BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 2442


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          Date of Hearing:  May 11, 2016


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                               Lorena Gonzalez, Chair


          AB  
          2442 (Holden) - As Amended April 14, 2016


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          |Policy       |Housing and Community          |Vote:|6 - 1        |
          |Committee:   |Development                    |     |             |
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          |             |Local Government               |     |7 - 0        |
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          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  








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            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  








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            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.










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             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
















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