Legislative steps toward more affordable housing in California

Homes for low- and moderate-income households are hard to find in California. The lack of homes available has reached a crisis point in California’s largest cities, leading to rising homelessness and decreased household formations.

California lawmakers are fighting back against the housing shortage with the introduction of several laws aimed to encourage builders to construct more low- and mid-tier housing and reduce housing costs for low- and moderate-income households.

AB 2406 Authorizes junior ADUs

Effective date: September 28, 2016

This new law authorizes local governments to allow for the construction of junior accessory dwelling units (ADUs), defined as dwellings of no more than 500 square feet and fully contained within an SFR. It also prohibits local agencies from requiring additional parking requirements for junior ADUs, treating these tiny units as part of the same SFR unit when it comes to installing water, sewer and power so a separate connection fee cannot be required for the junior ADU.

AB 2299: Loosens ADU regulations

Effective date: January 1, 2017

Under AB 2299, regulations around all types of ADUs are loosened. The new law:

  • limits parking requirements for all types of attached or unattached ADUs to one parking space per unit or bedroom;
  • provides maximum standards a local government is authorized to issue on ADUs (for example, an ADU may be built on the property even if it is zoned for SFR use only);
  • removes the setback requirement for ADUs built inside an existing garage; and
  • limits the setback requirement to no more than five feet from the side and rear of the lot for an ADU built over a garage.

SB 166: Residential density and affordability

Effective date: September 29, 2017

Each local government will need to assess its regional housing needs for each resident, based on an income assessment. The new law adds more restrictions on local governments seeking to re-zone for lower density. [Calif. Gov. Code §65863(a)]

This will ensure enough housing is available for each income segment, addressing the current shortage of affordable housing units across the state. It encourages re-zoning of areas for certain types of housing development.

SB 35: Streamline planning and zoning process

Effective date: September 29, 2017

Local governments across California will need to streamline their approval processes for new housing and enhance planning for new development and housing.

These new standards include:

  • subjecting multi-family projects to streamlined approval;
  • limiting parking requirements on streamlined developments; and
  • removing the expiration date on approvals for streamlined affordable housing projects. [Calif. Government Code 65913.4]

*NIMBY

Not-in-my-backyard. A vocal advocate for policies which exclude certain residents, types of construction or density levels from a neighborhood.

SB 167: Anti-NIMBY action

Effective date: September 29, 2017

SB 167, known as the Housing Accountability Act, makes it harder for a local government to disapprove of an affordable housing project. This essentially cuts off not in my backyard (NIMBY)* advocates who prefer their neighborhoods remain low density.

SB 540: Workforce Housing Opportunity Zone

Effective date: January 1, 2018

This new law aims to speed up the approval process for affordable housing.

The CEQA process can delay and cancel development projects, making it more costly, and risky, for builders to build. Further, NIMBY advocates are frequent abusers of CEQA to halt projects.

This new law advances the CEQA review process by allowing local governments to establish Workforce Housing Opportunity Zones. Once these zones are in place, the government may conduct an advance environmental impact report review of the area. This will speed up the approval process by efficiently evaluating a large area upfront for later development.

The California Environmental Quality Act (CEQA)

CEQA requires local agencies to follow numerous protocols to evaluate a project’s environmental impact before granting a permit.

*Inclusionary housing

A policy which requires developers to set aside a certain number of their units for low- and moderate-income households.

AB 1505: Overturns inclusionary housing ruling

Effective date: September 29, 2017

Local governments may now impose housing policies requiring certain percentages of developments to include housing for low- and moderate-income residents. This supersedes a 2009 ruling which caused confusion around local governments’ ability to mandate rents prior to tenancy. [Palmer/Sixth Street Properties, L.P. v. City of Los Angeles (2009) 175 CA4th 1396]

AB 571: Tax credit for farmworker housing

Effective date: September 29, 2017

This law authorizes advance payments of up to 20% of annual operating costs for migrant farm labor centers to contractors. It also expands the use of tax credits for farmworker housing.

AB 73 Housing sustainability districts

Effective date: September 29, 2017

AB 73 provides incentives for local governments to increase residential density. It also grants housing sustainability districts the ability to conduct advance environmental impact reports (EIRs) throughout the district, making future projects more efficient.

SB 2: Building homes and jobs act

Effective date: January 1, 2018

Senate Bill (SB) 2 mandates a recording fee of $75 for certain types of real estate transactions.

As of January 1, 2018, a $75 recording fee will be required for every transaction on each single parcel of real estate requiring a recording fee, in addition to any other local recording fee. This does not include the recording of any home sale connected to the residence of an owner-occupied residence. This does include other transactions related to owner-occupied residences, such as a mortgage refinancing. [Calif. Government Code §27388.1(a)(1); (2)]

The recording fees collected under this Act will be put into a fund to increase the affordable housing stock. [Calif. Gov C §27388.1(a)(3)]

  • 50% of the funds will be available to local governments to update planning and zoning 50% 50%
  • 50% of the funds will be made available to California’s homeless population through rental assistance and construction of new shelters 50% 50%

SB 3 Veterans and Affordable Housing Bond Act

SB 3 will appear on the state ballot in November 2018. It is likely to pass, and if it does, the new law will issue up to $4 billion in bonds to finance various housing programs in California. $3 billion of these bonds will go toward existing state finance programs, while $1 billion will provide additional financing to the CalVet home loan program.