The State Continues to Impact Local Independent Land Use Decision Making

Over the past several years I have highlighted in these articles policies adopted by the California State Legislature which impacts, restricts and directs the local planning and land use decisions of local cities and counties. This has included the removal of many restrictions on Accessory Dwelling Units (ADUs) on single-family home sites and providing incentives for affordable and higher-density housing which also limits local government’s ability to deny such projects.

Repurposing Commercially Zoned Land for New Residential Development

At the August 31, 2022, end of the legislative session, two new significant bills, AB 2011 and SB 6, were passed and the Governor has signed them into law. They both have the potential to impact how local governments must approve new housing development on commercially zoned areas. These bills were supported by the development industry, pro-housing organizations, and labor unions. Both bills have specific requirements and I have provided a synopsis of some of the key provisions below. These bills take effect on July 1, 2023 and remain in effect until 2033 unless they are extended.

AB (2011 Wicks) [Streamlined Approval Of Affordable or Mixed-Income Projects. AB 2011 provides a streamlined, ministerial review process that is CEQA-exempt, comparable to the existing provisions of SB 35 for multifamily housing development projects on commercially zoned sites. This is an effort to convert commercial sites which have been severely impacted by the changes in shopping and employment which were occurring prior to the Pandemic and have been exacerbated since then. The affordable housing allowed in these commercially zoned properties will need to meet wage and labor requirements which would include prevailing wage.

This bill applies to 100% affordable projects on commercially zoned property. In addition, there are provisions for the location of projects along commercial streets which are defined by the road’s right of way. The affordability requirements applicable to mixed-income projects are:

• Rental: (i) 8% very low income and 5% extremely low income, or (ii) 15% low income; and
• For-sale: (i) 30% moderate income, or (ii) 15% low income.

Developments of 50 or more housing units require construction contractors to also participate in an apprenticeship program or request dispatch of apprentices from a state-approved apprenticeship program and make specified health care expenditures for construction craft employees.

AB 2011 provides a list of how a project can get streamlined as was also contained in SB 35. Any proponent would need to review these requirements to see if your project would qualify for the benefits and protections of this bill.

SB 6 (Caballero) [No Rezoning of Commercially Zoned Property for Residential Use] SB 6 allows some housing or mixed-use development projects as permitted use on commercially zoned parcels of 20 acres or less without requiring rezoning by local governments. SB 6 differs from AB 2011 in some important ways, including:

1. Does not provide a new streamlined ministerial or CEQA-exempt approval. As a result, there may be some discretion to local jurisdictions, although existing SB 35 streamlining can be used for SB 6 projects.
2. Mandates that in addition to paying prevailing wages, the extremely costly “skilled and trained workforce” requirement for construction work (unless fewer than 2 bids are received, in which case this heightened requirement does not apply during the rebid).
3. There is no mandate for housing affordability requirements.

SB 6 and AB 2011 also allow eligible projects the protection of the Housing Accountability Act, which as we have previously written limits local government’s ability to reject a project or reduce density.

Builders Remedy Law

One other new potential impact on local land use authority is what is called the “Builders Remedy Law”. This was created almost 30 years ago but enhanced in 2019 to have local governments follow the state mandate for increased housing in their Housing Elements. State law requires each local city and County to adopt a Housing Element which must be approved the California Department of Housing and Community Development. In the past, this approval was frequently pro forma. However, with the state mandating that each local government entity plan for significant increases in housing the Department is now rejecting local government Housing Elements on many occasions. When that occurs, and a Housing Element has not been approved by its deadline, it is considered out of compliance. Developers can then submit a builder remedy project to the local government. In Santa Monica for example 12 project applications have been submitted during the time period the Housing Element was out of compliance. It is currently estimated that more than 100 cities and counties in Southern California remain out of compliance. The main restriction on these applications is that a portion of the housing must be set aside for low- or middle-income families. It is also important to note that any project must still comply with the California Environmental Quality Action (CEQA).

As a property owner looks at what can be developed on their property, they should look at these new laws, along with the laws passed in the past few years to determine how they can take advantage of them.