Legislative Bills

Housing is a Hot Topic at the California Capitol

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In its February 2018 Statewide Housing Assessment, the California Housing and Community Development Department stated that 180,000 homes would need to be produced annually between 2015-2025 to keep up with projected population and household growth. This is a goal that will likely go unmet, as California has only built an average of 80,000 homes per year over the last 10 years. As a result, California legislators have introduced multiple housing bills, many of which are aimed at streamlining housing production, increasing the state’s ability to control land use at the local level, and developing financing tools to fund increased housing production. A few of these bills, most notably ACA 1, SCA 1, AB 68, and SB 9 will significantly impact the state’s ability to meet its housing target. Here is a brief summary of these bills:

·         ACA 1 is focused on providing an additional funding source to enable construction of affordable housing and infrastructure. The additional funding would be available at a local level and would be focused on "workforce housing" (up to 150% AMI), thereby including the “missing middle” that is often neglected in housing legislation.  ACA 1 accomplishes this by reducing the local vote threshold (from a two-thirds vote to a 55-percent majority) for approval of an ad valorem tax to service bond indebtedness incurred to fund the construction, reconstruction, rehabilitation, or replacement of public infrastructure or affordable housing.

ACA 1 also includes provisions requiring that annual performance audits be made available to the public and a citizens’ oversight committee be formed, allowing the public to track progress and hold the issuer accountable for expenditures related to applicable projects. However, lawmakers should consider the administrative burden that these accountability provisions may create, as operation expenses will not be a cost covered by debt issuance. Link to bill.

·         SCA 1 would streamline the approval process for affordable housing developers and municipalities. SCA 1 would repeal Article 34 of the California Constitution, which was enacted in 1950 and prohibits the development, construction, or acquisition of a low-rent housing project by any state public body until electors of the public body approve the project with a majority vote. By requiring voter approval, Article 34 has slowed the approval process and increased the cost of affordable housing drastically. Link to bill.

·         AB 68 seeks to increase residential housing density in California by requiring that streamlined approval be given to permit applications for the development of Accessory Dwelling Units (ADUs) and Junior Accessory Dwelling Units (JADUs). This bill also prohibits a local ordinance from imposing minimum lot size, lot coverage, or floor area ratio requirement on ADUs.  Link to bill.

·         SB 9 is a financing tool that seeks to incentivize investment in affordable housing development. This bill authorizes a developer that is awarded a low-income housing tax credit to sell that credit to investors for each taxable year the credit is allowed indefinitely, thereby removing a January 1, 2020 sunset provision in existing law. Therefore, this change spurs investment in affordable housing projects for a longer, indefinite period of time than current law allows. Link to bill.

Senate Bill 2 Planning Grants Available Now!

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Does your community need funding to come up with a local solution to the housing crisis? Good news, Senate Bill 2 (“SB2”) might be the answer to your needs! With the passage of SB2, $123 million have become available to assist local governments with the implementation of planning activities to accelerate housing production.

Our first look at SB2 was in 2017 when it was one of the 15 bills in the 2017 Legislative Housing Package. We learned then that it establishes a permanent funding source for affordable housing and is designed to help local governments tackle the challenges of our housing crisis. This will be done by providing funding and technical assistance for the implementation of qualifying activities. Such activities include, but are not limited to, updates to general plans, local process improvements, updates to zoning ordinances, infrastructure financing plans, and pre-approved architectural and site plans, among many others. Can any of these address the needs of your community?

If your jurisdiction is currently considering the implementation of planning activities to increase housing production, SB2 Technical Assistance grants may provide the necessary financial assistance to implement such actions. Still confused, or wondering if your project qualifies? RSG is here to answer all your questions! Contact Irlanda Martinez (imartinez@webrsg.com) with any inquiries regarding SB2. Awards range from a minimum of $25,000, to a maximum of $625,000, depending on population size. Applications are due November 30, 2019 but RSG is here to help now!

