BILL ANALYSIS                                                                                                                                                                                                    



                                                                     AB 744


                                                                    Page  1


          CONCURRENCE IN SENATE AMENDMENTS


          AB  
          744 (Chau and Quirk)


          As Amended  August 18, 2015


          Majority vote


           -------------------------------------------------------------------- 
          |ASSEMBLY:  |      |(June 4, 2015) |SENATE: |22-15 | (August 31,     |
          |           |52-24 |               |        |      |2015)            |
          |           |      |               |        |      |                 |
          |           |      |               |        |      |                 |
           -------------------------------------------------------------------- 


          Original Committee Reference:  H. & C.D.


          SUMMARY:  Requires a local government, upon the request of a  
          developer that receives a density bonus, to reduce the minimum  
          parking requirements for a housing development, if it meets  
          specified criteria.  Specifically, this bill:


          1)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, shall reduce the minimum parking  
            requirements for the development, as follows:


             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.  










                                                                     AB 744


                                                                    Page  2


             b)   If the development is a for-rent housing development for  
               individuals who are 62 years of age or older, the ratio  
               shall not exceed 0.5 spaces per unit.  The development must  
               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 must 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.


          2)Provides that when a developer agrees to include the maximum  
            number of very low- or low-income units under Density Bonus  
            Law, and the development is 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 that exceeds 0.5 spaces per bedroom.


          3)Requires the above specified parking ratios to be inclusive of  
            handicapped and guest parking.


          4)Defines "unobstructed access" as a resident being able to  
            access the transit stop without encountering natural or  
            constructed impediments.


          5)Defines a "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.










                                                                     AB 744


                                                                    Page  3


          6)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.


          7)Allows a city, county, or city and county that conducted an  
            area-wide or jurisdiction-wide parking study within the last  
            seven years to impose a higher vehicular parking ratio that  
            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, the effect  
            of parking requirements on the cost of market-rate and  
            subsidized development, and the lower rates of car ownership  
            for very low- and low- income individuals, including seniors  
            and special needs individuals.  Any new study shall be paid  
            for by the city, county, or city and county. 


          8)Requires the city, county, or city and county which has  
            completed a parking study and imposes a higher standard to  
            make findings supporting the need for the higher parking  
            ratio.


          9)Provides that no reimbursement is required pursuant to  
            California Constitution Article XIII B, Section 6, because a  
            local agency or school district has the authority to levy  
            service charges, fees, or assessments sufficient to pay for  
            the program or level of service mandated by this bill.


          The Senate amendments: 


          1)Strike the requirement that a local government, upon the  
            request of a developer that receives a density bonus,  
            eliminate minimum parking requirements for specified  
            categories of 100% affordable projects near transit, and  
            instead provide reduced parking ratios for these projects.









                                                                     AB 744


                                                                    Page  4



          2)Provide that the parking ratios are inclusive of handicapped  
            and guest parking.


          3)Require projects to have unobstructed access to transit, and  
            defines unobstructed access as when a resident is able to  
            access the transit stop without encountering natural or  
            constructed impediments.


          4)Require seniors only or special needs projects to have either  
            paratransit service or be located within one-half mile of  
            fixed bus route service that operates at least eight times per  
            day.


          5)Require seniors only projects to comply with specified  
            existing laws regarding senior housing.


          6)Increase the duration of the parking study to seven years and  
            make changes to the parking study criteria.


          7)Provide that no reimbursement is required pursuant to  
            California Constitution Article XIII B, Section 6, because a  
            local agency or school district has the authority to levy  
            service charges, fees, or assessments sufficient to pay for  
            the program or level of service mandated by this bill.


          8)Make technical, clarifying changes.


          FISCAL EFFECT:  According to the Senate Appropriations  
          Committee, pursuant to Senate Rule 28.8, negligible state costs.


          COMMENTS:  Background:  California is facing a housing  
          affordability crisis on many fronts. According to the United  
          States Department of Housing and Urban Development, California  








                                                                     AB 744


                                                                    Page  5


          has six of the most expensive rental markets in the country.   
          Nationwide, rents in 2014 grew the fastest in the San Jose and  
          San Francisco metropolitan areas, increasing by 14.4% and 13.5%,  
          respectively.  Between 2006 and 2011, rents increased throughout  
          the state by an average of 10%.  Lower-income households  
          represent a majority of renter households.  Out of 5.1 million  
          renters in California, 60% are in lower-income households, while  
          one in four renter households are in the extremely low-income.   
          One in two renters in California pay in excess of 30% of their  
          income towards housing and one in four renters pay half of their  
          income towards housing.


          The funding sources to support construction of affordable  
          housing have drastically diminished over the last five years.   
          The dissolution of redevelopment agencies eliminated up to $1  
          billion in funding that was available for affordable housing  
          construction.  The last statewide housing bond was approved in  
          2008 and the proceeds of those bonds have been exhausted.   


           Density Bonus Law:  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.  This bill  
          would amend density bonus law to allow developers that agree to  
          either include a percentage of affordable units or where the  
          development is 100% affordable to lower income families and  
          individuals to request a city or county reduce parking ratios. 


          Cost of parking spaces:  Affordable housing is expensive to  
          build in California due to both the amount of subsidy needed to  
          make the housing affordable and the cost of local regulatory  
          requirements.  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  








                                                                     AB 744


                                                                    Page  6


          special needs who drive less frequently and have fewer vehicles.  
           Parking spaces, which sometimes go unused, can significantly  
          increase the cost of construction.  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:  This bill would allow a city or county to impose  
          a higher parking ratio than those outlined in this bill if the  
          city has conducted a study within the last seven years that  
          includes substantial evidence that supports the need for a  
          higher parking ratio.  The city could only increase the parking  
          ratio to the existing standard that is allowed under Density  
          Bonus Law.  This provision was included to address concerns  
          raised by local governments who argued they needed a means to  
          increase parking beyond the requirements of this bill.  


          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  
          (Nez), Chapter 488, Statutes of 2006:  The California Global  
          Solutions Act of 2006 requires California to reduce greenhouse  
          gas (GHG) emissions to 1990 levels by 2020.  SB 375 (Steinberg),  
          Chapter 728, Statutes of 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  
          community strategies to show how development will support  
          reduction in GHG emissions. 


          Purpose of this bill:  According to the author, this bill aligns  
          local land use decisions more closely with the goals of AB 32  
          and SB 375 by reducing the parking required for projects that  
          are close to transit and serve individuals who have fewer cars.   
          Much of California's existing parking requirements are based on  








                                                                     AB 744


                                                                    Page  7


          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.  


          Senate amendments:  Prior to the Senate amendments, this bill  
          would have eliminated the minimum parking requirements for  
          specified categories of 100% affordable projects near transit  
          that qualify for a density bonus, and would not have required a  
          nexus to transit for seniors or special needs projects.  To  
          address concerns raised by local governments, the Senate  
          amendments provide reduced parking ratios for these projects,  
          and require seniors and special needs projects to have access to  
          paratransit or be within one-half mile of a fixed bus route that  
          runs at least eight times per day.  The parking ratios are  
          inclusive of handicapped and guest parking.


          Analysis Prepared by:                                             
                          Rebecca Rabovsky / H. & C.D. / (916) 319-2085     
                                                                  FN:  
          0001472