Campbell tightens vacancy rule for starter-home projects and asks staff to draft demolition controls

The Campbell City Council on April 21 amended and adopted an interim ordinance to require parcels be vacant at the time a developer files a Starter Home Revitalization Act application and instructed staff to pursue drafting a demolition-control ordinance to limit speculative demolition.

The council's action follows an extended staff presentation and a packed public hearing in which neighbors, housing advocates and an attorney urged the council to tighten the city's local rule after residents said developers were attempting to use an interim local vacancy definition to qualify occupied single-family lots for ministerial 10-unit "starter home" projects.

Rob Eastwood, Campbell's community development director, told the council that state law (SB1123 as codified at Government Code 66499.41 and related statutes) requires streamlined, ministerial processing for starter-home projects but does not spell out a single, statewide date-of-application vacancy definition. Campbell's interim ordinance had allowed applicants to "render" a property vacant during the redevelopment process so a site with an existing house could be demolished as part of the project process. Eastwood said the city had adopted that approach to avoid speculative blight but that staff had received substantial community input questioning whether the local rule conflicts with state guidance and HCD technical clarifications.

"Under SB1123 these projects are processed ministerially and there is limited local discretion," Eastwood said in his presentation. He added that several applicants had submitted SB330 pre-applications that can vest development standards in place at the time of filing, and that the city had 16 starter-home applications in process, 11 filed this year, about half in single-family neighborhoods.

Neighborhood speakers told the council they had seen intact, habitable single-family homes listed, sold and then demolished or proposed for demolition to create sites that proponents then qualified as "vacant" under the city's prior local interpretation. "We do not want our neighborhoods reshaped by out-of-town developers exploiting a loophole for quick profit," Alicia Asano told the council. Attorney Richard Drury urged the council to adopt the stricter reading of vacancy, arguing the local ordinance as written is preempted by state law and could expose the city to legal challenge.

Proponents of retaining the city's more flexible approach argued that the measure had catalyzed infill housing that can provide more ownership opportunities for younger residents and reduce pressure on undeveloped land. "I support option one," a resident said, "It has been successful in spurring starter-home development and avoids speculative demolition." Council members and staff acknowledged both perspectives during deliberations.

After discussion, the council voted 4-1 to adopt the urgency interim ordinance reestablishing Campbell's ordinance language but with an amendment revising how vacancy is applied to single-family parcels to require vacancy at the moment an SB1123 application is submitted. Roll call was Skazola yes, Lopez no, Hines yes, Vice Mayor By yes, Mayor Fado yes. Council separately voted to direct staff to pursue development of a demolition-control ordinance for future consideration, including consulting the California Department of Housing and Community Development (HCD) on legal limits and drafting guidance.

City staff said HCD has been contacted for technical guidance and that some applications already have active demolition permits or SB330 filings; staff warned that those filings can vest under existing rules and may be reviewed under the standards locked in at the time of their SB330 submission. The council asked staff to return with proposed ordinance language, legal analysis and an implementation schedule.

The council's action does not retroactively void all in-process applications; Eastwood said SB330 pre-applications can preserve the standards in effect at filing and that the city would have to evaluate pending applications and any demolition permits already issued in light of state law and HCD guidance. The council's amendment and the staff's demolition-control work aim to reduce the incentive to demolish habitable homes purely to create sites eligible for ministerial starter-home review.

The council's next step is for staff to prepare the revised urgency ordinance language, proposed demolition-control ordinance draft, and an HCD-informed legal analysis to return to the council. The council noted the interim ordinance requires four votes to enact as an urgency measure and that more detailed rules and implementation will be reviewed at a future meeting.

What happens next: staff will continue to consult HCD, prepare draft demolition-control language, and bring implementation recommendations back to council for a follow-up decision.