BILL ANALYSIS                                                                                                                                                                                                    Ó

          |SENATE RULES COMMITTEE            |                        AB 744|
          |Office of Senate Floor Analyses   |                              |
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                                   THIRD READING 

          Bill No:  AB 744
          Author:   Chau (D) and Quirk (D), et al.
          AmendedAmended:8/18/15 in Senate
          Vote:     21  

           SENATE TRANS. & HOUSING COMMITTEE:  7-4, 7/7/15
           AYES:  Beall, Allen, Leyva, McGuire, Mendoza, Roth, Wieckowski
           NOES:  Cannella, Bates, Gaines, Galgiani

           SENATE GOVERNANCE & FIN. COMMITTEE:  4-2, 7/15/15
           AYES:  Hertzberg, Beall, Hernandez, Lara
           NOES:  Nguyen, Moorlach
           NO VOTE RECORDED:  Pavley


           ASSEMBLY FLOOR:  52-24, 6/4/15 - See last page for vote

           SUBJECT:   Planning and zoning:  density bonuses

          SOURCE:    Author

          DIGEST:   This bill places a cap on the parking ratios that  
          local governments may impose on some affordable housing  
          developments upon the request of a developer.

          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 city, county, or city  
            and county.  

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

          3)Requires a city, county, or city and county to grant one  
            density bonus and incentives or concessions when an applicant  
            for a housing development seeks and agrees to construct a  
            housing development, excluding any units permitted by the  
            density bonus awarded, that will provide for at least any one  
            of the following:

             a)   Ten percent of the total units of a housing development  
               for lower income households;

             b)   Five percent of the total units of a housing development  
               for very low-income households;

             c)   A senior citizen housing development or a mobilehome  
               park that limits residency based upon age requirements for  
               housing for older persons; and

             d)   Ten percent of the total dwelling units in a common  
               interest development (CID) for persons and families of  
               moderate income, provided all the units in the development  
               are offered to the public for purchase. 

          1)Requires cities and counties to provide an applicant for  
            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  
               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  


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               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.

          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  

          This bill:

          1)Provides that when a developer agrees to include the maximum  
            number of very low- or low-income units under Density Bonus  
            Law within one-half mile of a major transit stop and with  
            unobstructed access to the major transit stop from the  
            development, then upon the request of the developer a city,  
            county, or city and county shall not impose a parking ratio,  
            inclusive of handicapped and guest parking, that exceeds 0.5  
            spaces per bedroom.

          2)Provides that if a development is 100% affordable to lower  
            income families then, upon the request of a developer, a city,  
            county, or city and county, the following parking ratios shall  
            apply for the development:

             a)   If the development is located within one-half mile of a  
               "major transit stop" and there is unobstructed access to  
               the major transit stop from the development, the ratio  
               shall not exceed 0.5 spaces per unit.  "Unobstructed  
               access" means a resident is able to walk to the major  
               transit stop without encountering natural or constructed  


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             b)   If the development is a for-rent housing development for  
               individuals who are 62 years of age or older, the ration  
               shall not exceed 0.5 spaces per unit.  The development  
               shall have either paratransit service or have unobstructed  
               access, within one half-mile, to fixed bus route service  
               that operates at least eight times per day.

             c)   If the development is a special needs housing  
               development, the ratio shall not exceed 0.3 spaces per  
               unit.  The development shall have either paratransit  
               service or have unobstructed access, within one half-mile,  
               to fixed bus route service that operates at least eight  
               times per day.

          1)Provides that this bill does not preclude a city, county, or  
            city and county from reducing or eliminating a parking  
            requirement for developments of any type or location.

          2)Allows a city, county, or city and county that conducted an  
            area-wide or jurisdiction-wide parking study within the last  
            seven years by an independent consultant to impose a higher  
            vehicular parking ratio than the one for 1) and 2) above, but  
            does not exceed the standard under Density Bonus Law.  The  
            study must be based on substantial evidence and include, but  
            not be limited to, an analysis of parking availability,  
            differing levels of transit access, walkability access to  
            transit services, the potential for shared parking, and the  
            effect of parking requirements on the cost of market-rate and  
            subsidized parking and the lower rates of car ownership for  
            low- and very-low-income individuals, including seniors and  
            special needs individuals.  Any new study shall be paid for by  
            the city, county, or city and county.  The city, county, or  
            city and county shall find that a higher parking ratio is  
            required based on a parking study completed in conformance  
            with this subparagraph. 

