Senate Bill No. 1260

Introduced by Senator DeSaulnier

February 21, 2014

An act to amend Sections 53395.3 and 53395.5 of the Government Code, and to amend Sections 34191.26 and 34191.31 of the Health and Safety Code, relating to local government.

LEGISLATIVE COUNSEL’S DIGEST

SB 1260, as introduced, DeSaulnier. Local government: affordable housing.

Existing law authorizes a city or county to establish infrastructure financing districts to finance specified types public facilities.

Existing law requires any district that constructs dwelling units to set aside not less than 20% of those units to increase and improve the community’s supply of low- and moderate-income housing available at an affordable housing cost to persons and families of low- and moderate-income.

This bill would eliminate the requirement of a district that constructs dwelling units to set aside not less than 20% of those units for the purpose described above.

Existing law requires the legislative body of the district, if dwelling units are proposed to be removed or destroyed in the course of private development or public works construction within the area of the district, to, among other things, cause or require the construction or rehabilitation, within 4 years of the removal or destruction, for rental or sale to persons or families of low or moderate income, an equal number of replacement dwelling units at affordable housing cost, as specified, and a number of dwelling units that is at least one unit but not less than 20% of the total dwelling units removed at affordable cost, as specified.

This bill would instead require the district to dedicate no less than 25% of allocated tax increment revenues for affordable housing purposes in accordance with the applicable affordable housing provisions of the Community Redevelopment Law. This bill would require the district to ensure that the number of housing units occupied by extremely low, very low, and low-income households in the area of the district is not reduced during the effective period of the district, to ensure the replacement of dwelling units that house extremely low, very low, or low-income households within 2 years of their removal by public or private action from the area of the district, and to ensure that during the effective period of the district at least 20% of all new and substantially rehabilitated dwelling units developed are available at affordable housing cost to, and occupied by, persons and families of low or moderate income. This bill would require the district to require that housing units built remain available at affordable housing cost to, and occupied by, persons and families of low- or moderate-income households for the longest feasible time, as provided. This bill would also require the district to contract for an independent financial and performance audit every 5 years pursuant to guidelines established by the Controller, as provided.

The Community Redevelopment Law authorizes the establishment of redevelopment agencies in communities to address the effects of blight, as defined. Existing law dissolved community redevelopment agencies, as of February 1, 2012, and provides for the designation of successor agencies.

Senate Bill 1 of the 2013-14 Regular Session, if enacted, would authorize certain public entities of a Sustainable Communities Investment Area, as described, to form a Sustainable Communities Investment Authority (authority) to carry out the Community Redevelopment Law in a specified manner. The bill would require the authority to adopt a Sustainable Communities Investment Plan for a Sustainable Communities Investment Area, and would authorize the authority to include in that plan a provision for the receipt of tax increment funds provided that certain economic development and planning requirements are met, including, among others, a requirement in an ordinance for the replacement of dwelling units that house extremely low, very low, and low-income households, as specified. The bill would require the authority to contract for an independent financial and performance audit every 5 years, conducted according to guidelines established by the Controller. The bill would, where compliance has not been achieved, require the authority to adopt and submit to the Controller, as part of the audit, a plan to achieve compliance with the economic development and planning requirements, which includes, among other things, a means of achieving an increase in the production of housing for very low income households as required by other provisions of this bill.

This bill would require the low-income housing ordinance to require the replacement of dwelling units that house extremely low, very low, and low-income households within 2 years of their removal by public or private action, and to also require, prior to the time limit on the effective period of the Sustainable Communities Investment Plan, that at least 20% of all new and substantially rehabilitated dwelling units developed in the Sustainable Communities Investment Area meet specified affordability and occupancy requirements.

This bill would make the operation of its provisions contingent upon the enactment of specified bills.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 53395.3 of the Government Code is
amended to read:

53395.3.  

