California Housing Reform Advances Through Streamlined Approvals

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Date:

09 May 2025

With median home prices exceeding $800,000 and many residents spending over half their income on rent, California’s housing crisis requires decisive action. Two significant policy approaches are gaining traction: strengthened housing element requirements through Senate Bill 828 and the expansion of ministerial approval processes that eliminate lengthy, unpredictable reviews.

“Building more housing isn’t going to solve all of California’s problems, but it will be impossible to solve California’s problems unless we build more housing,” states Corey Smith, Executive Director of the Housing Action Coalition, addressing the state’s most pressing challenge.

SB 828: Enforcing Housing Requirements

For decades, California cities were required to plan for housing through “housing elements” but faced few consequences for failing to meet targets. Senate Bill 828, passed in 2018, substantially changed this dynamic.

“Cities, for a long time, did not actually have to take this plan very seriously, because there were no repercussions for not following their plans,” Smith explains. “Now there are going to be serious repercussions if you do not do what you are supposed to do.”

These consequences include loss of local control over development decisions, ineligibility for state funding, and potential intervention from state housing authorities. This shift has compelled municipalities to create genuine, actionable plans rather than merely satisfying procedural requirements.

Ministerial Approval Advances

A significant development is the expansion of ministerial approval processes, which provide a clear, objective path to building permits without subjective reviews that can delay projects for years.

“We are firm believers that all housing in California should be ministerially approved,” Smith asserts. “If you follow all of the rules, you should get to build your building.”

This approach marks an important shift in California’s development landscape. Recent legislation has expanded this concept, with laws like SB 1123 creating streamlined processes for smaller housing developments and AB 2243 expanding eligibility for housing projects on commercial sites.

ADUs: A Successful Case Study

California’s experience with Accessory Dwelling Units (ADUs) demonstrates how regulatory reform can increase housing production. Through state laws that standardized and streamlined ADU approvals, California has seen permits increase from just a few thousand annually to tens of thousands.

“We’re at a place where it’s ‘yes’ with ADUs, and we’re moving to a place where we are going to get to a ‘yes’ on the multifamily reform,” Smith notes.

The formula is straightforward: “If you let people who build housing professionally build housing — if you legally allow it and you don’t kill it from a financial feasibility point of view — people will build housing,” Smith explains.

Balancing Affordability Requirements

As California streamlines approvals, policymakers must carefully balance affordability requirements. Smith cites research that shows how inclusionary zoning policies can increase below-market-rate housing but may reduce overall production if requirements are too stringent.

For example, increasing inclusionary requirements from 11% to 25% in transit-oriented developments could produce more affordable units but might reduce total housing production by over 100,000 units. This illustrates the careful calibration required in crafting effective housing policy.

“It’s an all-of-the-above approach,” Smith emphasizes. “We need to be doing all of those things… different locations, different price points, different styles of housing.”

The Financing Challenge

Despite progress on regulatory reform, significant challenges remain around financing. “The financing is really the broken part right now,” Smith notes. “The financial gaps for builders are just so large, and the lack of funding for affordable housing makes it difficult.”

Recent legislation like SB 937, which allows for impact fee deferral, aims to improve project cash flow, but more comprehensive financing solutions are needed.

A Shared Responsibility

As California evolves its housing policies, Smith emphasizes that all communities must participate: “Our message to every city around the state of California is, quite simply, follow the law, do what you are supposed to be doing. Everybody’s got to do their fair share.”

This principle of shared responsibility, combined with streamlined approvals and balanced affordability requirements, represents California’s most promising path for addressing its persistent housing crisis.

The state’s approach offers valuable lessons for other regions facing similar challenges: clear requirements with meaningful enforcement, predictable approval processes, and careful attention to financial feasibility can unlock housing production at all income levels.

As California implements these reforms, the coming years will demonstrate whether this approach can deliver the affordable, accessible homes that residents need.

Accessory Dwelling Unit

Residential Real Estate