BILL ANALYSIS Ó AB 744 Page 1 Date of Hearing: May 27, 2015 ASSEMBLY COMMITTEE ON APPROPRIATIONS Jimmy Gomez, Chair AB 744 (Chau) - As Amended March 26, 2015 ----------------------------------------------------------------- |Policy |Housing and Community |Vote:|6 - 1 | |Committee: |Development | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | |Local Government | |7 - 2 | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: YesReimbursable: Yes SUMMARY: This bill requires a city or county, upon the request of a developer that receives a density bonus, to eliminate the minimum onsite parking requirements on the development that is AB 744 Page 2 within one-half mile of a major transit stop, is a senior housing development, or is a special needs housing development. FISCAL EFFECT: Minor, non-reimbursable costs to cities and counties. COMMENTS: 1)Purpose. According to the author, "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 AB 32 (The California Global Solutions Act of 2006) and SB 375 (Steinberg, Chapter 728, Statutes of 2008) 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." 2)Background. The density bonus law is designed 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. AB 744 Page 3 The density bonus law was originally enacted in 1979, but has been changed numerous times. In 2004, the Legislature made significant changes to the law, including reducing the number of housing units required at below market rate in order to qualify for a density bonus. Currently, developers are entitled to benefits under the density bonus law when they include one or more affordable housing unit(s) as part of an otherwise market-rate project. A housing project with 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. 3)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. 4)Arguments in Opposition. The League of California Cities writes that the 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. Analysis Prepared by:Jennifer Swenson / APPR. / (916) 319-2081 AB 744 Page 4