BILL ANALYSIS
AB 602
Page 1
Date of Hearing: August 25, 2010
ASSEMBLY COMMITTEE ON JUDICIARY
Mike Feuer, Chair
AB 602 (Feuer) - As Amended: August 20, 2010
FOR CONCURRENCE
SUBJECT : AFFORDABLE HOUSING: ENFORCEMENT AND PROTECTION OF
DEVELOPERS RIGHTS
KEY ISSUE : SHOULD LOCAL GOVERNMENTS BE ACCOUNTABLE FOR
DEFICIENCIES IN THEIR HOUSING PLANS REGARDING AFFORDABLE HOUSING
OBLIGATIONS FOR A REASONABLE PERIOD DURING THE LIFE OF THOSE
PLANS, CONSISTENT WITH THE LONGSTANDING RULE PRIOR TO A
CONTROVERSIAL RECENT COURT DECISION?
SYNOPSIS
For over 25 years, affordable housing obligations have been
enforceable throughout the multi-year life of the housing plans
adopted by local governments. A controversial recent court
decision slashed that time period to 90 days. Affordable
housing advocates argue that this extraordinarily short time
period is inconsistent with the policy compromise by which the
law was initially adopted, and makes effective enforcement
efforts impossible - both because the deficiencies are
frequently not sufficiently clear at such an early stage, and
because they cannot practically assess the compliance of
individual housing elements adopted en masse by many cities at
the same time. Under this bill, the period of time local
governments would be answerable for their plans is five years -
not the entire period of these plans (8 years) for most
jurisdictions, as under prior law, but a reasonable period,
supporters say. As a further compromise, the bill also
restricts the types of challenges that can be brought in this
period by excluding project-specific challenges allowable under
existing law. In addition, the bill clarifies the rights and
remedies of interested parties when a court finds that a local
government has violated the law. This provision protects
builders who have completed certain steps in the development
process.
The bill is supported by housing advocates and environmental
groups, the California Building Industry Association, and the
California Association of Realtors, and has received wide
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bipartisan support. Opposition comes from local governments who
argue that recently-enacted obligations under SB 375 (Steinberg)
require them to provide additional information and take
additional actions for which they might be sued, which they
argue is unfair. The opposition also contends that, despite the
language in the bill, they do not know whether the limitations
period in the bill is five years or six, that either period is
longer than other periods applicable to different types of
challenges, and that this issue should have been addressed by SB
375 if that bill did not provide appropriate requirements and
time periods. Opponents also argue that some cities and
counties would be subject to suit for their entire planning
period, as they were under prior law, because they have 5-year
periods, not 8 like other jurisdictions have, and that the bill
will create uncertainty for development approvals.
SUMMARY : Restores the practical ability to challenge specified
deficiencies in a city's or county's housing element for a
period after the adoption of a housing element if the city or
county fails to address the deficiencies within 60 days.
Specifically, this bill :
1)Requires a specified notice to be filed with the local
government within five years after an action to adopt, amend,
or revise a housing element, actions relating to the Least
Cost Zoning Law, annual limits on housing permits, and the
adequacy of a density bonus ordinance.
2)Excludes from the types of challenges that may be brought
during this time period any action related to the Housing
Accountability Act, the Subdivision Map Act, or the
application of a Density Bonus ordinance to a particular
project, all of which are project-specific actions.
3)Requires a challenging party to first serve the city or county
with a notice identifying the deficiencies in the housing
element, and allows the city or county 60 days to correct the
deficiency, following which a dissatisfied party may file an
action in court. No court filing can be initiated under this
bill more than 5 years after the underlying action by the
local government at issue.
4)Provides that a housing element from a prior planning period
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may not be challenged if the city or county has adopted a
revised housing element for the new planning period.
5)Provides that in any action or proceeding brought pursuant to
the foregoing provision no remedy, and no injunction pursuant
to Section 65754.5, shall abrogate, impair, or otherwise
interfere with the full exercise of the rights and protections
granted to (1) an applicant for a tentative map pursuant to
Section 66474.2, or (2) a developer pursuant to Sections 65866
and 66498.1.
6)Provides that if a third-party challenges the adequacy of a
housing element in court and the court finds that the housing
element substantially complies with all of the requirements of
the housing element law, the element shall be deemed to be in
compliance for purposes of state housing grant programs.
