To lessen housing production delays amidst California’s affordable housing shortage, Governor Gavin Newsom signed into law Assembly Bill (AB) 1561 on September 28, 2020. This bill extends certain housing entitlements, in an effort to decrease disruptions in housing financing, planning and construction.

Why are extended housing entitlements necessary?

Previously, cities and counties addressed permit extensions on a case-by-case basis, which required significant resources especially during the COVID-19 pandemic. Given these constraints, AB 1561 pushes back the expiration of all permits issued and in effect before March 4, 2020, setting them to expire on December 31, 2021.

AB 1561 limits housing permit extensions to:

• legislative, adjudicative, administrative, or any other kind of approval, permit, or other entitlement for housing development projects issued by a state agency;
• approval, permit, or other entitlement issued by a local agency for a housing development project that is subject to the Permit Streamlining Act;
• a ministerial approval, permit, or entitlement by a local agency required for a housing development project;
• a requirement to submit an application for a building permit within a specified period of time after the effective date of a housing entitlement described in the second and third bullets above; and
• a vested right associated with an approval, permit, or other entitlement described in the first and fourth bullets above.

California is in the clutches of an affordable housing shortage, and more construction is the only answer to the problem. During the six-month phase ending in December 2020, single family residential (SFR) starts were 24% below one year earlier and multi-family construction starts were down 41%.

Though the pandemic has intermittently shut down construction and added to delays, this downward trend began in 2019. The pandemic’s effect on the economy has stalled builders throughout much of last year, but hopefully this legislative shortcut will expedite sorely needed construction.

Related article:

Legislative steps towards more affordable housing