BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 1537
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          Date of Hearing:   April 30, 2014

                       ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
                           K.H. "Katcho" Achadjian, Chair
                    AB 1537 (Levine) - As Amended:  April 21, 2014
           
          SUBJECT  :   General plan housing element: regional housing need.

           SUMMARY  :  Creates an exception from existing law for Marin  
          County, and cities within Marin County, for purposes of  
          determining a jurisdiction's "default density" for accommodating  
          affordable housing.  Specifically,  this bill  :  

          1)Creates an exception, for purposes of determining a  
            jurisdiction's "default density" for accommodating affordable  
            housing, as follows:

             a)   Requires a county that is in the San  
               Francisco-Oakland-Fremont, California Metropolitan  
               Statistical Area (MSA) that has a population of less than  
               400,000, to be considered suburban; and,

             b)   Requires, if this county includes an incorporated city  
               that has a population of less than 10,000, this city to be  
               considered suburban.

          2)Allows the exceptions specified in 1), above, to apply to a  
            housing element revision cycle that is in effect from July 1,  
            2014, to December 31, 2023.

          3)Requires a jurisdiction that is classified as suburban  
            pursuant to 1), above, to report to the Assembly Committee on  
            Housing and Community Development, the Senate Committee on  
            Transportation and Housing, and the Department of Housing and  
            Community Development (HCD) regarding its progress in  
            developing low- and very low-income housing consistent with  
            the requirements of existing law.

          4)Requires the report to be provided twice, once, on or before  
            December 31, 2019, which shall address the initial four years  
            of the housing element cycle, and a second time, on or before  
            December 31, 2023, to address the subsequent four years of the  
            housing element cycle and the cycle as a whole.

          5)Requires the report to be consistent with the requirements of  








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            existing law related to reports submitted to the Legislature.

          6)Repeals, on December 31, 2023, items 1), above, through 5),  
            above, inclusive.

           EXISTING LAW  :

          1)Requires every city and county to prepare and adopt a general  
            plan containing seven mandatory elements, including a housing  
            element. 

          2)Requires a jurisdiction's housing element to identify and  
            analyze existing and projected housing needs, identify  
            adequate sites with appropriate zoning to meet the housing  
            needs of all income segments of the community, and ensure that  
            regulatory systems provide opportunities for, and do not  
            unduly constrain, housing development.

          3)Requires cities and counties located within the territory of a  
            metropolitan planning organization (MPO) to 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. 

          4)Requires, prior to each housing element revision, that each  
            council of governments (COG), in conjunction with HCD, prepare  
            a regional housing needs assessment (RHNA) and allocate to  
            each jurisdiction in the region its fair share of the housing  
            need for all income categories.  Where a COG does not exist,  
            HCD determines the local share of the region's housing need. 

          5)Divides the RHNA into the following income categories:

             a)   Very low-income (50% or lower of area median income);

             b)   Low-income (80% or lower of area median income);

             c)   Moderate-income (between 80% and 120% of area median  
               income); and,

             d)   Above moderate-income (exceeding 120% area median  
               income).










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          6)Requires housing elements to include an inventory of land  
            suitable for residential development that identifies enough  
            sites that can be developed for housing within the planning  
            period to accommodate the jurisdiction's entire share of the  
            RHNA. 


          7)Allows a jurisdiction to do either of the following in order  
            to show that a site is adequate to accommodate some portion of  
            its share of the RHNA for lower-income households:

             a)   Provide an analysis demonstrating that the site is  
               adequate to support lower-income housing development at its  
               zoned density level, and requires the analysis to include,  
               but not be limited to, factors such as market demand,  
               financial feasibility, or information based on development  
               project experience within a zone or zones that provide  
               housing for lower-income households; or

             b)   Zone the site at the jurisdiction's "default" density  
               level.


