BILL ANALYSIS Ó
AB 1934
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB
1934 (Santiago)
As Amended August 18, 2016
Majority vote
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|ASSEMBLY: |68-9 |(June 2, 2016) |SENATE: | 39-0 |(August 23, |
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Original Committee Reference: H. & C.D.
SUMMARY: Creates a development bonus when a commercial
developer enters into an agreement for partnered housing to
contribute affordable housing through a joint project or two
separate projects encompassing affordable housing. Specifically,
this bill:
1)Provides that when a commercial developer has entered into an
agreement for partnered housing to contribute affordable
housing through a joint project or two separate projects
encompassing affordable housing, the local government must
grant the commercial developer a development bonus.
2)Provides that the agreement for partnered housing shall be
between the commercial developer and the housing developer,
shall identify how the commercial developer will contribute
affordable housing, and shall be approved by the city, county,
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or city and county.
3)States housing shall be constructed on the site of the
commercial development or on a site that is 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) Located within one-half mile of a major transit stop, as
defined in Section 21155(b) of the Public Resources Code.
4)Defines "partner" as the formation of a partnership, limited
liability company, corporation, or other entity recognized by
the state in which the commercial development applicant and
the affordable housing developer are each partners, members,
shareholders or other participants, or a contract or agreement
between a commercial development applicant and affordable
housing developer for the development of both the commercial
and the affordable housing properties.
5)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% increase in maximum allowable intensity in
the General Plan, zoning ordinance, or other regulation.
b) Up to a 20% increase in maximum allowable floor area
ratio.
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c) Up to a 20% increase in maximum height requirements.
d) Up to a 20% increase in minimum parking requirements.
e) Use of a limited-use/limited-application elevator for
upper floor accessibility.
f) An exception to a zoning ordinance or other land use
regulation.
6)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 donate 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 a cash payment to the
affordable housing developer that must be used towards the
cost of constructing the affordable housing project.
7)States that the affordable housing replacement provisions in
State Density Bonus Law apply.
8)Provides that nothing shall preclude any additional allowances
or incentives offered to developers by local governments
pursuant to law or regulation.
9)Provides that, if the developer of affordable units does not
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commence construction of the units in accordance with the
agreed upon timeline, the local government may withhold
certificates of occupancy for the commercial development under
construction until the developer has completed construction of
the affordable units.
10)Requires, in order to qualify for a development bonus, a
commercial developer to partner with a housing developer that
provides at least 30% of the total units for low-income
households or at least 15% of the total units for very
low-income households.
11) Provides that nothing in this section shall preclude an
affordable housing developer from seeking a density bonus,
concessions or incentives, waivers or reductions of
development standards, or parking ratios under existing
density bonus law.
12)Provides that a development bonus shall not include a
reduction or waiver of the requirements within an ordinance
that requires the payment of a fee by a commercial developer
for the promotion or provision of affordable housing.
13)Provides that a city or county shall submit to the Department
of Housing and Community Development, as part of the annual
report, information describing an approved commercial
development bonus, including the terms of the agreements
between the commercial developer and the affordable housing
developer, and the developers and the local jurisdiction, and
the number of affordable units constructed as part of the
agreements.
14)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.
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15)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.
16)Provides a sunset date of January 1, 2022.
The Senate amendments:
1)Add a sunset date of January 1, 2022.
2)Provide that a city or county shall submit to the Department
of Housing and Community Development, as part of the annual
report, information describing an approved commercial
development bonus, including the terms of the agreements
between the commercial developer and the affordable housing
developer, and the developers and the local jurisdiction, and
the number of affordable units constructed as part of the
agreements.
3)Delete the requirement that affordable housing must be in
close proximity to both pedestrian amenities and transit
corridors, and instead requires housing to be located within
one-half mile of a major transit stop, as defined in Public
Resources Code Section 21155(b).
4)Define "partner" as the formation of a partnership, limited
liability company, corporation, or other entity recognized by
the state in which the commercial development applicant and
the affordable housing developer are each partners, members,
shareholders or other participants, or a contract or agreement
between a commercial development applicant and affordable
housing developer for the development of both the commercial
and the affordable housing properties.
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5)Provide 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 the commercial development,
instead of the market rate units, until the developer has
completed construction of the affordable units.
6)Delete the definition of "commence with construction."
7)Require, in order to qualify for a development bonus, a
commercial developer to partner with a housing developer that
provides at least 30% of the total units for low-income
households or at least 15% of the total units for very
low-income households.
8)Provide that nothing in this section shall preclude an
affordable housing developer from seeking a density bonus,
concessions or incentives, waivers or reductions of
development standards, or parking ratios under existing
density bonus law.
9)Specify that a development bonus for a commercial developer
may include an exception to a zoning ordinance or other land
use regulation.
10)Make numerous technical, clarifying changes.
FISCAL EFFECT: According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
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
AB 1934
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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.
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 changes 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
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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 a cash payment to an affordable housing developer to
be used towards the cost of constructing the 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 the commercial
development under construction until the affordable units are
completed.
Senate amendments make numerous technical and clarifying
changes, add a reporting requirement, and add a sunset date of
January 1, 2022.
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
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:
0004733
AB 1934
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