The Planning and Zoning Law requires a city or county to adopt a comprehensive, long-term general plan for the physical development of the city or county and of any land outside its boundaries that bears relation to its planning. That law also requires the general plan to contain specified mandatory elements, including a housing element for the preservation, improvement, and development of housing. Existing law prescribes requirements for the preparation of the housing element, including a requirement that a planning agency submit a draft of the element or draft amendment to the element to the Department of Housing and Community Development prior to the adoption of the element or amendment to the element. Existing law requires the department to review the draft and report its written findings, as specified. Existing law also requires the department, in its written findings, to determine whether the draft substantially complies with the housing element.

This bill would require the department to also review any action or failure to act by the city, county, or city and county that it determines is inconsistent with an adopted housing element or a specified provision and to issue written findings, as specified, whether the action or failure to act substantially complies with the housing element. If the department finds that the action or failure to act by the city, county, or city and county does not substantially comply with the housing element, and if it has issued findings as described above that an amendment to the housing element substantially complies with the housing element, the bill would authorize the department, after allowing no more than 30 days for a local agency response, to revoke its findings until it determines that the city, county, or city and county has come into compliance with the housing element. The bill would also require the department to notify the city, county, or city and county and authorize the department to notify the Office of the Attorney General that the city, county, or city and county is in violation of state law if the department makes certain findings of noncompliance or a violation.

The Planning and Zoning Law requires a city or county to adopt a comprehensive, long-term general plan for the physical development of the city or county and of any land outside its boundaries that bears relation to its planning. That law also requires the general plan to contain specified mandatory elements, including a housing element for the preservation, improvement, and development of housing. Existing law prescribes requirements for the preparation of the housing element, including a requirement that a planning agency submit a draft of the element or draft amendment to the element to the Department of Housing and Community Development prior to the adoption of the element or amendment to the element. Existing law requires the department to review the draft and report its written findings, as specified. Existing law also requires the department, in its written findings, to determine whether the draft substantially complies with the housing element.

This bill would require the department to also review any action or failure to act by the city, county, or city and county that it determines is inconsistent with an adopted housing element or a specified provision and to issue written findings, as specified, whether the action or failure to act substantially complies with the housing element. If the department finds that the action or failure to act by the city, county, or city and county does not substantially comply with the housing element, and if it has issued findings as described above that an amendment to the housing element substantially complies with the housing element, the bill would authorize the department, after allowing no more than 30 days for a local agency response, to revoke its findings until it determines that the city, county, or city and county has come into compliance with the housing element. The bill would also require the department to notify the city, county, or city and county and authorize the department to notify the Office of the Attorney General that the city, county, or city and county is in violation of state law if the department makes certain findings of noncompliance or a violation.

The Planning and Zoning Law requires a city or county to adopt a comprehensive, long-term general plan for the physical development of the city or county and of any land outside its boundaries that bears relation to its planning. That law also requires the general plan to contain specified mandatory elements, including a housing element for the preservation, improvement, and development of housing. Existing law prescribes requirements for the preparation of the housing element, including a requirement that a planning agency submit a draft of the element or draft amendment to the element to the Department of Housing and Community Development prior to the adoption of the element or amendment to the element. Existing law requires the department to review the draft and report its written findings, as specified. Existing law also requires the department, in its written findings, to determine whether the draft substantially complies with the housing element.

This bill would require the department to also review any action or failure to act by the city, county, or city and county that it determines is inconsistent with an adopted housing element or a specified provision and to issue written findings, as specified, whether the action or failure to act substantially complies with the housing element. If the department finds that the action or failure to act by the city, county, or city and county does not substantially comply with the housing element, and if it has issued findings as described above that an amendment to the housing element substantially complies with the housing element, the bill would authorize the department, after allowing no more than 30 days for a local agency response, to revoke its findings until it determines that the city, county, or city and county has come into compliance with the housing element. The bill would also require the department to notify the city, county, or city and county and authorize the department to notify the Office of the Attorney General that the city, county, or city and county is in violation of state law if the department makes certain findings of noncompliance or a violation.

The Planning and Zoning Law requires a city or county to adopt a comprehensive, long-term general plan for the physical development of the city or county and of any land outside its boundaries that bears relation to its planning. That law also requires the general plan to contain specified mandatory elements, including a housing element for the preservation, improvement, and development of housing. Existing law prescribes requirements for the preparation of the housing element, including a requirement that a planning agency submit a draft of the element or draft amendment to the element to the Department of Housing and Community Development prior to the adoption of the element or amendment to the element. Existing law requires the department to review the draft and report its written findings, as specified. Existing law also requires the department, in its written findings, to determine whether the draft substantially complies with the housing element.

This bill would require the department to also review any action or failure to act by the city, county, or city and county that it determines is inconsistent with an adopted housing element or a specified provision and to issue written findings, as specified, whether the action or failure to act substantially complies with the housing element. If the department finds that the action or failure to act by the city, county, or city and county does not substantially comply with the housing element, and if it has issued findings as described above that an amendment to the housing element substantially complies with the housing element, the bill would authorize the department department, after allowing no more than 30 days for a local agency response, to revoke its findings until it determines that the city, county, or city and county has come into compliance with the housing element. The bill would also require the department to notify the city, county, or city and county and the Office of the Attorney General that the city, county, or city and county is in violation of state law if the department makes certain findings of noncompliance or a violation.

The Planning and Zoning Law requires a city or county to adopt a comprehensive, long-term general plan for the physical development of the city or county and of any land outside its boundaries that bears relation to its planning. That law also requires the general plan to contain specified mandatory elements, including a housing element for the preservation, improvement, and development of housing. Existing law prescribes requirements for the preparation of the housing element, including a requirement that a planning agency submit a draft of the element or draft amendment to the element to the Department of Housing and Community Development prior to the adoption of the element or amendment to the element. Existing law requires the department to review the draft and report its written findings, as specified. Existing law also requires the department, in its written findings, to determine whether the draft substantially complies with the housing element.

This bill would require the department to also review any action or failure to act by the city, county, or city and county that it determines is inconsistent with an adopted housing element or a specified provision and to issue written findings, as specified, whether the action or failure to act substantially complies with the housing element. If the department finds that the action or failure to act by the city, county, or city and county does not substantially comply with the housing element, and if it has issued findings as described above that an amendment to the housing element substantially complies with the housing element, the bill would authorize the department to revoke its findings until it determines that the city, county, or city and county has come into compliance with the housing element. The bill would also require the department to notify the city, county, or city and county and the Office of the Attorney General that the city, county, or city and county is in violation of state law if the department makes certain findings of noncompliance or a violation.

Existing law provides that the Attorney General has charge of all legal matters in which the state is interested, except as specified.

This bill would appropriate $____ from the General Fund to the Attorney General to fund the Attorney Generals duties in enforcing specified laws relating to housing. The bill would require the Attorney General to report to the Assembly Committee on Housing and Community Development and the Senate Committee on Transportation and Housing on or before December 31, 2018, and each year thereafter on the expenditure of the funds.

Existing law provides that the Attorney General has charge of all legal matters in which the state is interested, except as specified.

This bill would appropriate $____ from the General Fund to the Attorney General to fund the Attorney Generals duties in enforcing specified laws relating to housing. The bill would require the Attorney General to report to the Assembly Committee on Housing and Community Development and the Senate Committee on Transportation and Housing on or before December 31, 2018, and each year thereafter on the expenditure of the funds.

(Without Reference to File)

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 72

Author:(Santiago and Chiu)

As Amended Ver:July 12, 2017

Majority vote

Original Committee Reference: H. & C.D.

