Guest Commentary: Thoughts on SB 35 and Housing

(Editor’s note: this comment was worth creating as a standalone article that can generate its own conversation).

by Keith Echols

I’ve advocated for more affordable housing….actually public housing in the community and that market rate housing should be built if it pays for itself and provides a benefit to the community.  There’s a bill that was passed about 4 years ago (SB 35) that streamlined the process for affordable housing to be built in the state.  Now, I have my opinions on how affordable housing should be allocated (teachers, fire fighters, police, existing residents…etc…)  but that’s another debate. The infill people will love this.  It does not negate the difficulty in making infill density economically feasible….but at least for affordable housing the bureaucratic process has been simplified.   So here’s how the bill goes:

SB 35 applies to cities and counties that have not made sufficient progress toward meeting their affordable housing goals for above-moderate and lower income levels as mandated by the State. In an effort to meet the affordable housing goals, SB 35 requires cities and counties to streamline the review and approval of certain qualifying affordable housing projects through a ministerial process.

HCD’s determination is based on whether the locality has issued fewer building permits than its pro-rata share of the regional housing need, by income level, for that reporting period. The “reporting period” is defined as either the first half or the second half of the regional housing needs assessment cycle (Section 65913.4(i)(10)) and is based upon the locality’s annual progress report (“APR”). This determination remains in effect until HCD’s determination for the next reporting period.

As of the date of this paper, the current Determination Summary represents Housing Element Annual Progress Report data received as of January 31, 2018. According to this data, 13 jurisdictions have met their prorated Lower (Very-Low and Low) and Above-Moderate Income Regional Housing Needs Assessment (RHNA) for the reporting period and are not currently subject to the streamlined ministerial approval process. All other cities and counties are subject to at least some form of SB 35 streamlining.

There are 378 jurisdictions that have made insufficient progress toward their Above Moderate income RHNA numbers and/or have not submitted their latest Housing Element Annual Progress Report (2016) and there are 148 jurisdictions that have made insufficient progress toward their Lower income RHNA numbers (Very-Low and Low income).

SB 35 requires cities and counties to streamline review and approval of eligible affordable housing projects through a ministerial approval process, exempting such projects from environmental review under the California Environmental Quality Act (“CEQA”). This process does not allow public hearings to consider the merits of the project; rather, only design review or public oversight of the development is allowed, which must be objective and strictly focused on assessing compliance with criteria required for streamlined projects as well as objective design review of the project (Section 65913.4(c)(1).

Depending on the number of housing units proposed in the project, the jurisdiction has only a short timeframe within which to review the application to determine if it is eligible for processing under SB 35 (between 60-90 days). If it is determined that the project is eligible, SB 35 specifies the timeframes within which the jurisdiction has to make a final decision on the application (between 90-180 days).

ELIGIBILITY CRITERIA FOR THE SB 35 STREAMLINED, MINISTERIAL APPROVAL PROCESS

(a) Urban Infill. Are located in an urban area, with 75% of the site’s perimeter already developed (Section 65913.4(a)(2)(A) and (B)).

(b) Number of Units. Propose at least two residential units (Section 65913.4(a)(1)).

(c) Designated for Residential Uses. Have a general plan and/or zoning designation that allows residential or mixed-use with at least 2/3 of the square footage as residential use (Section 65913.4(a)(2)(C)).

(d) Location. Cannot be located on property within any of the following areas: a coastal zone, prime farmland, wetlands, very high fire hazard severity zone, hazardous waste site, delineated earthquake fault zone, flood plain, floodway, community conservation plan area, habitat for protected species, under a conservation easement, or located on a qualifying mobile home site (Section 65913.4(a)(6)).

(e) Demolition of Residential Units. The development would not demolish any housing units that have been occupied by tenants in the last 10 years; are subject to any form of rent or price control, or are subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of moderate, low, or very low incomes (Section 65913.4(a)(7)).

(f) Historic Buildings. The development would not demolish a historic structure that is on a national, state, or local historic register (Section 65913.4(a)(7)(C)).

(g) Consistent with Objective Planning Standards. Must meet all objective general plan, zoning, subdivision and design review standards in effect at the time the application is submitted. Objective standards are those that require no personal or subjective (discretionary) judgment, and must be verifiable by reference to an external and uniform source available prior to submittal (Section 65913.4(a)(5)).

