To: Honorable Mayor and City Council Date: May 19, 2026 From: Andrea Sanders, City Clerk
Subject: Desk Item 8.1 – Starter Home Ordinance Public Comment The attached public comment emails were received in the City Clerk’s Office and are related to Item 8.1 – Starter Home Ordinance extension.
MEMORANDUM City of Campbell
City Clerk’s Office
23051064.1
Hanson Bridgett LLP
425 Market Street, 26th Floor, San Francisco, CA 94105
ROBIN R. BARAL
PARTNER
DIRECT DIAL (415) 995-6331
E-MAIL [email protected]
May 18, 2026
VIA E-MAIL
Rob Eastwood
Community Development Director
City of Campbell
70 North First Street
Campbell, CA 95008
Re: SB 1123 - Vacancy Provision, and Demolition Control Ordinance Dear Rob:
Hanson Bridgett LLP represents YIMBY Law in connection with its vigorous enforcement of state housing law in California. This letter is in response to the April 21, 2026, City Council meeting, to dispel some of the false legal claims raised by attorney Richard Drury and other opponents to the City of Campbell’s (“City”) interim ordinance for SB 1123. We understand that a few days prior to that meeting, the City also requested technical assistance on this issue from the Department of Housing and Community Development (“HCD”). This letter is being submitted to the City, and HCD in connection with its technical review, to clarify the following issues.
1. The City lawfully interpreted the vacancy provision in SB 1123 to promote greater housing production.
SB 1123 (Caballero 2024) was enacted as a trailer bill to SB 684 (Caballero 2023) with the purpose of establishing a ministerial pathway under the Subdivision Map Act for the subdivision of qualifying parcels, currently zoned for single-family use, into up to 10 new housing parcels. 1 SB 1123 also created a pathway that requires ministerial approval for eligible housing development projects of up to 10 units, in part by incorporating provisions of the Housing Accountability Act (the “HAA”).
2 The HAA, as we know, was designed to address an ongoing matter of statewide concern, namely to resolve the ongoing housing crisis in California, which now spans multiple decades.
3 The HAA and all other state housing laws were designed to provide a floor, i.e., minimum thresholds for reviewing and approving housing development projects that cities must follow.
Courts routinely uphold the application of conflict preemption in this context; cities may of course interpret state housing law more broadly to facilitate a higher rate of housing production.
As such, claims by Mr. Drury and others to the contrary, i.e., alleging that the City had no 1 See, Gov. Code § 66499.41
2 See, Gov. Code § 65852.28
3 California Renters Legal Advoc. & Educ. Fund v. City of San Mateo (2021) 68 Cal.App.5th 820, 849-50; Ruegg & Ellsworth v. City of Berkeley (2021) 63 Cal.App.5th 277, 295–297.
Rob Eastwood, Community Development Director
May 18, 2026
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discretion to interpret the “vacancy” provision to facilitate more housing, have no merit and should be disregarded.
SB 1123 requires that a lot proposed to be subdivided must meet a set of requirements, including the provision that the lot must be “vacant and zoned for single-family residential development.” In addition:
For purposes of [SB 1123], “vacant” means having no permanent structure, unless the permanent structure is abandoned and uninhabitable. All of the following types of housing shall not be defined as “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 that is subject to any form of rent or sales price control through a local public entity's valid exercise of its police power.
(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.
There is no express provision under SB 1123 that requires a property to be deemed vacant at any particular time during the City’s review of a small-lot subdivision application.
SB 1123 authorizes cities to adopt local ordinances to implement the state housing law, 4 which
the City utilized in enacting a series of interim ordinances. As you know, the City’s interim ordinance initially interpreted the vacancy provision as follows:
Vacant parcel. A parcel located within the Single-Family (R-1) Residential Zoning District or a legacy zoning district with a low density residential General Plan land use designation, shall only be eligible for a starter home project if it will meet the definition of “vacant,” as provided in this interim ordinance, no later than the date of recordation of a final map or issuance of a building permit, whichever occurs first.
As you noted in your presentation to the City Council on April 21, the interim ordinance was designed to address timing considerations, to facilitate a faster SB 1123 process, and to limit circumstances where a property may be demolished but redevelopment ultimately does not move forward. The City’s initial interim ordinance interpreted the vacancy provision somewhat expansively to accommodate these concerns and to facilitate more housing production within the City. The City’s interpretation of the vacancy provision therefore falls squarely within the City’s discretion, especially given that SB 1123 and the Starter Home Revitalization Act is silent on the timing of when a property must be deemed vacant. State housing law clearly allowed the City to implement the requirements of SB 1123 more expansively, to address this ambiguity.
In addition, when interpreting the City’s own general plan and zoning policies (i.e., how properties in an R-1 zone or Low Density Residential general plan designation should be deemed “vacant” under SB 1123), courts routinely defer to the expertise of the local agency in 4 Gov. Code § 66499.41, subd. (i)
Rob Eastwood, Community Development Director
May 18, 2026
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those contexts. The City’s interpretation of its general plan will be upheld as long as it “is not arbitrary, capricious, unsupported, or procedurally unfair.”5 In interpreting the City’s own zoning policies under R-1 zone, courts likewise will uphold the City’s interpretation unless it is “clearly erroneous.” Again, these are highly deferential standards to the City, and in your presentation to the City Council you articulated several reasonable rationales for the City’s prior interpretation of the vacancy provision, which would easily meet the “arbitrary and capricious” and “clearly erroneous” standards of review.
