UNFINISHED BUSINESS  

Bill No: SB 940

Author: Beall (D), et al.

Amended: 8/24/20

Vote: 21

SENATE GOVERNANCE & FIN. COMMITTEE: 6-0, 5/11/20

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

NO VOTE RECORDED: Moorlach

SENATE FLOOR: 38-0, 6/22/20

AYES: Allen, Archuleta, Atkins, Bates, Beall, Borgeas, Bradford, Caballero, Chang, Dahle, Dodd, Durazo, Galgiani, Glazer, Lena Gonzalez, Grove, Hertzberg, Hill, Hueso, Hurtado, Jackson, Jones, Leyva, McGuire, Melendez, Mitchell, Monning, Nielsen, Pan, Portantino, Roth, Rubio, Skinner, Stern, Umberg, Wieckowski, Wiener, Wilk

NO VOTE RECORDED: Moorlach, Morrell

ASSEMBLY FLOOR: 73-0, 8/30/20 - See last page for vote

SUBJECT: Housing Crisis Act of 2019: City of San Jose

SOURCE: City of San Jose

Santa Clara Valley Open Space Authority

DIGEST:

This bill grants the City of San Jose flexibility in meeting the no net loss in residential capacity requirements of SB 330 (Skinner Chapter 654, Statues of 2019).

Assembly Amendments

sunset the bill earlier, require additional reporting on the use of the authority granted by the bill, and place further constraints on eligible parcels.

ANALYSIS:

Existing law:

1. Allows, under the California Constitution:
   1. 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.”
   2. Cities that adopt charters to control their own “municipal affairs.” In all other matters, charter cities must follow the general, statewide laws.

1. 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, and a land use element that describes the general categories of uses (such as multifamily residential, single family residential, retail commercial, and open space) that are allowed in specific portions of a jurisdiction.
2. Requires cities’ and counties’ major land use decisions—including zoning ordinances and other aspects of development permitting—to be consistent with their general plans.
3. Requires a local government’s housing element to allow for enough housing to be produced to meet the jurisdiction’s regional housing need allocation (RHNA), which is updated on a statutory schedule (generally every eight years). The Department of Housing and Community Development (HCD) reviews and certifies housing elements as compliant with state law, and also reviews their zoning ordinances for consistency with the approved housing element.
4. Provides, pursuant to the Housing Crisis Act of 2019 (SB 330):
   1. Prohibits, until January 1, 2025, most local governments from changing local planning rules to reduce residential capacity within the jurisdiction or otherwise change land uses to a less intensive use that would reduce residential capacity.
   2. Allows cities and counties to reduce residential development intensity (“downzone”) in one part of their jurisdiction as long as they increase residential intensity (“upzone”) commensurately in another part of the jurisdiction at the same time, so that there is no net loss in residential capacity.

This bill:

1. Allows the City of San Jose, for the purposes of complying with the no net loss requirement in SB 330, to first increase the residential capacity in one area of the city and count that upzoning towards a later downzoning of an eligible parcel.
2. Applies this bill’s provisions only to parcels zoned for residential uses that are inconsistent with the general plan of the city in effect on January 1, 2018 and that do not have a designation for multi-family housing in the general plan.
3. Requires the downzoning to occur within one year of the increase in zoned capacity takes place.
4. Provides that any downzonings only take effect once the City of San Jose establishes zoning districts that implement mixed-use neighborhood, urban residential, transit residential, and urban village general plan land use designations.
5. Requires the City of San Jose to:
   1. Report each downzoning online in a publicly-accessible format and in the annual progress report that the city must file with HCD; and
   2. Submit the annual report to the relevant policy committees of the Legislature in every year that the City of San Jose amends a zoning ordinance pursuant to this bill.
6. Sunsets this bill on the date the city’s housing element for the sixth cycle is due.
7. Includes findings and declarations to support its purposes.

Background

The City of San Jose is a charter city. The city’s current general plan, Envision 2040, proposes 29 types of land uses within the city’s boundaries, including designations for urban villages that are intended to accommodate higher density housing and significant job growth, mixed use neighborhood, urban residential, transit residential that is intended to put mixed-use development near transit stations at moderately high density, urban residential that allows for medium density development and some commercial uses, and mixed use neighborhood that is intended for individual neighborhoods of denser single family homes or townhomes. The city has not yet adopted all the conforming zoning ordinances for these designations.

San Jose has relied on maintaining inconsistency between their general plan and zoning to ensure that development was concentrated in its urban core, rather than in its undeveloped outlying areas. Since the general plan designation overrides the zoning designation, the amount of housing that can be legally built on these parcels is negligible. Prior to 2019, state law didn’t require zoning ordinances for charter cities to be consistent with their general plans. SB 1333 (Wieckowski, Chapter 856, Statutes of 2018) extended the consistency requirement, as well as several other provisions of planning and zoning law, to charter cities. However, in order to meet SB 1333’s requirements, the city must downzone these parcels to less intensive uses. SB 330 prohibits downzoning unless a city simultaneously upzones to avoid any loss in residential capacity.

Because San Jose is embarking on a more comprehensive effort to bring zoning for many parcels into consistency with its general plan, it argues that it is infeasible to downzone and upzone all the parcels that it needs to modify for consistency simultaneously, as SB 330 requires. The city and the Santa Clara Valley Open Space Authority want the Legislature to grant the City of San Jose flexibility on when upzonings and downzonings can occur under SB 330.

Comments

1. Purpose of the bill. According to the author, “Senate Bill 940 empowers the City of San Jose to protect green and open space while maintaining a commitment to increase capacity for housing developments. This bill is urgently needed because the City of San Jose is currently in the process of rezoning over 11,000 acres of open space that is currently incorrectly zoned for single-family homes. Without SB 940, the city will have to navigate a burdensome rezoning process that will make it difficult to meet the deadlines required in recently passed legislation. This bill will authorize the City of San Jose to up-zone infill housing sites proactively in the urban core and around transit, while also having the flexibility to strategically down-zone sites to prevent sprawl. In other words, San Jose will aggressively up-zone in the urban core, then use their down-zone capacity to appropriate re-zone and protect our open spaces. I want to make it clear that this bill will not decrease the City’s housing capacity.”
2. Who’s next? SB 1333 required all charter cities to bring their zoning ordinances into conformity with their general plans. While some charter cities required consistency between their general plans and zoning ordinances prior to SB 1333, others did not. Accordingly, it seems likely that other cities will come forward with reasons of their own for relaxing provisions of SB 330, whether because of SB 1333’s consistency requirement or other implementation issues that arise. SB 940 sets a precedent for easing compliance with SB 330, which could be used by those cities who are less well-intentioned. However, SB 940 also included several provisions that ensure that it will be used in a manner that truly preserves residential capacity within the jurisdiction, such as a sunset, reporting requirements, and triggers on when the downzonings authorized by the bill become effective. Other city-by-city measures to loosen requirements set by SB 330 should ensure that they are similarly consistent with the spirit of the law.

