discretionary review, or are not permitted altogether, despite the state laws requiring the opposite.

To assist, the Attorney General issued a Legal Alert in March 2025.  Titled “Electric Vehicle Charging Station Permit Streamlining Requirements” (OAG 2025-001), it is a “reminder” to local California jurisdictions of the state laws to streamline and expedite the permitting of EV charging stations.

The Legal Alert clearly outlines what the state legislature intended with AB 1236 and AB 970.  It also provides examples of how jurisdictions have been out of compliance.  Importantly, the alert specifies:

  1. EV streamlining laws supersede all local zoning designations and ordinances
    • EV charging stations can go in any zoning district, whether or not they are currently zoned for them or are expressly prohibited.
    • Meaning, they are permitted throughout a locality’s boundaries.
  2. EV charging laws apply to both primary and secondary uses of EV chargers
    • The EV streamlining laws apply to all charging station installations, regardless of whether the EV stations are for personal, public, or fleet use; or whether they are for light-medium, or heavy-duty vehicles.
    • EV charging facilities are permitted as-of-right.
  3. No discretionary review-applications of EV charging stations
    • No Conditional Use permits, no design review, variances, or other use permits are allowed.
    • Localities cannot consider aesthetics / design.
  4. Accelerated timeline for EV charging station review-permit issuance
    • Applications shall be deemed complete within 5 or 10 days from submittal (depending on # of chargers proposed).
    • After deemed complete, locality has 20 or 40 business days to approve the permit (depending on # of chargers proposed).
    • This includes any Planning-Zoning review.
  5. Only specific health and safety impacts can be reviewed and conditioned by local jurisdictions
    • A locality must specify in writing that, based on substantial evidence, the charging station “would have a specific, adverse impact upon the public health or safety.”
    • Specific, adverse impact = “a significant, quantifiable, direct and unavoidable impact, based on objective, identified, and written public health or safety standards, policies, or conditions as they existed on the date the application was deemed complete.”

The Legal Alert states that components of a proposed installation that are integral for the functioning of the charging station (equipment, paving, etc.) are included in the streamlining process.  Design guidelines that implicate health and safety, such as safety-related lighting and clearance, are permissible for a locality to impose under Section 65850.7.  In addition, items such as bathrooms, accessory structures, etc., that are not necessary to the EV charging are subject to a locality’s zoning processes.

The Legal Alert clearly states how local jurisdictions should (and should not) be reviewing and approving EV charging installations.  It is meant to push local jurisdictions to update their processes and stop imposing illegal conditions and timelines for review of EV charging installations.  The Legal Alert’s written guidance will help EV charging companies and individuals obtain permits in a timely and efficient manner.  Hopefully this will open up approvals throughout the state so that the number of charging stations rise, furthering the use of electric vehicles.

 

Authored by Reuben, Junius & Rose, LLP Partner, Tara Sullivan.

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.

Major Builder’s Remedy/Housing Litigation Win

| Thomas P. Tunny
housing element

In a litigation result that will have a number of positive consequences for developers and housing advocates, the City of La Canada Flintridge (“City”) last week moved to dismiss its appeal of a closely-watched “Builder’s Remedy” case. After the appeals court ordered the City to post a $14 million bond on appeal, the City chose not to do so and will now comply with the trial court decision and process a housing application to build an 80-unit apartment project (“Project”).

Readers may recall us reporting on this litigation previously. (California Housing Defense Fund v. City of La Cañada Flintridge (L.A. Sup.Ct. No. 23STCP02614 and 2DCA No. B338985).) In May 2023, the City Council determined the Project did not qualify for the Builder’s Remedy, in part because the SB 330 Preliminary Application was filed after the date that the City Council (retroactively) self-certified its Housing Element update. Later that month, the City informed the Project developer that its SB 330 Preliminary Application was complete, but maintained its position that the Builder’s Remedy did not apply to the Project.