Mr. Drury, on the other hand, appeared at the City Council to assert that the City had no discretion at all in interpreting the vacancy provision in SB 1123, other than making a finding that a parcel must be vacant at the time an application is submitted. There is no express provision in SB 1123 that requires this. Mr. Drury’s assertion would have more merit, about the City’s limited discretion here, if the City were interpreting SB 1123 to prohibit or stifle housing production. There is simply no legal basis under state housing law, however, to support Mr.
Drury’s position. Testimony by others at the hearing asserted that the City’s interpretation would lead to “absurd results” by effectively rendering the entirety of the City’s R-1 zone subject to SB 1123. There is nothing absurd, however, with regard to the City taking action to defer the timing of demolition in order to facilitate more housing production. Residents can debate whether that is good or bad policy, but it was entirely within the City’s discretion.
To summarize, the City’s interpretation of SB 1123 was within its local control in implementing the state housing law via local ordinance.
2. Existing SB 1123 applications must remain vested under SB 330.
During the April 21 meeting, several speakers during the hearing asserted that vesting was not valid for any project submitted under the prior language of the interim ordinance. This assertion is based on false claims that the prior ordinance was invalid. The City had the discretion to interpret the vacancy provision as it did, therefore the HAA legally vests those projects under that prior interim ordinance,6 regardless of the resulting change to the interim ordinance.
3. The “No Net Loss” provisions in state housing law do not apply to single-family homes that have not been rented to tenants in the past five years.
The City has requested technical assistance from HCD to confirm whether the No Net Loss provisions in state housing law would apply to the demolition of a single-family home that did not include a corresponding application to replace that residential unit.7 Simply stated, the answer is “no.” The No Net Loss provision is expressly triggered by new development, not by demolition.
The No Net Loss rule requires that cities “shall not approve a housing development project that will require the demolition of one or more residential dwelling units unless the project will create as many residential dwellings as will be demolished.”8 Simply put, in the absence of a housing development project, this provision is not triggered.
5 Anderson First Coal. v. City of Anderson (2005) 130 Cal.App.4th 1173, 1192. 6 Gov. Code § 65589.5, subd. (o)
7 Gov. Code § 66300.6
8 Id., subd. (a)
Rob Eastwood, Community Development Director
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The No Net Loss rule also requires that cities “shall not approve a development project that will require the demolition of occupied or vacant protected units, or that is located on a site where protected units were demolished in the prior five years, unless [other findings are satisfied].”9 Again, this provision is only triggered if a development project application is submitted.
Granted, an unscrupulous applicant could attempt to evade this provision by seeking demolition first and then submitting a housing development project application under SB 1123. If the property has not had any tenant within the past five years, however, there would be no concern about evading the No Net Loss rule. The “No Net Loss” provisions does not apply, as a matter of law, to properties zoned for single-family homes that have not been rented to any tenant in the prior five years.
4. A demolition control ordinance proposed by the City that is clearly designed to stifle housing production under SB 1123 would violate state housing law and/or be deemed unconstitutional.
The City should resist the advances by the vocal opponents to medium-density housing who appeared at the April 21 meeting, along with Mr. Drury, urging for the adoption of a broad and unlawful demolition control ordinance. As noted above, demolition controls that require a concurrent application for replacement housing may be valid under state housing law given the risk that an unscrupulous applicant could seek demolition and then leverage SB 1123 to potentially bypass the No Net Loss provisions under state housing law. A demolition control ordinance, on the other hand, that requires all property owners to propose new housing, even for properties that have never been rented to, or occupied by, tenants, is deeply problematic, particularly in this case where the record is clear that the demolition control ordinance was proposed in order to thwart housing production under the vacancy provision in SB 1123.
Moreover, an ordinance that requires any property owner to build new housing in connection with the demolition of an existing home raises constitutional concerns as an unlawful exaction, given that the City would be requiring a homeowner to process a new permit and spend a substantial fortune merely in exchange for a demolition authorization.10 We note that several cities and counties, such as the City and County of San Francisco, and the cities of Berkeley, Los Angeles and City of Santa Monica have started this trend; in our opinion it is a matter of time before groups like the Pacific Legal Foundation or other property rights organizations challenge the constitutionality of those overbroad demolition control ordinances. A recent adoption of such an ordinance by the City would provide a clear pathway for such a challenge to emerge.
In conclusion, we urge both HCD and the City to issue proper findings that (1) the City’s prior SB 1123 interim ordinance was consistent with state housing law, (2) all existing applications under the City’s prior SB 1123 ordinance remain vested, (3) the No Net Loss provisions in state housing law only apply in connection with an active development proposal, or in cases where the property was previously occupied by tenants, and (4) a demolition control ordinance would be patently overbroad and violate state housing law and constitutional law if it required every 9 Id., subd. (b).
10 See Nollan v. California Coastal Comm. (1987) 483 U.S. 825, Dolan v. City of Tigard (1994) 512 U.S. 374, and subsequent precedents.
Rob Eastwood, Community Development Director
May 18, 2026
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type of demolition of residential units to build replacement housing, including homes that were never occupied by tenants.
Thank you for considering the above; please do not hesitate to contact me if you have questions or comments regarding this letter.
Very truly yours,
Robin R. Baral
Partner
RRB
cc: Campbell City Council
Campbell City Attorney
The Department of Housing and Community Development