California's 2017 Housing Package
Frequently Asked Questions

Updated July 2018

General

Q: What bills make up the California Housing Package?

A: The following are the 15 bills included in the 2017 California Housing Package. Further information on each of these bills can be found on the 2017 Housing Package page.

  • AB 72 (Santiago) Housing Element Law Enforcement
  • AB 73 (Chiu) Housing Sustainability Districts
  • AB 571 (E. Garcia) Low Income Housing Credits for Farmworkers
  • AB 678 (Bocanegra)/ SB 167 (Skinner) and AB 1515 (Daly) Housing Accountability Act
  • AB 879 (Grayson) Housing Element Annual Report and Fee Study
  • AB 1397 (Low) Housing Element Law Sites Requirements
  • AB 1505 (Bloom) Inclusionary Ordinances
  • AB 1521 (Bloom) Preservation of Existing Affordable Housing Stock
  • SB 2 (Atkins) Building Jobs and Homes Act
  • SB 3 (Beall) Veterans and Affordable Housing Bond Act
  • SB 35 (Wiener) Streamline Approval Process
  • SB 166 (Skinner) No-Net-Loss
  • SB 540 (Roth) Workforce Housing Opportunity Zones

Q: What is the purpose of the Housing Package?

A: The housing package offers an injection of new regulatory and financial resources, and, with it, an opportunity to increase supply and innovate delivery throughout the state. California has a very low supply of new homes compared to need. The state averaged less than 80,000 new homes annually over the last 10 years—less than half of the projected need. Further, production is less than half of what California was building during most of the 20th century. There are an estimated 1.5 million low-income California households that pay more than half of their income for housing costs. California also has the largest homeless population in the country, which research suggests is a direct outgrowth of our housing costs.

For more information, view California's Housing Future: Challenges and Opportunities.

Q: How can individuals and organizations engage in the implementation of these bills and what will the public participation process look like?

A: Public participation will be key to successful implementation of the 15 new laws. Individuals and organizations can sign up to receive advanced notice of all public participation opportunities (including program guideline development). To receive updates by email, sign up (scroll to "General Information" and select "California's 2017 Housing Package"). HCD will also post all public participation opportunities on HCD’s 2017 Housing Package page. Specific questions or recommendations can be sent by email to CAHP@hcd.ca.gov.

SB2 (Atkins) Building Jobs and Homes Act

Q: How much money will be collected from the recording fee on real estate documents?

A: The revenues from SB 2 will vary from year to year, as they are dependent on a variety of real estate transactions with fluctuating activity. The fees are currently estimated to generate approximately $250 million per year based on available recording document data from the last decade. Subject to appropriation through the state budget process, the State Controller’s Office will collect revenues quarterly and make those revenues available to the fund 30 days following the end of the quarter.

Q: What is the breakdown of funding under SB 2?

A: See Chart Below


Senate Bill 2 Ongoing Housing Funding Allocations page

View larger image.

Q: What can a jurisdiction do today to be prepared to receive SB 2 dollars?

A: In order to access first-year planning grant funds from the initial allocation, and the 70 percent local allocation in the second year and beyond, jurisdictions must:

In addition, to receive the local allocation from year two and beyond, jurisdictions will need to submit a plan to the department detailing the manner in which allocated funds will be used by the local government and how those activities will meet the local government’s unmet share of the regional housing needs allocation.

SB2: First Year

Q: When will funds for SB 2 be available?

A: Revenue for SB 2 will be collected beginning January 1, 2018 and revenue will be deposited in the SB 2 fund within 30 days following the end of each quarter. While the revenue will be generated throughout the calendar year, the Budget Act of 2018 proposes an appropriation of $250 million for SB 2 activities, and includes language to allow for an increase of the appropriation if revenues exceed this level. The funds will be available for HCD to award beginning July 2018 (and subject to the completion of any necessary guideline processes for each activity under SB 2). See the California Housing Package Projected Milestones chart for more information on expected release of the funds.

Q: How will homelessness funding be allocated in year one?

A: SB2 was revised through legislation in 2018 (SB 850, Statutes of 2018 ) to clarify the provisions around the homeless portions of the fund. These provisions allocate 50 percent of the SB 2 funding dedicated to homelessness to the Housing for a Healthy California Program and 50 percent to the California Emergency Solutions and Housing Program (CESH), both administered by HCD.

