BILL ANALYSIS                                                                                                                                                                                                    



                                                                    AB 2522


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          Date of Hearing:  April 13, 2016


               ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT


                                  David Chiu, Chair


          AB 2522  
          (Bloom) - As Amended April 5, 2016


          SUBJECT:  Land use:  attached housing developments


          SUMMARY:  Allows an attached housing development to be permitted  
          as a "use by right" provided that it meets specified  
          requirements.   Specifically, this bill:  


          1)Defines "use by right" to mean that a local government's  
            review of the owner-occupied or multi-family residential use  
            may not require a conditional use permit, planned unit  
            development permit, or other discretionary local government  
            review or constitute a "project" for the purposes of the  
            California Environmental Quality Act (CEQA). Requires any  
            subdivision of sites are subject to all laws including but not  
            limited to the local Subdivision Map Act. Use by right does  
            not exempt the use from design review. Design review does not  
            constitute a "project" for purposes of CEQA.   


          2)Defines "attached housing development" to mean:


             a)   A newly constructed or substantially rehabilitated  
               structure containing two or more dwelling units that is a  
               "housing development project;"    








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             b)   "Housing development project" means a use consistent  
               with any of the following:


                  i.        Residential use only; 


                  ii.       Mixed use developments consisting of  
                    residential and nonresidential in which the  
                    nonresidential uses are limited to neighborhood  
                    commercial uses and to the first floor of buildings  
                    that are more than two floors. Neighborhood commercial  
                    means small-scale general or special stores that  
                    provide goods primarily to the surrounding community;  
                    or 


                  iii.      Transitional or supportive housing.    


             a)   Does not include a second unit; and


             b)   Does not include a condominium conversion. 


          1)Requires the attached housing development to include housing  
            for very low, low-, or moderate-income households as follows:


             a)   At least 20% of the total units must be sold or rented  
               to lower income households making 80% of the area median  
               income (AMI) or below; or 


             b)   100% of the units must be sold or rented to moderate  
               income households, making between 80% to 120% of AMI or  








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               middle income households making 150% of AMI or below; and 


             c)   Replacement of all rental units that existed on the site  
               where the attached housing development is constructed in  
               the last five years that were:


                  a.        Occupied by very low- or low-income  
                    households;


                  b.        Restricted by a covenant or law to very low-  
                    or low-income rents;


                  c.        Subject to rent control if the occupants were  
                    moderate, low- or very low-income. 


          1)Requires the attached housing development  to either:


             a)   Satisfy existing exemptions within the California  
               Environmental Quality Act (CEQA) for farmworker housing,  
               low income housing developments, and infill sites with 100  
               housing units or less; or 


             b)   Requires the attached housing development to: 


                  i.        Be located on a site that is included in the  
                    jurisdiction's housing element inventory of  
                    residential land suitable for development; or


                  ii.       Be located on a site that has been or will be  
                    rezoned as required by the jurisdiction's housing  








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                    element and either the rezoning has been complete or  
                    three years has passed following the date that the  
                    jurisdiction's housing element was adopted unless an  
                    extension to four years is granted because most of the  
                    rezoning was completed within the previous three  
                    years; and 


                  iii.      Provides that the attached housing development  
                    cannot contain more dwelling units than were projected  
                    by the jurisdiction in the housing element as well as  
                    any density bonus units that the development is  
                    eligible for; and 


                  iv.       Requires the attached housing development must  
                    comply with applicable general plan and zoning  
                    standards and criteria, including but not limited to  
                    design standards in effect when the attached housing  
                    development is determined to be complete; and 


                  v.        Requires the attached housing development to  
                    either be in an "urbanized area" or "infill site."


          1)Defines an "urbanized area" to mean: 

             a)   An incorporated city with a population of at least  
               100,000 or an incorporated city with a population of less  
               than 100,000 if no more than two neighboring incorporated  
               cities have a population of at least 100,000; or  

              b)   An unincorporated area that is either completed  
               surrounded by one or more incorporated cities and the  
               population of the incorporated area and the population of  
               the surrounding incorporated city or cities is not less  
               than 100,000 and the population density of the incorporated  
               area is at least equal to the population density of the  








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               surrounding city or cities OR an unincorporated area that  
               is located within urban growth boundary and has an existing  
               residential population of at least 5,000 persons per square  
               mile; or  

              c)   In an census-defined place with a population density of  
               at least 5,000 persons per square mile; or  

              d)   If the development is 50 units or less within an  
               incorporated city with a population density of at least  
               2,500 persons per square mile and total population of at  
               least 25,000.  

           1)Defines an "infill site" to mean a site in an urbanized area  
            where either:  

              a)   The site has not been previously developed for urban  
               uses and both of the following apply:  the site is  
               immediately adjacent to parcels that are developed with  
               qualified urban uses, or at least 75 percent of the  
               perimeter of the site adjoins parcels that are developed  
               with qualified urban uses, and the remaining 25 percent of  
               the site adjoins parcels that have previously been  
               developed for qualified urban uses AND no parcel in the  
               site has been built on within the past 10 years unless the  
               parcel was built on as result of a redevelopment agencies  
               plan, or  

              b)   The site was previously developed for qualified urban  
               uses.  