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

SUPPORT: (Verified 8/26/20)

City of San Jose (co-source)

Santa Clara Valley Open Space Authority (co-source)

Bill Wilson Center

Bridge Housing Corporation

Building Industry Association of the Bay Area

California Building Industry Association

California Native Plant Society

County of Santa Clara

Green Foothills

Greenbelt Alliance

Midpeninsula Regional Open Space District

Mothers Out Front South Bay

Peninsula Open Space Trust

Santa Clara Valley Audubon Society

Sierra Club

OPPOSITION: (Verified 8/26/20)

None received

ASSEMBLY FLOOR: 73-0, 8/30/20

AYES: Aguiar-Curry, Arambula, Bauer-Kahan, Berman, Bigelow, Bloom, Bonta, Brough, Burke, Calderon, Carrillo, Cervantes, Chau, Chen, Chiu, Chu, Cooley, Cooper, Cunningham, Megan Dahle, Daly, Diep, Flora, Fong, Friedman, Gabriel, Gallagher, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gonzalez, Gray, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Petrie-Norris, Quirk, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Salas, Santiago, Smith, Mark Stone, Ting, Waldron, Weber, Wood, Rendon

NO VOTE RECORDED: Boerner Horvath, Choi, Eggman, Frazier, Voepel, Wicks

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

8/31/20 0:35:08

**** END ****

SENATE THIRD READING

STR Bill Id:SB 940

Author:(Beall)

As Amended Ver:August 24, 2020

Majority vote

SUMMARY:

Grants the City of San José flexibility in meeting the no net loss in residential capacity requirements of SB 330 (Skinner), Chapter 654, Statutes of 2019.

Major Provisions

1. Allows the City of San José, for the purposes of complying with the no net loss requirement in SB 330, to first increase the residential capacity in one area of the city and count that upzoning towards a later downzoning that decreases residential capacity, as long as all of the following occur:
   1. The combined upzoning and downzoning does not result in net loss in residential capacity;
   2. The downzoning occurs within one year of the upzoning;
   3. The only parcels that are eligible for downzoning are those that are zoned for residential use, that zoning is inconsistent with the general plan of the city in effect on January 1, 2020, and the general plan designation is not for multifamily housing;
   4. The downzoning does not take effect until the City of San José establishes zoning districts that implement certain general plan land use designations, as specified;
2. Requires the City of San José to report each downzoning subject to his bill on its website and in its housing element annual report to the Department of Housing and Community Development (HCD).
3. Provides that this bill become inoperative at the statutory deadline for the City's sixth revision of their housing element, December 15, 2022.
4. Provides that the Legislature finds and declares that a special statute is necessary and that a general statute cannot be made applicable within the meaning of California Constitution Article IV, Section 16, because the City of San José has unique open space land that will be negatively affected without the ability to change a zoning ordinance to a less intensive use as described in this measure.

COMMENTS:

Background:

Aligning Planning and Zoning. State law provides 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, and a land use element that describes the general categories of uses (such as multifamily residential, single family residential, retail commercial, and open space) that are allowed in specific portions of a jurisdiction.

Cities' and counties' major land use decisions – including zoning ordinances and other aspects of development permitting – must be consistent with their general plans. However, for charter cities this was not the case until the passage of SB 1333 (Wieckowski), Chapter 856, Statutes of 2018, which extended this consistency requirement that had already applied to non-charter cities to charter cities. Therefore, as of January 1, 2019, a charter city's zoning must be in compliance with its general plan.

Challenges for San José: SB 1333 had direct implications for the City of San José, a charter city that has thousands of acres of land designated in its General Plan for Agriculture and Open Space (a designation that does not allow housing) but whose underlying zoning does allow for approximately 11,000 single-family homes. Since the general plan designation overrides the zoning designation, the amount of housing that can be legally built on these parcels is negligible – approximately 350 homes spread individually over separate farms dispersed in the city's periphery, outside its urban growth boundary. Nonetheless, in order to meet SB 1333's requirements that its zoning be consistent with its general plan, the city must "downzone" these parcels to remove the ability for housing to be constructed. However, per SB 330, Skinner, San José cannot downzone those parcels without simultaneously "upzoning" by an equivalent or greater amount of housing units elsewhere in the city.

While the rezonings required by SB 1333 have only been contemplated since 2019, there are multiple upzonings that have been in the works since San José's general plan, "Envision 2040," was adopted in 2011. These include multiple rezonings required to implement the General Plan's mixed use neighborhood, urban residential, transit residential, and urban village designations. Collectively, these rezonings would result in an increase in housing capacity of well over 20,000 units, including nearly 5,000 units near BART's Berryessa Station, which opened in June of this year.

Purpose of this bill: This bill grants the City of San José (the City) additionally flexibility regarding when it meets the requirements of SB 1333 and SB 330. Specifically, instead of requiring the downzoning and affiliated upzoning to occur at the same time, they must occur within a year of each other. San José has stated that this is necessary, as it is unrealistic to simultaneously enact multiple upzonings and downzonings affecting separate neighborhoods and communities throughout the city. By contrast, they believe it would be better for all parties to enable each of those proposed actions to be assessed on its own merits, as long as they occur closely together, and that they begin with their long-expected upzonings.

This bill builds in appropriate safeguards to protect the intent of SB 330. This includes that the downzoning cannot be effective until the upzoning occurs, the downzoning can only apply to parcels zoned for residential uses that are inconsistent with the general plan (including that the general plan designation is not for multifamily housing), and that the provisions in this bill become inoperative upon the December 2022 due date for the City's sixthrevision of the housing element. SB 940 invites oversight by requiring the City to keep a running summary of affected units on the City's website, with additional materials required to be sent to HCD and the relevant policy committees of the Legislature.

