BILL ANALYSIS                                                                                                                                                                                                    



                                                                    AB 1934


                                                                    Page  1





          Date of Hearing:  May 11, 2016


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                               Lorena Gonzalez, Chair


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


           ----------------------------------------------------------------- 
          |Policy       |Housing and Community          |Vote:|6 - 0        |
          |Committee:   |Development                    |     |             |
          |             |                               |     |             |
          |             |                               |     |             |
          |-------------+-------------------------------+-----+-------------|
          |             |Local Government               |     |8 - 0        |
          |             |                               |     |             |
          |             |                               |     |             |
           ----------------------------------------------------------------- 


          Urgency:  No  State Mandated Local Program:  YesReimbursable:   
          No


          SUMMARY:  


          This bill 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, that when a commercial development agrees to partner  
            with an affordable housing developer to construct a mixed-use  








                                                                    AB 1934


                                                                    Page  2





            project with housing located onsite, a local government, in  
            addition to granting incentives and concessions under State  
            Density Bonus Law also grant the commercial developer  
            exceptions resulting in significant costs reductions over the  
            maximum allowable intensity in the general plan, zoning  
            ordinance, or regulation, including but not limited to, floor  
            area ratios, and may include modification to development  
            standards, such as height and parking requirements.


          2)Declares that the development of affordable housing is a  
            matter of statewide concern and it is not a municipal affair,  
            and therefore, this bill applies to all cities including  
            charter cities.  


          FISCAL EFFECT:


          No state fiscal impact.  Local agencies have the authority to  
          levy fees for related costs and thus, any local costs are not  
          reimbursable. 


          COMMENTS:


          1)Purpose.  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. This bill 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."










                                                                    AB 1934


                                                                    Page  3





          2)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  
            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 in order to offset the cost of the  
            affordable units which will be offered at a lower rent.   
            Developers that seek a density bonus must agree to restrict  
            very low- and low-income rental units to affordable levels for  
            55 years.   


          3)Arguments in Support.  Supporters (apartment owners and  
            realtors) 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.


          4)Arguments in Opposition.  Opponents (cities and planners) 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 local plans. Opposition also points to the  
            lack of definitions for "commercial" development and  
            "partners" in the bill.


          5)Related Legislation.  This is one of six Assembly bills  
            addressing density bonus issues before this committee today.


             a)   AB 2208 (Santiago) adds to the list of the types of  
               sites that a local government can identify as suitable for  








                                                                    AB 1934


                                                                    Page  4





               residential development in their housing element.    


             b)   AB 2299 (Bloom) requires, instead of allows, a local  
               agency to, by ordinance, provide for the creation of second  
               units in single-family and multifamily residential zones,  
               and makes a number of other changes specifying what is  
               required to be in the ordinance.  


             c)   AB 2442 (Holden) requires local agencies to grant a  
               density bonus when an applicant for a housing development  
               agrees to construct housing for transitional foster youth,  
               disabled veterans, or homeless persons.


             d)   AB 2501 (Bloom and Low) makes a number of changes to  
               density bonus law.


             e)   AB 2556 (Nazarian) requires a jurisdiction, in cases  
               where a proposed development is replacing existing  
               affordable housing units, to adopt a rebuttable presumption  
               regarding the number and type of affordable housing units  
               necessary for density bonus eligibility.  


          





          Analysis Prepared by:Jennifer Swenson / APPR. / (916)  
          319-2081












                                                                    AB 1934


                                                                    Page  5