California's 2022 Housing Laws: What You Need to Know

As in previous years, the California Legislature passed a large volume of laws related to housing in the 2021 legislative session. (See Holland & Knight's previous annual recaps of California Housing Laws in the final section below.) This Holland & Knight alert takes a closer look at the laws that the Legislature passed and that Gov. Gavin Newsom has signed into law, grouped into following categories:

• Single-Family Homes and Lots Zoned for Single-Family Residences
• Density
• Streamlining Housing Approvals
• Covenants, Conditions and Restrictions (CC&Rs)
• Equity, Fair Housing and Below Market Rate (BMR) Housing
• Planning and Housing Element Law
• Costs of Housing Production
• Surplus Lands
• Students, Teachers and Seniors
• California Environmental Quality Act (CEQA) Litigation

Except where urgency statutes are specifically noted, the new laws take effect Jan. 1, 2022.

Single-Family Homes and Lots Zoned for Single-Family Residences

The following laws have fueled the "End of Single Family Zoning" headlines. The physical feasibility of adding duplexes, lot splits and Accessory Dwelling Units (ADUs) on single-family lots will likely determine how frequently these tools will be utilized.

SB 9 (Sen. Toni Atkins) – Duplexes and Lot-Splits

As previously reported, Senate Bill (SB) 9 provides for the ministerial approval of converting existing homes occupied by a homeowner into a duplex if certain eligibility restrictions are satisfied. It also allows a single-family home lot to be split into two lots, and a duplex to be built on each lot, provided that the initial home is occupied by an owner who attests that the owner will continue to live in a unit on the property as their primary residence for at least three years. The most notable exceptions to duplex and lot split by right approvals are 1) the property could not have been used as a rental for the past three years, 2) the property cannot already have an accessory dwelling unit or junior ADU, 3) the new lot may not be less than 40 percent of the property and must be at least 1,200 square feet, 4) modifications to the existing home may not require the demolition of more than 25 percent of an exterior wall, and 5) neither the new duplex nor the lot split with up to four new units (a duplex on each) may not result in a significant adverse impact to the physical environment. SB 9 does not address covenants, conditions or restrictions that may prohibit multifamily development or lot splits. (For additional analysis, please see Holland & Knight's alert, "California Gov. Signs Landmark Duplex and Lot-Split Legislation into Law," Sept. 17, 2021.)

In addition, Assembly Bill (AB) 1584 (discussed further below under "Covenants, Conditions and Restrictions (CC&Rs)") builds on previously established laws promoting ADUs by declaring unenforceable any CC&R that prohibits, effectively prohibits or restricts the construction or use of an ADU on a lot zoned for single-family use.

Density

The Legislature enacted important reforms to spur more density through SB 10 and amendments to the State Density Bonus Law (SDBL) and took aim at restrictive floor area ratio (FAR) and lot coverage standards.

SB 10 (Sen. Scott Wiener) – 10-Unit Upzonings

As previously reported, SB 10 provides that if local agencies choose to adopt an ordinance to allow up to 10 dwelling units on any parcel within a transit-rich area or urban infill site, the rezoning will be exempt from environmental review pursuant to the California Environmental Quality Act (CEQA), but subsequent project approvals are not necessarily exempt, unless the local agency adopts a ministerial approval process or there is another exemption or local law that exempts the project. (See Holland & Knight's alert, "SB 10 to Facilitate Upzonings, But Does Not Include CEQA Exemption for Corresponding Projects," Sept. 20, 2021.)

SB 290 (Sen. Nancy Skinner) – SDBL Amendments

The SDBL grants bonuses, concessions, waivers and parking reductions to projects with qualifying affordable housing. The SDBL continues to be the most commonly used tool to increase housing density and production. SB 290 first builds on a 2018 law by Sen. Skinner, SB 1227, providing for density bonuses for projects that included student housing pursuant to the SDBL. SB 290 adds the ability to request one concession or incentive for projects that include at least 20 percent of the total units for lower-income students in a student housing development. It also requires the agency to report on student housing projects receiving density bonuses as part of a housing element annual report.