(h) Prevailing Wages. If the development is not in its entirety a public work, as defined in Government Code Section 65913.4(a)(8)(A), all construction workers employed in the execution of the development must be paid at least the general prevailing rate of per diem wages for the type of work and geographic area. (Section 65913.4(a)(8)(A)). This requirement does not apply to projects that include 10 or fewer units and is not a public work project (Section 65913.4(a)(8)(C)).

(i) Skilled and Trained Workforce Provisions. A skilled and trained workforce must complete the development if the project consists of 75 or more units that are not 100 percent subsidized affordable housing (Section 65913.4(a)(8)(B)). This requirement does not apply to projects that include 10 or fewer units and is not a public work project (Section 65913.4(a)(8)(C)).

(j) Subdivisions. Does not involve a subdivision subject to the Subdivision Map Act, unless the development either (i) receives a low-income housing tax credit and is subject to the requirement that prevailing wages be paid, or (ii) is subject to the requirements to pay prevailing wages and to use a skilled and trained workforce (Section 65913.4(a)(9)).

(k) Parking. The project must provide at least one parking space per unit; however, no parking may be required if 1) the project is located within a) one half mile of a public transit stop, b) an architecturally and historically significant historic district, c) one block of a car share vehicle station, or 2) on-street parking permits are required but not offered to the development occupants (Section 65913.4(d)).

(l) Mobilehome Site. The project site cannot be governed by the Mobilehome Residency Law, the Recreational Vehicle Park Occupancy Law, the Mobilehome Parks Act, or the Special Occupancy Parks Act (Section 65913.4(a)(10)).

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15 Comments

  1. Ron Oertel

    This article is technical in nature, with quite a few moving parts.

    According to this data, 13 jurisdictions have met their prorated Lower (Very-Low and Low) and Above-Moderate Income Regional Housing Needs Assessment (RHNA) for the reporting period and are not currently subject to the streamlined ministerial approval process. All other cities and counties are subject to at least some form of SB 35 streamlining.

    Does anyone know if Davis is one of the 13 jurisdictions?

  2. Edgar Wai

    HCD’s determination is based on whether the locality has issued fewer building permits than its pro-rata share of the regional housing need, by income level, for that reporting period.

    Pro rata determination by income creates social injustice when the result pattern does not match net migration.

    Suppose City A has more job opportunities and people with higher income than City B. According to pro rata determination, City A is required build more in City A regardless who in the region is not getting housed, and if City A does not provide, it is punished. This allows the migrants from an inhospitable city to prey on any successful and hospitable city without paying for their exporting migrants.

    In hospitality principle, cities that are hospitable and have net migrants are paid by those with net emigrants. Having net positive or zero migration allows a city to choose its size and style. A city with net emigration can keep its style by paying other cities or by shrinking and become net zero migration. Having migrant exporters pay for housing externality preserves social justice, and promote voluntary cooperation, and competition based on hospitality.

    Comparing to the policies described in the HCD, cities with net positive migration should be subjected to no housing requirement regardless of income level. Instead, they should be paid by cities with net negative migration. The determination should have nothing to do with income. A city with net emigration is not obligated to build within its city limits, it can simply pay any cities where its emigrants actually choose to live.

    So for example, if people from Bay Area choose to live in Davis, Bay Area needs to pay Davis. It doesn’t matter whether Davis is already profiting from having those people living there. And it doesn’t matter whether the person moved due to affordability or political reasons. If people are migrating then the cities exporting migrants need to pay each destination chosen by each migrant. A city cannot be inhospitable and driving people out without paying.

  3. David Greenwald

    “SB 35 applies to cities and counties that have not made sufficient progress toward meeting their affordable housing goals for above-moderate and lower income levels as mandated by the State. In an effort to meet the affordable housing goals, SB 35 requires cities and counties to streamline the review and approval of certain qualifying affordable housing projects through a ministerial process.”

    .
    One of the issues with the current Housing Element is in fact whether we can find enough land for affordable housing – the staff says “no” right now.

    1. Ron Oertel

      One of the issues with the current Housing Element is in fact whether we can find enough land for affordable housing – the staff says “no” right now.

      Just noting that “right now” means as currently-zoned.

      Also, do you happen to know the answer to the first question I asked (above)?

      Does anyone know if Davis is one of the 13 jurisdictions?

      Or, does the following apply to Davis, instead?

