BILL ANALYSIS                                                                                                                                                                                                    

                                                                  AB 1641
                                                                  Page  1

          Date of Hearing:   May 5, 2010

                                 Norma Torres, Chair
                     AB 1641 (Hall) - As Amended:  April 5, 2010
          SUBJECT  :   Redevelopment: City of Los Angeles public housing  

           SUMMARY  :  Establishes a special process for the redevelopment  
          agency of Los Angeles to facilitate the redevelopment of public  
          housing projects that are 50 years or older. Specifically,  this  
          bill  :  

          1)Defines a "public housing project" as a public housing project  
            in the City of Los Angeles that is owned by the Housing  
            Authority of the City of Los Angeles and was built prior to  
            January 1, 1960.

          2)Provides that a public housing project as defined above may  
            constitute blight. 

          3)Adds the" redevelopment of public housing" to the meaning of  

          4)Defines "redevelopment of public housing" as redevelopment  
            that results in the removal or rehabilitation and replacement  
            of existing public housing project buildings with  
            master-planned, mixed-income, and mixed-use projects that do  
            the following:

             a)   Includes replacement on at least a one-to-one basis of  
               all existing public housing units with publicly or  
               privately owned units inside or outside the project area  
               containing and equal or greater number of bedrooms as the  
               replaced housing units;  

             b)   The replacement units must be occupied by very low and  
               low income people at an affordable housing cost in the same  
               or lower income level as the persons displaced from the  
               public housing; 

             c)   It may include additional privately owned housing units  
               that are available to and occupied by low and moderate  
               income persons and families, including very-low income  


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               families and individuals at an affordable housing cost; 

             d)   May include work force market rate housing units, retail  
               services, commercial, industrial, educational,  
               recreational, and other uses that are appropriate to serve  
               the residents of the area; and 

             e)   Subjects the construction of privately owned components  
               of the project to applicable community benefits  
               requirements of the redevelopment agency and housing  

           EXISTING LAW  : 

          1)Requires a redevelopment agency to prepare a relocation plan  
            or method for families and individuals who are temporarily or  
            permanently displaced by the removal of housing in a project  
            area (Health & Safety Code 33411).

          2)Provides no low or moderate income persons may be displaced by  
            the removal of housing until the redevelopment agency has  
            determined that there are suitable housing units that are  
            ready and available to be occupancy at comparable rents  
            (Health & Safety Code Section 33411.1).

          3)Requires low and moderate income persons to be given the first  
            right of refusal to purchase or rent new units produced in the  
            project area. The redevelopment agency must create a list of  
            low and moderate income residents that qualify for this right  
            (Health & Safety Code Section 33411.3). 

          4)Requires permanent housing be available to displaced low and  
            moderate income residents within three years of the time  
            occupants are displaced and during the time that units are  
            being made available, replacement housing at a comparable rent  
            must be made available to displaced residents (Health & Safety  
            Code Section 33412).

          5)Requires the redevelopment agency to replace or cause to be  
            replaced, an equal number of low and moderate income housing  
            units, with an equal or greater number of bedrooms, as the  
            number that are removed or destroyed in a project area.   
            Housing units must be built inside the territorially  
            jurisdiction of the redevelopment agency.  Requires 100% of  
            the housing units to be provided at the same income levels or  


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            at lower income levels than the units destroyed or  
            removed.(Health & Safety Code Section 33413).

           FISCAL EFFECT  :   None.

           COMMENTS  :   

           Background  :  Community Redevelopment Law (CRL) requires  
          redevelopment agencies to insure that low and moderate income  
          housing units are replaced, if they are destroyed or removed as  
          part of the redevelopment of a project area.  Units are required  
          to be replaced on a one-to-one basis, with an equal or greater  
          number of bedrooms as those removed from the project area.   
          Redevelopment agencies are required to develop a relocation plan  
          for displaced low and moderate income residents.  Prior to  
          destroying or removing low and moderate income units, the  
          redevelopment agency must make sure that qualified residents are  
          relocated to replacement units. 

           Need for the bill  :  According to the sponsor, the Los Angeles  
          County Redevelopment Agency (LACRA), LACRA is authorized under  
          the state community redevelopment law to act in areas of the  
          city that have been designated by the city council as being  
          eligible for redevelopment. After making findings required by  
          law and following the many required procedures, the LACRA and  
          city council may adopt redevelopment plans for areas of the city  
          that need revitalization.  In order to justify the creation of  
          these areas, LACRA must demonstrate that the conditions of the  
          neighborhood, specifically the buildings (both residential and  
          commercial), are blighted.
          Since units within these neighborhoods are considered federally  
          funded public housing developments, the housing authority is  
          obligated under its operating agreement with the U.S. Department  
          of Housing and Urban Development (Public Housing Act of 1937) to  
          maintain the units in decent, sanitary and safe conditions.  By  
          determining that the neighborhood and specifically the  
          residential units are "blighted," LACRA would be making a  
          determination that would call into question the housing  
          authority's compliance with its operating agreements. This would  
          be highly problematic and jeopardize the operating subsidy that  
          the authority receives for these housing units and, thereby,  
          endanger the housing for families living within public housing.   
          When the federal government announced the closure of surplus  


