BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 1220
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          Date of Hearing:  May 4, 2011

                       ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
                                Cameron Smyth, 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 housing 
            development approval, 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 legislative 
            body of the city, county, or city and 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.  

          4)Provides that in any action or proceeding brought to challenge 
            the items listed in #1 no remedy, and no injunction pursuant 
            to those prescribed by a court during a challenge regarding 
            the validity of a general plan, shall abrogate, impair, or 
            otherwise interfere with the full exercise of the rights and 
            protections granted to:  

             a)   A completed tentative map application; or, 

             b)   A developer under a vested tentative map or a 
               development agreement.

          5)Provides that if a third party challenges the adequacy of a 








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            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.

          6)Provide 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.

          7)States that it is the intent of the Legislature in enacting 
            Section 2 of the bill 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)Requires each city, county, or city and county to prepare and 
            adopt a general plan for its jurisdiction that contains 
            certain mandatory elements, including a housing element.

          2)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.

          3)Requires cities and counties to designate and zone sufficient 
            vacant land for residential use with appropriate standards to 
            meet housing needs for all income categories and to contribute 
            to producing housing at the lowest possible cost.

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

          5)Requires cities and counties, when adopting an ordinance which 
            limits the number of housing units that 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. 

          6)Requires a city or county to make one or more specified 
            findings in order to disapprove a particular housing 
            development.








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          7)States that the Legislature finds and declares that there 
            currently is a housing crisis in California and it is 
            essential to reduce delays and restraints upon expeditiously 
            completing housing projects, and declares that a legal action 
            or proceeding challenging a decision of a city, county, or 
            city and county has a chilling effect on the confidence with 
            which property owners and local governments can proceed with 
            projects.

          8)Finds and declares that legal actions or proceedings filed to 
            attack, review, set aside, void, or annul a decision of, 
            including but not limited to, the implementation of general 
            plan goals and policies that provide incentives for affordable 
            housing, open-space and recreational opportunities, and other 
            related public benefits, can prevent the completion of needed 
            developments even though the projects have received required 
            governmental approvals.

          9)States that the purpose of Section 65009 of the Government 
            Code is to provide certainty for property owners and local 
            governments regarding decisions made pursuant to Planning and 
            Zoning laws.

          10)Provides than 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.

          11)Provides that a cause of action shall not be maintained until 
            60 days have expired following notice to the city or clerk of 
            the board of supervisors by the party bringing the cause of 
            action, or his or her representative, specifying the 
            deficiencies of the general plan, specific plan, or zoning 
            ordinance.









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          12)Provides that a cause of action shall accrue 60 days after 
            notice is filed or the legislative body takes a final action 
            in response to the notice, whichever occurs first.

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

          14)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.

          15)Requires that rezoning of sites needed to meet Regional 
            Housing Needs Assessment (RHNA) requirements, including 
            adoption of minimum density and development standards, shall 
            be completed no later than three years after either the date 
            the housing element is adopted or the date that is 90 days 
            after receipt of comments from HCD, whichever is earlier, 
            unless this deadline is extended, as specified.








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           FISCAL EFFECT  :  Unknown

           COMMENTS  :   

          1)According to the author, this bill has been introduced to 
            modify the court's opinion in Urban Habitat Program v. City of 
            Pleasanton, 116 Cal. App. 4th 1561 (2008), and to revise and 
            clarify statute of limitations and remedies for specified 
            housing-related challenges. 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 affordable housing obligation.  
            In 2008, the appellate court threw out the challenge and the 
            court opined:

          "Although the statute does not specify the time within which Ża 
            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."

            (Urban Habitat Program v. City of Pleasanton, 116 Cal. App. 
            4th 1561 (2008).)  In other words, housing advocates and other 
            interested parties may only initiate such a challenge by 
            submitting a deficiency notice within 90 days of the housing 
            element's adoption.

