July 25, 2024 - Scofield Drive SB330 Preliminary Application pursuant to Builder’s Remedy (Updated 7-25-24)
CITY COUNCIL INFORMATIONAL MEMORANDUM
Date: July 25, 2024
To: Cupertino City Council
From: Piu Ghosh, Planning Manager
Luke Connolly, Assistant Director of Community Development
CC: Benjamin Fu, Director of Community Development
Pamela Wu, City Manager
Chris Jensen, City Attorney
Re: Scofield Drive SB330 Preliminary Application pursuant to Builder’s Remedy
(“BR”) Provision of the Housing Accountability Act (“HAA”)
Background
At the July 16, 2024 City Council meeting, Councilmember Fruen requested an
informational memorandum regarding the SB330 Preliminary Application
submitted for property located at 20739 Scofield Drive. This informational
memorandum summarizes the vesting provisions of SB330, the “builder’s remedy”
(“BR”) provision of the Housing Accountability Act (“HAA”), the SB330 Preliminary
Application submitted by the property owner for 20739 Scofield Drive utilizing the
BR provision of the HAA and a summary of other SB330 Preliminary Applications
received by the City.
Summary of the “Builder’s Remedy”
The BR provision of the HAA is included in subdivision (d) of the HAA, which
requires local agencies to make one of five findings to deny, or to apply conditions
that make infeasible, a housing development project “for very low, low- or
moderate-income households” or an emergency shelter. (Gov. Code, § 65589.5(d).)
A housing development project must have 20 percent of the total units available to
lower income households, or all units available for moderate income households,
to qualify as housing “for very low, low- or moderate income households.”
(Gov. Code, §65589.5(h(3).)
OFFICE OF COMMUNITY DEVELOPMENT
CITY HALL
10300 TORRE AVENUE • CUPERTINO, CA 95014-3255
(408) 777-3308 • FAX (408) 777-3333 • planning@cupertino.org
Under subdivision (d), a local agency may deny a qualifying project only if one
of following five findings is made:
1. The jurisdiction has met or exceeded its Regional Housing Needs Allocation for
the proposed income categories in the development.
2. The housing development or emergency shelter 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 development unaffordable. The impact must be
based on objective, written public health or safety standards in place when the
application was deemed complete.
3. The denial or condition is required to meet state or federal law, and there is no
feasible method to comply 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 land being used for agriculture or
resource preservation, or there are not adequate water or sewage facilities to the
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. (Gov. Code, § 65589.5(d).)
The finding in Paragraph 5 cannot be made if a City does not have a certified housing
element by the deadline established for that jurisdiction by HCD. However, the HAA
explicitly states that nothing in the statute limits a jurisdiction’s obligation to comply
with CEQA. (Gov. Code, § 65589.5(e).)
In addition, notwithstanding the BR provisions of HAA, local agencies may apply
“objective, quantifiable, written development standards” that allow for
development “appropriate to, and consistent with, meeting the jurisdiction’s share of
the regional housing need.” (Gov. Code, § 65589.5(f)(1).) The development
standards must be applied “to facilitate and accommodate development at the
density permitted on the site and proposed by the development.” (Ibid.)
Rights under the BR provision of HAA are terminated when HCD makes a finding
that a housing element substantially complies with state law, and in some cases, the
jurisdiction completes the rezoning required to implement the housing element
amendments. For Cupertino, the deadline for adoption of a compliant housing
element was January 31, 2023, the same as that for the 109 jurisdictions in the
Association of Bay Area Governments (ABAG). Cupertino’s housing element was
adopted by the City Council on May 14, 2024, and the adopted housing element and
ordinances related to rezoning Priority Housing Element sites were submitted to
HCD on July 11, 2024 for their final compliance review. It is uncertain when HCD
will issue a letter to determine compliance with state law. Reports from other
jurisdictions indicate a turnaround time of 12 days to 60 days from submittal.
