SB 330 Provides Relief to California Homebuilders

On October 9, 2019, as part of an 18-bill housing package, Governor Newsom signed Senate Bill 330, also known as the "Housing Crisis Act of 2019." SB 330 addresses the statewide housing crisis by restricting local rules that limit housing production and further strengthens the Permit Streamlining Act (Gov. Code § 65920 et. seq) and the Housing Accountability Act (Gov. Code § 65589.5 et. seq). SB 330 declares a statewide housing emergency in effect until January 1, 2025, when several components of the law will expire.

Of particular interest to developers, the legislation creates a new form of statutory vested rights, tightens local approval procedures, restricts the adoption of new regulations that impede new housing, and provides new judicial relief options for residential development projects.  

Very Early Vested Rights

For housing developments, SB 330 creates a two-step application process through modifications to the Housing Accountability Act (HAA) and Permit Streamlining Act (PSA). An application is "deemed complete" when the applicant submits a "preliminary application" that complies with new Section 65941.1. Unlike the PSA's traditional back and forth regarding an application's completeness, a preliminary application is deemed complete so long as the items in Section 65941.1 are provided, and there is no requirement that the local agency makes an affirmative determination of completeness.

With regard to vesting, a housing development project shall be subject only to the ordinances, policies, and standards adopted and in effect when a preliminary application is submitted, which is very early in the process and predates the vesting afforded by a vesting tentative map.

Exceptions to SB 330's early vesting include:

• Increases to fees, changes, or monetary exactions that based on an independently published cost index
• Upon a showing under a preponderance of the evidence that the new regulation is necessary to avoid specific impacts on the public health or safety
• If necessary to avoid or substantially lessen a project's impact under the California Environmental Quality Act
• If a project has not initiated construction within 2.5 years after the project received "final approval," which includes all applicable administrative appeal periods and statutes of limitations
• If the housing development is revised following the submittal of a preliminary application by 20% or more in either square footage or number of residential units.

Similar to the last bullet, if the applicant alters the project after submittal of the preliminary application in a way that changes the residential unit number or square footage by 20% or more, the project shall not be deemed to have submitted a preliminary application.

Streamlining the Permit Streamlining Act

Within 180 days after submittal of a complete preliminary application, the applicant must submit a development application, as defined by the PSA, which is reviewed by the local agency under stricter PSA requirements. If the local agency determines that the development application is incomplete, the agency shall provide the project applicant a written determination which includes an "exhaustive list" of items that need to be in the application. Local agencies shall not request the applicant to provide any new information that was not enumerated in the initial list of items that were deemed incomplete. The local agency has 30 days from when it has received the application for a development project to send this exhaustive list. This new "exhaustive list" requirement is not limited to housing projects but to all "development projects."

Until January 1, 2025, SB 330 would reduce the time period in which a lead agency is required to approve or disapprove a housing project under the Permit Streamlining Act from 120 days from the certification of an environmental impact report to 90 days, and from 90 days to 60 days for a development project that complies with affordable housing requirements pursuant to Section 65950(a)(3)(A) of the Government Code. Commencing January 1, 2025, both timeline requirements will revert back to their original lengths, respectively.

In addition to the new timing requirements outlined above, SB 330 requires cities and counties to consider and either approve or disapprove an application in no more than five hearings (which includes continued hearings), consistent with the timelines under the PSA.

SB 330 Judicial Relief Changes

SB 330 reorganized sections of the HAA regarding judicial enforcement to distinguish between affordable housing projects  and other housing projects  (these provisions do not sunset), and attempts by local agencies to subject a housing project to new local regulations in violation of SB 330’s restrictions discussed below.

Restrictions on New Local Regulations

Until January 1, 2025, SB 330 prohibits cities and counties, including the electorate by using its local initiative or referendum power, from establishing rules that would effectively:

• Change the land use designation or zoning of parcels to a less intensive use or reducing the intensity of the land that was allowed under the specific or general plan as in effect on January 1, 2018
• Impose or enforce a moratorium on housing development within all or a selection of the local agency's jurisdictions
• Impose or enforce new design standards established on or after January 1, 2020, that are not objective design standards
• Establish or implement limits on permit numbers issue by the city or county unless the limit was approved before January 1, 2005, in a "predominantly agricultural county." 

Housing Replacement Requirements

In an effort to protect existing housing stock, SB 330 prohibits cities and counties from approving housing development projects that require the demolition of residential dwellings unless the project would at least replace every demolished dwelling unit at a one to one ratio. Furthermore, housing developments must replace all "protected units" subject to a rent or price control.

Takeaways

Though the bulk of this legislation sunsets on January 1, 2025, it provides housing project applicants with new procedural and substantive protections that should be carefully considered. Please contact us if you wish to consider this new legislation in greater detail.