BILL ANALYSIS
AB 1053
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1053 (Nunez)
As Amended September 7, 2007
Majority vote
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|ASSEMBLY: | |(June 6, 2007) |SENATE: | |(September 12, |
| | | | | |2007) |
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(vote not relevant) (vote not available)
Original Committee Reference: H. & C.D.
SUMMARY : Amends SB 86 (Committee on Budget and Fiscal Review),
a "trailer bill" to the 2007-08 Budget Act, Allow Business
Improvement Districts (BIDs) to be an "eligible joint applicant"
for receipt of funds provided under the $850 million Regional
Planning, Housing, and Infill Incentive Account, created by
Proposition 1C.
The Senate amendments delete the Assembly version of the bill,
and instead:
1)Provide that a city, county, public housing authority or
redevelopment agency with jurisdiction over a qualifying
infill area may apply jointly with a BID, that includes a
qualifying infill area, for funds under the Regional Planning,
Housing, and Infill Incentive Account.
2)Require, prior to receiving funds, but after a grant award,
joint applicants to submit to the Department of Housing and
Community Development (HCD) documentation that the actual
number of permitted housing units is equal or greater than the
number of units in the grant application.
EXISTING LAW :
1)Establishes the Housing and Emergency Shelter Bond Act of 2006
(Housing Bond) to allocate $2.85 billion for the benefit of
housing related programs.
2)Provides that $850 million from the Housing Bond is to be
allocated to the Regional Planning, Housing, and Infill
Incentive Account (a new program) to be used, upon
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appropriation by the Legislature, for the following purposes:
a) Incentive grants related to infill housing development
which may include:
i) Not more than $200 million for urban parks;
ii) Water, sewer, or other infrastructure associated
with infill;
iii) Transportation improvements; or,
iv) Traffic mitigation.
b) Brownfield cleanup that promotes infill housing
development.
3)Establishes "Property and Business Improvement District Law of
1994."
4)Defines an "owners' association" as a private nonprofit entity
that is under contract with a city to administer or implement
activities and improvements specified in the management
district plan.
5)Defines "improvement" to mean the acquisition, construction,
installation or maintenance of any tangible property with an
estimated useful life of five years or more including but not
limited to: parking facilities; benches, booths, kiosks,
display cases, pedestrian shelters, signs; trash receptacles,
public restrooms; lighting and heating facilities;
decorations; parks; fountains; planting areas; closing,
opening, widening, or narrowing of existing streets;
facilities or equipment, or both, to enhance security of
persons and property within the area; ramps, sidewalk, plazas,
and pedestrian malls; rehabilitation or removal of existing
structures.
AS PASSED BY THE ASSEMBLY , this bill:
1)Provided that it is the intent of the Legislature to provide
innovative methods to encourage local governments to approve
higher density infill housing closer to jobs, transportation,
retail, and other amenities.
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2)Provided that it is the intent of the Legislature to encourage
efficient development patterns that are consistent with
regional planning to meet local and state objectives in areas
of new growth and to measure reductions of vehicle miles
traveled per household or green house gas emission consistent
with the Global Warming Solutions Act of 2006.
3)Provided $100 million to be transferred to the California
Pollution Control Financing Authority for the authority's
California Recycle Underutilized Sites (CalReUSE) program to
be expended for brownfield cleanup that promotes infill
housing development as well as for other related development.
4)Provided $100 million to be transferred to the State
Infrastructure and Economic Development Bank for a revolving
loan program to be used for infrastructure that is integral to
facilitating the development of mixed-income infill housing.
Loans shall be a maximum of $10 million. Requires the
legislative body of the project sponsor to make the following
findings prior to applying for funds:
a) The project is consistent with the general plan of the
relevant jurisdiction(s);
b) The proposed financing is appropriate for the specific
project;
c) The project facilitates effective and efficient use of
existing and future public resources to promote infill
housing and conservation of natural resources; and,
d) The project is consistent with the criteria, priorities,
and guidelines required of the Infrastructure Bank under
existing law.