California 2018 Legislative Update

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Streamlining

AB 2162 – Supportive Housing by Right

  • Streamlined ministerial approval for projects that include supportive housing

  • CEQA not required for supportive housing projects that comply with local requirements, are 100% lower income and 25% of units are supportive.

AB 3194 – Housing Accountability Act

  • Limits local government determination of project inconsistency with zoning ordinance if the zoning doesn’t allow the maximum residential use, density or intensity in general plan.

  • Requires finding of a significant, quantifiable, direct, and unavoidable impact to disapprove or condition approval of projects if compliance with applicable, objective general plan, zoning, and subdivision standards and criteria.

SB 765 – SB 35 Clean Up

  • 100% affordable projects are exempt from the “skilled and trained workforce” labor requirement.

  • Only objective standards may be applied, including those related to subdivisions.

  • All local agency approvals for project are exempt from CEQA.

Density Bonus

AB 2753– Density Bonus Application

  • Jurisdictions must notify density bonus applicants in writing w/in 30 calendar days of application of completeness.

  • Local government must notify applicant of re-submitted density.

  • Bonus application in writing w/in 10 business days of resubmittal.

  • Local government has 60 days from complete application to approve or disapprove a density bonus.

  • Application deemed completed and density bonus granted if deadlines not met.

SB 1227 - Density Bonus for Student Housing

  • Requires up 35% density bonus projects with at least 20% of the total rental beds for very low income students enrolled in higher education at accredited institutions.

 Density Bonus (continued)

AB 2372 - Floor Area Ratio Bonus for Affordable Housing

  • Allows local government to adopt ordinance to grant floor area ratio (FAR) bonus in lieu of a density bonus. Project requirements include:

  • Multifamily development of 5+ units.

  • Located in urban infill site within transit priority area or within ½ mile of major transit stop.

  • Zoned for 20 units per acre.

  • Either 11% of affordable units for Very Low Income or 20 of affordable units for Low Income.

AB 1771 & SB 828 – RHNA

  • Requires modifications of regional RHNA allocation methodologies

  • RHNA must account for overcrowded housing units and cost burdened households, units lost related to a state of emergency

  • Gives HCD oversight authority over RHNA allocations

Fair Housing

AB 686– Housing Discrimination

  • Codifies recent HUD rules on jurisdictions’ obligation to further fair housing.

  • Housing elements and other planning documents must analyze how zoning programs/development approvals address/ reverse historical segregation patterns caused by past zoning practices.

CEQA Exemptions

AB 1804 – Infill Exemption for Counties

  • CEQA exemption applicable to unincorporated areas of counties.

  • Developments have minimum density and location requirements (must be urbanized area.)

AB 2341– Limited Aesthetic Impact Exemption

  • CEQA exemption for rehabilitation or replacement of existing, vacant structure (within building envelope) with residential development.

Charter Cities

AB 1333 – Charter Cities

  • Government Code provisions now apply to Charter Cities.

  • Consistency requirement applicable to general plan, specific plans and zoning.

  • No Net Loss” requirements apply to housing element inventory sites.

  • Specific findings required for growth control measures.

 Maps and Permits

AB 2913– Extension of building permits

  • Extends residential building permits from six months to one year.

  • One or more extensions of 180 days can be granted if justifiable cause

AB 2973– Subdivision map extensions (Central Valley)

  • 2 years for tentative subdivision maps in certain Central Valley jurisdictions 1771

Current Affordable Housing Legislative Overview

The disappearance of redevelopment dollars led to a sharp cutback in spending towards affordable housing. Funding for the development and preservation of affordable homes fell in California by 79%, or $1.7 billion annually, in the years after redevelopment dissolution. At the same time median rents and home values have risen while income levels dropped.

