BILL ANALYSIS Ó SB 674 SENATE COMMITTEE ON ENVIRONMENTAL QUALITY Senator Jerry Hill, Chair 2013-2014 Regular Session BILL NO: SB 674 AUTHOR: Corbett AMENDED: January 6, 2014 FISCAL: Yes HEARING DATE: January 15, 2014 URGENCY: No CONSULTANT: Joanne Roy SUBJECT : CEQA EXEMPTION: HOUSING PROJECTS SUMMARY : Existing law under the California Environmental Quality Act (CEQA), requires lead agencies with the principal responsibility for carrying out or approving a proposed discretionary project to prepare a negative declaration, mitigated negative declaration, or environmental impact report (EIR) for this action, unless the project is exempt from CEQA. (Public Resources Code §21000 et seq.). A residential project on an infill site is exempted from CEQA under specified conditions. "Residential" is defined to be either: 1) Residential units only; or 2) Residential units and primarily neighborhood-serving goods, services, or retail uses that do not exceed 15% of the total project floor area. (§21159.24). This bill revises the residential infill exemption by increasing the amount of allowable neighborhood-serving goods, services, or retail uses from 15% of the total project floor area to 25% of the total building square footage. COMMENTS : 1) Purpose of Bill . According to the author, "Over the last decade, smart growth planning principles have continued to SB 674 Page 2 encourage the integration of residents' day-to-day needs within close proximity of those same residences. This type of design encourages lower vehicle miles traveled (VMT) due to local residents' ability to access these services by walking or biking instead of traveling by car. Lowering VMT improves air quality, reduces greenhouse gas emissions, lessens the need for new roads and extends the life of existing roads. One method pursued by many local jurisdictions to implement these VMT-reducing policies in an urbanized setting is to encourage building design that incorporates ground-floor neighborhood-servicing uses on the bottom floor, with residential housing on the floors above. This means that for projects using this design, the current 15% limit for neighborhood-serving uses confines the use of this exemption to only those projects that are at least seven stories tall. This is much taller than many jurisdictions allow, even though the project would otherwise meet all other infill and environmental review requirements. An increase to 25% of the total building square footage would allow for a four-story project of this type to meet the exemption requirements." 2) Brief background on CEQA . CEQA provides a process for evaluating the environmental effects of a project, and includes statutory exemptions as well as categorical exemptions in the CEQA guidelines. If a project is not exempt from CEQA, an initial study is prepared to determine whether a project may have a significant effect on the environment. If the initial study shows that there would not be a significant effect on the environment, the lead agency must prepare a negative declaration. If the initial study shows that the project may have a significant effect on the environment, then the lead agency must prepare an EIR. Generally, an EIR must accurately describe the proposed project, identify and analyze each significant environmental impact expected to result from the proposed project, identify mitigation measures to reduce those impacts to the extent feasible, and evaluate a range of reasonable alternatives to the proposed project. Prior to approving any project that has received an environmental review, an agency must make certain findings. If SB 674 Page 3 mitigation measures are required or incorporated into a project, the agency must adopt a reporting or monitoring program to ensure compliance with those measures. If a mitigation measure would cause one or more significant effects in addition to those that would be caused by the proposed project, the effects of the mitigation measure must be discussed but in less detail than the significant effects of the proposed project. 3) Revising infill provisions . SB 1925 (Sher), Chapter 1039, Statutes of 2002, consolidated provisions relating to housing, established a residential infill exemption, revised affordable housing exemptions, and revised certain definitions, terms and conditions. The SB 1925 residential infill exemption applies if certain conditions are met (e.g., project site is not more than four acres, project does not contain more than 100 residential units, project promotes higher density development). Under this exemption, "residential" is either: a) residential units only; or b) residential units and primarily neighborhood-serving goods, services, or retail uses that do not exceed 15% of the total project floor area. SB 375 (Steinberg), Chapter 728, Statutes of 2008, contains provisions in CEQA for certain projects that are consistent with a sustainable communities strategy or alternative planning strategy, including a provision where a residential or mixed-use project consists of at least 75% of the total building square footage for residential use (§21159.28). By increasing the SB 1925 residential infill exemption percentage from 15% to 25% for the allowable non-residential uses, SB 674 makes this provision more consistent with the percentage specified under SB 375. 4) Previous legislation . SB 674 is similar to SB 359 (Corbett), Chapter 415, Statutes of 2013, as it was heard in this committee last year. Subsequent amendments adopted in the Assembly deleted the CEQA-related contents of SB 359 to instead provide money for California Air Resources Board projects aimed at encouraging the deployment of SB 674 Page 4 zero-emission and hybrid vehicles. AB 931 (Dickinson) (2011), relating to a transit proximity project and included a revision of a CEQA exemption for residential infill by increasing the amount of allowable neighborhood-serving goods, services, or retail uses. AB 931 failed in Senate Environmental Quality Committee (1-5). SUPPORT : American Planning Association, California Chapter California State Association of Counties Urban Counties Caucus OPPOSITION : None on file