          Purpose of the bill.  In some cases, cities and counties apply  
          minimum parking standards to affordable housing developments  
          that do not reflect the demand from tenants for parking.  These  
          projects may be close to transit stations or home to seniors or  


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          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.  This bill  
          promotes affordable housing by enabling developers to invest in  
          building more affordable dwelling units instead of spending  
          funds on parking spaces that may go unused.  AB 744 also  
          encourages building of urban infill, transit-oriented  
          development, and senior and special-needs housing by providing  
          benefits to those categories of development.  It also ensures  
          the mobility of residents of these developments by only granting  
          a benefit to developments in locations that provide residents  
          with access to alternative forms of transportation, such as  
          transit and paratransit.  Finally, AB 744 provides flexibility  
          to locals because it allows cities to establish parking  
          standards suitable for their specific circumstances upon  
          demonstration that the greater parking requirements are  

          Background of Density Bonus Law.  Given California's high land  
          and construction costs for housing, it is extremely difficult  
          for the private market to provide housing units that are  
          affordable to low- and even moderate-income households.  Public  
          subsidy is often required to fill the financial gap on  
          affordable units.  Density Bonus Law, however, allows public  
          subsidies to be reduced or even eliminated by allowing a  
          developer to include more total units in a project than would  
          otherwise be allowed by the zoning in order to spread the cost  
          of the affordable units over the project as a whole.  The idea  
          is to cover at least some of the affordability gap with  
          regulatory incentives rather than additional subsidy.

          Under existing law, if a developer agrees to construct a housing  
          development and meets a specified percentage of affordable  
          units, the city or county must provide all of the following  
          benefits: a density bonus, incentives or concessions, waiver of  
          any development standards that prevent the developer from  
          utilizing the density bonus or incentives, and reduced parking  

          While a local government is not required to provide financial  
          assistance or fee waivers, the incentives a local government  
          must grant include any of the following:

          1)A reduction in site development standards;


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          2)A modification of zoning code requirements (including a  
            reduction in setbacks, square footage requirements, or parking  
            spaces, or architectural design requirements that exceed the  
            minimum building standards);

          3)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 if such  
            non-residential uses are compatible with the project; or

          4)Other regulatory incentives or concessions that result in  
            identifiable, financially sufficient, and actual cost  

          Cost of parking spaces.  TransForm's GreenTrip program analyzed  
          parking utilization at 68 affordable-housing developments  
          throughout the Bay Area and found substantial overdevelopment of  
          residential parking, at an extremely high cost.  Surveying the  
          buildings' parking lots at night when residents would be  
          expected to be sleeping (with their cars in the on-site spaces),  
          the study found that 31% of the 9,387 spaces were empty.  The  
          cost to construct those spaces amounted to approximately $139  
          million.  The average construction cost per space, excluding  
          land cost, in a parking structure in the United States is  
          $24,000 for aboveground parking and $34,000 for underground  
          parking.  Certain types of parking - podium or subterranean -  
          can increase parking costs by 6% or more relative to other types  
          of parking.

          Parking study/bill exception.  This bill provides that a city or  
          county may impose a higher standard of parking than what is  
          otherwise permitted under this section based upon substantial  
          evidence found in an area- or jurisdiction-wide parking study.   
          The study must be conducted by an independent consultant within  
          the last seven years and includes certain requirements.  

          Sustainability goals and transit-oriented development.  A key  
          component of reducing greenhouse gas emissions is to move people  
          out of their cars and into public transit.  To encourage use of  
          transit, some cities and counties have adopted policies like  
          eliminating minimum parking requirements for projects that are  
          close to transit where demand for parking spaces is low.  They  
          recognize that parking requirements prevent infill redevelopment  


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          on small lots where it is difficult and costly to fit both a new  
          building and the required parking.  They also see that parking  
          requirements prevent new uses for older buildings that lack the  
          required parking spaces.

          Arguably, cities and counties that place minimum parking  
          requirements for developments near transit may not reflect the  
          demand for parking.  This is particularly likely in 100%  
          affordable developments within one-half mile of a transit stop,  
          a seniors-only development, or a development that serves  
          special-needs individuals.  In fact, a review of developments  
          funded through the Department of Housing and Community  
          Development's Transit-Oriented Development Implementation  
          Program (TOD program) showed that lower income households drive  
          25-30% fewer miles when living within one-half mile of transit  
          than those living in non-TOD areas.  

          Opposition.  Opponents state that while some housing projects  
          serving unique populations may need less parking, minimum levels  
          of parking should remain intact as these populations still often  
          have cars.  Many seniors do not give up their cars at 62 years  
          of age and many low-income persons require their cars to get to  
          work.  Additionally, adequate parking should be available for  
          guests and service providers.  Opponents argue that Density  
          Bonus Law already offers two tiers of parking incentives to  
          developers: 1) statutory maximums commencing at one parking  
          space per bedroom, and 2) the ability to seek additional  
          concessions to further reduce parking below the maximums.

