BILL ANALYSIS Ó
AB 1968
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Date of Hearing: April 20, 2016
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
David Chiu, Chair
AB 1968
(Steinorth) - As Amended March 17, 2016
SUBJECT: Greenhouse gases: Affordable Housing and Sustainable
Communities Program
SUMMARY: Sets aside 10% of funds within the Affordable Housing
Sustainable Communities (AHSC) program for medium-density
developments. Specifically, this bill:
1)Makes legislative findings.
2)Defines "medium-density residential development" to mean a
development of attached housing that includes a duet, duplex,
triplex, fourplex, or a townhouse or condominium of between
three and five stories with an allowable density range of
between eight and fifteen units per gross developable acre.
3)Requires 10% of moneys appropriated to the AHSC program each
year to be allocated each fiscal year to local governments
that adopt an ordinance promoting medium-density residential
developments to support projects that meet all of the
following requirements:
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a) Demonstrates that it will achieve a reduction in
greenhouse gas emissions;
b) Support implementation of an adopted or draft
sustainable communities strategy (SCS) or, if a SCS is not
required for a region by law a regional plan that includes
policies and programs to reduce greenhouse gas emissions;
and
c) Demonstrate consistency with the state planning
priorities established to achieve the state's environmental
goals.
1)Requires at least 20% of the total amount allocated to local
governments must be used for housing projects that are
affordable to lower income households.
EXISTING LAW:
1)Establishes the SGC made up of the California Business
Consumer Services and Housing Agency (BCSH), California Health
and Human Services (CHHS), California Environmental Protection
Agency (CalEPA), California State Transportation Agency
(CalSTA), the California Department of Food and Agriculture
(CDFA) and the California Natural Resources Agency (CNRA); the
director of the Governor's Office of Planning and Research
(OPR).
2)Directs the SGC to develop guidelines and selection criteria
for the implementation of AHCS to reduce greenhouse gas
emissions through projects that implement land use, housing,
transportation, and agricultural land preservation practices
to support infill and compact development and that support
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related and coordinated public policy objectives including the
following:
a) Reducing air pollution;
b) Improving conditions in disadvantaged communities;
c) Supporting or improving public health or other
co-benefits;
d) Improving connectivity and accessibility to jobs,
housing, and services;
e) Increasing options for mobility, including the Active
Transportation Program;
f) Increase transit ridership;
g) Preserve and develop affordable housing for lower income
people; and
h) Protect agricultural lands to support infill
development.
1)Requires a project to demonstrate the following to be eligible
for funding from the AHSC program:
a) Demonstrate that it will achieve a reduction in
greenhouse gas emissions;
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b) Support implementation of an adopted or draft SCS, or if
a SCS is not required for the region a regional plan that
includes policies and programs that reduce greenhouse gas
emissions.
c) Demonstrate consistency with the state planning
priorities established to achieve the state's environmental
goals.
1)Requires that at least 50% of the funding for AHSC benefit
projects in disadvantaged communities.
2)Requires SGC when revising its guidelines to develop the
guidelines and selection criteria, conduct at least two public
workshops (one in northern California and one in southern
California) to receive and consider public comments, and
publish the draft guidelines on its Internet Web site at least
30 days prior to the public meetings.
3)Requires SGC to consider comments from local governments,
regional agencies, and other stakeholders in adopting
guidelines and selection criteria.
4)Requires the SGC to conduct outreach to disadvantaged
communities to encourage comments on the draft guidelines from
those communities.
5)Defines "disadvantaged communities" to mean communities
identified by the CalEPA based on geographic, socioeconomic,
public health, and environmental hazard criteria, and may
include, but are not limited to, either of the following:
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a) Areas disproportionately affected by environmental
pollution and other hazards that can lead to negative
public health effects, exposure, or environmental
degradation; and
b) Areas with concentrations of people that are of low
income, high unemployment, low levels of homeownership,
high rent burden, sensitive populations, or low levels of
educational attainment.
FISCAL EFFECT: Unknown.
