BILL ANALYSIS Ó
AB 1934
Page 1
ASSEMBLY THIRD READING
AB
1934 (Santiago)
As Amended June 1, 2016
Majority vote
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+---------------------|
|Housing |6-0 |Chiu, Steinorth, | |
| | |Burke, Chau, Lopez, | |
| | |Mullin | |
| | | | |
|----------------+-----+----------------------+---------------------|
|Local |8-0 |Eggman, Waldron, | |
|Government | |Alejo, Bonilla, Chiu, | |
| | |Cooley, Gordon, | |
| | |Linder | |
| | | | |
|----------------+-----+----------------------+---------------------|
|Appropriations |15-1 |Gonzalez, Bloom, |Obernolte |
| | |Bonilla, Bonta, | |
| | |Calderon, McCarty, | |
| | |Eggman, Gallagher, | |
| | | | |
| | | | |
| | |Eduardo Garcia, Chau, | |
| | |Holden, Quirk, | |
| | |Santiago, Weber, Wood | |
AB 1934
Page 2
| | | | |
| | | | |
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SUMMARY: Creates a development bonus for commercial developers
that partner with an affordable housing developer to construct a
joint project or two separate projects encompassing affordable
housing. Specifically, this bill:
1)Provides that when a commercial developer agrees to partner
with an affordable housing developer to construct a joint
project or two separate projects encompassing affordable
housing, a local government must in addition to granting
incentives and concessions under State Density Bonus Law also
grant the commercial developer a development bonus.
2)Provides that the development bonus for the commercial
developer means: incentives, mutually agreed upon by the
developer and the jurisdiction, that may include, but are not
limited to, any of the following:
a) Up to a 20% variance in maximum allowable intensity in
the General Plan, zoning ordinance, or other regulation.
b) Up to a 20% variance in maximum allowable floor area
ratio.
c) Up to a 20% variance in minimum parking requirements.
d) A specific use of a limited-use/limited-application
elevator for upper floor accessibility.
AB 1934
Page 3
3)States that "offsite housing" shall be all of the following:
a) Within the boundaries of the local government;
b) In close proximity to public amenities including schools
and employment centers; and
c) In close proximity to both pedestrian amenities and
transit corridors.
4)Provides that the agreement for partnered housing and
commercial developments shall be approved by the affordable
housing developer, the commercial developer, and the local
government.
5)Provides that affordable housing may be contributed by the
commercial developer in one of the following manners:
a) The commercial developer may directly build the units.
b) The commercial developer may dedicate a portion of the
site or property elsewhere to the affordable housing
developer for use as a site for affordable housing.
c) The commercial developer may make an in-lieu payment to
the affordable housing developer that must be used towards
the cost of affordable housing construction on a pending
project.
AB 1934
Page 4
6)States that the affordable housing replacement provisions in
State Density Bonus Law apply.
7)Provides that nothing shall preclude any additional allowances
or incentives offered to developers by local governments
pursuant to law or regulation.
8)Provides that, if the developer of affordable units does not
commence construction of the units in accordance with the
agreed upon timeline, the local government may withhold
certificates of occupancy for any market rate units under
construction until the developer has completed construction of
the affordable units.
9)Defines "commence with construction" as either of the
following:
a) Commence or complete the construction of affordable
units; or
b) Issuance of building permits for the construction of the
affordable units.
10)Provides that no reimbursement is required by this act
because a local agency or school district has the authority to
levy service charges, fees, or assessments sufficient to pay
the program or level of service.
11)Makes findings and declarations 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.
AB 1934
Page 5
FISCAL EFFECT: According to the Assembly Appropriations
Committee, no state fiscal impact. Local agencies have the
authority to levy fees for related costs and thus, any local
costs are not reimbursable.
COMMENTS:
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. The increase in density and concessions and
incentives are to offset the cost 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.
AB 1934
Page 6
This bill seeks to encourage greater production of affordable
units by creating a "development bonus" for commercial
developers who partner with an affordable housing developer to
construct affordable units. Affordable housing developers would
receive a density bonus commensurate with the number of
affordable units included in the development plus concessions
and incentives. In addition to the density bonus and
concessions and incentives provided for the affordable units,
the commercial developer would receive a "development bonus"
which means incentives agreed upon between the commercial
developer and the local government, such as variances in zoning
regulations that result in significant cost reductions.
The types of projects promoted by this bill could result in
mixed-use developments, or could result in the commercial and
residential developments on separate sites. A commercial
developer may choose to build the units itself, or may opt to
have an affordable housing developer build the units either
onsite or offsite. A commercial developer also has the option
of making an in-lieu payment to an affordable housing developer
to be used towards the costs of construction on a pending
affordable housing project. If the affordable housing developer
does not commence with construction at the agreed upon time, the
local government may withhold certificates of occupancy for any
market rate units under construction until the affordable units
are completed.
Purpose of this bill: 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. Conversely, in an era of tight
budgets, local governments have more incentive to approve
commercial developments which will increase revenues (i.e.
hotels with transient occupancy tax or retail establishments
which generate sales tax). AB 1934 represents a solution to all
AB 1934
Page 7
three of these dilemmas: a piece of California's affordable
housing crisis solution which brings both residential and
commercial developers to the table? AB 1934 seeks to marry two
needs: a) the state's need for affordable housing; and b) local
government's desire for increased revenues, by encouraging
non-traditional housing developers to enter the market and think
outside the box in their developments."
Analysis Prepared by:
Rebecca Rabovsky / H. & C.D. / (916) 319-2085
FN:
0003385