Government Code §§65582.1, 66200, 66201, 66202, 66203, 66204, 66205, 66206, 66207, 66208, 66209 and 66210; Public Resources Code §§21155.10 and 21155.11
Added and amended by A.B. 73
Effective date: January 1, 2018

Housing sustainability district ordinances

A city or county may now establish an ordinance creating a housing sustainability district to streamline residential development and increase density when:

  • the area is zoned for residential use through the issuance of permits;
  • the minimum density for multifamily developments is at least the density needed to accommodate low-income housing ;
  • the minimum density for single family residences (SFRs) is at least ten units per acre;
  • proposed developments are permitted and consistent with local building designs and codes;
  • no limitations or moratoriums on residential use apply to the area;
  • the area is not subject to any age or other occupancy restrictions;
  • the proposed housing units comply with all federal, state and local fair housing laws;
  • the district area does not exceed 15 percent of the total land area under the jurisdiction of the city or county;
  • the total area of all sustainability districts does not exceed 30 percent of the total land area under the jurisdiction of the city or county;
  • the city or county provides a method of review by an approving authority; and
  • developments in the district comply with requirements for the replacement of affordable housing units.

A housing sustainability district ordinance needs to:

  • establish an authority to review permit applications for development in the district;
  • require at least 20 percent of the residential units within the district be affordable to very low, low- and moderate-income households and comply with affordability restrictions for those 55 years old and older;
  • require a developer certify whether the project is a public work or, if not, that all construction workers employed will be paid at least the prevailing wages for the type of work and area — included in all employment contracts;
  • exclude projects that include a subdivision subject to the Subdivision Map Act or other subdivision law, unless the project receives funding through a low-income housing tax credit or is subject to the above requirement that all construction workers be paid the prevailing wage;
  • provide relocation assistance to residents displaced due to development within the district; and
  • remain in effect for no more than ten years, but allow for renewal by the city or county for up to an additional ten years.

A city or county may provide for mixed-use development in a housing sustainability district, but must apply uniform standards to all projects within the district, including ordinances for:

  • parking;
  • public access;
  • grading;
  • hillside development;
  • flood plains;
  • conservation;
  • view protection; and
  • the reduction of greenhouse gas emissions.

Any amendment or repeal of a district requires written approval from the Department of Housing and Community Development (DHCD).

A city or county needs to apply to the DHCD for preliminary approval of an ordinance for a housing sustainability district. When the DHCD denies an application, it must inform the city or county of their application’s deficiencies. Once preliminary approval is obtained, the DHCD has 45 days from receiving the application to confirm the applicant’s approval.

On or before October 1 of each year following approval of a housing sustainability district, the DHCD is to provide the city or county with a certificate of compliance when the city or county:

  • has a housing sustainability district in effect that complies with all requirements;
  • has only denied a permit for a residential development in a manner consistent with the district ordinance or housing element; and
  • has remained compliant with all design review standards.

Zoning incentive payments and developer applications

A city or county with a housing sustainability district is entitled to a zoning incentive payment based on the number of residential units constructed within the district. When a city or county reduces the density of sites within a district from the required levels, the city or county is to return the full amount of the payments received.

Further, a city or county may prescribe the application contents and fees for residential development permits. The city’s or county’s approving authority is to issue its decision to a developer applicant within 120 days of submission of the application.

An applicant who is denied may appeal by filing a complaint in the superior court within 20 days after denial.

A city or county may also create design review standards for a district to ensure the physical character of a development is consistent with surrounding buildings.

DHCD annual report

The DHCD is responsible for regulating all housing sustainability districts.

Further, it is required to conduct an annual review of the program by requiring participating cities and counties to provide data on their districts. The annual report is to include:

  • the status of the housing sustainability district program;
  • identification of the cities and counties seeking preliminary approval;
  • approved districts and the incentive payments awarded for each;
  • a summary of the land area within proposed and approved housing sustainability districts;
  • the number of projects under review in these districts, proposed residential units, building permits issued and completed housing units; and
  • an estimate of the number and size of proposed new districts, the number of residential units allowed in the new districts and any expected construction.

The annual report needs to be published on the DHCD’s website by November 1 of each year.

Editor’s note — This is one of
several bills recently passed by the California legislature to address the state’s housing shortage.

Read the bill text.

Related article:

Streamlined approval for infill multifamily developments