The developer petitioned the Los Angeles Superior Court for a writ of mandate, alleging that the City violated the HAA, State Housing Element Law, and other state laws. The Superior Court granted the writ, making four key rulings:

  1. the City cannot “self-certify” its housing element;
  2. the Builder’s Remedy is “vested” on the date a complete SB 330 preliminary application is submitted;
  3. the Builder’s Remedy is available until any required rezoning is completed; and
  4. the City unlawfully “disapproved” the Builder’s Remedy Project.

The Court’s ruling in effect means a City can’t back-date its Housing Element compliance to avoid approving a Builder’s Remedy project.

The Court of Appeal’s decision to require such a substantial bond (the City’s entire budget is $42 million) not only reinforces the pro-housing intentions of the Builder’s Remedy, Housing Element, and HAA rules, but also puts cities and counties on notice with respect to processing housing projects. In this case, not only did the City lose the litigation, but it likely will have to pay the petitioners’ attorney’s fees, and the developer may recover millions in losses incurred due to the appeal. Local jurisdictions seeking to continue old strategies of baselessly denying housing projects will have to think twice going forward about the potential costs.

 

Authored by Reuben, Junius & Rose, LLP Partner, Thomas P. Tunny.

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.

Objective Standards for Housing Projects – The Next Battleground?

| Andrew J. Junius
housing

In November of last year, to little fanfare, the San Francisco Planning Department presented to the Planning Commission its new Citywide Objective Design Standards. San Francisco, like cities across the state, are grappling with the brave new world of objective standards as required by recent housing legislation out of Sacramento. As the dust settles around the new and improved Housing Element process, the next battleground will be over individual projects, and each jurisdiction’s take on how to implement “objective standards.”

The need for objective standards is straightforward: as the state took dramatic action to jumpstart housing production by removing local zoning barriers, the focus was on eliminating local discretion for qualifying housing projects. In other words, planning commissions and city councils could no longer determine that a proposed housing project, while compliant with all local zoning, density and height controls, simply did not fit into the neighborhood character, was too big, blocked views, and generally displeased existing residents. That discretion – used by cities across the state – is why California doesn’t have enough housing. For decades, local residents have been leaning on their city officials to stop these projects. And in many cities they have succeeded.

No longer able to defer to local discretion, planning departments were charged with making sure that housing projects would only be evaluated with respect to objective standards. What is an objective standard? The California Housing Accountability Act (amended in 2017) defines objective standards as those that “involve no personal or subjective judgment by a public official and are uniformly verifiable by reference to an external and uniform benchmark or criteria available and knowable by both the developer, applicant or proponent and the public official before submittal.”

This created an immediate challenge to planning departments across the state. While all city planning and zoning codes do have objective standards (i.e., numbers like height limits, floor area ratios, and the like), they also included a significant number of discretionary standards and processes. One would think that removing these discretionary provisions from planning codes and simply leaving the objective numbers would be a straightforward process. In other words, if a housing project in a certain zoning district required a conditional use authorization previously (a conditional use approval requires a Planning Commission to make very subjective findings regarding whether the project will be necessary and desirable and otherwise good for the neighborhood…) it should be a simple matter to remove that requirement and get on with it.

In many instances, that has simply not been the case. Discretionary and objective standards and procedures for many cities have been woven tightly together and cannot be easily untangled. At times there is even a debate over what is objective and what is subjective. And of course, such changes in local planning codes require legislative action by city councils.

Some California jurisdictions have attempted to comply with relatively minor changes to their code, claiming that these are in fact, “objective”. However, careful review of these minor changes reveals that there are still portions of their code purporting to protect views, “harmonize” the development with surrounding character, etc., etc. The subjective criteria that remain are not objective and would not pass muster if challenged.

Other jurisdictions, including San Francisco and Marin County, have taken a very different approach. In these cases, the Planners have gone to extraordinary lengths to provide an objective standard for virtually every aspect of a development, from site design, height limits, building modulation, etc., down to the more nuanced details for lobby and building entrance design and location, window location and design, façade treatment, building articulation, blind walls, and more. Marin County’s form-based code clocks in at a formidable 323 pages of objective standards.

