BILL ANALYSIS �
-----------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 1537|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
-----------------------------------------------------------------
THIRD READING
Bill No: AB 1537
Author: Levine (D)
Amended: 8/19/14 in Senate
Vote: 21
SENATE TRANSPORTATION & HOUSING COMMITTEE : 8-1, 6/24/14
AYES: Gaines, Beall, Cannella, Galgiani, Hueso, Pavley, Roth,
Wyland
NOES: DeSaulnier
NO VOTE RECORDED: Lara, Liu
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 62-4, 5/19/14 - See last page for vote
SUBJECT : Housing element default densities
SOURCE : Author
DIGEST : This bill, for purposes of the Bay Area housing
element cycle that runs from July 1, 2014 to December 31, 2023,
and redefines Marin County and the cities under 100,000
population within the County as suburban for purposes of the
default densities.
Senate Floor Amendments of 8/19/14 correct drafting errors and
resolve chaptering conflicts with AB 1690 (Gordon).
ANALYSIS : The Planning and Zoning Law requires cities and
counties to prepare and adopt a general plan, including a
CONTINUED
AB 1537
Page
2
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
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:
AB 1537
Page
3
1.Provide an analysis demonstrating how the adopted densities
accommodate lower-income housing, based on market demand,
financial feasibility, and recent development experience.
2.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 two 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 two 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:
1.Redefines, for purposes of the Bay Area housing element cycle
that runs from July 1, 2014 to December 31, 2023, 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.
2.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.
3.Requires that density requirements within one-half mile of
Sonoma-Marin Area Rail Transit stations in place on June 30,
2014 continue to apply.
AB 1537
Page
4
4.Requires Marin County utilize the sum existing in the county's
housing trust fund as of June 30, 2013, for development and
preservation of housing affordable to low- and very low income
households.
5.Contains double-jointing language with AB 1690 (Gordon).
Background
While this bill does not name names, the criteria listed in this
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 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% of the people employed in Marin County
are forced to commute from out of county.
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.
For the current housing element cycle due to end in July,
AB 1537
Page
5
unincorporated Marin County, Novato, and San Rafael had to
identify sites to accommodate 320, 446, and 469 units of
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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/15/14)
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
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
OPPOSITION : (Verified 8/15/14)
California Rural Legal Assistance Foundation
AB 1537
Page
6
Housing California
Western Center on Law and Poverty
ARGUMENTS IN SUPPORT : 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.
ARGUMENTS IN OPPOSITION : Opponents of this 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, this 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.
AB 1537
Page
7
ASSEMBLY FLOOR : 62-4, 5/19/14
AYES: Achadjian, Allen, Bigelow, Bloom, Bocanegra, Bonilla,
Bonta, Bradford, Brown, Buchanan, Ian Calderon, Campos, Chau,
Ch�vez, Chesbro, Conway, Cooley, Dababneh, Dahle, Daly,
Donnelly, Eggman, Fox, Beth Gaines, Garcia, Gatto, Gomez,
Gonzalez, Gordon, Gorell, Gray, Grove, Hagman, Hall, Roger
Hern�ndez, Holden, Jones, Jones-Sawyer, Levine, Linder, Logue,
Melendez, Mullin, Muratsuchi, Olsen, Patterson, Perea, V.
Manuel P�rez, Quirk, Quirk-Silva, Rendon, Ridley-Thomas,
Salas, Stone, Ting, Wagner, Weber, Wieckowski, Wilk, Williams,
Yamada, Atkins
NOES: Ammiano, Maienschein, John A. P�rez, Skinner
NO VOTE RECORDED: Alejo, Dickinson, Fong, Frazier, Harkey,
Lowenthal, Mansoor, Medina, Nazarian, Nestande, Pan,
Rodriguez, Waldron, Vacancy
JA:k 8/20/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****