BILL ANALYSIS �
AB 2222
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CONCURRENCE IN SENATE AMENDMENTS
AB 2222 (Nazarian)
As Amended August 22, 2014
Majority vote
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|ASSEMBLY: |72-0 |(May 23, 2014) |SENATE: |35-0 |(August 26, |
| | | | | |2014) |
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Original Committee Reference: H. & C.D.
SUMMARY : Prohibits an applicant from receiving a density bonus
unless the proposed housing development or condominium project
would, at a minimum, maintain the number and proportion of
affordable housing units within the proposed development.
Specifically, this bill :
1)Prohibits an applicant from receiving a density bonus or any
other incentives or concessions if a proposed housing
development or condominium project is proposed on any property
that includes a parcel or parcels on which rental dwelling
units are or, if the dwelling units have been vacated or
demolished in the five-year period preceding the application,
been:
a) Occupied by very low- or low-income households;
b) Subject to a recorded covenant, ordinance, or law that
restricts rents to levels affordable to persons and
families of very low- or 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.
2)Provides that a developer may overcome the above prohibition
if the proposed housing development or condominium project
would replace the existing affordable units with at least the
same number and type of affordable units and either of the
following applies:
a) For mixed-income housing, the development must include
additional affordable units at the percentage required by
existing density bonus law, inclusive of the units replaced
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pursuant to this bill; or,
b) For 100% affordable developments all units, except for
the manager's unit or units, are occupied by either very
low- or low- income households.
3)Defines "replace," for purposes of replacing units affordable
to or occupied by lower income households, as meaning:
a) For developments occupied on the date of application,
the developer must provide at least the same number of
units of equivalent size or type, or both, to be made
available for affordable rent or ownership to, and occupied
by, persons and families in the same or lower income
category. Unoccupied units within the development are
replaced in the same proportion as the occupied units.
b) For developments vacated or demolished within the
five-year period preceding the application, the developer
must provide a number of units available for rent or
ownership, affordable to persons and families in the same
or lower income category, that is equivalent to the highest
number of units affordable to or occupied by low-income
households as existed in that five-year period. If the
incomes of the former residents are unknown, then one-half
of the replacement units must be affordable to very
low-income households and one-half to low-income
households.
4)Provides that rental replacement units must be subject to a
recorded affordability restriction for at least 55 years.
5)Increases the affordability requirement of all very low- and
low-income rental units that qualified an applicant for a
density bonus from 30 years or longer to 55 years or longer.
6)Provides that affordable ownership units that qualify a
development for a density bonus must be subject to an equity
sharing agreement, as opposed to a resale restriction.
7)Clarifies that, other than through the incentive or concession
provisions under density bonus law, the granting of a density
bonus does not require the waiver of a local ordinance or
provisions of a local ordinance unrelated to development
standards.
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8)Provides that this bill does not apply to applicants for
density bonuses with applications submitted to, or processed
by, a local government before January 1, 2015.
The Senate amendments :
1)Clarify that a density bonus applicant is prohibited 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 or
parcels on which affordable rental dwelling units existed at
any time in the five-year period preceding the application,
including units that have since been vacated or demolished.
2)Clarify that a manager's unit or units is not counted towards
determining whether a project is 100% affordable for purposes
of overcoming the prohibition on density bonus on sites where
affordable rental housing has existed within the five-year
period preceding the application.
3)Define the term "replace," for purposes of replacing units
affordable to or occupied by lower-income households, as
meaning:
a) For developments occupied on the date of application,
the developer must provide at least the same number of
units of equivalent size or type, or both, to be made
available for affordable rent or ownership to, and occupied
by, persons and families in the same or lower income
category. Unoccupied units within the development are
replaced in the same proportion as the occupied units.
b) For developments vacated or demolished within the
five-year period preceding the application, the developer
must provide a number of units available for rent or
ownership, affordable to persons and families in the same
or lower income category, that is equivalent to the highest
number of units affordable to or occupied by low-income
households as existed in that five-year period. If the
incomes of the former residents are unknown, then one-half
of the replacement units must be affordable to very
low-income households and one-half to low-income
households.
4)Provide that rental replacement units must be subject to a
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recorded affordability restriction for at least 55 years.
5)Provide that, for mixed-income housing developments,
replacement units count towards the density bonus formula.
6)Provide that affordable ownership units that qualify a
development for a density bonus must be subject to an equity
sharing agreement, as opposed to a resale restriction.
7)Clarify that, other than through the incentive or concession
provisions under density bonus law, the granting of a density
bonus does not require the waiver of a local ordinance or
provisions of a local ordinance unrelated to development
standards.
8)Provide that this bill does not apply to applicants for
density bonuses with applications submitted to, or processed
by, a local government before January 1, 2015.
FISCAL EFFECT : None
COMMENTS : 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.
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% 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.
This bill addresses the preservation of existing affordable
rental and ownership units. Under existing law, a developer
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proposing to develop a residential project, or an applicant for
approval to convert apartments to a condominium project,
qualifies for a density bonus if the proposed project has a
specific percentage of units set-aside for affordable housing.
This bill would prohibit an applicant from receiving a density
bonus, incentive, or concession if a proposed housing
development or condominium project is located on property where
dwelling units have, at any time in the five-year period
preceding the application, been occupied by very low- or
low-income households or subject to rent control. This includes
units and projects that have since been vacated or demolished.
However, an applicant may overcome this prohibition by
replacing, as specified, the affordable units with rental or
ownership units of equivalent affordability and size and/or
type, as well as either providing an additional set-aside of
affordable housing units under the density bonus formula
(inclusive of the replacement units) or developing a 100%
affordable project. This bill also increases the required
affordability from 30 years or longer to 55 years or longer for
all affordable rental units that qualified an applicant for a
density bonus, and requires replacement rental units to be
subject to a recorded affordability restriction for at least 55
years. If the units that qualified an applicant for a density
bonus are affordable ownership units, as opposed to rental
units, they must be subject to the equity sharing model rather
than a resale restriction. Under existing law, only moderate
income affordable ownership units are subject to the equity
sharing model.
This bill also clarifies that, other than through the incentive
or concession provisions under density bonus law, the granting
of a density bonus does not require the waiver of a local
ordinance or provisions of a local ordinance unrelated to
development standards.
Lastly, this bill does not apply to applicants for density
bonuses with applications submitted to, or processed by, a local
government before January 1, 2015.
Analysis Prepared by : Rebecca Rabovsky / H. & C.D. / (916)
319-2085
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FN: 0005515