BILL ANALYSIS                                                                                                                                                                                                    ”



                                                                  AB 1220
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          Date of Hearing:   April 27, 2011

               ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
                                 Norma Torres, Chair
                    AB 1220 (Alejo) - As Amended:  April 25, 2011
           
          SUBJECT  :   Land use and planning: cause of actions: time 
          limitations

           SUMMARY  :   Revises the statute of limitations and remedies for 
          specified housing-related challenges.  Specifically,  this bill  :  


          1)Requires a specified notice to be filed with the local 
            government within five years after an action to adopt, amend, 
            or revise a housing element, actions relating to the Least 
            Cost Zoning Law, annual limits on housing permits, and the 
            adequacy of a density bonus ordinance.  

          2)Excludes from the types of challenges that may be brought 
            during this time period any action related to the Housing 
            Accountability Act, the Subdivision Map Act, or the 
            application of a Density Bonus ordinance to a particular 
            project, all of which are project-specific actions.  

          3)Requires a challenging party to first serve the city or county 
            with a notice identifying the deficiencies in the housing 
            element, and allows the city or county 60 days to correct the 
            deficiency, following which a dissatisfied party may file an 
            action in court.  No court filing can be initiated under this 
            bill more than 5 years after the underlying action by the 
            local government.

          4)Provides that a housing element from a prior planning period 
            may not be challenged if the city or county has adopted a 
            revised housing element for the new planning period.

          5)Provides that in any action or proceeding brought pursuant to 
            the foregoing provision, no remedy, and no injunction pursuant 
            to Government Code Section 65754.5, shall abrogate, impair, or 
            otherwise interfere with the full exercise of the rights and 
            protections granted to (1) an applicant for a tentative map 
            pursuant to Section 66474.2, or (2) a developer pursuant to 
            Government Code Sections 65866 and 66498.1.









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          6)Provides that if a third-party challenges the adequacy of a 
            housing element in court and the court finds that the housing 
            element substantially complies with all of the requirements of 
            housing element law, the element shall be deemed to be in 
            compliance for purposes of state housing grant programs.

          7)State that it is the intent of the Legislature to modify the 
            court's opinion in Urban Habitat Program v. City of Pleasanton 
            (2008) 164 Cal.App.4th 1561, with respect to the 
            interpretation of Section 65009 of the Government Code.

           EXISTING LAW  :


          1)Under the Planning and Zoning Law, specifies that "except as 
            provided under subdivision (d)," no action or proceeding shall 
            be maintained in any of the following cases by any person 
            unless the action or proceeding is commenced and service is 
            made on the legislative body within 90 days after the 
            legislative body's decision:

               a)     To attack, review, set aside, void, or annul the 
                 decision of a legislative body to adopt or amend a 
                 general or specific plan; 

               b)     To attack, review, set aside, void, or annul the 
                 decision of a legislative body to adopt or amend a zoning 
                 ordinance;


               c)     To determine the reasonableness, legality, or 
                 validity of any decision to adopt or amend any regulation 
                 attached to a specific plan;


               d)     To attack, review, set aside, void, or annul the 
                 decision of a legislative body to adopt, amend, or modify 
                 a development agreement;


               e)     To attack, review, set aside, void, or annul any 
                 decision related to applications for conditional use 
                 permits and variances, or to determine the 
                 reasonableness, legality, or validity of any condition 
                 attached to a variance, conditional use permit, or any 








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                 other permit;


               f)     Concerning any of the proceedings, acts, or 
                 determinations taken, done, or made prior to any of the 
                 decisions listed above.


               ›Government Code Section 65009(c)]


          2)Specifies that in the case of an action or proceeding 
            challenging the adoption or revision of a housing element, the 
            action or proceeding may, in addition, be maintained if it is 
            commenced and service is made on the legislative body within 
            60 days following the date that the Department of Housing and 
            Community Development reports its findings on a jurisdiction's 
            adopted housing element or adopted amendments to a housing 
            element ›Government Code Section 65009(c)].

