BILL ANALYSIS
AB 1867
Page 1
Date of Hearing: April 21, 2010
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Cameron Smyth, Chair
AB 1867 (Harkey) - As Introduced: February 12, 2010
SUBJECT : Land use: local planning: housing element program.
SUMMARY : Changes, for local governments, the eligibility
requirements for the substantial rehabilitation of units for
purposes of meeting housing element and regional housing needs
assessment (RHNA) requirements. Specifically, this bill :
1)Requires the local government or a court, in terms of the
substantial rehabilitation of a unit, to find that the unit is
a substandard building due to the existence of at least six
violations
of the conditions listed in the "Rules and Regulations" section
of the Health and Safety Code that regulates buildings used
for human habitation.
2)Reduces the number of units located in a multifamily rental
housing complex that have newly been made affordable with
affordability covenants, from four units to three units, in
order to qualify with respect to counting the rehabbed units
toward a local government's RHNA obligation.
EXISTING LAW :
1)Requires each city, county, or city and county to prepare and
adopt a general plan for its jurisdiction that contains
certain mandatory elements, including a housing element.
2)Provides that the housing element shall consist of an
identification and analysis of existing and projected housing
needs and a statement of goals, policies, quantified
objectives, financial resources, and scheduled programs for
the preservation, improvement, and development of housing.
3)Specifies that the Department of Housing and Community
Development (HCD) may allow a city or county to substitute the
provision of units for up to 25% of the community's obligation
to identify adequate sites for any income category in its
housing element, for units that meet specified substantial
rehabilitation, conversion or preservation requirements.
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4)Requires, for purposes of counting substantially rehabilitated
units toward meeting housing element requirements, that a unit
is not eligible to be "substantially rehabilitated" unless all
of the following requirements are met:
a) At the time the unit is identified for substantial
rehabilitation:
i) The local government has determined that the unit is
at imminent risk of loss to the housing stock;
ii) The local government has committed to provide
relocation assistance to any occupants temporarily or
permanently displaced by the rehabilitation or code
enforcement activity, or the relocation is otherwise
provided prior to displacement either as a condition of
receivership, or provided by the property owner or the
local government, provided the assistance includes not
less than the equivalent of four months' rent and moving
expenses and comparable replacement housing;
iii) The local government requires that any displaced
occupants will have the right to reoccupy the
rehabilitated units; and,
iv) The unit has been found by the local government or a
court to be "unfit for human habitation" due to the
existence of at least four violations of the conditions
listed in the Violations section of the Health and Safety
Code that provides for regulation of buildings used for
human habitation.
5)Provides that units that are located in a multifamily rental
housing complex of four or more units that are converted with
committed assistance from the city or county from
nonaffordable to affordable by acquisition of the unit or the
purchase of affordability covenants and restrictions for the
unit, will constitute a net increase in the community's stock
of housing affordable to low- and very-low income households.
6)States in the Violations section of the Health and Safety
Code, which provides for regulation of buildings used for
human habitation, that the following conditions are considered
violations:
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a) Termination, extended interruption or serious defects of
gas, water or electric utility systems provided such
interruptions or termination is not caused by the tenant's
failure to pay such gas, water or electric bills;
b) Serious defects or lack of adequate space and water
heating;
c) Serious rodent, vermin or insect infestation;
d) Severe deterioration, rendering significant portions of
the structure unsafe or unsanitary;
e) Inadequate numbers of garbage receptacles or service;
f) Unsanitary conditions affecting a significant portion of
the structure as a result of faulty plumbing or sewage
disposal; or,
g) Inoperable hallway lighting.
7)Provides that the rehabilitated unit will have long-term
affordability covenants and restrictions.
8)Provides that prior to initial occupancy after rehabilitation,
the local code enforcement agency shall issue a certificate of
occupancy indicating compliance with all applicable state and
local building code and health and safety code requirements.
9)Provides that a unit is not converted by acquisition of the
purchase of affordability covenants unless all of the
following occur:
a) The unit is made available at a cost affordable to low-
or very-low income households; and,
b) At the time the unit is identified for acquisition, the
unit is not available at an affordable housing cost to
either of the following:
i) Low-income households, if the unit will be made
affordable to low-income households; or,
ii) Very-low income households, if the unit will be made
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affordable to very-low income households.
FISCAL EFFECT : Unknown
COMMENTS :
1)Under current law, when a city updates its housing element, it
must generally show sufficient vacant land to accommodate the
projected housing need for the time period covered by the
element. This requirement ensures an adequate supply of land
for the construction of new housing. Current law also allows
a very limited exception to this requirement that allows a
local government to substitute a portion of these real,
available sites for a promise to rehabilitate existing units
in the future. This exception was put into place by AB 438
(Torlakson), Chapter 796, Statutes of 1998, and allows local
jurisdictions to fulfill up to
25% of their region's affordable housing needs by providing
substantially rehabilitated units whose long-term
affordability is assured through covenants and restrictions,
through the provision of "committed assistance" as provided by
the city or county. One of the requirements for counting
units within this 25% cap is that the units have received
"committed assistance" from the local jurisdiction, meaning
that the city or county must enter into a legally enforceable
agreement that obligates sufficient available funds to provide
the assistance necessary to make the identified units
affordable.
