BILL ANALYSIS Ó
AB 1229
Page 1
ASSEMBLY THIRD READING
AB 1229 (Atkins)
As Introduced February 22, 2013
Majority vote
HOUSING 5-2 LOCAL GOVERNMENT 6-1
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|Ayes:|Torres, Atkins, Brown, |Ayes:|Achadjian, Levine, Alejo, |
| |Chau, Mullin | |Gordon, Mullin, Rendon |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Beth Gaines, Maienschein |Nays:|Melendez |
| | | | |
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SUMMARY : Expressly authorizes the legislative body of a city or
county to establish inclusionary housing requirements as a
condition of development. Specifically, this bill :
1)Authorizes the legislative body of a city or county to
establish, as a condition of development, inclusionary housing
requirements, which may require the provision of residential
units affordable to and occupied by lower-income, very
low-income, or extremely low-income owners or tenants.
2)States the Legislature's intent to supersede any holding or
dicta in Palmer/Sixth Street Properties, L.P. v. City of Los
Angeles (2009) 175 Cal.App.4th 1396, to the extent that the
opinion in that case conflicts with the authority of local
governments to adopt inclusionary housing requirements, and
specifies that the bill does not otherwise enlarge or diminish
the authority of a jurisdiction beyond those powers that
existed as of July 21, 2009.
FISCAL EFFECT : None
COMMENTS : Article XI, Section 7 of the California Constitution
grants each city and county the power "to make and enforce
within its limits all local, police, sanitary, and other
ordinances and regulations not in conflict with general laws."
This is generally referred to as the police power of local
governments. The Planning and Zoning Law is a general law that
sets forth minimum standards for cities and counties to follow
in land use regulation, but the law also establishes the
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Legislature's intent to "provide only a minimum of limitation in
order that counties and cities may exercise the maximum degree
of control over local zoning matters."
Using this police power, many cities and counties have adopted
ordinances, commonly called "inclusionary zoning" or
"inclusionary housing" ordinances, that require developers to
ensure that a certain percentage of housing units in a new
development be affordable to lower-income households.
Approximately 140 jurisdictions in California currently have
inclusionary zoning ordinances. These ordinances vary widely in
the percentage of affordable units required, the depth of
affordability required, and the options through which a
developer may choose to comply. Most, if not all, such
ordinances apply to both rental and ownership housing.
In 2009, in the case of Palmer v. City of Los Angeles, the
Second District California Court of Appeal opined that the
city's affordable housing requirements associated with a
particular specific plan (which was similar to an inclusionary
zoning ordinance), as it applied to rental housing, conflicted
with and was preempted by a state law known as the Costa-Hawkins
Rental Housing Act. The Costa-Hawkins Act limits the
permissible scope of local rent control ordinances. Among its
various provisions is the right for a rental housing owner
generally to set the initial rent level at the start of a
tenancy, even if the local rent control ordinance would
otherwise limit rent levels across tenancies. This provision is
known as vacancy decontrol because the rent level is temporarily
decontrolled after a voluntary vacancy. The act also gives
rental housing owners the right to set the initial and all
subsequent rental rates for a unit built after February 1, 1995.
The court opined that "forcing Palmer to provide affordable
housing units at regulated rents in order to obtain project
approval is clearly hostile to the right afforded under the
Costa-Hawkins Act to establish the initial rental rate for a
dwelling or unit."
The Legislature enacted the Costa-Hawkins Rental Housing Act in
1995 with the passage of AB 1164 (Hawkins), Chapter 331. The
various analyses for this bill exclusively discuss rent control
ordinances and do not once mention inclusionary zoning
ordinances, of which approximately 64 existed in the state at
that time. The Assembly concurrence analysis of AB 1164, which
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is very similar to the other analyses, states that the bill
"establishes a comprehensive scheme to regulate local
residential rent control." The analysis includes a table of
jurisdictions that would be affected by the bill, and the table
exclusively includes cities with rent control ordinances and
does not include any cities that had inclusionary zoning
ordinances affecting rental housing. The analysis also states,
"Proponents view this bill as a moderate approach to overturn
extreme vacancy control ordinances which unduly and unfairly
interfere into the free market." The analysis further describes
strict rent control ordinances as those that impose vacancy
control and states, "Proponents contend that a statewide new
construction exemption is necessary to encourage construction of
much needed housing units, which is discouraged by strict local
rent controls." This legislative history provides no indication
that the Legislature intended to affect inclusionary zoning with
the passage of AB 1164.
This bill expressly authorizes cities and counties to establish
inclusionary housing requirements as a condition of development.
The bill further declares the intent of the Legislature to
supersede any holding or dicta in Palmer v. City of Los Angeles
that conflicts with this authority.
According to supporters, local inclusionary housing programs
have proven to be one of the most effective tools for producing
new homes affordable to working families and creating strong,
diverse neighborhoods with a range of housing choices.
Inclusionary ordinances have provided quality affordable housing
to over 80,000 Californians, including the production of an
estimated 30,000 units in the last decade alone. While many of
these local programs have been in place for decades, the recent
Palmer decision has created uncertainty and confusion for local
governments and housing advocates regarding the future viability
of this important local land use tool.
Opponents argue that inclusionary zoning is akin to rent control
and that this bill therefore allows local governments to enact
and enforce rent control on newly constructed rental housing
units by pre-empting the Costa-Hawkins Act. They believe that
the Costa-Hawkins protections for new construction are
appropriate and should be maintained. Moreover, they believe
that the bill will seriously hurt the construction industry.
They additionally argue that inclusionary units are difficult to
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own and manage because landlords do not set the tenant
qualification standards.
Analysis Prepared by : Anya Lawler / H. & C.D. / (916)
319-2085
FN: 0000495