Category Archive: Legislative Update

  1. California House, Senate Continue Efforts to Increase Supply of Affordable Housing

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    Picking up where they left off at the end of the 2017 legislative session, California lawmakers in both the House and Senate advanced several bills aimed at increasing the supply of affordable housing. These include efforts to modify laws related to the Regional Housing Needs Assessment (RHNA) and Housing Element, override local zoning requirements, and produce accessory dwelling units.

    RHNA/Housing Accountability

    SB 828 Land Use: Housing Element, authored by Sen. Scott Wiener (D-San Francisco), would require the State’s Housing and Community Development Department (HCD) to address the underproduction of housing.  This bill would require cities and counties to meet 125% of their RHNA requirements in their inventories.  Where that is not possible, cities and counties would be required to identify ways in which it will accommodate their RHNA, such as through rezoning. HCD would be required to complete a comprehensive assessment on the unmet needs for each region, and include the results of the assessment in regional allocations for the next housing element cycle. HCD would have to establish a methodology for the comprehensive assessment on unmet need that considers median rent or home prices and, in communities with high rates of income growth, sets a high rate of new housing production for all income levels to ensure equity and stabilize home prices. SB 828 would also prohibit a Council of Government (COG) from underestimating allocations for local jurisdictions based on predicted additional unmet need allocations.  This bill would require the final regional housing need plan to reflect equitable allocations for housing of all income levels, and not demonstrate disparities that promote racial or wealth disparities throughout a region.

    SB 1771 Planning and Zoning: Regional Housing Needs Assessment, authored by Sen. Richard Bloom (D-Santa Monica), would require jurisdictions to adopt long-term plans that address the development of land not only inside their jurisdiction, but in some cases, outside local boundaries as well.  As is currently the law, COGs would be required to create and adopt a “Final Regional Housing Needs Allocation Plan,” but which would now  be required to allocate housing needs according to certain specified objectives, including doing so in an equitable manner by dispersing housing typologies, affordability levels, and housing tenure  (whether owner or rental) across the region. It would also revise many of the current requirements of the RHNA plan.  Plans would be required to further objectives, rather than simply be consistent with them as is currently required.  COGs would be required to include data showing both the number of low-wage jobs within a jurisdiction as well as the number of housing units which are affordable to those workers.  In addition, COGs will be required to project the number of low wage workers and the number of housing units needed to house them during the planning period.   This would be a new focus on existing and projected demand, replacing the previous requirement to respond to housing demand. It would also limit the grounds upon which a jurisdiction could appeal to the COG to these three: the methodology was not informed by survey information submitted by the jurisdiction; the jurisdiction has undergone significant and unforeseen changes; and, the methodology used to calculate the RHNA was in violation of state law.

    AB 3194 Housing Accountability Act: Project Approval, authored by Assemblymember Tom Daly (D-Santa Ana), would prohibit a jurisdiction from disapproving, or placing infeasible conditions upon, a development of very low-income, low-income, or moderate-income housing (including emergency shelters), unless a preponderance of the evidence shows that the development would have a “specific, adverse impact upon the public health or safety.”  The State of California defines “preponderance of the evidence” as evidence that outweighs, not in its quantity but rather in its effect, the evidence of the other side.[1]  In 2017, AB 1515 (Daly) added the requirement for “substantial evidence,” which is defined as “being of ponderable legal significance,” and “which is reasonable in nature, credible, and of solid value.”[2] The proposed requirement for a preponderance of the evidence is a higher standard and could result in a higher number of housing developments being covered by the Housing Accountability Act (HAA). If approved, this bill would impart the protections of the HAA to projects that are both inconsistent with zoning and consistent with the objective general plan standards. Such projects would be deemed approved without having been rezoned.

    Overriding Local Zoning Requirements

    AB 2923 San Francisco Bay Area Rapid Transit District: Transit-Oriented Development, introduced by Assemblymembers David Chiu (D-San Francisco) and Timothy Grayson (D-Concord) and coauthored by Kevin Mullin (D-San Mateo), Richard Bloom (D-Santa Monica), and Phil Ting (D-San Francisco), would require the board of the San Francisco Bay Area Rapid Transit District (BART) to adopt new TOD guidelines for certain BART-owned land.  The new guidelines would establish minimum zoning requirements for land within 1/2 mile of a current or future BART entrance, on contiguous parcels that are at least .25 acres in size.  The bill would also require the board to adopt streamlining measures for TOD projects, and require that projects within these areas include 20 percent affordable housing. The effect of this bill, if approved, could be that jurisdictions where BART stations are located would have little control over what is built in their communities.

