UNFINISHED BUSINESS  

Bill No: SB 330

Author: Skinner (D)

Amended: 8/12/19

Vote: 21

SENATE GOVERNANCE & FIN. COMMITTEE: 6-0, 4/10/19

AYES: McGuire, Beall, Hertzberg, Hurtado, Nielsen, Wiener

NO VOTE RECORDED: Moorlach

SENATE HOUSING COMMITTEE: 8-2, 4/22/19

AYES: Wiener, Caballero, Durazo, McGuire, Roth, Skinner, Umberg, Wieckowski

NOES: Morrell, Bates

NO VOTE RECORDED: Moorlach

SENATE APPROPRIATIONS COMMITTEE: 4-2, 5/16/19

AYES: Portantino, Bradford, Hill, Wieckowski

NOES: Bates, Jones

SENATE FLOOR: 28-7, 5/29/19

AYES: Allen, Archuleta, Atkins, Beall, Bradford, Caballero, Chang, Dodd, Durazo, Galgiani, Hertzberg, Hill, Hueso, Hurtado, Jackson, Leyva, McGuire, Mitchell, Monning, Pan, Portantino, Roth, Rubio, Skinner, Umberg, Wieckowski, Wiener, Wilk

NOES: Bates, Glazer, Grove, Jones, Morrell, Nielsen, Stone

NO VOTE RECORDED: Borgeas, Moorlach, Stern

ASSEMBLY FLOOR: 67-8, 9/5/19 - See last page for vote

SUBJECT: Housing Crisis Act of 2019

SOURCE: Author

DIGEST:

This bill establishes the Housing Crisis Act of 2019, which, until January 1, 2025, places restrictions on certain types of development standards, amends the Housing Accountability Act (HAA), and makes changes to local approval processes and the Permit Streamlining Act.

Assembly Amendments delete a provision allowing property owners to request a delay in enforcement of substandard building violations; delete some restrictions on local government authority; include additional requirements for a preliminary application; clarify that the bill does not affect certain statutes; and make other changes.

ANALYSIS:

Existing law:

1. Requires every city and county to prepare and adopt a general plan, including a housing element, to guide the future growth of a community.
2. Establishes the HAA, which provides that when a proposed housing development project complies with applicable, objective general plan, zoning, and subdivision standards and criteria in effect at the time that the housing development project’s application is complete, but the local agency proposes to disapprove the project or to impose a condition that the project be developed at a lower density, the local agency shall base its decision regarding the proposed housing development project upon specified written findings.
3. Establishes the Permit Streamlining Act, which sets forth the rules for reviewing and processing development applications. Establishes the Mitigation Fee Act, which requires any city that establishes, increases, or imposes a fee as a condition of approval of a development project, as specified.

This bill establishes the Housing Crisis Act of 2019, which, until January 1, 2025, places restrictions on certain types of development standards, amends the HAA, and makes changes to local approval processes and the Permit Streamlining Act. Specifically, this bill:

Restrictions on Local Government

1. Establishes the Housing Crisis Act of 2019, which does the following:
   1. Defines “affected city” to mean a city, including a charter city, that is an urbanized area or urban cluster and defines affected county to mean a census designated place that is wholly located within an urbanized area, as specified, and provides that these terms include the electorate of those jurisdictions.
   2. Requires the Department of Housing and Community Development (HCD) to identify affected cities and counties by June 30, 2020, but allows HCD to update the determination after the 2020 census. This determination remains valid until January 1, 2025.
   3. Prohibits an affected city or county, with respect to land where housing is an allowable use, from enacting a development policy, standard, or condition that would have any of the following effects:
      1. Changing the general plan land use designation, specific plan land use designation, or zoning of a parcel to a less intensive use or reducing the intensity of land use within an existing general plan land use designation, specific plan land use designation, or zoning district below what was allowed under the land use designation and zoning ordinances of the affected county or affected city as in effect January 1, 2018. Less intensive uses means reductions in height, density, floor area ratio, new or increased open space or lot size requirements, or new or increased setback requirements, minimum frontage requirements or maximum lot coverage limitations or anything that would lessen the intensity of housing.
      2. Imposing a moratorium or similar restriction or limitation on housing development, including mixed-use development, within all or a portion of the jurisdiction, other than to specifically protect against an imminent threat to health and safety. An affected city or county cannot enforce a moratorium until HCD approves it.
      3. Imposing or enforcing design review standards established after January 1, 2020, if the standards are not objective.
      4. Limiting the number of land use approvals or permits necessary for the approval and construction of housing that will be issued or allocated within all or a portion of the affected city or county.
      5. Capping the number of housing units that can be approved or constructed either annually or for some other period of time.
      6. Limiting the population of the affected city or county.
   4. Provides that an affected city or county may enforce a limit on a number of approvals or permits or a cap on the number of housing units that can be approved or construction if the limit was approved by voters prior to January 1, 2005, and the affected city or county is located in a predominantly agricultural county, as defined.
   5. Allows an affected city or county to change land use designations or zoning ordinances to allow for less intensive uses if it concurrently changes the density elsewhere to ensure that there is no net loss in residential capacity.
   6. Provides that the above restrictions do not limit specified provisions in existing law law, including the California Coastal Act of 1976 (Coastal Act) and compliant local coastal plans, the California Environmental Quality Act (CEQA), a local policy to develop affordable housing, an urban grown boundary, height limit, or urban limit that complies with other specified provisions of the bill.
   7. Provides an affected city or county may only approve a housing development that requires the demolition of residential units if the project will create at least as many residential dwelling units as will be demolished.
   8. Allows an affected city or county to only approve a housing development that requires the demolition of protected units, as defined, if all the following apply:
      1. The project will replace all existing or demolished protected units, as specified. Those units count towards meeting specified inclusionary housing requirements.
      2. The housing development project will include at least as many residential dwelling units as the greatest number of residential dwelling units that existed on the project site within the last five years.
      3. Existing residents are allowed to occupy their units until six months before the start of construction activities.
      4. The developer agrees to provide: relocation benefits to the occupants of those affordable residential rental units, and a right of first refusal for units available in the new housing development affordable to the household at an affordable rent.
   9. Provides that the requirements in h) do not supersede more protective local ordinances.
   10. Applies the provisions in h) and i) only to housing projects that submit a complete application under the permit streamlining act on or after January 1, 2020.
   11. Exempts from all of the above provisions housing developments in very high fire hazard severity zones, as defined.
   12. Sunsets these provisions on January 1, 2025.

Development Application Processes and Timelines

1. Provides that if a housing development project complies with the applicable objective general plan and zoning standards in effect at the time an application is deemed complete, a city or county shall not conduct more than five hearings as specified, in connection with the approval of that housing development project, consistent with the timelines under the Permit Streamlining Act.
2. Requires the city or county shall consider and either approve or disapprove the application at any of the five hearings.
3. Requires a local government to make a determination of whether the site of a proposed housing project is a historic site when the application is deemed complete under the Permit Streamlining Act, unless any archaeological, paleontological, or tribal cultural resources are encountered during any grading, site disturbance, or building alteration activities, and provides that this requirement does not affect CEQA or the Coastal Act.
4. Establishes a procedure for filing an initial application and provides that a housing development project shall be deemed to have a complete initial application upon providing specified information, as specified.
5. Requires HCD to adopt a standardized form that applicants for housing development projects may use for the purpose of satisfying the requirements for submittal of a complete initial application.
6. Provides that if a project proponent revises the project to change the square footage or number of units by 20% or more, excluding density bonus, the proponent will no longer be deemed to have submitted a preliminary application.
7. Requires a development proponent to submit a full development application within 180 days of the submittal of a preliminary application.
8. Requires, if a development application is determined to be incomplete, the lead agency shall provide the development project applicant with an exhaustive list of items that were not complete. The list shall be limited to those items required on the lead agency’s submittal requirement checklist. In any subsequent review of the application determined to be incomplete, the local agency shall not request the applicant to provide any new information that was not stated in the initial list of items that were not complete. When determining if the application is complete, the local agency must limit its review to determining whether the application includes the missing information.
9. Establishes additional procedures for review, as specified.
10. Reduces the time that a local government has to approve or disapprove an application under the permit streamlining act from 120 to 90 days for a housing project that requires CEQA review and from 90 to 60 days if a housing project is at least 49% affordable units.
11. Sunsets these provisions pertaining to the development application processes and timelines on January 1, 2025.

Housing Accountability Act

1. Prohibits a local agency from applying ordinances, policies, and standards to a development after a preliminary application containing all the required information is submitted.

1. Allows local governments to apply new standards after the preliminary application is submitted in specified circumstances, as follows:
   1. If a fee or exaction is increased automatically for inflation.
   2. A preponderance of the evidence indicates that the development would have a specific, adverse impact on health or safety and there is no feasible alternative to mitigate it.
   3. To mitigate an impact under the California Environmental Quality Act.
   4. Construction has not begun within two and a half years following final approval of the project, as defined.
   5. The project is revised to increase the square footage or number of units by 20 percent, exclusive of density bonus increases.
      
2. Allows a local agency to subject new square footage or units to the ordinances, policies, and standards in effect when the preliminary application is submitted.
   
3. Allows a development applicant, a person who would be eligible to apply for residency in a proposed development, or a housing organization, to file a lawsuit if a local agency requires a housing development project to comply with an ordinance, policy, or standard not adopted and in effect when a preliminary application was submitted.
4. Sunsets these provisions pertaining to the Housing Accountability Act on January 1, 2025.

Comments

1. Purpose of the bill. California is in the midst of a housing crisis. Rents across the state significantly exceed the rest of the United States, and homeownership has fallen to abysmal levels. Demand is clearly high, but builders find themselves unable to meet that demand because of local rules that limit the number of units or simply prohibit building altogether. At a time when housing is so desperately needed, there are some local policies that should just be off limits. SB 330 is a targeted approach that prohibits the most egregious practices in the areas where housing is most needed. It prevents local governments from downzoning unless they upzone elsewhere, and it stops them from changing the rules on builders who are in the midst of going through the approval process. SB 330 also limits the application of design standards that drive up the cost of building. These are not uncontroversial changes, but SB 330 sunsets its provisions so that the Legislature can evaluate its effectiveness. The first rule of holes says that when you’re in one, stop digging: SB 330 applies this principle to one of the state’s greatest challenges.
2. Time marches on. Local governments update their development policies and standards over time to reflect new circumstances within their jurisdiction or to respond to mistakes made in the past. In some cases, this may mean amending those standards while a city or county is actively considering a project for approval. SB 330 freezes in time the standards that were in place when a preliminary application, a new term created in the bill, is filed. But these applications may not include all the information a local government needs to understand a development’s impacts or make a decision on the project. That’s why it’s important to have a completed final application. Should the Legislature prevent new ordinances from applying before a local government has a chance to understand the impacts of a development?

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

According to the Assembly Appropriations Committee:

• HCD indicates first-year costs of $405,000 (GF) and ongoing costs of $374,000 (GF) annually until January 1, 2025, for staff to develop and update guidelines, criteria and forms; identify affected cities and counties; review zoning ordinances for compliance; and provide consultation and technical assistance to local jurisdictions. HCD assumes approximately 400 jurisdictions would qualify as affected cities and counties, and four jurisdictions per year would make zoning ordinance changes that would impose a moratorium or other restriction on development.
• This bill imposes state-mandated new costs on affected local agencies to revise planning requirements for certain developments. These costs are generally not state-reimbursable because local agencies have the authority to charge various fees to offset any increased costs. It is unlikely the Commission on State Mandates would approve any claims for state reimbursement.

SUPPORT: (Verified 9/5/19)

Bay Area Council

BRIDGE Housing

Building Industry Assoc. – Los Angeles/Ventura Chapter

Building Industry Assoc. of Orange County

Building Industry Assoc. of San Diego

Building Industry Assoc. of Southern CA, Baldy View Chapter

Building Industry Association Riverside County Chapter

California Apartment Association

California Association of Realtors

California Building Industry Association

California Business Properties Association

California Business Roundtable

California Community Builders

California Council for Affordable Housing

California Hawaii State Conference of NAACP

CalChamber

California YIMBY

Central City Association of Los Angeles

Chan Zuckerberg Initiative

EAH Housing

East Bay for Everyone

East Bay Housing Organizations

East Bay Leadership Council

East Bay Young Dems

Eden Housing

Emerald Fund

Enterprise

Equality California

Facebook

Hamilton Families

Leading Builders of America

Local Government Commission

Los Angeles Area Chamber of Commerce

Los Angeles Business Council

Midpen Housing Corporation

MLK Freedom Center

Monterey Bay Economic Partnership

Nonprofit Housing Association of North America

Non-Profit Housing Association of Northern CA

North Bay Leadership Council

NRDC

Oakland Chamber of Commerce

PICO

Planning and Conservation League

Related

Salesforce

San Francisco Housing Action Coalition

Santa Cruz YIMBY

Save the Bay

Silicon Valley Community Foundation

SPUR

State Building & Construction Trades Council

SV@Home

Terner Center for Housing Innovation, UC Berkeley

The San Francisco Foundation

TMG Partners

Up For Growth

Urban Displacement Project, UC Berkeley

Valley Industry & Commerce Association

Western Center on Law and Poverty

Working Partnerships

Zillow Group

OPPOSITION: (Verified 9/5/19)

AIDS Healthcare Foundation

Association of CA Cities – Orange County

Boyle Heights Community Partners

CA Southwest Legislative Council

Cities Association of Santa Clara County

City of Beaumont

City of Bellflower

City of Beverly Hills

City of Burbank

City of Camarillo

City of Chino Hills

City of Cloverdale

City of Cloverdale

City of Clovis

City of Colma

City of Cupertino

City of Cypress

City of Dana Point

City of Del Mar

City of Downey

City of Fullerton

City of Garden Grove

City of Glendale

City of Glendora

City of Huntington Beach

City of La Mirada

City of Lafayette

City of Laguna Hills

City of Los Altos

City of Monterey Park

City of Moorpark

City of Morgan Hill

City of Mountain View

City of Murrieta

City of Novato

City of Orinda

City of Orinda

City of Palmdale

City of Paramount

City of Pasadena

City of Pinole

City of Pleasanton

City of Rancho Cucamonga

City of San Carlos

City of San Dimas

City of San Marcos

City of San Mateo

City of Santa Barbara

City of Santa Clarita

City of Solano Beach

City of Sunnyvale

City of Thousand Oaks

City of Torrence

City of Tulare

City of Tustin

City of Ventura

City of Visalia

City of Vista

City of West Hollywood

Coalition for Economic Survival

Coalition for San Francisco Neighborhoods

Coalition for Valley Neighborhoods

Coalition to Preserve LA

Corbett Heights Neighbors

County of Solano

Cow Hollow Association

Dolores Heights Improvement Club

East Mission Improvement Association

Endangered Habitats League

Grayburn Avenue Block Club

Green Foothills

Hamilton Families

Homeowners of Encino

Keep Sunnyvale Beautiful

LA City Councilmember Paul Koretz

League of CA Cities

Livable California

Los Alamitos

Los Angeles Conservancy

Los Angeles Division League of Cities

Marin County Council of Mayors and Council Members

Mayor Robert Whalen, City of Laguna Beach

Mission Economic Development Agency

Northeast Neighbors of Santa Monica

Orange County Business Council

Preserve Culture and Arts in SF

Preserve Walnut Acres – Woodland Hills

Raise the Balloon

San Francisco Tenants Union

San Gabriel Valley Council of Governments

San Mateo City and County/County Association of Governments

Save our Heritage Association

SF Ocean Edge

Sherman Oaks Homeowners Association

Solano County Board of Supervisors

South Bay Cities Council of Governments

Spaulding Square HPOZ Neighborhood Association

Sunset-Parkside Education and Action Committee

Sustainable Talamante

Ventura Council of Governments

West Mar Vista Residents Association

ASSEMBLY FLOOR: 67-8, 9/5/19

AYES: Aguiar-Curry, Arambula, Berman, Bigelow, Bloom, Bonta, Brough, Calderon, Carrillo, Cervantes, Chau, Chen, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Daly, Diep, Eggman, Flora, Fong, Friedman, Gabriel, Gallagher, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gonzalez, Gray, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Kiley, Lackey, Levine, Limón, Low, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Obernolte, Patterson, Petrie-Norris, Quirk, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Salas, Santiago, Ting, Voepel, Weber, Wicks, Wood, Rendon

NOES: Bauer-Kahan, Boerner Horvath, Kamlager-Dove, Maienschein, Muratsuchi, Smith, Mark Stone, Waldron

NO VOTE RECORDED: Burke, Frazier, Nazarian, O'Donnell

Prepared by: Anton Favorini-Csorba / GOV. & F. / (916) 651-4119

9/5/19 16:59:35

**** END ****

SENATE THIRD READING

STR Bill Id:SB 330

Author:(Skinner)

As Amended Ver:August 12, 2019

Majority vote

SUMMARY:

Restricts, for a period of five years, actions by cities and counties that would reduce the production of housing.

