SB 8, 9 AND 10LATEST DEVELOPMENT IN HOUSING DEVELOPMENT

Sean Lask, Deputy City Attorney

SB 8 – UPDATES

• SB 8 served as an update to the previous Housing Crisis Act of 2019 (“HCA”)

• Clarifies the term “housing development project” to include projects that involve

• No discretionary approvals

• Projects that involve both discretionary and nondiscretionary approvals, and

• Projects that include a proposal to construct a single dwelling unit.

• Much of these updates consist of changing dates and time periods such as:

• Specifically changes the HCA’s end date from 2025 to 2030

• Specific Changes are as follows:

SB 8 – THE OLD AND THE NEW

Original HCA• Act does not prohibit a housing development

project from being subject to ordinances, policies, and standards adopted after the preliminary application was submitted in certain circumstances, including when the housing development project has not commenced construction within 2.5 years following the date that the project received final approval.

SB 8 Clarification• Act does not prohibit a housing development

project that is an affordable housing project, as defined, from being subject to ordinances, policies, and standards adopted after the preliminary application was submitted if the project has not commenced construction within 3.5 years.

SB 8 – THE OLD AND THE NEW

Original HCA• Act prohibits an affected city from approving a

housing development project that requires the demolition of occupied or vacant protected units, as defined, UNLESS the developer agrees to provide the occupants of any protected units with RELOCATION BENEFITS and a RIGHT OF FIRST REFUSAL for a comparable unit available in the new housing development affordable to the household at an affordable rent or an affordable housing cost.

SB 8 Changes• SB 8 would limit the requirement to provide

relocation benefits and a right of first refusal to ONLY the occupants of protected units that are lower income households.

• SB 8 also specifies that the requirement to provide relocation benefits and a right of first refusal does not apply to an occupant of a short-term rental (Air BnB).

SB – FIRST REFUSAL CONTINUED

• SB 8 also exempts certain protected units requirement to provide a right of first refusal

• including a development project that consists of a single residential unit located on a site where a single protected unit is being demolished.

• It will also exempt protected units in a housing development where 100% of the units are reserved for lower income households, UNLESS the occupant of a protected unit qualifies for residence in the new development and the occupant is not precluded from occupancy due to unit size limitations or other requirements of one or more funding source of the housing development.

SB 8 – THE OLD AND THE NEW

Original HCA• The Act required the department to determine

the affected cities for purposes of the act, by June 30, 2020

• It also authorized the department to update the list of affected cities and affected counties once on or after January 1, 2021, as specified.

• Also provides that the department’s determinations remain valid until January 1, 2025.

SB 8 Update• SB 8 authorizes the department to update the

list of affected cities and affected counties a SECOND time on or after January 1, 2025.

• The department’s determinations remain valid until January 1, 2030.

SB 8 – THE OLD AND THE NEW

Original HCA• The Act specified that it does not prohibit an

affected city from changing a land use designation or zoning ordinance to a less intensive use IF the city or county concurrently changes the development standards, policies, and conditions applicable to other parcels within the jurisdiction to ensure that there is no net loss in residential capacity.

SB 8 Clarification• SB 8 defines “CONCURRENTLY” to mean that the

action is approved at the same meeting of the legislative body OR,

• if the action that would result in a net loss of residential capacity is requested by an applicant for a housing development project, within 180 DAYS.

• “CONCURRENTLY” means the action is included in the initiative in a manner that ensures the added residential capacity is effective at the same time as the reduction in residential capacity.