    SB 827 Planning and Zoning: Transit-Rich Housing Bonus, authored by Sen. Wiener (D-San Francisco), the bill would have promoted multi-family housing near transit. Among other things, SB 827 would have allowed developers to circumvent zoning in transit areas, and build to height, parking, and density levels that exceed zoning limits. The proposed height limit would have been five stories in areas within a half mile of a transit or subway station, and developers would also have benefited from reduced parking and density restrictions. Advocates of the bill purported it to be a nail in the coffin of residential racial segregation, forcing housing into neighborhoods that were historically zoned low-density in order to perpetuate the segregation of race and class.  The bill failed to pass in the Committee on Transportation and Housing.

    Accessory Dwelling Unit Requirements

    Interior view of an accessory dwelling unitAB 2890, authored by Sen. Ting (D-San Francisco), would require local jurisdictions to consider permit applications for ADUs within 60 days of receipt.  Current law allows jurisdictions up to 120 days to consider such permits.  It would also require that jurisdictions that condition permits on owner-occupancy to not monitor those units more than once per year. This bill would expand the law to allow for ministerial approval of ADUs on both single-family and multifamily lots, and prohibit certain requirements such as lot coverage standards, minimum lot size, and floor area ratio. If passed, HCD would be required to proposed small building standards by 2020, which would provide further oversight into  local ordinances.  If an ordinance is found to be in violation of the law, HCD could additionally notify the Attorney General.

    SB 831 Land Use: Accessory Dwelling Units, introduced by Sen. Wieckowski (D-Fremont) and coauthored by Sen. Toni Atkins (D-San Diego), Sen. Nancy Skinner (D-Berkeley), and Sen. Wiener (D-San Francisco), would require jurisdictions to designate, in their ADU ordinances, any areas where ADUs would be excluded because of certain health and safety concerns.  It would delete the authority to include lot coverage standards.  It would also prohibit jurisdictions from taking the square footage of the proposed ADU into account when determining the allowable FAR or lot coverage. In addition, a permit for the development of an ADU would be automatically approved if not considered within 60 days of its submittal.  It would prohibit requirements to replace off-street parking that is lost due to the development of an ADU. It would also prohibit the use of any other local policy, ordinance, or regulation as a means to inhibit the development of ADUs. This bill would not only prohibit local ordinances from owner-occupancy conditions, but also make void any such existing requirements. It would also prohibit a jurisdiction from considering an ADU as a “new residential use,” for purposes of determining fees.  School fees would be an exception; however, they would be limited to $3,000.

    Artemis Spyridonidis, Senior Associate, covers housing policy issues, including structural solutions to the housing affordability crisis, consolidated plans, housing elements, accessory dwelling unit policy implementation, and regional issues across the state of California. For information about linkage fees and other housing policy issues, contact Artemis Spyridonidis, at artemis@lesardevelopment.com.

    [1] Glage v. Hawes Firearms Co. (1990), 226 Cal.App.3d 314, 325, quoting People v. Miller (1916), 171 Cal. 6149, 652.

    [2] Kuhn v. Department of General Services, (1994) 22 Cal.App.4th 1627, 1633, 29 Cal.Rptr.2d 191; Mohilef v. Janovici, (1996) 51 Cal.App.4th 267, 305, fn. 28, 58 Cal.Rptr.2d 721.

  2. Requiem for SB 827

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    Image of baby grand piano in shadowSB 827 died April 17, 2018, in the Senate’s Transportation and Housing Committee. Authored by Sen. Scott Wiener (D-San Francisco), the bill would have promoted multi-family housing near transit. Supporters claimed it would have been a nail in the coffin of residential racial segregation, forcing housing into neighborhoods that were historically zoned low-density in order to perpetuate the segregation of race and class.

    Other similar bills have been successful in the recent past.  The state legislature has already begun to approve bills that have slowly chipped away at the powers of local government to deter the development of housing. SB 1069 (Wieckowski; codified as Cal. Gov. 65582.1), §AB 2299 (Bloom; codified as Cal. Gov. Code §65852.2) and AB 2406 (Thurmond; codified as Cal. Gov. Code §65852.22), which went into effect on January 1, 2017, prohibit local jurisdictions from barring the production of Accessory Dwelling Units (ADUs). On January 1, 2018, both SB 35 and SB 166 became effective.  SB 35 (Wiener; codified as Cal. Gov. Code §65400) penalizes certain jurisdictions that have not met their RHNA assessments by eliminating multiple local planning reviews and creating a streamlined, ministerial approval process for certain infill developments. (See “Bay Area Begins to Feel Effect of SB 35”). SB 166 (Skinner; codified as Cal. Gov. Code §65863), prohibits local governments, in most situations, from permitting a project at a rate lower than the already-established density allows.