SUMMARY: Gives the Department of Housing and Community Development (HCD) authority to find a city's, county's, or city's and county's (city and county) housing element out of substantial compliance if it determines that the city, county, or city and county acts or fails to act in compliance with its housing element, and allows HCD to refer violations of law to the Attorney General (AG). Specifically, this bill:

1. Requires HCD to review any action or failure to act by a city and county that it determines is inconsistent with the following:
   1. An adopted housing element;
   2. Its inventory of sites suitable to accommodate the city's and county's regional housing needs assessment (RNHA); and
   3. A program to rezone sites to meet the city's and county's RNHA.
2. Allows HCD to revoke its findings that a housing element or an amendment to the housing element is in substantial compliance, until the city, county, or city and county comes into compliance, if it determines that an action or failure to act by a city and county does not substantially comply with housing element law.
3. Allows HCD to consult with and to receive any written comments from a city, county, or city and county, public agency, group or person regarding a city's and county's action or failure to act to determine whether or not a housing element is in substantial compliance with housing element law.
4. Requires HCD to notify the local government of a violation of law and gives HCD authority to refer a violation to the Office of the Attorney General (AG) if it finds that the city has violated the law by taking any action contrary to the housing element or an amendment to the element, or any action or failure to act pursuant to 1) or that any city and county has taken an action in violation of the following:
5. The Housing Accountability Act (Government Code (GOV) Section 65589.5);
6. No-net-loss-in zoning density law limiting downzoning and density reductions (GOV Section 65863);
7. Density Bonus Law (GOV Section 65915);
8. Prohibiting discrimination against affordable housing (GOV Section 65008); and

The Senate amendments make the following changes to the Assemble version of the bill:

1. Require HCD, after notifying a city and county of a violation of law to give the city and county a reasonable time, but no longer than 30 days to correct the violation before finding a housing element out of compliance or referring the case to the AG.
2. Delete the following from a list of laws that HCD can find a city or county out of compliance with when referring a case to the AG: the Least Cost Zoning Law (GOV Section 65913); Local Surplus Lands Act (GOV Section 54220); and an amendment or cancellation of a development agreement between a city and a developer (GOV Section 65868).
3. Give HCD authority but does not require the department to refer a violation of law to the Attorney General.

FISCAL EFFECT: According to the Assembly Appropriations Committee:

1. Appropriates an unspecified amount of money from the General Fund, potentially in the millions of dollars, to the AG for housing law enforcement.
2. Costs to HCD, likely in the low hundreds of thousands of dollars (GF) annually, to review local actions, make determinations, and notify the AG of violations.

COMMENTS: Background: Every local government is required to prepare a housing element as part of its general plan. The housing element process starts when HCD determines the number of new housing units a region is projected to need at all income levels (very low-, low-, moderate-, and above-moderate income) over the course of the next housing element planning period to accommodate population growth and overcome existing deficiencies in the housing supply. This number is known as the regional housing needs assessment (RHNA). The COG for the region, or HCD for areas with no COG, then assigns a share of the RHNA number to every city and county in the region based on a variety of factors.

The housing element must show how the city or county plans to accommodate its share of the RHNA. The housing element must include an inventory of sites already zoned for housing. If a community does not have enough sites within its existing inventory of residentially zoned land to accommodate its entire RHNA, then the community must adopt a program to rezone land within the first three years of the planning period.

HCD adopts guidelines advising a local government on how to prepare its housing element and requirements for what is included in the housing element. The planning agency of a city or county submits a draft housing element or an amendment to a housing element to HCD for review prior to adopting it. HCD is required to review the housing element or an amendment and may consult with any public agency, group, or person. The department then makes written findings as to whether or not the draft element or amendment substantially complies with state law. If HCD finds that the housing element or amendment does not substantially comply the local government can either change it to substantially comply or adopt it without any changes along with a resolution detailing why the local government believes that it is in compliance. A local government submits its final housing element to HCD and the department is required with in ninety days to review the final housing element and report its findings to the planning agency of the local government. Staff research indicates that 88% of housing elements in the last review cycle were found in compliance.

Additional enforcement authority: This bill would allow HCD, during the planning period, to revoke a finding that a local government's housing element complies with housing element law based on any action or failure to act that it finds is inconsistent with housing element law. As an example, if HCD found that a local government downzoned a site listed in the housing element inventory of sites and the site can no longer accommodate the level of housing needed to meet local governments RNHA, HCD could make findings to revoke their original finding of substantial compliance. If HCD finds a violation of law either in a local government's action or failure to act in regards to its housing element or a list of other state housing laws, it would be required to notify the local government. In addition, HCD would be required to refer a violation of housing element law as well as a list of other state housing laws to the AG. The AG has authority under existing law to enforce state law; this bill would create a process for HCD to identify violations of law that warrant prosecution by the state's attorney.

Cities are impacted in several ways if their housing element is out of compliance. Most state funding sources for affordable housing require a local government to have an approved housing element to qualify. In addition, a local government can be sued if it doesn't have an approved housing element.

The sponsors write in support of this bill, "California has established a robust set of laws to foster the development of housing at all income levels. However, as noted in HCD's draft statewide housing assessment, California's Housing Future: Challenges and Opportunities, the lack of enforcement of state housing laws limits the effectiveness of existing planning tools intended to promote housing development.' The report also notes that this lack of enforcement is a barrier and constraint to housing development. AB 72 strengthens the state's ability to enforce laws that require local governments to achieve housing goals"

Analysis Prepared by: Lisa Engel / H. & C.D. / (916) 319-2085 FN: 0001274

 THIRD READING  

Bill No: AB 72

Author:

:

Vote:

SENATE TRANS. & HOUSING COMMITTEE: 11-2, 7/11/17

AYES: Beall, Cannella, Allen, Atkins, McGuire, Mendoza, Roth, Skinner, Vidak, Wieckowski, Wiener

NOES: Gaines, Morrell

SENATE APPROPRIATIONS COMMITTEE: 5-2, 7/17/17

AYES: Lara, Beall, Bradford, Hill, Wiener

NOES: Bates, Nielsen

ASSEMBLY FLOOR: 58-19, 6/1/17 - See last page for vote

SUBJECT:

SOURCE: California Housing Consortium

California Rural Legal Assistance Foundation

Western Center on Law & Poverty

DIGEST:

This bill requires the Department of Housing and Community Development (HCD) to review any action or inaction by a locality that it determines is inconsistent with an adopted housing element, permits HCD to find a locality’s housing element out of substantial compliance, and permits HCD to notify the Attorney General (AG) of violations of the law.

