BILL ANALYSIS Ó SENATE GOVERNANCE & FINANCE COMMITTEE Senator Lois Wolk, Chair BILL NO: AB 710 HEARING: 7/6/11 AUTHOR: Skinner FISCAL: No VERSION: 6/29/11 TAX LEVY: No CONSULTANT: Detwiler INFILL DEVELOPMENT AND SUSTAINABLE COMMUNITY ACT OF 2011 Limits local parking requirements for development in transit intensive areas. Background and Existing Law Cities and counties must adopt general plans with seven specified elements, including a land use element that contains standards for population density and building intensity. Most local land use decisions must be consistent with these general plans. All cities and counties' decisions on subdivisions and public works projects must be consistent with their general plans. General law cities and counties' zoning ordinances and conditional use permits must be consistent with their general plans. However, except for the City of Los Angeles's zoning ordinance (AB 283, V. Thomas, 1978), charter cities' zoning ordinances and conditional use permits don't have to be consistent with their general plans. When local officials approve development projects, they can require the applicants to dedicate land or pay in-lieu fees to offset the projects' effects. The exactions or impact fees must be reasonably related to the need for public facilities and the type of the development project. In other words, there must be a nexus between the development and the conditions that local officials impose. The Planning and Zoning Law declares three state planning priorities: Promote infill development. Protect environmental and agricultural resources. Encourage efficient development patterns. That third priority supports new development that uses land efficiently, is adjacent to developed areas, is planned for AB 710 -- 6/29/11 -- Page 2 new growth, is served by adequate transportation, and minimizes taxpayers' continuing costs (AB 857, Wiggins, 2002). California has a goal of reducing greenhouse gas emissions (AB 32, Nuñez & Pavley, 2006). Reducing vehicle emissions involves multiple strategies, including clean technology as well as reducing the amount of vehicle miles traveled. Among the ways to reduce vehicle miles is better coordination of transportation and land use plans and increasing the density in existing areas and new development projects. To those ends, the Legislature linked transportation planning and land use planning by state, regional, and local agencies. Metropolitan planning organizations and their constituent cities and counties are preparing sustainable communities strategies (SB 375, Steinberg, 2008). Relying on real estate studies, infill builders argue that when cities and counties impose their standard parking requirements on development projects located near transit routes and stops, the results include higher developer costs and lower densities. Some case studies show that reducing parking standards can increase land values and property tax revenues. Proposed Law Assembly Bill 710 enacts the "Infill Development and Sustainable Community Act of 2011," and contains legislative declarations in support of its provisions. For new development projects in transit intensive areas, AB 710 prohibits cities and counties from requiring a minimum parking standard greater than: One space per 1,000 square feet of nonresidential improvements, and One space per residential unit. The bill allows cities and counties to require higher minimum parking standards if they find that existing publicly available parking within a mile has a peak occupancy exceeding 85%. These findings require a parking utilization study completed within the last 24 months that reviews publicly owned on-street and off-street parking and AB 710 -- 6/29/11 -- Page 3 privately owned off-street parking that's publicly accessible, excluding spaces on exclusively residential streets. The bill's prohibition does not apply if the proposed project: And adjoining properties are restricted to development at a floor area ratio below 0.75; Is located on a parcel with dwelling units with rents that are restricted by recorded covenants or ordinances to levels affordable to low or moderate income persons and families where the units will be destroyed or removed. However, this exception does not apply if the proposed development includes an equal number of units that will be affordable in the same proportions as the former units. In that case, rental units must remain affordable for at least 55 years or the term remaining on recorded affordable housing covenants. Ownership units must be subject to the same equity sharing agreement as currently applies to ownership units in density bonus development projects; or Is located on a parcel where the owner withdrew rental units from rental or lease pursuant to the Ellis Act. AB 710 defines a "transit intensive area" as an area that is within a mile of: An existing major transit