           1)Applies to all cities and counties including charter cities  
            because the Legislature finds that the lack of affordable  
            housing is of vital statewide importance and thus a statewide  
            concern. 



          2)Operates independently of a jurisdictions obligation to  








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            identify multifamily sites developable by right in its housing  
            element. 




          3)Provides that the exemptions in this bill do not apply to the  
            Coastal Commission Act.




          4)Provides that an applicant or public agency must comply with  
            the Subdivision Map Act. 




          5)Provides that no reimbursement is required pursuant to Section  
            6 of Article XIII B of the California Constitution. 




          EXISTING LAW:  


          1)Defines "use by right" to mean that a local government's  
            review of the owner-occupied or multifamily residential use  
            may not require a conditional use permit, planned unit  
            development permit, or other discretionary local government  
            review or constitute a "project" for the purposes of the  
            California Environmental Quality Act (CEQA) Requires any  
            subdivision of the sites are subject to all laws including but  
            not limited to the local Subdivision Map Act. Use by right  
            does not exempt the use from design review. Design review does  
            not constitute a "project" for purposes of CEQA.   










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          2)The Housing Accountability Act defines housing for very low,  
            low-, or moderate-income households to mean either:


             a)   At least 20% of the total units in a development must   
               be sold or rented to lower income households at 80% of AMI  
               or below  (as defined in Section 50079.5 of the Health and  
               Safety Code); or 


             b)   100% of the units in a development must be sold or  
               rented to persons and families of moderate income between  
               80% to 120% of AMI (as defined in Section 50093 of the  
               Health and Safety Code)  or to persons and families of  
               middle income at up to 150% of AMI. (Government Code  
               Section 65589.5)


          1)The Housing Accountability Act provides that:


             a)   Housing units targeted for lower income households shall  
               be made available at a monthly housing cost that does not  
               exceed 30% of 60% of AMI with adjustments for household  
               size made in accordance with the adjustment factors on  
               which the lower income eligibility limits are based. 


             b)   Housing units targeted for persons and families of  
               moderate income shall be made available at a monthly  
               housing cost that does not exceed 30% of 100% of AMI with  
               adjustments for household size made in accordance with the  
               adjustment factors on which the moderate-income eligibility  
               limits are based.


          FISCAL EFFECT:  Unknown. 










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          COMMENTS:  


           Background:   California is facing a housing affordability crisis  
          on many fronts. According to the Public Policy Institute of  
          California (PPIC), as of February 2015, roughly 36% of mortgaged  
          homeowners and approximately 48% of all renters are spending  
          more than one-third of their household incomes on housing.  
          California continues to have the second lowest homeownership  
          rate in the nation and the Los Angeles metropolitan area is now  
          a majority renter region. In fact, five of the eight lowest  
          homeownership rates in the nation are in California metropolitan  
          areas.


          California has 12% of the United States population, but 20% of  
          its homeless population - 63% of these homeless Californians are  
          unsheltered (the highest rate in the nation).  At any given  
          time, 134,000 Californians are homeless. California has 24% of  
          the nation's homeless veterans and one-third of the nation's  
          chronically homeless. The state also has the largest numbers of  
          unaccompanied homeless children and youth, with 30% of the  
          national total. 

           By right proposal  :  This bill would exempt a housing development  
          that includes either 20% low-income units or 100% moderate  
          income units and middle income units from a conditional use  
          permit, a planned unit development permit or project level CEQA  
          review. In order to qualify, a housing development would need to  
          be on a site designated by the local government in its housing  
          element, be located in an urbanized area, and be consistent with  
          the adopted General Plan, written zoning, and design criteria.   
          In order to qualify for by right, the number of units in a  
          development could not exceed the number of units that the local  
          government had designated for the site in its housing element  
          plus any increased density a developers receives as part of a  
          density bonus. 

          The project would be exempt from a project level CEQA review;  








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          however it would be subject to environmental review as part of  
          the housing element review and adoption process. Public review  
          is also required when a local government adopts design  
          requirement, its General Plan, and zoning. A development that is  
          approved by right pursuant to this bill would be subject to  
          those reviews.   

          A housing development could not qualify for use by right if it  
          removes existing housing units that are affordable to low income  
          families or are subject to rent control unless replacement units  
          are included in the development in equal proportion.  

