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AB 2243

State Bank Act.

2025-2026 Regular Session Introduced by Sade Elhawary and 3 co-sponsors

Expands use-by-right streamlined approvals for affordable and mixed-income housing that meet objective standards and affordability criteria.

From committee: Do pass and re-refer to Com. on APPR. (Ayes 7. Noes 2.) (April 23). Re-referred to Com. on APPR.
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Bill Summary · AB 2243

Summary of AB 2243 (2025-2026) – State Bank Act (California)

Note: The bill text provided corresponds to AB 2243, relating to housing development projects and objective standards under the Affordable Housing and High Road Jobs Act of 2022. The summary below highlights the main purpose, key provisions, who is affected, and notable procedural/timeline aspects.

1) Purpose and intent

  • Aligns and amends the framework for housing development projects to emphasize objective, “by‑right” streamlined approval for qualifying affordable and mixed‑income housing.
  • Expands and adjusts objective standards, site criteria, and affordability rules to facilitate development near job centers while safeguarding certain protections (e.g., historic preservation, public processes).
  • Establishes or clarifies use by right status, review timelines, density/affordability requirements, and related labor/prevailing wage provisions.
  • Includes specific transitional provisions and studies to assess program outcomes over time.

2) Key provisions and changes

  • Use-by-right and streamlined approval:
    • Maintains and modifies the ministerial (streamlined) approval pathway for affordable and mixed‑income housing developments that meet objective standards and affordability/site criteria.
    • Adds/clarifies that use by right means no discretionary review and no project-level CEQA status under CEQA for any portion of the project.
  • Site size limits (with regional mall exception):
    • General site cap for housing development sites: 20 acres.
    • If the site is a regional mall, the cap increases to 100 acres.
  • Affordability standards and duration:
    • Rental units: 8% very low income and 5% extremely low income, or 15% lower income units, with 55-year affordability deed restrictions for rental units.
    • Owner-occupied units: either 30% affordable to moderate income or 15% affordable to lower income, with 45-year restrictions.
    • Affordability requirements apply to base units; density bonuses and added units may have separate treatment.
  • Density and design standards:
    • Requires multifamily housing with densities meeting or exceeding targets to serve lower income households.
    • Establishes objective zoning/subdivision/design standards that are verifiable and uniformly applicable.
    • Allows density bonuses, incentives, waivers, and reductions under the Density Bonus Law without triggering discretionary review.
  • Proximity to highways/freeways:
    • For developments within 500 feet of a freeway, certain HVAC, filtration, balcony, and air-quality requirements apply to mitigate exposure.
  • Industrial use proximity:
    • Prohibits streamlined review for sites designated for industrial use unless residential uses are principally permitted and the site meets other criteria; amendments adjust the 1/3 industrial-use threshold and related site-adjacency rules.
  • Historic preservation:
    • Prohibits demolishing a historic structure placed on a historic register for developments subject to the act.
  • Labor standards and workforce training:
    • Requires a skilled and trained workforce on construction, with monthly compliance reporting to the local agency.
    • Includes penalties and enforcement mechanisms for noncompliance; project labor agreements can modify or exempt certain requirements.
    • Prequalification and bidding requirements aimed at ensuring a qualified workforce; allows injunctive relief for violations.
  • Relocation and tenant protections:
    • Requires notice to commercial tenants on the parcel and provides relocation assistance tied to lease duration (ranging from 6 to 18 months’ rent, based on tenure).
  • Local exemptions and density reallocation:
    • Local agencies may exempt parcels from the act with conditions, including no net loss of residential capacity and reallocation of density to ensure continued affordability.
  • Reporting and studies:
    • Mandates at least two studies of outcomes: one by 2027 and another by 2031, assessing units built, location, affordability, emissions, and local job effects.
  • Applicability and transition:
    • Clarifies which provisions apply as of December 31, 2024 or January 1, 2025, offering an opt‑in/opt‑out approach for developers.
  • Local government responsibilities:
    • Local agencies must determine consistency with objective standards within specified timeframes (60 days for 150 units or fewer; 90 days for more than 150).
    • If consistent, agencies must approve within the corresponding 60/90-day window after consistency is determined.
  • State-mandated local program:
    • The bill imposes a state‑mandated local program due to new requirements placed on local governments.
  • Effective date and sunset:
    • Operative July 1, 2023; the act is set to repeal January 1, 2033, unless extended or amended earlier.

3) Who/what is affected

  • Local governments (cities and counties) that review and approve housing development projects under the act.
  • Housing development proponents (developers) seeking use‑by‑right approvals for affordable and mixed‑income housing.
  • Contractors and subcontractors involved in construction (with prevailing wage/skill requirements).
  • Commercial tenants on project parcels (relocation protections).
  • Regions near highways/freeways and near industrial-adjacent sites (specific suitability criteria and design standards apply).
  • Public and environmental-review processes (CEQA-related determinations, though use-by-right provisions are designed to limit project-level environmental review in certain cases).

4) Procedural and timeline aspects

  • Timeframes for consistency determinations and approval:
    • 60 days (≤150 units) or 90 days (>150 units) to determine consistency with objective standards after submission.
    • 60 days (≤150 units) or 90 days (>150 units) to approve after consistency is established.
    • 30 days for resubmitted proposals addressing written feedback.
  • Transition provisions:
    • Specifies applicability of 2024 provisions or January 1, 2025 provisions, allowing developers to choose.
  • Studies and reporting:
    • Department studies due in 2027 and 2031; reports posted online and delivered to the Legislature.
  • Reimbursement:
    • The bill explicitly states no state reimbursement is required for certain costs, while recognizing a state-mandated local program for local governments.

Overall, AB 2243 seeks to streamline the approval of affordable and mixed‑income housing through objective standards, while incorporating robust affordability, labor, and local planning safeguards, with explicit transitional rules and performance timelines for local agencies.

Compiled from official sources — confirm details with the bill’s official record.

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