Pending AB 2011 Amendments Hold Promise For Housing Developers

On March 19, 2024, Assemblymember Buffy Wicks introduced new amendments to pending Assembly Bill (AB) 2243, which would amend AB 2011 (operative as of July 1, 2023). As explained in our prior legal alert, AB 2011 provides for “by right” streamlined ministerial (i.e., no CEQA, no discretion) approval of qualifying mixed-income and affordable housing development projects along commercial corridors in zoning districts where office, retail and/or parking uses are principally permitted.

The following is a summary of the key AB 2011 amendments that would, if ultimately passed by the legislature and approved by the governor, apply to mixed-income housing development projects under AB 2243.

Project Review and Approval

As currently proposed, AB 2243 would:

• Require the local government to approve the AB 2011 project within a specified timeframe. Once the project is deemed to be consistent with applicable objective planning standards, the local government would be required to approve the project within 180 days (for projects with more than 150 housing units) or 90 days (for projects with 150 or fewer housing units).
• Require the local government to determine project consistency or inconsistency with applicable objective planning standards within 30 days when a project is resubmitted to address written feedback. The otherwise applicable timeframe is within 60 or 90 days, with the longer timeframe applying to projects with more than 150 housing units.
• Provide that a density bonus under the State Density Bonus Law, including related incentives, concessions and/or waivers, “shall not cause the project to be subject to a local discretionary government review process” even if the requested incentives, concessions and/or waivers are not specified in a local ordinance. This is important because some local governments purport to require discretionary approval for specified “off menu” incentives, concessions and waivers despite the fact that AB 2011 provides for a ministerial (i.e., no CEQA) project approval process and specifically contemplates utilization of the State Density Bonus Law in conjunction with AB 2011.
• Provide that the Phase I Environmental Assessment (ESA) requirement would be imposed as a condition of project approval versus prior to project approval. If any remedial action is required due to the presence of hazardous substances on the project site, that would need to occur prior to issuance of a certificate of occupancy (as specified).

Residential Density

As currently proposed, AB 2243 would:

• Provide that the AB 2011 (base) residential density, which varies depending on the location and size of the project site, is now the “allowable” density (prior to any density bonus) instead of a minimum (“meet or exceed”) density requirement.
• Impose a new minimum residential density requirement, which would be 75% of the greater of the applicable “allowable” residential density.
• Specify that the imposition of applicable objective planning standards shall not preclude the “required” (minimum) AB 2011 residential density (prior to any density bonus) or require a reduction in unit sizes. It appears that this new provision is instead intended to apply to the “allowable” AB 2011 residential density pursuant to the cross-referenced subsections.

Commercial Corridor Frontage Requirements

As currently proposed, AB 2243 would:

• Revise the definition for “commercial corridor” based on the applicable height limit. Where local zoning sets a height limit for the project site of less than 65 feet, the right-of-way would need to be at least 70 feet, which is the current AB 2011 requirement. For all other project sites, the right-of-way would now only need to be at least 50 feet.
• Clarify that the width of the right-of-way includes sidewalks for purposes of determining whether it is a “commercial corridor.”
• Expand eligible sites to include conversions of “existing office buildings” that meet all other AB 2011 requirements, even if they are not on a commercial corridor.

Project Site Size Requirements

As currently proposed, AB 2243 would:

• Waive the current 20 acre-project site size limitation for “regional malls” that are up to 100 acres. Regional malls is defined to include malls where (i) the permitted uses on the site include at least 250,000 square feet of retail, (ii) at least two-thirds of the permitted uses on the site are retail, and (iii) at least two of the permitted retail uses on the site are at least 10,000 square feet.

Setback Requirements

As currently proposed, AB 2243 would:

• Provide that density bonus incentives, concessions and waivers permitted under the State Density Bonus Law may be utilized to deviate from specified AB 2011 setback requirements related to existing adjacent residential uses. The California Department of Housing and Community Development (HCD) previously opined that under existing AB 2011, only the AB 2011 height and density maximums can be modified via the density bonus approval process.

Freeway, Industrial Use, & Oil/Natural Gas Facility Proximity

As currently proposed, AB 2243 would:

• Eliminate the freeway proximity and active oil/natural gas facility proximity prohibitions and replace those with specified air filtration media requirements, similar to Senate Bill 4 (Affordable Housing on Faith and Higher Education Lands Act of 2023).
• Revise the AB 2011 limitation on project sites dedicated to industrial uses. Currently, project sites are disqualified where more than one-third of the square footage is dedicated to industrial use or the project site adjoins a site exceeding that threshold. “Dedicated to industrial use” would no longer include sites (i) where the most recently permitted use was industrial, but that use has not existed on the site for over three years; or (ii) where the site is designated industrial by the general plan, but residential uses are a principally permitted use on the site or the site adjoins an existing residential use.
• Revise the definition of “freeway” to specify that freeway on-ramps and off-ramps are not included.

Coastal Zone Projects

As currently proposed, AB 2243 would:

• Provide that where a project site is located in the coastal zone, the public agency with coastal development permitting authority, as applicable, shall approve the permit if it determines that the project is consistent with all objective standards of the local government’s certified local coastal program or certified land use plan, as applicable.
• Provide that any density bonus, concession, incentive, waiver, and/or (reduced) parking ratios granted pursuant to the State Density Bonus Law “shall not constitute a basis to find the project inconsistent with the local coastal program.”

Residential Conversion Projects

As currently proposed, AB 2243 would:

• Eliminate the residential density limit for the conversion of existing buildings to residential use, except where the project would include net new square footage exceeding 20% of the “overall square footage of the project.”
• Prohibit the local government from requiring common open space beyond “what is required for the existing project site” versus required pursuant to the objective standards that would otherwise apply pursuant to the closest zoning district that allows for the AB 2011 residential (base) density, where applicable.
• Exempt the conversion of “existing office buildings” from the commercial corridor frontage requirement.

Clarifications

As currently proposed, AB 2243 would:

• Clarify that the AB 2011 on-site affordable housing requirement only applies to new housing units created by the project.
• Clarify that the number of on-site affordable housing units required under AB 2011 is based on number of housing units in the project prior to any density bonus (i.e., the “base” project), which is consistent with the State Density Bonus Law.
• Clarify the process for calculating the on-site affordable housing requirement under AB 2011 where the local jurisdiction requires a higher percentage of affordable units and/or a deeper level of affordability.
• Clarify that the “allowable” density under AB 2011 is calculated prior to any density bonus under the State Density Bonus Law.
• Clarify that “urban uses” includes a public park that is surrounded by other urban uses.