BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



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          |SENATE RULES COMMITTEE            |                  AB 1867|
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                                 THIRD READING


          Bill No:  AB 1867
          Author:   Harkey (R)
          Amended:  8/2/10 in Senate
          Vote:     21

           
           SENATE TRANSPORTATION & HOUSING COMMITTEE :  8-0, 6/29/10
          AYES:  Lowenthal, Huff, DeSaulnier, Harman, Kehoe, Pavley,  
            Simitian, Wolk
          NO VOTE RECORDED:  Ashburn

           ASSEMBLY FLOOR  :  74-0, 5/6/10 (Consent) - See last page for  
            vote


           SUBJECT  :    Housing elements:  credit for conversion

           SOURCE  :     Author


           DIGEST  :    This bill allows a city or county to count  
          against its housing need the conversion of existing  
          homeownership units in complexes of three or more units to  
          affordable rental housing, provided an equal number of  
          new-construction multifamily units affordable to lower  
          income households have been constructed in the city or  
          county within the same planning period.

           ANALYSIS  :    The Planning and Zoning Law requires cities  
          and counties to prepare and adopt a general plan, including  
          a housing element, to guide the future growth of a  
          community.  Cities and counties located within the  
          territory of a metropolitan planning organization (MPO)  
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          must revise their housing elements every eight years  
          following the adoption of every other regional  
          transportation plan.  Cities and counties in rural non-MPO  
          regions must revise their housing elements every five  
          years.  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 development.  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.  

          In general, in order for a city or county to show that it  
          can accommodate its RHNA allocation, it must identify sites  
          on which new housing may be built.  Current law also allows  
          a city or county, however, to meet up to 25 percent of its  
          RHNA allocation through the conversion (converting  
          non-affordable units to affordable units through purchase  
          of affordability covenants or the units themselves),  
          preservation (extending the term of affordability on  
          existing affordable housing units), or substantial  
          rehabilitation of affordable housing units under specified  
          conditions, including among others:

          The city or county must have met (i.e., housing units were  
          built) at least some portion of its RHNA allocation for  
          very low- and low-income housing in the previous planning  
          period.

          The city or county must identify the specific, existing  
          sources of available funding in the housing element and  
          commit assistance to individual developments (i.e., enter  
          into a legally binding agreement to provide the necessary  
          financial assistance) within the first two years of the  
          housing element planning period.

          The converted, preserved, or rehabilitated units must be  
          made available for occupancy within two years of the  

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          execution of the agreement committing assistance.

          For purposes of counting units against the city's or  
          county's RHNA allocation, the converted, preserved, or  
          rehabilitated units must be counted in the appropriate  
          income category.

          The city or county must include in its annual housing  
          element progress report it submits to HCD for the third  
          year of the planning period an update on its progress in  
          providing the units counted.

          With respect to units converted from non-affordable to  
          affordable in particular, the following conditions also  
          apply:

                 The units must be located in multifamily rental  
               housing complexes of four or more units.   
                  The units must not be acquired by eminent domain.  
                  The units must be unoccupied by low-income  
               households or, if occupied, the city or county must  
               provide relocation assistance to occupants displaced  
               by the conversion.    
                  The units must constitute a net increase in the  
               city's or county's stock of assisted affordable  
               housing units.  
                  The units must be subject to an affordability  
               covenant and remain affordable for a period of at  
               least 55 years.
           
           This bill, for purposes of utilizing the authority to meet  
          up to 25 percent of its RHNA allocation through the  
          conversion of non-affordable units to affordable units,  
          allows a city or county to count the conversion of existing  
          homeownership units in complexes of three or more units to  
          affordable rental housing, provided an equal number of  
          new-construction multifamily units affordable to lower  
          income households have been constructed in the city or  
          county within the same planning period

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  No    
          Local:  No

           SUPPORT  :   (Verified  8/2/10)

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          California State Association of Counties
          Cities of Buena Park, City of Dana Point, City of Laguna  
            Hills, City of Mission Viejo, City of Oakland, City of  
            Palm Desert, City of San Clemente, City of Torrance

           ARGUMENTS IN SUPPORT  :    According to the author's office,  
          local governments must have more tools to provide housing  
          for all segments of their populations.  This bill allows  
          for greater flexibility for local governments, will result  
          in additional affordable housing opportunities in  
          appropriate sites, and will allow municipalities to help  
          the low-income residents of existing substandard dwelling  
          units

           ASSEMBLY FLOOR  : 
          AYES:  Adams, Ammiano, Anderson, Arambula, Beall, Bill  
            Berryhill, Tom Berryhill, Blakeslee, Blumenfield,  
            Bradford, Brownley, Buchanan, Caballero, Charles  
            Calderon, Carter, Chesbro, Conway, Cook, Coto, Davis, De  
            Leon, DeVore, Emmerson, Eng, Evans, Feuer, Fletcher,  
            Fong, Fuentes, Fuller, Furutani, Gaines, Galgiani,  
            Garrick, Hagman, Hall, Harkey, Hayashi, Hernandez, Hill,  
            Huber, Huffman, Jeffries, Jones, Knight, Lieu, Logue,  
            Bonnie Lowenthal, Ma, Miller, Monning, Nava, Nestande,  
            Niello, Nielsen, Norby, V. Manuel Perez, Portantino,  
            Ruskin, Salas, Saldana, Silva, Skinner, Smyth, Solorio,  
            Audra Strickland, Swanson, Torlakson, Torres, Torrico,  
            Tran, Villines, Yamada, John A. Perez
          NO VOTE RECORDED:  Bass, Block, De La Torre, Gilmore,  
            Mendoza, Vacancy


          JJA:do  8/2/10   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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