Housing Crisis Act of 2019 (HCA)
On October 9, 2019, Gov. Gavin Newsom signed the Housing Crisis Act of 2019 (HCA) into law, commonly known as Senate Bill (SB) 330 (Chapter 654, Statutes of 2019) to respond to the California housing crisis. On September 16, 2021, Gov. Newsom signed SB 8 (Chapter 161, Statutes of 2021), which is an extension of the HCA. The HCA aims to increase residential unit development, protect existing housing inventory, and expedite permit processing. This new law makes a number of modifications to existing legislation, such as the Permit Streamlining Act and the Housing Accountability Act. Many of the changes expired on January 1, 2020. Under this legislation, municipal and county agencies are restricted in ordinances and polices that can be applied to residential development. The revised definition of “Housing Development” now contains residential projects of one or more units, mixed-use projects (with two-thirds of the floor area designated for residential use), transitional, supportive, and emergency housing projects. Answers to commonly asked questions are provided below.
Is there a prohibition on loss of residential units when redeveloping a site?
Yes, SB330 sets a temporary 5-year prohibition of residential density reduction associated with a “housing development project,” from January 1, 2020, to January 1, 2025. SB 8 extended the temporary prohibition for an additional 5-year period, concluding on January 1, 2030.
For example, during this temporary prohibition, a residential duplex cannot be demolished and replaced with a single-unit dwelling as this would be a net loss of one unit. However, replacement of a duplex with a new single-unit dwelling and an Accessory Dwelling Unit (ADU) or Junior Accessory Dwelling Unit (JADU) would be permissible. Please be advised that beginning January 1, 2020, all residential demolition projects must be processed in conjunction with a replacement project illustrating a compliant redevelopment project.
In addition, existing units that are defined as “protected” must be replaced, and displaced tenants must be provided relocation benefits as discussed further below.
What is defined as a “protected unit” under the law?
Protected units are units that are or were within the past 5 years either:
1) subject to a recorded covenant ordinance, or law restricting rents to levels affordable to low- or very low-income households;
2) occupied by low- or very-low income households; or
3) subject to a local rent control ordinance or units withdrawn from rental market pursuant to the Ellis Act within the last 10 years (Newport Beach does not have rent control ordinance and therefore this provision is not applicable).
Prior to the City of Newport Beach issuing a demolition permit for any number of units, the property owner must complete an income verification form to determine whether the units proposed for demolition are considered “protected” under the law. The form is accessible by clicking here.
Are there additional replacement requirements when a housing development project redevelops a site with existing “protected” rental units?
Yes, the new development must include at least as many units, at an “equivalent size,” as existed on the site within the previous 5 years. Equivalent size means the replacement units contain at least the same total number of bedrooms as the units being demolished. In addition, existing residents shall be allowed to remain until 6 months before construction begins, and displaced residents shall be provided relocation benefits and a right of first refusal for a comparable unit in the new project at an affordable rent for a minimum term of 55 years.
Preliminary Application Process
What are the benefits the new Preliminary Application Process?
HCA establishes a requirement for the City to implement a preliminary application process. The intent of this process is to make the development review process faster and provide certainty to an applicant by locking in the development requirements, standards, and fees at the time a complete application is submitted. By doing so, the City is prohibited from applying new ordinances, policies and standards to a development with a complete preliminary application.
As a part of this facilitation, the City compiled a checklist that details the criteria of what is needed to complete a preliminary development application. The application checklist can be found on the City’s permit webpage and at the Permit Center, or by clicking here. From the time the preliminary application is submitted, applicants have 180 days to submit a complete development application. If the City determines that the application for the development project is not complete, the applicant shall submit the specific information needed to complete the application within 90 days of receiving the City’s incomplete letter. If the applicant does not submit this information within the 90-day period, then the preliminary application shall expire and have no further force or effect. SB330 also provides more provisions for disclosure obligations when the City rejects an application due to incompleteness and is precluded from requesting anything not noted on the preliminary application checklist.
Is there an exception to the fees frozen as part of a Preliminary Application submittal?
Yes, in the case of fees, charges, or other monetary exactions, increases are allowed resulting from an automatic annual adjustment based on an independently public cost index that is referenced in the ordinance or resolution establishing the fee. An example is the City’s Traffic Fairshare Fee that increases annually based on changes in Consumer Price Index (CPI).
