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Controversial California Law Meant to Spur New Housing Could Get More Teeth

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An overhead view of two women watching housing construction from their balcony.
Julieta Aquino and her daughter Alexys on the balcony of their new home, watching a construction crew build additional affordable units. (Stephanie Lister/KQED)

A controversial California law meant to scare cities into allowing more housing could grow a few more teeth.

Attorney General Rob Bonta announced Tuesday that he is sponsoring AB 1893, a bill by Assemblymember Buffy Wicks (D-Oakland) that would update the builder’s remedy. The law allows developers to bypass local building rules and receive automatic approval for dense housing developments in jurisdictions that are out of compliance with state housing law.

AB 1893 updates the original law to reduce the amount of affordable housing required for builder’s remedy projects — from 20% to 10% — and exempt developments with 10 or fewer units from providing any affordable housing at all. It also clarifies where the projects can be located and establishes standards for how large they can be, among other changes.

Bonta said the bill clarifies “how the builder’s remedy will work in different situations.

“It provides clear and objective standards, to provide greater guidance, more clarity, more certainty as to when the builder’s remedy applies and when projects must be approved,” he said.

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By reducing the bill’s requirements and providing legal clarity on a law filled with ambiguities could empower more developers to use the law. And since the builder’s remedy only applies to cities or counties that don’t comply with state housing law, Wicks said the bill should further incentivize those jurisdictions to get in line.

“The message to local jurisdictions is very clear: The days of shirking your responsibility to your neighbors are over,” she said. “This bill is not about taking away local control. It’s about creating consequences for ignoring the law.”

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Though the builder’s remedy has been on the books since 1990, developers have only recently been willing to use it. That changed, in part, due to a bevy of new housing laws that have been approved over the past half-decade as the state seeks to spur the construction of some 2.5 million new homes by 2031.

In particular, jurisdictions are required to submit plans to the state every eight years detailing where developers can build new housing. But, because of those recent changes to state law, cities and counties not only have to plan for more housing than ever before, they also have to locate more of that housing in neighborhoods with access to highly-rated schools, grocery stores and transportation.

That’s meant that cities and counties have often had to resubmit plans multiple times.

As of Tuesday, 40% of cities and counties across the state were out of compliance with state housing law, and in the Bay Area, 37% were out of compliance — making them potentially vulnerable to builder’s remedy projects.

In the past two years, at least 93 builder’s remedy projects, representing 17,000 potential new homes or apartments, have been proposed across California, according to the pro-housing advocacy organization, YIMBY Law, which keeps a running tally — though Sonja Trauss, the organization’s executive director, admits the tally is an undercount.

“When a jurisdiction is in compliance with housing element law, that means they’ve made it possible to build the housing that we need,” Wicks said. “That means that they have zoned to ensure there’s enough land where it’s legal to build housing. They’ve removed constraints so that their approval process is more efficient and objective.”

Even without the update proposed under AB 1893, Trauss said the law has been successful “at motivating cities to get in compliance” with state housing laws.

“We’re looking forward to continuing to see positive results in the courts on projects using the existing program, and also looking forward to the improvements this bill promises in making the builder’s remedy even easier to use to build housing faster,” she wrote in an email.

The projects, however, have faced opposition from cities that have sought to block approvals under the builder’s remedy. In the wealthy Los Angeles-area city of La Cañada Flintridge, for instance, city officials denied an application for a project with 80 mixed-income apartment units, along with hotel and office space, arguing it had “self-certified” its own housing plan, making it immune to the law. Last month, a court ruled against the city, forcing it to proceed with processing the application.

AB 1893 clarifies where housing could be built, designating sites already used for housing, retail or office as appropriate and prohibiting projects on or adjacent to industrial sites. It also provides clearer objective standards for development, allowing projects to more than double or sometimes triple the density of housing the jurisdiction currently allows.

All of which should make it easier for developers to make sure their projects can’t be challenged in court, said Muhammad Alameldin, a policy associate with the Terner Center for Housing Innovation at UC Berkeley.

“It establishes a definitive objective standard,” he said. “This also diminishes the ability for local governments to disapprove projects by adding onerous standards or refusing to process applications.”

Alameldin said the projects are more likely to be financially feasible by lowering the requirements to provide affordable housing.

“So what the bill hopes to do is that by lowering the threshold, more projects will be proposed,” he said. “By making [the affordable housing requirement] 10%, then projects could start penciling across the state.”

One developer, Sasha Zbrozek, wasted no time submitting an application to build a five-unit townhouse on his property in the Bay Area’s Los Altos Hills. But just a month after he submitted it, city officials found it incomplete.

A year later, his project still hasn’t broken ground — a result, he said, of a combination of factors, including high-interest rates and regulatory hurdles. Even with the changes proposed to the builder’s remedy, Zbrozek said it’s unlikely to spur enough housing to make a dent in the state’s affordability crisis.

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“I’ve realized that if I want to build homes, that it will need to be in a different state that has fewer and more favorable laws,” he said.

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