According to the Author:

According to the author, "Senate Bill 940 empowers the City of San José to protect green and open space while maintaining a commitment to increase capacity for housing developments. This bill is urgently needed because the City of San José is currently in the process of rezoning over 11,000 acres of open space that is currently incorrectly zoned for single-family homes. Without SB 940, the city will have to navigate a burdensome rezoning process that will make it difficult to meet the deadlines required in recently passed legislation. This bill will authorize the City of San José to up-zone infill housing sites proactively in the urban core and around transit, while also having the flexibility to strategically downzone sites to prevent sprawl. In other words, San José will aggressively up-zone in the urban core, then use their down-zone capacity to appropriate re-zone and protect our open spaces. I want to make it clear that this bill will not decrease the City's housing capacity."

Arguments in Support:

Supporters argue this bill would allow San Jose to expedite infill housing while protecting green space and agricultural land. According to San José Mayor Sam Liccardo, "SB 940 will allow the City to expedite upzoning for housing development and have additional time to pair those upzoning actions with downzoning actions that protect open space land."

Arguments in Opposition:

None on file

FISCAL COMMENTS:

None

VOTES:

SENATE FLOOR: 38-0-2

YES: Allen, Archuleta, Atkins, Bates, Beall, Borgeas, Bradford, Caballero, Chang, Dahle, Dodd, Durazo, Galgiani, Glazer, Lena Gonzalez, Grove, Hertzberg, Hill, Hueso, Hurtado, Jackson, Jones, Leyva, McGuire, Melendez, Mitchell, Monning, Nielsen, Pan, Portantino, Roth, Rubio, Skinner, Stern, Umberg, Wieckowski, Wiener, Wilk

ABS, ABST OR NV: Moorlach, Morrell

ASM HOUSING AND COMMUNITY DEVELOPMENT: 8-0-0

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

UPDATED:

VERSION: August 24, 2020

CONSULTANT: Steve Wertheim / H. & C.D. / (916) 319-2085 FN: 0003269

SENATE THIRD READING

STR Bill Id:SB 940

Author:(Beall)

As Amended Ver:July 27, 2020

Majority vote

SUMMARY:

Grants the City of San José flexibility in meeting the no net loss in residential capacity requirements of SB 330 (Skinner), Chapter 654, Statutes of 2019.

Major Provisions

1. Allows the City of San José, for the purposes of complying with the no net loss requirement in SB 330, to first increase the residential capacity in one area of the city and count that upzoning towards a later downzoning that decreases residential capacity, as long as all of the following occur:
   1. The combined upzoning and downzoning does not result in net loss in residential capacity;
   2. The downzoning occurs within one year of the upzoning;
   3. The only parcels that are eligible for downzoning are those that are inconsistent with the general plan of the city in effect on January 1, 2020;
   4. The downzoning does not take effect until the City of San José establishes zoning districts that implement certain general plan land use designations, as specified;
2. Requires the City of San José to report each downzoning subject to his bill on its website and in its housing element annual report to the Department of Housing and Community Development (HCD).
3. Provides that this bill become inoperative at the statutory deadline for the City's sixth revision of their housing element, December 15, 2022.
4. Provides that the Legislature finds and declares that a special statute is necessary and that a general statute cannot be made applicable within the meaning of California Constitution Article IV, Section 16, because the City of San José has unique open space land that will be negatively affected without the ability to change a zoning ordinance to a less intensive use as described in this measure

COMMENTS:

Background:

Aligning Planning and Zoning. State law provides 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, and a land use element that describes the general categories of uses (such as multifamily residential, single family residential, retail commercial, and open space) that are allowed in specific portions of a jurisdiction.

Cities' and counties' major land use decisions – including zoning ordinances and other aspects of development permitting – must be consistent with their general plans. However, for charter cities this was not the case until the passage of SB 1333 (Wieckowski), Chapter 856, Statutes of 2018, which extended this consistency requirement that had already applied to non-charter cities to charter cities. Therefore, as of January 1, 2019, a charter city's zoning must be in compliance with its general plan.

Challenges for San José: SB 1333 had direct implications for the City of San José, a charter city that has thousands of acres of land designated in its General Plan for Agriculture and Open Space (a designation that does not allow housing) but whose underlying zoning does allow for approximately 11,000 single-family homes. Since the general plan designation overrides the zoning designation, the amount of housing that can be legally built on these parcels is negligible – approximately 350 homes spread individually over separate farms dispersed in the city's periphery, outside its urban growth boundary. Nonetheless, in order to meet SB 1333's requirements that its zoning be consistent with its general plan, the city must "downzone" these parcels to remove the ability for housing to be constructed. However, per SB 330, Skinner, San José cannot downzone those parcels without simultaneously "upzoning" by an equivalent or greater amount of housing units elsewhere in the city.

While the rezonings required by SB 1333 have only been contemplated since 2019, there are multiple upzonings that have been in the works since San José's general plan, "Envision 2040," was adopted in 2011. These include multiple rezonings required to implement the General Plan's mixed use neighborhood, urban residential, transit residential, and urban village designations. Collectively, these rezonings would result in an increase in housing capacity of well over 20,000 units, including nearly 5,000 units near BART's Berryessa Station, which opened in June of this year.

Purpose of this bill: SB 940 grants the City of San José (the City) additionally flexibility regarding when it meets the requirements of SB 1333 and SB 330. Specifically, instead of requiring the downzoning and affiliated upzoning to occur at the same time, they must occur within a year of each other. San José has stated that this is necessary, as it is unrealistic to simultaneously enact multiple upzonings and downzonings affecting separate neighborhoods and communities throughout the city. By contrast, they believe it would be better for all parties to enable each of those proposed actions to be assessed on its own merits, as long as they occur closely together, and that they begin with their long-expected upzonings.

This bill builds in appropriate safeguards to protect the intent of SB 330. This includes that the downzoning cannot be effective until the upzoning occurs, the downzoning can only apply to parcels zoned for residential uses that are inconsistent with the general plan, and that the provisions in this bill become inoperative upon the December 2022 due date for the City's sixthrevision of the housing element. SB 940 invites oversight by requiring the City to keep a running summary of affected units on the City's website, with additional materials required to be sent to HCD and the relevant policy committees of the Legislature.

