United States: California Issues Initial Implementation Guidance On 2017 Housing Laws

Jennifer Hernandez and Chelsea Maclean are Partners and Daniel Golub is an Associate in the San Francisco office

HCD Identifies Jurisdictions Where Local Governments Must Issue Qualifying Housing Projects "By Right" – with Streamlined Approvals and No Project-Level CEQA Reviews


  • One of the most notable laws in California's package of housing laws passed by the State Legislature and signed by Gov. Jerry Brown in 2017 is SB 35, which requires most local governments to issue housing developers streamlined approvals in 90-180 days for projects that comply with a number of qualifying criteria.
  • Significantly, SB 35 projects are statutorily exempt from the need for environmental review under the California Environmental Quality Act (CEQA).
  • The California Department of Housing and Community Development (HCD) recently issued an initial set of guidance documents on the 2017 housing laws, including HCD's official determinations about which local jurisdictions are subject to SB 35 streamlining and what percentage of affordable housing a project must include to qualify, based on each jurisdiction's progress toward meeting its Regional Housing Needs Assessment (RHNA) goal.

In the 2017 legislative session, Gov. Jerry Brown signed into law a package of 15 housing laws in response to California's ongoing housing crisis. (See Holland & Knight's " A Closer Look at California's New Housing Production Laws," Dec. 6, 2017, and "California Governor Signs into Law Major Reforms to Housing Accountability Act," Sept. 29, 2017.)

One of the most notable laws in this legislative package is SB 35 (Chapter 366, Statutes of 2017; Sen. Scott Wiener). It requires most local governments to issue housing developers streamlined approvals in 90-180 days if a project 1) complies with the jurisdiction's objective planning standards applicable to the project site and in effect at the time the project application is filed, 2) pays construction workers prevailing wages, 3) includes a minimum of 10 percent (or any higher applicable local ordinance percentage) of deed-restricted, low-income affordable units if a city has failed to meet its market-rate housing Regional Housing Needs Assessment (RHNA) obligations, or a minimum of 50 percent affordable units if a jurisdiction has met its market-rate obligations but not its affordable housing RHNA production obligations, and 4) meets SB 35's other qualifying criteria, which generally focus on multifamily housing production on "infill" locations within developed areas of existing communities.

Significantly, by virtue of SB 35's "by right" (also called "ministerial") approval process, SB 35 projects are statutorily exempt from the need for environmental review – and cannot be challenged in lawsuits – under the California Environmental Quality Act (CEQA). Because such projects are required to comply with objective zoning and related local requirements which already triggered CEQA compliance obligations, SB 35 avoids the need for a second round of CEQA processing and litigation risks for projects that comply with these previously approved requirements.

Highlights of HCD Guidance

The California Department of Housing and Community Development (HCD) has now issued an initial set of guidance documents on the 2017 housing laws. Highlights of these guidance documents are HCD's official determinations about which local jurisdictions are subject to SB 35 streamlining and what percentage of affordable housing a project must include to qualify, based on each jurisdiction's progress toward meeting its RHNA goal:

  • All but 13 jurisdictions in California are subject to some form of SB 35 streamlining
  • In 378 jurisdictions, projects that provide at least 10 percent affordable units are entitled to streamlined approval, provided the projects meet SB 35's other qualifying criteria
  • In 148 jurisdictions, projects that provide at least 50 percent affordable units are entitled to streamlined approval, provided the projects meet SB 35's other qualifying criteria

The complete list of jurisdictions now subject to SB 35's streamlined approval mandates was revealed, and HCD has prepared maps that show each jurisdiction's status in various areas of California: Statewide, Bay AreaCentral CoastCentral ValleySacramentoSan Diego and Southern California. For the processing benefits mentioned above, we encourage project applicants to utilize the recently released RHNA target evaluations to consider eligibility for streamlined permitting under SB 35.

