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A Closer Look at California's New Housing Production Laws


California's Fifth District Court of Appeal had previously ... Specifically, the law establishes funding through a $75 fee on real estate transaction documents. The fee is capped at $225 per transaction and exempts real estate sales. The fees would ...


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2AB 72 (Santiago/Chiu) HCD oversightThis law strengthens the ability of the California Department of Housing and Community Development (HCD) to enforce housing laws that require local governments to achieve housing goals. a) Increased HCD Oversight of Local Agency Compliance with Housing Element LawSpecifically, it requires HCD to review any action or failure to act by a local agency that it determines is inconsistent with an adopted housing element and to issue findings whether the action or failure to act substantially complies with the housing elementIf HCD finds that the action or failure to act by the agency does not substantially comply with the housing element, HCD may, after allowing no more than 30 days for a local agency response, revoke its findings until it determines that the city, county, or city and county has come into compliance with the housing element. b) HCD Obligation to Report Violation to Attorney General's OfficeThe law also requires HCD to notify the city, county, or city and county as well as authorizes HCD to notify the Office of the Attorney General that the city, county, or city and county is in violation of state law (including the HAA, state density bonus law and "no net loss" in zoning density law) if HCD makes certain findings of noncompliance or a violation. IIStreamlining and Other Incentives 3SB 35 (Weiner) "By Right" Approval ProcessingThis law streamlines the approval process for infill developments in local communities that have failed to meet their regional housing needs. a) Ministerial Approval ProcessingThe law authorizes a development proponent to submit an application for ministerial processing where a multifamily housing development satisfies specified planning objective standards and specified criteriaThe law includes a long list of qualifying criteria, including payment of prevailing wages, use of a "skilled and trained workforce, and consistency with objective development standardsThe law will apply only if it is shown in a housing production report (the first reports are due April 1, 2018) that a city is not achieving affordable housing targetsThe law requires a local government to notify the development proponent in writing within 90 days of submittal (for projects of more than 150 units) if the local government determines that the development conflicts with any of those objective standards; otherwise, the development is deemed to comply with those standardsDesign review or other public oversight of the development may still be conducted but is directed to the "objective and be strictly focused on assessing compliance with criteria required for streamlined projects, as well as reasonable objectives design standards published and adopted by ordinance or resolution by a local jurisdiction before submission of a development application, and shall be broadly applicable to development within that jurisdiction." The design review or public oversight process must be completed within 180 days (for projects of more than 150 units) of submittal of the development. b) Limitations on Local Government Imposition of Parking or Other Requirements for Qualifying ProjectsThe law limits the authority of a local government to impose parking standards on a streamlined development approvedThe law also prohibits a local government from adopting any requirement that applies to a project solely or partially on the basis that the project receives ministerial or streamlined approval pursuant to SB 35. c) Limitations on Approval ExpirationThe law provides that if a local government approves a project pursuant to that process, that approval will not expire if that project includes investment in housing affordability where more than 50 percent of units are affordableThe approval of a project that contains less than 50 percent affordable units expires automatically after three years, unless that project qualifies for a one-time, oneyear extension of that approvalSeparately, the law provides that an approval shall remain valid for three years from the date of the final action establishing that approval and shall remain valid thereafter so long as vertical construction of the development has begun and is in progress; it also authorizes a discretionary one-year extension. d) Local Government Housing Production ReportingThe law also requires local governments to include in the annual general plan report specified information regarding units of net new housing, including rental housing and for-sale housing that have been issued a completed entitlement, building permit or certificate of occupancyThe law also requires local governments to report on the housing produced pursuant to SB 35's requirements.  4SB 540 (Roth) Workforce Housing Opportunity ZonesThis law streamlines the environmental review and planning process for certain housing projects located within to-beestablished "Workforce Housing Opportunity Zones" and meeting affordable housing, prevailing wage and other specified criteria. a) Workforce Housing Opportunity Zone Planning and Environmental ReviewThe law encourages local agencies to prepare an environmental impact report (EIR) under the California Environmental Quality Act (CEQA) and adopt a specific planA local government may submit an application to HCD for funding to support the local government's efforts to develop a specific plan and EIR within a Workforce Housing Opportunity Zone. b) Streamlining for Compliant Housing Project ProcessingHousing projects meeting certain criteria (including providing affordable housing and paying prevailing wages), would not require a separate CEQA review, and the local jurisdiction would be required to take action on such projects within 60 days after an application is deemed complete. 