EXISTING LAW , under the Planning and Zoning Law, requires an
action or proceeding against local zoning and planning decisions
of a legislative body to be commenced and the legislative body
to be served within a year of accrual of the cause of action if
it meets certain requirements. Where the action or proceeding
is brought in support of or to encourage or facilitate the
development of housing that would increase the community's
supply of affordable housing, a cause of action accrues 60 days
after notice is filed or the legislative body takes a final
action in response to the notice, whichever occurs first.
(Government Code section 65009(d).)
FISCAL EFFECT : None
COMMENTS : The author explains that this bill partially restores
the law to its longstanding interpretation prior to a recent
court decision so that residents can hold local governments
accountable to follow existing law requiring local governments
to adopt housing elements that plan for a community's share of
the regional need for housing. Because these housing plans are
in place for 5 to 8 year periods, this bill allows deficient
plans to be challenged for five years - that is, for the
majority of jurisdictions, most but not all of the period during
which the plan continues to allegedly violate the law. This
five-year period is consistent with the time in which local
governments have traditionally been required to defend their
planning actions, and it is less than the 8-year lifespan of
housing elements, which would be the allowable period in the
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absence of the surprising recent court case. This reasonable
compromise period provides a fair opportunity for low income
persons and affordable housing advocates to bring a case, while
giving local governments needed assurance that their plans
cannot be challenged indefinitely.
In addition, the author notes that this bill is more limited
than existing law by substantially limiting the types of legal
challenges that can be brought. Under the bill, no
project-specific actions can be challenged under the Housing
Accountability Act, the Subdivision Map Act, or the application
of a Density Bonus ordinance - all of which are now subject to
legal attack under the statute.
The ability to seek judicial enforcement of local government's
existing obligation to plan for housing is absolutely critical
to the implementation of SB 375 (Steinberg), California's
landmark legislation aimed at reducing green house gas emissions
through changes in land use and transportation planning,
supporters argue. Allocation of the housing needs must be
consistent with the region's Sustainable Communities Strategy,
which under SB 375 must shrink the footprint of future
development. SB 375 cannot be effectuated if local governments
cannot be held to comply with SB 375's planning obligations.
Supporters argue that AB 602 also creates more certainty for all
home developers by ensuring that any court-ordered remedies will
not affect the rights granted to developers under other
statutes. According to supporters, this bill will facilitate
construction, create jobs, and help ensure a regulatory
environment for housing that encourages the recovery all
Californians so badly need.
The bill's sponsors, Housing California and CRLA Foundation,
state:
AB 602 helps ensure that every city and county does its
part to plan for housing to meet the needs of our
workforce, seniors, and other community members. The bill
fixes the recent decision in Urban Habitat v. City of
Pleasanton, which upended a 25-year old law and reduced the
time to enforce housing planning laws to a mere 90 days
from enactment. While most project-specific land use
decisions are subject to a 90-day statute of limitations,
certain plans relating to affordable homes have long been
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subject to an extended period in which a challenge can be
made. Some stakeholders, particularly low-income
residents, are not at the table when the housing element
plan is crafted. Therefore, its deficiencies may only come
to light when the time comes to implement the plan, e.g. an
affordable development is proposed or a shelter looks to
open its doors. The old law - part of legislation
sponsored by the League of CA Cities in 1983 - recognized
this. It allowed citizens to send a deficiency notice to
the local government at any point during the planning
period and then bring suit if the locality did not fix its
housing element. Only 11 suits were brought in 25 years.
AB 602 partially restores this long-standing provision.
California Association of Realtors states that the bill "will
help ensure a healthy business environment for the construction
of new housing in California. For 25 years ? housing for low
and moderate income households [has been] treated as a special
case and deserved the exception that was created to recognize
that cities and counties have an ongoing obligation to ensure
that such housing can be built."
Also in support of the bill, Public Advocates, Inc., adds "AB
602 will provide critical accountability to ensure that no
California city or county is immune from state affordable
housing laws. Those laws, designed to help meet California's
need for new workforce housing, only work if each local
jurisdiction does its part to accommodate its fair share of the
region's housing need at all income levels. The requirements of
the state Housing Element Law are effective in helping to meet
California's critical need for new affordable housing only to
the extent they can be enforced throughout the entire planning
period covered by a housing element. AB 602 ensures that a
mechanism exists to hold cities and counties accountable for
their fair share of this need."
Partially Reinstates Longstanding Time Period For Local
Governments To Be Answerable For Housing Element Violations.