Other highlights of HCD's guidance documents include the following:

  • HCD's "Frequently Asked Questions" confirms that local jurisdictions cannot require a Conditional Use Permit for qualifying SB 35 projects, even if the local jurisdiction's laws and ordinances would otherwise require one.
  • HCD has prepared a list of projected milestones in the development of the 2017 housing laws, including a projection that planning grants and homelessness grants funded by SB 2 will become available in Spring 2019 and Fall 2019, respectively. HCD will develop official guidelines to implement numerous laws in the 2017 housing package, including additional guidance on SB 35 as well as SB 2 (Building Homes and Jobs Act funding), SB 540 (Workforce Opportunity Zone streamlining), AB 73 (Housing Sustainability District streamlining) and AB 879 (Housing Production Reporting, Development Constraints Analysis and Local Fees Study). The guidelines will play an important role in the implementation of these laws. The laws are, however, already in effect while the guidelines are under development.
  • HCD will periodically revise its list of jurisdictions and remove jurisdictions that have met applicable RHNA targets. HCD's determinations about which jurisdictions are meeting their RHNA targets provides a glimpse into how other laws in the 2017 housing package will be implemented and which jurisdictions will be operating under increased state oversight. For example, AB 1505 authorizes HCD to oversee any jurisdiction that imposes a rental inclusionary housing ordinance if the jurisdiction has not met at least 75 percent of its RHNA target.
  • Some jurisdictions (including, notably, wealthier jurisdictions that engage in intense lobbying efforts to shift housing obligations to other cities in the region) have sidestepped SB 35 because they have exceeded their very modest RHNA requirements. The politicization of the RHNA process has prompted calls to reform the state's RHNA laws in order to increase housing production obligations on such cities to assure that they do their fair share in helping solve California's housing crisis. This concern is worth watching in the 2018 legislative session, which has started with its own controversial new suite of proposals, including a statewide "upzoning" of land near rail, ferry and frequent bus stops to automatically allow four-story to eight-story buildings in such locations. (See SB 827 of 2018.) The author of this 2018 proposal, Sen. Wiener (D-San Francisco), was also the lead author for SB 35. SB 35 promises to prompt resistance and further litigation in some jurisdictions, while other jurisdictions – including San Francisco – have already issued application procedures for projects seeking SB 35 streamlined approvals.

Takeaways and Considerations

For qualifying projects, SB 35 promises to cut entitlement time and associated costs for urban multifamily projects by more than half (to approximately six months), eliminate CEQA-related costs and processing times, and avoid the risk of CEQA litigation. Most housing experts have agreed that SB 35 is likely to increase housing production costs, based on the new law's labor mandate (requiring that all projects, even those not receiving public funding, pay all construction workers prevailing wages), as well as its inclusionary housing mandate. The market will decide if SB 35's regulatory streamlining, including its CEQA exemption, will save enough time and money to offset higher labor costs and applicable inclusionary housing requirements.

We anticipate that SB 35 will be most useful in producing multifamily housing in higher-cost areas with higher-wage workers in California's coastal regions such as the Bay Area, Los Angeles/Orange County and San Diego. These, of course, are the same areas with staunch and well-funded Not in My Backyard (NIMBY) opponents, as well as environmental, historic preservation and anti-gentrification advocates – and with local governments that are burdened by higher pension and service costs as well as aging infrastructure. That means SB 35's rollout is likely to be punctuated with litigation challenges to the applicability and legality of this state effort to speed up significant urban-area multifamily housing production.

Politically, SB 35 also backs up Gov. Brown's conclusion that CEQA reform has been blocked by construction unions that use CEQA litigation threats to get Project Labor Agreements (PLAs); the construction unions that make the most prolific use of CEQA litigation threats as leverage to secure PLAs supported SB 35 after the prevailing wage requirement was added.  

For an in-depth look at CEQA and the state's housing crisis, see "California Environmental Quality Act Lawsuits and California's Housing Crisis," Jennifer L. Hernandez, Hastings Environmental Law Journal, Vol. 24, No. 1 (Winter 2018).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Pillsbury Winthrop Shaw Pittman LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Pillsbury Winthrop Shaw Pittman LLP
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions