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“Upzoning” of Transit-Rich Areas Would Occur Under Proposed Housing Legislation

California State Senator Scott Wiener is continuing the Legislature’s efforts to address the State’s housing crisis with the introduction of a new bill that, while not changing a property’s zoning, would have the practical effect of “upzoning” areas well-served by transit to allow for the development of more housing. This proposed legislation comes on the heels of the enactment of 15 housing bills in the fall of 2017 and demonstrates Sacramento’s recognition that the State’s housing woes are unlikely to be fixed at the local level. 

Now working its way through the Legislature, SB 827 could provide a “transit-rich housing project” with relief from certain local zoning standards, such as height limits and density restrictions.  As always, the “devil is in the details” and the details are evolving as SB 827 moves through the legislative process.

The bill defines a “transit-rich housing project” as a residential development project located within one-half mile of a “major transit stop” or one-quarter mile of a stop on a “high-quality transit corridor.”  In order to qualify as a “transit-rich housing project,” the underlying zoning district must principally or conditionally permit housing.

For a qualifying “transit-rich housing project,” the “bonus” that the bill would grant is an exemption from local development standards (including those set forth in Charters, General Plans, Specific Plans, Zoning Ordinances or other local laws or regulations) regarding the following:

  • maximum controls on residential density;
  • maximum controls on FAR (that are lower than the minimums specified in SB 827);
  • minimum automobile parking requirements;
  • maximum height limits (that are lower than the minimums specified in SB 827); and
  • zoning or design controls that limit additions onto existing structures if the additions comply with the minimum height limits and FAR limits specified in SB 827.

With respect to height limits, if a qualifying project is within a one-quarter mile of a major transit stop or a stop on a high-quality transit corridor the project would be exempt from any height limit that is less than 85 feet (except that if the project in on a street less than 70 feet wide, the project would be exempt from any height limit that is less than 55 feet). pexels-photo-209218-300x199

If a qualifying project is between one-half mile and one-quarter mile of a major transit stop, the project would be exempt from any local height limit less than 55 feet (except if the project is on a street less than 70 feet wide, in which case the maximum height may not be less than 45 feet).  According to Senator Wiener, developers could build below these height limits, and local governments could increase height limits above the minimums set forth in SB 827, but local governments could not impose height limits below those set forth in the bill.

In order to apply for a transit-rich housing project, the developer must satisfy the following requirements:

  • The project is subject to local demolition controls, and any existing rent-controlled dwelling units cannot be demolished as part of the project unless the local government has passed a review process for such demolitions.
  • The project complies with local inclusionary housing requirements.
  • The developer submits a relocation assistance and benefits plan.
  • The project complies with local, objective zoning standards (except for those SB 827 preempts), provided that those standards do not result in a FAR that is less 2.5 for lots subject to a height limit of 45 feet, 3.25 for lots subject to a height limit of 55 feet, and 4.5 for lots subject to a height limit of 85 feet.
  • The project complies with local unit mix requirements, provided that those requirements do not have the effect of requiring more than 40 percent of all units to have two bedrooms or more.

In response to criticism that the originally introduced bill did not adequately address potential displacement of existing residents or affordable housing considerations, Senator Wiener introduced amendments to SB 827 on March 1, 2018, which, among other provisions, include extensive tenant relocation and benefits requirements, including but not limited to providing displaced tenants with a right of first refusal for a comparable unit in the transit-rich housing project and paying displaced persons for moving and related expenses and relocation benefits.

SB 827 states that the developer of a transit-rich housing project may also apply for a density bonus, and that the developer may apply for streamlined, ministerial approval pursuant to SB 35.  (SB 35 is Senator Wiener’s bill from the 2017 legislative session that created a streamlined, ministerial approval process for qualifying residential infill development projects in jurisdictions that failed to produce sufficient housing to satisfy their Regional Housing Needs Assessment (RHNA) requirements.)  SB 827 itself, however, does not include streamlining provisions. Therefore, the developer of a transit-rich housing project would most likely need to undergo a discretionary approval process and review under CEQA (unless the project also qualifies for streamlining under SB 35).

As you would expect, given that the bill would significantly limit cities’ and counties’ ability to control development in their jurisdictions and to enact and enforce development standards, there is opposition from cities and counties, environmental groups, and neighborhood organizations.  For example, Berkeley Mayor Jesse Arreguín has called SB 827 “a declaration of war against our neighborhoods.”  Furthermore, on March 27, 2018, the Los Angeles City Council voted unanimously to oppose SB 827.  Thus, to the extent that the bill moves forward, it will likely be significantly modified.

In any event, SB 827 shows continued interest amount certain State Senators and Assembly members in addressing the State’s housing crisis, and there may be another package of housing bills arriving on the Governor’s desk in 2018.

Cox, Castle & Nicholson LLP will continue to monitor housing-related bills in the Legislature, and will report on housing bill developments that could impact our clients’ businesses.