Under SB 330 (Chapter 654, Statutes of 2019) the State Legislature enacted the Housing Crisis Act of 2019, codified as Government Code Section 66300, which went into effect on January 1, 2020. Essentially, this new State law limits the City’s ability on approving residential developments that replacing existing housing. In order to preserve the number of dwelling units, the City cannot approve a housing development unless both of the following conditions are met:
- The new development contains as many units as currently exists on the property; and
- Any unit that is classified as a protected unit (i.e. affordable) is replaced at the same level of affordability.
As part of the Housing Crisis Act, the State defined a protected unit to include if the household income of the current tenant (for occupied units) or any tenant who lived in the unit during the past five years (for vacant units) is within the low, very low, or extremely low income level. Accordingly, the City is requiring the new housing developments be submitted with a self-certified income verification (attached).
If a unit is classified as a protected dwelling unit, the City is then required to take the following actions:
- Rental Units – Record a 55-year covenant guaranteeing the affordability level will remain the same as the current unit.
- For Sale Units – Enter into an equity sharing agreement with the owner, in which the City will utilize a portion of the profit from a future sale towards providing affordable housing.
The Housing Crisis Act was originally set to sunset on January 1, 2025 however, SB 8 extended the Housing Crisis Act of 2019 through 2030).