ANALYSIS:

Existing law:

1. Requires every city and county to prepare and adopt a general plan containing seven mandatory elements, including a housing element.
2. Requires a locality's housing element to identify and analyze existing and projected housing needs, identify adequate sites with appropriate zoning to meet the housing needs of all income segments of the community, and ensure that regulatory systems provide opportunities for, and do not unduly constrain, housing development.
3. Requires, prior to each housing element revision, that each council of governments (COG), in conjunction with the HCD, prepare a regional housing needs assessment (RHNA) and allocate to each jurisdiction in the region its fair share of the housing need for all income categories. Where a COG does not exist, HCD determines the local share of the region's housing need.
4. Requires the jurisdiction to submit a draft housing element to HCD at least 90 days prior to adopting the housing element or 60 days prior to amending the housing element.
5. Requires HCD to review the draft and report its written findings to the local jurisdiction within 90 days of its receipt of the draft in the case of an adoption or within 60 days of its receipt in the case of a draft amendment.
6. Requires HCD to consider written comments from any public agency, group, or person regarding the draft or adopted element or amendment under review.
7. Requires a locality to inventory land suitable for residential development to identify sites that can be developed to meet the locality's RHNA for all income levels. Provides that "land suitable for residential development" includes all of the following:
   1. Vacant sites zoned for residential use;
   2. Vacant sites zoned for nonresidential use that allows residential development;
   3. Residentially zoned sites that are capable of being developed at higher density, including the airspace above sites owned or leased by a city, county, or city and county;
   4. Sites zoned for nonresidential use that can be redeveloped for and as necessary, rezoned for, residential use, including above sites owned or leased by a city, county, or city and county.
8. Allows a locality to do either of the following to show that a site is adequate to accommodate some portion of its share of the RHNA for lower-income households:
   1. Provide an analysis demonstrating that the site is adequate to support lower-income housing development at its zoned density level, and require the analysis to include, but not be limited to, factors such as market demand, financial feasibility, or information based on development project experience within a zone or zones that provide housing for lower income households; or
   2. Zone the site at the jurisdiction's "default" density level.
9. Establishes "default" density levels for purposes of establishing a site's adequacy for supporting lower-income housing development.
10. Requires that, where the inventory of sites does not identify adequate sites to accommodate the need for groups of all household income levels, rezoning of those sites, including adoption of minimum density and development standards, is required by a specified deadline.
11. Requires the rezoning program to accommodate 100% of the need for housing for very low- and low-income households for which site capacity has not been identified in the inventory of sites. These sites must:
    1. Be zoned to permit owner-occupied and rental multifamily residential use by-right during the planning period;
    2. Be zoned with minimum density and development standards that permit between 16 and 20 units per acre, depending on the jurisdiction; and
    3. Accommodate at least 50% of the very low- and low-income housing need on sites designated for residential use and for which nonresidential uses or mixed-uses are not permitted, except that a city or county may accommodate all of the very low and low-income housing need on sites designated for mixed uses if those sites allow 100% residential use and require that residential use occupy 50% of the total floor area of a mixed-use project.
12. Establishes the Housing Accountability Act, which prohibits a local agency from disapproving a proposed housing development project for very low-,
    low-, or moderate-income households or an emergency shelter, or conditioning approval in a manner that renders the project infeasible for development, unless it makes written findings based upon substantial evidence in the record, as specified.

This bill:

1. Requires HCD to review any action or failure to act by a locality that it determines is inconsistent with the following:
2. An adopted housing element;
3. Its inventory of sites suitable to accommodate the locality’s regional housing needs assessment (RNHA); and
4. A program to rezone sites to meet the locality’s RNHA.
5. Requires HCD to issue written findings to the locality as to whether the action or failure to act substantially complies with housing element law and provide a reasonable time, not to exceed 30 days, for the locality to respond to the findings before taking any action.
6. Permits HCD, if HCD finds that the action or failure to act by the locality does not substantially comply with housing element law, and if it has issued findings that an amendment to the housing element substantially complies with requirements under housing element law and if HCD has issued findings that an amendment to the housing element substantially complies with housing element law, to revoke its findings until it determines that the locality has come into compliance with housing element law.
7. Requires HCD to notify the locality and permits HCD to notify the AG that the locality is in violation of the state law if HCD finds that the housing element or an amendment to the housing element, or any action or inaction does not substantially comply with existing housing element law or that the locality has taken an action in violation of the following:
   1. The Housing Accountability Act;
   2. No-net-loss-in zoning density law limiting downzoning and density reductions;
   3. Density Bonus Law; and
   4. Prohibiting discrimination against affordable housing.

Comments

1. Housing Elements. Every local government is required to prepare a housing element as part of its general plan. The housing element process starts when HCD determines the number of new housing units a region is projected to need at all income levels (very low-, low-, moderate-, and above-moderate income) over the course of the next housing element planning period to accommodate population growth and overcome existing deficiencies in the housing supply. This number is known as the RHNA. The COG for the region, or HCD for areas with no COG, then assigns a share of the RHNA number to every city and county in the region based on a variety of factors.

The housing element must show how the city or county plans to accommodate its share of the RHNA. The housing element must include an inventory of sites already zoned for housing. If a community does not have enough sites within its existing inventory of residentially zoned land to accommodate its entire RHNA, then the community must adopt a program to rezone land within the first three years of the planning period.

HCD adopts guidelines advising a local government on how to prepare its housing element and requirements for what is included in the housing element. The planning agency of a city or county submits a draft housing element or an amendment to a housing element to HCD for review prior to adopting it. HCD is required to review the housing element or an amendment and may consult with any public agency, group, or person. The department then makes written findings as to whether or not the draft element or amendment substantially complies with state law. If HCD finds that the housing element or amendment does not substantially comply the local government can either change it to substantially comply or adopt it without any changes along with a resolution detailing why the local government believes that it is in compliance. A local government submits its final housing element to HCD and the department is required with in ninety days to review the final housing element and report its findings to the planning agency of the local government.

1. Creating more accountability. Some communities do not comply with housing element requirements. State law requires HCD to review each community’s housing element for compliance with state requirements and in recent years, HCD has found that most (around 80%) housing elements comply with state laws. A minority of communities, however, have either adopted a noncompliant housing element or failed to submit their housing element to HCD for timely review. Communities without an approved housing element face limited ramifications.

A recent HCD report, California’s Housing Future: Challenges and Opportunities, states that there is a lack of implementation and enforcement of planning laws, which has created barriers to housing developments. The lack of enforcement of state housing laws limits the effectiveness of existing planning tools intended to guide and facilitate housing development. The report also states that the primary mechanism to enforce state housing law is through the judicial system. For example, an interested party can legally challenge the actions of local government by filing a lawsuit when a local government’s housing element is out of compliance with state law or when a local government denies approval of an affordable housing development. Money, time, and interest are necessary to pursue judicial remedies. In addition, developers are hesitant to seek a judicial remedy in localities where they intend to have future development. The lack of enforcement and lack of consequences for noncompliance with state requirements limits the effectiveness of these laws.

This bill gives the HCD authority to find a locality’s housing element out of substantial compliance if it determines that the locality acts or fails to act in compliance with its housing element and HCD had previously approved the locality’s housing element (ie found the housing element in substantial compliance). Additionally, it permits HCD to refer violations of housing law to the AG.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Senate Appropriations Committee:

• Estimated HCD costs of approximately $375,000 annually for two PY of staff to review local actions, make compliance determinations, correspond and interface with cities and counties, and notify the AG of violations. This estimate assumes a review of 10 local jurisdictions each year for compliance with specified laws and referral of two jurisdictions to the AG. (General Fund)
• Potentially significant cost pressures for the AG to take enforcement action against cities and counties in violation of specified housing laws, to the extent HCD refers violations to the AG. (General Fund)

SUPPORT: (Verified 8/16/17)

California Housing Consortium (co-source)

California Rural Legal Assistance Foundation (co-source)

Western Center on Law & Poverty (co-source)

Bay Area Council

California Apartment Association

California Association of Realtors

California Commission on Aging

California Council for Affordable Housing

LeadingAge California

OPPOSITION: (Verified 8/16/17)

League of California Cities

ARGUMENTS IN SUPPORT: According to the author, “There are communities that have either adopted a noncompliant housing element or failed to submit their housing element to HCD for timely review. The lack of enforcement limits the effectiveness of existing planning tools intended to guide and facilitate development of new housing. AB 72 comes at a crucial time for California, when decisions at the state and local level have created barriers in place of building affordable homes, worsening the unprecedented housing affordability crisis in our state. This bill provides greater accountability and enforcement to ensure there continues to be development for new housing.”