          3)Under subdivision (d), provides that an action or proceeding 
            shall be commenced and the legislative body served within one 
            year after the accrual of the cause of action, if the action 
            or proceeding meets both of the following requirements:


             a)   It is brought in support of or to encourage or 
               facilitate the development of housing that would increase 
               the community's supply of housing affordable to persons and 
               families with low or moderate incomes; and,

             b)   It is brought with respect to actions taken on the 
               Housing Element, Housing Accountability Act, Subdivision 
               Map Act, Density Bonus, or housing development approval.


            ›Government Code Section 65009(d)]


          4)Specifies that a cause of action brought pursuant to 
            subdivision (d) shall not be maintained until 60 days have 
            expired following notice to the city or county specifying the 
            deficiencies of the general plan, specific plan, or zoning 
            ordinance, and specifies that a cause of action brought 
            pursuant to subdivision (d) shall accrue 60 days after notice 








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            is filed or the legislative body takes a final action in 
            response to the notice, whichever occurs first ›Government 
            Code Section 65009(d)]

          5)Provides that in any action filed on or after January 1, 1991, 
            to challenge the validity of a housing element, there shall be 
            a rebuttable presumption of the validity of the element or 
            amendment if the Department of Housing and Community 
            Development (HCD) has found that the element substantially 
            complies with the requirements of the law.

          6)Requires a court, if it finds any portion of a general plan, 
            including a housing element, out of compliance with the law, 
            to include within its order or judgment one or more of the 
            following remedies for any or all types of developments or any 
            or all geographic segments 
          of the city or county until the city or county has complied with 
            the law, including;

               a)     Suspension of the city or county's authority to 
                 issue building permits;

               b)     Suspension of the city or county's authority to 
                 grant zoning changes and/or variances;

               c)     Suspension of the city or county's authority to 
                 grant subdivision map approvals;

               d)     Mandating the approval of building permits for 
                 residential housing that meet specified criteria;

               e)     Mandating the approval of final subdivision maps for 
                 housing projects that meet specified criteria; and,

               f)     Mandating the approval of tentative subdivision maps 
                 for residential housing projects that meet specified 
                 criteria.

               (Government Code Section 65009)


           FISCAL EFFECT  :   None
          
           COMMENTS  :   









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           Background
           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.  Following a 
          staggered statutory schedule, cities and counties located within 
          the territory of a metropolitan planning organization (MPO) must 
          revise their housing elements every eight years, and cities and 
          counties in rural non-MPO regions must revise their housing 
          elements every five years.  These five- and eight-year periods 
          are known as the housing element planning period.

          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.  

          The Planning and Zoning Law and the Subdivision Map Act also 
          includes a number of sections governing zoning and entitlements 
          specifically related to housing, including:

           The Housing Accountability Act, which requires a city or 
            county to make one or more specified findings in order to 
            disapprove a particular housing development.

           A provision requiring cities and counties, when adopting an 
            ordinance which limits the number of housing units which may 
            be constructed on an annual basis, to make findings as to the 
            public health, safety, and welfare benefits that justify 
            reducing the housing opportunities of the region. 

           Density bonus law, which requires cities and counties to grant 
            a developer a density bonus, incentives, and concessions when 
            the developer proposes to include specified percentages of 
            affordable housing within a development. 

           The Least Cost Zoning Law, which requires cities and counties 
            to designate and zone sufficient vacant land for residential 
            use with appropriate standards to meet housing needs for all 








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            income categories and to contribute to producing housing at 
            the lowest possible cost.

           A requirement that, when determining whether to approve a 
            tentative subdivision map, a city or county shall apply only 
            those ordinances, policies, and standards in effect as of the 
            date the developer's application is deemed complete.

          Prior to a recent court decision, it was generally understood 
          that current law allowed a party to challenge the adequacy of a 
          city's or county's housing element at any time during a planning 
          period, provided that the challenger brought the action "in 
          support of or to encourage or facilitate the development of 
          housing that would increase the community's supply of 
          ›affordable] housing."  The challenging party was required first 
          to serve the city or county with a notice identifying the 
          deficiencies in the housing element.  After 60 days or the date 
          on which the city or county took final action in response to the 
          notice, whichever occurred first, the challenging party had one 
          year to file the action in court.  This process and statute of 
          limitations also applied to actions brought pursuant to the 
          housing-related statutes listed above.  

