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How California’s new affordable housing laws impact real estate in 2018

In 2017, Governor Jerry Brown approved and signed into law more than a handful of bills addressing the housing needs of California’s low and moderate income residents. These measures officially took effect on January 1, 2018.

What does this mean for real estate owners and investors in California?


  • Senate Bill No. 2: Building Homes and Jobs Act


SB 2 requires a $75 recording fee for every transaction dealing with a parcel of real estate that requires such a fee.

The collected fees will be placed in a fund whose purpose is to boost affordable housing stock. Funds collected this year will be distributed evenly between:  

  • Local governments so they can streamline their affordable housing planning and zoning initiatives
  • California’s homeless population through rental subsidies and the construction of new homeless shelters and transition homes.

Starting 2019, a new distribution scheme will be implemented, with 70% of the fund going to local agencies for use in providing assistance to their local homeless populations.


  • Senate Bill No. 35: Streamline planning and zoning process


This measure requires local governments to implement more streamlined approval processes for new housing. The new law enhances planning efforts for new housing development.

Local governments are now required to observe the following statewide standards for their zoning and general plan:

  • Subjecting multi-family projects to streamlined approval
  • Limiting parking requirements on streamlined developments
  • Removing the expiration date on approvals for streamlined affordable housing


  • Senate Bill No. 166: Residential density and affordability


SB 166 doubles down on measures that require local governments to guarantee adequate housing based on the demand of local residents.  The law mandates that local governments must re-evaluate its regional housing needs for each resident based on an income assessment.

The measure adds restrictions against rezoning to favor lower-density communities. This ensures that there will be enough housing to distribute across all income segments.


  • Senate Bill No. 167: The Housing Accountability Act


This measure addresses the issue of the “not in my back yard” (NIMBY) advocacy that aims to keep neighborhoods low-density. SB 167 makes it more difficult for local governments to disapprove or provide conditional approval for affordable housing projects.

The law requires local governments to provide sufficient documentary evidence explaining specific reasons why a development project must be denied approval.

Reasons include:

  • Having an amended housing plan that covers the needs of all income segments
  • Specific negative effects on the health and safety of the public
  • The proposed development being located on or bordered on two sides by agricultural or preserved land

SB 167 protects very low, low and moderate-income residents by ensuring that housing projects intended for their benefit face fewer hurdles from their local governments.


  • Senate Bill No. 540: Workforce Housing Opportunity Zone


SB 540 is another measure that intends to hasten the approval of affordable housing projects. It expedites the California Environmental Quality Act (CEQA) review process, which involves evaluating a project’s environmental impact. This is a long process that can sometimes hold up development projects for a long period of time.

To get ahead of this, SB 540 authorizes local governments to establish Workforce Housing Opportunity Zones. On these zones, they can already conduct an advance environmental impact review of the area, getting the reports done before development even begins. Trust Lambert Investment, Inc. for all the latest news, updates, and expert analyses regarding the Southern California real estate market. Get in touch with us today – call 310-453-9656 or email