California’s New Housing Legislation: Key Bills Signed by Governor Newsom

Last Updated: October 30, 2024By

32 new bills recently signed into law in California aim to address various aspects of the state’s housing crisis.

California Governor Gavin Newsom recently signed 32 significant bills into law aiming to address various aspects of the state’s housing crisis. These new laws introduce changes to affordable income categories, streamline housing development processes, and enhance protections for tenants and homeowners. Below is a short summary of the key bills and their implications.

AB 3093: Creates two new income categories, Acutely Low Income (ALI) and Extremely Low Income (ELI), in the Regional Housing Needs Allocation (RHNA) process and throughout housing element law.

AB 799: Makes various changes to the California Interagency Council on Homelessness (Cal-ICH), including adding the Governor’s Tribal Advisor to the member list, developing and maintaining a strategic funding guide and calendar, and new data sharing and publishing requirements.

SB 7: Makes a number of technical changes to the regional housing needs determination process conducted by the Department of Housing and Community Development (HCD) and the RHNA process conducted by HCD or Councils of Governments (COGs).

SB 1395: Extends and expands existing California Environmental Quality Act (CEQA) exemptions for projects related to homeless shelters, extends the sunset date for the Shelter Crisis Act (SCA) by ten years, and permanently extends the streamlined, ministerial (by-right) approval process for Low-Barrier Navigation Centers (LBNCs), among other changes.

AB 1886: Clarifies that a housing element or amendment is not considered substantially compliant with housing element law until the local agency has adopted a housing element that the HCD has determined is in substantial compliance with housing element law, as specified.

AB 1893: Amends the Housing Accountability Act (HAA) to revise the standards a housing development project must meet in order to qualify for the “Builder’s Remedy,” which authorizes projects to bypass local development standards in jurisdictions that fail to adopt a substantially compliant housing element. This bill also expands the scope of actions that constitute disapproval of a housing development project by a local government for the purposes of the HAA.

AB 2023: Creates a rebuttable presumption of invalidity in any legal action challenging a local government’s action or failure to act if the HCD finds that the action or failure to act does not substantially comply with the local government’s adopted housing element or housing element obligations, among other changes.

SB 1037: Creates new legal remedies that can be used by the Attorney General (AG) to enforce the adoption of housing element revisions or to enforce any state law that requires a local government to ministerially approve any planning or permitting application related to a housing development project.

AB 1413: Establishes timeframes in the HAA for local agencies to consider objections, comments, and evidence related to determining whether an HAA-protected housing development project is exempt from CEQA.

AB 2667: Makes changes to the housing element law and Annual Progress Report (APR) process related to the requirement to affirmatively further fair housing (AFFH).

SB 393: Shifts the burden of demonstrating that posting a bond would place an undue economic hardship on the plaintiff in actions challenging certain low- or moderate-income housing projects.

SB 450: Amends the process established by SB 9 (Atkins), Chapter 162, Statutes of 2021, for the ministerial approval by a local agency of a duplex in a single-family zone and the lot split of a parcel zoned for residential use into two parcels.

AB 2243: Revises the scope of the Affordable Housing and High Road Jobs Act of 2022, enacted by AB 2011 (Wicks, Chapter 647, Statutes of 2022), and the Middle-Class Housing Act of 2022, enacted by SB 6 (Caballero, Chapter 659, Statutes of 2022).

AB 2488: Allows the City and County of San Francisco to create a Downtown Revitalization and Economic Recovery Financing District to finance commercial-to-residential conversion projects using incremental property tax revenues.

AB 2199: Extends, until January 1, 2032, the sunset on an existing CEQA exemption for multi-family residential and mixed-use housing projects on infill sites in unincorporated areas and makes alterations to the exemption.

AB 2694: Clarifies that Residential Care Facilities for the Elderly (RCFEs) qualify as senior citizen housing developments under Density Bonus Law (DBL).

SB 312: Relaxes several conditions attached to the CEQA exemption for public university housing projects, established by SB 886 (Wiener) in 2022.