It’s hard to predict how this will all work out in the months and years ahead. Now that the Housing Element battles are for the most part over (or at least not at full boil), the project-by-project housing battles have begun. We commend the state legislature’s efforts to prioritize housing production the only way it can: by removing the ability of cities to say no to qualifying housing projects. We hope that cities across the state will see the need for housing as critical and will work to implement these state laws as quickly and efficiently as possible.

 

Authored by Reuben, Junius & Rose, LLP Partner, Andrew J. Junius.

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.

Court Broadens Applicability of CEQA Infill Exemption

| Thomas P. Tunny
CEQA

Readers no doubt are aware of the CEQA Infill Exemption, one of the most common CEQA exemptions used for projects in San Francisco and the Bay Area. In an important opinion published on November 18, the Sixth District Court of Appeal interpreted key terms in the Infill Exemption (CEQA Guidelines Class 32 categorical exemption) to broaden its application, in particular “in-fill development” projects that meet specified criteria, including being “substantially surrounded by urban uses.” In doing so, the Court upheld a lower-population city’s use (King City) of the exemption for a Grocery Outlet project near Highway 101. (Working Families of Monterey County, et al. v. King City Planning Commission (Best Development Group, LLC, Real Party in Interest) (2024) ___ Cal.App.5th ___.)

The project at issue was a Grocery Outlet store in a single-story building with surface parking on a 1.6-acre lot located within 1,000 feet of Highway 101. The parcel’s General Plan land use designation was Highway Service Commercial (HSC) and its zoning designation was Highway Service District (H-S). It was surrounded on two sides by commercial buildings, on the third side by sheriff’s department buildings, and on the fourth side by a cemetery.

An environmental assessment submitted by the project developer in support of the project’s permit applications (for a CUP, architectural review, monument sign permit, and landscaping permit) concluded the project would not result in any significant environmental impacts relating to traffic, noise, air quality, water quality, or otherwise, and that it qualified for the CEQA Guidelines Class 32 exemption for in-fill development. The City’s Planning Commission agreed on all counts, and its decision approving the project entitlements and exemption was upheld by the City Council, which did the same on administrative appeal.

The Petitioners, a union, sought to have the court narrow the infill exemption by arguing the project was not located in an “urbanized area,” as defined in CEQA Section 21071(a) (population 100,000 or more) or CEQA Guidelines Section 15387 (population 50,000 or more). Petitioners also alleged the project did not meet the definition of an “infill site,” as defined in CEQA Section 21061.3, since the project site was not previously developed for “qualified urban uses.”

The court refused to take the bait and turned to traditional rules of statutory construction to discern the meaning of these key terms. Finding the language of the exemption arguably ambiguous, the court looked to the findings of the Natural Resources Agency and the Office of Planning and Research (“OPR”) in establishing the exemption. Their statements of regulatory intent showed no indication that the regulators intended to limit the Class 32 categorical exemption for infill development to projects that meet the criteria set forth in the statutory definitions of “infill site,” “urbanized area,” and “qualified urban uses”.

Citing OPR directly, the court concluded, with a flourish, “The term ‘infill development’ refers to building within unused and underutilized lands within existing development patterns, typically but not exclusively in urban areas. Infill development is critical to accommodating growth and redesigning our cities to be environmentally- and socially-sustainable.” This broad definition will allow the Infill Exemption to be used in areas that may not meet specific definitions of “urban”, but as a matter of common sense are clearly “urbanized”. This decision is important because it reinforces and even broadens the applicability of the Infill Exemption in both typical urban areas and smaller cities.

 

Authored by Reuben, Junius & Rose, LLP Partner, Thomas P. Tunny.

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.