What are the new Public Hearing limitations?
The Housing Accountability Act has been amended to limit review of a housing development project to no more than five (5) hearings after the application is deemed complete, granted compliance with objective standards from the general plan and zoning code are being fulfilled. The definition of “Hearing” covers a broad range of meetings of a board, commission, council, department, or subcommittee, including workshops, continued meetings, and most appeals. However, “Hearing” does not include a hearing to review a legislative approval required for a proposed housing development project, including, but not limited to, a general plan amendment, a specific plan adoption or amendment, a planned community adoption or amendment, or a zoning amendment.
CEQA and Coastal Commission hearings are also excluded.
How soon is the City required to review a housing development project application?
Within 30 calendar days of receiving a housing development project, a public agency is required to determine in writing whether the application is complete or incomplete. If incomplete, the agency shall provide the applicant an exhaustive list of items that were not complete. In any subsequent review of the application determined to be incomplete, the agency shall not request the applicant to provide any new information that was not stated in the initial list of items that were not complete.
What are shortened timeframes for approving or disapproving a development under the Permit Streamlining Act?
Changes shortening the timeframe for which public agencies are required to approve or disapprove a housing development under the Permit Streamlining Act are notable. The City now has 90 days, rather than 120 days, from the time an environmental impact report is certified to approve the project. For housing development pursuing tax credits or other public funding (e.g. affordable housing grants), the approval window must be within 60 days. The existing 60-day timeframe remains for projects where a negative declaration has been adopted or a determination that a project is exempt from CEQA.
How long does the City have to inform an applicant that their project is inconsistent with an applicable plan, program, policy, ordinance, standard, requirement, or similar provision?
Within 30 days of the date that an application is deemed complete for residential developments proposing 150 units or fewer, and within 60 days for residential developments proposing greater than 150 units. If the agency fails to meet these deadlines, the housing development project shall be automatically deemed consistent. For this purpose, a proposed housing development project is not inconsistent with the applicable zoning standards and criteria (and shall not require a rezoning), if the housing development project is consistent with the objective general plan standards and criteria but the zoning for the project site is inconsistent with the general plan.
Also for this purpose, a housing development project shall be deemed consistent, compliant, and in conformity with an applicable plan, program, policy, ordinance, standard, requirement, or other similar provision if there is substantial evidence that would allow a reasonable person to conclude that the housing development project is consistent, compliant, or in conformity.
Can the City deny a housing development project?
HCA strengthens the Housing Accountability Act (Government Code Section 65589.5), which states that a housing development project that complies with the objective standards of the General Plan and Zoning Ordinance must be approved by the City, unless the City is able to make written findings based on the preponderance of the evidence in the record that either: (1) the City has already met its Regional Housing Needs Assessment (RHNA) requirement; (2) there is an impact to the public health and safety and this impact cannot be mitigated; (3) the property is agricultural land; (4) approval of the project would violate State or Federal law and this violation cannot be mitigated; or (5) the project is inconsistent with the zoning and land use designation and not identified in the General Plan Housing Element RHNA inventory.
“Objective” means involving no personal or subjective judgment by a public official and being uniformly verifiable by reference to an external and uniform benchmark or criterion available and knowable by both the development applicant or proponent and the public official.
Can the City change land use plans or development standards that result in residential reduction of density or intensity?
No, HCA restricts the adoption of land use or zoning amendments that would result in the reduction of allowed residential density or intensity of land uses than what is allowed under the regulations in effect on January 1, 2018. The law defines “less intensive use” to include, but is not limited to, reductions to height, density, or floor area ratio, new or increased open space or lot size requirements, new or increased setback requirements, minimum frontage requirements, or maximum lot coverage limitations, or anything that would lessen the intensity of housing. The City is further prevented from establishing moratoriums or other restrictions on housing projects and cannot place new caps on the number of land use approvals or permits that will be issued for housing projects.
Does the Housing Crisis Act apply to charter cities?
Yes, the bill states that the changes imposed address a matter of statewide concern rather than a municipal affair and, therefore, apply to all cities, including charter cities such as Newport Beach.
This is complicated, is there an exhibit that helps explain this development process?
Who can I call for additional questions about the Housing Crisis Act?
If you have any questions about SB330 and how it may affect your project, please contact the Planning Counter at 949-644-3204, or email CDD@newportbeachca.gov.