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          military bases in the 1990's and transferred ownership to local  
          governments, the California Legislature amended the CRL to allow  
          for the expedited adoption of redevelopment plans to provide for  
          the accelerated conversion of these former military bases into  
          productive civilian uses. The "Military Base Conversion  
          Redevelopment Agencies" law made it possible for cities and  
          counties in California to place these targeted areas back on the  
          tax roles and authorized these areas into new commercial,  
          industrial and residential uses, including affordable housing. 
          A similar approach is needed for Los Angeles' older public  
          housing projects.  By seeking state legislation, that would  
          apply the precedent of the military base conversion statute to  
          the redevelopment of public housing sites, the LACRA and Housing  
          Authority of the City of Los Angeles would be able to establish  
          a test program in South Los Angeles where public housing  
          projects such as Jordan Downs and Nickerson Gardens in Watts,  
          which combined consist of 1,700 units of housing, may be  
          converted into well-designed privately owned mixed-income  
          communities, while ensuring the continued affordability of  
          replacement housing at least equal in number to the existing  
          housing in the project area.
          Arguments in opposition  :  The Western Center on Law & Poverty  
          (WCLP) is opposed to this bill unless it is amended.  In their  
          letter, they state "we are at a loss to comprehend the need for  
          AB 1641. We understand that there is concern that labeling a  
          public housing development as blighted may have repercussions  
          with the U.S. Department of Housing and Urban Development. But  
          the bill (page 3, lines 20-21) simply flat out declares that  
          public housing projects are "blighted." We do not see a blanket  
          pronouncement in California statute that public housing is per  
          se blighted as useful.  Assuming that some other means of  
          authorizing redevelopment agency financing and activity can be  
          found for redeveloping public housing, we fail to understand why  
          the standard
          redevelopment law cannot be applied."  WCLP raises the following  
          issues, which if addressed appropriately in the bill, would  
          remove their opposition:

             1)   Provision providing for extremely low income replacement  
             2)   That replacement housing is available to, and priority  
               for, all existing public housing authority residents;
             3)   That replacement housing is made by an equal bedroom  


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               size per each unit lost (v. cumulative number of bedrooms  
               in the development);
             4)   Replacement housing has a 55 year affordability  
             5)   On-site one for one replacement housing; and
             6)   Adequate relocation requirements.
          Staff comments  :  As proposed, the bill is unclear whether or not  
          the City of Los Angeles must comply with the requirements of  
          existing redevelopment law when removing and redeveloping  
          low-income housing,  including developing a relocation plan,  
          requiring replacement of units be on a one-to-one basis, with an  
          equal or greater number of bedrooms as those removed from the  
          project area.   The sponsor has indicated that it is their  
          intent to comply with the existing requirements of CRL. The  
          amendments below would make clear that the City of Los Angeles  
          must comply with CRL including providing one-to-one replacement  
          of units consistent with the income levels of existing tenants  
          including extremely-low income units.  The amendments would also  
          require that the replacement housing be built and available to  
          be occupied by displaced residents before the public housing is  
          demolished or renovated.    
          Committee amendments:
          1)Delete the contents of the bill.

          2)Add Health & Safety Code Section 33038 and amend as follows:

          Section 1. Section 33038 of the Health and Safety Code is  
            amended to read:
          (a) It is found and declared that blighted areas may include  
            housing areas constructed as  temporary  government-owned  
             wartime  housing projects constructed prior to January 1, 1960,  
            and that such areas may be characterized by one or more of the  
            conditions enumerated in Sections 33031 to 33034, inclusive.
          (b) A redevelopment agency undertaking activities involving  
            property described in subdivision (a) shall comply with all of  
            the requirements of this part, except as specifically modified  
            in subdivision (c).
          (c) In addition to the requirements specified in subdivision  
          (1) The project shall include the replacement, on at least a  
            one-to-one basis, of all existing public housing units. The  
            replacement dwelling units shall be made available to, and  
            occupied by, extremely low, very low and low income households  


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            at the same or lower income level as the household displaced  
            from the public housing units, for at least 55 years.
          (2) The replacement dwelling units: 
          (A) May be either publicly- or privately-owned.
          (B) Shall be located either inside the project area, or within a  
            5-mile radius of the parcel containing the public housing that  
            is being replaced. 
          (C) Shall have, for each income level described in paragraph  
            (1), an equal or greater number of bedrooms as the destroyed  
            or removed units.
          (3) No household shall be displaced under this section unless  
            when being immediately relocated it is to a permanent  
            replacement dwelling unit created pursuant to this section.  
            This paragraph does not apply if the household, having been  
            given priority for a replacement dwelling unit under this  
            part, voluntarily chooses not to accept the replacement  
            dwelling unit. 
          (4) The project may include the development of additional  
            privately-owned housing units that will be available to and  
            occupied by persons and families of low and moderate income,  
            including very low income households, at an affordable housing  
          (5) The project may also include workforce market-rate housing  
            units, retail services, commercial, industrial, educational,  
            recreational and other uses as may be appropriate to serve the  
            residents of the area, and public improvements inside or  
            adjacent to the project area.
          (6) The construction of any privately-owned components of the  
            project shall be subject to such community benefits  
            requirements as may be required by the redevelopment agency or  
            the housing authority.


          City of Los Angeles (sponsor)


           California Rural Legal Assistance Foundation (oppose, unless  
          Western Center on Law & Poverty (oppose, unless amended)


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          Analysis Prepared by  :    Lisa Engel / H. & C.D. / (916) 319-2085