BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 2508| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: AB 2508 Author: Caballero (D) Amended: 5/3/10 in Assembly Vote: 21 SENATE TRANSPORTATION & HOUSING COMMITTEE : 9-0, 6/29/10 AYES: Lowenthal, Huff, Ashburn, DeSaulnier, Harman, Kehoe, Pavley, Simitian, Wolk ASSEMBLY FLOOR : 72-0, 5/20/10 - See last page for vote SUBJECT : Infill Incentive Grant Program and minimum densities SOURCE : Author DIGEST : This bill allows a city, as specified, to petition the Department of Housing and Community Development for an exception to the density requirements of the Infill Infrastructure Grant Program. ANALYSIS : In November 2006, California voters approved Proposition 1C, the $2.85 billion Housing and Emergency Shelter Trust Fund Act of 2006. Among other things, Proposition 1C included $850 million for grants for capital projects related to housing and housing-related infill development and for Brownfield cleanup that promotes housing and housing-related infill development. Ultimately, the Legislature appropriated $790 million to the Infill Infrastructure Grant (IIG) Program, to be CONTINUED AB 2508 Page 2 administered by the Department of Housing and Community Development (HCD). SB 86 (Senate Budget Committee), Chapter 179, Statutes of 2007, establishes the statutory framework for the IIG Program, which offers gap financing grants to cover the costs of infrastructure improvements necessary for the development of infill housing. Under current law, to be eligible for an IIG grant, an infill project or infill area must meet the following criteria: 1. Be located in a city or county that has an HCD-approved housing element. 2. Include not less than 15 percent affordable units. 3. Have an average residential density equal to or greater than the "Mullin densities" described below or greater than 10 units per acre in rural areas. 4. Be located in an area designated for mixed-use or residential development in a local or regional land use plan. Under housing element law, each city and county must adopt a housing element to its general plan that identifies and analyzes existing and projected housing needs, identifies adequate sites with appropriate zoning to meet its share of the regional housing need for each income group, and ensures that regulatory systems provide opportunities for, and do not unduly constrain, housing development. HCD reviews both draft and adopted housing elements to determine whether or not they are in substantial compliance with the law. For the purposes of housing element law, current statute uses density as a proxy for affordability. In order to show that it can accommodate lower-income housing, a city or county must show that is has sites zoned to allow higher-density multifamily housing in one of two ways: 1. Provide an analysis demonstrating how the adopted densities accommodate lower-income housing, based on market demand, financial feasibility, or recent AB 2508 Page 3 development experience. 2. Meet or exceed the following default densities established in statute and known as the "Mullin densities": (1) 30 units per acre for metropolitan jurisdictions, generally defined as any city or county (except for jurisdictions of less than 25,000 population) in a Metropolitan Statistical Area (MSA) with a population of 2 million persons or greater and any city or county over 100,000 population in any size MSA. (2) 20 units per acre for suburban jurisdictions, generally defined as cities and counties in an MSA of less than 2 million persons (except for jurisdictions over 100,000 population) and jurisdictions under 25,000 population in larger MSAs. (3) 15 units per acre for incorporated cities within non-metropolitan counties and for non-metropolitan counties that have micropolitan areas (i.e., Del Norte, Humboldt, Lake, Mendocino, Nevada, Tehama, and Tuolumne Counties). (4) 10 units per acre for unincorporated areas in all non-metropolitan counties. This bill, until January 1, 2015, allows a city with a population over 100,000 in a standard metropolitan statistical area of less than 200,000 population, with respect to the IIG Program only, to petition HCD for an exception to the Mullin densities if the agency believes it is unable to meet this requirement. The petition shall include the reasons for the exception and provide information supporting the need for the exception. FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local: No SUPPORT : (Verified 8/2/10) AB 2508 Page 4 California State Association of Counties City of Salinas City of Watsonville League of California Cities Monterey Housing Authority ARGUMENTS IN SUPPORT : Current law defines the City of Salinas as a "metropolitan" jurisdiction for purposes of the IIG, requiring projects to have an average density of 30 units per acre to be eligible for funding. According to the author's office, this designation is not accurate because Salinas in neither a central city nor an urban core. Moreover, the city "lacks the overall infrastructure to develop at a density of 30 units per acre." As a result, the author's office believes that the city cannot qualify for IIG funds and introduced this bill to establish a process for cities or counties to petition HCD to lower the density requirements applicable to IIG projects in their jurisdictions. ASSEMBLY FLOOR : AYES: Adams, Ammiano, Anderson, Arambula, Bass, Beall, Bill Berryhill, Tom Berryhill, Blakeslee, Block, Blumenfield, Bradford, Brownley, Buchanan, Caballero, Charles Calderon, Carter, Chesbro, Conway, Cook, Coto, Davis, De Leon, DeVore, Emmerson, Eng, Feuer, Fong, Fuentes, Fuller, Furutani, Gaines, Galgiani, Garrick, Gilmore, Hagman, Hall, Hayashi, Hernandez, Hill, Huber, Huffman, Jeffries, Jones, Knight, Lieu, Logue, Bonnie Lowenthal, Ma, Mendoza, Miller, Monning, Nestande, Niello, Nielsen, Norby, V. Manuel Perez, Portantino, Ruskin, Salas, Saldana, Silva, Skinner, Smyth, Solorio, Audra Strickland, Swanson, Torlakson, Torres, Torrico, Tran, Yamada NO VOTE RECORDED: De La Torre, Evans, Fletcher, Harkey, Nava, Villines, John A. Perez, Vacancy JJA:do 8/2/10 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END ****