Amended in Senate June 22, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 1516

Introduced by Committee on Housing and Community Development

March 9, 2015

An act begin insert to amend Section 5570 of the Civil Code, end insert to amend Section 65589.5 of the Government Code, begin insert and to amend Section 51345 of the Health and Safety Code, end insert relating to housing.

LEGISLATIVE COUNSEL’S DIGEST

AB 1516, as amended, Committee on Housing and Community Development. Housing.

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(1) The Davis-Stirling Common Interest Development Act regulates common interest developments and requires the governing association of a common interest development, among other things, to distribute to its members an annual budget report and the Assessment and Reserve Funding Disclosure Summary form. The act requires the form to contain certain information and disclosures regarding the association’s assessments and reserves, including a statement that the major components, as defined, are included in the association’s reserve study and calculations.

end insert begin insert

This bill would make technical changes to the form.

end insert begin delete

The

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begin insert (2) end insert begin insert   end insert begin insert The end insert Housing Accountability Act, among other things, prohibits a local agency from disapproving a housing development project unless the local agency makes specified written findings.

This bill would update cross-references and make technical changes to the act.

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(3) Existing law requires the California Housing Finance Agency to administer the California Homebuyer’s Downpayment Assistance Program for the purpose of assisting first-time low- and moderate-income homebuyers by utilizing existing mortgage financing. Existing law authorizes a borrower to refinance a mortgage under specified circumstances. Existing law authorizes the agency, in its discretion, to permit a downpayment assistance loan to be subordinated to refinancing if it determines that certain criteria have been met. Existing law authorizes the agency to permit subordination on those terms and conditions as it determines are reasonable. Existing law requires the repayment of the home purchase assistance amount at the end of the term, upon the sale of the home, or upon refinancing, unless a showing of hardship is established, as specified.

end insert begin insert

This bill would instead provide that the amount of home purchase assistance would not be due upon the sale of the home if the first mortgage loan is insured by the Federal Housing Administration (FHA) or if the first mortgage loan is, or has been, transferred to the FHA, or if the requirement is otherwise contrary to the regulations of the United States Department of Housing and Urban Development governing FHA insured first mortgage loans.

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Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

end insert

begin insert Section 5570 of the end insert begin insert Civil Code end insert begin insert is amended to
read: end insert

5570.  

(a) The disclosures required by this article with regard
to an association or a property shall be summarized on the
following form:

Assessment and Reserve Funding Disclosure Summary For the
Fiscal Year Ending _____

(1)  The regular assessment per ownership interest is $_____
per ____. Note: If assessments vary by the size or type of
ownership interest, the assessment applicable to this ownership
interest may be found on page _____ of the attached summary.

(2)  Additional regular or special assessments that have already
been scheduled to be imposed or charged, regardless of the purpose,
if they have been approved by the board and/or members:

 

Date assessment will be due:	Amount per ownership interest per month or year (If assessments are variable, see note immediately below):	Purpose of the assessment:
	Total:

 

Note: If assessments vary by the size or type of ownership
interest, the assessment applicable to this ownership interest may
be found on page ____ of the attached report.

(3)  Based upon the most recent reserve study and other
information available to the board of directors, will currently
projected reserve account balances be sufficient at the end of each
year to meet the association’s obligation for repair and/or
replacement of major components during the next 30 years?

Yes _____   No _____

(4)  If the answer to (3) is no, what additional assessments or
other contributions to reserves would be necessary to ensure that
sufficient reserve funds will be available each year during the next
30 years that have not yet been approved by the board or the
members?

 

Approximate date assessment will be due:	Amount per ownership interest per month or year:
	Total:

 

(5)  All major components are included in the reserve study and
are included in its calculations.

(6) Based on the method of calculation in paragraph (4) of
subdivision (b) of Section 5570, the estimated amount required in
the reserve fund at the end of the current fiscal year is $____, based
in whole or in part on the last reserve study or update prepared by
____ as of ____ (month), ____ (year). The projected reserve fund
cash balance at the end of the current fiscal year is $____, resulting
in reserves being ____ percent funded at this date.

