HomeMy WebLinkAbout05 PC REPORT LEGISLATIVE HOUSING PACKAGE d W 0
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AGENDA REPORT ITEM #5
MEETING DATE: MARCH 27, 2018
TO: PLANNING COMMISSION
FROM: COMMUNITY DEVELOPMENT DEPARTMENT
SUBJECT: 2017 LEGISLATIVE HOUSING PACKAGE
RECOMMENDATION:
That the Planning Commission receive and file the report.
BACKGROUND:
In 2017, Governor Brown signed into law fifteen (15) legislative housing bills into a
"housing package" to address housing supply and affordability issues throughout the
State of California. These bills provide for new and increased funding for housing,
regulatory reform that streamlines local project approval processes and holds
jurisdictions accountable for the lack of housing construction. Attached is a summary of
the most significant new laws that became effective January 1 , 2018 and that will affect
City processes and functions related to housing development.
At the pleasure of the Planning Commission, staff will provide a presentation which will
include a summary of the background leading to the new legislation and each of the bills
summarized in the attached "2017 Legislative Housing Package".
ya_ Q
EI ine Dove, AICP, RLA Elizabeth A. Binsack
Senior Planner Community Development Director
Attachments: 2017 Legislative Housing Package Summary
ATTACHMENT A
2417 LEGISLATIVE HOUSING PACKAGE SUMMARY
2017 Legislative Housing Package Summary
STREAMLINING HOUSING MEASURES
SB 35 Streamline Approval Process Amends Gov. Code Sections 65400 & 65582.1:
This measure streamlines multifamily housing project approvals. Cities that have issued fewer building permits than its share of the
regional housing needs (RHNA) or.have failed to submit an annual housing element report for two consecutive years are subject to
SB 35. The State of California Department of Housing and Community Development (HCD) determines which jurisdictions are
subject to SB35 streamlining. Approval of a qualifying housing development would be a ministerial act, without CEQA review or
public hearings. To be eligible for streamlining, the housing development must:
❖ Be on a qualifying site;
❖ For the City of Tustin, HCD has determined that projects with fifty (50) percent of the units affordable to households earning
eighty(80) percent or less of the average median income (AMI) are subject to streamlining.
❖ Pay prevailing wages and use a "skilled and trained workforce'for projects over ten (10) units.
Once eligibility has been determined, the development must be located on a site that':
❖ Is within a city that has at least 50,000 population or has.between 2,500 to 50,000 population;
At least 75% of the site perimeter adjoins parcels that are developed with urban uses;
❖ Is zoned or has a General Plan land use designation for residential use or residentiallnonresidential mixed-use development
and at feast two-thirds of the square footage of the development is designated for residential use.
No parking requirements can be imposed on an SB 35 housing development if it is located:
❖ Within '/2 mile of public transit;
❖ Within an architecturally and historically significant historic district;
In an area where on-street parking permits are required but not offered to occupants of the development; or
❖ Where there is a car-share vehicle located within one block of the development.
1 Development sites that would demolish an historic structure,are occupied by tenants for past ten years or housing subject to rent control are excluded.
2017 Legislative Housing Package Summary
❖ If the project includes public investment beyond tax credits and 50% of units are affordable to households earning less than
80%of the AM[, the approval does not expire. If the project does not include 50% of units affordable to AMI, approval
automatically expires in three (3) years, except for a one-year extension if significant progress has not been made in
preparing the project for construction. Once vertical construction has begun and is in progress, all approvals remain valid for
three (3) years.
According-to the HCD, Tustin is only subject to streamlining under SB 35 for proposed developments with 50% of the units affordable
to households earning 80 percent or less of AMI. If the city determines a development is in conflict with "objective planning
standards2,,, it must provide written documentation to the applicant within strict time limits. Depending on the number of proposed
units, approval by must be completed within 90 to 180 days, must be ministerial, and not subject to CEQA.
SB 540 Workforce Housing Opportunity Zones Article 10.10.to Chapter 3 of Division 1 of Title 7 Gov. Code Section 65620- 65625
This measure streamlines the housing approval process by allowing jurisdictions to establish Workforce Housing Opportunity Zones
(WHOZ), which focus on workforce and affordable housing in areas close to jobs and transit and conform to California's greenhouse
gas reduction laws. Up to fifty(50) percent of the city's RHNA may be included in a WHOZ that accommodates 100 to 1,500 units.
SB 540 encourages cities to conduct planning, environmental review and public input on the front end by adopting detailed Specific
Plans for WHOZ.
❖ The Specific Plan should include design standards, parking, grading, public access, reduction of greenhouse gas emissions
and habitat protection, if applicable, and a source of funding for infrastructure and services.
❖ Once adopted, the Specific Plan and an Environmental Impact Report(EIR) are valid for five (5)years.
