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This legal alert was revised on April 3, 2024, to reflect AB 1893 amendments made in the Assembly on April 1, 2024. The summary below only pertains to Builder’s Remedy projects. Please note that there are now additional amendments proposed under AB 1893 that would not be limited to Builder’s Remedy projects.
Two bills proposed to modify the Builder's Remedy under the Housing Accountability Act (HAA) (Gov. Code § 65589.5(d)(5)) are currently making their way through the State Legislature: Assembly Bill (AB) 1893, proposed by Assemblymember Wicks, and AB 1886, proposed by Assemblymember Alvarez.
As currently proposed, AB 1893 would (i) reduce the required percentage of (lower income) affordable units for mixed-income Builder’s Remedy projects from 20% to 10%; (ii) impose new size and location guardrails on Builder’s Remedy projects; and (iii) authorize local jurisdictions to require compliance with other specified objective development standards so long as they do not reduce the “allowed” project density or result in an increase in “actual costs.”
As currently proposed, AB 1886 would clarify the necessary conditions for a Housing Element to be deemed “substantially compliant” with State Housing Element Law. That determination is important, as it dictates whether the local jurisdiction must accept and process Builder’s Remedy applications.
The following provides background on the Builder’s Remedy and then summarizes the key changes proposed by AB 1893 and AB 1886.
As we previously reported, the Builder’s Remedy applies when a local jurisdiction has not adopted an updated Housing Element in substantial compliance with State Housing Element Law (Gov. Code § 65580, et seq.), in which case the local jurisdiction cannot deny a qualifying housing development project even if it is inconsistent with the local general plan and zoning ordinance (subject to limited exceptions).
To qualify, the project must currently (i) fall under the definition of 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) and (ii) dedicate at least 20% of the dwelling units in the project as lower income (or 100% of the units as moderate income), as defined in the HAA.
Use of the Builder’s Remedy has surged recently, as local jurisdictions statewide have struggled to adopt, or have resisted adopting, a Housing Element that is in substantial compliance with State Housing Element Law. Responding to this flurry of activity and related litigation, Assemblymembers Wicks and Alvarez have proposed various amendments to the law as summarized below.
As currently proposed, AB 1893 would reduce the required percentage of affordable units for a mixed-income Builder’s Remedy project from 20% to 10% where lower income units would be provided. AB 1893 would also eliminate the affordability requirement for Builder’s Remedy projects with 10 or fewer residential units.
As currently proposed, AB 1893 would significantly amend the most controversial component of the Builder's Remedy, which is that a local jurisdiction without a substantially compliant Housing Element (“Non-Compliant Jurisdiction”) cannot deny a qualifying Builder’s Remedy project unless specified findings are made, which are intended to create a high threshold for denial by local jurisdictions.
As currently proposed, AB 1893 would newly authorize a Non-Compliant Jurisdiction to deny a qualifying Builder’s Remedy project if the project fails to meet any of the following “objective” standards. In other words, Builder’s Remedy projects would need to meet all of the following new requirements (unless the project is “grandfathered” as explained below):
AB 1893 would provide that in no case may the local agency apply any objective development standards that will (i) have the effect of physically precluding the construction of the project at the “allowed” density or (ii) result in an increase in “actual costs.” The local agency would bear the burden of proof under these circumstances.
As currently proposed, the foregoing new requirements would not apply to Builder’s Remedy applications that are “deemed complete” on or before April 1, 2024. Under existing law, “deemed complete” is defined to mean that the applicant has submitted a SB 330 preliminary application or, if that has not been submitted, a complete development application (as defined) has been submitted. AB 1893 would add that the local agency shall bear the burden of proof in establishing that the applicable application is not complete.
A recent Builder's Remedy lawsuit exposed some ambiguity regarding when a Housing Element is deemed “substantially compliant” with State Housing Element Law. Opposing sides of the litigation disputed whether (retroactive) self-certification by the local jurisdiction was sufficient. The court ruled that it was not. See our prior legal alert for our coverage of this ruling, which appears to be the impetus for the amendments proposed under AB 1886.
As currently proposed, AB 1886 would:
AB 1886 would make it clear that a local jurisdiction cannot “self-certify” its Housing Element. Rather, an affirmative determination must be granted by HCD or, if a local jurisdiction adopts its Housing Element notwithstanding HCD’s determination to the contrary, a court of competent jurisdiction would need to agree with the local jurisdiction, notwithstanding the “rebuttable presumption” in favor of HCD’s non-compliance determination, where applicable.
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 Non-Compliant Jurisdictions.
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