BILL NUMBER: AB 1867	AMENDED
	BILL TEXT

	AMENDED IN SENATE  AUGUST 2, 2010
	AMENDED IN ASSEMBLY  APRIL 26, 2010

INTRODUCED BY   Assembly Member Harkey

                        FEBRUARY 12, 2010

   An act to amend Section 65583.1 of the Government Code, relating
to land use.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1867, as amended, Harkey. Land use: local planning: housing
element program.
   The Planning and Zoning Law authorizes the Department of Housing
and Community Development to allow a city or county to substitute the
provision of units for up to 25% of the city's or county's
obligation to identify adequate sites for any income category in its
housing element if the city or county includes in its housing element
a program committing the city or county to provide units in that
income category within the city or county that will be made available
through the provision of committed assistance, during the planning
period covered by the element, to low- and very low income households
at affordable housing costs or affordable rents, as defined. In
order for a unit to qualify for inclusion in this program, 
the city or county   it  must meet one of several
 ,  specified criteria, including the criterion of
being located in a multifamily rental housing complex of 4 or more
units,  as specified   converted with committed
assistance from nonaffordable to affordable by acquisition of the
unit or the purchase of affordability covenant and restrictions for
the unit, and not acquired by eminent domain, and constituting a net
increase in the community's stock of low- and very low income housing
 .
   This bill would revise the  above-described  criterion
 of being located in a multifamily rental housing complex of
4 or more units, as specified, and replace it with the criterion
  by changing the element of that criterion  of
being located in a multifamily rental or ownership housing complex of
 4 or more units to, instead, being located in a multifamily
rental or ownership housing complex of  3 or more units 
, as specified  . 
   The Planning and Zoning Law requires specified requirements to be
met in order for a unit to be considered as converted by acquisition
or the purchase of affordability covenants, and thereby within the
above-described criterion.  
   This bill would add to those requirements the requirement, for
units located in multifamily ownership housing complexes with 3 or
more units, that at least an equal number of new-construction
multifamily rental units affordable to lower income households have
been constructed in the city or county within the same planning
period as the number of ownership units to be converted. 
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 65583.1 of the  
Government Code   is amended to read: 
   65583.1.  (a)  The Department of Housing and Community
Development, in evaluating a proposed or adopted housing element for
substantial compliance with this article, may allow a city or county
to identify adequate sites, as required pursuant to Section 65583, by
a variety of methods, including, but not limited to, redesignation
of property to a more intense land use category and increasing the
density allowed within one or more categories. The department may
also allow a city or county to identify sites for second units based
on the number of second units developed in the prior housing element
planning period whether or not the units are permitted by right, the
need for these units in the community, the resources or incentives
available for their development, and any other relevant factors, as
determined by the department. Nothing in this section reduces the
responsibility of a city or county to identify, by income category,
the total number of sites for residential development as required by
this article.
   (b) Sites that contain permanent housing units located on a
military base undergoing closure or conversion as a result of action
pursuant to the Defense Authorization Amendments and Base Closure and
Realignment Act (Public Law 100-526), the Defense Base Closure and
Realignment Act of 1990 (Public Law 101-510), or any subsequent act
requiring the closure or conversion of a military base may be
identified as an adequate site if the housing element demonstrates
that the housing units will be available for occupancy by households
within the planning period of the element. No sites containing
housing units scheduled or planned for demolition or conversion to
nonresidential uses shall qualify as an adequate site.
   Any city, city and county, or county using this subdivision shall
address the progress in meeting this section in the reports provided
pursuant to paragraph (1) of subdivision (b) of Section 65400.
   (c) (1) The Department of Housing and Community Development may
allow a city or county to substitute the provision of units for up to
25 percent of the community's obligation to identify adequate sites
for any income category in its housing element pursuant to paragraph
(1) of subdivision (c) of Section 65583 where the community includes
in its housing element a program committing the local government to
provide units in that income category within the city or county that
will be made available through the provision of committed assistance
during the planning period covered by the element to low- and very
low income households at affordable housing costs or affordable
rents, as defined in Sections 50052.5 and 50053 of the Health and
Safety Code, and which meet the requirements of paragraph (2). Except
as otherwise provided in this subdivision, the community may
substitute one dwelling unit for one dwelling unit site in the
applicable income category. The program shall do all of the
following:
   (A) Identify the specific, existing sources of committed
assistance and dedicate a specific portion of the funds from those
sources to the provision of housing pursuant to this subdivision.
