Last July, we published a blog post discussing the failure of most California local governments to meet the deadline to submit their housing elements for approval to the California Department of Housing and Community Development (HCD).

At the time, we criticized the California legislature for extending the timeline for submission of housing elements and rezoning. Housing elements were originally due to HCD by February 2022, but cities who had failed to meet this deadline were given until October 2022 to comply through the passage of SB 197. These cities were then allowed three years to adopt their approved housing elements and complete the rezoning process (which was originally required to be completed by October 2022). If local governments fail to complete their housing elements and rezoning processes by these new deadlines, they will be ineligible to receive affordable housing grants from the state. But given that this is a routine process and cities have been required to submit their housing elements for approval and rezone accordingly every eight years since the 1970s, the local governments’ argument that the original timeline was impractical does not have standing.

Despite our justifiable skepticism, we may have underestimated the California legislature’s willingness to stand up to the NIMBY lobby. While the legislature remains reluctant to cut off housing funds to non-compliant localities, state officials have instead utilized an obscure provision of the Housing Accountability Act known as the Builder’s Remedy to bypass the local governments who have deliberately chosen to not zone for adequate amounts of housing. The Builder’s Remedy discontinues the zoning abilities of localities who fail to get their housing elements approved by HCD by the applicable deadline. Developers in these cities are then permitted to propose residential projects at any height and any density as long as at least 20 percent of the units are restricted for individuals at or below 80 percent of the Area Median Income. As a result, the Builder’s Remedy allows for greater amounts and types of housing to be built in communities that are typically opposed to projects outside of single-family homes.

HCD is tracking the status of each localities’ housing element. Currently, 46 percent of jurisdictions (for a total of 249 out of 539) have housing elements that are out of compliance. All these jurisdictions are now subject to the Builder’s Remedy.

While there has been discussion of local governments challenging the Builder’s Remedy in court, there are no active cases at this point. In the meantime, it looks like more housing will be built throughout California, which is good news for the state’s embattled homebuyers and renters.