Major Provisions

1. Establishes the Housing Crisis Act through January 1, 2025, after which time provisions below are no longer applicable.
2. Applies the requirements of the bill to the following
3. Amends the development policies, standards, and conditions for "affected" cities and counties, as follows:
   1. Defines "affected city" to mean a city that the Department of Housing and Community Development (HCD) determines is in an urbanized area or urban cluster, as designated by the United States Census Bureau, excluding cities of 5,000 people or less that is not in an urbanized area. Defines "affected county" to mean a census-designated place that is wholly located within the boundaries of an urbanized area, as designated by the United States Census Bureau.
   2. Prohibits an affected city or county, with respect to land where housing is an allowable use on or after January 1, 2018, from enacting a development policy, standard, or condition that would have any of the following effects:
      1. Changing the general plan land use designation, specific plan land use designation, or zoning of a parcel to a less intensive use or reducing the intensity of land use within an existing general plan land use designation, specific plan land use designation, or zoning district below what was allowed under the land use designation and zoning ordinances of the affected county or affected city as in effect January 1, 2018;
      2. Imposing or enforcing design review standards established after January 1, 2020, if the standards are not objective;
      3. Limiting the amount of housing or population in any of the following ways, except for specified longstanding limits in predominantly agricultural counties:
         1. Imposing a moratorium or similar restriction or limitation on housing development within all or a portion of the jurisdiction, other than to specifically protect against an imminent threat to health and safety;
         2. Limiting the number of land use approvals or permits necessary for the approval and construction of housing that will be issued or allocated within all or a portion of the affected city or county;
         3. Capping the number of housing units that can be approved or constructed either annually or for some other period of time; and,
         4. Capping the population of the affected city or county.
   3. Allows an affected city or county to change land use designations or zoning ordinances to allow for less intensive uses if it concurrently changes the density elsewhere to ensure that there is no net loss in residential capacity.
4. Amends the permitting process for housing projects in local jurisdictions as follows:
   1. Creates a process for submitting preliminary applications for housing projects, including:
      1. That a housing development project must be deemed to have a complete preliminary application to the approving city or county upon providing specified information, including site location, existing uses, proposed uses, specified environmental and cultural sensitivities and hazards, and proposed approvals process;
      2. That cities and counties must provide a checklist and application form for these preliminary applications that must be limited to the specified requirements; and
      3. That, not later than 30 days after a public agency receives an application for a development project, the public agency must determine in writing whether the application is complete.
   2. Prohibits a local agency from applying ordinances, policies, and standards to a development after a preliminary application is submitted, except in narrowly defined specified circumstances.
   3. Provides that if a housing development project complies with the applicable objective general plan and zoning standards in effect at the time a preliminary application is deemed complete, a city or county shall not conduct more than five hearings in connection with the approval of that housing development project, as well as one appeal hearing, and that those hearings must be consistent with the timelines under the Permit Streamlining Act.
   4. Requires any determination that a housing project is on a historic site to occur at the time the housing application is deemed complete. This determination will remain valid throughout the development process unless any archaeological, paleontological, or tribal cultural resources are encountered during any grading, site disturbance, or building alteration activities.
   5. Reduces the time period that a housing project must be approved or disapproved upon the completion of an Environmental Impact Report (EIR) by 30 days, to 60 days for specified projects that are at least 49% affordable to very-low and low-income households, and 90 days for other housing projects.
   6. Provides that if a housing development project in an affected city or county requires the demolition of residential property, the city or county may only approve that housing development if all of the following apply:
      1. There is a no net loss of units being rented at an affordable rent to lower income households;
      2. The proposed housing development project increases density above the density of the existing residential use of the property, including an increased number of deed-restricted low-income units;
      3. Existing residents are allowed to occupy their units until six months before the start of construction activities; and
      4. The developer agrees to provide relocation benefits to the occupants of those affordable residential rental units, and a right of first refusal for units available in the new housing development affordable to the household at an affordable rent.

COMMENTS:

Background: According to Up for Growth's 2018 analysis, housing underproduction is rampant throughout the United States, but California's underproduction is greater than the other 49 states combined. According to the 2016 McKinsey study, California's housing deficit is over 2 million units, and that it would require production of 500,000 units a year (3.5 million units total) over a seven year period to normalize the state's housing prices. According to HCD, there needs to be 180,000 units built per year to maintain housing costs. By contrast, housing production averaged less than 80,000 new homes annually over the last 10 years.

Planning for Housing: SB 330 makes a number of changes to how "affected" cities and counties plan for housing in the next five years. These areas include almost all jurisdictions over 5,000 people in the state, and represent around 90% of the state's population. These strategies are intended to prevent these jurisdictions from reducing the allowable amount of housing during this time-period of the housing crisis. This includes that the bill prohibits them, through January 1, 2025, from enacting a development policy, standard, or condition that would:

1. Reduce the housing development capacity of a parcel to less than was in effect in effect January 1, 2018, unless there is a concurrent change elsewhere to ensure that there is no net loss in residential capacity;
2. Impose or enforce any non-objective design review standards on housing that were established after January 1, 2020;
3. Limit the amount of housing or population in any of the following ways, except for specified longstanding limits in predominantly agricultural counties:
   1. Impose a moratorium or similar restriction or limitation on housing development within all or a portion of the jurisdiction, other than to specifically protect against an imminent threat to health and safety;
   2. Limit the number of land use approvals or permits necessary for the approval and construction of housing to meet the Regional Housing Needs Allocation (RHNA);
   3. Cap the number of housing units that can be approved or constructed; and
   4. Limit the population of the affected city or county.

Permitting Housing: This bill changes the permitting process for housing projects in cities and counties over the next five years. These changes are designed to provide more certainty to housing developers and prevent undue delay or cost increases. This change is implemented through the bill's creation of a "preliminary application," a new first step in the Permit Streamlining Act (PSA) process. After submittal of this application, the bill prohibits a local agency from applying ordinances, policies, and standards to a development, except in narrowly defined specified. The application is deemed "complete," many key aspects of the project are locked into place, including its zoning, fees, and historic status.

The information required in the preliminary application is specified in the bill, and includes only objective information, such as site location, existing uses, proposed uses, specified environmental and cultural sensitivities and hazards, and proposed approvals process. Local jurisdictions are precluded from requiring additional information and must deem the application to be complete if all of the required information is provided. If the required information is not provided, then the bill delineates a protocol for both the applicant and the jurisdiction. Failure to comply by the application results is the voiding of their application. Failure to comply by the jurisdiction results in the application being deemed "complete."

Once a complete application for a development has been submitted, the PSA requires local officials to act within a specific time period after completing any environmental review documents required under the California Environmental Quality Act (CEQA). The bill shortens by 30 days the review period, to 60 days for specified projects that are at least 49% affordable to very-low and low-income households, and 90 days for other housing projects.

To streamline the public process, for those projects that comply with the applicable objective general plan and zoning standards in effect at the time an application is deemed complete, no more than five public hearings can occur in connection with the approval of that housing development project. These hearings must be consistent with the timelines under the PSA.

Anti-Demolition Provisions: This bill also provides provisions to limit the impact of demolition of rental housing on lower-income residents in affected cities and counties. It does so by requiring that, for housing projects that would demolish residential property, the city or county may only approve that housing development if all of the following apply:

1. There is a no net loss of units being rented at an affordable rent to lower income households;
2. The proposed housing development project increases density above the density of the existing residential use of the property, including an increased number of deed-restricted low-income units;
3. Existing residents are allowed to occupy their units until six months before the start of construction activities;
4. The developer agrees to provide relocation benefits to the occupants of those affordable residential rental units, and a right of first refusal for units available in the new housing development affordable to the household at an affordable rent.

According to the Author:

"California is experiencing an extreme housing shortage. We now rank 49th in the number of housing units per capita and are home to 33 of the 50 US cities with the highest rents. SB 330 is designed to address our housing crisis by asking local governments to process permits for housing that is already allowed under their existing rules, but to do it faster and not change the rules once the housing application is submitted. By requiring timely processing of permits and relaxing a limited set of rules, SB 330 employs the same approach that cities have used to help recover from fires or other disasters. And to help keep tenants and low-income families in their homes, SB 330 also includes anti-displacement measures."

Arguments in Support:

According to the Western Center on Law and Poverty, "To meaningfully address the housing crisis, we need to dramatically increase the development of housing affordable to lower-income households in almost every corner of the state. SB 330 will help by ensuring that housing projects are not unreasonably delayed, that jurisdictions do not impose strict growth controls that constrain the development of needed housing, and that the demolition of existing housing has limits to ensure that there is no net loss of total housing capacity, that units occupied by lower-income households are replaced by new units affordable to those households, and that lower-income renters who are displaced are provided with relocation assistance and a right to return after construction is completed."

Arguments in Opposition:

According to Livable California, "Senate Bill 330, is a massive shotgun attack on local democracy – an anti-democratic bill that would strip most California cities of local control. SB 330's onerous impacts include: Massive land use changes that will produce no new affordable housing. Applies retroactively to Jan 1, 2018, throwing out many local planning decisions already in place. Guts CEQA. Puts spot zoning in developers' hands and severely removes necessary local input. This is one-size-fits-all for large projects and small. Undermines renters' protections. Drives up land prices in hot areas making new affordable units nearly impossible.

FISCAL COMMENTS:

According to the Assembly Appropriations Committee,

1. The Department of Housing and Development (HCD) indicates first-year costs of $405,000 (GF) and ongoing costs of $374,000 (GF) annually until January 1, 2025, for staff to develop and update guidelines, criteria and forms; identify affected cities and counties; review zoning ordinances for compliance; and provide consultation and technical assistance to local jurisdictions. HCD assumes approximately 400 jurisdictions would qualify as affected cities and counties, and four jurisdictions per year would make zoning ordinance changes that would impose a moratorium or other restriction on development.
2. This bill imposes state-mandated new costs on affected local agencies to revise planning requirements for certain developments. These costs are generally not state-reimbursable because local agencies have the authority to charge various fees to offset any increased costs. It is unlikely the Commission on State Mandates would approve any claims for state reimbursement.

VOTES:

SENATE FLOOR: 28-7-3

YES: Allen, Archuleta, Atkins, Beall, Bradford, Caballero, Chang, Dodd, Durazo, Galgiani, Hertzberg, Hill, Hueso, Hurtado, Jackson, Leyva, McGuire, Mitchell, Monning, Pan, Portantino, Roth, Rubio, Skinner, Umberg, Wieckowski, Wiener, Wilk

NO: Bates, Glazer, Grove, Jones, Morrell, Nielsen, Stone

ABS, ABST OR NV: Borgeas, Moorlach, Stern

ASM HOUSING AND COMMUNITY DEVELOPMENT: 7-0-1

YES: Chiu, Diep, Gabriel, Gloria, Kiley, Limón, Quirk-Silva

ABS, ABST OR NV: Maienschein

ASM LOCAL GOVERNMENT: 7-1-0

YES: Aguiar-Curry, Lackey, Bloom, Ramos, Gonzalez, Robert Rivas, Voepel

NO: Boerner Horvath

ASM APPROPRIATIONS: 17-0-1

YES: Gonzalez, Bigelow, Bloom, Bonta, Brough, Calderon, Carrillo, Chau, Diep, Eggman, Fong, Gabriel, Eduardo Garcia, Obernolte, Petrie-Norris, Quirk, Robert Rivas

ABS, ABST OR NV: Maienschein

UPDATED:

VERSION: August 12, 2019

CONSULTANT: Steve Wertheim / H. & C.D. / (916) 319-2085 FN: 0001666

Date of Hearing: August 28, 2019

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

SBPCA Bill Id:SB 330

Author:(Skinner) – As Amended Ver:August 12, 2019

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

SUMMARY:

This bill establishes the Housing Crisis Act of 2019, and makes numerous changes, until January 1, 2025, to various statutes related to housing development. These changes affect the Permit Streamlining Act, local housing approval processes and the Housing Accountability Act (HAA), impose restrictions on specified development standards and provide for delayed enforcement of certain code violations, among other things.

FISCAL EFFECT:

1. The Department of Housing and Development (HCD) indicates first-year costs of $405,000 (GF) and ongoing costs of $374,000 (GF) annually until January 1, 2025, for staff to develop and update guidelines, criteria and forms; identify affected cities and counties; review zoning ordinances for compliance; and provide consultation and technical assistance to local jurisdictions. HCD assumes approximately 400 jurisdictions would qualify as affected cities and counties, and four jurisdictions per year would make zoning ordinance changes that would impose a moratorium or other restriction on development.
2. This bill imposes state-mandated new costs on affected local agencies to revise planning requirements for certain developments. These costs are generally not state-reimbursable because local agencies have the authority to charge various fees to offset any increased costs. It is unlikely the Commission on State Mandates would approve any claims for state reimbursement.

COMMENTS:

1. Purpose. This bill intends to facilitate housing construction by restricting, for a period of five years, actions by cities and counties that could reduce the production of housing. According to the author:

California is experiencing an extreme housing shortage. We now rank 49th in the number of housing units per capita and are home to 33 of the 50 US cities with the highest rents. SB 330 is designed to address our housing crisis by asking local governments to hold off on actions that would decrease or delay housing and to process permits for housing that is already allowed under their existing rules, but to do it faster and not change the rules once the housing application is submitted.

1. Background. The Planning and Zoning law requires every city and county to prepare and adopt a general plan, including a housing element, to guide the future growth of a community. The housing element must 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.

The Legislature has enacted a variety of statutes to facilitate and encourage the provision of housing, particularly affordable housing and housing to support individuals with disabilities or other needs. Among them is the HAA, enacted in 1982 in response to concerns over a growing rejection of housing development by local governments due to not-in-my-backyard (NIMBY) sentiments among local residents. The HAA, also known as the “Anti-NIMBY” legislation, restricts a local agency’s ability to disapprove, or require density reductions in, certain types of residential projects. The HAA limits the ability of local governments to reject or render infeasible housing developments based on their density without a thorough analysis of the economic, social and environmental effects of the action.

The 1977 Permit Streamlining Act requires public agencies to act fairly and promptly on applications for development permits. Public agencies must compile lists of information that applicants must provide and explain the criteria they will use to review permit applications. Public agencies generally have 30 days to determine whether applications for development projects are complete and accepted for filing; failure to act results in an application being "deemed complete." If additional information is required, there could be time extensions before an application is deemed complete.

Once a complete application has been submitted, the act requires public officials to respond within a specific time period after completing any environmental review documents required under the California Environmental Quality Act (CEQA). Specifically, local governments that serve as lead agencies under CEQA must act within: (a) 60 days after completing a negative declaration or determining that a project is exempt from review, or (b) 120 days after certifying an environmental impact report (EIR). However, shorter deadlines apply to certain affordable housing developments. A lead agency must decide within 90 days of certifying an EIR for a residential or mixed use development that meets specified conditions, including: residential units make up at least half of the overall square footage, commercial space is reserved for specified small businesses that serve local residents and at least 49% of units are available to low- or very low-income households.

This bill, for five years, makes various changes to these statutes to accelerate the housing permitting process, prevent net-loss downzoning in most cases, suspend housing moratoriums and growth-control measures including population caps and annual housing permit caps, and prohibit demolition of affordable units unless developers meet specified conditions.

1. Related Legislation.

SB 4 (McGuire), of this legislative session, creates a streamlined approval process for eligible projects within a half mile of fixed rail or ferry terminals in cities of 50,000 residents or more in smaller counties and in all urban areas in counties with over a million residents. It also creates a streamlined approval process for duplexes and fourplexes in residential areas on vacant, infill parcels. This bill is awaiting a hearing in the Senate Environmental Quality Committee.

SB 50 (Wiener), of this legislative session, requires a local government to grant an equitable communities incentive, which reduces specified local zoning standards in “jobs rich” and “transit rich areas,” as defined, when a development proponent meets specified requirements. This bill was held on the Senate Appropriations Committee’s Suspense File.

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

Date of Hearing: July 10, 2019

ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT

Cecilia Aguiar-Curry, Chair

SBPCA Bill Id:SB 330

Author:(Skinner) – As Amended Ver:July 1, 2019

SENATE VOTE: 28-7

SUBJECT: Housing Crisis Act of 2019.

SUMMARY: Restricts, for a period of five years, actions by cities and counties that would reduce the production of housing. Specifically, this bill:

