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The Housing Crisis Act and Development Impact Fees

On Behalf of | Feb 11, 2021 | Real Estate

Housing shortages have been an increasing problem across California. The state legislature is trying to take steps to address this growing crisis.

The legislature passed the Housing Crisis Act in an effort to spur development projects. The law aims to accomplish this goal by limiting the power of local jurisdictions (cities and counties) to tack on additional fees or changing building requirements once a development application has been submitted. However, developers must include all of the required information in their application to ensure that they receive the protection of this law.

A development application must be “deemed complete”

The protections of the Housing Crisis Act apply to development applications that have been “deemed complete.” Jurisdictions should have a checklist that they use to determine whether an application is complete. In general, any application for development should include:

  • Your plans for the project
  • Information to address potential environmental concerns
  • A discussion of coastal-zone impacts, when necessary
  • Locations of recorded public easements

As long as your application contains all of the required information, you should be protected from any surprise increases in development fees. Approval from the jurisdiction’s governing body is not required before an application can be deemed complete. Obtaining acknowledgement that the application is complete will be key.

You may have to update your plans if they change

Of course, you can’t deviate wildly from the plans you submitted with your application. Should the number of units or square footage increase by 20% or more, you will need to submit a new development application. Also, construction must be underway within two-and-a-half-years of the project’s initial approval.

It will take time to determine the impact of the Housing Crisis Act. Hopefully, developers will benefit from the additional protections. You should seek advice from a skilled legal professional if you are developing real estate in California or have plans to get into this industry. Protecting your interests from the start is vital.