    Similarly, but certainly with more severe repercussions, SB 827 would have allowed developers to circumvent zoning in transit areas, and build to height, parking, and density levels that exceed zoning limits. The proposed height limit would have been five stories in areas within a half mile of a transit or subway station, and developers would also have benefited from reduced parking and density restrictions. The bill also provided that projects within a half mile of “high-quality” bus lines offering service at 15-minute intervals or more frequently during peak times would benefit from reduced parking and density restrictions, but not the new height limit.

    Opponents claimed that it would ruin neighborhoods, devalue homes, allow incongruous development, and unfairly create a strain on infrastructure and transportation. Proponents claimed that the increase in units would drive down rents, giving renters a sigh of relief, and a greater swatch of neighborhoods from which to choose. With the third-lowest homeownership rate in the country after D.C. and New York, California clearly needs more housing. Currently, only 55% of Californians own their home. SB 827 may have been laid to rest, but we undoubtedly need to continue to pursue ways to increase development throughout the state.

    Artemis Spyridonidis, Senior Associate, covers housing policy issues, including structural solutions to the housing affordability crisis, consolidated plans, housing elements, accessory dwelling unit policy implementation, and regional issues across the state of California. For information about linkage fees and other housing policy issues, contact Artemis Spyridonidis, at artemis@lesardevelopment.com.

  3. Bay Area Begins to Feel Effect of SB 35

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    Developers across the Bay Area have begun to leverage SB 35, one of the bills in the 2017 Housing Package, to accelerate housing production for households at all income levels across California. Authored by Sen. Scott Wiener (D-San Francisco) SB 35 provides for a streamlined and ministerial approval process for developments in jurisdictions that have failed to meet their Regional Housing Needs Allocation (RHNA) goals. To take advantage of SB 35, the development must be proposed for an infill site, comply with existing residential and mixed-use zoning, allocate at least 10% percent of its units to affordable housing, and conform to the prevailing union wage.[1]

    In March, Blake Griggs Properties became one of the first developers to invoke SB 35 for a 260-unit housing project in Berkeley which has been delayed for almost five years by a lengthy environmental review. The proposed multifamily residential project would replace a parking lot and earmark 50% of the projected units for lower-income housing.[2]

    Sand Hill Property Company, another Bay Area developer, has used SB 35 to streamline the approval process for a redevelopment plan envisioned for the derelict Vallco Shopping Mall in Cupertino. The proposed project is a mixed-use complex that promises to set aside two-thirds of its development area to housing, and also designate half the projected 2,400 multifamily units as affordable housing. SB 35 requires the City of Cupertino to respond to the developer’s proposal within 180 days.[3]

    San Francisco-based nonprofit Mission Economic Development Agency (MEDA) also invoked SB 35 to build a 130-unit, 100% affordable housing project in San Francisco’s Mission District. Once a critic of SB 35, MEDA is now hoping that the law will override, or at least expedite, San Francisco’s cumbersome entitlement process for the proposed project.[4]

    While proponents are hoping that SB 35 would break through legislative barriers, cut lengthy approval processes, and trigger construction of badly needed affordable housing, critics have voiced concern that SB 35 decreases the authority of local governments over land use, deprives local communities of their rights to oppose a project, and increases the extent of state intervention in local affairs. Moreover, in many communities, the new development’s conformance with “neighborhood character” is still a controversial issue. Affordable housing advocates, MEDA included, render SB 35 as a “one-size-fits-all” policy, arguing that the bill requires a scant amount of affordable housing and it may even cause displacement and gentrification in low-income neighborhoods.[5]

    Artemis Spyridonidis, Senior Associate, covers housing policy issues, including structural solutions to the housing affordability crisis, consolidated plans, housing elements, accessory dwelling unit policy implementation, and regional issues across the state of California. For information about linkage fees and other housing policy issues, contact Artemis Spyridonidis, at artemis@lesardevelopment.com.

    [1] Leginfo, “Senate Bill No. 35,” Published on September 29,2017. Date of Access 04-24-2018. https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201720180SB35. And, California Department of Housing and Community Development, “California’s 2017 Housing Package,” 2017, Date of Access 04-24-2018. http://www.hcd.ca.gov/policy-research/lhp.shtml

    [2] San Francisco Business Times, “Stalled for five years, 260-unit Berkeley housing project will be California’s first to use streamlined approvals,” Published March 8, 2018. Date of Access: 04-26-2018. https://www.bizjournals.com/sanfrancisco/news/2018/03/08/berkeley-housing-affordable-sb35-approval-wiener.html

    [3] Vallco Town Center, “The Future of Vallco,” April 2018, Date of Access: 04-25-2018. http://revitalizevallco.com

    [4] San Francisco Chronicle,” Mission housing project invokes law to exchange review for affordable units,” Published on April 7, 2018. Date of Access 04-24-2018. https://www.sfchronicle.com/politics/article/Mission-housing-project-invokes-law-to-exchange-12815332.php

    [5] Ibid.