ARGUMENTS IN OPPOSITION: The League of California Cities, writing in opposition to a prior version of the bill, asserts that this bill allows HCD to second-guess any action taken by a city or county that it determines is inconsistent with a state approved housing element, the Housing Accountability Act, or a number of other housing related laws, which could slow down construction. Additionally, the opposition writes that this bill grants HCD the right to review “any action or failure to act by the city, county, or city and county that it determines inconsistent with an adopted housing element” but fails to explain how HCD is supposed to determine that an action is inconsistent with the law in the first place.

ASSEMBLY FLOOR: 58-19, 6/1/17

AYES: Aguiar-Curry, Arambula, Berman, Bloom, Bocanegra, Bonta, Burke, Caballero, Calderon, Cervantes, Chau, Chiu, Chu, Cooper, Dababneh, Daly, Eggman, Fong, Frazier, Friedman, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gomez, Gonzalez Fletcher, Gray, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Lackey, Limón, Low, Maienschein, McCarty, Medina, Mullin, Muratsuchi, Nazarian, O'Donnell, Patterson, Quirk, Quirk-Silva, Reyes, Ridley-Thomas, Rodriguez, Rubio, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Weber, Wood, Rendon

NOES: Acosta, Travis Allen, Baker, Bigelow, Brough, Chávez, Chen, Cunningham, Dahle, Gallagher, Harper, Kiley, Levine, Mathis, Mayes, Melendez, Obernolte, Voepel, Waldron

NO VOTE RECORDED: Choi, Cooley, Flora

Prepared by:

8/16/17 17:45:21

**** END ****

SENATE COMMITTEE ON

Senator Ricardo Lara, Chair

2017 - 2018 Regular Session

AB 72 (Santiago) - Housing

This bill meets the criteria for referral to the Suspense File.

Bill Summary:

AB 72 would require the Department of Housing and Community Development (HCD) to review local inconsistencies with housing elements and other housing inventory requirements, make determinations of substantial compliance with housing elements, and notify a city or county if a housing element is out of compliance or if it is in violation of other specified housing laws. The bill would also authorize HCD to refer specified housing law violations to the Attorney General (AG).

Fiscal Impact:

• Estimated HCD costs of approximately $375,000 annually for 2 PY of staff to review local actions, make compliance determinations, correspond and interface with cities and counties, and notify the AG of violations. This estimate assumes a review of 10 local jurisdictions each year for compliance with specified laws and referral of two jurisdictions to the AG. (General Fund)
  
• Potentially significant cost pressures for the AG to take enforcement action against cities and counties in violation of specified housing laws, to the extent HCD refers violations to the AG. (General Fund)

Background:

Existing law requires cities and counties to prepare a general plan comprised of seven mandatory elements, including a housing element that includes an identification of existing and projected housing needs. The housing element must identify an inventory of adequate sites zoned for housing at all income levels and to accommodate a jurisdiction’s share of the Regional Housing Need Assessment (RHNA) over the planning period. If the city or county does not have enough sites within its existing inventory of residentially zoned land to accommodate its entire RHNA, it must adopt a program to rezone land within the first three years of the planning period. Housing elements must be updated every eight years in urban areas, and every five years in more rural areas.

Existing law authorizes HCD to adopt and revise guidelines for the preparation of a housing element. The planning agency of a city or county submits a draft housing element or an amendment to a housing element to HCD for review prior to adoption. HCD is required to review the housing element or amendment and make written findings as to whether or not the draft element or amendment substantially complies with state law. If HCD finds a housing element or amendment is not in substantial compliance, the local entity can either make revisions to bring it into compliance or adopt it without any changes along with a resolution detailing why the local government believes that it is in compliance. Ultimately, the city or county submits its final housing element to HCD, and the department is required to review it and report its findings to the local planning agency within 90 days.

Existing law authorizes HCD to require a local government to submit a housing element and any local housing assistance plan in connection with any loan or grant application.

Proposed Law:

AB 72 would require HCD to review city and county actions and failures to act that it determines to be inconsistent with an adopted housing element and associated requirements, including failures to implement any required program actions. The bill would require HCD to issue written findings to the city or county regarding whether or not the action or inaction complies with housing element law, and provide up to 30 days for a response before taking any other action. If HCD finds an action or inaction does not comply, and has previously issued written findings that an amendment to the housing element substantially complies with housing element law, the department may revoke its findings of compliance until the local entity comes into compliance.

The bill would also require HCD to notify a city or county, and authorize HCD to notify the AG, that the local entity is in violation of state law if it finds that the housing element or an amendment, or any specified action or inaction, does not substantially comply with housing element law, or that the local government has taken an action in violation of any of the following:

• The Housing Accountability Act, as specified.
• The “no-net-loss-in” zoning density law, as specified.
• The Density Bonus Law, as specified.
• Specified provisions prohibiting discrimination against affordable housing.

Staff Comments:

HCD indicates that approximately 80 percent of cities and counties that are required to adopt housing elements are in compliance with the housing element law. Some local entities, however, have either adopted a noncompliant housing element, or have simply failed to submit a housing element to HCD for review. This bill would provide an additional administrative tool to document noncompliance, provide an opportunity for correction, and authorize HCD to refer violations to the AG for enforcement.

-- END --

SENATE COMMITTEE ON TRANSPORTATION AND HOUSING

Senator Jim Beall, Chair

2017 - 2018 Regular

Bill No: AB 72 Hearing Date: 7/11/2017

SUBJECT: Housing

DIGEST: This bill would require the Department of Housing and Community Development (HCD) to review any action or inaction by a locality that it determines is inconsistent with an adopted housing element, permit HCD to find a locality’s housing element out of substantial compliance, and requires HCD to notify the Attorney General of violations of the law.

ANALYSIS:

Existing law:

1. Requires every city and county to prepare and adopt a general plan containing seven mandatory elements, including a housing element.
2. Requires a locality's housing element to identify and analyze existing and projected housing needs, identify adequate sites with appropriate zoning to meet the housing needs of all income segments of the community, and ensure that regulatory systems provide opportunities for, and do not unduly constrain, housing development.
3. Requires, prior to each housing element revision, that each council of governments (COG), in conjunction with the HCD, prepare a regional housing needs assessment (RHNA) and allocate to each jurisdiction in the region its fair share of the housing need for all income categories. Where a COG does not exist, HCD determines the local share of the region's housing need.
4. Requires the jurisdiction to submit a draft housing element to HCD at least 90 days prior to adopting the housing element or 60 days prior to amending the housing element.
5. Requires HCD to review the draft and report its written findings to the local jurisdiction within 90 days of its receipt of the draft in the case of an adoption or within 60 days of its receipt in the case of a draft amendment.
6. Requires HCD to consider written comments from any public agency, group, or person regarding the draft or adopted element or amendment under review.
7. Requires a locality to inventory land suitable for residential development to identify sites that can be developed to meet the locality's RHNA for all income levels. Provides that "land suitable for residential development" includes all of the following:
8. Vacant sites zoned for residential use;
9. Vacant sites zoned for nonresidential use that allows residential development;
10. Residentially zoned sites that are capable of being developed at higher density, including the airspace above sites owned or leased by a city, county, or city and county;
11. Sites zoned for nonresidential use that can be redeveloped for and as necessary, rezoned for, residential use, including above sites owned or leased by a city, county, or city and county.
12. Allows a locality to do either of the following to show that a site is adequate to accommodate some portion of its share of the RHNA for lower-income households:
    1. Provide an analysis demonstrating that the site is adequate to support lower-income housing development at its zoned density level, and requires the analysis to include, but not be limited to, factors such as market demand, financial feasibility, or information based on development project experience within a zone or zones that provide housing for lower income households; or
    2. Zone the site at the jurisdiction's "default" density level.
13. Establishes "default" density levels for purposes of establishing a site's adequacy for supporting lower-income housing development.
14. Requires that, where the inventory of sites does not identify adequate sites to accommodate the need for groups of all household income levels, rezoning of those sites, including adoption of minimum density and development standards, is required by a specified deadline.
15. Requires the rezoning program to accommodate 100% of the need for housing for very low- and low-income households for which site capacity has not been identified in the inventory of sites. These sites must:
16. Be zoned to permit owner-occupied and rental multifamily residential use by-right during the planning period;
17. Be zoned with minimum density and development standards that permit between 16 and 20 units per acre, depending on the jurisdiction; and
18. Accommodate at least 50% of the very low- and low-income housing need on sites designated for residential use and for which nonresidential uses or mixed-uses are not permitted, except that a city or county may accommodate all of the very low and low-income housing need on sites designated for mixed uses if those sites allow 100% residential use and require that residential use occupy 50% of the total floor area of a mixed-use project.
19. Establishes the Housing Accountability Act, which prohibits a local agency from disapproving a proposed housing development project for very low-, low-, or moderate-income households or an emergency shelter, or conditioning approval in a manner that renders the project infeasible for development, unless it makes written findings based upon substantial evidence in the record, as specified.

