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NEW LAW GUIDANCE
1 At the start of each new year, Best Best & Krieger
LLP provides critical legal updates based on new
laws and court decisions from the previous year.
The 2022 edition of “Under One Roof” covers
important new laws related to California’s Housing
Plan reporting, affordable housing, density bonus,
housing element and more.
Within you will find takeaways and analysis of the
following new laws: AB 68, AB 571, AB 634, SB
290, SB 728, AB 491, AB 721, AB 1043, AB 215, AB
787, AB 1029, AB 1304, AB 1398, SB 8, SB 9, SB
10, SB 478, SB 1174 and AB 345.
Housing and Community Development’s Housing
Plan Annual Reporting Bill
AB 68
Assembly Bill 68 amends various Health and
Safety Code sections regarding the Department
of Housing and Community Development’s (HCD)
annual reporting requirements and California’s
quadrennial Statewide Housing Plan.
Noteworthy features of AB 68 include:
• Existing Health and Safety Code provisions
are collapsed into a new chapter dedicated
specifically to the Plan. (Health & Saf. Code, §
50420 et seq.).
• HCD is mandated to publish the Plan on its
website. (Health & Saf. Code, § 50425).
• Every Plan update made after Jan. 1, 2023
must include an inventory of the number of
affordable units needed to meet California’s
affordable housing needs and recommendations
for modernizing statutory and regulatory
terminology. (Health & Saf. Code, § 50426).
• HCD is directed to publish an annual report
on its website by Dec. 31 of each year that
includes specified information regarding HCDadministered grant programs. Among other things, the report must compare how the time
between award letter, standard agreement and
standard agreement execution varies across
HCD-administered grant programs. (Health &
Saf. Code, § 50408.1(a)(1)-(5).)
• HCD is directed to publish an annual report
on its website by Dec. 31 of each year that
includes specified information regarding housing
element oversight actions that were active in
Articles and Analysis by BB&K To Help Communities Adopt and Adapt to New Housing Legislation
Under One Roof: New California Housing Law Updates
Attachment A
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2 the previous year. The report must describe:
the number oversight actions taken against
cities and counties; the outcomes of those
oversight actions; and the median time between
the initiation of each oversight action and its
resolution. (Health & Saf. Code, § 50408.1(b)
(1)-(3).)
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Density Bonus Housing Laws
AB 571
AB 634
SB 290
SB 728
As part of the California State Legislature’s push
to remove local barriers for creating additional
affordable housing units, Assembly Bill 571,
Assembly Bill 634, Senate Bill 290 and Senate
Bill 728 revise the requirements placed on local
agencies required to grant density bonuses to
qualifying housing development projects. State
Density Bonus Law (DBL) (Gov. Code §§ 65915-
65918) requires a city or county to provide
a housing developer with a “density bonus,”
beyond what is permitted by the local agency’s
adopted base density applicable to the project,
and other incentives, waivers or concessions for
the production of lower income housing units,
covenanted affordable over a designated number
of years.
AB 571 and AB 634
Both bills add new requirements under the DBL
statutes, removing barriers to the creation of
affordable density bonus units and allowing
greater control for local agencies to go beyond the
affordability term otherwise required. Specifically,
AB 571 adds a new Section 65915.1 to the
Government Code, which provides that affordable
housing impact fees, including inclusionary zoning
fees and in-lieu fees, must not be imposed on a
housing development’s affordable units. Those
affordable units are used under DBL to receive
a density bonus that would allow the housing
developer to build more market rate units. AB 634
applies to cities and counties that have adopted
inclusionary housing ordinances that mandate
an affordability mix of new residential units
beyond what is required under the DBL. Under
existing DBL, developers are required to record
55-year affordability covenants on the affordable
housing units that qualify the development for the
density bonus. AB 634 clarifies that for units in a
housing development required to comply with a
city or county’s inclusionary housing ordinance,
the city or county may impose an affordability
covenant longer than 55 years, provided that the
development is not financed with low-income
housing tax credits.
SB 290
SB 290 makes a series of changes to DBL that
further incentivize housing developers to utilize
California laws to qualify for increased density
on residential projects. SB 290 clarifies that an
inclusionary unit, to the extent required under a
local agency’s municipal code, is added to the
total number of units of the project for purposes
of determining the specific density bonus provided
beyond the local agency’s base density, plus in
the calculation used to determine the number of
concessions or waivers provided to the housing
developer for the affordable units.
