1. Legislative Activity Related to Housing and Affordable Housing
August, 3, 2018
10:15 am
Sheraton Grand Sacramento Hotel

2. Today’s speakers
William Halligan, Esq., Managing Principal, PlaceWorks,
Matt Klopfenstein, Esq., California Advisors, LLC,
Scott Morgan, Deputy Director of Administration and State Clearinghouse Director,

3. Today’s Agenda Housing and CEQA California’s 2017 Housing Package
2018 Housing Bills
Questions, Answers

4. Housing and CEQA

5. Housing and CEQA
The state is building at least 100,000 fewer units a year than it needs to keep pace with population growth, according to a Brown- administration report released in January 2017
One-third of the California renters spend more than half their income on housing, and the state’s homeless population is dramatically higher than the rest of the country.

6. 180,000 new homes needed annually
Annual New Housing Permits
Average 80,000
Notes are from State Department of Housing and Community Development
Before we get into all of the great solutions ahead of us, we need to take a look at what brought us here in the first place.
For years California has been underbuilding homes—especially multifamily housing. This lack of supply and skyrocketing rents and home prices have created heavy, overwhelming cost burdens on families. And because of all this, it’s become really bad here in CA.
We have a very low supply of new homes compared to our need. HCD projects we need 180,000 homes annually just to keep up with our projected growth. However, we only averaged construction of 80,000 new homes annually over the last 10 years. And that’s less than half of what we were building in most of the 20th century, when our base population was much lower.
This underproduction and tight supply is exacerbated by the tragic Northern CA fires that took almost 5 thousand homes from this area. That’s as many homes as are typically built in any given year, so the impact is enormous.
In addition: California’s homeless population is the highest in the nation and continues to rise, homeowners are priced out of the market due to rising costs, and the gap between average incomes and actual rents continues to widen.
IF ASKED: The permits for 2016 were 47,889 single family and 51,992 multifamily for a total of 99,881 permits.
Source:, Construction Industry Research Board/California Homebuilding Foundation Reports 2005, 2013, 2015; Graphic by Department of Housing and Community Development

7. Rent vs. Renter Income
2000
2005
Notes are from State Department of Housing and Community Development
Rent and renter incomes are going in opposite directions, creating a big gap between what a family earns and what they can afford to pay each month just to keep a roof over their heads. Since 2000 rents have increased nearly 30%, while renter income has struggled and has still almost 5 percent below 2000 levels.
The permits for 2016 were 47,889 single family and 51,992 multifamily for a total of 99,881 permits.
Source: California Housing Partnership analysis of 2000 Decennial Census and American Community Survey 1 year data and are an estimated trend. Median rent and renter income are inflation adjusted to 2014 dollars. Graphic by Department of Housing and Community Development

8. Housing and CEQA
Candidate for Governor Gavin Newsom has said he wants developers in California to build a half million homes in a year.
Wants builders to do it for seven straight years, resulting in 3.5 million new homes from the time the next governor takes office through 2025.

9. Housing and CEQA
CEQA gets a bad rap for housing costs and delays, while it can be a significant driver, other key drivers are …
trying to force projects through in bad locations
not listening to stakeholders
impact fees
inefficient approval processes
non-supportive jurisdictions
cities lack the political support to approve new housing projects
No growth and slow growth initiatives
poor project design (failure to consider site limitations, and project scale and context)

10. Other impediments to Housing
No Growth and Slow Growth Initiatives
SOAR Initiative (Ventura County)
Measure S (City of Los Angeles) - Failed
Greenlight Initiative (City of Newport Beach)
Measure Y (City of Costa Mesa) – Passed in Nov
Irvine for Responsible Growth – Failed to qualify for the November 2018 ballot

11. Housing and CEQA
CEQA contains key provisions for streamlining project approvals…
Infill (although current statutory exemptions are underused because of complexity)
Exemptions for affordable housing
Transit Priority Areas
Exemption for projects consistent with a specific plan and its EIR
General and community plan consistency
Subsequent EIR provisions

12. Housing and CEQA CEQA could be still be improved…
Simplify/expand exemptions for infill and affordable housing
Limit “late hits”
Improve use of tiering
Promote greater use of mitigated negative declarations
Limit CEQA abuse

13. California's 2017 Housing Package

14. 2017 Housing Package SB 35 (Wiener) Streamline Approval Process
Creates a streamlined approval process for developments in localities that have not yet met their housing targets, provided that the development is on an infill site and complies with existing residential and mixed use zoning.