2)AB 1867 makes several changes to the section of law that
allows a city or county to substitute the provision of units
for up to 25% of the community's obligation to identify
adequate sites.
First, the bill allows units that are located in a multifamily
rental housing complex of three or more units that have newly
been made affordable with affordability covenants to qualify,
with respect to counting the rehabbed units toward a local
government's RHNA obligation. Current law specifies that this
only applies to a complex of four or more units [AB 2348
(Mullin), Chapter 725, Statutes of 2004]. Prior to 2004, this
requirement was for a multifamily rental housing complex of
sixteen or more units.
Second, the bill revises requirements for what is necessary
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for a local government to substantially rehabilitate a unit.
Pursuant to existing law, one of the requirements is for the
unit to be found by the local government or the court to be
"unfit for human habitation" due to the existence of at least
four violations of certain building conditions specified in
the Health and Safety Code (See Section 17995.3). A majority
of the seven violations listed in that code are serious in
nature - including serious rodent, vermin or insect
infestations, serious defects or lack of adequate space and
water heating, severe deterioration which renders portions of
the structure to be unsafe or unsanitary, and unsanitary
conditions affecting a significant portion of the structure as
a result of faulty plumbing or sewage disposal.
Instead, this bill provides that the local government or court
has to find that the unit is a "substandard building" due to
the existence of at least six violations in a different Health
and Safety Code Section (see Section 17920.3). These fifteen
conditions are less serious in nature than what is provided in
existing law, and include violations like lack of adequate
exit facilities, nuisances, faulty weather protection, and
lack of fire-resistive construction, for example.
The result of this bill's provisions that change from "unfit
for human habitation" to a "substandard building" and the
subsequent code switch to less serious violations could mean
that more units would potentially be eligible to be
rehabilitated, but the rehabilitation of those units would be
less likely to increase the actual number of affordable units
for the purposes of the local government's share of RHNA,
given that the units deemed "unfit for human habitation" would
most likely fall out of the housing stock if not
rehabilitated, where the units that are "substandard" would
most likely remain in the housing stock even if they were not
rehabbed.
3)According to the author and the sponsor, the City of San Juan
Capistrano, current law leaves some cities with few
opportunities to utilize the alternative methods of meeting
RHNA requirements. San Juan Capistrano believes that this
section of law needs to be changed for three reasons: first,
San Juan Capistrano is approximately 90% built out, making
developable land sparse; second, land that is available to
build tends to include land with historic and cultural
sensitivity, or have topography and geography concerns; and
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third, the majority of remaining building sites in San Juan
Capistrano are in areas distant from schools, public
transportation, and amenities necessary for lower-income
households.
According to the author, given San Juan Capistrano's built-out
condition and location
of vacant and buildable parcels, the city is struggling to
find sites to accommodate newly constructed units and is
seeking to make current law more usable and flexible for the
substantial rehabilitation of existing sites.
4)AB 720 (Caballero), Chapter 467, Statutes of 2009, updated
this same section of law to increase flexibility for local
governments in meeting housing requirements by expanding
the amount of time a city or county could provide committed
assistance for the rehabilitation
of affordable housing units. Other provisions in AB 720 allow a
city or county to include weatherization and energy efficiency
improvements as part of its efforts to substantially
rehabilitate a unit. Additionally, AB 720 allows a
jurisdiction to claim credit in their annual report for any
units rehabbed, preserved, or acquired that meet the statutory
requirements, regardless of whether their housing element
included a program to address the alternative adequate sites
requirement.
In light of the recent changes to allow for greater
flexibility in this section of housing element law, the
Committee may wish to ask whether it is necessary to amend
this statute for more flexibility before any local government
has had much of a chance to use the expanded provisions of AB
720 that took effect on January 1, 2010.
5)Support Arguments : The cities of San Juan Capistrano, Buena
Park, Mission Viejo, Laguna Hills and San Clemente, in
support, note that AB 1867 seeks to make minor changes to
current law in order to give local governments additional
autonomy, to provide increased opportunities to create
additional affordable units, and to implement methods of
addressing the needs of low-income individuals who are
currently housed in sub-standard dwelling units.
Opposition Arguments : Housing California, in opposition, writes
that "when a home is unfit for human habitation and
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rehabilitated, it is the equivalent of bringing a new home
into the housing market, because it is uninhabited prior to
rehabilitation." And, "most homes that are considered to be
substandard are already occupied, so allowing these homes to
be rehabilitated and counted towards a jurisdictional
obligation to increase housing supply does not actually bring
any new homes into the market."
6)AB 1867 is double-referred to the Committees on Local
Government and Housing and Community Development.
REGISTERED SUPPORT / OPPOSITION :
Support
City of San Juan Capistrano [SPONSOR]
Cities of Buena Park, Dana Point, Laguna Hills, Mission Viejo,
Laguna Hills, and San Clemente
League of CA Cities
Opposition
CRLA Foundation (unless amended)
Housing CA
Western Center on Law & Poverty (unless amended)
Analysis Prepared by : Debbie Michel / L. GOV. / (916)
319-3958