Additionally, SB 290 adds a new project eligible
for a density bonus: student housing development
projects where at least 20% of total units are
devoted to lower income students, based on the
household income and asset level required for
recipients of a Cal Grant A or Cal Grant B, verified
by affidavit, award letter or letter of eligibility.
To qualify under DBL, the student housing
development needs to be used exclusively for
full time undergraduate, graduate or professional
students at an accredited institution and there
must be an operating agreement or master lease
between the developer and the institution. Under
SB 290, this type of qualifying project results in
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3 one incentive or concession under DBL from the
otherwise applicable development standards, and
a 35% density bonus to the number of student
housing units.
SB 290 also amends DBL to clarify that qualifying,
for-sale moderate units no longer need to be
included in a common interest development
in order to be eligible for a density bonus. SB
290 adds certain moderate-income qualifying
DBL projects for a parking incentive that
previously only applied to projects with a certain
percentage of low-income or very-low units.
Now, if a DBL qualifying project supplies at least
40% moderate-income units, the developer can
seek a parking incentive that requires as few as
0.5 parking spaces per unit bedroom, provided
the development is within a half mile of a major
transit stop. Finally, the bill removes the right of
local agencies to deny requested DBL incentives,
waivers or concessions for a specific adverse
impact on the physical environment. However,
local agencies may still deny a DBL qualifying
project based on a specific adverse impact on
health or safety.
SB 728
When a project qualifies for a density bonus, DBL
requires the developer and the city or county to
ensure that the initial occupant of a for-sale unit
that qualified the developer for the award of the
density bonus is a person or family of very low,
low or moderate income.
This bill requires the developer and the city or
county to ensure that a for-sale unit that qualified
the developer for the award of the density bonus
is either:
• initially occupied by a person or family of very
low, low or moderate income, as required, and is
offered at an affordable housing cost, as defined,
and is subject to an equity sharing agreement, as
specified; or
• a qualified nonprofit housing organization
purchases the unit pursuant to a specified
recorded contract that includes a repurchase
option requiring a subsequent purchaser
that desires to sell the property to first offer
the nonprofit corporation the opportunity
to repurchase the property; an affordability
restriction (for at least 45 years for owneroccupancy); and an equity sharing agreement, as specified.
With regard to the equity sharing agreement, the
city or county may allow the qualified nonprofit to
recapture any initial subsidy and its proportionate
share of appreciation provided that the nonprofit is
required to use 100% of the proceeds to promote
homeownerships for lower income households
within the jurisdiction. The city or county is not
required to enforce the equity sharing agreement
if it is conflict with the requirements of another
public funding source or law. The changes provide
some additional flexibility regarding developments
involving qualified nonprofits.
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Affordable and Market Rate Housing Laws
AB 491
AB 721
AB 1043
AB 491 – Equal Access to Common Areas and
Amenities
Assembly Bill 491 adds Section 17929 to the
Health and Safety Code, and requires that a mixedincome multifamily structure provide occupants of the affordable housing units and occupants of
the market rate housing units with equal access
to common entrances, areas and amenities. The
bill also prohibits the structure from isolating the
affordable housing units within the structure to a
specific floor or an area on a specific floor. These
additions do not constitute a change in, but are
declaratory of, existing law.
AB 721 – Recordation of Covenant Modifications
to Revise Illegal Restrictions
Assembly Bill 721 adds Section 714.6 to the Civil
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4 Code, and allows the owner of a property that
the owner thinks is the subject of an unlawfully
restrictive covenant to record a Restrictive
Covenant Modification. The Modification would
correct the illegal covenant by providing the
original covenant document, with the illegal
language stricken. If an approved Modification
has been recorded in the public record, illegal
covenants are unenforceable against the owner
of an affordable housing development unless a
specified exception applies.
The bill requires that before recording the
Modification, the county recorder submit the
Modification document and original document to
county counsel. Counsel will then be required to
determine whether the original document contains
an unlawful restriction and if the property qualifies
as an affordable housing development.
