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Desk Item. Builder's Remedy Study Session with attachment Reviewed by: Town Manager, Assistant Town Manager, and Community Development Director 110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832 www.losgatosca.gov TOWN OF LOS GATOS COUNCIL AGENDA REPORT MEETING DATE: 09/03/2024 ITEM NO: 1 DESK ITEM DATE: September 3, 2024 TO: Mayor and Town Council FROM: Gabrielle Whelan, Town Attorney SUBJECT: Conduct a Study Session to Receive Information on and Discuss Senate Bill 330, Builder’s Remedy, Density Bonus Law, Existing Litigation Outcomes, Proposed State Laws, and the Town Planning Application Review Process REMARKS: Attachment 6 contains staff’s presentation. Attachments Previously Received with the Staff Report: 1. Builder’s Remedy Statute 2. SB 330 Preliminary Application Statute 3. Density Bonus Statute 4. Workflow Diagram of Town’s Planning Application Review Process Attachment Received with the Addendum: 5. Public Comments Received After the Agenda was Posted and Before 11:00 a.m. on Friday, August 30, 2024. Attachment Received with this Desk Item: 6. Presentation This Page Intentionally Left Blank California’s Housing Laws Barbara E. Kautz Goldfarb & Lipman LLP Town of Los Gatos Town Council Study Session September 3, 2024 ATTACHMENT 6 Presentation Overview •Key State Laws •The Builder’s Remedy •Preliminary Applications (SB 330) •Density Bonus Law •Litigation to Date Regarding the Builder’s Remedy •Proposed State Laws (AB 1886 and AB 1893) 2 The Builder’s Remedy 3 Key Provisions Applies to “affordable” projects with: •20% of the total units affordable to lower-income households, or •100% of the units affordable to moderate-income households •AB 1893 reduces affordability to 7 – 13% 4 The Builder’s Remedy Provision Additional finding to deny “affordable” projects: •Town meeting RHNA numbers; •Specific adverse impact to public health and safety; •Deny to comply with state or federal law; •Proposed on agricultural land or water/sewer inadequate, OR •Inconsistent with Zoning Ordinance & GP land use designation; BUT must have a housing element in substantial conformance with state law, and not on a site designated in housing element for lower or moderate income housing. 5 Why Now? •Enacted in 1982 as part of Housing Accountability Act; but no published cases •Many more cities not approved by HCD in sixth cycle; much harder to be compliant •Applies when Housing Element is not substantially compliant with case law •Publicized by UC Davis law professor; used in Santa Monica; extensively publicized 6 The Effect of Preliminary Applications 7 Preliminary Applications (“SB 330 Applications”) “Preliminary application” freezes development standards as of date all required info was submitted •But project must meet these timelines: •Project application must be filed within 180 days •Applicant must complete application within 90 days of receiving incomplete letter (HCD: applicant may continue to resubmit) •Can change project by up to 20% of square footage or number of units or invoking density bonus and still rely on initial preliminary application •BUT: Conditions and ordinances may be applied to mitigate environmental impacts •Can be submitted for ANY housing project. 8 Other Key Processing Provisions •Formal project application subject to Permit Streamlining Act •Must review for completeness within 30 days of each submittal, or “deemed complete” •Once complete, staff must notify applicant in short time (30 or 60 days) if there are any “inconsistencies” – or “deemed consistent” with all Town standards •If “deemed consistent,” can probably not be denied for inconsistency 9 CEQA If project requires discretionary approval, CEQA still applies •Many exemptions require general plan conformance •Mitigation measures can be imposed 10 Density Bonuses 11 Density Bonus Law •Eligible project: 5% to 100% affordable housing •Eligible projects entitled to receive: •A density bonus [20 – 100%, or unlimited]; •1 – 5 “incentives / concessions” [reduce costs] •Unlimited waivers of development standards •Reduced parking requirements. •Density Bonus project = consistent with Town standards 12 Density Bonus Law and Builder’s Remedy •Builder’s Remedy project with 20% affordable housing is eligible for density bonuses •Some projects submitted as Builder’s Remedy could qualify as density bonus projects unless: •Density more than 2X maximum density •Density less than minimum density •Proposed in areas where residences are prohibited 13 Builder’s Remedy Litigation 14 General Comments •NO appellate published decisions •All involve city as defendant •AG has intervened •HCD frequently submits declarations against cities 15 Few City Successes •Trial courts have agreed with HCD on housing element adequacy •Have found requirement to apply for rezoning or GP amendment to be an effective denial •Agree that preliminary application freezes the status of the housing element •Split on whether HCD approval is needed for adequacy 16 HCD and Attorney General Enforcement •HCD Housing Accountability Unit with at least 25 staff •Broader and broader authority •Letters of Technical Advice •Notices of Violation •Referral to Attorney General •Attorney General has 12-person strike force that acts independently 17 Active Third-Party Litigants •Have sued at least 10 SoCal cities and 12 Bay Area cities (Californians for Homeownership, YIMBY, California Housing Defense Fund) on housing elements •Often join in, or are plaintiffs, in litigation related to denials of housing development 18 Housing Cases in General •Courts: •Generally very pro-housing •Uphold housing approvals •Overturn denials •Town risks: •Significant attorneys fees exposure •High defense costs •Possible damages 19 Builder’s Remedy Legislation AB 1886 and AB 1893 20 Key Provisions •Base density in Los Gatos is greatest of: •45 du/acre •3x maximum density (90 du/acre if max density is 30 du/A) •Density consistent with housing element •Plus 35 du/acre in high opportunity areas •At least 80 units/acre throughout Los Gatos •May be doubled under density bonus law 21 Key Provisions •Reduces required affordability to 7%, 10%, or 13% depending on affordability; based only on base density •City cannot apply its inclusionary ordinance unless can show that this will not make project infeasible •Provides 2 additional density bonus concessions 22 Key Provisions •Objective standards are those applicable to district that allows density and type of building; if none, developer may select standards •BR projects are deemed to comply with Town standards •Developer may use SB 35 if complies with selected standards (ministerial approval; no CEQA) •Existing BR projects may elect to use new provisions even if change by more than 20% 23 Thank You! 24