BILL ANALYSIS
AB 720
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Date of Hearing: May 13, 2009
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
Norma Torres, Chair
AB 720 (Caballero) - As Amended: April 20, 2009
SUBJECT : Land use: housing element.
SUMMARY : Makes changes in housing element law related to the
use of certain existing units in meeting a local government's
share of the regional housing need. Specifically, this bill :
1)Deletes the requirement that a local government must provide
committed assistance within the first two years of the housing
element planning period in order to count certain
substantially rehabilitated units and other types of
affordable housing units towards meeting its share of the
regional housing need.
2)Provides that a city, county, or city and county may include
weatherization and energy efficiency improvements as part of
its efforts to substantially rehabilitate a unit.
3)Specifies that weatherization and energy efficiency
improvements may include measures that encompass the building
envelope, its heating and cooling systems, and its electrical
system.
EXISTING LAW
1)Requires every city and county to prepare and adopt a general
plan containing seven mandatory elements, including a housing
element (Government Code Sections 65300 and 65302).
2)Requires a jurisdiction's housing element to identify and
analyze existing and projected housing needs, identify
adequate sites with appropriate zoning to meet the housing
needs of all income segments of the community, and ensure that
regulatory systems provide opportunities for, and do not
unduly constrain, housing development (Government Code Section
65583).
3)Requires cities and counties to revise their housing elements
every eight years based on a staggered statutory schedule
(Government Code Section 65588).
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4)Requires, prior to each housing element revision, that each
council of governments (COG), in conjunction with the
Department of Housing and Community Development (HCD), prepare
a regional housing needs assessment (RHNA) and allocate to
each jurisdiction in the region its fair share of the housing
need for all income categories. Where a COG does not exist,
HCD determines the local share of the region's housing need.
(Government Code Sections 65584-65584.09)
5)Requires each local government to make sites available during
the first three years of the housing element planning period
with appropriate zoning and development standards and with
services and facilities to accommodate the city's or county's
share of the regional housing need (Government Code Section
65583).
6)Allows a city or county to meet up to 25% of its share of the
regional housing need through a program committing the local
government to make certain existing housing units affordable
to low- and very low-income households during the planning
period through the provision of committed assistance
(Government Code Section 65583.1).
7)Limits the program to the following categories of units:
a) Units that are to be substantially rehabilitated and
that will have long-term affordability covenants and
restriction that require them to be available to, and
occupied by, a person of low- or very low income at
affordable housing costs for at least 20 years;
b) Units that are located in a multifamily rental housing
complex of four or more units, will be converted from
nonaffordable to affordable, and will have long-term
affordability covenants and restrictions that require the
unit to be affordable to persons of low- or very low-income
for at least 55 years; and
c) Units in an assisted housing development at risk of
conversion to market rate housing or another use that will
be preserved at an affordable housing cost to persons or
families of low or very low incomes for at least 40 years.
(Government Code Section 65583.1)
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8)Defines "committed assistance" as legally enforceable
agreements entered into by the city or county during the first
two years of the housing element planning period that
obligates sufficient available funds to provide the assistance
necessary to make the identified units affordable and that
requires that the units be made available for occupancy within
two years of execution of the agreement (Government Code
Section 65583.1).
9)Specifies that "committed assistance" does not include
tenant-based rental assistance (Government Code Section
65583.1).
10)Requires a city or county to report, on July 1 of the third
year of the housing element planning period, on the specific
units for which committed assistance has been provided or that
have been made available to low- and very low-income
households (Government Code Section 65583.1).
11)Specifies that if, by July 1 of the third year of the
planning period, the city or county has not committed
assistance for all of the units specified in its housing
element, the city or county must identify adequate sites to
accommodate the number of units for which committed assistance
was not provided (Government Code Section 65583.1).
12)Specifies that if a city or county does not identify adequate
sites to address any shortfalls in committed assistance, or
fails to complete the rehabilitation, acquisition, purchase of
affordability covenants, or preservation of any housing unit
within two years after committed assistance was provided to
that unit, then it is limited in the next housing element to
only the number of units actually provided or preserved due to
committed assistance rather than 25% of its share of the
regional housing need (Government Code Section 65583.1).
FISCAL EFFECT : None
COMMENTS :
Every local government is required to prepare a housing element
as part of its general plan. The housing element process starts
when HCD determines the number of new housing units a region is
projected to need at all income levels (very low-, lower-,
moderate-, and above-moderate income) over the course of the
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next housing element planning period to accommodate population
growth and overcome existing deficiencies in the housing supply.
This number is often referred to as the "RHNA" number (short
for regional housing needs assessment). The COG for the region,
or HCD for areas with no COG, then assigns a share of the RHNA
number to every city and county in the region based on a variety
of factors.
In preparing its housing element, a city or county must show how
it plans to accommodate its share of the RHNA. The housing
element must include an inventory of sites already zoned for
housing. If the existing inventory of residentially zoned land
cannot accommodate the jurisdiction's entire RHNA share, the
city or county must rezone enough sites during the first three
years of the housing element planning period.