SB330 Housing Crisis Act
Senate Bill 330 (SB330), signed on October 9, 2019, established the Housing Crisis Act
of 2019 (“HCA”), which went into effect on January 1, 2020. On September 16, 2021,
Senate Bill 8 (SB 8), which updated SB330, made clarifications to the existing
regulations and extended the HCA from January 1, 2025 to January 1, 2030, was
signed into law. These laws were passed to address the current “housing crisis” in
the State with three general aims: 1) increase residential unit development; 2) protect
existing housing inventory; and, 3) expedite permit processing. Both SB 330 and SB
8 made numerous changes to the existing legislation, such as the Permit Streamlining
Act (“PSA”) and the HAA.
Among the many changes made, the HCA establishes a requirement for cities to
implement a preliminary application process for eligible housing development
projects. This application process is not required for all housing development
projects, but it is required for applicants with eligible projects that seek the vesting
and processing benefits offered under SB330. Local agencies are required to compile
a checklist for required application materials and an application form for
preliminary applications choosing to utilize the vesting rights offered by SB330.
(Gov. Code, § 65941.1(b).) The intent of this process is to make the development
review process faster and provide certainty to an applicant by locking in the
development requirements, standards, and fees at the time a complete application
is submitted for a period of 180 days. By doing so, the City is prohibited from
applying new ordinances, policies and standards to a development with a complete
preliminary application, provided the other requirements of SB330 are met. In
addition, the local government is not required to provide a formal determination
about whether the preliminary application is “complete,” rather the preliminary
application is considered “deemed complete.” An application must be “deemed
complete,” if it contains all of the information required by Gov. Code §65941.1.
There are certain conditions under which an applicant may lose the vested rights
offered under SB330. These include:
1. Failure to submit a complete formal application within 180 days of submittal of
an SB330 Preliminary Application;
2. A change in the number of units or square footage of construction changes by
20% after submittal of an SB330 Preliminary Application; or
3. Failure to commence construction 2.5 years from the date of final approval of the
project.
It should be noted that the City only needs to accept the submittal of an SB330
Preliminary Application. Until a Formal Application for permits from the City is
made, the City is not obligated to process the application. Once a Formal Application
for permits is made, the City must process the application pursuant to applicable
state and local laws (e.g. Municipal Code, HAA, Density Bonus, and/or other laws).
Relationship between BR and SB330
While the BR provision of HAA has been in legislation since the 1980’s, it has
received renewed attention and use due to HCD comments regarding a recently
proposed project in Santa Monica interpreting the relationship between the BR
provision of HAA and SB 330 (first adopted in 2019). HCD opined that an SB 330
preliminary application submitted prior to certification of a housing element vests
development rights as they exist at the time of the application. Under this
interpretation, sans a certified housing element at the time of application of an SB330
Preliminary Application, the City does not have the ability to deny a project due to
inconsistency with “both the zoning ordinance and the land use designation as
specified in any general plan element.” As a result, no development standards in the
General Plan or Zoning Ordinance, including density limits, height and setback
standards, apply to the vested project and any housing development that meets the
criteria of the provisions of the BR provision could be eligible for consideration
under the HAA.
On its face, the BR provision of HAA could allow applicants to avoid compliance
with local development standards for qualifying projects. However, to date no BR
project has been approved in the state. Several factors may limit its uptake in
practice. First, the absence of a certified general plan EIR could make CEQA
compliance for BR projects time-consuming and expensive, since options for CEQA
streamlining may be limited. Second, BR projects require relatively high levels of
affordability— 20% of the total units must be affordable to lower income households
at rents equal to, or less than, 60% of Area Median Income (AMI). By comparison,
the Density Bonus Law (applicable when five or more units are proposed) allows a
50% density bonus, if 15% of the base project units are affordable to very low income
households, those at or below 50% of AMI. It is unclear how many projects would
be feasible at the required affordability level. Finally, there are other avenues for
development involving a greater degree of streamlining, lower affordability
requirements, and much less legal uncertainty. Depending on the location of a parcel
within the City, new state laws may offer other options for redevelopment with
housing.