Prior to an unusual recent court decision, it was understood for
over 25 years that a party could challenge the adequacy of a
city's or county's housing element at any time during a planning
period (generally five to eight years) when the action is
brought "in support of or to encourage or facilitate the
development of housing that would increase the community's
supply of [affordable] housing." During this time, affordable
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housing advocates have successively, and selectively, used the
law to enforce compliance with affordable housing obligations.
Because the law required prior notice to local governments, and
limited suits to those attacking a narrow set of violations
filed within one year of the notice, the law struck a workable
balance between the need for meaningful access to judicial
enforcement and local government's need for certainty when
making land use decisions.
Supporters argue that this long history of success has been
undermined by an aberrant court decision slashing the period to
90 days - one of the shortest periods under any law for bringing
a legal challenge, and one that is not specified in the statute.
Urban Habitat Program brought suit to challenge the City of
Pleasanton's housing policies, including the city's annual cap
on housing permits and the city's cap on the aggregate number of
permissible housing units, both of which Urban Habitat claimed
were insufficient to allow the city to meet its affordable
housing obligation. In 2008, the appellate court threw out the
challenge, allowing the city to avoid answering the allegation
on the facts. The court opined:
Although the statute does not specify the time within which
[a deficiency] notice must be given, it is our conclusion
that the statute must be interpreted as containing a time
limit within which this requirement must be met? In sum, a
party bringing a challenge governed by section 65009,
subdivision (d), has 90 days from the date a legislative
action is taken or approval is given to notify the local
land use authority of any claimed deficiencies in such an
action or approval. Its claim then accrues 60 days after it
gives this notice.
(Urban Habitat Program v. City of Pleasanton, 116 Cal. App. 4th
1561 (2008).) In other words, instead of being able to initiate
a challenge to a deficient housing element at all relevant times
during the planning period, housing advocates and other
interested parties may only initiate such a challenge by
submitting a deficiency notice within 90 days of the housing
element's adoption.
The Legislature Has Previously Reiterated That Affordable
Housing Actions Should Be Allowed During The Life of the Housing
Element, Regardless Of The Time Period For Other Types of
Challenges. The statutory language interpreted by the Urban
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Habitat court at issue in this bill was added to statute by AB
998 (Waters), Chapter 1138, Statutes of 1983, a bill jointly
sponsored by the League of California Cities and the California
Building Industry Association. AB 998 created a short statute
of limitations period for land use decisions generally, but
provided a specific exception to protect the ability to
challenge deficient housing elements. The Senate Housing and
Land Use Committee and the Senate Third Reading analysis of the
bill stated that the bill:
Specifies that for challenges in support of low- and
moderate-income housing requirements, the petitioner shall
notice local government 60 days prior to filing action.
The [one-year] statute of limitations then begins on the
first day the legislative body fails to act.
In the intervening 25 years prior to the Urban Habitat ruling,
housing advocates filed and successfully settled at least ten
cases in which the 60-day deficiency notice was sent more than
90 days after adoption of the city's or county's housing
element. In none of these cases was the timeliness on the
advocates' suit contested. Likewise, the Senate Transportation
and Housing Committee reports, six bills amended other portions
of this statute during those intervening years, and there was
never any controversy surrounding the lack of a deadline for
housing advocates to serve a deficiency notice nor any attempt
to change the statute in this regard.
Background Regarding Housing Element Obligations. The Planning
and Zoning Law requires cities and counties to prepare and adopt
a general plan, including a housing element, to guide the future
growth of a community. Following a staggered statutory
schedule, cities and counties located within the territory of a
metropolitan planning organization (MPO) must revise their
housing elements every eight years, and cities and counties in
rural non-MPO regions must revise their housing elements every
five years. These five- and eight-year periods are known as the
housing element planning period.
Before each revision, each community is assigned its fair share
of housing for each income category through the regional housing
needs allocation (RHNA) process. This allocation is a linchpin
of SB 375, California's seminal green house gas reduction
legislation mandating changes in land use and transportation
planning to reduce vehicle emissions. Allocation of the housing
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needs must be consistent with the region Sustainable Communities
Strategy required by SB 375. A housing element, accordingly,
must identify and analyze existing and projected housing needs,
identify adequate sites with appropriate zoning to meet its
share of the RHNA, and ensure that regulatory systems provide
opportunities for, and do not unduly constrain, housing
development. The Department of Housing and Community
Development (HCD) reviews both draft and adopted housing
elements to determine whether or not they are in substantial
compliance with the law.
