2023 Housing Element Annual Progress Report Update & 2024 SB 423 Streamlined Ministerial Approval Process Determination

2023 Housing Element Annual Progress Report Update

2024 SB 423 Streamlined Ministerial Approval Process Determination

Attend our webinar on July 19 to summarize

results of the determination

The California Department of Housing and Community Development (HCD) is pleased to announce the results of the 2023 Housing Element APR collection and an updated SB 423 Streamlined Ministerial Approval Process (SMAP) Determination (replacing the prior SB 35 SMAP Determination) displaying the California cities and counties that are subject to streamlined housing approvals for specific housing projects.

2024 SB 423 Streamlined Ministerial Approval Process Determination

Exempt Jurisdictions: 47
Jurisdictions with SB 35 Streamlining for at least 50% affordability: 238 (developments with at least 50% affordability would also be able to access Streamlining in the 254 jurisdictions with Streamlining for at least 10%affordability noted below, for a total of 497 jurisdictions)
Jurisdictions with Streamlining with at least 10% affordability: 254

For most of the state (492 jurisdictions out of 539 jurisdictions) Streamlining is available to developments with at least 50% affordability.

Join our webinar

We will be summarizing the results of the determination

July 19, 2024

2 pm - 3 pm

Legislative Changes to SMAP Determination

SB 423 (Weiner, 2023), updated SB 35 (Weiner, 2017), and made changes to how SMAP Determination criteria are applied:

1) Any jurisdiction without a compliant Housing Element is now required to applying SMAP Streamlining for housing developments with 10% affordability. If different from the current SB 423 SMAP Determination, this would supersede the current SB 423 SMAP Determination.

2) Upon reaching Housing Element compliance, the jurisdiction reverts to their Streamlining criteria from the current SB 423 SMAP Determination.

A developer can confirm the jurisdiction’s current compliance status using the Housing Element Review and Compliance Report. A developer may submit a SB 330 preliminary application in partnership with SB 423 applications locking in the current Streamlining criteria regardless of future changes to housing element compliance or a subsequent SB 423 SMAP determination.

SB 423 also changed the SMAP Determination for the City and County of San Francisco to be calculated annually, rather than at the mid-point or end of cycle.

2023 APR Update:

The 2024 SB 423 SMAP Determination is based on data collected on housing construction from jurisdictions’ 2023 Housing Element APR submissions. These submissions provide an unparalleled statewide snapshot of residential permitting and development.

Some key findings from 2023 include:

Total Housing Activity:

Completed residential construction (units issued certificates of occupancy) is up 13.1% from 99,130 in 2022 to 112,076 in 2023. Construction is up every year for six years in a row (since 2018).

Structure Type:

Multifamily housing activity in 2023 remained high with 308,577 units in the housing pipeline; above the previous five-year average of 278,385 units.
ADUs: ADU production continues to increase to record highs with 27,919 permits issued in 2023 compared to 25,150 in 2022.

Income Level:

The share of development affordable to lower income Californians continues to grow. In 2018, lower income units accounted for 9% of the total permitted units and 7% of the total completed. In 2023, the share of lower income units increased to 19% of all permitted units and 16% of completed. Very low income completed units are up 44.2% from 4,943 in 2022 to 7,128 in 2023 while low income completed units jumped 75.7% from 6,057 to 10,640. That is a 61.5% increase in lower income unit production from 2022 to 2023.

Development Timeline:

The development timeline continues to decrease for projects in the residential development pipeline. For all structure types, the average development timeline in 2018 was 145 days. In 2023, this decreased to only 63 days, or roughly two months.
For projects moving from Entitlements to Permits in 2018, the average permitting process took 117 days. In 2023, this decreased to 85 days.
For the last phase, which is from permitting to completion, the average timeframe in 2018 was 265 days. In 2023, this decreased to 178 days.
This acceleration in development is a credit to statewide legislative initiatives such as SB 35 (now SB 423), SB 330, and the Department’s Housing Accountability Unit which has unlocked 23,000 units since its inception in 2020.

Density Bonus

There has been a sharp increase in deed-restricted affordable units from 2021 to 2022 (roughly 29k units to 41k units). This included an increase in the entitlements of Density Bonus units after 2021 (20k to 27k), which is when AB 2345 was passed to amend the Density Bonus Law to expand and enhance development incentives for projects with affordable housing components.
This increase continued in 2023 with over 48 thousand total deed restricted units, of which 36 thousand were permitted or entitled under state density bonus law or a similar local ordinance.

For additional information, please refer to the Department’s Housing Element Implementation and APR Dashboard and Statutory Determinations webpage, which have been updated to include data on residential development through December 31, 2023.

Questions? Please email [email protected].