Alleviating Barriers to Housing Development in California
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Alleviating Barriers to Housing Development in California

Brownstein Client Alert, Oct. 17, 2022

Gov. Gavin Newsom Signs Into Law New Efforts to Address the State’s Housing Crisis

On Sept. 28, 2022, California Gov. Gavin Newsom executed this year's housing legislation intended to address the state’s housing crisis. While the entire legislative package is intended to “create much-needed new housing units aimed at helping middle and low income Californians,” SB 6, AB 2011 and AB 2097 may be particularly helpful for housing developers to address regulatory barriers in developing commercial properties and properties near transit. A summary of the key features and eligibility requirements in these bills is provided below.

Senate Bill (SB) 6: Permitting Housing on Commercially Zoned Parcels

  • Multifamily housing developments are allowed on commercially zoned (retail, office or parking) property without requiring the property to be rezoned, provided that the property is 20 acres or smaller and located within an urban area, the housing development meets certain density requirements, and the housing development is not on a site or adjoined to a site where more than one-third of the square footage is dedicated to an industrial use.
  • Housing developments are required to comply with local zoning, parking, design and other ordinances; local code requirements; procedures applicable to housing developments; and certain other objective local requirements for the property.
  • Housing developments are required to provide notice to commercial tenants on the property and relocation assistance to eligible tenants.
  • Short-term residential rentals (i.e. shorter than 30 days) are limited in housing developments.
  • Applicants are allowed to leverage the Housing Accountability Act and Density Bonus Law
  • Housing developments are required to comply with the California Environmental Quality Act (CEQA), the California Coastal Act (if applicable), state or local affordable housing laws and state or local tenant protection laws.
  • Applicants must commit to paying prevailing wages for workers.
  • Applicants must commit to the "skilled and trained workforce" requirements for construction work unless, after following specified bid procedures, fewer than two bids are received.
  • The bill takes effect July 1, 2023.

Assembly Bill (AB) 2011: By-Right and CEQA-Exempt Housing on Certain Commercially Zoned Parcels

  • Certain multi-family (five units or more) housing developments are allowed on commercially zoned (retail, office or parking) property pursuant to a CEQA-exempt, streamlined ministerial approval process provided that the development meets similar conditions as SB 6 and several additional conditions, such as: at least 75% of the property’s perimeter adjoins parcels that are developed with urban uses; any applicable neighborhood plan must permit multifamily housing on the site; if the property is vacant, the property does not contain tribal cultural resources and is not located within a very high fire hazard severity zone; and none of the housing is located within 500 feet of a freeway or 3,200 feet of an oil or gas extraction or refinery facility.
  • The bill provides two pathways to qualify for the benefits of the legislation—the housing project must either be (1) 100% affordable, or (2) mixed-income on a project site 20 acres or smaller that has a frontage along a “commercial corridor” of a minimum of 50 feet.
  • Additional restrictions applicable to the “commercial corridor” pathway include, among others, that the housing development may not require the demolition of certain types of housing of a historic structure, or be located on a property that is vacant and zoned for housing but not for multifamily residential use.
  • Applicants must commit to paying prevailing wages for workers and, for projects with 50 or more housing units, meet certain apprenticeship program requirements.
  • Development standards for the 100% affordable project pathway require, among other things, that the residential density meet or exceed the specified housing density for lower income households in that jurisdiction and certain objective zoning, subdivision and design review standards.
  • Development standards for the “commercial corridor” pathway require, among other things, that the development satisfy certain setback and density requirements, with the density being dictated by the location and size of the property, and certain objective zoning, subdivision and design review standards.
  • For the “commercial corridor” pathway, additional benefits of the legislation include a prohibition on parking requirements, except for electric vehicles and accessible parking spaces, and a height limit dictated by the local government or the limits set in the legislation, whichever is greater.
  • The bill takes effect July 1, 2023.

AB 2097: Eliminating Parking Requirements for Residential, Commercial and Other Development Projects Near Major Transit Stops

  • The bill generally restrains a public agency from imposing minimum parking requirements on any residential, commercial or other development project that is located within one half of a mile of a “major transit stop.”
  • “Major transit stop” is defined as a site containing an existing rail transit station, a ferry terminal served by either a bus or rail transit service, the intersection of two or more major bus routes with a frequency of service interval of 15 minutes or less during the morning and afternoon peak commutes and any major transit stops that are included in the applicable regional transportation plan.
  • There is an exception for a public agency to require minimum parking requirements if the agency makes written findings, within 30 days of receipt of a completed application, that not imposing the parking requirement would have a substantially negative impact on: the agency’s ability to meet its regional housing need for low- and very low-income households, the agency’s ability to meet any special housing needs for the elderly or persons with disabilities and existing residential or commercial parking within one half of a mile of the housing development project.
  • The exception detailed above (i.e., the public agency’s ability to require parking) cannot be used on housing development projects that satisfy any of the following: the development dedicates a minimum of 20 percent of the total units to very low-, low- or moderate-income households, students, the elderly or persons with disabilities; the development contains fewer than 20 housing units; or the development is subject to parking reductions based on the provisions of any other law.
  • Any requirements applicable to new multifamily or nonresidential developments to provide electric vehicle supply equipment installed parking spaces or parking spaces accessible to persons with disability would still apply.
  • The bill takes effect Jan. 1, 2023.

For more information about these bills or specific analysis of how these bills may apply to specific development projects or provisions in the development process, please contact the authors.'

This document is intended to provide you with general information regarding new affordable housing development laws in California. The contents of this document are not intended to provide specific legal advice. If you have any questions about the contents of this document or if you need legal advice as to an issue, please contact the attorneys listed or your regular Brownstein Hyatt Farber Schreck, LLP attorney. This communication may be considered advertising in some jurisdictions. The information in this article is accurate as of the publication date. Because the law in this area is changing rapidly, and insights are not automatically updated, continued accuracy cannot be guaranteed.

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