BILL ANALYSIS �
AB 2222
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Date of Hearing: May 7, 2014
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
K.H. "Katcho" Achadjian, Chair
AB 2222 (Nazarian) - As Amended: May 5, 2014
SUBJECT : Housing: density bonus.
SUMMARY : Modifies provisions of density bonus law.
Specifically, this bill :
1)Increases the affordability requirement of all low- and very
low-income units that qualified an applicant for a density
bonus from 30 years or longer to 55 years or longer.
2)Prohibits an applicant from receiving a density bonus or any
other incentives or concessions if a proposed housing
development or condominium project is located on any property
that includes a parcel on which dwelling units have, at any
time in the five-year period preceding the application, been:
a) Occupied by lower- or very low-income households;
b) Subject to a recorded covenant, ordinance, or law that
restricts rents to levels affordable to persons and
families of lower- or very low-income; or,
c) Subject to any other form of rent or price control
through a public entity's valid exercise of its police
power.
1)Provides that the prohibition in 2), above, shall not apply if
the proposed housing development or condominium project would
replace the existing units with at least the same number of
units of equivalent size or type, or both, to be made
available for rent at affordable housing costs to, and
occupied by, persons and families in the same or lower income
category in the same proportion as the existing affordable
units, and either of the following applies:
a) The proposed housing development includes the additional
required set aside of affordable units at the percentages
set forth in existing law; or,
b) Each unit in the development is affordable to, and
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occupied by, either a low- or very low- income household.
EXISTING LAW :
1)Defines "density bonus" as a density increase over the
otherwise maximum allowable residential density as of the date
of application by the applicant to the local government.
2)Requires all cities and counties to adopt an ordinance that
specifies how they will implement state density bonus law.
3)Requires local governments to grant a density bonus when an
applicant for a housing development of five or more units
seeks and agrees to construct a project that will contain at
least any one of the following:
a) 10% of the total units for lower-income households;
b) 5% of the total units for very-low income households;
c) A senior citizen housing development or mobilehome park;
and,
d) 10% of the units in a common-interest development (CID)
for moderate-income households.
4)Provides that, when an applicant for approval to convert
apartments to a condominium project agrees to provide at least
33% of the total units of the proposed condominium project to
persons and families of low- or moderate-income, or 15% of the
total units of the proposed condominium project to
lower-income households, and agrees to pay for the reasonably
necessary administrative costs incurred by a local government,
the local government must either grant a density bonus or
provide other incentives of equivalent financial value.
5)Provides that a local government, when considering an
application for approval to convert apartments to a
condominium project, may place reasonable conditions on the
granting of a density bonus or other incentives.
6)Provides that the density bonus for low-, very low-, and
moderate-income units increase incrementally according to a
set formula.
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7)Requires that the applicant agree to continued affordability
of all low- and very low-income units that qualified the
applicant for the density bonus for at least 30 years.
8)Requires that applicants receive incentives or concessions,
unless the local government makes a written finding, based
upon substantial evidence, that:
a) The concession or incentive is not needed to provide the
affordable housing;
b) The concession or incentive would have a specific
adverse impact on health and safety, the environment, or an
historical resource; or,
c) The concession or incentive would be contrary to state
or federal law.
9) Specifies that concessions or incentives may include the
following:
a) A reduction in site development standards or a
modification of zoning code requirements or architectural
design requirements that exceed the minimum building
standards;
b) Approval of mixed-use zoning in conjunction with the
housing project if commercial, office, industrial, or other
land uses will reduce the cost of the housing development
and are compatible with the project and the surrounding
area.; and,
c) Other regulatory incentives or concessions proposed by
the developer or the local government that result in
identifiable, financially sufficient, and actual cost
reductions.
1)Requires local governments to provide applicants with the
following number of incentives or concessions:
a) One incentive or concession for projects that include at
least 10% of the total units for lower-income households,
at least 5% for very low-income households, or at least 10%
for persons and families of moderate-income in a common
interest development;
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b) Two incentives or concessions for projects that include
at least 20% of the total units for lower-income
households, at least 10% for very low-income households, or
at least 20% for persons and families of moderate-income in
a common interest development; and,
c) Three incentives or concessions for projects that
include at least 30% of the total units for lower-income
households, at least 15% for very low-income households, or
at least 30% for persons and families of moderate-income in
a common interest development.
