California’s Housing Laws for 2023

As has been the case for the last few years, California lawmakers made housing a priority in 2022 and there will again be a host of new laws hitting the books in 2023 that aim to put a dent in the state’s housing shortage. Overall, the new housing laws offer a range of benefits for developers of middle density housing. They take aim at a variety of factors that impact housing production: streamlining entitlements and permitting; increasing density; reducing costs and parking requirements; additional accessory dwelling unit allowances; and increasing affordable housing. All necessary, to be sure, but not all necessarily prudent nor practical. In this week’s post I'll briefly review most of what is coming online in 2023 in terms of housing laws. In weeks to follow I’ll spend time providing more in depth writing on the laws that will have a larger impact on middle density housing design and development.

These laws present unique opportunities to housing developers, but—just as in years past—there will inevitably be some confusion as to how each local municipality will implement the requirements of these state laws. As clarification becomes available for L.A. City and County, I’ll work to add links here. And, before beginning this synopsis, let me make clear that this is not intended as an exhaustive or definitive review. I am not a land use attorney, so please consult one as needed. If you have more specific questions as to how these laws might impact your upcoming project, feel free to reach out directly. If we can’t help directly, I’d be happy to connect you with someone that can. Now, let’s dive in.

Laws aimed at streamlining projects…

Assembly Bill 2011 (AB 2011), Housing Development on Commercial Lots - according to the law firm Holland and Knight, AB 2011 (along with SB 6) are the centerpieces of this year’s housing production legislation. This bill provides a streamlined ministerial approval pathway for qualifying Multifamily projects on commercial zoned land. In other words, this could help circumvent lengthy discretionary approvals (such as zone changes) currently required in many localities to approve housing in commercial zones. There is a significant catch, however: the projects must meet specified affordable housing targets and pay prevailing wages. Find more information on this and SB6 here.

Senate Bill 6 (SB 6), Housing on Retail/Office Lots - this bill allows for residential development to take place on properties zoned for retail and office space without the need for rezoning. It does not provide a pathway for ministerial approval, however, and requires commitment to paying both prevailing wage and more costly “skilled and trained workforce” requirements. This is a serious drawback that means this bill will likely be used in lower cost areas of the state (aka not LA). Find more information on this here.

AB 2234, Timelines for Post-Entitlement Permits - this bill borrows aspects from the Permit Streamlining Act and extends the process to apply to post-entitlement permits such as: building permits; demolition permits; permits for minor or standard excavation; grading permits; or offsite improvement permits. Among other things, local agencies must complete a review of any complete application within 30 business days for projects with 25 or few units or 60 days for projects with more than 25 housing units. Anyone who’s ever been lost in the LADBS wormhole (everyone?) can appreciate how much of a benefit this law might be. Read more here.

AB 2295, Educational Employee Housing - will allow for projects located on property owned by an “educational agency” to be exempt from certain local regulations. Among other things, qualifying developments would be exempt from any regulations that preclude at least 35 feet in height and a minimum density of 10 to 30 units per acre. Read more here.

Laws addressing density…

AB 2334, State Density Bonus Law Amendments - this one is, admittedly, very much in the weeds. It regards changes to the manner in which “base density” is defined in the state’s Density Bonus Law that would presumably allow for more units per qualifying project. The density bonus law is similar to LA’s own TOC Incentive Program; it is not clear whether this will have any effect on that. Read more here.

AB 1551, State Density Law for Mixed-Use Projects - this law benefits commercial projects that include affordable by granting certain increases in use/density/height. It could prove useful in making mixed-use projects more financially feasible to support residential components. Read more here.

AB 682, State Density Bonus Law Benefits for Shared Housing - this law creates a new specific category of “shared housing” projects that would be eligible for benefits under the State Density Bonus Law. Its aim is to ease roadblocks facing co-living projects, and in doing so opens up some exciting possibilities for alternative residential solutions here in Los Angeles. It prohibits jurisdictions from requiring any minimum unit size requirements which is often a roadblock for many share-housing projects. Read more here.

On parking and development fees…

AB 2097, No Parking Minimums Near Transit - this one is a biggie. This law prohibits jurisdictions from imposing minimum parking requirements on development projects located within a half-mile radius of public transit. Read that again: no more parking requirements if your project is within half a mile of transit. There are some exceptions, of course (accessibility and energy code requirements still apply, for example), but this removal of parking requirements stands to have a huge impact on development projects. I’ll write more on this one in the coming weeks. For now, read more specifics here.

AB 2536, Impact Fees - the bane of many a developer’s bottom line, this law addresses how an agency can increase or assess a fee or capacity charge. Evidence must be provided that the charge does not exceed estimated reasonable cost, and the information must be made public before enactment. Read more here.

On ADUs…

AB 2221, ADU Law “Cleanup” - this law contains language to clarify and clean up confusions from previous ADU laws. It includes: provisions that jurisdictions “approve or deny” an ADU application within 60 days of completeness determination (including any interdepartmental referrals); passageway requirements will not apply to ADUs; clarification that construction of an ADU does not trigger a change in “Group R” Occupancy; clarification that ADU cannot trigger requirement to install sprinklers in main home; and adds front setbacks to the list of standards that local agencies are precluded from imposing if it prevents the construction of an ADU that is up to 800 sf. I’ll dedicate a full newsletter to the changes in ADU laws in the coming weeks as there is a lot to cover. For now, read more here.

SB 897, Increase Height Limits for ADUs - this law increases the minimum height limits on ADUs as follows: 16 feet for detached ADUs on same lot with an existing or proposed single-family or multifamily dwelling; 18 feet for detached ADUs within a half-mile of transit or detached ADUs on lots with existingor proposed multistory multifamily dwellings; or 25 feet or base zone height (whichever is lower) for attached ADUs. Additionally, SB 897 clarifies that two detached ADUs may be constructed on lots with proposed multifamily dwellings. This is a big win here in L.A. where this has been foggy at best. More on these ADU laws in a later post, but for now read more specifics here.

Let’s  end this summary here, but know that this is not an exhaustive list. In addition to the housing laws mentioned above, there are new laws on the books aimed at disposing of surplus state-owned land for the development of affordable housing, reduce pushback to “low rent housing” projects, increase annual reporting requirements for housing progress, and promote diversity in affordable housing development among other things. In coming weeks we’ll follow up with more in-depth posts on some of these new laws as well as other recent laws that have a big impact on middle density housing development. Until then, feel free to reach out with any questions you might have on how this affects your own projects. If we can’t help, I’m happy to connect you with someone who can.