15. 2017 Housing Package
AB 73 (Chiu) Streamline and Incentivize Housing Production
Provides state financial incentives to cities and counties that create a zoning overlay district with streamlined zoning.
Gives local governments incentives to create housing on infill sites near public transit.

16. 2017 Housing Package
SB 540 (Roth) Workforce Housing Opportunity Zones Authorizes the state to provide planning funds to a city or county to adopt a specific housing development plan that minimizes project level environmental review.

17. 2017 Housing Package
AB 678 (Bocanegra)/SB 167 (Skinner) Strengthen the Housing Accountability Act Strengthens the Housing Accountability Act by increasing the documentation necessary and the standard of proof required for a local agency to legally defend its denial of low-to-moderate- income housing development projects.

18. 2017 Housing Package
AB 1515 (Daly) Reasonable Person Standard States that a housing development conforms with local land use requirements if there is substantial evidence that would allow a reasonable person to reach that conclusion.

19. 2017 Housing Package
AB 72 (Santiago) Enforce Housing Element Law Authorizes HCD to find a jurisdiction out of compliance with state housing law at any time (instead of the current 8-year time period), and refer any violations of state housing law to the Attorney General.

20. 2017 Housing Package AB 1397 (Low) Adequate Housing Element Sites
Requires cities to zone more appropriately for their share regional housing needs and in certain circumstances require by-right development on identified sites.
Makes changes to the definition of “land suitable for residential development” in a Housing Element of a General Plan to increase number of sites where new multifamily housing can be built.

21. 2017 Housing Package
SB 166 (Skinner) No Net Loss Requires a city or county to identify additional low-income housing sites in their housing element when market- rate housing is developed on a site currently identified for low- income housing.

22. 2017 Housing Package AB 879 (Grayson) and related reporting bills
Make various updates to housing element and annual report requirements to provide data on local implementation including number of project application and approvals, processing times, and approval processes.
Authorizes a study of local fees charged to new residential developments that will include a proposal to reduce such fees.

23. 2017 Housing Package
SB 2 (Atkins) Building Jobs and Homes Act Imposes a fee on recording of real estate documents excluding sales for the purposes of funding affordable housing.

24. 2017 Housing Package
SB 3 (Beall) Veterans and Affordable Housing Bond Act Places a $4 billion general obligation bond on the November 2018 general election ballot.

25. 2017 Housing Package
AB 1505 (Bloom) Inclusionary Ordinances Authorizes the legislative body of a city or county to require a certain amount of low- income housing on-site or off-site as a condition of the development of residential rental units.

26. 2017 Housing Package
AB 571 (E. Garcia) Low Income Housing Credits for Farmworkers Makes modifications to the state’s farmworker housing tax credit to increase use. Authorizes HCD to advance funds to operators of migrant housing centers at the beginning of each season to allow them to get up and running.

27. 2018 Bills Related to Housing

28. Bills Still Moving

29. AB 1804 (Berman) – Infill Exemption
Would expand the current Class 32 categorical infill exemption to apply to unincorporated areas (counties).
Currently, the infill exemption, which OPR created in the Guidelines, is only available to incorporated cities.
Amendments forthcoming to place the exemption into statute for counties for 5 years.
AEP has been following the bill closely and engaging with the author and OPR as questions regarding the bill occur.
Currently in Senate Appropriations Committee.

30. AB 2267 (Wood) – Santa Rosa
Would exempt the City of Santa Rosa from CEQA until January 1, 2024, for certain changes to Santa Rosa’s specific plans for land use and projects related to those plans.
Intended to help Santa Rosa and portions of Sonoma County to rebuild quickly from 2017 wildfires.
Currently in Senate Appropriations Committee.