          2)AB 1220 revises the statute of limitations and certain 
            remedies for specified housing-related challenges.  AB 998 
            (Waters), Chapter 1138, Statutes of 1983, put in place 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, a measure 
            which was sponsored by the League of California Cities 
            (League) and the California Building Industry Association 
            (CBIA).  AB 998 specified, for challenges in support of low- 
            and moderate-income housing requirements, that the petitioner 








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            shall notice the local government 60 days prior to filing 
            action, and that the Żone-year] statute of limitations would 
            then begin on the first day that the legislative body fails to 
            act.

            Since that time, and prior to the Urban Habitat ruling in 
            2008, housing advocates have 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.  The author notes that in none of 
            these cases was the timeliness on the advocates' suit 
            contested.

            Instead, this bill allows an entity challenging such an action 
            in support of affordable housing to serve the deficiency 
            notice up to five years after the city's or county's action.  
            AB 1220 provides, 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 may not be 
            filed more than five years after the city's or county's 
            action.  

            Current law 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 
            development or any or all geographic segments of the city or 
            county until the city or county has complied with the law, 
            including suspension of a city or county's authority to issue 
            building permits, grant zoning changes or variances, or grant 
            subdivision map approvals, or mandating the approval of 
            building permits for residential housing, mandating the 
            approval of final subdivision maps for housing projects, or 
            mandating the approval of tentative subdivision maps for 
            residential housing project, under specified criteria.  This 
            bill clarifies that in an action or proceeding brought 
            pursuant to the notice and accrual provisions relating to 
            housing development approval, 

            annual limits on housing permits, and the adequacy of a 
            density bonus ordinance, that neither the court remedies 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 a completed 








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            tentative map application, or a vested tentative map under the 
            Subdivision Map Act.

          3)According to the sponsors of this bill, the California Rural 
            Legal Assistance (CRLA) Foundation and Housing California, "AB 
            1220 helps ensure that every city and county does its part to 
            plan for housing to meet the needs of our workforce, seniors, 
            and other community members.  The bill fixes the recent 
            decision in Urban Habitat v. City of Pleasanton, which upended 
            a 25-year old law and reduced the time to enforce housing 
            planning laws to a mere 90 days from enactment.  While most 
            project-specific land use decisions are subject to a 
          90-day statute of limitations, certain plans relating to 
            affordable homes have long been subject to an extended period 
            in which a challenge can be made.  Some stakeholders, 
            particularly low-income residents, are not at the table when 
            the housing element plan is crafted.  Therefore, its 
            deficiencies may only come to light when the time comes to 
            implement the plan, e.g. an affordable development is proposed 
            or a shelter looks to open its doors.  The old law - part of 
            legislation sponsored by the League of California Cities in 
            1983 - recognized this.  It allowed citizens to send a 
            deficiency notice to the local government at any point during 
            the planning period and then bring suit if the locality did 
            not fix its housing element.  Only 11 suits were brought in 25 
            years.  AB 1220 partially restores this long-standing 
            provision."

          4)Opponents to this bill, the League, the California State 
            Association of Counties (CSAC), the American Planning 
            Association (APA), and the Regional Council of Rural Counties 
            (RCRC) note that in the Urban Habitat decision, the decision 
            this bill is intended to overturn, the housing advocates were 
            successful in reaching a settlement that overturned the City's 
            growth limit.  Additionally, the opponents believe the bill's 
            provisions "do not contain a balanced approach and that under 
            this bill, a small misstep on the part of the local agency can 
            shut down development in a jurisdiction until a lawsuit is 
            completed, even though more targeted remedies are available 
            that can require a local agency to make a fix without imposing 
            a full building moratorium until a court makes a final 
            determination." The opponents write that "these challenges, 
            costing local agencies millions of dollars to defend, are 
            brought to require a specific change in a planning document, 
            not to build housing."








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          5)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.  This 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.  Additionally, 
            this bill 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.

