Erik Hayden never intended to build in Los Gatos. For years, the CEO of Urban Catalyst treated the affluent Silicon Valley enclave like a no-go zone. He described it as one of the most difficult development environments in the region, a place where politics, neighborhood "NIMBY" opposition, and a hostile planning process effectively killed housing projects before they could break ground (Silicon Valley Business Journal) [7].
But then, the rules of the game changed. California’s “Builder’s Remedy” provided a legal crowbar to pry open a door that had been locked for decades. Today, Urban Catalyst isn't just looking at Los Gatos; they’ve proposed a townhome development to replace an orchard on the edge of the city, bypassing local zoning entirely. Hayden isn’t calling it a magic wand, though. He calls it a "stick", a punishment for cities that refuse to get their act together (Silicon Valley Business Journal) [7].
This isn't just a Bay Area quirk. From the tech hubs of San Jose to the historic streets of Plymouth, Massachusetts, a new era of "aggressive development" is taking hold. Developers and property managers are no longer asking for permission; they are using state-level mandates to override local blockades.
In this post, we’ll explore:
- How the "Builder's Remedy" works and why it’s being deployed now.
- The high-stakes standoff between local control and state housing mandates.
- What property managers and developers need to know about the "Nuclear Option" of zoning.
The Rise of the 'Stick'
The Builder’s Remedy isn't actually new. It has been a quiet part of California’s Housing Accountability Act since 1990 (California Department of Housing and Community Development) [1]. However, it remained a legal footnote for decades because the state rarely enforced housing element compliance with much vigor. That changed recently as the California Department of Housing and Community Development (HCD) began aggressively auditing cities' "Housing Elements", the long-term plans that specify how a city will meet state-mandated housing targets.
When a city fails to have a state-approved Housing Element, it loses the authority to enforce its own local zoning laws against certain housing projects. Specifically, if a project includes at least 20% affordable units (or 100% moderate-income units), the city must approve it, even if it exceeds local height limits, density caps, or setbacks (CA Department of Justice) [5]. It is, for all intents and purposes, the "nuclear option" for development.
The Los Gatos Standoff
Los Gatos is the perfect case study for why this matters. For years, the town relied on "subjective" standards to slow down or block development. If a building didn't "fit the character" of the neighborhood, it was a dead project. But the Builder’s Remedy renders those subjective complaints toothless. When Urban Catalyst filed for their townhome project, the town’s lack of a compliant housing element meant their usual arsenal of delays was empty.
This dynamic creates a massive opportunity for development services. Projects that were once considered pipe dreams due to restrictive zoning are suddenly viable. For property managers, it means a potential influx of high-density units in areas where supply has been artificially suppressed for decades.
A National Trend: Massachusetts 40B
While California is currently the front line, this tension is playing out nationwide. In Plymouth, Massachusetts, a 163-unit condominium complex was recently approved by a zoning board that explicitly stated they hated the project (Boston Business Journal) [8]. This was possible because of "Chapter 40B," a Massachusetts law that allows developers to bypass local zoning if at least 25% of the units are affordable (Mass.gov) [9].
The chair of the Plymouth board, Michael Main, expressed total disappointment, stating he tried every way he knew to deny the project but couldn't (Boston Business Journal) [8]. This highlights a growing reality: state-level "sticks" are effectively ending the era of local veto power over dense housing.
The Affordability Trade-Off
Using the Builder’s Remedy isn't a free pass. It requires a significant commitment to affordable housing. For developers, the math has to work. You are trading away 20% of your potential market-rate revenue for the right to build at a much higher density than the city would normally allow.
However, in high-demand markets like Oakland or San Jose, the trade-off is often worth it. If you can build 100 units on a lot where the city only wanted 20, the extra 80 units, even with 20% of them being affordable, often lead to a much higher ROI. It’s about leveraging general contracting expertise to maximize the footprint of a site.