A sustainable supply of housing is vital to a sustainable economy. While Governor Brown’s 2016-17 budget sets aside $400 million for affordable housing, the money is tied up in negotiations surrounding the “By-Right Proposal”, a bill that would streamline the approvals needed for developers to build affordable housing to the maximum density allowed by zoning with limited local and CEQA review. Several proposed laws are navigating the legislature, working to infill the dearth of funding. Here are bills to watch closely:

  • SB 873, signed into law on June 28, 2016, makes fundamental changes to state low-income housing tax credits. The bill restores the ability to split the state credits, allowing different parties to invest in the state and federal credits. The bill also authorizes state credits to be sold to a state investor; current law requires the investor to be a partner. In addition, the bill increases the value of the state credit by exempting the credits from federal taxes.
  • AB 2031 authorizes jurisdictions to issue affordable housing bonds against the revenue stream of redevelopment “boomerang funds.”  Boomerang funds are monies received by a jurisdiction that are not needed by a successor agency to wind-down former redevelopment agency activities.
  • AB 2501 makes a number of changes to density bonus law, including clarifying the processing of a density bonus application. The bill prohibits a local government from requiring density bonus applications to include an additional report or study that is not otherwise described or required by state law. It also requires local government to adopt procedures and timelines to provide for expeditious processing of a density bonus application.
  • AB 2502 commonly referred to as the “Palmer Fix”, authorizes a city or county to establish inclusionary housing requirements as a condition of the development of residential units.
  • AB 2734 enacts the Local Control Affordable Housing Act to require the Department of Finance to determine, each year, the amount of General Fund savings as a result of the dissolution of RDAs, and requires that 50% of those savings or $1 billion, whichever is less, be redirected to the Department of Housing and Community Development for distribution to both state level programs and local agencies for housing purposes.
  • AB 2817 increases the amount of state tax credits the California Tax Credit Allocation Committee can allocate for low-income housing to $300 million, increases the allocation for the farmworker housing tax credit to $25 million, and makes other changes to the state low-income housing tax credit program.

RSG is an active member of the San Diego Housing Federation (SDHF) and Tara Matthews, Principal, sits on the Policy Committee. SDHF, through the input of the Policy Committee, provides feedback to State legislators on proposed bills.  We would love to get your thoughts on how these bills would affect your community, so we can ensure that your voice is heard by State policy makers.  Please contact Tara Matthews at tmatthews@webrsg.com or 714-316-2111 if you would like additional information or to share your thoughts on the proposed legislation.

Written by Tara Matthews, a Principal at RSG, and Jeff Khau, a Senior Analyst at RSG

Making Sense of 2015 Legislative Bills

 

Knowledge is power.  At RSG we track pending legislation closely to give our clients often input, reaction and help in crafting a formal position.  Besides, knowing what is on the horizon is critical to being an expert in the field.  It’s just part of our mission to enhance communities’ physical, economic and social future.

Some quick highlights of pending bills:
•    AB 2054 (O’Donnell): this would extend the life of oversight boards in LA County specifically beyond their current statutory time limit of 7/1/16. Limited to just LA County, this is intended to help the County deal with its unusually high number of successor agencies. 
•    AB 313 (Atkins): the speaker’s bill is one of several that makes technical changes to the EIFD legislation enacted last year by SB 628). We heard at CALED that this was to address concerns about debt limit triggers, liability, and other cleanup needs from SB 628. 
•    AB 851 (Mayes): this CALAFCO-sponsored bill to re-write how California cities can disincorporate, necessary given the fiscal challenges of Jurupa Valley and some other cities.  
•    AB 1335 (Atkins): the “Building Homes and Jobs Act” would create a $75 fee paid at closings on real estate transactions to be transferred to HCD for purposes of creating a fund for affordable housing. This is not the first effort on this, but there could be support this time around. It remains to be seen. 
•    SB 533 (Pan): This would prohibit cities from entering into subvention agreements on sales taxes. Developers still seek financial assistance to develop projects and use these agreements to get public financial support. This does not affect the ability to share property or other taxes (it appears). 
•    SB 562 (Lara): This is an interesting one: it would be limited to Long Beach in its effort to finance the redevelopment of the civic campus for public and private uses. Many cities are interested in similar programs, so the financing benefits here are at least curious.

Written by Jim Simon who is the President of RSG.