BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 2208


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          Date of Hearing:  April 20, 2016


                       ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT


                           Susan Talamantes Eggman, Chair


          AB 2208  
          (Santiago) - As Amended April 4, 2016


          SUBJECT:  Local planning:  housing element:  inventory of land  
          for residential development.


          SUMMARY:  Adds, for purposes of the requirements of housing  
          element law, to the list of the types of sites that a local  
          government can identify as suitable for residential development  
          in the housing element.  Specifically, this bill:  


          1)Adds, for purposes of the requirements of housing element law  
            that a city or county identify sites that can be developed for  
            housing within the planning period and that are sufficient to  
            provide for the jurisdiction's share of the regional housing  
            need for all income levels, the following to the list of land  
            suitable for residential development:


             a)   Buildings owned or under the control of a city or  
               county, zoned for residential use and capable of having  
               residential developments constructed above the existing  
               building;


             b)   Buildings owned or under the control of a city or a  
               county and zoned for nonresidential use that can be rezoned  








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               for residential use and are capable of having residential  
               developments constructed above the building;


             c)   Underutilized sites zoned for residential use; and,


             d)   Underutilized sites zoned for nonresidential use that  
               allow residential development. 


          1)Defines "underutilized sites" to mean properties or portions  
            of a property that are used only 


          at irregular periods or intermittently by the accountable agency  
            of the local government or property that is being used for the  
            accountable agency's current program purposes that can be  
            satisfied with only a portion of the property.  
          2)States that no reimbursement is necessary because a local  
            agency has the authority to levy service charges, fees, or  
            assessment sufficient to pay for the program or level of  
            service mandated by this act.


          EXISTING LAW:  


          1)Requires every city and county to prepare and adopt a general  
            plan containing seven mandatory elements, including a housing  
            element.  

          2)Divides the regional housing needs allocation (RHNA) into the  
            following income categories:



             a)   Very low-income (50% or lower of area median income),  
               including extremely low-income (30% or lower of area median  








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               income);



             b)   Low-income (80% or lower of area median income);



             c)   Moderate-income (between 80% and 120% of area median  
               income); and,
             d)   Above moderate-income (exceeding 120% area median  
               income).





          1)Requires a jurisdiction's housing element to identify and  
            analyze existing and projected housing needs, identify  
            adequate sites with appropriate zoning to meet the housing  
            needs 
          of all income segments of the community, and ensure that  
            regulatory systems provide opportunities for, and do not  
            unduly constrain, housing development.

          2)Requires a local government to inventory land suitable for  
            residential development to identify sites that can be  
            developed to meet the jurisdiction's regional housing needs  
            for all income levels.  Provides that "land suitable for  
            residential development" includes all of the following:


             a)   Vacant sites zoned for residential use;


             b)   Vacant sites zoned for nonresidential use that allows  
               residential development;










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             c)   Residentially zoned sites that are capable of being  
               developed at higher density; and,


             d)   Sites zoned for nonresidential use that can be  
               redeveloped for and as necessary, rezoned for, residential  
               use.  


          FISCAL EFFECT:  This bill is keyed fiscal.


          COMMENTS:  


          1)Bill Summary.  This bill adds, for purposes of the  
            requirements of housing element law that a city or county  
            identify sites that can be developed for housing within the  
            planning period and that are sufficient to provide for the  
            jurisdiction's share of the regional housing need for all  
            income levels, the following to the list of land suitable for  
            residential development:


             a)   Buildings owned or under the control of a city or  
               county, zoned for residential use and capable of having  
               residential developments constructed above the existing  
               building;


             b)   Buildings owned or under the control of a city or a  
               county and zoned for nonresidential use that can be rezoned  
               for residential use and are capable of having residential  
               developments constructed above the building;


             c)   Underutilized sites zoned for residential use; and,










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             d)   Underutilized sites zoned for nonresidential use that  
               allow residential development. 


            The bill defines "underutilized sites" to mean properties or  
            portions of a property that are used only at irregular periods  
            or intermittently by the accountable agency of the local  
            government or property that is being used for the accountable  
            agency's current program purposes that can be satisfied with  
            only a portion of the property.  


            This bill is an author-sponsored measure.


          1)Author's Statement.  According to the author, "In many urban,  
            dense areas, there is a distinct lack of land that can be used  
            for affordable housing.  In fact, the City of Los Angeles is  
            about to hit its development limit.  The city is now zoned to  
            house, at most, 4.2 million people.  The current population is  
            3.9 million.  There were 28,000 new housing starts in the Los  
            Angeles metro area last year (population 13 million), versus  
            64,000 in Houston (population two million). In California's  
            largest urban areas, and those where land costs are the  
            highest, it is particularly important that local governments  
            and developers both think outside the box on how to use land  
            and space more effectively.  AB 2208 takes an important step  
            in this direction by requiring that local governments  
            specifically consider non-traditional spaces in their property  
            surveys for housing.  AB 2208 requires local governments to  
            include underutilized land, and available air rights when  
            surveying property that may be applicable for use in  
            affordable housing as a part of their Housing Element."


