BILL ANALYSIS
SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: SB 303
SENATOR ALAN LOWENTHAL, CHAIRMAN AUTHOR: Ducheny
VERSION: 3/22/07
Analysis by: Mark Stivers FISCAL: yes
Hearing date: March 27, 2007
SUBJECT:
Housing element law
DESCRIPTION:
This bill requires cities and counties to update their general
plans at least every ten years to accommodate a planning period
of at least 20 years, expands the housing element planning
period from five to ten years, requires cities and counties to
complete any necessary rezonings to meet their housing needs
concurrent with adoption of the housing element, and makes other
changes to general plan and housing element law.
ANALYSIS:
The Planning and Zoning Law requires cities and counties to
prepare and adopt a general plan to guide the future growth of a
community. Every general plan must contain seven elements: land
use, circulation, housing, conservation, open-space, noise, and
safety. While the law requires cities and counties to "prepare,
periodically review, and revise, as necessary" their general
plans, there is no established deadline for doing so outside of
the housing element. Based on local planners' responses
compiled in the The California Planner's Book of Lists, 2006,
the Governor's Office of Planning and Research identified 304
cities and 39 counties that have not comprehensively revised
their general plans within the last 10 years.
Cities and counties must revise their housing elements every
five years, following a staggered statutory schedule. Before
each revision, each community is assigned its fair share of
housing for each income category through the regional housing
needs assessment (RHNA) process. A housing element must
identify and analyze existing and projected housing needs,
identify adequate sites with appropriate zoning to meet its
share of the RHNA, and ensure that regulatory systems provide
opportunities for, and do not unduly constrain, housing
SB 303 (DUCHENY) Page 2
development.
Under current law, cities and counties are required to
demonstrate that sites are adequate to accommodate housing for
each respective income group based on the zoning after taking
into consideration individual site factors such as property
size, existing uses, environmental constraints, and economic
constraints. With respect to the zoning, density is used as a
proxy for affordability. Jurisdictions may establish the
adequacy of a site for very low- or low-income housing by
demonstrating that the site realistically allows the densities
established in statute (commonly referred to as the "Mullin"
densities) or by providing an analysis of how a lower density
can accommodate the need for affordable housing. The
safe-harbor Mullin densities are 30 units per acre for
jurisdictions in metropolitan counties, 20 units per acre in
"suburban" jurisdictions, 15 units per acre in cities in
non-metropolitan counties, and 10 units per acre in
unincorporated areas in non-metropolitan counties.
To the extent that a community does not have adequate sites
within its existing inventory of residentially zoned land, then
the community must adopt a program to rezone land at appropriate
densities to accommodate the community's housing need for all
income groups. With respect to sites rezoned to accommodate its
need for very low- and low-income housing, the new zoning must
allow multifamily residential use by right (i.e. without
discretionary review of individual projects other than design
review).
The Department of Housing and Community Development (HCD)
reviews both draft and adopted housing elements to determine
whether or not they are in substantial compliance with the law.
The rezonings that a city or county commits to in its program
often occur after the housing element is adopted and reviewed by
HCD, sometimes years into the planning period.
This bill requires cities and counties to update their general
plans at least every ten years to accommodate a planning period
of at least 20 years, expands the housing element planning
period from five to ten years, requires cities and counties to
complete any necessary rezonings to meet their housing needs
concurrent with adoption of the housing element, and makes other
changes to general plan and housing element law. Specifically,
the bill:
SB 303 (DUCHENY) Page 3
General Plan
Requires every city and county to update the non-housing
element portions of its general plan as necessary but not less
often than every ten years and requires that the general plan
and each of its elements encompass a planning period of at
least 20 years.
Requires cities and counties to bring their zoning ordinances
into consistency with the general plan by the next required
update of the housing element and maintain consistency
thereafter.
Specifies that in the case of residential land uses,
consistency means that the zoning allows development at the
density designated in the general plan without any additional
legislative or quasi-legislative land use approvals (e.g.
rezoning).
Allows a property owner to bring suit at any time, as opposed
to within 90 days, to bring the zoning on his or her property
into consistency with the general plan.
Housing Element
Maintains the five-year update schedule for housing elements
but expands the RHNA to cover a ten-year period. As a result,
the bill requires a housing element to identify adequate sites
to accommodate the ten-year housing need.
Requires a city or county to include in its housing element
quantified objectives (i.e. production estimates) for the
development, preservation, and rehabilitation of housing for
extremely low-, very-low-, low-, and moderate-income
households and for special housing needs.
Requires that the zoning for sites needed to meet the
jurisdiction's share of the RHNA be in place at the time the
housing element is adopted.
Requires that the housing element identify policies and
incentives to promote infill development and the efficient use
of land.