  4. State Lawmakers Continue Push for ADU Development

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    ADU demonstration at the Jacobs Center for Neighborhood Innovation on Oct. 26th 2017.

    Two years ago, in an effort to increase the housing supply statewide, California state lawmakers began laying the legislative foundation to stimulate the development of accessory dwelling units, or ADUs. Defined by California State law to be secondary units, ADUs are typically built on a single-family home lot and smaller than the primary dwelling; according to state law, they cannot exceed the lesser of 50 percent of the square footage of the primary home, or 1200 square feet. While ADUs are not explicitly defined as affordable housing, available data suggests that the permanent expansion of the rental housing stock through ADUs can lead to a reduction in prices in a given area.  This is due in part to their size and to not having to pay for land to build the unit.

    The first bills Assembly Bill 2299/Senate Bill 1069, which were signed by Gov. Jerry Brown in September 2016, relaxed ADU requirements by nullifying existing local ordinances and giving jurisdictions 60 days to adopt new ordinances in compliance with the law. ADU laws were further clarified in September 2017 when Gov. Brown signed Senate Bill 229/Assembly Bill 494 into law. Together, the four bills focused specifically on streamlining the approval process and easing construction standards for ADUs.

    Since these laws went into effect, California has seen the greatest increase in ADU permits issued nationwide. The Legislature’s first set of ADU bills went into effect in January 2017, and the following year saw 4,352 building permits issued, a 63% increase over the previous year. Both Los Angeles and San Francisco were among the top five metropolitan areas issuing the highest number of permits, with 1,475 and 1,007, respectively.

    These gains reflect substantial changes to building codes in many California regions. Recently, the County of Los Angeles implemented a pilot program that allowed homeowners to receive up to $75,000 for building an ADU, as well as implementing a streamlined permitting process. These incentives are conditional on renting the ADU to the formerly homeless, an effort to increase development and address the region’s homelessness crisis. San Francisco has spent the past several years removing barriers to ADU development and now has some of the most relaxed requirements. Notably, San Francisco is one of the few cities that allows ADU development on multi-family lots.

    Promoting ADU Development, Enforcing Local Compliance

    While California is leading the way on ADUs, lawmakers are continuing to remove barriers to ADU development. In January 2018, Sen. Wieckowski (D-Fremont) along with Sens. Atkins (D-San Diego) and Wiener (D-San Francisco) introduced SB 831, which creates “carrots” to promote ADU development and “sticks” for local jurisdictions that unlawfully disapprove them. If passed, the law would allow ADUs to be built in more zones, incur fewer fees, and be permitted more easily. It would also empower the California Department of Housing and Community Development (HCD) and the courts to address local jurisdictions that inappropriately refrain to act on or erroneously disapprove ADU applications.

    Carrots

    ADUs in More Zones: This bill would eliminate the requirement that ADUs be built in single-family or multifamily zones only.

    Fewer Fees: If passed, ADUs would no long be treated as “new construction” for the purpose of collecting fees, and therefore would not incur new construction impact fees, connection fees, capacity charges, or any other new construction fees levied by a local agency, special district, or water corporation. This change would be especially impactful in jurisdictions with high ADU permitting fees, such as San Diego, where fees can be as high as $28,000.

    Streamlined Permitting: This bill would prohibit local jurisdictions from requiring owner occupancy by the permit applicant. It would prohibit off-street parking requirements for ADUs that are created through the demolition of a garage, carport, or covered parking.  If a jurisdiction fails to act on an application within 120 days, that application will be deemed approved.  Prohibit consideration of the square footage of the proposed ADU when calculating allowable FAR on the lot.

     Sticks                                               

    Written Findings: HCD would be authorized to submit written findings to the local jurisdiction regarding whether or not the local ordinance complies with the law.

    Court Judgments and Fines: If a Court finds that a local jurisdiction acted in violation of the law when it disapproved or conditioned a permit, the Court may issue an order requiring the local jurisdiction to come into compliance within 60 days. The court may even issue an order requiring the local jurisdiction to take action on a specific ADU permit application. Jurisdictions that don’t comply within 60 days may be fined, and any fines collected would be used to fund the local housing trust fund in the Building Homes and Jobs Trust Fund.

    Artemis Spyridonidis covers housing policy issues, including structural solutions to the housing affordability crisis, consolidated plans, housing elements, accessory dwelling unit policy implementation, and regional issues across the state of California. For information about ADUs and other housing alternatives, contact Artemis Spyridonidis, at artemis@lesardevelopment.com.

