In mid-October, a chaotic Santa Monica City Council meeting revealed that the city’s own failure to produce an approved housing plan had opened the door to a potential building frenzy.
Since then, much of California has become obsessed with the previously obscure legal provision colloquially known as “builder’s remedy.”
The provision comes from a 1990 state law that aimed to spur housing development across the state (sound familiar?), and works by invoking a penalty on jurisdictions that are failing to meet their state-directed housing goals. For cities that are out of compliance, the penalty is a loss of authority over the zoning entitlements process. This means that even residential projects that don’t fit local zoning, such as one 15-story, 2,400-unit application in Santa Monica,
are automatically approved.
There are caveats. To qualify for the builder’s remedy provision, at least 20 percent of a project’s units must be classified as affordable, and a city could still potentially deny approval on rarer, non-zoning grounds, such as a public health risk. (To guard against frivolous rejections, state law also includes penalties for cities that deny projects in bad faith.)
To date, the controversial provision, which caught nearly everyone off guard when development teams invoked it this year, has not actually been tested by the state’s courts. Legal disputes over the recent applications could still play out for months or longer.
But the Santa Monica application bonanza has already struck fear in the hearts of plenty of development-averse local officials, and ushered in a broader wave of public interest over where else in California developers could capitalize on the decades-old legislative tool.
“They’re getting 20 years of production in one year because the City Council was not paying attention,” Huntington Beach’s mayor pro tem recently warned. “It’s a travesty.”
The answer hinges on a timetable.
The status of a given city’s compliance, as it relates to builder’s remedy, is determined through its Housing Element, the component of every city’s general plan that lays out its housing goals.
However, such goals are not set in stone due to changes in housing needs. Since 1969, jurisdictions in California have been required to update their local Housing Elements every eight years, with compliance granted once the state’s Department of Housing and Community Development (HCD) signs off with its certification of the city’s finalized update.
In much of Southern California — all of the nearly 200 cities that make up L.A., Orange, Riverside, San Bernardino and Ventura counties — the state’s deadline for the latest Housing Element update was actually in October of 2021.
But Santa Monica, and plenty of other cities, weren’t even close, leaving a window of months for developers to file the builder’s remedy applications. After the development firm WSC Communities filed a slew of Santa Monica applications earlier this fall, while the city still worked on passing its updated version, the same window closed again on October 14, when HCD certified the city’s update.
The state’s relevant deadline for the eight-year update is staggered over a period of multiple years, a timeline that one housing advocate referred to as a kind of Housing Element “season” that also theoretically grants HCD more time to parse cities’ compliance.
While Greater L.A. jurisdictions faced last year’s deadline, for example, in San Diego County the deadline was six months earlier, in April. Other jurisdictions, including Kern County and Kings County, in the Central Valley, don’t face another deadline until early 2024.
Even as the repercussions from the L.A. County applications are still just coming into focus, the same calendar overwhelmingly points toward the San Francisco Bay Area, where development fights have already been stewing for years. It’s almost certain to be the next major battleground for builder’s remedy projects.
The 100 cities that make up Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano and Sonoma counties all face a January 31, 2023 deadline. This could mean that applications could come in as early as February 1.
Some major Bay Area cities, including Oakland, appear to be on track to meet the deadline. But the biggest battle is likely to play out in San Francisco, because city officials erroneously believed they actually had until the end of May.
YIMBY groups and developers are already anticipating a deluge of hundreds of applications that have the potential to dramatically reshape the iconic city, and even California itself.
“What we’re going to have in California,” said Sonja Trauss, executive director of the nonprofit YIMBY Law, “is this natural experiment” where certain wealthy cities will effectively have no zoning rules for a period of several months.
“We think it’s going to be great,” she concluded.