20739 Scofield Drive SB330 Preliminary Application
On March 26, 2024, the City received an SB330 Preliminary application (PR-2024-020)
for a multi-family development within a single-family residential neighborhood on
a 0.32 acre lot with single family (R-1) zoning, located at 20739 Scofield Drive. The
proposal is for 23 units which include 18 market rate units and 5 Below Market Rate
Units. Since more than 20% of the proposed total units are affordable at lower income
levels, the project is eligible to avail itself of the BR provision of the HAA. To date,
their submission has been limited to a SB330 Preliminary Application and does not
constitute a Formal Application, which would necessitate City review of the project
including but not limited to, applicable objective standards and environmental
impacts. If the applicant submits a Formal Application within 180 days of submitting
the Preliminary Application (September 22, 2024 is the Formal Application
deadline), then the zoning, design, subdivision, and fee requirements in effect at the
time the Preliminary Application was submitted shall remain in effect for the
remainder of the entitlement and permitting process.
Since the City did not have a Housing Element approved by January 31, 2023, the
city has been subject to the BR provisions of the HAA. While the BR provisions may
require a local agency to approve an eligible housing development project despite
its noncompliance with local development standards, for this particular project, the
city has not received any communication from the property owner, as well as any
indication of a Formal Application being submitted within the 180-day timeline
specified in the HCA.
Other SB330 Preliminary Applications received
To date, the City has received eight SB330 Preliminary Applications in addition to
the Scofield Drive proposal, of which four are utilizing the BR provisions of HAA.
The following is a list of these applications:
Location and Project
Description Status Builder’s Remedy/
Density Bonus?
1. 20015 Stevens Creek
Blvd (Shan Restaurant
etc.) – 142 apartments,
including 28 affordable
units
Formal Application
pursuant to SB330
submitted on May 8,
2023.
Project on hold at
applicant’s request
Utilizing BR provisions
of HAA for
development
standards including
density.
Location and Project
Description Status Builder’s Remedy/
Density Bonus?
2. 20770, 20830, 20840, &
20850 Stevens Creek
Blvd (Pizza Hut/
Fontana’s/Staples) – 59
townhomes with 12
affordable units
SB330 Preliminary
Application submitted
on January 29, 2024.
Formal Application
filed July 22, 2024.
General Plan density
compliant at time of
SB330 Preliminary
Application submittal.
Density Bonus waivers
and incentives
requested.
3. United Furniture site –
55 townhomes,
including 11 affordable
units
SB330 Preliminary
Application submitted
on February 14, 2024.
No formal submittal.
180-day deadline ends
on August 14, 2024.
General Plan density
compliant at time of
SB330 Preliminary
Application submittal.
Density Bonus waivers
and incentives
requested.
4. Linda Vista (portion of
former McDonald
Dorsa quarry, APN 356
05 007) – 30 homes,
including six affordable
units, and a commercial
gymnasium
SB330 Preliminary
Application submitted
on February 20, 2024.
No formal submittal.
180-day deadline ends
on August 18, 2024.
Utilizing BR provisions
of HAA for standards,
including density and
land use (commercial
use proposed on
residential property).
5. 20807, 20813, 20823,
and 20883 Stevens
Creek Boulevard
(Stevens Creek Office
Center/Panera Bread) –
139 units, including 28
affordable units, mix of
single family, condos
and townhomes
SB330 Preliminary
Application filed on
April 1, 2024.
No formal submittal.
180-day deadline ends
on September 28, 2024.
General Plan density
compliant at time of
SB330 Preliminary
Application submittal.
Density Bonus waivers
and incentives have
been requested.
6. 21911 Dolores Ave - 5
townhomes, including
1 affordable unit
SB330 Preliminary
Application submitted
on April 15, 2024.
No formal submittal.
180-day deadline ends
on October 15, 2024.
Utilizing BR provisions
of HAA for standards
including density.
Location and Project
Description Status Builder’s Remedy/
Density Bonus?
7. 20085 Stevens Creek
Blvd (Office buildings)
- 55 townhomes,
including 11 affordable
units
SB330 Preliminary
Application submitted
on June 27, 2024.
No formal submittal.
180-day deadline ends
on December 27, 2024.
General Plan density
compliant at time of
SB330 Preliminary
Application submittal.
Density Bonus waivers
and incentives
requested.
8. 11841 Upland Way - 6
homes, including two
affordable units
SB330 Preliminary
Application submitted
on July 15, 2024.
No formal submittal.
180-day deadline ends
on January 11, 2025.
Utilizes BR provisions
of HAA for standards,
including density.
As, and when, Formal Applications are submitted for each of these Preliminary
Applications, the City’s website will be updated with project information, status and
procedural requirements.