If an alternate, but generally accepted, method of calculation is
also used, the required reserve amount is $____. (See attached
explanation)

(7) Based on the method of calculation in paragraph (4) of
subdivision (b) of Section 5570 of the Civil Code, the estimated
amount required in the reserve fund at the end of each of the next
five budget years is $______, and the projected reserve fund cash
balance in each of those years, taking into account only assessments
already approved and other known revenues, is $______, leaving
the reserve at ______ percent begin delete funding. end delete begin insert funded. end insert If the reserve
funding plan approved by the association is implemented, the
projected reserve fund cash balance in each of those years will be
$______, leaving the reserve at ______ percent begin delete funding. end delete begin insert funded. end insert

begin insert end insert

Note: The financial representations set forth in this summary
are based on the best estimates of the preparer at that time. The
estimates are subject to change. At the time this summary was
prepared, the assumed long-term before-tax interest rate earned
on reserve funds was ____ percent per year, and the assumed
long-term inflation rate to be applied to major component repair
and replacement costs was ____ percent per year.

(b) For the purposes of preparing a summary pursuant to this
section:

(1) “Estimated remaining useful life” means the time reasonably
calculated to remain before a major component will require
replacement.

(2) “Major component” has the meaning used in Section 55530.
Components with an estimated remaining useful life of more than
30 years may be included in a study as a capital asset or disregarded
from the reserve calculation, so long as the decision is revealed in
the reserve study report and reported in the Assessment and
Reserve Funding Disclosure Summary.

(3) The form set out in subdivision (a) shall accompany each
annual budget report or summary thereof that is delivered pursuant
to Section 5300. The form may be supplemented or modified to
clarify the information delivered, so long as the minimum
information set out in subdivision (a) is provided.

(4) For the purpose of the report and summary, the amount of
reserves needed to be accumulated for a component at a given time
shall be computed as the current cost of replacement or repair
multiplied by the number of years the component has been in
service divided by the useful life of the component. This shall not
be construed to require the board to fund reserves in accordance
with this calculation.

begin delete SECTION 1. end delete
begin insert SEC. 2. end insert   

Section 65589.5 of the Government Code is amended
to read:

65589.5.  

(a) The Legislature finds and declares all of the
following:

(1) The lack of housing, including emergency shelters, is a
critical problem that threatens the economic, environmental, and
social quality of life in California.

(2) California housing has become the most expensive in the
nation. The excessive cost of the state’s housing supply is partially
caused by activities and policies of many local governments that
limit the approval of housing, increase the cost of land for housing,
and require that high fees and exactions be paid by producers of
housing.

(3) Among the consequences of those actions are discrimination
against low-income and minority households, lack of housing to
support employment growth, imbalance in jobs and housing,
reduced mobility, urban sprawl, excessive commuting, and air
quality deterioration.

(4) Many local governments do not give adequate attention to
the economic, environmental, and social costs of decisions that
result in disapproval of housing projects, reduction in density of
housing projects, and excessive standards for housing projects.

(b) It is the policy of the state that a local government not reject
or make infeasible housing developments, including emergency
shelters, that contribute to meeting the need determined pursuant
to this article without a thorough analysis of the economic, social,
and environmental effects of the action and without complying
with subdivision (d).

(c) The Legislature also recognizes that premature and
unnecessary development of agricultural lands for urban uses
continues to have adverse effects on the availability of those lands
for food and fiber production and on the economy of the state.
Furthermore, it is the policy of the state that development should
be guided away from prime agricultural lands; therefore, in
implementing this section, local jurisdictions should encourage,
to the maximum extent practicable, in filling existing urban areas.

