BILL ANALYSIS                                                                                                                                                                                                    



                                                                     AB 744


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          Date of Hearing:  April 29, 2015 


                       ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT


                              Brian Maienschein, Chair


          AB 744  
          (Chau) - As Amended March 26, 2015


          SUBJECT:  Planning and zoning:  density bonuses.


          SUMMARY:  Requires a city or 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)Prohibits, upon the request of the developer that receives a  
            density bonus, a city, county, or city and county from  
            imposing a minimum onsite parking requirement on a development  
            that meets any 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 development.










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          2)Allows a city, county, or city and county to impose a maximum  
            onsite parking requirement for a development.


          3)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. 


          4)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% of  
            their area farther than one-half mile from the stop or  
            corridor and if not more than 10% of the residential units or  
            100 units, whichever is less, in the project are farther than  
            one-half mile from the stop or corridor.

          5)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. 

          6)Provides that if the Commission on State Mandates determines  
            that this act contains costs mandated by the state, then  
            reimbursement shall be made to local agencies and school  
            districts for those costs.


          EXISTING LAW:  


          1)Defines "major transit stop" as a site containing an existing  
            rail transit station, a ferry terminal served by either a bus  








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            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.  

           2)Requires all cities and counties to adopt an ordinance that  
            specifies how they will implement state density bonus law.

          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.            
                                                                            
                    
          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  








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               households in a CID;

             b)   Two incentives or concessions if the project includes at  
               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. 

          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.
          FISCAL EFFECT:  This bill is keyed fiscal and contains a  
          state-mandated local program.


          





          COMMENTS:  










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          1)Bill Summary.  This bill makes a number of changes to density  
            bonus law and the elimination of parking minimum requirements  
            for certain housing projects. This bill requires a city or  
            county, upon the request of a developer that receives a  
            density bonus, to eliminate the minimum parking requirements  
            for the development, if the development 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 development.  


            The bill is author-sponsored.  


          2)Author's Statement.  According to the author, "AB 32:  The  
            California Global Solutions Act of 2006 requires California to  
            reduce greenhouse gas emissions (GHG) 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 their cars and onto public  
            transit.  Cities and counties are required to adopt  
            sustainable communities strategies to show how development  
            will support reduction in GHG emissions.  Some cities and  
            counties have adopted policies like eliminating minimum  
            parking requirements for projects that are close to transit  
            and where demand for parking spaces is low.


            "In some cases, cities and counties apply minimum parking  
            standards to housing development that do 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.  AB 744  
            aligns local land use decisions more closely with the goals of  








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            AB 32 and SB 375 by reducing the parking required for projects  
            that are close to transit or serve individuals who have fewer  
            cars.  The bill also provides another incentive to developers  
            to include affordable units in their development in turn for a  
            reduction in parking requirements, where those reductions make  
            sense."


          3)Density Bonus.  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% of 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.  

          4)Policy Considerations.  The American Planning Association,  
            California Chapter (APA) 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  








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            issues: a) Whether the bill should include a parking study  
            completed by the developer to support the need for reduced  
            parking; b) Whether the definition of a transit stop is too  
            broad; c) Whether the definition of special needs housing is  
            too broad; and, d) Whether it is clear that to qualify for the  
            reduced parking the project must include affordable units.      


          5)Arguments in Support. Supporters argue that outdated,  
            one-size-fits all minimum parking requirements increase  
            development costs, and therefore, housing and rental prices,  
            by distorting the market for parking, will instead allow the  
            developer to build to actual parking demand and thereby allow  
            renters and homebuyers to save money on their units.


          6)Arguments in Opposition.  The League of California Cities  
            writes that density bonus law already offers two tiers of  
            parking incentives to developers: a) Statutory maximums  
            commencing at one parking space per bedroom; and, b) The  
            ability to seek additional concessions to further reduce  
            parking below the maximums, and that the League is unclear why  
            the existing provisions are inadequate.


          7)Double-Referral.  This bill was heard by the Housing and  
            Community Development Committee on April 15, 2015, where it  
            passed with a 6-1 vote.


          REGISTERED SUPPORT / OPPOSITION:




          Support


          American Planning Association, California Chapter (if amended)








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          California Apartment Association


          California Housing Consortium


          Circulate San Diego


          Council of Infill Builders


          Domus Development


          Local Government Commission




          Opposition


          League of California Cities (unless amended)




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
















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