Governor Approves Bill to Further Allow Housing Development Projects in Commercial Zones
The Governor has signed Assembly Bill 2243, which makes it easier for developers to build housing and constrains local review of housing proposals. AB 2243 amends certain provisions of both Senate Bill 6, also known as the Middle Class Housing Act of 2022, and Assembly Bill 2011, also known as the Affordable Housing and High Road Jobs Act of 2022. These 2022 bills aimed to increase affordable housing stock in California by making it easier for developers to build housing development projects on commercially zoned land. Now, AB 2243 significantly expands the scope of both.
Expansion of SB 6
SB 6 previously facilitated residential development in commercial zones by categorizing certain housing development projects as an “allowable use” in zones where office, retail, or parking are principally permitted uses. As a result, qualifying multifamily and mix-used housing projects proposed in commercial zones no longer require local rezoning. Additionally, SB 6 also provided that if these statutory “allowable uses” met specified criteria, they would also be deemed consistent with a municipality’s objective design, development and subdivision standards under the Housing Accountability Act.
One of SB 6’s criteria for a qualifying housing development project is that the project site must not exceed 20 acres. AB 2243 amends that criterion to provide an exception for regional mall sites. Under AB 2243, if a project site is a regional mall of less than 100 acres, the project will still qualify for special treatment under SB 6. “Regional mall” is defined to include any site that meets all of the following criteria:
- The permitted uses on the site include at least 250,000 square feet of retail use;
- At least two-thirds of the permitted uses on the site are retail uses; and
- At least two of the permitted retail uses on the site are at least 10,000 square feet.
Expansion of AB 2011
AB 2011 previously established a new streamlined, ministerial approval process for two types of multifamily housing development projects on commercially zoned land — (1) 100% affordable housing projects and (2) mixed-income projects located on “commercial corridors” and containing a specified percentage of affordable housing units.
AB 2243 expands AB 2011 eligibility in several key ways, including the following:
- Expanding project eligibility to mixed-income projects located on certain regional mall sites and adopting development standards for such projects;
- Expanding project eligibility to mixed-income projects located in narrower commercial corridors;
- Expanding project eligibility to all AB 2011 projects located within 500 feet of a freeway;
- Imposing more rigorous streamlining requirements for all AB 2011 projects;
- Modifying coastal development permit requirements for all AB 2011 projects; and
- Limiting requirements applicable to projects involving the conversion of existing buildings.
Each of these amendments are discussed in turn.
1. Expansion of Project Eligibility to Mixed-Income Projects on Certain Regional Mall Sites and Adoption of Project Development Standards
Just as AB 2243 expands project eligibility under SB 6 to projects located on regional mall sites of less than 100 acres that meet the criteria specified above, it would likewise expand AB 2011 project eligibility to AB 2011 mixed-income projects located on such sites as well.
Moreover, for purposes of AB 2011, AB 2243 requires that mixed-income projects located on regional mall sites meet all of the following requirements:
- The average size of a block does not exceed 3 acres;
- At least 5% of the site is dedicated to open space; and
- For the portion of the property that fronts a street that is newly created by the project and is not a commercial corridor, a building abuts within 10 feet of the street for at least 60% of the frontage.
2. Expansion of Project Eligibility to Mixed-Income Projects Located in Narrower Commercial Corridors
AB 2011 defined “commercial corridors” to include highways with 70 to 150 feet of right-of-way access, but excluding freeways.
AB 2243 revises the definition of “commercial corridors” to include all streets, inclusive of highways, but still excluding freeways, with 70 to 150 feet of right-of-way access. Moreover, AB 2243 revises the definition of “street” for purposes of AB 2011 to expressly provide that it includes sidewalks.
In turn, these changes allow for more mixed-income projects in narrower commercial corridors to qualify for AB 2011’s streamlined, ministerial approval process.
3. Expansion of Project Eligibility to All AB 2011 Projects Located Within 500 Feet of a Freeway
Under AB 2011, qualifying projects were prohibited from having any housing units located within 500 feet of a freeway.
AB 2243 removes that blanket restriction. Instead, AB 2243 requires that qualifying projects comply with all of the following for housing units on the site:
- The building must have a centralized heating, ventilation, and air-conditioning system;
- The outdoor air intakes for the heating, ventilation, and air-conditioning system must face away from the freeway;
- The building must provide air filtration media for outside and return air that provide a minimum efficiency reporting value of 16;
- The air filtration media must be replaced at the manufacturer’s designated interval; and
- The building must not have any balconies facing the freeway.
4. Imposition of More Rigorous Streamlining Requirements for all AB 2011 Projects
AB 2011 already required local agencies to process AB 2011 project applications within specified timeframes. Specifically, it required local agencies to notify AB 2011 project applicants of any inconsistencies between proposed projects and applicable objective planning standards within 60 or 90 days of the applicant’s submittal of the application to the local agency, depending on whether the project contains up to 150 housing units or greater than 150 housing units, respectively.
AB 2243 imposes additional streamlining requirements. Specifically, AB 2243 additionally requires that a local agency issue a consistency determination within 30 days in the event of a re-submittal of a proposed AB 2011 project to address written feedback provided by an agency to an applicant, regardless of the size of the proposed project. Moreover, AB 2243 requires that local agencies provide an exhaustive list of any conflicting standards within every consistency determination. Lastly, AB 2243 expressly requires that a local agency approve a proposed AB 2011 project within 60 or 90 days of the date that the application is determined to be consistent with objective planning standards, depending on whether the project contains up to 150 housing units or greater than 150 housing units, respectively.
5. Modification of Coastal Development Permit Requirements for All AB 2011 Projects
Previously, AB 2011 incorporated a number of project site restrictions adopted in Senate Bill 35, but did not expressly incorporate Senate Bill 35’s restrictions for projects located in certain areas of the coastal zone, as specifically set forth in Government Code section 65913.4, subdivision (a)(6)(A). Accordingly, uncertainty remained with respect to whether local agencies were required to allow AB 2011 projects located within the coastal zone and, if so, to what extent they could require project compliance with coastal zone requirements, such as coastal development permits.
AB 2243 amends AB 2011 to expressly incorporate SB 35’s coastal zone restrictions, but also to expressly exclude one such restriction applicable to coastal zone developments on parcels not zoned for multifamily housing. Moreover, AB 2243 clarifies that AB 2011 projects in the coastal zone (that are not excluded under the incorporated site restrictions) do require coastal development permits. However, AB 2243 further provides that a public agency with coastal development permitting authority must approve a coastal development permit if the agency determines that the proposed project is consistent with all objective standards of the local agency’s certified local coastal program or, for areas that are not subject to a fully certified local coastal program, the certified land use plan of that area.
6. Limitation of Requirements Applicable to all AB 2011 Projects Involving the Conversion of Existing Buildings
For any AB 2011 project involving the conversion of the use of an existing non-residential use building to residential use, AB 2243 expressly prohibits local agencies from requiring projects to include common open space beyond what is already existing on the project site.
Takeaway
AB 2243 makes significant amendments to both SB 6 and AB 2011 that allow additional residential developments in commercial zones and further limit local discretion to review, condition, and deny them.
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