What Is SB 423?
Senate Bill 423 is one of California's most powerful tools for accelerating housing approvals. It forces cities that have failed to meet their state-mandated Regional Housing Needs Allocation (RHNA) to approve qualifying multifamily housing projects "by-right" — meaning without discretionary Planning Commission review.
In practical terms, this eliminates one of the most unpredictable and time-consuming elements of the entitlement process: the public hearing. A project that qualifies under SB 423 cannot be denied on the basis of neighborhood opposition, aesthetic objections, or subjective planning criteria. Approval becomes a ministerial (administrative) function, not a political one.
"Discretionary review is where projects go to die. SB 423 replaces that uncertainty with a rule-based approval process — and that changes the entire risk calculus for multifamily development." — Samuel R. Kuo
Which Cities Does SB 423 Apply To?
SB 423 applies in jurisdictions that have not met their RHNA housing production targets. Given that the vast majority of California cities — including many in the San Gabriel Valley, Los Angeles County, Riverside, and San Bernardino — have historically underproduced housing relative to their RHNA obligations, this law has broad application across SKDM's target markets.
What Projects Qualify?
- Multifamily residential projects with at least two-thirds residential use
- Projects located in urbanized areas with access to public transit
- Projects that comply with objective development standards (height, setbacks, FAR)
- Projects that include a minimum percentage of affordable units (the percentage varies by project size and location)
- Projects that do not involve demolition of existing affordable housing or protected tenants
SKDM's SB 423 Strategy
SKDM evaluates every prospective project site for SB 423 eligibility as part of our initial feasibility analysis. When a project qualifies, we structure the entitlement strategy to take full advantage of the by-right pathway — dramatically reducing the time, cost, and uncertainty of the approval process.
- Screening target markets for cities with RHNA compliance gaps
- Designing projects to meet objective standards that trigger by-right approval
- Structuring affordable unit inclusion to qualify while preserving project economics
- Advising investors on the reduced entitlement risk and timeline compression that SB 423 enables