This bill:

1. Requires HCD to review any action or failure to act by a locality that it determines is inconsistent with the following:
2. An adopted housing element;
3. Its inventory of sites suitable to accommodate the locality’s regional housing needs assessment (RNHA); and
4. A program to rezone sites to meet the locality’s RNHA.
5. Requires HCD to issue written findings to the locality as to whether the action or failure to act substantially complies with housing element law and provide a reasonable time, not to exceed 30 days, for the locality to respond to the findings before taking any action.
6. Permits HCD, if HCD finds that the action or failure to act by the locality does not substantially comply with housing element law, and if it has issued findings that an amendment to the housing element substantially complies with requirements under housing element law and if HCD has issued findings that an amendment to the housing element substantially complies with housing element law, to revoke its findings until it determines that the locality has come into compliance with housing element law.
7. Requires HCD to notify the locality and the AG that the locality is in violation of the state law if HCD finds that the housing element or an amendment to the housing element, or any action or inaction does not substantially comply with existing housing element law or that the locality has taken an action in violation of the following:
   • 1. The Housing Accountability Act;
     2. No-net-loss-in zoning density law limiting downzoning and density reductions;
     3. Density Bonus Law;
     4. Prohibiting discrimination against affordable housing; and

COMMENTS:

1. Purpose of the bill. According to the author, “There are communities that have either adopted a noncompliant housing element or failed to submit their housing element to HCD for timely review. The lack of enforcement limits the effectiveness of existing planning tools intended to guide and facilitate development of new housing. AB 72 comes at a crucial time for California, when decisions at the state and local level have created barriers in place of building affordable homes, worsening the unprecedented housing affordability crisis in our state. This bill provides greater accountability and enforcement to ensure there continues to be development for new housing.”
2. Housing Elements Background. Every local government is required to prepare a housing element as part of its general plan. The housing element process starts when HCD determines the number of new housing units a region is projected to need at all income levels (very low-, low-, moderate-, and above-moderate income) over the course of the next housing element planning period to accommodate population growth and overcome existing deficiencies in the housing supply. This number is known as the RHNA. The COG for the region, or HCD for areas with no COG, then assigns a share of the RHNA number to every city and county in the region based on a variety of factors.

The housing element must show how the city or county plans to accommodate its share of the RHNA. The housing element must include an inventory of sites already zoned for housing. If a community does not have enough sites within its existing inventory of residentially zoned land to accommodate its entire RHNA, then the community must adopt a program to rezone land within the first three years of the planning period.

HCD adopts guidelines advising a local government on how to prepare its housing element and requirements for what is included in the housing element. The planning agency of a city or county submits a draft housing element or an amendment to a housing element to HCD for review prior to adopting it. HCD is required to review the housing element or an amendment and may consult with any public agency, group, or person. The department then makes written findings as to whether or not the draft element or amendment substantially complies with state law. If HCD finds that the housing element or amendment does not substantially comply the local government can either change it to substantially comply or adopt it without any changes along with a resolution detailing why the local government believes that it is in compliance. A local government submits its final housing element to HCD and the department is required with in ninety days to review the final housing element and report its findings to the planning agency of the local government.

1. Creating more accountability. Some communities do not comply with housing element requirements. State law requires HCD to review each community’s housing element for compliance with state requirements and in recent years, HCD has found that most (around 80%) housing elements comply with state laws. A minority of communities, however, have either adopted a noncompliant housing element or failed to submit their housing element to HCD for timely review. Communities without an approved housing element face limited ramifications.

A recent HCD report, California’s Housing Future: Challenges and Opportunities, states that there is a lack of implementation and enforcement of planning laws, which has created barriers to housing developments. The lack of enforcement of State housing laws limits the effectiveness of existing planning tools intended to guide and facilitate housing development. The report also states that the primary mechanism to enforce State housing law is through the judicial system. For example, an interested party can legally challenge the actions of local government by filing a lawsuit when a local government’s Housing Element is out of compliance with State law or when a local government denies approval of an affordable housing development. Money, time, and interest are necessary to pursue judicial remedies. In addition, developers are hesitant to seek a judicial remedy in localities where they intend to have future development. The lack of enforcement and lack of consequences for noncompliance with State requirements limits the effectiveness of these laws.

This bill gives the HCD authority to find a locality’s housing element out of substantial compliance if it determines that the locality acts or fails to act in compliance with its housing element and HCD had previously approved the locality’s housing element (ie found the housing element in substantial compliance). Additionally, it requires HCD to refer violations of housing law to the AG.

1. Opposition. The League of California Cities, writing in opposition to a prior version of the bill, asserts that this bill allows HCD to second-guess any action taken by a city or county that it determines is inconsistent with a state approved housing element, the HAA, or a number of other housing related laws, which could slow down construction. Additionally, the opposition writes that this bill grants HCD the right to review “any action or failure to act by the city, county, or city and county that it determines inconsistent with an adopted housing element” but fails to explain how HCD is supposed to determine that an action is inconsistent with the law in the first place.

Assembly Votes:

Floor: 58-19

Appr: 13-4

H&CD: 6-1

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

POSITIONS: (Communicated to the committee before noon on Wednesday,

July 5, 2017.)