More broadly, the SDBL amendments do the following:

• Clarify that the SDBL more broadly applies to projects with for-sale housing by replacing prior references to "common interest developments" with references to for-sale housing
• Provide that when determining the required percentage of units that must be affordable in order to qualify for SDBL benefits, the "total units" or "total dwelling units" excludes the units added pursuant to the SDBL or a local law granting a greater density bonus and includes the units designated to satisfy local inclusionary zoning requirements
• Provide that an impact on the physical environment is no longer an appropriate basis for denying a concession or incentive, aligning the SDBL with the Housing Accountability Act's (HAA) basis for denying or reducing the density of a qualifying housing development project
• Impose a new parking maximum of 0.5 spaces per bedroom for a development that includes 40 percent moderate income, for-sale units and is within a half-mile of a major transit stop to which residents have unobstructed access

In another revision related to the SDBL, AB 1584 (a housing omnibus bill discussed further below under "Covenants, Conditions and Restrictions (CC&Rs)" section) amends the HAA to clarify that any SDBL incentives, concessions, waivers and reductions in development standards – and not just the density bonus itself – are disregarded when considering a project's consistency with objective standards under the HAA. This amendment is intended to broaden the scope of SDBL projects eligible for the HAA's protections.

SB 728 (Sen. Robert Hertzberg) – Purchase of Density Bonus Units by Nonprofit Housing Organizations

In connection with for-sale density bonus units that qualified a developer for an award of a density bonus under the SDBL, SB 728 requires that such unit be either 1) initially occupied by a person or family of the required income, offered at an affordable housing cost and subject to an equity sharing agreement, or 2) purchased by a qualified nonprofit housing organization receiving a property tax welfare exemption. For option 2, a recorded contract must memorialize a) affordability restrictions for at least 45 years, b) an equity sharing agreement and c) a repurchase option that requires a subsequent purchaser desiring to sell or convey the property to first offer the nonprofit corporation the opportunity to repurchase the property. This creates more ownership options for nonprofit housing organizations.

SB 478 (Sen. Wiener) – Minimum FAR/Lot Coverage Standards and Prohibition on CC&R Restrictions of FAR for Missing Middle Multifamily Housing

FAR is a common mechanism in local zoning codes that limits the total floor area of a building in relation to the square footage of a lot. SB 478 prohibits agencies from imposing a FAR of less than 1.0 for a housing development project (comprised solely of residential units, a mixed-use development with at least two-thirds of the square footage attributed to residential uses or transitional or supportive housing as defined in the HAA) consisting of three to seven units and a FAR of less than 1.25 for housing development project consisting of eight to 10 units. Additionally, an agency may not deny a housing development project located on an existing legal parcel solely on the basis that the lot area does not meet the agency's requirement for minimum lot size. To qualify, a project must consist of three to 10 units in a multifamily residential zone or mixed-use zone in an urbanized area and cannot be within a single-family zone or within a historic district. SB 478 also makes any private development CC&R void and unenforceable if it effectively prohibits or unreasonably restricts an eligible FAR, as authorized under the new FAR standards and summarized above (and now found in Government Code Section 65913.11).

AB 345 (Assembly Member Sharon Quirk-Silva) – ADU Separate Conveyances

AB 345 further facilitates ADUs by removing the requirement for a local agency to first pass an ordinance allowing the conveyance of an ADU separately from a primary residence (which can be an extended process) before such conveyance occurs and permits an ADU to be sold or conveyed separately from the primary residence to a qualified buyer (low- and moderate-income individuals and families as defined in California Health and Safety Code Section 50093) and if certain conditions are met, including that the primary residence or ADU was built by a qualified nonprofit corporation and that the property is held pursuant to a recorded tenancy in common agreement. In addition to the current requirements, agreements recorded after Dec. 31, 2021, must also include 1) a delineation of all areas of the property that are for the exclusive use of a cotenant, 2) delineation of each cotenant's responsibility for the costs of taxes, insurance, utilities, general maintenance and repair and improvements associated with the property, and 3) procedures for dispute resolution among cotenants before resorting to legal action.

