California’s most controversial housing law, the ‘builders remedy,’ could get a makeover

For the last two years the “builder’s remedy” has been the unruly teenager of California housing laws.

Running roughshod over zoning regulations while sowing angst among local elected officials, the law lets developers build as much as they like, wherever they like, in cities and counties that have blown past deadlines to get their housing development blueprints certified by state regulators.

Also see: Some California cities can’t stop apartment projects as developers use ‘builder’s remedy’

Despite its use as a hardball negotiating tactic by aggressive developers, no project has broken ground, much less finished, as a result of the builder’s remedy. That’s partially because relatively few developers are willing to make use of the confusingly-worded law for lack of legal certainty.

Now, some of California’s most powerful Democratic lawmakers are pushing legislation that would clear up, but also rein in, the state’s most controversial housing statute. Nearly a year and a half since a developer first used the law to propose a zoning-code-blowing project, 2024 may be the year that the builder’s remedy grows up.

See the list: Developers file 26 Southern California builder’s remedy projects

“The ‘builder’s remedy’ has sort of lived in the Twitterverse, but actually making it a clear law, so that everyone is following the same rules of engagement and we know what the rules are…(that) is really what we’re aiming to do here,” said Assemblymember Buffy Wicks, a Berkeley Democrat, who chairs the Assembly appropriations committee and who authored AB 1893, which she said would “modernize” the law.

The proposed overhaul, outlined in a newly amended draft of the bill published Tuesday, April 2, includes new perks for developers, textual edits to clear up how the law would apply and a new “streamlining” provision that would let developers bypass environmental review and public hearing requirements so long as they pay their workers union-level wages and meet basic environmental requirements.

But the bill would also put a cap on how big builder’s remedy projects can be, while prohibiting its use in industrial zoned areas. That’s a break from current law, in which the sky — and the California Building Code — is the limit.

“We tried to land this bill in a place where it is a stick — it’s holding our cities accountable — but it’s not overreaching in its scope,” said Wicks.

Wicks’ bill is backed by Attorney General Rob Bonta, who has ramped up the state Department of Justice’s enforcement of housing production law since coming into office in 2021.

Also see: Possible ‘zoning holiday’ shakes up housing across California cities

“It has been over 30 years since the builder’s remedy was enacted and it’s remained in effect, largely unchanged, since then,” Bonta said in a statement. The bill is meant to provide clarity to “local governments, planners, developers, and courts,” he added, while also ensuring that housing actually gets built in cities and counties that don’t have certified housing elements, rather than getting stuck in legal limbo.

This is one of at least two bills aimed at tying up the builder’s remedy’s perceived loose ends.

AB 1886 by San Diego Assemblymember David Alvarez, a Democrat, would specify that jurisdictions without state certified housing plans would be subject to the builder’s remedy until those plans are passed by local officials and signed off on by the California Housing and Community Development department. That’s a response to cities that have argued that the state’s stamp of approval isn’t necessary.

Does the builder’s remedy need fixing?

The builder’s remedy has been on the books for more than three decades, but was only recently given new life by pro-housing legal scholars and state housing regulators.

Related: Developers propose 576 homes in Orange, some at the mall, others by hospital

As cities and counties have scrambled to plan for their share of the 2.5 million new homes that Gov. Gavin Newsom wants built across California by the end of the decade, the builder’s remedy — which spells a total loss of local control over land use — has been among the most menacing possible consequences of non-compliance.

It’s also been a reliable path to litigation.

Though the state doesn’t gather data on builder’s remedy projects, the pro-housing legal advocacy group YIMBY Law has identified 93 projects with roughly 17,000 potential units spread across 40 mostly affluent California cities. Jurisdictions have refused to process nearly half  of these applications, arguing that the law doesn’t actually apply, that it’s been misinterpreted or that the law itself is unconstitutional. Eight of the projects are the subject of current lawsuits. Few, if any, builder’s remedy projects have actually resulted in new housing — yet.

“The builders remedy is already a very successful program at motivating cities to get in compliance with the housing element law and in generating applications for housing that would otherwise not be possible in the highest income, highest opportunity places in California,” said Sonja Trauss, YIMBY Law’s founder. The group has not taken a position on Wicks’ bill.

Though all builder’s remedy projects remain on paper, the law has taken on an outsized significance in the politics of California housing over the last 15 months.

For “Yes In My Backyard” activists who blame development-averse local governments for the state’s housing shortage, the builder’s remedy has been celebrated as the policy equivalent of the “F—- Around and Find Out” meme.

