New Law Fast-Tracks Housing in 18 Bay Area Cities, Plus SF

Forget the builder’s remedy. Across the Bay Area, the new SB 423 could surpass the decades-old legal loophole to allow developers to skirt local zoning in cities that fall short of state housing plans.

The law authored by state Sen. Scott Wiener, D-San Francisco, opened up 18 cities in nine Bay Area counties to unprecedented streamlining provisions for new homes, the San Francisco Business Times reported.

Enacted last week, SB 423 singles out San Francisco for annual check-ups on its goal to build 82,000 homes by 2031. The city, which permitted 831 new homes this year, is far short of the 10,000 permits it needs annually to keep pace. All other cities will be reviewed every four years.

That puts it out of compliance with the law, and open to qualified housing approvals under SB 423 that can take six months — instead of years.

Wiener’s bill extends and expands one of his previous laws, Senate Bill 35, which streamlined affordable housing. The new law impacts three-fourths of all permitting applications in the state.

The bill effectively shields eligible residential development from review under the California Environmental Quality Act, local planning commission approvals and a discretionary review process in which projects can become lodged for years.

The new law allows developers to bypass discretionary review for residential projects that include a minimum of 10 percent onsite affordable housing, or comply with local affordable housing requirements, if more stringent.

It affects cities and counties that fail to certify their state-mandated housing elements, or blueprints to rezone areas for development. In the Bay Area, the deadline was Jan. 31, 2023.

Across the region, 18 towns and cities are out of compliance with their housing element plans, leaving them open to both the builder’s remedy and SB 423. While the remedy requires projects contain at least 20 percent of affordable housing, Wiener’s law requires half that much.

Upscale cities from Silicon Valley to Napa Valley that haven’t met their benchmarks are now subject to the same project streamlining as San Francisco, stripping away local control.

They include Atherton, Belmont, Cupertino, Daly City, Hercules, Lafayette, Larkspur, Los Gatos, Napa County, Palo Alto, Pittsburg, Portola Valley, San Mateo, San Mateo County, Santa Clara County, Saratoga, Woodside and Yountville, according to the state Department of Housing and Community Development.

SB 423 would open up new opportunities for the construction of both affordable and market-rate housing in “scofflaw” cities, Mark Rhoades, who runs a Berkeley-based planning consultancy, told the Business Times.

“You have, I think, developers who are now targeting the 10 percent jurisdictions, because those are the jurisdictions that have had some of the higher pressures for housing, and some of the lowest development rates in the Bay Area,” Rhoades said.

But the bill isn’t a cure-all, according to the Business Times.

Wayland Li, planning manager for San Leandro, said he doesn’t expect SB 423 to create a new building rush because interest rates and construction costs are still too high.

“I don’t think it’s opening the floodgates to this huge influx of applications we wouldn’t otherwise see,” Li told the newspaper.

— Dana Bartholomew