According to the Author:

Author's statement: According to the author, "Senate Bill 940 empowers the City of San José to protect green and open space while maintaining a commitment to increase capacity for housing developments. This bill is urgently needed because the City of San José is currently in the process of rezoning over 11,000 acres of open space that is currently incorrectly zoned for single-family homes. Without SB 940, the city will have to navigate a burdensome rezoning process that will make it difficult to meet the deadlines required in recently passed legislation. This bill will authorize the City of San José to up-zone infill housing sites proactively in the urban core and around transit, while also having the flexibility to strategically downzone sites to prevent sprawl. In other words, San José will aggressively up-zone in the urban core, then use their down-zone capacity to appropriate re-zone and protect our open spaces. I want to make it clear that this bill will not decrease the City's housing capacity."

Arguments in Support:

Supporters argue this bill would allow San Jose to expedite infill housing while protecting green space and agricultural land. According to San José Mayor Sam Liccardo, "SB 940 will allow the City to expedite upzoning for housing development and have additional time to pair those upzoning actions with downzoning actions that protect open space land."

Arguments in Opposition:

None on file

FISCAL COMMENTS:

None

VOTES:

SENATE FLOOR: 38-0-2

YES: Allen, Archuleta, Atkins, Bates, Beall, Borgeas, Bradford, Caballero, Chang, Dahle, Dodd, Durazo, Galgiani, Glazer, Lena Gonzalez, Grove, Hertzberg, Hill, Hueso, Hurtado, Jackson, Jones, Leyva, McGuire, Melendez, Mitchell, Monning, Nielsen, Pan, Portantino, Roth, Rubio, Skinner, Stern, Umberg, Wieckowski, Wiener, Wilk

ABS, ABST OR NV: Moorlach, Morrell

ASM HOUSING AND COMMUNITY DEVELOPMENT: 8-0-0

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

UPDATED:

VERSION: July 27, 2020

CONSULTANT: Steve Wertheim / H. & C.D. / (916) 319-2085 FN: 0003167

Date of Hearing: July 29, 2020

ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT

David Chiu, Chair

SBPCA Bill Id:SB 940

Author:(Beall) – As Amended Ver:July 27, 2020

SENATE VOTE: 38-0

SUBJECT: Housing Crisis Act of 2019: City of San Jose

SUMMARY: Grants the City of San José flexibility in meeting the no net loss in residential capacity requirements of SB 330 (Skinner, 2019). Specifically, this bill:

1. Allows the City of San José, for the purposes of complying with the no net loss requirement in SB 330, to first increase the residential capacity in one area of the city and count that upzoning towards a later downzoning that decreases residential capacity, as long as all of the following occur:
   1. The combined upzoning and downzoning does not result in net loss in residential capacity;
   2. The downzoning occurs within one year of the upzoning;
   3. The only parcels that are eligible for downzoning are those that are inconsistent with the general plan of the city in effect on January 1, 2020;
   4. The downzoning does not take effect until the City of San José establishes zoning districts that implement certain general plan land use designations, as specified;
2. Requires the City of San José to report each downzoning subject to his bill on its website and in its housing element annual report to the Department of Housing and Community Development (HCD).
3. Provides that this bill become inoperative at the statutory deadline for the City’s sixth revision of their housing element, December 15, 2022.
4. Provides that the Legislature finds and declares that a special statute is necessary and that a general statute cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because the City of San José has unique open space land that will be negatively affected without the ability to change a zoning ordinance to a less intensive use as described in this measure.

EXISTING LAW:

1. 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.” Allows cities that adopt charters to control their own “municipal affairs.” In all other matters, charter cities must follow the general, statewide laws (California Constitution).
2. 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, and a land use element that describes the general categories of uses (such as multifamily residential, single family residential, retail commercial, and open space) that are allowed in specific portions of a jurisdiction. Requires cities’ and counties’ major land use decisions – including zoning ordinances and other aspects of development permitting – to be consistent with their general plans (Local Planning Law, Government Code Section 65100 – 65763).
3. Requires a local government’s housing element to allow for enough housing to be produced to meet the jurisdiction’s regional housing need allocation (RHNA), which is updated on a statutory schedule (generally every eight years). The Department of Housing and Community Development (HCD) reviews and certifies housing elements as compliant with state law, and also reviews their zoning ordinances for consistency with the approved housing element (Housing Element Law, Government Code Section 65580 – 65589.11).
4. Provides, pursuant to the Housing Crisis Act of 2019 (SB 330), that cities and counties can reduce residential development intensity (“downzone”) in one part of their jurisdiction as long as they increase residential intensity (“upzone”) commensurately in another part of the jurisdiction at the same time, so that there is no net loss in residential capacity (Government Code 66300(i)).

FISCAL EFFECT: None

COMMENTS:

Author’s statement: According to the author, “Senate Bill 940 empowers the City of San José to protect green and open space while maintaining a commitment to increase capacity for housing developments. This bill is urgently needed because the City of San José is currently in the process of rezoning over 11,000 acres of open space that is currently incorrectly zoned for single-family homes. Without SB 940, the city will have to navigate a burdensome rezoning process that will make it difficult to meet the deadlines required in recently passed legislation. This bill will authorize the City of San José to up-zone infill housing sites proactively in the urban core and around transit, while also having the flexibility to strategically downzone sites to prevent sprawl. In other words, San José will aggressively up-zone in the urban core, then use their down-zone capacity to appropriate re-zone and protect our open spaces. I want to make it clear that this bill will not decrease the City’s housing capacity.”

Background:

Aligning Planning and Zoning. State law provides 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, and a land use element that describes the general categories of uses (such as multifamily residential, single family residential, retail commercial, and open space) that are allowed in specific portions of a jurisdiction.

Cities’ and counties’ major land use decisions – including zoning ordinances and other aspects of development permitting – must be consistent with their general plans. However, for charter cities this was not the case until the passage of SB 1333 (Wieckowski, 2018), which extended this consistency requirement that had already applied to non-charter cities to charter cities. Therefore, as of January 1, 2019, a charter city’s zoning must be in compliance with its general plan.