  5. How Will the 2017 Housing Package Affect 2018?

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    Colorado Court Apartments, affordable housing in Santa Monica, CAOf the 130 housing-related bills introduced last year, 15 were approved and signed into law by Gov. Brown.  As we look forward to 2018, we’ve examined how some of these bills might be catalysts for change in 2018.  In particular, we examined SB35, Senator Wiener’s streamlining bill; SB40, Senator Roth’s Workforce Housing Opportunity Zone (WHOZ) bill; and, AB1397, Assemblymember Low’s bill addressing housing element inventory.

    SB35 (Wiener) is a measure that streamlines certain multifamily housing project approvals, at the request of the developer, in jurisdictions that have not met their Regional Housing Needs Assessment (RHNA) requirements or have not submitted housing elements for two consecutive years.

    Qualifying developments must meet the following requirements: (1) be in an urbanized area (population of 50,000 or more) or an urban cluster (population 2,500 – 50,000); (2) have at least 75 percent of its perimeter adjoining parcels that are already developed as urban uses; and, (3) be zoned residential or mixed-use, with at least 2/3 of the square footage dedicated for residential use. Several exclusions, including excluded land use designations, apply.

    SB 540 (Roth) establishes “Workforce Housing Opportunity Zones” (WHOZs).  Jurisdictions that opt in will encourage the development of affordable housing near jobs and transit by creating zones where planning, environmental review, and public input is completed through Specific Plans.  Developments within Specific Plan areas will benefit in that they will require neither CEQA review nor discretionary review. In 2018, we’ll see jurisdictions begin to develop specific plans in order to take advantage of this program and incentivize the development of affordable housing.

    AB 1397 (Low) makes changes to how governments comprise their housing element site inventories.  For instance, parcels must have sufficient water, sewer, and utilities in order to be counted.  Sites that are now vacant will now need to overcome certain restrictions in order to be included.  And, sites must be “available” for residential development, or show that they have “realistic and demonstrated” potential to be developed.

    Artemis Spyridonidis covers housing policy issues, including structural solutions to the housing affordability crisis, consolidated plans, housing elements, accessory dwelling unit policy implementation, and regional issues across the state of California.

    To learn more about LDC’s policy services, contact Artemis Spyridonidis, Senior Associate, at artemis@lesardevelopment.com.

  6. State Housing Package Passed by Legislature, Gov. Brown

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    Gov. Brown gave affordable housing advocates statewide a reason to celebrate when he signed a package of housing bills into law into September 2017. SB2, The Building Homes and Jobs Act, creates a dedicated and permanent source of funding that will provide approximately $250 million annually for affordable housing development by imposing a $75 fee on specific real estate transactions.  In 2018, 50 percent of the funds collected will be made available for governments seeking to update their planning and zoning documents.   The other 50 percent will be dedicated to homelessness services.  California’s Department of Housing and Community Development expects to release a Notice of Funding Availability (NOFA) to release these funds in 2018. Local governments can begin to plan now by identifying any planning and/or zoning documents that may need updating before the NOFA is released. For 2019 and subsequent years, the funding will support affordable housing development.

    SB 3, the Veterans and Affordable Housing Bond Act of 2018, was authorized to be placed on the November 2018 ballot.  If passed, it will provide $4 billion for veterans housing and affordable housing throughout the state.  Eligible uses of these funds will include Multifamily Housing, Transit-Oriented Rental Housing, the Infill Incentive Grant Program, the Local Housing Trust Fund Matching Grant Program, the CalHOME Program, and the CalVet Home Loan Program.

    Finally, AB 1505, the “Palmer Fix” bill, makes it legal for jurisdictions to apply Inclusionary Zoning ordinances to not only for-sale developments, but also rental projects. We will continue to track the implementation of these bills and welcome the opportunity to help you align your efforts with forthcoming state regulations and funding opportunities

    Artemis Spyridonidis covers housing policy issues, including structural solutions to the housing affordability crisis, consolidated plans, housing elements, accessory dwelling unit policy implementation, and regional issues across the state of California.

    To learn more about LDC’s housing policy services, contact Artemis Spyridonidis, Senior Associate, at artemis@lesardevelopment.com.

  7. Realigning Regulations to Boost Housing Production

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    California has a long history of enacting land use policies and practices to curtail urban sprawl and protect the environment, but some of the policies intended to promote sustainable growth have instead stifled housing development and constrained local economies. While there is widespread recognition that existing regulations have contributed to the crisis, local governments have few incentives to bring about change. The recently approved housing package, which includes several measures to reverse the unintended consequences of outmoded regulations, represents a critical step in removing barriers to housing development.