   (B) Indicate the number of units that will be provided to both
low- and very low income households and demonstrate that the amount
of dedicated funds is sufficient to develop the units at affordable
housing costs or affordable rents.
   (C) Demonstrate that the units meet the requirements of paragraph
(2).
   (2) Only units that comply with subparagraph (A), (B), or (C)
qualify for inclusion in the housing element program described in
paragraph (1), as follows:
   (A) Units that are to be substantially rehabilitated with
committed assistance from the city or county and constitute a net
increase in the community's stock of housing affordable to low- and
very low income households. For purposes of this subparagraph, a unit
is not eligible to be "substantially rehabilitated" unless all of
the following requirements are met:
   (i) At the time the unit is identified for substantial
rehabilitation, (I) the local government has determined that the unit
is at imminent risk of loss to the housing stock, (II) the local
government has committed to provide relocation assistance pursuant to
Chapter 16 (commencing with Section 7260) of Division 7 of Title 1
to any occupants temporarily or permanently displaced by the
rehabilitation or code enforcement activity, or the relocation is
otherwise provided prior to displacement either as a condition of
receivership, or provided by the property owner or the local
government pursuant to Article 2.5 (commencing with Section 17975) of
Chapter 5 of Part 1.5 of Division 13 of the Health and Safety Code,
or as otherwise provided by local ordinance; provided the assistance
includes not less than the equivalent of four months' rent and moving
expenses and comparable replacement housing consistent with the
moving expenses and comparable replacement housing required pursuant
to Section 7260, (III) the local government requires that any
displaced occupants will have the right to reoccupy the rehabilitated
units, and (IV) the unit has been found by the local government or a
court to be unfit for human habitation due to the existence of at
least four violations of the conditions listed in subdivisions (a) to
(g), inclusive, of Section 17995.3 of the Health and Safety Code.
   (ii) The rehabilitated unit will have long-term affordability
covenants and restrictions that require the unit to be available to,
and occupied by, persons or families of low- or very low income at
affordable housing costs for at least 20 years or the time period
required by any applicable federal or state law or regulation.
   (iii) Prior to initial occupancy after rehabilitation, the local
code enforcement agency shall issue a certificate of occupancy
indicating compliance with all applicable state and local building
code and health and safety code requirements.
   (B) Units that are located in a multifamily rental  or
ownership  housing complex of  four   three
 or more units, are converted with committed assistance from
the city or county from nonaffordable to affordable by acquisition of
the unit or the purchase of affordability covenants and restrictions
for the unit, are not acquired by eminent domain, and constitute a
net increase in the community's stock of housing affordable to low-
and very low income households. For purposes of this subparagraph, a
unit is not converted by acquisition or the purchase of affordability
covenants unless all of the following occur:
   (i) The unit is made available  for rent  at a cost
affordable to low- or very low income households.
   (ii) At the time the unit is identified for acquisition, the unit
is not available at an affordable housing cost to either of the
following:
   (I) Low-income households, if the unit will be made affordable to
low-income households.
   (II) Very low income households, if the unit will be made
affordable to very low income households.
   (iii) At the time the unit is identified for acquisition the unit
is not occupied by low- or very low income households or if the
acquired unit is occupied, the local government has committed to
provide relocation assistance prior to displacement, if any, pursuant
to Chapter 16 (commencing with Section 7260) of Division 7 of Title
1 to any occupants displaced by the conversion, or the relocation is
otherwise provided prior to displacement; provided the assistance
includes not less than the equivalent of four months' rent and moving
expenses and comparable replacement housing consistent with the
moving expenses and comparable replacement housing required pursuant
to Section 7260.
   (iv) The unit is in decent, safe, and sanitary condition at the
time of occupancy.
   (v) The unit has long-term affordability covenants and
restrictions that require the unit to be affordable to persons of
low- or very low income for not less than 55 years. 
   (vi) For units located in multifamily ownership housing complexes
with three or more units, at least an equal number of
new-construction multifamily rental units affordable to lower income
households have been constructed in the city or county within the
same planning period as the number of ownership units to be
converted. 
   (C) Units that will be preserved at affordable housing costs to
persons or families of low- or very low incomes with committed
assistance from the city or county by acquisition of the unit or the
purchase of affordability covenants for the unit. For purposes of
this subparagraph, a unit shall not be deemed preserved unless all of
the following occur:
   (i) The unit has long-term affordability covenants and
restrictions that require the unit to be affordable to and reserved
for occupancy by persons of the same or lower income group as the
current occupants for a period of at least 40 years.