          2)Background.  Every local government is required to prepare a  
            housing element as part of its general plan.  The housing  
            element process starts when the Department of Housing and  
            Community Development (HCD) determines the number of new  








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            housing units a region is projected to need at all income  
            levels (very low-, low-, moderate-, and above-moderate income)  
            over the course of the next housing element planning period to  
            accommodate population growth and overcome existing  
            deficiencies in the housing supply.  This number is known as  
            the regional housing needs assessment (RHNA).  The council of  
            governments (COG) for the region, or HCD for areas with no  
            COG, then assigns a share of the RHNA number to every city and  
            county in the region based on a variety of factors.
            In preparing its housing element, a city or county must show  
            how it plans to accommodate its share of the RHNA.  The  
            housing element must include an inventory of sites already  
            zoned for housing.  If a community does not have enough sites  
            within its existing inventory of residentially zoned land to  
            accommodate its entire RHNA, then the community must adopt a  
            program to rezone land within the first three years of the  
            planning period. 


            Cities and counties are required to demonstrate that sites are  
            adequate to accommodate housing for each income group based on  
            the zoning after taking into consideration individual site  
            factors, such as property size, existing uses, environmental  
            constraints, and economic constraints.  With respect to the  
            zoning, density can be used as a proxy for affordability.   
            Jurisdictions may establish the adequacy of a site for very  
            low- or low-income housing by showing that it is zoned at the  
            "default" density (also referred to as the Mullin density).  
            These densities range from 10 to 30 units per acre depending  
            on the type of jurisdiction.  Jurisdictions may also include  
            sites zoned at lower densities by providing an analysis of how  
            the lower density can accommodate the need for affordable  
            housing.  


          3)Building Up.  According to an article in Governing Magazine  
            entitled "Why Don't More Cities Sell Air Rights?" published in  
            September 2014, "Public works projects often come at heavy  
            expense.  Whether it's building new schools, municipal halls  








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            or other facilities, such projects produce not only upfront  
            costs, but depending on their magnitude, long-term debts.   
            There is however, a way to mitigate costs, or even make a  
            project more profitable:  sell off the air rights."


            The article also points out that "U.S. cities do not maximize  
            their use of public properties?It is in compact cities such as  
            Seattle - along with Boston, Chicago, New York City, San  
            Francisco and Washington, D. C - where utilizing air rights  
            would make the most sense?.after all, if proposed three-story  
            schools, libraries and recreation centers could instead sit  
            inside 50-story mixed-use towers, this would increase the  
            supply of affordable housing and office space, further  
            compelling people to locate centrally."


          4)Policy Considerations.  The Committee may wish to consider the  
            following:


             a)   Feasibility.  Is it feasible to build residential units  
               on top of existing structures?  The Committee may wish to  
               consider whether cities should be able to count these sites  
               toward the RHNA, if constructing residential developments  
               above existing buildings is not truly feasible.  Also,  
               given the concerns around seismic safety in California, the  
               Committee may wish to consider whether it is prudent to  
               encourage developments on top of existing buildings that  
               were not originally built with the idea of expansion  
               upwards.


             b)   Cost of Reviewing Existing Properties.  As noted by the  
               California State Association 


             of Counties in their letter of "Concerns," "Counties are  
               concerned?with the potential costs of reviewing existing  








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               properties to determine whether they can feasibly  
               accommodate housing development?.moreover, we are concerned  
               that the bill may put counties in the position of proving  
               why county-owned or controlled buildings or properties are  
               not appropriate for housing development rather than solely  
               allowing local jurisdictions the flexibility to inventory  
               these properties when they are clearly suitable for  
               development."
             c)   More Housing? The Committee may wish to consider whether  
               such a review of existing properties will actually result  
               in any additional housing being built on those sites.


          5)Arguments in Support.  Supporters argue that the expansion in  
            the bill will provide cities additional flexibility in meeting  
            their regional housing needs by identifying a greater number  
            of sites where housing can be built.


          6)Arguments in Opposition.  There are concerns that the  
            definition of "underutilized" and the public buildings on  
            which housing can be built above is not adequately developed  
            in the bill and could result in sites not suitable for  
            residential development being included in the jurisdiction's  
            housing element.   


          7)Double-Referral.  This bill was heard by the Housing and  
            Community Development Committee on April 13, 2016, where it  
            passed with a 7-0 vote.


          














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          REGISTERED SUPPORT / OPPOSITION:




          Support


          League of California Cities


          California Council for Affordable Housing




          Concerns


          California State Association of Counties


          Housing California




          Opposition


          American Planning Association, California Chapter (unless  
          amended)










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          Analysis Prepared by:Debbie Michel / L. GOV. / (916) 319-3958