Permit streamlining and fee reduction are not new topics among cities, counties, and the development community. Both permit applicants and reviewers can find permit processing to be quite frustrating. Most cities and counties have not made significant changes to their development permit processing and administrative procedures to ensure an efficient and timely process not only for applicants, but also for city or county staff review. Permit fees have not seen significant reform either. As a result, many permit review procedures and fee structures have led to excessive review times and fees, which in turn increase housing project costs, and are always passed on to the home buyer or renter.
Permit streamlining and fee reduction benefits. The primary benefit to permit streamlining and fee reduction is clear: reduced per-unit housing development costs. A shorter permit review process reduces costs for both the applicant and the local agency. Applicants have lower “carrying costs” that translate into less costly development projects and increased profits, theoretically reducing housing unit sales, prices, or rents. More reasonable, reduced permit process time can often make the difference between a successful project and one that fails to get built. On the public agency side, less time devoted to application review and approval means more time to devote to other important priorities.
By-Right Housing
A key contemporary best planning practice is to amend zoning code provisions to allow more housing types, particularly multifamily housing by-right in more zoning districts, subjecting fewer housing project to discretionary and public review. Typical zoning codes include several residential zoning districts, ranging from low to high density. In many zones, particularly the more widely used low-density zones, multifamily uses either require a discretionary permit or are not permitted. Permitting certain multifamily housing by-right in more zoning districts would streamline permitting by eliminating the discretionary review process for those uses. A simple change to allow more housing types by-right (e.g., duplexes, triplexes, fourplexes) in single-family zones would increase housing supply and decrease costs.
Recent State legislation requires that local jurisdictions adopt objective design standards and streamline the review and permitting processes for housing development. In addition to CEQA-related changes for streamlining, these laws are aimed at reducing the extent of discretionary review for housing developments. A ministerial review process is mandated for projects that meet certain criteria, including all housing developments of two or more units and mixed-use developments that are at least two-thirds residential that meet objective general plan, zoning, and design standards (see Related State Laws and Statutes below). Housing Element law also requires jurisdictions to identify zones (with sufficient capacity to accommodate identified needs) that allow emergency shelters and farmworker housing by-right, as well as zones that permit supportive and transitional housing projects. For example, supportive housing must be a by-right use in all zones where multi-family residential and mixed-use are permitted. By-right zoning and approvals, coupled with objective standards, would make most residential projects subject to ministerial review, thereby increasing certainty, streamlining approvals, and decreasing permitting costs for housing developers.
Outside of State-mandated ministerial review, jurisdictions are increasingly expanding the housing typologies which are permitted by-right in residential and mixed-use zoning districts and are, therefore, subject to a more streamlined review process. Effective local by-right policies establish thresholds for discretionary review as the exception, with the majority of projects subject to the ministerial process. In developing thresholds, jurisdictions may also want to consider their RHNA allocation to ensure that by-right policies are in line with housing production goals.
Reduced housing costs. The cost of required reviews and studies, and other approvals (entitlements and permits) imposed by State and local governments can make up as much as 15 to 20 percent of the costs to build new housing. By-right zoning and approvals, coupled with objective standards, would make most residential projects subject to ministerial review, thereby increasing certainty for developers, streamlining approvals, and decreasing overall housing production costs.
Infill in high resource areas. A key benefit of approval streamlining, particularly through by-right zoning, is the potential to increase housing in areas of high resources. According to the National Multifamily Housing Council, while high resource neighborhoods have the greatest demand for new housing, they are often more effective at blocking efforts to increase housing through political and discretionary processes. This in turn can increase development in neighboring lower resource areas, contributing to displacement. By-right zoning regulations should be applied in a manner that furthers fair housing goals.
Relevant State Law
Assembly Bill No. 1485 (AB 1485) (2019) Amendment to Senate Bill No. 35 (SB 35) (2017) adds an additional class of projects that qualify for streamlined project approval and clarifies existing law under Senate Bill 35.
Senate Bill No. 765 (SB 765) (2021). Amendments to SB 35 (2017). Makes a series of “cleanup” revisions to SB 35.
Senate Bill No. 35 (SB 35) (2017). “By-Right” Approval Processing, applies permit streamlining requirements, including ministerial review, to projects meeting certain criteria in jurisdictions that have not met their RHNA targets.
Senate Bill No. 330 (SB 330) (2019). Housing Crisis Act of 2019, establishes new procedural protections affecting larger-scale housing developments, which refers to 1) a development project consisting of two or more residential units, 2) a mixed-use development project where at least two-thirds of the square footage comprises residential uses, or 3) transitional or supportive housing development projects. Makes numerous changes to the Permit Streamlining Act and the HAA.
Assembly Bill No. 3194 (AB 3194) (2018), Housing Accountability Act Amendments (2019), strengthens the HAA, a law which strictly limits local government authority to reject or restrict housing development projects that comply with applicable objective general plan, zoning, and subdivision standards. Expands the meaning of zoning consistency to include projects that are consistent with general plan designations on a site even if the zoning designation is inconsistent with the general plan.
Senate Bill No. 167 (SB 167) (2017); Assembly Bill No. 678 (AB 678) (2017); Assembly Bill No. 1515 (AB 1515) (2021). These Housing Accountability Act Amendments strengthen the Housing Accountability Act (HAA) by increasing the standard of proof required for a local government to justify a denial of low- and moderate-income housing development projects. AB 1515 provides for a broader range of housing projects to be afforded the protections of the HAA if the project is consistent with local planning rules.
Assembly Bill No. 2162 (AB 2162) (2018). Supportive Housing Use “By-Right,” requires supportive housing to be considered a use “by-right” in zones where multifamily and mixed uses are permitted, including nonresidential zones permitting multifamily uses, if the proposed housing development meets specified criteria.
Assembly Bill No. 1397 (AB 1397) (2017), makes projects that include 20 percent of units affordable to lower-income households eligible for by-right approval without discretionary reviews if the project is located on:
- Non-vacant sites that were identified in the previous housing element for lower-income RHNA
- Vacant sites that were identified in the previous two cycles of housing element for lower-income RHNA
- Vacant or non-vacant sites rezoned for lower-income RHNA after the housing element statutory deadline (i.e., a program is included in the housing element promising to rezone for RHNA)
Senate Bill No. 2 (SB 2) (2017), requires cities to identify a zone that allows emergency shelters as a permitted use.
Government Code Section 65589.5, includes requirements for emergency shelters/farmworker housing.
Senate Bill No. 13 (SB 13) (2019), allows ADUs to be created in areas zoned to allow single-family or multi-family residential uses.
Assembly Bill No. 68 (AB 68) (2019), limits review periods and standards that local jurisdictions can impose on ADUs.
Assembly Bill No. 881 (AB 881) (2019), allows for an ADU as well as a “junior” ADU where certain criteria are met.
Resources
National Multifamily Housing Council. The Housing Affordability Toolkit.
Opticos Design. How to Get By-Right Zoning Right.
HCD. Updated Streamlined Ministerial Approval Process.
HCD. Housing Accountability Act Technical Assistance Advisory (Government Code Section 65589.5).
GovThink, Amburgey, Tom, 5 Reasons Why Issuing Permits Faster Benefits Everyone.
California Legislative Information, Assembly Bill No. 2132, Chapter 386 (September 17, 2018).
Local Housing Solutions, Reduced or Waived Fees For Qualifying Projects.
Examples
County of Sacramento, Office of Planning and Environmental Review, SB 35 materials: