Civil actions: housing development projects

The law raises the potential financial exposure for unsuccessful bad-faith challenges and creates a fast-track motion process for lawsuits contesting eligible care developments.

What the law does ​

• Raises the maximum liability under a court-ordered bond for challenges to qualifying affordable housing projects from $500,000 to $1 million, with annual inflation adjustments beginning in 2028.
• Extends bond requirements to challenges that delay qualifying priority care developments funded for supportive housing or housing assistance connected to behavioral-health services.
• Lets defendants in lawsuits challenging approval or permitting of priority care developments seek early dismissal; discovery generally pauses while the court decides the motion.
• Awards attorney’s fees and costs to defendants that win these dismissal motions, while allowing fees for challengers if a motion is frivolous or solely intended to delay.
• Allows appeals of orders granting or denying these dismissal motions.
• Allows a court to reduce or waive a bond when it would cause the challenger undue economic hardship.
• Makes a developer reimburse the challenger’s bond cost if the developer in bad faith changes a project so it no longer qualifies.

Who it affects ​

• Developers, public agencies, and other parties seeking to build qualifying affordable housing or priority care developments.
• Individuals and organizations suing to challenge the approval, permitting, or construction of those projects.
• Providers and intended residents of supportive housing and other qualifying behavioral-health housing assistance.

Context ​

If SB 916’s specified enactment conditions are met, the bond provisions also apply to defined public-university student housing projects.