BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1103|
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THIRD READING
Bill No: AB 1103
Author: Huffman (D)
Amended: 7/12/11 in Senate
Vote: 21
SENATE TRANSPORTATION & HOUSING COMM : 9-0, 07/05/11
AYES: DeSaulnier, Gaines, Harman, Huff, Kehoe, Lowenthal,
Pavley, Rubio, Simitian
ASSEMBLY FLOOR : 77-0, 05/19/11 - See last page for vote
SUBJECT : Land use: housing element
SOURCE : Author
DIGEST : This bill allows, on or after January 1, 2015, a
city or county to accommodate a portion of its housing
element needs for lower-income households through the
provision of financial assistance to convert foreclosed
homes and second units to affordable units.
ANALYSIS : Current law states that early attainment of
decent housing and a suitable living environment for every
Californian is a priority of the highest order and that
local and state governments have a responsibility to make
adequate provision for the housing needs of all economic
segments of the community and to facilitate the improvement
and development of housing. These statements are known as
the state housing goal.
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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 is
assigned its fair share of housing for each income category
through the regional housing needs assessment (RHNA)
process.
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. The
Department of Housing and Community Development (HCD)
reviews both draft and adopted housing elements to
determine whether or not they are in substantial compliance
with the law.
In general, in order for a city or county to show that it
can accommodate its RHNA allocation, it must identify sites
on which new housing may be built. In order to establish
the appropriateness of sites to accommodate very low- and
low-income housing, housing element law relies on densities
as a proxy for affordability. While high-density
developments are not necessarily affordable, it is
generally impossible to develop affordable housing at lower
densities without an exorbitant amount of subsidy. Current
law allows cities and counties to demonstrate the
appropriateness of their zoning densities for very low- and
low-income housing in two ways:
1.By providing an analysis demonstrating how the adopted
densities accommodate lower-income housing, based on
market demand, financial feasibility, or recent
development experience; or
2.By meeting or exceeding the following default densities
established in statute, in which case no further analysis
is required:
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A. 30 units per acre for counties and cities in
metropolitan areas of more than 2 million persons.
B. 20 units per acre for counties and cities in
metropolitan areas of less than 2 million persons.
C. 15 units per acre for incorporated cities within
non-metropolitan counties.
D. 10 units per acre for unincorporated areas in all
non-metropolitan counties.
In addition to zoning sites for the construction of new
housing, current law also allows a city or county to meet
up to 25 percent of its RHNA allocation through the
conversion (converting non-affordable units to affordable
units through purchase of affordability covenants or the
units themselves), preservation (extending the term of
affordability on existing affordable housing units), or
substantial rehabilitation of affordable housing units
under specified conditions, including among others:
The city or county must have met (i.e., housing
units were built) at least some portion of its RHNA
allocation for very low- and low-income housing in the
previous planning period.
The city or county must identify the specific,
existing sources of available funding in the housing
element and commit assistance to individual
developments (i.e., enter into a legally binding
agreement to provide the necessary financial
assistance) within the first two years of the housing
element planning period.
The converted, preserved, or rehabilitated units
must be made available for occupancy within two years
of the execution of the agreement committing
assistance.
For purposes of counting units against the city's
or county's RHNA allocation, the converted, preserved,
or rehabilitated units must be counted in the
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appropriate income category.
The city or county must include in its annual
housing element progress report it submits to HCD for
the third year of the planning period an update on its
progress in providing the units counted.
With respect to units converted from non-affordable to
affordable in particular, the following conditions also
apply:
The units must be located in multifamily housing
complexes of three or more units.
The units must not be acquired by eminent domain.
The units must be unoccupied by low-income
households or, if occupied, the city or county must
provide relocation assistance to occupants displaced
by the conversion.
The units must constitute a net increase in the
city's or county's stock of assisted affordable
housing units.
The units must be subject to an affordability
covenant and remain affordable to very low- and
low-income households for a period of at least 55
years.