❖ This measure is intended to provide the development community with certainty that for five (5) years, a development
consistent with the plan will be approved without further CEQA review or discretionary decision-malting. The WHOZ may be
extended for an additional five (5)years by conducting a review of the plan and EIR, including a new CEQA analysis.
•'r The WHOZ may not include more than fifty (50) percent of the jurisdictions RHNA requirement.
If a developer proposes all of the required elements below, the city must approve the project without further discretionary or CEQA
review, unless it identifies a physical condition that would have an adverse impact on public health or safety. In order for a
development to receive streamlining within the WHOZ, the project must:
2 Objective standard is defined as"no personal or subjective judgment by a public official and are uniformly verifiable by reference to an external and uniform
benchmark or criterion available and knowable by both the development proponent and the public official".
2017 Legislative Housing Package Summary
❖ Be consistent with the Sustainable Communities Strategy(SCS)3
❖ Comply with the development standards in the Specific Plan for the WHOZ;
❖ Comply with mitigation measures in the Specific Plan for the WHOZ;
❖ A proposed project must contain at least:
o Thirty (30) percent of the units affordable to moderate or middle-income households;
o Fifteen (15) percent of the units affordable to lower-income households; and
o Five (5) percent of the units affordable to very-low income households.
❖ A proposed project may not contain more than fifty (50) percent of the units affordable to above-moderate income
households.
❖ Within developments affordable to households of above-moderate income, include a minimum of ten (10) percent of units for
lower income households.
❖ Pay prevailing wages.
AB 73 Streamline and Incentivize Housing Production Amends Government Code 65582.1 Adds Government Code §66200 et
seg.)
This measure allows jurisdictions to create Housing Sustainability District, which function similarly to SB 540's WHOZ. Local
jurisdictions complete upfront planning and environmental review in advance so that housing projects proposed in the districts can be
approved through a streamlined process and are not subject to project-specific legal challenges under CBQA.
AB 73 differs from SB 540 as follows:
❖ The housing sustainability district is a type of housing overlay zone, which allows for the ministerial approval of housing that
includes a minimum of 20 percent of units affordable to very low-, low- and moderate-income households;
❖ The ordinance establishing the housing sustainability district requires the State of California Housing and Community
Development Department (HCD) approval and must remain in effect for 10 years;
3 The SCS is prepared by the Southern California Association of Governments(SCAG). The SCS is part of the Regional Transportation Plan which integrates land
use and transportation to achieve the Air Resources Board's emissions reduction targets.
2017 Legislative Housing Package Summary
❖ A Zoning Incentive Payment4 is available to local governments if HCD determines that approval of housing is consistent with
the ordinance.
FUNDING MEASURES
SB 2 Building Homes and Jobs Act Adds Government Code 27388.1 and Health & Safety Code Chapter 2.5 commencing with
Section 50470)
This measure establishes a new real estate recording fee to fund affordable housing-related activities on a permanent, ongoing
basis, effective September 29, 2017. The fee is projected to generate $200 million to $300 million per year for affordable housing.
The fees will go toward affordable housing; supportive housing, emergency shelters, transitional housing and other housing needs
via a $75 to $225 recording fee an specified real estate documents. New home purchases are excluded from the fee. HCD will
adopt guidelines to implement SB 2 and determine methodologies to distribute funding allocations in consultation with stakeholders.
In 2018, fifty (50) percent of the funds are earmarked for local governments to update or create General Plans, Community Plans,
Specific Plans, sustainable communities strategies and local coastal programs. Funds may also be used to conduct new
environmental analyses that improve or expedite local permitting processes. The remaining fifty (50) percent of the funds are
allocated to the HCD to assist individuals experiencing or in danger of experiencing homelessness.
Beginning in 2019 and for subsequent years, 70 percent of the proceeds are allocated to local governments through the federal
Community Development Block Grant (CDBG) formula, so that the funds may be used to address housing needs at the local level.
HCD will allocate the remaining 30 percent as follows:
❖ Five (5) percent for state incentive programs;
❖ Ten (10) percent for farmworker housing;
❖ Fifteen (15) percent for the California Housing Finance .Agency to create mixed-income multifamily residential housing for
lower-to moderate-income households.
4 As of March 1,2018,the Zoning Incentive Payment program has not been funded at the State level.
2017 Legislative Housing Package Summary
SB 3 Veterans and Affordinq Housing bond Act of 20. 18 Adds Health & Safety Code 454000 et seg., and Military and Veterans Code
§998.600 et seg.