(d) A local agency shall not disapprove a housing development
project, including farmworker housing as defined in subdivision
(h) of Section 50199.7 of the Health and Safety Code, for very
low, low-, or moderate-income households, or an emergency
shelter, or condition approval in a manner that renders the project
infeasible for development for the use of very low, low-, or
moderate-income households, or an emergency shelter, including
through the use of design review standards, unless it makes written
findings, based upon substantial evidence in the record, as to one
of the following:

(1) The jurisdiction has adopted a housing element pursuant to
this article that has been revised in accordance with Section 65588,
is in substantial compliance with this article, and the jurisdiction
has met or exceeded its share of the regional housing need
allocation pursuant to Section 65584 for the planning period for
the income category proposed for the housing development project,
provided that any disapproval or conditional approval shall not be
based on any of the reasons prohibited by Section 65008. If the
housing development project includes a mix of income categories,
and the jurisdiction has not met or exceeded its share of the regional
housing need for one or more of those categories, then this
paragraph shall not be used to disapprove or conditionally approve
the project. The share of the regional housing need met by the
jurisdiction shall be calculated consistently with the forms and
definitions that may be adopted by the Department of Housing and
Community Development pursuant to Section 65400. In the case
of an emergency shelter, the jurisdiction shall have met or exceeded
the need for emergency shelter, as identified pursuant to paragraph
(7) of subdivision (a) of Section 65583. Any disapproval or
conditional approval pursuant to this paragraph shall be in
accordance with applicable law, rule, or standards.

(2) The development project or emergency shelter as proposed
would have a specific, adverse impact upon the public health or
safety, and there is no feasible method to satisfactorily mitigate or
avoid the specific adverse impact without rendering the
development unaffordable to low- and moderate-income
households or rendering the development of the emergency shelter
financially infeasible. As used in this paragraph, a “specific,
adverse impact” means a significant, quantifiable, direct, and
unavoidable impact, based on objective, identified written public
health or safety standards, policies, or conditions as they existed
on the date the application was deemed complete. Inconsistency
with the zoning ordinance or general plan land use designation
shall not constitute a specific, adverse impact upon the public
health or safety.

(3) The denial of the project or imposition of conditions is
required in order to comply with specific state or federal law, and
there is no feasible method to comply without rendering the
development unaffordable to low- and moderate-income
households or rendering the development of the emergency shelter
financially infeasible.

(4) The development project or emergency shelter is proposed
on land zoned for agriculture or resource preservation that is
surrounded on at least two sides by land being used for agricultural
or resource preservation purposes, or which does not have adequate
water or wastewater facilities to serve the project.

(5) The development project or emergency shelter is inconsistent
with both the jurisdiction’s zoning ordinance and general plan land
use designation as specified in any element of the general plan as
it existed on the date the application was deemed complete, and
the jurisdiction has adopted a revised housing element in
accordance with Section 65588 that is in substantial compliance
with this article.

(A) This paragraph cannot be utilized to disapprove or
conditionally approve a housing development project if the
development project is proposed on a site that is identified as
suitable or available for very low, low-, or moderate-income
households in the jurisdiction’s housing element, and consistent
with the density specified in the housing element, even though it
is inconsistent with both the jurisdiction’s zoning ordinance and
general plan land use designation.

(B) If the local agency has failed to identify in the inventory of
land in its housing element sites that can be developed for housing
within the planning period and are sufficient to provide for the
jurisdiction’s share of the regional housing need for all income
levels pursuant to Section 65584, then this paragraph shall not be
utilized to disapprove or conditionally approve a housing
development project proposed for a site designated in any element
of the general plan for residential uses or designated in any element
of the general plan for commercial uses if residential uses are
permitted or conditionally permitted within commercial
designations. In any action in court, the burden of proof shall be
on the local agency to show that its housing element does identify
adequate sites with appropriate zoning and development standards
and with services and facilities to accommodate the local agency’s
share of the regional housing need for the very low and low-income
categories.

