HomeMy WebLinkAboutItem 13 - Study Session for recent 2019 Housing Legislation
Department Name: Community Development
Cost Center: 40400
For Agenda of: January 21, 2020
Placement: Study Session
Estimated Time: 30 Minutes
FROM: Michael Codron, Community Development Director
Prepared By: Cara Vereschagin, Housing Coordinator
SUBJECT: STUDY SESSION: SUMMARY AND UPDATE OF RECENT 2019 HOUSING
LEGISLATION
RECOMMENDATION
Receive an update on recently passed State housing legislation and discuss action items and
anticipated impacts to ensure ongoing compliance with City of San Luis Obispo (City)
operations.
DISCUSSION
Background
The 2019 California Legislative Session ended on October 13, 2019 with over 30 new bills in
response to the State’s worsening housing crisis. Recently elected Governor Gavin Newsom
signed several of these bills designed to increase housing production by easing development
regulations and compelling jurisdictions to make fee and land information readily available to
potential developers. There were also several bills passed that impose new ongoing reporting and
inventory requirements for local jurisdictions.
Policy Context
The new State housing legislation is impactful to the City as it creates several new requirements
staff will have to incorporate into City practices beginning January 1, 2020. Numerous
professional organizations provided information regarding these bills, including the American
Planning Association, League of California Cities, and various housing and land use law firms
across the State. An initial summary collected from the opinions of the above entities, as well as
any initial action items and foreseen impacts to the City, are provided in Attachment A for new
State laws, pertinent for the City. Note that several other housing-related laws were passed in the
2019 Legislative Session; however, these laws are specific to regional areas and jurisdictions
outside of San Luis Obispo and the Central Coast, thus they are not summarized in Attachment
A.
Additionally, a summary and action items are included in relation to SB 166, which was passed
as part of the 2017 Housing Package. This is because that bill contains specific requirements the
City must comply with in relation to the Sites Inventory to accommodate the 6th Cycle Regional
Housing Needs Allocation, which is part of the current Housing Element Update.
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The following table displays the bills discussed in Attachment A and includes links to the
corresponding bill text.
Category Bill Title
Bills Removing Barriers to Boost Housing
Production
SB 330 – Housing Crisis Act of 2019 and
Changes to Permit Streamlining Act &
Housing Accountability Act
AB 1763 – Density Bonuses for Affordable
Housing
AB 1743 – Eligibility of Property Welfare
Exemptions
AB 116 – Enhanced Infrastructure Financing
Districts
Surplus Land Databases and Reporting
Requirements
AB 1486 / SB 6 / AB 1255 – Expansion of
Surplus Land Act and Reporting
AB 1483 – Housing Data Collection and
Reporting
Requirements for Accessory Dwelling
Units
AB 68 / AB 881 / SB 13 – Modifications to
Increase Accessory Dwelling Unit
Development
AB 587 – Sale of Accessory Dwelling Units
AB 670 – Construction of Accessory
Dwelling Units in Common Interest
Developments
AB 671 – Affordable Accessory Dwelling
Unit Program Creation
Established “Uses by Right”
AB 101 – Housing and Homelessness
Budget and Regulations
SB 234 – Keeping Kids Closer to Home Act
Related Housing Element Laws from 2017
Housing Package
SB 166 – “No Net Loss” Law
Previous Council and Advisory Body Action
Although there has not been any previous Council or Advisory Body action on these particular
bills, City staff have historically held study sessions and have provided updates to the Council
and Planning Commission on new State housing laws that affect local policy and regulations as
applicable. Ongoing monitoring and reporting on changing State housing legislation is a task in
the 2019-21 Housing Major City Goal, as well as a theme commonly referenced throughout the
Housing Element.
Public Engagement
As this recommendation is to receive an update on recently passed housing legislation, no public
engagement is required. However, as this legislation relates to updating City policies,
ordinances, and standards, public engagement and outreach will be conducted, with opportunities
for public to provide comments at or before any future hearings or study sessions.
