Legislative Activity Related to Housing and Affordable Housing

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, whalligan@placeworks.com • Matt Klopfenstein, Esq., California Advisors, LLC, matt@caladvisorsllc.com • Scott Morgan, Deputy Director of Administration and State Clearinghouse Director, Scott.Morgan@opr.ca.gov

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 1955-2016 • 2007-2016 • Average 80,000 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 Source: California Housing Partnership analysis of 2000 Decennial Census and 2005-2014 American Community Survey 1 year data. 2001-2004 and 2015-2016 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. 2016 • 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 2856 (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 EndThank You for Coming!