1. Enacts the Housing Crisis Act of 2019. Makes a number of findings and declarations related to the housing supply crisis in the State of California, and declares, in light of the findings, that the Legislature hereby declares a statewide housing emergency, to be in effect until January 1, 2025, at which point the provisions specified below will be repealed.
2. Declares the intent of the Legislature, in enacting the Housing Crisis Act of 2019, to do both of the following:
   1. Suspend certain restrictions on the development of new housing during the period of the statewide emergency; and,
   2. Work with local governments to expedite the permitting of housing in regions suffering the worst housing shortages and highest rates of displacement.
3. Establishes a preliminary application process for housing projects, as follows:
   1. Deems an applicant for a housing development to have submitted a “preliminary application” upon providing all of the following information about the proposed project to the city, county, or city and county, from which approval for the project is being sought and upon payment of the permit processing fee:
      1. The specific location, including parcel numbers, a legal description, and site address, if applicable;
      2. The existing uses on the project site and identification of major physical alterations to the property on which the project is to be located;
      3. A site plan showing the location on the property, elevations showing design, color, and material, and the massing, height, and approximate square footage, of each building that is to be occupied;
      4. The proposed land uses by number of units and square feet of residential and nonresidential development using the categories in the applicable zoning ordinance;
      5. The proposed number of parking spaces;
      6. Any proposed point sources of air or water pollutants;
      7. Any species of special concern known to occur on the property;
      8. Any portion of the property located within any of the following:
         1. A very high fire hazard severity zone;
         2. Wetlands;
         3. A hazardous waste site, as specified;
         4. A special flood hazard area, as specified;
         5. A delineated earthquake fault zone, as specified;
         6. Any historic or cultural resources known to exist on the property;
         7. The number of proposed below market rate units and their affordability levels;
         8. The number of bonus units and any incentives, concessions, waivers, or parking reductions;
         9. Whether any approvals under the Subdivision Map Act are being requested;
         10. The applicant’s contact information and, if the applicant does not own the property, consent from the property owner to submit the application.
   2. Requires each local agency to compile a checklist and application form that applicants
      for housing development projects may use for the purpose of satisfying the requirements for submittal of a preliminary application. Requires the Department of Housing and Community Development (HCD) to adopt a standardized form that applicants may use
      if a local agency has not developed its own application form;
   3. Prohibits a checklist or form from requiring or requesting any information beyond what was identified above;
   4. Provides that the housing development project shall not be deemed to have submitted
      a preliminary application if, after the submittal of all the information, the development proponent revises the project such that the number of residential units or square footage of construction changes by 20% or more, as specified;
   5. Requires, within 180 calendar days after submitting a preliminary application to a city
      or county, the development proponent to submit an application for a development project that includes all of the information to process the development application, as specified;
   6. Requires, if the public agency determines that the application for the development project is not complete, the proponent to submit the specific information needed to complete the application within 90 days of receiving the agency’s written identification of the necessary information. Specifies that the preliminary application shall expire if the proponent does not submit the information within 90 days; and,
   7. Requires, if an application is determined to be incomplete, the lead agency to provide the development project applicant with an exhaustive list of items that were not complete. Requires the list to be limited to those items required on the lead agency’s submittal checklist and application form. Prohibits, if any subsequent review of the application is determined to be incomplete, the local agency from requesting the applicant to provide any new information that was not stated in the initial list of items that were not complete. Requires, when determining if the application is complete, the local agency to limit its review to determining whether the application includes the missing information.
4. Reduces the time period that a housing project must be approved or disapproved upon the completion of an Environmental Impact Report (EIR) by 30 days, to 60 days for specified projects that are at least 49 % affordable to very-low and low-income households, and 90 days for other housing projects.
5. Establishes a new chapter (Chapter 12) in Division 1 of Title 7 of the Government Code, entitled the “Housing Crisis Act of 2019,” and establishes the following for Chapter 12:
   1. Defines “affected city” to mean:
      1. A city that HCD determines that the average of the following metrics is greater than zero: (1) the percentage the average rate of rent differed from 130% of the national median rent in 2017, and (2) the percentage by which the vacancy rate for rental units differs from the national rate; and;
      2. A city that does not have a population of 5,000 or fewer and is not located in an urban core.
   2. Defines “affected county” to mean:
      1. The unincorporated portion of any county that is wholly within the boundaries of an urbanized area or urban cluster and qualifies based on the same metrics as affected cities, above in 5)a)i);
   3. Specifies that an affected city or county includes the electorate of an affected city or county exercising its local initiative or referendum power;
   4. Requires HCD to determine which cities and counties are affected cities and counties no later than June 30, 2020;
   5. Amends the development policies, standards, and conditions for affected cities and counties as follows:
      1. Prohibits an affected city or county, with respect to land where housing is an allowable use on or after January 1, 2018, from enacting a development policy, standard, or condition that would have any of the following effects:
      2. Changing the general plan land use designation, specific plan land use designation, or zoning of a parcel to a less intensive use or reducing the intensity of land use within an existing general plan land use designation, specific plan land use designation, or zoning district below what was allowed under the land use designation and zoning ordinances of the affected county or affected city as in effect January 1, 2018;
      3. Imposing a moratorium or similar restriction or limitation on housing development within all or a portion of the jurisdiction, other than to specifically protect against an imminent threat to health and safety;
      4. Imposing or enforcing design review standards established after January 1, 2018,
         if the standards are not objective design standards, defined as involving no personal or subjective judgment by a public official and is uniformly verifiable by reference to an external and uniform benchmark or criterion available and knowable by both the development applicant or proponent and the public official before submittal of an application;
      5. Establishing or implementing any provision that limits the number of land use approvals or permits necessary for the approval and construction of housing, acts
         as a cap on the number of housing units, or limits the population, except for specified longstanding limits in predominantly agricultural counties, as specified;
      6. Allows an affected city or county to change land use designations or zoning ordinances to allow for less intensive uses if it concurrently changes the density elsewhere to ensure that there is no net loss in residential capacity;
      7. Allows an affected city or county to enact a development policy, standard, or condition to prohibit the commercial use of land that is designated for residential use, including but not limited to, short-term occupancy of a residence; as specified; and,
      8. Prohibits an affected city or county from approving a housing development project that will require the demolition of residential dwelling units as will be demolished, except as specified.
6. Amends the Housing Accountability Act (HAA), as follows:
   1. Prohibits a local agency from applying ordinances, policies, and standards to a development after a preliminary application is submitted, except in narrowly defined specified circumstances. Allows specified persons and entities to file a lawsuit to enforce this prohibition, including prospective residents of the development;
   2. Provides that a housing development project shall only be subject to the preconstruction development ordinances, policies and standards adopted and in effect when all the information required in a preliminary application was submitted;
   3. Provides that 6b), above, shall not prohibit a housing development project from being subject to preconstruction development ordinances, policies, and standards adopted after the preliminary application was submitted in the following circumstances:
      1. In the case of a fee, charge, or other monetary exaction, to an increase resulting from an automatic annual adjustment based on an independently published cost index that is referenced in the ordinance or resolution establishing the fee or other monetary exaction;
      2. A preponderance of the evidence in the record establishes that subjecting the housing development project to an ordinance, policy, or standard beyond those in effect when a preliminary application was submitted is necessary to mitigate or avoid a specific, adverse impact upon the public health or safety, and there is no feasible alternative method, as specified;
      3. Subjecting the housing development project to an ordinance, policy, standard, or any measure, beyond those in effect when a preliminary application was submitted, is necessary to avoid or substantially lessen an impact of the project under CEQA;
      4. The housing development project has not commenced construction within 2 ½ years following the date that the project received final approval, as defined; and,
      5. The housing development project is revised following submittal of the preliminary application such that the number of residential units or square footage of construction changes by 20% or more, exclusive of any increase resulting from the receipt of a density bonus, incentive, concession, waiver, or similar provision.
7. Prohibits a city or county from conducting more than five hearings in specified circumstances, if a proposed housing development project complies with the applicable, objective general plan and zoning standards in effect at the time an application is deemed complete. Requires the city or county to approve or disapprove the application at any of the five hearings consistent with the applicable timelines under the Permit Streamlining Act (PSA).
8. Requires any determination that a housing project is on a historic site to occur at the time the housing application is deemed complete. This determination will remain valid throughout the development process unless any archaeological, paleontological, or tribal cultural resources are encountered during any grading, site disturbance, or building alteration activities.
9. Finds and declares that the provision of adequate housing, in light of the severe shortage
   of housing at all income levels in this state, is a matter of statewide concern and is not a municipal affair as that term is used in Section 5 of Article XI of the California Constitution. Therefore, the provisions of this act apply to all cities, including charter cities.
10. Provides that no reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution for certain costs that may be incurred by a local agency or school district because, in that regard, this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution. However, if the Commission on State Mandates determines that this act contains other costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.
11. Specifies that the provisions of this act are severable. If any provision of this act or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.

EXISTING LAW:

1. Requires every city and county to prepare and adopt a general plan, including a housing element, to guide the future growth of a community.
2. Establishes the HAA, which provides that when a proposed housing development project complies with applicable, objective general plan, zoning, and subdivision standards and criteria in effect at the time that the housing development project’s application is complete, but the local agency proposes to disapprove the project or to impose a condition that the project be developed at a lower density, the local agency shall base its decision regarding the proposed housing development project upon specified written findings.
3. Establishes the PSA, which sets forth the rules for reviewing and processing development applications.

FISCAL EFFECT: This bill is keyed fiscal and contains a state-mandated local program.

COMMENTS:

1. Background. Planning and approving new housing is mainly a local responsibility. The California Constitution allows cities and counties to “make and enforce within its limits, all local, police, sanitary and other ordinances and regulations not in conflict with general laws.” It is from this fundamental power (commonly called the police power) that cities and counties derive their authority to regulate behavior to preserve the health, safety, and welfare of the public – including land use authority.

State law provides additional powers and duties for cities and counties regarding land use. The Planning and Zoning Law requires every county and city to adopt a general plan that sets out planned uses for all of the area covered by the plan. A general plan must include specified mandatory “elements,” including a housing element that establishes the locations and densities of housing, among other requirements. Cities’ and counties’ major land use decisions – including most zoning ordinances and other aspects of development permitting –must be consistent with their general plans. The Planning and Zoning Law also establishes a planning agency in each city and county, which may be a separate planning commission, administrative body, or the legislative body of the city or county itself. Cities and counties must provide a path to appeal a decision to the planning commission and/or the city council or county board of supervisors.

The Legislature has enacted a variety of statutes to facilitate and encourage the provision of housing, particularly affordable housing and housing to support individuals with disabilities or other needs. Among them is the HAA, enacted in 1982 in response to concerns over a growing rejection of housing development by local governments due to not-in-my-backyard (NIMBY) sentiments among local residents (SB 2011, Greene). The HAA, also known as the “Anti-NIMBY” legislation, restricts a local agency’s ability to disapprove, or require

density reductions in, certain types of residential projects. The HAA limits the ability of local governments to reject or render infeasible housing developments based on their density without a thorough analysis of the economic, social, and environmental effects of the action. Specifically, when a proposed development complies with objective general plan and zoning standards, including design review standards, a local agency that intends to disapprove the project, or approve it on the condition that it be developed at a lower density, must make written findings based on substantial evidence that the project would have a specific, adverse impact on the public health or safety and that there are no feasible methods to mitigate or avoid those impacts other than disapproval of the project.

The PSA requires public agencies to act fairly and promptly on applications for development permits. Public agencies must compile lists of information that applicants must provide and explain the criteria they will use to review permit applications. Public agencies have 30 days to determine whether applications for development projects are complete; failure to act results in an application being “deemed complete.” However, local governments may continue to request additional information, potentially extending the time before the clock begins running.

1. Bill Summary. SB 330 makes a number of changes to local planning processes to restrict, for the next five years, actions by cities and counties related to housing development. The major changes fall into three categories: creation of a new preliminary application for a development, limits on local agencies planning powers related to housing developments, and enforcement provisions.
   1. Preliminary Application. SB 330 changes the permitting process for housing projects in “affected” cities and counties (as the bill defines) over the next five years. This change is implemented through the bill’s creation of a “preliminary application,” a new first step in the PSA process. After submittal of this application, the bill prohibits a local agency from applying ordinances, policies, and standards to a development, except in narrowly defined circumstances. The information required in the preliminary application is specified in the bill, and includes only objective information, such as site location, existing uses, proposed uses, specified environmental and cultural sensitivities and hazards, and proposed approvals process.

Local jurisdictions are precluded from requiring additional information and must deem the application to be complete if all of the required information is provided. If the required information is not provided, then the bill specifies a process for both the applicant and the jurisdiction to follow. Failure to comply by the applicant results is the voiding of their application. Failure to comply by the jurisdiction results in the application being deemed “complete.”

• 1. Limits on Local Planning Powers. SB 330 makes a number of changes to how affected cities and counties plan for housing by prohibiting cities and counties, through January 1, 2025, from enacting a development policy, standard, or condition that would:
     1. Reduce the housing development capacity of a parcel to less than what was allowed under the land use designation and zoning ordinances of the city or county, as in effect January 1, 2018;
     2. Impose or enforce any non-objective design review standards on housing that were established after January 1, 2018; or,
        
     3. Limit the number of land use approvals or permits necessary for the approval and construction of housing, act as a cap on the number of housing units, or limit the population, except for specified longstanding limits in predominantly agricultural counties.

SB 330 prohibits a city or county from conducting more than five hearings in specified circumstances, if a proposed housing development project complies with the applicable, objective general plan and zoning standards in effect at the time an application is deemed complete. The bill also requires any determination that a housing project is on a historic site to occur at the time the housing application is deemed complete.

• 1. Enforcement. SB 330 amends the HAA to:
     1. Prohibit a local agency from applying ordinances, policies, and standards to a development after a preliminary application is submitted, except in narrowly defined specified circumstances. The bill allows specified persons and entities to file a lawsuit to enforce this prohibition, including prospective residents of the development; and,
     2. Provide that a housing development project shall only be subject to the preconstruction development ordinances, policies and standards adopted and in effect when all the information required in a preliminary application was submitted, except in specified circumstances.

This bill is an author-sponsored measure.

1. Author’s Statement. According to the author, “California is experiencing an extreme housing shortage. We now rank 49th in the number of housing units per capita and are home to 33 of the 50 US cities with the highest rents. SB 330 is designed to address our housing crisis by asking local governments to hold off on actions that would decrease or delay housing and to process permits for housing that is already allowed under their existing rules, but to do it faster and not change the rules once the housing application is submitted. By requiring timely processing of permits and relaxing a limited set of rules, SB 330 employs the same approach that cities have used to help recover from fires or other disasters. Lastly, to help keep tenants and low-income families in their homes, SB 330 also includes anti-displacement measures.”
2. Arguments in Support. According to the California Chamber of Commerce, “Many cities and counties – while likely well intentioned – have exacerbated the housing shortage by creating barriers to new housing construction. We believe SB 330 takes meaningful steps to re-establish good government standards for permitting zoning compliant housing projects. This bill would streamline the development of more housing in California by amending local land use approval processes and the PSA for certain defined local jurisdictions by requiring the timely processing of permits, preventing unreasonable delays in the approval of new
   housing projects, providing a more fairer playing field by preventing local governments from
   
   imposing new fees or exactions in excess of the amounts that would have been applicable at the time the initial application was submitted, and ensuring that residential housing applicants are consistent with city general plans.”
3. Arguments in Opposition. The League of California Cities writes that this bill essentially bans project-specific fees, after the submittal of a preliminary application, because these fees cannot be determined until a city fully analyzes the project. The California State Association of Counties and Urban Counties of California are concerned that the information required to be submitted via the preliminary application may be insufficient to determine the development’s impacts at the local level, especially in new growth areas located in counties, where new development may require project-specific fees under the Mitigation Fee Act to ensure that essential community services can be provided to new residents.
4. Double-Referral. This bill was heard in the Housing and Community Development Committee on June 19, 2019, and passed with a 7-0 vote.

REGISTERED SUPPORT / OPPOSITION:

Support

Bay Area Council
Bridge Housing Corporation
Building Industry Association - Los Angeles/ Ventura Chapter
Building Industry Association of Orange County
Building Industry Association of San Diego
Building Industry Association of Southern California, Baldy View Chapter
Building Industry Association of the Bay Area
California Apartment Association
California Association of Realtors
California Building Industry Association
California Business Roundtable
California Chamber of Commerce
California Community Builders
California Council for Affordable Housing
California Hawaii State Conference of The NAACP
Central City Association
Chan Zuckerberg Initiative
Eden Housing
Equality California
Leading Builders of America
Los Angeles Area Chamber of Commerce
Martin Luther King Jr Freedom Center
Mayor Inga Miller, City of Orinda
Midpen Housing Corporation
Natural Resources Defense Council
Non-Profit Housing Association of Northern California
North Bay Leadership Council
Planning And Conservation League
Related California
Salesforce.Com
Save The Bay
Silicon Valley At Home (Sv@Home)
SPUR (in concept)
Technet
Tmg Partners
Up For Growth
Western Center on Law & Poverty, Inc.
Working Partnerships USA

Opposition

AIDS Healthcare Foundation
Boyle Heights Community Partners

Opposition (continued)

California State Association of Counties (unless amended)
Cities of: Beaumont, Camarillo, Beverly Hills, Burbank, Chino Hills, Colma, Cupertino Cypress, Del Mar, El Centro, Glendora, La Habra, La Mirada, Lafayette, Laguna Hills, Los Alamitos, Mission Viejo, Moorpark, Morgan Hill, Murrieta, Orinda, Pasadena, Pinole, Rancho Cucamonga, San Dimas, Santa Barbara, Sunnyvale, Thousand Oaks, Tulare, Ventura, Vista, West Hollywood
Coalition for Economic Survival
Coalition for San Francisco Neighborhoods (CSFN)
Coalition to Preserve LA
Corbett Heights Neighbors
Cow Hollow Association
East Mission Improvement Association

Endangered Habitats League (unless amended)
Environmental Defense Center
Grayburn Avenue Block Club
Keep Sunnyvale Beautiful
League of California Cities
Livable California
Los Angeles City Councilmember Paul Koretz
Los Angeles County Division, League of California Cities
Marin County Council of Mayors and Council Members
Mayor Robert Whalen, City of Laguna Beach
Mission Economic Development Agency
Raise The Balloon
San Francisco Tenants Union
San Gabriel Valley Council of Governments
San Mateo County-City/County Association of Governments
Save Our Heritage Organization
SF Ocean Edge
Sherman Oaks Homeowners Association
Spaulding Square Neighborhood Association
Sunset-Parkside Education and Action Committee (SPEAK)
Sustainable Tamalmonte

Urban Counties of California (unless amended)
Ventura Council of Governments

127 Individuals

Analysis Prepared by: Debbie Michel / L. GOV. / (916) 319-3958

Date of Hearing: June 19, 2019

ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT

David Chiu, Chair

SBPCA Bill Id:SB 330

Author:(Skinner) – As Amended Ver:June 12, 2019

SENATE VOTE: 28-7

SUBJECT: Housing Crisis Act of 2019

SUMMARY: Restricts, for a period of five years, actions by cities and counties that would reduce the production of housing. Specifically, this bill:

1. Establishes the Housing Crisis Act through January 1, 2025, after which time provisions below are no longer applicable.
2. Applies the requirements of the bill to the following “affected” cities and counties:
   1. Defines “affected city” to mean:
      1. A city that the Department of Housing and Community Development (HCD) determines that the average of the following metrics is greater than zero: (1) the percentage the average rate of rent differed from 130% of the national median rent in 2017, and (2) the percentage by which the vacancy rate for rental units differs from the national rate; and
      2. A city that does not have a population of 5,000 or fewer and is not located in an urban core.
   2. Defines “affected county” to mean:
      1. For purposes of permit streamlining, as being the unincorporated portion of any county that is wholly within the boundaries of an urbanized area or urban cluster and qualifies based on the same metrics as affected cities; and
      2. For purposes of development standards, as a county in which at least 50 percent of the cities located within the territorial boundaries of the county are affected cities.
   3. Specifies that an affected city or county includes the electorate of an affected city or county exercising its local initiative or referendum power; and
   4. Requires that HCD must determine which cities and counties are affected cities and counties no later than June 30, 2020.
3. Amends the development policies, standards, and conditions for affected cities and counties as follows:
   1. Prohibits an affected city or county, with respect to land where housing is an allowable use on or after January 1, 2018, from enacting a development policy, standard, or condition that would have any of the following effects:
      1. Changing the general plan land use designation, specific plan land use designation, or zoning of a parcel to a less intensive use or reducing the intensity of land use within an existing general plan land use designation, specific plan land use designation, or zoning district below what was allowed under the land use designation and zoning ordinances of the affected county or affected city as in effect January 1, 2018;
      2. Imposing or enforcing design review standards established after January 1, 2018, if the standards are not objective;
      3. Limiting the amount of housing or population in any of the following ways, except for specified longstanding limits in predominantly agricultural counties:
         1. Imposing a moratorium or similar restriction or limitation on housing development within all or a portion of the jurisdiction, other than to specifically protect against an imminent threat to health and safety;
         2. Limiting the number of land use approvals or permits necessary for the approval and construction of housing that will be issued or allocated within all or a portion of the affected city or county;
         3. Capping the number of housing units that can be approved or constructed either annually or for some other period of time; and,
         4. Capping the population of the affected city or county.
   2. Allows an affected city or county to change land use designations or zoning ordinances to allow for less intensive uses if it concurrently changes the density elsewhere to ensure that there is no net loss in residential capacity.
   3. Provides that any requirement for local voter approval, or the approval of a supermajority of any body of the affected county or affected city, be obtained to increase the allowable intensity of housing, to establish housing as an allowable use, or to provide services and infrastructure necessary to develop housing, is declared against public policy and void. This section shall not be construed to void a height limit, urban growth boundary, or urban limit established by the electorate of an affected city or county on or before January 1, 2018.
   4. Prohibits an affected city or county from requiring minimum parking requirements of more than 0.5 spaces per unit if the housing development is:
      1. Within one-quarter mile, unobstructed, of a rail stop that is a major transit stop; and
      2. The affected city has a population of 100,000 or greater or is located in a county with a population of greater than 700,000.
4. Amends the permitting process for housing projects in affected cities and counties as follows:
   1. Creates a process for submitting preliminary applications for housing projects, including:
      1. That a housing development project must be deemed to have a complete preliminary application to the approving city or county upon providing specified information, including site location, existing uses, proposed uses, specified environmental and cultural sensitivities and hazards, and proposed approvals process; and
      2. That cities and counties must provide a checklist and application form for these preliminary applications which must be limited to the specified requirements. Requires HCD to adopt a standardized form that applicants for housing development projects may use if one has not been adopted by the relevant city or county.
      3. That, not later than 30 days after a public agency receives an application for a development project, the public agency must determine in writing whether the application is complete and immediately transit the determination to the applicant for the development project. If the written determination of completeness is not made in 30 days, the application shall be deemed complete;
      4. If an application is determined to be incomplete, the lead agency must provide the development project applicant with an exhaustive list of items that were not complete. The list must be limited to those items required on the lead agency’s submittal checklist and application form. If any subsequent review of the application determined to be incomplete, the local agency cannot request the applicant to provide any new information that was not stated in the initial list of items that were not complete. When determining if the application is complete, the local agency must limit its review to determining whether the application includes the missing information.
      5. If the local agency determines that the information provided is not complete, the proponent has 90 days after receiving this determination in writing to provide the information, or their preliminary application will expire.
      6. Requires a development proponent to submit, within 180 days of the preliminary application, all other specified materials necessary to process the application;
   2. Prohibits a local agency from applying ordinances, policies, and standards to a development after a preliminary application is submitted, except in narrowly defined specified circumstances. Allows specified persons and entities to file a lawsuit to enforce this prohibition, including prospective residents of the development.
   3. Provides that if a housing development project complies with the applicable objective general plan and zoning standards in effect at the time an application is deemed complete, a city or county shall not conduct more than five hearings in connection with the approval of that housing development project, and that those hearings must be consistent with the timelines under the Permit Streamlining Act.
   4. Requires any determination that a housing project is on a historic site to occur at the time the housing application is deemed complete. This determination will remain valid throughout the development process unless any archaeological, paleontological, or tribal cultural resources are encountered during any grading, site disturbance, or building alteration activities.
   5. Reduces the time period that a housing project must be approved or disapproved upon the completion of an Environmental Impact Report (EIR) by 30 days, to 60 days for specified projects that are at least 49 percent affordable to very-low and low-income households, and 90 days for other housing projects.
   6. Provides that if a housing development project in an affected city or county requires the demolition of residential property, the city or county may only approve that housing development if all of the following apply:
      1. There is a no net loss of units being rented at an affordable rent to lower income households;
      2. The proposed housing development project increases density above the density of the existing residential use of the property, including an increased number of deed-restricted low-income units;
      3. Existing residents are allowed to occupy their units until six months before the start of construction activities; and
      4. The developer agrees to provide relocation benefits to the occupants of those affordable residential rental units, and a right of first refusal for units available in the new housing development affordable to the household at an affordable rent.
   7. Requires, if the affected city or county approves an application for a conditional use permit for a proposed housing development project and that project would have been eligible for a higher density under the affected city or county’s general plan land use and zoning ordinances prior to January 1, 2018, that the affected city or county must allow the project at the higher density.
5. Amends the enforcement process for housing in affected cities and counties by:
   1. Requiring that any local agency notice related to the violation of a building standard for occupied housing include a statement of the owner’s right to request a delay in enforcement; and
   2. Enables a local agency, upon request of the owner, to delay enforcement for seven years, if correction is not necessary to protect health and safety.