Examples of recorded covenants that shall not be
enforceable against the owner of an affordable
housing development if an approved Modification
has been recorded are:
• Covenants that contain limits on the use of
private or publicly owned land, contained in
any deed, contract, security instrument or other
instrument affecting the transfer or sale of any
interest in real property, which restricts the
number, size, or location of the residences that
may be built on the property.
• Language that restricts the number of persons or
families that may reside on the property.
The bill specifies its provisions do not apply to
restrictive covenants that:
• Relate to purely aesthetic objective design
standards;
• Provide for fees or assessments for the
maintenance of common areas;
• Provide for limits on the amount of rent that may
be charged to tenants;
• Are conservation easements that meet certain
conditions;
• Are a recorded interest in land comparable to
a conservation easement held by a political
subdivision;
• Are a settlement, conservation agreement
or conservation easement for which certain
conditions apply; or
• Are a recorded deed restriction, public access
easement, or other similar covenant that was
required by a California agency for the purpose
of compliance with a state or federal law under
certain circumstances.
AB 1043 – Adds “Acutely Low Income” to List of
Income Categories
Assembly Bill 1043 amends Health and Safety
Code section 50053 to add “acutely low income
households” to the list of income categories for
purposes of defining affordable rents. Aimed
at capturing the lowest income households
in California, the new “acutely low income
households” category is defined to include
persons and households with incomes not
exceeding 15% of area median income (AMI),
adjusted for family size and revised annually. The
bill provides that “affordable rent” for “acutely low
income households” is the product of 30% times
15% AMI adjusted for family size appropriate to
the unit. The new income category applies only to
leases entered into on or after Jan. 1, 2022.
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Housing Element Laws
AB 215
AB 787
AB 1029
AB 1304
AB 1398
SB 8
SB 9
SB 10
SB 478
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5 In September 2021, Gov. Newsom signed into law
six new laws that change the way local agencies
must prepare and submit Housing Element
updates in order to keep the State abreast of
efforts to ameliorate the housing crisis at the local
level.
Assembly Bill 215 amends GC 65585 by building
in a 30-day public comment period for draft
Housing Element updates, plus a 10-business
day period for the planning agency to consider
and incorporate comments before it may submit
the update to HCD. Upon receipt of a first draft
submittal for a Housing Element revision, HCD
now has 90 days to review the draft and report
its written findings to the planning agency. For
subsequent draft amendments and adoption,
HCD has 60 days from receipt of submittals. In
addition, AB 215 adds other housing-related laws,
including the Housing Crisis Act of 2019 (SB 330),
that when violated, requires HCD to notify the
local agency and refer the matter to the Attorney
General for enforcement proceedings. AB 215
eliminates requirements that HCD first provide
two consultations and written findings to a noncompliant jurisdiction.
Assembly Bill 787 adds GC 65400.2, which
authorizes jurisdictions to include in their
April 1 annual reports all units in an existing
multifamily building that were converted to deedrestricted rental housing for moderate income households by imposing affordability covenants
and restrictions – up to 25% of their moderate
income Regional Housing Need Allocation
(RHNA). In order to qualify, the units must not
have been previously affordable to very low,
low or moderate income households; the initial
post-conversion rent for the unit must be at least
10% less than the average monthly rent charged
during the 12 months prior to conversion; and
the units must be subject to a 55-year recorded
regulatory agreement that restricts affordability to
moderate-income households. HCD is not required
to implement this law until Jan. 1, 2023, but for
annual reports issued after Jan. 1, 2023, planning
agencies may report conversions that occurred on
or after Jan. 1, 2022.
Assembly Bill 1029 amended GC 65589.9 to
reward local agencies with “prohousing” Housing
Elements by providing additional points or other
preference in the scoring of competitive housing
and infrastructure programs whose aim is to
help local agencies preserve existing affordable
housing units. AB 1029 defines “prohousing
local policies” with a non-exclusive list of types
of policies that facilitate the planning, approval
or construction of housing – like local financial
incentives for housing (e.g. local housing trust
fund), reduced parking requirements for sites
zoned for residential development, adoption of
by-right zoning for residential and mixed-use
development, and many more. This is an urgency
statute that went into effect upon Gov. Newsom’s
signature on Sept. 28, 2021.