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Next Steps
City staff will continue to analyze the housing legislation for additional impacts and monitor for
any amendments that arise. Staff is also working on an update to the City’s current Accessory
Dwelling Unit Ordinance, in accordance with these new State laws, which is anticipated for City
Council review in early February 2020.
ENVIRONMENTAL REVIEW
Since this item is informational in nature and involves no action by the City Council, the
California Environmental Quality Act does not apply to the recommended action in this report,
because the action does not constitute a “Project” under CEQA Guidelines Sec. 15378.
FISCAL IMPACT
Budgeted: No Budget Year: 2019-2020
Funding Identified: No
Fiscal Analysis
Funding Sources
Total Budget
Available
Current Funding
Request
Remaining
Balance
Annual
Ongoing Cost
General Fund N/A
State
Federal
Fees
Other:
Total N/A
As of now, there is no immediate fiscal impact associated with this study session. The California
Department of Housing and Community Development (HCD) has historically published
technical assistance documents and hired resources to assist local jurisdictions implement new
housing laws. Since these particular laws will require the City to adjust existing policies,
ordinances, and standards, the City will need to utilize any future technical assistance resources
HCD provides, and may also need to consider additional staffing resources to help implement the
necessary changes.
ALTERNATIVES
Continue consideration of the housing legislation update presentation. Although no action is
recommended in association with this report, the City Council could ask staff to return during a
future meeting to present additional information. If the Council would like to hear additional
information at a future meeting, specific direction should be provided to staff.
Attachments:
a - Summary and Update of Recent 2019 Housing Legislation
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City of San Luis Obispo, Community Development, 919 Palm Street, San Luis Obispo, CA, 93401-3218, 805.781.7170, slocity.org
Summary and Update of Recent 2019 Housing Legislation
Housing Legislation City Council Study Session
BILLS REMOVING BARRIERS TO BOOST HOUSING PRODUCTION
SB 330 – Housing Crisis Act of 2019 and Changes to the Permit
Streamlining Act & Housing Accountability Act
Description:
This bill establishes the Housing Crisis Act of 2019, in response to the declaration of a
statewide housing emergency which will be in effect until January 1, 2025. The law includes
16 sections aimed to accelerate housing production throughout California by streamlining and
permitting approval processes, ensuring “no net loss” in zoning capacity and limiting fees
after residential projects are approved. The bill contains provisions that apply to all
jurisdictions throughout the State, as well as additional provisions limited to “affected” cities
and counties. Descriptions of both new areas of provisions are described in further detail
below, along with key actions and foreseeable impacts to the City:
Statewide Provisions (update to the Housing Accountability Act & Permit Streamlining Act):
Statewide, SB 330 establishes a new Preliminary Application Process for residential housing
projects, as displayed in the figure below. Although the bill does not require new housing
applications to submit a Preliminary Application, the law requires jurisdictions to offer the
Process and to review/accept applications that comply with the terms and provisions identified
in SB 330, should an applicant choose to utilize this new Preliminary Application Process.
Source: APA California, SB 330 Housing Crisis Act of 2019 Webinar, December 13, 2019.
Specific Provisions for “Affected” Cities and Counties (The Housing Crisis Act):
SB 330 also outlines specific housing provisions in which “affected” cities and counties
throughout the State must comply. Although the California Department of Housing and
Community Development (HCD) has until June 1, 2020 to officially publish these
jurisdictions, it is anticipated that the City will be identified as an “affected city” subject to
these provisions of SB 330. Provisions for these areas include the following:
Preliminary
Application
Vets standards and
fees
Complete
Application and
Historic
Determination
Must be submitted
within 180 days after
Preliminary
Application
Application
Review
Consistancy review
with objective
standards at time of
Preliminary
Application
Hearing Process
Limit of 5 hearings;
must act within 90
days after EIR is
certified
Project
Approval
If project not
approved, subject to
judicial review under
the Housing
Accountability Act
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Page 2 Summary and Update of Recent 2019 Housing Legislation
- No residential downzoning or any adoption of standards that reduce residential
capacity from what was in place as of January 1, 2018, unless if there is a “no net loss”
exemption finding that allows up zoning to compensate for lost residential capacity as
approved by HCD.