stop, as defined by the California Environmental Quality Act. A planned major transit stop, as shown on a regional transportation plan. A high-quality transit corridor. The bill declares that a project is within this -mile standard if: All of the parcels have not more than 25% of their area more than a -mile of the transit stop or transit corridor; and Not more than 10% of the residential units or 100 units (whichever is less) are more than miles from the transit stop or corridor. AB 710 defines a "high-quality transit corridor" as a corridor with fixed route bus service with service intervals less than 15 minutes during peak commute hours. AB 710 -- 6/29/11 -- Page 4 State Revenue Impact No estimate. Comments 1. Purpose of the bill . Less is more. By reducing their standard parking requirements, public officials can promote housing affordability and encourage residential densities, especially near transit hubs and corridors. Working from real estate case studies, infill builders say that requiring less space for parking boosts residential densities while lowering their development costs. Lower costs can translate into higher profits and less expensive housing. While some cities and counties are starting to accept this argument, many local officials still rely on parking standards with origins that date back decades. In light of the significant federal, state, and local investments in building and operating high-quality transit services, the Legislature needs to step in and lower the regulatory barriers to denser development. AB 710 leaves local standard parking requirements in place everywhere except in transit intensive areas. It's time to get a private land use return on the public's transit investments. 2. Community control, not state intrusion . With rare exceptions, California leaves land use decisions up to locally elected city councils and county boards of supervisors. Who knows local circumstances better than the local officials picked by their constituents to promote community values? The state preempts local discretion over land use only in limited situations. Cities and counties have lost their land use permit powers in four regions to protect natural resources that have statewide importance: the San Francisco Bay Conservation Development Commission, the Tahoe Regional Planning Agency, the California Coastal Commission, and the Delta Protection Commission. The Legislature has limited (or even preempted) local land use regulations for specific uses: manufactured housing in residential zones (AB 3735, Bornstein, 1994), second units in residential zones (AB 1866, Wright, 2002), amateur radio station antenna structures (AB 1228, Dutton, 2003), solar AB 710 -- 6/29/11 -- Page 5 energy systems (AB 2473, Wolk, 2004), wireless telecommunications collocation facilities (SB 1627, Kehoe, 2006), small wind energy systems (AB 45, Blakeslee, 2009). State law also regulates certain land uses' proximity to specific sites: development on active earthquake faults (SB 5, Alquist, 1975), tobacco ads on billboards near schools (AB 752, Migden, 1997), and medical marijuana sales near schools (AB 2650, Buchanan, 2010). But mundane local parking standards hardly rise to those levels. Sacramento should stay out of local communities' need to control their quality of life. 3. Gentrification worries . Nearly everyone recognizes that lower parking standards help builders. That's why the density bonus law allows a developer demand lower parking standards when building more housing, including affordable units, than usually allowed (SB 1818, Hollingsworth, 2004). Affordable housing advocates point out the quid pro quo nature of the density bonus law; to get lower parking standards, the builder must produce affordable housing as part of the increased density. In contrast, AB 710 insists on lower parking standards without the quid pro quo for affordable housing. As a result, affordable housing advocates worry about gentrification; builders will tear down affordable apartments near transit hubs and corridors, so they can build more market-rate housing. The bill provides two specific protections against gentrification. Lower parking standards don't apply: (a) if a builder tears down rent-controlled housing, unless the builder provides income-restricted replacement housing in the same proportions, or (b) if the project involves rental units covered by the Ellis Act. Housing advocates want additional detailed protections for very low and low income households. Conversely, some advocates for apartment owners want to ease the bill's current restrictions. The Committee may wish to consider whether enacting intricate conditions and formulas into AB 710 will dilute the bill's policy goals, substituting legislative prescription for local adaptation. 