BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 184|
|Office of Senate Floor Analyses | |
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THIRD READING
Bill No: SB 184
Author: Leno (D)
Amended: 1/23/12
Vote: 21
SENATE TRANSPORTATION & HOUSING COMMITTEE : 5-3, 5/3/11
AYES: DeSaulnier, Kehoe, Lowenthal, Pavley, Simitian
NOES: Gaines, Harman, Huff
NO VOTE RECORDED: Rubio
SUBJECT : Land use: zoning regulations
SOURCE : California Rural Legal Assistance Foundation
Western Center on Law and Poverty
DIGEST : This bill overturns the Palmer v. City of Los
Angeles decision and expressly authorizes a county or city
to establish inclusionary housing requirements as a
condition of development.
Senate Floor Amendments of 1/23/12 add uncodified findings
to this bill and clarify that this bill does not otherwise
enlarge or diminish the powers cities and counties
possessed before the date of the Palmer v. City of Los
Angeles decision of July 21, 2009.
ANALYSIS : Article XI, Section 7 of the California
Constitution grants counties and cities the power "to make
and enforce within its limits all local, police, sanitary,
and other ordinances and regulations not in conflict with
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general laws." This is generally referred to as the police
power of local governments. The Planning and Zoning law
within state statute is a general law that sets forth
minimum standards for counties and cities to follow in land
use regulation, but the law also establishes the
Legislature's clear intent to "provide only a minimum of
limitation in order that counties and cities may exercise
the maximum degree of control over local zoning matters."
Using this police power, many counties and cities have
adopted ordinances, commonly called "inclusionary zoning
ordinances," that require developers to ensure that a
certain percentage of housing units in a new development be
affordable to lower income households. According to the
California Rural Housing Coalition's database, 140
jurisdictions in California currently have mandatory
inclusionary zoning ordinances. These ordinances vary
widely in the percentage of affordable units required, in
the depth of affordability required, and in the options
through which a developer may choose to comply. Most if
not all such ordinances apply to both rental and ownership
housing.
In 2009 in the case of Palmer v. City of Los Angeles , the
Second District California Court of Appeal opined that the
city's affordable housing requirements associated with a
particular specific plan (akin to an inclusionary zoning
ordinance), as it applied to rental housing, conflicted
with and was preempted by a state statute known as the
Costa-Hawkins Rental Housing Act. The Costa-Hawkins Act
limits the permissible scope of local rent control
ordinances. Among its various provisions is the right for
a rental housing owner generally to set the initial rent
level at the commencement of a tenancy, even if the local
rent control ordinance would otherwise limit rent levels
across tenancies. This provision is known as vacancy
decontrol because the rent level is temporarily
decontrolled after a voluntary vacancy. The act also gives
rental housing owners the right to set the initial and all
subsequent rental rates for a unit built after February 1,
1995. The court opined that "forcing Palmer to provide
affordable housing units at regulated rents in order to
obtain project approval is clearly hostile to the right
afforded under the Costa-Hawkins Act to establish the
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initial rental rate for a dwelling or unit."
This bill expressly authorizes a county or city under the
Planning and Zoning Law to establish as a condition of
development inclusionary housing requirements, which may
require the provision of affordable residential units for
low, very low, or extremely low income owners or tenants.
The bill further declares the intent of the Legislature to
supersede any holding or dicta in Palmer v. City of Los
Angeles that conflicts with this authority, and clarifies
that this bill does not otherwise enlarge or diminish the
powers cities and counties possessed before the date of the
Palmer v. City of Los Angeles decision of July 21, 2009.
Background
The inclusionary zoning debate . The purposes of
inclusionary zoning ordinances are twofold. First,
inclusionary zoning ordinances are intended to increase the
production of affordable housing by leveraging additional
resources and opportunities. While developers often do not
build the mandated affordable units themselves or pay their
full cost, inclusionary zoning ordinances generally place
the burden on the developer to ensure construction of the
affordable units. To fulfill this obligation, developers
often donate land or make a financial contribution, or
both, towards development costs. Many ordinances also
allow a developer to fulfill his or her obligation by
paying an in-lieu fee, which the city or county uses to
help finance its own development.