San Francisco Building Department Updates

| Gillian Allen

Some exciting improvements and developments at the Building Department have been published in the past few weeks including the guidelines for adaptive reuse projects converting downtown commercial offices into multi-family residential buildings and a streamlined ADU review process. See below for the direct updates from San Francisco Department of Building Inspection.

Converting Downtown Commercial Offices into Multi-Family Residential

Multiple agencies came together to work on final guidelines for commercial to residential adaptive re-use projects and the result is a thoughtful and comprehensive clarification of building code provisions and local equivalency processes that may present developers and design professionals options which could enable many more potential projects to pencil out without sacrificing code compliance.

Throughout this incredibly extensive information sheet, the authors did a great job of providing clear and detailed information on how to approach equivalencies for building envelope, exterior walls and openings, means of egress, ventilation, lighting, unit size, earthquake safety, accessibility, high-rise and low-rise structures, use of the California Historic Building Code, and the San Franciscos Green building code. Some of the highlights include the following:

  • Dwelling unit sizes may meet the minimum size for new construction instead of the larger dimensions required for existing buildings. This will require approval of local equivalency through the SFDBI Administrative Bulletin AB-005 process.
  • Qualified historic buildings are permitted to use existing fire escapes per CHBC 8-502.5 where the fire escapes are inspected and improved to comply with SFDBI Administrative Bulletin AB-019.
  • Existing elevators in low-rise buildings can remain unchanged in a downtown adaptive reuse project and do not need to be upgraded to meet the current code requirements for gurney size, hoistway construction or Firefighters Emergency Operation.
  • High-rise structures over 120’ that do not have fire safe access elevators or do not house two elevator banks, and a hardship to install a new fire safe access elevator exists, may propose alternative equivalent facilitations to satisfy CBC 3003 FSAE.
  • Link to full Information Sheet G-29.

ADU Roundtable

The City has also recently launched a new service to streamline and speed up the review and issuance of Accessory Dwelling Unit (ADU) building permits submitted through the State or Hybrid Program.

The Permit Review Roundtable will quickly and efficiently review plans, provide feedback and answer compliance questions during a live virtual meeting. A 45-minute roundtable meeting will be held on Mondays with the ADU project’s design professional, the Department of Building Inspection (DBI), the Planning Department, SF Fire, Public Works and the Public Utilities Commission. Both the adaptive re-use guidelines and the relaunch of the ADU round table process are continued evidence of the hard work behind the scenes by City staff to improve their partnership with the development community.

 

Authored by Reuben, Junius & Rose, LLP Manager, Post Entitlement Division Gillian Allen.

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.

Fee Waiver Possible for Downtown Conversions

| Thomas P. Tunny
downtown

Mayor Breed and Supervisor Dorsey recently introduced legislation to waive development impact fees and inclusionary housing requirements for downtown office-to-housing conversion projects. For the Mayor it is the latest in a series of new policies she has dubbed the “30 x 30” initiative, designed to bring at least 30,000 residents and students downtown by 2030.

The city’s impact fees and inclusionary housing requirements are the largest source of city-imposed costs on conversion projects. According to some estimates they add between $70,000 to $90,000 per unit in project development cost. The legislation would waive these fees for all commercial-to-residential conversion projects downtown, specifically projects located in any C-3 zoning district or a C-2 zoning district east of or fronting Franklin Street/13th Street and north of Townsend Street. The legislation would apply to new projects and projects that have received Planning approvals or permit sign-off by Planning prior to January 1, 2025, but not yet received issuance of the first construction document. This legislation builds off the waiver of real estate transfer taxes for conversion projects that was enacted in March 2024.

The Mayor first introduced her 30 x 30 initiative in March 2024. The initiative has three components: (1) commercial to residential conversions; (2) 5,000 units of new housing; and (3) a focus on colleges and universities seeking to bring 10,000 students, teachers, and staff downtown.

