Will 2025 be the Year of the Builder’s Remedy?

One of the most controversial housing bills in California that was signed into law last year was the Attorney General-backed AB 1893 (Wicks). This bill’s goal was to make the so-called Builder’s Remedy of the Housing Accountability Act (HAA) a more useful entitlement tool for developers. We wrote a summary of AB 1893 with our friends over at Patterson & O’Neill on this topic. While this bill may be helpful in making the builders remedy more useful, we’re most excited about how it strengthens the HAA.

AB 1893 attempts to crack down on many strategies that local agencies have used to stop HAA and Builder’s Remedy projects. AB 1893 expands what it to means to unlawfully “disapprove the housing development project” for both Builder’s Remedy and HAA projects. Previously, the HAA only defined a project as being disapproved when a local agency voted or took final administrative action on the project or failed to comply with Permit Streamlining Act deadlines for the project. AB 1893 expands the definition of “disapprove” to include when a local agency:

1. Causes unnecessary delays to increase the costs of an HAA or Builder’s Remedy project in order to stop it without taking final administrative action;
2. Determines that an HAA or Builder’s Remedy application is incomplete and requests additional information or includes an item that is not required on its submittal checklist;
3. Fails to comply with the Housing Crisis Act (SB 330), including the five hearing rulefor both HAA and Builder’s Remedy projects;
4. Wrongfully determines that the applicant has lost its vested rights for an HAA or Builder’s Remedy project; or
5. Determines that an HAA or Builder’s Remedy application is incomplete if a reasonable person would conclude that the applicant has submitted all the required information.

These address some glaring loopholes in the HAA that have now been closed, especially around “project completeness,” which cities have been adept at exploiting to avoid formally admitting that they are disapproving a project that is protected by the HAA from being disapproved! The excuse of “we didn’t disapprove your project because we don’t think you’ve submitted all of the items we need to process your application” should soon become a thing of the past, since developers now have a tool to bring an action to contest this kind of fake “disapproval” when cities can’t point to a written policy that requires the so-called ‘missing items’ for an application to be considered “complete.”

But did this bill succeed in also helping builders remedy projects? It’s only been in affect for 50 days as of this writing, but we’re already hearing from builders that aspects of it, especially its limitations on delays that cities might cause via the CEQA process, are proving to be beneficial, while other aspects of it, like its reduction in density available to projects, are frustrating.

While, in some cases, AB 1893 reduces the number of housing units (aka density) that a builders remedy project is allowed to be built at compared to what was allowed for builders remedy projects prior to 2025, it does lower the overall percentage of deed-restricted affordable units that are required to be included in the project, which can help with overall feasibility. While previously, builders remedy projects were required to set aside 20% of the total units as affordable, now, not only is the “base density” number reduced, but the builders remedy can be combined with State Density Bonus Law to lower the total percentage further, depending on how many additional “bonus units” are included in the project.

AB 1893 clarifies that Builder’s Remedy projects are eligible for the Density Bonus Law (Gov’t. Code § 65915) and that the base density for the Density Bonus Law is calculated based on the underlying Builder’s Remedy project. AB 1893 does not limit a Builder’s Remedy project’s eligibility for density bonuses, incentives, concessions, waivers, or reductions of development standards and parking ratios under the Density Bonus Law. In fact, AB 1893 grants two additional incentives or concessions to Builder’s Remedy projects. Additionally, a Builder’s Remedy project that has 7% of its units restricted to extremely low-income households can now receive the same density bonus as one with 10% of its units restricted to very-low income households.

Confusingly though, while AB 1893 lowers the required affordability for builders remedy projects in the base density, it now also allows cities to impose their own local inclusionary zoning requirements on the projects.

“AB 1893 allows local jurisdictions to impose greater affordable housing requirements on Builder’s Remedy projects, but caps them at a maximum of 20% unless the jurisdiction makes written findings that a higher requirement will not make the Builder’s Remedy project infeasible. So a local agency can require a project to have 20% lower-income, very-low income, or extremely low units to qualify for the Builder’s Remedy. We expect local agencies will use this as a tool to deter developers from using the Builder’s Remedy. Although the written findings requirement for each project may deter cities. In fact, in the Arguments in Opposition section of the August 31, 2024 Assembly Floor analysis, the Legislative Analyst’s Office noted that AB 1893 imposes an “unworkable project-by-project feasibility study requirement in order for a jurisdiction to apply a local inclusionary requirement to a builder’s remedy project.””

What does all of this add up to? More litigation for sure, but also, we hope, more housing!