These new state laws could increase San Diego homebuilding

New statewide laws could make home construction easier this year in San Diego, says the state’s biggest construction organization.

California’s Building Industry Association says new legislation is likely to cut down on time, and delay or reduces costs. The new laws, signed last year by Gov. Gavin Newsom, are focused on making homebuilding easier in the nation’s most expensive state for housing.

The Sacramento-based association held an online webinar in December to discuss several new laws. Members of the association include architects, homebuilders, engineers, suppliers and other jobs related to home construction.

The presentation was through the eyes of the construction industry and new laws are likely seen differently by groups that, for example, oppose new home construction. The Greater San Diego Association of Realtors holds a similar event every January that is heavily focused on the landlord perspective.

“We build housing much easier in every other state in the United States,” said Dan Dunmoyer, president of the association. “These new policies are intended to help move us forward.”

More time to build (AB 2729)

Builders will soon have more time to finish apartment buildings, housing developments and other projects.

This assembly bill extends entitlements for housing projects by 18 months that were set to expire by the end of this year. This gives builders additional time to start construction on a project that was delayed for any reason. It’s useful to builders because getting entitlements for a housing project can take years and be very costly, making it very difficult to restart the process.

The idea behind the law is many housing projects were hit with rising costs of materials as inflation rose, which stopped many developments dead in their tracks, said Nick Cammarota, general counsel for the association. He said the new law was also aimed at developers who struggled with rising interest rates in gathering capital.

The requirement for an extension is that entitlements had to be granted before Jan. 1, 2024. California passed a nearly identical law in 2022 that extended entitlements by 18 months for projects that faced significant delays during the pandemic.

Keeping local governments honest (AB 1893)

California has had a fairly obscure housing law, called “builder’s remedy,” around for decades. It only recently started being used by developers so this new assembly bill gives it a bit more teeth.

The gist is cities that don’t have a state-approved housing plan, for things like where they will put subsidized housing, can be subject to a developer coming in — with a so-called builder’s remedy — and putting whatever they want up. It is designed to bypass some of the state’s most anti-housing communities.

A project in Del Mar called Seaside Ridge has attempted to use the builder’s remedy law to get a 259-unit apartment project approved since 2022. The Los Angeles County city of La Cañada Flintridge lost a court case in March for denying a project with 80 mixed-income units and a 14-room hotel under a builder’s remedy application. Both cities have struggled to approve housing plans in the past, called a housing element, with the state — opening them up to builder’s remedy laws.

The new law clarifies builders must comply with local ordinances on density limits and zoning. In theory, before this recent change, a developer could have just come into Del Mar a few years ago and built a high rise apartment building in a single-family neighborhood because the city had failed to get a housing plan approved. Still, nobody ever did that and this aspect wasn’t a concern to the developer association.

However, the new law also strengthens a developer’s case to use builder’s remedy — something that should help developers and housing lawyers. It says cities can no longer require projects to apply for a rezoning, add additional fees that a normal project wouldn’t face and are not allowed to delay projects by requiring more than five hearings.

To qualify for builder’s remedy, a developer previously had to have 20 percent subsidized units for lower-income households or 100 percent affordable to moderate or middle-income households. The new law reduces that to 13 percent subsidized for lower-income units.

Delayed fees for builders (SB 937)

This state Senate bill would reduce the fees builders face upfront for things like schools, parks, public art and more.

SB 937 would instead allow a developer to pay fees once someone actually moves into what they are building. Developers have argued for years that paying so many fees in the beginning — before getting any money from a buyer or renter — makes the cost of construction too high to even start in some cases.

The new law won’t reduce the fees, just change when developers need to pay them. Also, builders will still need to pay some fees at the beginning for things like water service, sewer, public safety, roads and sidewalks.