          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   Yes

          SUPPORT:   (Verified8/18/15)

          American Planning Association, California Chapter 
          Association of Regional Center Agencies 
          Blaydes & Associates
          California Apartment Association
          California Association of Housing Authorities 
          California Association of Local Housing Finance Agencies 
          California Bicycle Coalition


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          California Council for Affordable Housing 
          California Economic Summit 
          California Housing Consortium 
          California Housing Partnership Corporation
          California League of Conservation Voters 
          California Rural Legal Assistance Foundation
          California State Treasurer, John Chiang 
          Circulate San Diego
          City of Richmond, California 
          Council of Infill Builders
          Councilmember Dominic Farinha, City of Patterson
          Councilmember Jake McKenzie, City of Rohnert Park
          Councilmember Pam O'Connor, City of Santa Monica
          Councilmember Rebecca J. Garcia, City of Watsonville
          Councilmember Steve Hansen, City of Sacramento
          Councilmember Wendy Thomas, City of Placerville
          Councilwoman Michelle Martinez, City of Santa Ana
          Domus Development
          Donald C. Shoup, Professor of Urban Planning, UCLA Luskin School  
            of Public Affairs
          EAH Housing
          Eden Housing 
          Enterprise Community Partners 
          Greenbelt Alliance
          Habitat for Humanity Greater San Francisco
          Housing Authority of the City of Alameda
          Housing California
          Housing Leadership Council of San Mateo County
          Kate Meis, Executive Director, Local Government Commission
          LINC Housing
          Local Government Commission
          Lyft, Inc. 
          Mayor Ed Lee, City of San Francisco
          Mayor Libby Schaaf, City of Oakland 
          Mayor Pro Tem Jon Harrison, City of Redlands
          Mayor Tom Butt, City of Richmond
          Mercy Housing California
          Metropolitan Transportation Commission 
          Michael Lane, Policy Director, Non-Profit Housing Association of  
            Northern California 
          National Community Renaissance 
          Natural Recourses Defense Council 
          Nelson\Nygaard Consulting Associates


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          Non-Profit Housing Association of Northern California 
          Sacramento Housing Alliance
          San Diego Housing Federation
          San Francisco Bay Area Rapid Transit District 
          Satellite Affordable Housing Associates 
          Southern California Association of NonProfit Housing 
          Supervisor Leticia Perez, Kern County
          Tenderloin Neighborhood Development Corporation
          USGBC California
          Valley Industry and Commerce Association 
          Western Center on Law & Poverty
          9 individuals

          OPPOSITION:   (Verified8/18/15)

          City of Brentwood
          City of Calimesa
          City of Camarillo
          City of Chino Hills
          City of Colton
          City of Concord
          City of Dublin
          City of El Centro
          City of Encinitas 
          City of Fortuna
          City of Glendale 
          City of Highland
          City of Lakewood
          City of Lomita
          City of Norwalk
          City of Palmdale
          City of Rocklin
          City of Sacramento
          City of San Rafael
          City of Seaside
          City of Walnut Creek
          City of Whittier
          County of Los Angeles
          League of California Cities 
          Los Angeles County Division of the League of California Cities
          Marin County Council of Mayors and Council Members 


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          ASSEMBLY FLOOR:  52-24, 6/4/15
          AYES:  Bloom, Bonilla, Bonta, Burke, Calderon, Campos, Chau,  
            Chiu, Chu, Cooley, Cooper, Dababneh, Daly, Dodd, Eggman,  
            Frazier, Cristina Garcia, Eduardo Garcia, Gatto, Gipson,  
            Gomez, Gonzalez, Gordon, Gray, Hadley, Roger Hernández,  
            Holden, Jones-Sawyer, Lackey, Levine, Linder, Lopez, Low,  
            McCarty, Medina, Mullin, O'Donnell, Patterson, Quirk, Rendon,  
            Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark  
            Stone, Thurmond, Ting, Weber, Williams, Wood, Atkins
          NOES:  Achadjian, Travis Allen, Baker, Bigelow, Brough, Chang,  
            Chávez, Dahle, Beth Gaines, Gallagher, Grove, Harper, Irwin,  
            Jones, Kim, Maienschein, Mathis, Mayes, Melendez, Obernolte,  
            Olsen, Wagner, Waldron, Wilk
          NO VOTE RECORDED:  Alejo, Brown, Nazarian, Perea

          Prepared by:Alison Dinmore / T. & H. / (916) 651-4121
          8/19/15 20:42:50

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