Date of Hearing: April 22, 2019

ASSEMBLY COMMITTEE ON NATURAL RESOURCES

Laura Friedman, Chair

ABPCA Bill Id:AB 490 (

Author:Salas) – As Amended Ver:April 11, 2019

SUBJECT: California Environmental Quality Act: affordable housing development projects: administrative and judicial streamlining

SUMMARY: Establishes special administrative and judicial review procedures under the California Environmental Quality Act (CEQA) for “qualified projects” (affordable housing projects in housing cost-burdened counties, as defined), including requiring the courts to resolve CEQA lawsuits on qualified projects within 270 days to the extent feasible from the date the certified record of proceedings is filed with the court.

EXISTING LAW:

1. CEQA requires lead agencies with the principal responsibility for carrying out or approving a proposed project to prepare a negative declaration, mitigated negative declaration, or environmental impact report (EIR) for this action, unless the project is exempt from CEQA (CEQA includes various statutory exemptions, as well as categorical exemptions in the CEQA guidelines).
   
2. Authorizes judicial review of CEQA actions taken by public agencies, following the agency's decision to carry out or approve the project. Challenges alleging improper determination that a project may have a significant effect on the environment, or alleging an EIR doesn't comply with CEQA, must be filed in the Superior Court within 30 days of filing of the notice of approval. The courts are required to give CEQA actions preference over all other civil actions.
3. Pursuant to AB 900 (Buchanan), Chapter 354, Statutes of 2011, establishes procedures for expedited judicial review (i.e., requiring the courts to resolve lawsuits within 270 days, to the extent feasible) for "environmental leadership" projects certified by the Governor and meeting specified conditions, including LEED gold-certified infill site projects achieving transportation efficiency 15 percent greater than comparable projects and zero net additional greenhouse gas (GHG) emissions. AB 900 sunsets January 1, 2021.
4. Exempts from CEQA any residential development project, including any subdivision, or any zoning change that is undertaken to implement and is consistent with a specific plan for which an EIR has been certified after January 1, 1980, unless substantial changes or new information require the preparation of a supplemental EIR for the specific plan, in which case the exemption applies once the supplemental EIR is certified.
5. Exempts from CEQA specified residential housing projects which meet detailed criteria established to ensure the project does not have a significant effect on the environment. [SB 1925 (Sher), Chapter 1039, Statutes of 2002] The SB 1925 exemptions are available to:
   
   1. Affordable agricultural housing projects not more than 45 units within a city, or 20 units within an agricultural zone, on a site not more than five acres in size;
      
   2. Urban affordable housing projects not more than 100 units on a site not more than five acres in size; and,
      
   3. Urban infill housing projects not more than 100 units on a site not more than four acres in size which is within one-half mile of a major transit stop.
6. Requires metropolitan planning organizations (MPOs) to include a sustainable communities strategy (SCS), as defined, in their regional transportation plans, or an alternative planning strategy (APS), for the purpose of reducing GHG emissions, aligns planning for transportation and housing, and creates specified incentives for the implementation of the strategies, including CEQA exemption or abbreviated review for residential or mixed-use residential "transit priority projects" if the project is consistent with the use designation, density, building intensity, and applicable policies specified for the project area in either an approved SCS or APS. [SB 375 (Steinberg), Chapter 728, Statutes of 2008]
   
7. Establishes abbreviated CEQA review procedures for specified infill projects, where only specific or more significant effects on the environment which were not addressed in a prior planning-level EIR need be addressed. An EIR for such a project need not consider alternative locations, densities, and building intensities or growth-inducing impacts. Infill projects may include residential, retail, commercial, transit station, school, or public office building projects located within an urban area. [SB 226 (Simitian), Chapter 469, Statutes of 2011] SB 226 requires the Office of Planning and Research (OPR) to develop CEQA guidelines to implement its infill provisions, including statewide standards to promote smart growth, reduction of GHG emissions, reduction in water use, energy efficiency improvements and protection of public health.
8. Exempts from CEQA residential, mixed-use, and "employment center" projects, as defined, located within "transit priority areas," as defined, if the project is consistent with an adopted specific plan and specified elements of an SCS or APS adopted pursuant to SB 375. [SB 743 (Steinberg), Chapter 386, Statutes of 2013]
9. Establishes a ministerial approval process (i.e., not subject to CEQA) for certain multifamily affordable housing projects that are proposed in local jurisdictions that have not met regional housing needs. [SB 35 (Wiener), Chapter 366, Statutes of 2017]
10. Authorizes a city or county to establish a Workforce Housing Opportunity Zone (WHOZ) by preparing an EIR and by adopting a specific plan. Once a WHOZ is established, and for five years thereafter, requires approval of eligible housing developments within a WHOZ within 60 days without requiring the preparation of an EIR or negative declaration under CEQA. [SB 540 (Roth), Chapter 369, Statutes of 2017]
11. Authorizes a city or county to create a "housing sustainability district" (HSD) to complete upfront zoning and environmental review in order to receive incentive payments for residential and mixed-use development projects with an affordable housing component. Requires the city or county to prepare an EIR when designating an HSD, then "housing projects" within, and consistent with, a designated HSD are exempt from CEQA. [AB 73 (Chiu), Chapter 371, Statutes of 2017]
12. Exempts from CEQA multi-family residential and mixed-use housing projects on infill sites within cities and unincorporated areas that are within the boundaries of an urbanized area or urban cluster. [AB 1804 (Berman), Chapter 670, Statutes of 2018]

