BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON GOVERNANCE AND FINANCE
                         Senator Robert M. Hertzberg, Chair
                                2015 - 2016  Regular 

                              
          
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          |Bill No:  |AB 2180                          |Hearing    |6/22/16  |
          |          |                                 |Date:      |         |
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          |Author:   |Ting                             |Tax Levy:  |No       |
          |----------+---------------------------------+-----------+---------|
          |Version:  |3/31/16                          |Fiscal:    |Yes      |
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          |Consultant|Favorini-Csorba                                       |
          |:         |                                                      |
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                         Land use:  development project review



          Shortens deadlines for approval or disapproval of certain  
          residential and mixed use developments under the Permit  
          Streamlining Act.


           Background 

           Planning and Zoning Law. The California Constitution allows a  
          city to "make and enforce within its limits, all local, police,  
          sanitary, and other ordinances and regulations not in conflict  
          with general laws, known as the police power of cities."  It is  
          from this fundamental power that local governments derive their  
          authority to regulate land through planning, zoning, and  
          building ordinances, thereby protecting public health, safety  
          and welfare.  

          The Planning and Zoning Law requires every county and city to  
          adopt a general plan that sets out the intensity (density) and  
          location for planned uses in the area covered by the plan.   
          Cities' and counties' major land use decisions-including  
          development permitting-must be consistent with their general  
          plans.  Local zoning laws and building codes specify where  
          housing may be built, as well as its density, quality, and  
          style.  Housing developers must obtain building permits from  
          city and county planning departments and typically must gain  
          approval from local planning commissions and city councils or  







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          county boards of supervisors. 

          Permit Streamlining Act.  The 1977 Permit Streamlining Act  
          requires public agencies to act fairly and promptly on  
          applications for development permits.  It covers state agencies,  
          cities, charter cities, counties, special districts, and other  
          political subdivisions of the state.  The act requires public  
          agencies to compile lists of information that applicants must  
          provide and explain the criteria they will use to review permit  
          applications.  Public agencies have 30 days to determine whether  
          applications for development projects are complete; failure to  
          act results in an application being "deemed complete."  However,  
          local governments may continue to request additional  
          information, potentially extending the time before an  
          application is deemed complete.

          Once a complete application for a development project has been  
          submitted, the act requires public officials to act within a  
          specific time period after completing any environmental review  
          documents required under the California Environmental Quality  
          Act (CEQA).  Specifically, local governments that serve as lead  
          agencies under CEQA must act within: (1) 60 days after  
          completing a negative declaration or determining that a project  
          is exempt from review, or (2) 180 days after certifying an  
          environmental impact report (EIR).

          However, shorter deadlines apply to certain affordable housing  
          developments.  A lead agency must decide within 90 days of  
          certifying an EIR for a residential or mixed use development  
          that meets all of the following conditions:
                 Residential units make up at least half of the square  
               footage;
                 Any commercial space is reserved for small-scale  
               businesses that primarily serve local residents and are  
               located on the first floor of a building;
                 At least 49% of the units are affordable to low- or very  
               low-income households; and
                 The developer has applied for tax credits or other  
               financial assistance that is necessary to build the unit  
               and has provided confirmation of the application before the  
               EIR is certified.

          The Permit Streamlining Act also sets deadlines for responsible  
          agencies, as defined by CEQA, to act.  These agencies are public  








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          agencies that are not the lead agency but have a role in  
          approving a permit or other authorization for some aspect of the  
          proposed project.  For example, local agency formation  
          commissions are often responsible agencies on new development  
          projects because they must approve necessary boundary changes.   
          Responsible agencies rely on the lead agency's CEQA  
          documentation to issue permits and make decisions.  The Permit  
          Streamlining Act requires responsible agencies to approve or  
          disapprove the development project within 180 days of the date  
          that either the lead agency approved the project or deemed the  
          application complete, whichever is longer.

          If the public agency fails to approve or disapprove the  
          application in the relevant time period, the application is  
          deemed approved and the applicant may sue to order the local  
          government to issue the permit.  Upon mutual agreement between  
          the government and the applicant, the deadlines may be extended  
          once for up to 90 days.

          Housing Costs and Needs.  Housing prices in many parts of  
          California-particularly in cities along the coast-vastly  
          outstrip prices in other states.  While the causes of these high  
          housing prices are complex, studies have shown that a major  
          factor is the undersupply of housing.  Local governments looking  
          to preserve the character of their neighborhoods or keep home  
          values high have found novel ways to slow, modify, or halt new  
          development that might otherwise lower prices.  These tactics  
          include prohibiting the construction of second units, imposing  
          low-density zoning, or implementing explicit policies that limit  
          growth.  In addition, local government revenue streams have been  
          limited by constitutional amendments, leading them to  
          incentivize commercial development that uses fewer services and  
          produces sales tax revenue over residential development that  
          needs more services but produces limited amounts of property tax  
          revenue.