    Currently, permitting for new development takes one-third longer in California’s coastal areas than in the average American city, which significantly increases development costs, says Carol Galante, housing policy expert at the Terner Center for Housing Innovation at UC Berkeley.[1] Conversely, streamlined land use policies can position developers to better leverage limited financial resources and increase connectivity between housing and transportation, jobs, and amenities.

    SB 35 (Wiener), one of the legislative session’s key housing bills, aims to speed up housing production by eliminating multiple planning reviews for infill projects in cities that have fallen short of their Regional Housing Needs Assessment (RHNA) targets. Other projects that meet certain affordability, density, and zoning requirements will also qualify for streamlined approval. By streamlining the approval process, lawmakers seek to eliminate the costs of time-consuming and costly legal challenges that have kept supply from responding elastically to demand.

    A second historically underutilized strategy to reduce regulatory delays and costs related to CEQA is the Program Environmental Impact Review (PEIR). Often implemented under a General Plan, a Community Plan update, or a specific plan for a targeted redevelopment area, a PEIR generally establishes a framework for “tiered” or project-level environmental documents that are prepared in accordance with the overall program. For tiering to occur, a community first has to designate high-priority neighborhoods for economic growth and construction and adopt a plan for those areas with full initial CEQA review. Having an approved PEIR in place reduces project-specific uncertainties, and may also reduce the risk of project delays from duplicative lawsuits aimed at derailing plans and projects that have completed the CEQA process.

    A PEIR can be used to simplify the task of preparing environmental documents on projects that are within the same geographic area, have generally similar environmental effects and mitigation needs, and are carried out under the same regulatory agency.  This approach can expedite permitting by focusing subsequent environmental reviews on project-specific design features. For example, if a mixed-use development project would create a significant traffic impact, a planner can attempt to tier off a Program EIR that covers the project site within a specific plan, and utilize the discussion, data, analysis, and mitigation measures from the PEIR to reduce the potential traffic impact of the project.

    For example, SB 540 will authorize local jurisdictions to establish Workforce Housing Opportunity Zones by preparing an EIR and adopting a specific plan. For 5 years after a plan is adopted, local jurisdictions would not have been able to deny entitlement for any development proposed within the specific zoning area and would also have waived requirements for an EIR or negative declaration if the project satisfied certain criteria.

    Several additional laws clarify existing Housing Element law, which require each community to produce their fair share of housing at each income level. Specifically, SB 166 prohibits communities from permitting units at a capacity lower than what is needed to meet their RHNA assessment for lower- and moderate-income households, and AB 1397 establishes higher standards for determining whether sites are suitable for development. In addition, AB 879 requires local governments to conduct more in-depth analysis of development constraints. Under the new law, local governments will be required to analyze the impact of local ordinances on the cost and supply of residential development, as well as requests to develop housing at lower densitites and other factors.

    These laws reflect recommendations from several key studies and policy “toolkits,”[2] which outline a series of strategies that, when implemented together, can boost housing production and promote economic growth. These strategies can also be customized to reflect the specific needs of a community.

    If you are interested in developing customized strategies to address your community’s needs, please contact Artemis Spyridonidis, Senior Associate, at artemis@lesardevelopment.com.

    LeSar-Artemis-square webArtemis Spyridonidis covers housing policy issues, including structural solutions to the housing affordability crisis, consolidated plans, housing elements, accessory dwelling unit policy implementation, and regional issues across the state of California.

    [1] Carol Galante, “Why By-Right Affordable Housing in California is the Right Thing to Do.”  Terner Center for Housing Innovation at UC Berkeley (May 24, 2016).

    [2] Recent, notable reports include McKinsey Global Institute’s “Closing California’s Housing Gap” (October 2016) and The White House Housing Development Toolkit (September 2016)

  8. Gov. Brown Signs Housing Bill Package

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    Gov. Brown Signing Housing Package

    Gov. Brown Signs Housing Bill Package at Hunters View, an affordable housing development in San Francisco

    Hunters View, an affordable housing development in San Francisco, served as a fitting backdrop for Gov. Jerry Brown as he signed the package of housing bills on September 29th, surrounded by legislators and leaders who championed the legislation. The package of legislation, which includes SB 2, SB 3, and SB 35, reflects the feeling of urgency among lawmakers to address California’s housing crisis on a statewide level.

    The package’s centerpiece, the Affordable Homes and Jobs Act authored by Sen. Toni Atkins, creates a permanent revenue source for affordable housing, and is expected to generate approximately $250 million annually through recording fees charged on real estate transactions, such as mortgage refinance documents, notices of foreclosure sales, and quitclaim deeds, among others. The bill passed the Legislature following intense negotiations, which resulted in amendments to provide greater local control over the funds.

