State Law Could Overhaul “Builder’s Remedy”

Assemblymember Buffy Wicks has introduced Assembly Bill 1893 (“AB 1893”) to “modernize” the so-called “Builder’s Remedy” that allows projects with enough affordable units to bypass local zoning requirements when a city or county is out of compliance with Housing Element Law.   This month, California Attorney General Rob Bonta announced his sponsorship of the bill.

The Builder’s Remedy is part of the state’s Housing Accountability Act (“HAA”) that has been in effect for over 30 years. It prohibits local governments that haven’t met Housing Element deadlines from denying an application to build a housing project based on inconsistency with local zoning controls or a general plan designations so long as the project meets certain affordability requirements.

The Builder’s Remedy has laid idle for decades, but gained visibility and application over the past couple years as the Legislature has continued to strengthen state housing laws and numerous cities dropped the ball on meeting Housing Element deadlines.  It is no longer idle.  Housing advocacy groups have aggressively promoted the Builder’s Remedy, characterizing it as a “zoning holiday.”  Recent news coverage estimates that there are 93 Builder’s Remedy projects across the state that could deliver as many as 17,000 new housing units.[1]

Some cities have attempted to push back against the Builder’s Remedy as an unacceptable intrusion of state law into local land use permitting decisions.  These attempts have been met forcefully by the State Department of Housing and Community Development which has issued numerous advisory letters explaining that failure to process Builder’s Remedy projects could expose a city or county to liability under the HAA.  The Attorney General’s office has also intervened in litigation to enforce the Builder’s Remedy.  Just last month Los Angeles County saw the first court case victory for developers on a Builder’s Remedy project in La Caňada Flintridge, and a fleury of other cases are pending.  News coverage suggests that cities and counties have refused to process nearly half of the Builder’s Remedy applications filed based on arguments that it doesn’t actually apply, has been misinterpreted, or is itself unconstitutional.[2]

Developers have also pointed out the difficulty in meeting the affordability requirements of the Builder’s Remedy.  Projects must either provide 20% of the units at prices affordable to low-income households or 100% of the units at prices affordable to moderate income households.  Given current financial constraints, these affordability levels are often infeasible to meet.

AB 1893 would overhaul the Builder’s Remedy in a number of ways:

  • Revised Affordability Requirements. AB 1893 would replace the 20% low-income threshold with a 10% very-low-income threshold.  The 100% threshold for moderate-income projects would remain. Projects with 10 units or fewer would be exempt from affordability requirements.
  • Limiting Where Builder’s Remedy Can Apply. Currently, there is no restriction on what sites can apply the Builder’s Remedy. AB 1893 would only allow such projects on sites that permit housing, retail, office, or parking, or agricultural use if 75% of the site perimeter adjoins a site developed with urban uses.  Builder’s Remedy would not apply on a site or adjoined to any site where more than 1/3rd of the existing square footage is dedicated to industrial uses.
  • Capping Density. AB 1893 would generally cap the residential density of Builder’s Remedy projects to two- to three-times that otherwise permitted by local zoning, depending on whether the site is located in a high-resource area. Additional density (in an amount not yet specified) could be permitted for sites within ½ mile of a major transit stop.
  • Imposing Objective Development Standards. AB-1893 would require Builder’s Remedy projects to comply with objective zoning standards for the closest zone that allows multifamily residential use at specified density minimums, or if no such district exists, the zone that allows the greatest density in the locality.
  • Integrating the Builder’s Remedy with Other State Housing Laws. Among other items, this legislation prohibits local agencies from applying objective standards to Builder’s Remedy projects that would physically preclude their construction at the allowed densities or increase “actual costs.” It further clarifies that Builder’s Remedy projects can utilize State Density Bonus Law; that projects meeting residential density standards of AB 1893 will be deemed to satisfy objective density standards for streamlined ministerial development under AB 2011; and that projects meeting residential density and objective criteria of AB 1893 can qualify for qualify for streamlined, ministerial processing under SB 35.

As currently written, AB 1893 would not apply to Builder’s Remedy projects with applications deemed complete on or before April 1, 2024.

The Attorney General argues that AB 1893 is needed to “clarify and modernize” the Builder’s Remedy by “providing clear, objective standards for builder’s remedy projects, including density standards and project location requirements.”  It argues that these revisions will make the Builder’s Remedy into “a more effective enforcement tool because local governments will face greater certainty of swift consequences when they do not adopt a timely and substantially compliant housing element.”  Finally, the Attorney General argues that AB 1893 will yield better projects by incentivizing “development in urban infill and near transit centers, and promoting higher density housing that is more affordable than single-family homes.”

Opponents argue that AB 1893 will reduce the amount of affordable housing generated and reduce local control over land use permitting decisions.

We understand that some parties (including the Housing Action Coalition and YIMBY Action) are advocating for including the provisions of AB 1893 as an alternative to the existing Builder’s Remedy, but leaving the existing Builder’s Remedy in place for projects that are able to meet the increased affordability requirements and do not wish to be constrained by AB 1893’s limitations on location, density, and design.

AB 1893 passed from the Assembly Committee on Housing and Community Development and Local Government on April 17, 2024.  It will next be considered by the Assembly Committee on Local Government.  If it is signed into law this year, it would take effect in January 2025.

[1] California’s most controversial housing law, the ‘builder’s remedy,’ could get a makeover – Local News Matters

[2] Id.

Authored by Reuben, Junius & Rose, LLP Attorney’s Matthew Visick 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.