The CESH program will combine the available SB 2 funds with the remaining 2016 California Emergency Shelter Grant Funds (approximately $25 million). These funds will be available for the following activities:

  • Rental assistance and housing relocation and stabilization services to ensure housing affordability to people experiencing homelessness or at risk of homelessness. Rental assistance provided pursuant to this paragraph shall not exceed 48 months for each assisted household, and rent payments shall not exceed two times the current Federal Department of Housing and Urban Development (HUD) fair market rent for the local area, as determined pursuant to Part 888 of Title 24 of the Code of Federal Regulations.
  • Operating subsidies in the form of 15-year capitalized operating reserves for new and existing affordable permanent housing units for homeless individuals and families.
  • Flexible housing subsidy funds for local programs that establish or support the provision of rental subsidies in permanent housing to assist homeless individuals and families. Funds used for purposes of this paragraph may support rental assistance, bridge subsidies to property owners waiting for approval from another permanent rental subsidy source, vacancy payments, or project-based rent or operating reserves.
  • Operating subsidies in the form of 15-year capitalized operating reserves for new and existing affordable permanent housing units for homeless individuals and families.
    • Navigation centers that provide temporary room and board and case managers who work to connect homeless individuals and families to income, public benefits, health services, permanent housing, or other shelter.
    • Street outreach services to connect unsheltered homeless individuals and families to temporary or permanent housing.
    • Shelter diversion, including, but not limited to, homelessness prevention activities, and other necessary service integration activities to connect individuals and families to alternate housing arrangements, services, and financial assistance.
  • Systems support for activities necessary to maintain a comprehensive homeless services and housing delivery system, including Coordinated Entry Systems (CES), data, and Homeless Management Information Systems (HMIS) reporting, and homelessness planning activities.
  • To develop or update a CES system or to develop a plan addressing actions to be taken within the Continuum of Care service area to address homelessness.

Once the budget process is complete, HCD will provide a timeline for a Notice of Funding Availability (NOFA).

Q: What is the proposed funding formula for the allocation of the SB 2 year one homeless funds?

A: Pursuant to SB 850, Statutes of 2018, funding will be allocated to each Continuum of Care service area based on the formula currently used within the California Emergency Solutions Grants program, utilizing the following formula components:

  • The 2017 point-in-time count published by HUD that includes both sheltered and unsheltered homeless.
  • The number of extremely low-income renter households paying more than 50 percent of their income for rent using HUD's most recent Comprehensive Housing Affordability Strategy dataset.
  • The number of persons below the federal poverty line divided by the total population within the Continuum of Care service area. This factor shall be double-weighted. Data for this factor will be obtained from the U.S. Census Bureau.

In a separate but complementary grant program, the 2018 Budget allocates $500,000,000 in additional resources for homelessness through the Homeless Emergency Aid program that provides localities with one-time flexible block grant funds to address immediate homelessness challenges. The Business Consumer Services and Housing Agency will administer these funds.

Q: When will the funding to local governments to update planning documents and zoning ordinances in order to streamline housing production be made available?

A: The full amount of funding available to this program will be determined by 2018 revenues to be deposited into the fund in February 2019. Beginning the summer of 2018, 5 percent of the resources available to local governments to support planning efforts will be available for technical assistance to jurisdictions, provided by HCD and the Governor’s Office of Planning and Research. HCD expects to release the NOFA for planning funds no later than Spring of 2019 and those funds will be made available for a two-year timeframe. To prepare for receiving these funds, jurisdictions should begin to identify local plans and policies which could be updated or amended to streamline and accelerate housing production.

SB2: Year Two and Beyond

Q: Has the state completed any projections on what each jurisdiction's allocation will be for the 70 percent local government funding that will be formulated?

A: SB 2 stipulates that funds will be awarded in accordance with the Community Development Block Grant (CDBG) formula for the Federal Fiscal Year 2017. HUD’s CDBG formula includes factors such as the extent of poverty, population, housing overcrowding, age of housing, and population growth lag in relationship to other metropolitan areas. Because the revenues from SB 2 are unknown, we are not able to provide estimates of what each eligible jurisdiction’s award will be.

Q: When will the 70 percent of the funding for local governments become available?