The Planning and Zoning Law and the Subdivision Map Act also
includes a number of sections governing zoning and entitlements
specifically related to housing, including:
? The Housing Accountability Act, which requires a city or
county to make one or more specified findings in order to
disapprove a particular housing development.
? A provision requiring cities and counties, when adopting an
ordinance which limits the number of housing units which may
be constructed on an annual basis, to make findings as to the
public health, safety, and welfare benefits that justify
reducing the housing opportunities of the region.
? Density bonus law, which requires cities and counties to grant
a developer a density bonus, incentives, and concessions when
the developer proposes to include specified percentages of
affordable housing within a development.
? The Least Cost Zoning Law, which requires cities and counties
to designate and zone sufficient vacant land for residential
use with appropriate standards to meet housing needs for all
income categories and to contribute to producing housing at
the lowest possible cost.
? A requirement that, when determining whether to approve a
tentative subdivision map, a city or county shall apply only
those ordinances, policies, and standards in effect as of the
date the developer's application is deemed complete.
Creating Opportunities For The Private Housing Market . The
purpose of housing element law is to create opportunities for
the private housing market to function. Builders cannot build
without access to appropriately zoned land, and current land use
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plans in many cities and counties in California fail to provide
sufficient opportunities to accommodate projected population
growth. The San Diego Association of Governments' Regional
Comprehensive Plan describes this typical California paradox in
the following way:
Under current plans and policies, more than 90 percent of
[the San Diego region's] remaining vacant land designated
for housing is planned for densities of less than one home
per acre, and most is in the rural back country areas
dependent upon scarce groundwater supplies. And of the
remaining vacant land planned for housing in the 18
incorporated cities, only about seven percent is planned
for multifamily housing. When taken together, the current
land use plans of the 19 local jurisdictions do not
accommodate the amount of growth anticipated in our region.
SANDAG's population forecast, which reflects the current
adopted local land use plans in the region, projects that
while population will increase by 37 percent by 2030,
housing will grow by just 30 percent. The forecast shows
that if local plans are not changed, demand for housing
will continue to outpace the supply, just as it does today.
Housing element law addresses this problem directly by requiring
cities and counties to zone land at appropriate densities to
accommodate the projected housing needs of all income groups and
to remove constraints that prevent such sites from being
developed at the allowed densities. Cities and counties,
however, are not required to build housing because that is the
role of private developers. The law holds cities and counties
accountable only for that which they control: zoning and land
use entitlements. Without the ability to enforce housing
element law, the market's ability to meet housing demand may
well remain locked up.
Ongoing Problems With Housing Element Compliance . According to
HCD's website as of June 7, 2010, only 46 percent of cities and
counties have adopted an HCD-approved housing element for the
current planning period that began in 2005 for the San Diego
region, 2008 for the Southern California, Fresno, Kern, and
Sacramento regions, and the summer of 2009 for the remaining
areas of the state.
Clarification of Remedies . Current law requires a court, if it
finds any portion of a general plan, including a housing
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element, out of compliance with the law, to include within its
order or judgment one or more of the following remedies for any
or all types of developments or any or all geographic segments
of the city or county until the city or county has complied with
the law:
? Suspend the authority of the city or county to issue
building permits.
? Suspend the authority of the city or county to grant
zoning changes and/or variances.
? Suspend the authority of the city or county to grant
subdivision map approvals.
? Mandate the approval of building permits for residential
housing that meet specified criteria.
? Mandate the approval of final subdivision maps for
housing projects that meet specified criteria.
? Mandate the approval of tentative subdivision maps for
residential housing projects that meet specified criteria.
This bill clarifies that in any action or proceeding brought
pursuant to the notice and accrual provisions of Government Code
Section 65009 described above, neither the court remedies
described above nor any injunction against the development of a
housing project shall abrogate, impair, or otherwise interfere
with the full exercise of the rights and protections granted to
an applicant for a tentative map or a vesting tentative map
under specified provisions of the Subdivision Map Act or to a
developer under a specified provision relating to development
agreements.
