Get key information with this Real Estate Legislation Update October 2023. California has been busy recently with the passing and signing of multiple bills to address various areas of the local California housing industry. In October, California Governor Gavin Newsom signed 56 bills covering areas such as new construction, tenant protections, and housing affordability. The bills also include measures to allow colleges and religious organizations to build housing on portions of their property. The legislation also seeks to ensure local governments are meeting housing planning goals. See below for a complete list and short description of each of the bills.
Before reading, also see this YouTube video from Yahoo Finance summarizing the bills.
AB 12 – Current law reads that a landlord may not demand a security deposit more than 2 months rent for unfurnished property or 3 months for furnished. The changes that go into effect on 7/1/2024 state that only 1 month can be required or demanded unless the landlord is a natural person (including a natural person who is a beneficiary of a family trust) or an LLC that has all natural persons as members and owns no more than two residential properties with no more than four rentable units combined. In that case, the security deposit can be 2 months’ rent.
AB 84 – Under current law, a partial tax exemption (welfare exemption) is provided for property used exclusively for religious, hospital, scientific, or charitable purposes and that is owned or operated by certain types of nonprofit entities, if certain qualifying criteria are met and the property is used for rental housing and related facilities. The exemption amount is related to the percentage of units serving lower income households. The law now provides for a partial exemption if the property is acquired, rehabilitated, developed, or operated, or any combination of these factors, with financing from qualified 501(c)(3) bonds.
AB 281 – now requires that special districts provide notifications with time limits for post entitlement phase permit next steps when applications are received by a housing development project. The notification is also required for an application for service.
AB 318 – The existing law is changed to allow more violations of the Mobilehome Residency Law to be referred to the Division of Codes and Standards when complaints are received by homeowners. The law also removes the requirement that all parties negotiate to resolve in good faith within 25 days.
AB 319 – This bill extends certain sections of the Mobilehome Parks Act through January 1, 2025. This includes provisions that allow enforcement by the Department of Housing and Community Development or a city, county, or city and county with approval of the department and fees that are used for inspections to support compliance. The bill also establishes policies for inspectors to supply conflicts of economic interests statements and to address inspector complaints.
AB 323 – This bill turns existing law into a state mandated program for cities and counties to ensure that when developers receive certain bonuses for units sold to or occupied by moderate, lower, or very low income households, those units are sold to either persons or families that meet the income requirements, or qualified non-profit housing organizations or corporations. Violators would be subject to civil penalties.
AB 346 – This bill modifies existing law to increase the ability for non-federally subsidized housing to receive low-income tax credits.
AB 434 – This bill modifies existing law to increase the types of violations that the Department of Housing and Community Development can notify a city, county, or city and county, and the Attorney General about if there is a violation of state law.
AB 480 – This bill has several changes to how surplus land is handled by local agencies and entities looking to purchase the surplus land.
Check out this short video about the California Surplus Land Unit.
AB 516 – This bill adds to existing law, the Mitigation Fee Act. It expands the details provided in reporting of public improvements and expands what is covered when someone requests an audit of fees issued by a local agency for public improvements to see if those fees are reasonable.
AB 519 – This bill creates an Affordability Housing Finance Workgroup composed of existing state agencies involved with affordable housing needs. The group will be charted to provide recommendations for a consolidated application process for multifamily affordable rental housing developers so that the application can be used for multiple types of requests.
AB 529 – This bill would make it easier to facility the conversion or redevelopment of commercial properties into housing, including the adoption of adaptive reuse.
AB 548 – Existing law, the State Housing Law, establishes construction and occupancy standards for building for human habitation. The law also authorizes an officer, employee, or agent of an enforcement agency to perform inspections to enforce the law. This new bill gives a deadline of January 1st, 2025 for enforcement agencies to develop policies and procedures for inspections of buildings with multiple units, notification of the owner, and reinspections to correct any violations.
AB 572 – This bill amends the Davis-Sterling Common Interest Development Act to cap HOA assessments of a deed-restricted affordable housing unit to not be more than 5% plus the percentage change in the cost of living, and not to exceed 10% greater than the previous fiscal year’s assessment.
AB 671 – This bill adds language specifying that accessory dwelling units can be transferred to lower-income households when the development projects are supported by funds from the CalHome Program.
AB 812 – This bill authorizes a city or county to require that up to 10% of the units of a residential housing development be affordable housing reserved for artists, and specifies that units reserved are located within or within one-half mile from a state-designated cultural district or within a locally designated cultural district as a condition of approval.
