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It's time to invest in California, now! The zoning changes will make California a hot real estate market

California introduced a series of zoning reforms aimed at revitalizing the market and making it more attractive for investment. These changes are created to streamline the development process, encourage denser development, and make it easier to build affordable housing.

Who were California's top competitors?

As California faces increasing challenges with its real estate market—marked by skyrocketing property prices, many individuals and companies have decided to relocate to states like Texas and Florida in search of more affordable housing and business opportunities.

Texas

Texas has become the top destination for Californians seeking more affordable living. With a cost of living 37% lower than California's and significant savings in housing and rent, many Californians are drawn to cities like Austin, Dallas, San Antonio, and Houston. Despite a median household income that’s about $19,000 lower than in California, the state’s lower housing costs, lack of state income tax, and overall affordability make it an appealing choice for those struggling with the high costs of living in California.

Florida

Florida has become a popular destination for Californians due to its much lower cost of living. Despite a median household income that’s 26% lower than California’s, the state’s overall affordability, including home values and rent, is a big draw. The average home in Florida costs nearly 50% less than in California, making it a great option for those looking to escape California's high real estate prices. Florida’s warm weather, mild winters, and extensive coastline make it an appealing choice for relocation, with its lifestyle and climate offering a familiar atmosphere for Californians.

The high cost of purchasing property in California has contributed to this trend, with many leaving for regions where real estate is more affordable and accessible.

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New Housing Law Boosts California

In response to housing challenges, the state legislature has introduced zoning and planning reforms aimed at revitalizing the market. These changes focus on addressing housing shortages and streamlining the development process, positioning California to become an attractive location for real estate investment again.

The new laws target development at all levels, from single-family homes to larger multi-family projects, while also improving the permitting process, reducing delays, and lowering building costs. Together, these measures are expected to create a more favorable environment for developers and homeowners, helping to strengthen the state's real estate market.

Recent Assembly and Senate Bills you can benefit in California

SB-35: Streamlined Permitting

This California bill aims to streamline the approval process for affordable housing developments. It allows eligible multifamily housing projects to be approved ministerially, bypassing the typical conditional use permit process, provided they meet specific criteria, including location, affordability requirements, and compliance with objective planning standards. The bill also restricts local governments' ability to impose certain requirements on these streamlined projects, such as parking standards.

SB-423: Streamlined Permitting Processes

SB 423 in California significantly expands and extends a previous law that streamlined the approval process for multifamily housing developments. It aims to further accelerate housing construction by modifying eligibility criteria, streamlining local review procedures, and enhancing public participation while maintaining certain affordability requirements. Key changes include adjustments to coastal zone restrictions, modifications to fire hazard zone considerations, and revised labor standards for construction workers.

SB-9: Multi-Unit Development in Single-Family Zoning Districts

SB-9 allows homeowners to split their single-family residential lots into two parcels, each with the potential to build up to two residential units, effectively allowing the construction of up to four units on a single lot. This bill targets single-family zoning districts, traditionally restricted to one home per lot, and facilitates multi-unit development, helping to address California’s housing crisis by encouraging denser development in existing neighborhoods.

In addition to lot splitting, SB-9 also streamlines the approval process, removing many of the bureaucratic hurdles that typically slow down construction.

ADU Law

Accessory Dwelling Units (ADUs) are a solution designed to address several housing challenges, particularly the shortage of affordable housing. ADUs provide additional living spaces within existing residential properties, allowing homeowners to increase the available housing supply without needing to develop new land. They are often seen as a way to efficiently use underutilized space, such as large backyards or garages, to create smaller, more affordable rental units.

Upzoning Multifamily Zoned Properties with SB-684

SB-684 is a California state bill designed to streamline the development process for small residential projects. It allows for the subdivision of residential lots to create developments of 10 or fewer units on urban lots under 5 acres. This legislation specifically targets underutilized land in urban areas, making it easier for homeowners and developers to subdivide their properties and build additional homes. By removing certain zoning restrictions and simplifying the approval process, SB-684 encourages denser development in existing neighborhoods, which is a crucial step toward addressing California’s housing shortage.

SB-937 Delayed Payment for Permit Fees

SB 937 aims to reform how local governments collect fees from developers for the construction of public improvements. The bill delays the collection of most fees until the first certificate of occupancy is issued for certain residential development projects, limits utility connection fees, exempts some affordable housing projects from certain fee payment requirements, and provides developers with options to guarantee payment through performance bonds or letters of credit. These changes aim to reduce upfront costs for developers, potentially incentivizing the construction of more housing, particularly affordable housing.

State Density Bonus

The State Density Bonus incentivizes developers to include affordable housing units in their projects by offering benefits like increased density and expedited approvals. Projects qualify for a density bonus if they meet certain affordability requirements, including units for very low, low, or moderate-income residents. These bonuses can be particularly beneficial in jurisdictions with existing inclusionary housing requirements. Special bonuses are also available for projects that partner with affordable housing developers, include childcare facilities, or cater to specific populations like foster youth, disabled veterans, and college students.

Most cities adopted these changes and created local ordinances that were slightly different from the Senate or Assembly Bills so that these laws would align with the local zoning.

Check the articles for every jurisdiction to find out how these zoning changes apply:

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