Timeline: The Road to the Nuclear Option
| Date | Milestone | Source |
|---|---|---|
| 1990 | California passes the Housing Accountability Act (HAA). | [1] |
| 2019 | SB 330 (Housing Crisis Act) is signed, limiting local delays. | [2] |
| Oct 2022 | Santa Monica hit with 16 Builder’s Remedy projects in one month. | [3] |
| Feb 2023 | HCD officially decertifies multiple Bay Area housing elements. | [4] |
| Nov 2023 | CA Attorney General sues Huntington Beach for housing defiance. | [5] |
| Jan 2024 | Courts rule Builder’s Remedy applies even if a city "thinks" they are compliant. | [6] |
| Apr 2026 | Urban Catalyst moves forward in Los Gatos via Builder's Remedy. | [7] |
| Apr 2026 | Plymouth, MA board admits defeat on 40B condo project. | [8] |
The Property Manager’s Burden
While developers love the "stick," property managers are often left to handle the social fallout. When a project is forced into a neighborhood that didn't want it, the incoming residents enter a tense environment. Effective property maintenance and community management become vital.
These "Builder's Remedy" buildings are often denser and more complex than surrounding structures. They require sophisticated janitorial and maintenance plans to keep the property value high and the neighbors (who are looking for any excuse to complain) at bay.
Data Element: Traditional Zoning vs. Builder’s Remedy
| Metric | Traditional Development | Builder's Remedy Project |
|---|---|---|
| Approval Timeline | 24–48 Months | 6–12 Months (Statutory limits) [2] |
| Density Limit | Set by Local Code | No Limit (if consistent with health/safety) [5] |
| Affordability Requirement | Often 10–15% (Inclusionary) | Minimum 20% Low-Income [1] |
| Local Discretion | High (Subjective standards) | Low (Objective standards only) [1] |
| Typical Outcome | Downsized units / Delayed | Max density / Expedited |
Case Example: The 20% Gamble
Consider a hypothetical 1.5-acre site in a Peninsula suburb. Under traditional zoning, the city allows 12 single-family homes. A developer using the Builder’s Remedy proposes a 5-story, 80-unit apartment building.
The city is furious. Neighbors cite "traffic" and "shadows." However, because the developer committed 16 units to low-income residents (20%), the city’s zoning code is legally irrelevant. The developer saves $2M in carrying costs due to a faster approval timeline and gains 68 market-rate units instead of 12. This is why Erik Hayden calls it a "stick", it changes the negotiation from "Can I build?" to "How fast can I build?" (Silicon Valley Business Journal) [7].
What Smart Critics Argue
Critics of the Builder’s Remedy, including many municipal leaders, argue that this "nuclear option" erodes the democratic process. They contend:
- Infrastructure Strain: Local planners argue that state-forced density doesn't account for local water, sewer, or school capacity (League of California Cities) [10].
- Community Character: Residents worry that massive podium buildings will destroy the aesthetic and "feel" of historic neighborhoods (Save Our Neighborhoods) [11].
- The Affordable "Floor": Some argue that 20% isn't enough, and that developers are getting a "windfall" of density for a relatively small social contribution.
The Counter-Argument: State regulators and housing advocates point to the fact that "community character" has historically been used as a dog-whistle for exclusion. They argue that if cities actually planned for housing, the Builder’s Remedy wouldn't need to exist. The "Infrastructure" argument is often debunked by studies showing that dense, transit-oriented development is actually more efficient for utility usage per capita (UC Berkeley Terner Center) [12].
Key Takeaways
- Compliance is Mandatory: If a city doesn't have an HCD-certified housing element, they lose control over zoning for affordable projects [1].
- Speed is the Real Asset: The primary value of the Builder's Remedy is the bypassing of the multi-year discretionary review process [2].
- The 20% Rule: You must include 20% low-income or 100% moderate-income units to trigger the remedy [5].
- Subjective Standards are Dead: Cities cannot use "it looks ugly" as a reason to deny a state-mandated project [6].
- It’s Not Just California: Laws like Massachusetts 40B show a national trend toward state-level housing intervention [9].
- Opportunity for Redevelopment: Old offices and parking lots are prime targets for this strategy (Atlas Premier Services) [13].
- Maintenance Matters: Higher density requires more professional janitorial and maintenance services to succeed.
Actions You Can Take
At Work
Audit your current land holdings. Are any of your properties in cities that are currently out of housing element compliance? If so, your site value might have just doubled. Consult with development specialists to run a feasibility study.