AB 821 – This bill would require local agencies to amend a zoning ordinance within 180 days or accept an application for housing development projects as-is if the zoning ordinance does not comply with the long-term general plan for physical development adopted by the county or city. The bill would further authorize a resident or property owner to bring an action or proceeding to superior court if the local agency does not comply.
AB 894 – This bill would require local agencies to allow entities with underutilized parking to share that parking with the public, local agencies, or other entities.
AB 911 – Existing law allows for the modification of an existing unlawfully restrictive covenant that is restricting property that is part of an affordable housing development.
AB 976 – This bill changes current law (65852.2 of the Government Code) by amending existing language to make it more consistent with other portions of the law so that are local agencies are authorized to require an accessory dwelling unit to be used for rentals of terms 30 days or longer instead of “longer than 30 days”. The bill also will now prohibit a local agency from imposing an owner-occupancy requirement on any accessory dwelling unit.
AB 1033 – This bill adds to existing law so that local agencies are now additionally authorized to adopt local ordinances that allow the separate conveyance of a primary dwelling unit and accessory dwelling unit or units as condominiums.
AB 1114 – This bill makes changes to the current post entitlement phase permit process to also include all building permits and other permits issued under the California Building Standards Code or any applicable local building code for the construction, demolition, or alteration of buildings, whether discretionary or nondiscretionary. The bill further streamlines the process by prohibiting local agencies from subjecting the post entitle phase permit to appeals or additional hearing requirements once the permit is found to be compliant.
AB 1218 – The Housing Crisis Act of 2019 prohibited an affected city or an affected county from approving a housing development project that would have required the demolition of one or more residential dwelling units, unless the project created at least as many residential dwelling units as what was proposed to be demolished. This bill will, among other things, now require the replacement of all existing protected units and protected units demolished on or after January 1, 2020.
See this short webinar on the Housing Crisis Act of 2019 for a summary of the legislation.
AB 1287 – This bill clarifies the definition of the “maximum allowable residential density” that a developer can surpass (density bonus) when building a housing development if the developer agrees to construct specified percentages of units for lower income households or very low-income households and meets other requirements. The bill also provides for additional density bonuses under certain conditions.
AB 1308 – This bill prohibits public agencies from increasing the minimum parking requirements for single-family residences as a condition of approval to remodel, renovate, or add to a single-family residence with exceptions.
AB 1317 – This bill requires the owner of a qualified residential property to unbundle the price of parking from rent. Qualified residential properties are defined as any dwelling or unit that is intended for human habitation that (1) is issued a certificate of occupancy on or after January 1, 2025, (2) consists of 16 or more residential units, and (3) is located within the County of Alameda, Fresno, Los Angeles, Riverside, Sacramento, San Bernardino, San Joaquin, Santa Clara, Shasta, or Ventura.
AB 1319 – This bill expands the number of representatives and the knowledge and expertise areas of the advisory committee formed by the Bay Area Housing Finance Authority and the Association of Bay Area Governments to also include the area of construction workforce. It also authorizes the Authority to expand funding to nonprofit corporations to finance affordable housing.
AB 1332 – Preapproval of accessory dwelling unit plans will now be required to be performed by local agencies according to planning and zoning laws. Preapproval plans and applicants will be posted on agency websites and establishes a 30-day turnaround time for approval or denial.
AB 1386 – Existing law (the Veterans Housing and Homeless Prevention Act of 2014) provides housing and supportive programs for veterans at risk of homelessness. This bill increases the housing options for veterans by allowing referrals of designated housing units to additional low- and lower-income veterans if initial extremely low-income veteran tenants cannot be found.
AB 1449 – This bill allows for some exceptions to the California Environmental Quality Act (CEQA) for affordable housing projects if certain requirements are met.
AB 1474 – This bill adds veterans to the list of population groups that will receive housing assistance under the California Statewide Housing Plan.
AB 1485 – This bill allows the Department of Housing and Community Development and the office of the Attorney General to join a suit to address a violation of specified housing laws to include, among others, the Housing Accountability Act, the Density Bonus Law, and the Housing Crisis Act of 2019.
AB 1490 – This bill provides some additional flexibility, but also more controls around affordable housing developments projects that are classified as adaptive reuse in existing developed areas served with public infrastructure.
AB 1508 – This bill includes first-time homebuyers within the polices, goals and objectives that are in the California Statewide Housing Plan.
AB 1528 – This bill makes exempt from taxation property held by a nonprofit public benefit corporation that is controlled by a housing authority.
AB 1620 – This bill allows tenants with permanent disabilities to keep the same rental rate and lease terms when moving to a comparable or smaller unit under certain conditions.
AB 1633 – Under existing law, the Housing Accountability Act prohibits local agencies from disapproving a housing development project without certain written findings are made available. This bill includes the California Environment Quality Act as part of the possible criteria for disapproving a housing development project.