Challenges for San José: SB 1333 had direct implications for the City of San José, a charter city that has thousands of acres of land designated in its General Plan for Agriculture and Open Space (a designation that does not allow housing) but whose underlying zoning does allow for approximately 11,000 single-family homes. Since the general plan designation overrides the zoning designation, the amount of housing that can be legally built on these parcels is negligible – approximately 350 homes spread individually over separate farms dispersed in the city’s periphery, outside its urban growth boundary. Nonetheless, in order to meet SB 1333’s requirements that its zoning be consistent with its general plan, the city must “downzone” these parcels to remove the ability for housing to be constructed. However, per SB 330, Skinner, San José cannot downzone those parcels without simultaneously “upzoning” by an equivalent or greater amount of housing units elsewhere in the city.

While the rezonings required by SB 1333 have only been contemplated since 2019, there are multiple upzonings that have been in the works since San José’s general plan, “Envision 2040,” was adopted in 2011. These include multiple rezonings required to implement the General Plan’s mixed use neighborhood, urban residential, transit residential, and urban village designations. Collectively, these rezonings would result in an increase in housing capacity of well over 20,000 units, including nearly 5,000 units near BART’s Berryessa Station, which opened in June of this year.

Purpose of this bill: SB 940 grants the City of San José (the City) additionally flexibility regarding when it meets the requirements of SB 1333 and SB 330. Specifically, instead of requiring the downzoning and affiliated upzoning to occur at the same time, they must occur within a year of each other. San José has stated that this is necessary, as it is unrealistic to simultaneously enact multiple upzonings and downzonings affecting separate neighborhoods and communities throughout the city. By contrast, they believe it would be better for all parties to enable each of those proposed actions to be assessed on its own merits, as long as they occur closely together, and that they begin with their long-expected upzonings.

This bill builds in appropriate safeguards to protect the intent of SB 330. This includes that the downzoning cannot be effective until the upzoning occurs, the downzoning can only apply to parcels zoned for residential uses that are inconsistent with the general plan, and that the provisions in this bill become inoperative upon the December 2022 due date for the City’s sixthrevision of the housing element. SB 940 invites oversight by requiring the City to keep a running summary of affected units on the City’s website, with additional materials required to be sent to HCD and the relevant policy committees of the Legislature.

Arguments in Support: Supporters argue this bill would allow San Jose to expedite infill housing while protecting green space and agricultural land. According to San José Mayor Sam Liccardo, “SB 940 will allow the City to expedite upzoning for housing development and have additional time to pair those upzoning actions with downzoning actions that protect open space land.”

Arguments in Opposition: None on file.

Related Legislation:

SB 330 (Skinner), Chapter 654, Statutes of 2019: This bill restricts, for a period of five years, actions by cities and counties that would reduce the production of housing.

SB 1333 (Wieckowski), Chapter 856, Statutes of 2018: This bill applies specified provisions in the Government Code pertaining to local planning and zoning requirements to charter cities.

REGISTERED SUPPORT / OPPOSITION:

Support

City of San José (Co-Sponsor)
Santa Clara Valley Open Space Authority (Co-Sponsor)

Bill Wilson Center
Building Industry Association of the Bay Area
California Building Industry Association
California Native Plant Society

County of Santa Clara
Green Foothills
Greenbelt Alliance

Midpeninsula Regional Open Space District
Santa Clara Valley Audubon Society

Sierra Club California

Opposition

None on file

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

Date of Hearing: July 28, 2020

ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT

David Chiu, Chair

SBPCA Bill Id:SB 940

Author:(Beall) – As Amended Ver:July 27, 2020

SENATE VOTE: 38-0

SUBJECT: Housing Crisis Act of 2019: City of San Jose

SUMMARY: Grants the City of San José flexibility in meeting the no net loss in residential capacity requirements of SB 330 (Skinner, 2019). Specifically, this bill:

1. Allows the City of San José, for the purposes of complying with the no net loss requirement in SB 330, to first increase the residential capacity in one area of the city and count that upzoning towards a later downzoning that decreases residential capacity, as long as all of the following occur:
   1. The combined upzoning and downzoning does not result in net loss in residential capacity;
   2. The downzoning occurs within one year of the upzoning;
   3. The only parcels that are eligible for downzoning are those that are inconsistent with the general plan of the city in effect on January 1, 2020;
   4. The downzoning does not take effect until the City of San José establishes zoning districts that implement certain general plan land use designations, as specified;
2. Requires the City of San José to report each downzoning subject to his bill on its website and in its housing element annual report to the Department of Housing and Community Development (HCD).
3. Provides that this bill become inoperative at the statutory deadline for the City’s sixth revision of their housing element, December 15, 2022.
4. Provides that the Legislature finds and declares that a special statute is necessary and that a general statute cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because the City of San José has unique open space land that will be negatively affected without the ability to change a zoning ordinance to a less intensive use as described in this measure.

EXISTING LAW:

1. 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.” Allows cities that adopt charters to control their own “municipal affairs.” In all other matters, charter cities must follow the general, statewide laws (California Constitution).
2. 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, and a land use element that describes the general categories of uses (such as multifamily residential, single family residential, retail commercial, and open space) that are allowed in specific portions of a jurisdiction. Requires cities’ and counties’ major land use decisions – including zoning ordinances and other aspects of development permitting – to be consistent with their general plans (Local Planning Law, Government Code Section 65100 – 65763).
3. Requires a local government’s housing element to allow for enough housing to be produced to meet the jurisdiction’s regional housing need allocation (RHNA), which is updated on a statutory schedule (generally every eight years). The Department of Housing and Community Development (HCD) reviews and certifies housing elements as compliant with state law, and also reviews their zoning ordinances for consistency with the approved housing element (Housing Element Law, Government Code Section 65580 – 65589.11).
4. Provides, pursuant to the Housing Crisis Act of 2019 (SB 330), that cities and counties can reduce residential development intensity (“downzone”) in one part of their jurisdiction as long as they increase residential intensity (“upzone”) commensurately in another part of the jurisdiction at the same time, so that there is no net loss in residential capacity (Government Code 66300(i)).

FISCAL EFFECT: None

COMMENTS:

Author’s statement: According to the author, “Senate Bill 940 empowers the City of San José to protect green and open space while maintaining a commitment to increase capacity for housing developments. This bill is urgently needed because the City of San José is currently in the process of rezoning over 11,000 acres of open space that is currently incorrectly zoned for single-family homes. Without SB 940, the city will have to navigate a burdensome rezoning process that will make it difficult to meet the deadlines required in recently passed legislation. This bill will authorize the City of San José to up-zone infill housing sites proactively in the urban core and around transit, while also having the flexibility to strategically downzone sites to prevent sprawl. In other words, San José will aggressively up-zone in the urban core, then use their down-zone capacity to appropriate re-zone and protect our open spaces. I want to make it clear that this bill will not decrease the City’s housing capacity.”

