BILL ANALYSIS
SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: AB 720
SENATOR ALAN LOWENTHAL, CHAIRMAN AUTHOR: Caballero
VERSION: 6/30/09
Analysis by: Mark Stivers FISCAL: No
Hearing date: July 7, 2009
SUBJECT:
Housing elements: rehabilitation, acquisition, and preservation
DESCRIPTION:
This bill allows a city or county to meet up to 25% of its
housing need allocation through the acquisition, preservation,
or substantial rehabilitation of affordable housing units for
which the city or county has committed financial assistance in
the two years prior to the beginning of the housing element
planning period, in addition to during the first two years of
the planning period.
ANALYSIS:
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. Before each revision, each community
is assigned its fair share of housing for each income category
through the regional housing needs assessment (RHNA) process.
Because the RHNA is developed two years before a planning period
starts (i.e., the five- or eight-year period starting when a
city's or county's housing element is due), the RHNA allocation
covers a time period (the projection period) that starts
generally two years before the planning period.
A housing element must identify and analyze existing and
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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.
In general, in order for a city or county to show that it can
accommodate its RHNA allocation, it must identify sites on which
new housing may be built. Current law also allows a city or
county, however, to meet up to 25% of its RHNA allocation
through the acquisition (converting non-affordable units to
affordable units), preservation (extending the term of
affordability on existing affordable housing units), or
substantial rehabilitation of affordable housing units under
specified conditions, including among others:
The city or county must have met (i.e., housing units were
built) at least some portion of its RHNA allocation for very
low- and low-income housing in the previous planning period.
The city or county must identify the specific, existing
sources of available funding in the housing element and commit
assistance to individual developments (i.e., enter into a
legally binding agreement to provide the necessary financial
assistance) within the first two years of the housing element
planning period.
With respect to acquired units, the units must be in
multifamily rental complexes of four or more units, must not
be affordable to or occupied by very low- or low-income
residents, and must represent a net increase in the city or
county's supply of affordable housing.
With respect to preservation, the units must be subject to
affordability restrictions, and the city or county must make a
finding that the units are eligible and reasonably expected to
change from affordable housing to any other use during the
next five years.
With respect to substantially rehabilitated units, the local
government or a court must have found the units to be unfit
for human habitation due to the existence of at least four
conditions on a list of serious code violations, and the local
government must have determined that the units are at imminent
risk of loss to the housing stock.
The acquired, preserved, or rehabilitated units must be made
available for occupancy within two years of the execution of
the agreement committing assistance.
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The acquired, preserved, or rehabilitated units must be
subject to long-term affordability covenants for at least 20
years (rehabilitation), 40 years (preservation), or 55 years
(acquisition).
For purposes of counting units against the city's or county's
RHNA allocation, the acquired, preserved, or rehabilitated
units must be counted in the appropriate income category.
The city or county must include in its annual housing element
progress report it submits to HCD for the third year of the
planning period an update on its progress in providing the
units counted.
This bill :
For purposes of utilizing the authority to meet up to 25% of
its RHNA allocation through acquisition, preservation, or
substantial rehabilitation, allows a city or county to count
units for which it executed the agreement to commit financial
assistance between the beginning of the projection period and
the beginning of the planning period, in addition to during
the first two years of the planning period.
Allows a city or county to include in the annual housing
element progress report it submits to HCD in any year of the
planning period data on the number of acquired, preserved, or
substantially rehabilitated units for the planning period to
date, provided that the city or county documents how the units
meet the conditions described above.
Allows a city or county to include weatherization and energy
efficiency improvements in the substantial rehabilitation of
units.
COMMENTS:
1.Purpose of the bill . In general, when a city or county adopts
its housing element, it may subtract from its RHNA allocation
any units newly constructed within the jurisdiction since the
beginning of the RHNA projection period. In order to count
acquired, preserved, or substantially rehabilitated units
towards its RHNA allocation, however, current law requires a
city county to commit financial assistance "during the first
two years of the planning period." While this language was
enacted before state law clearly distinguished between
projection and planning periods and arguably was intended to
allow cities and counties also to count units completed in the
two years before the housing element was due, HCD has
interpreted the law to mean that the assistance may only be
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provided in the two years after the housing element due date.
This bill clarifies any ambiguity by clearly counting units
acquired, preserved, or substantially rehabilitated in the two
years of the projection period that come prior to the housing
element due date. According to the author, this bill will
facilitate usage of the 25% allowance for acquisition,
preservation, and rehabilitation, focus the law on real,
funded projects in addition to contemplated projects, and
generally create incentives for local governments to provide
affordability within the existing housing stock.
2.Technical amendments :
On page 5, strike lines 19-24, insert "65583.1", and
reletter the subsequent subdivisions.
On page 10, line 16, strike "On July 1 of" and insert
"In".
Amend Government Code Section 65583(a)(8) by adding
"Cities and counties are encouraged to include
weatherization and energy efficiency improvements as part
of publicly-subsidized housing rehabilitation projects.
This may include energy efficiency measures that encompass
the building envelope, its heating and cooling systems, and
its electrical system."
Add chaptering amendments to resolve conflicts with SB
575 (Steinberg) in Government Code Section 65583.
Assembly Votes:
Floor: 78-0
HCD: 6-0
Local Gov: 7-0
POSITIONS: (Communicated to the Committee before noon on
Wednesday,
July 1, 2009)
SUPPORT: California Foundation for Independent Living
Centers
California Redevelopment Association
City of Sacramento
League of California Cities
OPPOSED: None received.