BILL ANALYSIS                                                                                                                                                                                                    Ķ



                                                                  AB 325
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          Date of Hearing:  May 8, 2013

                       ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
                           K.H. "Katcho" Achadjian, Chair
                  AB 325 (Alejo) - As Introduced:  February 13, 2013
           
          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)States 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.

          2)Provides that an entity initiating a challenge in support of  
            affordable housing to a city or county action relating to  
            housing element law, the Least Cost Zoning Law, annual limits  
            on housing permits, or the adequacy of a density bonus  
            ordinance may serve a deficiency notice up to three years  
            after the city's or county's action.

          3)Provides that after 60 days or the date on which the city or  
            county takes final action in response to the deficiency  
            notice, whichever occurs first, the challenging party has one  
            year to file an action in court, except that the suit may not  
            be filed more than three years after the city's or county's  
            action.

          4)Removes from the current list of city or county actions that a  
            party may challenge pursuant to the notice and accrual  
            provision described above, those actions related to the  
            Housing Accountability Act, the Subdivision Map Act, and the  
            application of a Density Bonus ordinance to a particular  
            project, all of which are project-specific actions.

          5)Clarifies that in any action brought pursuant to the notice  
            and accrual provisions described above, no legal remedy or  
            injunction pursuant to 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  








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            Map Act or to a developer under a specified provision relating  
            to development agreements.

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

          7)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.

           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 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.

          3)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.

          4)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. 

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

          6)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  








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            which property owners and local governments can proceed with  
            projects.

          7)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.

          8)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.

          9)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.

          10)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.

          11)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.

          12)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  








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            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.

          13)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.

          14)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.

           FISCAL EFFECT  :   None

           COMMENTS  :   

          1)This bill declares the intent to modify the court's opinion in  
            Urban Habitat Program v. City of Pleasanton, 116 Cal. App. 4th  








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            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  
               [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.

            (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 325 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  
            shall notice local government 60 days prior to filing action,  
            and that the [one-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 11 cases in which the 60-day deficiency notice was sent  
            more than 90 days after adoption of the city's or county's  








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            housing element.  In none of these cases was the timeliness on  
            the advocates' suit contested.

            Instead, AB 325 allows an entity challenging such an action in  
            support of affordable housing to serve the deficiency notice  
            up to three years after the city's or county's action.  Cities  
            and counties would still have 60 days to take a final action  
            in response to the notice, and the challenging party would  
            still have one year after the city's or county's final action  
            in response to the notice to file an action in court.

            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 325 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 tentative map application,  








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            or a vested tentative map under the Subdivision Map Act.

          1)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 325 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,  
            AB 325 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.

          2)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 [AB 32 (Nuņez), 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 took 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 are then required to submit their housing  
            element every four years to HCD.  SB 375 also requires local  
            governments to ensure that zoning is done on time with a  








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            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.


            Since several counties in the state are rural and will still  
            operate under a five-year housing element period, AB 325 would  
            allow those counties to be under legal threat on their housing  
            elements throughout much of their 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 325 becomes law, thus setting up a discrepancy among  
            local governments in how AB 325 would be applied.

          3)This bill is identical to AB 1220 (Alejo, 2011), which was  
            vetoed by Governor Brown with the following veto message:  
           
               "While I understand the value of using the courts to compel  
          compliance with state                                        
          housing goals, there should be a balance between a local  
          government's planning authority                             and  
          citizen oversight. This bill tilts that balance and creates too  
          much uncertainty."

            The bill is also substantially similar to AB 602 (Feuer,  
            2010), which was vetoed by Governor Schwarzenegger.  

            Given the previous vetoes, the Committee may wish to ask the  
            author and sponsor about their efforts to reach a different  
            fate for this year's bill.

          4)A coalition of the American Planning Association, California  
            State Association of Counties, League of California Cities,  
            and the Rural County Representatives of California suggest  
            that, rather than opening up local agencies to litigation for  
            four years, the bill be amended to:

                     Add an additional alternative to challenge the  
                 adequacy of a housing element: Amend Section 65009 (c)(2)  
                 to allow someone wishing to challenge the adequacy of a  
                 housing element to write a letter with 60 days of the  
                 Department reporting its findings pursuant to Section  








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                 65585(h) and to file suit within one year of receiving  
                 the local agency's response to the letter.

                     Delete the new language in 65589.3 regarding court  
                 findings that housing element "substantially complies  
                 with all of the requirements of this article." Litigation  
                 related to housing elements involves specific alleged  
                 deficiencies, not "all" the requirements of the housing  
                 element, and the provision is essentially useless unless  
                 local governments seek declaratory relief, resulting in  
                 more and unnecessary litigation.

           1)Support Arguments  :  According to the sponsors of AB 325, the  
            California Rural Legal Assistance Foundation, Housing  
            California, and the Western Center on Law and Poverty,  
            "Deficiencies in a housing element may only come to light when  
            the plan is implemented, e.g. when an affordable development  
            is proposed or a domestic violence or homeless shelter looks  
            to open its doors.  The old law, part of legislation sponsored  
            by the League of California Cities in 1983, recognized that  
            any harm or deficiency might not be known until a development  
            was undertaken.  That law 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.  Far from opening a floodgate for  
            litigation, only 11 suits were brought in 25 years. The simple  
            existence of a real accountability mechanism spurred local  
            governments to address the housing needs of all residents and  
            obey the law."
                
              Opposition Arguments  :  Opponents, including the California  
            Chapter of the American Planning Association, the League of  
            California Cities, the Rural County Representatives of  
            California, and the California State Association of Counties,  
            argue that AB 325 "does not differentiate between major  
            noncompliance with state law or a small difference in  
            interpretation and targets jurisdictions that have made a  
            major effort to comply with the housing element law."  
            Opponents argue that the three-year statute of limitations  
            creates too much uncertainty for local agencies and could lead  
            to an increase in costly litigation at a time when state and  
            local resources are limited. They additionally argue that the  
            appropriate time for interested citizens to become involved  
            with a community's housing element is when it is adopted, not  
            three years later, and that there is ample opportunity for  








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            interested parties to engage prior to adoption given that  
            Housing Element Law specially requires outreach and public  
            participation.

          2)This bill was heard by the Housing and Community Development  
            Committee on May 1, 2013, and passed with a 5-1 vote.

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          California Rural Legal Assistance Foundation [CO-SPONSOR]
          Housing California [CO-SPONSOR]
          Western Center on Law and Poverty [CO-SPONSOR]

           Opposition 
           
          American Planning Association, California Chapter
          California State Association of Counties
          Cities of Lakewood, Torrance, Rancho Cucamonga, Roseville,  
          Thousand Oaks
          League of California Cities
          Rural County Representatives of California
           

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