          6)SB 375 (Steinberg), Chapter 728, Statutes of 2008, links 
            together housing policy, land use and transportation planning, 
            and environmental review with climate policy, with the intent 
          of reducing greenhouse gas emissions through the development of 
            a sustainable communities 

          strategy (SCS), thus setting up a process to help achieve the 
            goals of the Global Warming Solutions Act of 2006 ŻAB 32 
            (Nuńez), Chapter 488, Statutes of 2006].  Prior to SB 375, 
            local governments were required to revise their housing 
            elements every five years.  The Regional Housing Needs 
            Assessment (RHNA) process was also on a five-year schedule.  
            However, most metropolitan planning organizations (MPOs) adopt 
            a regional transportation plan (RTP) every four years pursuant 
            to federal law, meaning that the planning for housing and 
            transportation rarely occurs at the same.  SB 375 aligned 
            these processes by creating an eight-year housing element 
            cycle, meaning that one RHNA planning period will equal two 
            RTP planning periods.

            The alignment provisions contained in SB 375 take effect for 
            the fifth revision of the housing element for local 
            governments.  Under the provisions of SB 375, once the local 
            government receives its RHNA allocation (and adopts an RTP at 
            the same time), it then has 18 months to prepare its housing 
            element and submit it to HCD - beginning with the first RTP to 
            be adopted after September 30, 2010.  Those local governments 
            that fail to submit a housing element to HCD within the 
            18-month timeline would fall out of the eight-year housing 
            element cycle and will then be required to submit their 








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            housing element every four years to HCD.  SB 375 also requires 
            local governments to ensure that zoning is done on time with a 
            60-day resolution, a three-year statute of limitations to 
            target specific actions that are inconsistent with state law, 
            and a process to challenge local agencies if they do not meet 
            deadlines for implementation contained in their housing 
            elements.

            SB 375 is still in the beginning stages of implementation.  
            Since SB 375 involves major changes to land use planning and 
            zoning for local governments, the Committee may wish to 
            consider how AB 1220 interacts with the implementation of SB 
            375.  

            Additionally, since many counties in the state are rural and 
            will still operate under a five-year housing element period, 
            AB 1220 would allow those counties to be continuously under 
            legal threat on their housing elements throughout their entire 
            planning period.  Those jurisdictions that, under the 
            provisions of SB 375, opt to have their housing elements due 
            every eight years, however, will have several years in which 
            challenges may not be brought, if AB 1220 becomes law, thus 
            setting up a discrepancy among local governments in how AB 
            1220 would be applied.

          7)This bill is substantially similar to AB 602 (Feuer, 2010).  
            That bill passed both the Assembly Judiciary Committee and the 
            Assembly Local Government Committee but was ultimately 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 an action, and extending this 
            period to five years could                   result in 
            uncertainty for local governments."

          8)Support arguments:  Supporters argue that this bill partially 
            restores the law to its longstanding interpretation prior to a 
            recent court decision so that residents can hold local 
            governments accountable to follow existing law requiring local 
            governments to adopt housing elements that plan for a 








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            community's share of the regional need for housing.  
            Supporters argue that this reasonable compromise provides a 
            fair opportunity for low-income persons and affordable housing 
            advocates to bring a case, while giving local governments 
            needed assurance that their plans cannot be challenged 
            indefinitely.

            Opposition arguments:  Opponents argue that this bill creates 
            uncertainty for development approvals at a time when the state 
            is attempting to crawl out of an economic recession. 
            Additionally, housing element law has been substantially 
            changed in the last few years to provide more opportunity for 
            litigation.  Opponents believe that SB 375 provided a number 
            of fast and effective challenge options that address the 
            sponsor's concerns, and therefore, those provisions should be 
            given time to take effect. 

          9)This bill was heard by the Housing and Community Development 
            Committee on April 27, 2011, where it passed with a 5-2 vote.
           
          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
          Corporation for Supportive Housing
          Mammoth Lakes Housing, Inc.
          Mercy Housing
          Public Advocates
          San Diego Housing Federation
          Self-Help Enterprises
          Silicon Valley Leadership Group
          Southern California Association of Non-Profit Housing 
          TransForm

           Opposition 
           
          American Council of Engineering Companies of California








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          American Planning Association, California Chapter
          California State Association of Counties
          Cities of Brea, Cypress, Fullerton, Mission Viejo, Town of Apple 
          Valley
          Civil Justice Association of California
          Counties of San Diego and Santa Clara
          League of California Cities
          Regional Council of Rural Counties

           Analysis Prepared by  :    Debbie Michel / L. GOV. / (916) 
          319-3958