BILL ANALYSIS
SB 948
Page 1
SENATE THIRD READING
SB 948 (Alarcon)
As Amended August 16, 1999
Majority vote
SENATE VOTE :21-13
HOUSING 6-3 APPROPRIATIONS 14-6
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|Ayes:|Lowenthal, Corbett, |Ayes:|Migden, Cedillo, Davis, |
| |Dutra, Mazzoni, | |Hertzberg, Kuehl, Papan, |
| |Torlakson, Wildman | |Romero, Shelley, |
| | | |Steinberg, Thomson, |
| | | |Wesson, Wiggins, Wright, |
| | | |Aroner |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|House, Margett, Runner |Nays:|Brewer, Ackerman, |
| | | |Ashburn, Campbell, |
| | | |Maldonaldo, Runner |
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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)Specifies that the Ellis Act is not intended to preempt local
or municipal, environmental land use regulations, procedures
or controls that govern the demolition and redevelopment of
residential property.
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
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objective, identified written public health or safety
standards policies or conditions as they existed on the
date the application was deemed complete; and,
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 carried out,
this bill allows the court to take further action.
5)Clarifies existing law: a) allowing a developer to accept
less than the 25% density bonus offered by the jurisdiction;
and, b) 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).
FISCAL EFFECT : According to the Assembly Appropriations
Committee analysis, minor absorbable costs to local government.
COMMENTS :
1)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
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the Ellis Act.
2)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 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
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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?
3)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, this 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 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.
4)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 (i.e., 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 this bill will broaden
the protections of the Anti-NIMBY law while preserving public
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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?
5)Density Bonuses. In 1997, the Burbank Housing Development
Corporation applied to the City of Santa Rosa (City) to build
an affordable housing project and wanted to use the state's
density bonus law to increase density above the allowable
zoning. The City 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 (HCD)
strongly disagreed with the City'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. This bill clarifies the density
bonus requirements so as to prevent future misinterpretations.
6)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.
Analysis Prepared by : Patrick O Donnell / H. & C.D. / (916)
319-2085
FN: 0002692