BILL ANALYSIS                                                                                                                                                                                                    



                                                                    AB 1934


                                                                    Page  1





          Date of Hearing:  April 20, 2016


                       ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT


                           Susan Talamantes Eggman, Chair


          AB 1934  
          (Santiago) - As Amended April 14, 2016


          SUBJECT:  Planning and zoning:  density bonuses:  mixed-use  
          projects.


          SUMMARY:  Creates a density bonus for commercial developers that  
          partner with an affordable housing developer to construct a  
          mixed-used development.  Specifically, this bill:  


          1)Requires, when an applicant for approval for commercial  
            development agrees to partner with an affordable housing  
            developer to construct a mixed-use project for which the  
            housing will be located onsite and the proposed commercial  
            development, the city, county, or city and county shall, in  
            addition to any density bonus and incentives or concessions  
            granted to the affordable housing developer pursuant to  
            existing law, to grant a density bonus pursuant to 2), below,  
            to the commercial developer.


          2)Specifies that the density bonus granted to the commercial  
            developer shall mean exceptions resulting in significant cost  
            reductions over the maximum allowable intensity in the general  
            plan, zoning ordinance, or other regulation of the city,  
            county, or city and county, including, but not limited to,  
            floor area ratios, and may include modification to development  








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            standards, such as height and parking requirements.


          3)States that the Legislature finds and declares that the  
            development of affordable housing is a matter of statewide  
            concern and is not a municipal affair, as specified, and that  
            the bill's provisions apply to all cities, including charter  
            cities.


          4)States that no reimbursement is required because a local  
            agency has the authority to levy service charges, fees, or  
            assessments sufficient to pay for the program or level of  
            service mandated by this act, as specified.


          EXISTING LAW:  


          1)Defines "density bonus" as a density increase over the  
            otherwise maximum allowable residential density as of the date  
            of application by the applicant to the local government.  



          2)Requires all cities and counties to adopt an ordinance that  
            specifies how they will implement state density bonus law.



          3)Requires local governments  to grant a density bonus when an  
            applicant for a housing development of five or more units  
            seeks and agrees to construct a project that will contain at  
            least any one of the following:



             a)   10% of the total units for lower-income households;









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             b)   5% of the total units for very-low income households;

             c)   A senior citizen housing development or mobilehome park;  
               and,





             d)   10% of the units in a common-interest development (CID)  
               for moderate-income households.





          4)Requires that the applicant agree to continued affordability  
            of all low- and very low-income units that qualified the  
            applicant for the density bonus for at least 30 years.

          5)Specifies that concessions or incentives may include the  
            following:

             a)   A reduction in site development standards or a  
               modification of zoning code requirements or architectural  
               design requirements that exceed the minimum building  
               standards;

             b)   Approval of mixed-use zoning in conjunction with the  
               housing project if commercial, office, industrial, or other  
               land uses will reduce the cost of the housing development  
               and are compatible with the project and the surrounding  
               area; and,

             c)   Other regulatory incentives or concessions proposed by  
               the developer or the local government that result in  
               identifiable, financially sufficient, and actual cost  








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               reductions.



          6)Requires local governments to provide applicants with the  
            following number of incentives or concessions:

             a)   One incentive or concession for projects that include at  
               least 10% of the total units for lower-income households,  
               at least 5% for very low-income households, or at least 10%  
               for persons and families of moderate income in a common  
               interest development;\

             b)   Two incentives or concessions for projects that include  
               at least 20% of the total units for lower-income  
               households, at least 10% for very low-income households, or  
               at least 20% for persons and families of moderate income in  
               a common interest development.



             c)   Three incentives or concessions for projects that  
               include at least 30% of the total units for lower-income  
               households, at least 15% for very low-income households, or  
               at least 30% for persons and families of moderate income in  
               a common interest development.

          FISCAL EFFECT:  This bill is keyed fiscal.


