BILL ANALYSIS                                                                                                                                                                                                    

                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          SB 341 (Nguyen) - Housing: Department of Housing and Community  
          Development: local fees.
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          |Version: March 26, 2015         |Policy Vote: T. & H. 10 - 0     |
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          |Urgency: No                     |Mandate: No                     |
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          |Hearing Date: May 11, 2015      |Consultant: Mark McKenzie       |
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          This bill meets the criteria for referral to the Suspense File.

          Summary:  SB 341 would require the Department of Housing and  
          Community Development (HCD) to conduct a periodic statewide  
          survey of cities and counties to determine the total amount of  
          fees and charges that local agencies impose on new home  
          construction.  The bill would also require HCD to take a number  
          of mandatory actions relating to housing that are currently  
          specified as discretionary actions HCD may take under its  
          general authority.

           HCD costs of approximately $267,000, and similar costs every  


          SB 341 (Nguyen)                                        Page 1 of  
            five years thereafter, to survey local agency residential  
            development fees. (General Fund)

           Unknown, but potentially significant costs related to  
            provisions that require, rather than authorize, HCD to conduct  
            specified general activities. (General Fund)

          Background:  Existing law authorizes local agencies to charge fees  
          associated with local development.  Except for school fees,  
          which are capped in the Sterling Act, local agencies have fairly  
          broad discretion over the number, type, and amount of local  
          development fees, but there must generally be a nexus between  
          the amount of the fee and purpose for which the fee is charged.   
          Cities and counties typically charge more than two dozen  
          different types of development-related fees, most of which fall  
          into three broad categories: (1) planning fees, which cover  
          administrative costs of reviewing planning documents; (2)  
          building permit, plan check, and inspection fees, which cover  
          site-specific review requirements; and (3) capital facilities  
          fees, which cover up-front costs of providing capital  
          infrastructure.  The largest component is usually capital  
          facilities fees and may cover on-site costs of connecting to  
          utilities, broader off-site impact fees associated with  
          providing infrastructure to serve residential development,  
          mitigation fees, and in-lieu fees.  Local development fees may  
          vary significantly by jurisdiction for a variety of reasons  
          (density, land use, location, etc.), and these fees may be a  
          sizable component of housing production costs.
          Existing law provides HCD with the general authority to do any  
          of the following:

           Make investigations of housing and community development in  
            the state.
           Call conferences of representatives of all levels of  
            government, industry, and private groups to discuss housing  
            and community development problems in California.
           Investigate and report on substandard housing, the resulting  
            problems, and the work being done to remedy those conditions.
           Study the operation and enforcement of housing, building,  
            zoning, and subdivision laws and regulations, of housing  
            finance, taxes, redevelopment programs and public housing  
            projects, as related to housing and community development.


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           Examine the records of housing authorities and redevelopment  
            agencies, and secure reports and copies of their records at  
            any time.
           Promote the formation of organizations intended to increase  
            the supply of adequate housing and the proper living  
            environment for all people of the state.
           Investigate and report, with the California Department of  
            Transportation, on the consistency among state, federal, and  
            local housing and transportation plans and programs.

          Proposed Law:  
            SB 341 would require, rather than authorize, HCD to conduct  
          those actions noted above.  The bill would also require HCD to  
          conduct a statewide survey of cities and counties to determine  
          the total amount of fees and charges imposed by local  
          jurisdictions on new residential construction.  The survey must  
          include data on fees and charges from at least 150 cities, with  
          at least one city within each county, and all 58 counties. The  
          fees and charges surveyed must at least include the following:
                 Planning and zoning fees.
                 Environmental documentation fees.
                 Building permit fees.
                 Plan check fees.
                 School fees.
                 School mitigation fees.
                 Highway, road, traffic, and transit fees.
                 Water, wastewater, sewer, and drainage fees.
                 Utility or water connection fees.
                 Public safety fees.
                 Capital facilities fees
                 Affordable housing fees and assessments.
                 Parks and recreation fees.

          The bill would require HCD to complete the survey and submit a  
          report of findings to the Legislature by January 1, 2017, and  
          every five years thereafter.

          Comments:  In 2001, HCD commissioned a study in cooperation with  


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          the University of California to examine the development fees  
          charged by local agencies throughout the state (Pay to Play:  
          Residential Development Fees in California Cities and Counties,  
          1999).  This bill would require HCD to conduct an updated  
          statewide survey of the fees and charges imposed by local  
          agencies by January 1, 2017, and to update that study every five  
          years thereafter.
          HCD would incur an estimated $267,000 in staffing costs in the  
          2016 calendar year to design the survey, identify sample  
          jurisdictions, coordinate with local agency planning staff,  
          compile and analyze results, and produce the report and  
          accompanying exhibits.  These costs would recur every five  

          SB 341 would also require, rather than authorize, HCD to conduct  
          a variety of general activities related to housing and community  
          development.  Considering the lack of specificity regarding the  
          listed activities, such as the frequency and duration of the  
          duties, and the specific duties to be investigated, studied, or  
          examined, the fiscal impacts of these provisions is  
          indeterminable, but potentially significant. 

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