Rescinding Hollister’s General Plan could trigger ‘builder’s remedy’

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For a year, Hollister has been susceptible to a provision of a state law, known as “the builder’s remedy,” which limits how much power local jurisdictions have over residential projects. Having the state approve the city’s latest revision of the housing element would put a stop to that. 

But the referendum effort to rescind the 2040 General Plan threatens to increase the city’s susceptibility to the builder’s remedy and state penalties, according to Hollister Assistant City Manager Rod Powell. Rescinding the General Plan would also make the city ineligible for state funding aimed at increasing affordable housing, Powell said. 

The state-mandated General Plan serves as the city’s blueprint for growth. The state requires the housing element—a component of the General Plan—to be updated every five to eight years. Powell said the General Plan and housing element are “significantly intertwined,” adding that the recently adopted General Plan supports sites identified in the housing element, which is required by the state through zoning policies. 

If the General Plan is rescinded, the city would revert back to the previous one, which was adopted in 2005. Powell said the 2005 General Plan does not have “supportive rezoning of sites that are required to achieve full [housing element] certification from the state.”

“As a consequence of not being certified, the city will remain out of compliance and would be subject to significant financial penalties and litigation,” Powell said. That would mean “succumbing to potential developments with little or no conditions, and continued disqualification from receiving contingent, supportive funding related to the production of affordable housing.”

The housing element has been required since 1969 and primarily serves to identify where a jurisdiction can accommodate residential development goals assigned by the state. In 2022 San Benito County was assigned the planning of 5,005 units with 4,163 to be within Hollister, 754 in unincorporated San Benito County and 88 in San Juan Bautista. Of those units, 22.2% are to be very low income housing units, 17.8% low income, and 18.9% moderate income. The remaining 41.1% can be market rate homes.

According to state law, the projects would still be required to go through environmental studies under the California Environmental Quality Act. 

Powell said the city expects the state to approve the latest revision to the draft housing element. The state received the latest revision Dec. 3 and has up to 60 days to review it, according to the Department of Housing and Community Development. 

“It is rare that the state would accept the first submitted version of a housing element,” Powell said. “Rather it is more common that a proposed housing element would receive one or more rounds of comments from the state requesting additional information, qualitative support, clarification or analysis which then creates a bit of a back and forth until all are satisfied.”

Hollister Mayor Roxanne Stephens, Councilmember Dolores Morales and Hollister Guardians Action—the group heading the referendum—did not immediately respond for comment. 

Builder’s remedy

New state regulations for builder’s remedy projects took effect Jan. 1. For a jurisdiction to deny a project, it now needs to make one of the following findings:

1. For mix-use projects, a jurisdiction has adopted a housing element and it has met or exceeded its Regional Housing Needs Allocation for the planning period and income category proposed under the project, or the adopted housing element (before the application was deemed complete) which has zoning ordinance inconsistent with the project.
2. The project has a specific, adverse impact upon the public health or safety and has no way to mitigate it, rendering the project unaffordable to low- and moderate-income households. 
3. Denial of the project is required to comply with a state or federal law and mitigating it would render the project unaffordable to low and moderate income households. 
4. The project is proposed on land zoned for agriculture or resource preservation that is surrounded by at least two sides by land being used for agricultural or resource preservation purposes, or does not have adequate water or wastewater facilities to serve the project.
5. The project is not a builder’s remedy project.

Eligible projects under builder’s remedy are residential units for moderate, low and very low income households. The state set a sliding scale for the percent of units that need to be affordable in a project with at least 7% for extremely low to 100% for moderate.

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