SB4 – California’s New Law re Affordable Housing

Affordable Housing on Faith and Higher Education Lands Act of 2023

On October 11, 2023, Governor Gavin Newsom signed Senate Bill (“SB”) 4 into law. Effective January 1,2024. SB 4 adds Section 65913.16 to the Government Code, which limits the ability of cities and counties to regulate the development of new housing on property owned by religious institutions and colleges. An SB 4 project is permitted as a “use by right” and exempt from the California Environmental Quality Act if it meets SB 4’s criteria for:

• Affordability requirements
• Locational requirements
• Development requirements
• Labor requirements.

Under SB 4, 100% affordable housing projects located on “religious institutions” or an “independent institution of higher education” are a “use by right,” and are eligible for density bonuses, incentives, concessions, waivers or reductions of development standards, except that SB 4 projects in non-residential zones cannot use the density bonus to increase the height of a project. All of the housing units in an SB 4 project must be affordable for lower income households, except for:

• 20% of the total housing units may be for moderate-income households
• 5% of the units may be reserved for staff members of the independent institution of higher education
• the manager’s unit or units.

The land must have been owned by the religious institution or independent institution of higher education before January 1, 2024 for SB 4 to apply. Housing units for rent must be deed-restricted as affordable for 55 years and housing units for sale must be deed-restricted as affordable for 45 years or the first purchaser must participate in an equity sharing agreement.

SB 4 projects cannot occur on a site that would require the demolition of housing that is deed-restricted affordable, subject to rent control, or has been occupied by tenants within the past 10 years or that was used for housing but was demolished within the past 10 years.

There are significant restrictions on what parcels of land can be used for development under SB 4, and developers are cautioned to consult with appropriate land-use planners in determining the appropriateness of a particular location.