By Eric Giersch and Darien Key
The California Department of Housing and Community Development (HCD) has released draft guidelines for the Affordable Housing and High Road Jobs Act of 2022, commonly known as AB 2011. The draft guidelines clarify how local governments and applicants should apply AB 2011’s ministerial approval pathways for qualifying multifamily housing on commercially zoned sites and along commercial corridors.
Background
AB 2011 became operative on July 1, 2023, and was later amended by AB 2243 and AB 893. The statute facilitates housing on commercial sites by requiring a streamlined, ministerial review process for qualifying multifamily housing projects on sites where office, retail, or parking uses are already permitted.
The Draft Guidelines
Two Project Pathways
The draft guidelines classify AB 2011 into two principal pathways: one for 100 percent affordable developments and one for mixed-income developments. Both pathways require a multifamily housing development project with at least five residential units, and both may include mixed-use projects where at least two-thirds of the square footage is designated for residential use.
For 100 percent affordable projects, all new units, other than managers’ units, must be dedicated to lower-income households, with affordability restrictions running 55 years for rental units and 45 years for owner-occupied units. Mixed-income rental projects must generally provide either 8 percent of base units for very low-income households and 5 percent for extremely low-income households, or 15 percent of base units for lower-income households. Mixed-income ownership projects must generally provide either 30 percent of base units for moderate-income households or 15 percent for lower-income households. The guidelines also address alternative affordability standards for qualifying developments in campus development zones.
Site Eligibility
The draft guidelines place substantial emphasis on site eligibility. For both pathways, the site must be in a zone where office, retail, or parking is a principally permitted use, must be located in an urban area, must have at least 75 percent of its perimeter adjoining parcels that are or were developed with urban uses, and generally may not be located on or adjoining a site substantially dedicated to industrial use.
Both pathways also incorporate environmental exclusions, including limitations related to certain coastal-zone locations, farmland, wetlands, very high fire hazard severity zones, hazardous waste sites, earthquake fault zones, flood hazard areas, floodways, conservation lands, protected species habitat, and conservation easements. The mixed-income pathway includes additional criteria: the site must generally abut a qualifying commercial corridor with at least 50 feet of frontage or be located within a campus development zone. Mixed-income sites are generally limited to 20 gross acres, although regional mall sites may be up to 100 gross acres, and the guidelines include restrictions protecting existing housing and tenants.
Development Standards and Review
For 100 percent affordable projects, the draft guidelines require compliance with Housing Element Law “default density” standards for lower-income housing, but state that these projects are not subject to a specified maximum density, subject to applicable objective planning standards. For mixed-income projects, allowable density depends on jurisdiction type, site size, commercial corridor width, proximity to major transit, very low vehicle travel area status, and campus development zone status. Allowable densities range from 20 to 80 units per acre, or the local maximum residential density if higher, depending on those site characteristics.
The mixed-income pathway also includes minimum-density requirements, state-mandated height standards, setback and stepback standards, and a prohibition on required parking, including replacement parking, while preserving requirements for bicycle parking, electric vehicle charging infrastructure, and accessible parking. Local objective standards continue to apply, but the guidelines limit review to objective standards and statutory criteria. Subjective standards, such as undefined “neighborhood character,” may not be applied as objective standards.
The draft guidelines emphasize that qualifying AB 2011 projects are processed as a use by right and through ministerial review. No aspect of the development project, including related permits, is a “project” for purposes of the California Environmental Quality Act (CEQA). If a local government finds a project inconsistent with applicable objective standards, it must provide an exhaustive written list of conflicts within 60 days for projects of 150 or fewer units, or 90 days for larger projects; resubmittals must be reviewed within 30 days. If the local government fails to provide timely written documentation, the project is deemed to satisfy the required objective planning standards.
Labor and Post-Approval Requirements
The draft guidelines also address post-approval processing and labor standards. Certain approvals do not expire where the project includes public investment in affordability beyond tax credits and at least 50 percent of units are affordable at or below 80 percent of area median income; other approvals generally remain valid for three years, subject to construction progress and a possible one-year extension. Subsequent permits must be processed without unreasonable delay where they substantially comply with the approved development, and project modifications before final building permit issuance are subject to a separate review framework.
All qualifying developments must comply with prevailing wage requirements. Projects of 50 or more units are subject to additional labor requirements related to apprenticeship programs, health care expenditures, monthly reporting, payroll records, and enforcement. For mixed-income projects, the guidelines also implement commercial tenant notice and relocation assistance requirements, with eligible assistance ranging from six months’ rent to 18 months’ rent depending on length of tenancy.
Conclusion and Implications
The draft guidelines provide a detailed administrative framework for a statute that already limits local discretion over qualifying housing projects on commercial sites. The practical effect is likely to shift many AB 2011 disputes toward threshold eligibility, objective-standard consistency, labor compliance, and post-approval implementation rather than traditional discretionary entitlement issues. For local governments, the guidelines underscore the need for clear objective standards and timely application processing. For applicants, they provide a more structured roadmap for assembling applications, preserving streamlining rights, and responding to inconsistency determinations. Since the guidelines remain in draft form, their final language may change, but they indicate HCD’s intent to interpret AB 2011 as a robust ministerial housing production tool. HCD’s primer on AB 2011 is available online at: https://www.hcd.ca.gov/sites/default/files/docs/planning-and-community/aff-hsg-high-roads-jobs-act-ab-2011.pdf. The draft guidelines is available online at: https://www.hcd.ca.gov/sites/default/files/docs/planning-and-community/draft-ab-2011-guidelines.pdf