4. Hubs and spokes . In communities without major transit stops or high-quality bus service, AB 710 won't have any impact. However, by limiting local parking standards within a mile of transit stops and corridors, the bill affects large areas in metropolitan regions. The prohibitions in AB 710 affect about 500 acres around every AB 710 -- 6/29/11 -- Page 6 existing and planned major transit stop, plus mile-wide swaths (a half-mile on each side of key bus lines). When combined, those areas of state preemption remove local control over parking standards from communities that enjoy better transit services. Practically speaking, where do these provisions apply in transit rich communities like Berkeley, Concord, Los Angeles, Pasadena, Sacramento, and San Diego? The Committee may wish to consider narrowing the definition of a transit corridor to a mile on each side of the bus line, for a total width of mile. 5. Parks and parking . AB 710 has a historical parallel. Almost 30 years ago, home builders complained that some cities used excessive local standards when imposing parkland dedications or in-lieu fees conditions on residential subdivisions. The Legislature responded by capping Quimby Act park dedications at three acres for each 1,000 new residents. However, if local officials can show that the amount of parkland in surrounding areas exceeds that standard, they can use a higher standard, but not more than five acres for each 1,000 new residents (AB 1785, Foran, 1982). Although city councils opposed the 1982 Foran bill as an intrusion into their home rule prerogatives, they adapted quickly to the new state standards. Three decades later, hardly anyone remembers the controversy. Similarly, local officials will come to accept AB 710's standards as the "new normal." 6. Conforming amendments ? AB 710's provisions for affordable housing are similar, but not identical, to the requirements that apply to redevelopment agencies. If a builder tears down affordable housing, AB 710 requires the construction of an equal number of units . Redevelopment law requires the construction of an equal number of bedrooms (Health & Safety Code §33413 Ýf]). AB 710 requires the replacement units to remain affordable to renters for at least 55 years and requires an equity sharing agreement for the ownership replacement units. Redevelopment law requires rental replacement units to remain affordable for at least 55 years and ownership replacement units to remain affordable for at least 45 years (Health & Safety Code §33334.2 Ýf]Ý1]ÝA] & ÝB]). The Committee may wish to consider amendments that conform AB 710's affordable housing requirements to the existing requirements in redevelopment law. AB 710 -- 6/29/11 -- Page 7 Assembly Actions Assembly Housing & Community Development Committee: 7-0 Assembly Local Government Committee: 8-0 Assembly Appropriations Committee: 17-0 Assembly Floor: 76-0 Support and Opposition (6/30/11) Support : California Infill Builders Association; Alameda Transportation Commission; AMCAL Multi-Housing Inc.; American Institute of Architects, California Council; A.G. Spanos Companies; Brookfield Homes; California Apartment Association; California Building Industry Association; California Housing Consortium; California League of Conservation Voters; California ReLeaf; Cities of El Monte, Pittsburgh, San Bernardino; Civic Enterprise Development, LLC; CIM Group, Inc.; Codding Enterprises; Community Dynamics; Creative Housing Associates; David Taylor Interest; Domus Development; Fulcrum Properties; Greenbelt Alliance; JMA Ventures, LLC; Local Government Commission; Metropolitan Transportation Commission; Mogavero Notestine Associates; Natural Resources Defense Council; Newport Partners, LLC; Non-Profit Housing Assoc. of Northern California; Policy in Motion; Related Companies; San Francisco Bay Area Rapid Transit District; San Francisco Planning and Urban Research Association; TMG Partners; Township Nine; TRANSFORM; United States Green Building Council. Opposition : Association of California Cities-Orange County; BOCA; Bus Riders Union; California Affordable Housing Law Project; California Rural Legal Assistance Foundation; Cities of Concord, Encinitas, Lafayette, Lakewood, Moreno Valley; Coalition for Economic Survival; Contra Costa County; Contra Costa Transportation Authority; Green LA Coalition; Hollywood Community Housing Corporation; Housing California; Housing Long Beach; Korean Youth & Community Center; International Union of Painters and Allied Trades, District Council 36; Kennedy Commission; LA Voice PICO; LAANE; League of California Cities; Neighborhood Based CDC Coalition; People Organized for Westside Renewal; Public Advocates; Public Counsel Law Center; Search to Involve Pilipino Americans; Strategic AB 710 -- 6/29/11 -- Page 8 Actions for a Just Economy; Southern California Association of Nonprofit Housing; T.R.U.S.T. South LA; Venice Community Housing Corporation; Watts/Century Latino Organization.