HB 2068

This bill prohibits zoning authorit ies from adopting or enforcing an amendment , on or after July 1, 2026, to zoning regulations or zoning map s that downzones property. However, this prohibition does not apply to downzoning necessary that meets any of the following criteria:  Protect s the public from threats to health or safety, including geologic hazards, unstable soil, earthquake fault zones, fire hazard severity zones, or known flood-prone areas .  Compl ies with federal or state law, including the federal Endangered Species Act, the federal Fair Housing Act, the federal Americans with Disabilities Act, or applicable building accessibility standards .  Prevent s or abate s a nuisance. Additionally, t his bill does not prevent the addition of compatible commercial, light industrial, or mixed -use zoning overlays, if residential capacity is not reduced and modifications are consistent with other land use regulations. "DOWNZONE"" DEFINED As used in this bill, a "" d ownzone"" means a zoning action, land-use regulation, ballot initiative, or administrative policy that results in any of the following:  A reduction in permitted density, floor area ratio, building height, lot coverage, build requirements, or other form-based entitlement .  A regulation that introduces or increases procedural barriers, including new discretionary reviews, conditional use permits, public hearings, or other non-ministerial processes, for projects that previously qualified for by right or administrative approval .  A regulation that reduces or restricts the lawful use, division, sale, or possession of property .  The imposition of design standards, objective development standards, specific plans, neighborhood plans, or overlay zones that reduce a parcel's feasible yield or buildable area relative to prior entitlements. REMEDIES AND COMPENSATION This bill authorizes property owners whose property is subject of a n uncompensated downzone to bring an action to enjoin enforcement, seek declaratory relief, or recover damages for the loss of fair market value. In those actions, all of the following applies:  The zoning authority must prove by clear and convincing evidence that a health, safety, legal, or nuisance exception applies.  A prevailing property owner, housing developer, or nonprofit organization must be awarded reasonable attorney's fees and costs.  A zoning authority is prohibited from requiring a n applicant to indemnify, defend, or hold harmless the authority regarding actions alleging the violation of the applicant's rights or protections. This bill requires a zoning authority to compensate a property owner if a downzone results in a reduction in fair market value, which is calculated as the difference between the fair market value immediately before the adoption and after the enforcement, established through an independent, certified appraisal submitted by the owner. A j urisdiction may elect to waive the application of the downzone as it pertains to the subject property to avoid liability . This waiver must be made within 60 days of receiv ing written notice or within the time to answer a legal action, whichever comes first . If waived, the downzone is void with respect to that property."