BILL ANALYSIS �
AB 1537
Page 1
Date of Hearing: April 30, 2014
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
Ed Chau, Chair
AB 1537 (Levine) - As Amended: April 21, 2014
SUBJECT : Land use: housing element: default densities.
SUMMARY : Creates a pilot program for Marin County to utilize a
"suburban" default density standard for accommodating its share
of affordable housing. Specifically, this bill:
1)Specifies that, for purposes of determining a jurisdiction's
"default density" for accommodating affordable housing, if a
county that is in the San Francisco-Oakland-Fremont,
California Metropolitan Statistical Area (MSA) has a
population of less than 400,000, that county is considered
suburban. If this county includes an incorporated city that
has a population of less than 100,000, this city is also
considered suburban.
2)Provides that this classification shall apply to a housing
element revision cycle that is in effect from July 1, 2014, to
December 31, 2023, inclusive.
3)Requires that all jurisdictions affected by this legislation
report to the Assembly Committee on Housing and Community
Development, the Senate Committee on Transportation and
Housing, and the Department of Housing and Community
Development (HCD) regarding its progress in developing low-
and very low-income housing. The report must be provided
twice, once, on or before December 31, 2019, and a second
time, on or before December 31, 2023. The report is comprised
of information that is already required as part of all local
governments' annual Housing Element Progress Report to HCD.
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
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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 located within the territory of a
metropolitan planning organization (MPO) to revise their
housing elements every eight years following the adoption of
every other regional transportation plan. Cities and counties
in rural non-MPO regions must revise their housing elements
every five years. (Government Code 65588)
4)Requires, prior to each housing element revision, that each
council of governments (COG), in conjunction with 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)Divides the RHNA into the following income categories:
a) Very low-income (50% or lower of area median income);
b) Low-income (80% or lower of area median income);
c) Moderate-income (between 80% and 120% of area median
income); and
d) Above moderate-income (exceeding 120% area median
income).
(Government Code Section 65584)
6)Requires housing elements to include an inventory of land
suitable for residential development that identifies enough
sites that can be developed for housing within the planning
period to accommodate the jurisdiction's entire share of the
RHNA. (Government Code Sections 65583 and 65583.2)
7)Allows a jurisdiction to do either of the following in order
to show that a site is adequate to accommodate some portion of
its share of the RHNA for lower-income households:
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a) Provide an analysis demonstrating that the site is
adequate to support lower-income housing development at its
zoned density level, and requires the analysis to include,
but not be limited to, factors such as market demand,
financial feasibility, or information based on development
project experience within a zone or zones that provide
housing for lower income households; or
b) Zone the site at the jurisdiction's "default" density
level.
(Government Code Section 65583.2)
8)Establishes the following "default" density levels for
purposes of establishing a site's adequacy for supporting
lower-income housing development:
a) 30 units per acre for metropolitan jurisdictions,
generally defined as any city or county (except for
jurisdictions of less than 25,000 persons) in an MSA with
a population of 2 million persons or greater and any city
or county over 100,000 persons in any size MSA.
b) 20 units per acre for suburban jurisdictions,
generally defined as cities and counties in an MSA of
less than 2 million persons (except for jurisdictions
over 100,000 persons) and jurisdictions under 25,000
persons in larger MSAs.
c) 15 units per acre for incorporated cities within
non-metropolitan counties and for non-metropolitan
counties that have micropolitan areas (i.e., Del Norte,
Humboldt, Lake, Mendocino, Nevada, Tehama, and Tuolumne
Counties).
d) 10 units per acre for unincorporated areas in all
non-metropolitan counties.
9)Requires each local government to prepare an annual Housing
Element Progress Report using forms and definitions adopted by
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HCD. This includes reporting on the local government's
progress in meeting its share of the RHNA. (Government Code
Section 65400)
FISCAL EFFECT : Unknown.
COMMENTS :
Background:
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-, low-,
moderate-, and above-moderate income) over the course of the
next housing element planning period to accommodate population
growth and overcome existing deficiencies in the housing supply.
This number is known as the regional housing needs assessment
(RHNA). 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 a community does not have enough sites within its
existing inventory of residentially zoned land to accommodate
its entire RHNA, then the community must adopt a program to
rezone land within the first three years of the planning period.
Cities and counties are required to demonstrate that sites are
adequate to accommodate housing for each income group based on
the zoning after taking into consideration individual site
factors such as property size, existing uses, environmental
constraints, and economic constraints. With respect to the
zoning, density can be used as a proxy for affordability.
Jurisdictions may establish the adequacy of a site for very low-
or low-income housing by showing that it is zoned at the
"default" density (also referred to as the Mullin density).
These densities range from 10 to 30 units per acre depending on
the type of jurisdiction. Jurisdictions may also include sites
zoned at lower densities by providing an analysis of how the
lower density can accommodate the need for affordable housing.
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Arguments in Support:
Supporters of the bill argue that the default density standards
are in need of refinement due to inconsistent outcomes. They
explain that certain cities and counties within larger
multi-county MSAs are considered "metropolitan" under the
current default density standards despite being suburban or
rural in character. Specifically, supporters point to the fact
that unincorporated Sonoma County, which is in a less populous
MSA, is considered "suburban" despite having a higher population
than unincorporated Marin County. Supporters also point to the
fact that Marin has the same default density standard as San
Francisco due to its inclusion in the same MSA.