SB 9 – THE BASICS

• SB 9 is broken into 5 sections• The first two are the most important

• Section 1• Requires ministerial approval for a proposed two unit residential development in a single family residential zone

• Subject to a few requirements

• Local agencies shall also include these newly created units in the annual housing element report (sec 65400(a)(2)(l))

• Section 2• Requires ministerial approval of a parcel map for an urban lot split

• A bit more restrictions and caveats than section 1

• The SB 9 parcel map should be included in annual house element report

• Section 3, 4, 5

• Cleans up some language in section 66452.6

• Declares affordable housing a statewide concern and NOT a municipal affair

• No reimbursement per California Constitution

SB 9 SECTION 1 – BASIC RESTRICTIONS

• Parcel needs to be in a city which includes sections designated by the Census Bureau as an URBANIZED AREA or URBAN CLUSTER

• Hawthorne is included in the Los Angeles – Long Beach – Anaheim, CA Urbanized Area

• Cannot be specific types of land designated in Gov Code 65913.4(a)(6)(B)-(K)

• Farmland, Wetlands, Fire Zones, Hazardous Waste Areas, Earthquake Fault Zones, Flood Zones, Regulatory Flood Ways, Conservation Land, Habitat Land, and Conservation Easements

• Cannot use SB 9 if would alter or demolish specific types of housing…

SB 9 SECTION 1 – EXEMPT HOUSING

• Housing with rent restricted to “levels affordable to persons and families of moderate, low, or very low income”

• Rent controlled housing

• Housing that has been occupied by a tenant in the last 3 years

• Cannot be a property where the owner exercised their rights under the Ellis Act in the last 15 years

• Evicting tenants so the owner can withdraw property from rental market

• Cannot demo entire house, must keep at least 25% of original structure…UNLESS…

• Local ordinance allows it OR

• Has not been occupied by tenant within last 3 year

• Not located in historic district and cannot be historic property/landmark

SB 9 – LIMITATIONS ON LOCAL RESTRICTIONS

• Can impose OBJECTIVE zoning standards, subdivision standards, and design review standards

• However if they cannot conflict in any way with SB 9

• Also cannot create any standard that would effectively cause one of the two newly created units to be less than 800 sq-ft.

• Cannot have a setback requirement for an existing structure or a structure built on the same location and to the same dimensions as existing structure

• There can be a setback requirement of up to 4 feet from side and rear lot as long as it wont create a unit less than 800sq-ft.

SB 9 – DEFINITION

• Objective Zoning Standards, Subdivision Standards, and Design Review Standards Defined

• No personal/subjective judgement (NO DISCRETION)

• Uniformly verifiable by reference to some outside benchmark or criterion readily available

• Can be alternative objective land use specifications, and could be housing overlay zones, specific plans, inclusionary zoning ordinances, and density bonus ordinances. Not exclusive list.

• Housing Development “Contains two residential units” if

• Proposes no more than TWO new units

OR

• Proposes to ADD ONE new unit to an existing one

SB 9 SECTION 1 – LOCAL LIMITATIONS CONT.

• Can require one off street parking space per unit UNLESS

• Lot is located within ½ MILE of either a HIGH QUALITY TRANSIT CORRIDOR or MAJOR TRANSIT STOP

• Car share vehicle located within a block of the parcel

• Application cannot be rejected SOLELY because it proposes adjacent/connected structures so long as

• Structure meets building code standards

And

• Sufficient to allow separate conveyances

SB 9 SECTION 1 - DENYING THE UNDENIABLE

• Cities may deny an otherwise SB 9 qualified development IF

• A building official makes a WRITTEN FINDING based upon PREPONDERANCE OF THE EVIDENCE that the project would have a SPECIFIC, ADVERSE IMPACT (defined in Gov Code 65589.5(d)(2)) upon

• PUBLIC HEALTH and SAFETY

OR

• PHYSICAL ENVIRONMENT

• AND there must be NO FEASIBLE METHOD to MITIGATE or AVOID these issues

SB 9 SECTION 1 – RESTRICTIONS ON DEVELOPER

• Any unit created by SB 9 cannot be used for short-term rental

• All units must be rented for longer than 30 days

• Local agency is not REQUIRED to permit an ADU or JADU when developer makes use of SB 9 sections 1 and 2

• notwithstanding Sections 65852.2 and 65852.22

• Doesn’t change Costal Act but local agencies don’t have to hold public hearings for coastal development permit applications for SB 9 developments

