BILL ANALYSIS Ó AB 2442 Page 1 Date of Hearing: May 11, 2016 ASSEMBLY COMMITTEE ON APPROPRIATIONS Lorena Gonzalez, Chair AB 2442 (Holden) - As Amended April 14, 2016 ----------------------------------------------------------------- |Policy |Housing and Community |Vote:|6 - 1 | |Committee: |Development | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | |Local Government | |7 - 0 | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: YesReimbursable: No SUMMARY: This bill requires local agencies to grant a density bonus, when an applicant for a housing development agrees to construct housing for transitional foster youth, disabled veterans, or homeless persons. Specifically, this bill: 1)Requires a local agency to grant one density bonus, when an applicant for a housing development seeks and agrees to construct a housing development that contains 10% of the total units for transitional foster youth, disabled veterans, or AB 2442 Page 2 homeless persons, as those terms are defined in code. 2)Requires the units to be subject to a recorded affordability restriction of 55 years and to be provided at the same affordability level as very low-income units. 3)Specifies, for housing developments meeting the criteria of 1) that the density bonus must be 20% of the number of the type of units giving rise to a density bonus, as specified, thus making the density bonus for 1) consistent with density bonus that a developer receives for senior housing units. FISCAL EFFECT: No state fiscal impact. Local agencies have the authority to levy fees for related costs and thus, any local costs are not reimbursable. COMMENTS: 1)Purpose. According to the author, "Many at-risk populations can benefit from affordable housing options, made available by providing existing incentives to build density housing. In existing law, income level and age are the only factors available for housing developers and local governments to consider, when making the commitment to build a housing project that has been granted a multiple density bonus. AB 2442 adds that a density bonus can be obtained by a housing developer, if an agreement is made to build housing and set aside ten percent of the housing units for former foster youth, disabled veterans, and/or formerly homeless individuals. 2)Background. Density bonus is a tool to encourage the AB 2442 Page 3 production of affordable housing 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 intended to financially support the inclusion of the affordable units. All local governments are required to adopt an ordinance that provides concessions and incentives to developers that seek a density bonus on top of the city's zoned density in exchange for including extremely low-, very low-, low-, and moderate-income housing. Typically, housing developments that serve special needs populations are financed using public funding to reduce the debt service on the projects. It's unclear whether or not market rate developers would opt to dedicate at least 10% of the units in development to a transition age foster youth, disabled veterans, and homeless person in return for increased density and concessions and incentives. In addition, these populations would be captured under the existing percentages for very low- and low-income households. 3)Related Legislation. This is one of six Assembly bills addressing density bonus issues before this committee today. a) AB 1934 (Santiago) creates a density bonus for commercial developers that partner with an affordable housing developer to construct a mixed-used development. AB 2442 Page 4 b) AB 2208 (Santiago) adds to the list of the types of sites that a local government can identify as suitable for residential development in their housing element. c) AB 2299 (Bloom) requires, instead of allows, a local agency to, by ordinance, provide for the creation of second units in single-family and multifamily residential zones, and makes a number of other changes specifying what is required to be in the ordinance. d) AB 2501 (Bloom and Low) makes a number of changes to density bonus law. e) AB 2556 (Nazarian) requires a jurisdiction, in cases where a proposed development is replacing existing affordable housing units, to adopt a rebuttable presumption regarding the number and type of affordable housing units necessary for density bonus eligibility. Analysis Prepared by:Jennifer Swenson / APPR. / (916) 319-2081 AB 2442 Page 5