This measure places a $4 billion general obligation bond on the November 2018 ballot to fund affordable housing programs and the
veterans homeownership program (CalVetr. If approved by voters, SB 3 would fund the following existing programs:
❖ Multifamily Housing Program — $1.5 billion, administered by HCD, to assist the new construction, rehabilitation and
preservation of permanent and transitional rental housing for lower-income households through loans to local public entities
and nonprofit and for-profit developers;
❖ Transit-Oriented Development Implementation Program — $150 million, administered by HCD, to provide low-interest loans
for higher-density rental housing developments close to transit stations that include affordable units and as mortgage
assistance for homeownership. Grants are also available to cities, counties and transit agencies for infrastructure
improvements necessary for the development.
❖ Infill Incentive Grant Program — $300 million, administered by HCD, to promote infill housing developments by providing
financial assistance for infill infrastructure that serves new construction and rehabilitates existing infrastructure to support
greater housing density.
❖ Joe Serna, Jr. Farmworker Housing Grant Fund -- $300 million, administered by HCD, to help finance the new construction,
rehabilitation and acquisition of owner occupied and rental housing units for agricultural workers.
❖ Local Housing Trust Fund Matching Grant Program — $300 million, administered by HCD, to help finance affordable housing
by providing matching grants, dollar for dollar, to local housing trusts.
❖ CalHome Program — $300 million, administered by HCD, to help low- and very low- income households become or remain
homeowners by providing grants to local public agencies and nonprofit developers to assist individual first-time homebuyers.
It also provides direct loan forgiveness for development projects that include multiple ownership units and provides loans for
property acquisition for mutual housing and cooperative developments.
❖ Self-Help Housing Fund — $150 million, administered by HCD. This program assists low- and moderate-income families with
grants to build their homes with their own labor.
❖ CalVet Home Loan Program — $1 billion, administered by the California Department of Veterans Affairs, provides loans to
eligible veterans at below-market interest rates with few or no down payment requirements.
S Funds would be paid back to the state through veterans'mortgage payments.
2017 Legislative Housing Package Summary
ACCOUNTABILITY MEASURES
SB 167/AB 678 Strengthen the Housing Accountability Act AB 1515 Reasonable Reporting Standard Amend Gov. Code 65589.5
These three measures limit the ability of a jurisdiction to deny affordable or market-rate housing projects that are consistent with
existing planning and zoning requirements and provide new,remedies for a court to compel a jurisdiction to comply with the HAA.
These measures include:
❖ Modification of the definition of mixed-use development consisting of residential and nonresidential uses to apply where at
least two-thirds of the square footage is designated for residential use;
❖ Modification of the findings requirement to deny a housing development project to be supported by a preponderance of the
evidence, rather than by substantial evidence in the record;
❖ Defines "lower density' to mean "any conditions that have the same effect or impact on the ability of the project to provide
housing';
❖ Requires an applicant to be notified if the jurisdiction considers a proposed housing development project to be inconsistent,
not in compliance, or not in conformity with an applicable plan, program, policy, ordinance, standard, requirement or other
similar provision within strict timelines. If the jurisdiction fails to provide the required notice, the project is deemed consistent,
compliant and in conformity with the applicable plan, program, policy ordinance, standard, requirement or other similar
provision;
❖ Deems a housing developrhent project "consistent, compliant and in conformity with an applicable plan, program, policy,
ordinance, standard, requirement or other similar provision if there is substantial evidence that would allow a reasonable
person to conclude that the housing development project is consistent, compliant or in conformity."
❖ If a court finds that a jurisdiction's findings are not supported by a preponderance of the evidence, the court must issue an
order compelling compliance within 60 days. The court may issue an order directing the jurisdiction to approve the housing
development project if the court finds that the jurisdiction acted in bad faith when it disapproved or conditionally approved the
housing development project.
• If a jurisdiction fails to comply with the court order within 60 days, the court must impose fines on the jurisdiction at a
minimum of$10,000 per unit in the housing development project on the date the application was deemed complete;
• If a jurisdiction fails to carry out a court order within 60 days, the court may issue further orders including an order to
vacate the decision of the jurisdiction and to approve the housing development project as proposed by the applicant at the
time the jurisdiction took the action determined to violate the HAA along with any standard conditions;
2017 Legislative Housing Package Summary
• if the court finds that a jurisdiction acted in bad faith when it disapproved or conditionally approved a housing project and
failed to carry out the court's order or judgment within 60 days, the court must multiply the $10,000 per-unit fine by a factor
of five. "Bad faith includes but is not limited to an action that is frivolous or otherwise entirely without merit."
AB 966 No Net Loss Amends Gov. Code 65863
This measure requires a jurisdiction to immediately identify additional low-income housing sites in their housing element when
market-rate housing is developed on a site currently identified for low-income housing and that the replacement site must meet the
specific housing affordability level that was lost.
