The first major hurdle is obtaining approval from a Design Review Board consisting of 5 elected board members who subjectively determine if the project is "neighborhood compatible". Even while complying with all zoning requirement for setbacks, building height and envelope, lot coverage, environmental impact, etc, and not requesting any variances, most projects stall here, some for years. The board convenes monthly and invites public participation and comments, and if there is opposition either from board members, or neighbors, you're in a very long and arduous process in getting approval. Common complaints are mass and scale, incompatible architecture, view blockage, noise pollution, excessive glazing, color choices, and the list goes on.
When/if you get through design review, you're then off to coastal commission and building and safety for more review and approvals, and eventually building permits if you make it through it all. The entire process will take many years, and potentially 10s or 100s of thousands in expenses before you even break ground. This is for a single residence - I can only imagine the hurdles and expense for a multi-unit project. So I understand and agree with the state attempting to legislate a reduction on the restrictions and roadblocks that local municipalities impose on residential construction.