How These Laws Affect Rural Counties
Why California’s Housing Reforms Can Look Very Different Outside the Cities
Much of the conversation about California’s new housing laws focuses on cities.
Transit-oriented development.
Apartment buildings.
Commercial corridors.
Urban lot splits.
Reduced parking requirements.
But California’s housing crisis doesn’t stop at the edge of an urban area, and neither do many of the state’s housing laws.
Rural counties are also required to plan for housing, comply with state ADU law, maintain compliant Housing Elements, process qualifying projects under applicable state standards, and accommodate their share of California’s housing needs.
But there is an important difference:
In rural California, being legally allowed to build housing and being physically able to build it are often two very different things.
A state law may create a development right.
The property still needs water.
It still needs wastewater disposal.
It still needs legal and physical access.
And increasingly, it needs to meet significant wildfire and fire-access requirements.
For rural homeowners, builders, and real estate investors, understanding both sides of that equation is critical.
State Housing Laws Still Apply in Rural California
One of the biggest misconceptions is that California’s housing laws are primarily an urban issue.
Many aren’t.
Cities and counties throughout California remain subject to state requirements involving:
· Housing Elements.
· Regional Housing Needs Allocations.
· Accessory Dwelling Units.
· Density Bonus Law.
· Housing Accountability laws.
· Objective development standards.
· Affordable-housing planning.
· Permit-processing requirements.
HCD also has authority to enforce numerous state housing laws against local jurisdictions. (hcd.ca.gov)
A rural county cannot simply decide that California’s housing policies don’t apply because its development patterns are different.
But the practical effect of those laws can be very different.
Some Laws Really Are Urban
It is equally important not to assume that every housing law we’ve discussed applies everywhere.
SB 9 is a good example.
SB 9’s lot-split and two-unit development provisions apply to qualifying properties within an urbanized area or urban cluster.
That means it isn’t a general mechanism for dividing large rural parcels throughout California.
Similarly, several of California’s newer housing laws specifically target:
· Transit areas.
· Commercial corridors.
· Urbanized communities.
· Particular categories of multifamily development.
So the first question on a rural property should always be:
Does this particular state law actually apply here?
Not every one will. (hcd.ca.gov)
ADUs May Be the Biggest Rural Opportunity
Accessory Dwelling Units are a different story.
California requires cities and counties to permit qualifying ADUs and JADUs, and state law significantly limits the restrictions local governments may impose. HCD describes ADUs as an important statewide housing tool and reviews local ADU ordinances for compliance with state law. (hcd.ca.gov)
For rural property owners, this can create significant opportunities.
A rural property may have:
· A primary residence.
· A detached garage.
· A barn or accessory structure.
· Significant unused land.
· Existing utility infrastructure.
Depending on the property and applicable law, some of those conditions may create opportunities for additional housing.
For investors, that can mean additional long-term rental income without purchasing another parcel.
For families, it can mean housing for:
· Adult children.
· Aging parents.
· Caregivers.
· Extended family.
In areas where new subdivisions are difficult, ADUs can be one of the most practical ways to add housing.
But Septic Can Stop the Entire Project
This is one of the biggest differences between urban and rural development.
In a city, adding another dwelling may mean connecting to an existing municipal sewer system.
In rural California, the property may rely on an onsite wastewater treatment system.
That changes everything.
A property may have enough land for another dwelling and still lack the wastewater capacity to support it.
Questions may include:
· Is the existing septic system adequately sized?
· Can it accommodate another dwelling?
· Is expansion possible?
· Is there enough usable land for a replacement dispersal area?
· Does the soil support an additional system?
· Are there setback conflicts with wells, waterways, property lines, or structures?
A beautiful five-acre parcel can have less development potential than a much smaller property if the wastewater constraints are severe.
For rural real estate, septic feasibility is development feasibility.
Water Can Be Just as Important
Rural properties may depend on:
· Private wells.
· Springs.
· Shared water systems.
· Small community water systems.
· Water storage tanks.
Adding housing can therefore require more than simply connecting another pipe.
The project may need to demonstrate that adequate water is available and that the proposed system satisfies applicable health and safety requirements.
In drought-prone parts of California, water availability can become one of the most important development constraints on the property.
This is another reason investors should be careful about assuming that acreage equals development potential.
Ten acres without reliable water may have far less development potential than one acre with adequate infrastructure.
