San Francisco Misses Housing Goal, Triggers SB 423 Streamlining
The Department of Housing and Community Development has determined that the City and County of San Francisco missed its housing permitting goals in 2023 and will be subject to state-imposed streamlining. The city permitted only 3,039 units in 2023; its targets fro the current eight-year RHNA cycle is over 82,000. The determination makes San Francisco subject to Senate Bill 423, the 2023 extension of SB 35. The law requires most projects to be approved within six months without the need for Planning Commission review or appeals to the Board of Supervisors. Although it excludes large or non-compliant developments, SB 423 marks a shift towards faster, less contentious housing construction in San Francisco. Currently, projects take an average of 26 months to be approved.

Beverly Hills Rejects Builder's Remedy Project, Draws Lawsuit
A developer’s bid to circumvent Beverly Hills’ zoning laws and erect a 165-unit, 19-story apartment building faced a significant setback when the City Council decisively turned down the project. The council’s unanimous decision dismissed developer Leo Pustilnikov's appeal challenging a prior ruling that deemed his plans for 125-129 South Linden Drive incomplete. This ruling seems to flouts the builder’s remedy rule, which provides streamlined approvals to build larger projects that exceed local zoning regulations. Pustilnokv has invoked the builder's rememdy in several proposals in Los Angeles-area cities. Californians for Homeownership, a group sponsored by the California Association of Realtors, has filed suit on behalf of Pustilnikov. The group recently prevailed in a different lawsuit challenging the city's housing element. (See related CP&DR coverage, and a copy of the complaint.)

Robotic Air Taxis to Debut in Bay Area
Air taxi companies Archer Aviation and Joby Aviation have received FAA certification to operate commuter and on-demand drone flights, aiming to launch commercial services by 2025. Archer plans to collaborate with Kilroy Realty to build a “vertiport” in South San Francisco, featuring a water hub powered by renewable energy. The company initially seeks to connect five locations across the San Francisco Bay Area: South San Francisco, Napa, San Jose, Oakland, and Livermore. Both Joby Aviation and Archer Aviation have received their Part 135 from the FAA, a certification that will enable them to offer air rides directly to passengers. Both services are expected to be available via Uber-style ride-hailing apps.

Court Tosses Out Moreno Valley General Plan Update
Moreno Valley has revoked approvals for developments tied to its 2021 General Plan, called "MoVal 2040," and its environmental impact report following a legal challenge by the Sierra Club, which criticized the plan's environmental study as flawed and warned of excessive air pollution in residential neighborhoods. A Riverside Superior Court judge ruled in favor of the Sierra Club, ordering the city to rectify deficiencies in its environmental review process. This decision led the Moreno Valley City Council to unanimously repeal project approvals associated with the General Plan update, acknowledging the need for transparency and proper assessment of environmental impacts. The city now faces the task of reevaluating projects under older guidelines while considering a revised General Plan compliant with state environmental laws.

Report Excoriates San Francisco for Mismanagement of Capital Projects
A new report by the San Francisco Civil Grand Jury found that San Francisco Public Works’s capital projects, valued at over $18.9 billion, are plagued by cost overruns, delays and deficiencies. The Grand Jury found several instances where projects did not follow original development plans leading to extra costs, unsafe design, and unusable infrastructure. For example, the fire department’s new fireboat station went over budget by $13 million, doesn’t address rising sea levels, consistently experiences equipment failure, and can’t legally house fire trucks. Public Works responded to the report stating that they have a legacy of award-winning facilities, but they will review the grand jury’s recommendation in an effort to improve their department and projects.