THIS BILL:

1. Defines “qualified project” as follows:
   1. The project creates high-wage, highly skilled jobs that pay living wages and provide construction jobs and helps reduce unemployment in California.
   2. The project does not result in any net additional GHG emission as determined by the Air Resources Board (ARB).
   3. The project applicant has entered into a binding and enforceable agreement that all mitigation measures and other measures required pursuant to CEQA to certify an EIR or to adopt a mitigated negative declaration for the project shall be conditions of approval of the project and that those conditions will be fully enforceable by the lead agency or another agency designated by the lead agency. In case of environmental mitigation measures, the applicant agrees, as an ongoing obligation, that those measures will be monitored and enforced by the lead agency for the life of the obligation.
   4. The project is an affordable housing development.
   5. The project’s total housing units are designated to be 25% to 50% affordable housing.
   6. The project is located within a county where 10% or more of residents are considered severely housing cost burdened, as defined by the California Budget and Policy Center and as identified by the Department of Housing and Community Development.
2. Requires the courts to resolve CEQA lawsuits on qualified projects within 270 days to the extent feasible from the date the certified record of proceedings is filed with the court.

FISCAL EFFECT: Unknown

COMMENTS:

1. CEQA exemptions for housing. CEQA includes various statutory exemptions, as well as categorical exemptions in the CEQA Guidelines, for housing projects. For example, any residential development project, including any subdivision, or any zoning change that is consistent with an adopted specific plan is exempt from CEQA pursuant to a statute enacted in 1984.

In 2002, SB 1925 established CEQA exemptions for certain residential projects providing affordable urban or agricultural housing, or located on an infill site within an urbanized area, and meeting specified unit and acreage criteria.

Since SB 1925, additional legislation has provided CEQA exemptions and streamlining for residential (including, but not limited to, affordable housing) and certain other projects in infill areas. SB 375 provided a CEQA exemption for a narrow set of eligible residential projects in infill areas adjacent to transit. SB 226 provided abbreviated CEQA review procedures for a broader set of urban infill projects, including retail, commercial, and public buildings. SB 743 established a new exemption for residential, mixed-use and "employment center" projects located within one-half mile of a major transit stop, if the project is consistent with an adopted specific plan and specified elements of an SB 375 strategy. SB 743 also required OPR to propose revisions to the CEQA Guidelines for transportation impacts to better support infill development.

In 2017, the Legislature passed three bills to streamline the CEQA process for affordable housing projects. SB 35 established a ministerial approval process (i.e., not subject to CEQA) for certain multifamily affordable housing projects that are proposed in local jurisdictions that have not met regional housing needs. SB 540 authorizes a city or county to establish a WHOZ by preparing an EIR and by adopting a specific plan. Once a WHOZ is established, and for five years thereafter, eligible housing developments within a WHOZ must be approved within 60 days without requiring the preparation of an EIR or negative declaration under CEQA. AB 73 authorizes a city or county to create an HSD to complete upfront zoning and environmental review in order to receive incentive payments for residential and mixed-use development projects with an affordable housing component. Once the city or county has prepared an EIR for the HSD, then housing projects within, and consistent with, a designated HSD are exempt from CEQA. In 2018, AB 1804 codified an existing categorical exemption for infill projects, expanding the exemption to apply to multi-family residential and mixed-use housing projects on infill sites in unincorporated urbanized areas or urban clusters.