The second purpose of inclusionary zoning ordinances is to
achieve "inclusion" in newly-developing communities. Over
the past few decades, development in California has
generally resulted in single-product neighborhoods, often
single-family home subdivisions. In many cases, the prices
of these new homes are affordable only to the upper end of
the market. Because inclusionary zoning results in some
homes being sold at below-market rates or in a greater mix
of housing products (duplexes, townhomes, condos,
apartments) that come at a greater variety of prices, it
increases economic diversity within neighborhoods and meets
a greater range of the community's housing needs.
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In summing up the inclusionary zoning experience in
California in its 2007 report, the California Coalition for
Rural Housing states, "The single most important conclusion
is that inclusionary programs are putting roofs over the
heads of tens of thousands of Californians. These homes,
in turn, are building mixed-income neighborhoods where
houses considered 'affordable' are often indistinguishable
from those at market-rate."
While market-rate housing developers generally do not argue
with the "inclusionary" aspect of inclusionary zoning, they
often do take issue with having to contribute their
resources for a societal benefit. They believe that if a
jurisdiction wants to promote greater affordable housing,
it should spend public resources for this purpose rather
than require a private entity to do so. Developers also
point out that theirs is one of the few industries that is
asked to provide its product at below-market prices to some
of those who cannot afford the full price.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 1/23/12)
California Rural Legal Assistance Foundation (co-source)
Western Center on Law and Poverty (co-source)
Abode Communities (Los Angeles)
Advocates for Affordable Housing (Mountain View)
Alliance of Californians for Community Empowerment (Los
Angeles)
American Civil Liberties Union of California
Asian Law Alliance
Berkeley Organizing Congregations for Action
Bet Tzedek Legal Services (Los Angeles)
Bonnewit Development Services (Oakland)
Cabrillo Economic Development Corporation (Ventura)
California Catholic Conference
California Coalition for Rural Housing
California Housing Partnership Corporation (Los Angeles,
San Diego)
California Labor Federation
California State Association of Counties
California State Building and Construction Trades Council
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California Hawaii State NAACP
Century Housing (Culver City)
Chinatown Community Development Center (San Francisco)
Cities of Berkeley, Brea, Chino, Daly City, El Cerrito,
Emeryville, Encinitas, Fontana, Half Moon Bay, Hanford,
Los Angeles, Mission Viejo, Montclair, Ontario, Pasadena,
Salinas, San Jose, San Mateo, Santa Monica, South San
Francisco, Sunnyvale, Union City, Wasco, West Hollywood
Charities Housing
Clifford Beers Housing (Los Angeles)
Coalition for Economic Survival (Los Angeles)
Community Action to fight Asthma (Oakland)
Communities Actively Living Independent and Free (Los
Angeles)
Community Corporation of Santa Monica
Community Housing Partnership
Community Resources for Independent Living (Alameda)
Corporation for Supportive Housing (San Diego)
Council for Community Housing Organizations
County of Los Angeles
County of Mono
Downtown Women's Center (Los Angeles)
EAH Housing (San Rafael)
East Bay Housing Organizations
East LA Community Corporation
Eden Housing (Hayward)
Equity Community Builders (San Francisco)
Fair Housing of Marin
Friends Committee on Legislation
Greater Long Beach Interfaith Community Organization
Greenbelt Alliance (San Francisco)
Global Green USA (Santa Monica)
Habitat for Humanity of Greater Los Angeles
Habitat for Humanity of Orange County
Habitat for Humanity of Greater San Francisco
Habitat for Humanity San Bernardino
Hollywood Community Housing Corporation (Los Angeles)
Homes for Life Foundation (Los Angeles)
Housing California
Housing Land Trust of Sonoma County
Housing Leadership Council of San Mateo County
Housing Long Beach
Housing Works (Los Angeles)
Independent Living Center of Southern California (Los
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Angeles)
International Union of Painters and Allied Trades District
Council 36 (Los Angeles)
Jamboree Housing Corporation (Irvine)
LAANE (Los Angeles)
LA Voice
Las Palmas Foundation
League of California Cities
League of California Cities Los Angeles Division
League of Women Voters of California
Legal Services of Northern California
Little Tokyo Service Center Community Development
Corporation (Los Angeles)
Loaves and Fishes
Long Beach Area Coalition for the Homeless
Low Income Investment Fund (Los Angeles)
Los Angeles Neighborhood based Community Development
Coalition (Los Angeles)
Lutheran Office of Public Policy (Glendale, Santa Ana)
Mammoth Lakes Housing Inc.