Streamlining Housing Approvals

The Legislature took little action to streamline the approval of housing developments other than to extend and revise previously enacted laws.

SB 8 (Sen. Skinner) – Extending Provisions in the Housing Crisis Act

One of the most important recent housing laws is SB 330, also known as the Housing Crisis Act of 2019 (HCA), which 1) limits a locality's ability to prolong the housing approval process, 2) gives housing applicants an opportunity to invoke vesting rights against later-adopted changes to local ordinances, 3) limits cities' ability to impose or enforce housing caps and development moratoria and 4) requires developers who demolish existing housing to provide replacement housing and relocation benefits. Many of these provisions were originally due to sunset in 2025. (See Holland & Knight's previous alert, "California Legislature Passes Housing Crisis Act of 2019 and Rent Control Bill, Among Others," Sept. 12, 2019.) SB 8 extends until 2034 the HCA provision that prohibits cities from conducting more than five hearings on an application as well as HCA provisions that provide vesting rights for housing projects that submit a qualifying "preliminary application." Applicants who submit qualifying preliminary applications for housing developments prior to Jan. 1, 2030, can now invoke vesting rights until Jan. 1, 2034. SB 8 extends until 2030 provisions that limit localities' authority to impose shifting requirements as part of application "completeness" review, as well as provisions that require localities to render any decision about whether a site is historic at the time the application for the housing development project is deemed complete. SB 8 also enacts a series of reforms intended to provide that HCA provisions apply to both discretionary and ministerial approvals as well as to the construction of a single dwelling unit and makes a series of revisions to the already complex replacement housing and relocation requirements.

AB 1174 (Assembly Member Timothy Grayson) – Reforms to SB 35's Streamlined Ministerial Approval Process for Post-Approval Modifications and Permits

SB 35 of 2017 provides for streamlined ministerial approval of qualifying infill affordable housing developments. In order to qualify, the housing development must meet or comply with a number of requirements, especially 1) consistency with all of the locality's applicable objective zoning, subdivision and design review standards, 2) the housing development will not require the demolition of affordable housing or rent controlled units, units that have been occupied in the preceding 10 years or a historic structure, 3) either 10 percent or 50 percent of the units (depending upon the jurisdiction's performance permitting enough housing to meet its share if its state-assigned regional housing need targets ) are designated at BMR rents or housing costs, 4) prevailing wage and "skilled and trained" workforce requirements for contractors and subcontractors, and 5) other locational requirements generally targeting infill housing locations. (For further information on SB 35's streamlined ministerial approval process, see Holland & Knight's previous alerts on the firm's legal victories using SB 35 to achieve project approvals: "Holland & Knight First in California to Secure Housing Approval Through Litigation Under Streamlining Law," Sept. 11, 2020, and "California Court of Appeal Sides with Holland & Knight Clients in Landmark Housing Case," April 26, 2021.)

AB 1174 further reforms the streamlined ministerial approval statute by addressing the process for modifying the project after an SB 35 permit is issued. The law specifies that the three-year time period during which an SB 35 permit remains valid is paused when a project is sued and while modifications are considered. The law also clarifies that subsequent permit applications must only meet the objective standards that were in place when the original development application was submitted. As an urgency statute, the law took effect on Sept. 17, 2021.

AB 1398 (Assembly Member Richard Bloom) – Accelerating By-Right Rezoning Requirement for Noncompliant Housing Elements

One underappreciated provision of Housing Element Law is the requirement that, if a city cannot identify sufficient sites adequate to accommodate its regional housing need, the Housing Element must commit to rezone properties within three years to allow "by right" development of 20 percent BMR projects. AB 1398 requires a locality that fails to adopt a housing element that the California Department of Housing and Community Development (HCD) has found to be in substantial compliance with state law within 120 days of the statutory deadline to complete this required rezoning no later than one year from the deadline for adoption of the housing element – and prohibits the Housing Element from being found in substantial compliance until that rezoning is completed. Previously, an agency had three years to rezone. This accelerated rezoning requirement, combined with other recent laws requiring agencies to make more realistic housing production assumptions and meet ever-increasing housing targets, present an important opportunity for by right processing within jurisdictions that do not meet housing targets.

