Coming to a Shuttered Mall Near You – an apartment complex
California’s AB 2011 passed in 2022. While housing advocates and cities were aware of the bill, most of us were not. That has changed recently, as high-density housing projects are receiving streamlined permit approvals and local news outlets have covered surprised neighbors or angry city council members.[1]
So, what does AB 2011 do?
It allows high density housing projects to bypass a city’s zoning rules and build either 100% affordable housing or mixed-income housing where “office, retail, or parking are a principally permitted use.”[2] Think of the abandoned strip mall on the old side of town. Think of the office building that has been vacant since 2022. The bill’s goal was to allow these to be converted into housing. In effect, that means a builder can rezone a commercial office parcel as residential. Not only can the parcel be rezoned, it can be done with very little input from the city council or planning commission. A city may have the option to say “you cannot build on Site A; build on Site B instead,” but that requires the city to have a similar lot available. In addition, this ministerial approval process is fast. Depending on the number of units, the approval process is either a maximum of 90 or 180 days. Cities that do not comply with this law may be referred to the state Attorney General’s office by the California Department of Housing and Community Development (HCD). [3]
More housing now
Proponents of the bill, including three cities and a handful of mayors, see this bill as a way to alleviate California’s housing crisis.[4] They note that many cities heavily restrict approval of housing developments, preferring large lots and high value properties to high density housing meant for families of limited means. Cities may be slow to rezone underutilized land. They argue that, with so much vacant office space, rezoning properties as residential is a way to bring life back into blocks that have gone quiet.
Assemblymember Buffy Wicks, (District 14, Piedmont to Rodeo), the author of the bill, applauded its ability to remove red tape and use existing land for housing.[5] Some of that red tape involves exempting these projects from CEQA. When asked about it for this article, Professor Christopher Elmendorf from the UC Davis School of Law said that these projects “should be exempt” from CEQA. He has written several times on CEQA reform and believes legislation is needed to “stop cities from abusing CEQA to stall, indefinitely, the same housing projects that the Legislature has said they may not deny.”[6]
Let local governments decide
Opponents of the bill, including many local cities like Brentwood and Pleasant Hill, oppose the loss of local control and oversight in building, including “the ability to provide affiliated infrastructure.”[7] With large developments moving from a years-long approval process to a months-long process, the infrastructure issue may be the largest downside of swift ministerial approval. Increasing the number of residents means additional utilities and more traffic. Adding a lane to a road is not a fast process.
Some cities have also complained about the potential loss of sales tax from converting commercial spaces into residential. There is a provision in AB 2011 that will “enable a local government to require up to half of the ground floor of the new development be utilized as retail,” so hopefully that will bring back some of the lost revenue if a site is transferred from retail to residential.[8]
Will AB 2011 help solve the housing crisis?
That will depend on whether the ministerial approvals continue and whether tenants move into these new properties. Some cities are hoping that becoming a “charter city” will allow them to avoid this law and others by taking back local control.[9] A charter city creates its own governing documents and rules, which allows it to bypass some of the state’s regulations. This is different than a general law city, which is subject to all of the state’s regulations. Their goal is to put these projects back in the normal pipelines of planning commission and city council oversight.
Although there was a recent case that seems to provide some hope to this movement, charter cities are still required to follow housing rules where the “concern is statewide,” rather than a “strictly municipal affair.”[10] When there is doubt as to whether something is statewide or local, the state wins.[11] As a practical matter, if every city becomes a charter city to escape the legislature’s rules, the legislature is unlikely to allow charter city exemptions for long. For example, as of the writing of this article, Assemblymember Wicks is proposing amendments to AB 2011 in AB 2243, including a specific finding that AB 2011 applies to charter cities.
What both sides can agree on is that boarded up commercial or retail areas are not helping anyone. Perhaps the mixed-use retail / residential projects will be something everyone will be happy to see. HCD is required to complete a study by January 1, 2027, so check with me in a few years to see whether the bill is working. [12]
[1] See, for example: Jake Menez, ‘Your City Council in Brentwood is Pissed’ State law supersedes local housing decisions, Brentwood Press, March 28, 2024, updated March 29, 2024, https://www.thepress.net/news/your-city-council-in-brentwood-is-pissed/article_dee4117c-ed21-11ee-bfca-e7cb1ef2a2f5.html
[2] Cal. Gov’t Code §65912.111(a)
[4] Cal. AB 2011 (2022), Senate Floor Analysis, Third Reading.
[5] Press Release, Gov. Gavin Newsom, California to Build More Housing, Faster, (Sept. 28, 2022), https://www.gov.ca.gov/2022/09/28/california-to-build-more-housing-faster/
[6] Elmendorf, Christopher S., Testimony for Little Hoover Commission Hearing on the California Environmental Quality Act (March 16, 2023). Available at SSRN: https://ssrn.com/abstract=4389930 or http://dx.doi.org/10.2139/ssrn.4389930
[7] Nearby municipalities who opposed the bill included Brentwood, Fairfield, Fremont, Novato, Pleasant Hill, Pleasanton, Ripon, and Sunnyvale. Regional associations in opposition included cities located in San Mateo County, Marin County, and the “Tri-Valley Cities of Dublin, Livermore, Pleasanton, San Ramon, and Town of Danville.” Cal. AB 2011 (2022), Senate Floor Analysis, Third Reading.
[8] Cal. Gov’t Code §65912.123(j)
[9] Ben Christopher, These cities are Using a Controversial New Tactic to Sidestep California Housing Laws, KQED, June 18, 2024, https://www.kqed.org/news/11990860/these-cities-are-using-a-controversial-new-tactic-to-sidestep-california-housing-laws.
[10] Ruling on Verified First Amended Petition for Writ of Mandate in City of Redondo Beach, et. al v. Rob Bonta, et. al, (April 22, 2024, LA County Superior Court) Case 22STCP01143, quoting Baggett v. Gates (Cal. 1982) 32 Cal.3d 128, 140. This case found that SB 9 did not apply to Redondo Beach, which is a charter city.