The office-to-residential component of the initiative aims to convert 5 million square feet of office space to approximately 5,000 units of housing, bringing 10,000 of the 30,000 new residents downtown. Actions towards this goal include:

  • The Commercial-to-Residential Adaptive Reuse Program streamlines permitting by waiving a number of Planning Code requirements for conversion projects. Now scheduled to expire in 2028, the proposed impact fee legislation would extend this streamlining indefinitely.
  • Approved by voters in March 2024, Proposition C waives the real estate transfer tax on up to 5 million square feet of commercial-to-housing conversion projects downtown.
  • The Department of Building Inspection’s Commercial-to-Residential Adaptive Reuse Information Sheet, published in September 2024, clarifies Building and Fire Code requirements and alternative methods of compliance for adaptive reuse projects.
  • In 2025, as authorized by AB 2488, the Office of Economic and Workforce Development will establish a special Financing District for commercial-to-residential conversion projects that would reinvest incremental property tax revenue to offset a significant share of development costs for these projects.

 

Authored by Reuben, Junius & Rose, LLP Partner, Thomas P. Tunny.

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.

2024 State Housing Legislation Preview

| Alex Klein and Melinda Sarjapur
legislation

During its 2024 legislative session, the California State Legislature again passed a variety of laws aimed at increasing housing production.  As this new housing legislation heads to Governor Newsom’s desk to be either vetoed or signed into law, here is a preview of nine housing bills which could soon become law:

Streamlining Laws

  • AB 2243 (Wicks): AB 2011 amendments. This bill would update the Affordable Housing and High Road Jobs Act of 2022 (AB 2011), which allowed for streamlined residential development on parcels abutting commercial corridors where office, retail, or parking are principally permitted uses.  If enacted, this bill would update the Affordable Housing and High Road Jobs Act of 2022 (AB 2011, Cal Gov Code Sec. 65912.100, et. Seq.).  Among other changes, this bill would expand program eligibility to sites up to 100 acres that contain a regional mall; expand the definition of “urban uses” [which must abut 75% of a qualifying site’s perimeter] to include parking lots and public parks surrounded by other urban uses; and revise the definition of “dedicated to industrial use” so that it applies only to sites which currently contain industrial use, were most recently permitted as industrial and occupied with such use within the past three years, or were designated for industrial use in the jurisdiction’s most recent general plan adopted before 2022 (except where residential uses are also principally permitted).  Further, AB 2243 would allow projects within five hundred (500) feet of a freeway, provided they meet certain ventilation and HVAC requirements.
  • AB 1893 (Wicks): Builders Remedy update. This bill would amend what’s known as the Builder’s Remedy: a provision of the Housing Accountability Act (HAA).  As amended, the Builder’s Remedy would generally prohibit local governments that have failed to adopt a compliant Housing Element from disapproving residential projects that provide either one hundred percent (100%) of units affordable to lower-income or moderate-income households; thirteen percent (13%) are affordable to lower-income households; ten percent (10%) are affordable to very-low income households; or seven percent (7%) are affordable to extremely-low income households.  This affordability requirement would not apply to projects with ten (10) or fewer units located on a site smaller than one (1) acre with a minimum density of ten (10) units per acre.  AB 1893 would also set some new site eligibility restrictions; establish maximum and minimum density limits; and allow qualifying developments to use an existing streamlining program such as AB-2011 or SB-423, as well as State Density Bonus Law.  Importantly, projects that are currently seeking Builder’s Remedy relief and filed applications with a local jurisdiction before January 1, 2025 may proceed under the original Builder’s Remedy law.
  • SB 1123 (Caballero): More flexibility for residential subdivisions up to 10 units. This bill would amend the Starter Home Revitalization Act of 2021 (Cal. Gov. Code Sec. 65852.28 & 66499.41), which allows ministerial approval for subdivisions with ten (10) or fewer units on parcels of five (5) acres or less, zoned for multifamily residential use, and surrounded by qualified urban uses.  Among other changes, this bill would extend the Act to vacant sites up to 1.5 acres that are zoned for single-family housing.  It would also provide that ADUs and JADUs (if permitted) would not count toward the 10-unit maximum.  If signed into law, these changes would become effective as of July 1, 2025.