5AB 73 (Chiu) Housing Sustainability DistrictsThis law gives local governments incentives to create housing in "Housing Sustainability Districts" on infill sites near public transportation. a) Creation of Housing Sustainability DistrictsThe law prescribes the contents of the ordinance that must be established to create a Housing Sustainability District, including the obligation to require that at least 20 percent of the residential units constructed within the district are affordableThe law requires the agency to prepare an EIR when designating a Housing Sustainability DistrictHowever an EIR is not required if, when reviewing a housing project, the agency has certified an EIR within 10 years of the lead agency's review of a housing project.  b) Zoning Incentive Payment for Compliant Housing Sustainability DistrictsThe law requires HCD to approve a zoning incentive payment for those agencies that apply for such payment if its housing sustainability ordinance meets the specified requirements and the city's housing element is in compliance with specified lawThe law requires HCD to issue a certificate of compliance if the agency meets specified criteria pertaining to the continued compliance. c) Streamlining Compliant Housing Project ProcessingThe law authorizes a developer to develop a project in a Housing Sustainability District in accordance with the housing sustainability ordinance or the agency's otherwise applicable general plan and zoning ordinancesThe law imposes deadlines for an agency's processing of a project within a Housing Sustainability District and limits the instances in which an approving authority may deny a qualifying project. Notably, the law requires that prevailing wages be paid and a skilled workforce be employed in connection with all projects within the Housing Sustainability DistrictThe law establishes procedures for review of an application by an approving authority, including requiring the approving authority to conduct a public hearing on an application and issue a written decision within 120 days of receipt of the applicationThe law also prescribes procedures for review of a decision of the approving authority to deny or approve with conditions an application for a permit within a Housing Sustainability District in the appropriate superior court. d) HCD Obligation to Prepare Housing Sustainability District Program ReportThe law requires HCD to publish a report containing specified information about the Housing Sustainability District program on its website no later than Nov1, 2018, and each Nov1 thereafter. IIIHousing Element Law Amendments 6SB 166 (Skinner) Residential DensityExisting "no net loss" in zoning density law requires that local governments identify adequate sites to meet regional housing needs when a housing element is adoptedThis new law bolsters existing law to ensure that agencies maintain an ongoing supply of housing construction sites for residents of various income levels, throughout the entirety of a housing element planning period. a) Prohibitions on Reducing DensitySpecifically, the law prohibits an agency from reducing residential density to a density that is below the density utilized by HCD in determining compliance with housing element law unless the agency makes findings that the reduction is consistent with the general plan and that the remaining sites identified in the housing element are adequate to meet the jurisdiction's share of the regional housing needIt also prohibits local agencies from causing their inventories of housing sites to be insufficient to meet their required housing needs for lower-income and moderate-income householdsThe law also requires agencies to make specified written findings if the agency allows development of any parcel with fewer units by income category than identified in the housing element for that parcelIf the approval of a development project results in fewer units by income category than identified in the housing element for that parcel and the remaining sites in the housing elements are not adequate to accommodate the jurisdiction's share of the regional housing need by income level, the agency must then identify additional adequate sites within 180 days. 7AB 1397 (Low) Residential Development Inventory. Existing law requires an agency's housing element to contain an inventory of land suitable for residential development, including vacant sites and sites having the potential for redevelopmentThe new law strengthens housing element law by limiting the reliance of local governments on sites that do not have a realistic capacity for development of housing. a) Modified Analysis of Land for Residential DevelopmentSpecifically, the new law makes changes to the definition of land suitable for residential development to increase the number of sites where new multifamily housing can be builtSpecifically, the law requires the inventory of land to be available for residential development in addition to being suitable for residential development and to include vacant sites and sites that have "realistic and demonstrated potential for redevelopment during the planning period to meet the locality's housing need for a designated income level." b) Local Agency Obligation to Consider Infrastructure and Resource AvailabilityThe law also includes new requirements for requiring parcels included in the inventory to have sufficient water, sewer and dry utilities supply available, or be included in an existing general plan program or other mandatory program or plan to secure sufficient water, sewer and dry utilities supply to support housing development and to be accessible to support housing developmentThis law requires the agency to specify for each site the number of units that can realistically be accommodated on that site and whether the site is adequate to accommodate lower-income housing, moderate-income housing or abovemoderate-income housing. c) Local Agency Obligation to Consider Local Experience in Housing ProductionThe new law requires the agency's discussion of the methodology used to determine development potential to consider, among other things, the city's or county's past experience with converting existing uses to higher-density residential development, the current demand for the existing use, and an analysis of existing leases or other contracts that would perpetuate the existing use or prevent redevelopment. 