A: Funds will be collected beginning January 1, 2019. While the revenues will be generated throughout the calendar year, funds must be appropriated by the Legislature to HCD before they can be awarded. Appropriation of the funding would likely occur through adoption of the state budget, which is passed by June 15 of each year, and covers the state fiscal year from June 30, 2019 through the following June 2020. Funds will not be available to local governments until after the Legislature has made those appropriations and local governments have met the requirements to receive funding.

Q: Will the Joe Serna Jr. Farmworker Housing Grant Program receive the 10 percent of year two and beyond SB 2 funds that are required to be used to address affordable homeownership and rental housing opportunities for agricultural workers and their families?

A: Not necessarily. The use of these funds has not yet been defined and is subject to, among other things, appropriation by the Legislature and guidelines HCD may adopt in consultation with stakeholders.

SB 3 (Beall) Veterans and Affordable Housing Bond Act of 2018

Q: The $4 Billion Bond authorized by SB 3 is contingent on voter approval in November 2018. If the Bond passes in 2018, when will funding become available?

A: Pending voter approval in November 2018 and subject to bond sales, HCD would be able to release its first NOFA in Spring 2019. Subsequent NOFAs would follow throughout 2019. HCD expects to expend the Bond proceeds through a series of NOFAs over a five year timeframe.

SB 35 (Wiener) Streamlined Housing Approval Process

Q: How will SB 35 help to speed up housing development in California?

A: For jurisdictions that have not met regional housing need targets, SB 35 will streamline approval processes for eligible infill projects by speeding up the project approval process allowing construction to happen more quickly. Infill housing is either constructed on vacant lots among older, existing properties in urban neighborhoods, or inserted into an already-approved neighborhood as additional units. These infill developments must provide at least 10 percent of the housing units for lower-income individuals or families. The developer must also pay construction workers the current prevailing wage. These projects must be approved ministerially, using only objective standards, within 90 to 180 days of submission.

Q: Which jurisdictions will be subject to SB 35 streamlining?

A: Any jurisdiction may be subject to SB 35 streamlining for the following:

  • not permitting sufficient housing units to meet its pro-rata share of regional housing need, or;
  • not submitting Annual Progress Reports (APRs) (pursuant to Gov. Code section 65913.4(a)(4)(A)).

HCD provided preview Annual Progress Report (APR) data to jurisdictions in November 2017. Visit the Regional Housing Needs Allocation and Housing Elements page (and click on "Annual Progress Reports") to view the list of jurisdictions that are subject to SB 35 and the information on the methodology.

Note: APRs are due to HCD by April 1 every year, reporting on the prior calendar year activities. HCD will update the SB 35 Determination and Background Data on the following schedule:

2018: Determination Update in June and September.

  • June 4, 2018: SB 35 Determination and data release, including APRs received by May 1, 2018.
  • September 4, 2018: SB 35 Determination and data release, including APRs received by July 1, 2018. The September release will allow jurisdictions to make corrections to any errors observed in the June release.

2019 and beyond: Determination Update Annually.

  • May annually: Provide preview data to jurisdictions, including APRs received by April 1.
  • June annually: Public SB 35 Determination and data release, including APRs received by May 1. The June release will allow jurisdictions to make corrections to any errors observed in the May preview.

Q: How are regional housing needs targets determined?

A: Regional housing needs targets are determined through the Regional Housing Needs Allocation (RHNA) process every five to eight years, and are incorporated into each local government’s housing element of the general plan. For additional information, see the Regional Housing Needs Allocation page.

Q: Does SB 35 apply prior to the development of guidelines? When will HCD develop guidelines around the implementation of SB 35?

A: Yes, SB 35 does apply prior to guideline development. The law went into effect on January 1, 2018 and its implementation is not dependent on the development of guidelines by HCD. HCD is expecting to begin the public participation process for guideline development in Summer 2018.

Q: SB 35 refers to the share of the regional housing need by income category for the reporting period, which is either the first or second half of the planning cycle. How will HCD determine whether jurisdictions have permitted less than their share of the jurisdiction’s regional housing need by income for the reporting period if the jurisdiction has not yet reached the first half of its planning period?