Assembly Bill 1304 amends the Housing Element
law (GC 65583 et seq.) to clarify a local agency’s
mandatory duty to administer its programs and
activities relating to housing and community
development in a manner that “affirmatively
furthers fair housing,” and not in any way that is
materially inconsistent with this obligation. More
specifically and as one example, AB 1304 requires
local agencies, when compiling its inventory of
land suitable and available for development of
housing, to analyze the relationship of the sites
identified in the inventory to the jurisdiction’s
duty to affirmatively further fair housing.
“Affirmatively furthering fair housing,” as defined
in GC 8999.50(a)(1), means “taking meaningful
actions, in addition to combating discrimination,
that overcome patterns of segregation and foster
inclusive communities free from barriers that
restrict access to opportunity based on protected
characteristics. Specifically, affirmatively
furthering fair housing means taking meaningful
actions that, taken together, address significant
disparities in housing needs and in access to
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6 opportunity, replacing segregated living patterns
with truly integrated and balanced living patterns,
transforming racially and ethnically concentrated
areas of poverty into areas of opportunity, and
fostering and maintaining compliance with
civil rights and fair housing laws. The duty to
affirmatively further fair housing extends to all of a
public agency’s activities and programs relating to
housing and community development.”
Assembly Bill 1398 amends GC 65583(c)(1)(A)
to change the penalty for a local agency’s failure
to timely adopt a Housing Element that is in
substantial compliance with California law. Under
prior law, the local agency was threatened with
rezoning of its inventory sites to accommodate its
RHNA allocation by no later than 3 years and 120
days from the statutory deadline for adoption of
the Housing Element, and revision of the Housing
Element every 4 years (rather than every 8) until
the local government had adopted at least two
consecutive revisions by the statutory deadline.
This penalty for non-compliance proved ineffective
and incentivized local agencies to adopt deficient
housing elements months after the deadline with
no consequences. Some local agencies even
adopted non-compliant housing elements by the
deadline to avoid the penalty of having to revise
the element every four years. AB 1398 reduces
the rezoning timeframe to no later than one year
from the statutory deadline for adoption of the
Housing Element; and maintains revision of the
Housing Element every 4 years (rather than every
8) until the due date for the sixth revision of the
Housing Element. This new accelerated rezoning
requirement, combined with other recent laws
requiring agencies to make more realistic housing
production assumptions and meet ever-increasing
housing targets, present a significant opportunity
for by-right processing within jurisdictions that do
not meet applicable deadlines.
Amendment to the Housing Crisis Act of 2019
Senate Bill 8’s main effect is to extend the
duration of the Housing Crisis Act (HCA) from
2025 to 2030. Additionally, the HCA required
any decrease to residential capacity in a general
plan or zoning to be “concurrently” offset by an
increase elsewhere in the city to ensure there
was “no net loss” of housing units. SB 8 defines
“concurrently,” for purposes of no-net-loss
requirements under the HCA, to mean:
• the action is approved at the same meeting; or
• if the action that would result in a net loss of
residential capacity is requested by an applicant
for a housing development project, then within
180 days; or
• if by local initiative, then that “the action is
included in the initiative in a manner that ensures
the added residential capacity is effective at
the same time as the reduction in residential
capacity.”
Additionally, SB 8 purports to clarify existing law
by clarifying that a “housing development project”
for purposes of certain parts of the HCA “includes,
but is not limited to, projects that involve no
discretionary approvals and projects that
involve both discretionary and nondiscretionary
approvals” — as well as “a proposal to construct
a single dwelling unit.” This latter bit, the inclusion of a single-unit project, is a significant change
from the California Housing and Community
Development Department’s interpretation of
housing development project in the Housing
Accountability Act. As noted, SB 8 adds a “single
dwelling unit” to the housing development project
definition, thus expanding the application of the
term significantly — but only as it is used in Gov
Code 66300. SB 8 limits the right to relocation
benefits and the right of first refusal during
demolitions to the occupants of protected units
that are lower-income households, as defined, to
the exclusion of short-term renters.
Under Senate Bill 9, local agencies must
ministerially approve certain subdivisions of one
lot into two without discretionary review or a
hearing. SB 9 also requires local agencies to
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7 ministerially approve a proposed two-unit
development project on a lot in a single-family
residential zone without discretionary review or
a hearing. This applies to building two new units
or adding a second one. Qualifying criteria and
standards for both by-right “urban lot splits” and
two-unit development projects, along with other
details, can be seen here.