Requires that sites identified to accommodate the need for
extremely low-, very low- or low-income housing meet the
Mullin density standards.
Requires that any sites rezoned after the housing element due
date to accommodate the need for extremely low-, very low- or
low-income housing shall permit the development of multifamily
housing by-right.
Requires the city or county to make a finding, based on
substantial evidence in the record, that each site designated
SB 303 (DUCHENY) Page 4
to meet the jurisdiction's share of the RHNA will
realistically accommodate all the units allowed under the
density for the site. The finding shall show that each site
has appropriate size, configuration, physical characteristics,
access, infrastructure, availability, and market demand and
does not suffer from environmental constraints or
inappropriate adjacent uses.
Requires the city or county to conduct an environmental impact
report (EIR) to cover all the sites identified in the housing
element to accommodate the jurisdiction's share of the RHNA.
The EIR shall address cumulative impacts, growth inducing
impacts, off-site impacts, and alternative sites.
Provides that any approval sought in connection with a project
that is consistent with the housing element is subject to the
Permit Streamlining Act.
Prohibits a city or county from denying or reducing the
density on a project that is consistent with the housing
element except by a 4/5 vote and with written findings that
the project has a specific, adverse impact upon the public
health or safety and there is no feasible method to
satisfactorily mitigate or avoid the adverse impact.
Prohibits a city or county, except by a 4/5 vote and with the
written findings described above, from changing the zoning on
a property without the consent of the project applicant after
an application has been submitted that is consistent with the
housing element.
Provides that if a court finds that a city or county has
failed to identify adequate sites or has failed to make the
findings related to the ability of each site to realistically
accommodate the allowed density, the court shall issue an
order requiring compliance within 120 days, retain
jurisdiction, and award reasonable attorney fees to the
prevailing plaintiff. The bill also provides these provisions
are in addition to, not in lieu of, existing remedies
available under housing element law.
Repeals the requirement for cities and counties in the coastal
zone to include in the housing element a review of the number
of affordable housing units converted, demolished, or
developed within the zone.
Clarifies that all deadlines within housing element law are
mandatory, not directory.
Declares that the Court of Appeal opinion in Mira Development
Corporation of San Diego v. City of San Diego (1988) is
inconsistent with the Legislature's intent that the phrase
"health or safety" be construed narrowly and that evidence to
support of a health or safety finding be of ponderable legal
SB 303 (DUCHENY) Page 5
significance, reasonable in nature, credible, and of solid
value in light of all of the evidence in the record.
COMMENTS:
1.Purpose of the bill . According to the author, a University of
California Berkeley study concluded that California's housing
affordability crisis stems from a lack of supply. The main
reason for this lack of housing is a local government planning
and permitting process that is broken. In many jurisdictions,
there is little land zoned for residential development. Where
residential uses are allowed, it is often at lower densities
at which only higher-income units are economically feasible,
and even these sites are often subject to discretionary votes
by the local government that can prevent housing from being
built. A University of California report found that there is
virtually no certainty that a project consistent with a
general plan will be approved, much less in a timely,
cost-efficient manner. In fact, it can take nearly a decade
for new projects to receive approval while project costs
skyrocket. A separate Harvard University study found that
local barriers to development in California add 40% to home
prices.
This bill seeks to lay the foundation for meeting California's
housing needs by focusing on two key issues: land supply and
certainty in the entitlement process. The bill requires every
general plan to encompass a planning period of 20 years and
every housing element to set aside enough land with
appropriate zoning in place to supply housing at all income
levels to accommodate the ten-year projected population
growth. The bill also limits the ability of local governments
to deny or reduce densities on proposed development that are
consistent with the housing element.
2.Increasing land supply by extending the planning period .
Current housing element law generally establishes a five-year
planning period. Due to various statutory extensions,
however, these planning periods have historically covered
anywhere from five to eight years. This bill still requires
councils of governments (COGs) to distribute the RHNA every
five years, but the allocation each city and county receives
would cover a ten-year period. The intent is to make
available a greater supply of land for housing and to ensure
that sites are available at the end of each five-year housing
element cycle. The RHNA process, however, is often very
SB 303 (DUCHENY) Page 6
contentious. Because accommodating new housing, especially
affordable housing, is such a politically sensitive topic in
many communities and the allocation of housing need is a
zero-sum game, the pressure on the COGs is intense to allocate
the need to someone else. While providing a ten-year land
supply for housing should help increase production, it is
unclear how increasing the total number of housing units to be
allocated will impact the RHNA process. It may make the
process even more politically contentious.
