BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 1867| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ 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) CONTINUED AB 1867 Page 2 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 CONTINUED AB 1867 Page 3 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) CONTINUED AB 1867 Page 4 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 **** END **** CONTINUED