    Sens. Jim Beall and Toni Atkins

    Sens. Jim Beall and Toni Atkins

    In 2018, half the funds will be allocated to local governments to update planning documents and zoning ordinances to streamline housing production, and half will be made available to fund programs for individuals experiencing or at risk of homelessness. Beginning in 2019, 70% of the funds will be allocated to local governments, and 30% of the funds will be appropriated for mixed income multifamily residential housing, state incentive programs, and efforts to address affordable homeownership and rental housing opportunities for agricultural workers and their families.

    Gov. Brown also signed the Veterans and Affordable Housing Bond Act of 2018, which authorizes a November 2018 ballot measure seeking voter approval for $4 billion in bond funding. The bond would include $3 billion for the construction of new low-income housing and $1 billion to extend the Cal-Vet Farm and Home Loan Program, which provides veterans with assistance to purchase homes, farms, and mobile homes.

    The third key measure, Senate Bill 35, will eliminate multiple local planning reviews for infill projects that meet certain zoning and affordability standards in cities that have fallen short of their Regional Housing Needs Assessment targets. To qualify, projects will also need to meet applicable zoning standards, include at least 10% of affordable units, and pay a prevailing wage to construction workers.

    Although Gov. Brown and key legislative leaders had reached a deal on the central measures of the housing package in late August, the bills were held up until the close of the legislative session as leaders worked to secure the necessary votes. SB 2 passed the Assembly with a single Republican vote from San Diego’s Brian Mainschein, the former San Diego County commissioner on homelessness.

    LDC will continue to follow news on how these and other measures are implemented in cities and counties statewide. If you are interested in learning more about how to maximize the opportunities created by the legislation, please contact Jessica Ripper, Senior Associate, at jessica@lesardevelopment.com for a briefing or trainings for your team.

    Jennifer LeSar President and CEO LeSar Development Consultants

    With more than 25 years of experience in the real estate development and investment banking industries, Jennifer LeSar brings a diverse background to her work in community development and urban revitalization. Her technical expertise spans from policy and program development to the origination and underwriting of complex investments in equity funds, multi-family portfolios, and historic and low-income tax credit properties utilizing federal and state financing programs.

  9. State Lawmakers Take Action on Homelessness

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    Tents set up by people who are homeless on Skid Row in Los Angeles

    Tents set up by people who are homeless on Skid Row in Los Angeles

    Affordable housing advocates weren’t the only winners last week as California lawmakers worked to push through a flurry of bills before the end of the legislative session on September 15th. In addition to creating a permanent source of revenue to fund affordable housing, SB 2 (Atkins) provides funding for programs for people experiencing or at risk of homelessness. In 2018, half the funds will be made available to the Department of Housing and Community Development to provide funding for programs for people experiencing  or at risk of homelessness. The legislation specifies that use of the funds includes, but is not limited to, providing rapid rehousing, rental assistance, and navigation centers, as well as the construction, rehabilitation, and preservation of permanent and transitional rental housing.

    Several other bills aimed specifically at addressing homelessness also passed during the 2017 legislative session:

    AB 727 (Nazarian) authorizes counties to expand access to housing assistance for people in programs funded by the Mental Health Services Act. The use of MHSA funds for rental subsidies was previously restricted to individuals participating in Full Service Partnerships who require intensive services to stabilize and to individuals who were referred to services from the field. This bill will allow counties to continue to support individuals as they transition to lower levels of service along the continuum of care.

    AB 74 (Chiu) establishes the Housing for a Healthy California Program, which aims to create supportive housing for homeless SSI recipients by leveraging Medi-Cal benefits. The program would be funded through the federal Housing Trust Fund or other sources available to the Department of Housing and Community Development (HCD), and would be released through competitive grants to counties and operating reserve grants and capital loans to developers. Numerous studies have demonstrated the cost-effectiveness of coupling stable housing with physical and mental health services for high utilizers of public services.

    AB 932 (Ting) establishes a pilot program allowing specific cities and counties to develop a plan and local ordinances to expedite the construction of emergency shelters on land owned or leased by the city upon declaration of a shelter crisis. HCD would be required to approve local ordinances adopted during the pilot program to ensure compliance with health and safety standards. Eligible localities that declare a shelter crisis are required to submit an annual progress report to the Legislature indicating the total number of residents in shelters, the number who have moved from a shelter into permanent supportive housing, and the number who have exited the system, as well as other data on steps the locality is taking to reduce homelessness.

    AB 210 (Santiago) allows counties to develop multidisciplinary teams to expedite the process of linking homeless adults and families to housing and supportive services by allowing provider agencies to share information and coordinate care. Allowing for a coordinated interagency response will not only improve government efficiency, individuals and families will benefit from greater continuity of care.

    LDC will continue to follow the news from the 2017 legislative session and provide you with updates on how these and future measures, if enacted, are implemented in cities and counties statewide.

