How the Housing Crisis Act Affects Development Impact Fees

Housing shortages are not only a problem in the Bay Area. Large swaths of California are experiencing a lack of housing. Enter the Housing Crisis Act.

The California legislature passed the Housing Crisis Act in 2019. A major part of the law limits the power of a jurisdiction to assess additional fees or to change building requirements once a housing application has been “deemed complete.” It’s important for developers to understand the necessary requirements for a complete application. It’s also important to be aware of situations where a jurisdiction may increase development fees.

When Is a Development Application Deemed Complete?

When you’ve submitted your development application, and it’s been deemed complete, you should be shielded from any surprise increases in development fees. Your application should meet all of the requirements outlined by the jurisdiction’s checklist. In general, your application should include information regarding:

• Project plans
• Environmental impacts
• Coastal-zone concerns, where necessary
• Site characteristics
• Recorded public easement locations

As long as your plan contains all of the required information and you have paid all of the necessary processing fees, it should be deemed complete. Approval or recognition of the plans by the jurisdiction’s governing body is not a requirement.

Of Course, Exceptions Apply

As always, there is some flexibility within the law. If your plans change and you up the number of residential units or square footage by 20% or more, you will have to submit a new plan. In addition, you must start construction within two-and-a-half years of the initial approval. If you miss this deadline, you will not benefit from the protections provided by the Housing Crisis Act.

It will take time to determine whether the Housing Crisis Act will help achieve the state’s goals. You can expect certain aspects to be settled by the courts. You should always work closely with a skilled legal professional from Zacks & Freedman, PC if you are developing property anywhere in California. Doing so can help ensure that your interests remain protected.