      There are 378 jurisdictions that have made insufficient progress toward their Above Moderate income RHNA numbers and/or have not submitted their latest Housing Element Annual Progress Report (2016) and there are 148 jurisdictions that have made insufficient progress toward their Lower income RHNA numbers (Very-Low and Low income).

       

       

       

        1. Ron Oertel

          It means currently or potentially could be zoned.

          That is also not correct.

          The fact is that there is land within city limits that could be zoned to accommodate it. This isn’t even in question.

          1. David Greenwald

            This is from the Housing Element:

            The Housing Element must identify specific sites or parcels that are appropriate and available for residential development. Land suitable for residential development includes:

            * vacant sites with zoning that allows for residential development; and
            * nonvacant, underutilized sites with zoning that allows for residential development and are capable of being developed at a higher density or with greater intensity.

            “While Measure J adds costs, extends processing times, and has been used to halt development projects that would convert agricultural land to urban development, it is only a constraint to meeting housing needs if the city lacks sufficient infill housing sites. As described in more detail in the Sites Inventory Section, there is not currently (2021) enough land designated for residential development to meet the sixth-cycle RHNA. All of the sites identified to meet the lower-income RHNA are non-vacant sites. Although, Measure J supports infill development, these sites are not sufficient to meet the lower-income RHNA. Even with the increased residential densities planned for the Downtown under the Draft Downtown Davis Specific Plan, the City will need to rezone additional sites to meet the RHNA. Had DISC passed, the City would have sufficient sites to meet the sixth-cycle RHNA upon adoption of the Downtown Davis Specific Plan and would not need to rezone additional sites.”

        2. Ron Oertel

          “While Measure J adds costs, extends processing times, and has been used to halt development projects that would convert agricultural land to urban development, it is only a constraint to meeting housing needs if the city lacks sufficient infill housing sites.

          Measure J includes a specific stipulation that allows the city to add 5 acres at a time (as I recall) to meet Affordable housing requirements – if it cannot be accommodated within city limits.

          So, any claim that Measure J is preventing the city from meeting Affordable housing requirements is factually incorrect.

          If you claim that this is not correct, please show us via reference/citation.

          As described in more detail in the Sites Inventory Section, there is not currently (2021) enough land designated for residential development to meet the sixth-cycle RHNA.

          This does not state there isn’t enough land within city limits to meet RHNA requirements.  However, the conclusion itself is incorrect, in that existing sites can be rezoned for more density. It appears that they were actually referring to land as it is currently-zoned, which would then be correct.

          If sprawl was actually required to meet the requirements, the entire Bay Area (and their 500,000 or so additional housing unit allocation) would have no way to be in compliance with the new law.

          Since Woodland and West Sacramento (for example) has higher numbers than Davis, the willingness to support sprawl seems to result in higher numbers.  (Unless as Matt noted, Woodland and West Sacramento specifically “asked for it”.)

          https://www.davisvanguard.org/2021/08/commentary-we-cant-solve-our-housing-problems-with-wishes-and-prayers/#comment-453382

          All of the sites identified to meet the lower-income RHNA are non-vacant sites.

          “Non-vacant” is irrelevant.

          these sites are not sufficient to meet the lower-income RHNA.

          it is not clear “which” sites this refers to.

          Even with the increased residential densities planned for the Downtown under the Draft Downtown Davis Specific Plan, the City will need to rezone additional sites to meet the RHNA.

          Not in question.  Did the report go on to identify other potential sites within the city’s boundaries that could meet the requirements?  If so, any claim that peripheral development is needed to meet the requirements is factually incorrect.

          Had DISC passed, the City would have sufficient sites to meet the sixth-cycle RHNA upon adoption of the Downtown Davis Specific Plan and would not need to rezone additional sites.”

          Hmm.  Does the document note what the impact of DISC would be in the next round of RHNA requirements?  Given that (if successful), it would have created more “jobs” than “housing” units needed to accommodate it?  Which is THE primary consideration when HCD assigns the RHNA numbers?

    2. Ron Oertel

      The reason I’m pointing this out is because your comment seems similar to the “no available land” (within the existing city) in regard to potential commercial redevelopment/space.

      As such, I read it as an advocacy for sprawl.

      Note that something like 500,000 additional units must be accounted for in the Bay Area alone – in cities that won’t be expanding their boundaries.