          In 2006 Urban Habitat Program brought suit to challenge the City 
          of Pleasanton's housing policies, including the city's annual 
          cap on housing permits and the city's cap on the aggregate 
          number of permissible housing units, both of which Urban Habitat 
          claimed were insufficient to allow the city to meet its RHNA 
          obligation.  In 2008, the First District California Court of 
          Appeals issued an unpublished decision in the case of Urban 
          Habitat Program v. City of Pleasanton allowing the case to 
          proceed with respect to some causes of action, but ruling that 
          the challenge to the housing element itself was time-barred.  
          The court stated:

               Although the statute does not specify the time within which 
               ›a deficiency] notice must be given, it is our conclusion 
               that the statute must be interpreted as containing a time 
               limit within which this requirement must be met? In sum, a 
               party bringing a challenge governed by section 65009, 
               subdivision (d), has 90 days from the date a legislative 
               action is taken or approval is given to notify the local 
               land use authority of any claimed deficiencies in such an 
               action or approval. Its claim then accrues 60 days after it 
               gives this notice.








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          In other words, instead of being able to initiate a challenge to 
          a deficient housing element at any time during the planning 
          period, housing advocates and other interested parties may now 
          only initiate such a challenge by submitting a deficiency notice 
          within 90 days of the housing element's adoption.

          The statutory language interpreted by the court and at issue in 
          this bill was added to statute by AB 998 (Waters), Chapter 1138, 
          Statutes of 1983, a bill sponsored by the League of California 
          Cities and the California Building Industry Association.  AB 998 
          created a short statute of limitations period for land use 
          decisions generally but provided a specific exception to protect 
          the ability to challenge deficient housing elements. AB 998 
          specified, for challenges in support of low- and moderate-income 
          housing requirements, that the petitioner must notice local 
          government 60 days prior to filing action, and that a one-year 
          statute of limitations would then begin on the first day that 
          the legislative body fails to act.  The law was silent on when 
          the 60-day notice had to be served, the prevailing 
          interpretation of which was that the notice could be served at 
          any point during the housing element planning period, which at 
          the time was five years for all jurisdictions.

          In the intervening 25 years between the passage of AB 998 and 
          the Urban Habitat ruling, housing advocates filed and 
          successfully settled at least eleven cases in which the 60-day 
          deficiency notice was sent more than 90 days after adoption of 
          the city's or county's housing element. In none of these cases 
          was the timeliness on the advocates' suit contested.  Likewise, 
          six bills amended other portions of this statute during those 
          intervening years, and there was never any controversy 
          surrounding the lack of a deadline for housing advocates to 
          serve a deficiency notice nor any attempt to change the statute 
          in this regard. 

           Purpose of the Bill
           According to the author, AB 1220 has been introduced to modify 
          the court's in opinion in Urban Habitat.  AB 1220 allows an 
          entity challenging an action in support of affordable housing to 
          serve the deficiency notice up to five years after the city's or 
          county's action.  The bill provides that after 60 days or the 
          date on which the city or county takes final action in response 
          to the notice (whichever occurs first), the challenging party 
          has one year to file an action in court, except that the lawsuit 








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          may not be filed more than five years after the city's or 
          county's action.  

          Current law (Government Code Section 65009) requires a court, if 
          it finds any portion of a general plan, including a housing 
          element, out of compliance with the law, to include within its 
          order or judgment one or more of the following remedies for any 
          or all types of developments or any or all geographic segments 
          of the city or county until the city or county has complied with 
          the law:

                 Suspend the authority of the city or county to issue 
               building permits.

                 Suspend the authority of the city or county to grant 
               zoning changes and/or variances.

                 Suspend the authority of the city or county to grant 
               subdivision map approvals.

                 Mandate the approval of building permits for residential 
               housing that meet specified criteria.  


