BILL ANALYSIS Ó
AB 2556
Page 1
(Without Reference to File)
CONCURRENCE IN SENATE AMENDMENTS
AB
2556 (Nazarian)
As Amended August 19, 2016
Majority vote
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|ASSEMBLY: |76-0 |(May 19, 2016) |SENATE: |39-0 |(August 25, |
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Original Committee Reference: H. & C.D.
SUMMARY: Requires, in cases where a proposed development is
replacing affordable housing units, a jurisdiction to apply a
rebuttable presumption regarding the number and type of
affordable housing units necessary for density bonus
eligibility. Specifically, this bill:
1)Requires, if the income of the household that occupies the
unit is not known, it to be rebuttably presumed that
lower-income renter households occupied these units in the
same proportion of lower-income renter households to all
renter households within the jurisdiction, as determined by
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the most recently available data from the United States (U.S.)
Department of Housing and Urban Development's (HUD)
Comprehensive Housing Affordability Strategy database.
2)Requires, for unoccupied units in a development with occupied
units, replacement units to be made available at affordable
rent or affordable housing cost to, and occupied by, persons
and families in the same or lower income category as the last
household in occupancy. If the income category of the last
household in occupancy is not known, it shall be rebuttably
presumed that lower income renter households occupied these
units in the same proportion of lower income renter households
to all renter households within the jurisdiction, as
determined by the most recently available data from HUD's
Comprehensive Housing Affordability Strategy database.
3)Requires, in cases where all dwelling units have been vacated
or demolished within the five-year period preceding the
density bonus application and the incomes of the occupants at
the high point of the affordable units is not known, that it
be rebuttably presumed that low-income and very low-income
renter households occupied these units in the same proportion
of low-income and very low-income renter households to all
renter households within the jurisdiction, as determined by
the most recently available data from HUD's Comprehensive
Housing Affordability Strategy database.
4)Allows a city or county, in cases where a proposed development
is replacing existing affordable units, for any dwelling unit
that is or was, within the five-year period preceding the
density bonus application, subject to a form of rent or price
control through a local government's valid exercise of police
power and that is or was occupied by persons of families above
lower income, to do either of the following:
a) Require that the replacement units be made available at
affordable rent or affordable housing cost to, and occupied
by low-income persons or families. If the replacement
units will be rental dwelling units, these units shall be
subject to a recorded affordability restriction for at
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least 55 years. If the proposed development is for-sale
units, the units replaced shall be subject to existing law.
b) Require that units be replaced in compliance with the
jurisdiction's rent- or price-control ordinance, provided
that each affordable rental unit, including those that were
vacated or demolished in the five years leading to the
application, is replaced. Unless otherwise required by the
jurisdiction's rent or price control ordinance, these units
shall not be subject to a recorded affordability
restriction.
5)Specifies that the proposed housing development shall provide
at least the same number of replacement units of equivalent
size.
6)Defines "equivalent size" as the replacement units containing
at least the same total number of bedrooms as the units being
replaced.
7)Incorporates chaptering out amendments, proposed by AB 2442
(Holden) and AB 2501 (Bloom) of the current legislative
session, that would become operative only if this bill and
either or both of those bills are chaptered and become
effective on or before January 1, 2017, and this bill is
chaptered last.
8)States that no reimbursement is required because a local
agency has the authority to levy service charges, fees, or
assessments sufficient to pay for the program or level of
service mandated by this act.
The Senate amendments:
1)Require, if a unit must be replaced and the income of the
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occupant is not known, it to be rebuttably presumed that
lower-income renter households occupied these units in the
same proportion of lower-income renter households to all
renter households within the jurisdiction, as determined by
the most recently available data from HUD's Comprehensive
Housing Affordability Strategy database.
2)Require, for unoccupied units in a development with occupied
units, replacement units to be made available at affordable
rent or affordable housing cost to, and occupied by, persons
and families in the same or lower income category as the last
household in occupancy. If the income category of the last
household in occupancy is not known, it shall be rebuttably
presumed that lower income renter households occupied these
units in the same proportion of lower income renter households
to all renter households within the jurisdiction, as
determined by the most recently available data from HUD's
Comprehensive Housing Affordability Strategy database.