A: Until every jurisdiction has reached the end of the first half of their fifth cycle planning period, HCD will pro-rate the regional housing need. For example, a jurisdiction that is three years into an eight-year planning period on January 2018 would have met their regional housing need by income if they had permitted three out of the eight years of their assigned regional housing need for that income category. The list of which jurisdictions are subject to SB 35 and information on the methodology for this determination is available on the Regional Housing Needs Allocation page under "Annual Progress Reports."

Q: If a housing unit received a building permit in one period, but a certificate of occupancy in the next, how would the unit be counted towards RHNA objectives for purposes of SB 35?

A: The SB 35 Determination is based on building permits, which have been required as part of the APR since 2010. The unit would be counted towards meeting RHNA objectives in the planning period in which the building permit was issued.

Q: How long does HCD’s determination last? Could a jurisdiction request an update of their determination if new information becomes available?

A: HCD will recalculate the pro-rated regional housing need target, and permitting progress toward that need, each year after APRs are due until all jurisdictions have reached the end of the first half of their fifth cycle planning period. At that point, the determination will hold until the next reporting period begins. HCD is currently continuing to accept corrections and late submissions of APRs.

Q: If a developer submits a SB 35 streamlining project application to a jurisdiction subject to SB 35, but that jurisdiction’s SB 35 status changes during the 180-day review period due to HCD’s release of a new SB 35 Determination, can a jurisdiction subsequently revoke the SB 35 permitting process eligibility based on the jurisdiction’s new SB 35 status?

A: No. The jurisdiction’s status on the date for which the application was received determines if a development can access the SB 35 streamlining process.

Q: Are multiple projects, submitted simultaneously, eligible for SB 35 streamlining if either one of them would result in achieving a city's RHNA objectives?

A: Yes. A jurisdiction’s SB 35 Determination status is valid until the next release of the SB 35 Determination Summary by HCD.

Q: Charter cities will be subject to the annual report requirement beginning January 1, 2018. Will charter cities be subject to SB 35 if they did not submit APRs for the prior reporting period?

A: As of January 1, 2018, all jurisdictions, including charter cities, were subject to SB 35 if they did not submit the last due APR. Currently the latest required APR is the 2017 APR, which was due April 2018. Charter cities may also wish to submit prior fifth cycle APRs to enable the housing permits from those years to count toward their regional housing need targets.

Q: What minimum percentage of below-market rate housing must a development provide?

A: The minimum affordability level required for a project to receive SB 35 streamlining within a jurisdiction depends on which income categories of the regional housing need have not been met (pursuant to Gov. Code section 65913.4(a)(4)(B)). Projects of 10 units or less are not required to have a minimum percent of below-market rate housing to qualify for streamlining in jurisdictions subject to the 10 percent affordability requirement. However, they are subject to the affordability requirements in jurisdictions subject to the 50 percent affordability requirement.


Streamlining for projects with 10 units or less or more than 10 units with 10 percent affordable units (and meet other SB 35 provisions)
  • Jurisdictions that did not submit the latest APR, or;
  • Jurisdictions that did not permit enough above-moderate income units to meet a pro-rata share of their above-moderate income regional housing need for the current housing element cycle.

  • These jurisdictions are subject to SB 35 streamlining for projects with 10 or more units that dedicate a minimum of 10 percent of units affordable to lower-income households, as well as meet other SB 35 provisions.

    Note: If a local ordinance requires greater than 10 percent affordability, the local ordinance applies.

Streamlining for projects with 50 percent affordable units (and that meet other SB 35 provisions)
  • Jurisdictions that did not permit sufficient lower income units (very-low and low-income) to meet a pro-rata share of their very-low and low-income regional housing need for the current housing element cycle.

    These jurisdictions respectively are subject to SB 35 streamlining for projects that dedicate a minimum of 50 percent of units affordable to lower-income households, as well as meet other SB 35 provisions.

  • Note: If a local ordinance requires greater than 50 percent affordability, the local ordinance applies.

Q: Must a development propose the maximum density permitted in the land use designation, or simply not exceed the maximum density? (pursuant to Gov. Code section 65913.4(a)(5)(A))

A: A project must be compliant with the maximum density allowed by the general plan, which would include any density allowed by the land use designation, up to the maximum density.

