SB 423 is a major piece of California housing legislation passed in the 2023-24 session. It mostly extends the period that SB 35 (passed in 2017) is in effect for, as well as modifying it somewhat.
SB 35 created an alternative process for projects to receive entitlements. Instead of having to go through discretionary review, qualifying projects could apply for a ministerial process. This bill, signed in 2017, was set to expire in 2026. Extending SB 35, which by 2023 had experienced modest success in producing housing, was a major motivation for passing SB 423.
Another motivation was expanding the number of projects using the streamlined process. SB thus far had mostly been used by 100% affordable projects, with 97 of 156 projects using the process between 2018 and 2021 being at least 95% affordable. Policy writers suspected that this was largely due to skilled and trained labor requirements in SB 35. 100% affordable projects generally had grants that required them to have a skilled and trained workforce anyways, so there was generally no extra effort to apply for the bill. Mixed income projects on the other hand generally didn't meet the state's definition of skilled and trained, and thus often didn't use the SB 35 process.
- SB 35 is extended to 2036.
- Loosened labor requirements for projects to qualify. Under SB 35, projects needed to use a skilled and trained workforce, which is a specific term that generally entails union labor. SB 423 removes this requirement, and replaces it with a prevailing wage requirement. This states that SB 35 projects must pay prevailing wage to workers, which is a rate generally negotiated by unions, but does not need to hire union workers in cases where they cannot locate enough for the project.