EXISTING LAW:

1. Requires every city and county to prepare and adopt a general plan, including a housing element, to guide the future growth of a community.
2. Establishes the Housing Accountability Act (HAA), which provides that when a proposed housing development project complies with applicable, objective general plan, zoning, and subdivision standards and criteria in effect at the time that the housing development project’s application is complete, but the local agency proposes to disapprove the project or to impose a condition that the project be developed at a lower density, the local agency shall base its decision regarding the proposed housing development project upon specified written findings.
3. Establishes the Permit Streamlining Act (PSA), which sets forth the rules for reviewing and processing development applications.

FISCAL EFFECT: Unknown.

COMMENTS:

Purpose of the Bill: According to the author, “California is experiencing an extreme housing shortage. We now rank 49th in the number of housing units per capita and are home to 33 of the 50 US cities with the highest rents. SB 330 is designed to address our housing crisis by asking local governments to process permits for housing that is already allowed under their existing rules, but to do it faster and not change the rules once the housing application is submitted. By requiring timely processing of permits and relaxing a limited set of rules, SB 330 employs the same approach that cities have used to help recover from fires or other disasters. And to help keep tenants and low-income families in their homes, SB 330 also includes anti-displacement measures.

Background: The cost of housing in California is the highest of any state in the nation. Additionally, the pace of change has far outstripped that in other parts of the county. Whereas in 1970 housing in California was 30% more expensive than the U.S. average, now it is 250% more expensive. While incomes have increased over that period, they have done so at a much slower pace. The result is that housing has become much more expensive. Only 28% of households can buy the median priced home. Over half of renters and 80% of low-income renters are rent-burdened, meaning they pay over 30% of their income towards rent. According to a 2016 McKinsey Global Institute, every year Californians pay $50 billion more for housing than they are able to afford.

According to the Legislative Analyst’s Office, “a collection of factors drive California’s high cost of housing. First and foremost, far less housing has been built in California’s coastal areas than people demand. As a result, households bid up the cost of housing in coastal regions. In addition, some of the unmet demand to live in coastal areas spills over into inland California, driving up prices there too. Second, land in California’s coastal areas is expensive. Homebuilders typically respond to high land costs by building more housing units on each plot of land they develop, effectively spreading the high land costs among more units. In California’s coastal metros, however, this response has been limited, meaning higher land costs have translated more directly into higher housing costs. Finally, builders’ costs—for labor, required building materials, and government fees—are higher in California than in other states. While these higher building costs contribute to higher prices throughout the state, building costs appear to play a smaller role in explaining high housing costs in coastal areas.”

According to Up for Growth’s 2018 analysis, housing underproduction is rampant throughout the United States, but California’s underproduction is greater than the other 49 states combined. According to the 2016 McKinsey study, California’s housing deficit is over 2 million units, and that it would require production of 500,000 units a year (3.5 million units total) over a seven year period to normalize the state’s housing prices. According to HCD, there needs to be 180,000 units built per year to maintain housing costs. By contrast, housing production averaged less than 80,000 new homes annually over the last 10 years.

Who is Affected by the Housing Crisis: Who is Affected by the Housing Crisis: The requirements of the bill would not apply to the whole state. Instead, the bill would only apply to those cities that are experiencing a “housing crisis,” as defined generally by a formula calculated by HCD that equally factors rents and vacancy rates. The bill would also only apply to portions of counties experiencing a “housing crisis.” For purposes of the permit streamlining requirements of the bill, this includes the unincorporated portion of any county that is wholly within the boundaries of an urbanized area or urban cluster. For purposes of the development standards requirements of the bill, this includes any county in which at least 50 percent of its cities are “affected” cities.

For purposes of clarity for both the state and counties, it would be beneficial to have a single consistent definition of “affected county,” and to focus on those areas that are more urbanized where the measures contained in this bill are more meaningful. As such, the Committee may consider amending the bill to apply the definition of affected counties that applies for purposes of the permit streamlining requirements to the portion that is affected by the development standards.

Planning for Housing: Planning and approving new housing is mainly a local responsibility. The California Constitution allows cities and counties to “make and enforce within its limits, all local, police, sanitary and other ordinances and regulations not in conflict with general laws.” It is from this fundamental power (commonly called the police power) that cities and counties derive their authority to regulate behavior to preserve the health, safety, and welfare of the public – including land use authority.

State law provides additional powers and duties for cities and counties regarding land use. The Planning and Zoning Law requires every county and city to adopt a general plan that sets out planned uses for all of the area covered by the plan. A general plan must include specified mandatory “elements,” including a housing element that establishes the locations and densities of housing, among other requirements. Cities’ and counties’ major land use decisions—including most zoning ordinances and other aspects of development permitting—must be consistent with their general plans. The Planning and Zoning Law also establishes a planning agency in each city and county, which may be a separate planning commission, administrative body, or the legislative body of the city or county itself. Cities and counties must provide a path to appeal a decision to the planning commission and/or the city council or county board of supervisors.

The Legislature has enacted a variety of statutes to facilitate and encourage the provision of housing, particularly affordable housing and housing to support individuals with disabilities or other needs. Among them is the Housing Accountability Act (HAA), enacted in 1982 in response to concerns over a growing rejection of housing development by local governments due to not-in-my-backyard (NIMBY) sentiments among local residents (SB 2011, Greene). The HAA, also known as the “Anti-NIMBY” legislation, restricts a local agency’s ability to disapprove, or require density reductions in, certain types of residential projects. The HAA limits the ability of local governments to reject or render infeasible housing developments based on their density without a thorough analysis of the economic, social, and environmental effects of the action. Specifically, when a proposed development complies with objective general plan and zoning standards, including design review standards, a local agency that intends to disapprove the project, or approve it on the condition that it be developed at a lower density, must make written findings based on substantial evidence that the project would have a specific, adverse impact on the public health or safety and that there are no feasible methods to mitigate or avoid those impacts other than disapproval of the project.

SB 330 makes a number of changes to how “affected” cities and counties plan for housing in the next five years. These strategies are intended to prevent these jurisdictions from reducing the allowable amount of housing during this time-period of the housing crisis. This includes that the bill prohibits them, through January 1, 2025, from enacting a development policy, standard, or condition that would:

• Reduce the housing development capacity of a parcel to less than was in effect in effect January 1, 2018, unless there is a concurrent change elsewhere to ensure that there is no net loss in residential capacity;
• Impose or enforce any non-objective design review standards on housing that were established after January 1, 2018;
• Limit the amount of housing or population in any of the following ways, except for specified longstanding limits in predominantly agricultural counties:
  • Impose a moratorium or similar restriction or limitation on housing development within all or a portion of the jurisdiction, other than to specifically protect against an imminent threat to health and safety;
  • Limit the number of land use approvals or permits necessary for the approval and construction of housing to meet the Regional Housing Needs Allocation (RHNA);
  • Cap the number of housing units that can be approved or constructed; and
  • Limit the population of the affected city or county.

There are occasions on which decreasing the development capacity of a piece of land may help preserve housing that serves low-income residents, such as mobilehomes and single-room occupancy hotels. As such, the Committee may wish to consider an amendment that would enable affected cities to decrease development capacity in specified instances to help preserve affordable housing.

The bill also establishes that within one-quarter mile of major rail stops in larger cities and counties, minimum parking requirements cannot exceed 0.5 space per unit. As such, local jurisdictions could not force developers to “over-park” near mass transit, facilitating more space for housing (and potentially less traffic congestion and greenhouse gas emissions) for developers who choose to provide these reduced amounts.

The bill includes language permitting affected cities and counties to charge an in-lieu fee for compliance with a local affordable housing requirement. This language appears to be vestigial to a previous version of the bill that limited increases in fees. As such, the Committee may wish to amend this language out of the bill.

Permitting Housing: The 1977 Permit Streamlining Act (PSA) requires public agencies to act fairly and promptly on applications for development permits. Public agencies must compile lists of information that applicants must provide and explain the criteria they will use to review permit applications. Public agencies have 30 days to determine whether applications for development projects are complete; failure to act results in an application being “deemed complete.” However, local governments may continue to request additional information, potentially extending the time before the clock begins running.

SB 330 changes the permitting process for housing projects in affected cities and counties over the next five years. These changes are designed to provide more certainty to housing developers and prevent undue delay or cost increases. This change is implemented through the bill’s creation of a “preliminary application,” a new first step in the PSA process. After submittal of this application, the bill prohibits a local agency from applying ordinances, policies, and standards to a development, except in narrowly defined specified. The application is deemed “complete,” many key aspects of the project are locked into place, including its zoning, fees, and historic status. As written, it could be implied that the rules being locked into place last the lifetime of the housing, rather than just through the completion of the housing itself. Such an interpretation would preclude a city from implementing rules in the future meant to maintain the housing, such as code enforcement requirements. As such, the Committee may wish to consider amendments that would clarify that the rules being locked into place are limited to those that cover the entitlement and construction of the dwelling units.

The information required in the preliminary application is specified in the bill, and includes only objective information, such as site location, existing uses, proposed uses, specified environmental and cultural sensitivities and hazards, and proposed approvals process. Local jurisdictions are precluded from requiring additional information and must deem the application to be complete if all of the required information is provided. If the required information is not provided, then the bill delineates a protocol for both the applicant and the jurisdiction. Failure to comply by the application results is the voiding of their application. Failure to comply by the jurisdiction results in the application being deemed “complete.”

The bill requires that housing projects that receive a conditional use permit and would have been eligible for a higher density under the affected city or county’s general plan land use and zoning ordinances prior to January 1, 2018, that the affected city or county must allow the project at the higher density. As written, the bill is unclear about when “prior to” January 1, 2018 a project could have been eligible. To clarify the intent, and to align with language used elsewhere in the bill, the Committee may wish to consider changing “prior to” to “in effect as of.”

Once a complete application for a development has been submitted, the PSA requires local officials to act within a specific time period after completing any environmental review documents required under the California Environmental Quality Act (CEQA). The bill shortens by 30 days the review period, to 60 days for specified projects that are at least 49 percent affordable to very-low and low-income households, and 90 days for other housing projects.

Anti-Demolition Provisions: To streamline the public process, for those projects that comply with the applicable objective general plan and zoning standards in effect at the time an application is deemed complete, no more than five public hearings can occur in connection with the approval of that housing development project. These hearings must be consistent with the timelines under the PSA. The bill specifies the government bodies to whom this applies, including the legislative body, planning agency, or other agency, department, board, or commission. However, some local jurisdictions have additional designated hearing officers and bodies. To provide completeness to this list, the Committee may wish to amend the bill to specify that a public hearing would also include those conducted by any designated hearing officer or body.

SB 330 also provides provisions to limit the impact of demolition of rental housing on lower-income residents in affected cities and counties. It does so by requiring that, for housing projects that would demolish residential property, the city or county may only approve that housing development if all of the following apply:

• There is a no net loss of units being rented at an affordable rent to lower income households;
• The proposed housing development project increases density above the density of the existing residential use of the property, including an increased number of deed-restricted low-income units;
• Existing residents are allowed to occupy their units until six months before the start of construction activities;
• The developer agrees to provide relocation benefits to the occupants of those affordable residential rental units, and a right of first refusal for units available in the new housing development affordable to the household at an affordable rent.

As written, these demolition controls would not effectively protect the majority of low-income residents. While the bill would protect low-income residents paying affordable rents, over 80 percent of the state’s low-income residents do not have affordable rents, in that they are paying over 30 percent of their income in rent. As such, the Committee may wish to consider amending the bill to ensure there is no net loss of units being rented to lower income households, independent of the rent being charged. The Committee may also wish to consider amending the bill to provide a “look back” period for low-income renters (such as contained in 2017’s SB 35 (Wiener)), so as to dissuade landlords from displacing such tenants in anticipation of demolishing their building.

Additionally, the bill in general focuses on ensuring that there is no loss of production capacity within cities. Yet, regarding demolition, the bill only seeks to ensure there is no net loss of units for low-income residents. In keeping with the intent of the bill, the Committee was wish to consider an amendment that would require that any demolition result in no net loss of overall units.

Enforcement of Building Standards for Housing:

The bill amends the enforcement process for housing in affected cities and counties for building code violations that are not necessary to protect health and safety. It would enable cities and counties, upon request of the owner, to delay enforcement of non-critical violations by up to five years. This change would reduce cost burdens that are often passed through to low-income residents and result in eviction from non-standard housing. However, this provision also makes it much easier for landlords to substantially delay improvements that may not be defined as something that would protect health and safety, but could still greatly impact a resident’s quality of life. This is particularly worrisome in those jurisdictions that may have a very narrow definition of “health and safety” focused on imminent risks rather than long-term ones. As such, the Committee may wish to recommend removal of the entire section regarding enforcement of buildings standards.

Arguments in Support: According to the California Chamber of Commerce, “Many cities and counties—while likely well intentioned—have exacerbated the housing shortage by creating barriers to new housing construction. We believe SB 330 takes meaningful steps to re-establish good government standards for permitting zoning compliant housing projects. This bill would streamline the development of more housing in California by amending local land use approval processes and the Permit Streamlining Act for certain defined local jurisdictions by requiring the timely processing of permits, preventing unreasonable delays in the approval of new housing projects, providing a more fairer playing field by preventing local governments from imposing new fees or exactions in excess of the amounts that would have been applicable at the time the initial application was submitted, and ensuring that residential housing applicants are consistent with city general plans. Notably, the bill still preserves significant local authority to control its housing element, general plans, zoning and other local land use provisions.”

Arguments in opposition: According to the Aids Healthcare Foundation, “While we agree that many local governments have not done enough to meet the housing needs of low income Californians, we assert that bills like SB 330 are equally unlikely to positively affect productive housing development for the vast majority of our citizens and will result in a substantial detraction from existing efforts to create more affordable housing. SB 330 retroactively invalidates many local housing reforms, takes away the right of citizens to engage as robustly in public hearings as they can under current law, shields bad actor landlords from code enforcement, and is insufficiently responsive to the affordable housing crisis in our state.”

Committee Amendments: To address the issues raised above, the Committee may wish to consider the following amendments:

• Clarify, in Government Code (GC) Section 65589.5(o), that the rules being locked into place are limited to those that cover the entitlement and construction of the dwelling units;
• Specify, in GC 65905.5(b)(2) that a public hearing would also include those conducted by any designated hearing officer or body;
• Apply the definition of affected counties that applies for purposes of the permit streamlining requirements (GC Section 65913.3(a)) to the portion that affects the development standards (GC 66300(a));
• Remove, in GC Section 65913.3(b), the language enabling affected cities and counties to charge an in-lieu fee for compliance with a local affordable housing requirement;
• Change, in GC Section 65913.3(d), “prior to” to “in effect as of”;
• Include in the demolition protections (GC 65913.3(e)) provisions to:
  • Ensure that there is no net loss of units being rented to lower income households, independent of the rent being charged;
  • Create a “look back” period for low-income renters to dis-incentivize early displacement; and
  • Require that any demolition result in no net loss of overall units.
• Enable affected cities to decrease development capacity in specified instances to help preserve affordable housing (GC 66300(b)(1)(A)).
• Remove the section regarding enforcement of buildings standards (Health and Safety Code Section 17980.12).

Related Legislation:

SB 4 (McGuire, 2019): This bill creates a streamlined approval process for eligible projects within ½ mile of fixed rail or ferry terminals in cities of 50,000 residents or more in smaller counties and in all urban areas in counties with over a million residents. It also allows creates a streamlined approval process for duplexes and fourplexes, as specified, in residential areas on vacant, infill parcels. This bill was help in the Senate Environmental Quality Committee.

SB 50 (Wiener, 2019): requires a local government to grant an equitable communities incentive, which reduces specified local zoning standards in “jobs-rich” and “transit rich areas,” as defined, when a development proponent meets specified requirements. This bill was held in the Senate Appropriations Committee.

Double-referred: This bill was also referred to the Assembly Committee on Local Government where it will be heard should it pass out of this committee.

