BILL ANALYSIS
SB 948
Page 1
Date of Hearing: July 7, 1999
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
Alan Lowenthal, Chair
SB 948 (Alarcon) - As Amended: July 1, 1999
SENATE VOTE : 21-13
SUBJECT : Affordable housing developments
SUMMARY : Specifies that the Ellis Act is not intended to
interfere with local governments authority to regulate the
demolition of rental property nor its authority to regulate the
conversion of non-residential use following its withdrawal from
rent or lease. Specifically, this bill :
1)Provides that the Ellis Act is not intended to prohibit single
owners of property and their immediate family members from
occupying one or more of the units as a primary residence in a
structure that it withdraws from rent or lease.
2)Clarifies that a party challenging the adequacy of a housing
element may file suit within 60 days of the Department of
Housing and Community Development's review or after providing
the jurisdiction 60 days to correct the cited deficiencies.
3)Strengthens the findings a city or county must make in order
to deny an affordable housing project. Specifically, this
section of the bill:
a) Defines specific adverse impact to mean a significant,
quantifiable, direct, and unavoidable impact based on
objective, identified written public health or safety
standards policies or conditions as they existed on the date
the application was deemed complete.
b) Provides that the project must be inconsistent with both
the general plan and the zoning ordinance.
4) Further defines what it means to "disapprove the
development project" and requires the court to issue an order
or judgement if the local governmental body disapproves the
project without making "sufficient findings supported by
substantial evidence." The court shall retain jurisdiction to
ensure compliance, and if after 60 days the order is not
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carried out, this bill allows the court to take further
action.
5)Clarifies existing law 1) allowing a developer to accept less
than the 25% density bonus offered by the jurisdiction 2)
requiring that local government grant the density bonus
without approval of a general plan amendment, zoning change,
or other discretionary approval.
6)Reduces the amount of time a local government's lead agency
has to approve a development project from 180 days to 90 days
after the Environmental Impact Report (EIR) is certified if
certain conditions are meet. (e.g., the project is affordable
to very low or low-income, the local governmental body has
received notice that an application has been made or will be
made for an allocation or commitment of financing, tax
credits, bond authority or other financial assistance from a
public agency or federal agency.)
EXISTING LAW
1)Requires each city, county, and city and county to include a
housing element in its general plan and that the housing
element be updated every five years.
2)Prohibits a local agency from disapproving a low- and
moderate-income housing development or give conditional
approval in a manner which renders the project unfeasible for
development unless it finds, based upon substantial evidence,
one of the following:
a) The jurisdiction has adopted a housing element pursuant
to state law and the development project is not needed for
the jurisdiction to meet its share of the regional housing
needs of low-income housing.
b) The development project would have a specific, adverse
impact upon the public health or safety and there is no
feasible method to satisfactorily mitigate or avoid the
specific adverse impact upon the public health or safety
without rendering the project unaffordable to low- and
moderate-income households.
c) The denial of the project or imposition of conditions is
required in order to comply with specific state or federal
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law, and there is no feasible method to comply without
rendering the development unaffordable to low- and
moderate-income households.
d) Approval of the development project would increase the
concentration of lower-income households in a neighborhood
that already has a disproportionately high number of
lower-income households, as specified.
e) The development is proposed on land zoned for agriculture
or resource preservation which is surrounded on at least two
sides by land being used for agricultural or resource
preservation purposes or which does not have available
adequate water or waste water facilities to serve the
development.
f) The development project is inconsistent with the
jurisdiction's general plan land use designation, as
specified, and the jurisdiction has adopted a housing
element.
3) Defines "specific adverse impact" as an impact that is
significant and unavoidable as provided by written standards,
policies, or conditions.
4) Prohibits a local agency from disapproving a housing
development which complies with the applicable general plan,
zoning, and development policies or approving the project upon
the condition that it be developed at a lower density, unless
the local agency finds that the project would have an adverse
impact upon the public health and safety and there is not a
feasible method to mitigate the adverse impact.
5)Provides that if a project has been denied or restrictions
have been imposed, including a reduction in densities, which
have a substantial adverse effect on the viability or
affordability of a affordable housing development and the
denial or restriction is the subject of a court challenge, the
burden of proof is upon the local legislative body to show
that its decision is consistent with the findings described in
#2 above.
6)Provides that under the Permit Streamlining Act:
a) If an EIR is prepared, the local government's lead
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agency must approve or disapprove the development project
within 180 days from the date that the lead agency
certified the EIR.
b) If a lead agency does not approve or disapprove the
development project within the time limits, the failure to
act must be deemed approval of the permits application for
the development project under certain circumstances.
FISCAL EFFECT : State mandated local program; contains fee
disclaimer
COMMENTS :
Author's Statement . State officials estimate that there is a
demand for 250,000 new housing units each year in California,
but fewer than 130,000 were built last year. Many economists
agree that inadequate housing production poses a major long-run
threat to the state's economic growth. According to the author
this bill will increase the development of affordable housing by
reducing barriers at the local level. This bill has been
thoroughly negotiated with the only opposition remaining to that
portion of the bill dealing with the Ellis Act.