Q: If the total number of housing units on a parcel or in a specific plan area is limited to a specific number or allocation, could the total number of housing units in an SB 35 development exceed that allocation if it is consistent with the maximum density in the general plan? (pursuant to Gov. Code section 65913.4(a)(5)(A))

A: Yes. The statute specifies that a project that does not exceed the maximum density allowed pursuant to that land use designation must be deemed consistent with objective zoning standards related to density regardless of any additional unit caps that are placed upon the parcel.

Q: Could a developer request a density bonus in addition to using the maximum allowable density?

A: Yes. SB 35 allows a development to request a density bonus that would exceed maximum allowable density in the zone and still qualify for streamlining provisions under SB 35 (pursuant to Gov. Code section 65913.4(a)(5)(A)).

Q: If a city’s general plan required a specific plan or another discretionary permit, such as a conditional use permit, be approved before a project can be approved, is such a requirement considered an “objective planning standard” that can apply to an SB 35 development?

A: No. SB 35 specifically exempts developments from the conditional use permit process and they must be approved through a streamlined, ministerial approval process if they satisfy the objective planning standards described above (pursuant to Gov. Code section 65913.4(a))

Q: What other requirements are there for the ministerial process aside from not requiring a conditional use permit?

A: A qualifying development is subject to the ministerial approval process outlined in Government Code section 65913.4 (b) which consists of a review of the project for conformance with objective planning and design review standards, providing a list of any conflicts with objective standards within 60 to 90 days after project submittal, and making a decision on the project within 90 to 180 days after project submittal.

Q: Are both non-residential and residential portions of a mixed-use development subject to the streamlined and ministerial approval process, provided that residential uses make up at least two-thirds of the square footage of the total development?

A: Yes. If the entire development meets the requirements under SB 35, it can be subject to the streamlining process.

SB 35 (Wiener) and AB 879 (Grayson) Annual Progress Report

The California Housing Package relies on the submittal of annual reports pursuant to Government Code Section 65400. Information on the actual reporting requirements including frequently asked questions can be found in the Annual Progress Report section.

Q: When will APR forms be updated to accommodate changes from the California Housing Package?

A: There will be no changes to APR forms for the 2017 reporting period, due April 2018. The new data requirements will impact the 2018 APRs due April 2019, and the forms will be changed prior to the April 1, 2019 deadline.

Q: Do charter cities have to submit APRs?

A: Yes. AB 879 (Grayson), Statutes of 2017 requires Charter cities to submit annual progress reports starting in 2018. Forms and instructions can be found in the Annual Progress Reports section. Annual Progress Reports may be submitted online using the Online Annual Progress Reporting system . Email APR@hcd.ca.gov to request a user name and password.

Q: At what stage or level are units allowed on the Annual Progress Report (APR): units that are approved, permitted, or built?

A: Only permitted units should be reported; these units should represent the final permitting needed before the units can begin construction. As a result of the 2017 legislation, there will be broader reporting requirements in the future, but those requirements will not come into effect until the 2018 APRs, due April 2019.

Q: What new information should a local government begin to collect for the 2018 APR in anticipation of new requirements?

A: In addition to the current APR requirements, the following is a preliminary list of information a jurisdiction should collect for the 2018 APR (due in 2019). A full list and new forms will be available once the APR guideline update process is complete.

  • Residential development applications, including the number of all development applications, the number of units in all applications, the number of units approved, and the number of units disapproved as a result of project denial or reduction in project density.
  • Completed entitlements by assessors parcel number (APN), income level (very low, low, moderate or above moderate), and tenure. “Completed entitlements” means a housing development which has received all the required land use approvals or entitlements necessary for the issuance of a building permit.
  • Building permits by APN, income level, and tenure. NEW for 2018: Building permits by income and tenure have been required on the APR since 2010, but the location demonstrated through APN will now be required for each development permit.
  • Certificates of Occupancy or final inspections as appropriate to the jurisdiction, by APN, income, and tenure.
  • Changes to residential zoning in order to complete a housing element program or because of a no-net-loss requirement. Similar to the Housing Element sites inventory, reporting on these items should include APN, acreage, previous general plan and zoning designation, new general plan and zoning designation, realistic unit capacity, and information on any existing uses.
  • SB 35 Tracking
    • Number of applications submitted under the SB 35 streamlining provisions
    • Location and number of developments approved using SB 35 streamlining provisions
    • Total number of building permits issued using SB 35 streamlining provisions
    • Total number of units constructed using SB 35 streamlining provisions by tenure and income category
  • A description of any commercial development bonuses approved under Gov. Code section 65915.7. Note: this requirement was added by Chapter 747, Statutes of 2016 (AB 1934).