COMMENTS:
In 2014, Legislature created the AHSC program funded through
cap-and-trade proceeds. SB 862 (Senate Budget and Fiscal Review
Committee) Chaptered 862, Statutes of 2014 continuously
appropriated 35% of the cap-and-trade funds for investments in
transit, affordable housing, and sustainable communities. Of
this, 10% is for transit and inter-city rail capital programs
administered by the Department of Transportation (Caltrans) and
the California Transportation Commission (CTC); 5% is for low
carbon transit operations through the State Transit Assistance
formula; and 20% is for affordable housing and sustainable
communities, with half of this funding going to affordable
housing projects that demonstrate a reduction in greenhouse
gases.
The AHSC program has approximately $300 million available in
funding and is administered by the SGC and HCD. HCD is
responsible for implementing the transportation, housing, and
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infrastructure components of the AHSC program. According to the
AHSC guidelines, "The AHSC program is designed to implement the
GHG emissions reductions through fewer shorter vehicle trips.
The AHSC program will fund integrated land use and
transportation projects supporting low-carbon transportation
options. Promoting mode shift to low-carbon transportation will
require strategies that link residential areas, major employment
centers and other key destinations to accessible reliable,
affordable safe, comfortable transit, and active transportation
options."
Purpose of this bill : According to the author, "In some parts
of California, it is not as economically feasible (or perhaps
even permissible) to build high-density, high rise developments
envisioned by the AHSC. For those areas, "medium-density"
development may be a more realistic option, especially where
there is a strong need for increased housing supply. Such
development is unfortunately not as easy to build, due to
tougher building code standards and engineering challenges. As a
result, suburban and less-affluent parts of the state are at a
disadvantage when trying to qualify for the AHSC. This in turn
hinders compact development efforts in these regions and creates
a disparity with the areas that can afford higher density
projects. A 2014 federal report on infill development determined
that one of the biggest challenges to creating infill
development were construction costs in buildings that utilized
steel or reinforced concrete, typically those that are four or
more stories. The report also references a 2007 Brookings
Institution paper which also found that the cost to construct
wood-framed buildings over two stories ballooned and that
mid-rise reinforced concrete buildings were even more expensive.
Other studies show a similar concept: increased building heights
(and density) often lead to increase per-unit construction costs
and rental prices. AB 1968 would help developers, who may be
financially prohibited from such development, defray some of
their costs and be able to provide more infill development to
communities that may not be as suited for larger-scale projects.
In particular, in areas that may not have a strong enough demand
or capital resources to sustain a high-rise building, this bill
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would help support developments for a more affordable, mid-range
market."
Staff comments:
This bill would award 10% of AHSC funding to local governments
that adopt an ordinance that promotes medium-density residential
developments which would include developments that are between
three and five stories with a density range of between eight and
fifteen units per developable acre. Local governments would
only be required to use 20% of the funds awarded to it for
affordable housing. The intent of programs funded by
cap-and-trade proceeds is to reduce greenhouse gas emissions to
achieve goals set in AB 32 (Nunez), Chapter 488, Statues of
2006. In order to meet this standard affordable housing
project must combine both density and accessibility to public
transportation in order to result in vehicle miles travelled
which will reduce our overall GHG production. The effect of this
bill is to reduce the density required for projects and
potentially undermine the goal of the program. In addition,
AHSC is limited to funding housing that is affordable to lower
income households. This bill proposes to allow local governments
to use 80% of the funds awarded to it for housing at any income
and is not limited to affordable housing.
Climate change is a dynamic and evolving situation that the
state needs to be able to respond to through policy and funding
mechanisms in an efficient and thoughtful manner. Locking
program guidelines into statute may undermine that process and
the fundamental purpose of the AHSC program, to reduce our GHG
emissions and slow climate change. The committee may wish to
consider if making changes to the guidelines through this bill
will invite other stakeholders who are dissatisfied with the
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guidelines process to pursue changes through the legislative
process.
REGISTERED SUPPORT / OPPOSITION:
Support
County of San Bernardino
Opposition
None on File
Analysis Prepared by:Lisa Engel / H. & C.D. / (916) 319-2085,
Lisa Engel / H. & C.D. / (961) 319-2085
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