3.Requiring upfront zoning . Current housing element law allows
cities and counties to meet their zoning obligations over some
period of time. If a particular jurisdiction does not have
adequate sites in place, it must commit in its housing element
program to rezone the requisite number of acres at specified
densities within a specified time frame. In such cases, HCD
will often issue a conditional approval letter holding the
jurisdiction to the agreed-upon time frame, generally one to
two years from approval of the element. This provides
flexibility to cities and counties and allows them to be "in
compliance" while they work out where to rezone and conduct
the necessary environmental review. The downside to this is
that sites are not available early on in the planning period.
In cases where HCD's approval comes in the middle of the
planning period, it can mean that the required rezoning occurs
almost at the end of the five-year planning period. Because
development is itself a multi-year process, this almost
guarantees that the housing will not be constructed during the
planning period. In other cases, the rezoning never occurs.
In these cases, HCD has rescinded its approval letters, but
years have been lost, during which time the jurisdiction
enjoyed a legal safe harbor from enforcement.
This bill requires that all necessary sites be rezoned prior
to or concurrent with the adoption of the housing element.
This will ensure that sites are in fact available early on in
the planning period. On the other hand, because conducting
the environmental review and rezoning do take a significant
amount of time, it is likely that many more jurisdictions will
fail to meet the established housing element revision deadline
for their region.
4.Increasing certainty . In addition to increasing the land
supply for housing, the second major focus of this bill is to
increase the certainty that local governments will approve
projects that are consistent with the housing element. The
SB 303 (DUCHENY) Page 7
bill seeks to accomplish this by requiring a supermajority 4/5
vote and findings of significant adverse impacts to public
health or safety for a local government to deny a project,
reduce the density on a project, or changing the zoning on a
site after a project has been proposed if the project is
consistent with the housing element. In addition, the bill
requires a full EIR on all the sites identified in the housing
element. This EIR must address cumulative impacts, growth
inducing impacts, off-site impacts, and alternative sites.
The intent of the this provision is to analyze all the "big
picture" issues upfront and in a comprehensive fashion, which
allows the project level review to focus on the
project-specific impacts in a more streamlined way.
5.Balancing accountability and local control . When it comes to
developing new housing, local governments control what gets
built and what does not within their boundaries through the
land use entitlement process. This bill increases the amount
of land that each local government must zone to accommodate
its housing needs, ensures that this zoning is in place at the
beginning of a planning period rather than at the end, and
ensures that projects that are consistent with zoning and
local development standards are not derailed by discretionary
denials. In doing so, this bill increases the accountability
of local government with respect to housing development. On
the other hand, while the bill maintains local control over
where these sites are and the development standards that will
apply, it limits the ability of local governments to deny or
reduce densities on individual projects.
6.Promoting infill or inducing sprawl ? Proponents argue that
this bill will promote infill development. Opponents argue
that the bill will induce sprawl. In both cases, the
arguments are highly speculative. While this bill will open
up more land for housing development, it is unclear and
impossible to predict what exact impacts this bill will have
on urban form in California because of the many variables that
exist.
First, the impacts will depend on how the higher housing needs
are distributed through the RHNA process. In most of the
large regions, COGs are increasingly using regional growth
plans, known as blueprints, as a basis for allocating housing
needs. To the extent that these blueprints are currently
based on smart growth scenarios, it is likely that a large
percentage of the RHNA will be allocated to the most urbanized
SB 303 (DUCHENY) Page 8
portions of a region, especially those with extensive public
transit networks. Most jurisdictions in this category will
want to or have to look to infill development to accommodate
their RHNA need. There is no guarantee, however, that COGs
will continue allocating the RHNA in this manner.
Second, this bill's impacts will depend on each jurisdiction's
ability to expand. Most incorporated cities do not have large
amounts of vacant greenfield land within their existing
boundaries. Cities often rely on annexation of unincorporated
land for such development, and annexation is a lengthy and
somewhat uncertain process. To the extent that this bill
requires rezoning of sites concurrent with adoption of the
housing element, annexation may be a less likely outcome than
under current law because it will not be possible to complete
an annexation in such a short time frame. In addition, for
each city that has the ability to expand outwards, there are
other cities that cannot expand due to neighboring cities or
geographical constraints. All cities that are unable to
expand will have to look to infill development to accommodate
their share of the RHNA.
Third, the impacts of this bill will depend on local political
decisions. Cities and counties have the ability to choose
sites that accommodate growth in the most appropriate way for
their community. Some communities will maximize infill
opportunities. Others will look to greenfield development as
much as possible.
7.Site-by-site findings overly burdensome ? Current law requires
cities and counties to demonstrate that sites are adequate to
accommodate housing after taking into consideration individual
site factors such as property size, existing uses,
environmental constraints, and economic constraints. Except
for community-wide environmental or resource constraints, this
analysis must be conducted on a site-by-site basis. HCD
checks the adequacy of the information as part of its review
process. This bill further requires cities and counties to
analyze the realistic development capacity of each site based
on access, location, adjacent uses, and market demand. Market
demand, in particular, may be a difficult factor to assess and
may not reflect where a community is able to or wants to grow.