AB 879 Amends Gov. Code 65400 65583 and 65700 and Health & Safety Code M456
This measure makes updates to housing element and annual report requirements to provide data on local implementation, including
the number of project application and approvals, processing times and approval processes and a listing of sites that are rezoned to
accommodate the jurisdiction's share of the RHNA for each income level that could not be accommodated on specific sites. In
addition, it requires the housing element include an analysis of constraints on housing :for all income levels and for persons with
disabilities, including land use controls, building codes and their enforcement, site improvements, fees and other exactions of
developers and local processing and permitting procedures.
AB 72 Enforce Housing Element Law (Amends Gov. Code §65585)
This measure grants new authority to HCD to find a jurisdiction's housing element out of substantial compliance if it determines that
the jurisdiction fails to act in compliance with its housing element and allows HCD to refer violations of law to the attorney general.
44- HCD is required to review any action or failure to act by a jurisdiction that it determines is inconsistent with an adopted
housing element or Gov. Code §65583, including any program actions included in the housing element;
•:- HCD is required to issue written findings to the city as to whether the jurisdiction's failure to act complies with the jurisdiction's
housing element or §65583. A jurisdiction must respond within thirty (30) days. if the jurisdiction does not comply, the HCD
can revoke its findings of compliance until the jurisdiction comes into compliance;
HCD may notify the attorney general that the jurisdiction is in violation of HAA(Gov. Code §§658636, 659157 and 650088)
6 Requires a jurisdiction ensure its housing element inventory or program makes sites_ available that can accommodate its remaining unmet share of regional
housing needs.
7 Requires a jurisdiction to adopt an ordinance specifying how it will meet density bonus requirements.(See City of Tustin Ordinance 1484).
a Prohibits discrimination in the rights of individual(s)to enjoy residence, land ownership,and tenancy.
2017 Legislative Housing Package Summary
AB 1397 Adequate Housing Element Sites Amends Gov. Code §4 65580 65583 and 65583.2
This measure changes requirements to be included in the General Plan Housing Element and requires a jurisdiction to establish its
housing element site inventory with more specificity with respect to the number of units that could be accommodated on a site and
whether the site is adequate to accommodate lower income, moderate income or above income-housing, including:
❖ Identified sites must be available for residential development and have realistic and demonstrated potential for
redevelopment;
❖ Parcels must have sufficient water, sewer and dry utilities or be part of a mandatory program to provide such utilities;
•:• Places restrictions on using non-vacant sites as part of the housing element inventory;
Places limitations on continuing identification of non-vacant sites and certain vacant sites that have not been approved for
housing developments;
❖ Stipulates that lower income sites must be between one-half acre and ten (10) acres in size unless evidence is provided that
a smaller or larger site is adequate.
OTHER IMPORTANT MEASURES
AB 1505 Inclusionary Ordinances (Amends Gov. Code W5850 and adds 465850.01
This measure authorizes counties and cities to adopt an ordinance that requires a housing development to include a certain
percentage of residential rental units affordable to and occupied by households with incomes less than the limits of households in the
extremely low, very low, low or moderate income levels. Any ordinance adopted under this measure would be required to provide
alternative means of compliance with in-lieu fees, off-site construction, land dedication or acquisition of rehabilitation of existing units.
This measure also authorizes HCD to review any incluslonary rental housing ordinance requiring more than fifteen (15) percent to be
occupied by households earning eighty(80) percent or less of AMI and the jurisdiction failed to either met seventy-five (75) percent of
its share of its above-moderate income RHNA or submit a General Plan annual report.
HCD may request an economic feasibility study with evidence that such an ordinance does not duly constrain the production of
housing and decide whether the study meets the section's requirements.
2017 Legislative Housing Package Summary
AB 1521 Preserve The Existing Affordable Housing Stock Amends Gov. Code 65863.10 and 65863.11
This measure strengthens the existing Preservation Notice Law that applies to housing developments whose affordability
requirements are set to expire (so that rents will no longer be required to be maintained at below-market rates). The bill requires
longer advance notice to tenants in these units to let them know when rents are scheduled to increase. The bill also requires the
owners to preferentially sell to qualified buyers who intend to maintain the properties at below-market rental housing and who make a
fair-market-value purchase offer.
AB 571 Low-Income Housinq Credits for Farmworkers Amends Health & Safety Code IA 50199.7 50710 and 50710.1 and evenue
&Taxation Code &§12206, 17058 and 23610)
This measure modifies the criteria for projects eligible for the state LIHTC set-aside for farmworker housing, which has been under-
utilized in prior years (and has approximately $5.5 million currently available for qualified projects). AB 571 allows individual
farmworker housing projects to qualify for more public funding and allows projects with 50 percent of units for farmworkers (instead of
100 percent)to qualify, making these types of projects more financially viable