Sunnyvale got some good news from the state Housing and Community Development Department this month: its eight-year Housing Element plan has been ruled in "substantial compliance."
The Sunnyvale plan approved by the state requires the city to add 11,966 homes by 2031.
The approval removes Sunnyvale from a list of nine cities in Santa Clara County that have not had their plans approved yet by the state. Failure to gain approval for a Housing Element plan means that builder's remedy can be imposed on the city by the state.
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Builder's remedy allows developers to bypass local zoning approval processes with an override from the state. Missing the state's deadline for filing an acceptable Housing Element plan also opens up cities to state penalties, including losing millions of dollars in affordable housing funds.
In its letter to the city, state officials said they were satisfied with the city's response to areas of the plan it had said were in need of revision, including how low-income sites are distributed and the addition of "missing middle-housing," or affordable-by-design projects including as duplexes, triplexes or single-family homes on smaller lots.
Before its Housing Element plan was approved, Sunnyvale had received two builder's remedy proposals, including a plan that involves the demolition of the Horizon Sunnyvale office park on Oakmead Parkway.
The plans called for the 181K SF office park to be replaced by a 315-unit townhome and apartment complex. The campus, owned by Embarcadero Capital, defaulted on a $63.5M loan from LoanCore Capital Credit REIT. LoanCore Capital partnered with Sares Regis Group and filed plans to build 100 townhomes in 16 buildings as well as a five-story, 215-unit apartment complex.
In Southern California, not all builders of affordable housing think builder's remedy is the right tool to spur new housing developments across cities.
"For affordable [housing] developers, the builder's remedy is a two-edged sword," Jeff Edgren, director of acquisitions for San Diego-based developer Affirmed Housing, told GlobeSt.com. "If an affordable developer wants to get funding from a local government, then the builder's remedy is probably not an option."
"For market-rate developers attempting to use the builder's remedy, the bigger issue is CEQA [California Environmental Quality Act] approval," Edgren said.
"The idea that the builder's remedy allows unlimited zoning to produce more housing-was the intent, but the reality is that without exemption from CEQA, the builder's remedy is only a paper tiger with no real teeth," he said.
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