- No adoption or enforcement of housing moratorium, except to protect against an
imminent threat to the health and safety of persons with HCD approval.
- No newly adopted design standards, unless they are objective.
- No growth control measures from levels that where in place on January 1, 2018, except
for jurisdictions in predominately agricultural counties with voter-approved measures
in place before 2005.
Although there are several changes to permit processing under SB 330, there are still allowable
things the City can enforce, which include:
- Prohibition of commercial uses (including short-term occupancy bans) of land
designated for residential
- New standards that increase density, reduce cost, or “facilitate” housing
- Housing Crisis Act does not apply to a housing development project located within a
“very high fire hazard severity zone” as designated by the Director of Forestry and
Fire Protection
- CEQA still applies, and mitigation measures are not limited
SB 330 also states that “affected” cities and counties may not approve housing development
projects that would demolish dwelling units unless the proposed project both creates at least
as many units as would be demolished and replaces all occupied or vacant “protected units.”
The bill states that “protected units” include:
- Units subject to recorded affordability restrictions for lower income households (or
below) within the past five years
- Units that are occupied by lower income households (or below) within the past five
years
- Units subject to local rent or price control
- Units withdrawn from the market via the Ellis Act within the past 10 years.
The bill also includes tenant protections for those tenants existing in units that are to be
demolished.
Actions Items for the City
The City currently offers various “application checklists” for what is required in new
development applications, which are publicly available on the City website. City staff will
need to review the current application checklists to insure they are compliant with the 17 new
items identified in the Permit Streamlining Process SB 330. City staff will also need to be
educated and aware of the new Permit Streamlining provisions, to ensure compliance of
review times, vested standards and fees, and public hearing requirements. Since it is also
anticipated that the City will be identified as an “affected” jurisdiction, staff will need adhere
to new demolition restrictions and replacement obligations as set forth by SB 330.
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Page 3 Summary and Update of Recent 2019 Housing Legislation
AB 1763 – Density Bonuses for Affordable Housing
Description:
AB 1763 amends California’s density bonus law to authorize significant development
incentives to encourage 100 percent affordable housing projects. In response to a need for
housing for low- and moderate-income households, the bill allows up to 20 percent of the
units to be available for moderate income households, while the remainder of the units must
be affordable to lower income households. The affordability restrictions apply to both the
base units and the extra units granted through the density bonus. Qualifying projects will be
able to receive an 80 percent density bonus from the otherwise allowable density on the site,
along with up to 4 development incentives, and no parking requirements.
Actions and Impacts to the City:
The City will need to update Chapter 17.140 (Affordable Housing Incentives) of the Zoning
Regulations for consistency with AB 1763. It is anticipated that this change, along with the
changes outlined by SB 330, will allow for non-profit housing developers to increase the
number of affordable units in 100 percent affordable projects.
AB 1743 – Eligibility of Property Welfare Exemptions
Description:
This bill expands properties that are exempt from community facility district taxes, to include
properties that qualify for the property tax welfare exemption. The bill also limits the ability
of local governments to reject housing projects qualifying for the exemption.
Impacts to the City:
Limited impact to the City at this time is perceived since historically, the City has not rejected
housing projects that have qualified for welfare exemptions. Welfare exemptions must be
submitted to the County Assessor, and are only available to non-profit organizations that are
religious, hospital, scientific, or charitable in nature.
AB 116 – Enhanced Infrastructure Financing Districts
Description:
AB 116 removes the requirement for Enhanced Infrastructure Financing Districts (EIFDs) to
receive voter approval, prior to the issuance of any bonds.
Impacts to the City:
Limited impact to the City at this time is perceived but will be beneficial to the City for future
housing developments to be EIFDs, since voter approval is no longer required to create these
Districts.