   (ii) The unit is within an "assisted housing development," as
defined in paragraph (3) of subdivision (a) of Section 65863.10.
   (iii) The city or county finds, after a public hearing, that the
unit is eligible, and is reasonably expected, to change from housing
affordable to low- and very low income households to any other use
during the next five years due to termination of subsidy contracts,
mortgage prepayment, or expiration of restrictions on use.
   (iv) The unit is in decent, safe, and sanitary condition at the
time of occupancy.
   (v) At the time the unit is identified for preservation it is
available at affordable cost to persons or families of low- or very
low income.
   (3) This subdivision does not apply to any city or county that,
during the current or immediately prior planning period, as defined
by Section 65588, has not met any of its share of the regional need
for affordable housing, as defined in Section 65584, for low- and
very low income households. A city or county shall document for any
housing unit that a building permit has been issued and all
development and permit fees have been paid or the unit is eligible to
be lawfully occupied.
   (4) For purposes of this subdivision, "committed assistance" means
that the city or county enters into a legally enforceable agreement
during the period from the beginning of the projection period until
the end of the second year of the planning period that obligates
sufficient available funds to provide the assistance necessary to
make the identified units affordable and that requires that the units
be made available for occupancy within two years of the execution of
the agreement. "Committed assistance" does not include tenant-based
rental assistance.
   (5) For purposes of this subdivision, "net increase" includes only
housing units provided committed assistance pursuant to subparagraph
(A) or (B) of paragraph (2) in the current planning period, as
defined in Section 65588, that were not provided committed assistance
in the immediately prior planning period.
   (6) For purposes of this subdivision, "the time the unit is
identified" means the earliest time when any city or county agent,
acting on behalf of a public entity, has proposed in writing or has
proposed orally or in writing to the property owner, that the unit be
considered for substantial rehabilitation, acquisition, or
preservation.
   (7) In the third year of the planning period, as defined by
Section 65588, in the report required pursuant to Section 65400, each
city or county that has included in its housing element a program to
provide units pursuant to subparagraph (A), (B), or (C) of paragraph
(2) shall report in writing to the legislative body, and to the
department within 30 days of making its report to the legislative
body, on its progress in providing units pursuant to this
subdivision. The report shall identify the specific units for which
committed assistance has been provided or which have been made
available to low- and very low income households, and it shall
adequately document how each unit complies with this subdivision. If,
by July 1 of the third year of the planning period, the city or
county has not entered into an enforceable agreement of committed
assistance for all units specified in the programs adopted pursuant
to subparagraph (A), (B), or (C) of paragraph (2), the city or county
shall, not later than July 1 of the fourth year of the planning
period, adopt an amended housing element in accordance with Section
65585, identifying additional adequate sites pursuant to paragraph
(1) of subdivision (c) of Section 65583 sufficient to accommodate the
number of units for which committed assistance was not provided. If
a city or county does not amend its housing element to identify
adequate sites to address any shortfall, or fails to complete the
rehabilitation, acquisition, purchase of affordability covenants, or
the preservation of any housing unit within two years after committed
assistance was provided to that unit, it shall be prohibited from
identifying units pursuant to subparagraph (A), (B), or (C) of
paragraph (2) in the housing element that it adopts for the next
planning period, as defined in Section 65588, above the number of
units actually provided or preserved due to committed assistance.

  SECTION 1.    Section 65583.1 of the Government
Code is amended to read:
   65583.1.  (a) The Department of Housing and Community Development,
in evaluating a proposed or adopted housing element for substantial
compliance with this article, may allow a city or county to identify
adequate sites, as required pursuant to Section 65583, by a variety
of methods, including, but not limited to, redesignation of property
to a more intense land use category and increasing the density
allowed within one or more categories. The department may also allow
a city or county to identify sites for second units based on the
number of second units developed in the prior housing element
planning period whether or not the units are permitted by right, the
need for these units in the community, the resources or incentives
available for their development, and any other relevant factors, as
determined by the department. Nothing in this section reduces the
responsibility of a city or county to identify, by income category,
the total number of sites for residential development as required by
this article.
   (b) Sites that contain permanent housing units located on a
military base undergoing closure or conversion as a result of action
pursuant to the Defense Authorization Amendments and Base Closure and
Realignment Act (Public Law 100-526), the Defense Base Closure and
Realignment Act of 1990 (Public Law 101-510), or any subsequent act
requiring the closure or conversion of a military base may be
identified as an adequate site if the housing element demonstrates
that the housing units will be available for occupancy by households
within the planning period of the element. No sites containing
housing units scheduled or planned for demolition or conversion to
nonresidential uses shall qualify as an adequate site.