Background:

Aligning Planning and Zoning. State law provides 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, and a land use element that describes the general categories of uses (such as multifamily residential, single family residential, retail commercial, and open space) that are allowed in specific portions of a jurisdiction.

Cities’ and counties’ major land use decisions – including zoning ordinances and other aspects of development permitting – must be consistent with their general plans. However, for charter cities this was not the case until the passage of SB 1333 (Wieckowski, 2018), which extended this consistency requirement that had already applied to non-charter cities to charter cities. Therefore, as of January 1, 2019, a charter city’s zoning must be in compliance with its general plan.

Challenges for San José: SB 1333 had direct implications for the City of San José, a charter city that has thousands of acres of land designated in its General Plan for Agriculture and Open Space (a designation that does not allow housing) but whose underlying zoning does allow for approximately 11,000 single-family homes. Since the general plan designation overrides the zoning designation, the amount of housing that can be legally built on these parcels is negligible – approximately 350 homes spread individually over separate farms dispersed in the city’s periphery, outside its urban growth boundary. Nonetheless, in order to meet SB 1333’s requirements that its zoning be consistent with its general plan, the city must “downzone” these parcels to remove the ability for housing to be constructed. However, per SB 330, Skinner, San José cannot downzone those parcels without simultaneously “upzoning” by an equivalent or greater amount of housing units elsewhere in the city.

While the rezonings required by SB 1333 have only been contemplated since 2019, there are multiple upzonings that have been in the works since San José’s general plan, “Envision 2040,” was adopted in 2011. These include multiple rezonings required to implement the General Plan’s mixed use neighborhood, urban residential, transit residential, and urban village designations. Collectively, these rezonings would result in an increase in housing capacity of well over 20,000 units, including nearly 5,000 units near BART’s Berryessa Station, which opened in June of this year.

Purpose of this bill: SB 940 grants the City of San José (the City) additionally flexibility regarding when it meets the requirements of SB 1333 and SB 330. Specifically, instead of requiring the downzoning and affiliated upzoning to occur at the same time, they must occur within a year of each other. San José has stated that this is necessary, as it is unrealistic to simultaneously enact multiple upzonings and downzonings affecting separate neighborhoods and communities throughout the city. By contrast, they believe it would be better for all parties to enable each of those proposed actions to be assessed on its own merits, as long as they occur closely together, and that they begin with their long-expected upzonings.

This bill builds in appropriate safeguards to protect the intent of SB 330. This includes that the downzoning cannot be effective until the upzoning occurs, the downzoning can only apply to parcels zoned for residential uses that are inconsistent with the general plan, and that the provisions in this bill become inoperative upon the December 2022 due date for the City’s sixthrevision of the housing element. SB 940 invites oversight by requiring the City to keep a running summary of affected units on the City’s website, with additional materials required to be sent to HCD and the relevant policy committees of the Legislature.

Arguments in Support: Supporters argue this bill would allow San Jose to expedite infill housing while protecting green space and agricultural land. According to San José Mayor Sam Liccardo, “SB 940 will allow the City to expedite upzoning for housing development and have additional time to pair those upzoning actions with downzoning actions that protect open space land.”

Arguments in Opposition: None on file.

Related Legislation:

SB 330 (Skinner), Chapter 654, Statutes of 2019: This bill restricts, for a period of five years, actions by cities and counties that would reduce the production of housing.

SB 1333 (Wieckowski), Chapter 856, Statutes of 2018: This bill applies specified provisions in the Government Code pertaining to local planning and zoning requirements to charter cities.

REGISTERED SUPPORT / OPPOSITION:

Support

City of San José (Co-Sponsor)
Santa Clara Valley Open Space Authority (Co-Sponsor)

Bill Wilson Center
Building Industry Association of the Bay Area
California Building Industry Association
California Native Plant Society

County of Santa Clara
Green Foothills
Greenbelt Alliance

Midpeninsula Regional Open Space District
Santa Clara Valley Audubon Society

Sierra Club California

Opposition

None on file

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

 THIRD READING  

Bill No: SB 940

Author: Beall (D), et al.

Amended: 4/17/20

Vote: 21

SENATE GOVERNANCE & FIN. COMMITTEE: 6-0, 5/11/20

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

NO VOTE RECORDED: Moorlach

SUBJECT: Housing Crisis Act of 2019: City of San Jose

SOURCE: City of San Jose

Santa Clara Valley Open Space Authority

DIGEST:

This bill grants the City of San Jose flexibility in meeting the no net loss in residential capacity requirements of SB 330 (Skinner Chapter 654, Statues of 2019).

ANALYSIS:

Existing law:

1. Allows, under the California Constitution:
   1. 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.”
   2. Cities that adopt charters to control their own “municipal affairs.” In all other matters, charter cities must follow the general, statewide laws.

1. 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, and a land use element that describes the general categories of uses (such as multifamily residential, single family residential, retail commercial, and open space) that are allowed in specific portions of a jurisdiction.
2. Requires cities’ and counties’ major land use decisions—including zoning ordinances and other aspects of development permitting—to be consistent with their general plans.
3. Requires a local government’s housing element to allow for enough housing to be produced to meet the jurisdiction’s regional housing need allocation (RHNA), which is updated on a statutory schedule (generally every eight years). The Department of Housing and Community Development (HCD) reviews and certifies housing elements as compliant with state law, and also reviews their zoning ordinances for consistency with the approved housing element.
4. Provides, pursuant to the Housing Crisis Act of 2019 (SB 330):
   1. Prohibits, until January 1, 2025, most local governments from changing local planning rules to reduce residential capacity within the jurisdiction or otherwise change land uses to a less intensive use that would reduce residential capacity.
   2. Allows cities and counties to reduce residential development intensity (“downzone”) in one part of their jurisdiction as long as they increase residential intensity (“upzone”) commensurately in another part of the jurisdiction at the same time, so that there is no net loss in residential capacity.

