california-state-flagWe reported in December that State Senator Scott Wiener marked his first day in state office by introducing legislation (SB 35) to address barriers to housing production. Senator Wiener has introduced amendments to SB 35 that would create a streamlined, ministerial (i.e., not triggering CEQA) approval process for certain infill projects in localities that (1) fall short on regional housing needs assessment (RHNA) production goals, or (2) fail to provide annual housing production reports to the State for two consecutive years before the infill project’s application. SB 35 has been passed by the Senate Transportation and Housing Committee, and is now before the Governance and Finance Committee for further consideration.

What Qualifies Under SB 35?

Under the current version of SB 35, certain multifamily and accessory dwelling unit projects would qualify for a streamlined, ministerial approval process if they meet various criteria, including being within a locality reporting RHNA housing production shortfalls or failing to provide annual housing production reports.

The percentage of affordable units and required affordability levels vary depending on the type of RHNA housing production shortfall reported by the locality. If the shortfall is for households earning below 80% of area median income (AMI), then the majority of project units must be affordable to those households. If the shortfall is for “above moderate-income households” (i.e., households earning above 120% AMI under the current RHNA schedule), then 10% of project units must be affordable to households earning below 80% AMI. Shortfalls for moderate-income households (i.e., households earning between 81% and 120% AMI) aren’t addressed in the current version of SB 35.

If a local inclusionary housing ordinance requires a greater percentage of units to be affordable to households earning below 80% AMI (more than 10% of project units in the “above moderate-income households” shortfall scenario, or more than 50% of project units in the “below 80% of AMI” shortfall scenario), that local ordinance would set the floor for the required percentage of affordable units needed for SB 35 streamlining eligibility.

Very generally, the remaining criteria require an eligible project to be:

  1. located on a qualifying urban infill site zoned for residential or residential mixed use development with at least two-thirds of the square footage designated for residential use;
  2. consistent with objective zoning and design review standards, including the State Density Bonus Law;
  3. outside of certain sensitive areas (e.g., coastal zone) and certain high-risk areas (e.g., floodways); and
  4. not located on a site with an existing historic resource or certain existing housing (e.g., rent controlled units or units occupied by tenants within the past 10 years) that would be demolished.

In addition, a qualifying project must be subject to certain enforceable prevailing wage requirements. If the project includes subsidized units, those units must remain subsidized for 45 or 55 years, for ownership and rental units, respectively.