Local agencies should immediately adopt
objective standards for these mandatory,
ministerial lot splits and two-unit development
projects. In addition, they should note the
following nuances:
• Local agencies must prohibit short-term rentals
in any dwelling created under SB 9 (whether
through the lot split or two-unit development
approval, or both).
• SB 9 creates two narrow exceptions from the
general requirement that local agencies allow
accessory dwelling units and junior accessory
dwelling units ministerially: When a lot is both
created by an SB 9 lot split and developed with
an SB 9 two-unit development, a local agency
does not need to allow an ADU or JADU. Also, a
local agency does not need to allow an ADU or
JADU on a lot if there are already two units of
any kind on the lot.
• Because approval under SB 9 is ministerial,
CEQA does not apply and the bill creates a new
statutory exemption for an ordinance adopted to
implement SB 9.
• The Coastal Act does apply, but the local
agency is not required to hold a public hearing
on a coastal development permit for an SB
9 approval. The Coastal Act applies in full to
SB 9 lot splits and two-unit projects, with one
exception—the local agency just can’t hold a
public hearing on a CDP.
• SB 9 also changes the lifespan of tentative
subdivision maps. Local agencies may now
extend map expiration by an additional year—
up to 2 years generally and up to 4 years for
maps that are conditioned on significant public
improvement obligations.
Senate Bill 10 authorizes cities to provide a
streamlined upzoning process in certain areas. SB
10 does not impose any mandatory requirements
upon cities; however, it empowers cities to adopt
an ordinance allowing for up to 10 dwelling units
per parcel provided the parcel is located in either
a transit rich area or an urban infill site. The
ordinance must set a height limit. When adopting
the ordinance, the city must make the finding that
the increased density “is consistent with the city
or county’s obligation to affirmatively further fair
housing pursuant to Section 8899.50.”
It’s important to note that the city may adopt
an SB 10 zoning ordinance notwithstanding
any other local restrictions on adopting zoning
ordinances, including restrictions enacted by local
initiative. However, an SB 10 zoning ordinance
that supersedes a zoning restriction enacted by
local initiative must be adopted by two-thirds of
the members of the city council in order to be
effective. The ordinance must be adopted before
Jan. 1, 2029, though ordinances adopted before
that date may have operative dates that extend
beyond Jan. 1, 2029.
SB 10 does not apply to a parcel located in a very
high fire hazard severity zone — unless the site
complies with “fire hazard mitigation measures” in
“existing building standards or state fire mitigation
measures applicable to the development.”
An SB 10 zoning ordinance cannot reduce the
density of any parcel subject thereto. Moreover,
once a parcel’s density has been increased
pursuant to an SB 10 zoning ordinance, the City
cannot subsequently reduce the density of that
parcel. Generally, SB 10 creates a new statutory
exemption for an SB 10 zoning ordinance, as well
as for “any resolution to amend the jurisdiction’s
General Plan, ordinance, or other local regulation
adopted to be consistent with that zoning
ordinance.”
CEQA will still apply to both of the following:
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8 • a residential or mixed-use residential project
consisting of more than 10 new residential units
on one or more parcels that are zoned pursuant
to an SB 10 zoning ordinance, and
• a subsequent ordinance adopted to rezone a
parcel zoned under an SB 10 zoning ordinance.
Moreover, a project may not be divided into
smaller projects in order to get around these
restrictions.
Senate Bill 478 adds GC 65913.11 to prohibit
local agencies from imposing a floor area ratio
standard that is less than 1.0 on a housing
development project that consists of three to
seven units, or less than 1.25 on a housing
development project that consists of eight to
10 units. It also prohibits local agencies from
imposing lot coverage requirements that would
physically preclude a housing development
project from achieving these floor area ratios;
and denying a housing development project
located on an existing legal parcel solely on the
basis that the lot area of the proposed lot does
not meet the local agency’s requirements for
minimum lot size. These restrictions only apply
to housing development projects that are located
in multifamily residential zones or mixed-use
zones. The law is intended to stop cities from
using minimum lot size and floor area ratios
to block multifamily housing development and
allow builders to pay for smaller pieces of land
to develop multifamily housing for the “missing
middle” (i.e., three to 10 homes). But some
affordable housing advocates criticize the new
law as one that will displace and do nothing for
lower income households who will not be able to
afford these “small lot” condos.
