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California may see affordable housing boom as its “builder’s remedy” law is tested by local developers

Nightmare for NIMBYs

California may see affordable housing boom as its “builder’s remedy” law is tested by local developers

(Alexander Migl/Wikimedia Commons/CC BY-SA 4.0)

The numbers speak for themselves: With a 13.2 percent poverty rate and a median home price of $836,110, California is experiencing one of the nation’s most staggering affordable housing crises. While some of the state’s largest cities, like San Francisco, San Diego, and Los Angeles, currently have programs intended to meet Governor Gavin Newsom’s recent goal of creating one million units statewide by 2030, several of its lower-density cities are stymied by local NIMBY groups. In many cases, California’s myriad zoning laws and regulatory statutes, designed with the intent to improve the lives of all residents (such as the California Environmental Quality Act), have been manipulated into prohibiting new building altogether.

As of late, however, developers have discovered a way around these restrictions by citing a law that’s largely gone unnoticed since its creation in 1990. Government Code § 65589.5(d)—nicknamed the “builder’s remedy” law—was written into California’s Housing Accountability Act (HAA) as a means of streamlining the affordable housing development process in cities noncompliant with the Housing Element Law, which states that “all local governments (cities and counties) must adequately plan to meet the housing needs of everyone in the community.”

Given its stipulation that only 20 percent of the units of any new development be affordable, the builder’s remedy law has caught the attention of developers eager to expand their portfolios or otherwise use it as a bargaining chip with city leaders. WS Communities (WSC), the largest developer in Santa Monica, became the first to test the legal waters last year by applying for 14 apartment buildings that could together create over 4,000 housing units. In May, the city council and WSC came to an agreement: In exchange for pulling the majority of its applications, Santa Monica will update its zoning code to encourage developers to work with the city rather than against it through expedited processing and additional incentives on all new affordable housing projects.

Other cities across the state, however, may not make these same concessions in the face of large developers. “For some of the other 80-odd cities in L.A. County [for which this law applies],” said Rayne Laborde Ruiz, an associate at the Santa Monica–based architecture firm Koning Eizenberg, “its impact will depend on if the locality takes the state seriously in getting a compliant housing element filed in a timely manner and if and how antidevelopment neighbors mobilize. Any large development in notoriously antidevelopment areas is likely to face costly litigation challenges that the proponents will have to weigh carefully, whether they are technically in the right under builder’s remedy or not.”

While several larger developers have confidently strutted the builder’s remedy law, nonprofit housing developers have shown more caution, as a significant portion of their funding typically comes from the very same governmental departments they would be challenging. “This provision has sat unused for decades,” said Scott Sullivan, founding principal of the Los Angeles–based firm Relativity Architects. “That alone should give one a sense of how reluctant anyone’s been to challenge the very local governments that issue permits for their projects. It takes a certain kind of chutzpah to walk up to a planning department counter and tell them that they can’t use local rules to stop us from building a large apartment complex anywhere we like. So, if one is going to take on an adversarial stance with a city from the get-go, that’s probably better left to land-use attorneys.”

The builder’s remedy represents the second avenue by which California has attempted to increase affordable housing by streamlining development. Two bills passed in 2019—AB-881 and AB-68—have recently expedited the process of building accessory dwelling units by rendering existing restrictions obsolete. Yet these two alone might not be enough to reach the state’s one-million-unit goal by 2030. “If recent housing bills and the builder’s remedy are both ways for the state to supersede slow-to-adjust or blatantly antidevelopment local control on housing,” Laborde Ruiz argues, “we also need the ‘carrot’ for noncompliant jurisdictions. That means reliable, sustainable funding for affordable and innovative housing. New funds are trickling out for affordable housing, community land trusts, housing on faith-based land, and other explorations—hopefully making these more substantial, lasting streams.”

Shane Reiner-Roth is a lecturer at the University of Southern California.

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