Establishing Vested Rights Through SB 330’s

Establishing Vested Rights Through SB 330’s Preliminary Application: Understanding the Key Differences Between “Deemed Complete” and “Determined to be Complete” in the “Housing Crisis Act of 2019”

By Bryan W. Wenter, AICP on January 15, 2020

Senate Bill 330, referred to as the Housing Crisis Act of 2019, contains two major parts intended to accelerate housing production over the next five years by streamlining permitting and ensuring no net loss in housing capacity. Governor Newsom signed SB 330 into law on October 9, 2019, and it will be in effect from January 1, 2020 until January 1, 2025 unless extended via additional legislation.

The first major part of SB 330 establishes various “good government” requirements that affect the processing of housing development projects in every California city and county. The second part of the law limits the ability of “affected” cities and counties—a smaller but substantial subset of agencies that are designated by the U.S. Census Bureau as “urbanized areas or urban clusters”—to downzone property and regulates the ability of developers to replace existing housing with new housing.

The focus of this blog post is the powerful new, and applicant-friendly, statutory form of vested rights referred to as a “preliminary application,” contained in the first part of SB 330, over which cities and counties have no discretion.

Under SB 330, applicants have the absolute and unqualified right to submit a preliminary application, pursuant to Government Code section 65941.1, containing seventeen statutorily prescribed pieces of information, along with payment of the applicable permit processing fee. The act of doing so automatically renders the relevant project “deemed complete” and protects the project against changes in ordinances, policies, and standards in effect on the day the preliminary application was submitted with certain limited exceptions. Cities and counties may not add to the list of required information and have no authority over any part of the process.

In reviewing summaries provided by several cities and counties of this key part of SB 330, it appears that some are operating under the mistaken impression that local governments must affirmatively “deem” or “determine” a preliminary action to be complete in order for the statutory vested rights to become effective. These two examples are illustrative of the issue:

“When the City has determined that all of the information required by SB 330 has been provided, including payment of the permit processing fee, the preliminary application is ‘deemed submitted’ and ‘deemed complete.’ At this point, the development regulations are ‘locked in’, and the project is only subject to the ordinances, policies and standards that were adopted and in effect when the preliminary application was deemed submitted.”
“Once a Preliminary Application is received, the City has 30 days to determine if the application is complete.”
These statements are both incorrect. SB 330 does not authorize or allow a city or county to affirmatively determine whether a preliminary application is complete, nor does it peg the time of vesting to any date other than the date the applicant submits a preliminary application that contains the information prescribed in the statute. What’s more, the 30-day deadline to act does not relate to a preliminary application at all. Rather, it relates to the traditional “final” application process that is already established in Government Code section 65943 in the Permit Streamlining Act.

The confusion likely stems from the complicated manner in which the Legislative Counsel (the Legislature’s scrivener) chose to re-define two existing terms in the Housing Accountability Act (Government Code Section 65589.5 et seq.) for the five-year period of SB 330: “deemed complete” and “determined to be complete.”

Before SB 330, Government Code section 65589.5 used the terms “deemed complete” and “determined to be complete” interchangeably, with both referring to the process set forth in the Permit Streamlining Act for a project applicant to secure a complete application for a development project. That process could occur by way of a local government making an affirmative determination that an application was complete or, if no determination was made within prescribed timelines, the application could be deemed or determined to be complete by operation of law.

SB 330 now defines these key terms differently and they now relate to two distinct types of development applications. With respect to the term “deemed complete,” new Government Code section 65589.5(h)(5) of the Housing Accountability Act expressly provides that “Notwithstanding any other law, until January 1, 2025, ‘deemed complete’ means that the applicant has submitted a preliminary application pursuant to Section 65941.1.” Similarly, new Government Code section 65941.1(a) of the Permit Streamlining Act provides that an applicant for a housing development project “shall be deemed to have submitted a preliminary application” upon providing all of the statutorily prescribed information and upon payment of the applicable permit processing fee. And new Government Code section 65941.1(d)(3) of the Permit Streamlining Act provides that “This section shall not require an affirmative determination by a city, county, or city and county regarding the completeness of a preliminary application or a development application for purposes of compliance with this section.”

These provisions make clear that for purposes of a “preliminary application” under SB 330, an applicant’s submittal of such an application is automatically “deemed complete” by operation of law.

The applicant thus plainly controls the filing of a “preliminary application” under SB 330, and the mere act of doing so provides the earliest form of vested rights available under California law. SB 330 provides no role for cities or counties in that process. There is no requirement that a city or county review the preliminary application and make a determination regarding its completeness in order for an applicant’s statutory rights to vest, and there is no authority for a city or county to do so. In this way, SB 330’s statutory vesting mechanism differs fundamentally from the longstanding vesting tentative map procedures of Government Code sections 66474.2 and 66498.1 in the Subdivision Map Act, which peg the date of a project’s vesting to the date the local agency “has determined that the application is complete.” Under SB 330, if a preliminary application contains the information prescribed in the statute itself then the date of the submittal automatically triggers the early statutory vesting.

Importantly, even after establishing vested rights through submittal of a “preliminary application” the applicant still must submit a traditional “complete application” that includes all of the information required to process the development application, consistent with Government Code sections 65940, 65941, and 65941.5. The applicant must submit such a “complete application” within 180 days of submittal of a “preliminary application.”

Under SB 330, a city’s or county’s limited discretion kicks in only at this more traditional post-vesting stage. In particular, upon submittal of the information intended to establish a “complete application,” the city or county has 30 days to consider the completeness of the final application, and if the city or county determines that the application for the housing development project is still not complete pursuant to Government Code section 65943, the applicant must submit the specific information needed to complete the application within 90 days of receiving the agency’s written identification of the necessary information. Once the applicant has provided the required information to complete an application, the application is “determined to be complete.”

Consistent with this revised process, SB 330 now defines “determined to be complete” in new Government Code section 65589.5(h)(9) in the Housing Accountability Act to mean that “the applicant has submitted a complete application pursuant to Section 65943.”

It is also important to understand that it is only this submittal of a “complete application” that triggers the separate 30-or 60-day deadlines for a city or county to provide the applicant with notice and documentation of any alleged inconsistencies with applicable planning and zoning rules. A city’s or county’s failure to provide such notice and documentation within the specified time results in the project being deemed consistent, compliant, and in conformity with the applicable plan, program, policy, ordinance, standard, requirement, or other similar provision as a matter of law, as provided in Government Code section 65589.5(j)(2) of the Housing Accountability Act.

SB 330 is a complicated new law on many levels, but it has applicant-friendly provisions intended to increase housing production by appropriately reducing local control over new housing development projects, including at the beginning of the application process, by establishing an early NIMBY-proof form of vested rights that project applicants control.

Questions? Please contact Bryan W. Wenter, AICP of Miller Starr Regalia.

For more than 50 years, Miller Starr Regalia has served as one of California’s leading real estate law firms. Miller Starr Regalia has expertise in all types of real property matters, including full-service litigation and dispute resolution, transactions, acquisitions, dispositions, leasing, financing, common interest development, construction, management, eminent domain and inverse condemnation, exactions, title insurance, environmental law, and land use. Miller Starr Regalia attorneys also write Miller & Starr, California Real Estate 4th, a 12-volume treatise on California real estate law. “The Book” is the most widely used and judicially recognized real estate treatise in California and is cited by practicing attorneys and courts throughout the state. For more information, visit www.msrlegal.com.