SB 9 SECTION 2 - BASICS

• Requires ministerial approval of a parcel map for an urban lot split if it meets certain requirements

SB 9 SECTION 2 – REQUIREMENTS FOR ORIGINAL LOT

• Original parcel (before the split) must also meet specific requirements• Parcel must be in single-family residential zone

• The city must be within an URBANIZED AREA or URBAN CLUSTER per the Census Bureau

• Cannot be specific types of land designated in Gov Code 65913.4(a)(6)(B)-(K)

• Farmland, Wetlands, Fire Zones, Hazardous Waste Areas, Earthquake Fault Zones, Flood Zones, Regulatory Flood Ways, Conservation Land, Habitat Land, and Conservation Easements

• Housing with rent restricted to “levels affordable to persons and families of moderate, low, or very low income”

• Rent controlled housing

• Housing that has been occupied by a tenant in the last 3 years

• Cannot be a property where the owner exercised their rights under the Ellis Act in the last 15 years

• Not located in historic district and cannot be historic property/landmark

• Parcel cannot have been the result of a previous SB 9 lot split

• CANNOT split two neighboring plots if you own both NOR can you “act in concert with an owner” of an adjacent lot who split their lot using SB 9

SB 9 SECTION 2 – REQUIREMENTS FOR NEW LOTS

• The parcel map can only result in TWO parcels

• They should be approximately equal to each other

• No lot can be smaller than 40% of the original area

• The newly created parcels cannot be smaller than 1,200 sq-ft.

• Local ordinance may allow the new lots to be smaller than 1,200 sq-ft.

SB 9 SECTION 2 – LOCAL AGENCY RESTRICTIONS

• These parcel maps must be ministerially approved – no discretion

• The parcel map must comply with the Subdivision Map Act unless SB 9 provides otherwise

• SB 9 takes priority

• No local requirement for dedicated rights of way or offsite improvements for parcels being created as a condition of approval if made pursuant to SB 9.

• This is not withstanding Sub Map Act

SB 9 SECTION 2 – LOCAL AGENCY RESTRICTIONS CONT

• Much of the following is copied and pasted from Section 1

• Can impose OBJECTIVE zoning standards, subdivision standards, and design review standards

• However if they cannot conflict in any way with SB 9

• Also cannot create any standard that would effectively cause one of the two newly created parcels to have a unit that is less than 800 sq-ft.

• Cannot have a setback requirement for an existing structure or a structure built on the same location and to the same dimensions as existing structure

• There can be a setback requirement of up to 4 feet from side and rear lot as long as it wont create a unit less than 800sq-ft.

• Also cannot condition approval of SB 9 lot split on correcting nonconforming zoning issues

SB 9 SECTION 2 – LIMITS ON DENIAL

• Cities may deny an otherwise SB 9 qualified development IF

• A building official makes a WRITTEN FINDING based upon PREPONDERANCE OF THE EVIDENCE that the project would have a SPECIFIC, ADVERSE IMPACT (defined in Gov Code 65589.5(d)(2)) upon

• PUBLIC HEALTH and SAFETY

OR

• PHYSICAL ENVIRONMENT

• AND there must be NO FEASIBLE METHOD to MITIGATE or AVOID these issues

• (exact same as Section 1)

SB 9 SECTION 2 – WHAT CAN THE CITY DO

• Can require easements for public services and facilities

• Can require that the parcels have access to, provide access to, or adjoin the public right-of-way

• Off street parking of one space per unit UNLESS… (you know the rest)

• Local agency MUST require that the new lots be ONLY used for residential

• Applicant MUST sign an affidavit stating that applicant intends to occupy one of the housing units as principal residence for minimum of 3 years from approval.