History of Ellis Act . The Ellis Act was adopted in 1986
following the California Supreme Court decision Nash v. City of
Santa Monica (1984) 37 Cal. 3d 97. In Nash , the court upheld
the constitutionality of a portion of Santa Monica's rent
control ordinance which required a landlord who desired to
remove a controlled rental unit from the rental housing market
by demolition, conversion or other means to obtain a prior
permit from the Rent Control Board. The ordinance permitted a
removal or demolition of a housing rental unit only where the
unit was not occupied by, or affordable to, persons of low or
moderate income; the removal would not adversely affect the
housing supply; and the owner could not make a reasonable return
on his or her investment.
The court concluded "that while the challenged provision may be
said to implicate interests which are entitled to a high degree
of constitutional protection?including one's choice whether to
remain in a particular business or occupation?the actual
limitation upon those interests posed by the challenged
provision is minimal and not significantly different from other,
constitutionally permissible limitations upon the use of private
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property imposed by government regulation. At the same time,
the provision by protecting existing tenants from eviction and
the scarce supply of residential housing in Santa Monica against
further erosion, clearly serves an important public objective."
[Id., at p. 105]
As a result of the Nash decision the Ellis Act was enacted to
preempt any local ordinance that prohibited landlords from
removing a rental unit from the marketplace. During the
negotiations of the Ellis Act and in response to concerns that
the bill should not completely restrict local government's
ability to regulate the subsequent use of property, the bill
provided for some safeguards. Specifically, the bill provided
that it was not intended to interfere with local government's
authority over land use, including regulation of the conversion
of existing housing to condominiums or other subdivided
interests.
Since the adoption of the Ellis Act, a string of court decisions
have undermined the compromise reached between the rights of a
property owner to remove rental units from the market and the
ability of a local government to mitigate the effects of tenant
displacement and to regulate the subsequent use of the property.
Specifically, in First Presbyterian Church v. City of Berkeley
(1998), 59 Cal. App. 4th 1241, the trial court held that the
Ellis Act allowed an owner to demolish a building that had been
designated a landmark by the City, regardless of its landmark
status, because the building had once been used for rental
housing. Although the appellate court disagreed, it did say
that a city could exercise its powers only "where this
regulatory review is based on criteria having nothing to do with
the maintenance of residential units in the rental market."
Does this decision ignore local government's police power to
regulate land use?
Overview of Ellis Act Amendments . This bill makes it clear that
local governments have authority to regulate the demolition of
rental property and the authority to regulate the conversion of
non-residential use following its withdrawal from rent or lease.
In addition, the bill provides that the Ellis Act was not
intended to prohibit a single owner of property and their
immediate family members from occupying one or more of the units
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as a primary residence in a structure that it withdraws from
rent or lease.
There is nothing in current law that would prohibit a single
owner of property and their immediate family member from
occupying one or more units as a primary residence in a
structure that has been withdrawn from rent or lease. This
language could be interpreted to now prohibit multiple owners
from owning and occupying the residence. This language may lead
to increased litigation. The committee may want to consider
amending this language out of the bill.
Anti-NIMBY law . In spite of requirements that a local
government make specific findings in order to deny an affordable
housing project, 22% of the non-profit housing developers
responding to a recent survey ranked community opposition to
affordable housing (known as NIMBY for "Not In My Back Yard") as
the number one barrier to affordable housing development. The
average delay to the affected projects was 11.9 months, and the
additional costs incurred averaged $100,000. The author
believes SB 948 will broaden the protections of the Anti-NIMBY
law while preserving public access to the decision-making
process. Does the definition of "specific adverse impact" limit
local government's ability to deny and affordable housing
development based on health and safety concerns?
Density Bonuses . In 1997, the Burbank Housing Development
Corporation applied to the city of Santa Rosa to build an
affordable housing project and wanted to use the state's density
bonus law to increase density above the allowable zoning. Santa
Rosa initially required the developer to build 25% more units
than the general plan allowed, even though the developer wanted
to use a lesser density bonus. The city also required the
developer to rezone the property.
The Department of Housing and Community Development strongly
disagreed with Santa Rosa's interpretation of state law and
asked the city to reconsider its view. HCD argued that no
rezoning was required, stating that the density bonus law
"imposes what amounts to a statewide overlay zone increasing
potential densities on all land zoned for residential
development in California by 25 percent." HCD also said that a
request for any number of units over the applicable zoning is
allowed under the law. SB 948 clarifies the density bonus
requirements so as to prevent future misinterpretations.
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Permit Streamlining. The state has set deadlines for reaching
various decisions relating to certain types of development
projects. This is commonly referred to as the Permit
Streamlining Act (PSA). The PSA time limits relate to the
completeness of applications and reaching decisions on
development projects. This bill reduces the amount of time a
local government's lead agency has to approve a development
project from 180 days to 90 days after the EIR is certified to
prevent developers from losing time sensitive funding on
development projects.
REGISTERED SUPPORT / OPPOSITION :
Support
American Planning Association
Bank of America
California Building Industry Association
City of Los Angeles
City of Sacramento
City of San Francisco
City of Watsonville
Congress of California Seniors
County of Fresno
Friends Committee on Legislation
JERICHO
Opposition
Apartment Association of Greater Los Angeles
California Apartment Association
Cambridge Management Company
City of Barstow
City of El Cajon
City of Lakewood
City of Oceanside
City of Poway
City of Santa Barbara
City of Santa Clara
City of Tustin
County of Sacramento
Matel Realtors
San Francisco Apartment Association
Analysis Prepared by : Tia Boatman / H. & C.D. / (916)319-2085
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