REGISTERED SUPPORT / OPPOSITION:

Support

Bay Area Council
Bridge Housing Corporation
Building Industry Association of the Bay Area
California Apartment Association
California Association of Realtors
California Building Industry Association
California Chamber of Commerce
California Community Builders

California-Hawaii State Conference of the NAACP
California YIMBY

Chan Zuckerberg Initiative
East Bay for Everyone
East Bay Leadership Council
Eden Housing

Emerald Fund
Enterprise Community Partners
Facebook
Hamilton Families
Local Government Commission

Martin Luther King Jr. Freedom Center
MidPen Housing Corporation
Non-Profit Housing Association of Northern California

North Bay Leadership Council

Oakland Metropolitan Chamber of Commerce

Orange County Business Council
PICO California
Related California
The San Francisco Foundation

San Francisco Housing Action Coalition
Santa Cruz YIMBY
Silicon Valley At Home

Silicon Valley foundation
SPUR
Terner Center for Housing Innovation
TMG Partners
Urban Displacement Project, UC-Berkeley
Working Partnerships USA

Opposition

AIDS Healthcare Foundation

Association of California Cities - Orange County
Boyle Heights Community Partners

Cities Association Of Santa Clara County
City of Bellflower
City of Beverly Hills
City of Burbank
City of Camarillo

City of Cloverdale

City of Clovis
City of Cupertino
City of Downey

City of Garden Grove
City of Glendale

City of La Mirada
City of Laguna Hills
City of Los Alamitos
City of Mountain View
City of Novato

City of Orinda
City of Paramount

City of Pasadena
City of Rancho Cucamonga
City of San Carlos
City of San Dimas
City of San Marcos
City of Solana Beach 
City of Thousand Oaks

City of Torrance

City of Tulare

City of Ventura

City of Vista
Coalition for Economic Survival

Coalition for San Francisco Neighborhoods

Coalition for Valley Neighborhoods

Coalition to Preserve LA

Cultural Action Network

Dolores Heights Improvement Club

East Mission Improvement Association

Environmental Defense Center

Grayburn Avenue Block Club

Individuals Opposed to SB 330

Jorge Castaneda

Keep Sunnyvale Beautiful
League of California Cities

Livable California
Los Angeles County Division, League of California Cities
Marin County Council of Mayors and Council Members
Paul Koretz, Councilmember, City of Los Angeles

San Gabriel Valley Council of Governments

Save our Heritage Organization
Solano County Board of Supervisors
South Bay Cities Council of Governments

Spaulding Square Neighborhood Association

Sustainable TamAlmonte
Town of Colma
Ventura Council of Governments

Individuals - 96

Oppose Unless Amended

California State Association of Counties
City of Morgan Hill
Urban Counties of California

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

 THIRD READING  

Bill No: SB 330

Author: Skinner (D)

Amended: 5/21/19

Vote: 21

SENATE GOVERNANCE & FIN. COMMITTEE: 6-0, 4/10/19

AYES: McGuire, Beall, Hertzberg, Hurtado, Nielsen, Wiener

NO VOTE RECORDED: Moorlach

SENATE HOUSING COMMITTEE: 8-2, 4/22/19

AYES: Wiener, Caballero, Durazo, McGuire, Roth, Skinner, Umberg, Wieckowski

NOES: Morrell, Bates

NO VOTE RECORDED: Moorlach

SENATE APPROPRIATIONS COMMITTEE: 4-2, 5/16/19

AYES: Portantino, Bradford, Hill, Wieckowski

NOES: Bates, Jones

SUBJECT: Housing Crisis Act of 2019

SOURCE: Author

DIGEST:

This bill establishes the Housing Crisis Act of 2019, which places restrictions on certain types of development standards, amends the Housing Accountability Act (HAA), makes changes to local approval processes and the Permit Streamlining Act, and requires a local agency, upon request of the residential property owner, to delay enforcement of a code violation for seven years, or earlier at the discretion of the enforcement agency, if the correction is not necessary to protect health and safety.

ANALYSIS:

Existing law:

1. Requires every city and county to prepare and adopt a general plan, including a housing element, to guide the future growth of a community.
2. Establishes the HAA, which provides that when a proposed housing development project complies with applicable, objective general plan, zoning, and subdivision standards and criteria in effect at the time that the housing development project’s application is complete, but the local agency proposes to disapprove the project or to impose a condition that the project be developed at a lower density, the local agency shall base its decision regarding the proposed housing development project upon specified written findings.
3. Establishes the Permit Streamlining Act, which sets forth the rules for reviewing and processing development applications. Establishes the Mitigation Fee Act, which requires any city that establishes, increases, or imposes a fee as a condition of approval of a development project, as specified.

This bill establishes the Housing Crisis Act of 2019, which, for five years places restrictions on certain types of development standards, amends the HAA, makes changes to local approval processes and the Permit Streamlining Act, and requires a local agency, upon request of the residential property owner, to delay enforcement of a code violation for five years, or earlier at the discretion of the enforcement agency, if the correction is not necessary to protect health and safety.

Restrictions on Local Government

1. Defines “affected” city or county as one in which that the Department of Housing and Community Development (HCD) determines that in any calendar year, the average of the following is greater than zero: (a) rent rate exceeds 130% of the national median rent in 2017, as specified, and (b) the vacancy rate for rental units is less than the national rate, as specified. Affected city or county does not include a city with a population of 5,000 or fewer and not located in an urban core, and affected county means at least 50% of the cities are affected cities.
2. Prohibits an affected city or county, with respect to land where housing is an allowable use, from doing the following:
   1. Imposing any new, or increasing any existing requirement, parking in a housing development, as applicable:
      1. A minimum parking requirement if the proposed housing development is within one-quarter mile of a rail stop in an affected city that meets either of the following: (A) The affected city is located in a county with a population of greater than 700,000. (B) The affected cities city has a population of 100,000 or greater and is located in a county with a population of 700,000 or less.
      2. A minimum parking requirement in excess of 0.5 spaces per unit in affected cities that are not subject to (ii).
   2. Allowing an affected city or county to charge a fee that is in lieu of a housing development’s compliance with an inclusionary housing ordinance.
3. Requires, if the affected city or county approves an application for a conditional use permit for a proposed housing development project and that project would have been eligible for a higher density under the affected city or county’s general plan land use and zoning ordinances as of January 1, 2018, the affected city or county to allow the project at the higher density.
4. Provides that if a housing development project subject to this bill requires the demolition of residential property, an affected city or county may only approve that housing development if all of the following apply:
   1. There is a no net loss of units being rented at an affordable rent to lower income households.
   2. The proposed housing development project increases density above the density of the existing residential use of the property, including an increased number of deed-restricted low-income units.
   3. Existing residents are allowed to occupy their units until six months before the start of construction activities.
   4. The developer agrees to provide: relocation benefits to the occupants of those affordable residential rental units, and a right of first refusal for units available in the new housing development affordable to the household at an affordable rent.
   5. HCD shall determine which cities and counties are affected cities and counties within the following timeframes: (i) an initial determination shall be no later than June 30, 2020, and shall remain valid until January 1, 2025.
5. Establishes the Housing Crisis Act of 2019, which does the following:
6. Defines “affected” city or county as one in which that HCD determines that in any calendar year, the average of the following is greater than zero: (1) rent rate exceeds 130% of the national median rent in 2017, as specified, and (2) the vacancy rate for rental units is less than the national rate, as specified. Affected city or county does not include a city with a population of 5,000 or fewer and not located in an urban core, and affected county means at least 50% of the cities are affected cities.
7. Affected city or county includes the electorate of an affected city or county exercising its local initiative or referendum power.
8. Prohibits an affected city or county, with respect to land where housing is an allowable use, from enacting a development policy, standard, or condition that would have any of the following effects:
   • 1. Changing the general plan land use designation, specific plan land use designation, or zoning of a parcel to a less intensive use or reducing the intensity of land use within an existing general plan land use designation, specific plan land use designation, or zoning district below what was allowed under the land use designation and zoning ordinances of the affected county or affected city as in effect January 1, 2018. Less intensive uses means reductions in height, density, floor area ratio, new or increased open space or lot size requirements, or new or increased setback requirements, minimum frontage requirements or maximum lot coverage limitations or anything that would lessen the intensity of housing.
     2. Imposing a moratorium or similar restriction or limitation on housing development, including mixed-use development, within all or a portion of the jurisdiction, other than to specifically protect against an imminent threat to health and safety. An affected city or county cannot enforce a moratorium until HCD approves it.
     3. Imposing or enforcing design review standards established after January 1, 2018, if the standards are not objective.
     4. Limiting the number of land use approvals or permits necessary for the approval and construction of housing that will be issued or allocated within all or a portion of the affected city or county.
     5. Capping the number of housing units that can be approved or constructed either annually or for some other period of time.
     6. Limiting the population of the affected city or county.
9. Provides that an affected city or county may enforce a limit on a number of approvals or permits or a cap on the number of housing units that can be approved or construction if the limit was approved by voters prior to January 1, 2005, and the affected city or county is located in a predominantly agricultural county.
10. Allows an affected city or county to change land use designations or zoning ordinances to allow for less intensive uses if it concurrently changes the density elsewhere to ensure that there is no net loss in residential capacity.
11. Provides that any requirement that local voter approval, or the approval of a supermajority of any body of the affected county or affected city, be obtained to increase the allowable intensity of housing, to establish housing as an allowable use, or to provide services and infrastructure necessary to develop housing, is declared against public policy and void. This section shall not be construed to void a height limit, urban growth boundary, or urban limit established by the electorate of an affected city or county on or before January 1, 2018.
12. HCD shall determine which cities and counties are affected cities and counties within the following timeframes: (i) an initial determination shall be no later than June 30, 2020, and shall remain valid until January 1, 2025.

Housing Accountability Act

1. Prohibits a local agency from applying ordinances, policies, and standards to a development after a preliminary application is submitted. This bill allows local governments to apply new standards after the preliminary application is submitted only in specified circumstances.
   
2. Allows a local agency to subject new square footage or units to the ordinances, policies, and standards in effect when the preliminary application is submitted.
   
3. Allows a development applicant, a person who would be eligible to apply for residency in a proposed development, or a housing organization, to file a lawsuit if a local agency requires a housing development project to comply with an ordinance, policy, or standard not adopted and in effect when a preliminary application was submitted.

Development Application Processes and Timelines

1. Provides that if a housing development project complies with the applicable objective general plan and zoning standards in effect at the time an application is deemed complete, a city or county shall not conduct more than five de novo hearings in connection with the approval of that housing development project, consistent with the timelines under the Permit Streamlining Act. The city or county shall consider and either approve or disapprove the application ta any of the five hearings. The city or county shall schedule each hearing to occur within 30 days following the request by the applicant or an earlier date if required by law. The city or county shall not continue any hearing to another date.
2. Provides that a housing development project shall be deemed to have a complete initial application upon providing specified information.
3. Requires HCD to adopt a standardized form that applicants for housing development projects may use for the purpose of satisfying the requirements for submittal of a complete initial application.
4. Requires, if an application is determined to be incomplete, the lead agency shall provide the development project applicant with an exhaustive list of items that were not complete. The list shall be limited to those items required on the lead agency’s submittal requirement checklist. In any subsequent review of the application determined to be incomplete, the local agency shall not request the applicant to provide any new information that was not stated in the initial list of items that were not complete. When determining if the application is complete, the local agency must limit its review to determining whether the application includes the missing information.
5. Requires, not later than 30 days after a public agency receives an application for a development project, the public agency to determine in writing whether the application is complete and immediately transit the determination to the applicant for the development project. If the written determination is not made in 30 days, the application shall be deemed complete.
6. Requires, upon receipt of any resubmittal of the application, a new 30-day period to begin, during which the public agency shall determine the completeness of the application. If the application is determined not to be complete, the agency’s determination shall specify those parts of the application which are incomplete and indicate the manner in which they can be made complete, including a list and thorough description of the specific information needed to complete the application.
7. Requires that, if the submitted materials are determined not to be complete, the public agency shall provide a process for the applicant to appeal that decision in writing to the governing body of the agency or to the director of the agency. A final written determination on the appeal shall be made within 60 calendar days after receipt of the applicant’s written appeal. If a decision is not made within 60 days, the application with the submitted materials shall be deemed complete.

Substandard Buildings

1. Requires a local agency notice of a violation of any building standard to an owner of an occupied substandard building or unit where residential is a permitted use, including areas zoned for mixed use, to include a statement of the owner’s right to request a delay in enforcement. Requires a local agency, upon request of the owner, to delay enforcement for seven years, or earlier at the discretion of the enforcement agency, if correction is not necessary to protect health and safety.

Comments

Appropriations Amendments. The following changes occurred in the Senate Appropriations Committee:

1. Make the bill’s changes applicable for five years, until January 1, 2025, instead of 10 years.
2. Delete the requirement that HCD identify affected cities and counties for the second time in 2025 (as a conforming change to shortening the bill’s applicability).
3. Delete provisions that would prohibit affected cities or counties from charging or increasing fees, charges, or exactions imposed in connection with housing development projects, as specified.

NOTE: For more information and context, please see the policy committee analyses.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

According to the Senate Appropriations Committee:

• HCD first-year costs of $405,000 and ongoing costs of $374,000 annually until January 1, 2025 for staff to develop and update guidelines, criteria, and forms; identify affected cities and counties; review zoning ordinances for compliance; and provide consultation and technical assistance to local jurisdictions. (General Fund)
• Unknown local mandated costs. While this bill imposes new costs on affected local agencies to revise planning requirements for certain developments, these costs are generally not state-reimbursable because local agencies have the authority to charge various permit, planning, and developer fees to offset any increased costs associated with the higher level of service. As such, it is unlikely that the Commission on State Mandates would approve any claims for state reimbursement.

SUPPORT: (Verified 5/22/19)

Bay Area Council
BRIDGE Housing

Building Industry Association of the Bay Area
California Association of Realtors

California Building Industry Association
California Chamber of Commerce
California Community Builders
California YIMBY
EAH Housing
East Bay For Everyone
East Bay Leadership Council
Emerald Fund
Enterprise Community Partners
Facebook, Inc.
Hamilton Families
Local Government Commission
Oakland Chamber of Commerce
Oakland Metropolitan Chamber of Commerce
PICO California

Related California
Santa Cruz YIMBY
Silicon Valley At Home
SPUR
Terner Center for Housing Innovation
TMG Partners
Urban Displacement Project, UC-Berkeley

OPPOSITION: (Verified 5/22/19)

American Planning Association, California Chapter

California State Association of Counties

City of Cupertino

City of Downey

City of Morgan Hill

City of Paramount

City of Rancho Cucamonga

City of San Carlos

City of Solana Beach

City of Thousand Oaks

League Of California Cities

Livable California

Solano County Board Of Supervisors

South Bay Cities Council Of Governments

Urban Counties Of California

Prepared by: Alison Hughes / HOUSING / (916) 651-4124

5/22/19 13:48:44

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anthony Portantino, Chair

2019 - 2020 Regular Session

SB 330 (Skinner) - Housing Crisis Act of 2019

Bill Summary:

SB 330 would establish the Housing Crisis Act of 2019, and make temporary changes, until January 1, 2030, to various housing statutes. Specifically, this bill would make temporary changes to the Permit Streamlining Act and local approval processes, impose restrictions on specified development standards, amend the Housing Accountability Act (HAA), and provide for delayed enforcement of certain code violations, among other things.

*********** ANALYSIS ADDENDUM – SUSPENSE FILE ***********

The following information is revised to reflect amendments

adopted by the committee on May 16, 2019

Fiscal Impact:

• The Department of Housing and Development (HCD) first-year costs of $405,000 and ongoing costs of $374,000 annually until January 1, 2025 for staff to develop and update guidelines, criteria, and forms; identify affected cities and counties; review zoning ordinances for compliance; and provide consultation and technical assistance to local jurisdictions. (General Fund)
  
• Unknown local mandated costs. While the bill would impose new costs on affected local agencies to revise planning requirements for certain developments, these costs are generally not state-reimbursable because local agencies have the authority to charge various permit, planning, and developer fees to offset any increased costs associated with the higher level of service. As such, it is unlikely that the Commission on State Mandates would approve any claims for state reimbursement.

Committee Amendments:

• Make the bill’s changes applicable for five years, until January 1, 2025, instead of 10 years.
• Delete the requirement that HCD identify affected cities and counties for the second time in 2025 (as a conforming change to shortening the bill’s applicability).
• Delete provisions that would prohibit affected cities or counties from charging or increasing fees, charges, or exactions imposed in connection with housing development projects, as specified.

-- END --

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anthony Portantino, Chair

2019 - 2020 Regular Session

SB 330 (Skinner) - Housing Crisis Act of 2019

Bill Summary:

SB 330 would establish the Housing Crisis Act of 2019, and make temporary changes, until January 1, 2030, to various housing statutes. Specifically, this bill would make temporary changes to the Permit Streamlining Act and local approval processes, impose restrictions on specified development standards, amend the Housing Accountability Act (HAA), and provide for delayed enforcement of certain code violations, among other things.

Fiscal Impact:

• The Department of Housing and Development (HCD) first-year costs of $405,000 and ongoing costs of $374,000 annually for staff to develop and update guidelines, criteria, and forms; identify affected cities and counties; review zoning ordinances for compliance; and provide consultation and technical assistance to local jurisdictions. (General Fund)
  
• Unknown local mandated costs. While the bill would impose new costs on affected local agencies to revise planning requirements for certain developments, these costs are generally not state-reimbursable because local agencies have the authority to charge various permit, planning, and developer fees to offset any increased costs associated with the higher level of service. Staff notes, however, that the bill also caps these fees for certain projects, which may result in higher fees on other types of projects in an affected jurisdiction.

Background:

The Planning and Zoning law requires every city and county to prepare and adopt a general plan, including a housing element, to guide the future growth of a community. The housing element must 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.

Existing law establishes the HAA, which provides that when a proposed housing development project complies with applicable, objective general plan, zoning, and subdivision standards and criteria in effect at the time that the housing development project’s application is complete, but the local agency proposes to disapprove the project or to impose a condition that the project be developed at a lower density, the local agency shall base its decision regarding the proposed housing development project upon specified written findings.

The 1977 Permit Streamlining Act requires public agencies to act fairly and promptly on applications for development permits. Public agencies must compile lists of information that applicants must provide and explain the criteria they will use to review permit applications. Public agencies generally have 30 days to determine whether applications for development projects are complete and accepted for filing; failure to act results in an application being "deemed complete." If additional information is required, there could be time extensions before an application is deemed complete. Once a complete application has been submitted, the Act requires public officials to act within a specific time period after completing any environmental review documents required under the California Environmental Quality Act (CEQA). Specifically, local governments that serve as lead agencies under CEQA must act within: (1) 60 days after completing a negative declaration or determining that a project is exempt from review, or (2) 120 days after certifying an environmental impact report (EIR).