CP&DR Coverage: Builder's Remedy Bill Advances, with Changes
The builder’s remedy reform bill is moving forward in the Legislature – though the YIMBY movement is divided over the bill and significant amendments have been made in the Senate that would decrease allowable densities and affordability requirements. AB 1893, carried by Assemblymember Buffy Wicks, sailed through the Assembly. But at a Senate Housing Committee hearing on June 18, the bill ran into opposition from YIMBY Law and several amendments were made. The bill will now go to the Senate Local Government Committee. There are two major changes: 1) Currently, the builder’s remedy is allowed for projects that dedicate either 20% of the units for low-income housing or 100% for moderate-income housing; the original Wicks bill cut the 20% to 10%; the Senate version increases the 10% up to 13%; 2) A change in the permitted density; the original Wicks bill called for limiting density to double what’s required to achieve housing element goals or triple what the local density calls for; the new bill limits the number to 50% of what’s required for housing element goals. Meanwhile, at least one city – West Hollywood – is seeking legislation that would exempt it from the builder’s remedy.

Quick Hits & Updates

Six conservation groups have petitioned the California Fish and Game Commission to classify five western burrowing owl populations as threatened or endangered under state law, potentially impacting development in various California regions. The Commission has extended the California Department of Fish and Wildlife's evaluation period to July 16, 2024, with a decision expected at its August 2024 meeting.

A lawsuit filed by Save The American River Association Inc. challenges the approval process for four high-rise apartment towers along Sacramento's American River. The lawsuit alleges that the city and LPA Design Studios did not comply with California Environmental Quality Act requirements when approving the project. The proposed development aims to build 826 market-rate apartment units and was expedited due to its proximity to light rail stops, which exempted it from certain environmental reviews. The lawsuit seeks to invalidate the city's approval and halt construction until further environmental studies are conducted.

Mountain House, California’s newest city in San Joaquin County was officially incorporated on July 1 with nearly 30,000 residents, marking the county’s eighth city and the state’s 483rd.

The Huntington Beach City Council voted to place a city charter amendment on the November 5 general election ballot, requiring voter approval for City-initiated general plan amendments or zoning changes that are deemed to have significant and unavoidable negative environmental impacts. The proposal reflects ongoing tensions between the council majority and the State of California regarding housing mandates, particularly the Regional Housing Developments Assessment, which could potentially require zoning for thousands of new residences in Huntington Beach.

The Santa Ana City Council has implemented a moratorium on new, expanded or relocated industrial activities in areas surrounding the Logan, Lacy and Downtown neighborhoods. This decision, part of an environmental justice initiative under the city's new General Plan, aims to address historical disparities in environmental burdens faced by these predominantly Latino and historically disadvantaged neighborhoods.

A grand jury report criticizes San Luis Obispo County’s plan to reduce homelessness by 50%, citing obstacles like NIMBYism, organizational challenges, zoning laws, and funding gaps. The report highlights that only 130 of the 300 beds planned for the first three years are in progress, recommending the county to improve staff succession planning, and implement a public awareness campaign on homelessness issues.

California Attorney General Rob Bonta filed an appeal to reverse a Los Angeles County Superior Court judgment preventing the enforcement of Senate Bill 9 (SB 9) against five charter cities, arguing it violates their state constitutional authority. SB 9 mandates a streamlined approval process for homeowners to build duplexes or subdivide lots zoned for single-family homes.

The University of California turned down an invitation by San Francisco’s Mayor London Breed to open a campus in the city’s downtown, citing budget issues. Mayor Breed hopes to keep pursuing the opportunity to open a satellite campus for an HBCU in the area.

Rhode Island-based Gilbane Development will continue with its plans to build an 18-story apartment building atop the former California Theater in Berkeley, while persevering its facade and marquee thanks to the city’s Landmarks Preservation Commission. The project proposal, which was exempt from CEQA, will host a live performance space twice the size of the original 11,000-square-food cinema and will have 211 residential units, comprising studios, two-bedroom, and four-bedroom apartments, with eleven units designated for very-low-income residents.

According to an analysis of first-quarter economic measurements by Attom, California is home to six of the ten counties across the U.S. with the highest risk of home-price declines due to affordability issues, high rates of underwater mortgages, foreclosures, and unemployment. Most of California’s high-risk counties are less-populated regions to the north such as San Joaquin (1), Merced (2), and Madera (4). On the other hand, some of the state’s largest housing markets, like Santa Clara (363) and San Diego (267), show lower risk despite higher home prices.