                 Mandate the approval of final subdivision maps for 
               housing projects that meet specified criteria.

                 Mandate the approval of tentative subdivision maps for 
               residential housing projects that meet specified criteria.

          AB 1220 clarifies that in any action or proceeding brought 
          pursuant to the notice and accrual provisions of Government Code 
          Section 65009 described above, neither the court remedies 
          described above nor any injunction against the development of a 
          housing project shall abrogate, impair, or otherwise interfere 
          with the full exercise of the rights and protections granted to 
          an applicant for a tentative map or a vesting tentative map 
          under specified provisions of the Subdivision Map Act or to a 
          developer under a specified provision relating to development 
          agreements.

          Under current law, HCD operates a number of grant programs to 
          which cities and counties may apply.  In many cases, the law 
          requires a city or county to have an HCD-approved housing 
          element in order to be eligible for funding.  AB 1220 provides 








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          that if a third-party challenges the adequacy of a housing 
          element in court and the court finds that the housing element 
          substantially complies with all of the requirements of housing 
          element law, the element shall be deemed to be in compliance for 
          purposes of state housing grant programs.

           Arguments in Support
           According to the sponsors of AB 1220, the California Rural Legal 
          Assistance and Housing California, "The court's decision in 
          Urban Habitat misinterpreted the statute of limitations for 
          challenging an inadequate housing element, and eliminated the 
          25-year-old 'Affordable Housing Exception' that has ensured 
          compliance with the law. This erroneous interpretation shortened 
          the statute of limitations from 5 years to 90 days and makes 
          effective enforcement of housing element law nearly impossible. 
          AB 1220 would restore the Affordable Housing Exception while 
          also making some modest reforms to ensure that the interests of 
          all stakeholders are balanced. The restoration of the law is 
          consistent with the Legislature's original intent and corrects 
          the court's plainly erroneous interpretation of the statute."

           Arguments in Opposition
           Opponents, including the California Chapter of the American 
          Planning Association, the League of California Cities, the 
          Regional Council of Rural Counties, and the California State 
          Association of Counties, argue that by allowing a five-year 
          statute of limitations to sue a city or county challenging the 
          adoption of a housing element, AB 1220 will "encourage a broad 
          array of expensive lawsuits that do not differentiate between 
          major noncompliance with state law or a small difference in 
          interpretation. This will leave local agencies, businesses, and 
          developers unfairly open to uncertainty long after decisions 
          have been made." 

           Previous Legislation:
           This bill is identical to AB 602 (Feuer, 2010).  That bill was 
          vetoed by Governor Schwarzenegger with the following veto 
          message:

          "Local governments face numerous potential legal liabilities 
          when land is developed.  One of the protections and assurances 
          provided to local governments in order to encourage them to move 
          forward with land development is that there is a reasonable 
          statute of limitations on when a legal claim can be filed.  
          Existing law gives interested parties sufficient time to bring 








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          an action, and extending this period to five years could result 
          in uncertainty for local governments."

           Double-Referred:
           This bill was also referred to the Local Government Committee, 
          where it is scheduled to be heard on May 11, 2011, should it 
          pass out of this committee.

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 

           California Rural Legal Assistance Foundation (co-sponsor)
          Housing California (co-sponsor)
          Bay Area Council
          California Association of Realtors
          California Coalition for Rural Housing
          Century Housing
          Community Housing Improvement Program
          Congress of California Seniors
          Mammoth Lakes Housing, Inc.
          Mercy Housing
          San Diego Housing Federation
          Self-Help Enterprises
          Silicon Valley Leadership Group
          Southern California Association of Non-Profit Housing 
          TransForm
           
          Opposition 
           
          American Planning Association, California Chapter
          California State Association of Counties
          Cities of Cypress and Fullerton
          City of Mission Viejo
          Civil Justice Association of California
          League of California Cities
          Regional Council of Rural Counties
          Santa Clara County
           
          Analysis Prepared by  :    Anya Lawler / H. & C.D. / (916) 
          319-2085 












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