REPORT TO PLANNING COMMISSION
SUBJECT
Title
Public Hearing: Amend Title 18 (Zoning) of the Santa Clara City Code to Establish a Replacement Housing Unit Ordinance Implementing State Law
Report
SUMMARY
Three existing state laws: the Density Bonus Law (Government Code Sections 65915 - 65918); Housing Element Law (Government Code Section 65580 - 65589.11); and the Housing Crisis Act of 2019 (Government Code Sections 66300 - 66300.6.5) enacted as Senate Bill (SB) 330, established new replacement housing provisions to ensure that new housing developments do not reduce the total number of existing dwellings and do not reduce the number of dwellings affordable to lower income persons. The Housing Crisis Act (HCA) also established and expanded protections for existing residential tenants who are displaced due to new residential or non-residential developments otherwise known as anti-displacement objectives. City Council through a Study Session on September 13, 2025 directed staff to provide meaningful action and evaluate next steps for actions on displacement for the City’s most vulnerable residents. This request is to apply State Law to City Ordinance for purposes of consistency.
The City’s certified 2023-2031 Housing Element includes 21 Actions that support the City’s anti-displacement objectives through measures designed to protect, preserve, and produce affordable housing. Specifically, Housing Plan Action 13: Residential Displacement, includes several discrete and ongoing objectives that commit the City to explore and/or adopt new anti-displacement measures.
The purpose of the proposed ordinance (Attachment #1) is to implement objectives from Housing Plan Action 13 by:
1. Codifying separate requirements from existing state law related to demolition and replacement of housing units and related tenant protections into one comprehensive ordinance;
2. Clarifying certain definitions from state law;
3. Clarifying and/or establishing basic procedures for implementing and documenting a project’s compliance with existing state law; and
4. Providing a framework to accommodate implementation of future state law changes that affect the City, if needed.
A comparison of state-law requirements and the City of Santa Clara’s proposed Residential Replacement Ordinance (Chapter 18.68) is provided (Attachment #2). It highlights where the draft ordinance codifies existing state law and where it adds local procedures or clarifications to support administration and compliance.
BACKGROUND
The HCA requires housing development projects to create at least as many
units as will be demolished during construction of the project in an affected jurisdiction. All development projects, including housing development projects and non-housing development projects, must replace any existing protected units on site and provide relocation benefits to existing occupants of protected units. Replacement units required for non-housing projects must be developed prior to or concurrently with the development project and may be located on a site other than the project site but must be located within the same jurisdiction. This section provides:
• An overview of existing state law as it relates to replacement housing unit requirements and associated tenant protections
• A summary of the City’s assessment of conditions that could result in displacement
• Findings from the 2025 countywide survey on displacement, and
• Feedback from the September 23, 2025, City Council Study Session on displacement.
Existing State Law
The Density Bonus Law (Government Code Sections 65915 - 65918), Housing Element Law (Government Code Section 65580 - 65589.11) and the Housing Crisis Act (HCA) 2019 (Government Code Sections 66300 - 66300.6.5) established the following key provisions related to replacement housing requirements and associated tenant protections:
• Applicability and No Net Loss. A development (residential or non-residential) that includes the demolition of existing housing units must provide at least the same number of new replacement units that existed on the project site in the last five years.
• Additional Requirements For Protected Units. Projects that involve the demolition of any existing housing units that, within the prior five years (or ten for Ellis Act removals), meet any of the following criteria, are considered “Protected Units” and are subject to additional replacement and tenant protection requirements:
o deed-restricted for lower-income households,
o subject to rent control,
o occupied by lower-income tenants, or
o withdrawn from the rental market under the Ellis Act.
• Density Bonus Eligibility. Projects are only eligible for a density bonus or any other incentives, concessions, or waivers under State Density Bonus law if the project conforms to replacement housing requirements.
• Housing Element Sites. The City must monitor all properties listed on the Housing Element Sites Inventory, including the proposed redevelopment of non-vacant sites that would result in the displacement of existing residents.
The Housing and Community Development (HCD) Department Factsheet (Attachment #3) provides a technical overview of the Housing Crisis Act of 2019 (SB 330), as amended. In addition to limiting the ability of jurisdictions to reduce existing residential capacity or delay the approval of housing developments, the Housing Crisis Act strengthened requirements for replacement of demolished housing units and tenant protections.