1. CEQA judicial review. CEQA is enforced through judicial review. CEQA actions taken by public agencies can be challenged in Superior Court once the agency approves or determines to carry out the project. CEQA appeals are subject to unusually short statutes of limitations. Under current law, court challenges of CEQA decisions generally must be filed within 30 to 35 days, depending on the type of decision. The courts are required to give CEQA actions preference over all other civil actions. The petitioner must request a hearing within 90 days of filing the petition and, generally, briefing must be completed within 90 days of the request for hearing. There is no deadline specified for the court to render a decision.

In 2011, AB 900 and SB 292 (Padilla), Chapter 353, Statutes of 2011, established expedited CEQA judicial review procedures for a limited number of projects. For AB 900, it was large-scale projects meeting extraordinary environmental standards and providing significant jobs and investment. For SB 292, it was a proposed downtown Los Angeles football stadium and convention center project achieving specified traffic and air quality mitigations. For these eligible projects, the bills provided for original jurisdiction by the Court of Appeal and a compressed schedule requiring the court to render a decision on any lawsuit within 175 days. This promised to reduce the existing judicial review timeline by 100 days or more, while creating new burdens for the courts and litigants to meet the compressed schedule. AB 900's provision granting original jurisdiction to the Court of Appeal was invalidated in 2013 by a decision in Alameda Superior Court in Planning and Conservation League v. State of California. AB 900 was subsequently revised to restore jurisdiction to superior courts and require resolution of lawsuits within 270 days.

1. Author’s statement:

Since its inception, CEQA has become the primary tool for environmental concerns around the state to legally challenge development that may do disproportionate harm to surrounding ecosystems. While CEQA has given voice to the public when defending the environment, it has also become weaponized by special interest groups to accomplish objectives that are unrelated to protecting the environment. With California in the midst of an enormous housing crisis and Governor Newsom aiming to build 3.5 million new housing units, every tool at the state’s disposal will need to be utilized to meet these ambitious goals. While the Legislature sometimes exempts specific projects from CEQA’s lengthy judicial reviews, these designations are usually granted to major stadium projects, not other developments such as affordable housing that will have a direct impact on our current housing crisis. This bill would help streamline desperately needed affordable housing projects that are 25-50% affordable in counties that require it most. Specifically, AB 490 would apply to counties where 10% or more of the population are considered severely housing-cost burdened which is defined as a household spending 50% or more of their income on rent or housing costs. This bill would help increase California’s affordable housing supply and move the state closer towards meeting our ambitious housing goals.

1. All 58 counties appear to meet the housing cost burden condition. This bill requires eligible projects to be located within a county where 10% or more of residents are considered severely housing cost burdened, as defined by the California Budget and Policy Center and as identified by the Department of Housing and Community Development. Severe housing cost burden is defined as households paying more than 50% of household income toward housing costs, including rent, homeownership costs, and utilities.

Data provided by the California Budget and Policy Center indicates that every county in California meets this condition, ranging from Napa County at 14.4% to Los Angeles County at 25.1%. This data underscores that every county has communities that need affordable housing, a fact that has been recognized and addressed on many fronts in recent years by the Legislature. As referenced above, the 2017 housing package included three bills with new exemptions for affordable housing, as well as bonds and other measures to assist development of affordable housing.

1. No definition of affordable housing. Affordable housing bills typically include eligibility conditions regarding maximum income level and minimum term of income-based deed restrictions for either rental or owner-occupied housing. This bill includes no definition of affordable housing, presumably leaving it to the lead agency to determine what affordable means.
2. Apples and oranges. Under current law, the 270-day judicial review applies to a handful of very large projects that know they have to prepare an EIR, expect to be sued, and are prepared to commit to extraordinary environmental standards over and above what CEQA requires. Unlike AB 900 and several related project-specific bills, this bill doesn’t require a project to meet comparable environmental requirements, and doesn’t even require the project to be reviewed under CEQA.

It’s misguided to suggest the same standard that applies to AB 900 projects should apply to affordable housing projects because (1) the housing projects typically are not required to prepare an EIR, (2) it would be unreasonable to expect a small affordable housing project to meet the LEED certification, GHG mitigation, and other conditions required of environmental leadership projects, and (3) there is no evidence that protracted litigation is a significant factor stalling the development of affordable housing.

REGISTERED SUPPORT / OPPOSITION:

Support

Burbank Housing
California Apartment Association
California Association of Realtors
California Chamber of Commerce
Civil Justice Association of California

Opposition

California Judges Association
Center for Biological Diversity
Center on Race, Poverty & the Environment
Judicial Council of California
Sierra Club California

Analysis Prepared by: Lawrence Lingbloom / NAT. RES. /