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Page 4 Summary and Update of Recent 2019 Housing Legislation
SURPLUS LAND DATABASES AND REPORTING REQUIREMENTS
AB 1486 / SB 6 / AB 1255 – Expansion of Surplus Land Act and Reporting
Description:
These three bills expand the Surplus Land Act requirements for local jurisdictions, thus
requiring cities and counties to include specified information relating to surplus lands in their
housing elements and annual progress reports (APRs). The package also requires the HCD to
establish and maintain a database of these surplus lands and public inventory of sites suitable
for residential development.
Impacts to the City:
Staff will need to update the inventory of City surplus land (land no longer necessary for the
City’s use) and City excess land (land in excess of the City’s foreseeable needs), and provide
this inventory in the 2019 Housing APR, which is due to HCD by April 1st, 2020.
Additionally, the City will need to actively manage and digitally publish the Sites Inventory,
currently being created as part of the Housing Element Update, that identifies
suitable/available parcels for residential development.
AB 1483 – Housing Data Collection and Reporting
Description:
This bill requires local jurisdictions to publicly share information about zoning ordinances,
development standards, fees, exactions, and affordability requirements. It also requires HCD
to develop and update a 10-year housing data strategy. Specifically, law requires jurisdictions
to post the following on their websites:
1. A current schedule of fees, exactions and affordability requirements imposed by the
agency that are applicable to a proposed housing development project (defined as a
residential project, mixed used project or transitional or supportive housing project)
2. All zoning ordinances and development standards, including an identification of the
zoning ordinances and development standards applicable to each parcel
3. The list of information required from a development project applicant
4. The current and five previous annual fee reports or annual financial reports
5. An archive of impact fee nexus studies or cost of service studies conducted by the
public agency after January 1, 2018.
Impacts and Actions to the City:
The City currently publishes all of the current and active information identified in the bill on
its website. However, to comply with state law, the City will need to publish all annual fee
schedules and reports dating back to Fiscal Year 2014-15. The City should also consider
organizing its’ online archive of fee nexus studies or any cost of service studies conducted
after January 1, 2018.
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Page 5 Summary and Update of Recent 2019 Housing Legislation
REQUIREMENTS FOR ACCESSORY DWELLING UNITS
AB 68 / AB 881 / SB 13 – Modifications to Increase Accessory Dwelling Unit
Development
Description:
These three bills are designed to reduce barriers to, and facilitate the development of,
accessory dwelling units (ADUs), which are anticipated to increase the supply of affordable
housing in California. The package enacts several new provisions, which include restrictions
on local jurisdictions’ permitting criteria, such as owner-occupancy and replacement parking
requirements, mandates shorter approval timeframes, and creates a process in which HCD
ensures local ordinances follow these statues.
Impacts to the City:
These new provisions took effect on January 1, 2020, and all existing local ordinances are
now null and void if not consistent with the new provisions. In response to these changes,
and to retain some local parameters on ADU development, staff is currently working on an
update to the City’s ADU Ordinance, which is anticipated for Council review early February
2020.
AB 587 – Sale of Accessory Dwelling Units
Description:
This bill establishes a new narrow exemption for affordable housing organizations to sell
deed-restricted land to eligible low-income homeowners. Under this legislation, local
agencies are able to adopt an ordinance to allow the separate sale or conveyance of ADUs
from a primary residence, as if it was constructed by a nonprofit housing developer.
Impacts to the City:
This bill will be beneficial to the City for future affordable housing development, as it gives
nonprofit housing developers (i.e. HASLO, Peoples’ Self-Help Housing) options in housing
types to develop for lower income households.
AB 670 – Construction of Accessory Dwelling Units in Common Interest
Developments
Description:
AB 670 voids existing Covenants, Conditions & Restrictions (CC&Rs) that prohibits or
unreasonably restricts ADUs or junior accessory dwelling units (JADUs) in existing common
interest developments.
Impacts to the City:
The City currently has many existing neighborhoods in which this new provision is applicable.
However, development of these structures will be subject to the provisions in the updated
ADU Ordinance, currently underway by City staff.
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Page 6 Summary and Update of Recent 2019 Housing Legislation
AB 671 – Affordable Accessory Dwelling Unit Program Creation
Description:
This bill requires local governments to include a plan in their Housing Elements to incentivize
and promote the creation of ADUs that can be offered at affordable rents to very-low, low,
and moderate-income households. It also requires the State to develop a list of grants and
financial incentives for affordable ADUs.