However, shorter deadlines apply to certain affordable housing developments. A lead agency must decide within 90 days of certifying an EIR for a residential or mixed use development that meets specified conditions, including: residential units make up at least half of the overall square footage, commercial space is reserved for specified small businesses that serve local residents, and at least 49% of units are available to low- or very low-income households

The Mitigation Fee Act requires any city or county that establishes, increases, or imposes a fee as a condition of approval of a development project to determine a reasonable relationship between the amount of the fees and the cost of the public facility, as specified. The California courts have upheld these mitigation fees for sidewalks, parks, school construction, and many other public purposes. .

Proposed Law:

SB 330 would establish the Housing Crisis Act of 2019 and would make numerous temporary changes to housing laws for a ten-year period to facilitate housing construction, as specified. All of the following specified changes are only applicable until January 1, 2030.

This bill would specify that an “affected city” is a city, including a charter city, for which HCD determines that the average of the following is greater than zero: (a) the percentage by which the city’s average rent rate exceeded 130% of the national median rent in 2017, as specified, and (b) the percentage by which the vacancy rate for rental units is less than the national rate, as specified. Affected city or county does not include a city with a population of 5,000 or fewer and not located in an urban core, and “affected county” means a county in which at least 50% of the cities are affected cities. HCD must determine which cities and counties are “affected cities and counties” by June 30, 2020, which remains valid until a second determination, which must be made by June 30, 2025, which remains valid until January 1, 2030.

SB 330 prohibits an affected city or county from doing the following, with respect to land where housing is an allowable use:

• Imposing any new, or increasing any existing, parking requirement in a housing development, except as specified.
• Charging a fee or any other specified exaction imposed in connection with the approval of a development in excess of the amounts that would have been applied as of January 1, 2018. An affected city or county may impose an increase in a fee or exaction resulting from an automatic annual adjustment based on an independently published cost index that is referenced in an ordinance or resolution that establishes the fee.
• Charging any fee in connection with the approval of any unit within a housing development that is affordable to households with an income equal to or less than 80% area median income and subject to an affordability restriction for at least 55 years.; (2) unit is affordable to households with an income equal to or less than 80% area median income.
• Charging a fee that is in lieu of a housing development’s compliance with an inclusionary housing ordinance.
• Denying or refusing to approve a housing development project on the basis of an applicant’s failure or refusal to pay an amount of a fee or exaction that exceeds the amounts noted above.

SB 330 prohibits an affected city or county, with respect to land where housing is an allowable use, from enacting a development policy, standard, or condition that would have any of the following effects:

• Changing the general plan land use designation, specific plan land use designation, or zoning of a parcel to a less intensive use or reducing the intensity of land use within an existing general plan land use designation, specific plan land use designation, or zoning district below what was allowed under the land use designation and zoning ordinances of the affected county or affected city as in effect January 1, 2018, as specified.
• Imposing a moratorium or similar restriction or limitation on housing development, including mixed-use development, within all or a portion of the jurisdiction, other than to specifically protect against an imminent threat to health and safety. An affected city or county cannot enforce a moratorium until HCD approves it.
• Imposing or enforcing design review standards established after January 1, 2018, if the standards are not objective.
• Limiting the number of land use approvals or permits necessary for the approval and construction of housing that will be issued or allocated within all or a portion of the affected city or county.
• Capping the number of housing units that can be approved or constructed either annually or for some other period of time.
• Limiting the population of the affected city or county.

The bill would also do the following:

• Authorize an affected city or county to enforce a limit on a number of approvals or permits or a cap on the number of housing units that can be approved or construction if the limit was approved by voters prior to January 1, 2005, and the affected city or county is located in a predominantly agricultural county.
• Allow an affected city or county to change land use designations or zoning ordinances to allow for less intensive uses if it concurrently changes the density elsewhere to ensure that there is no net loss in residential capacity.
• Declares void any requirement that local voter approval, or the approval of a supermajority of any body of the affected county or affected city, be obtained to increase the allowable intensity of housing, to establish housing as an allowable use, or to provide services and infrastructure necessary to develop housing, as specified. This provision shall not be construed to void a height limit, urban growth boundary, or urban limit established by the electorate of an affected city or county on or before January 1, 2018.
• Specify that a housing development shall not be inconsistent, not in compliance, or not in conformity with the zoning in effect as of January 1, 2018 and the project shall not require rezoning, if the zoning did not allow the maximum residential use, density, and intensity allowable on the site by the land use or housing element of the general plan as of that date even if downzoning has occurred since that time.
• Require an affected city or county to allow a project at a higher density if the affected city or county approves an application for a conditional use permit for a proposed housing development project and that project would have been eligible for a higher density under the affected city or county’s general plan land use and zoning ordinances as of January 1, 2018.
• Specify that if a housing development project subject to this bill would require the demolition of residential property, an affected city or county may only approve that housing development if specified conditions are met, including no net loss of lower-income affordable rental units, the project increases density, and existing residents may stay in their units until six months prior to demolition, as specified.

With respect to the Housing Accountability Act, this bill would:

• Prohibit a local agency from applying ordinances, policies, and standards to a development after a preliminary application is submitted. The bill allows local governments to apply new standards after the preliminary application is submitted in the following circumstances:
  • A development fee or exaction is indexed to inflation in the ordinance.
  • A local government finds that a new standard is needed to mitigate or avoid a specific, adverse impact to public health or safety based on a preponderance of the evidence in the record, and there is no feasible alternative to mitigate it.
  • A new policy, standard, or ordinance is needed to mitigate an impact of the project to a less than significant level pursuant to the California Environmental Quality Act.
  • The housing development project has not commenced construction within three years following the date that the project received final approval, as defined.
  • The housing development project is revised following submittal of a preliminary application such that the number of residential units or square footage of construction changes by 20% or more, excluding the application of density bonus.
• Allow a local agency to subject new square footage or units to the ordinances, policies, and standards in effect when the preliminary application is submitted.
• Allow a development applicant, a person who would be eligible to apply for residency in a proposed development, or a housing organization, to file a lawsuit if a local agency requires a housing development project to comply with an ordinance, policy, or standard not adopted and in effect when a preliminary application was submitted.

SB 330 would do the following, with respect to development application processes and timelines:

• Prohibit a city or county from conducting more than five de novo hearings in connection with the approval of a housing development if the project complies with the applicable objective general plan and zoning standards in effect at the time an application is deemed complete, consistent with the timelines under the Permit Streamlining Act, as specified.
• Require a city or county to make a determination as to whether a site of a proposed housing development is a historic site at the time the application for the housing development is deemed complete under the Permit Streamlining Act.
• Specify that a housing development project shall not be found to be inconsistent, not in compliance, or not in conformity with the zoning, and the project shall not require rezoning, if the zoning does not allow the maximum residential use, density, and intensity allowable on the site by the land use or housing element of the general plan.
• Require an initial application for a housing development project to be deemed complete upon providing the following information:
  • The specific location.
  • The major physical alterations to the property on which the project is to be located.
  • A “site place” showing the location on the property, as well as the massing, height, and approximate square footage of each building that is to be occupied.
  • The proposed land uses by number of units or square feet using the categories in the applicable zoning ordinance.
  • The proposed number of parking spaces.
  • Any proposed point sources of air or water pollutants.
  • Any species of special concern known to occur on the property.
  • Any historic or cultural resources known to occur on the property.
  • The number of below market rate units and their affordability levels.
• Require HCD to adopt a standardized form that applicants for housing development projects may use for the purpose of satisfying the requirements for submittal of a complete initial application.
• Provide that after submittal of a preliminary application, if a development proponent revises the project such that the number of residential units for square footage of construction changes by 20% or more, exclusive of any increase resulting from the receipt of a density bonus, the housing development project shall not be deemed to have submitted a preliminary application until the development proponent resubmits the required for preliminary application that reflects the revisions.
• Require the lead agency to provide the applicant with an exhaustive list of items that were not complete if an application is determined to be incomplete, and limit the list to those items required on the lead agency’s submittal requirement checklist. In any subsequent review of the application determined to be incomplete, the local agency shall not request the applicant to provide any new information that was not stated in the initial list of items that were not complete. When determining if the application is complete, the local agency must limit its review to determining whether the application includes the missing information.
• Require the public agency to determine in writing whether the application is complete within 30 days of receiving an application, and immediately transit the determination to the applicant for the development project. If the written determination is not made in 30 days, the application shall be deemed complete.
• Require, upon receipt of any resubmittal of the application, a new 30-day period to begin, during which the public agency shall determine the completeness of the application. If the application is incomplete, the agency must specify which parts of the application are incomplete and indicate how they can be made complete, as specified. The public agency has 30 days to determine in writing if the submitted materials are complete and shall immediately transit that determination to the applicant. If the determination has not been made within 30 days, the application with the submitted materials shall be deemed complete.
• Provides for an appeal process if submitted materials are deemed incomplete, as specified. A final written determination on the appeal shall be made within 60 calendar days after receipt of the applicant’s written appeal. If a decision is not made within 60 days, the application with the submitted materials shall be deemed complete.
• Require a public agency, that is a lead agency for a development project, to approve or disapprove the project within 90 days from the date of the certification by the lead agency of the EIR, or within 60 days from the date of the lead agency’s certification of the EIR for developments containing specified amounts of units affordable to lower income households, as specified.

SB 330 would also require a local agency notice of a violation of any building standard to an owner of an occupied substandard building or unit where residential is a permitted use, including areas zoned for mixed use, to include a statement of the owner’s right to request a delay in enforcement. Requires a local agency, upon request of the owner, to delay enforcement for 7 years, or earlier at the discretion of the enforcement agency, if correction is not necessary to protect health and safety.

Staff Comments:

With respect to state costs, this bill would require HCD to adopt a standardized form that applicants for housing development projects may use for the purpose of satisfying the requirements for submittal of a complete initial application. The bill also requires HCD to determine which cities and counties are “affected cities and counties,” as specified, by June 30, 2020, and again by June 30, 2025. HCD assumes that approximately 400 jurisdictions would qualify as affected cities and counties, and that 4 jurisdictions per year would make zoning ordinance changes that would impose a moratorium or other restriction on development. HCD estimates it would incur costs of approximately $375,000 annually over ten years.

-- END --

SENATE COMMITTEE ON HOUSING

Senator Scott Wiener, Chair

2019 - 2020 Regular

Bill No: SB 330 Hearing Date: 4/22/2019

SUBJECT: Housing Crisis Act of 2019

DIGEST: This bill establishes the Housing Crisis Act of 2019, which places restrictions on certain types of development standards, amends the Housing Accountability Act (HAA), makes changes to local approval processes and the Permit Streamlining Act, and creates separate building standards for occupied substandard buildings.

ANALYSIS:

Existing law:

1. Requires every city and county to prepare and adopt a general plan, including a housing element, to guide the future growth of a community. The housing element must 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.
2. Establishes the HAA, which provides that when a proposed housing development project complies with applicable, objective general plan, zoning, and subdivision standards and criteria in effect at the time that the housing development project’s application is complete, but the local agency proposes to disapprove the project or to impose a condition that the project be developed at a lower density, the local agency shall base its decision regarding the proposed housing development project upon specified written findings.
3. Establishes the Permit Streamlining Act, which sets forth the rules for reviewing and processing development applications.
4. Establishes the Mitigation Fee Act, which requires any city that establishes, increases, or imposes a fee as a condition of approval of a development project to do all of the following:
   1. Identify the purpose of the fee;
   2. Identify how the fee will be used;
   3. Demonstrate there is a reasonable relationship between the purpose of the fee and the type of development project on which the fee imposed;
   4. Demonstrate that there is a reasonable relationship between the need for the public facility and the type of development project on which the fee is imposed.
5. Establishes the State Housing Law, which lists various conditions that, if they exist in a building containing dwelling units, that the building be declared substandard.
6. Establishes the California Building Standards Commission (CBSC) within the Department of General Services, and requires any building standards adopted or proposed by state agencies to be submitted to, and approved by, the CBSC prior to codification into the California Building Standards Code (CBC). Requires the Department of Housing and Community Development (HCD) to propose the adoption, amendment, or repeal of building standards to the CBSC and to adopt, amend, and repeal other rules and regulations to protect the health, safety, and welfare of occupants and to the public. These regulations become part of the California Building Standards Code.

This bill places restrictions on certain types of development standards, amends the HAA, makes changes to local approval processes and the Permit Streamlining Act, and creates separate building standards for occupied substandard buildings.

Restrictions on Local Government

1. Defines “affected” city or county as one in which that HCD determines that in any calendar year, that the average rent rate exceeds 130% of the national median rent in 2017, as specified, and the vacancy rate for rental units is less than the national rate, as specified. Affected city or county does not include a city with a population of 5,000 or fewer and not located in an urban core, and affected county means at least 50% of the cities are affected cities.
2. Prohibits an affected city or county, with respect to land where housing is an allowable use, from doing the following:
   1. Imposing any new, or increasing any existing requirement, parking in a housing development.
   2. Charging a fee or any other exaction imposed in connection with the approval of a development in excess of the amounts that would have been applied as of January 1, 2018. “Other exaction” includes, but is not limited to, sewer and water connection charges, community benefit charges, and requirements that the project include public art. An affected city or county may impose an increase in a fee or exaction resulting from an automatic annual adjustment based on an independently published cost index that is referenced in an ordinance or resolution that establishes the fee.
   3. Charging any fee in connection with the approval of any unit within a housing development that meets the following criteria:
      1. The unit is affordable to households with an income equal to or less than 80% area median income.
      2. The unit is subject to a recorded affordability restriction for at least 55 years.
   4. Allowing an affected city or county to charge a fee that is in lieu of a housing development’s compliance with an inclusionary housing ordinance.
   5. Denying or refusing to approve a housing development project on the basis of an applicant’s failure or refusal to pay an amount of a fee or exaction that exceeds the amount under (b) or (c) above.
3. Provides that a housing development shall not be inconsistent, not in compliance, or not in conformity with the zoning in effect as of January 1, 2018 and the project shall not require rezoning, if the zoning did not allow the maximum residential use, density, and intensity allowable on the site by the land use or housing element of the general plan as of that date even if downzoning has occurred since then.
4. Requires, if the affected city or county approves an application for a conditional use permit for a proposed housing development project and that project would have been eligible for a higher density under the affected city or county’s general plan land use and zoning ordinances as of January 1, 2018, the affected city or county to allow the project at the higher density.
5. Provides that if a housing development project subject to this bill would require the demolition of residential property, an affected city or county may only approve that housing development if all of the following apply:
   1. The proposed housing development project is at least as dense as the existing residential use of the property.
   2. The developer agrees to provide: relocation benefits to the occupants of those affordable residential rental units, and a right of first refusal for units available in the new housing development project at rents commensurate with the occupants’ previous rent or compensation to previous occupants who will be displaced.
   3. “Residential property” means residential units that are assisted by Section 8 vouchers, subject to any form of rent or price control, or affordable persons with a household income equal to or less than 80% of the area median income. “Residential property” also means a residential structure containing residential dwelling units currently occupied by tenants or previously occupied by tenants if those units were withdrawn from rent or lease and offered for sale.
6. Establishes the Housing Crisis Act of 2019, which does the following:
7. Defines “affected” city or county as one in which that HCD determines that in any calendar year, that the average rent rate exceeds 130% of the national median rent in 2017, as specified, and the vacancy rate for rental units is less than the national rate, as specified. Affected city or county does not include a city with a population of 5,000 or fewer and not located in an urban core, and affected county means at least 50% of the cities are affected cities.
8. Affected city or county includes the electorate of an affected city or county exercising its local initiative or referendum power.
9. Defines “development policy, standard, or condition” as a provision of, or amendment to, a general plan, specific plan, zoning ordinance, or a subdivision standard or criterion.
10. Prohibits an affected city or county, with respect to land where housing is an allowable use, from enacting a development policy, standard, or condition that would have any of the following effects:
    1. Changing the general plan land use designation, specific plan land use designation, or zoning of a parcel to a less intensive use or reducing the intensity of land use within an existing general plan land use designation, specific plan land use designation, or zoning district below what was allowed under the land use designation and zoning ordinances of the affected county or affected city as in effect January 1, 2018. Less intensive uses means reductions in height, density, floor area ratio, new or increased open space or lot size requirements, or new or increased setback requirements, minimum frontage requirements or maximum lot coverage limitations for property zoned for residential use.
    2. Imposing a moratorium or similar restriction or limitation on housing development, including mixed-use development, within all or a portion of the jurisdiction, other than to specifically protect against an imminent threat to health and safety. An affected city or county cannot enforce a moratorium until HCD approves it.
    3. Imposing or enforcing design review standards established after January 1, 2018, if the standards are not objective.
    4. Limiting the number of land use approvals or permits necessary for the approval and construction of housing that will be issued or allocated within all or a portion of the affected city or county.
    5. Capping the number of housing units that can be approved or constructed either annually or for some other period of time.
    6. Limiting the population of the affected city or county.
11. Allows an affected city or county to change land use designations or zoning ordinances to allow for less intensive uses if it concurrently changes the density elsewhere to ensure that there is no net loss in residential capacity.
12. Provides that any requirement that local voter approval be obtained to increase the allowable intensity of housing, to establish housing as an allowable use, or to provide services and infrastructure necessary to develop housing, is declared against public policy and void. “Intensity of housing” includes, but is not limited to, height, density, or floor area ratio, or open space or lot size requirements, or setback requirements, minimum frontage requirements, or maximum lot coverage limitations.

Housing Accountability Act

1. Prohibits a local agency from applying ordinances, policies, and standards to a development after a completed initial application is submitted. The bill allows local governments to apply new standards after the complete initial application is submitted in the following circumstances:
2. A development fee or exaction is indexed to inflation in the ordinance.
3. A local government finds that a new standard is needed to mitigate or avoid a specific, adverse impact to public health or safety based on a preponderance of the evidence in the record, and there is no feasible alternative to mitigate it.
4. A new policy, standard, or ordinance is needed to mitigate an impact of the project to a less than significant level pursuant to the California Environmental Quality Act (CEQA).
5. The housing development project has not commenced construction within three years following the date that the project received final approval, as defined.
6. The housing development project is revised following submittal of a complete initial application such that the number of residential units or square footage of construction changes by 20% or more, excluding the application of density bonus.
7. Allows a local agency to subject new square footage or units to the ordinances, policies, and standards in effect when the complete initial application is submitted.
   
8. Allows a development applicant, a person who would be eligible to apply for residency in a proposed development, or a housing organization, to file a lawsuit if a local agency requires a housing development project to comply with an ordinance, policy, or standard not adopted and in effect when a complete initial application was submitted.

