BILL ANALYSIS �
SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: ab 1537
SENATOR MARK DESAULNIER, CHAIRMAN AUTHOR: levine
VERSION: 4/21/14
Analysis by: Mark Stivers FISCAL: yes
Hearing date: June 24, 2014
SUBJECT:
Housing element default densities
DESCRIPTION:
This bill, for purposes of the Bay Area housing element cycle
that runs from July 1, 2014 to December 31, 2023, redefines
Marin County and the cities under 100,000 population within the
county as suburban for purposes of the default densities.
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 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. These five- and eight-year cycles
are known as the housing element planning period. If a city or
county on an eight-year cycle fails to adopt a housing element
within 120 days of its due date, then the city or county must
revise and readopt its housing element at mid-point of the cycle
after four years.
Before each revision, each city and county receives its fair
share of housing through the regional housing needs assessment
(RHNA) process. First, the Department of Housing and Community
Development (HCD) works with a council of governments to
determine the region's housing need. A council of governments
then allocates the region's need to each city and county within
the region. The RHNA allocation includes both an overall
housing need number and a breakdown of this overall need into
four income categories: above moderate-, moderate-, low-, and
very low-income households. A housing element must identify
adequate sites with appropriate zoning to meet the city's or
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county's share of the RHNA by income category and ensure that
regulatory systems provide opportunities for, and do not unduly
constrain, housing development. HCD reviews both draft and
adopted housing elements to determine whether or not they are in
substantial compliance with the law.
In establishing whether or not a given site is appropriately
zoned to accommodate housing affordable to very low- or
low-income households, housing element law relies on density as
a proxy for affordability. In general, spreading fixed land
costs over a larger number of units will reduce the per-unit
land costs and thereby reduce the total development cost of each
unit. A reduced per-unit cost allows market rents and sale
prices to be more affordable and reduces the public subsidy
required for affordable units.
As a result, housing element law requires a city or county to
demonstrate how its adopted densities accommodate the need for
affordable housing. A city or county may make this
demonstration in either of two ways:
Provide an analysis demonstrating how the adopted densities
accommodate lower-income housing, based on market demand,
financial feasibility, and recent development experience
Document that adopted densities meet or exceed the following
"default densities" established in statute:
30 units per acre for metropolitan jurisdictions,
generally defined as any city or county over 25,000
population in a Metropolitan Statistical Area (MSA) with a
population of 2 million persons or greater and any city or
county over 100,000 population in any size MSA
20 units per acre for suburban jurisdictions, generally
defined as cities and counties under 25,000 population in
an MSA of 2 million persons or greater and jurisdictions
under 100,000 population in all other MSAs
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)
10 units per acre for unincorporated areas in all
non-metropolitan counties
This bill , for purposes of the Bay Area housing element cycle
that runs from July 1, 2014 to December 31, 2023, redefines
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Marin County and the cities under 100,000 population within the
county as suburban for purposes of the default densities, which
means that sites within those jurisdictions are deemed
appropriate for low-income housing at 20 units per acre instead
of 30 units per acre. The bill further requires a city or
county so redefined to report in 2019 and 2023 to HCD and the
Legislature regarding its progress in developing low- and very
low-income housing.
COMMENTS:
1.Purpose of the bill . According to supporters, the default
density standards are in need of refinement due to
inconsistent outcomes. 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, unincorporated Sonoma
County is considered "suburban" despite having a higher
population than unincorporated Marin County. Instead, Marin
has the same default density standard as San Francisco due to
its inclusion in the same MSA. This bill will refine the
default density housing formula to allow for suburban
designations in Marin County.
The author believes that this bill will 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. Reducing the default density
will address local concerns and give cities and counties more
flexibility to zone land suitable for affordable housing in a
way that fits within the communities' individual
circumstances.
2.Affects three high-rent jurisdictions . While the bill does
not name names, the criteria listed in the bill change the
default densities for only three jurisdictions: the
unincorporated County of Marin and the cities of Novato and
San Rafael. These three jurisdictions happen to be located in
what is arguably the most expensive county in the state, if
not the nation. According to the National Low Income Housing
Coalition's Out of Reach report for 2013, Marin County is tied
with San Francisco and San Mateo Counties as the most
expensive counties in the nation for renting housing, in which
a working person must earn $37.62 per hour to afford the fair
market rent on a two-bedroom apartment. Since then, the Marin
Independent Journal reports that rents in Marin during the
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first quarter of 2014 jumped 9.6% over the first quarter of
2013 and that occupancy was at 97.4% (95% is considered fully
occupied). Already, an estimated 60 percent of the people
employed in Marin County are forced to commute from out of
county. In addition, construction is in full swing on the
Sonoma-Marin Area Rail Transit (SMART) system, and Novato and
San Rafael will each have two stations. Lowering densities in
these cities may frustrate efforts to bring riders to the new
system. In spite of these conditions, this bill seems to
reflect the recent political sentiments in Marin County
against affordable housing and higher density housing in
general. The committee may wish to consider whether or not it
is good policy to lower default densities and thereby increase
the cost of developing affordable and market rate housing in
one of the most expensive housing markets in the nation. If
the committee wishes to allow lower densities for these
jurisdictions, it may wish to consider requiring jurisdictions
that choose to use the lower default densities to commit new
financial resources to affordable housing to offset the
increased per-unit costs of development.