More importantly, this bill requires cities and counties to
make a finding, based on substantial evidence in the record,
on the adequacy of each site. While requiring such findings
may improve the quality of sites and the accountability of
SB 303 (DUCHENY) Page 9
local governments, compiling and presenting the substantial
evidence will likely be a cumbersome task that adds minimal
value to what current law already requires. The committee may
wish to consider amendments to delete the finding requirement,
delete the reference to market demand, and incorporate the
other factors into the existing inventory requirements.
8.Funding the planning process . One of the reasons that current
planning is so reactive is that a rezoning only occurs when a
developer steps forward to pay for it, and developers only do
that when it will benefit their proposed project. One problem
with moving towards a more proactive planning process is local
governments' lack of funding to do upfront planning. Local
governments currently have the authority to charge fees
"necessary or appropriate for the work of the planning
agency," including the housing element itself and any
rezonings required to meet the jurisdiction's share of the
RHNA. In communities without a lot of development, however,
there can be a timing problem. Fees are generated only when
development occurs, not before hand. This bill requires
upfront zoning and an EIR on all sites included in the housing
element, but unlike a similar related bill from last year, SB
1800 (Ducheny), this bill does not include a mechanism to
provide additional funding to local governments for upfront
planning activities. The committee may wish to consider
levying a surcharge on each new residential building permit
statewide to capitalize a planning grant program for local
governments. In addition, the committee may wish to consider
earmarking $5 or $10 per unit of the fee to fund the RHNA
process. While the RHNA is key to the state's entire housing
planning framework, lack of funding has often resulted in
planning periods being extended and delayed.
9.Arguments in opposition . Writing in opposition, the League of
California Cities, argues that the combination of extending
the RHNA to ten years and requiring upfront zoning will
trigger significant sprawl because no time is provided to
phase in the availability of housing sites. Due to the lack
of apparent sites in developed areas, prezoning will be easier
in suburban and rural communities that can more readily plan
on annexations. The League also objects to site-specific
findings, the requirement to establish market demand for each
site, the attorney fees provisions, and the lack of a funding
mechanism to accomplish the requirements of the bill.
10. Double referral to Rules . This bill has been referred to
SB 303 (DUCHENY) Page 10
the Senate Transportation and Housing Committee and then back
to the Rules Committee for possible reassignment to another
policy committee. If the committee approves this bill, the
motion should be to re-refer the bill to the Rules Committee.
11. Technical amendments :
In Section 65301(b) after "plan" strike the comma.
Restore the by-right language in Section 65588.2 to
Section 65583.2(h) and track the existing by-right language
with respect to sites zoned after the housing element
deadline in Section 65588.
RELATED LEGISLATION
AB 414 (Jones) limits the ability of a jurisdiction to meet its
share of the RHNA by identifying sites for which the zoning
allows substantially all of the site to be developed without
residential use.
AB 1497 (Niello) prohibits a jurisdiction from including lands
under Williamson Act contracts or owned by the state or federal
governments in their housing element.
POSITIONS: (Communicated to the Committee before noon on
Wednesday, March 21,
2007)
SUPPORT: California Major Builders Council (sponsor)
Access to Independence
AFSCME
Allied Housing
Alvarado & Associates, LLC
Asian Law Alliance
Asian Pacific Islander Small Business Program
Barratt American, Inc.
Beyond Shelter
Brehm Communities
California Association of Realtors
California Building Industry Association
California Council for Environmental and Economic
Balance
California Council of Churches Impact
California State Firefighters Association
Calistoga Affordable Housing, Inc.
SB 303 (DUCHENY) Page 11
Cal-Nevada Conference of Operating Engineers
Coalition of Women from Asia and the Middle East
(CWAME)
Communities Actively Living Independent & Free
Congress of California Seniors
Corman Leigh Communities
Delco Builders & Developers
Father Joe's Villages
HomeAid Northern California
Los Angeles Conservation Corps
Martha's Village & Kitchen, Inc.
National AIDS Foundation, Josue Homes
Neighborhood Housing Services of Orange County
Ponderosa Homes II Inc.
Samaritan Reach
San Diego Regional Chamber of Commerce
Self Help for the Elderly
St. Vincent de Paul Village
Toussaint Youth Villages - Toussaint Teen Center
Tri-City Homeless Coalition
United California Mortgage and Financial Services
West Bay Housing Corporation
OPPOSED: City of Alhambra
City of Bell
City of Burlingame
City of Selma
City of Taft
City of Temple City
League of California Cities