This bill:

1. Allows the City of San Jose, for the purposes of complying with the no net loss requirement in SB 330, to first increase the residential capacity in one area of the city and count that upzoning towards a later downzoning of an eligible parcel.
2. Applies this bill’s provisions only to parcels zoned for residential uses that are inconsistent with the general plan of the city in effect on January 1, 2020. The downzoning authorized by SB 940 must occur within one year of the increase in zoned capacity takes place.
3. Provides that any downzonings only take effect once the City of San Jose establishes zoning districts that implement mixed use neighborhood, urban residential, transit residential, and urban village general plan land use designations.
4. Requires the city of San Jose to report each downzoning in the annual progress report that the city must file with HCD and to submit the annual report to the relevant policy committees of the Legislature in every year that the City of San Jose amends a zoning ordinance pursuant to this bill.
5. Sunsets this bill once HCD certifies the city’s housing element for the sixth cycle.
6. Includes findings and declarations to support its purposes.

Background

The City of San Jose is a charter city. The city’s current general plan, Envision 2040, proposes 29 types of land uses within the city’s boundaries, including designations for urban villages that are intended to accommodate higher density housing and significant job growth, mixed use neighborhood, urban residential, transit residential that is intended to put mixed-use development near transit stations at moderately high density, urban residential that allows for medium density development and some commercial uses, and mixed use neighborhood that is intended for individual neighborhoods of denser single family homes or townhomes. The city has not yet adopted all the conforming zoning ordinances for these designations.

San Jose has relied on maintaining inconsistency between their general plan and zoning to ensure that development was concentrated in its urban core, rather than in its undeveloped outlying areas. Since the general plan designation overrides the zoning designation, the amount of housing that can be legally built on these parcels is negligible. Prior to 2019, state law didn’t require zoning ordinances for charter cities to be consistent with their general plans. SB 1333 (Wieckowski, Chapter 856, Statutes of 2018) extended the consistency requirement, as well as several other provisions of planning and zoning law, to charter cities. However, in order to meet SB 1333’s requirements, the city must downzone these parcels to less intensive uses. SB 330 prohibits downzoning unless a city simultaneously upzones to avoid any loss in residential capacity.

Because San Jose is embarking on a more comprehensive effort to bring zoning for many parcels into consistency with its general plan, it argues that it is infeasible to downzone and upzone all the parcels that it needs to modify for consistency simultaneously, as SB 330 requires. The city and the Santa Clara Valley Open Space Authority want the Legislature to grant the City of San Jose flexibility on when upzonings and downzonings can occur under SB 330.

Comments

1. Purpose of the bill. According to the author, “Senate Bill 940 empowers the City of San Jose to protect green and open space while maintaining a commitment to increase capacity for housing developments. This bill is urgently needed because the City of San Jose is currently in the process of rezoning over 11,000 acres of open space that is currently incorrectly zoned for single-family homes. Without SB 940, the city will have to navigate a burdensome rezoning process that will make it difficult to meet the deadlines required in recently passed legislation. This bill will authorize the City of San Jose to up-zone infill housing sites proactively in the urban core and around transit, while also having the flexibility to strategically down-zone sites to prevent sprawl. In other words, San Jose will aggressively up-zone in the urban core, then use their down-zone capacity to appropriate re-zone and protect our open spaces. I want to make it clear that this bill will not decrease the City’s housing capacity.”
2. Who’s next? SB 1333 required all charter cities to bring their zoning ordinances into conformity with their general plans. While some charter cities required consistency between their general plans and zoning ordinances prior to SB 1333, others did not. Accordingly, it seems likely that other cities will come forward with reasons of their own for relaxing provisions of SB 330, whether because of SB 1333’s consistency requirement or other implementation issues that arise. SB 940 sets a precedent for easing compliance with SB 330, which could be used by those cities who are less well-intentioned. However, SB 940 also included several provisions that ensure that it will be used in a manner that truly preserves residential capacity within the jurisdiction, such as a sunset, reporting requirements, and triggers on when the downzonings authorized by the bill become effective. Other city-by-city measures to loosen requirements set by SB 330 should ensure that they are similarly consistent with the spirit of the law.

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

SUPPORT: (Verified 5/14/20)

City of San Jose (co-source)

Santa Clara Valley Open Space Authority (co-source)

Building Industry Association of the Bay Area
California Building Industry Association
Green Foothills
Santa Clara Valley Audubon Society

OPPOSITION: (Verified 5/14/20)

None received

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

5/15/20 8:59:28

**** END ****

SENATE COMMITTEE ON GOVERNANCE AND FINANCE

Senator Mike McGuire, Chair

2019 - 2020 Regular

Housing Crisis Act of 2019: City of San Jose

Grants the City of San Jose flexibility in meeting the no net loss in residential capacity requirements of SB 330 (Skinner, 2019).

Due to the COVID-19 Pandemic and the unprecedented nature of the 2020 Legislative Session, all Senate Policy Committees are working under a compressed timeline.  This timeline does not allow this bill to be referred and heard by more than one committee as a typical timeline would allow.  In order to fully vet the contents of this measure for the benefit of Senators and the public, this analysis includes information from the Senate Housing Committee.

Background

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. The California Constitution also 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.

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, and a land use element that describes the general categories of uses (such as multifamily residential, single family residential, retail commercial, and open space) that are allowed in specific portions of a jurisdiction.

Cities’ and counties’ major land use decisions—including zoning ordinances and other aspects of development permitting—must be consistent with their general plans. However, prior to 2019, state law didn’t require zoning ordinances for charter cities to be consistent with their general plans. SB 1333 (Wieckowski, 2018) extended the consistency requirement, as well as several other provisions of planning and zoning law, to charter cities.

State law imposes numerous requirements on the housing element of a general plan. A local government’s housing element must allow for enough housing to be produced to meet the jurisdiction’s regional housing need allocation (RHNA), which is updated on a statutory schedule (generally every eight years). The Department of Housing and Community Development (HCD) reviews and certifies housing elements as compliant with state law, and also reviews their zoning ordinances for consistency with the approved housing element. If a local government’s zoning ordinances do not include enough sites where housing is permitted at the density needed to meet its RHNA obligations, the local government must rezone sufficient additional sites within three years of certification of their housing element.

