Big Support for Smaller Housing: Three Bills That Reduce Entitlement Friction for Housing Projects
9.25.24
News & Publications
This year, the Governor signed three bills that promote “gentle density,” including small homes and accessory dwelling units (ADUs): SB 1123, SB 1211, and SB 450. SB 1123 makes it easier to build smaller, ownership projects on infill sites, including vacant sites with single-family zoning. SB 1211 modifies existing ADU rules to support the burgeoning “prefab” ADU market and provide more “value add” opportunities to existing multifamily buildings. SB 450 reinforces the application of SB 9 to charter cities and introduces a streamlining component to SB 9’s existing ministerial approval process. Each of these bills is discussed below.
- SB 1123 – Extends the Ministerial Approval Process for Development Projects of 10 or Fewer Residential Units to Lots Zoned for Single-Family Residential Development and “Vacant”
In 2023, SB 684 created a streamlined ministerial approval process for development projects of 10 or fewer residential units. Designed to spur the development of small, starter homes that would be naturally affordable, SB 684 initially applied to lots zoned for multifamily and single-family development, but at the last minute the bill was altered to exclude single-family zoned parcels. SB 1123 enacts the previously gutted provision of SB 684, allowing 10 or fewer units on lots that are either (i) zoned to allow multifamily residential uses, or (ii) “vacant” (as defined) and zoned for single-family residential development.
Meaning of Vacant. SB 1123 defines “vacant” to mean “having no permanent structure, unless the permanent structure is abandoned and uninhabitable. The following housing types are never “vacant”: (i) housing that is subject to a recorded covenant, ordinance, or law that restricts rent or sales price to levels affordable to persons and families of low, very low, or extremely low income; (ii) housing subject to rent or sales price control through a local public entity’s valid exercise of its police power; or (iii) housing occupied by tenants within the five years preceding the date of the application, including housing that has been demolished or that tenants have vacated prior to the submission of the application for a development permit.
Lot Size Before and After Subdivision. SB 684 required that the lot be no larger than five acres and be substantially surrounded by qualified urban uses. SB 1123 maintains this requirement for parcels zoned for multifamily housing. For parcels zoned for single-family housing, SB 1123 reduces the maximum lot size to 1.5 acres.
SB 684 required that newly created parcels be no smaller than 600 square feet (unless a local agency authorized a smaller parcel size). SB 1123 maintains this requirement for parcels other than those zoned for single-family residential use, for which the newly created parcels may be no smaller than 1,200 square feet (unless a local agency has authorized a smaller parcel size).
Height Limits. For a lot that is “vacant” and zoned for single-family residential development, SB 1123 allows a local agency to impose a height limit of no less than the height allowed pursuant to the existing zoning designation applicable to the lot, even if it would physically preclude the development.
Ownership Structure. SB 684 required that the housing units must be constructed on fee simple lots, be part of a common interest development or housing cooperative or owned by a community land trust. SB 1123 expands this list to include being part of a tenancy in common, as specified and revises the above-described community land trust condition to instead include being constructed on land owned by a community trust.
Minimum Density. SB 684 created different requirements for parcels in a jurisdiction’s housing element and other parcels. SB 684 required that if the parcel was not identified in the housing element, the proposed development must result in at least as many units as the maximum allowable residential density. SB 1123 revises this requirement to instead require that the proposed development result in at least 66 percent of the maximum allowable residential density as specified by local zoning or the applicable minimum density deemed appropriate to accommodate housing for the jurisdiction pursuant to Government Code section 65583.2(c)(3)(B), whichever is greater. SB 1123 makes no changes to the existing requirements if the parcel is identified in the housing element.
Average Unit Size. SB 684 required that the average total floor area of the housing units not exceed 1,750 net habitable square feet. SB 1123 defines “net habitable square feet” as “the finished and heated floor area fully enclosed by the inside surface of walls, windows, doors, and partitions, and having a headroom of at least six and one-half feet, including working, living, eating, cooking, sleeping, stair, hall, service, and storage areas, but excluding garages, carports, parking spaces, cellars, half-stories, and unfinished attics and basements.”
Limits on Sale of Existing Units. SB 1123 adds to the list of requirements needing to be satisfied to use the streamlined ministerial approval process, that if there are two or more existing units on the lot, the proposed subdivision will not result in any existing unit being alienable separately from the title to any other existing unit.
Exemptions to Otherwise Applicable Subdivision and Zoning Standards. SB 684 provided that a housing development project on a proposed site to be subdivided under its provisions is not required to comply with certain requirements, including a minimum requirement on the size, width, depth, or dimensions of an individual parcel created by the development beyond the minimum parcel size listed above, except as provided. SB 1123 adds frontage to this list.
ADUs. SB 684 allowed a local agency to prohibit the creation of accessory dwelling units and junior accessory dwelling units on parcels created through its utilization. SB 1123 provides that if a local agency chooses to permit accessory dwelling units or junior accessory dwelling units on the created parcels, those units shall not be counted in the 10 unit maximum.
Given the limitations on where SB 1123 applies, together with historically high construction costs and the need to comply with local inclusionary requirements, it remains to be seen whether it this bill will yield as many starter homes in infill urban locations its drafters desire. Nevertheless, for those looking to construct on vacant urban lots, it could provide exactly the flexibility needed to make a project with ten or fewer units possible. - SB 1211 – Expands Opportunities for Building ADUs
Of all the changes the state has made to housing laws, the bills requiring the ministerial approval of certain ADUs have been some of the most successful. For example, a 2024 California Department of Finance study revealed that ADUs accounted for 20 percent of new home construction in 2023. With a young but maturing ADU market, SB 1211 protects developers of prefabricated units by limiting a jurisdiction’s application of design review standards and provides new opportunities to add ADUs to property. Specifically, this bill increases the number of detached ADUs a multifamily building owner can add from 2 to 8 and makes it easier to add ADUs on existing uncovered parking spaces by eliminating the need to replace those spaces. This bill also adds a definition of “livable space” to clarify where ADUs can be added in existing multifamily buildings.