Existing law allows jurisdictions to meet up to 25% of their
zoning obligation by instead adopting a program to make certain
existing housing units affordable to low- and very low-income
households during the planning period. Eligible units include
units that are to be substantially rehabilitated, units in
multifamily rental complexes that are to be converted from
unaffordable to affordable, and units in an assisted housing
development (such as public housing) that are at risk of
conversion to market rate or to another use. In all cases, the
units must have affordability covenants and restrictions that
will keep them affordable to low- and very-low income households
for 20 to 55 years depending on the type of unit.
One of the requirements for counting units within the 25% cap is
that the units will receive "committed assistance" from the
local jurisdiction. The definition for "committed assistance"
requires that a city or county enter into a legally enforceable
agreement during the first two years of the housing element
planning period that obligates sufficient available funds to
provide the assistance necessary to make the identified units
affordable. Funds might come from a variety of sources, ranging
from a jurisdiction's general fund to money that a redevelopment
agency is obligated to set aside for affordable housing.
AB 720 removes the two-year time limitation for when a city or
county would have to enter into a legally enforceable contract
in order to provide assistance, and instead, provides that a
legally enforceable agreement can be entered into during any
part of the housing element planning period. Additionally, AB
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720 also contains provisions that authorize a city or county to
include weatherization and energy efficiency improvements as
part of the local government's efforts to substantially
rehabilitate a unit.
Arguments in Support
The author notes that the issue with localities being limited in
timeframe on top of the 25% threshold is that it essentially
disincentivizes rehabilitation and preservation projects. In
addition, last year, SB 375 (Steinberg), Chapter 728, Statutes
of 2008, extended the housing element planning period from five
to eight years. Given this change, the author believes that
cities and counties should be have more time to commit financial
assistance to rehabilitation projects in order to count those
units towards meeting their housing element obligations.
The City of Sacramento, in its support letter, writes:
"[AB 720] recognizes the importance of rehabilitation and
preservation in meeting local affordable housing needs.
This is especially important as the State and localities
move toward implementing SB 375 through smart growth and
infill development. AB 720 will help to align the Housing
Element process with these larger goals?.
Rehabilitation and preservation of affordable housing can
often be the most difficult projects that a locality takes
on; they are located in areas where there is little room
for new construction and serve as a revitalization tool in
weak market areas when the market does not support new
development?.Current Housing Element Law forces
jurisdictions to choose between taking on these difficult
and important projects and meeting their RHNA goals. AB
720 will allow localities to do both of these important
things-create new affordable housing opportunities and
rehabilitate and preserve existing housing."
The League of California Cities writes that "California's
building industry is at historic lows. According to the
California Building Industry Association, approximately 65,000
building permits were issued in 2008, almost a 70 percent
reduction from the number issued in 2005. And if current trends
hold, the number of permits in 2009 will be less than 50,000.
Accordingly, California should take every opportunity to
encourage local agencies to rehabilitate units to create more
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livable units?."
Committee amendments:
Existing law contains certain checks and balances to ensure that
the provision of law allowing a jurisdiction to meet up to 25%
of its RHNA through substantial rehabilitation or preservation
does not provide a loophole that cities and counties can use to
avoid their housing element obligation to zone land for housing.
If a jurisdiction has not committed assistance within the first
two and a half years of the planning period, then it must zone
sufficient land to accommodate the number of units for which
assistance was not committed by the middle of the fourth year of
the planning period. Additionally, a jurisdiction has two years
from the time it commits assistance to make the units available
for habitation. Thus, current law ensures that any units that a
jurisdiction commits to providing through rehabilitation or
preservation at the outset of the planning period are actually
available by the end of the planning period. Finally, if a
jurisdiction misses the deadline to commit assistance and fails
to complete the required zoning, or fails to complete the units
once committing the assistance, it is limited in its ability to
use the provision of law in the next planning period.
In deleting the two-year requirement for committing assistance,
AB 720 creates a conflict with the existing system of checks and
balances. To address this conflict, ensure that the checks and
balances remain, and also provide additional time for
jurisdictions to commit assistance in light of the longer
housing element planning period, the Committee may wish to
consider the following amendments:
1)On page 7, line 9, after "the" insert: first five years of
the housing element
2)On page 7, line 29, delete "third" and insert: sixth
3)On page 7, line 40, delete "third" and insert: sixth
4)On page 8, line 4, delete "fourth" and insert: seventh
Double referred : The Assembly Committee on Rules referred AB
720 to the Committees on Local Government and Housing and
Community Development. The bill passed the Assembly Committee
on Local Government on May 6, 2009 by a vote of 7-0.
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REGISTERED SUPPORT / OPPOSITION :
Support
California Redevelopment Association
City of Sacramento
League of CA Cities
Opposition
None on file
Analysis Prepared by : Anya Lawler / H. & C.D. / (916)
319-2085