BILL ANALYSIS Ó AB 1886 Page 1 Date of Hearing: May 3, 2016 ASSEMBLY COMMITTEE ON NATURAL RESOURCES Das Williams, Chair AB 1886 (McCarty) - As Introduced February 11, 2016 SUBJECT: California Environmental Quality Act: transit priority projects SUMMARY: Revises the definition of a "transit priority project" for purposes of qualifying for exemption or abbreviated review under the California Environmental Quality Act (CEQA) to permit up to 50% of the parcels within the project to be farther than 1/2 mile from a major transit stop or high-quality transit corridor, as defined. 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 AB 1886 Page 2 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 applicable policies specified for the project area in either an approved SCS or APS. [SB 375 (Steinberg), Chapter 728, Statutes of 2008] a) Requires a "transit priority project" to meet the following conditions: i) Contain at least 50% residential use; ii) Provide at least 20 dwellings per acre; and iii) Be within 1/2 mile of a major transit stop or high-quality transit corridor. To qualify, all parcels within the project must have no more than 25% of their area farther than 1/2 mile from transit and not more than 10% of the residential units or 100 units, whichever is less, may be farther than 1/2 mile from transit. b) Defines "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. c) Defines "high-quality transit corridor" as a corridor with fixed route bus service with service intervals no longer than 15 minutes during peak commute hours. AB 1886 Page 3 3)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. 4)Exempts from CEQA residential, mixed-use, and "employment center" projects, as defined, located in "transit priority areas" within one-half mile of an existing or planned major transit stop, 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] 5)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, including urban infill housing projects not more than 100 units on a site and not more than 4 acres in size which is within 1/2 mile of a major transit stop. [SB 1925 (Sher), Chapter 1039, Statutes of 2002] 6)The CEQA Guidelines further exempt infill projects meeting the following conditions: a) The project is consistent with the applicable general plan designation and all applicable general plan policies, as well as with applicable zoning designation and AB 1886 Page 4 regulations. b) The proposed development occurs within city limits on a project site of no more than five acres substantially surrounded by urban uses. c) The project site has no value as habitat for endangered, rare, or threatened species. d) Approval of the project would not result in any significant effects relating to traffic, noise, air quality, or water quality. e) The site can be adequately served by all required utilities and public services. THIS BILL revises the definition of a "transit priority project" for purposes of the SCS provisions of CEQA to permit up to 50% of the area of parcels within the project to be farther than 1/2 mile from a major transit stop or high-quality transit corridor. 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 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. AB 1886 Page 5 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. Since 1985, any residential development project can be exempt from CEQA if the project is consistent with a specific plan for which an EIR has been certified. In 2002, SB 1925 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 specified unit and acreage criteria. For purposes of qualifying for the CEQA exemption for urban infill housing, projects must be within one-half mile of a major transit stop. More recently, the Legislature has enacted CEQA exemptions and streamlining for residential 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, as well as alternatives of abbreviated EIR and mitigated negative declaration review. SB 226 (2011) provided abbreviated CEQA review procedures for a broader set of urban infill projects, including retail, commercial, and public buildings, with no requirement regarding proximity to transit. 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 AB 1886 Page 6 OPR to propose revisions to the CEQA Guidelines for transportation impacts to better support infill development. 2)Author's statement: Past legislative efforts, such as SB 226, SB 375 and SB 743, have sought to update CEQA by creating exemptions and streamlining provisions for projects which meet specific criteria. The goals of those efforts were to maintain the integrity of CEQA, while recognizing that certain projects do not require as thorough review as others. These are projects which must be close to mass transit, promote smart growth strategies and are environmentally friendly. These types of development pose significant challenges for both the developer/builder and for the city looking to approve them. Infill projects are complicated and face significant threats of litigation and other hurdles. This is because the nature of infill means that projects are surrounded by current residents, business or outside groups who may oppose the project despite its benefits to both the environment and the community. After many discussions with the Governor's Office of Planning and Research, Infill Builders, the City of Sacramento, environmental and labor groups, we found that the use of a streamlined EIR (PRC 21155.2) or the CEQA exemption after a public hearing (PRC 21155.1) is an effective way to reduce some of the CEQA burden on projects, while still maintaining an avenue for objections to be raised concerning individual projects. AB 1886 Page 7 A streamlined EIR, as allowed for transit priority projects (PRC 21155.2), is a valuable tool for infill development. It carries the litigation protection as a full EIR, but is less expensive and less time consuming. It must still consider environmental impacts of a proposed project and must go through the public process for comments or revisions. By changing the requirements which have access to streamlined EIRs, cities may have the ability to attract more infill development. This bill seeks to encourage more environmentally friendly infill development by making a slight change to PRC 21155 to allow for more flexibility in project design, while still remaining within walking distance to high quality transit. It changes the current requirement of how much of an entire mixed use or residential infill project of no more than 200 residential units is within a mile from mass transit from 75% to 50%. This change only affects the non-residential pieces of a project. Current law would remain the same under this bill, that 90% of residential units be within mile distance to mass transit. 3)Three forms of relief. SB 375 provide three alternative forms of relief for CEQA review of transit priority projects: a) Exemption (Section 21155.1). This requires a hearing and findings by the public agency that the project meets specified criteria, including a variety of conditions to assure the project has no significant AB 1886 Page 8 environmental impacts. The project must also be located within one-half mile of a rail transit station or ferry terminal, or within one-quarter mile of a high-quality transit corridor. b) Sustainable communities environmental assessment [Section 21155.2(b)]. This is equivalent to a mitigated negative declaration, except that the lead agency's actions are subject to a more deferential standard of review (substantial evidence rather than fair argument). c) Abbreviated EIR [Section 21155.2(c)]. This limits the consideration of cumulative impacts and does not require analysis of off-site alternatives to the project. 4)Opposition argument. Environmental groups opposed to the bill contend that the half-mile limit is not just about proximity of transit to housing, but also to jobs and retail: AB 1886 maintains that no more than 10 percent of the residential units in the development, or 100 units, whichever is less, can be located more than one-half mile away from the transit station. We are pleased to see an effort to honor the original intent of SB 375, to locate the majority of residential units in walking distance from the transit stop. However, we are concerned about the impacts?on the commercial and retail portions of a project. A report on Transit Oriented Development published by the Public Policy Institute of California recommended a greater emphasis on locating commercial development and jobs near transit to reduce vehicle miles traveled and promote transit ridership. If the bulk of the jobs are located too far from a station for the transit to be a viable commuting option, this commercial development, while near transit, AB 1886 Page 9 may not reduce vehicle miles traveled. Moreover, AB 1886 might result in more, larger projects that choose to locate the full 100 residential units more than one-half mile from transit, rendering transit a less viable option for these residents. 5)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. 6)Suggested amendment. The author and the committee may wish to consider amending the bill to clarify that the changes to the one-half mile limit do not apply to the exemption (Section 21155.1), which has its own, more-stringent transit proximity requirements. REGISTERED SUPPORT / OPPOSITION: Support Association of Environmental Professionals California Association of Realtors AB 1886 Page 10 Opposition California Bicycle Coalition California League of Conservation Voters Natural Resources Defense Council Safe Routes to School National Partnership Sierra Club California Analysis Prepared by:Lawrence Lingbloom / NAT. RES. / (916) 319-2092