SB 423 in San Diego: The Streamlined Approval Pathway Most Developers Aren't Using

SB 423 in San Diego: The Streamlined Approval Pathway Most Developers Aren’t Using

Introduction

SB 35 quietly created a ministerial approval pathway in 2017. It worked. But it had a sunset clause and a limited reach.

SB 423 made the program permanent in 2024 and expanded which cities it applies to.

What Ministerial Actually Means

A ministerial process is one in which the City reviews a project against fixed objective standards and issues approval if the project meets them.

No hearing. No conditional use permit. No site-development permit. No discretionary action.

If the project meets the objective standards, the City must approve it.

What a Project Needs to Qualify

SB 423 qualification is structured, not casual.

A project generally needs to:

• be located in a jurisdiction that has not met its share of either above-moderate or below-moderate RHNA targets
• be primarily residential, with at least two-thirds of square footage in housing
• include a minimum percentage of deed-restricted affordable units, typically tied to the locality’s RHNA gap
• be located on an infill site that is not in a sensitive habitat, flood zone, or hazardous area
• comply with prevailing wage requirements, and in larger projects, skilled and trained workforce standards
• meet all objective zoning, design, and subdivision standards

The prevailing-wage condition is real. It changes labor cost meaningfully. The math has to work before SB 423 is the right tool.

Why It Is Underused in San Diego

Three reasons projects bypass the SB 423 pathway:

• the affordability requirement is misread as too rich, when in practice it often aligns with what density bonus already requires
• the prevailing-wage trigger is treated as a deal killer without modeling the offset from faster delivery
• the deal team defaults to the discretionary pathway because that is what they know

On the right site, with the right affordable mix, SB 423 turns an 18-month entitlement into a 90-day ministerial approval.

Where SB 423 Beats the Alternative

The decision is not just SB 423 versus discretionary review.

It is SB 423 versus:

• the CCHS process, which is fast but still requires plan-check and design review
• the state Density Bonus Law process, which adds incentives and concessions but stays discretionary
• the Builder’s Remedy under SB 4, which is unlocked only when the housing element is non-compliant

SB 423 is the only one that strips away discretion entirely while keeping density bonus and CCHS compatible.

How We Use It in Strategy Work

For every multifamily site we evaluate, SB 423 is one of four pathways we score.

We ask:

• does the affordable mix required by SB 423 already match what makes the project pencil?
• does the prevailing-wage cost get offset by the schedule compression?
• are there objective standards on this site that the project cannot meet?
• does the site qualify under the RHNA-shortfall analysis at the time of application?

When the answers line up, SB 423 is the lowest-risk entitlement on the table.

Closing

SB 423 is not for every project.

It is for projects where schedule certainty is worth more than design flexibility, and where the affordable mix already pencils.

When that is true, the pathway is faster, quieter, and lower-risk than anything else available.