BILL ANALYSIS Ó AB 1268 Page 1 Date of Hearing: May 11, 2015 ASSEMBLY COMMITTEE ON NATURAL RESOURCES Das Williams, Chair AB 1268 (Steinorth) - As Amended May 5, 2015 SUBJECT: California Environmental Quality Act: exemption for a housing project SUMMARY: Eliminates the exclusion of projects located within the boundaries of a state conservancy from an existing California Environmental Quality Act (CEQA) exemption for specified housing projects. EXISTING LAW: 1)CEQA requires lead agencies with the principal responsibility for carrying out or approving a proposed project to prepare a negative declaration, mitigated negative declaration, or environmental impact report (EIR) for this action, unless the project is exempt from CEQA (CEQA includes various statutory exemptions, as well as categorical exemptions in the CEQA guidelines). 2)Requires metropolitan planning organizations (MPOs) to include a sustainable communities strategy (SCS), as defined, in their regional transportation plans, or an alternative planning strategy (APS), for the purpose of reducing greenhouse gas emissions, aligns planning for transportation and housing, and creates specified incentives for the implementation of the AB 1268 Page 2 strategies, including CEQA exemption or abbreviated review for residential or mixed-use residential "transit priority projects" if the project is consistent with the use designation, density, building intensity, and applicable policies specified for the project area in either an approved SCS or APS. [SB 375 (Steinberg), Chapter 728, Statutes of 2008] 3)Exempts from CEQA residential, mixed-use, and "employment center" projects, as defined, located within "transit priority areas," as defined, if the project is consistent with an adopted specific plan and specified elements of a SCS or APS adopted pursuant to SB 375. [SB 743 (Steinberg), Chapter 386, Statutes of 2013] 4)Establishes abbreviated CEQA review procedures for specified infill projects, where only specific or more significant effects on the environment which were not addressed in a prior planning-level EIR need be addressed. An EIR for such a project need not consider alternative locations, densities, and building intensities or growth-inducing impacts. Infill projects may include residential, retail, commercial, transit station, school, or public office building projects located within an urban area. [SB 226 (Simitian), Chapter 469, Statutes of 2011] 5)Exempts from CEQA any residential development project, including any subdivision, or any zoning change that is undertaken to implement and is consistent with a specific plan for which an EIR has been certified after January 1, 1980, unless substantial changes or new information require the preparation of a supplemental EIR for the specific plan, in which case the exemption applies once the supplemental EIR is certified. (Section 65457 of the Government Code). 6)Exempts from CEQA specified housing projects which meet detailed criteria established to ensure the project does not have a significant effect on the environment, including excluding projects within the boundaries of a state AB 1268 Page 3 conservancy. [SB 1925 (Sher), Chapter 1039, Statutes of 2002] The SB 1925 exemptions are available to: a) Affordable agricultural housing projects not more than 45 units within a city, or 20 units within an agricultural zone, on a site not more than five acres in size; b) Urban affordable housing projects not more than 100 units on a site not more than five acres in size; and, c) Urban infill housing projects not more than 100 units on a site not more than four acres in size, which is within one-half mile of a major transit stop. 7)Requires local agencies to file notice of the SB 1925 exemptions with the Office of Planning and Research (OPR), however, failure to file this notice does not affect the validity of the project. [AB 677 (Firebaugh), Chapter 677, Statutes of 2003] THIS BILL eliminates the exclusion of projects within the boundaries of a state conservancy from the SB 1925 exemptions. FISCAL EFFECT: Non-fiscal COMMENTS: 1)Background. CEQA provides a process for evaluating the environmental effects of applicable projects undertaken or approved by public agencies. If a project is not exempt from CEQA, an initial study is prepared to determine whether the project may have a significant effect on the environment. If the initial study shows that there would not be a significant effect on the environment, the lead agency must prepare a negative declaration. If the initial study shows that the AB 1268 Page 4 project may have a significant effect on the environment, the lead agency must prepare an EIR. Generally, an EIR must accurately describe the proposed project, identify and analyze each significant environmental impact expected to result from the proposed project, identify mitigation measures to reduce those impacts to the extent feasible, and evaluate a range of reasonable alternatives to the proposed project. SB 1925, enacted in 2002, exempts from CEQA certain residential projects providing affordable urban or agricultural housing, or located on an infill site within an urbanized area, and meeting specified unit and acreage criteria. The stated intent of the Legislature in enacting those provisions included "creating a streamlined procedure for agricultural employee housing, affordable housing, and urban infill housing projects that do not have an adverse effect on the environment." Projects located within the boundaries of a state conservancy were excluded from the SB 1925 exemptions, but not from other existing exemptions available for residential projects. 2)Need and purpose of this bill. According to a Legislative Analyst's Office (LAO) report entitled "California's High Housing Cost: Causes and Consequences" published on March 17, 2015, the authors conclude that CEQA requirements are a significant factor in causing increased housing costs in California. According to the author, although there are existing laws exempting various housing projects from CEQA, these projects are not exempt if the site is located within a state conservancy, which covers 56% of the state. The author states: Eliminating the overbroad preclusion of conservancy land, while still maintaining other existing preclusions against development upon land with wildlife value, would prove to be a practical and careful reform to CEQA in order to achieve a balance between AB 1268 Page 5 environmental protection and California's critical need for low-income housing. 3)LAO report conclusions unsupported. The conclusion that CEQA is a significant driver to inhibiting housing development in California was based on data between 2004-2013 from OPR that found the average delay of a project associated with an EIR was 2.5 years. Using this single value to draw this conclusion is problematic for several reasons: a) Due to a few very long delays, the average value is inflated upwards as the middle value (median) is two years and is more appropriate to use for analytical purposes. b) To conclude that EIRs are a significant cause of California housing supply shortage, knowing the proportion of EIR projects in relation to total housing projects is necessary. If EIR projects represent a very small proportion, it would be inappropriate to conclude that EIR's have a significant effect on development. Unfortunately this data is not available. c) Additionally, EIR projects that could be categorized as frivolous need to be separated from others that might provide larger cost reducing benefits in the long run. For instance, if a two-year EIR process avoided larger and long-term environmental quality costs to the community and future development, the EIR process should not be categorized as a costly delay. Unfortunately, this analysis was not undertaken in the report. 4)The SB 1925 exemption is rarely used. When a local agency determines that a project is exempt from CEQA pursuant to SB 1925, the local agency must file a notice of exemption with OPR. According to OPR, it has received just four notices of exemption pursuant to the SB 1925 exemption since 2004. Curiously, two of those projects, affordable housing AB 1268 Page 6 developments in the City of Inglewood and the City of Goleta, appear to be located within the general jurisdiction of the State Coastal Conservancy. Besides the restriction of a project not being located on state conservancy lands, there are numerous other criteria that must be met to receive an exemption through SB 1925. The lack of use of the SB 1925 exemption is likely due to a combination of the complication and difficultly of meeting all its conditions and the availability of other exemptions with broader application and/or fewer conditions. 5)Other CEQA exemptions are available for housing projects within state conservancies. Although SB 375 and SB 743 offer CEQA exemptions for only limited "transit priority areas," both SB 226 and Section 65457 of the Government Code offer broader opportunities for housing projects to be either exempt from CEQA or subject to abbreviated review requirements. All of these existing exemptions apply to housing projects located on state conservancy lands. REGISTERED SUPPORT / OPPOSITION: Support None on file Opposition Environmental Action Committee of West Marin AB 1268 Page 7 Natural Resources Defense Council Sierra Club California Analysis Prepared by:Paul Jacobs / NAT. RES. / (916) 319-2092