SUPPORT:

California Housing Consortium (Co-Sponsor)

California Rural Legal Assistance Foundation (Co-Sponsor)

Western Center on Law & Poverty (Co-Sponsor)

Bay Area Council

Bridge Housing

California Apartment Association

California Association of Realtors

California Commission on Aging

California Council for Affordable Housing

LeadingAge California

OPPOSITION:

League of California Cities (prior version)

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 72

Author:(Santiago and Chiu)

As Amended Ver:May 30, 2017

Majority vote

SUMMARY: Gives the Department of Housing and Community Development (HCD) authority to find a city's, county's, or city's and county's housing element out of substantial compliance if it determines that the city, county, or city and county acts or fails to act in compliance with its housing element, and requires HCD to refer violations of law to the Attorney General (AG). Specifically, this bill:

1. Requires HCD to review any action or failure to act by a city, county, or city and county that it determines is inconsistent with the following:
2. An adopted housing element;
3. Its inventory of sites suitable to accommodate the city's, county's, or city's and county's regional housing needs assessment (RNHA); and
4. A program to rezone sites to meet the city's, county's, or city's and county's RNHA.
5. Allows HCD to revoke its findings that a housing element or an amendment to the housing element is in substantial compliance, until the city, county, or city and county comes into compliance, if it determines that an action or failure to act by a city, county, or city and county does not substantially comply with housing element law.
6. Allows HCD to consult with and to receive any written comments from a city, county, or city and county, public agency, group or person regarding a city's, county's, or city's and county's action or failure to act to determine whether or not a housing element is in substantial compliance with housing element law.
7. Requires HCD to notify the local government and the Office of the Attorney General (AG) that the city, county, or city and county has violated state law if the department finds that the housing element or an amendment to the element, or any action or failure to act pursuant to 1) or that any city, county, or city and county has taken an action in violation of the following:
8. The Housing Accountability Act (Government Code Section 65589.5);
9. Least Cost Zoning Law (Government Code Section 65913);
10. No-net-loss-in zoning density law limiting downzoning and density reductions (Government Code Section 65863);
11. Density Bonus Law (Government Code Section 65913);
12. Local Surplus Lands Act (Government Code Section 54220)
13. Prohibiting discrimination against affordable housing (Government Code Section 65008); and
14. Amendment or cancellation of a development agreement between a city and a developer (Government Code Section 65868).

FISCAL EFFECT: According to the Assembly Appropriations Committee:

1. Appropriates an unspecified amount of money from the General Fund, potentially in the millions of dollars, to the AG for housing law enforcement.
2. Costs to HCD, likely in the low hundreds of thousands of dollars (GF) annually, to review local actions, make determinations, and notify the AG of violations.

COMMENTS:

Background: Every local government is required to prepare a housing element as part of its general plan. The housing element process starts when HCD determines the number of new housing units a region is projected to need at all income levels (very low-, low-, moderate-, and above-moderate income) over the course of the next housing element planning period to accommodate population growth and overcome existing deficiencies in the housing supply. This number is known as the RHNA. The COG for the region, or HCD for areas with no COG, then assigns a share of the RHNA number to every city and county in the region based on a variety of factors.

The housing element must show how the city or county plans to accommodate its share of the RHNA. The housing element must include an inventory of sites already zoned for housing. If a community does not have enough sites within its existing inventory of residentially zoned land to accommodate its entire RHNA, then the community must adopt a program to rezone land within the first three years of the planning period.

HCD adopts guidelines advising a local government on how to prepare its housing element and requirements for what is included in the housing element. The planning agency of a city or county submits a draft housing element or an amendment to a housing element to HCD for review prior to adopting it. HCD is required to review the housing element or an amendment and may consult with any public agency, group, or person. The department then makes written findings as to whether or not the draft element or amendment substantially complies with state law. If HCD finds that the housing element or amendment does not substantially comply the local government can either change it to substantially comply or adopt it without any changes along with a resolution detailing why the local government believes that it is in compliance. A local government submits its final housing element to HCD and the department is required with in ninety days to review the final housing element and report its findings to the planning agency of the local government. Staff's research indicates that 88% of housing elements in the last review cycle were found in compliance.

Additional enforcement authority: This bill would allow HCD, during the planning period, to revoke a finding that a local government's housing element complies with housing element law based on any action or failure to act that it finds is inconsistent with housing element law. As an example, if HCD found that a local government downzoned a site listed in the housing element inventory of sites and the site can no longer accommodate the level of housing needed to meet local governments RNHA, HCD could make findings to revoke their original finding of substantial compliance. If HCD finds a violation of law either in a local government's action or failure to act in regards to its housing element or a list of other state housing laws, it would be required to notify the local government. In addition, HCD would be required to refer a violation of housing element law as well as a list of other state housing laws to the AG. The AG has authority under existing law to enforce state law; AB 72 would create a process for HCD to identify violations of law that warrant prosecution by the state's attorney. It is staff's understanding that HCD would be required to pay for the cost of any lawsuit initiated by the AG on its behalf.

Cities are impacted in several ways if their housing element is out of compliance. Most state funding sources for affordable housing require a local government to have an approved housing element to qualify. In addition, a local government can be sued if it doesn't have an approved housing element.

The sponsors write in support of AB 72, "California has established a robust set of laws to foster the development of housing at all income levels. However, as noted in HCD's draft statewide housing assessment, California's Housing Future: Challenges and Opportunities, the lack of enforcement of state housing laws limits the effectiveness of existing planning tools intended to promote housing development.' The report also notes that this lack of enforcement is a barrier and constraint to housing development. AB 72 strengthens the state's ability to enforce laws that require local governments to achieve housing goals"

Analysis Prepared by: Lisa Engel / H. & C.D. / (916) 319-2085 FN: 0000884

Date of Hearing: May 10, 2017

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez Fletcher, Chair

ABPCA Bill Id:AB 72

Author:(Santiago) – As Amended Ver:April 17, 2017

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY: This bill gives the Department of Housing and Community Development (HCD) authority to find a city or county housing element out of substantial compliance if it determines that the local government acted or failed to act in compliance with its housing element; requires HCD to refer violations of law to the Attorney General (AG); and appropriates funds to the AG to enforce state housing laws. Specifically, this bill:

1. Requires HCD to review any action or failure to act by a city, county, or city and county that it determines is inconsistent with the following:
2. An adopted housing element;
3. Its inventory of sites suitable to accommodate the city or county's regional housing needs assessment (RNHA); and
4. A program to rezone sites to meet the city or county's RNHA.
5. Allows HCD to revoke its findings that a housing element or an amendment to the housing element is in substantial compliance, until the local government comes into compliance, as specified.
6. Requires HCD to notify the local government and the AG that the city or county has violated state law as specified.
7. Appropriates an unspecified amount of money to the AG to fund enforcement of housing laws as specified, and requires the AG to annually report to the Legislature on the expenditure of the funds.

FISCAL EFFECT:

1. Appropriates an unspecified amount of money from the General Fund, potentially in the millions of dollars, to the AG for housing law enforcement.
2. Costs to HCD, likely in the low hundreds of thousands of dollars (GF) annually, to review local actions, make determinations, and notify the AG of violations.

COMMENTS:

1. Purpose. The intent of this bill is to ensure greater enforcement of existing state housing laws. The sponsors write in support, "California has established a robust set of laws to foster the development of housing at all income levels. However, as noted in HCD's draft statewide housing assessment, California's Housing Future: Challenges and Opportunities, the lack of enforcement of state housing laws limits the effectiveness of existing planning tools intended to promote housing development.' The report also notes that this lack of enforcement is a barrier and constraint to housing development. AB 72 strengthens the state's ability to enforce laws that require local governments to achieve housing goals"
2. Background. Every city and county is required to prepare a housing element as part of its general plan. HCD adopts guidelines on how to prepare a housing element and requirements for what is included in the housing element. The planning agency of a city or county submits a draft housing element or an amendment to a housing element to HCD for review prior to adopting it.

HCD is required to review the housing element, or an amendment, and may consult with any public agency, group, or person. HCD then makes written findings as to whether or not the draft element, or amendment, substantially complies with state law. If HCD finds that the housing element, or amendment, does not substantially comply, the local government can either change it to substantially comply or adopt it without any changes along with a resolution detailing why the local government believes that it is in compliance. At end of the process, a local government submits its final housing element to HCD, and the department is required within ninety days to review the final housing element and report its findings to the planning agency of the local government.

Most state funding sources for affordable housing require a local government to have an approved housing element to qualify. Data indicates that 88% of housing elements in the last review cycle were found in compliance.

