Credit: Jean Yamamura (file)

As the February 15, 2023, deadline approaches for local governments to submit their revised Housing Element drafts to the California Department of Housing and Community Development (HCD) for certification, the terms “builder’s remedy” and “use by right” have been used more frequently. And now that the County of Santa Barbara and the City of Carpinteria have announced that they will likely fail to meet that February deadline to submit their plans, questions arise as to what exactly these terms mean and what the repercussions are of losing state certification.

As readers may recall, California’s “Housing Element” is a law that, according to the HCD website, requires all local governments both at the city and county levels to “address the housing needs and demand” of residents and specifically that they “adopt plans and regulatory systems that provide opportunities for — and do not unduly constrain — housing development.” For the upcoming eight-year housing element cycle, the county must prove it can — at least on paper — accommodate the state’s allocation of 24,856 units of housing by 2031; the City of Carpinteria is on the hook for accommodating 901 of those units, while the City of Santa Barbara has been allocated 8,001 for the same cycle.

During the December 5 meeting of the Carpinteria Planning Commission, Chair Jane Benefield was shocked to learn that the city was on course to miss the deadline and could potentially be subject to the “builder’s remedy” — which would essentially tie the hands of local review boards on projects that met certain objective standards, regardless of whether the project meets specific zoning guidelines. Put simply, if a city or county government does not have a certified housing element in place after February 15, it could mean they lose the ability to stop a housing project that would normally be denied.

“Our housing element, is it going to be in on time?” Benefield asked city staff at the beginning of the December meeting. The commission, she said, had done its due diligence to ensure the city made the deadline.

Carpinteria Community Development Director Steve Goggia replied by saying it was “doubtful” they would meet the deadline. “Like the other jurisdictions all around us,” he added.

During a South County Housing Element Workshop in November, County of Santa Barbara Housing Element project manager Jessi Steele similarly broke the news that the county would also overshoot the state’s timeline.

“The county is not going to meet this deadline,” Steele said.

For the county, staff shortages in the planning department put pressure on the team drafting the housing element; Steele’s co-manager on the project, Selena Evilsizor Whitney, left her job at the county shortly after the November workshop, and the department is still trying to fill several vacancies. But for many jurisdictions throughout California, the state’s strict deadline and slow response in providing comments on the initial drafts turned in to HCD over the summer tightened up an already short window of opportunity to make the state’s requested changes before February.

“The state added additional timelines for HCD,” Goggia explained. “Also, even once we had our contractor involved, they added more materials that needed to be submitted; and the state is taking longer to look at documents and requesting a lot more information, so it’s safe to say the majority of jurisdictions are not making their timeline.”

The City of Santa Barbara was also on track when it submitted its initial draft in August, but HCD staff was unable to process and review the draft until October 31, and on November 16 the state sent a letter to the city planners with 12 pages of comments and revisions that the city would need to address before submitting the final draft in February.

According to the HCD response letter, the state said that if the city fails to address all of the revisions — which include directions to provide in-depth studies on parking, affordability, city-owned sites, and more — it would be in danger of losing its certification.

“The draft element addresses many statutory requirements,” the letter reads, “however, revisions will be necessary to comply with state Housing Element law.” 

If the city doesn’t address the comments from the state — which require a mountain of work executed and drafted within the next six weeks, including the holiday period  — it would be without a certified housing element, and like a majority of other California jurisdictions who are also on track to miss the deadline, it would be theoretically powerless to stop new projects.

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Local governments who fail to adopt a compliant housing element within 120 days of February 15 have one year to rezone available sites to accommodate the Regional Housing Needs Allocation, which for Santa Barbara County is just over 24,000 units over the next eight years. 

So for that period of time between when the current fifth housing element cycle expires on February 15 until the cities and county can certify the next cycle, government agencies would be exposed to the builder’s remedy.

The tactic, also referred to as “use by right,” was most notably seen in its most dramatic form in the City of Santa Monica, where a perfect storm of underdevelopment and slow-moving city review boards gave the power to developers who took advantage of the builder’s remedy after the city failed to certify its housing element in 2021. In less than a year, one developer in particular applied for 16 projects containing 4,562 housing units in buildings up to 15 stories tall before the city was able to officially certify its housing element in November 2022. 

While Santa Monica is an example of a worst-case scenario, it was also in a unique position with a notoriously nitpicky city leadership that turned down many attempts at addressing housing needs in the years leading up to the missed deadline. Then in October 2021, the city council voted 5-2 to approve its own housing element, despite concerns that the draft did not meet HCD’s standards or address the state’s revisions. When the state formally rejected the housing element in February 2022, it opened the door for several large-scale projects that had already been in the pipeline or were previously rejected by the city.

In Santa Barbara, if the city and county miss the February deadline, it is far less likely that a big project would make it through review and receive permits before the jurisdictions receive certification from HCD — even if that certification takes up to one year. Furthermore, use by right would only apply to projects that offer 20 percent or more “very low income” affordable housing or 100 percent “moderate level” housing, which local developers have been historically reluctant to offer. Many of the most recent apartment projects of 10 or more units only offer the minimum 10 percent affordable housing, very few of which are ever offered at the “very low” income level.

Certain areas of Santa Barbara County are also subject to their own development standards that supersede the Housing Affordability Act, through which the builder’s remedy receives its power to sidestep local standards. Much of Carpinteria is covered by the Coastal Act, which Goggia explained would take precedence over the use-by-right clause, allowing city review boards to cling to Coastal Act standards on projects in review during that time.

Instead, it is more likely that local governments risk losing out on important federal funding and transportation grants, and they would also be exposed to lawsuits and fines.

Out of the more than 200 Southern California governments that went through the same situation last year, 97 percent of them missed their February 2022 deadline. The state was intent on adhering to the tougher rules for compliance, and gave those local governments a second chance to file before October 2022. Even then, HCD reported that 121 cities and counties were “doubly non-compliant” and had missed both deadlines. Since then, most have filed for certification and avoided the wave of developments that were seen in Santa Monica.

This year, there has been no indication that the state would extend the February deadline. But as the date fast approaches, local governments are holding out hope that they will also avoid a run-in with the builder’s remedy.

“I think we’re in pretty good shape,” Goggia said.

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