The California Building Industry Association (CBIA) comments in
support:
The goal of the state's housing element law is to plan for
and encourage communities to meet their housing needs for
all types of housing. Challenges to a community's housing
element can often result in a judicially-imposed moratorium
on all housing production in the area (see California
Government Code section 65755). AB 602 will remove some of
the dysfunctional results of the current statutory scheme
that punishes builders by shutting down projects when a
city or county fails to comply with the law. At a time
when California's unemployment levels are unusually high, a
moratorium will not help the job picture. Housing
construction is a prolific job generator. Indeed, three
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permanent new jobs are created every time a home is built.
Recovery in the residential market has led the nation out
of recession in nearly every economic recovery of the past
40 years. AB 602, with its protections for development
projects through build out will facilitate construction
jobs.
Court Approval To Be Deemed Compliance For Grant Purposes.
Under current law, HCD operates a number of grant programs to
which cities and counties may apply. In many cases, the law
requires a city or county to have an HCD-approved housing
element in order to be eligible for funding. At the request of
local government associations, the author reports, this bill
provides that if a third-party challenges the adequacy of a
housing element in court and the court finds that the housing
element substantially complies with all of the requirements of
housing element law, the element shall be deemed to be in
compliance for purposes of state housing grant programs.
ARGUMENTS IN OPPOSITION: The League of Cities and Association
of Counties argue that the bill allows "any party to sue a city
or county for claims arising out of a number of housing statutes
that could encourage or facilitate loosely-defined affordable
housing goals - a very broad array of potential lawsuits that
does not differentiate between major noncompliance with state
law or a small difference in interpretation. This will leave
cities and counties, businesses and developers unfairly open to
uncertainty and challenges long after decisions have been made."
The local government opponents go on to argue, "The SB 375 deal
provided a number of fast and effective challenge options that
addresses the sponsors concerns. A deal was cut in SB 375 to
provide for new remedies for housing advocates, including a
special remedy to ensure that zoning is done on time with a 60
day resolution, a three-year statute of limitations to target
specific actions that are inconsistent with state law, and a
process to challenge local agencies if they do not meet
deadlines for implementation contained in their housing
elements. Housing element law has been substantially changed
creating more opportunities for litigation. The law now
provides for an 8-year housing element with a ten-year RHNA,
rigorous proof to identify available sites, and much more
detail. Most jurisdictions have not yet gone through this new
housing element process yet, but given the hundreds of pages
that the newer housing elements are turning out to be, and the
fact that most housing elements cost in the six figures to
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complete, the new laws appear to provide an incredible amount of
information, programs and implementation on which to sue that
was not in the law even three years ago. Jeopardizing this
investment years after adoption, in a time of budgetary crisis,
is unfair."
The American Planning Association, California Northern chapter
opposes AB 602, arguing that the bill "would permit those who
have a particular perspective to single out actions (and be
awarded attorney's fees) years after a particular decision has
been made, creating uncertainty precisely at the time when local
governments are doing everything they can to encourage projects
and economic development. AB 602 is also troubling because the
expansion of the housing element law and other laws (such as the
density bonus law) over the past two decades provide a great
deal of legal fodder for litigious plaintiffs and special
interests. In essence, the scope of what can be challenged
under housing element law has greatly expanded. The extremely
broad language in this expansion of housing element law and the
imprecise language with which it was drafted make local agencies
especially vulnerable. Finally, the current economic downturn
must be taken into account. Put simply, cities are being asked
to do more planning with less staff and other resources. AB 602
ensures that cities will continue to face legal liability due to
this lack of resources well into the future (through
liabilities, costs of defense in all cases, and attorney's fees
in cases lost)."
REGISTERED SUPPORT / OPPOSITION :
Support:
California Rural Legal Assistance Foundation (co-sponsor)
Housing California (co-sponsor)
Advocates for Affordable Homes in Fremont
California Association of Realtors
California Building Industry Association
California Coalition for Rural Housing
City of Oakland
Community Housing Improvement Program
Community Housing Works
Eden Housing
Fair Housing of Marin
Grassroots Leadership Network of Marin
Kennedy Commission
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Mercy Housing California
Planning and Conservation League
Public Advocates, Inc
Sacramento Housing Alliance
San Diego Housing Federation
Self-Help Enterprises
Sierra Club of California
Silicon Valley Leadership Group
Transform
Urban Habitat
Western Center on Law and Poverty
Opposition :
American Planning Association, California Chapter
California State Association of Counties
Civil Justice Association of California
League of California Cities
A number of individual cities
Analysis Prepared by : Kevin Baker / JUD. / (916) 319-2334