California’s new housing laws and how Newsom may implement them

As another wave of new California housing laws adopted by Gov. Jerry Brown in 2018 will continue to make incremental progress in increasing housing production at the local government level, many anxiously await to see how Governor-elect Gavin Newsom will achieve the goal stated during his campaign to oversee construction of 3.5 million new units of housing in California by 2025.

Following 2017, a year in which the California Legislature passed a high-profile package of 15 new housing laws, Brown recently signed into law 16 pieces of housing legislation, which will become effective on Jan. 1, 2019. Taken as a whole, these laws continue a significant trend toward increasing the expectations on local governments to make progress toward approving sufficient housing to meet the state's housing crisis.

Increasing Density and Housing Opportunities.

Assembly Bill 2923 (Chiu and Grayson) facilitates development near Bay Area Rapid Transit stations by granting the BART board of supervisors the authority to rezone any BART-owned land within a half-mile of a BART station. Local jurisdictions must then adopt conforming zoning amendments within two years after BART adopts standards for a district. Qualifying projects may apply for streamlined, ministerial processing as specified in Senate Bill 35. Several new laws also reform the state's longstanding Density Bonus Law, which entitles developers to a density bonus and to certain concessions and incentives in exchange for including affordable housing in developments. Notably, SB 1227 (Skinner) extends the State Density Bonus Law to student housing. AB 2753 (Friedman) seeks to expedite the processing of density bonus applications by requiring local governments to provide determinations regarding requests for incentives, concessions, waivers or parking reductions during the application process. AB 2372 (Gloria) authorizes local governments to grant an eligible developer a floor area ratio bonus in lieu of a bonus on the basis of dwelling units per acre. Finally, AB 2797 (Bloom) requires the State Density Bonus Law to be harmonized with the California Coastal Act so that both statutes can be given effect within the coastal zone.

Streamlining and Removing Barriers to Housing Production.

SB 765 (Wiener) and AB 3194 (Daly) make a series of "clean-up" revisions to the major streamlining laws from the 2017 housing package (SB 35 and the Housing Accountability Act). AB 2263 (Friedman) authorizes parking reductions for a development project in which a designated historical resource is being converted or adapted. AB 2162 (Chiu and Daly) requires supportive housing to be considered a use "by right" in zones where multifamily and mixed uses are permitted if the proposed housing development meets specified criteria. AB 829 (Chiu) prohibits local governments from requiring a developer to obtain a letter of acknowledgment or similar document prior to applying for state assistance for a housing development.

Planning, Regional Housing Needs and Fair Housing Laws.

SB 828 (Wiener) and AB 1771 (Bloom) make a number of changes to the Regional Housing Needs Assessment process to use more data to more accurately and fairly reflect job growth and housing needs, with an emphasis on fair housing goals. Additionally, SB 1333 (Wieckowski) makes charter cities subject to a number of planning laws that previously only applied to general law cities. Significantly, the new law now requires a charter city's zoning ordinances to be consistent with its adopted general plan. AB 686 (Santiago) requires a public agency to administer its programs and activities relating to housing and community development in a manner to affirmatively further fair housing and not take any action that is inconsistent with this obligation.

Miscellaneous.

AB 1919 (Wood) expands prohibitions against "price gouging" on rental properties during emergencies. AB 2913 (Wood) extends the duration of a building permit from six months (180 days) to 12 months, as long as construction has started and has not been abandoned.

After another prolific year of new California housing laws, tracking and understanding these new laws is more important than ever. The California Department of Housing and Community Development has been extremely active in monitoring the implementation of these laws by regularly releasing new materials on the interpretation, implementation and enforcement of these laws on its dedicated webpage. Most recently, HCD promulgated draft official guidelines for SB 35, which will have significant weight interpreting this important law. Further, implementation of the HAA continues to pick up steam throughout the state in both administrative and judicial settings. This year's package has the potential to increase the effectiveness of these laws even further.

To meet Newsom's self-described "audacious" housing goal, he vowed on the campaign trail to find more funding for affordable housing by supporting bond financing, making more tax credits available and to scale Enhanced Infrastructure Financing Districts (or other forms of redevelopment funding replacement) statewide. He has also pledged to revamp the current system in which local governments are fiscally disincentivized to approve housing with a new system of "tough accountability backed by financial incentives" to support housing. He also promised to address homelessness by establishing a new state agency, the "Interagency Council on Homelessness led by a State Homelessness Secretary."

Newsom will also likely have to address continued rumblings around rent control and residential property taxes following the uprising in support, but ultimate defeat, of Proposition 10 (proposing the repeal of the Costa-Hawkins Rental Housing Act) and Proposition 5 (proposing an amendment to Proposition 13 to allow homebuyers who are age 55 or older or severely disabled to transfer the tax-assessed value from their prior home to their new home). Even with the Democratic "blue tsunami" in California, finding legislative solutions to harmonize state goals with actual local government production in order to meet Newsom's housing goals may remain as challenging as ever.