          Some organizations want to expedite public agency decisions on  
          residential and mixed use developments.


           Proposed Law

           Assembly Bill 2180 shortens timelines under the Permit  
          Streamlining Act for a public agency to approve or disapprove  








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          certain types of development projects.  Specifically, AB 2180  
          requires a lead agency to approve or disapprove an application  
          for a residential or mixed use development that devotes at least  
          half of its square footage to residential units and only  
          includes small-scale commercial enterprises, within 120 days of  
          certifying an EIR for the project.  AB 2180 also requires  
          responsible agencies to approve or disapprove those projects  
          within 90 days of the date that either the lead agency approved  
          the project or deemed the application complete, whichever is  
          longer.


           State Revenue Impact

           No estimate.


           Comments

           1.  Purpose of the bill  .  California is in the midst of an  
          unprecedented housing crisis caused by a severe lack of new  
          housing construction, both market rate and affordable.   
          Unfortunately, the local and state approval processes for new  
          housing construction are frequently slow and cumbersome.  AB  
          2180 takes a modest but important step towards speeding those  
          approvals by encouraging public agencies to act more quickly on  
          residential and neighborhood-scale mixed use developments, while  
          preserving all public notice and appeals requirements in current  
          law.  AB 2180 will ensure that badly needed housing projects  
          move through the building approval process faster, thus reducing  
          costs and other delays that can be associated with a lengthy  
          approval process.  

           2.  Sure, but will it work  ? In practice, it can be hard to take  
          advantage of the "deemed-approved" remedy in the Permit  
          Streamlining Act.  The Act doesn't apply to general plan  
          amendments or zoning ordinances that are prerequisites to  
          permitting any sort of development.  And creative local  
          governments have continued to develop new ways to slow or block  
          dense residential or mixed use development that they fear would  
          reduce housing prices, such as providing vague lists of required  
          information.  AB 2180 may expedite some approvals in communities  
          that are already favorably inclined towards development, but  
          stronger intervention in local planning and zoning may be needed  








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          to truly accelerate the construction of new housing and address  
          high housing costs.

          3.   Newer isn't always better  .  Scholars agree that building  
          more housing will, over time, reduce housing costs.  But new  
          housing does not necessarily mean more housing.  While the  
          state's "no-net-loss zoning" statute makes it more difficult for  
          local governments to reduce the density of housing development,  
          it by no means ensures high density development.  Furthermore,  
          there is significant disagreement over the effects of new  
          market-rate housing on low-income residents.  A March 2016 study  
          by UC Berkeley researchers found that affordable housing units  
          did significantly more to protect low-income households at the  
          regional level and found that at the neighborhood level  
          market-rate housing may simply encourage wealthier individuals  
          to move into newly attractive neighborhoods.  AB 2180 expedites  
          reviews for residential and mixed use developments without  
          regard to density or affordability.  Should the Legislature be  
          encouraging all new development, or is a more targeted approach  
          necessary to ensure that help goes to those Californians that  
          struggle to pay their rents?

          4.  Coastal Act  . The California Coastal Act prohibits development  
          in the "coastal zone" along California's coast without a coastal  
          development permit from the Commission or a Commission-certified  
          local agency.  Permitting is performed by local agencies in the  
          vast majority (87%) of the coastal zone.  But in the remaining  
          13% of the coastal zone, the Commission issues permits in the  
          remaining area, making it a responsible agency.  Commission  
          staff argue that the deadlines in the bill for responsible  
          agencies will make it difficult for them to perform thorough  
          work and provide adequate public notice for project approvals.   
          Should they be subject to different timelines for approval than  
          other public agencies?


















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          5.   Mandate  .  The California Constitution generally requires the  
          state to reimburse local agencies for their costs when the state  
          imposes new programs or additional duties on them.  According to  
          the Legislative Counsel's Office, AB 2180 creates a new  
          state-mandated local program because it increases the duties of  
          local officials.  AB 2180 disclaims this liability by stating  
          that no reimbursement is required under the Constitution because  
          local agencies have the authority to levy fees sufficient to  
          cover the cost of the increased services.

           Assembly Actions

           Assembly Local Government Committee:              9-0
          Assembly Appropriations Committee:                20-0
          Assembly Floor:                                   67-0



           Support and  
          Opposition   (6/16/16)


           Support  :  California Apartment Association; California  
          Association of Realtors; California Building Industry  
          Association; California Business Properties Association;  
          California Chamber of Commerce.

           Opposition  :  Unknown.


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