Development Fees

  • SB 937 (Weiner): Delaying payment of certain development fees. This bill would amend the Mitigation Fee Act (Cal. Gov. Code 66007, et. seq.).  Among other changes, it would delay assessment of development impact fees on certain housing developments until issuance of a first certificate of occupancy or first temporary certificate of occupancy.  Further, it would limit the amount of utility service fees that can be collected at the time an application is received for a residential project to costs incurred by the utility related to the connection.
  • AB 1820 (Schiavo): Fee estimates for residential development. This bill would allow residential developers to request that a local agency provide a preliminary fee and exaction estimate at the time an SB 330 preliminary application is submitted. If requested, the local agency would be required to provide the estimate within thirty (30) business days.  Within thirty (30) business days of final project approval, the local agency would also be required to provide an itemized list and good faith estimate of all applicable fees and extractions.
  • SB 1210 (Skinner): Greater transparency for utility fees and timeframes. This bill would require certain publicly-owned utilities to post the following information on their websites by January 1, 2026: (1) a schedule of fee estimates for typical service connection fees; and (2) estimated timeframes for completing typical service connections for a variety of residential developments including ADUs, single-family homes, multifamily, and mixed-use developments.

Entitlement and Permit Extensions

  • AB 2729 (Patterson): Entitlement extension for certain projects. This bill would extend entitlements for housing developments that were issued prior to and in effect on or before January 1, 2024, and that are set to expire before December 31, 2025, by eighteen (18) months.  AB 2729 would apply to a broad range of entitlements including legislative approvals; administrative approvals; ministerial approvals; and building permits, but would not apply to development agreements, SB-330 preliminary housing applications, or tentative maps that have already been approved for at least twenty-four (24) months under the Government Code.  The area of qualifying housing development projects must be at least two-thirds residential.
  •  AB 2117 (Patterson): Tolling expiration dates. This bill would toll the expiration of certain local entitlements during the time when an action challenging them is pending.  AB 2117 tolling would apply to approvals including variances, conditional use permits, and any other development permits, but not to building permits issued under state or local code, demolition permits, minor or standard excavation and grading permits, or other nondiscretionary permits required post-entitlement prior to construction.

ADUs

  • SB 1211 (Skinner): Expanding state ADU law. This bill would increase the number of detached ADUs eligible for a ministerial approval on a lot that has an existing multifamily dwelling from two (2) detached ADUs to no more than eight (8) detached ADUs, provided that the number of ADUs does not exceed the number of existing dwelling units on the lot.  It would also prohibit local agencies from imposing objective development or design standards that are not authorized by state law on ADUs subject to ministerial approval, or from requiring the replacement of parking spaces if uncovered parking is eliminated to construct an ADU.

The Governor has until September 30, 2024, to either sign or veto legislation passed during the California State Legislature’s 2024 legislative session.

 

Authored by Reuben, Junius & Rose, LLP Attorney, Alex Klein, and Partner, Melinda Sarjapur.

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.

HCD Reverses Course: No Zoning Amendments for Builder’s Remedy Projects

| Chloe Angelis
HCD

Back in May, we wrote about a March 28, 2024, Department of Housing and Community Development (“HCD”) Letter of Technical Assistance to the City of Compton, which determined that the Builder’s Remedy does not prohibit a city or county from requiring Builder’s Remedy projects to obtain zoning or general plan amendment approvals.[1]  Since then, HCD has issued a Letter of Technical Assistance and a subsequent Notice of Violation[2] to the City of Beverly Hills, walking back that March determination and confirming that a Builder’s Remedy project cannot be denied based on inconsistency with a jurisdiction’s zoning ordinance or general plan land use designation.

The Builder’s Remedy, which is part of the Housing Accountability Act (“HAA”), allows developments that meet certain affordability thresholds to bypass local zoning when a city or county is out of compliance with housing element requirements.

