BILL ANALYSIS Ó AB 1500 Page 1 Date of Hearing: January 11, 2015 ASSEMBLY COMMITTEE ON NATURAL RESOURCES 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 guidelines.) 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 certified. 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 health. 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 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 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 challenges. 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 housing. 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. REGISTERED SUPPORT / OPPOSITION: Support California Association of Realtors California Building Industry Association (prior version) California Chamber of Commerce (prior version) California Housing Consortium (prior version) Opposition 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) 319-2092 AB 1500 Page 11