    If you are interested in learning more about how to maximize the opportunities created by the legislation, please contact Jessica Ripper, Senior Associate, at jessica@lesardevelopment.com for a briefing or trainings for your team.

  10. Lawmakers Rally Votes to Pass Housing Package

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    California State Capitol SacramentoIn the waning hours of the 2017 legislative session, state lawmakers rallied the votes necessary to reach agreement on a package of housing bills designed to help alleviate the state’s historic housing crisis. The Legislature’s vote to approve the package will provide up to $4.1 billion in bond funding, plus another $250 million annually from a real estate transaction fee, altogether the largest amount of state financing for affordable housing in California history. The package is projected to generate an estimated 70,000 housing units by 2022.

    The vote followed amendments to Senate Bills 2 and 3, which were the subject of intense negotiation as leaders statewide sought to stimulate development and respond to growing public pressure to improve housing affordability. Both SB2 and SB3 required a two-thirds approval by the Assembly to pass.

    Building Homes and Jobs Act

    The Building Homes and Jobs Act (SB 2), authored by Sen. Atkins (D-San Diego), will create a permanent revenue source to fund affordable housing by charging $75 to $225 in document fees on real estate transactions, such as mortgage refinancing. Home and commercial property sales are exempt from the fee. SB 2 is expected to generate approximately $5 billion over the next five years when matched with federal, local, and private funds.

    SB 2 was amended August 29th to provide greater local control over the funds. In 2018, half the funds will be made available to local governments to support community planning and half to the Department of Housing and Community Development to fund programs for people experiencing or at risk of homelessness. Beginning in 2019, local governments will receive 70% of the funds, with the remaining 30% appropriated to the California Housing Finance Agency to create mixed-income multifamily residential housing for lower to moderate income households.

    “There is no single silver bullet that will solve the crisis; however, SB 2 is a step in the right direction,” said Atkins following the bill’s passage. “It will generate new, ongoing funding to create permanent supportive housing for people who are experiencing chronic homelessness, providing them with services they need to address their physical and mental health issues and relieving pressure on our courts, jails, and emergency rooms.”

    Veterans and Affordable Housing Bond Act of 2018

    SB 3, the Veterans and Affordable Housing Bond Act of 2018 (Beall, D-San Jose), authorizes a November 2018 ballot measure seeking voter approval for $4 billion in bond funding for rental housing and existing housing programs. Introduced as a $3 billion bond proposal for the construction of new low-income housing, an August 28th amendment increased the bond by $1 billion to provide homeownership subsidies to veterans by extending the Cal-Vet Farm and Home Loan Program.

    Streamlining Development

    The Legislature also passed several bills related to eliminating local barriers to housing production. SB 35 (Wiener, D-San Francisco) will streamline permitting by eliminating multiple planning reviews “by right” for housing projects that meet certain zoning and affordability standards. Under the bill, projects featuring more than 10 units that qualify for expedited approval would pay union-level or prevailing wages to construction workers, and developers of some larger projects would “have to agree to union-standard work rules or apprenticeship programs.”

    Sen. Friedman (D-Glendale) spoke in favor of the bill, saying that it struck the right balance between providing the housing we need and protecting the environment. “The bill targets urban infill areas where residents are less likely to depend on cars, and more likely to rely on public transportation,” she added.

    SB 540 (Roth, D-Riverside) will allow local governments to form priority Workforce Housing Opportunity Zones and charge fees for developers seeking approvals within the zone. Local governments that establish the zones will be required to approve proposed developments that meet the plan’s criteria within 60 days. In addition to spurring construction, SB 540 is expected to increase jobs and economic opportunity. The bill was supported by both realtors and the building trades. 

    The Legislature also passed SB 166, which will eliminate a loophole in the current housing element law and prohibit communities from permitting units at a capacity lower than what is needed to meet their share of the Regional Housing Needs Assessment for lower and moderate-income households.

    In addition, SB 167 strengthens the Housing Accountability Act, also known as the “Anti-NIMBY Act,” by requiring local agencies to base any decisions to prohibit the development of very low- to moderate-income projects or emergency shelters “on a preponderance of the evidence” and allows the courts to impose fees for non-compliance.

    “If cities are not doing what they should be doing, they could be found in violation of the Act,” said David Chiu (D-San Francisco).

    AB 1505 (Bloom, D-Santa Monica), which would restore the ability of local governments to adopt ordinances requiring that inclusionary housing policies be applied as a condition of permitting for rental housing, will be heard in the Senate today.

    The Governor, who has until October 15th to sign the bills, tweeted his support for the package.

    LDC will continue to follow the news from today’s legislative session, and will provide you with updates as Gov. Brown takes action on these bills.