SB 10 is Safe: California Court "Supply & Demand is a thing" decision a blow to NIMBYs, boost for YIMBYs

Photo by Josh Olalde on Unsplash

A California appeals court ruled this week that cities and counties can more easily zone for smaller, lower-cost housing developments of up to 10 units, even if local voters previously tried to limit such projects.

Why it matters: The decision is a significant win for housing advocates, developers, and anyone concerned about the state's severe housing shortage and affordability crisis. California's housing approval process has long been criticized as too cumbersome and restrictive to allow for sufficient new housing construction.

Driving the news: The Second District Court of Appeal upheld SB 10, a controversial 2021 state law aimed at streamlining approval for small housing developments. The law was championed by pro-housing legislators as a critical tool to address the state's housing woes.

• SB 10 allows local governments to zone for up to 10 housing units per parcel in transit-rich areas or urban infill sites, even if this would override existing density limits that were previously enacted by local voters through ballot initiatives.

• The law provides a powerful tool for local governments to greenlight these small projects with just a city council resolution, bypassing the lengthy and costly California Environmental Quality Act (CEQA) review process that housing projects are typically subject to.

• Legal challenges under CEQA have been blamed for delaying or blocking tens of thousands of badly needed homes per year. Housing advocates argue these lawsuits are often abused by NIMBYs ("not in my backyard" opponents of new development).

The big picture: Supporters say SB 10, by creating a pathway for streamlined upzoning of small projects in transit-accessible areas, could significantly expand housing access for more Californians, including young families, lower-income residents and communities of color. Building more small-scale "infill" housing near transit could also help reduce long car commutes and traffic pollution.

• But the AIDS Healthcare Foundation, a longtime player in California housing politics despite its healthcare mission, teamed up with the city of Redondo Beach to sue the state over SB 10. 

• They argued the law unconstitutionally undermines the will of voters in cities like Redondo Beach, where residents previously approved local ballot measures to cap housing density and growth

Yes, but: In a unanimous opinion, the three-judge panel rejected this argument. The court said California's housing crisis is a matter of "statewide concern," giving the state legislature constitutional grounds to limit local zoning control in this manner.

• The court said the statewide housing crisis justifies the state limiting local control in this way. It upheld SB 10's parcel-by-parcel rezoning mechanism as legally valid.

What's next: The ruling gives a green light for pro-housing city councils to start using SB 10 to chip away at local voter-enacted growth limits that have restricted housing supply. 

• However, city councils will likely still face vigorous political pushback as they attempt to apply SB 10, project-by-project. Some local officials may be wary of backlash from anti-growth constituents.

• Meanwhile, the plaintiffs could still try to appeal the ruling to the California Supreme Court. So the legal battle over SB 10 may not be finished yet. But for now, it stands as a major win for California's state-led efforts to solve its housing crisis.