1. Arguments in Support. Housing advocates assert that the lack of enforcement of state housing laws limits the effectiveness of existing planning tools intended to promote housing development.
2. Arguments in Opposition. Cities are supportive of providing increased funding, but are concerned with the broad unreviewable powers granted to HCD under the bill to determine violations of state law and revoke a finding of substantial compliance.

Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081

Date of Hearing: April 26, 2017

ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT

David Chiu, Chair

ABPCA Bill Id:AB 72 (

Author:Santiago) – As Amended Ver:April 17, 2017

SUBJECT: Housing

SUMMARY: Gives the Department of Housing and Community Development (HCD) authority to find a city's, county's, or city's and county's housing element out of substantial compliance if it determines that the city, county, or city and county acts or fails to act in compliance with its housing element, requires HCD to refer violations of law to the Attorney General (AG), and appropriates funds to the AG to enforce state housing laws. Specifically, this bill:

1. Requires HCD to review any action or failure to act by a city, county, or city and county that it determines is inconsistent with the following:
2. An adopted housing element;
3. Its inventory of sites suitable to accommodate the city's, county's, or city's and county's regional housing needs assessment (RNHA); and
4. A program to rezone sites to meet the city's, county's, or city's and county's RNHA.
5. Allows HCD to revoke its findings that a housing element or an amendment to the housing element is in substantial compliance, until the city, county, or city and county comes into compliance, if it determines that an action or failure to act by a city, county, or city and county does not substantially comply with housing element law.
6. Allows HCD to consult with and to receive any written comments from a city, county, or city and county, public agency, group or person regarding a city's, county's, or city's and county's action or failure to act to determine whether or not a housing element is in substantial compliance with housing element law.
7. Requires HCD to notify the local government and the Office of the Attorney General (AG) that the city, county, or city and county has violated state law if the department finds that the housing element or an amendment to the element, or any action or failure to act pursuant to 1) or that any city, county, or city and county has taken an action in violation of the following:
8. The Housing Accountability Act (Government Code Section 65589.5);
9. Least Cost Zoning Law (Government Code Section 65913);
10. No-net-loss-in zoning density law limiting downzoning and density reductions (Government Code Section 65863);
11. Density Bonus Law (Government Code Section 65913);
12. Local Surplus Lands Act (Government Code Section 54220)
13. Prohibiting discrimination against affordable housing (Government Code Section 65008); and
14. Amendment or cancellation of a development agreement between a city and a developer (Government Code Section 65868).
15. Appropriates an unspecified amount of money to the AG to fund enforcement of the following housing laws:
16. Housing element law focusing on jurisdictions that have failed to adopt a housing element or failed to implement a rezoning program to comply with the rezoning requirements of law;
17. The Housing Accountability Act (Government Code Section 65589.5);
18. Least Cost Zoning Law (Government Code Section 65913);
19. No-net-loss-in zoning density law limiting downzoning and density reductions (Government Code Section 65863);
20. Density Bonus Law (Government Code Section 65913);
21. Local Surplus Lands Act (Government Code Section 54220);
22. Prohibiting discrimination against affordable housing (Government Code Section 65008); and
23. Amendment or cancellation of a development agreement between a city and a developer (Government Code Section 65868)

EXISTING LAW:

Under Housing Element Law:

1. Requires every city and county to prepare and adopt a general plan containing seven mandatory elements, including a housing element.
2. Requires that city, county, or city and county zone sites adequate to accommodate its RNHA, facilitate the development of affordable housing by the administration of land use and development controls and the provision of regulatory concessions and incentives to significantly reduce housing development costs.
3. Requires a locality's housing element to identify and analyze existing and projected housing needs, identify adequate sites with appropriate zoning to meet the housing needs of all income segments of the community, and ensure that regulatory systems provide opportunities for, and do not unduly constrain, housing development.
4. Requires, prior to each housing element revision, that each council of governments (COG), in conjunction with the HCD, prepare a regional housing needs assessment and allocate to each jurisdiction in the region its fair share of the housing need for all income categories. Where a COG does not exist, HCD determines the local share of the region's housing need (Govt. Code Sections 65584-65584.09).
5. Divides the RHNA into the following income categories:
6. Very low-income (50% or lower of area median income), including extremely low-income (30% or lower of area median income);
7. Low-income (80% or lower of area median income);
8. Moderate-income (between 80% and 120% of area median income); and
9. Above moderate-income (exceeding 120% area median income).
10. Requires a locality to inventory land suitable for residential development to identify sites that can be developed to meet the locality's RHNA for all income levels. Provides that "land suitable for residential development" includes all of the following:
11. Vacant sites zoned for residential use;
12. Vacant sites zoned for nonresidential use that allows residential development;
13. Residentially zoned sites that are capable of being developed at higher density, including the airspace above sites owned or leased by a city, county, or city and county;
14. Sites zoned for nonresidential use that can be redeveloped for and as necessary, rezoned for, residential use, including above sites owned or leased by a city, county, or city and county.
15. Provides that the inventory of land suitable for residential development shall include all of the following:
16. A listing of properties by parcel number or other unique reference.
17. The size of each property, and the general plan designation and zoning of each property.
18. For nonvacant sites, a description of the existing use of each property.
19. A general description of any environmental constraints to the development of housing within the jurisdiction, the documentation for which has been made available to the jurisdiction. This information need not be identified on a site-specific basis.
20. A general description of existing or planned water, sewer, and other dry utilities supply, including the availability and access to distribution facilities. This information need not be identified on a site-specific basis.
21. Sites identified as available for housing for above moderate-income households in areas not served by public sewer systems. This information need not be identified on a site-specific basis.
22. A map that shows the location of the sites included in the inventory, such as the land use map from the jurisdiction’s general plan, for reference purposes only.
23. Allows a locality to do either of the following in order to show that a site is adequate to accommodate some portion of its share of the RHNA for lower-income households:
    1. Provide an analysis demonstrating that the site is adequate to support lower-income housing development at its zoned density level, and requires the analysis to include, but not be limited to, factors such as market demand, financial feasibility, or information based on development project experience within a zone or zones that provide housing for lower income households; or
    2. Zone the site at the jurisdiction's "default" density level.

(Govt. Code Section 65583.2)

1. Establishes "default" density levels for purposes of establishing a site's adequacy for supporting lower-income housing development.
2. Requires that, where the inventory of sites does not identify adequate sites to accommodate the need for groups of all household income levels, rezoning of those sites, including adoption of minimum density and development standards, is required by a specified deadline. (Govt. Code Section 65583)
3. Requires the rezoning program to accommodate 100% of the need for housing for very low- and low-income households for which site capacity has not been identified in the inventory of sites. These sites must:
4. Be zoned to permit owner-occupied and rental multifamily residential use by-right during the planning period;
5. Be zoned with minimum density and development standards that permit between 16 and 20 units per acre, depending on the jurisdiction; and
6. Accommodate at least 50% of the very low- and low-income housing need on sites designated for residential use and for which nonresidential uses or mixed-uses are not permitted, except that a city or county may accommodate all of the very low and low-income housing need on sites designated for mixed uses if those sites allow 100% residential use and require that residential use occupy 50% of the total floor area of a mixed-use project.

(Govt. Code Section 65583.2)

Under the Housing Accountability Act:

1. Defines “housing development project” to mean a use consisting of any of the following:
   1. Residential units only.
   2. Mixed-use developments consisting of residential and nonresidential uses as specified.
   3. Transitional housing or supportive housing.
2. Defines “disapprove the development project” to include any instance in which a local agency either:
   1. Votes on a proposed housing development project and the application is disapproved; or
   2. Fails to comply with the required time period for approval or disapproval required by law.
3. Defines “housing for very low-, low-, or moderate-income households” as either:
   1. At least 20% of the total units shall be sold or rented to lower-income households; or

• 1. 100% of the units shall be sold or rented to persons and families of moderate-income or middle-income.