(C) If the local agency has failed to identify a zone or zones
where emergency shelters are allowed as a permitted use without
a conditional use or other discretionary permit, has failed to
demonstrate that the identified zone or zones include sufficient
capacity to accommodate the need for emergency shelter identified
in paragraph (7) of subdivision (a) of Section 65583, or has failed
to demonstrate that the identified zone or zones can accommodate
at least one emergency shelter, as required by paragraph (4) of
subdivision (a) of Section 65583, then this paragraph shall not be
utilized to disapprove or conditionally approve an emergency
shelter proposed for a site designated in any element of the general
plan for industrial, commercial, or multifamily residential uses. In
any action in court, the burden of proof shall be on the local agency
to show that its housing element does satisfy the requirements of
paragraph (4) of subdivision (a) of Section 65583.

(e) Nothing in this section shall be construed to relieve the local
agency from complying with the congestion management program
required by Chapter 2.6 (commencing with Section 65088) of
Division 1 of Title 7 or the California Coastal Act of 1976
(Division 20 (commencing with Section 30000) of the Public
Resources Code). Neither shall anything in this section be
construed to relieve the local agency from making one or more of
the findings required pursuant to Section 21081 of the Public
Resources Code or otherwise complying with the California
Environmental Quality Act (Division 13 (commencing with Section
21000) of the Public Resources Code).

(f) (1) Nothing in this section shall be construed to prohibit a
local agency from requiring the development project to comply
with objective, quantifiable, written development standards,
conditions, and policies appropriate to, and consistent with, meeting
the jurisdiction’s share of the regional housing need pursuant to
Section 65584. However, the development standards, conditions,
and policies shall be applied to facilitate and accommodate
development at the density permitted on the site and proposed by
the development.

(2) Nothing in this section shall be construed to prohibit a local
agency from requiring an emergency shelter project to comply
with objective, quantifiable, written development standards,
conditions, and policies that are consistent with paragraph (4) of
subdivision (a) of Section 65583 and appropriate to, and consistent
with, meeting the jurisdiction’s need for emergency shelter, as
identified pursuant to paragraph (7) of subdivision (a) of Section
65583. However, the development standards, conditions, and
policies shall be applied by the local agency to facilitate and
accommodate the development of the emergency shelter project.

(3) This section does not prohibit a local agency from imposing
fees and other exactions otherwise authorized by law that are
essential to provide necessary public services and facilities to the
development project or emergency shelter.

(g) This section shall be applicable to charter cities because the
Legislature finds that the lack of housing, including emergency
shelter, is a critical statewide problem.

(h) The following definitions apply for the purposes of this
section:

(1) “Feasible” means capable of being accomplished in a
successful manner within a reasonable period of time, taking into
account economic, environmental, social, and technological factors.

(2) “Housing development project” means a use consisting of
any of the following:

(A) Residential units only.

(B) Mixed-use developments consisting of residential and
nonresidential uses in which nonresidential uses are limited to
neighborhood commercial uses and to the first floor of buildings
that are two or more stories. As used in this paragraph,
“neighborhood commercial” means small-scale general or specialty
stores that furnish goods and services primarily to residents of the
neighborhood.

(C) Transitional housing or supportive housing.

(3) “Housing for very low, low-, or moderate-income
households” means that either (A) at least 20 percent of the total
units shall be sold or rented to lower income households, as defined
in Section 50079.5 of the Health and Safety Code, or (B) 100
percent of the units shall be sold or rented to persons and families
of moderate income as defined in Section 50093 of the Health and
Safety Code, or persons and families of middle income, as defined
in Section 65008 of this code. Housing units targeted for lower
income households shall be made available at a monthly housing
cost that does not exceed 30 percent of 60 percent of area median
income with adjustments for household size made in accordance
with the adjustment factors on which the lower income eligibility
limits are based. Housing units targeted for persons and families
of moderate income shall be made available at a monthly housing
cost that does not exceed 30 percent of 100 percent of area median
income with adjustments for household size made in accordance
with the adjustment factors on which the moderate-income
eligibility limits are based.

(4) “Area median income” means area median income as
periodically established by the Department of Housing and
Community Development pursuant to Section 50093 of the Health
and Safety Code. The developer shall provide sufficient legal
commitments to ensure continued availability of units for very low
or low-income households in accordance with the provisions of
this subdivision for 30 years.

