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By Beth Abramson
December 7, 2023
California Senate Bill 4 (“SB4”) was signed into law on October 11, 2023 and focuses on streamlining the approval process for affordable housing developments on sites owned by religious institutions and independent higher education institutions even if the site is not zoned for residential purposes. If certain requirements are met, SB4 allows for affordable housing developments to be approved through a ministerial review process, to which CEQA’s expensive and time-consuming review process does not apply.
Streamlining land use and zoning approvals is only one hurdle to developing affordable housing, so it is difficult to predict the impact of SB4 on increasing the number of affordable units. For the institutions that qualify, additional resources and expertise will be needed to navigate the development process, acquire funding, and manage the properties once complete.
Requirements
To be eligible for a streamlined approval process under SB4, the following criteria must be satisfied:
- Owned by Covered Institution. The development is located on land owned on or before January 1, 2024, by an independent institution of higher education or a religious institution.
- “Religious institutions” are defined as institutions owned, controlled and operated and maintained by a church, religious denomination or religious organization composed of multidenominational members of the same well-recognized religion, lawfully operating as a nonprofit religious corporation or corporation.
- “Independent institutions of higher education” are defined as private higher education institutions that (i) grant undergraduate degrees, graduate degrees or both, (ii) are formed as a nonprofit corporation in California, and (iii) accredited by an agency recognized by the US Department of Education.
- Not Adjacent to Industry. The development is not adjoined to any site where more than 1/3 of the square footage on the site is dedicated to light industrial use. Parcels separated by only a street or highway are considered to be adjoined.
- The housing units on site would not be located within 1,200 feet of a site that is either (i) currently a heavy industrial use, or (ii) a site where the most recent permitted use was a heavy industrial use.
- The housing units on site would not be located within 1,600 feet of either (i) a site that is currently a Title V industrial use, or (ii) a site where the most recent permitted use was a Title V industrial use.
- Not Close to Oil or Gas Refinery. For a site where multifamily housing is not an existing use, the housing units on the site would not be located within 3,200 feet of a facility that actively extracts or refines oil or natural gas.
Tempering the extent of the bill’s application, there are strict affordability requirements, which will be enforced via deed restrictions for 55 years on rental units and 45 years on purchaser units. One hundred percent (100%) of the units must be designated as affordable with at least eighty percent (80%) of the units for lower income households, up to twenty (20%) of the units for moderate income households, and up to five percent (5%) of the units for staff of the religious institution or education institution. In San Diego, a family of four earning less than $110,250 or a single person earning less than $77,200 would qualify as a low income household.
Projects that contain more than ten units and are not a public works project must comply with prevailing wage requirements, while projects with more than fifty units must comply with prevailing wage, healthcare, and apprenticeship program requirements, as defined in the Labor Code.
If you are interested in using SB4 and wish to determine the development potential for your site, including density potential, parking requirements and ancillary uses, please contact Beth Abramson at babramson@hechtsolberg.com, Talon Powers at tpowers@hechtsolberg.com, or Neil Hyytinen at nhyytinen@hechtsolberg.com.