Fire Access Can Determine What Is Buildable
Wildfire risk is another major difference.
Many rural California properties are located in or near wildfire-prone areas.
Fire requirements can affect:
· Road width.
· Driveway width.
· Turnarounds.
· Grades.
· Bridge capacity.
· Gate dimensions.
· Addressing.
· Vegetation management.
· Emergency access.
· Water supply for firefighting.
A parcel may have plenty of physical room for another dwelling while the existing driveway cannot satisfy the requirements necessary to serve it.
California allows fire protection districts, under specified procedures, to adopt building standards relating to fire and panic safety that are more stringent than statewide standards when supported by required findings. (hcd.ca.gov)
For rural development, the driveway can sometimes matter almost as much as the building site.
More Land Does Not Necessarily Mean More Development Rights
This is one of the most important lessons for rural investors.
A 20-acre property may look like it should have enormous development potential.
But acreage alone tells you very little.
Development may be limited by:
· Zoning density.
· Minimum parcel size.
· General Plan designations.
· Agricultural restrictions.
· Conservation easements.
· Steep slopes.
· Biological resources.
· Streams and wetlands.
· Septic suitability.
· Water availability.
· Fire access.
· Easements.
· Legal access.
The question isn’t:
“How many acres does it have?”
The better question is:
“How much of this property is actually usable for the development I want?”
Housing Elements Matter in Rural Counties Too
Every California city and county must maintain a Housing Element as part of its General Plan.
Rural jurisdictions have the same basic responsibility to identify how they will accommodate their assigned housing needs.
But the planning challenge can be very different.
A rural county may have thousands of acres of land while having relatively little land that realistically supports higher-density housing.
Why?
Because housing requires infrastructure.
HCD’s Housing Element guidance recognizes different density benchmarks for metropolitan, suburban, and other jurisdictions when evaluating sites appropriate for lower-income housing. (hcd.ca.gov)
This matters because California housing planning isn’t simply about putting units on a map.
The sites have to represent realistic housing opportunities.
Density Bonus Can Still Matter
California’s Density Bonus Law isn’t limited to major cities.
Qualifying housing developments may receive additional density and development incentives throughout California.
For rural and small-town projects, this could potentially provide:
· Additional units.
· Concessions.
· Development-standard waivers.
· Parking reductions.
HCD notes that state law requires jurisdictions to provide qualifying density bonuses and development incentives when projects satisfy the statutory affordability requirements. (hcd.ca.gov)
But again, additional legal density doesn’t create infrastructure.
Receiving permission for more units doesn’t solve:
· Septic capacity.
· Water supply.
· Fire access.
· Road capacity.
This is why rural feasibility analysis has to consider land-use rights and infrastructure together.
Affordable Housing Can Be Especially Difficult
Rural communities need affordable housing too.
Farmworkers.
Seniors.
Families.
Teachers.
Healthcare workers.
Service workers.
Young adults trying to remain in the communities where they grew up.
But rural affordable housing faces a difficult economic problem.
Construction costs can be similar to—or sometimes higher than—urban construction costs while achievable rents may be substantially lower.
Smaller projects also don’t always benefit from the same economies of scale as large apartment developments.
That makes incentives particularly important.
HCD identifies strategies including:
· Reduced or waived development fees.
· Fast-track processing.
· Reduced development standards.
· Publicly owned land.
· Funding assistance.
· Ministerial permitting.
These tools can help close the gap between what housing costs to build and what local residents can afford to pay. (hcd.ca.gov)
Ministerial Approval Helps—but It Doesn’t Eliminate Other Agencies
This is another important distinction.
Suppose a rural housing project qualifies for ministerial land-use approval.
That’s valuable.
But the project may still need separate approvals from:
· Environmental Health.
· Fire districts.
· Public Works.
· CalFire.
· Caltrans.
· Water districts.
· Regional Water Quality Control Boards.
· California Department of Fish and Wildlife.
· Other state or federal agencies.
Ministerial approval means the particular housing entitlement is processed without discretionary land-use review.
It does not mean every other regulatory requirement disappears.
For rural projects especially, identifying all the agencies involved at the beginning can prevent major surprises later.
Existing Structures Can Create Opportunities
Rural properties often contain older structures that don’t exist on typical suburban lots.
These may include:
· Detached garages.
