A Developer’s Guide to the Builder’s Remedy

The so-called “Builder’s Remedy” under the Housing Accountability Act (HAA) is disciplinary and applies when a local jurisdiction has not adopted a revised Housing Element in compliance with state law, in which case the local jurisdiction cannot deny a qualifying housing development project even if it is inconsistent with the general plan and zoning ordinance (subject to limited exceptions). 

There has been a renewed focus on the Builder’s Remedy, in part because the California Department of Housing and Community Development (HCD) has recently determined that (i) various local jurisdictions are either currently in non-compliance with state Housing Element requirements or could be in non-compliance as of January 31, 2023, and (ii) submittal of a SB 330 preliminary application during the applicable period of non-compliance vests the Builder’s Remedy.

The following is a step-by-step summary of the process for determining whether the Builder’s Remedy could apply to a proposed housing development project. Please contact one of our attorneys for more detailed information.

Step 1: Confirm Housing Element Non-Compliance

• For Southern California jurisdictions, the October 15, 2021, deadline has already passed. As of the date of this legal alert, over 150 Southern California jurisdictions are currently in non-compliance, including but not limited to Anaheim, Costa Mesa, Glendale, Laguna Beach, Laguna Niguel, Pasadena, San Bernardino, San Marino, and Thousand Oaks.
• Approximately 33 of the non-compliant Southern California jurisdictions have adopted revised Housing Elements that are currently under HCD review.
• For Bay Area jurisdictions, the January 31, 2023, deadline for Housing Element compliance is rapidly approaching. As of the date of this legal alert, various Bay Area jurisdictions, including but not limited to San Francisco, San Jose, Berkeley and Oakland, have not submitted a revised Housing Element to the HCD, so at least some of those local jurisdictions could miss that deadline.
• Please refer to the HCD Housing Element compliance report for up-to-date information.

Step 2: Confirm Project Qualification under HAA

• The project must qualify as a “housing development project” under the HAA (i.e., a project consisting of residential units only, mixed-use developments consisting of residential and non-residential uses with at least two-thirds of the square footage designated for residential use, or transitional or supportive housing).
• At least 20% of the dwelling units in the project must be designated as lower income or 100% of the units must be designated as moderate income, as defined in the HAA.
• See our prior legal alert for more information about the HAA.

Step 3: Submit SB 330 Preliminary Application

• An SB 330 preliminary application for the housing development project should be filed with the local jurisdiction immediately upon Housing Element non-compliance. As noted above, numerous Southern California jurisdictions are currently non-compliant. Bay Area jurisdictions face a January 31, 2023 compliance date.
• No affirmative “completeness” determination by the local jurisdiction needs to occur for the Builder’s Remedy vesting to apply; all the applicant needs to do is submit a complete preliminary application.
• Local jurisdictions are required to adopt a form and checklist of preliminary application materials under SB 330.
• The vesting process locks in the “ordinances, policies, and standards adopted and in effect” when the preliminary application is filed, subject to specified exceptions, and the HCD has recently opined that includes a local jurisdiction’s non-compliant Housing Element, which triggers the Builder’s Remedy, even if the Housing Element subsequently becomes compliant.
• Within 180 days after submittal of a complete preliminary application, the applicant must submit a “full” development application, as specified.
• See our prior legal alert for more information about SB 330, which, as we reported, was recently amended.

Step 4: CEQA Compliance

• The housing development project will still be subject to CEQA clearance if a discretionary approval is required for the project.
• The scope of CEQA review in the context of the Builder’s Remedy is an open issue.
• SB 330 imposes a “five hearing rule” and shortens the timeframe for approval of a housing development project following CEQA review to 60 days when, e.g., a CEQA exemption or MND is required, and up to 180 days when an EIR is required.
• The HCD has previously stepped in when the CEQA review process has seemingly been used by a local jurisdiction as a delay tactic and will likely continue to do so.
• Housing development projects proposed under the Builder’s Remedy in non-compliant Southern California jurisdictions should provide near-term guidance on how the HCD and the courts weigh in on this open issue.