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.

Building Department Update

| Gillian Allen
DBI

The San Francisco Department of Building Inspection (“DBI”) is working hard to improve on permit review and processing times. They launched a program called “Enhanced In-House Review Permit Application Process” on July 1, 2022, which should streamline the review and issuance of small and medium sized projects, and there are many new faces at the over-the-counter shifts which inevitably gives more seasoned staff time to work through their backlog.

The Enhanced In-House Review program incorporates suggestions from stakeholders and internal staff and creates new plan check categories. Until recently, DBI had only two options for plan review—Over-the-Counter and In-House review. For a project to qualify for Over-the-Counter review, the plan review needed to be an hour or less at each plan review station. Under their new Pre-Plan Check system launched on July 1, they added two new plan check categories for small to medium-sized projects that don’t qualify for Over-the-Counter review, but could be reviewed in one day after their assignment to a reviewer. Projects are now pre-screened per the criteria below:

Plan Check Category OTC Level 1 In-House Level 2 In-House Level 3 In-House Level 4
Time for plan review <1 hour 1-4 hours 4-8 hours >8 hours

New Central Queue

The new system also changes the way DBI assigns projects to plan reviewers. Previously, they assigned projects to plan reviewers as they came in—so if a plan reviewer had a large workload or went on vacation, customers waited longer for plan review. Under the new system, projects now go into a central queue and will be assigned to plan reviewers on a weekly basis. For customers, it means that once your project is assigned to a plan reviewer, you can expect DBI to begin review on your project in the next few business days. Over the past three weeks, the new process has effectively increased the quality of plan submissions and is helping DBI manage its workload better.

DBI’s next step is to remove projects from individual plan checker’s queues and to move all the existing in-house review project submissions into one queue and then begin assigning them to plan reviewers on a weekly basis.

The program has been in action for about two months, and according to the August update, DBI is pleased with the progress on the transition to the new process. About 68% of new applications have been accepted as complete and all of the older priority projects, such as affordable housing and Accessible Dwelling Units, have been assigned to a plan reviewer.

The new system also establishes a minimum 20 business days and maximum 40 business days target for DBI to respond to the application with comments for the applicant to clarify or address. Other agencies will attempt to match these turnaround thresholds but may have exceptions.

To ensure clear communication and to keep projects moving, DBI staff comments that cannot be or are not addressed with two resubmittals (ie: resubmitting revised plans), will be automatically escalated to a DBI plan check supervisor. Should a project have unresolved comments after four resubmittals, the project will automatically be escalated to the Deputy Director of Permit Services.

DBI plans to start posting updates to their website in September to let you know the date range of projects being assigned to DBI staff every week and appreciates your support as they move from the old system to a new system that will serve you better. Learn more here.

 

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.

Reinstatement of Electronic Plan Review

Electronic Plan Review

Electronic Plan Review

The San Francisco Department of Building Inspection has reinstated Electronic Plan Review (EPR) for any new in-house review projects. This process saves applicants time and money on their project.

  • Saves Money – No need to print multiple large rolls of paper plans and coordinate multiple design professional wet signatures. Digital signature over stamp accepted.
  • Increases Transparency – All project information, comments, revisions, and approvals are captured, aggregated, and logged in one location, accessible online 24/7 through the designated Bluebeam session.
  • Saves Time – With the project plans online, plan checkers can conduct some reviews simultaneously, and any revisions can be uploaded directly into the Bluebeam session by the respondent rather than in person rechecks and paper submittals.

The EPR option is not currently available to any projects that were submitted in paper and currently under review. It is only for new applications. It also does not apply to over-the-counter permits. There are several formatting requirements, and the Building Department is offering a training session which you can register for below:

More information is available on the DBI website through the links below:

 

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.