8AB 879 (Grayson) Housing Production Reporting, Development Constraints Analysis and Local Fees StudyThis law requires additional analysis of housing production and housing constraints in an agency's annual general plan report as well as an HCD-prepared study of local fees charged to new residential developments that will also include a proposal to substantially reduce such fees. a) Local Agency Obligation to Report on Housing ProductionSpecifically, the law now requires an agency, as part of its annual general plan report, to report on the number of housing development applications received in the prior year, units approved and disapproved in the prior year, and a listing of sites rezoned to accommodate that portion of the city's or county's share of the regional housing need for each income level that could not be accommodated on specified sitesThe law also extends the obligation to prepare the general plan report to charter cities. b) Local Agency Obligation to Analyze Housing ConstraintsThe law also now requires an analysis of governmental constraints upon the maintenance or development of housing to also include any locally adopted ordinances that directly impact the cost and supply of residential developmentThe law requires the analysis of nongovernmental constraints to also include the requests to develop housing at densities below those anticipated in a specified analysis as well as the length of time between receiving approval for a housing development and submittal of an application for building permits for that housing developmentThe law requires the analysis of nongovernmental constraints to demonstrate local efforts to remove nongovernmental constraints that create a gap between the locality's planning for the development of housing for all income levels and the construction of that housing. c) HCD Obligation to Prepare Local Fees Study and Recommend Means to Reduce FeesThis law also requires HCD, by June 30, 2019, to complete a study to evaluate the reasonableness of local fees charged to new developmentsThe law requires the study to include findings and recommendations regarding potential amendments to the California Mitigation Fee Act to substantially reduce fees for residential development. IVFunding 9SB 2 (Atkins) Building Homes and Jobs Act. This law establishes a permanent funding source for affordable housing to fill the gap in funding lost from the loss of redevelopment agencies and the exhaustion of prior bond fundsSpecifically, the law establishes funding through a $75 fee on real estate transaction documentsThe fee is capped at $225 per transaction and exempts real estate salesThe fees would generate roughly $225 million per year, which would be split among state and local housing programs. 10SB 3 (Beall) Veterans and Affordable Housing Bond Act of 2018This law authorizes $4 billion in general obligation bonds for affordable housing programs and a veteran's home ownership programSB 3 must be approved by voters in November 2018. VOther 11AB 1505 (Bloom/Bradford/Chiu/Gloria) "Palmer Fix." The law declares the legislative intent to supersede the holding and dicta in Palmer/Sixth Street Properties L.PvCity of Los Angeles (2009) 175 Cal.App.4th 1396 (Palmer) to the extent that the decision conflicts with a local jurisdiction's authority to impose inclusionary housing requirements on rental housing. a) Authorization of Inclusionary Housing Ordinances for Residential Rental UnitsSpecifically, this law authorizes cities and counties to adopt an inclusionary ordinance for residential rental units in order to create affordable housing. b) HCD Review of Inclusionary Housing OrdinancesThis law also authorizes HCD – within 10 years of the adoption or amendment of an inclusionary ordinance by a county or city after Sept15, 2017, requiring more than 15 percent of the total number of units rented in the development be affordable to, and occupied by, households at 80 percent or less of the area median income – to review that ordinance if the county or city fails to meet specified conditions (i.e., that the county or city has failed to meet at least 75 percent of its share of the regional housing need allocated or that the agency has failed to submit its annual general plan report)The law authorizes HCD to request – and require that the county or city provide – evidence that the ordinance does not unduly constrain the production of housing by submitting an economic feasibility study that meets specified standards.  c) Limitation on Inclusionary Housing Obligations if Not Economically FeasibleIf HCD finds that the economic feasibility study does not meet specified standards, or if the county or city fails to submit the study within 180 days, the law would require the county or city to limit any requirement to provide rental units in a development affordable to households at 80 percent or less of the area median income to no more than 15 percent of the total number of units in the development.  12AB 1521 (Bloom/Chiu) Preservation Notice Law AmendmentsThis law strengthens the Preservation Notice Law by requiring additional notice of a scheduled expiration of rental restrictions and by requiring owners of expiring affordable rental properties to accept any market-rate purchase offer from a qualified preservation entity that intends to maintain the property's affordability restrictionsThe law requires HCD to monitor compliance and allows tenants the right to enforce the lawThe law applies to an "assisted housing development," defined as a multifamily rental housing development that receives governmental assistance pursuant to specified federal or local programsThe granting of density bonuses, concessions or incentives is included as a type of local assistance that renders a project subject to the lawHowever, assisted housing developments in which 25 percent or less of the units are subject to affordability restrictions are exempt from the requirement to accept any market-rate purchase offer from a qualified preservation entity that intends to maintain the property's affordability restrictions. 13AB 571 (EGarcia) Farmworker Housing Tax CreditsThis law makes it easier to develop farmworker housing by easing qualifications for the Farmworker Housing Tax Credit. To view all formatting for this article (eg, tables, footnotes), please access the original here. Holland & Knight LLP - Chelsea Maclean Back Forward View original Forward Print Save ShareFacebookTwitterGoogle PlusLinked In Follow Please login to follow content. 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