Housing element compliance: committed assistance: in-kind services: realistic capacity formula.

New legislative finding (Section 1(g)) states that nothing in the act authorizes or imposes a requirement that sites be subject to a local ordinance requiring or providing bonuses for deed-restricted affordable housing in order for the site to count toward a city's or county's regional housing need allocation below the above-moderate income level. This protects local governments from being forced to adopt inclusionary mandates as a condition of using the safe harbor formula.

The provision exempting department-issued rules, policies, or standards implementing the formula from the Administrative Procedure Act (APA) was removed, along with the alternative requirement that the department post proposed formulas on a public website and accept written comments for at least 60 days before promulgation. This means the standard APA rulemaking process would apply to any regulations the department issues to implement the formula.

New clause (Section 65583(a)(3)(B)(ii)) explicitly states that use of the safe harbor formula shall not be a substitute for the analysis of the relationship of sites in the land inventory to the jurisdiction's duty to affirmatively further fair housing. This closes a potential loophole where local governments might argue that using the formula satisfies all site analysis requirements.

The reference to Section 65583.01 in the site capacity analysis provision was clarified by adding the phrase 'for purposes of estimating the realistic development capacity of sites in the inventory,' narrowing the stated purpose of the formula.

Legislative finding (f) was modified to specify that the formula is used 'to estimate site capacity,' adding precision to the safe harbor compliance language. A typo ('exempt a the use') was corrected to 'exempt the use.'

The deadline for the Department of Housing and Community Development to promulgate or approve realistic capacity formulas and associated tools appears to have changed from January 1, 2028 to July 1, 2028, based on tracked text visible in the removed version.

The version label changed from '08/20/26 - Amended Assembly' to 'SB457,' which may indicate the bill reached a final or enrolled status. The full scope of any additional changes cannot be determined due to diff truncation.

Amendments to Government Code Section 65589.5 (Housing Accountability Act) were entirely removed. This included a revision to the definition of 'deemed complete' that would have required applicants to submit a complete application (rather than a preliminary application) before the disapproval protections kicked in, and a change making a housing element substantially compliant on the date of local adoption rather than after state or court determination.

Amendments to Government Code Section 65585.03 were removed from the bill.

The bill title was changed from amending 'Sections 65585.03 and 65589.5 Section 65583.1' to amending only 'Section 65583.1' of the Government Code.

The principal co-author (Senator Stern) was removed from the bill's introduction line.

The fiscal committee determination changed from 'no yes' to 'yes,' indicating the bill now has a state-mandated local program or fiscal impact requiring fiscal committee review.

The bill now amends Sections 65583, 65583.1, and 65583.2 of the Government Code and adds new Section 65583.01, expanding from a single-section amendment to a multi-section overhaul of housing element law.

The original bill's focus on defining in-kind services for committed assistance programs is retained but becomes a smaller component of a much larger bill addressing the full housing element framework including land inventory, constraints analysis, and emergency shelter siting.

New Section 65583.01 would require HCD to promulgate or approve formulas and user interfaces by January 1, 2028 for determining realistic capacity of housing element inventory sites under current zoning and after rezoning. Local governments that properly apply the formula are guaranteed compliance (safe harbor).

Housing elements must now specify the number of units allowed on each site at adoption and the number allowed after rezoning to accommodate the jurisdiction's share of regional housing need.

Local governments must identify zoning designations where emergency shelters are allowed as a permitted use without discretionary permits, with sites meeting specific standards (vacant residential-zoned sites, nonresidential sites near services, or suitable nonvacant sites). Shelters cannot be required to be more than 300 feet apart. Site capacity is calculated at a minimum of 200 square feet per person.

For seventh and subsequent housing element cycles, local governments must include a governmental constraints disclosure statement identifying each new or amended constraint adopted after the prior element's due date and any constraints the governing body can anticipate adopting in the first three years of the planning period.

Housing elements must now include an analysis of nongovernmental constraints (financing availability, land prices, construction costs, permit processing delays) and demonstrate local efforts to remove those constraints.

The bill adds a legislative findings section declaring housing element compliance is a matter of supreme statewide importance and stating the Legislature's intent to simplify seventh cycle housing elements through safe harbor formulas.