AB 1397 (Low) Housing Element Sites Inventory

Q: When are housing elements subject to the new requirements?

A: Any element adopted and any draft received by HCD after March 31, 2018 is subject to the new housing element requirements.

Q: Can jurisdictions use sites identified in prior housing elements in their sites inventories to accommodate their current lower-income RHNA?

A: Yes. However, certain conditions apply when the site meets the following parameters:

  • Non-vacant sites identified in a housing element from a prior planning period.
  • Vacant sites identified in housing elements from two consecutive prior planning periods.

All previous sites can only be included if the site meets the site analysis requirements of Gov. Code 65583.2 including the density requirements of Gov. Code section 65583.2(c)(3). In addition, the previously identified site is also subject to a housing element program that requires rezoning within three years of the beginning of the planning period to allow residential use by right for housing developments containing a minimum of 20 percent affordability to lower income households. (Pursuant to Government Code section 65583.2, subdivision (c)).

Q: For jurisdictions that have not yet completed shortfall rezone programs required by their fifth cycle housing element and the element was adopted prior to January 1, 2018, are the rezones required to include the new by-right provision?

A: No. If a jurisdiction’s housing element was adopted prior to January 1, 2018 and found in compliance by HCD, and the jurisdiction implements its housing element rezone program after January 1, 2018, the new provision requiring by-right processing for projects including at least 20 percent of the units be affordable to lower income households does not apply. However, if the housing element is amended after January 1, 2018 and prior to implementation of rezoning, the new by-right zoning provisions may apply.

SB 166 (Skinner) No-Net-Loss

Q: What are the requirements for rezoning if a jurisdiction approves a development project at a lower density or different income category than identified in the sites inventory and that approval triggers a need to rezone another site under no-net-loss law?

A: The jurisdiction has 180 days to identify and make available additional adequate sites to accommodate the remaining RHNA by income level if the reduction in density was due to the approval of a development project. However, downzoning not associated with a development project is not allowed without contemporaneous identification or rezoning of alternative sites (Gov. Code section 65863(c)(1)). An adequate site must meet the sites requirements of Gov. Code section 65583.2.

Q: Does rezoning sites pursuant to the provisions of no-net-loss law to ensure there are adequate sites remaining in an inventory constitute an amendment to the housing element that requires its submittal to HCD?

A: The statute requires any sites required to be identified by no-net-loss be reported as part of the jurisdiction’s APR and may not trigger an amendment of the sites inventory (Gov. Code section 65400(a)(2)(G)). However, actions that are inconsistent with housing element policies and programs, such as a moratorium or downzoning, may require the jurisdiction to amend the housing element. The jurisdiction must submit these draft amendments to HCD who will review compliance with State Housing Element Law (Gov. Code section 65585).

AB 72 (Santiago) Housing Element Accountability

Q: What actions may HCD may take to enforce housing law under AB 72?

A: AB 72 grants expanded enforcement authority to HCD. On a case-by-case basis, HCD will review a local government’s actions and inactions, including programs committed within an adopted housing element, to determine consistency or inconsistency with state housing element law. Generally, HCD will review the concern, provide technical assistance or a letter requesting corrective action, and if warranted, issue a 30-day notice of findings prior to decertification of housing element compliance and/or provide notice the Attorney General’s Office has been notified of a violation. In addition to state housing element law, HCD may also review actions related to:

  • Housing Accountability Act (Gov. Code section 65589.5)
  • No Net Loss Law (Gov. Code section 65863 of the Government Code)
  • Density Bonus Law (Gov. Code section 65915)
  • Anti-Discrimination Law (Gov. Code Section 65008)

Q: How can a concerned party contact HCD to report a potential violation?

A: Concerned parties may submit comments to ComplianceReview@hcd.ca.gov or summit written comments to:

Mr. Zachary Olmstead, Deputy Director
Department of Housing and Community Development
Division of Housing Policy Development
2020 W. El Camino Avenue, Suite 500
Sacramento, CA 95833

Return to California's 2017 Housing Package page.