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What to know about California’s ‘builders remedy’ — and how it could explode housing development in S.F
A state law may force San Francisco and other cities to allow developers to build housing with few local controls.Yalonda M. James, Staff / The Chronicle
Cities in California have long insisted that they take the state’s housing crisis seriously and that they know best where new housing should go. This year, they actually have to prove it. Every eight years, the state makes cities plan for growth through the Regional Housing Needs Allocation process, which sets baselines for housing production to accommodate factors such as births, immigration and jobs. Until recently, those plans were rubber-stamped by the state.
This cycle is different.
The California Department of Housing and Community Development is now enforcing the rules, and state-mandated housing goals are much higher, especially in wealthy cities; San Francisco’s increased from 29,000 to 82,069.
Nonetheless, many cities that haven’t built much new housing for decades still seem to think they can blow off these state requirements. The deadline for Southern California cities to submit what’s called a housing element plan was 15 months before the Bay Area’s and the results have not been pretty: Plans from 125 cities were not certified and fell "out of compliance" with state law. Noncomplying cities are ineligible for state grants for affordable housing and transit, the kind that San Francisco just requested for a 160-unit, 100% affordable development at 730 Stanyan St.
Some cities, such as Beverly Hills, don’t especially want affordable housing and don’t mind losing funds. But a second penalty, a 1990 amendment to the Housing Accountability Act informally called the "builder’s remedy" is getting more attention.
There’s a lot of confusion about the builder’s remedy right now, including in San Francisco. Here’s how it works:
The builder’s remedy says that noncompliant cities must allow housing at any density and any height, anywhere in the city, as long as at least 20% of the new homes are affordable. In effect, developers could get streamlined permits to build Central Park’s glass skyline on Fulton Street in San Francisco or "Star Trek’s" Starfleet headquarters in Marin County under these rules. So long as applications are submitted while cities are not in compliance, local officials can’t use subjective criteria ("too tall," "not in character") to deny the applications.
All Bay Area cities have until Jan. 31, 2023, to certify a compliant housing element. Until last week, many cities, including San Francisco, incorrectly assumed they had a "grace period" of a further 120 days before penalties started.
These cities will likely be unprepared to submit a compliant plan before Jan. 31. If that happens, builder’s remedy applications would open on Feb. 1.
The builder’s remedy has never been tested in court, so there’s still plenty of uncertainty. Cities will almost certainly find ways to run developers through bureaucratic and legal gauntlets before they are allowed to build.
Environmental review is one such way. Normally, cities perform one environmental review for a citywide or neighborhood-wide zoning plan. So long as project applications comply with those plans, they can piggyback on the parent environmental report. But since builder’s remedy applications often disregard local zoning, cities can ask developers to complete a full environmental impact report for a project. Once that’s done, cities can then claim that any impact — noise, shadows, pollution — in the report was insufficiently studied and demand costly redos. Community groups can also take builders to court.
Cities can further pile on costs for builder’s remedy projects by requiring infrastructure upgrades like new sewer connections. Local governments can also potentially exact revenge by making other applications from developers more unpleasant — for instance, by subjecting them to additional scrutiny or longer processing times. This threat will likely dissuade many developers from pursuing a builder’s remedy project.
Alternatively, cities could outright deny a project and take their chances on a lawsuit. In court, anything can happen.
Despite all these risks, however, some builders are going for it.
Developers in Santa Monica have applied to build 14 different projects that ignore local density rules after the city failed to submit a compliant housing element. These applications total over 4,000 new homes, 800 of which are for lower-income households.
If Southern California is any indication, expect to see projects like these in the Bay Area where cities have not taken the January deadline seriously.
Consider Lafayette, which evaluated plans to rezone its downtown for 70-115 homes per acre 18 months ago. If it had followed through, this would have been a compliant plan. Instead, the City Council did not rezone anything. The state sent Lafayette a skeptical letter two weeks ago, asking for evidence that developers will build enough at the current zoned density to meet the city’s goals. Lafayette now has 100 days to pass a compliant plan, including possible rezoning, or risk developers proposing 200 homes per acre anywhere they want.
Now that we have seen developers try to use the builder’s remedy in noncompliant cities, the stakes for Bay Area cities in January are high. The choice facing them is clear: Make realistic plans to add housing — and do it fast — or let developers make them for you.
Kevin Burke is a volunteer with the California Renters Legal Advocacy and Education Fund and serves on the board of East Bay for Everyone.
Correction: An earlier version of this article misstated the number of Southern California cities that did not submit housing plans in compliance with state law.
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