Covenants, Conditions and Restrictions (CC&Rs)

One very notable trend in this year's session was new laws that take aim at existing recorded CC&Rs: rules and limitations on the use of property which are usually imposed by a developer or a homeowners association, attached to the title of a property, memorialized in documents recorded by the county recorder and binding as private contracts upon later purchasers of property. In addition to SB 478 (discussed above), which restricts CC&Rs that impose FAR restrictions, laws restricting CC&Rs include the following:

AB 721 (Assembly Member Bloom) – Covenants That Limit Residential Development Rendered Unenforceable Against Affordable Housing Developments

One of the most under-publicized laws of the 2021 session, AB 721 makes recorded covenants that limit residential development unenforceable against qualifying affordable housing developments. The law builds on existing law that allows parties to eliminate unenforceable racially restrictive covenants from recorded documents – but goes dramatically further by making any recorded CC&Rs that restrict the number, size or location of residences that may be built on a property, or that restrict the number of persons or families who may reside on a property, unenforceable against the owner of a 100 percent BMR housing development that is affordable to lower-income households. There are exceptions for certain conservation easements and covenants required to comply with state or federal law, but the law will nonetheless have significant effect on real estate throughout the state. Since the law does not authorize development that is inconsistent with local zoning and general plans, parties who would have standing to enforce CC&Rs may turn to applicable general plan or zoning laws to enforce residential restrictions, while others may turn to challenging the constitutionality or enforceability of the law, either on a facial basis or as applied to specific development proposals.

AB 1584 (Committee on Housing) – Covenants that Limit an ADU on Single-Family Lot Rendered Unenforceable

AB 1584, a housing omnibus bill, establishes a restriction on contractual development controls that mirrors AB 721 by declaring unenforceable any CC&R contained within a deed, contract, security instrument or other instrument that prohibits, effectively prohibits or restricts the construction or use of an ADU on a lot zoned for single-family use.

AB 1466 (Assembly Member Kevin McCarty) – Removal of Unenforceable Discriminatory Covenants from Recorded Documents

Existing law notifies a buyer of real property that recorded covenants on the property may contain racially restrictive or other unenforceable discriminatory provisions and informs buyers of their right to file an Restrictive Covenant Modification (RCM) form that effectively operates to remove the covenant from any subsequent documents sent to future buyers by the county recorder. AB 1466 aims to hasten the removal of these covenants by requiring all county recorders throughout the state to establish a program to identify and redact unlawfully restrictive covenants (which counties may fund by imposing a $2 recording fee on all property recordings) and easing restrictions on the ability of other parties to seek to remove such covenants.

Equity, Fair Housing and BMR Housing

Several laws focus on fair housing and equity, including a new law that requires all BMR homes within a development to be integrated with market-rate homes, adding a new "Acutely Low Income" Household category and adding fair housing criteria to state and local program eligibility.

AB 491 (Assembly Member Christopher Ward) – State Law Requirement for Multifamily Developments to Integrate BMR Units and Provide Same Access to Common Areas and Amenities

AB 491 requires that, for any residential structure with five or more residential dwelling units that include both affordable housing units and market-rate housing units, the BMR units must provide the same access to common entrances, areas and amenities as non-BMR units, and the building "shall not isolate the affordable housing units within that structure to a specific floor or an area on a specific floor." Similar provisions have previously been included in locally adopted inclusionary housing requirements. Although clearly a new requirement, AB 491 states that it is declaratory of existing law (apparently a reference to the fact the authors believe that isolating BMR units may violate current fair housing or anti-discrimination requirements), which means that state and local building officials may apply it retroactively. It will be important to plan for affordable and market-rate unit integration from an entitlement, financing and construction perspective.

