The 2021-2022 California Legislative Session closed on August 31 and was dominated by further efforts to address the state’s continued housing crisis. The flurry of major legislation passed by the Legislature and now on the Governor’s desk for signature focuses on expanding the types of development sites eligible for housing production and streamlining approval of that housing (AB 2011, SB 6, AB 2234), expanding the Density Bonus Law and providing enhanced density incentives (AB 682, AB 1551, AB 2334), and restricting minimum parking requirements (AB 2097). Taken together, these are potentially powerful tools to generate new housing opportunities as cities across California face significant housing production goals and work towards meeting state law deadlines for the ongoing Housing Element updates in the coming months.
This post focuses on the key housing-related bills that are, at the time of this publication, awaiting the Governor’s signature. The Governor has until September 30 to either sign or veto the bills. We will follow up with more in-depth coverage on the legislation ultimately signed by the Governor and insights on the resulting potential impacts on the housing landscape.
Repurposing Commercially Zoned Land for New Residential Development
The two blockbuster bills of 2022 – AB 2011 and SB 6 – both have the potential to result in major changes to the housing development pipeline by allowing new qualifying residential development on eligible commercially zoned sites. Both bills are the result of significant and hard-won efforts among legislators, development and pro-housing advocates, and organized labor. Each bill includes very specific eligibility requirements, applicable development standards, and density calculation metrics. The details are beyond the scope of this analysis, but the highlights are described briefly below. If signed by the Governor, both laws would take effect on July 1, 2023 – not in January 2023, as is the case for most new laws – and would remain in effect for 10 years, sunsetting in 2033 unless extended.
AB 2011 (Wicks) [Streamlined Approval Pathway for Qualifying Affordable or Mixed-Income Developments] – AB 2011 provides a streamlined, ministerial review process that is CEQA-exempt, comparable to the existing SB 35 law (see our previous posts on SB 35 here and here), for qualifying multifamily housing development projects on commercially zoned sites (where office, retail, or parking are principally permitted uses) that include requisite affordable housing units and meet certain wage and labor requirements, including paying prevailing wage. The goal of AB 2011 is to unlock significant affordable and mixed-income housing development potential in existing commercial zones.
The bill creates two primary pathways to qualify for its protections: (i) 100% affordable projects located on a commercially zoned site, or (ii) mixed-income projects located along a “commercial corridor,” meaning a street with a right of way width between 70 and 150 feet. The affordability requirements applicable to mixed-income projects are:
- Rental: (i) 8% very low income and 5% extremely low income, or (ii) 15% low income; and
- For-sale: (i) 30% moderate income, or (ii) 15% low income.
AB 2011 also requires development proponents to meet certain wage and labor standards, including that construction workers be paid at least the general prevailing rate of wages (but not requiring a “skilled and trained workforce” as required under SB 6). For developments of 50 or more housing units, construction contractors must also participate in an apprenticeship program or request dispatch of apprentices from a state-approved apprenticeship program, and make specified health care expenditures for construction craft employees.
AB 2011 imposes a detailed list of specific site exclusions, similar to the existing SB 35 ministerial streamlining site requirements, which must be reviewed on a site-specific basis to determine whether a project would potentially qualify for the bill’s protections.