(a) A district may finance (1) the purchase,
construction, expansion, improvement, seismic retrofit, or
rehabilitation of any real or other tangible property with an
estimated useful life of 15 years or longer which satisfies the
requirements of subdivision (b), (2) may finance planning and
design work which is directly related to the purchase, construction,
expansion, or rehabilitation of that property and (3) the costs
described in Sections 53395.5, and 53396.5. A district may only
finance the purchase of facilities for which construction has been
completed, as determined by the legislative body. The facilities
need not be physically located within the boundaries of the district.
A district may not finance routine maintenance, repair work, or
the costs of ongoing operation or providing services of any kind.

(b) The district shall finance only public capital facilities of
communitywide significance, which provide significant benefits
to an area larger than the area of the district, including, but not
limited to, all of the following:

(1) Highways, interchanges, ramps and bridges, arterial streets,
parking facilities, and transit facilities.

(2) Sewage treatment and water reclamation plants and
interceptor pipes.

(3) Facilities for the collection and treatment of water for urban
uses.

(4) Flood control levees and dams, retention basins, and drainage
channels.

(5) Child care facilities.

(6) Libraries.

(7) Parks, recreational facilities, and open space.

(8) Facilities for the transfer and disposal of solid waste,
including transfer stations and vehicles.

begin delete

(c) Any district which constructs dwelling units shall set aside
not less than 20 percent of those units to increase and improve the
community’s supply of low- and moderate-income housing
available at an affordable housing cost, as defined by Section
50052.5 of the Health and Safety Code, to persons and families of
low- and moderate-income, as defined in Section 50093 of the
Health and Safety Code.

end delete

SEC. 2.  

Section 53395.5 of the Government Code is amended
to read:

53395.5.  

It is the intent of the Legislature that begin delete the area of the
districts created be substantially undeveloped, and end delete the
establishment of a district should not ordinarily lead to the removal
of existing dwelling units begin delete . If, however, any dwelling units are
proposed to be removed or destroyed in the course of private
development or public works construction within the area of the
district, the legislative body shall do all of the following: end delete begin insert and
should increase and improve the community’s supply of low- and
moderate-income housing available at an affordable housing cost,
as defined by Section 50052.5 of the Health and Safety Code, to
persons and families of low and moderate income, as defined in
Section 50093 of the Health and Safety Code. end insert

begin delete

(a) Within four years of the removal or destruction, cause or
require the construction or rehabilitation, for rental or sale to
persons or families of low or moderate income, of an equal number
of replacement dwelling units at affordable housing cost, as defined
in Section 50052.5 of the Health and Safety Code, within the
territory of the district if the dwelling units removed were inhabited
by persons or families of low or moderate income, as defined in
Section 50093 of the Health and Safety Code.

end delete begin delete

(b) Within four years of the removal or destruction, cause or
require the construction or rehabilitation, for rental or sale to
persons of low or moderate income, a number of dwelling units
which is at least one unit but not less than 20 percent of the total
dwelling units removed at affordable housing cost, as defined in
Section 50052.5 of the Health and Safety Code, within the territory
of the district if the dwelling units removed or destroyed were not
inhabited by persons of low or moderate income, as defined in
Section 50093 of the Health and Safety Code.

end delete begin insert

(a) The district shall dedicate no less than 25 percent of
allocated tax increment revenues for affordable housing purposes
in accordance with Section 33334.2 and all other applicable
affordable housing provisions of the Community Redevelopment
Law (Part 1 (commencing with Section 33000)).

end insert begin insert

(b) The district shall ensure that the number of housing units
occupied by extremely low, very low, and low-income households,
including the number of bedrooms in those units, in the area of
the district at the time the district is established is not reduced
during the effective period of the district.

end insert begin insert

(c) The district shall ensure the replacement pursuant to
subdivision (a) of Section 33413 of dwelling units that house
extremely low, very low, or low-income households within two
years of their removal by public or private action from the area
of the district.

