Bay Area Cities To Lose ALL Housing Zoning Powers in 2 Days

Old law proposes to turn the Bay Area's zoning system into something like Japan's in just two days.

San Francisco’s Sunset District will be upzoned for new, high density housing to help add 80,000 new homes via the housing element approved by SF city gov’t and the state.

Update: you can track a city's housing element status here.

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An old law may eliminate the housing-related zoning ordinances of the vast majority of cities throughout the Bay Area. Yes, seriously. It’ll occur this Wednesday, too. Developers will be allowed to propose housing (and only housing) at any height and any density in a city, so long as at least 20% of the homes in the proposed building are deed-restricted to low income residents who make at or less than 80% the area median income. Alternatively, 100% affordable to moderate income residents where rents don’t exceed 120% area median income.

The first city to have the builder’s remedy thrust upon them was Santa Monica who failed to adopt a valid housing element. What happened next shocked California: the residential zoning for the city was suspended by law.

The whole residential zoning.

A town which in the last eight years approved 1,600 new homes and within a week, saw a dozen development proposals filed that put 4,000 new homes in the pipeline with over 800 of them deed-restricted for low income households. They couldn’t reject a single home, either. It didn’t even go through a long city council process, the project approvals were merely administrative by the planning department who verified if the project is sound in non-density or height regulations. The city councils and zoning boards had zero authority to deny the projects. Zero.

This shocked California political pundits, news media and neighborhood organizations. This had never happened before. Were more cities next? Yes, the rest of the state of California. But it was brought about by a combinations of new and old laws that got us here. So a brief history:

The “builder’s remedy” is a very old law from the 1990s known as the Housing Accountability Act (HAA). Cities since the 1970s have been required to design housing elements (formerly known as municipal master plans) that essentially sketch out the residential zoning of a city. During the ‘70s, cities were all about an anti-population growth and downzoned the capacity for future housing by the millions in housing units, which pretty quickly led to a housing shortage.

In the 1980s, the state passed the Regional Housing Needs Allocation (RHNA) which gave every municipality a target amount of housing to build based on population growth. These early estimates were remarkably small, they were astonishingly controversial, and unsurprisingly most cities didn’t even try to fulfill them. So the legislature gradually passed policies to try and provide carrots to encourage cities, such as affordable housing funds, and a few sticks such as the HAA. The HAA contained a provision that if a city’s housing element didn’t satisfy the standards laid out by the Housing and Community Development (HCD), which oversees the process of zoning for RHNA targets, then your current zoning is suspended.

Essentially you have no zoning power over housing rules like height and density limits until you make a zoning map that HCD finds suitable enough to build the RHNA numbers your city is given. But since the HAA’s passage in 1990, this policy was entirely hypothetical and obscure because HCD never invoked it via declaring a city out of compliance. They wouldn’t dare. There were no real standards or scrutiny so HCD would just approve any housing elements no matter how bad. Cities routinely zoned for housing in illogical and comical areas where they’d never be built, and still do, such as Orinda, CA trying to zone for its low income housing requirements beside an impractical freeway off-ramp.

That all changed with laws mainly passed by state senators Nancy Skinner (D - Berkeley) and Scott Wiener (D - San Francisco) in the 2010s to update the RHNA requirements. Cities now had to zone for a variety of equitable impacts, most importantly putting housing in affluent neighborhoods, away from toxic industry and in ways that were feasible for development. So for example, SoCal cities loved to zone for apartments on top of active, popular shopping centers that would never be torn down. This was no longer permitted.

And Wiener’s law SB 828 reformed RHNA so that the numbers had to more accurately gauge for population demand, lack of vacant housing and household formation which increased housing requirements tremendously. Places like Beverly Hills went from being required to build 3 homes over 8 years in the previous RHNA cycle to 3,000 homes now post-SB 828.

Santa Monica pre-2023 approved 1,600 homes, 551 of them below-market rate, over 8 years. Now Santa Monica must zone for 8,874 new homes with half of them below-market rate. Having been struck by the Builders Remedy and getting their zoning suspended, within one week developers officially filed to build 4,797 new homes with 829 of them low income.

Santa Monica met 50% of their dramatically increased 2023 - 2031 housing requirements, including a 50% increase in the amount of low income housing approved over the previous 8 years — without a cent of public subsidy — in just one week. This also consists of several high-rise buildings taller than anything allowed in Santa Monica’s zoning code or current housing stock.

It is a perfect example of a substandard zoning code creating housing shortages.

Santa Monica’s builder remedy pipeline within just 1 week of losing its zoning powers.