3)Require, in cases where all dwelling units have been vacated
or demolished within the five-year period preceding the
density bonus application and the incomes of the occupants at
the high point of the affordable units is not known, that it
be rebuttably presumed that low-income and very low-income
renter households occupied these units in the same proportion
of low-income and very low-income renter households to all
renter households within the jurisdiction, as determined by
the most recently available data from HUD's Comprehensive
Housing Affordability Strategy database.
4)Specify that the proposed housing development shall provide at
least the same number of replacement units of equivalent size.
5)Define "equivalent size" as the replacement units containing
at least the same total number of bedrooms as the units being
replaced.
6)Incorporate chaptering out amendments, proposed by AB 2442
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(Holden) and AB 2501 (Bloom), that would become operative only
if this bill and either or both of those bills are chaptered
and become effective on or before January 1, 2017, and this
bill is chaptered last.
7)Make technical, clarifying changes.
FISCAL EFFECT: According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS: To help address California's affordable housing
shortage, the Legislature enacted density bonus law to encourage
the development of more affordable units. Under current law, a
city or county must grant a density bonus, concessions and
incentives, prescribed parking requirements, as well as waivers
of development standards upon a developer's request when the
developer includes a certain percentage of affordable housing in
a housing development project.
Density bonus law was originally enacted in 1979, but has been
changed numerous times since. SB 1818 (Hollingsworth), Chapter
928, Statutes of 2004, made significant changes to the law,
including reducing the number of housing units required to be
provided at below market rate in order to qualify for a density
bonus.
AB 2222 (Nazarian), Chapter 682, Statutes of 2014, encouraged
the preservation of existing affordable units by prohibiting an
applicant from receiving a density bonus, incentive, or
concession if a proposed housing development or condominium
project is located on property where dwelling units have, at any
time in the five-year period preceding the application, been
occupied by very low- or lower-income households or subject to
rent control. An applicant may overcome this prohibition by at
least replacing all of the existing affordable units with units
of equivalent affordability, size and/or type.
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In implementing the provisions of AB 2222, cities, housing
advocates, and developers have discovered several places where
the law needs clarification. AB 2222 did not address how to
determine the number of units that have to be replaced when
resident income information is not known. This bill provides a
method for making this determination, and Senate amendments
require that local governments use a rebuttable presumption
based on the most recently available data from HUD's
Comprehensive Housing Affordability Strategy database.
According to HUD, "Each year, HUD receives custom tabulations of
American Community Survey (ACS) data from the U.S. Census
Bureau. These data, known as the "CHAS" data, demonstrate the
extent of housing problems and housing needs, particularly for
low income households. The CHAS data are used by local
governments to plan how to spend HUD funds, and may also be used
by HUD to distribute grant funds."
Senate amendments specify that the proposed housing development
shall provide at least the same number of replacement units of
equivalent size, and define "equivalent size" as the replacement
units containing at least the same total number of bedrooms as
the units being replaced. Senate amendments also make a number
of technical, clarifying changes, and incorporate chaptering out
amendments with changes proposed by AB 2442 (Holden) and AB 2501
(Bloom).
Additionally, AB 2222 did not provide guidance on what the rent
level for the replacement unit should be in cases where the
current occupant of the rent-controlled unit is not
lower-income, for example due to wage increases. This bill
allows cities to require that these units be replaced either
with deed-restricted units affordable to low-income families or
with other rent-controlled units. Although a jurisdiction
cannot mandate that rent control apply to new developments, in
this case developers may voluntarily choose to comply and offer
units rent-controlled units if they are seeking a density bonus
for their project. For developers, one benefit of
rent-controlled units relative to affordable units is that the
former generally include an escalator for rent increases.
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Purpose of the bill: According to the author, "There is a need
to clarify language in AB 2222. This bill maintains the intent
of AB 2222 in requiring developers to replace affordable units
while providing greater clarity for developers and local
governments in meeting replacement requirements. AB 2556
recognizes that adequate affordable housing is an issue of
statewide concern. This bill preserves and promotes the supply
of affordable units for years to come."
Analysis Prepared by:
Rebecca Rabovsky / H. & C.D. / (916) 319-2085
FN:
0004847