In the March letter to the City of Compton, HCD wrote that “the Builder’s Remedy does not expressly prevent the City from requiring discretionary permits and/or legislative actions (e.g., GPAs, Zoning Changes, CUPs, specific plan amendments, etc.) that would be required for similar projects where the Builder’s Remedy does not apply.”  While the March letter focuses on a general plan amendment and zoning change intended “to remedy the inconsistencies between the project and applicable regulatory documents that will result when the project is approved,” the determination cuts to the core of the Builder’s Remedy, which is meant to provide a path for qualifying projects to completely bypass local zoning.

Thankfully, the latest pair of HCD letters to the City of Beverly Hills reverses course.  At issue in these letters is a 165-unit project with 20% low-income units.  The applicant had appealed an incompleteness letter, in which the City instructed the applicant to pursue a general plan amendment and zoning change.  Pending the City Council’s decision on the appeal, the applicant sought direction from HCD on whether a general plan amendment and zoning change could legally be required under the HAA.

The June 26, 2024, Letter of Technical Assistance acknowledges the earlier City of Compton Letter and walks back the March conclusion, explaining that a requirement to pursue a general plan and/or zoning amendment is, in fact, a violation of the HAA:

“While it remains true that the statutory language in the HAA does not expressly prevent the City from requesting or requiring legislative actions (e.g., a GPA/ZC) that would be required for similar projects where the Builder’s Remedy does not apply, requiring such action where the Builder’s Remedy does apply leads to an absurd outcome . . .

The HAA is clear that a project protected by the Builder’s Remedy may not be disapproved for inconsistency with a jurisdiction’s general plan and zoning ordinance.  Accordingly, a jurisdiction that refuses to process or approve a project subject to the Builder’s Remedy due to the applicant’s refusal to submit a GPA/ZC requested or required by the jurisdiction to resolve such an inconsistency violates the intent of the HAA.

. . . In other words, the requirement for a GPA/ZC is essentially a requirement for consistency, and disapproving the project for failure to resolve that inconsistency is effectively a disapproval on the grounds of inconsistency.  The HAA prohibits such a disapproval.”

Following the June letter, HCD issued a Notice of Violation after the Beverly Hills City Council ignored HCD’s prior guidance and denied the applicant’s appeal of the City’s incompleteness letter, based on a finding that a general plan amendment and zoning change are required for the application to be deemed complete.

HCD confirms in the Notice of Violation that, irrespective of the HAA, the Permit Streamlining Act prohibits a city from determining that an application is incomplete on the basis that it does not include an item (in this case, a general plan amendment and zoning change application) that was not included in the submittal requirement checklist.

The Notice of Violation also offers two important reminders about processing preliminary development applications (pursuant to Government Code section 65941.1) and the rights provided by a vested preliminary development application:

(1) The 90-day deadline that an applicant has to respond to a notice of incompleteness resets each time a city issues a notice of incompleteness, such that a project with multiple incompleteness letters and responses could have multiple 90-day response periods without losing the vested right of a preliminary development application.

(2) A vested preliminary development application remains vested unless the number of units or the square footage changes by at least 20%. Other project changes do not affect the rights conferred by a vested preliminary development application.

[1] HCD RE: 1601 W. El Segundo Blvd., Compton – Letter of Technical Assistance (March 28, 2024); available at https://www.hcd.ca.gov/sites/default/files/docs/planning-and-community/HAU/compton-hau604-ta-03282024.pdf.

[2] HCD RE: 125-129 Linden Drive, Beverly Hills – Notice of Violation (August 22, 2024) and HCD RE: 125-129 Linden Drive, Beverly Hills – Letter of Support and Technical Assistance (June 26, 2024); both available at https://www.hcd.ca.gov/sites/default/files/docs/planning-and-community/HAU/beverly-hills-hau-1071-nov-082224.pdf.

 

Authored by Reuben, Junius & Rose, LLP Partner, Chloe Angelis.

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.