Impacts to the City:
This requirement only applies to jurisdictions with housing element revisions either due on or
after January 1, 2021. The City’s Housing Element is due December 2020, making it exempt
from the provisions of this bill.
ESTABLISHED “USES BY RIGHT”
AB 101 – Housing and Homelessness Budget and Regulations
Descriptions and Actions for the City: The complex bill establishes new funding sources and
regulations around six categories, described in detail below. Actions and any foreseen impacts
to the City are also provided for each category:
Housing Element Compliance:
AB 101 requires that the HCD annually publish a list of jurisdictions that have failed to adopt
a State-certified housing element. If a jurisdiction’s housing element is found to be
noncompliant with state law, the bill then enacts the procedure to which the jurisdiction and
HCD must follow to achieve compliance, as well as establishes grounds and consequences for
legal challenges. The City currently has an HCD-certified Housing Element and fully intends
on achieving compliance in the 6th Cycle Housing Element Update currently underway.
Local Government Planning Support Grants Program:
AB 101 requires the HCD to make available $250,000,000 to regions, cities, counties, and
councils of governments (COG) for technical assistance with the preparation and adoption of
planning documents and process improvements to accelerate housing production and facilitate
compliance with the 6th Regional Housing Needs Allocation (RHNA) Cycle.
City staff will continue to participate in discussions with the San Luis Obispo Council of
Governments (SLOCOG) on how best to allocate the portion of financial support our COG
will receive in relation to the allocated 6th Cycle RHNA funding.
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Page 7 Summary and Update of Recent 2019 Housing Legislation
Infill Infrastructure Grant Program of 2019:
AB 101 makes available $500 million of competitive grant funding for “qualifying infill
projects” or “qualifying infill areas.” The bill defines a qualifying infill project as a residential
or mixed-use project located in an urbanized area within a city with an HCD-compliant
housing element. These grant funds are allowed to be used for capital improvement projects
to facilitate the development of a qualifying infill project or area, including water, sewer, or
other utility improvements; streets, roads, transit; project site preparation; and sidewalk or
streetscape improvement. The City will continue to monitor the grant guidelines and future
Notice of Funding Availabilities published by HCD.
Homelessness Funding and Programs:
AB 101 makes $650 million available for one-time grants to cities, counties, and continuums
of care (CoCs) to support regional coordination, expand or develop local capacity, and address
immediate homelessness challenges. Awards will be based on applicants’ proportionate
shares of the state’s total homeless population. The City participates in the local CoC overseen
by the SLO County Department of Social Services and will continue its involvement in
discussions and provide input on allocating the future funding to be received by our CoC.
Low Barrier Navigation Centers:
This bill establishes the term Low Barrier Navigation Centers as a “Housing First, low-barrier,
service-enriched shelter focused on moving people into permanent housing that provides
temporary living facilities while case managers connect individuals experiencing
homelessness to income, public benefits, health services, shelter, and housing.” The law states
that these Low Barrier Navigation Centers and other supportive housing uses be a “use by
right” allowed in residential and mixed-use zones. No discretionary approvals, with the
exception of design review, are permitted under this law. The bill states that within 30 days
of receiving an application for a center, a jurisdiction must notify the applicant whether the
application is complete; and within 60 days of a completed application, the jurisdiction must
act on the application.
Since this piece of legislation created a new term, the City will need to include and define
“Low Barrier Navigation Center” in the Zoning Regulations which allows for the development
of homeless shelters in a majority of zoning districts, upon receiving approval of a Conditional
Use Permit. The City will need to amend the Zoning Regulations to allow for no Conditional
Use Permit requirement in certain zones for homeless shelters, thus allowing homeless
shelters, Low Barrier Navigation Centers, and supportive housing developments to be an
allowed “use by right” in areas zoned for mixed uses and nonresidential zones permitting
multifamily uses. The City staff will also need to be aware of the 30 and 60 day review time
for these developments, to ensure compliance with the new statute.