At Home
If you see a "Builder's Remedy" project proposed in your neighborhood, look at the plans objectively. These projects often bring much-needed residential construction and can actually increase nearby property values by bringing new retail and amenities to the ground floor.
In the Community
Support "Missing Middle" housing. The Builder’s Remedy is a blunt instrument, but the goal is to create more housing for the workforce. Engaging in local planning early can help cities avoid the "stick" by creating their own compliant plans.
In Civic Life
Contact your local planning commission. Ask them directly: "Is our Housing Element compliant?" If the answer is no, ask what they are doing to fix it before the "Nuclear Option" is used in your backyard.
The Extra Step
If you are an investor or developer, don't wait for a city to become "friendly." The whole point of the Builder’s Remedy is that you don't need them to be. Look for commercial construction opportunities where the local zoning blockade is about to be breached.
FAQ
Q: Can a city still deny a project for health and safety?
A: Yes, but the bar is incredibly high. The city must prove a "specific, adverse impact" upon public health or safety that cannot be mitigated. General concerns about "traffic" usually don't qualify (CA HCD) [1].
Q: Does the Builder's Remedy apply to luxury condos?
A: Only if at least 20% of the units are deed-restricted for low-income households. You can't use the remedy for a 100% luxury project [5].
Q: Is the Builder's Remedy permanent?
A: No. Once a city gets its Housing Element certified by the state, the "remedy" window closes. However, projects that were filed while the city was non-compliant are usually "vested" and can proceed [2].
Q: How does this affect retail development?
A: Many Builder's Remedy projects are mixed-use. Developers often put retail on the ground floor to satisfy community needs while putting the high-density housing above.
Q: What is the biggest risk for developers?
A: Litigation. Cities often sue to block these projects, leading to high legal fees. You need a team that understands the design-build process and the legal landscape to navigate this.
Atlas Premier Services & Consultants is a premier general contracting and project management firm dedicated to high-performance commercial and residential development, management, janitorial, maintenance, etc. From commercial offices to complex medical facilities, we bring a standard of excellence to every square foot we manage.
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Sources
[1] California Department of Housing and Community Development, “The Housing Accountability Act,” HCD.ca.gov, Last updated Jan 2024, Accessed April 19, 2026.
[2] California State Legislature, “Senate Bill 330: Housing Crisis Act of 2019,” leginfo.legislature.ca.gov, Oct 2019, Accessed April 19, 2026.
[3] Los Angeles Times, “Santa Monica Builder’s Remedy Projects,” latimes.com, Oct 13, 2022, Accessed April 19, 2026.
[4] San Francisco Chronicle, “Bay Area Cities Fail Housing Deadlines,” sfchronicle.com, Feb 1, 2023, Accessed April 19, 2026.
[5] California Department of Justice, “Attorney General Bonta Statement on Housing Accountability,” oag.ca.gov, Nov 2023, Accessed April 19, 2026.
[6] California Courts of Appeal, “California Renters Legal Council v. City of San Mateo,” scholar.google.com, 2021 (Cited for ongoing precedent in 2026), Accessed April 19, 2026.
[7] Silicon Valley Business Journal, “Band-Aid on a Bullet Wound: Builder’s Remedy in Los Gatos,” bizjournals.com, April 15, 2026, Accessed April 19, 2026.
[8] Boston Business Journal, “Plymouth 40B Development Approval,” bizjournals.com, April 12, 2026, Accessed April 19, 2026.
[9] Commonwealth of Massachusetts, “Chapter 40B Planning and Information,” mass.gov, Last updated 2025, Accessed April 19, 2026.
[10] League of California Cities, “Impact of State Mandates on Local Infrastructure,” calcities.org, Jan 2026, Accessed April 19, 2026.
[11] Save Our Neighborhoods, “Protecting Local Zoning Control,” saveourneighborhoods.org, March 2026, Accessed April 19, 2026.
[12] UC Berkeley Terner Center for Housing Innovation, “The Efficiency of Density,” ternercenter.berkeley.edu, June 2024, Accessed April 19, 2026.
[13] Atlas Premier Services & Consultants, “Internal Development Standards 2026,” atlas-premier.com, April 2026, Accessed April 19, 2026.
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