That’s a pretty big deal and you can see why it shocked Californian political observers and city councils throughout the state. HCD meant business. Affluent cities throughout Southern California tried to resist but places like Beverly Hills failed and their zoning was temporarily eliminated by the builder’s remedy. The following cities: Huntington Beach, Malibu, Palm Springs, Pasadena and West Hollywood had their housing plans failed by HCD, and developers have lined up to fulfill RHNA’s housing mandates without being obstructed by density, height limits, parking requirements or approval times. (Cities like Los Angeles were approved by HCD).

Now that Southern California’s review is over, the Bay Area’s review is up. Next year remaining regions throughout California. HCD has made clear than any housing element that doesn’t zone feasibly for new housing especially in affluent areas will have their housing elements rejected. If they’re still in a rejected state by the deadline, their zoning disappears. If a city creates a good housing element and HCD approves, the builder’s remedy turns off and their local zoning is restored — but the projects approved under builder’s remedy will remain.

San Francisco frantically sought to avoid this, especially since HCD drew extra fire on the city and announced a special investigation into the slow housing approval process of San Francisco’s political system. The first ever housing investigation of its kind. Supervisors in the city cried they were being targeted and bullied by the state — but it worked. Fearing total loss of the highly sacred power to approve housing in San Francisco, the Board of Supervisors, the Planning Department & Commission, and the political activists of the city assembled quite a radical (but potentially lemon) housing element. One that proposes to upzone corridors in SF’s wealthier and lower density westside, something that was long believed to be politically impossible a year or two ago.

HCD reviewed SF’s housing element and said it “largely complied” with the state’s rules, even though it was heavy on promises. As such, SF will not be subjected to the builder remedy on Wednesday. Shockingly, only a few other Bay Area jurisdictions can claim to keep their zoning as of writing this: Emeryville, Redwood City, and Alameda city.

Oakland got its housing element rejected by the state for failing to zone for more high density housing in its white and affluent northeast neighborhoods. Oakland has written another draft that upzoned the Rockridge BART area for high density housing — more than 50 years after apartments were banned there — and is hoping for approval tomorrow. Chances are high that Oakland gets it. In December, HCD bestowed Oakland and only 6 other cities (none in the Bay Area) the state designation of “pro-housing,” which comes with a pot of affordable housing funds due to Oakland resident’s supportive attitudes towards housing approvals.

Berkeley’s housing element, like its neighbors, long perpetuated segregation. New housing in Berkeley was only allowed in historically commercial or redlined areas. A last minute change to avoid the hammer by pro-housing city council members adopted major re-zonings that would for the first time in Berkeley’s history, high density apartments in its all-white neighborhood’s commercial corridors. It was a big deal but on January 30th, HCD rejected Berkeley’s proposal and required additional assurance for more feasible targets rather than lofty goals. The city is legally believed to be subjected to builder’s remedy, although a housing element rejected but largely in compliance when certified can spend extra years re-zoning after builder’s remedy is de-activated rather than one. This is legally in question, however. (Updated: Feb 1).

Here’s a brief rundown of cities’ housing element status by yimby activists who have been pressuring suburbs and cities throughout the Bay Area to abide by fair housing and re-zone their wealthy enclaves. An effort that’s been heralded by HCD themselves and derided by the biggest NIMBYs furious at this major increases in housing zones on the horizon. Even the wealthiest community in the world, Atherton, has been subjected to these zoning battles with its residents such as Marc Andreessen and Steph Curry voicing opposition and concern respectively about additional housing in their neighborhood.

We’ve never seen anything like this in California housing history where a residential building of any height, with any amount of parking, can be placed in the wealthiest communities in the world provided its just 20% affordable and is safe. Zoning has often confined new development to low income, gentrifying enclaves due to NIMBYism in wealthier ones but also higher income enclaves being more profitable for developers. But now the wealthiest communities in the Bay like Marin County, Lamorinda and Silicon Valley may be getting highrises of housing for the first time in their history come the 1st with no ability to appeal.

There’s a lot of questions still unanswered, though. This will all be legally challenged since we’re in new territory with the HAA. Many developers still can’t believe it and aren’t sure to propose nor have readied capital to propose projects. Other builders since the Santa Monica news appear quite excited to build apartments in exclusive, expensive enclaves they’ve always wanted to. There’s a political question too about whether HCD will let substandard housing elements through just to not anger cities and incite backlash.

I’ll update you all shortly after February 1st to see who made it and who didn’t. Many cities today will get their zoning proposals approved. That’s a safe bet. But the ones that don’t, who mostly whipped together nonsensical housing elements, will probably see a tall apartment or two approved in their city, and push those cities to comply with fair housing rules.

Lastly, this process is not sudden. These laws were passed years ago and the housing element process is a multi-year process that occurs every eight years. Cities and advocates have been talking about this exact date years ago. The process rewards cities serious about accommodating new housing in ways that don’t perpetuate blatant inequities which is what a good zoning map is supposed to do, and what many cities have refused to do.