Pending "Builder's Remedy" Bill Significantly Amended in Senate

AB 1893 (Wicks) is currently making its way through the legislature and would modify the Builder's Remedy under the Housing Accountability Act (HAA). This legal alert summarizes the significant amendments made to AB 1893 in the Senate on June 10, 2024. Please see our prior legal alert for background information on the Builder’s Remedy and the prior version of AB 1893. Please note that the legislative process is ongoing and additional amendments are expected. 

Reduced Affordability Requirements

As now proposed, AB 1893 would:

• Reduce the affordability requirement for mixed-income Builder’s Remedy projects from 20% lower income to 13% lower income, 10% very low income, or 7% extremely low income (as each is defined).
• Require compliance with local affordable housing requirements that, as of January 1, 2024, required a greater percentage of affordable units or a deeper level of affordability, unless compliance would render the project infeasible.
• Cap the local affordable housing requirement, if any, to a maximum of 20% and where 20% is required, lower income units shall be deemed to meet the local requirement.
• Eliminate the affordability requirement for Builder’s Remedy projects consisting of 10 units or fewer (so long as the project site is smaller than one acre with a minimum density of 10 units per acre).

Mixed-Use Projects

As now proposed, AB 1893 would allow a wider variety of mixed-use housing development projects to qualify for the Builder’s Remedy:

• Under existing law, at least two-thirds of the square footage must be designated for residential use. That would now include “new or converted” square footage.
• That requirement would be reduced to 50% for projects proposing at least 500 net new residential units.
• That requirement would also be reduced to 50% for qualifying projects involving the demolition of existing nonresidential uses, as specified.

Maximum Density

As now proposed, AB 1893 would newly impose the greater of the following density maximums for Builder’s Remedy projects -- prior to any density bonus under the State Density Bonus Law:

• 50% greater than the minimum density deemed appropriate to accommodate housing for the local jurisdiction pursuant to Gov. Code § 65583.2(c)(3)(B).
• Three times the density allowed by the general plan, zoning ordinance, or state law (whichever is greater).
• The density specified in the Housing Element.
• 35 additional units per acre if the project site is within one-half mile of a major transit stop or is a “very low vehicle travel area” or a “high or highest resource census tract” (as each is defined).

Minimum Density

As now proposed, AB 1893 would newly impose the following density minimums for Builder’s Remedy projects:

• “On sites that have a minimum density requirement and are located within one-half mile of a commuter rail station, the density of the project shall not be less than the minimum density required on the site.”
• “On all other sites with a minimum density requirement, the density of the project shall not be less than the local government’s minimum density or one-half of the minimum density deemed appropriate to accommodate housing for that jurisdiction, as specified in [Gov. Code 65583.2(c)(3)(B)], whichever is lower.”

Siting Requirement

As now proposed, AB 1893 would newly impose the following siting requirement for Builder’s Remedy projects: “The project site [shall not] abut a site where more than one-third of the square footage on the site has been used, within the past three years, by a heavy industrial use, or a Title V industrial use, as those terms are defined in Section 65913.16.”

Local Requirements

As now proposed, AB 1893 would specifically authorize a local agency to require a Builder’s Remedy project to comply with local objective, quantifiable, written development standards, conditions, and policies (Local Requirements), subject to the following limitations:

• Local Requirements must not involve “personal or subjective judgement by a public official and [must be] uniformly verifiable by reference to an external and uniform benchmark or criterion….”
• Local Requirements must be based on the general plan designation and zoning classification that allow the density and unit type “proposed by the applicant” (as newly defined).
• Local Requirements must not render the project infeasible.
• Local Requirements may be modified pursuant to the State Density Bonus Law.

Density Bonus Law Projects

As now proposed, AB 1893 includes the following additional benefits for Builder’s Remedy projects that also utilize the State Density Bonus Law:

• Two additional incentives/concessions.
• Projects that dedicate units to extremely low-income households would be eligible for the same density bonus benefits provided to a density bonus project that dedicates three percentage points more units to very low income households.
• To illustrate, if 7% of the units would be designated as extremely low income under the Builder’s Remedy, the project would qualify for a 32.5% density bonus and four incentives/concessions.

Project Vesting

As now proposed, AB 1893 would:

• “Grandfather” Builder’s Remedy projects with an application, including a SB 330 preliminary application, “deemed complete” before January 1, 2025, in which case the project sponsor may opt to utilize the existing version of the statute.

• Authorize a qualifying project to be converted to a Builder’s Remedy project, so long as the original application is “deemed complete” before January 1, 2025 -- “even if the revision results in the number of residential units or square footage of construction changing by 20 percent or more” (i.e., even if vesting under SB 330 would not otherwise be retained.)

Local Agency Restrictions

As now proposed, AB 1893 would provide that a Builder’s Remedy project:

• Shall not require a general plan amendment, specific plan amendment, rezoning, or other legislative approval.
• Shall not require any approval or permit not generally required of a project of the same type and density.
• Shall not be deemed a nonconforming lot, use, or structure for any purpose.
• Shall not be subject to any additional Local Requirements (e.g., increased fees) based on utilization of the Builder’s Remedy.

New Developer Protections

As now proposed, AB 1893 would provide that disapproval of a qualifying housing development project (including but not limited to a Builder’s Remedy project) by a local agency also includes any instance where the local agency “undertakes a course of conduct, including sustained inaction or the imposition of burdensome processing requirements, from which a reasonable person would conclude that the local agency intends to effectively disapprove the housing development.”

Recall that a local agency cannot disapprove a qualifying housing development project unless it makes specified findings based on a preponderance of the evidence in the record. (Gov. Code § 65589.5(d).) Therefore, this new provision would make it easier for project sponsors to prove that a local agency stalling for the purpose of suspending a disfavored housing development project has violated the HAA.

Implications

AB 1893 is an attempt to “modernize” the Builder’s Remedy by providing clarity to developers, local jurisdictions, and courts to avoid the “legal limbo” described by Attorney General Rob Bonta.  As part of that compromise, significant new requirements would be imposed on Builder’s Remedy projects, including a new “cap” on residential density where no codified limit currently exists.  In return, the clarifications made by AB 1893 and the reduced affordability requirement for mixed-income projects could help prompt additional Builder’s Remedy projects in jurisdictions that have failed to comply with State Housing Element Law.