BILL ANALYSIS                                                                                                                                                                                                    

                                                                    AB 1500

                                                                    Page  1

          Date of Hearing:  January 11, 2015


                                 Das Williams, Chair

          AB 1500  
          (Maienschein) - As Amended January 4, 2016

          SUBJECT:  California Environmental Quality Act:  priority  
          housing projects:  exemption

          SUMMARY:  Exempts from CEQA a "priority housing project," which  
          includes an emergency shelter, transitional housing, or  
          supportive housing project.  

          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  

          2)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  


                                                                    AB 1500

                                                                    Page  2

            which case the exemption applies once the supplemental EIR is  

          3)Requires cities and counties to accommodate their need for  
            emergency shelters on sites where the use is allowed without a  
            conditional use permit (i.e., approval is non-discretionary,  
            and therefore not subject to CEQA) and requires cities and  
            counties to treat transitional and supportive housing projects  
            as a residential use of property.  [SB 2 (Cedillo), Chapter  
            633, Statutes of 2007]

          4)Exempts from CEQA specified residential housing projects which  
            meet detailed criteria established to ensure the project does  
            not have a significant effect on the environment.  [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.

          5)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  
            (GHG) emissions, aligns planning for transportation and  
            housing, and creates specified incentives for the  
            implementation of the 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  


                                                                    AB 1500

                                                                    Page  3

            applicable policies specified for the project area in either  
            an approved SCS or APS.  [SB 375 (Steinberg), Chapter 728,  
            Statutes of 2008]  

          6)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]  SB 226 requires the Office of Planning and  
            Research (OPR) to develop CEQA guidelines to implement its  
            infill provisions, including statewide standards to promote  
            smart growth, reduction of GHG emissions, reduction in water  
            use, energy efficiency improvements, and protection of public  

          7)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]

          THIS BILL:

          1)Exempts from CEQA a "priority housing project" if all the  
            following conditions are met:

               a)     The lead agency has filed a notice of determination  
                 with OPR.

               b)     The city or county has adopted a housing element  
                 approved by the Department of Housing and Community  


                                                                    AB 1500

                                                                    Page  4

                 Development and is in compliance with the housing element  
                 portion of its annual general plan report.

          2)Defines "priority housing project" as any activity or approval  
            necessary for, or incidental to, the development, planning,  
            design, site acquisition, subdivision, financing, leasing,  
            construction, operation, or maintenance of an emergency  
            shelter, transitional housing, or supportive housing.

          3)Incorporates the following definitions by reference:

               a)     "Emergency shelter" means housing with minimal  
                 supportive services for homeless persons that is limited  
                 to occupancy of six months or less by a homeless person.   
                 No individual or household may be denied emergency  
                 shelter because of an inability to pay.

               b)     "Transitional housing" means housing with supportive  
                 services for up to 24 months that is exclusively  
                 designated and targeted for recently homeless persons.   
                 Transitional housing includes self-sufficiency  
                 development services, with the ultimate goal of moving  
                 recently homeless persons to permanent housing as quickly  
                 as possible, and limits rents and service fees to an  
                 ability-to-pay formula reasonably consistent with the  
                 United States Department of Housing and Urban  
                 Development's requirements for subsidized housing for  
                 low-income persons.  Rents and service fees paid for  
                 transitional housing may be reserved, in whole or in  
                 part, to assist residents in moving to permanent housing.

               c)     "Supportive housing" means housing with no limit on  
                 length of stay, that is occupied by the target  
                 population, and that is linked to onsite or offsite  
                 services that assist the supportive housing resident in  


                                                                    AB 1500

                                                                    Page  5

                 retaining the housing, improving his or her health  
                 status, and maximizing his or her ability to live and,  
                 when possible, work in the community.

          FISCAL EFFECT:  Unknown


          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 the project would not have a  
            significant effect on the environment, the lead agency must  
            prepare a negative declaration.  If the initial study shows  
            that the project may have a significant effect, 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.  Prior to approving any project that has  
            received environmental review, an agency must make certain  
            findings.  If mitigation measures are required or incorporated  
            into a project, the agency must adopt a reporting or  
            monitoring program to ensure compliance with those measures.  

             CEQA includes various statutory exemptions, as well as  
            categorical exemptions in the CEQA Guidelines.  SB 1925 (2002)  
            established CEQA exemptions for certain residential projects  
            providing affordable urban or agricultural housing, or located  
            on an infill site within an urbanized area, and meeting  


                                                                    AB 1500

                                                                    Page  6

            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."  For purposes  
            of qualifying for the CEQA exemption for affordable housing,  
            among other criteria, projects must be located within an  
            urbanized area, not more than five acres in area and fewer  
            than 100 units.

            Since then, additional legislation has provided CEQA  
            exemptions and streamlining for residential (not specific to,  
            but including, affordable housing) and certain other projects  
            in infill areas.  SB 375 (2008) provided a CEQA exemption for  
            a narrow set of eligible residential projects in infill areas  
            adjacent to transit.  SB 226 (2011) provided abbreviated CEQA  
            review procedures for a broader set of urban infill projects,  
            including retail, commercial, and public buildings.  SB 743  
            (2013) established a new exemption for residential, mixed-use  
            and "employment center" projects located within one-half mile  
            of a major transit stop, if the project is consistent with an  
            adopted specific plan and specified elements of a SB 375  
            strategy.  SB 743 also required OPR to propose revisions to  
            the CEQA Guidelines for transportation impacts to better  
            support infill development. 