(5) “Disapprove the development project” includes any instance
in which a local agency does either of the following:

(A) Votes on a proposed housing development project
application and the application is disapproved.

(B) Fails to comply with the time periods specified in
subdivision (a) of Section 65950. An extension of time pursuant
to Article 5 (commencing with Section 65950) shall be deemed to
be an extension of time pursuant to this paragraph.

(i) If any city, county, or city and county denies approval or
imposes restrictions, including design changes, a reduction of
allowable densities or the percentage of a lot that may be occupied
by a building or structure under the applicable planning and zoning
in force at the time the application is deemed complete pursuant
to Section 65943, that have a substantial adverse effect on the
viability or affordability of a housing development for very low,
low-, or moderate-income households, and the denial of the
development or the imposition of restrictions on the development
is the subject of a court action which challenges the denial, then
the burden of proof shall be on the local legislative body to show
that its decision is consistent with the findings as described in
subdivision (d) and that the findings are supported by substantial
evidence in the record.

(j) When a proposed housing development project complies
with applicable, objective general plan and zoning standards and
criteria, including design review standards, in effect at the time
that the housing development project’s application is determined
to be complete, but the local agency proposes to disapprove the
project or to approve it upon the condition that the project be
developed at a lower density, the local agency shall base its
decision regarding the proposed housing development project upon
written findings supported by substantial evidence on the record
that both of the following conditions exist:

(1) The housing development project would have a specific,
adverse impact upon the public health or safety unless the project
is disapproved or approved upon the condition that the project be
developed at a lower density. As used in this paragraph, a “specific,
adverse impact” means a significant, quantifiable, direct, and
unavoidable impact, based on objective, identified written public
health or safety standards, policies, or conditions as they existed
on the date the application was deemed complete.

(2) There is no feasible method to satisfactorily mitigate or
avoid the adverse impact identified pursuant to paragraph (1), other
than the disapproval of the housing development project or the
approval of the project upon the condition that it be developed at
a lower density.

(k) The applicant or any person who would be eligible to apply
for residency in the development or emergency shelter may bring
an action to enforce this section. begin delete If end delete begin insert If, end insert in any action brought to
enforce the provisions of this section, a court finds that the local
agency disapproved a project or conditioned its approval in a
manner rendering it infeasible for the development of an emergency
shelter, or housing for very low, low-, or moderate-income
households, including farmworker housing, without making the
findings required by this section or without making sufficient
findings supported by substantial evidence, the court shall issue
an order or judgment compelling compliance with this section
within 60 days, including, but not limited to, an order that the local
agency take action on the development project or emergency
shelter. The court shall retain jurisdiction to ensure that its order
or judgment is carried out and shall award reasonable attorney’s
fees and costs of suit to the plaintiff or petitioner who proposed
the housing development or emergency shelter, except under
extraordinary circumstances in which the court finds that awarding
fees would not further the purposes of this section. If the court
determines that its order or judgment has not been carried out
within 60 days, the court may issue further orders as provided by
law to ensure that the purposes and policies of this section are
fulfilled, including, but not limited to, an order to vacate the
decision of the local agency, in which case the application for the
project, as constituted at the time the local agency took the initial
action determined to be in violation of this section, along with any
standard conditions determined by the court to be generally
imposed by the local agency on similar projects, shall be deemed
approved unless the applicant consents to a different decision or
action by the local agency.

(l) If the court finds that the local agency (1) acted in bad faith
when it disapproved or conditionally approved the housing
development or emergency shelter in violation of this section and
(2) failed to carry out the court’s order or judgment within 60 days
as described in subdivision (k), the court, in addition to any other
remedies provided by this section, may impose fines upon the local
agency that the local agency shall be required to deposit into a
housing trust fund. Fines shall not be paid from funds that are
already dedicated for affordable housing, including, but not limited
to, redevelopment or low- and moderate-income housing funds
and federal HOME and CDBG funds. The local agency shall
commit the money in the trust fund within five years for the sole
purpose of financing newly constructed housing units affordable
to extremely low, very low, or low-income households. For
purposes of this section, “bad faith” shall mean an action that is
frivolous or otherwise entirely without merit.

