Builder's Remedy' is Game-Changer for Housing Developers in California

The housing crisis in California has been a persistent issue, with a shortage of affordable and accessible housing options plaguing many communities. To address this challenge, the state has implemented a unique provision known as the "builder's remedy." This law, which has been on the books since 1990, is gaining traction and stirring up a heated debate between housing developers and local municipalities.

The builder's remedy allows developers to bypass local zoning rules in cities and counties that lack a state-certified housing plan, provided that a fifth of the units are reserved for low-income families and the project complies with environmental laws. With dozens of municipalities failing to meet their housing plan deadlines, a golden opportunity has emerged for developers to propose projects that would otherwise be rejected due to zoning restrictions.

However, this opportunity has not come without controversy. Cities and their lobbyists argue that the law is unclear, leading to disagreements over when the builder's remedy is triggered and what it entails. Some cities have resisted these applications, claiming that their housing plans were in "substantial compliance" before receiving state certification. At the same time, developers contend that compliance is achieved only after the state's formal approval.

Recent court rulings in Los Angeles County have shed light on this legal tug-of-war. In two cases, judges sided with developers, ruling that cities cannot "self-certify" or "backdate" their housing plan compliance to circumvent the builder's remedy. Additionally, one judge held that a city's refusal to process a builder's remedy application constitutes a "disapproval," potentially entitling developers to reimbursement for legal expenses.

These rulings, while not binding statewide, have emboldened developers and could impact ongoing cases in cities like Orange and Beverly Hills, where builders have faced denials or roadblocks. Notably, the city of La Habra has accepted a builder's remedy application from Lennar for a 530-home development on the Westridge golf course, albeit with the requirement for a costly environmental review.

As the battle rages on, two proposed bills in Sacramento aim to clarify and potentially rein in the builder's remedy. One bill seeks to codify the rule that city plans are not complete until the state housing department certifies them. At the same time, the other proposes limits on where and how much developers can build under the provision.

Bottom Line

Despite the ongoing legal and legislative debates, one thing is clear: the builder's remedy has the potential to reshape housing development in California, providing developers with a powerful tool to circumvent local zoning restrictions and potentially alleviate the state's housing shortage.

If you're considering a move in Orange County, let's connect. As an experienced realtor, I can guide you through the complexities of the local housing market and ensure a smooth transition to your dream home, navigating the evolving landscape shaped by the "builder's remedy" and other housing laws.

Reference: “Housing developers win first ‘builders remedy’ battles in fight to bypass local zoning” by Jeff Collins. Published on April 22, 2024.