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The Builder’s Remedy: California crackdown on housing explained

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Senior Staff

MARCH 03, 2023

As California enters its sixth “housing element update” cycle, a contentious battle for equitable housing ensues.

Since 1969, California jurisdictions have been mandated by state law to adopt eight-year “Housing Elements” that plan to build new housing units, the amount set by individual regional housing need allocations determined by the state Department of Housing and Community Development, or HCD.

However, the 2021 creation of a Housing Accountability Unit in the HCD by Gov. Gavin Newsom has led to stricter judgment from the HCD — and harsher consequences for a noncompliant element.

Specifically, HCD spokesperson Alicia Murillo stated that jurisdictions not found in compliance would relinquish their ability to lawfully deny developers the ability to build “qualifying affordable housing” — a rule colloquially called the Builder’s Remedy. This includes proposals from developers that are inconsistent with local zoning and general plan standards.

Essentially, if a developer proposes housing that sets aside at least 20% of its units for low-income residents, they would be permitted to build given the proposal met health and safety standards, according to Nisha Vyas, senior attorney at the Western Center on Law & Poverty.

“But that’s a very limited rejection point,” Vyas said.

Berkeley and the Builder’s Remedy

The city of Berkeley’s 2023-31 Housing Element was approved Tuesday, following a divisive City Council meeting and a “worrying” initial rejection by the HCD.

With modifications to address the need to provide more realistic timelines and further efforts to develop housing in higher-income areas, among other issues, many city residents might take a breath of relief, seeing the approval as a successful warding off of the Builder’s Remedy.

Darrell Owens, Berkeley housing advocate, revealed the Remedy’s looming threat in a Substack post when the city of Berkeley’s Housing Element was rejected by the HCD in February, after the Jan. 31 deadline.

“An old law may eliminate the housing-related zoning ordinances of the vast majority of cities throughout the Bay Area,” Owens’ post reads. “Yes, seriously.” 

Berkeley was not alone in its battle with state regulations — Oakland also found their element to face initial rejection, while many other Bay Area jurisdictions missed the deadline entirely, as reported by SF Chronicle.

While the city may have escaped the purview of the Remedy for the time being, the HCD’s approval letter to the city manager notes that regular reports on the progress of Berkeley’s Housing Element must be submitted, under the risk of having their compliance revoked.

“Please be aware, Government Code section 65585, subdivision (i) grants HCD authority to review any action or failure to act by a local government that it determines is inconsistent with an adopted housing element or housing element law,” the letter reads. “This includes failure to implement program actions included in the housing element. HCD may revoke housing element compliance if the local government’s do not comply with state law.”

Should Berkeley fail to comply with the HCD’s future expectations, the Builder’s Remedy may tower over the city’s vacant lots yet again.

What led to the Builder’s Remedy’s creation?

Vyas noted that the Builder’s Remedy was spurred on by a statewide wave of housing reform and tightening of deadlines.

“Housing element law really came out of the civil rights movement as an attempt to address the issues of local control and affirmatively combat racial segregation,” Vyas said. “There is an acknowledgement by the state that the way that local governments have controlled the way land use operates and where housing opportunities perpetuate segregation.”

Even with the initial state provisions to encourage development, progress has been slow. After years of statewide underperformance from cities and counties, the term “Builder’s Remedy” has become increasingly commonplace in NIMBY and YIMBY circles on Twitter. 

Murillo expressed uncertainty as to the cause of fresh interest in the Remedy since its implementation in 1990.

“HCD will note that Housing Element Law has been strengthened in recent years, and there has been increased housing advocacy around the housing element process, and additional academic attention on the topic of the ‘Builder’s Remedy’ … that may have recently raised awareness on, and interest in, the topic,” Murillo said in an email.

For years, California’s liberal government fielded criticism from Republicans and progressive activists alike for an alleged failure to address the state’s houselessness and affordability crisis. However, things seemed to take a turn when state Senator Scott Wiener’s 2017 bill to streamline housing construction, titled SB 35, was enacted by former Gov. Jerry Brown.

The impact of SB 35 is felt today, with the HCD showing up prepared to take on local government.

“What we’re seeing with this cycle is all of the teeth that we fought for, as housing advocates and equity housing advocates,” Vyas said. “They’re being tested here in this cycle of the housing element process.”

Contact Kavya Gupta at [email protected] or @kavyaguptta on Twitter

MARCH 03, 2023