Did You Know? Housing Development in San Francisco May Get Easier with the Builder’s Remedy
The Builder’s Remedy is a provision within California’s Housing Accountability Act that allows developers to circumvent zoning and general plan review when local government fails to comply with the state’s “Housing Element” laws. San Francisco may be affected by the end of 2023. Once in effect, time is of the essence for developers to act.
Most cities and counties in the San Francisco Bay Area are out of compliance with state Housing Element law, and will soon lose out on certain funding, grants, and, most importantly, control over development via zoning ordinances and general plan
What is the Builder’s Remedy?
The Builder's Remedy, found in Government Code section 65589.5(d)(5), is a provision of California's Housing Accountability Act. It prevents cities and counties that are out of compliance with Housing Element law from denying certain housing projects based on inconsistencies with zoning ordinances or general plan standards.
Though it’s been a provision that has existed for more than 30 years, the Builder's Remedy has come to the forefront due to the recent deadlines for local jurisdictions to adopt updated housing elements that have mandated plans for significantly more housing units. If a city or county fails to adopt a substantially compliant housing element by the deadline, it becomes out of compliance with State Housing Element Law. As of the writing of this article, most local jurisdictions in the San Francisco Bay Area are currently out of compliance and potentially subject to the Builder's Remedy.
Developers need to be aware of this provision as it opens opportunities for them to entitle housing projects even in jurisdictions that traditionally impose strict limits on size, density, or location. To qualify for the Builder's Remedy, a project must meet specific criteria, including being a "Housing Development Project" under the Housing Accountability Act, meeting affordability requirements, and being located in a city or county that is currently out of compliance with State Housing Element law. Though the Builder’s Remedy allows certain developments to skip zoning review, they must still comply with CEQA (California Environmental Quality Act).
In San Francisco, the Builder's Remedy could become an option for private developers by the close of 2023. This is contingent upon approving Mayor London Breed's "constraints reduction" ordinance. If missed, the city risks losing funding for transportation and affordable housing projects, along with control over development through zoning and general plan standards.
What is a Housing Element? What incentives are there for a local government to comply with State Housing Element law?
The Housing Element in California is a state-level legislative framework established to address the vital importance of housing availability and the priority of ensuring decent housing and suitable living environments. The state legislature adopted the Housing Element law with the goal of compelling local governments to recognize and fulfill their responsibilities in achieving these housing objectives. Key performance indicators to determine compliance with the Housing Element include housing unit production, affordability levels, appropriate zoning/land-use changes, and adoption of efficient approval processes.
Incentives for local governments to comply with State Housing Element law are substantial. Effective implementation of housing elements is essential for the private market to adequately address housing demands. Compliance is also crucial for accessing state funding programs related to transportation, infrastructure, and housing. Compliance with housing elements is also a factor in competitive funding applications, with extra points awarded to jurisdictions with compliant plans. State funding programs encouraging coordination with housing planning include the Local Partnership Program, Transit and Intercity Rail Capital Program, and Active Transportation Program. These programs assess projects based on their alignment with housing element goals, support for transit ridership growth, and contribution to infill development.
How can I determine if my development project qualifies for the Builder’s Remedy?
The Builder's Remedy is available for housing development projects that meet specific criteria:
The proposed development is a “Housing Development Project”, which is defined as:
Consisting of residential units only.
Mixed-use developments with at least two-thirds of the square footage designated for residential use.
Transitional housing or supportive housing.
Not available for entirely commercial or non-residential projects.
The project must also meet specific affordability requirements:
Twenty percent of the total units sold or rented to lower-income households.
One hundred percent of the units sold or rented to moderate-income households.
The project qualifies if it serves as an emergency shelter.
The proposed development must also be in a specific location:
The project must be located in a city or county that is not currently in substantial compliance with state housing element law. This means the local jurisdiction must be listed as out of compliance in the Housing Element Compliance Report provided by the California Department of Housing and Community Development (HCD).
What are the steps to take advantage of the Builder’s Remedy? When must this be done?
According to Hanson Bridgett’s land-use attorneys, an important step for developers to take advantage of the Builder's Remedy is to submit a preliminary application under Government Code section 65941.1, commonly known as Senate Bill 330 ("SB 330"). This should be done while the city or county is still subject to the Builder's Remedy, i.e., before it adopts a compliant housing element.
Hanson Bridgett emphasizes that by submitting a preliminary application under SB 330 during the period when the jurisdiction is subject to the Builder's Remedy, the developer maintains a vested right to develop the project under the Builder's Remedy. This right is preserved even if the city or county later adopts a compliant housing element before the project receives final approval.
When may a Builder’s Remedy application be denied?
According to Hanson Bridgett, an application for a project that qualifies for the Builder's Remedy may be denied or conditioned in a way that renders it infeasible under specific circumstances. The reviewing jurisdiction has the authority to make such decisions based on the following very narrow circumstances, supported by substantial evidence:
Specific, Adverse Impact on Public Health or Safety:
Denial of the project may occur if the jurisdiction determines that the project would have a specific, adverse impact upon public health or safety.
The denial could be justified if there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact without rendering the development unaffordable to low-income households.
Compliance with State or Federal Law:
Denial of the project or imposition of conditions may be required if the jurisdiction finds that such actions are necessary to comply with specific state or federal law.
The denial or conditions may be deemed necessary, especially if there is no feasible method to comply with the law without rendering the development unaffordable to low-income households.
Project Proposed on Protected Land:
The project may face denial or specific conditions if it is proposed on land zoned for agriculture or resource preservation.
This applies specifically if the land is surrounded on at least two sides by land being used for agricultural or resource preservation purposes, or if the project site lacks adequate water or wastewater facilities.
NOTE: Though LLCRE has made significant efforts to provide accurate information, the article is not legal advice. Please consult a land-use attorney for the most accurate and up-to-date guidance on this subject matter.
Sources:
https://www.hansonbridgett.com/publication/230307-2100-builders-remedy-faq
https://www.sfchronicle.com/sf/article/s-f-housing-deadline-california-18504255.php
https://wclp.org/wp-content/uploads/2017/01/Affordable-Housing-Manual-Chapter-07.pdf
https://abag.ca.gov/sites/default/files/documents/2022-10/Builders-Remedy-and-Housing-Elements.pdf
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