AB 1043 (Assembly Member Isaac Bryan) – Adding "Acutely Low Income" Households to Affordable Housing Law

Most affordable housing programs and laws target "lower income" households (which, in most counties, are generally households who earn less than 80 percent of Area Median Income [AMI]). State law recognizes two further subcategories of "lower income" households: "Very Low Income" and "Extremely Low Income" households (whose incomes vary by county but who typically earn less than 50 percent, and 30 percent, of AMI, respectively). AB 1043 adds a new subset of "lower income households": "Acutely Low Income" households, who earn 15 percent of AMI and whose rents can be no greater than 30 percent of the 15 percent AMI level. This new income band of acutely low-income households is likely to be targeted in future state or local funding programs and inclusionary zoning ordinances.

AB 1095 (Assembly Member Ken Cooley) – Equity in State and Local Programs for Affordable Homeownership Opportunities

Recognizing that "home ownership provides low-income families the opportunity to build inter-generational wealth," AB 1095 revises laws governing the Affordable Housing and Sustainable Communities Program (AHSC) and the Strategic Growth Council (SGC) to specify that both programs aim to promote affordable housing rental units and owner-occupied affordable housing units. The legislation additionally requires the SGC to adopt guidelines or selection criteria for the AHSC program that include both affordable housing rental and owner-occupied affordable housing units.

AB 1304 (Assembly Member Miguel Santiago) – Further Reforms to "Affirmatively Further Fair Housing" in Housing Elements

As previously described, the Legislature in 2018 required public agencies to administer their public programs, and in particular their housing elements, "in a manner to affirmatively further fair housing [AFFH]." AFFH means, among other things, "taking meaningful actions ... that overcome patterns of segregation and foster inclusive communities" and "address significant disparities in housing needs and in access to opportunity." (See Holland & Knight's previous alert, "California's 2019 Housing Laws: What You Need to Know," Oct. 8, 2018.) AB 1304 further reforms these requirements by clarifying that public agencies have a mandatory duty to comply with AFFH requirements by requiring housing element site inventories to identify sites needed to meet the AFFH requirement and analyze the relationship of those sites to the locality's AFFH duty, and providing other further specific guidance about how housing elements must analyze AFFH policies and goals.

Planning and Housing Element Law

The Housing Element is a part of a local agency's general plan, which requires them to adequately plan for their "fair share" of housing needs pursuant to the Housing Needs Allocation (RHNA). Local agencies are required to update their Housing Element every eight years (or four years if HCD determines it is noncompliant). Several new laws add transparency to the process for updating the Housing Element and progress on meeting the Housing Element's goals by imposing additional noticing and reporting obligations on local jurisdictions.

AB 215 (Assembly Member David Chiu) – Housing Element Revision Publication Requirements and Housing Law Violation Enforcement

AB 215 requires local agencies to make draft revisions of the housing element available for public comment for 30 days. The agency must consider and incorporate public comments prior to submission to the HCD for review. This bill also expands the attorney general's authority to independently seek action and grants HCD the ability to hire or appoint other counsel if the attorney general does not pursue action against a local agency that has violated certain housing laws, inclusive of the HCA, AFFH policies (AB 686), SB 35 Streamlining, Permanent Supportive Housing streamlining (AB 2162) and Low Barrier Navigation Center streamlining (AB 101). As such, this law strengthens the enforcement tools that may be used against noncompliant jurisdictions.

AB 68 (Assembly Member Quirk-Silva) – California Statewide Housing Plan Reporting Requirements

AB 68 requires the HCD to develop and publish on its website in an annual report regarding land use oversight actions taken against local agencies related to housing for violations of the HCA, AFFH policies (AB 686), SB 35 streamlining, Permanent Supportive Housing streamlining (AB 2162) and Low Barrier Navigation Center streamlining (AB 101).