            This bill provides a complete exemption for emergency  
            shelters, transitional housing, and supportive housing  
            projects, regardless of location or size.

          2)Author's statement:
               California has the largest population of persons  
               experiencing homelessness of any state in the country.  The  
               Department of Housing and Urban Development (HUD) reported  
               that on a single night in 2008, California communities  
               counting people living on the streets or in shelters  


                                                                    AB 1500

                                                                    Page  7

               reported a total of 157,277 homeless persons.  Over 380,000  
               people are homeless for some period of time during the  
               course of each year in California.  The state has one of  
               the highest rates of homelessness, with one in every 230  
               residents homeless at any point in time, and one in every  
               95 residents homeless at some point during the course of a  
               year.  In the rest of the country, most homeless people are  
               sheltered, temporarily living in shelters or in  
               transitional housing.  In California, 70 percent of  
               homeless people live unsheltered, the largest percentage in  
               the nation.

               A Legislative Analyst's Office report entitled  
               "California's High Housing Costs: Causes and Consequences"  
               was published on March 17, 2015, and identified CEQA as a  
               major contributor to the state's high cost of housing.   
               Unlike other major development projects, homeless complex  
               projects do not have a high potential for profits upon  
               completion and are less worth the costs incurred with CEQA  

               According to the  San Jose Mercury News , when the city shut  
               down the notorious homeless encampment known as "The  
               Jungle," they discovered that many of its inhabitants were  
               actually receiving housing subsidies but were unable to  
               find housing to use the subsidies for.  The severe shortage  
               of affordable housing and shelters has resulted in many  
               homeless people across the state who are not being helped  
               even though they are eligible and receiving benefits  
               designed to get them off the streets and into stable  

          3)LAO housing report.  The LAO report cited by the author  
            includes the following statements in a section entitled "Why  
            Do Coastal Areas Not Build Enough Housing?":
               (CEQA) requires local governments to conduct a detailed  


                                                                    AB 1500

                                                                    Page  8

               review of the potential environmental effects of new  
               housing construction (and most other types of development)  
               prior to approving it.  The information in these reports  
               sometimes results in the city or county denying proposals  
               to develop housing or approving fewer housing units than  
               the developer proposed.  In addition, CEQA's complicated  
               procedural requirements give development opponents  
               significant opportunities to continue challenging housing  
               projects after local governments have approved them.

               Our review of CEQA documents submitted to the state by  
               California's ten largest cites between 2004-2013 indicates  
               that local agencies took, on average, around two and a half  
               years to approve housing projects that required an EIR.   
               The CEQA process also, in some cases, results in developers  
               reducing the size and scope of a project in response to  
               concerns discovered during the review process.

            The LAO report did not include any specific examples or data.   
            It also makes no reference to the vast majority of housing  
            projects that do not require an EIR, because they are exempt  
            from CEQA or approved via a negative declaration.

          4)OPR survey indicates CEQA is not a significant barrier to  
            infill projects.  OPR's "2012 Annual Planning Survey Results"  
            asked city and county planners to explain the primary barriers  
            their jurisdictions have experienced to implementing infill  
            projects.  Based on 238 responses, 25% of jurisdictions  
            reported that infrastructure constraints were a primary  
            barrier to implementing infill projects.  Just under 25%  
            reported that they had problems with assembling parcels of the  
            right size and configuration for infill development.  Only 4%  
            of respondents identified CEQA as a barrier.


                                                                    AB 1500

                                                                    Page  9

          5)Emergency shelters, transitional housing, and supportive  
            housing projects can be approved without CEQA review under  
            current law.  The Planning and Zoning Law requires cities and  
            counties, through the adoption of General Plan housing  
            elements, to identify housing needs and sites, including  
            emergency shelters.  Among other things, the housing element  
            must identify zones where emergency shelters are allowed as a  
            permitted use without a conditional use permit or other  
            discretionary permit, meaning they are not subject to CEQA  
            review.  In addition, any residential project is exempt from  
            CEQA review if it is consistent with an adopted specific plan  
            for which an EIR has been prepared.  Housing element law  
            requires cities and counties to treat transitional and  
            supportive housing projects as a residential use of property  
            and prohibits restrictions that are not applicable to other  
            residential dwellings of the same type.  


          California Association of Realtors

          California Building Industry Association (prior version)

          California Chamber of Commerce (prior version)

          California Housing Consortium (prior version)



                                                                    AB 1500

                                                                    Page  10

          California League of Conservation Voters

          Sierra Club California

          State Building and Construction Trades Council of California

          Brandt-Hawley Law Group (prior version)

          California Labor Federation (prior version)

          California State Pipe Trades Council (prior version)

          Center for Biological Diversity (prior version)

          Environmental Defense Center (prior version)

          Natural Resources Defense Council (prior version)

          Planning and Conservation League (prior version)

          Shute, Mihaly and Weinberger (prior version)

          Analysis Prepared by:Lawrence Lingbloom / NAT. RES. / (916)  


                                                                    AB 1500

                                                                    Page  11