State Low Income Housing Tax Credits:
AB 101 increased the state low income housing tax credit program to $500 million for 2020.
This is great news for the City, as this is a primary funding source our local non-profit housing
developers utilize to build affordable housing in the community.
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Page 8 Summary and Update of Recent 2019 Housing Legislation
SB 234 – Keeping Kids Closer to Home Act
Description:
This bill established the “Keeping Kids Closer to Home Act” which aims to expand childcare
opportunities for California families. This legislation allows large family childcare homes
that provide care for up to 14 children in multifamily units, meaning these large family daycare
homes are now to be treated as a residential use of property in local ordinances. The bill also
prohibits a property owner or manager from refusing to sell or rent a dwelling unit to a person
that is a daycare provider. The law prohibits local jurisdictions from imposing a business
license, fee, or tax for the privilege of operating both small and large daycare homes as well.
Actions for the City:
The City currently requires large child daycare facilities to obtain approval by the Community
Development Director via a Director’s Action to operate; thus the City will need to amend the
Zoning Regulations to allow for these large daycare facilities to be an allowed use by right,
with no requirement to obtain a business license for operation. The current Zoning
Regulations also require these facilities to comply with parking requirements, which is now
void under the law.
RELATED HOUSING LEGISLATION FROM 2017 HOUSING
PACKAGE
SB 166 – “No Net Loss” Law
Description:
SB 166 was signed in 2017 by Governor Brown, as part of the State’s landmark Housing
Package. This bill was designed to ensure that development opportunities remain available
throughout the planning period to accommodate a jurisdiction’s RHNA cycle, especially for
lower and moderate income households. The Memorandum recently issued by HCD on
October 2, 2019, provides guidance for local jurisdictions to implement the statues
Summary of Requirements:
- Jurisdictions must identify adequate sites to accommodate their RHNA by income
category at all times throughout the entire planning period of the 6th Cycle Housing
Element
- A jurisdictions may not take any action to reduce a parcel’s residential density unless
it makes findings that the remaining sites identified in the Housing Element Sites
Inventory can accommodate the remaining unmet RHNA by each income category, or
if it identifies additional sites so that there is no net loss of residential unit capacity.
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Page 9 Summary and Update of Recent 2019 Housing Legislation
- If a jurisdiction approves a development of a parcel identified in the Housing Element
Sites Inventory with fewer units than shown in the Housing Element, it must either
make findings that the Housing Element’s remaining sites have sufficient capacity to
accommodate the remaining unmet RHNA by each income level, or identify and make
available sufficient sites to accommodate the remaining unmet RHNA for each income
category.
- A jurisdiction may not disprove a housing project on the basis that approval of the
development would trigger the identification of zoning of additional adequate sites to
accommodate the remaining RHNA.
Impact and Actions for the City:
Since the City has received the new 6th Cycle RHNA numbers, and is underway updating the
Housing Element to accommodate the allocation, the provisions outlined by SB 166 are
extremely pertinent to follow. A Sites Inventory to identify eligible locations for housing
development to accommodate the total RHNA has historically been required in the Housing
Element; however, state law now additionally requires jurisdictions to state the number of
housing units to be developed by income level on each individual site in the Inventory, to
accommodate the total RHNA. This means that the City will need to update the Sites
Inventory accordingly to identify future housing development per each income level. The
City will also need to ensure it identifies a sufficient amount of additional, back-up sites to
accommodate the RHNA, in the case that future development of parcels results in less
residential units than identified in the Sites Inventory. If at any time during the 6th Housing
Element Planning Cycle the City finds that there is a shortfall of sites to accommodate the
remaining RHNA, then the City must take immediate action to correct the shortfall by
amending the Housing Element Sites Inventory to either include sites previously unidentified
with capacity to accommodate the shortfall, or sites that have been rezoned to correc t for the
shortfall. Any failure of the City to do so would constitute as a violation of this “No Net Loss”
law, which is to be avoided. Nonetheless, this bill enacts the importance ongoing management
and tracking of residential development in the City.
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