Development Application Processes and Timelines

1. Provides that if a housing development project complies with the applicable objective general plan and zoning standards in effect at the time a complete initial application is submitted, a city or county shall not conduct more than three hearings, consistent with the timelines under the Permit Streamlining Act. In addition, the city or county must either approve or disapprove the permit within 12 months from the date on which the application is deemed complete. The clock will stop running while the applicant is revising their application materials.
2. Requires a city or county to make a determination as to whether a site of a proposed housing development is a historic site at the time the application for the housing development is deemed complete under the Permit Streamlining Act.
3. Provides that a housing development project shall not be found to be inconsistent, not in compliance, or not in conformity with the zoning, and the project shall not require rezoning, if the zoning does not allow the maximum residential use, density, and intensity allowable on the site by the land use or housing element of the general plan.
4. Provides that a housing development project shall be deemed to have a complete initial application upon providing the following:
   1. The specific location.
   2. The major physical alterations to the property on which the project is to be located.
   3. A “site place” showing the location on the property, as well as the massing, height, and approximate square footage of each building that is to be occupied.
   4. The proposed land uses by number of units or square feet using the categories in the applicable zoning ordinance.
   5. The proposed number of parking spaces.
   6. Any proposed point sources of air or water pollutants.
   7. Any species of special concern known to occur on the property.
   8. Any historic or cultural resources known to occur on the property.
   9. The number of below market rate units and their affordability levels.

1. Requires HCD to adopt a standardized form that applicants for housing development projects may use for the purpose of satisfying the requirements for submittal of a complete initial application.
2. Provides that a housing development project shall not be deemed as having submitted a completed initial application if, following the initial application being deemed complete, the development proponent revises the project such that the number of residential units for square footage of construction changes by 20% or more, exclusive of any increase resulting from the receipt of a density bonus.
3. Requires, if an application is determined to be incomplete, the lead agency shall provide the development project applicant with an exhaustive list of items that were not complete. The list shall be limited to those items required on the lead agency’s submittal requirement checklist. In any subsequent review of the application determined to be incomplete, the local agency shall not request the applicant to provide any new information that was not stated in the initial list of items that were not complete. When determining if the application is complete, the local agency must limit its review to determining whether the application includes the missing information.
4. Requires a city or county to make copies of any list of required information from a housing development applicant both in writing to those persons to whom the agency is required to make that information available, and publicly available on their web site.
5. Requires, not later than 30 days after a public agency receives an application for a development project, the public agency to determine in writing whether the application is complete and immediately transit the determination to the applicant for the development project. If the written determination is not made in 30 days, the application shall be deemed complete.
6. Requires, upon receipt of any resubmittal of the application, a new 30-day period to begin, during which the public agency shall determine the completeness of the application. If the application is determined not to be complete, the agency’s determination shall specify those parts of the application which are incomplete and indicate the manner in which they can be made complete, including a list and thorough description of the specific information needed to complete the application. The public agency has 30 days to determine in writing if the submitted materials are complete and shall immediately transit that determination to the applicant. If the determination has not been made within 30 days, the application with the submitted materials shall be deemed complete.
7. Requires that, if the submitted materials are determined not to be complete, the public agency shall provide a process for the applicant to appeal that decision in writing to the governing body of the agency or to the director of the agency. A final written determination on the appeal shall be made within 60 calendar days after receipt of the applicant’s written appeal. If a decision is not made within 60 days, the application with the submitted materials shall be deemed complete.

Substandard Buildings

1. Requires HCD to propose the adoption, amendment, or repeal of building standards to the CBSC, and adopt, amend, or repeal other rules and regulations for the protection of the public health, safety, and general welfare of the occupant and the public, applicable to occupied substandard buildings in lieu of existing standards. Defines “occupied substandard building” as a building in which one or more people reside that an enforcement agency finds is in violation of the CBC other than those adopted in this bill.
2. Requires the proposed building standards, and the rules adopted to establish minimum health and safety standards for occupied substandard buildings, as follows:
   1. The building standards, rules, and regulations shall require that an occupied substandard building include adequate sanitation and exit facilities and comply with seismic safety standards.
   2. The building standards, rules, and regulations shall permit those conditions that do not endanger the live, limb, health, property, safety, or welfare of the public or occupant.
   3. The building standards need not be the same as those contained in the most recent editions of the international or uniform industry codes.
   4. The building standards shall apply state fire codes as proposed by the State Fire Marshall.
3. Provides that occupied substandard buildings that comply with the building standards created under this bill shall be deemed to be in compliance with state building codes for seven years following the date that the enforcement agency finds that the occupied building was otherwise in violation. After seven years, the current building standards apply.
4. Provides that this bill does not apply to very high fire hazard severity zones and that it does not affect the California Coastal Act of 1976 or prevent the operation of CEQA.
5. Provides that all provisions in this bill sunset on January 1, 2030.

COMMENTS

1. Purpose of the bill. According to the author, “California is in a housing crisis. Housing has become enormously expensive for many middle- and low-income residents. Of the 50 U.S. cities with the highest rent prices, 33 are in California, and median home prices have risen to $600,000. In San Francisco, median home prices are well over $1 million. The state needs an estimated 180,000 additional units of housing each year – just to keep up with current population growth. California is falling far short of this production target. In order to facilitate the building of new housing in the areas where the housing crisis is the worst, it is crucial that the state temporarily lift restrictions and impediments to housing construction. [This bill] will clear the way for housing that is consistent with city general plans to be built more quickly over the next 10 years, while also ensuring adequate protections against demolitions of rent controlled, Section 8, and low income housing units.”
2. Restrictive land use controls. Planning and approving new housing is mainly a local responsibility. The California Constitution allows cities and counties to “make and enforce within its limits, all local, police, sanitary and other ordinances and regulations not in conflict with general laws.” It is from this fundamental power (commonly called the police power) that cities and counties derive their authority to regulate behavior to preserve the health, safety, and welfare of the public—including land use authority. Local governments use their police power to enact zoning ordinances that shape development, such as setting maximum heights and densities for housing units, minimum numbers of required parking spaces, setbacks to preserve privacy, lot coverage ratios to increase open space, and others. These ordinances can also include conditions on development to address aesthetics, community impacts, or other particular site-specific considerations.

Zoning ordinances also add additional constraints that can reduce density: setbacks, floor-area ratios, lot coverage ratios, design requirements, dedications of land for parks or other public purposes, and other regulations can reduce the space on a lot that a building can occupy in ways that lower the number of units it is feasible to construct on a lot. Local governments also sometimes establish stringent zoning restrictions specifically to maintain discretion over development. This practice allows them to bargain with developers for contributions to services to overcome the fiscal effects of residential development or to simply provide more opportunities to deny projects.

Stricter land use controls are also associated with greater displacement and segregation along both income and racial lines. Past practices such as redlining, which led to the racial and economic segregation of communities in the 1930s, have shown the negative effects that these practices can have on communities. The federal National Housing Act of 1934 was enacted to make housing and mortgages more affordable and to stop bank foreclosures during the Great Depression. These loans were distributed in a manner to purposefully exclude “high risk” neighborhoods composed of minority groups. This practice led to underdevelopment and lack of progress in these segregated communities while neighborhoods surrounding them flourished due to increased development and investment. People living in these redlined communities had unequal access to quality, crucial resources such as health and schools. These redlined communities experience higher minority and poverty rates today and are experiencing gentrification and displacement at a higher rate than other neighborhoods. Today, exclusionary zoning can lead to “unintended” segregation of low-income and minority groups, which creates unequal opportunities for Californians of color. Both the Legislative Analyst’s Office and an analysis by the Institute of Governmental Studies at the University of California, Berkeley indicate that building new housing would reduce the likelihood that residents would be displaced in future decades.

1. Housing Crisis Act of 2019. This bill places restrictions on several types of development standards in an affected city or county for 10 years. Specifically, this bill would nullify the following: any existing or new parking requirements, any increases in development fees set on or after January 1, 2018 or any development fees on units affordable to lower-income households; any reductions in the density of a parcel unless it increases density elsewhere in the jurisdiction so that there is no net loss in residential capacity; any moratoria on housing developments other than to protect against health and safety or unless the local jurisdiction receives approval from HCD; any design standards that are not objective; any limits on land use approvals or permits necessary for housing; and any cap on the number of housing units; or any population caps.
2. More accountability. The purpose of the HAA, also known as the “Anti-NIMBY” law, is to limit the ability of local agencies to reject or make infeasible housing developments without a thorough analysis of the economic, social, and environmental effects of the action. A person who would be eligible to apply for residency in the development or emergency shelter, or a housing organization, as defined, may bring an action to enforce the HAA. Specifically, when a proposed development complies with objective general plan and zoning standards, including design review standards, a local agency that intends to disapprove the project, or approve it on the condition that it be developed at a lower density, must make written findings based on a preponderance of the evidence that the project would have a specific, adverse impact on the public health or safety and that there are no feasible methods to mitigate or avoid those impacts other than disapproval of the project. If a local agency is found by a court to be in violation of the HAA, a court may issue an order or judgement compelling compliance with the HAA within 60 days. The HAA also allows a court, upon a determination that the locality has failed to comply with the order or judgment compelling compliance with the HAA within 60 days, to impose fines on a local agency that has violated the HAA and to deposit any fine into a local housing trust fund or elect to deposit the fine in a state account. The fine shall be a minimum of $10,000 per unit. Additional fines may be imposed if the court finds that the locality acted in bad faith.

This bill adds to the HAA that a local agency may not apply ordinances, policies, and standards to a development after a completed initial application is submitted, unless specified conditions apply. This bill also provides that a project shall be subject only to those ordinances, policies, and standards in effect when a completed application is submitted. An application is compete if it contains specified information as required under this bill.

1. Wasting time. The Permit Streamlining Act requires public agencies to act fairly and promptly on applications for development permits. Public agencies must compile lists of information that applicants must provide and explain the criteria they will use to review permit applications. Public agencies have 30 days to determine whether applications for development projects are complete; failure to act results in an application being "deemed complete." However, local governments may continue to request additional information, potentially extending the time before the clock begins running. Once a complete application for a development has been submitted, the Act requires local officials to act within a specific time period after completing any environmental review documents required under the CEQA.

This bill amends the existing application process under the Permit Streamlining Act. Specifically, it requires a public agency to provide an applicant with an exhaustive list of items in their application that was not complete. That list must be limited to those items actually required on the agency’s checklist pursuant to existing law. In any subsequent review of the application determined to be incomplete, the local agency cannot request the applicant to provide any new information that was not stated in the initial list of items that were not complete. When determining if the application is complete, the public agency must limit its review to only determining whether the application includes the missing information. This bill requires each city and each county to make copies of any list of required application information available both in writing to development applicants and on their website. This bill also requires any determination of whether the site of a proposed housing development is a historic site to be made at the time when the application for the project is deemed complete under the Permit Streamlining Act.

This bill also establishes a process for submitting a complete initial application—separate from and prior to the complete application required for the Permit Streamlining Act clock to begin running—and restricts the changes that local governments may apply to a project after a completed initial application is submitted.

1. A different (building) standard. The California Building Standards Law established the CBSC and the process for adopting state building codes, which are minimum standards to ensure health and safety. Under this process, relevant state agencies propose amendments to model building codes, which the CBSC must then adopt, modify, or reject. The HCD is the relevant state agency for residential building codes. Building officials — through provisions in the California Health and Safety Code and the CBC — have broad authority as part of their enforcement authority to render interpretations of the code and to adopt policies and procedures to clarify the application of its provisions. Existing law authorizes a building department of any local government to approve an alternate material, appliance, installation, device, arrangement, method, or work on a case-by-case basis if it finds that the proposed design is satisfactory and the alternative used is the equivalent of that prescribed in the CBC or in the State Housing Law in performance and safety. A building official may render interpretations of the code and to adopt policies and procedures to clarify the application of its provisions, so long as those policies and procedures are in compliance with the intent and purpose of the code and shall not have the effect of waiving requirements in the code. Additionally, where there are practical difficulties involved in carrying out the provisions of the CBC, a building official may grant modifications for individual cases provided they first find that special individual reasons make the strict letter of the law impractical, the modification is in compliance with the intent of the code, and that the modification does not lessen health, accessibility, life, and fire safety or structural requirements.

This bill directs HCD to propose temporary building standards that can be applied to occupied substandard buildings, as identified by a local building official, in lieu of building standards, rules and regulations that are currently adopted for residential properties. These temporary standards would apply for 7 years, at which time the current building standards would apply. These temporary standards must establish minimum health and safety standards, require adequate sanitation and exit facilities, comply with seismic safety standards, and contain fire standards adopted by the State Fire Marshall.

Since the standards proposed by HCD and adopted by the CBSC are minimum health and safety standards, moving forward, the author may wish to instead consider, upon finding a violation of a building standard in a residential development in a zone where residential is a permitted use, including mixed use, authorizing a delay of compliance with that building standard for a period of time at the discretion of the building official. The delay would apply to changes that, in the judgement of the local building official, and in consultation with fire and code enforcement officials, is not necessary to protect the health and safety of the building residents. The building official would be required to include in the violation notice that an owner has a right to request a delay. After seven years, the owner would be subject to the current building code standards. This alternative approach would grant the building owner a grace period to address any code violations that are not health and safety concerns rather than creating a new set of building codes.

1. Fees. As part of the 2017 Housing Package, the Legislature passed AB 879 (Grayson, Chapter 374), which requires HCD to complete a study to evaluate the reasonableness of local feels charged to new developments. The study, which is due to the Legislature by June 30th, 2019, must include findings and recommendations regarding amendments to existing law to substantially reduce fees for residential development. HCD is on track to deliver that report to the Legislature on time.

This bill precludes an affected city or county from imposing any development fees or exactions higher than what was in place as of January 1, 2018, unless the increase is adjusted for inflation as required by a local ordinance or resolution. This bill also prohibits an affected city or county from imposing any development fees on units in housing development projects that are affordable to lower-income households, as specified. Moving forward, the author may wish to consider whether it is premature to prohibit certain fees when a study is already underway to provide overall policy recommendations for reducing housing costs.

1. Opposition. The League of California Cities is opposed to the following provisions: prohibiting parking; freezing impact fees and eliminating development fees on affordable housing, which pay for public improvements and services; and prohibiting design standards if they are more costly, which effectively prohibits new design standards. The California Apartment Association is concerned about the inability for builders to demolish older housing stock and replace it with much needed additional housing. They would like to ensure that developers can continue to do this so long as they are replacing the housing with the same or additional units and they are compensating existing tenants who may be temporarily relocated, and thereafter giving them the first right to occupy the new units. The American Planning Association – California Chapter states that the indicators for affected cities and counties in the bill may not be indicators of the housing crisis, and is opposed to adding a new layer to the application approval process (the “complete initial application) that does include enough information for the city or county to understand the development’s impact or to understand which standards would apply to the project. Freezing requirements at January 1, 2018 could preclude legislation from last year from going into effect and freezing design standards will be confusing and hard to define.
2. Incoming! This bill was heard in the Governance and Finance Committee on April 10^th, 2019. Due to time constraints, committee amendments agreed to in that committee will be taken in this committee. The amendments agreed to include the following:
3. Increase the number of hearings on a project to 5;
4. Change the parking provisions in the bill to specify:
5. No parking minimum within a quarter mile of rail stops for cities that meet either of the following: (1) cities of any size in counties above 700,000, or (2) cities of 100,000 or greater in other counties.
6. 0.5 spaces per unit elsewhere.
7. Grandfather in caps on the number of developments that meet the following conditions: initially enacted by voters prior to 2005 and is in a “predominantly agricultural county” defined to mean a county that meets both of the following, as determined by the most recent California Farmland Conversion Report produced by the Department of Conservation:
   1. Has more than 550,000 acres of agricultural land, and
   2. At least half of the county area is agricultural land.
8. Technical amendments to harmonize HAA provisions with existing law.

10) Double-referral. This bill was heard in the Governance and Finance Committee on April 10th and passed with a vote of 6-0.

Related Legislation:

SB 4 (McGuire, 2019) — creates a streamlined approval process for eligible projects within ½ mile of fixed rail or ferry terminals in cities of 50,000 residents or more in smaller counties and in all urban areas in counties with over a million residents. It also allows creates a streamlined approval process for duplexes and fourplexes, as specified, in residential areas on vacant, infill parcels. This bill is pending in the Senate Governance and Finance Committee.

SB 50 (Wiener, 2019) — requires a local government to grant an equitable communities incentive, which reduces specified local zoning standards in “jobs-rich” and “transit rich areas,” as defined, when a development proponent meets specified requirements. This bill is pending in the Senate Governance and Finance Committee.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

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

April 17, 2019.)

SUPPORT:

Bay Area Council
Building Industry Association Of The Bay Area
California Building Industry Association
California Community Builders
California YIMBY
EAH Housing
Enterprise Community Partners, Inc.
Facebook, Inc.
Hamilton Families
Oakland Metropolitan Chamber Of Commerce
Related California
Silicon Valley At Home
TMG Partners
Urban Displacement Project, UC Berkeley

OPPOSITION:

American Planning Association, California Chapter
Association of California Water Agencies
League of California Cities
Livable California
Solana Beach; City Of
South Bay Cities Council Of Governments

-- END --

SENATE COMMITTEE ON GOVERNANCE AND FINANCE

Senator Mike McGuire, Chair

2019 - 2020 Regular

Housing Crisis Act of 2019

Enacts the “Housing Crisis Act of 2019,” which, until January 1, 2030: (1) makes changes to local approval processes, (2) modifies the Permit Streamlining Act, (3) imposes restrictions on certain types of development standards, and (4) creates separate building standards for occupied substandard buildings.

Background

Planning and approving new housing is mainly a local responsibility. The California Constitution allows cities and counties to “make and enforce within its limits, all local, police, sanitary and other ordinances and regulations not in conflict with general laws.” It is from this fundamental power (commonly called the police power) that cities and counties derive their authority to regulate behavior to preserve the health, safety, and welfare of the public—including land use authority.

Planning and Zoning Law. State law provides additional powers and duties for cities and counties regarding land use. The Planning and Zoning Law requires every county and city to adopt a general plan that sets out planned uses for all of the area covered by the plan. A general plan must include specified mandatory “elements,” including a housing element that establishes the locations and densities of housing, among other requirements. Cities’ and counties’ major land use decisions—including most zoning ordinances and other aspects of development permitting—must be consistent with their general plans. The Planning and Zoning Law also establishes a planning agency in each city and county, which may be a separate planning commission, administrative body, or the legislative body of the city or county itself. Cities and counties must provide a path to appeal a decision to the planning commission and/or the city council or county board of supervisors.

When approving development projects, counties and cities can require applicants to mitigate the project's effects by paying fees. The California courts have upheld these mitigation fees for sidewalks, parks, school construction, and many other public purposes. When imposing a fee as a condition of approving a development project, local officials must determine a reasonable relationship between the fee's amount and the cost of the public facility.

