BILL ANALYSIS Ó
AB 2222
Page 1
Date of Hearing: April 30, 2014
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
Ed Chau, Chair
AB 2222 (Nazarian) - As Amended: April 22, 2014
SUBJECT : Housing: Density Bonus.
SUMMARY : Prohibits an applicant from receiving a density bonus
unless the proposed housing development or condominium project
would maintain the number and proportion of affordable housing
units within the proposed development, and increases the
required affordability from 30 years or longer to 55 years or
longer. Specifically, this bill:
1)Prohibits an applicant from receiving a density bonus or any
other incentives or concessions if a proposed housing
development or condominium project is located on any property
that includes a parcel on which dwelling units have, at any
time in the five-year period preceding the application, been:
a) Occupied by lower- or very low-income households;
b) Subject to a recorded covenant, ordinance, or law
that restricts rents to levels affordable to persons and
families of lower- or very low-income; or
c) Subject to any other form of rent or price control
through a public entity's valid exercise of its police
power.
1)Provides that the above prohibition shall not apply if the
proposed housing development or condominium project would
maintain the number and proportion of affordable housing units
within the development, as well as include the additional set
aside of affordable units under the density bonus formula.
2)Increases the affordability requirement of all low- and very
low-income units that qualified an applicant for a density
bonus from 30 years or longer to 55 years or longer.
EXISTING LAW:
1)Defines "density bonus" as a density increase over the
otherwise maximum allowable residential density as of the date
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of application by the applicant to the local government.
2)Requires all cities and counties to adopt an ordinance that
specifies how they will implement state density bonus law.
3)Requires local governments to grant a density bonus when an
applicant for a housing development of five or more units
seeks and agrees to construct a project that will contain at
least any one of the following:
a) 10% of the total units for lower-income households;
b) 5% of the total units for very-low income
households;
c) A senior citizen housing development or mobilehome
park; and,
d) 10% of the units in a common-interest development
(CID) for moderate-income households.
4)Provides that, when an applicant for approval to convert
apartments to a condominium project agrees to provide at least
33% of the total units of the proposed condominium project to
persons and families of low- or moderate-income, or 15% of the
total units of the proposed condominium project to
lower-income households, and agrees to pay for the reasonably
necessary administrative costs incurred by a local government,
the local government must either grant a density bonus or
provide other incentives of equivalent financial value.
5)Provides that a local government, when considering an
application for approval to convert apartments to a
condominium project, may place reasonable conditions on the
granting of a density bonus or other incentives.
6)Provides that the density bonus for low-, very low-, and
moderate-income units increase incrementally according to a
set formula.
7)Requires that the applicant agree to continued affordability
of all low- and very low-income unites that qualified the
applicant for the density bonus for at least 30 years.
8)Provides a 15% density bonus to the developer of a market-rate
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housing project who donates land to a local government that
could accommodate housing for very low-income households equal
to at least 10% of the number of units in the development,
subject to certain conditions. For each one percent increase
above the 10%, the density bonus increases by 1% up to a
maximum combined density increase of 35%.
9) Requires that applicants receive incentives or concessions
unless the local government makes a written finding, based
upon substantial evidence, that
a) The concession or incentive is not needed to provide the
affordable housing;
b) The concession or incentive would have a specific
adverse impact on health and safety, the environment, or an
historical resource; or
c) The concession or incentive would be contrary to state
or federal law.
10) Specifies that concessions or incentives may include the
following:
a) A reduction in site development standards or a
modification of zoning code requirements or architectural
design requirements that exceed the minimum building
standards.
b) Approval of mixed-use zoning in conjunction with the
housing project if commercial, office, industrial, or other
land uses will reduce the cost of the housing development
and are compatible with the project and the surrounding
area.
c) Other regulatory incentives or concessions proposed by
the developer or the local government that result in
identifiable, financially sufficient, and actual cost
reductions.
1) Requires local governments to provide applicants with the
following number of incentives or concessions:
a) One incentive or concession for projects that
include at least 10% of the total units for lower-income
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households, at least 5% for very low-income households,
or at least 10% for persons and families of
moderate-income in a common interest development.
b) Two incentives or concessions for projects that
include at least 20% of the total units for lower-income
households, at least 10% for very low-income households,
or at least 20% for persons and families of
moderate-income in a common interest development.
c) Three incentives or concessions for projects that
include at least 30% of the total units for lower-income
households, at least 15% for very low-income households,
or at least 30% for persons and families of
moderate-income in a common interest development.