           Purpose of this bill:   According to the author, "AB 2522 amends  
          Government Code Section 65589.4 to focus on building affordable  
          and workforce housing through a market-rate solution, and to  
          address continued strong local opposition to housing at the  
          local level through the CEQA process.  This bill is also  
          designed to avoid further modification to or additional  
          requirements on the housing element itself as they will have  
          minimal positive effect on the amount of housing produced in the  
          state. AB 2522 would require by right approval by cities and  
          counties of any market rate multi-family rental housing project  
          that includes at least 20% low income housing or 100% moderate  
          income housing. The by right approval would apply to attached  
          housing projects proposed for sites already designated by the  
          city or county in the housing element for housing, in urban  
          areas, and subject to consistency with written up-front General  
          Plan, zoning and design criteria.  By right approval is  
          completed without any discretionary approval, eliminating the  
          need for CEQA review, and is already required on any housing  
          element sites where rezoning was required. However, public  
          review is still required to establish design guidelines and the  
          zoning, and subdivisions remain subject to CEQA. Substantial  
          public review, comment and CEQA are also required during the  
          housing element review and adoption process."


           Arguments in support  : According to the sponsor, the American  
          Planning Association, California Chapter, AB 2522 is designed to  








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          get more affordable and market rate housing built by, providing  
          greater certainty to developers who will know well before  
          submitting a project application what is required to receive the  
          by right approval through written, upfront General Plan, zoning  
          and design criteria. AB 2522 respects local planning for housing  
          because the sites where the  housing would be approved by right  
          have already been designated as housing sites in the housing  
          element by the city or county itself, and the project must also  
          comply with written and adopted General Plan, zoning and design  
          criteria developed and approved by the local agency. Encourages  
          public engagement early in the process by shifting local  
          engagement and participation away from CEQA review at the time  
          of project approval, the public can engage much earlier in the  
          process during approval and adoption of the General Plan,  
          housing element, zoning and design criteria. AB 2522 provides a  
          clear and concrete solution that encourages the production of  
          housing rather than additional paperwork: Additional  
          requirements for the housing element have been passed by the  
          Legislature nearly every year for 20 years - these requirements  
          have not prevented a severe housing shortage. Further detailed  
          requirements for housing elements will have minimal positive  
          effects on the amount of housing produced in the state. The  
          emphasis now must be on increasing the production of housing at  
          all affordability levels.


           Arguments in opposition  : According to the League of California  
          Cities, "when a city prepares its housing element it does its  
          best to identify sites that accommodate its share of the RHNA.    
          However, a detailed engineering, environmental analysis is not  
          completed when the housing element is prepared. This means that  
          the maximum number of units may not be able to be accommodated  
          on a particular site because of engineering and environmental  
          issues that are discovered as part of the review of a housing  
          development. By right approval of the maximum units does not  
          allow a city to analyze whether the site can accommodate the  
          number of units. The bill requires continued affordability for  
          30 years. The density bonus law requires continued affordability  
          for 55 years. The League has always supported 55 years  








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          requirements to ensure continued affordability and availability.  


           Staff comments: 

           The committee may wish to consider the following amendments to  
          exempt jurisdictions who are successfully building affordable  
          housing from the provisions of this bill. In the most recently  
          competed RNHA cycle, local governments that exceed 60% of their  
          total RHNA for all income levels and exceed 40% of the RNHA for  
          very low- and low-income levels combined would have the option  
          of opting out of the requirements of the bill.  Local  
          governments would be required to make a finding that they have  
          met these thresholds and would be required to notify HCD on  
          their housing element annual report that they opted-out. 


            This act shall not apply to a city, county, or a city and  
            county in the last RNHA cycle exceeded 60% of the total  
            regional housing needs in all income levels and exceeded 40%  
            of the combined RHNA for very-low- and low-income. A city,  
            county or city and county shall make a finding annually to  
            maintain this exemption.  

          The committee may wish to consider the following amendments to  
          ensure that the maximum numbers of affordable units are  
          constructed and that the housing is deed restricted for 55-years  
          for very low- and low- and 45 years for moderate income.  

          Amend 65589.4 (b) as follows: 

            (b) The attached housing development provides both of the  
            following:

            (1) "Housing for very low, low or moderate income households"  
            as defined in paragraph (3) of subdivision (h) of Section  
            65589.5; and  or  

            (2) Replacement housing units as required by paragraph (3) of  








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            subdivision (c) of Section 65915  , whichever provides the  
            greater amount of lower income housing  .

             The jurisdiction shall require the developer of the attached  
            housing development to provide sufficient legal commitments to  
            the local agency to ensure the continued availability and use  
            of the housing units for very low- and low-income households  
            for a period of at least 55 years and for moderate-income  
            households for a period of at least 45 years.  



           Technical amendment: 


           Page 3, line 22, delete "element" and replace with "development"  
           


           Double referred  :  If AB 2522 passes this committee, the bill  
          will be referred to the Committee on Local Government.


          REGISTERED SUPPORT / OPPOSITION:




          Support


          American Planning Association, California Chapter (sponsor)


          California Apartment Association


          California Association of Realtors









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          California Building Industry Association


          California Housing Consortium







          Opposition


          City of Lakeport


          City of Torrance


          Council of Community Housing Organizations


          League of California Cities




          Analysis Prepared by:Lisa Engel / H. & C.D. / (916) 319-2085,   
          Lisa Engel / H. & C.D. / (961) 319-2085
















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