(m) Any action brought to enforce the provisions of this section
shall be brought pursuant to Section 1094.5 of the Code of Civil
Procedure, and the local agency shall prepare and certify the record
of proceedings in accordance with subdivision (c) of Section 1094.6
of the Code of Civil Procedure no later than 30 days after the
petition is served, provided that the cost of preparation of the record
shall be borne by the local agency. Upon entry of the trial court’s
order, a party shall, in order to obtain appellate review of the order,
file a petition within 20 days after service upon it of a written
notice of the entry of the order, or within such further time not
exceeding an additional 20 days as the trial court may for good
cause allow. If the local agency appeals the judgment of the trial
court, the local agency shall post a bond, in an amount to be
determined by the court, to the benefit of the plaintiff if the plaintiff
is the project applicant.

(n) In any action, the record of the proceedings before the local
agency shall be filed as expeditiously as possible and,
notwithstanding Section 1094.6 of the Code of Civil Procedure or
subdivision (m) of this section, all or part of the record may be
prepared (1) by the petitioner with the petition or petitioner’s points
and authorities, (2) by the respondent with respondent’s points and
authorities, (3) after payment of costs by the petitioner, or (4) as
otherwise directed by the court. If the expense of preparing the
record has been borne by the petitioner and the petitioner is the
prevailing party, the expense shall be taxable as costs.

(o) This section shall be known, and may be cited, as the
Housing Accountability Act.

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 51345 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

51345.  

(a) The agency shall administer a home purchase
assistance program in accordance with this chapter. The purpose
of the home purchase assistance program is to assist first-time
homebuyers to utilize existing mortgage financing available
pursuant to this part or Division 4 (commencing with Section 800)
of the Military and Veterans Code with the additional financial
resources made available pursuant to Part 8 (commencing with
Section 53130).

(b) Home purchase assistance under this chapter shall include,
but not be limited to: (1) an interest rate subsidy to reduce the
interest rate, (2) a deferred-payment, low-interest, second-mortgage
loan to reduce the principal and interest payments, and (3)
downpayment assistance to make financing affordable to first-time
homebuyers.

(c) In no case shall the interest rate subsidy reduce the effective
interest rate to the borrower below 3 percent per annum, nor shall
the deferred-payment, low-interest, second mortgage loan exceed
49 percent of the total debt financing necessary to purchase the
home.

(d) The amount of home purchase assistance shall be a second
mortgage loan secured by a deed of trust of second priority to the
primary financing provided by the agency or the Department of
Veterans Affairs. The term of the home purchase assistance shall
not exceed the term of the primary loan.

begin delete

(e) (1) Except as provided in paragraph (2), the amount of home
purchase assistance shall be due and payable at the end of the term,
upon the sale of the home, or upon refinancing. The borrower may
refinance the mortgages on the home if the principal of and accrued
interest on the second mortgage loan securing the home purchase
assistance are repaid in full. All repayments shall be deposited in
the fund.

end delete begin delete

(2)

end delete

begin insert (e) end insert begin insert   end insert begin insert (1) end insert  The agency may, in its discretion, permit the
downpayment assistance loan to be subordinated to refinancing if
it determines that the borrower has demonstrated hardship,
subordination is required to avoid foreclosure, and the new loan
meets the agency’s underwriting requirements. The agency may
permit subordination on those terms and conditions as it determines
are reasonable, but subordination is not permitted if the borrower
has sufficient equity to repay the loan.

begin insert

(2) The amount of home purchase assistance shall not be due
and payable upon the sale of the home if the first mortgage loan
is insured by the Federal Housing Administration (FHA) or if the
first mortgage loan is, or has been, transferred to the FHA, or if
the requirement is otherwise contrary to the regulations of the
United States Department of Housing and Urban Development
governing FHA insured first mortgage loans.

end insert begin insert

(f) All repayments shall be deposited in the fund.

end insert