   Any city, city and county, or county using this subdivision shall
address the progress in meeting this section in the reports provided
pursuant to paragraph (1) of subdivision (b) of Section 65400.
   (c) (1) The Department of Housing and Community Development may
allow a city or county to substitute the provision of units for up to
25 percent of the community's obligation to identify adequate sites
for any income category in its housing element pursuant to paragraph
(1) of subdivision (c) of Section 65583 where the community includes
in its housing element a program committing the local government to
provide units in that income category within the city or county that
will be made available through the provision of committed assistance
during the planning period covered by the element to low- and very
low income households at affordable housing costs or affordable
rents, as defined in Sections 50052.5 and 50053 of the Health and
Safety Code, and which meet the requirements of paragraph (2). Except
as otherwise provided in this subdivision, the community may
substitute one dwelling unit for one dwelling unit site in the
applicable income category. The program shall do all of the
following:
   (A) Identify the specific, existing sources of committed
assistance and dedicate a specific portion of the funds from those
sources to the provision of housing pursuant to this subdivision.
   (B) Indicate the number of units that will be provided to both
low- and very low income households and demonstrate that the amount
of dedicated funds is sufficient to develop the units at affordable
housing costs or affordable rents.
   (C) Demonstrate that the units meet the requirements of paragraph
(2).
   (2) Only units that comply with subparagraph (A), (B), or (C)
qualify for inclusion in the housing element program described in
paragraph (1), as follows:
   (A) Units that are to be substantially rehabilitated with
committed assistance from the city or county and constitute a net
increase in the community's stock of housing affordable to low- and
very low income households. For purposes of this subparagraph, a unit
is not eligible to be "substantially rehabilitated" unless all of
the following requirements are met:
   (i) At the time the unit is identified for substantial
rehabilitation, (I) the local government has determined that the unit
is at imminent risk of loss to the housing stock, (II) the local
government has committed to provide relocation assistance pursuant to
Chapter 16 (commencing with Section 7260) of Division 7 of Title 1
to any occupants temporarily or permanently displaced by the
rehabilitation or code enforcement activity, or the relocation is
otherwise provided prior to displacement either as a condition of
receivership, or provided by the property owner or the local
government pursuant to Article 2.5 (commencing with Section 17975) of
Chapter 5 of Part 1.5 of Division 13 of the Health and Safety Code,
or as otherwise provided by local ordinance; provided the assistance
includes not less than the equivalent of four months' rent and moving
expenses and comparable replacement housing consistent with the
moving expenses and comparable replacement housing required pursuant
to Section 7260, (III) the local government requires that any
displaced occupants will have the right to reoccupy the rehabilitated
units, and (IV) the unit has been found by the local government or a
court to be unfit for human habitation due to the existence of at
least four violations of the conditions listed in subdivisions (a) to
(g), inclusive, of Section 17995.3 of the Health and Safety Code.
   (ii) The rehabilitated unit will have long-term affordability
covenants and restrictions that require the unit to be available to,
and occupied by, persons or families of low- or very low income at
affordable housing costs for at least 20 years or the time period
required by any applicable federal or state law or regulation.
   (iii) Prior to initial occupancy after rehabilitation, the local
code enforcement agency shall issue a certificate of occupancy
indicating compliance with all applicable state and local building
code and health and safety code requirements.
   (B) Units that are located in a multifamily rental or ownership
housing complex of three or more units, are converted with committed
assistance from the city or county from nonaffordable to affordable
by acquisition of the unit or the purchase of affordability covenants
and restrictions for the unit, are not acquired by eminent domain,
and constitute a net increase in the community's stock of housing
affordable to low- and very low income households. For purposes of
this subparagraph, a unit is not converted by acquisition or the
purchase of affordability covenants unless all of the following
occur:
   (i) The unit is made available for rent at a cost affordable to
low- or very low income households.
   (ii) At the time the unit is identified for acquisition, the unit
is not available at an affordable housing cost to either of the
following:
   (I) Low-income households, if the unit will be made affordable to
low-income households.
   (II) Very low income households, if the unit will be made
affordable to very low income households.