AB 787 (Assembly Member Jesse Gabriel) – Moderate-Income Conversions Counted Towards RHNA

AB 787 expands existing law that permits jurisdictions to claim credit for up to 25 percent of their RHNA from the conversion of existing housing units for very low- and low-income households by also permitting cities and counties to satisfy up to 25 percent of the local agency's moderate-income regional housing need through RHNA through the conversion of units in an existing multifamily building to be restricted for moderate-income households. In order to qualify, the conversion 1) must occur beginning Jan. 1, 2022, 2) units may not be previously affordable to very low-, low- or moderate-income households, 3) must be subject to a 55-year recorded agreement and 4) the initial post-conversion rent for the unit must be at least 10 percent less than the average monthly rent charged during the 12 months prior to conversion.

AB 1029 (Assembly Member Kevin Mullin) – Grants for Pro-Housing Local Policies

AB 1029 permits HCD to add the preservation of affordable housing units to a list of pro-housing, local policies that allow cities and counties to qualify for extra points or preference when scoring program applications for state programs, including the AHSC grant program, Transformative Climate Communities (TCC) Program and the Infill Incentive Grant (IIG) Program of 2007 for award cycles commenced after July 1, 2021. This is an urgency statute that went into effect Sept. 28, 2021, but requires HCD to adopt these policies as a part of the formal rulemaking process in order to take effect.

Costs of Housing Production

The following new laws are aimed at curbing the increasing cost of housing production by imposing additional procedures on jurisdictions adopting impact fees and prohibiting affordable housing fees on affordable housing units.

AB 602 (Assembly Member Grayson) – Impact Fee Nexus Study Standards and Procedures

AB 602 imposes additional standards and procedures for agencies adopting impact fees. It requires agencies to identify an existing level of services for public facilities and information supporting the agency's actions in increasing fees and requires agencies to impose fees on a housing development proportionately to the square footage of the development or make findings for a different methodology. Agencies must adopt studies at a public hearing with at least 30 days' notice, notify any member of the public who requests notice of an impact fee nexus study and consider any evidence submitted by any member of the public that the agency's determinations or findings are insufficient. Large jurisdictions are required to adopt a capital improvement plan as part of the nexus study. Agencies must update nexus fee studies at least every eight years from the period beginning on Jan. 1, 2022. Agencies must also post the current impact fee schedule and update at least twice a year. Finally, the law directs HCD to create an impact fee nexus study template. With additional standards and procedures, more engaged oversight and comment on the impact fee process by housing groups and industry organizations may follow.

AB 571 (Assembly Member Chad Mayes) – Prohibition of Affordable Housing Fees on Affordable Housing Units

AB 571 prohibits agencies from imposing affordable housing impact fees, including inclusionary zoning fees and in lieu fees, on affordable units proposed as part of a SDBL project.

Surplus Lands Act

The Legislature has continued the trend of amending the Surplus Land Act (SLA), enacted in 2019 to activate underutilized publicly owned land to encourage the development of affordable housing. The SLA has been strengthened in recent years (with new penalty provisions) as a result of noncompliance in the past and to increase opportunities for affordable housing and other public purposes on underutilized public land. (For more details regarding the SLA, see Holland & Knight's previous alert, "California's 2020 Housing Laws: What You Need to Know," Oct. 18, 2019)

SB 791 (Sen. Dave Cortese) – Establishment of California Surplus Land Unit

SB 791 establishes within HCD the California Surplus Land Unit to provide technical assistance to local agencies and developers to "facilitate the development and construction of residential housing on local surplus land." The unit may adopt, amend and repeal regulations and rules; provide advice to agencies seeking to dispose of land; and facilitate agreements, grants and other types of financing for housing developers and local agencies to support the construction of housing on surplus land.

AB 1180 (Assembly Member Devon Mathis) – Dispositions to Tribes Exempted from Surplus Land Act Requirements

AB 1180 amends the definition of the type of land a local agency may declare as "exempt surplus land" to include the transfer of surplus land to a federally recognized California Native American tribe. Such a transfer is exempt from provisions governing disposal of surplus land, which dictate how a local agency may notice, negotiate and process the disposal of surplus land and is not subject to provisions that allow for private enforcement actions for noncompliance with the law.

Students, Teachers and Seniors

The Legislature also focused on encouraging student and intergenerational housing planning and production.