· Workshops.
· Barns.
· Guesthouses.
· Cabins.
· Agricultural buildings.
· Older second residences.
Some may have been legally constructed.
Some may have incomplete permit histories.
Some may have been converted over time.
These structures can sometimes create development or legalization opportunities—but they should be investigated carefully.
Before assuming an existing building can become housing, an investor should understand:
· Permit history.
· Legal use.
· Structural condition.
· Septic capacity.
· Water.
· Fire access.
· Building Code requirements.
The building already being there doesn’t automatically mean it can legally become a dwelling.
But it may represent an opportunity worth investigating.
Rural Building Codes Can Also Be Different
Some California jurisdictions have adopted special provisions for limited-density owner-built rural dwellings under state law.
These regulations can provide alternative building standards in qualifying rural areas when the local jurisdiction has formally adopted them.
They are not automatically available throughout rural California, and they have specific limitations—including requirements related to owner-building and occupancy. (hcd.ca.gov)
This is another example of why understanding the local jurisdiction matters.
Two rural properties in neighboring counties may be subject to very different permitting environments.
Why Investors Should Care
Rural real estate is often evaluated badly.
People see:
20 acres.
Or:
Two houses and three outbuildings.
Or:
Plenty of room for another unit.
And assume that means development opportunity.
Sometimes it does.
Sometimes it doesn’t.
The investor who understands permitting asks different questions:
· What does state housing law allow?
· What does the zoning allow?
· Is the existing development legal?
· Can the property support another septic system?
· Is there adequate water?
· Does the road meet fire standards?
· Are there environmental constraints?
· Are there easements?
· Which agencies have jurisdiction?
Those questions can reveal both hidden value and hidden problems before money changes hands.
Rural Properties Can Have Opportunities Urban Investors Overlook
The constraints are significant.
So are the opportunities.
Rural properties may offer:
· ADU potential.
· Existing structures suitable for conversion.
· Multigenerational housing.
· Agricultural employee housing opportunities.
· Affordable housing opportunities.
· Larger building areas.
· Lower land acquisition costs.
· Less competition from institutional developers.
The key is understanding which development strategy fits the property rather than trying to force an urban development model onto rural land.
Common Misconceptions
“State housing laws don’t apply in rural counties.”
False.
Many statewide housing laws apply to rural jurisdictions, although individual statutes have their own eligibility requirements.
“I have ten acres, so I can build several houses.”
Not necessarily.
Acreage alone doesn’t establish development rights.
“If an ADU is allowed by state law, the county can’t stop me because of septic.”
False.
State ADU law limits local land-use restrictions, but legitimate health and safety requirements still matter. The property must still be capable of supporting the development.
“Ministerial approval means I don’t need other agency permits.”
False.
A ministerial housing entitlement doesn’t eliminate separate approvals that may be required for wastewater, water, fire access, roads, or other regulated issues.
“Rural development is easier because there are fewer neighbors.”
Often, the opposite is true.
There may be fewer neighbors, but there can be considerably more infrastructure that the property owner must provide.
Why This Matters
California housing policy increasingly creates development rights at the state level.
But rural development exposes an important reality:
A legal development right is only one piece of feasibility.
In an urban neighborhood, much of the infrastructure already exists.
The road is there.
The sewer is there.
The water main is there.
The fire hydrant may be there.
On a rural property, the developer may have to solve those problems individually.
That makes early feasibility analysis especially important.
The Bottom Line
California’s new housing laws absolutely create opportunities in rural counties.
But those opportunities have to be evaluated differently.
For rural properties, successful development requires understanding three things at the same time:
What state law allows.
What local regulations require.
What the land can physically support.
When those three align, rural properties can offer development opportunities that other buyers completely overlook.
When they don’t, even a beautiful property with plenty of acreage can become an expensive lesson.
For investors, the goal isn’t simply to find more land.
It’s to identify usable development potential.
Looking Ahead
In our next article, we’ll shift the focus directly to property owners with What Homeowners Need to Know—bringing together the most important changes involving ADUs, lot splits, permitting, parking, and development rights that can affect an existing home.
If you’re considering developing or purchasing rural property, Buchanan Land Use Consulting can help evaluate zoning, state housing laws, permitting requirements, infrastructure constraints, and the agencies that may be involved before you commit significant money to a project.
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