SB 330 (Skinner, 2019). The Legislature has enacted a variety of statutes to facilitate and encourage the provision of housing, including the Housing Accountability Act, the Permit Streamlining Act, and, most recently, the Housing Crisis Act of 2019 (SB 330, Skinner). Among other provisions, SB 330 prohibits, until January 1, 2025, most local governments from changing local planning rules to reduce residential capacity within the jurisdiction or otherwise change land uses to a less intensive use that would reduce residential capacity. However, SB 330 allows cities and counties to reduce residential development intensity (“downzone”) in one part of their jurisdiction as long as they increase residential intensity (“upzone”) commensurately in another part of the jurisdiction at the same time, so that there is no net loss in residential capacity.

City of San Jose zoning ordinances. The City of San Jose is a charter city. The city’s current general plan, Envision 2040, proposes 29 types of land uses within the city’s boundaries, including designations for urban villages that are intended to accommodate higher density housing and significant job growth, mixed use neighborhood, urban residential, transit residential that is intended to put mixed-use development near transit stations at moderately high density, urban residential that allows for medium density development and some commercial uses, and mixed use neighborhood that is intended for individual neighborhoods of denser single family homes or townhomes. The city has not yet adopted all the conforming zoning ordinances for these designations. The city must also adopt a housing element for the sixth cycle of housing element revisions no later than January 2023; accordingly the rezonings required under housing element law to ensure that there are adequate sites to meet the city’s RHNA obligations must take place no later than January 2026.

Many parcels outside San Jose’s urban growth boundary (but within its territory) are designated for open space or agricultural uses in the city’s general plan, but have zoning designations that allow residential uses that are inconsistent with those general plan designations, such as single family housing. Additionally, some industrial or commercial general plan designations are zoned to allow inconsistent residential uses. The image on the following page identifies these parcels.

San Jose is a charter city that for many years has relied on maintaining inconsistency between their general plan and zoning to ensure that development was concentrated in its urban core, rather than in its undeveloped outlying areas. Since the general plan designation overrides the zoning designation, the amount of housing that can be legally built on these parcels is negligible. However, in order to meet SB 1333’s requirements that its zoning be consistent with its general plan, the city must downzone these parcels to less intensive uses. SB 330 prohibits downzoning unless a city simultaneously upzones to avoid any loss in residential capacity.

Because San Jose is embarking on a more comprehensive effort to bring zoning for many parcels into consistency with its general plan, it argues that it is infeasible to downzone and upzone all the parcels that it needs to modify for consistency simultaneously, as SB 330 requires. The city wants the Legislature to grant it flexibility on when upzonings and downzonings can occur under SB 330.

Proposed Law

Senate Bill 940 allows the City of San Jose, for the purposes of complying with the no net loss requirement in SB 330, to first increase the residential capacity in one area of the city and count that upzoning towards a later downzoning of an eligible parcel. SB 940 applies only to parcels zoned for residential uses that are inconsistent with the general plan of the city in effect on January 1, 2020. The downzoning authorized by SB 940 must occur within one year of the

increase in zoned capacity takes place, and SB 940 provides that any downzonings only take effect once the City of San Jose establishes zoning districts that implement mixed use neighborhood, urban residential, transit residential, and urban village general plan land use designations.

SB 940 requires the City of San Jose to report each downzoning in the annual progress report that the city must file with HCD and to submit the annual report to the relevant policy committees of the Legislature in every year that the City of San Jose amends a zoning ordinance pursuant to the bill.

SB 940 provides that its provisions become inoperative once HCD certifies the City’s housing element for the sixth cycle and includes findings and declarations to support its purposes.

State Revenue Impact

No estimate.

Comments

1. Purpose of the bill. According to the author, “Senate Bill 940 empowers the City of San Jose to protect green and open space while maintaining a commitment to increase capacity for housing developments. This bill is urgently needed because the City of San Jose is currently in the process of rezoning over 11,000 acres of open space that is currently incorrectly zoned for single-family homes. Without SB 940, the city will have to navigate a burdensome rezoning process that will make it difficult to meet the deadlines required in recently passed legislation. This bill will authorize the City of San Jose to up-zone infill housing sites proactively in the urban core and around transit, while also having the flexibility to strategically down-zone sites to prevent sprawl. In other words, San Jose will aggressively up-zone in the urban core, then use their down-zone capacity to appropriate re-zone and protect our open spaces. I want to make it clear that this bill will not decrease the City’s housing capacity.”

2. Careful…. Local governments are a creative bunch, and some find ways to skirt laws that they disagree with. Ordinarily, a request for flexibility on the upzonings and downzonings mandated by SB 330 could be seen as a mechanism for local agencies to avoid the bill’s requirements. However, SB 940 contains several provisions that ensure that it will be used in a manner that truly preserves residential capacity within the jurisdiction, as follows:

• The sixth housing element cycle is expected to require significant increases in residential capacity to account for much higher RHNA obligations. As a result, most jurisdictions, including San Jose, will have to upzone additional sites to comply with state housing law, even in the absence of SB 330’s no net loss requirement. SB 940 allows the city to proactively upzone for the purposes of later reducing residential capacity, but sunsets this authority once HCD certifies the city’s housing element. This sunset helps to ensure that the city does not get to count upzonings that it would have been legally required to do anyway towards the downzonings that it wants to pursue.
• Similarly, SB 940 provides that the city’s downzonings do not take effect until the city adopts zoning ordinances for many of its land use designations that allow dense residential development. This requirement ensures that residential capacity will be increased, consistent with SB 330’s purpose.
• Finally, the bill requires the city to report annually on the use of this authority, providing the opportunity for the Legislature and HCD to hold the city accountable.

3. Who’s next? SB 1333 required all charter cities to bring their zoning ordinances into conformity with their general plans. While some charter cities required consistency between their general plans and zoning ordinances prior to SB 1333, others did not. Accordingly, it seems likely that other cities are likely to come forward with reasons of their own for relaxing provisions of SB 330, whether because of SB 1333’s consistency requirement or other implementation issues that arise. SB 940 sets a precedent for easing compliance with SB 330, which could be used by those cities who are less well-intentioned. Other city-by-city measures to loosen requirements set by SB 330 should ensure that, similar to SB 940, they are consistent with the spirit of the law.

4. Special legislation. The California Constitution prohibits special legislation when a general law can apply (Article IV, §16). SB 940 contains findings and declarations explaining the need for legislation that applies only to the City of San Jose.

Support and Opposition

(5/7/20)

Support: City of San Jose (co-sponsor); Santa Clara Valley Open Space Authority (co-sponsor); Building Industry Association of the Bay Area.

Opposition: Unknown.

-- END --