Will This Bill Save or Scuttle California’s Builder’s Remedy?

Happy Tuesday and welcome to another edition of Rent Free. This week’s stories include:

• A new bill introduced by Sen. John Fetterman (D–Pa.) and Rep. Lisa Blunt Rochester (D–Del.) aims to help localities reform their zoning codes through consultation with the U.S. Department of Housing and Urban Development.
• The University of California, Berkeley, at long last, gets the California Supreme Court’s blessing to move forward with a contentious redevelopment of People’s Park.
• Austin considers applying an “equity overlay” to its “missing middle” reforms, much to the alarm of some YIMBYs who say the new overlay will only reduce new housing construction.

But first, our lead story on whether a proposed California bill would give “more teeth” to the state’s builder’s remedy law or defang it entirely.

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YIMBYs Divided on Reforms to ‘Builder’s Remedy’

Over the past few years, developers across California have been dusting off a little-used provision of state housing law called the “builder’s remedy” to try to get massive residential projects approved in communities that are out of step with state housing law. They’ve had limited success.

The builder’s remedy law prevents communities without state-approved “housing elements”—lengthy plans outlining how local laws will change to accommodate new housing—from denying residential projects just because they’re inconsistent with local zoning codes.

In theory, this would allow developers to build projects of unlimited density in the 183 jurisdictions that don’t have a state-compliant housing element. In practice, ambiguities in state law and persistent local intransigence have seen most builder’s remedy projects stalled in the courts or negotiated down to smaller projects with fewer units.

Proposed Fixes

Enter Assembly Bill (A.B.) 1893, authored by Assemblymember Buffy Wicks (D–Berkeley) and supported by California Attorney General Rob Bonta, which aims to make the builder’s remedy process more predictable and functional for developers and a little less scary and offensive for cities.

“The message to local jurisdictions is clear—the days of shirking your responsibility to your neighbors are over,” said Wicks in an April press release, when her bill was first introduced.

For developers, Wicks’ bill attempts to clarify the kinds of standards local governments can apply to builder’s remedy projects, streamline project approvals, and lessen project costs. For cities, Wicks’ bill would impose density caps on builder’s remedy projects and limit the areas where they could be built.

Given the difficulty that developers have had in getting builder’s remedy projects approved, the bill would seem to offer a win-win compromise.

Uncertain Improvements

But many YIMBY housing advocates are skeptical of the bargain the bill tries to strike: its process improvements are minimal and its density caps will undermine many builder’s remedy projects.

“When we look at the uncertainty that they’re trying to take away, it’s like 5 percent of the uncertainty,” says Sonja Trauss, the executive director of YIMBY Law. Meanwhile, “there are whole [categories] of builder’s remedy projects that are possible now that would become just off the table.”

The current builder’s remedy law says that local governments can’t disapprove projects for being inconsistent with local zoning, but they can require they abide by development standards consistent with meeting state housing goals, without defining what those development standards are.

A.B. 1893 attempts to clear this up by saying that cities can only apply “objective development standards” that don’t make a project physically impossible and don’t add to a project’s “actual costs.”

Trauss argues that this will do little to prevent builder’s remedy projects from ending up in court. A city eager to prevent a builder’s remedy project could impose expensive or impractical development standards and argue they don’t increase costs. A developer will disagree and sue over standards. At the end of the day, projects still end up in court.

Two Steps Back

Meanwhile, the bill would impose density caps on projects of between two to three times the base density allowed by existing zoning. Builder’s remedy projects could also only be built on land currently zoned for housing, retail, office, or parking. Current law has no such restrictions.

Some builders’ groups complain that these density caps would make many builder’s remedy projects financially infeasible.

“Builder’s remedy only applies when a jurisdiction’s housing element doesn’t comply with state law and if it does not comply with state law, chances are it has very low base density,” says Andrew Malick of the Council of Infill Builders.

Being able to build at three times a city’s existing duplex densities, he says as a way of an example, isn’t that much of enticement.

These density caps could also discourage cities from more broadly reforming their zoning codes.

Builder’s remedy projects are intended to work as a stick: If a city doesn’t broadly reform its zoning code to be more development-friendly, it runs the risk that it will have no ability to say no to residential mega-projects totaling thousands of units.

But if builder’s remedy projects are capped at lower densities, there’s less of an incentive to adopt a compliant housing element or risk a builder’s remedy project.

Much Ado About Affordability

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