For units located in multifamily ownership housing
complexes with three or more units, the city or county
must have constructed at least an equal number of
new-construction multifamily rental units affordable
to lower income households within the same planning
period as the number of ownership units to be
converted.
This bill:
1.For purposes of utilizing the authority to meet up to 25
percent of its RHNA allocation by means other than zoning
for new construction, allows a city or county, on or
after January 1, 2015, to commit assistance for the
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conversion of existing units located on foreclosed
properties to affordable housing, subject to the
requirements for conversions listed above.
2.Encourages HCD's Housing Element Working Group to discuss
default densities.
Comments
This bill arises out of a political controversy in the City
of Novato in which residents opposed the city's efforts to
comply with housing element law by identifying sites to
rezone for higher-density multifamily housing. The city's
lack of sites is a political problem, because from a
planning and development perspective, there are viable
sites within the city that can support such housing. The
city is also planning a commuter train station downtown,
and higher density housing could support the rail line as
well as bring additional customers to downtown business
establishments. Rezoning such sites could result in more
housing choice, more compact development, and lower
emissions, consistent with the goals of SB 375 (Steinberg),
Chapter 728, Statutes of 2008.
This bill, however, seeks to address the political
controversy by allowing the city greater flexibility to
comply with housing element law without rezoning. The
author argues that cities need flexibility because housing
element law imposes a one-size-fits-all density requirement
on cities and counties, implying that housing at the
default density of 30 units per acre is too dense for
Novato. Most communities, even suburban communities, have
found it possible and reasonable to zone for densities of
30 units per acre. In addition, as described above, the
law allows a city or county to demonstrate to HCD that
lower densities can effectively accommodate affordable
housing. In such cases, HCD looks at a city's prior
experience developing affordable housing at lower
densities, how land costs relate to total development
costs, and what densities affordable housing developers say
are necessary to obtain financing and make a project
financially viable. HCD states that it has allowed at
least 14 jurisdictions to designate sites at densities
lower than the default densities after conducting such an
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analysis.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 7/12/11)
City of Novato
City of San Rafael
County of Marin
Engineering Contractors' Association
Fireman's Fund Insurance Companies
Habitat for Humanity of Greater San Francisco
Marin County Council of Mayors and Councilmembers
Non-Profit Housing Association of Northern California
Novato Chamber of Commerce
Novato Housing Coalition
Town of Corte Madera
ARGUMENTS IN SUPPORT : According to the author's office,
the intent of this bill is not to undermine the goals of
the housing element law but rather to provide the
flexibility necessary to allow local governments to meet
the housing needs of their residents and workforce. The
one-size-fits-all approach does not necessarily fit all.
In regions, such as Marin, with limited space available for
new development, the conversion of existing units is one
way that cities and counties can provide housing. This
bill provides flexibility for local governments to meet the
housing needs of their residents and workforce in creative
and innovative ways.
ASSEMBLY FLOOR : 77-0, 05/19/11
AYES: Achadjian, Allen, Ammiano, Atkins, Beall, Bill
Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Cedillo, Chesbro, Conway, Cook, Davis, Dickinson,
Donnelly, Eng, Feuer, Fletcher, Fong, Fuentes, Furutani,
Beth Gaines, Galgiani, Garrick, Gatto, Gordon, Grove,
Hagman, Halderman, Hall, Harkey, Hayashi, Roger
Hernández, Hill, Huber, Hueso, Huffman, Jeffries, Jones,
Knight, Lara, Logue, Bonnie Lowenthal, Ma, Mansoor,
Mendoza, Miller, Mitchell, Monning, Morrell, Nestande,
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Nielsen, Norby, Olsen, Pan, Perea, V. Manuel Pérez,
Portantino, Silva, Skinner, Smyth, Solorio, Swanson,
Torres, Valadao, Wagner, Williams, Yamada, John A. Pérez
NO VOTE RECORDED: Alejo, Gorell, Wieckowski
JJA:nl 7/12/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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