Assessment of Conditions Leading to Displacement
Chapter 3 of the City’s Housing Element includes an Assessment of Fair Housing (AFH) that identified and analyzed how patterns, trends, conditions, and practices could result in displacement and fewer housing choices for lower-income residents. Recent housing growth has primarily occurred on commercial and industrial sites, limiting direct residential displacement. Nevertheless, a key takeaway from the AFH is that rising costs continue to create pressure for indirect displacement, and redevelopment of older, lower density “Naturally Occurring Affordable Housing” (NOAH) will increase as remaining commercial opportunity sites are built out.
2025 Countywide Survey on Displacement
The Santa Clara Planning Collaborative hosted a countywide community survey on displacement that was open between September 6 and November 19, 2025. The survey received 1,032 total responses countywide, with 466 responses from City of Santa Clara residents and workers. Displacement and its impacts were highlighted as a significant concern, particularly as it relates to lack of affordable housing and rising costs.
In response to questions about the community’s understanding of tenant rights, support for tenant protections, and for preservation programs, City of Santa Clara residents indicated that:
• 64-percent have at least a basic understanding of their rights as tenants regarding eviction and displacement.
• 73-percent either strongly or somewhat support tenant protection programs, that help residents remain in their homes; and
• 68-percent either strongly or somewhat support preservation and community stabilization programs, that help residents remain in their homes.
City Council Study Session
On September 23, 2025, the City Council held a study session on displacement. Staff provided an overview of the Community Development Department’s Work Plan to Reduce Residential Displacement (Attachment #4), organized into three categories:
1. Actions that are already underway;
2. Actions the City has committed to doing; and
3. Actions the City has committed to evaluate.
The City Council acknowledged the severe housing crisis in Santa Clara and directed staff to take meaningful action to protect Santa Clara’s most vulnerable residents from displacement and directed staff to evaluate next steps for actions that the City has committed to evaluate, including providing clarity on tenant protections and replacement unit requirements required by state law. The Council emphasized the need for clarity on state required tenant protections again at their April 21, 2026, study session on the 2025-2030 Community Plan to End Homelessness and Updates on Local Work Efforts.
Through the proposed ordinance, the following three objectives (of seven) the City committed to evaluate in Action 13: Residential Displacement, can be addressed through local implementation of existing state law.
• 13b.1: Requiring no net loss of income-restricted residential units during the construction of new housing or rehabilitation of existing housing.
• 13b.2: Requiring the replacement of existing affordable units at the same or lower income level as a condition of development.
• 13b.3: Requiring developers to notify tenants and the City at least one year in advance of redevelopment and/or potential conversion to market-rate housing. Provide information regarding tenant rights and conversion procedures.
Although the draft ordinance focuses only on implementing state law, future amendments to the ordinance will address another objective:
• 13b.4: Require developers and property owners of existing rental buildings to provide relocation benefits beyond those required by the state when a residential building is redeveloped and when existing tenants are evicted for no cause or no fault.
The draft ordinance codifies existing state relocation requirements; it does not establish additional local relocation benefits at this initial stage.
DISCUSSION
The proposed ordinance (Attachment #1) adds Chapter 18.68 Replacement Housing Unit Regulations to the Zoning Code (Title 18 of the Santa Clara City Code).
As stated previously, the proposed ordinance implements objectives from Housing Element Action 13: Residential Displacement by:
1. Codifying separate requirements from existing state law related to demolition and replacement of housing units and related tenant protections into one comprehensive ordinance;
2. Defining terms not expressly defined in state law for purposes of local administration;
3. Clarifying and/or establishing basic procedures for implementing and documenting a project’s compliance with existing state law; and
4. Providing a framework for future City-specific enhancements to state law, if needed.
In addition, the ordinance is intended to improve transparency regarding state-law tenant protections by requiring documentation demonstrating compliance throughout the development review process. Redevelopment projects that result in the demolition of existing housing units and displacement of residents must:
• Share required notices with tenants and make tenants aware of their rights throughout the development process; and
• Maintain at least the same number of dwelling units and the number of dwelling units affordable to lower-income residents.
A discussion of for the proposed ordinance is provided below.
Applicability
The proposed ordinance applies existing state law regarding replacement housing unit requirements and tenant protections to any development projects (residential or non-residential) that include the demolition of one or more existing housing units of any type (e.g., apartments, accessory dwelling units, townhomes, condominiums, etc.) or that are located on a site that contained a residential unit or units within the past five years, even if currently vacant.
