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Today the CA legislature revealed transformative changes to the housing development approval process that will go into effect as soon as Monday.
★With these changes, most infill housing projects will be exempt from CEQA.
★If a project is by-right, it generally must be approved within 90 days.
★If a project is discretionary and meets the new CEQA exemption criteria, it generally must be approved (or denied) in 4 - 6 months
To qualify for the new CEQA exemption, a project needs to be compliant with zoning (although it can use density bonuses and waivers) and meet certain environmental and site standards.
If a project has more than 25 units, it has to comply with wage standards, but these are pretty reasonable. In LA, all construction workers need to be making at least $24/hour, and at least 60% of construction workers need to be making at least $36/hour.
However, if a project is over 85’ in height or 100% LI affordable, it needs to pay prevailing wages. (wage requirements are also stricter in San Francisco)
Finally, tribal monitoring of excavation work is required, and projects are conditional on either a clean Phase I or completed mitigations of any environmental hazards found.
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Perhaps a bigger deal, however, is another piece of the budget bill that has gone under the radar.
California has a law that has been around since 1977 called the Permit Streamlining Act. Among other things, this law sets deadlines by which cities must approve or deny development entitlements. Under the PSA, technically, all development projects are supposed to be approved in between two to six months.
In theory, under what has been part of this law since 1999, development projects in California are supposed to be automatically approved if a city doesn’t vote to approve or deny it within six months.
However, the Permit Streamlining Act has a few fatal flaws that have made it completely unenforceable. First, it only applies to discretionary projects. So cities can take as long as they want to approve by-right projects. Second, the timelines don’t kick in until a CEQA determination is made. So cities have been able to get around the law by holding off on making a CEQA determination until the same time as the project approval.
The budget bill fixes these flaws for infill, zoning-compliant projects by 1) applying the PSA to by-right developments and 2) aligning the new CEQA exemption with the PSA so that it kicks in once a tribal consultation is complete. It also cleans up some outdated requirements to make the PSA more straight-forward to use.
The attached graphic shows what a typical entitlement timeline should look like for a project that qualifies for the new CEQA exemption.
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Because these changes were implemented as part of the budget bill, they will go into effect when signed by the governor, which may be as soon as Friday.
For developers and cities, I’m expecting utter chaos at first. Many cities will have no idea how to comply with the law, as their existing entitlement processes are completely incompatible with the timelines required under the PSA. Cities will likely need to rewrite their development process ordinances to fix this.
I’ll end this with a quick self-serving pitch: if you are a city or a developer or anyone else who needs help understanding the new requirements under this law, I offer consulting services to help :)
