As of January 1, 2025, a bevy of new housing laws will take effect in California. This update focuses on several bills that seek to clarify the Builder’s Remedy as an entitlement pathway, along with the steps needed for a city or county to obtain a certified Housing Element. AB 1893 (Wicks) formalizes the Builder’s Remedy and significantly amends the Housing Accountability Act (HAA). AB 1886 (Alvarez) clarifies that cities and counties cannot self-certify their Housing Element. AB 2023 (Quirk-Silva) puts the burden on public agencies to challenge HCD’s findings regarding Housing Element compliance.

Key Takeaways

• AB 1893 codifies the Builder’s Remedy as an entitlement pathway for existing projects. The bill also amends key definitional terms under the HAA, and establishes development standards and other criteria for Builder’s Remedy projects. Notably, existing Builder’s Remedy projects can elect to opt into some, but not all of the provisions of AB 1893.
• AB 1886 prevents cities and counties from self-certifying their Housing Element.
• AB 2023 gives deference to the Department of Housing and Community Development (HCD) by shifting the responsibility to local agencies to prove that their Housing Element is compliant when HCD finds otherwise.

What Exactly is the Builder’s Remedy?

Prior to AB 1893, the Builder’s Remedy was a term coined after a provision in the HAA intended to spur cities and counties to plan for new housing by adopting a Housing Element on a timely basis. Since the 1990’s, the HAA included a provision that prevented cities and counties from applying development standards on housing projects if the city or county did not have a Housing Element in compliance with state law. The Builder’s Remedy took off as an entitlement pathway after the enactment of the Housing Crisis Act of 2019 (SB 330), which allows a developer to vest projects into the policies in place at the time that a preliminary application is filed. As a result, SB 330 allows Builder’s Remedy projects to remain viable throughout the entitlement process, even if a city subsequently obtains a certified Housing Element. More background on the Builder’s Remedy can be found here.

AB 1893 Imposes New Requirements on Builder’s Remedy Projects Submitted After January 1, 2025

AB 1893 has some limitations but, overall, it reinforces the Builder’s Remedy as a tool to spur housing development in cities and counties that fall out of compliance with their Housing Element. The bill does so by: (1) formalizing the Builder’s Remedy as an entitlement pathway; (2) setting new standards for Builder’s Remedy projects submitted after January 1, 2025; and (3) grandfathering existing Builder’s Remedy projects from the new requirements while allowing projects to opt into certain features of the new law, such as revised density bonus tools.

Builder’s Remedy projects submitted after January 1, 2025 are subject to AB 1893’s new provisions:

• Site Location. Projects cannot abut a site where more than one-third of the square footage was used for heavy industrial or Title V uses within the last three years.
• Density Thresholds. Projects will be subject to zoning and development standards, such as minimum and maximum density thresholds. Projects within one-half mile of a major transit stop, commuter rail or heavy rail station, or very low vehicle travel area will be allowed greater density. The intent of these provisions is to prevent developers from proposing Builder’s Remedy projects that are significantly out of scale with the surrounding neighborhood. The law clarifies, however, that Builder’s Remedy projects can utilize state density bonus law for additional density. By expressly allowing state density bonus law, Builder’s Remedy projects can waive development standards if they are found to physically prohibit a viable project under the new standards.
• Affordability Thresholds. A wider array of mixed-income projects will qualify under new, more lenient affordability thresholds. A Builder’s Remedy project will need to satisfy any of the following affordability thresholds:
• At least 7% of the units are affordable to extremely low-income households;
• At least 10% of the units are affordable to very low-income households;
• At least 13% of the units are affordable to lower income households;
• None, if ten or fewer units are proposed on a site smaller than one acre, with density that exceeds ten units per acre.
• Mixed-Use Projects. Mixed-use projects with at least half of the square footage designated for residential use can now qualify if certain requirements are met. Existing law requires at least two-thirds to be set aside for residential use.
• Objective Standards. Projects must comply with objective standards, conditions, or policies that a local agency may impose, subject to several limitations. The standards, for example, must be quantifiable and written, cannot make a project infeasible, and cannot single out a project because it is a Builder’s Remedy project.
• State Density Bonus Law. In addition to obtaining additional density, Builder’s Remedy projects are allowed two additional concessions under state density bonus law. Concessions may be used to waive any local development standard or code provision that increases the cost of delivering the project.