      1. Tim Keller

        The reason I’m pointing this out is because your comment seems similar to the “no available land” (within the existing city) in regard to potential commercial redevelopment/space.
        As such, I read it as an advocacy for sprawl

        This demonstrates what qualifies as “sprawl” in Ron’s mind:  anything outside the existing city boundaries.

         

        To paraphrase a former vice presidential candidate:  I grew up in LA.  I know sprawl.  I crawled through sprawl for 15 years.  Sprawl was a friend of mine.   This, my friend, is NOT sprawl.

  4. Keith Y Echols

    Huh….didn’t see this coming.  I guess I should give credit to a developer friend of mine (he sometimes reads my comments here for amusement but would not want this name mentioned) who brought this subject up in a recent conversation about the old Vallco shopping mall in Cupertino.  It’s a 2400 unit project next the Apple Mothership campus.  The Vallco shopping center has gone through multiple owners and attempts to redevelop it.  But the latest attempt succeeded by submitting a proposal that included 51% (1,201 units) of affordable housing that went through the ministerial/turbo/streamlined process.

    I think this article would be more popular if the title were: “Affordable Housing: Out Flanking the NIMBYs!” 

    Affordable housing can be built in a few different ways.  Non-profit affordable housing builders are one way.  Another is For-profit builders and publicly built and owned affordable housing.  I think a mix of them all is probably optimal.  Relying on for-profit builders to solve affordable housing issues isn’t a good idea.  Put simply they’re in it for the money.  But they can contribute through inclusionary housing that would have them build a percentage of their for profit project as affordable (anywhere from 5% to 15% in some counties); the subsidization cost is borne by new home buyers.  But I think the best way for affordable housing to be built would be for city built and owned and operated public housing.

    A comment from a previous post

    Tim Keller: I most resonate with something you said the other day – about building a range of housing of different types and all in the higher-density, lower cost ranges.   More apartments, maybe some condo towers…. ( and no… not “luxury condos”.. 

    What envision is something like a 200 unit mixed use city owned and managed project.  101 affordable units (for households that make 60% or less of the medium household income).  50 units of workforce housing (anywhere from 50% to 120% of the medium household income).  And 49 units of market rate housing.  Rents would be adjusted based on the type of housing a person/family received based on income.  Market rate and to a lesser degree workforce housing would fund much of the project going forward.  If necessary for a immediate capital some of the market rate units could be sold off as condos.  The commercial component would also be a source of city revenue as well that would help pay for the project.

    Now I have my views on how or to whom that housing should be allocated beyond simply income requirements.  I don’t want people to just show up in Davis and expect a home will be provided (homeless shelters are a different topic).  I think city funded affordable homes should be for people that live in Davis (for some specified period of time), employed in Davis and even more specifically/priority: police officers, teachers, fire fighters, first responders, healthcare workers…etc…

    Does anyone know if Davis is one of the 13 jurisdictions?

    From what I’ve read  that as of 2018, Davis falls into the category that projects with more than 50%  affordable housing for a project to be eligible for the streamlined approval process (there are some jurisdictions like Yolo County that fall under the 10% or more affordable housing definition for streamlined approval).

    SB 35 has recently held up in court.

    SB 35 Streamlining Upheld Against “Home Rule” Challenge

    A recent order from the Santa Clara County Superior Court suggests that California courts intend to uphold and implement SB 35’s goals of fast-tracking housing developments

    Court of Appeal Issues First Published Opinion Interpreting California Senate Bill 35 Streamlining Provisions

    Mixed-Use Projects

    The Court of Appeal also rejected the City’s argument that SB 35 only applies to mixed-use sites where local zoning provisions require a minimum of two-thirds of the site to be dedicated to residential use. Specifically, the City argued that a project might only invoke SB 35’s streamlining procedures when the project is located on a site with a general plan or zoning designation “mandating that at least two-thirds of the square footage of any development [at the site] be designated for residential use.” (Slip Op. at p. 51.) The City’s argument was based on a provision in SB 35 that, at the time of the administrative and trial court proceedings, read as follow:

    “The development [must be] located on a site that satisfies all of the following: [¶] . . . [¶] A site that is zoned for residential use or residential mixed-use development, or has a general plan designation that allows residential use or a mix of residential and nonresidential uses, with at least two-thirds of the square footage of the development designated for residential use.”

    That statutory provision has now been amended to state that “[t]he development and the site on which it is located [must] satisfy all of the following . . . .” (Gov. Code, § 65913.4, subd. (a)(2)(C) [emphasis added].) The trial court agreed with the City and ruled that SB 35 places “restrictions as to sites on which a project can be located and still be eligible for SB 35 streamlined approval,” and SB 35 limits streamlined approval to projects on “mixed-use sites which require minimum two-thirds residential use.” (Slip Op. at p. 47.) According to the trial court, the “context and structure” of the statutory text “indicate that the two-thirds proviso is part of a restriction on ‘the site’ rather than the development project itself.” (Slip Op. at p. 47, fn. 26.)

    The Court of Appeal disagreed and held that the City’s interpretation of SB 35 was not supported by the plain text of the statute, which “consistently uses ‘the development’ to refer to the project that is the subject of an application for ministerial approval,” rather than the site on which the development is located (Slip Op. at p. 51.) The Court of Appeal concluded that the “two-thirds” requirement, therefore, applies to the project that is the subject of the application rather than the site. Here, the project satisfied this requirement: approximately 88 percent of the project’s floor area would be devoted to residential uses (254,888 gross square feet of the project’s total 286,809 square feet).

    The Court also noted that the City’s interpretation “would discourage development of affordable housing by limiting the applicability of the streamlined approval process to projects on sites with a minimum residential requirement for mixed-use developments even if the development itself is at least two-thirds residential.” (Slip Op. at p. 52.) The Court also observed that the City’s interpretation “would make the proposed project ineligible for ministerial approval despite it being 88 percent residential and located on a site zoned for mixed uses.” (Slip Op. at p. 52.)

    Project Consistency with Objective Zoning Standards

    Finally, the Court of Appeal found that the City improperly rejected the SB 35 application on the ground that the project conflicted with objective zoning standards. The City claimed that the project failed to comply with affordable housing mitigation fee requirements, but the Court of Appeal held that the fee requirements were not an objective standard. 

    The Court also held that the City improperly denied the SB 35 application on the grounds that the project did not comply with objective standards for traffic impacts. In its letter denying the SB 35 application, the City informed the developers that the project ” ‘potentially’ conflicted with the ‘objective standards’ that it ‘[b]e capable of meeting any applicable performance standards for off-site impacts’ and ‘[n]ot exceed the amount and intensity of use that can be served by available traffic capacity and potential parking supply.’ “

    1. Keith Y Echols

      $#%#$^^@!!  now that’s just embarrassing

       …..60% or less of the medium household income

      I did it twice!

      120% of the medium household income

      MEDIAN!!!!

  5. Bill Marshall

    Measure J includes a specific stipulation that allows the city to add 5 acres at a time (as I recall) to meet Affordable housing requirements – if it cannot be accommodated within city limits.
    If you claim that this is not correct, please show us via reference/citation.

    How about the text of measure D?  Will that suffice?

    637299994460830000 (cityofdavis.org)

    See Section 41.01.030, “Exceptions”

    There are “if’s” as you state… but that is gross acres, not net/developable acres… an exception that pretty much guarantees it’ll never happen.  Which would appear to meet your ‘goals’.  No development.

    You are technically correct. But in reality, …

    Really high density would be 25 units/acre… if 3.5 -4.2 acres are developable, well, do the math…

    1. Ron Oertel

      It looks like there are quite a number of exemptions in regard to Measure J.  For some reason, I can’t copy and paste at the moment, so I’ll retype the specific exemption.  (You might want to double-check the wording I’ve retyped below, as a result.)

      3.  “Not more than five acres per year in total area is designated under this exemption for residential development.  Additional acreage may be designated under this exemption if the City Council finds that acreage is necessary to meet the City’s legal fair share obligation based on maximum multifamily densities.

      Any proposal under this subsection shall be required to have all housing units permanently affordable to persons or families of moderate, low, and very low income.

      The intent of this exemption is to provide sufficient land for housing to accommodate moderate, low, and very-low income housing as may be necessary over time.”

      ———————————————————————————————————-
      RHNA numbers apply over an 8-year period, while the Measure J exemption is annual.  But there isn’t even a 5-acre annual limit in the first place (regarding Measure J exemptions), if the city council determines that additional acreage is needed.

      As a side note, I appreciate the information provided by Keith E., and Matt’s suggestion to post it as a separate article.

       

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