Sacramento, CA -This week Governor Newsom signed into law the three bills of a housing package put forth by Senator Scott Wiener.
“This year’s housing package builds on the progress of the more than 150 pro-housing laws passed in California since 2017, many of which were authored by Senator Wiener,” his office noted in a release last week.
The bills speed the production of new housing to overcome California’s shortage by:
- Strengthening enforcement against cities that illegally obstruct new housing (SB 1037).
- Providing homebuilders with the flexibility on impact fees (SB 937).
- Remove regulatory barriers to building student housing at UC, CSU and community colleges (SB 312).
“California is continuing to pioneer solutions to the housing shortage at a time when Vice President Harris is shining a new light on the issue nationally,” said Senator Wiener. “These new laws remove some of the senseless barriers holding back housing production in critical areas like student housing. And they’re backed by SB 1037, which allows the Attorney General to back up our pro-housing laws with strong new enforcement tools to hold cities accountable for violations of the law. I thank the Governor and the Attorney General for their bold leadership on housing.”
SB 312
SB 312 will resolve an issue with SB 886 (Wiener, 2022) that prevents universities from utilizing the bill to streamline student and faculty housing.
SB 886 created a CEQA exemption for student housing projects. However, one of the qualifications for these projects to utilize SB 886 is a requirement for all buildings to meet Leadership in Energy and Environmental Design (LEED) Platinum certification. Platinum is the highest level of LEED certification, and as such includes numerous requirements to determine if a building qualifies for certification. Some of these determinations, however, cannot be made until the building is occupied. Given this, SB 886’s requirement to certify LEED Platinum prior to being granted the CEQA exemption and the certificate of occupancy simply isn’t possible.
SB 312 addresses the LEED timing issue by requiring that these buildings qualify for LEED Platinum certification, rather than receive the certification, which can be achieved prior to occupancy. The bill also makes several technical changes.
The bill is sponsored by California YIMBY, the UC Student Association, Student HOMES Coalition, and GENUp.
SB 937
Cities vary widely in the development fees they charge for new homes in California, often for reasons that can seem arbitrary. Los Angeles reports a multifamily development fee of $12,000 per unit, while Fremont reports $75,000. The state contains more than its share of cities charging high development fees, with the six jurisdictions charging the highest recorded fees in the nation all located in California.
Some cities have deferred the collection of development fees during periods of economic hardship to prevent housing production from grinding to a halt. During the Great Recession, Fremont was one of many cities that deferred fees, and in 2023 it announced it would revive the program. With today’s high interest rates and rising costs driven by COVID-related inflation, developers are facing a similar challenge to make projects pencil. Developers need the flexibility of both fee deferrals and entitlement extensions to meet state housing goals amid challenging market conditions.
SB 937 builds on these efforts by delaying the payment of specified development fees imposed by a local government until the certificate of occupancy is issued. Local governments may not charge interest rates on any deferred fees.
SB 937 passed out the Assembly with amendments to: 1) add a 5-year shot clock for developers to start construction before losing their fee deferral; 2) remove provisions of the bill related to housing entitlement extensions; 3) narrow when local governments can require impact fees to be paid earlier if the funds will pay for specified infrastructure or public improvements; and 4) give developers the option of providing a bond or letter of credit as a fiscal surety—and if the developer does not pay the impact fees at the time of certificate of occupancy, then the unpaid fees will constitute a lien on the property.
Senate Bill 937 is sponsored by the California Housing Consortium, California YIMBY, and the Housing Action Coalition. It is co-authored by Assemblymember Tim Grayson (D-Concord).
SB 1037
SB 1037 enhances the Attorney General’s ability to seek civil penalties in court against local governments that violate state housing law. Currently, when a court finds a locality in violation of state housing law, monetary penalties can only be imposed 60 days, or in some cases up to a year, after a court has ordered compliance.
Local governments thus have no real incentive to follow the law since they can force the state to sue, lose, and then simply remedy the violation at that point and avoid penalties. This is a huge waste of taxpayer resources and undermines California’s housing goals.
Under SB 1037, the Attorney General can instead seek penalties that are assessed from the date that the housing law violation began. Those penalties would be earmarked for affordable housing in the same jurisdiction.
SB 1037 applies to local governments that refuse to adopt a compliant housing element and/or violate a ministerial approval law. If enacted, SB 1037 will subject violators to a minimum civil penalty of $10,000 per month, and not to exceed $50,000 per month, for each violation calculated from the date the violation started. The penalty money would be earmarked to support the development of affordable housing located in the affected jurisdiction.
Under the state’s Housing Element Law, every city and county in California must periodically update its housing plan to meet its share of the regional and statewide housing needs. Laws requiring “ministerial,” or streamlined, approval include Government Code sections 65852.2 and 65852.22, which allow homeowners to add accessory dwelling units, as well as Assembly Bill (AB) 2011 concerning affordable housing projects located in commercial zones. Ministerial review is where public officials, such as local planning staff, ensure that a proposed development meets all applicable objective standards for a proposed action.
SB 1037 applies only in jurisdictions that have acted arbitrarily, not to cities that make good faith errors. The fines generated by the bill’s civil penalties will be deposited into an affordable housing fund for use in the offending city.
SB 1037 is sponsored by Attorney General Rob Bonta.