• Note that there is no penalty in SB 9 for not complying

• Importantly SB 9 specifically says the city cannot impose any other owner occupancy standard aside from the affidavit

• City can and must require the rental of any unit created by this section be for more than 30 days

SB 9 SECTION 2 – WRAPPING UP

• Except as provided by section 1, ADU section, and JADU section, SB 9 does not require a city to permit more than 2 units on each SB 9 parcel

• Similar to section 1

• Unit – any dwelling unit created by section 1, ADU section, and JADU section of government code

• Exactly like section 1 cannot reject development solely because proposed adjacent / connected structures

• Doesn’t change Costal Act but local agencies don’t have to hold public hearints for coastal development permit applications for SB 9 developments

SB 9 – THE “INCENTIVE”

• Both section 1 and 2 state that a local agency may adopt these section as an ordinance

• Why would you do that?

• If you enact SB 9 as an ordinance, projects implemented under this section WILL NOT be considered a project under CEQA

SB 10 – FOR ONCE, A CHOICE

• SB 10 is completely optional

• cities MAY adopt an ordinance to zone a parcel for up to TEN UNITS of residential density per parcel.• Height is specified by the city in its SB 10 ordinance

• The parcels designated under an SB 10 ordinance must be located in either• A transit-rich area

• An urban infill site

• This has a time limit• Cannot be adopted after Jan 1, 2029

• If timely adopted will continue after Jan 1, 2029

• Any project related to this ordinance will not be a “project” for the purposes of CEQA

SB 10 - DEFINITIONS

• “Transit-rich area” means a parcel within ½ mile of a major transit stop, or a parcel on a high-quality bus corridor.

• “High-quality bus corridor” means a corridor with fixed route bus service that meets all of the following criteria:

• Average service intervals of no more than 15 minutes during the three peak hours between 6 a.m. to 10 a.m., inclusive, and the three peak hours between 3 p.m. and 7 p.m., inclusive, on Monday through Friday.

• Average service intervals of no more than 20 minutes during the hours of 6 a.m. to 10 p.m., inclusive, on Monday through Friday.

• Average intervals of no more than 30 minutes during the hours of 8 a.m. to 10 p.m., inclusive, on Saturday and Sunday.

• “Urban infill site” means a site that satisfies all of the following:• A site that is a legal parcel or parcels located in a city whose boundaries include some portion of either an urbanized

area or urban cluster

• A site in which at least 75 percent of the perimeter of the site adjoins parcels that are developed with urban uses. For the purposes of this section, parcels that are only separated by a street or highway shall be considered to be adjoined.

• 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.

SB 10 – COMMON SENSE RESTRICTION

• Parcel cannot be located in a fire zone or anywhere related to high fire or fire mitigation areas

• Cannot use SB 10 on public owned land designated as an open space or designated as a park/recreation area

SB 10 – ADOPTING THE ORDINANCE

• The ordinance must include declaration designating it as an SB 10 ordinance

• Ordinance shall clearly indicate what areas are zoned for this type of development

• City must make a finding that increased density is consistent with the obligation to further fair housing

• If this ordinance supersedes zoning restrictions adopted by local initiative, SB 10 ordinance shall only take effect if adopted by a 2/3 vote of legislative body

• Cannot reduce the density of any parcel subject to the ordinance

SB 10 – WHAT DOESN’T THIS LAW DO

• Developments of MORE THAN 10 residential units in a residential or mixed use residential project shall NOT be approved ministerially or by right and are not exempt from CEQA even if they are done on SB 10 zoned parcels

• Cannot use SB 10 to circumvent local zoning control

• SB 10 ordinance wont apply if the parcel is rezoned to not be an SB 10 parcel. (common sense)

• Subsequent ordinance to rezone is not exempt from CEQA

• Any CEQA review shall consider the change in zoning that was applicable before the SB 10 rezoning

• Important Note - Creation of 2 ADU/JADU per parcel do not count towards the number of units of res or mixed-use res project when determining if the project may be ministerially or by right approved

• Meaning that SB 10 can actually be used to create 12 units so long as 2 of them are ADU/JADUs

• Developer cannot divide project into smaller pieces in order to qualify for SB 10

QUESTIONS?

ASK GREGG!

THANK YOU!