1. Defines “very low-income” as persons and families whose income does not exceed 50% area median income (AMI).
2. Defines “low-income” as persons and families whose income does not exceed 80% AMI.
3. Defines “moderate-income” as persons and families whose income does not exceed 120% of AMI.
4. Defines “above moderate-income” as persons and families whose income exceeds 120% of AMI.
5. Prohibits a local agency from disapproving a proposed housing development project for very low-, low-, or moderate-income households or an emergency shelter, or conditioning approval in a manner that renders the project infeasible for development, unless it makes written findings based upon substantial evidence in the record, as to one of the following:
   1. The jurisdiction has adopted and revised its housing element as required by law and has met its share of the regional housing need allocation.
   2. The proposed development project would have a specific adverse impact upon public health or safety that cannot be mitigated without rendering the development unaffordable or shelter infeasible.
   3. The denial of the proposed development project is required to comply with specific state or federal law and there is no feasible method to comply without rendering the development unaffordable or shelter infeasible.
   4. The development project or emergency shelter is proposed on land that does not have adequate water or waste water facilities, or is zoned for agriculture or resource preservation as specified.
   5. The proposed development project or emergency shelter is inconsistent with both the jurisdiction’s zoning ordinance and general plan land use designation as specified in any element of the general plan as it existed on the date the application was deemed complete.
6. Provides that when a proposed housing development project complies with applicable, objective general plan and zoning standards and criteria, including design review standards, in effect at the time that the housing development project’s application is determined to be complete, but the local agency proposes to disapprove the project or to approve it upon the condition that the project be developed at a lower density, the local agency shall base its decision regarding the proposed housing development project upon written findings supported by substantial evidence on the record that both of the following conditions exist: 
   1. The housing development project would have a specific, adverse impact upon the public health or safety unless the project is disapproved or approved upon the condition that the project be developed at a lower density. As used in this paragraph, a “specific, adverse impact” means a significant, quantifiable, direct, and unavoidable impact, based on objective, identified written public health or safety standards, policies, or conditions as they existed on the date the application was deemed complete; and
   2. There is no feasible method to satisfactorily mitigate or avoid the adverse impact identified pursuant to a), above, other than the disapproval of the housing development project or the approval of the project upon the condition that it be developed at a lower density.
7. Requires, if a jurisdiction denies approval or imposes restrictions that have a substantial adverse effect on the viability or affordability of a housing development for very low-, low-, or moderate-income households and is the subject of a court action which challenges the denial, the burden of proof to be on the local legislative body.
8. Requires, in any action taken to challenge the validity of a decision by a jurisdiction to disapprove a project or approve a project upon the condition that it be developed at a lower density, the local government shall bear the burden of proof that its decision has conformed to all of the conditions specified in the HAA.
9. Authorizes the applicant, any person who would be eligible to apply for residency in the proposed development or emergency shelter, or a housing organization to bring an action to enforce the HAA.

(Govt. Code Section 65589.5)

FISCAL EFFECT: Unknown.

COMMENTS:

Background: Every local government is required to prepare a housing element as part of its general plan. The housing element process starts when HCD determines the number of new housing units a region is projected to need at all income levels (very low-, low-, moderate-, and above-moderate income) over the course of the next housing element planning period to accommodate population growth and overcome existing deficiencies in the housing supply. This number is known as the RHNA. The COG for the region, or HCD for areas with no COG, then assigns a share of the RHNA number to every city and county in the region based on a variety of factors.

The housing element must show how the city or county plans to accommodate its share of the RHNA. The housing element must include an inventory of sites already zoned for housing. If a community does not have enough sites within its existing inventory of residentially zoned land to accommodate its entire RHNA, then the community must adopt a program to rezone land within the first three years of the planning period.

HCD adopts guidelines advising a local government on how to prepare its housing element and requirements for what is included in the housing element. The planning agency of a city or county submits a draft housing element or an amendment to a housing element to HCD for review prior to adopting it. HCD is required to review the housing element or an amendment and may consult with any public agency, group, or person. The department then makes written findings as to whether or not the draft element or amendment substantially complies with state law. If HCD finds that the housing element or amendment does not substantially comply the local government can either change it to substantially comply or adopt it without any changes along with a resolution detailing why the local government believes that it is in compliance. A local government submits its final housing element to HCD and the department is required with in ninety days to review the final housing element and report its findings to the planning agency of the local government. Staff's research indicates that 88% of housing elements in the last review cycle were found in compliance.

Additional enforcement authority: This bill would allow HCD, during the planning period, to revoke a finding that a local government's housing element complies with housing element law based on any action or failure to act that it finds is inconsistent with housing element law. As an example, if HCD found that a local government downzoned a site listed in the housing element inventory of sites and the site can no longer accommodate the level of housing needed to meet local governments RNHA, HCD could make findings to revoke their original finding of substantial compliance. If HCD finds a violation of law either in a local government's action or failure to act in regards to its housing element or a list of other state housing laws, it would be required to notify the local government. In addition, HCD would be required to refer a violation of housing element law as well as a list of other state housing laws to the AG. The AG has authority under existing law to enforce state law; AB 72 would create a process for HCD to identify violations of law that warrant prosecution by the state's attorney. It is staff's understanding that HCD would be required to pay for the cost of any lawsuit initiated by the AG on its behalf.

Cities are impacted in several ways if their housing element is out of compliance. Most state funding sources for affordable housing require a local government to have an approved housing element to qualify. In addition, a local government can be sued if it doesn't have an approved housing element.

Arguments in support: The sponsors write in support of AB 72, " California has established a robust set of laws to foster the development of housing at all income levels. However, as noted in HCD's draft statewide housing assessment, California's Housing Future: Challenges and Opportunities, the lack of enforcement of state housing laws limits the effectiveness of existing planning tools intended to promote housing development.' The report also notes that this lack of enforcement is a barrier and constraint to housing development. AB 72 strengthens the state's ability to enforce laws that require local governments to achieve housing goals"

Support if amended: The American Planning Association, California Chapter (APA California) has a support if amended position on AB 72. APA California supports the new enforcement authority for the Attorney General if the enforcement is limited to clear violations of law but is concerned that the authority given to HCD to find a city out of compliance is too broad and should be limited to failures to complete required rezoning and adequate sites. Additionally, APA California contends that the housing element guidelines are not subject to the Administrative Procedures Act to provide an opportunity for review and comment and to challenge regulations not in compliance with the statute.

Staff comments: The intent of this bill is insure greater enforcement of existing state housing laws, of which there are many. As currently written, the bill would require HCD to refer any violation of law it identifies to the AG for review. The committee may wish to amend the bill to give HCD authority but not require it to refer violations to the Attorney General. In addition, the committee may also wish to consider if the local government should be given an opportunity to correct a violation, with a strict timeline, before HCD refers a violation to the AG.

REGISTERED SUPPORT / OPPOSITION:

Support

California Housing Consortium (co-sponsor)

California Rural Legal Assistance Foundation (co-sponsor)

Western Center on Law and Poverty (co-sponsor)

American Planning Association, California Chapter (support if amended)

Bay Area Council

California Apartment Association

California Commission on Aging

California Council for Affordable Housing

LeadingAge California

Opposition

None on file

Analysis Prepared by: Lisa Engel / H. & C.D. / (916) 319-2085