California's 2017 Housing Package
Frequently Asked Questions
- SB2 (Atkins) Building Jobs and Homes Act
- SB 3 (Beall) Veterans and Affordable Housing Bond Act of 2018
- SB 35 (Wiener) Streamlined Housing Approval Process
- SB 35 (Wiener) and AB 879 (Grayson) Annual Progress Report
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 at www.hcd.ca.gov/policy-research/lhp.shtml
- SB 35 (Wiener) Streamline Approval Process
- AB 73 (Chiu) Housing Sustainability Districts
- SB 540 (Roth) Workforce Housing Opportunity Zones
- AB 678 (Bocanegra)/ SB 167 (Skinner) and AB 1515 (Daly) Housing Accountability Act
- AB 72 (Santiago) Housing Element Law Enforcement
- AB 1397 (Low) Housing Element Law Sites Requirements
- SB 166 (Skinner) No Net Loss
- AB 879 (Grayson) Housing Element Annual Report and Fee Study
- SB 2 (Atkins) Building Jobs and Homes Act
- SB 3 (Beall) Veterans and Affordable Housing Bond Act
- AB 1505 (Bloom) Inclusionary Ordinances
- AB 1521 (Bloom) Preservation of Existing Affordable Housing Stock
- AB 571 (E. Garcia) Low Income Housing Credits for Farmworkers
Q: Why did the state need this Housing Package?
A: California has a very low supply of new homes compared to need. The state only 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 who 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 not of the mild weather, but of our housing costs.
For more information, view California's Housing Future: Challenges and Opportunities – Public Draft (PDF).
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 bills.
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").
SB2 (Atkins) Building Jobs and Homes Act
Q: How much money will be collected from the fee on recording 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 collected are estimated to generate approximately $250 million per year. Subject to appropriation through the 2018-19 state budget, 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
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:
- have a compliant housing element, and;
- submit a current annual report (pursuant to Section 65400). Visit the Regional Housing Needs Allocation and Housing Elements page (and click on "Annual Progress Reports") to verify a jurisdiction’s status.
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, funding must be appropriated by the legislature to HCD before it can be awarded. Appropriations would likely occur through adoption of the state budget, which is passed by June 30th of each year, and covers the state fiscal year from July 1st through the following June. The Governor’s Budget proposes an appropriation of $250 million for SB 2 activities, and there is language to allow for an increase of the appropriation if revenues exceed this level. Assuming inclusion of funds in the budget, the funds would 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: The allocation of these funds during the first year will be determined through a public participation process that will begin in March 2018. HCD will then develop guidelines on the use of these funds through either:
- a new guideline process, or;
- revisions to existing guidelines (if used to augment existing homeless programs).
Following an expected appropriation in the state budget adopted in June 2018, and subject to the feedback received in the public participation process, HCD will target the first release of this funding to be available by the end of September 2018.
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. Starting summer of 2018, 5 percent of the resources available to local governments to support planning efforts is available for technical assistance to jurisdictions, provided by HCD and the Governor’s Office of Planning and Research. HCD expects to release the notice of funding availability for planning funds no later than Spring of 2019 and those funds will be made available for a two-year timeframe.
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 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. Appropriations would likely occur through adoption of the state budget, which is passed by June 30th of each year, and covers the state fiscal year from July 1, 2019 through the following June, 2020. Funds will be available following those appropriations.
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 Notice of Funding Availability (NOFA) in Spring 2019. Subsequent NOFAs would follow throughout 2019. HCD expects to expend the Bond proceeds through a series of NOFA’s 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 needs targets, SB 35 will streamline approval processes allowing construction to happen more quickly. The bill also ensures that more housing is “infill.” 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.
Q: Which jurisdictions will be subject to SB 35 requirements?
A: A jurisdiction may be subject to SB 35 for:
- not permitting sufficient housing units to meet its pro-rata share of regional housing need, or;
- not submitting Annual Progress Reports (APRs) (pursuant to 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. HCD will update the list at least quarterly to incorporate late annual progress reports and corrections.
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 is applicable 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 Spring 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: 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 Annual Progress Reports (APRs).
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 Annual Progress Reports (APRs) for the prior reporting period?
A: As of January 1, 2018, all jurisdictions, including charter cities, will be subject to SB 35 if they do not submit their latest APR. Currently the latest required APR is the 2016 APR, which was due April 2017. The 2017 APR will be 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 streamlining within a jurisdiction changes based on which income categories of the regional housing need have not been met (pursuant to Section 65913.4(a)(4)(B))
|Streamlining for projects with 10 percent affordable units (and that 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)||
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 Section 65913.4(a)(5)(A))
A: A project must be compliant with the maximum density allowed, which would include any density allowed under the land use designation, up to the maximum density.
Q: If the total number of housing units on a parcel or specific plan area is limited to a specific number or allocation, could the total number of housing units in a development exceed that allocation if it is consistent with maximum density standards? (pursuant to Section 65913.4(a)(5)(A))
A: Yes. The statute specifies that a project that meets 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 Section 65913.4(a)(5)(A)).
Q: If a specific plan or other legislative approval such as a conditional use permit is required by a city’s general plan, is such a requirement not considered an “objective planning standard” and therefore would not apply to an SB 35 development?
A: SB 35 specifically exempts developments from the conditional use permit process and must be approved through a streamlined, ministerial approval process if it satisfies the objective planning standard described (pursuant to Section 65913.4(a))
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 Annual Progress Report (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 leading up to that.
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 recent legislation, there will be broader reporting requirements in the future, but those requirements will not come into effect until the 2018 Annual Progress Reports, due April 2019.