5)Provided $450 million to be transferred to the Department of
Housing and Community Development (HCD) to establish and
administer a competitive grant program to allocate funds to
qualifying cities for infill projects in designated infill
areas to be used for infrastructure that is directly related
to, or integral to facilitating the development of,
mixed-income infill housing and:
a) Defined "infill project" as a residential or mixed-use
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residential project located on a designated infill site
within an incorporated city.
b) Defined "designated infill" site as either:
i) A site that has been designated by a city that has
been previously developed and is located in an area where
zoning allows for residential or mixed use; or,
ii) A vacant site where the adjoining parcels on at
least 75% of the perimeter of the site are, or previously
have been developed for urban uses.
c) Provided that in order to be eligible for grant funding,
projects shall conform to all of the following:
i) Consistency with any land use plan applicable to the
subject site. The housing element of the general plan
shall be found by HCD to be in substantial compliance. A
notice of determination pursuant to the California
Environmental Quality Act (CEQA) shall have been
completed with respect to any local land use plan;
ii) Consistency with state planning priorities;
iii) At least 20% of the residential units in the
proposed infill project will be affordable to very low,
low, or moderate income residents. Residential units may
be either rental or for sale and shall be subject to
regulatory agreements to guarantee their continuing
affordability;
iv) Both the infrastructure project and the housing
project shall be identified with sufficient specificity
to be considered and analyzed for the purposes of
compliance with CEQA;
v) Must be an integral part of the infrastructure needs
that are required to allow infill housing projects to
proceed; and,
vi) Required a dollar for dollar match with non-state
funds. Allows HCD to waive the match requirement for
projects that exceed the affordability threshold.
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d) Required HCD to consider the following in rating
applications:
i) Number of housing units to be created;
ii) Depth and duration of affordability;
iii) Creation of housing in job-rich areas;
iv) Proximity of housing to mass transit, parks,
schools, social services and other amenities;
v) Pedestrian and bicycle accessibility within, to, and
from the site; and,
vi) The extent to which the project design and location
incorporates sustainable building practices.
e) Required HCD to give additional consideration to
projects located in jurisdictions that have adopted the
following policies:
i) To reduce barriers to, encourage, or require
construction of, mixed-income housing development;
ii) To encourage collaboration with school districts to
promote joint use facilities, pedestrian friendly
connections or safe school routes between infill housing
development, schools and recreational facilities; and,
iii) To encourage efficient land use, including but not
limited to general plan updates that balance population
growth and distribution, urban expansion, land
development and resource preservation regionally to
achieve reduction of greenhouse gas emission.
f) Required a reasonable geographic distribution of funds;
and,
g) Required HCD provide an annual report to the Legislature
by April 1 of each year on its activities relating to this
program.
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6)Provided $100 million to be transferred to the Multifamily
Housing Program (MHP) administered by HCD with priority to
public housing authorities that seek major rehabilitation, new
construction and other physical improvements to severely
distressed public housing units.
7)Provided $100 million to be allocated to HCD to be used for
the Workforce Housing Rewards Program (Rewards Program) with
priority funding to local entities that have done all of the
following:
a) Adopted policies to reduce barriers to, encourage, or
require construction of mixed-income housing developments;
b) Provided community outreach efforts on the benefits of
providing housing for all income levels; and,
c) Approved new housing that incorporates either
sustainable building practices or Leadership in Energy and
Environmental Design (LEED) or Neighborhood Development
principals likely to achieve reduction of greenhouse gas
emissions consistent with the California Global Warming
Solutions Act of 2006.
8)Required HCD to provide a report to the Legislature on its
activities relating to the Rewards Program for each fiscal
year that awards given.
9)Required the legislative body of a local entity submitting an
application for funding to approve the application by
resolution.
FISCAL EFFECT : Unknown.
COMMENTS : AB 1053 (Nunez) was gutted-and-amended in the
Senate, deleting the Assembly version of the bill and replacing
it with language identically to SB 465 (Lowenthal) which is
currently on the Assembly Floor.
SB 465 is sponsored by Anschutz Entertainment Group (AEG).
