As Morgan Hill and Santa Clara County officials wait for state housing authorities to sign off on their required local General Plan Housing Elements, developers have submitted plans for more than 1,900 new homes in and around the city under a provision of state law known as the “builder’s remedy.”
The builder’s remedy allows developers to bypass local zoning laws and build certain types of housing projects, even if those plans do not comply with a city or county’s zoning ordinance or general plan. A provision of the Housing Accountability Act, the builder’s remedy is triggered when a local jurisdiction fails to update its housing element, or if the element is not found to be in compliance with state law.
In California, the housing element is an eight-year roadmap for how a city or county will meet its projected need for new homes as the region grows. Those needs are based on the state’s annual Regional Housing Needs Allocation (RHNA).
In Morgan Hill, the latest RHNA says Morgan Hill will need 1,037 new homes from now through 2031. The housing element approved by the council shows 1,819 homes likely to be built in that time period.
While city officials think its housing element for 2023-31 complies with state law, the California Department of Housing and Community Development has not yet signed off on it. The city council initially approved Morgan Hill’s 2023-31 housing element in January, but HCD staff tasked with reviewing the document sent it back for revisions.
Specifically, the HCD’s holdup with Morgan Hill’s housing element had to do with a newly required section of the housing element on “Affirmatively Furthering Fair Housing,” Morgan Hill Development Services Director Jennifer Carman said.
After making revisions and posting them for public review, the city submitted its housing element to HCD again on Oct. 5 “for what we hope is our last 60-day review,” said Carman, who noted that the city’s assigned HCD reviewers have changed since the housing element was first submitted in February.
“This is a common trend seen during this cycle due to HCD staffing issues and the complexity of analysis required in this cycle,” Carman said.
As of Sept. 28, 10 of 16 jurisdictions in Santa Clara County have not had their housing elements signed off by HCD, according to city staff. Of 109 jurisdictions in the Bay Area, 66 jurisdictions’ elements have not been signed off, leaving them subject to the builder’s remedy.
Since February, developers have submitted plans for four projects, with a total of 1,002 units proposed in the city limits, under the builder’s remedy. These include a 323-unit development at Monterey Road and Butterfield Boulevard and a 265-home project at Tennant Avenue and Butterfield Boulevard.
The four projects have only submitted “preliminary applications” and have not yet been reviewed or approved by city officials, Carman said. After submitting a preliminary application, the applicant has 180 days to submit a formal request for design review—which would trigger the city’s obligation to begin processing entitlements and conducting an environmental review.
According to Carman, it is unknown if the builder’s remedy applications will remain active if the local housing element is approved by HCD before that 180-day window.
“Substantial case law is being generated across California in relation to builder’s remedy applications—with the issues in almost every case being slightly different,” Carman said. “The city hopes that there will be future guidance from both case law and HCD on future steps should these preliminary applications move forward to final application.”
Santa Clara County finds itself in a similar situation. The board of supervisors approved its 2023-31 housing element on Oct. 17. Developers have already submitted applications for seven housing projects in unincorporated county areas under the builder’s remedy.
These include four projects in Morgan Hill, for a total of 899 proposed units, according to county staff. These projects are also awaiting county review and approval.
One of the projects proposed in the county is a 320-unit subdivision proposed on a 57.6-acre site at 1515 Half Road, on property that was previously an orchard, according to SF YIMBY.
The county has responded to the HCD’s initial comments on its housing element and resubmitted the document to state officials, county staff said.
To qualify for the builder’s remedy, a submitted housing development application must have at least 20% affordable homes.
Morgan Hill Mayor Mark Turner said it has “been a bit frustrating” waiting for HCD to approve the city’s housing element, and the builder’s remedy is allowing developers statewide to take advantage of a process that is largely beyond local control.
“I don’t like the process that the builder’s remedy creates, especially when there are delays to getting our housing element certified—delays that certainly are not upon us,” Turner said.
Builder’s Remedy by the numbers
The following residential projects have been submitted in and around Morgan Hill under the state’s “builder’s remedy” law:
Morgan Hill city limits:
– 323 units at Monterey Road and Butterfield Boulevard
– 265 units at the southeast corner of Tennant Avenue and Butterfield Boulevard
– 263 homes at 14900 Monterey Road
– 151 units at Cochrane Road and DePaul Drive
Unincorporated Morgan Hill:
– 271-home subdivision at 1125 East Main Avenue (two applications for one property)
– 219-home subdivision at 14465 Monterey Road
– 320-unit subdivision at 1515 Half Road
– 89-unit subdivision on four parcels on the 1200 and 1300 block of Diana Avenue, and the 1200 block of Condit Road