New CA Housing Laws Aiming to Cut Housing Red Tape for Builders

If California wants to build its way out of its long term housing shortage, plenty of things stand in its way in 2024: high interest rates, sluggish local approval processes and a persistent shortage of skilled construction workers, among others.

But a slew of housing bills from the 2023 legislative session that went into effect on Jan. 1 promise to ease or eliminate some of the other burdens.

Among the batch of fresh housing laws are an especially high profile set by San Francisco Democratic Sen. Scott Wiener: Senate Bill 423 re-ups and expands a law that speeds up the approval of apartment buildings in which some units are set aside for lower income Californians, while SB 4 does something similar for affordable housing on property owned by religious institutions and non-profit colleges.

Wiener’s two new laws set the tone of housing legislation in 2023, where ripping out barriers and boosting incentives for housing construction emerged as the dominant theme.

“The era of saying no to housing is coming to an end,” Wiener said in a statement after the two bills were signed.

That was especially true for developers of purpose-built affordable housing, per policy analysts at UC Berkeley’s Terner Center for Housing Innovation in an end-of-year legislative summary.  Lawmakers, the analysts wrote, in the continuation of a “remarkable run over the last several years,” gave “more flexibility to exceed or override local zoning, greater certainty on the timing and likelihood of planning approvals, and substantial relief from (environmental) review and litigation.”

“I’ve never seen this type of consensus in the Legislature before,” said Michael Lane, state policy director for the San Francisco-based urban planning think-tank SPUR.

Or as Politico put it succinctly in a headline from late summer: “YIMBYs” — short for so-called yes in my backyard activists who push for more building — “are winning.”

Other notable victories from that camp include AB 1287, a bill by San Diego Democratic Assemblymember David Alvarez, that will give developers permission to build denser, taller buildings if they set aside additional units for middle-income earners, and SB 684, which will make it easier to divide up large parcels of land for modest clusters of townhomes and cottages.

It wasn’t entirely smooth sailing for the pro-development caucus. That second bill, by Merced Democratic Sen. Anna Caballero, will only apply to parts of the state already zoned for multifamily housing. Historic single family home neighborhoods got a last minute carve out, leading one of the bill’s sponsors to take the unusual step of asking Gov. Gavin Newsom to veto their own bill (he didn’t). That eleventh hour switcheroo demonstrated that though the political coalition opposed to state pro-density policies are on the back foot, they are still a force to contend with.

That coalition of local governments, certain organized labor groups and environmental justice advocates also prevented housing supply boosters from entirely rewriting the state’s signature environmental law, as some advocates had hoped earlier this year.

But a host of new laws will make it more difficult for opponents of proposed housing projects to use the California Environmental Quality Act to delay certain types of housing projects. Oakland Democratic Assemblymember Buffy Wicks wrote a bill that instructs judges not to consider the noise of future residents as a pollutant in need of environmental mitigation, a response to one of the most headline grabbing California court decisions of the year.

Wicks’ bill, which went into effect in September, may have gotten much of the media attention, but other, similarly intentioned bills that will become law in 2024 may prove more consequential. One, SB 439, by Berkeley Democratic Sen. Nancy Skinner will make it easier for courts to slap down “frivolous” environmental lawsuits, a second, AB 1449, by Alvarez will shield many affordable housing projects from environmental review and a third, AB 1633, by San Francisco Democratic Assemblymember Phil Ting will force cities to either approve or deny a project’s environmental review within a set time limit.

“This just points out the reason we need to continue to have this fight at the state level,” said Ting in a recent webinar touting the new policy. “We know we have these two million homes to get built and they’re not getting built fast enough…Local governments just aren’t getting the job done.”

Ting has also carved out a reputation as a champion of accessory dwelling units. Sometimes called in-law units or granny flats, these pint-sized add ons have become an increasingly popular way for local governments to meet their state-set housing production goals. They’ve also come to make up a significant share of California’s new housing stock in recent years.

That’s largely thanks to a suite of recent state laws that make it increasingly difficult for local governments to say no to these developments or to tack on costly requirements. Starting in 2024, a new bill by Ting may help to reshape the existing ADU market. AB 1033 will let homeowners spin off their ADUs as separate for-sale condos, so long as local governments opt in.

That’s a big “if,” but the condoization law has many backyard cottage builders optimistic about the future, even at a time when California’s residential construction industry appears to be slowing.

“I am deeply concerned about the market and how few young buyers can actually afford to get into the game anymore,” said Seth Phillips, founder of the Los Angeles-based development and consulting firm ADU Gold. “If they do it right, if they really get the processes right…young homebuyers could have a whole bunch of new stuff to pick from, which basically doesn’t exist right now.”

Ben Christopher is a reporter for CalMatters.

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