          COMMENTS:  


          1)Bill Summary.  This bill requires, when an applicant for  
            approval for commercial development agrees to partner with an  
            affordable housing developer to construct a mixed-use project  
            for which the housing will be located onsite and the proposed  
            commercial development, the city, county, or city and county  
            to, in addition to any density bonus and incentives or  








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            concessions granted to the affordable housing developer  
            pursuant to existing law, to grant a density bonus to the  
            commercial developer.  Additionally, the bill specifies that  
            the density bonus granted to the commercial developer shall  
            mean exceptions resulting in significant cost reductions over  
            the maximum allowable intensity in the general plan, zoning  
            ordinance, or other regulation of the city, county, or city  
            and county, including, but not limited to, floor area ratios,  
            and may include modification to development standards, such as  
            height and parking requirements.  The bill also finds and  
            declares that the development of affordable housing is a  
            matter of statewide concern and is not a municipal affair,  
            thereby applying the provisions of the bill to all cities,  
            including charter cities.


            This bill is an author-sponsored measure.


          2)Author's Statement.  According to the author, "Local  
            governments can be wary of high density residential  
            development because of the corresponding increase in demand  
            for public services and infrastructure.  In an era of tight  
            budgets, local governments are also more likely to approve  
            commercial developments which will increase revenues.  


            "AB 1934 seeks to marry these two needs:  a) the state's need  
            for affordable housing; and 


            b) local governments' desire for increased revenues, by  
            encouraging non-traditional housing developers to enter the  
            market and think outside the box in their developments."
          3)Background.  In 1979, the Legislature enacted density bonus  
            law to help address the affordable housing shortage and to  
            encourage development of more low- and moderate-income housing  
            units.  Density bonus is a tool to encourage the production of  
            affordable housing that is used by both market rate and  








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            affordable housing developers. In return for inclusion of  
            affordable units in a development, developers are given an  
            increase in density over a city's zoned density and  
            concessions and incentives.  The increase in density and  
            concessions and incentives are to offset the cost of the  
            affordable units which will be offered at a lower rent, as low  
            as 30% of area median income.  Developers that seek a density  
            bonus must agree to restrict very low- and low-income rental  
            units to affordable levels for 55 years.   


            State law specifies concessions and incentives that a local  
            government may include in its density bonus ordinance,  
            including a reduction in site development standards, or a  
            modification of zoning code requirements, or architectural  
            design requirements that exceed the minimum building  
            standards, and  approval of mixed-use zoning in conjunction  
            with the housing project if commercial, office, industrial, or  
            other land uses will reduce the cost of the housing  
            development and are compatible with the project and the  
            surrounding area.  A developer or city can also propose other  
            regulatory incentives or concessions that result in  
            identifiable, financially sufficient, and actual cost  
            reductions.


          4)Arguments in Support.  Supporters argue that the bill's  
            proposed solution meets the needs of local governments for  
            economic development, along with the construction of  
            affordable housing for the individuals and families who work  
            in our communities and will be helpful to encourage affordable  
            housing construction.


          5)Arguments in Opposition.  Opponents are concerned that the new  
            statutory framework proposed by the bill may result in  
            requests for local agency concessions that may not be  
            warranted, or which may unnecessarily limit authority to  
            review development applications and ensure consistency with  








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            local plans. Opposition also points to the lack of definitions  
            for "commercial" development and "partners" in the bill.


          6)Double-Referral.  This bill was heard by the Housing and  
            Community Development Committee on April 13, 2016, where it  
            passed with a 6-0 vote.


          








          REGISTERED SUPPORT / OPPOSITION:




          Support


          California Apartment Association


          California Association of Realtors


          California Council for Affordable Housing




          Concerns









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          California State Association of Counties


          Housing California




          Opposition


          American Planning Association, California Chapter


          League of California Cities




          Analysis Prepared by:Debbie Michel / L. GOV. / (916) 319-3958