          8)Establishes the following "default" density levels for  
            purposes of establishing a site's adequacy for supporting  
            lower-income housing development:


               a)     30 units per acre for metropolitan jurisdictions,  
                 generally defined as any city or county (except for  
                 jurisdictions of less than 25,000 persons) in a  
                 Metropolitan Statistical Area (MSA) with a population of  
                 two million persons or greater and any city or county  
                 over 100,000 persons in any size MSA.

               b)     20 units per acre for suburban jurisdictions,  
                 generally defined as cities and counties in an MSA of  
                 less than two million persons (except for jurisdictions  
                 over 100,000 persons) and jurisdictions under 25,000  
                 persons in larger MSAs. 
               c)     15 units per acre for incorporated cities within  
                 non-metropolitan counties and for non-metropolitan  
                 counties that have micropolitan areas (i.e., Del Norte,  
                 Humboldt, Lake, Mendocino, Nevada, Tehama, and Tuolumne  
                 Counties).








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               d)     10 units per acre for unincorporated areas in all  
                 non-metropolitan counties.

           FISCAL EFFECT  :  This bill is keyed fiscal.

          COMMENTS  :   

           1)Purpose of this bill  .  This bill would require, until December  
            31, 2023, a county that is in the San  
            Francisco-Oakland-Fremont, California MSA that has a  
            population of less than 400,000 to be considered suburban for  
            purposes of determining the densities appropriate to  
            accommodate housing for lower-income households.  The bill  
            also requires a city that has a population of less than  
            100,000 and is incorporated within that county to be  
            considered suburban, for the same purposes of determining the  
            densities appropriate to accommodate housing for lower-income  
            households.  The practical application of this bill would  
            affect the unincorporated area of Marin County, as well as two  
            cities in Marin - Novato and San Rafael.
             
             This bill is author-sponsored.

           2)Housing element requirements  .  Every local government is  
            required to prepare a housing element as part of its general  
            plan.  The housing element process starts when HCD determines  
            the number of new housing units a region is projected to need  
            at all income levels (very low-, low-, moderate-, and  
            above-moderate income) over the course of the next housing  
            element planning period to accommodate population growth and  
            overcome existing deficiencies in the housing supply.  This  
            number is known as the regional housing needs assessment.  The  
            COG for the region, or HCD for areas with no COG, then assigns  
            a share of the RHNA number to every city and county in the  
            region based on a variety of factors.
             
             In preparing its housing element, a city or county must show  
            how it plans to accommodate its share of the RHNA.  The  
            housing element must include an inventory of sites already  
            zoned for housing.  If a community does not have enough sites  
            within its existing inventory of residentially zoned land to  
            accommodate its entire RHNA, then the community must adopt a  
            program to rezone land within the first three years of the  
            planning period. 








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            Cities and counties are required to demonstrate that sites are  
            adequate to accommodate housing for each income group based on  
            the zoning after taking into consideration individual site  
            factors such as property size, existing uses, environmental  
            constraints, and economic constraints.  With respect to the  
            zoning, density can be used as a proxy for affordability.  
            Jurisdictions may establish the adequacy of a site for very  
            low- or low-income housing by showing that it is zoned at the  
            "default" density (also referred to as the Mullin density).  
            These densities range from 10 to 30 units per acre depending  
            on the type of jurisdiction.  Jurisdictions may also include  
            sites zoned at lower densities by providing an analysis of how  
            the lower density can accommodate the need for affordable  
            housing.  

           3)Default density in statute .  In 2003, HCD convened a Housing  
            Element Working Group (HEWG), after several lengthy and  
            divisive legislative battles over changes to housing element  
            law.  The broad-based group included representatives from  
            local government, COGs, the for-profit and non-profit  
            development community, and affordable housing advocacy groups.  
             
             
             The HEWG met from June through November of 2003, and reached  
            consensus on reform proposals in three major areas:  the  
            regional housing needs allocation process, increasing housing  
            development certainty, and the identification of adequate  
            sites. The bills that implemented the reform proposals  
            represented a consensus agreement and received broad  
            bi-partisan support throughout the legislative process. One of  
            these bills, AB 2348 (Mullin), Chapter 724, Statutes of 2004,  
            amended housing element law by clarifying the land inventory  
            requirements to provide local governments more certainty about  
            the statutory requirements.  Amongst other things, AB 2348  
            established the default densities, also known as "Mullin"  
            densities, for affordable housing sites.  

