Spring is in the air in Sacramento, which means the next round of proposed changes to the Housing Element Law are getting their first look in the State Legislature. The bill that is attracting the most attention is SB 303 (Ducheny), a measure that would overhaul the process in which local agencies must plan for and accommodate their Regional Housing Needs Assessment (RHNA) number.

This Building Industry Association (BIA)-sponsored bill is an attempt to create more certainty in the entitlement process for developers, which in itself may be a worthy policy goal. The bill’s approach is flawed, however, because like so many state mandates, SB 303 creates a narrow "one-size-fits-all" solution that will be difficult to unworkable in many cities and counties because it takes the seriously broken existing RHNA process and simply makes its much, much worse.

SB 303 would double the planning period (from five to 10 years) for the RHNA. At the same time, the bill would require local agencies to pre-zone their housing need for the entire 10-year period. In addition, SB 303 would require that every single site be analyzed to ensure that the size, configuration, use, physical and environmental characteristics, adjacent uses, market demand, and infrastructure will "realistically accommodate" the planned density of the parcel.

As a result, each site will have to be visited and surveyed for all of these characteristics. It will be a massive and costly mandate that will make infill housing less feasible in the future because of the higher infrastructure and other public and private costs associated with them. The effect of this bill will be to undercut popular local and regional efforts in recent years to steer housing development to infill areas.

League Position

The League opposes SB 303 because it is an expensive mandate that will discourage infill development, encourage sprawl, and penalize all cities-urban, suburban and rural-and dramatically undercut local control of residential development in the future.

Further, the measure fails to balance this emphasis on housing with other important state and local planning priorities, such as protecting open space and farmland, improving air quality, promoting infill-centered development, manufacturing and high-tech job development and maximizing the investment in existing infrastructure.

Potential Impact of SB 303

Below is a technical summary of SB 303’s impact on local governments if passed:

• Analyze and Pre-Zone 10-Year Supply of Land For Residential Development. Requires every single site identified for a 10-year supply of land for housing to be analyzed by the local government to ensure that the size, configuration, current use, physical and environmental constraints, access, location, adjacent use?planned availability of infrastructure and services will "realistically accommodate" the density zoned for the parcel.

This will be a massive and costly undertaking. Each site in a community would have to be visited and surveyed for all of the above listed issues. Once analyzed, the 10-year supply will have to be zoned properly for that type of housing development.

• Encourages Sprawl and Discourages Infill and Transit-Oriented Development (TOD). Requires the local government to attest that for each site there exists "market demand for the density and type of housing." This will not only be costly, it will also create a lowest-common-denominator focus on housing. Private developers often maintain that infill development "does not pencil out" while traditional subdivisions on the edge of cities do.

This will undercut local and regional efforts to steer housing development to infill areas, promote transit oriented development, and develop and incentivize regional blueprints for guiding growth.

• Discourages Public Involvement. Removes opportunities for public comment and review by locking in planning and zoning on each site for 10 years, and allowing only changes consented to by the developer, or through a narrow health or safety finding which may only be adopted by a four-fifths vote. This places significant barriers to community participation in the planning process.

For example, a resident would have needed to be present at a hearing on the adoption of a housing element for the entire city to have any voice about a development in their neighborhood. A building could be built in 2018, based upon a public discussion that occurred in 2008.

• Trial Lawyers Win While Taxpayers Lose. Establishes the ability of all developers to collect attorney’s fees against local agencies when they prevail in litigation on these matters, but provides nothing to the local tax payers when the public agency prevails.

This is a bad precedent that provides significant leverage to private interests over the interests of a community and the taxpayers. SB 303 provides incentives to litigate and can have an intimidating effect especially over small communities which may lack the resources to defend themselves.

• Forces Increases in Local Development Fees For Planning. Requires all general plans to be updated every 10 years, but provides no funding to pay for it. A comprehensive update of a local general plan for a small community costs approximately $500,000, and for larger cities and counties the costs can soar to $5 million.

That figure does not include the costs of the site-by-site analysis and other requirements of this bill. With 478 cities and 58 counties, the costs imposed by this measure will likely exceed $500 million.

This legislation states that these costs can be recovered by local governments through fees. While greenfield developers may be able to offset these costs, local governments in urban and infill areas will likely face significant cost burdens on their general funds because of a lack of developer interest in building in their communities due to deteriorated infrastructure, concerns about crime and school quality, and other issues.

• Prevents Safeguards Against Future Sprawl. Clarifies that even if all the above sites (10 years worth of sites) are identified and verified and supported by market surveys, and local governments have incurred all the costs to make them available, that nothing in the legislation shall be interpreted to affect existing laws with respect to housing development outside of these areas. This is surely sprawl and growth without limits-which many people believe will contribute to further global warming.

Finally, it should also be noted that housing starts have declined in the last year due to market forces, and home builders are not starting new home construction even when they have all local approvals and permits. Would they do any differently with double the land supply available?

The League remains committed to working with the author and sponsor on incentive-based legislation that will increase certainty for home builders while also increasing the supply of affordable housing. That offer is still on the table, and we hope to have the opportunity to work on housing amendments that will work for home builders, cities and our residents.

For more information and a sample opposition letter on SB 303, visit www.cacities.org/billsearch and look up the measure. Further updates on this legislation will appear in future editions of Priority Focus. Questions should be directed to League Legislative Representative Bill Higgins at bhiggins@cacities.org or Legislative Director Dan Carrigg at dcarrigg@cacities.org .