end insert begin insert

(d) The district shall ensure that during the effective period of
the district at least 20 percent of all new and substantially
rehabilitated dwelling units developed in the area of the district
by public or private entities or persons, excluding any units
developed to meet the requirements of subdivisions (b) and (c),
shall be available at affordable housing cost to, and occupied by,
persons and families of low or moderate income. Not less than 40
percent of the dwelling units required to be available at affordable
housing cost to, and occupied by, persons and families of low or
moderate income shall be available at affordable housing cost to,
and occupied by, very low income households.

end insert begin delete

(c) Provided

end delete

begin insert (e) end insert begin insert   end insert begin insert The district shall provide end insert relocation assistance and make all
the payments required by Chapter 16 (commencing with Section
7260) of Division 7 of Title 1, to persons displaced by any public
or private development occurring within the territory of the district.
This displacement shall be deemed to be the result of public action.

begin delete

(d) Ensure

end delete

begin insert (f) end insert begin insert   end insert begin insert The district shall ensure end insert that removal or destruction of any
dwelling units occupied by persons or families of low or moderate
income not take place unless and until there are suitable housing
units, at comparable cost to the units from which the persons or
families were displaced, available and ready for occupancy by the
residents of the units at the time of their displacement. The housing
units shall be suitable to the needs of these displaced persons or
families and shall be decent, safe, sanitary, and otherwise standard
dwellings.

begin insert

(g) (1) Except as provided in paragraph (2), the district shall
require, by recorded covenants or restrictions, that housing units
built pursuant to this section shall remain available at affordable
housing cost to, and occupied by, persons and families of low- or
moderate-income households for the longest feasible time, but for
not less than 55 years for rental units and 45 years for
owner-occupied units.

end insert begin insert

(2) In lieu of a 45-year covenant or restriction, the district may
subject owner-occupied units to an equity sharing agreement
described in paragraph (2) of subdivision (c) of Section 65915.

end insert begin insert

(h) (1) Every five years the district shall contract for an
independent financial and performance audit. The audit shall be
conducted according to guidelines established by the Controller.
A copy of the completed audit shall be provided to the Controller,
the Director of the Department of Finance, and to the Joint
Legislative Budget Committee. The Controller shall not be required
to review and approve the completed audits.

end insert begin insert

(2) The guidelines established by the Controller shall include
guidelines for determining compliance with the affordable housing
production, maintenance, and replacement requirements of this
section, including provisions to ensure that the requirements are
met within each five-year period covered by the audit. A finding
of failure to comply with the requirements of this section shall
require the district to adopt and submit to the Controller, as part
of the audit, a plan to achieve compliance with those provisions
as soon as feasible but in not less than two years following the
findings. The Controller shall review and approve the plan, and
shall require the plan to stay in effect until compliance is achieved.
The Controller shall ensure that the plan includes one or more of
the following means of achieving compliance:

end insert begin insert

(A) The expenditure of an additional 10 percent of gross tax
increment revenue for increasing, preserving, and improving the
supply of low-income housing.

end insert begin insert

(B) An increase in the production, by an additional 10 percent,
of housing for very low income households as required by
subdivision (d).

end insert begin insert

(C) The targeting of expenditures pursuant to Section 33334.2
exclusively to rental housing affordable to, and occupied by,
persons of very low and extremely low income.

end insert

SEC. 3.  

Section 34191.26 of the Health and Safety Code, as
added by Senate Bill 1 of the 2013-14 Regular Session, is amended
to read:

34191.26.  

A Sustainable Communities Investment Plan may
include a provision for the receipt of tax increment funds according
to Section 33670, provided that the local government with land
use jurisdiction has adopted all of the following:

(a) A sustainable parking standards ordinance that restricts
parking in transit priority project areas to encourage transit use to
the greatest extent feasible.

(b) An ordinance creating a jobs plan that requires all entities
receiving financial support from the authority to enter into an
agreement with the authority describing how the project will do
both of the following:

(1) Further construction careers that pay prevailing wages and
create living wage permanent jobs.

(2) Implement a program for community outreach, local hire,
and job training that includes disadvantaged California residents,
including veterans of the Iraq and Afghanistan wars, people with
a history in the criminal justice system, and single-parent families.