1)Authorizes an applicant to initiate judicial proceedings if
the local government refuses to grant a requested density
bonus, incentive, or concession. If a court finds that the
refusal to grant the request is in violation of density bonus
law, the court will award the plaintiff reasonable attorney's
fees and costs.
2)Prohibits a local government from applying any development
standard that will have the effect of precluding the
construction of housing that qualifies for a density bonus at
the densities or with the concessions or incentives required
by density bonus law.
3)Authorizes a developer to request a waiver or reduction of
development standards that will have the effect of physically
precluding the construction of housing that qualifies for a
density bonus at the densities or with the concessions or
incentives required by density bonus law.
FISCAL EFFECT : None
COMMENTS :
1)Background on density bonus . To help address California's
affordable housing shortage,
the Legislature enacted density bonus law to encourage the
development of more affordable units. Under current law, a
city or county must grant a density bonus, concessions and
incentives, prescribed parking requirements, as well as
waivers of development standards upon a developer's request
when the developer includes a certain percentage of affordable
housing in a housing development project.
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Density bonus law was originally enacted in 1979, but has been
changed numerous times since. SB 1818 (Hollingsworth),
Chapter 928, Statutes of 2004, made significant changes to the
law, including reducing the number of housing units required
to be provided at below market rate in order to qualify for a
density bonus. Developers are entitled to benefits under the
density bonus law when they include as few as one affordable
housing unit as part of an otherwise market-rate project. A
housing project with only 5% of very low-income housing is
entitled to a 20% density bonus, one concession, unlimited
waivers from development standards, and reduced parking
standards for the entire project.
2)Purpose of this bill . This bill makes a number of changes to
density bonus law. First, this bill increases the
affordability requirement of all low- and very low-income
units that qualified an applicant for a density bonus from 30
years or longer to 55 years or longer. Also, the bill
prohibits an applicant from receiving a density bonus or any
other incentives or concessions if a proposed housing
development or condominium project is located on any property
that includes a parcel on which dwelling units have, at any
time in the five-year period preceding the application, been
occupied by lower- or very low-income households, subject to a
recorded covenant, ordinance, or law that restricts rents to
levels affordable to persons and families of lower- or very
low-income, or subject to any other form of rent or price
control through a public entity's valid exercise of its police
power. This prohibition shall not apply if the proposed
housing development or condominium would replace the existing
units with at least the same number of units of equivalent
size or type, or both, to be made available for rent at
affordable housing costs to, and occupied by, persons and
families in the same or lower income category in the same
proportion as the existing affordable units, in specified
instances.
This bill is author-sponsored.
3)Author's statement . According to the author, "Adequate and
affordable housing is an issue of statewide concern. Yet, the
change made to the density bonus law by SB 1818 had the
reverse effect and has resulted in fewer affordable
units?.buildings that were built pre-
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SB 1818 that are proposed to be demolished and replaced may now
qualify for a density bonus under the new SB 1818 structure.
"SB 1818 inadvertently created a loophole whereby developers
that propose to demolish pre-SB 1818 buildings are not
required to begin the new project with the same number of
affordable units. As a result, a new project may result in
less affordable units than previously existed on the parcel.
"This bill addresses the loophole created by SB 1818 and
ensures that affordable units are preserved when a development
proposes to demolish a site and the new proposal is to replace
the outdated structure with a new residential structure by
ensuring that the project begins with the same number of
affordable units. Additionally, this bill increases the
classification of affordability from 30 years to 55 years.
This change is consistent with other state and local programs
and ensures that affordable units remain affordable. AB 2222
will preserve and promote the supply of affordable units for
years to come."
4)Arguments in support . None on file.
5)Arguments in opposition . None on file.
6)Double-referral . This bill was heard by the Housing and
Community Development Committee on April 30, 2014, and passed
with a 7-0 vote.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file
Opposition
None on file
Analysis Prepared by : Debbie Michel / L. GOV. / (916)
319-3958
AB 2222
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