SB 1123: Requires local agencies to ministerially approve the subdivision of vacant, single-family lots to allow for up to ten units, as specified, and makes other changes to SB 684 (Caballero), Chapter 783, Statutes of 2023.

SB 1211: Increases the allowable detached accessory dwelling units (ADUs) on a lot with an existing multifamily dwelling from no more than two detached ADUs to no more than eight detached ADUs, as specified.

AB 1053: Allows a borrower to request funding from the HCD as a construction loan, a traditional permanent financing option, or a combination of both.

AB 2117: Delays expiration of a development approval for the duration of any litigation over the project.

AB 2430: Prohibits a city or county from charging a monitoring fee on a 100% affordable housing development under the state’s Density Bonus Law (DBL) if the development is subject to a regulatory monitoring agreement with California HCD, the California Housing Finance Agency (CalHFA), or the California Tax Credit Allocation Committee (TCAC).

AB 2553: Requires cities and counties to set lower traffic impact mitigation fees for transit-oriented housing developments near major transit stops instead of just at transit stations and changes the definition of a major transit stop.

AB 2663: Requires local agencies that collect inclusionary housing in-lieu fees and have a website to post specified information about the amount of fees collected and how they were spent.

AB 2926: Changes to the Preservation Notice Law (PNL) include (1) requiring an owner of an assisted housing development to accept a bona fide offer from a qualified entity to purchase and execute a purchase agreement or to record a new regulatory agreement with a term of at least 30 years that meets specified requirements, (2) deleting the option for an owner to decline to sell the property, and (3) making other clarifying revisions.

SB 937: Makes various changes to the process for local agencies to collect development impact fees.

AB 2801: Prohibits a landlord of residential property from deducting costs for materials or supplies, the work of a contractor, or for professional carpet cleaning services from a tenant’s security deposit unless reasonably necessary to restore the premises to original condition before the tenancy, less ordinary wear and tear, and requires landlords to take photographs of the premises, as specified.

AB 2747: Requires, on or after April 1, 2025, a landlord of residential real property with more than 15 dwelling units to offer tenants the option of having their full, on-time rent payments reported to at least one nationwide consumer reporting agency.

SB 611: Prohibits certain fees from being charged by landlords and provides some protections to service members in connection with security charges.

SB 900: Makes a number of changes to the responsibility of homeowners associations (HOAs) relating to utility service repairs and replacements in common areas.

AB 1878: Creates the Tribal Housing Grant Program Fund Advisory Committee (Committee) within the HCD upon appropriation and changes tribal liaison and technical assistance requirements that apply to HCD.

SB 1187: Creates a new tribal housing program, the Tribal Housing Grant Program (THGP), in the HCD for the construction and rehabilitation of rental and for-sale housing.

The Nixon Peabody California Real Estate team is closely monitoring these developments. Our attorneys regularly work with clients to navigate California’s evolving landscape.

Written by Bryan LeRoy and Sonia Nayak, Nixon Peabody LLP

Bryan LeRoy is a partner in Nixon Peabody’s Real Estate practice group. He represents private and public entities across California in zoning, land use, environmental compliance, energy and infrastructure and other property development matters. Clients seek his counsel on property rights, entitlement strategy and the processing of land use permits, securing zoning approvals and managing environmental concerns and other project impacts, particularly with regard to requirements of the California Environmental Quality Act (CEQA) and the National Environmental Policy Act (NEPA). He regularly represents clients before city and county governments, the state of California and multiple federal agencies.

Sonia Nayak is the managing partner of the Nixon Peabody’s Los Angeles office. Her practice centers on real estate development, including tax credit finance, affordable housing, and commercial lending, working with clients to bring private capital to community and affordable housing development projects in California and nationwide. She helps investors—large financial institutions, regional banks and funds—leverage unique financing structures and tools to infuse development projects with the capital needed to bring critical services to underserved neighborhoods and communities.

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