           4)Author's statement  .  According to the author, "AB 1537 seeks  
            to designate Marin as suburban for purposes of its housing  
            element default density in the next housing element cycle.   
            With a population of 250,000 it is an anomaly that Marin is  
            designated as metropolitan.   This designation will be a more  
            appropriate reflection of the existing character of the county  
            and will help focus the discussions over affordable housing  








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            development to the most relevant issues.  It is important to  
            note that affordable housing developers and the Association of  
            Bay Area Governments (ABAG) support AB 1537.  The bill would  
            not change in any way the number of units the county must zone  
            for, would only apply for the next housing element cycle, and  
            there will be reporting to the Legislature as well as the  
            Department of Housing and Community Development."

           5)Marin designations  .  Marin County is rural and suburban in  
            nature with an aggregate population of about 252,000, and is  
            separated from San Francisco by a body of water and includes  
            thousands of acres of land in open space preserves.  It is  
            included in the San Francisco MSA and is considered  
            metropolitan with a default density of 30 dwelling units per  
            acre.  In addition, unlike cities in suburban counties that  
            are also considered suburban if under 100,000 in population,  
            cities in metropolitan counties are only considered suburban  
            if under 25,000 in population.  Marin County and its cities  
            with a population greater than 25,000 have the same default  
            density as downtown San Francisco or Sacramento.

            The nine incorporated cities with a population of less than  
            25,000 have a default density of 20 dwelling units per acre,  
            but the unincorporated county areas around these incorporated  
            cities are designated metropolitan with a default density of  
            30 dwelling units per acre.

           6)Related legislation  .  The introduced version of AB 2508  
            (Caballero), Chapter 390, Statutes of 2010, allowed a local  
            agency to petition HCD for a jurisdiction reclassification if  
            its classification under Housing Element Law jeopardizes the  
            agency's ability to meet threshold requirements for funding  
            programs promoting infill development.  AB 2508 was sponsored  
            by the City of Salinas, which at the time had a population  
            just under 150,000, and was classified as a metropolitan  
            jurisdiction under the Mullin Densities formula.  As such, an  
            infill project in Salinas would have to be built at 30 units  
            per acre or more in order to be eligible under the infill  
            program.  The author and sponsor argued that Salinas lacked  
            the overall infrastructure to develop at a density above 30  
            units per acre, and that Salinas should not be designated as a  
            metropolitan jurisdiction because it was not a central city or  
            an urban 

          core.  Salinas was unable to compete in the first two funding  








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            rounds under Infill Incentive Grants Program because it did  
            not have any projects that met the density requirements.
             
             The introduced version of AB 745 (Levine, 2013) would have  
            authorized a city or county to request the appropriate council  
            of governments to adjust a density to be deemed appropriate if  
            it is inconsistent with the city's or county's existing  
            density.  The bill was subsequently amended to deal with a  
            different topic.

           7)Arguments in support  .  Supporters argue that this bill allows  
            these suburban and rural communities in Marin the flexibility  
            to zone land suitable for housing in a way that fits within  
            the communities' individual circumstances while still  
            promoting affordable development.

           8)Arguments in opposition  .  Opponents argue that reduction of  
            the default density without mitigation that will help ensure  
            that affordable housing will be developed at the lower  
            densities will make it difficult or impossible to build  
            housing for lower-income families in need.
                
            9)Double-referral  .  This bill is double-referred to the  
            Committees on Housing and Community Development Committee and  
            will be heard in that Committee on April 30, 2014.

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          Association of Bay Area Governments
          BRIDGE Housing Corporation
          California State Association of Counties
          Center for Sustainable Neighborhoods
          Eden Housing
          Marin County Board of Supervisors
          Marin County Council of Mayors and Council Members
          Non-Profit Housing Association of Northern California
          Domus Development
          EAH Housing

           Opposition 
           
          Western Center on Law and Poverty
          California Rural Legal Assistance Foundation








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