Marin Partnership to End Homelessness
Marin Workforce Housing Trust
McCormack Baron Salazar Real Estate Development (Los
Angeles)
Mercy Housing (West Sacramento)
MidPen Housing (Foster City)
MOVE LA
Napa Valley Community Housing
National Community Renaissance (Rancho Cucamonga)
New Directions Inc. (Los Angeles)
Non-Profit Housing Association of Northern California
Pacific West Communities
Palo Alto Housing Corporation
Paratransit Inc. (Sacramento)
Partnership for Working Families
Peninsula Interfaith Action (San Carlos)
People Organized for Westside Renewal (Santa Monica)
Peoples' Self -Help Housing Corporation (Santa Barbara)
Public Counsel Law Center (Los Angeles, Beverly Hills)
Sacramento Yolo Mutual Housing Association
San Diego Housing Federation (San Diego)
Silicon Valley Bank
Silicon Valley Leadership Group
Self-help Enterprises (Visalia)
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Skid Row Housing Trust (Los Angeles)
South Bay Labor Council (San Jose)
Southern California Association of Nonprofit Housing (Los
Angeles)
Southern California Conference Ministerial Alliance
State Building and Construction Trades Council
Step Up on Second (Santa Monica)
Strategic Actions for a Just Economy
Tenants Together (San Francisco)
Tenderloin Neighborhood Development Corporation (San
Francisco)
The International Union of Painters and Allied Trades
District Council 36 (Los Angeles)
The Kennedy Commission (Irvine)
The Second African Methodist Episcopal Church of Los
Angeles
Thomas Safran & Associates (Los Angeles)
Town of Hillsborough
Town of Mammoth Lakes
T.R.U.S.T. South LA (Los Angeles)
Venice Community Housing Corporation (Venice)
West Angeles Community Development Corporation (Los
Angeles)
West Hollywood Community Housing (West Hollywood)
Women Organizing Resources, Knowledge and Services (WORKS)
(Los Angeles)
OPPOSITION : (Verified 1/23/12)
Apartment Association, California Southern Cities
Apartment Association of Greater Los Angeles
Apartment Association of Orange County
California Association of Realtors
California Building Industry Association
Rental Property Association of Northern Alameda County
San Diego County Apartment Association
San Francisco Association of Realtors
Santa Barbara Rental Property Association
ARGUMENTS IN SUPPORT : According to the sponsors, local
inclusionary housing programs have proven to be one of the
most effective tools for producing new homes affordable to
working families and creating strong, diverse neighborhoods
with a range of housing choices. Inclusionary ordinances
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have provided quality affordable housing to over 80,000
Californians, including the production of an estimated
30,000 units in the last decade alone. While many of these
local programs have been in place for decades, the recent
Palmer decision has created uncertainty and confusion for
local governments and housing advocates regarding the
future viability of this important local land use tool.
According to the author's office, this bill resolves a
conflict between local inclusionary zoning ordinances and
the state's Costa-Hawkins Rental Housing Act, thereby
restoring the ability of local governments to use one of
the most effective tools at their disposal to promote the
production of both ownership and rental homes that are
affordable to California's lower income working families.
ARGUMENTS IN OPPOSITION : Opponents argue that
inclusionary zoning is akin to rent control and that this
bill therefore allows local governments to enact and
enforce rent control on newly constructed rental housing
units by pre-empting the Costa-Hawkins Act. They believe
that the Costa-Hawkins protections for anew construction
are appropriate and should be maintained. Moreover, they
believe that the bill will seriously hurt the construction
industry.
JJA:do 1/25/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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