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 725: Greater, denser housing plans

Effective date: January 1, 2022

This bill requires at least 25% of a metropolitan jurisdiction’s regional housing need for moderate-income housing be allocated to sites with zoning that allow at least four units of housing, but no more than 100 units per acre. For above moderate-income housing, this bill requires at least 25% of regional housing need be allocated to sites with zoning that allows for at least four units of housing.

AB 2011 & SB 6: Encourages commercial-to-residential conversions

Effective date: July 1, 2023

Developers now have two options for converting commercial units to residential: to comply with stricter standards meeting low-income parameters (through AB 2011, which exempts commercial conversions from conditional use permits and environmental impact reports.) or stricter labor standards for builders (through SB 6, which allows residential development within areas zoned for office, retail or parking uses).

AB 2483: Incentives for developers to set aside units to address homelessness

Effective date: January 1, 2023

AB 2483 requires the Department of Housing and Community Development (HCD) to award incentives to Multifamily Housing Program project applicants that set aside 20%-to-50% of the projects units, when the project includes more than 100 units, for individuals experiencing homelessness or who are eligible for services such as the Program of All-Inclusive Care for the Elderly.

AB 2221 & SB 897: Smooths the ADU permitting process

Effective date: January 1, 2023

When a homeowner submits an accessory dwelling unit (ADU) permit application, local agencies need to approve or deny an application within the same time frame using objective standards. Further, when the ADU application is denied, the permitting agency needs to return in writing a full list of items that are defective or deficient and a description of how the application can be remedied by the applicant within the same timeframes.

AB 345: ADUs conveyed separately

Effective date: January 1, 2022

This bill requires each local agency to allow an accessory dwelling unit (ADU) to be sold or conveyed separately from the primary residence to a qualified buyer. To smooth the transition, it also imposes an additional condition on tenancy in common (TIC) agreements to delineate all areas of the property that are for the exclusive use of a co-tenant. This includes each co-tenant’s responsibility for the costs of taxes, insurance, utilities, general maintenance and repair, and improvements associated with the property, and dispute resolution procedures among co-tenants.

AB 1584: Prohibits unreasonable ADU restrictions

Effective date: January 1, 2022

This bill makes any covenant condition and restriction (CC&R) void and unenforceable when it affects the transfer or sale of an interest in real estate that effectively prohibits or unreasonably restricts the construction or use of an ADU on a lot zoned for SFR use. It also requires a common interest development (CID) to amend any governing document that includes a covenant restricting ADUs in this manner by July 1, 2022.

AB 571: No impact fees for affordable housing

Effective date: January 1, 2022

This bill prohibits a local government from imposing affordable housing impact fees on a housing development’s affordable units. This prohibition includes inclusionary zoning fees and in-lieu fees.

AB 2782: Mobilehome change of use and rent control

Effective date: January 1, 2021

This bill requires the manager of a mobilehome park seeking to change the park’s use, terminating the residents’ tenancies, to provide a report on the impacts and a plan for where the residents might find replacement housing at least 60 days prior to requesting permits for change of use. The management is required to pay for an appraisal of the in-place market value of each resident’s mobilehome and, when a resident is unable to obtain adequate replacement housing, to pay the appraised market value to the displaced tenant.

This bill also includes mobilehome leases exceeding 12 months in local rent control measures for rental agreements entered into beginning February 13, 2020 through January 1, 2025. 

AB 1561: Housing entitlement extension

Effective date: January 1, 2021

This bill extends by 18 months the period for the expiration, effectuation, or utilization of a housing entitlement that was issued before March 4, 2020 and is scheduled to expire before December 31, 2021. This extension will account for the slowdown in housing projects and financing during the COVID-19 response.

SB 2923: BART transit-oriented housing

Effective date: July 1, 2020

The new law impacts cities connected by Bay Area Rapid Transit (BART). It requires BART to adopt transit-oriented standards for the building of housing near their stations. Most of this housing will be created on top of existing BART parking lots. The new housing units built will consist of at least 20% that are affordable to low- or very-low-income households, though BART has stated its non-official goal is 35%.

