A Well-Informed Start to 2025: BBK’s Guidance for New Laws in California – Housing Part One
New Housing Legislation Related to the Housing Accountability Act and Housing Development Fees
In part one of the Housing New Laws series from Best Best & Krieger LLP (BBK), attorneys cover important new housing legislation for 2025 that updates the Housing Accountability Act and relates to housing development fees. Below are synopses of AB 1893, AB 1413, AB 1820, AB 3012, AB 3177 and SB 937.
Housing Accountability Act
This Bill makes a number of changes to the Housing Accountability Act (HAA), set forth in Government Code Section 65589.5, including making revisions to the HAA’s builder’s remedy provisions, broadening the application of the HAA to more types of housing projects, and expanding the scope of city actions that can constitute “disapproval” of a housing development project.
AB 1893 amends the HAA to make the following changes related to builder’s remedy projects:
- Clarifies that a builder’s remedy project must be approved if the city’s housing element is not adopted at the time the project application is deemed complete, and general plan and zoning changes adopted after the applications are deemed complete will not apply to that project.
- Reduces the affordability requirements for builder’s remedy projects, and allows mixed-income projects to qualify for approval under the builder’s remedy provisions of the HAA.
- Declares that a project on a low or moderate housing-element inventory site cannot be denied or conditioned — even if the project was inconsistent with the zoning and general plan land use designation when the application was “deemed complete” — if the project is consistent with the density specified in the housing element.
- Makes clear that cities cannot require a builder’s remedy project to apply for general plan or specific plan amendments, but acknowledges that cities can require approvals or permits that are generally required of projects of the same type or density.
- Declares that builder’s remedy projects must be treated as legal, conforming uses, and will not be subject to a jurisdiction’s rules governing nonconforming uses or structures.
- Provides that a city may impose the development standards from another general plan designation and zoning classification that would allow the proposed project — or if the city doesn’t have a general plan designation and zoning classification that would allow the proposed project — the applicant may identify objective development standards associated with a different general plan designation or zoning classification within that jurisdiction that would facilitate the proposed project. However, even those standards must yield if necessary to make the project feasible or to avoid precluding benefits under the density bonus law.
- Notwithstanding the limits above, a builder’s remedy project can qualify for more units and exceptions to city standards through the state density bonus law, and builder’s remedy projects may receive extra incentives or concessions under the density bonus law. The HAA also now sets a maximum density for builder’s remedy projects, though that limit is significantly higher than limits that would apply under the city’s housing element, general plan, zoning or state law.
AB 1893 made additional changes to the HAA to broaden the definition of “housing development projects” that are subject to the requirements of the HAA, and to broaden the definition of a “disapproval” of a housing development project, to include a wide range of decisions that are typically intermediate steps in the entitlement process. AB 1893 provides that the court will order compliance with builder’s remedy provisions within 60 days if a violation is found, and gives the court leeway to order compliance in fewer than 60 days. Additionally, if the city acted in “bad faith” when violating the HAA, the court will apply a multiplier of 5x to fines levied under the HAA and may apply an additional multiplier if there were previous violations of the HAA within the same planning period.
AB 1413 also made a number of changes to the HAA, but those were chaptered out and overwritten by AB 1893’s subsequent enactment. However, AB 1413 did add two new sections to replace the language removed from the HAA by AB 1893 declaring that certain actions or failures to act under CEQA constituted a “disapproval” of a housing project. The new Government Code Section 65589.5.1 provides that failure to determine whether a housing project is exempt from CEQA, or committing an “abuse of discretion” in finding that the housing project is not exempt if it meets certain specified conditions, is a disapproval of a housing project under the HAA. The new Section 65589.5.2 clarifies that failure to adopt an appropriate environmental document under CEQA, when certain conditions are met, will also constitute a disapproval of a housing project.
