Legal Alerts Oct 17, 2019

Housing Density Bonus and Reporting Changes for Local Agencies

Part 6: New California Housing Laws

As part of the 2019 housing package, Gov. Gavin Newsom signed a number of bills modifying density bonus rules, and information and reporting rules. Each of these bills is designed to increase housing production by easing regulations on development or making information readily available to potential developers.
Density Bonus
Assembly Bill 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.
These 100 percent affordable housing projects can receive an 80 percent density bonus from the otherwise maximum allowable density on the site. If the project is within 1/2 mile of a major transit stop, the city may not apply any density limit to the project. In addition to the density bonus, qualifying projects will receive four regulatory concessions. And, if the project is within 1/2 mile of a major transit stop, it will also receive a height increase of up to three additional stories, or 33 feet. The 100 percent affordable housing projects are also not subject to any minimum parking requirements.
Essentially, this bill encourages 100 percent affordable housing projects to provide as many units as possible on the site, and the limits on project size come from other standards, such as maximum height limits and setbacks (which are also subject to any allowable deviations through the four available concessions). Under existing law, cities are already required to have an ordinance that implements the state density bonus law. Cities should update their density bonus ordinances to codify this new bonus for 100 percent affordable projects.
Information and Reporting Requirements
Under existing law, counties are required to establish a central inventory of all surplus governmental property located in the county. AB 1255 amends the Government Code to extend this obligation to cities. It requires that on or before Dec. 31 of each year, each county and city create an inventory of surplus land (land no longer necessary for the agency’s use) and excess land (land in excess of the agency’s foreseeable needs) within its jurisdiction. Upon request, the agencies are required to make the inventory available to a citizen, limited dividend corporation or nonprofit corporation free of charge. For each site identified in the inventory, the agency must provide a description of the parcel and its present uses, and report that information to the California Department of Housing and Community Development before April 1 of each year. HCD must then report that information to the Department of General Services for inclusion in an inventory of all state-owned parcels that are in excess of state needs.
Similar to AB 1255, Senate Bill 6 requires DGS to develop and host a publicly available database on its website that lists the “inventory sites” that local agencies have identified as suitable and available for residential development in their respective housing elements. Under existing law — including, specifically, Housing Element Law section 65583(a)(3) — these inventory sites are required to be included in each local agency’s housing element. However, SB 6 obligates local agencies to prepare their respective inventory sites consistent not only with existing law, but also with standards, form, and definitions adopted by HCD. SB 6 further authorizes HCD to adopt, amend and repeal these standards, forms, and definitions to implement Housing Element Law section 65583(a) .
Beginning Jan. 1, 2021, all agencies that amend or adopt their housing element must deliver to HCD, along with the copy of its adopted housing element or amendment, an electronic copy of their inventory sites. HCD is responsible for then furnishing the DGS with the list of inventory sites to be included in the database. DGS’ database will also include State lands determined or declared excess pursuant to Government Code section 11011.
AB 1483 creates more transparency requirements. Existing law requires public agencies to provide a development project applicant with a detailed list of the information that will be required from the applicant. Existing law also requires a local agency that establishes or increases a fee as a condition of a development project’s approval to determine a reasonable relationship between the fee’s use and the type of development project on which the fee is imposed. AB 1483 adds section 65940.1 to the Government Code to require that a city, county, or special district post on its website all of the following:

  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 and
  5. an archive of impact fee nexus studies or cost of service studies conducted by the public agency after Jan. 1, 2018.

The public agency must update this information within 30 days of any changes.
AB 1483 also amends the Health and Safety Code to add new requirements for HCD regarding its updates to the California Statewide Housing Plan, completed every 4 years. AB 1483 requires that HCD include in the next revision (due on or after Jan. 1), and each subsequent revision, a 10-year housing data strategy. This includes, among other things, an assessment of data submitted by annual reports, and a strategy to achieve more consistent terminology for housing data across the State. In establishing the data strategy, HCD is required to establish a workgroup that includes representatives from local governments, the Department of Technology and other groups.
Next Year
It should be noted that there were a number of housing-related bills that did not make it out of the Legislature, but may be back next year. The most well-known was SB 50, which would have created new incentives for developers to build apartments and condominiums near train and bus stations, even in areas zoned strictly for single-family homes. As proposed, it would waive or relax local minimum parking requirements and density restrictions for developers looking to build housing near train stations and “high-quality” bus stops. It also allows developers to build up to four-stories within 1/2 mile of a train station and up to five stories within 1/4 mile. SB 50 was converted to a 2-year bill and will be back in the process in January.
A second bill that was proposed but didn’t make it out of the Legislature was Assembly Constitutional Amendment 1. ACA 1 was the repeal of Article XXXIV. Article XXXIV requires a vote of the people before a local agency can provide financial support for an affordable housing project where the local agency restricts more than 49 percent of the units to be built. Although its future is less certain than SB 50, it is possible this bill will be reintroduced in the near future.

With California’s housing shortage reaching crisis levels, the state Legislature and Gov. Gavin Newsom approved a slew of new bills this session aimed at helping the situation. Using a mix of carrots and sticks, these laws will change how cities and counties address housing shortages in their own communities. 

Also in BB&K’s Housing Series:

If you have any questions about new housing laws and how they may impact your agency, please contact the authors of this Legal Alert listed to the right in the firm’s Municipal Law practice group, or your BB&K attorney.
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Disclaimer: BB&K Legal Alerts are not intended as legal advice. Additional facts or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information in this communiqué.

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