Blogs

By: Taylor M. Anderson, Esq. and @Gary Bell, Esq., Colantuono, Highsmith & Whatley, PC

The California State Legislature shows no signs of slowing its overhaul of housing laws. This year, two laws—SB 489 and AB 712—aim to expedite housing development but bring downstream consequences for special districts responsible for delivering critical infrastructure and services.

Special districts are sometimes consulted in the development process too late or not at all by other public agencies entitling these projects. Without land use authority to condition projects, special districts lack a mechanism used by cities and counties to ensure their development requirements are met. Yet these projects cannot be built without the water, sewer, solid waste, fire, parks and other essential services provided by special districts.

SB 489: Expanding Transparency Requirements

The Permit Streamlining Act – designed to speed up review of development projects – applies to any public agency including a “public district … or other political subdivision” and was recently amended to apply to both discretionary and ministerial “housing development projects” as defined in the Housing Accountability Act (i.e., a project consisting of residential units or a mixed use development with at least 2/3rds of the square footage designated for residential use). 

The Act requires each public agency to compile lists that specify in detail the information that will be required from any applicant for a development project. Because this requirement applies to applicants for development projects, including housing development projects, most special districts do not create these lists. 

A public agency reviewing an application for a development project must limit its completeness review to only those items included on the lists in advance and may not ask an applicant for any new or additional information not specified on the lists.

SB 489 amends the Act to require, for any list created for applications for housing development projects, that the list include the criteria the public agency will apply to determine completeness, including the name of the type of approval, and be posted online. Other public agencies entitling housing development projects – primarily counties and cities – are currently revising their lists to meet the January 1, 2026 effective date for the new law.

Special districts with requirements for housing development projects—including water, sewer, solid waste, fire, parks and other essential services—should proactively engage with counties and cities now to ensure their requirements are included in these lists. This could include express requirements from the special district’s code, concurrent submission of plans to the special district, or incorporation of special district requirements into the county and city planning process. 

Excluding special district requirements from these lists may leave critical development requirements to later negotiation with developers or enforcement with uncertain results.

AB 712: New Fines and Penalties for Housing Reform Law Violations

AB 712 adds new enforcement "teeth" by providing fines and attorney’s fees for violations of “housing reform laws”—defined broadly to include any law for the benefit of applicants for housing development projects.

Applicants for housing development projects can now recover attorney's fees and costs if a public agency violates housing reform laws. The penalties escalate quickly. If an applicant prevails and the local agency was previously warned in writing by the Attorney General or the Department of Housing and Community Development (HCD) about the violation but failed to correct it within 60 days, the local agency faces substantial fines: $10,000 per unit for projects with five or more units, or a minimum of $50,000 per violation for smaller projects. If the local agency violates the same housing law more than once during the same housing element cycle, the court must multiply the fine by five.

The law also prohibits public agencies from requiring developers to indemnify or defend the agency against lawsuits related to housing reform laws. 

Moving Forward

Special districts should be aware of AB 489 and AB 712 and the immense pressure being placed on public agencies to approve housing development projects. These new fines and attorney’s fees mean counties and cities will be approving housing development projects swiftly and based solely on the lists created in advance, which are included in the housing reform laws now subject to new and significant enforcement tools.

Given these new laws, special districts should:

• Engage proactively with counties and cities in your service area. Don't wait to be consulted—reach out now to communicate your special district’s role in the development process and what requirements should be included in the planning process. 
• Adopt or revise your codes. Special districts might consider adopting or revising their codes to require an agreement or other approval in conjunction with “will serve” letters for development projects to ensure their requirements are met.
• Review and update your standards. Most cities and counties must apply objective standards to housing development projects. To include your standards in county and city lists for development projects, consider revising your standards to be objective.
• Update your contracts if necessary. Consider when and how risk can be shifted to those performing the work through indemnification and insurance. 
• Stay informed on housing law updates. Understand these requirements to help your special district support timely approvals while limiting liability. The regulatory landscape is changing rapidly, and keeping current is essential.
• Assess your infrastructure capacity. Monitor whether your infrastructure can support anticipated housing growth and identify gaps early so you can plan accordingly.

This Article was contributed by Taylor M. Anderson, Esq. and Gary B. Bell, Esq. with Colantuono, Highsmith & Whatley, PC, a CSDA Business Affiliate. CSDA members can contact Colantuono, Highsmith & Whatley, PC through the CSDA Buyer’s Guide at csda.net.

This communication is provided for general information only and is not offered or intended as legal advice. Readers should seek the advice of an attorney when confronted with legal issues and attorneys should perform an independent evaluation of the issues raised in these communications.

Take a look back at previous parts of the 2026 New Laws Series in CSDA eNews for more in-depth overviews of new laws affecting special districts:

Missed Part 5? Read it now: Biggest Brown Act Revamp in Decades (SB 707)
Missed Part 4? Read it now: Clarifying Timing for Collection of Development Related Fees (SB 499)
Missed Part 3? Read it now: Certified Payroll Records Requests on Prevailing Wage Public Works Projects (AB 538)
Missed Part 2? Read it now: Additional CEQA Exemptions and Reforms
Missed Part 1? Read it now: CA Supreme Court Denies Elected Officials Right to Sue as “Employees” Under Whistleblower Statute