Governor Seeks to Streamline Approval of Multifamily Housing Projects

In an effort to encourage housing production, Governor Jerry Brown has made a bold proposal to streamline the approval of certain multifamily housing projects that include a portion deed-restricted affordable units. The proposal would give certain multifamily projects “by right” entitlement to develop, thereby removing a local government’s discretionary authority to reject such projects and reducing the approval process.

The proposal – called Streamlining Affordable Housing Proposals – is contained in a trailer bill to the administration’s budget revision and would add section 65913.3 to the Government Code. For qualifying projects, the local government (including charter cities) could not require discretionary review such as a conditional use or planned unit development permit. Since such approvals would be ministerial, such projects would be exempt from the California Environmental Quality Act.

To achieve by right status, a project must meet five separate criteria:

• The applicant must notify the local government that it intends to proceed under section 65913.3 and certify, under penalty of perjury, that the development conforms to all of the statute’s requirements;
• The development must be consistent with applicable objective general plan and zoning standards at the time the application is submitted to the local government;
• The development must be located on an “urban” site, i.e., either immediately adjacent to parcels developed with urban uses or surrounded by at least 75 percent of parcels developed with urban uses;
• The development must be attached housing with at least 20% of the units to be set aside (deed-restricted for at least 30 years) for lower-income residents (those making 80% or less of median gross income). However, the affordability requirement is reduced if the development is within a half-mile of a major bus line stop, train or ferry station (i.e., in a “transit priority area”). In that case, only at least 5% of the units must be set aside for very-low income residents (those making 50% or less of area median income) or 10% set aside for lower-income residents (those making 80% or less of area median income); and
• If the site is not a designated housing site, then it may not be on certain types of land (e.g., prime farmland, wetlands, very high fire hazard zone, hazardous waste site, delineated earthquake fault zone or flood plain).

The proposal also includes streamlined processing for qualifying projects. If the local government determines the project is inconsistent with general plan and zoning standards, it must give written documentation of, and explain the reasons for, the inconsistency within 30 days of the application’s submittal. If this deadline is missed or the documentation regarding the inconsistency is inadequate the development is deemed to qualify for by right approval.

Such projects, would remain subject to design review, but design review must take place within 90 days from the application’s submittal and “shall not in any way inhibit, chill, or preclude” ministerial approval. In other words, the local agency cannot turn its design review process for qualifying projects into a discretionary approval that would be subject to CEQA. Projects that would directly displace existing residents (e.g., by demolishing an existing residential building) would be subject to the California Relocation Assistance Act.

The proposed legislation would strengthen certain laws already on the books, such as Government Code section 65589.4, which makes attached housing developments a permitted use not subject to a conditional use permit in certain circumstances. However, in general, Section 65589.4 requires qualifying projects to include about double the percentage of affordable housing and other more restrictive provisions than the proposed new law would require.

This new proposal would reduce the amount of affordable housing needed to qualify, would dramatically reduce entitlement processing time, and require projects to meet objective general plan and zoning standards that exist at the time an application is submitted, not when it is deemed complete. Since approval of qualifying projects would be ministerial, they would be exempt from CEQA. The proposal is intended to apply broadly and expressly provides that it would apply “notwithstanding anything to the contrary contained in this code or in any other law.”

As it stands, even where multifamily projects are consistent with general plan and zoning provisions, they may need to undergo CEQA analysis and discretionary approvals that can last years and are more easily subject to legal challenge by opponents.

Whether cities will oppose the Governor’s proposal is yet to be seen, but many may object to a measure that reduces local control. Such concerns may be overstated since a local government’s general plan and zoning are intended to reflect anticipated development. However, in light of the magnitude of the state’s housing crisis and that the lack of housing inhibits economic development, the legislature may agree that more dramatic steps must be taken in light of decades of anti-development actions perpetuated at the local level.

The State’s Legislative Analyst, who has previously authored detailed reports decrying “NIMBYism” (that is, “Not In My Back Yard”) as a major contributing factor to the housing crisis, commented that the Governor’s proposal “has merit” and that it should be strengthened and expanded by making more projects eligible and lowering the affordability requirements that must be met, as well as including changes to guard against actions that communities may take (e.g., reducing allowed densities, or adopting restrictive zoning provisions) to hinder the use of streamlined approval.

The state budget, on which this trailer bill is attached, is set for a vote as early as June 1, however the language of the proposal could change and the vote on the budget delayed.  (By law, legislators must send a final spending plan with any revisions to the governor by June 15.)  We will continue to track the progress of, and provide updates regarding, the Governor’s proposal.  Click here to read the proposal.

Please feel free to email Todd at ToddWilliams@wendel.com if you have any questions.