Builder’s Remedy Frequently Asked Questions

^{We found the following on the Saratoga town site and feel it does an excellent job of explaining the Builders Remedy.}

 

Q: What is the Builder’s Remedy?

 

A: The Builder’s Remedy is a legal tool that may allow developers to bypass local zoning and general plan requirements when a locality’s housing element does not substantially comply with state law. Although the Builder’s Remedy, which is created in the Housing Accountability Act (HAA), has technically existed for years, developers began asserting it in 2022 after the end of the most recent Housing Element cycle. Press coverage has reported on many such projects proposed in cities across California over the past year.  

Q: How Does the Builder’s Remedy Work?

 

A: The HAA limits the ability of cities and counties to disapprove or impose certain conditions on housing development projects. For projects that propose a certain amount of below-market-rate housing or an emergency shelter, the local agency must make one of five findings in order to deny the project or apply conditions that make it infeasible. (Government Code Section 65589.5(d).) The builder’s remedy limits the local agency’s ability to make one of those findings if the local agency does not have a housing element in substantial compliance with state law. This is described in more detail below. 

1. The city or county has met or exceeded its Regional Housing Needs Allocation (RHNA) for the proposed income categories in the development. A city cannot make this finding if it has not adopted a housing element in substantial compliance with state law.        
2. The project would have a specific adverse impact on public health and safety, and there is no way to mitigate or avoid the impact without making the project unaffordable. The impact must be based on objective, written public health or safety standards in place when the project’s preliminary application was properly submitted. 
3. The denial or condition is required to meet state or federal law, and there is no feasible way to comply with such a law without making the development unaffordable. 
4. The project is proposed on land zoned for agriculture or resource preservation that is surrounded on at least two sides by similarly preserved land, or there are not adequate water or sewage facilities to serve the project.
5. The project is inconsistent with both the zoning ordinance and the land use designation as specified in any general plan element. However, a city or county cannot make this finding if it has not adopted a housing element in substantial compliance with state law. 

The fifth finding creates the Builder’s Remedy. It usually allows an agency to reject a project that is inconsistent with zoning or general plan designations. However, a city may only use this finding to reject a qualifying project if it has adopted a housing element in substantial compliance with Housing Element Law. 

Therefore, if an agency does not have a substantially compliant housing element, it loses its authority to reject HAA-eligible projects on the grounds that they are inconsistent with local zoning and general plan requirements. Three other findings remain available as a basis to condition or deny a project.

A local agency may impose objective, quantifiable, and written development standards on Builder’s Remedy projects, as long as those standards do not make a project infeasible to develop.  

 

Q: Are Projects Using the Builder’s Remedy Exempt from the California Environmental Quality Act (CEQA) Review?

A: Builder’s Remedy projects are subject to CEQA review. The HAA states specifically that nothing relieves a local agency from making the required CEQA findings and otherwise complying with CEQA. (Section 65589.5(e).) A project may still be exempt from CEQA under other provisions of CEQA, other state laws, or the CEQA Guidelines. 

 

Q: When Does a Housing Element No Longer Comply with State Law? Is There a Grace Period If the Housing Element Is Not Adopted by the Due Date?

A: Housing elements must be periodically updated in what are known as “cycles.” Housing elements adopted in the most recent, sixth, cycle must comply with current state housing element law on the established due date (January 31, 2023, in the Bay area). If a sixth cycle element has not been adopted by the due date, the housing element would likely be out of compliance with state law until a compliant sixth cycle housing element is adopted. 

There is no grace period after the deadline.  This is true even during the period when a housing element is being reviewed by the Department of Housing and Community Development (HCD). HCD is tasked with reviewing a housing element’s compliance with state law and can refer agencies to the Attorney General if it finds a housing element out of compliance with state law. (Section 65585(j).)

 

Q: Are a Local Agency’s Development Standards Null and Void If the Housing Element is Not in Compliance with State Law?

A: No, the HAA does not nullify a local agency’s development standards if the housing element is not in substantial compliance with state law. The builder’s remedy, however, may require a local agency to approve an eligible housing development project despite the project’s noncompliance with local zoning and general plan standards. A local agency may still impose objective, quantifiable, and written development standards on a builder’s remedy project, as long as those standards do not make the project infeasible to develop.   

 

Q: What Projects Are Eligible to Use the Builder’s Remedy? 

A: The Builder’s Remedy applies only to a housing development project “for very low, low- or moderate-income households” and to emergency shelters. The HAA defines a “housing development project” as either: 

• Residential units only; 
• Mixed-use developments with at least two-thirds of the square footage designated for residential use; or 
• Transitional housing or supportive housing. (Section 65589.5(h)(2).) 

“Housing for very low, low-, or moderate-income households” includes either: 

• 20% of the total units sold or rented to lower-income households; 
• 100% of the units sold or rented to moderate-income households; or 
• 100% of the units sold or rented to middle-income households. 

The “very low,” “low,” and “moderate-income” household categories are based on area median income (AMI). Monthly housing costs for affordable units cannot exceed specific thresholds, with adjustments for household size. Monthly housing costs for lower-income households cannot exceed 30 percent of 60 percent of AMI. (For example, the 2023 AMI for a four-person household in Santa Clara County is $181,300; 60 percent of that figure is $108,780. Therefore monthly housing costs for such households cannot exceed $2,719 (30% of 108,780 divided by 12). Costs for moderate-income households cannot exceed 30 percent of 100 percent of AMI. No threshold exists for middle-income households. 

 

Emergency shelters are also subject to the HAA and are defined as housing with minimal supportive services for homeless persons that are limited to occupancy of six months or less.