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Housing Development Fees
AB 1820 imposes new obligations on cities to provide certain good faith estimates of fees and exactions that will be imposed on housing development projects. The developer may request a preliminary fee and exaction estimate when the developer submits a preliminary application for a housing development project, and the city must provide a preliminary estimate of the fees and exactions that would be imposed on the project by the city within 30 business days of the submission of the preliminary application. Additionally, within 30 business days following approval of a housing project, the city must provide an itemized list and good faith estimate of the total sum amount of all fees and exactions that will apply to the project. Similar to the preliminary estimate, the city is not required to provide development fees imposed by other agencies, but the developer may request a fee estimate directly from those agencies.
For both the preliminary (if requested) and post-approval estimates, the “exactions” that must be included in the estimate include any construction excise tax, requirement that the project provides public art or an in-lieu payment, dedications of parkland or in-lieu fees, and any Community Facilities District (CFD) special taxes that would be imposed on the new units. Exactions do not include water or sewer connection fees or capacity charges that are not imposed in connection with issuing or approving a permit for development or as a condition of approval of a proposed development.
Additionally, under existing law, a city is required to request that developers inform them of the total amount of fees and exactions associated with the project for which the certificate was issued, and the city is required to post this information on its website. AB 1820 clarifies that the requirement to make the request to developers does not impose any obligation on any entity, including the developer to whom the request is made.
AB 3012 requires cities to make a “fee estimate tool” available on their website that the public can use to calculate an estimate of fees and exactions for a proposed housing project. The tool must calculate an estimate of fees for the proposed housing development project, including, among others, fees imposed under the Mitigation Fee Act, in-lieu fees for affordability requirements, construction excise taxes, and special taxes levied under the Mello-Roos Community Facilities Act of 1982. The deadline for compliance under AB 3012 is either: (i) July 1, 2031, for cities with a population greater than 500,000; or (ii) July 1, 2032, for cities with a population of 500,000 or fewer.
AB 3177 amends the Mitigation Fee Act to (1) require lower traffic mitigation fees for qualifying housing developments near major transit stops and (2) enact certain limitations on cities’ ability to impose land dedication requirements for housing developments. Specifically, AB 3177:
- Modifies existing criteria under the Mitigation Fee Act to provide that a housing development project will qualify for lower traffic mitigation fees if it is located within one-half mile of either: (i) an existing major transit stop or (ii) a planned major transit stop, provided that it is programmed to be completed before or within one year from the scheduled completion and occupancy of the housing development. As a result, more housing developments may now qualify for lower traffic mitigation fees; and
- Generally prohibits cities from imposing a land dedication requirement on a housing development to widen a roadway for the purpose of mitigating vehicular traffic impacts, achieving an adopted traffic level of service, or achieving a desired roadway width. AB 3177 does allow cities to impose such a land dedication requirement in the following limited instances:
- When a housing development both (i) is not located in a transit priority area and (ii) has a linear street frontage of 500 feet or more;
- Where the city makes a finding that the land dedication requirement is necessary to preserve the health, safety, and welfare of the public, including pedestrians, cyclists, and children; or
- To construct public improvements, including, but not limited to, sidewalk and sewer improvements.
SB 937 amends Government Code Section 66007 (also a provision of the Mitigation Fee Act) to introduce significant changes to the collection of development fees for designated residential development projects.
For “designated residential development projects,” SB 937 generally prohibits cities from requiring the payment of fees or charges for the construction of public improvements or facilities until the issuance of the first certificate of occupancy or first temporary certificate of occupancy, whichever occurs first. Moreover, SB 937 provides that cities cannot do either of the following: (i) charge an amount for such fees and charges in excess of the amount that would have been paid had the fees and charges been paid prior to the issuance of building permits or (ii) charge interest or other fees on any amount deferred under SB 937.
“Designated residential projects” are defined in the new law, but generally include certain affordable housing developments, density bonus projects, low barrier navigation centers, certain projects that are subject to streamlined, ministerial approval and housing developments of 10 units or fewer.
Disclaimer: BBK Legal Alerts are not intended as legal advice. Additional facts, facts specific to your situation, or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information herein.
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