Formulas, user interfaces, and tools promulgated by HCD are exempt from judicial review (with exceptions) and exempt from the Administrative Procedure Act. Instead, HCD must make proposed formulas available on a public website with a 60-day public comment period before adoption.

HCD is authorized to hire economists and data scientists specifically for developing the capacity formulas and associated tools.

The judicial review exemption was narrowed. Previously, the bill exempted 'a formula, associated user interface, or tool promulgated or approved by the department' from judicial review. The amended version instead exempts 'the use by a city or county of any adopted formula, associated user interface, or tool' from judicial review. This means the formula itself could still potentially be challenged in court, but a local government's reliance on it cannot be.

The bill title was corrected to remove a redundant reference: 'Section 65583.1 of Sections 65583, 65583.1, and 65583.2' was changed to simply 'Sections 65583, 65583.1, and 65583.2.'

The legislative counsel's digest was reorganized: the paragraph about exempting rules from the Administrative Procedure Act and the paragraph defining 'in-kind services' were moved to appear after the judicial review paragraph rather than before it. No substantive content was added or removed in these paragraphs.

The bill now amends Section 65583.1 to define 'in-kind services' for purposes of committed assistance programs in housing elements. This clarifies what non-cash contributions (such as land, labor, or materials) a local government can pledge to make affordable housing units available to lower-income households.

The entire amendment to Section 65585.03 was removed. That provision would have changed the timing of when a housing element is considered in substantial compliance - shifting it from the date HCD or a court determines compliance to the date the local governing body adopts the element (with subsequent confirmation). This removal means the bill no longer alters the substantial compliance determination process.

The bill's stated purpose now includes amending Section 65583.1 in addition to Sections 65585.03 and 65589.5, expanding the bill's reach into housing element committed assistance requirements.

The bill now amends Sections 65585.03 and 65589.5 of the Government Code instead of Section 65400. The original suite-style student housing reporting requirement was removed entirely.

Section 65585.03 now provides that a housing element is considered in substantial compliance on the date the governing body adopts it, provided that afterward (without further action by the governing body) the department or court determines it is in substantial compliance. Previously, the department or court determination was part of the initial compliance finding rather than a subsequent confirmation.

Extensive new provisions for builder's remedy projects (subdivision (f)(6)) including: local agencies may only require compliance with objective standards that would apply at the proposed density; burden of proof is on the local agency to show standards do not render the project infeasible; additional density bonus incentives and concessions; no requirement for general plan amendment, rezoning, or other legislative approval; projects are deemed compliant with residential density standards and objective zoning, subdivision, and design review standards; local agencies cannot impose requirements solely because a project is a builder's remedy project.

The original requirement for cities and counties to report the number of suite-style student housing quarters in their annual housing element reports, including the specific requirements (fully functioning kitchen, bed-to-toilet ratio of 5:1 or less, Health and Safety Code compliance) and the 25 percent cap per income category, was removed from the bill.

The definition of 'deemed complete' for purposes of allowing disapproval based on inconsistency with zoning and general plan (paragraph (d)(5)) is revised to mean the applicant submitted a complete application pursuant to Section 65943. This replaces the prior definition that allowed a preliminary application to trigger the 'deemed complete' date. The new definition applies only to applications that as of January 1, 2026 have not received local agency approval or incurred substantial liability in good faith reliance on approval.

New provisions limit local affordable housing requirements for builder's remedy mixed-income projects to no more than 20 percent of units dedicated to affordable housing, and no affordable unit may be required at an income level deeper than lower income households. Local agencies must make written findings that compliance would not render the project infeasible.

Removed the amendment to Section 65400 that would have required cities and counties to include the number of suite-style student housing quarters in their annual reports to HCD for the 7th and subsequent housing element revisions.

Removed findings that the bill addresses a matter of statewide concern applying to all cities including charter cities, which were tied to the now-removed Section 65400 provision.

Changed fiscal committee review from 'yes' to 'no' and state-mandated local program from 'yes' to 'no,' reflecting the removal of the reporting mandate that would have imposed costs on local agencies.

Removed the reimbursement provisions stating that no state reimbursement is required for the act's mandates.

Added Senator Stern as principal coauthor of the bill.