1)Authorizes an applicant to initiate judicial proceedings if
the local government refuses to grant a requested density
bonus, incentive, or concession. If a court finds that the
refusal to grant the request is in violation of density bonus
law, the court will award the plaintiff reasonable attorney's
fees and costs.
2)Prohibits a local government from applying any development
standard that will have the effect of precluding the
construction of housing that qualifies for a density bonus at
the densities or with the concessions or incentives required
by density bonus law.
3)Authorizes a developer to request a waiver or reduction of
development standards that will have the effect of physically
precluding the construction of housing that qualifies for a
density bonus at the densities or with the concessions or
incentives required by density bonus law.
4)Requires the local government to grant either an additional
density bonus or and additional concession or incentive when
the applicant proposes to include a child care facility in or
adjacent to the housing development.
5)Provides that, upon the developer's request, the local
government may not require parking standards greater than the
following:
a) Zero to one bedrooms: one onsite parking space;
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b) Two to three bedrooms: two onsite parking spaces; and
c) Four or more bedrooms: two and one-half parking spaces.
(Government Code Sections 65915- 65915.5)
FISCAL EFFECT : None.
COMMENTS :
To help address California's affordable housing shortage, the
Legislature enacted density bonus law to encourage the
development of more affordable units. Under current law, a city
or county must grant a density bonus, concessions and
incentives, prescribed parking requirements, as well as waivers
of development standards upon a developer's request when the
developer includes a certain percentage of affordable housing in
a housing development project.
Density bonus law was originally enacted in 1979, but has been
changed numerous times since. SB 1818 (Hollingsworth), Chapter
928, Statutes of 2004, made significant changes to the law,
including reducing the number of housing units required to be
provided at below market rate in order to qualify for a density
bonus. Developers are entitled to benefits under the density
bonus law when they include as few as one affordable housing
unit as part of an otherwise market-rate project. A housing
project with only 5% very low-income housing is entitled to a
20% density bonus, one concession, unlimited waivers from
development standards, and reduced parking standards for the
entire project.
AB 2222 addresses the preservation of existing affordable units.
Under existing law, a developer proposing to develop a
residential project, or an applicant for approval to convert
apartments to a condominium project, qualifies for a density
bonus if the proposed project has a specific percentage of units
set-aside for affordable housing. This bill would prohibit an
applicant from receiving a density bonus, incentive, or
concession if a proposed housing development or condominium
project is located on property where dwelling units have, at any
time in the five-year period preceding the application, been
occupied by very-low or lower-income households or subject to
rent control.
AB 2222
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However, an applicant may overcome this prohibition by, in
addition to the percentage of units already set-aside for
affordable housing under the density bonus formula, replacing
all existing affordable units with units of equivalent
affordability and size and/or type. The Committee may wish to
accept amendments, listed below under "Committee Amendments",
that provides a 100% affordable project must only replace all
existing affordable units. Additionally, AB 2222 increases the
required affordability from 30 years or longer to 55 years or
longer for all affordable units that qualified an applicant for
a density bonus.
Purpose of the bill:
Adequate and affordable housing is an issue of statewide concern
but, according to the author, the change made to density bonus
law by SB 1818 had the reverse effect and resulted in fewer
affordable units. AB 2222 ensures that affordable units are
preserved when a developer proposes to demolish a site and the
new proposal is to replace the prior structure with a new
residential structure by ensuring that the project begins with
the same number of affordable units. AB 2222 also increases the
affordability requirement from 30 years to 55 years for all
affordable units that qualified an applicant for a density
bonus, which is consistent with other state and local programs
and promotes the supply of affordable units for years to come.
Committee Amendments:
The Committee may wish to accept the following amendments:
1) On page 5, in line 4, strike out "." and insert:
unless all of the units in the development are affordable
to and occupied by lower-income households.
2) On page 16, in line 7, strike out "." and insert:
unless all of the units in the development are affordable
to and occupied by lower-income households.
Double referred: If AB 2222 passes this committee, the bill will
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be referred to the Committee on Local Government.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file
Opposition
None on file
Analysis Prepared by : Rebecca Rabovsky / H. & C.D. / (916)
319-2085