Supporters contend that Marin County has difficulty zoning for a
default density of 30 units per acre, which impacts their
ability to promote affordable housing. In this view, reducing
the default density would create momentum for more affordable
housing projects by addressing local concerns about high-density
housing. Supporters argue that the bill would allow specific
communities more flexibility to zone land suitable for
affordable housing in a way that fits within the communities'
individual circumstances.
Arguments in Opposition:
Opponents of the bill point to the fact that default densities
are not mandatory. In establishing the adequacy of sites for
affordable housing, local governments can either zone the site
at the default density or provide HCD with an analysis
demonstrating that the site is adequate to support lower-income
housing development at its zoned density level, including
factors such as market demand, financial feasibility, or
information based on development project experience within a
zone or zones that provide housing for lower-income households.
Opponents also point to the issue that default density standards
were instituted after a lengthy working group process involving
a diverse group of stakeholders. In opponents' view, the bill
is a result of local opposition to affordable housing, and
legislating to accommodate this narrow opposition is the wrong
direction. Opponents point to the current lack of availability
of affordable housing for low- and moderate-income individuals
and families, and contend that AB 1537 will have the effect of
making it even more costly to develop affordable housing in the
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areas affected by the bill.
Purpose of the Bill:
According to the author, AB 1537 will refine the default density
housing formula to allow for suburban designations for the lower
population county of Marin. The bill is intended to help create
momentum for more affordable housing development in areas that
have had challenges in getting projects off the ground due to
concerns about high density development.
Staff Comments:
AB 1537 will impact reforms to housing element law that came out
of the Housing Element Working Group (HEWG). The group, which
was convened by HCD in 2003, was a broad-based group that
included representatives from local government, COGs, the
for-profit and non-profit development community, and affordable
housing advocacy groups. HCD proposed the group after several
lengthy and divisive Legislative battles over changes to housing
element law.
The HEWG met from June through November of 2003 and reached
consensus on reform proposals in three major areas: the
regional housing needs allocation process, increasing housing
development certainty, and the identification of adequate sites.
The bills that implemented the reform proposals represented a
consensus agreement and received broad bi-partisan support
throughout the legislative process. No "no" votes were cast
against the bills. One of these bills, AB 2348 (Mullin) amended
housing element law by clarifying the land inventory
requirements to provide local governments more certainty about
the statutory requirements. Amongst other things, AB 2348
established the default densities, also known as "Mullin"
densities, for affordable housing sites.
In establishing the adequacy of sites for affordable housing,
current law allows a city or county to either zone the site at
the default density or provide an analysis demonstrating that
the site is adequate to support lower-income housing development
at its zoned density level. The default density is not
mandatory, but was intended to provide an option for local
governments to streamline the housing element approval process.
If a local government can show that affordable housing can be
developed within the jurisdiction at lower densities, then the
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law allows these lower density sites to count towards meeting a
share of the jurisdiction's RHNA for lower-income households.
AB 1537 was introduced in response to concerns arising out of
Marin County. Marin County is included in an MSA of 2 million
persons or greater. Several cities within the County have
populations of less than 25,000, and are already considered
"suburban" under the default density standards. This bill would
reduce the default density from 30 units per acre to 20 units
per acre in the cities of Novato and San Rafael, and in
unincorporated Marin County for one housing element cycle. It
is unclear why this bill is needed for the city of San Rafael,
which currently utilizes densities between 43 and 72 units per
acre toward its lower income need, which is well above the
current default density. The city of Novato currently utilizes
a density of 23 units per acre toward its lower income need
after working with HCD to zone at a lower density.
Unincorporated Marin County currently zones at its default
density of 30 units per acre, although nothing is precluding
them from utilizing the existing process with HCD to zone at a
lower density.
While this bill requires the affected jurisdictions to report
back twice on their progress in developing affordable housing,
this report is comprised of information that is already required
as part of all local governments' annual reports to HCD. The
Committee may wish to consider additional reporting requirements
to better evaluate the effectiveness of this pilot project.
There is no provision in the bill for an outside evaluation of
Marin County's progress in developing affordable housing at the
reduced default density level. Additionally, there is no
mechanism for terminating the pilot project if the first four
years show no positive outcomes. It will be difficult to
measure the effectiveness of this legislation without additional
reporting and evaluation requirements.
Reducing default density levels may have the effect of
increasing the price of affordable housing development and
thereby making it a less attractive option for developers. In a
county such as Marin, with one of the least affordable housing
markets in the nation and nearly 60% of its workforce commuting
into the county from other areas, sufficient affordable housing
development is something that should be promoted. While there
may certainly be legitimate concerns about the default density
standards, and nothing precludes the Legislature from revisiting
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this issue, it may not be a prudent course of action to take a
piecemeal approach. It is also likely that other jurisdictions,
as a result of this legislation, will request similar reductions
in default density.
Double referred: If AB 1537 passes this committee, the bill will
be referred to the Committee on Local Government.
REGISTERED SUPPORT / OPPOSITION :
Support
Bridge Housing
California State Association of Counties
Center for Sustainable Neighborhoods
County of Marin
Domus Development
EAH Housing
Eden Housing
El Dorado County
League of California Cities
Marin County Council of Mayors and Council members
Non-Profit Housing Association of Northern California (NPH)
Transportation Authority of Marin
Opposition
Western Center on Law and Poverty
California Rural Legal Assistance Foundation
Analysis Prepared by : Rebecca Rabovsky / H. & C.D. / (916)
319-2085