BILL ANALYSIS Ó AB 744 Page 1 Date of Hearing: April 15, 2015 ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT Ed Chau, Chair AB 744 (Chau) - As Amended March 26, 2015 SUBJECT: Planning and zoning: density bonuses SUMMARY: Requires a city, county, or city and county, upon the request of a developer that receives a density bonus, to eliminate the minimum parking requirements for the development, if it meets specified criteria. Specifically, this bill: 1)Requires a city, county, or city and county, upon the request of a developer that receives a density bonus, to eliminate the minimum parking requirements for the development, if it meets one of the following criteria: a) The development is located within one-half mile of a "major transit stop"; b) The development is a senior citizen housing development; or c) The development is a special needs housing development. AB 744 Page 2 1)Allows a city, county, or city and county to impose maximum onsite parking requirements for a development. 2)Defines a "major transit stop" to mean a site containing an existing rail transit station, a ferry terminal served by either a bus or rail transit service, or the intersection of two or more major bus routes with a frequency of service interval of 15 minutes or less during the morning and afternoon peak commute periods, includes a major transit stop that is included in the applicable regional transportation plan. 3)Specifies that a project is considered to be within one-half mile of a major transit stop or high-quality transit corridor if all parcels within the project have no more than 25 percent of their area farther than one-half mile from the stop or corridor and if not more than 10 percent of the residential units or 100 units, whichever is less, in the project are farther than one-half mile from the stop or corridor. 4)Clarifies that, when calculating density bonus amounts, all calculations that result in fractional numbers must be rounded up including but not limited to maximum allowable density, total affordable units, and the total amount of the density bonus. EXISTING LAW: 1)Defines "major transit stop" as a site containing an existing rail transit station, a ferry terminal served by either a bus or rail transit service, or the intersection of two or more major bus routes with a frequency of service interval of 15 minutes or less during the morning and afternoon peak commute periods (Public Resources Code Section 21064.3). 2)Requires all cities and counties to adopt an ordinance that AB 744 Page 3 specifies how they will implement state density bonus law (Government Code Section 65915). 3)Requires cities and counties 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) Ten percent of the total units for lower income households; b) Five percent of the total units of a housing for very low income households; c) A senior citizen housing development or mobilehome park; and, d) Ten percent of the units in a common-interest development (CID) for moderate-income households. (Government Code Section 65915) 1)Requires cities and counties to provide an applicant for a density bonus concessions and incentives based on the number of below market-rate units included in the project as follows: a) One incentive or concession if the project includes at least 10% of the total units for low-income households, 5% for very low-income households, or 10% for moderate-income households in a CID; b) Two incentives or concessions if the project includes at AB 744 Page 4 least 20% of the total units for low-income households, 10% for very low-income households, or 20% for moderate-income households in a CID; and c) Three incentives or concessions if the project includes at least 30% of the total units for low-income households, 15% for very low-income households, or 30% for moderate-income households in a CID. (Government Code Section 65915) 2)Provides that, upon the developer's request, the local government may not require parking standards greater than the following (the developer may, however request additional parking incentives or concessions): a) Zero to one bedrooms: one onsite parking space; b) Two to three bedrooms: two onsite parking spaces; and c) Four or more bedrooms: two and one-half parking spaces. (Government Code Section 65915) FISCAL EFFECT: Unknown. COMMENTS: Background : According to the Urban Land Institute's Transportation for a New Era: Growing more Sustainable Communities (2009) study "the more that housing, jobs, and services spread out, the harder it becomes to access them without an automobile. Only with more compact development and more transportation options - rapid AB 744 Page 5 transit and walkable designs - is it feasible to achieve national goals for economic productivity and environmental sustainability. What's more, Americans increasingly demand more compact product types. Consumer preference surveys and studies of housing values show that there is an unmet demand for walkable neighborhoods. Transit use is up and voters have repeatedly approved referendums raising taxes or approving bond issues for expanded rapid transit service. But the supply of affordable compact, mixed-use, transit-oriented development products has not kept pace. Studies show that compact development results in fewer miles traveled, reducing fuel consumption and emissions. In areas where housing, employment, shopping, or services are close by - even in low-density places without high-quality transit service - people walk more. Compact development can reduce the cost of public infrastructure and encourage healthy habits such as incorporating walking and biking into daily routines. With transportation options, families save. Each automobile a household maintains costs it, annually, between $5,500 for a small sedan driven 10,000 miles a year to nearly $12,000 for an SUV driven 20,000 miles a year. The compact development model can be adapted to urban, suburban, and rural contexts. New communities can develop in more compact ways, and many existing suburban areas are ready to be revamped into a more concentrated, walkable, and mixed-use "village" form. However, in many communities, development around transit and other likely locations is stymied by zoning restrictions and parking requirements." Sustainable development goals: California has taken steps over the last several years to establish programs and policies to help incentivize regional and local planning efforts. AB 32: The California Global Solutions Act of 2006 requires California to reduce greenhouse gas (GHG) emissions to 1990 levels by 2020. SB 375 (Steinberg) (2008) supports the state's climate action goals to reduce GHG emissions through coordinated transportation and land use planning with the goal of more sustainable communities. A key component of reducing GHG emissions is moving people out of AB 744 Page 6 their cars and onto public transit. Cities and counties are required to adopt sustainable community strategies (SCS) to show how development will support reduction in GHG emissions. In some cases, cities and counties apply minimum parking standards to housing developments that may not reflect the demand from tenants for parking. These projects may be close to transit stations or home to seniors or individuals with special needs who drive less frequently and have fewer vehicles. Parking spaces, which sometimes go unused, can significantly increase the cost of construction. Certain types of parking, podium or subterranean, can increase parking costs by 6% or more relative to other types of parking. In cases where projects are 100% affordable or include affordable units, parking spaces needlessly drive up the cost of the project. 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. Purpose of this bill : According to the author, AB 744 aligns local land use decisions more closely with the goals of AB 32 and SB 375 by reducing the parking required for housing developments that include affordable units and are close to transit or are home to seniors or special needs individuals. Much of California's existing parking requirements are based on low-density and single-purpose land use designations. Parking is costly to build and maintain and can increase the cost of projects in existing development areas. AB 744 Page 7 Support if amended : The American Planning Association: California Chapter has a support on AB 744. According to APA, "generally, the narrower focus from the previous parking minimum legislation is appreciated and APA shares the author's goal to encourage infill housing by not overburdening development near active transit or other parking options. However, APA does have questions and concerns about the precise qualifying terms and the supportive service component included in the bill." APA's concerns include the following issues 1) whether the bill should include a parking study completed by the developer to support the need for reduced parking, 2) whether the definition of a transit stop is too broad, 3) whether the definition of special needs housing is too broad, and 4) whether it is clear that to qualify for the reduced parking the project must include affordable units. Staff comments : The author has indicated the intent of the bill is that only developers that include affordable units should be able to request that a local government eliminate the minimum parking requirement. The committee may wish to consider asking the author to clarify this provision. Double referred : This bill was also referred to the Local Government Committee where it will be heard should it pass out of this committee. REGISTERED SUPPORT / OPPOSITION: Support AB 744 Page 8 American Planning Association (Support if Amended) California Housing Consortium Circulate San Diego Domus Development Local Government Commission Opposition None on file. Analysis Prepared by:Lisa Engel / H. & C.D. / (916) 319-2085