AB 1893 Also Amends Key Definitional Terms for All “Housing Development Projects” Under the HAA

AB 1893 is not just limited to Builder’s Remedy projects. The bill amends key definitional terms under the HAA for all housing development projects, for housing projects that include affordable housing, and for when those projects are deemed disapproved under the HAA.

• Housing Development Project. The key changes to this definition are that the threshold for mixed-use projects has been expanded to include projects that have 50% of the proposed square footage of construction reserved for residential use, provided that those projects may not include certain hotel uses, and/or must involve conversion of other nonresidential uses, while including at least 500 new residential units.
• Housing for Very Low, Low-, or Moderate-Income Households. AB 1893 provides significantly more flexibility in determining a blend of affordability for all housing development projects. The previous 20% lower-income threshold has been replaced with a suite of affordability options that allows a developer to set aside 7% of the total units for extremely low income households, 10% for very-low income households, 13% for lower-income households, 100% for moderate-income households, or even no deed restricted housing if a small lot development of up to 10 units is proposed on a site smaller than 1 acre.

• Disapprovals. AB 1893 expands the criteria for when a housing development project is deemed disapproved under the HAA. “Unnecessary delay” is now a criteria for deeming a project disapproved. The HAA provides a process for the developer to assert that an unnecessary delay is causing their project to be disapproved by operation of law. A last-minute change to the bill include a provision that states that “a local agency’s action in furtherance of complying with [CEQA]… shall not constitute project disapproval.” This exception, however, only applies if a city or county is affirmatively taking action and moving the environmental review forward.

  In addition to unnecessary delay, a project may be deemed disapproved under the HAA if a city or county unlawfully determines that an application is incomplete, or if the agency requests new information that was not identified in the initial review of the application.

  Lastly, if an application remains incomplete after 2 resubmittals, the agency has the burden of proof to establish that the incompleteness determination is not an effective disapproval.

AB 1893 Allows Existing Builder’s Remedy Projects to Opt Into Some, But Not All, of the New Law

Assemblymember Wicks drafted AB 1893 with a mindful eye to ensure that existing projects would not be penalized by the new law. Builder’s Remedy projects submitted prior to January 1, 2025 can proceed under existing law. Alternatively, developers can select which provisions of AB 1893 they want their projects to utilize. In order to utilize the new provisions, if an existing project does not currently meet the new definition of a Builder’s Remedy project, the law allows the developer to revise their application without resubmitting and losing their vested status. Given this flexibility, developers and landowners with Builder’s Remedy projects should review AB 1893 closely, to determine whether to opt into any of its applicable provisions—or to make clear if a project opts to forego any new provision under AB 1893.

AB 1893 is one of the most significant housing bills enacted by the legislature in 2024, and will cause broad changes to the Housing Accountability Act and Builder’s Remedy projects. While the ongoing bevy of housing laws are intended to address our housing crisis, each passing year makes the selection of housing entitlement pathways more complicated. We encourage developers to confer with land use counsel early in the application process to ensure the most efficient entitlement pathway is selected.

AB 1886 Clarifies Existing Law That Only HCD Can Certify a Housing Element

Over the past few years, lawsuits ensued as cities rejected Builder’s Remedy projects by “self-certifying” their Housing Element, i.e., by making their own findings that they were in substantial compliance as opposed to HCD making that determination. AB 1886 resolves any lingering ambiguity by clearly stating that “local agencies cannot self-certify housing element compliance.” Instead, the law clarifies that HCD is solely responsible in determining whether a Housing Element is substantially compliant with state housing law and should be certified. Importantly, the legislature declared AB 1886 to be a restatement of existing law. This provision applies to all Builder’s Remedy projects.

AB 2023 Places the Burden on Cities and Counties to Challenge HCD’s Findings

Developers will benefit from a “rebuttable presumption of invalidity” set forth by AB 2023. This means that when HCD determines that a Housing Element is not compliant with state law, that determination will be upheld unless a city or county can produce evidence to the contrary. If a city challenges HCD and loses, all Builder’s Remedy applications submitted during the litigation could also be validated. As a result, developers may have a larger window to submit a Builder’s Remedy project if a jurisdiction falls out of compliance with its Housing Element and opts to challenge HCD, and loses. As a result, cities should be more incentivized to have their Housing Element certified by HCD in a timely manner. Cities should also reconsider challenging HCD’s determination of non-compliance unless there is a strong body of evidence showing that the determination was misguided.