BILL ANALYSIS Ó AB 1537 Page 1 ASSEMBLY THIRD READING AB 1537 (Levine) As Amended April 21, 2014 Majority vote HOUSING 7-0 LOCAL GOVERNMENT 8-0 ----------------------------------------------------------------- |Ayes:|Chau, Beth Gaines, |Ayes:|Achadjian, Levine, | | |Gordon, Brown, | |Bradford, Gordon, | | |Maienschein, Quirk-Silva, | |Melendez, Mullin, Rendon, | | |Yamada | |Waldron | | | | | | ----------------------------------------------------------------- APPROPRIATIONS 17-0 ----------------------------------------------------------------- |Ayes:|Gatto, Bigelow, | | | | |Bocanegra, Bradford, Ian | | | | |Calderon, Campos, | | | | |Donnelly, Eggman, Gomez, | | | | |Holden, Jones, Linder, | | | | |Pan, Quirk, | | | | |Ridley-Thomas, Wagner, | | | | |Weber | | | | | | | | ----------------------------------------------------------------- SUMMARY : Creates a pilot program for Marin County to utilize a "suburban" default density standard for accommodating its share of affordable housing. Specifically, this bill : 1)Specifies that, for purposes of determining a jurisdiction's "default density" for accommodating affordable housing, if a county that is in the San Francisco-Oakland-Fremont, California Metropolitan Statistical Area (MSA) has a population of less than 400,000, that county is considered suburban. If this county includes an incorporated city that has a population of less than 100,000, this city is also considered suburban. 2)Provides that this classification shall apply to a housing element revision cycle that is in effect from July 1, 2014, to December 31, 2023, inclusive. AB 1537 Page 2 3)Requires that all jurisdictions affected by this legislation report to the Assembly Housing and Community Development Committee, the Senate Transportation and Housing Committee, and the Department of Housing and Community Development (HCD) regarding its progress in developing very low- and low-income housing. The report must be provided twice, once, on or before December 31, 2019, and a second time, on or before December 31, 2023. The report is comprised of information that is already required as part of all local governments' annual Housing Element Progress Report to HCD. FISCAL EFFECT : According to the Assembly Appropriations Committee, minor, non-reimbursable costs to the affected local agencies to produce the required reports and make the necessary administrative adjustments. COMMENTS : Purpose of the bill: According to the author, this bill will refine the default density housing formula to allow for suburban designations for the lower population in Marin County. This bill is intended to help create momentum for more affordable housing development in areas that have had challenges in getting projects off the ground due to concerns about high density development. Housing Element Working Group: This bill will impact reforms to housing element law that came out of the Housing Element Working Group (HEWG). HEWG, which was convened by HCD in 2003, was a broad-based group that included representatives from local government, councils of governments (COGs), the for-profit and non-profit development community, and affordable housing advocacy groups. HCD proposed the group after several lengthy and divisive Legislative battles over changes to housing element law. The HEWG met from June through November 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. The bills did not receive AB 1537 Page 3 any "no" votes. 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. Default density: 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 (RHNA). 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. 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. This bill was introduced in response to concerns arising out of AB 1537 Page 4 Marin County. Marin County is included in an MSA of two million persons or greater. Several cities within the County have populations of less than 25,000, and are already considered "suburban" under the default density standards. This bill would reduce the default density from 30 units per acre to 20 units per acre in the cities of Novato and San Rafael, and in unincorporated Marin County for one housing element cycle. Arguments in support: Supporters of the bill argue that the default density standards are in need of refinement due to inconsistent outcomes. They explain that certain cities and counties within larger multi-county MSAs are considered "metropolitan" under the current default density standards despite being suburban or rural in character. Specifically, supporters point to the fact that unincorporated Sonoma County, which is in a less populous MSA, is considered "suburban" despite having a higher population than unincorporated Marin County. Supporters also point to the fact that Marin has the same default density standard as San Francisco due to its inclusion in the same MSA. Supporters contend that Marin County has difficulty zoning for a default density of 30 units per acre, which impacts their ability to promote affordable housing. In this view, reducing the default density would create momentum for more affordable housing projects by addressing local concerns about high-density housing. Supporters argue that the bill would allow specific communities more flexibility to zone land suitable for affordable housing in a way that fits within the communities' individual circumstances. Arguments in opposition: Opponents of the bill point to the fact that default densities are not mandatory. In establishing the adequacy of sites for affordable housing, local governments can either zone the site at the default density or provide HCD with an analysis demonstrating that the site is adequate to support lower-income housing development at its zoned density level, including 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. Opponents also point to the issue that default density standards were instituted after a lengthy working group process involving AB 1537 Page 5 a diverse group of stakeholders. In opponents' view, the bill is a result of local opposition to affordable housing, and legislating to accommodate this narrow opposition is the wrong direction. Opponents point to the current lack of availability of affordable housing for low- and moderate-income individuals and families, and contend that this bill will have the effect of making it even more costly to develop affordable housing in the areas affected by the bill. Analysis Prepared by : Rebecca Rabovsky / H. & C.D. / (916) 319-2085 FN: 0003478