3.Local governments already have the option to avoid default
densities . The default densities were a consensus
recommendation of the HCD-convened Housing Element Working
Group in 2004. The idea was to create a safe harbor at which
densities would be presumed to promote affordability and to
eliminate the time-intensive analysis for cities and counties
that already used higher densities. As described above,
housing element law does not require cities and counties to
use the default densities. Instead, they may still complete
an analysis that demonstrates that lesser densities can
accommodate lower-income housing, based on market demand,
financial feasibility, and recent development experience.
Novato, for example, has chosen to do this. Instead of using
the default density of 30 units per acre for the current
housing element cycle, the city chose to complete the analysis
and demonstrated to HCD's satisfaction that development at
densities of 23 units per acre can accommodate lower-income
housing. As a result, not only is this bill unnecessary, but
it would lower the default densities below what Novato's
analysis showed was feasible for affordable housing.
4.The three jurisdictions already have adequate sites . For the
current housing element cycle due to end in July,
unincorporated Marin County, Novato, and San Rafael had to
identify sites to accommodate 320, 446, and 469 units of
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lower-income housing, respectively. All three were able to do
so and received HCD approval of their housing elements. In
the case of San Rafael, the city regularly allows densities up
to 40 units per acre, particularly in its downtown area.
Although due in 2009, Novato adopted its housing element in
late 2013 and applied an affordable housing overlay to five
new sites comprising roughly 10 acres. Likewise, Marin County
adopted its element in late 2013 and applied an affordable
housing overlay allowing densities of 30 units per acre to
additional sites. For the upcoming housing element cycle,
Marin County, Novato, and San Rafael have a lower-income
housing need of 87, 176, and 388 units, respectively. Given
that little to no development has occurred since the adoption
of each jurisdiction's current element, the identified sites
are still available for the cities to use towards their new
and much smaller RHNA allocations. Presumably, these
jurisdictions will have little trouble getting HCD approval of
their new housing elements. As a result, this bill is not
necessary for the three affected jurisdictions to achieve
compliance with housing element law.
Moreover, while zoning ordinances generally set maximum
densities, developers may propose individual projects at
lesser densities if that makes economic and political sense.
Instead of continuing the debate in these communities over the
maximum densities allowed by the zoning ordinances as this
bill does, it may be more effective to focus on permitting
individual projects at densities that can work. A project
with a density of 25 units per acre will likely be more
politically attractive if the maximum zoning density is 30
units per acre rather than 25.
5.Bad precedent . Although housing element compliance is at its
highest rate in history, roughly 20% of jurisdictions do not
have HCD-approved housing elements. The reasons vary, but
most often the lack of HCD approval is due to a failure to
identify enough sites with appropriate densities to
accommodate lower-income housing. Generally, local political
pressures are the barrier to compliance. If the three
jurisdictions in Marin County are successful in winning
special legislation to reduce their default densities, this
will surely encourage other jurisdictions to do likewise. The
committee may wish to consider whether this bill sets a
troublesome precedent.
6.Reporting redundant . This bill requires the three
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jurisdictions to report in 2019 and 2023 to HCD and the
Legislature regarding their progress in developing low- and
very low-income housing. Government Code 65400 already
requires each city and county to report annually to HCD on the
status of the housing element and progress in its
implementation, including progress in meeting the city's or
county's RHNA allocation. Instead of redundant reporting, the
committee may wish to require the jurisdictions to readopt
their housing elements after four years at the original
default densities if they have permitted less than 50% of
their RHNA allocation for lower-income households.
7.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.
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 approach. Opponents point to the
current lack of availability of affordable housing for low-
and moderate-income individuals and families and contend that
this bill will have the effect of making it even more costly
to develop affordable housing in Marin County.
8.Technical amendment . Add a provision to Section 2 of the bill
stating that it shall take effect on January 1, 2024.
9.Chaptering conflict . This bill has a chaptering conflict with
AB 1690 (Gordon). The author will need to resolve this
conflict prior to final passage.
Assembly Votes:
Floor: 62-4
Appr: 17-0
H&CD: 7-0
L Gov: 8-0
POSITIONS: (Communicated to the committee before noon on
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Wednesday, June 18,
2014.)
SUPPORT: Association of Bay Area Governments
Bel Marin Keys Community Service District
BRIDGE Housing Corporation
California State Association of Counties
Center for Sustainable Neighborhoods
City of Novato
Domus Development
EAH Housing
Eden Housing
Habitat for Humanity California
League of California Cities
Marin Association of Realtors
Marin County Board of Supervisors
Marin County Council of Mayors and Council
Members
Non-Profit Housing Association of Northern
California
Transportation Authority of Marin
OPPOSED: California Rural Legal Assistance Foundation
Western Center on Law and Poverty