Restrictions on Demolition of Dwelling Units
In conformance with state law, the proposed ordinance prohibits demolition of dwelling units when the proposed development would result in fewer units than would be demolished or there have been any adjudicated cases establishing tenant harassment or illegal eviction in the previous five years. In addition, the proposed ordinance provides that if the applicant cannot demonstrate that the units were lawfully vacated, that demolition permits may be denied or revoked.
Definitions
The proposed ordinance includes definitions of terms from state law that are specific to implementing residential replacement unit requirements and related tenant protections. Where certain terms are not well-defined in the California Government Code or Health and Safety Code, staff looked to other sources for guidance (e.g., HCD, ABAG, other jurisdictions) in drafting definitions (Attachment #5).
Clarify and Establish Procedures for Documenting Conformance
In order to determine whether a proposed project is meeting the requirements of state law in terms of the number, size, and affordability of required replacement units and related tenant rights (e.g., noticing, right to remain, relocation benefits, right to return, and right of first refusal), the proposed ordinance includes basic requirements for the applicant to submit documentation throughout the development review process from planning and/or building permit application submittal through building permit approval and certificate of occupancy.
Framework for Future City Enhancement to State Law
With the majority of the City’s recent and near-term growth occurring/planned on non-residential properties, the City currently has not received applications related to replacement of existing residential units and potential displacement of existing residents.
However, the City might see more interest in redeveloping older, lower-density residential areas as its primary growth areas continue to build out, and ongoing amendments to state law.
This proposed ordinance provides a clear framework to implement existing state requirements for replacement housing and related tenant protections for the benefit of staff, applicants, and residents.
The proposed ordinance is also intended to be the framework to implement future revisions to state law, if needed, to reflect feedback from applicants, the community, and address any implementation gaps as staff receive and process these types of redevelopment applications.
Proposed Planning Commission Actions
The project is presented to the Planning Commission for consideration and action. The following specific actions are required:
1. CEQA: Determine that the project is consistent with the Addendum to the 2010-2035 General Plan Environmental Impact Report (EIR) adopted by the City Council on November 16, 2010, which provided environmental clearance for the 6th Cycle Housing Element.
2. Recommend that the City Council approve an ordinance amending Title 18 Zoning to include Chapter 18.68 Replacement Housing Unit Regulations. The recommendation on a zoning ordinance amendment is a legislative act not requiring any specific findings.
ENVIRONMENTAL REVIEW
On January 31, 2023, the City Council adopted Resolution No. 23-9188, approving an Addendum to the 2010-2035 General Plan Environmental Impact Report (EIR) adopted by the City Council on November 16, 2010, which provided environmental clearance for the 6th Cycle Housing Element.
Because the ordinance implements Housing Element policies previously analyzed in the Addendum to the 2010-2035 General Plan EIR and will not result in environmental effects beyond those previously evaluated, no further environmental review is required. The Project is also exempt from formal environmental review pursuant to California Environmental Quality Act (CEQA) Guidelines Sections 15183 (projects consistent with General Plan and Zoning) and 15061(b)(3) (general rule, no significant effect on the environment).
FISCAL IMPACT
There is no fiscal impact to the City for developing the Ordinance other than administrative time.
COORDINATION
This report was coordinated with the City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Planning Commission agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov or at the public information desk at any City of Santa Clara public library.
Newspaper notice of this item was published in The Weekly, a newspaper of general circulation, on July 22, 2026. At the time of this staff report, no comments have been received by the Planning Division in support or opposition to the project.
On August 21, 2026, a GovDelivery bulletin was emailed to the City’s 4,502 Housing Element Implementation topic subscribers to let them know the availability of the draft ordinance and the proposed hearing schedule.
RECOMMENDATION
Recommendation
1. Recommend that the City Council adopt an ordinance amending Title 18 Zoning to include Chapter 18.68 Replacement Housing Unit Regulations
Staff
Prepared by: John Baty, Senior Planner, Community Development
Lakshmi Rajagopalan, Assistant Director, Community Development
Reviewed by: Alexander Abbe, Assistant City Attorney
Reviewed by: Afshan Hamid, Director, Community Development
Approved by: Jovan Grogan, City Manager
ATTACHMENTS
1. Draft Ordinance
2. Summary Document outlining State Law Requirements and the City’s Draft Ordinance
3. HCD Factsheet on Housing Crisis Act
4. Work Plan to Reduce Residential Displacement
5. Definitions Specific to Implementing Residential Replacement Unit Requirements and Related Tenant Protections