AB 1734 – This bill makes it easier for surplus land to be used towards supportive housing, transitional housing for youth and young adults, or affordable housing through certain exemptions.
AB 1764 – Among many changes made by this bill, one change is that limited equity housing cooperatives can now be deemed as non-profits that can receive financial assistance from the Department of Housing and Community Development to develop or purchase a mobile home park, ownership of which will be transferred to persons and families of low or moderate income.
SB 4 – This bill makes it easier for an independent institution of higher education or religious institution to have a “use by right” housing development project which may provide certain exemptions from conditional use permits, planned unit development permits, or other discretionary local government review or approval and would require that units be available for lower income households.
SB 34 – This bill specifically deals with the County of Orange or any city within the County of Orange and prohibits the disposal (sale) of surplus land if a violation has not been corrected within 60 days as required by existing law.
SB 82 – This bill requires a county assessor to also accept a digital letter of service-connected disability for the disabled veteran’s property tax exemption..
SB 229 – This bill requires that if local agency seeking to dispose of land receives a violation of disposal provisions provided in existing law, the agency must hold a public meeting so that the public can review information about the violation. The agency cannot take further action relating to that land until after the meeting is held.
SB 240 – Existing law requires the Department of General Services to dispose of surplus state real property first to local agencies, and then to non-profit affordable housing sponsors, prior to offering it for sale to private entities or individuals. Today, a local agency or non-profit can be considered a priority buyer if all or a portion of the surplus property will be used for open space, public parks, affordable housing projects, or development of local government-owned facilities. This bill expands the this to include housing for formerly incarcerated individuals.
SB 267 – Existing law, the California Fair Employment and Housing Act (FEHA), prohibits for properties relying on government rent subsidy, the use of a financial or income standard in assessing eligibility for the rental of housing that is not based on the portion of the rent to be paid by the tenant. This bill would prohibit the use of an applicant’s credit history without allowing alternative evidence of the ability to pay.
Here is an overview of the California Fair Housing Laws.
SB 341 – This bill adds additional incentives and support for infill housing development.
SB 423 – This bill makes changes to the streamlined approval process for multifamily housing development to include changes related to equine or equestrian districts, coastal zones, and high fire severity zones. The bill also includes enforcement for development project worker wages.
SB 439 – This bill deals with special motions to strike when civil actions are brought related to the approval or permitting of a priority housing development project.
SB 482 – This bill amends the Health Safety Code related to housing by allowing for capital reserves of the Multifamily Housing Program to be used for supportive housing units. “supportive housing units” means housing with no limit on length of stay, that is occupied by the target population, and that is linked to onsite or offsite services that assist the supportive housing resident in retaining the housing, improving their health status, and maximizing their ability to live and, when possible, work in the community.
SB 520 – This bill ensures that a homeowner can receive the homeowner’s property tax exemption even if they are confined to a hospital or other care facility if they intend to return to the dwelling when they are able to.
SB 593 – This bill provides that the successor agencies to the Redevelopment Agency of the City and County of San Francisco will have authority for bonds issued and other debt to finance the development, construction, repair, renovation, or reconstruction of affordable housing units for persons and families of low-, moderate-, extremely low, and very low-income households.
SB 684 – This bill adds certain requirements and exemptions for housing development projects for the number of units (10 or fewer) and lot size (5 acres) and provides streamlining and consideration without discretionary review or hearing when parcel maps are submitted to local agencies.
SB 713 – This bill makes it easier for developers to receive reductions of development standards when the developers agree to construct certain types of housing under the Density Bonus Law by including development standards adopted by local governments or enacted by local governments’ electorates exercising local initiative or referendum powers.
SB 734 – This bill specifies that being a low-income household tenant in a residential unit of a publicly owned housing project leased with affordable rents does not cause the tenant to be subject to property taxes.
SB 747 – This bill defines “dispose” for the purposes of surplus land to mean the sale or lease of surplus property for a term greater than 15 years including renewal options. The bill also adds more categories of exempt surplus land. Exempt surplus land is not subject to certain existing requirements local agencies are expected to abide by under current law when disposing of surplus land. Among those requirements is the requirement for a local agency to make a declaration at a public meeting that the land is surplus and not necessarily for an agency’s use.
SB 789 – If adopted by the legislature, Assembly Constitutional Amendment 1 (ACA 1) would be submitted to voters with the statewide general election scheduled for November 5, 2024. ACA 1 would concern an additional exception to the 1% limit on the ad valorem tax rate on real property and the ability for local jurisdictions to impose, extend, or increase a sales and use tax on real property.
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