31. AB 3030 (Caballero) – Opportunity Zones
Provides a CEQA exemptions for projects financed by a qualified opportunity fund, if long list of conditions are met:
2/3 of project for residential, and 1/2 is Affordable Housing
No destruction of existing affordable housing
Consistent with General Plan, etc.
Meant to promote investment into Qualified Opportunity Zones in CA, which were created by the Federal Tax Bill and allow for deferral of capital gains taxes.
Currently in Sen. Appropriations

32. AB 2341 (Mathis) – Dilapidated Buildings
Would say that, for projects that are reconstructing dilapidated buildings in urban areas and that include housing, the aesthetic effects are not significant effects on the environment for purposes of CEQA and that the lead agency is not required to evaluate the aesthetic effects of those projects.
Currently in Sen. EQ Committee

33. SB 828 (Wiener) - RHNA
Requires a city or county’s inventory of land suitable for residential development to meet 125% of its regional housing need allocation for all income levels.
If unmet, city/county must identify actions it will take.
Makes a number of changes to the regional housing needs assessment (RHNA) methodology and process.
No use of prior underproduction or lack of production in determinations.
Additional reporting by COGs and new considerations by HCD in determining RHNA.
Follow up bill to SB 35 (2017).
Currently in Assembly Appropriations Committee.

34. AB 2782 (Friedman) – Positive Impacts
Would authorize lead agencies to consider the benefits of, and the negative impacts of denying, a project under CEQA.
While already relatively common as a “statement of overriding considerations” this would specify in statute that a lead agency may undertake this additional analysis.
Currently in Senate Appropriations.

35. AB 2162 (Chiu) - Streamlining for Supportive Housing
This bill will allow developers to build supportive housing “by right,” promoting siting of supportive housing, without battling stigma of housing people with disabilities.
While local jurisdictions would be able to apply objective standards to reviewing an application to build supportive housing, AB 2162 would allow nonprofit developers to build supportive housing without the prolonged approval process typically required in these projects.
“By right” would be ministerial and CEQA exemption.
Currently in Senate Appropriations Committee.

36. AB 2447 (Reyes) – Environmental Justice
Add new, specific and detailed, noticing requirements under CEQA for any proposed project in or near a Disadvantaged Community.
Also prohibits a project from moving forward if the EIR identified significant impacts, unless there’s a finding that no discrimination is taking place by approving the project.

37. Bills Dead this Year

38. SB 827 (Wiener) – Upzoning
A development in a transit-rich housing zone would be exempted from certain zoning requirements, including local controls on maximum residential density, maximum floor area ratio, and minimum automobile parking spaces.
Most high profile housing bill of the year, that drew significant opposition from certain regions of the state.
Died in Senate Transportation & Housing Committee.

39. AB 3023 (Medina) – Noticing
Would require lead agencies to post notices and environmental documents on either (1) their website, or (2) to the State Clearinghouse database at OPR.
AEP is generally supportive of the creation of the State Clearinghouse at OPR as a repository for all CEQA documents in the state.
However, we only support centralized noticing if done to make the process more efficient and publicly accessible, not if it makes it more cumbersome.
Failed in Asm. Natural Resources Committee

40. SB 1340 (Glazer) – CEQA Litigation
Would prohibit a court from enjoining a housing project that is being challenged.
Failed in Sen. Judiciary Committee
Identical bill was introduced in the Assembly, AB (Melendez), but also failed.

41. SB 1341 (Glazer) – CEQA Litigation
Would require anyone challenging a lead agency decision pursuant to CEQA to disclose the entities or individuals funding the effort.
Failed in Sen. Environmental Quality Committee

42. AB 30 (Caballero) – Malls
Would have created a CEQA exemption for "qualified strip mall conversion housing projects.”
The idea was to streamline turning strip malls into residential projects.
Failed in Assembly Housing & Community Development Committee

43. AB 1905 (Grayson) – CEQA Litigation
Under CEQA, prohibit a court from staying or enjoining a transportation project that would reduce VMT, that is included in a sustainable communities strategy, and for which an environmental impact report has been certified.
Failed in Asm. Natural Resources Committee

44. The End Thank You for Coming!