AB 101: Housing development action

Effective date: July 1, 2019

AB 101 allows the Attorney General to take action against a city or county, including levying fines, when its housing element does not follow laws to meet regional housing need.

AB 671: Incentives for accessory dwelling units (ADUs)

Effective date: January 1, 2020

This new law requires local governments to make incentives for the creation of ADUs accessible to very low-, low- and moderate-income households. It also requires the Department of Housing and Community Development to develop a list of existing state grants and incentives for construction and operating these types of ADUs, and to post this list on its website.

SB 13 and AB 881: ADUs in SFR zones

Effective date: January 1, 2020, expires January 1, 2025

This law change authorizes the creation of accessory dwelling units (ADUs) in areas zoned for single family residences or multi-family residences. It also broadens application, occupancy, parking and minimum square footage requirements.

AB 1110: Rent increases: noticing

Effective date: January 1, 2020

AB 1110 requires a landlord increasing the rent of a month-to-month unit by 10% and no more than 15% to provide 90 days’ notice before the increase. A landlord increasing the rent on a month-to-month unit by more than 15% needs to provide at least 120 days’ notice.

AB 1399: Rent control, Ellis Act evictions

Effective date: January 1, 2020

This law specifies that a landlord who pays a penalty under an Ellis Act eviction is not exempted from offering their unit to the prior tenant when it returns to the market.

AB 68: Accessory dwelling unit (ADU) permitting timeline

Effective date: January 1, 2020

This law shortens the permitting time for approving the creation of an ADU from a maximum of 120 days from receiving an application to 60 days when there is an existing dwelling on the property.

SB 1130: Helps vulnerable mobilehome owners

Effective date: July 1, 2019

This new law allows qualifying low-income senior and disabled mobilehome owners to postpone property tax payments until the eventual sale, transfer of title or death of the homeowner. At that time, the deferred payments will be due to the county with interest. The law change will help vulnerable mobilehome owners stay in their residences where previously they might have been unable to keep up with property taxes.

SB 828: Tightens previous legislation to better determine regional housing need

Effective date: January 1, 2019

This law follows up on a 2017 bill, SB 166, which required local governments to determine regional housing needs and loosen zoning to meet those needs. Now, prior under-production of housing may not be used to calculate the area’s regional housing need. Instead, each region needs to strike a balance between the number of low-wage jobs present alongside the number of housing units available to low-income workers. 

Additionally, each region needs to strive for a healthy rental vacancy rate, which the new law defines as no less than 5%.

SB 765: Homeless shelters made CEQA exempt, loopholes removed for streamlined approval

Effective date: January 1, 2019

SB 765 removes loopholes from existing exemptions for builders of lower-income housing developments receiving streamlined approval, preventing a landlord from taking advantage of the streamlined approval without meaningfully setting aside units for lower-income households.

The law also specifically exempts homeless shelters funded by, leased by or constructed on land owned by a city or county from the California Environmental Quality Act (CEQA).

AB 3194: Anti-NIMBY legislation

Effective date: January 1, 2019

This new law makes it easier for developers to build housing for low- and moderate-income households by considering these types of developments to meet local zoning standards. Previously, the local governments were allowed to require re-zoning to occur before approving the development, leaving the door open for not-in-my-backyard (NIMBY) advocates.

The legislative intent of this new law is for local governments to encourage urban infill rather than sprawling development into surrounding agricultural areas that may lack infrastructure.

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]


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 appeared on the state ballot in November 2018 as Proposition 1: the Housing Programs and Veterans’ Loans Bond. It passed, issuing up to $4 billion in bonds to finance various housing programs in California. $3 billion of these bonds go toward existing state finance programs, while $1 billion provide additional financing to the CalVet home loan program.