BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



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                                 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





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          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  







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             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)








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          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

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