   (iii) At the time the unit is identified for acquisition the unit
is not occupied by low- or very low income households or if the
acquired unit is occupied, the local government has committed to
provide relocation assistance prior to displacement, if any, pursuant
to Chapter 16 (commencing with Section 7260) of Division 7 of Title
1 to any occupants displaced by the conversion, or the relocation is
otherwise provided prior to displacement; provided the assistance
includes not less than the equivalent of four months' rent and moving
expenses and comparable replacement housing consistent with the
moving expenses and comparable replacement housing required pursuant
to Section 7260.
   (iv) The unit is in decent, safe, and sanitary condition at the
time of occupancy.
   (v) The unit has long-term affordability covenants and
restrictions that require the unit to be affordable to persons of
low- or very low income for not less than 55 years.
   (C) Units that will be preserved at affordable housing costs to
persons or families of low- or very low incomes with committed
assistance from the city or county by acquisition of the unit or the
purchase of affordability covenants for the unit. For purposes of
this subparagraph, a unit shall not be deemed preserved unless all of
the following occur:
   (i) The unit has long-term affordability covenants and
restrictions that require the unit to be affordable to and reserved
for occupancy by persons of the same or lower income group as the
current occupants for a period of at least 40 years.
   (ii) The unit is within an "assisted housing development," as
defined in paragraph (3) of subdivision (a) of Section 65863.10.
   (iii) The city or county finds, after a public hearing, that the
unit is eligible, and is reasonably expected, to change from housing
affordable to low- and very low income households to any other use
during the next five years due to termination of subsidy contracts,
mortgage prepayment, or expiration of restrictions on use.
   (iv) The unit is in decent, safe, and sanitary condition at the
time of occupancy.
   (v) At the time the unit is identified for preservation it is
available at affordable cost to persons or families of low- or very
low income.
   (3) This subdivision does not apply to any city or county that,
during the current or immediately prior planning period, as defined
by Section 65588, has not met any of its share of the regional need
for affordable housing, as defined in Section 65584, for low- and
very low income households. A city or county shall document for any
housing unit that a building permit has been issued and all
development and permit fees have been paid or the unit is eligible to
be lawfully occupied.
   (4) For purposes of this subdivision, "committed assistance" means
that the city or county enters into a legally enforceable agreement
during the period from the beginning of the projection period until
the end of the second year of the planning period that obligates
sufficient available funds to provide the assistance necessary to
make the identified units affordable and that requires that the units
be made available for occupancy within two years of the execution of
the agreement. "Committed assistance" does not include tenant-based
rental assistance.
   (5) For purposes of this subdivision, "net increase" includes only
housing units provided committed assistance pursuant to subparagraph
(A) or (B) of paragraph (2) in the current planning period, as
defined in Section 65588, that were not provided committed assistance
in the immediately prior planning period.
   (6) For purposes of this subdivision, "the time the unit is
identified" means the earliest time when any city or county agent,
acting on behalf of a public entity, has proposed in writing or has
proposed orally or in writing to the property owner, that the unit be
considered for substantial rehabilitation, acquisition, or
preservation.
   (7) In the third year of the planning period, as defined by
Section 65588, in the report required pursuant to Section 65400, each
city or county that has included in its housing element a program to
provide units pursuant to subparagraph (A), (B), or (C) of paragraph
(2) shall report in writing to the legislative body, and to the
department within 30 days of making its report to the legislative
body, on its progress in providing units pursuant to this
subdivision. The report shall identify the specific units for which
committed assistance has been provided or which have been made
available to low- and very low income households,
                       and it shall adequately document how each unit
complies with this subdivision. If, by July 1 of the third year of
the planning period, the city or county has not entered into an
enforceable agreement of committed assistance for all units specified
in the programs adopted pursuant to subparagraph (A), (B), or (C) of
paragraph (2), the city or county shall, not later than July 1 of
the fourth year of the planning period, adopt an amended housing
element in accordance with Section 65585, identifying additional
adequate sites pursuant to paragraph (1) of subdivision (c) of
Section 65583 sufficient to accommodate the number of units for which
committed assistance was not provided. If a city or county does not
amend its housing element to identify adequate sites to address any
shortfall, or fails to complete the rehabilitation, acquisition,
purchase of affordability covenants, or the preservation of any
housing unit within two years after committed assistance was provided
to that unit, it shall be prohibited from identifying units pursuant
to subparagraph (A), (B), or (C) of paragraph (2) in the housing
element that it adopts for the next planning period, as defined in
Section 65588, above the number of units actually provided or
preserved due to committed assistance.