Blogpost

Navigating the Impact of SB 423 on California Municipalities

A Comprehensive Guide

7.4 minute read

August 22, 2024

California's SB 423, a transformative piece of housing legislation, promises to significantly alter the landscape of housing development across the state. As municipalities grapple with the implications of this new law, it is crucial to understand the new mandates for jurisdictions and the implications on local governmental control. Here, we dissect SB 423, its requirements, and how Harris' Community Development + Housing services can support municipalities in navigating these changes.

Understanding SB 423

SB 423 extends the effective time period of SB 35, which mandates a ministerial approval process (eliminating CEQA, discretionary reviews and public hearings for qualifying housing developments) for housing projects that include a high percentage of affordable units in those jurisdictions that are not meeting the Regional Housing Needs Allocation (RHNA). This legislation mandates a ministerial approval process, eliminating discretionary reviews and public hearings for qualifying housing projects. Key changes to SB 35 include:

Extended Duration

Until January 1, 2036 (previously to January 1, 2026).

Expanded Applicability

Jurisdictions not meeting RHNA OR no compliant housing element (regardless of RHNA progress). Previously, only jurisdictions not meeting RHNA.
Projects in coastal zones (in specified urban coastal locations) and in certain high fire hazard areas. Both areas were previously exempt.

Modified Skilled Labor Requirements

Only for projects above 85 feet in height and/or 50 or more units.

Affordability Requirements (Rental Projects)

>10% Very Low Income units. Previously, >10% at Low Income.
If inclusionary housing at incomes >SB 35, SB 35 units meet local requirement.

Objective Design Standards

Planning director (or equivalent) must make objective design standards compliance determination.
Prohibits requiring compliance with any other standards.
No planning commission public oversight requirement other than design review.

Implications for Municipalities

Municipalities must adapt to SB 423's requirements swiftly to avoid penalties and leverage the opportunities it presents for increasing housing supply. The following impacts are anticipated:

Objective Design Standards Needed

In order to satisfy the amended legal requirements of a compliance determination by a jurisdiction’s planning director (or equivalent) on consistency with objective design standards.

Administrative Changes

Cities will need to adjust their administrative processes to align with the ministerial approval requirements, ensuring that qualifying projects are approved within the mandated timeframes.

Resource Allocation

With the potential increase in housing project applications, municipalities may need to allocate additional resources to planning and community development departments to handle the increased workload efficiently.

Strategies for Adapting

To ensure compliance and take full advantage of SB 423's provisions, municipalities should consider the following strategies:

Adopt Objective Design Standards

Planning managers/directors will need clear objective design standards in order to make compliance determinations on projects. Harris can assist clients with preparing straightforward and defensible objective design standards.

Streamline Internal Processes

Establish Clear Guidelines: Develop clear internal guidelines and checklists for staff to assess project eligibility under SB 423, ensuring a consistent and efficient review process.
Leverage Technology: Implement digital tools and software to manage application submissions, track progress, and facilitate communication between departments. This can significantly reduce processing times and improve transparency.

Enhance Staff Capacity and Training

Staff Augmentation: Temporarily increase staffing levels with qualified professionals to manage the anticipated surge in housing project applications. Harris’ staff augmentation services can provide the necessary support.
Ongoing Training: Regularly train staff on the specifics of SB 423 and other relevant legislation to ensure they are well-versed in the new requirements and can apply them accurately and efficiently.

Engage with Developers Early and Often

Pre-Application Meetings: Conduct pre-application meetings with developers to clarify SB 423 requirements and address potential issues early in the process. This can help streamline the approval process and avoid delays.
Guidance Materials: Provide developers with detailed guidance materials, including FAQs and best practices, to help them prepare compliant applications.

Harris' Role in Supporting Municipalities

At Harris, our Community Development and Planning services focus on inclusive and sustainable development, ensuring that new housing projects contribute positively to the community's fabric. Our expertise in zoning, development standards, development fee implications and fiscal impacts of new state laws ensures that projects meet both community needs and regulatory requirements, promoting equitable growth and resilience.

Additionally, Harris offers Technical and Administrative Support through our Community Development and Affordable Housing services. Our skilled professionals support municipal planning departments by managing the increased workload resulting from SB 423 and ensuring that all housing initiatives align with local and state regulations. We provide strategic planning and implementation support to enhance housing supply and community development initiatives, helping municipalities navigate the complexities of housing policies and projects.

Conclusion

SB 423 represents the furtherance of limiting local governmental discretionary review related to housing projects in California's response to the housing crisis. There have been hundreds of new state housing laws enacted in past 7 years and navigating these requirements is complicated and time consuming for jurisdictions.

Harris is committed to supporting cities and counties with navigating and implementing processes for legal compliance while maximizing local control. For more information on how Harris can assist your municipality in implementing SB 423, please contact us.