According to their website, AEG is one of the leading sports and
entertainment presenters in the world. AEG, a wholly owned
subsidiary of the Anschutz Company, owns or controls a
collection of companies including facilities such as STAPLES
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Center, Toyota Sports Center, Toyota Park (Bridgeview, Il), WaMu
Theatre (Seattle), The Hartford Civic Center, El Rey Theatre
(Hollywood, CA), Colosseum at Caesars Palace (Las Vegas),
Anaheim Convention Center Arena, Rentschler Field (Hartford),
Target Center (Minneapolis), NOKIA Theatre Times Square, NOKIA
Theatre at Grand Prairie and The O2, a 28-acre development
located in the eastern part of London along the Thames River
which includes a 20,000-seat arena and over 650,000 square feet
of leisure and entertainment use; sports franchises including
the Los Angeles Kings (NHL), Los Angeles Riptide (MLL),
Manchester Monarchs (AHL), Reading Royals (ECHL), Chicago Fire,
Houston Dynamo and Los Angeles Galaxy (MLS), two hockey
franchises operated in Europe, the Hammarby (Sweden) Futbol Club
and management of privately held shares of the Los Angeles
Lakers; AEG Marketing, a sponsorship, sales and consulting
company; AEG Merchandising, a multi-faceted merchandising
company; and AEG Creative, a full-service marketing and
advertising agency.
AEG is developing a downtown Los Angeles sports and
entertainment destination, a 4-million square foot development
adjoining STAPLES Center and The Los Angeles Convention Center.
AEG would like to have BIDs be an eligible applicant to apply
for funds for the "Figueroa Corridor Project."
AEG states that this project "is a transformative development.
Existing and planned transit will reinforce the ability to get
to and from existing centers of employment. The Figueroa
Corridor will encourage ground floor active uses that will help
create and sustain a healthy and vital pedestrian environment.
Upper floor development will provide for over 8,000 new market
rate housing units along the corridor, supporting a population
of over 25,000 people. All the infrastructure improvements
associated with the Figueroa Corridor will be for the public
benefit. None of it will accrue to any single housing project.
Rather, it will make the Figueroa Corridor such a desirable
"infill area" that housing developers will want to build
housing, and people will want to live along its route. The
Figueroa Corridor will be an example of what infill development
should be."
In November 2006, California voters approved Proposition 1C, the
$2.85 billion Housing and Emergency Shelter Trust Fund Act of
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2006. The Bond Act includes an $850 million Regional Planning,
Housing, and Infill Incentive Account that is subject to
appropriation and further statutory implementation by the
Legislature. Proposition 1C further provides that the funds are
available for infill incentive grants for capital outlay related
to infill housing and housing-related development as well as for
brownfield cleanup that promotes infill housing and
housing-related development that is consistent with regional and
local plans.
Arguments in Support: According to the sponsors, the Anschutz
Entertainment Group and Figueroa Corridor Working Group, because
BIDs have become successful at transforming areas and because
they already have relationships with local jurisdictions, BIDs
could add to the quality of a jurisdiction's application.
Additionally, because BIDs directly represent local property
owners, BID participation could help local municipalities gain
support for the projects for which funding is being sought.
BIDs provide local municipalities a partner that is seen as
effective and efficient at creating change within neighborhoods.
BIDs have proven to be an effective bridge and partner between
the public and private sectors.
From a practical perspective, BIDs can also be helpful in
identifying other sources of funding that can be leveraged with
the funding provided by the state under 1C. Private developers
may also be more comfortable providing matching funding, knowing
that BIDs will participate in the oversight of project
implementation.
Arguments in Opposition: According to the Affordable Housing
Collaborative, only entities with experience in housing
development should be eligible applicants for Prop. 1C, infill
housing development funds. BIDs, though perhaps experienced in
commercial development, clearly don't fit into this category.
Additionally, BIDs are created to meet the needs of their
business members. These needs may not coincide with the needs
of residents and may actually conflict. While they may have an
interest in what's being developed, so do many other entities -
such as neighborhood associations. Only the developer and the
local government would be sufficiently familiar with the details
of the proposed development and its infrastructure needs to make
effective and efficient use of state funds.
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Additionally, BIDs are created to meet the needs of their
business members. Their idea about improvements needed in an
infill area may not be in the best interest of current or
potential residents.
According to the Western Center on Law and Poverty (WCLP), as
drafted it is not clear that BIDs must be joint applicants with
other public entities. WCLP argues that the current language
could be interpreted to mean that any of the enumerated entities
may be joint applicants with each other, but not that BIDs must
apply jointly with a public entity.
WCLP continues to argue that BIDs are subject to minimal
requirements under state law. By expanding their mandates, they
could take on more of the roles of redevelopment agencies, but
without the extensive safeguards provided in the Community
Redevelopment Law.
Analysis Prepared by : Hubert Bower / H. & C.D. / (916)
319-2085
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