State housing law. The Legislature has enacted a variety of statutes to facilitate and encourage the provision of housing, particularly affordable housing and housing to support individuals with disabilities or other needs. Among them is the Housing Accountability Act (HAA), enacted in 1982 in response to concerns over a growing rejection of housing development by local governments due to not-in-my-backyard (NIMBY) sentiments among local residents (SB 2011, Greene). The HAA, also known as the “Anti-NIMBY” legislation, restricts a local agency’s ability to disapprove, or require density reductions in, certain types of residential projects. The HAA limits the ability of local governments to reject or render infeasible housing developments based on their density without a thorough analysis of the economic, social, and environmental effects of the action. Specifically, when a proposed development complies with objective general plan and zoning standards, including design review standards, a local agency that intends to disapprove the project, or approve it on the condition that it be developed at a lower density, must make written findings based on substantial evidence that the project would have a specific, adverse impact on the public health or safety and that there are no feasible methods to mitigate or avoid those impacts other than disapproval of the project.

Permit Streamlining Act. The 1977 Permit Streamlining Act requires public agencies to act fairly and promptly on applications for development permits, including wireless facilities. Public agencies must compile lists of information that applicants must provide and explain the criteria they will use to review permit applications. Public agencies have 30 days to determine whether applications for development projects are complete; failure to act results in an application being "deemed complete." However, local governments may continue to request additional information, potentially extending the time before the clock begins running.

Once a complete application for a development has been submitted, the Act requires local officials to act within a specific time period after completing any environmental review documents required under the California Environmental Quality Act. Specifically, local governments must act within (1) 60 days after completing a negative declaration or determining that a project is exempt from review, or (2) 180 days after certifying an environmental impact report (EIR). If the local government fails to approve or disapprove the application in the applicable time period, the application is deemed granted, and the applicant may file suit in state court to order the local government to issue the permit.

California’s housing challenges. California faces a severe housing shortage. In its most recent statewide housing assessment, HCD estimated that California needs to build an additional 100,000 units per year over recent averages of 80,000 units per year to meet the projected need for housing in the state. A variety of causes have contributed to the lack of housing production. Recent reports by the Legislative Analyst’s Office (LAO) and others point to local approval processes as a major factor. They argue that local governments control most of the decisions about where, when, and how to build new housing, and those governments are quick to respond to vocal community members who may not want new neighbors. The building industry also points to CEQA review, and housing advocates note a lack of a dedicated source of funds for affordable housing.

Many local governments have adopted policies that limit or outright prohibit new residential development within their jurisdictions, or implement restrictive zoning ordinances, or otherwise impose costly procedural and design requirements on building. The author wants to remove some of these barriers in areas where housing is most acutely needed.

Proposed Law

Senate Bill 330 enacts the “Housing Crisis Act of 2019,” which, until January 1, 2030: (1) makes changes to local approval processes, (2) modifies the Permit Streamlining Act, (3) imposes restrictions on certain types of development standards, and (4) creates separate building standards for occupied substandard buildings.

Approval process changes. SB 330 establishes a process for submitting a complete initial application—separate from and prior to the complete application required for the Permit Streamlining Act clock to begin running—and restricts the changes that local governments may apply to a project after a completed initial application is submitted.

SB 330 deems a complete initial application to have been submitted by a housing development applicant if they have provided the following information about the project:

• The specific location.
• The major physical alterations to the property on which the project is to be located.
• A site place showing the location on the property, as well as the massing, height, and approximate square footage, of each building that is to be occupied.
• The proposed land uses by number of units or square feet using the categories in the applicable zoning ordinance.
• The proposed number of parking spaces.
• Any proposed point sources of air or water pollutants.
• Any species of special concern known to occur on the property.
• Any historic or cultural resources known to exist on the property.
• The number of below market rate units and their affordability levels.

However, if a project applicant revises the project to change the number of units or square footage by 20 percent or more, excluding density bonus, the initial application is no longer complete.

SB 330 directs HCD to adopt a standardized form that applicants may use for submitting an initial application, and provides that the adoption of the form is not subject to the Administrative Procedures Act.

SB 330 prohibits a city or county from conducting more than three de novo hearings on a proposed housing development if it complies with the applicable, objective general plan and zoning standards in effect at the time a complete initial application. The city or county must consider and either approve or disapprove the application at any of the three hearings consistent with the applicable timelines under the Permit Streamlining Act. In addition to those requirements, the city or county must either approve or disapprove the permit within 12 months from when the date on which the application is deemed complete. However, SB 330 stops the clock from running while the applicant is revising their application materials.

SB 330 states that a project cannot be found inconsistent, not in compliance, or not in conformity with the zoning, and the project does not require rezoning, if the zoning does not allow the maximum residential use, density, and intensity allowable on the site by the land use or housing element of the general plan.

SB 330 amends the HAA to prohibit a local agency from applying ordinances, policies, and standards to a development after a completed initial application is submitted. The bill allows local governments to apply new standards after the complete initial application is submitted in the following circumstances:

• A development fee or exaction is indexed to inflation in the ordinance.
• A local government finds that a new standard is needed to mitigate or avoid a specific, adverse impact to public health or safety based on a preponderance of the evidence in the record, and there is no feasible alternative to mitigate it.
• A new policy, standard, or ordinance is needed to mitigate an impact of the project to a less than significant level pursuant to CEQA.
• The housing development project has not commenced construction within three years following the date that the project received final approval, as defined.
• The housing development project is revised following submittal of a complete initial application such that the number of residential units or square footage of construction changes by 20 percent or more, excluding the application of density bonus.

A local agency may also subject new square footage or units to the ordinances, policies, and standards in effect when the complete initial application is submitted.

A development applicant, a person who would be eligible to apply for residency in a proposed development, or a housing organization can file a lawsuit if a local agency requires a housing development project to comply with an ordinance, policy, or standard not adopted and in effect when a complete initial application was submitted.

Permit Streamlining Act changes. SB 330 also amends the existing application process under the Permit Streamlining Act. Specifically, SB 330 requires a public agency to provide an applicant with an exhaustive list of items in their application that was not complete. That list must be limited to those items actually required on the agency’s checklist that is required by existing law. In any subsequent review of the application determined to be incomplete, the local agency cannot request the applicant to provide any new information that was not stated in the initial list of items that were not complete. When determining if the application is complete, the public agency must limit its review to only determining whether the application includes the missing information. SB 330 also requires each city and each county to make copies of any list of required application information available both (1) in writing to those persons to whom the agency is required to make information available, and (2) publicly available on their website.

The bill also requires any determination of whether the site of a proposed housing development is a historic site to be made at the time when the application for the project is deemed complete under the Permit Streamlining Act.

SB 330 provides that the timelines under the Permit Streamlining Act are mandatory.

Restrictions on local development standards and policies. SB 330 imposes restrictions on several types of development standards in an affected city or county. SB 330 defines “affected city” to be those that meet all the following conditions:

• The percentage by which the city’s average rate of rent exceeded 130 percent of the national median rent in 2017, based on the federal 2013-2017 American Community Survey 5-year estimates.
• The percentage by which the vacancy rate for residential rental units is less than the national vacancy rate, based on the federal 2013-2017 American Community Survey 5-year estimates.
• The city has a population of more than 5,000, or has a population of 5,000 or less but is located within an urban core.

SB 330 defines an affected county to mean a county where at least half the cities are affected cities.

In an affected city or county, SB 330 prohibits a local government from adopting a development policy, standard, or condition that would have any of the following effects:

• Changing the general plan land use designation, specific plan land use designation, or zoning of a parcel or parcels of property to a less intensive use, as defined to include specified zoning standards, or reducing the intensity of land use within an existing general plan land use designation, specific plan land use designation, or zoning district below what was allowed under the land use designation and zoning ordinances of the affected county or affected city, as applicable, as in effect on January 1, 2018.
• Imposing a moratorium or similar restriction or limitation on housing development, including mixed-use development, within all or a portion of the jurisdiction of the affected county or city, other than to specifically protect against an imminent threat to the health and safety. A city or county cannot enforce the moratorium until HCD approves it.
• Imposing or enforcing design standards established on or after January 1, 2018, that are not objective design standards.
• Limiting the number of land use approvals or permits necessary for the approval and construction of housing that will be issued or allocated within all or a portion of the affected county or affected city, as applicable.
• Capping the number of housing units that can be approved or constructed either annually or for some other time period.
• Limiting the population of the affected county or affected city, as applicable.

However, a local government may change land use designations or zoning ordinances to allow a less intensive use if it concurrently increases intensity elsewhere it ensure that there is no net loss of residential capacity. SB 330 also allows a local government to enact a policy that prohibits commercial use of land that is designated for residential use, such as short-term occupancy of a residence.

SB 330 also prohibits an affected city or county from:

• Imposing any new, or increasing or enforcing any existing, requirement that a proposed housing development include parking.
• Charging a development fee or exaction, including water or sewer connection fees, in an amount that exceeds the amount that would have applied to the project on January 1, 2018, except if that fee or exaction is indexed to inflation, or if that fee is charged in lieu of an inclusionary housing requirement.
• Charging any development fees or exactions to deed-restricted units affordable to lower income persons and families, as defined.

An affected city or county cannot deny a housing project solely because the applicant does not pay a fee that is prohibited by the bill.

SB 330 provides that if the affected county or affected city approves an application for a conditional use permit for a proposed housing development project and that project would have been eligible for a higher density under the affected county’s or affected city’s general plan land use designation and zoning ordinances as in effect prior to January 1, 2018, the affected county or affected city must allow the project at that higher density.

A development that would require demolition of specified types of affordable housing units or rental units cannot benefit from SB 330’s provisions unless (1) the developer agrees to provide relocation benefits to the current residents and offers them first right of refusal in the new development, and (2) the development is at least as dense as the existing residential use of property.

SB 330 nullifies any development policy, standard, or condition enacted on or after January 1, 2018, that does not comply with the above prohibitions. The bill states that it must be construed broadly to maximize the development of housing, and that any exceptions shall be construed narrowly.

SB 330 applies its provisions to the electorate of an affected city or county, and voids any voter initiative or other policy that requires local voter approval for an increase the allowable intensity of housing, to establish housing as an allowable use, or to provide services and infrastructure necessary to develop housing.

SB 330 exempts the Very High Fire Hazard Severity Zone, as defined in existing law, from its provisions, and provides that it does not affect the California Coastal Act of 1976, nor does it prevent the operation of CEQA.

Substandard buildings. SB 330 also establishes a process for legalizing occupied substandard buildings. The bill requires HCD to develop building standards and other rules that apply to an occupied substandard building, defined to be a building in which one or more persons reside that an enforcement agency finds is in violation of any health and safety requirements. SB 330 applies these standards, once developed, in lieu of the requirements that apply to buildings under existing law. The standards developed by HCD must:

• Require that an occupied substandard building include adequate sanitation and exit facilities and comply with seismic safety standards;
• Permit those conditions prohibited under existing substandard building laws that do not endanger the life, limb, health, property, safety, or welfare of the public or the occupant; and
• Meet rules and regulations developed by the State Fire Marshal.

SB 330 deems the occupied substandard building in compliance with state building codes and health and safety laws if it meets the substandard building requirements developed by HCD for a period of seven years. After that time, the current building standards in force at the time apply.

SB 330 sunsets all its provisions on January 1, 2030 and provides throughout the bill that nothing in the bill supersedes, limits, or otherwise modifies the requirements of CEQA. The bill also states that its provisions are severable, makes technical and conforming changes, and includes findings and declarations to support its purposes.

State Revenue Impact

No estimate.

Comments

1. Purpose of the bill. California is in the midst of a housing crisis. Rents across the state significantly exceed the rest of the United States, and homeownership has fallen to abysmal levels. Demand is clearly high, but builders find themselves unable to meet that demand because of local rules that limit the number of units or simply prohibit building altogether. At a time when housing is so desperately needed, there are some local policies that should just be off limits. SB 330 is a targeted approach that prohibits the most egregious practices in the areas that are hardest hit by the housing crisis. It repeals local voter initiatives enacted by NIMBYs that have prevented well-meaning local officials from taking the steps they need to ensure that housing can get built. It prevents local governments from downzoning unless they upzone elsewhere, and it stops them from changing the rules on builders who are in the midst of going through the approval process. SB 330 also limits the application of parking ratios and design standards that drive up the cost of building. These are not uncontroversial changes, but SB 330 sunsets its provisions so that the Legislature can evaluate its effectiveness. The first rule of holes says that when you’re in one, stop digging: SB 330 applies this principle to one of the state’s greatest challenges.

2. Home rule. California is a diverse state, with 482 cities and 58 counties. Local elected officials for each of those municipalities are charged by the California Constitution with protecting their citizens’ welfare. One chief way local governments do this is by exercising control over what gets built in their community. Local officials weigh the need for new housing against the concerns and desires of their constituents. Where appropriate, those officials impose enact ordinances to shape their communities or set standards to make sure that the impacts of new development are considered and mitigated, based on local conditions. SB 330 runs roughshod over the unique features of California’s communities by imposing blanket prohibitions on certain types of development regulation.

3. Time marches on. Local governments update their development policies and standards over time to reflect new circumstances within their jurisdiction or to respond to mistakes made in the past. In some cases, this may mean amending those standards while a city or county is actively considering a project for approval. SB 330 freezes in time the standards that were in place when a complete initial application, a new term created in the bill, is filed. But these completed applications do not include all the information a local government needs to understand a development’s impacts, make a decision on the project, or to even necessarily know which standards apply to it. That’s why it’s important to have a completed final application. Should the Legislature prevent new ordinances from applying before a local government has a chance to understand the impacts of a development?

4. Power to the people. In 1911, California voters amended the Constitution to provide voters the power to enact initiatives and referenda. The voter initiative is a “reserved power;” it is not a right granted to them, but a power reserved by them. As such, the power of initiative is integral to California’s political process. SB 330 removes the ability of local elected officials, and more importantly, local voters, to enact new growth management ordinances or even enforce existing ones. Locals adopt these measures for a variety of reasons, some more noble than others: for example, some are adopted out of environmental concerns, such as preventing sprawl or reducing pressure to convert agricultural land to urban uses, while others are intended to block new neighbors from moving in. To avoid universally overturning the will of the voters and to draw a distinction between some, the Committee may wish to consider amending SB 330 to allow the continuation some duly adopted growth management ordinances, such as those that may need enhanced open-space protections, that still allow for affordable housing development, and that have been in effect for a longer period of time.

5. Gridlock. Ask any local elected official: Californians love their cars and consider it of paramount importance that they have somewhere to park them. For this reason, many local governments impose minimum parking requirements. But building new parking is expensive and potentially increases the cost of new development. Developers, for their part, would prefer to only build the parking they absolutely need to include in order to rent or sell their units. SB 330 voids local parking requirements in areas that it affects, regardless of whether residents can realistically go without cars. The Committee may wish to consider amending SB 330 to allow some parking requirements to remain in force for developments that aren’t close to transit or are built in smaller cities that may not have the density of amenities to allow going car-free, or otherwise allowing local governments to impose some parking limits where they are truly needed.

6. Time is money. Developers face lots of costs when they try to get a project built: the “hard” construction costs of the actual structure, plus the “soft” costs of completing all the procedural steps and documentation that are needed to secure approval, plus the time value of money. SB 330 aims to reduce these costs in several ways, including by imposing a 12-month time limit on approval and limiting the number of hearings on development applications that are consistent with local zoning to three. But this reduction in the number of hearings constrains public input on new developments. Given that the bill caps the total time to approval, developers’ soft costs may be sufficiently reduced to encourage new production without having to limit public comment. The Committee may wish to consider amending SB 330 to increase or remove the limit on the number of hearings allowed on development approvals that is imposed by the bill.

7. Whither general plans? The general plan is often called the “constitution for future development.” It serves an important role in shaping the location and type of development that will occur, ensuring that there is adequate infrastructure to support that development, providing adequate open space, and mitigating future risks from fire, floods, and climate change. Zoning ordinances then effectuate the requirements in the housing element and general plan—those ordinances are specific where the general plan is, well, general. SB 330 provides that a project isn’t inconsistent with local zoning if it meets the objective standards for density and other metrics in the general plan, but that misunderstands how general plans and zoning ordinances are applied. For example, a general plan may specify a range of densities for an area, which is only then specifically applied through the zoning ordinance. AB 3194 (Daly) of last year initially made similar changes to the HAA as SB 330 does, but was amended to more accurately reflect the way zoning works in practice. The Committee may wish to consider amending SB 330 to track the changes made in the final version of AB 3194.

8. Pay the man. Local governments have seen their revenues significantly constrained over the past several decades. Local governments have seen their sources of revenue slashed by a series of propositions, while demand for public services have increased. As a result, cities and counties follow a simple principle: new developments should pay for the impacts that they have on the community and the burden they impose on public services. Developer fees pay for important public services, including schools, new infrastructure for water and wastewater, roads, transit, and parks. SB 330 prevents most increases in fees, even if they follow the stringent requirements of the Constitution and state law, and outright exempts affordable units, even though those units are likely to generate similar demands for public services. Without the ability to charge appropriate fees, residents may find that their services are scaled back.

9. Mandate. The California Constitution generally requires the state to reimburse local agencies for their costs when the state imposes new programs or additional duties on them. Because SB 330 expands the penalties under state housing law and requires new duties of local planning officials, Legislative Counsel says it creates a new state mandate. But the bill disclaims the state's responsibility for reimbursing local governments for enforcing these new crimes. That's consistent with the California Constitution, which says that the state does not have to reimburse local governments for the costs of new crimes (Article XIIIB, 6[a] [2]). SB 330 also says that if the Commission on State Mandates determines that the bill imposes a reimbursable mandate, reimbursement must be made pursuant to existing statutory provisions.

10. Charter city. The California Constitution allows cities that adopt charters to control their own “municipal affairs.” In all other matters, charter cities must follow the general, statewide laws. Because the Constitution doesn't define "municipal affairs," the courts determine whether a topic is a municipal affair or whether it's an issue of statewide concern. SB 330 says that its statutory provisions apply to charter cities. To support this assertion, the bill includes a legislative finding that the provision of adequate housing, in light of the severe shortage of housing at all income levels in this state, is a matter of statewide concern.

11. Double referral. The Senate Rules Committee has ordered a double referral of SB 330: first to the Governance and Finance Committee to hear issues relating to local permitting, and then to the Senate Housing Committee.

12. Related legislation. The Legislature is considering numerous bills to increase the production of housing in the state. Most notably, SB 4 (McGuire) and SB 50 (Wiener), increase zoning near transit and in other parts of the state.

Support and Opposition

(4/5/19)

Support: Bay Area Council; Bridge Housing Corporation; Building Industry Association of the Bay Area; California Building Industry Association; California Community Builders; California Yimby; Enterprise Community Partners, Inc.; Facebook, Inc.; Silicon Valley At Home (Sv@Home); TMG Partners.

Opposition: League of California Cities.

-- END --