(c) For transit priority project areas and small walkable
communities within a metropolitan planning organization, a plan
consistent with the use designation, density, building intensity,
and applicable policies specified for the Sustainable Communities
Investment Area in the sustainable communities strategy.

(d) Within small walkable communities outside a metropolitan
planning organization, a plan for new residential construction that
provides a density of at least 20 dwelling units per net acre and,
for nonresidential uses, provides a minimum floor area ratio of
0.75.

(e) An ordinance that does begin delete both end delete begin insert all end insert of the following:

(1) Prohibits the number of housing units occupied by extremely
low, very low, and low-income households, including the number
of bedrooms in those units, in the Sustainable Communities
Investment Area at the time the Sustainable Communities
Investment Authority is established from being reduced during the
effective period of the Sustainable Communities Investment Plan.

(2) Requires the replacement begin insert , pursuant to subdivision (a) of
Section 33413, end insert of dwelling units that house extremely low, very
low, or low-income begin delete households, end delete begin insert households within two years end insert upon
their removal begin insert by public or private action end insert from the Sustainable
Communities Investment Area begin delete , pursuant to subdivision (a) of
Section 33413 within two years of their displacement end delete .

begin insert

(3) Notwithstanding subdivision (b) of Section 33413, requires
that prior to the time limit on the effective period of the Sustainable
Communities Investment Plan at least 20 percent of all new and
substantially rehabilitated dwelling units developed in the
Sustainable Communities Investment Area by public or private
entities or persons, excluding any units developed to meet the
requirements of paragraphs (1) and (2), shall be available at
affordable housing cost to, and occupied by, persons and families
of low or moderate income. Not less than 40 percent of the dwelling
units required to be available at affordable housing cost to, and
occupied by, persons and families of low or moderate income shall
be available at affordable housing cost to, and occupied by, very
low income households.

end insert

SEC. 4.  

Section 34191.31 of the Health and Safety Code, as
added by Senate Bill 1 of the 2013-14 Regular Session, is amended
to read:

34191.31.  

(a) Every five years the authority shall contract for
an independent financial and performance audit. The audit shall
be conducted according to guidelines established by the Controller.
A copy of the completed audit shall be provided to the Controller,
the Director of the Department of Finance, and to the Joint
Legislative Budget Committee. The Controller shall not be required
to review and approve the completed audits.

(b) The guidelines established by the Controller shall include
guidelines for determining compliance with the affordable housing
maintenance and replacement requirements of subdivision (e) of
Section 34191.26, including provisions to ensure that the
requirements are met within each five-year period covered by the
audit. A finding of failure to comply with the requirements of
subdivision (e) of Section 34191.26 shall require the authority to
adopt and submit to the Controller, as part of the audit, a plan to
achieve compliance with those provisions as soon as feasible but
in not less than two years following the findings. The Controller
shall review and approve the plan, and require the plan to stay in
effect until compliance is achieved. The Controller shall ensure
that the plan includes one or more of the following means of
achieving compliance:

(1) The expenditure of an additional 10 percent of gross tax
increment revenue on increasing, preserving, and improving the
supply of low-income housing.

(2) An increase in the production, by an additional 10 percent,
of housing for very low income households as required by
paragraph begin delete (2) end delete begin insert (3) end insert of subdivision begin delete (b) end delete begin insert (e) end insert of Section begin delete 33413 end delete begin insert 34191.26 end insert .

(3) The targeting of expenditures pursuant to Section 33334.2
exclusively to rental housing affordable to, and occupied by,
persons of very low and extremely low income.

SEC. 5.  

Sections 1 to 4, inclusive, of this act shall only become
operative if Senate Bill 1 of the 2013-14 Regular Session, and any
of the following bills, become operative:

(a) Senate Bill 33 of the 2013-14 Regular Session.

(b) Senate Bill 628 of the 2013-14 Regular Session.

(c) Assembly Bill 229 of the 2013-14 Regular Session.

(d) Senate Bill 243 of the 2013-14 Regular Session.