BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 542|
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THIRD READING
Bill No: AB 542
Author: Allen (D)
Amended: 6/27/12 in Senate
Vote: 21
SENATE TRANSPORTATION & HOUSING COMMITTEE : 6-0, 7/3/12
AYES: DeSaulnier, Gaines, Kehoe, Lowenthal, Rubio, Wyland
NO VOTE RECORDED: Harman, Pavley, Simitian
ASSEMBLY FLOOR : 60-3, 6/1/11 - See last page for vote
SUBJECT : Housing element law: alternative to default
densities
SOURCE : County of Napa
DIGEST : 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
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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 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:
1. Provide an analysis demonstrating how the adopted
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densities accommodate lower-income housing based on
market demand, financial feasibility, or recent
development experience.
2. 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 two 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 two 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.
This bill:
1. More clearly differentiates the site capacity
requirement from the requirement for an analysis that
adopted densities can accommodate the need for
affordable housing.
2. 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(s) that provide housing for lower-income
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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:
A. 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.
B. 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
According to the Senate Transportation and Housing
Committee, 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, 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
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consisting of county representatives, housing advocates,
and HCD staff.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 6/27/12) (per Senate Transportation
and Housing Committee analysis - unable to reverify at time
of writing)
County of Napa (source)
OPPOSITION : (Verified 8/9/12)
City of Torrance
City of Rancho Cucamonga
ASSEMBLY FLOOR : 60-3, 6/1/11
AYES: Achadjian, Allen, Atkins, Beall, Bill Berryhill,
Bonilla, Bradford, Buchanan, Butler, Campos, Carter,
Cedillo, Chesbro, Conway, Cook, Eng, Feuer, Fletcher,
Fuentes, Beth Gaines, Galgiani, Gatto, Grove, Hagman,
Halderman, Hall, Harkey, Hayashi, Roger Hernández, Hill,
Huber, Hueso, Huffman, Jeffries, Jones, Knight, Lara,
Logue, Bonnie Lowenthal, Mansoor, Mendoza, Miller,
Mitchell, Morrell, Nestande, Nielsen, Norby, Olsen, Pan,
Perea, Portantino, Silva, Skinner, Smyth, Solorio,
Swanson, Torres, Valadao, Wagner, John A. Pérez
NOES: Alejo, Ammiano, Ma
NO VOTE RECORDED: Block, Blumenfield, Brownley, Charles
Calderon, Davis, Dickinson, Donnelly, Fong, Furutani,
Garrick, Gordon, Gorell, Monning, V. Manuel Pérez,
Wieckowski, Williams, Yamada
JJA:m 8/9/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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