2020
Real Property
Key Statutory Developments

Statewide Extension for Some Housing Entitlements: AB 1561

AB 1561 provides a statewide extension for certain housing entitlements to facilitate the recovery of the housing industry during the pandemic-induced recession and ongoing housing crisis. In particular, AB 1561 extends by 18 months the otherwise applicable time for the expiration, effectuation, or utilization of housing entitlements that were in effect on March 4, 2020 and are set to expire before Dec. 31, 2021. The 18-month extension is calculated from the date the entitlements would otherwise expire. “Housing entitlement” is defined broadly to include legislative, adjudicative, or administrative approvals, permits, or other entitlements issued by a state or local agency.

However, it explicitly excludes development agreements; tentative maps that are extended under the extension provisions of the Subdivision Map Act on or after March 4, 2020; SB 330 preliminary applications; and SB 35 applications. While AB 1561 does not preclude a city or county from independently granting entitlement extensions, it clarifies that it does not apply to any housing entitlement that a state or local agency extends by at least 18 months on or after March 4, 2020, but before Jan. 1, 2021.

More analysis on this and related topics from CEB:
Current Awareness Articles
Top 5 Housing Laws Passed in 2020
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Real Property Law Reporter

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Key Developments in Real Property Law 2020
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Streamlining Infill Housing Projects: AB 831 and AB 168

AB 831 and AB 168 amend SB 35, which was adopted in 2017 to streamline the approval process for infill housing projects. As urgency legislation, these changes are effective immediately. Some of the changes to SB 35 are in response to the 2019 case Ruegg & Ellsworth v. City of Berkeley, in which a mixed-use project in Berkeley was ruled ineligible for SB 35 streamlining. The court found that the project’s destruction of a shellmound asserted to be located on the site was tantamount to the demolition of a historic structure, making the project ineligible under SB 35. The court also found that the two-thirds residential requirement in SB 35 is intended to apply to the site on which the development project is located, rather than to the project itself.

More analysis on this and related topics from CEB:
Current Awareness Articles
Top 5 Housing Laws Passed in 2020
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Real Property Law Reporter

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Key Developments in Real Property Law 2020
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Tax Relief for Homeowners Who Rebuild After Disaster: AB 2013

AB 2013, ch 124 allows owners of property substantially (more than 50 percent) damaged or destroyed in a Governor-declared disaster to reconstruct comparable improvements on the same site with a return to the former improvement’s base year value. Specifically, the owner may apply the base year value of the damaged property to replacement property reconstructed onsite within 5 years after the disaster if the reconstructed property is similar in size, utility, and function to the damaged or destroyed property, as specified in Rev & T C §70.5(c)(2). An owner who receives property tax relief under these provisions is not eligible to transfer the base year value of that reconstructed property to a comparable replacement property. To qualify for this parity provision, the full cash value of the reconstructed property must not exceed 120 percent of the full cash value of the original property immediately before the calamity.

AB 2013 corrects the inequity in current law by adding Section 70.5 of the Revenue and Taxation Code. Any improvement over 120% of value of the destroyed improvements would be assessable as new construction. By creating this parity with existing taxpayer protections, AB 2013 will help support those who may have lost everything.

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Real Property Ownership and Taxation
Real Property Law Reporter
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Key Developments in Real Property Law 2020
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Yet More Changes to California’s Density Bonus Law: AB 2345

AB 2345, ch 197 amends Govt C §§65400 and 65915, the Density Bonus Law (DBL). The DBL was enacted to help address the affordable housing shortage and to encourage development of more low- and moderate-income housing units. The DBL requires local governments to adopt ordinances that provide concessions and incentives to developers seeking a density bonus on top of the cities’ zoned density in exchange for including low-income housing.

This bill revises the DBL to increase the maximum allowable density and the number of concessions a developer can seek. Specifically, the bill adds a definition for developments “located within one-half mile of a major transit stop,” adding a definition of “major transit stop.” The bill also requires a development to restrict 17% (down from the current 20%) of the total units of a development to lower-income households, to qualify for two incentives and concessions, or restrict 24% (up from 20%) of the total units of a development to lower-income households to qualify for three incentives and concession. It deletes the option for developments to receive five incentives and concessions.