For opponents, the builder’s remedy is the most extreme logical conclusion of the state’s recent push to build more housing.

Jen Wolosin is a Menlo Park city council member whose district includes the former headquarters of Sunset Magazine, now the site of a proposed builder’s remedy project with three residential towers and 805 housing units. The tallest would reach 421 feet. Nothing is moving forward just yet. The builder’s remedy application simply holds the project’s place in the permitting queue. Even so, Wolosin, who was endorsed in her 2020 election by Peninsula for Everyone, a local YIMBY group, called the proposal “jaw dropping” and “outrageous” in its scale relative to the surrounding low-lying neighborhood.

“I don’t like seeing cities flaunt state law and exacerbate the housing crisis,” she said. “That offends me.”

More on housing: Most cities still falling behind affordable housing mandate, state numbers show

But, she added, in lacking all “guardrails,” the builder’s remedy “can turn off people who would otherwise want to help solve the housing crisis.”

A sizable chunk of California municipalities are still legally vulnerable to the “remedy.” At last count, nearly 40% of cities and counties have failed to have their “housing elements” certified by the state.

Legal gray areas hold back widespread adoption

Wicks’ bill would add some of those guardrails.

The bill would cap projects at twice the current zoned density. That doesn’t include whatever add-ons are allowed under the state’s density bonus law, which gives developers added height and density in exchange for building affordable units. The bill would also allow cities to impose “objective” standards of development, including architectural style requirements, if they already apply to other dense multifamily areas and aren’t prohibitively expensive to abide by.

Also on housing: Southern California housing plans contain ‘fake sites,’ lack analysis, critics say

Putting restrictions on the builder’s remedy may seem an ideological 180 for Wicks and Bonta, both of whom have allied themselves with YIMBY activists. Even so, the bill has received outright support or optimistic neutrality from many of the state’s pro-housing organizations. Leaders of California Community Builders and Habitat for Humanity California are attending a press conference in Sacramento today where Bonta and Wicks will unveil the latest version of the bill.

“Part of why the YIMBY movement emerged was to have a clear process in place to have homes actually being built and if you’re going to have to end up in court all the time, that’s not really ideal,” said Matthew Lewis, a spokesperson for the state advocacy group, California YIMBY.

The group does not yet support the bill, but Lewis said it agrees with Wicks’ general intent. “The builder’s remedy is fantastic, we love it, it’s one of the most popular things among YIMBYs. But with the big asterisk — not if a city decides to sue you all the time.”

Supporters of the legislation say it will resolve two problems that are currently slowing the law down.

The first is legal. As written, the builder’s remedy includes seemingly self-contradictory provisions that seem to simultaneously allow developers an unlimited amount of density while also empowering local governments to apply their own standards. Both of those things can’t be true at the same time.

“This is just a crazy-making provision of the law,” said Chris Elmendorf, a UC Davis law professor who has done more than anyone to revitalize and popularize the long-forgotten statute.

Setting explicit numeric limits on what is allowed could make it more difficult for opponents to argue that a builder’s remedy project isn’t consistent with the law.

Converting the builder’s remed from a supersized bargaining chip in an open-ended negotiation into a policy that “anyone with a calculator can figure out” would likely encourage more traditional developers to make use of it, said Dave Rand, a land-use attorney who represents many builder’s remedy projects.

In a perk for developers, the bill would also reduce the number of affordable units that builder’s remedy projects are required to provide. Currently developers have to set aside at least 20% of the units for lower income renters or buyers. The bill would cut that number to 10% while exempting projects of 10 units or fewer from any affordability requirement.

A credible housing threat 

Keeping developers from proposing supersized “completely preposterous” developments could also help limit the political backlash to the law, said Louis Mirante, a lobbyist with the Bay Area Council, which regularly backs legislation to speed up housing construction. “Legislators are worried about maintaining the credibility of housing laws to their housing skeptical colleagues.”

The proposal is likely to face plenty of skepticism regardless. The bill is scheduled to go before the Assembly’s Housing and Community Development committee on April 17.

As negotiations continue over future amendments continue, pro-development lawmakers and lobbyists will need to come to a shared conceptual understanding of what the builder’s remedy is actually for, Elmendorf said.

For cities that failed to get their housing plans enacted on time, the builder’s remedy has been seen as a “punishment,” he said.

This new bill could represent a different way of thinking about the law, one that doesn’t unleash unmitigated chaos on a city’s planning department, Elmendorf said, but kicks in “as a default statewide zoning code that applies when cities haven’t come up with a good enough alternative on their own.”

Source: Orange County Register