Limits Application of Local Development and Design Standards. Existing ADU law contains “statewide exemption ADUs,” which are required to be approved by a local agency notwithstanding any local ordinance or other provisions of state ADU law. SB 1211 prohibits a local agency from imposing any objective development or design standard that is not authorized under Government Code section 66323 (the code section that describes statewide exemption ADUs) on an ADU qualifying as a “statewide exemption ADU.” This change protects manufacturers of prefabricated ADUs, affording them the ability to manufacture a uniform product without worrying about locally disparate design and development standards.
Increases ADUs Allowed on Property with a Multifamily Building. One of the existing “statewide exemption ADUs” is up to two detached ADUs (meeting specified standards) that are located on a lot that has an existing or proposed multifamily dwelling. SB 1211 delineates this “statewide exemption ADU” depending on whether the multifamily dwelling is existing or proposed. On a lot with a proposed multifamily dwelling, the allowance remains at up to two new detached ADUs (meeting specified standards). SB 1211 authorizes up to eight detached ADUs (meeting specified standards) on a lot with an existing multifamily dwelling, provided that the number of ADUs does not exceed the number of existing units on the lot.
Replacing Uncovered Parking with ADUs. Existing ADU law prohibited a local agency that adopted an ADU ordinance from requiring the replacement of covered parking spaces (garages, covered parking structures, and carports) if demolished in conjunction with the construction or conversation of an ADU. SB 1211 adds uncovered parking spaces to this list.
Clarifies “Livable Space.” Existing ADU law allows the conversion of areas in multifamily buildings that are not livable space, such as basements, garages, storage rooms, boiler rooms, and similar spaces, into ADUs equal in number to up to 25 percent of the existing multifamily units. SB 1211 defines “livable space” as “a space in a dwelling intended for human habitation, including living, sleeping, eating, cooking, or sanitation,” clarifying existing law. - SB 450 – Clarifies SB9’s Purpose and Adds Requirements to Make Permit Processing Faster and Easier
SB 9 has not yielded nearly as many units as state ADU laws. SB 450 expands SB 9 opportunities, mainly by clarifying that SB 9 applies in charter cities and provides clarity on the process to obtain SB 9 approval. In light of the stringent siting and, for urban lot splits, owner occupancy requirements, however, it remains to be seen if the changes enacted through SB 450 will be sufficient to increase units created through the process introduced by SB 9.
Applies to Charter Cities. In 2022, SB 9 created a ministerial approval process for “urban lot splits” to subdivide (under specified circumstances) a single-family residential zoned property into two lots. SB 9 also required (under specified circumstances) a ministerial approval process for the development of two residential units on a single-family residential zoned property (including each of the lots created pursuant to an urban lot split). SB 9 applied to all cities, including charter cities based on the Legislature’s declaration that ensuring access to affordable housing is a matter of statewide concern and not a municipal affair.
In April 2024, the Honorable Judge Kin of the Los Angeles Superior Court (“LASC”) ruled that because SB 9’s ministerial approval processes did not necessarily create affordable housing, SB 9 violated the “home rule” doctrine and, therefore would not apply to charter cities. SB 450 is a direct response to the LASC ruling and makes other amendments to streamline the processing of SB 9.
In response to the LASC ruling, SB 450 expands the Legislature’s purpose in enacting SB 9 to include addressing the housing crisis and the severe shortage of housing by encouraging an increase in the overall housing supply and not just affordable housing.
Eases Restrictions on SB 9 Projects. SB 9 generally prohibited a proposed housing development project from demolishing more than 25 percent of existing structural walls. SB 450 removes this limit. SB 9 also authorized a local agency to impose objective zoning standards, objective subdivision standards, and objective design standards (except as specified) on the proposed housing development project or urban lot split. SB 450 narrows this authorization, allowing application of only those standards uniformly applicable to development within the underlying zone or more permissive standards. SB 450 further specifies that objective standards imposed on an urban lot split must be related to the design or to improvements of a parcel.
Harder to Deny Applications. SB 9 allowed a local agency to deny a proposed housing development project or urban lot split if the building official makes a written finding that the project would have a specific, adverse impact upon public health and safety or the physical environment. Under SB 450, a denial cannot be based on specific, adverse impact upon the physical environment.
Shortened Approval Period. SB 450 adds a processing timeline, requiring a local agency to approve or deny an application for a proposed SB 9/450 housing development project or urban lot split within 60 days from the date the local agency received a completed application. An application is “deemed approved” if a local agency fails misses its 60-day deadline. If the agency denies the application, it must provide the applicant in writing with a list of items that are defective or deficient and a description of how the application can be remedied by the applicant.
These bills increase the opportunities for adding smaller units to the state’s housing stock. This segment of the market has been historically underserved in recent decades and these bills are representative of the recent pieces of legislation passed by the state designed to alter that trend and increase the supply of naturally affordable units.
If you have questions concerning these bills or any of the myriad of housing bills passed by the state, contact the authors or any member of the firm’s land use team. Keep an eye out for upcoming alerts as we continue to cover development related bills that have been chaptered from this past legislative session.