More analysis on this and related topics from CEB:
Current Awareness Articles
Top 5 Housing Laws Passed in 2020
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California Land Use Practice
The California Municipal Law Handbook
Real Property Law Reporter
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Key Developments in Real Property Law 2020
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Homestead Exemption Amounts Updated: AB 1885

As the COVID-19 pandemic has dragged on with no end in immediate sight, homesteading has become of greater importance, and the California legislature has voted to increase the statutory homestead amounts for the first time since 2013. Gov. Newsom signed AB 1885 into law on Sept. 18, with an effective date of Jan. 1, 2021.

A declared homestead requires the homeowner to record a declaration of homestead and prevents a money judgment lien filed after the declaration of homestead is recorded from attaching to the property until there is sufficient equity to pay senior liens and encumbrances plus the homestead exemption. The statutory homestead arises by operation of law and prevents the sale of a family residence where there is insufficient equity to pay applicable liens and the homestead amount. Under AB 1885, the current tiered exemptions are eliminated in favor of a value-based exemption amount that provides better protection and will apply to every primary residence across the state, regardless of the characteristics of the homeowner.

More analysis on this and related topics from CEB:
Current Awareness Articles
California Legislature Updates Homestead Exemption Amounts
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Real Property Ownership and Taxation

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Key Developments in Real Property Law 2020
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Eviction Protections Extended: AB 3088

In early April 2020, the California Judicial Council enacted an emergency eviction ban to help stem an expected deluge of eviction proceedings due to nonpayment of rent caused by the financial effects of the COVID-19 pandemic. The Judicial Council’s vote to eliminate its unlawful detainer moratorium on Sept. 1 forced the legislature to take urgent action to forestall likely unlawful detainer litigation beginning in September. AB 3088 took effect immediately upon the governor’s signature on Aug. 31. The bill is not considered to be a long-term fix to the COVID-19-related rental problem, but it does provide the legislature with another five months to come up with a longer-term solution.

AB 3088 extends eviction protections to residential tenants who declare to their landlords, via written notice under penalty of perjury, that they have a financial hardship related to COVID-19. If landlords want to pursue evictions against residential tenants who are behind on their rent payments, they will need to send notices containing a statutory explanation of tenants’ rights under the new law. AB 3088’s complex (but temporary) set of rules will be subject to interpretation by courts and will continue to change.

More analysis on this and related topics from CEB:
Current Awareness Articles
AB 3088 Extends Eviction Protections Through January 2021
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California Landlord-Tenant Practice
California Eviction Defense Manual

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Key Developments in Real Property Law 2020
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CEQA Exemption Aims to Fast-Track Transportation Projects: SB 288

This year, the state set its sights on CIDs as a possible source of more rental units, including ADUs and JADUs, by enacting AB 3182 (Stats. 2020, ch. 198). The bill makes several important changes to the laws governing CIDs, aimed at removing barriers to leasing units in CIDs as a potential source of affordable housing. The bill’s author comments, “There are millions of homes across the state that have the potential to be rented to Californians in need of housing but that are prohibited from being leased under outdated homeowners association (HOA) rules. AB 3182 prohibits rental bans in HOAs to allow homeowners who want to rent out their homes to do so.

More analysis on this and related topics from CEB:
Current Awareness Articles
New Two-Year CEQA Exemption Aims to Fast-Track Transportation Projects
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Practice Under the California Environmental Quality Act

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Key Developments in Real Property Law 2020
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Long-Term Rentals in Common Interest Developments: AB 3182

This year, the state set its sights on CIDs as a possible source of more rental units, including ADUs and JADUs, by enacting AB 3182 (Stats. 2020, ch. 198). The bill makes several important changes to the laws governing CIDs, aimed at removing barriers to leasing units in CIDs as a potential source of affordable housing. The bill’s author comments, “There are millions of homes across the state that have the potential to be rented to Californians in need of housing but that are prohibited from being leased under outdated homeowners association (HOA) rules. AB 3182 prohibits rental bans in HOAs to allow homeowners who want to rent out their homes to do so.

More analysis on this and related topics from CEB:
Current Awareness Articles
Yet More Challenges for California HOAs: AB 3182’s Prohibition of ‘Unreasonable’ Restrictions on Long-Term Rentals in Common Interest Developments
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Advising California Common Interest Communities

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Key Developments in Real Property Law 2020
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