BILL ANALYSIS Ó
SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: ab 542
SENATOR MARK DESAULNIER, CHAIRMAN AUTHOR: allen
VERSION: 6/27/12
Analysis by: Mark Stivers FISCAL: no
Hearing date: July 3, 2012
SUBJECT:
Housing element law: alternative to default densities
DESCRIPTION:
This bill further defines what a city or county, if it chooses
not to utilize the statutory default densities, must demonstrate
in its housing element to show that its adopted densities
accommodate housing affordable to lower-income households.
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) 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 receives its fair share of
housing need for four separate income categories (very low-,
low-, moderate-, and above-moderate income households) through a
two-step process known as the regional housing needs assessment
(RHNA). In the first step, the Department of Housing and
Community Development (HCD) determines the aggregate housing
need for the region during the planning period the housing
element will cover. In the second step, the council of
governments (COG) for the region allocates the regional housing
need to each city and county within the region.
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. HCD reviews both draft
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and adopted housing elements to determine whether or not they
are in substantial compliance with the law.
With respect to identifying sites with appropriate zoning, a
city or county must, through a site-specific analysis, calculate
the capacity of each site to accommodate during the housing
element planning period some portion of its share of the RHNA by
income level, taking into account the realistic density for the
site, land use controls, and environmental constraints. This is
referred to below as the site capacity requirement.
In addition, the city or county must provide an analysis
demonstrating how its adopted densities accommodate the need for
affordable housing, meaning how the densities allow for
economies of scale that facilitate the production of affordable
housing with minimum public subsidy. This is referred to below
as the requirement for an analysis that adopted densities can
accommodate the need for affordable housing. A city or county
must make this demonstration in one of two ways:
Provide an analysis demonstrating how the adopted densities
accommodate lower-income housing based on market demand,
financial feasibility, or recent development experience.
Document that adopted densities meet or exceed the following
default densities established in statute and known as the
default densities:
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.
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.
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).
10 units per acre for unincorporated areas in all
non-metropolitan counties.
AB 542 (ALLEN) Page 3
This bill :
More clearly differentiates the site capacity requirement from
the requirement for an analysis that adopted densities can
accommodate the need for affordable housing.
Provides for a more focused and site-specific analysis of the
appropriateness of adopted densities by repealing the current
language requiring a general analysis of factors such as
market demand, financial feasibility, or information based on
development project experience within a zone or zones that
provide housing for lower-income households and instead
requiring that the analysis be based on substantial evidence
and include one or more of the following for the sites
designated for lower-income housing:
An analysis demonstrating the financial feasibility of
newly constructing unsubsidized, market-rate housing that
is affordable to low- and very low-income households at the
adopted densities.
An analysis demonstrating that the total development
cost per unit of newly constructing housing affordable to
lower-income households at the adopted densities does not
exceed the total development cost per unit of newly
constructing housing affordable to lower-income households
at the default densities and that the adopted densities do
not reduce the ability of housing developments affordable
to lower-income households to obtain subsidies to meet all
anticipated funding gaps.
COMMENTS:
1.Purpose of the bill . Housing element law requires cities and
counties that choose not to utilize the default densities to
demonstrate that their adopted densities accommodate housing
affordable to lower-income households. The statute provides
very little guidance, however, on what the alternative
analysis must include to make this demonstration. This lack
of clarity has led to differing interpretations from the
various housing element stakeholders, including HCD, local
governments, and housing advocates. This bill seeks to
provide this guidance by clearly delineating two ways in which
cities and counties may show that their adopted densities
accommodate affordable housing: 1) by showing that newly
constructed, unsubsidized, market-rate units will be
affordable to low- and very-low income households,
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respectively; or 2) by showing that densities less than the
default densities do not increase development costs for
affordable housing and do not reduce the ability of such
developments to obtain subsidies to meet all anticipated
funding gaps. This bill represents the work product of an
informal working group consisting of county representatives,
housing advocates, and HCD staff.
2.Does not affect determination of adequate sites . While more
clearly differentiating the site capacity requirement from the
requirement for an analysis of adopted densities, this bill
does not alter the criteria by which available sites are
deemed adequate to accommodate lower-income housing. The
capacity for each site is determined by utilizing the acreage
available for development, applying a minimum or realistic
density for the site, and accounting for land use controls
(e.g. setbacks, parking, and open space requirements). Other
factors that make a site unsuitable, such as height limits
that prevent densities from being achieved, infrastructure
deficiencies, or the fact that a site is too small or too
large to realistically accommodate an affordable housing
development are considered constraints, which the local
government must also address.
Assembly Votes:
Previous votes are not relevant.
POSITIONS: (Communicated to the committee before noon on
Wednesday, June 27,
2012)
SUPPORT: County of Napa (sponsor)
OPPOSED: None received.