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Amendment to SB 35
SB 1174
In 2017, Senate Bill 35 created a streamlinedapproval process for certain multifamily housing projects, under Gov. Code 65913.4. In 2021, the
Legislature tinkered with the law once again,
mostly to allow earlier vesting and longer approval
shelf-life. Instead of having to start vertical
construction to vest, the project needs only to
start “construction activity,” including demo
and grading. And now, the validity of a project
approval is extended if the developer requests
a modification (extended by number of days
between request and final approval, plus 180
days). This modification-extension can only be
used once. Both changes apply retroactively to
pre-2022 projects.
Other changes include:
• Underground space is now omitted from square
footage calculations.
• Current building standards may now be applied
only to modifications made prior to the first
building permit (before it was subject to any
modification) … unless the developer agrees
otherwise.
• Subsequent permits are now considered in light
of the standards that were in place “when the
original development application was submitted”
… unless the developer agrees otherwise.
• The definition of “affordable rent” for large, pre2019 projects is now modified to allow 70% of the units to be rented at the maximum rent levels
allowed under Low-Income Housing Tax Credit
projects.
Overall, SB 1174 is considered to be more of a
fine-tuning of the same streamlined-approval
process rather than a broad change.
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Planning/Zoning
AB 345
Assembly Bill 345 builds off of Assembly Bill 587
by adding new requirements and making its
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9 provisions mandatory. With AB 345 now in effect,
local agencies should note the following:
• Mandatory Requirement: Local agencies are
now required to allow accessory dwelling units
(ADUs) to be sold or conveyed separately from
the primary dwelling if the conditions provided
in Government Code Section 65852.26 are
satisfied. (See list of prominent conditions here.)
• Limited Applicability: The impact of AB 345 may
be limited, as it only applies to properties built by
qualified nonprofits that are then purchased and
occupied by qualified low-income buyers.
• Not Applicable to JADUs: AB 345 does not apply
to or permit the separate sale or conveyance
of junior accessory dwelling units (JADUs). In
accordance with Government Code Section
65852.22, a local agency’s ordinance must
prohibit JADUs from being sold or conveyed
separately from the primary dwelling.
• ADU Ordinance Update: ADU ordinances
generally include language providing that the
separate sale or conveyance of an ADU is not
allowed. As a nod to AB 345’s changes to this
landscape, local agencies should consider
qualifying this portion of their ADU ordinance to
include something to the effect of: “Except as
otherwise provided in Government Code Section
65852.26, no ADU may be sold or otherwise
conveyed separately from the lot and the primary
dwelling.”
The provisions of AB 345 apply only when
numerous detailed conditions are satisfied. Thus,
to assist staff and the public with implementing
this new law, local agencies may want to consider
coordinating with legal counsel to create a
checklist that tracks AB 345’s requirements. Done
right, such a checklist would provide staff and
the public with a digestible and straightforward
method for determining whether the property in
question satisfies the requirements of AB 345.
Disclaimer: BB&K Legal Alerts are not intended
as legal advice. Additional facts, facts specific
to your situation or future developments may
affect subjects contained herein. Seek the advice
of an attorney before acting or relying upon any
information herein.
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10 (continued from page 9)
Elizabeth W. Hull
[email protected]
(949) 263-2608
PARTNER
IRVINE, CA
Todd R. Leishman
[email protected]
(949) 263-6576
PARTNER
IRVINE, CA
Brian Byun
[email protected]
(619) 525-1360
OF COUNSEL
SAN DIEGO, CA
Victoria “Tori” Hester
[email protected]
(619) 525-1365
ASSOCIATE
SAN DIEGO, CA
Samantha Lee
[email protected]
(925) 977-3326
ASSOCIATE
WALNUT CREEK, CA
Isaac Rosen
[email protected]
(213) 787-2564
ASSOCIATE
LOS ANGELES, CA
Abraham J. Galvan Sanchez
[email protected]
(909) 466-4914
ASSOCIATE
ONTARIO, CA
Ryan Stager
[email protected]
(949) 263-6596
ASSOCIATE
IRVINE, CA
Matthew Richardson
[email protected]
(949) 263-6562
PARTNER
IRVINE, CA