County of Monterey and most cities failed to meet state deadline for housing plans.

There is one brass ring in California housing right now, the coveted certification of eight-year housing plans of cities and counties by the California Department of Housing and Community Development. Once grasped, jurisdictions are free from possible fines and penalties for being late to finish their plans, known as housing elements. Only three of 12 cities in the county have achieved certification, which means the rest, plus the County of Monterey, are left vulnerable to consequences.

Salinas was the first city to both approve its housing element ahead of a Dec. 15, 2023, deadline and be found in “substantial compliance” by HCD on Feb. 8. Seaside was next, approving its element in March and getting a nod from HCD on March 27. Carmel joined their ranks on Monday, April 8, after a pair of contentious special meetings of the Planning Commission and City Council. Despite protests by some residents, the council passed the city’s housing element 4-1, Councilmember Alissandra Dramov voting no.

The vote came just one week before an April 15 deadline – the end of a 120-day grace period past the original December deadline – that, had they missed it, would have put the town in danger of penalties. It also could have left Carmel vulnerable to what’s known as “builder’s remedy,” from the Housing Accountability Act of 1990, that allows developers to build projects if a city or county does not have a certified housing element, as long as they include 20 percent low-income units. It could mean forcing a multi-unit development in the small town despite zoning that limits the number of units.

“For me what was important, as a representative of the residents of this town, I needed to protect this city,” said Carmel Councilmember Bobby Richards. “[The builder’s remedy] scares me. It would be a real game changer in our downtown area if any developer wanted to come in and do a [large scale] low-income or affordable housing program.”

Carmel residents who packed the council chambers urged their representatives to vote against approval of their housing element, angry that the state was requiring them to add 349 units, 287 in the extremely-low to low-income categories and over the inclusion of city-owned parking lots as sites to consider for low-income housing. They were told that the state, attempting to fix the shortage of affordable housing, wasn’t playing around.

Asked by one planning commissioner if the state was using builder’s remedy as a “threat,” Community Planning and Building Director Brandon Swanson replied, “If it’s a threat, it’s not an idle one.”

The remaining nine cities in Monterey County without certification – Del Rey Oaks, Gonzales, Greenfield, King City, Marina, Monterey, Pacific Grove, Sand City and Soledad – are waiting for HCD to complete reviews of their draft housing elements, sometimes after a second round of revisions required by HCD staff.

While they won’t make it before the end of the grace period, they may not face state fines or penalties, as long as they are working in good faith to finish their housing elements, says YIMBY Law’s executive director, Sonja Trauss. So far it appears the state is reserving punishment for cities and counties that take too long to complete, or refuse to comply outright. In addition, developers are less likely to pursue builder’s remedy projects if they are nearing certification, choosing to instead wait until jurisdictions have updated zoning.

Standing alone in the mix is the County of Monterey, which has yet to complete a draft element to send to HCD in Sacramento. The first draft is expected to be released and available for public review in May, followed by a 30-day public review period, with opportunities for public comment, according to a spokesperson. HCD then has 90 days to review the draft.

On March 28, a preliminary builder’s remedy application was submitted by a Monterey architect to construct 41 market-rate townhomes and apartments and 11 low-income townhomes and apartments at 24945 Valley Way, just over the Carmel border in an unincorporated area of the county. It’s the site of the former Carmel Convalescent Hospital, and the first location of the Community Hospital of the Monterey Peninsula.

The proposal seeks to demolish non-historic buildings on the property and replace them with 52 units, leaving the historic hospital, built in 1930, intact. It’s been sitting empty for at least 10 years, since the convalescent hospital closed down. The site has vested water rights, a plus on the Monterey Peninsula.

A proposed law, Assembly Bill 1893, authored by Assemblymember Buffy Wicks, D-Oakland, seeks to modernize builder’s remedy and provide more guidance to developers, cities and counties, making it easier to use. It would provide standards for upzoning parcels in “high-resource areas” (Carmel is considered one), and would make it easier for smaller projects to be approved, by reducing the affordability requirement from 20 percent to 10 percent. The goal is to provide more infill and “missing middle” projects, relatively small multifamily projects like duplexes and townhomes.

The next challenge for cities will be rezoning on state deadlines, to incorporate increased housing units.