AB 1377 (Assembly Member McCarty) – University of California and California State University Student Housing Plans

AB 1377 requires the University of California (UC) and California State University (CSU) to conduct a needs assessment to determine projected student housing needs by campus by July 1, 2022, for the 2022-2023 through 2026-2027 fiscal years and to create a student housing plan, with a focus on affordable student housing, that outlines how they will meet projected student housing needs and to update that plan every three years. The report must take into account projected enrollment growth and the goal of closing the degree gap, defined to mean the gap between the number of highly educated workers that California's future economy will need and the number the state is on pace to produce. The intent of the bill is to provide the financial and technical support necessary for the UC and CSU systems and for community college campuses to build affordable housing to meet the urgent and growing needs of California's students.

SB 591 (Sen. Josh Becker) – Intergenerational Housing Developments

SB 591 authorizes the establishment of intergenerational housing developments that would include senior citizens, caregivers and transition-age youth in order to permit developers who receive local or state funds or tax credits designated for affordable rental housing to prioritize and restrict occupancy of certain developments to senior citizens, caregivers and transition-age youth. A qualifying intergenerational housing development must have at least 80 percent of the units occupied by at least one senior citizen, defined as a person 55 years of age or older, and up to 20 percent of the units occupied by at least one caregiver or transition-age youth. The development must also be affordable to lower-income households. The bill requires that the CC&Rs for the development set forth the limitations on occupancy, residency and use consistent with the bill.

AB 306 (Assembly Member Patrick O'Donnell) – Teacher and School Staff Housing

Existing law requires school buildings to meet heightened standards for earthquake safety in order to protect children and requires the California Department of General Services (DGS) to approve plans and construction methods for such buildings. AB 306 removes these requirements and requires DGS to approve the plans, specifications and methods of construction of certain factory-built school buildings to exclude from the definition of "school building" any building used or intended to be used by a school district as residential housing, meaning any building used as a personal residence by a teacher or employee of a school district or community college district.

CEQA Litigation

As in most years, the Legislature made only modest CEQA reforms by reenacting streamlined CEQA litigation tools, now available to certain qualifying mixed-use and residential projects, and adding a CEQA exemption for homelessness and COVID hardship housing.

SB 7 (Sen. Atkins) – Additional Mixed-Use and Residential Projects Eligible for Streamlined Environmental Leadership Development Project Litigation Process

As previously described, SB 7 revises and expands on the previously enacted Environmental Leadership Development Project (ELDP) litigation process to include qualifying mixed-use and residential projects that were not previously eligible for certification. (See Holland & Knight's previous alert, "SB 7 Creates Expedited CEQA Litigation Schedule for Qualifying Projects," May 28, 2021.) The law does not streamline project approval, but qualifying projects can benefit from expedited litigation procedures that attempt to reduce CEQA challenge timelines to less than a year if they can achieve the governor's certification. As an urgency statute, this law took effect on May 20, 2021.

AB 140 (Committee on Budget) – CEQA Exemption for Homelessness and COVID Hardship Housing

Within a wide-sweeping budget bill funding housing programs, AB 140 creates a new CEQA exemption for certain housing projects that are targeted at prospective residents facing homelessness and COVID hardship. As an urgency statute, this law took effect on July 19, 2021.

Conclusion

Although some critics faulted SB 9, the duplex law, for failing to specifically impose BMR requirements on new housing, the overall thrust of the Legislature's efforts shows significant – and in some cases dramatic – attention to BMR housing developments. The Legislature did not advance any significant new streamlining laws, but it did create opportunities for creative project applicants to use provisions such as the SDBL to create feasible housing opportunities and to invoke the HAA and the HCA to move project approvals forward.

Previous California Housing Law Alerts

• A Closer Look at California's New Housing Production Laws, Dec. 6, 2017
• California's 2019 Housing Laws: What You Need to Know, Oct. 8, 2018
• California's 2020 Housing Laws: What You Need to Know, Oct. 18, 2019
• California's 2021 Housing Laws: What You Need to Know, Nov. 4, 2020

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.