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Housing Legislation Being Expedited with Cap-and-Trade Deal

Bill Language Expected Early Next Week, Vote Expected on Thursday

July 14, 2017
With the Legislature just days away from its month-long recess, the Cap-and-Trade deal announced on July 10 has prompted lawmakers to fast-track several bills in an attempt to help solve the state’s housing crisis.
While the actual package of bills that will be included in the housing deal has not yet been announced, Gov. Jerry Brown has been firm that he will only support new funding for housing if it comes with streamlined regulations at the local level. He is actively engaged in negotiations to finalize the deal before the Legislature breaks for summer recess next Friday, July 21.
There are a number of bills that are likely to be part of this package, including:
  • SB 2 (Atkins): Imposes a fee of $75 recordation on specified real estate documents to generate hundreds of millions of dollars per year for affordable housing, supportive housing, emergency shelters, and transitional housing.
  • SB 35 (Weiner): Seeks to streamline multifamily housing project approvals by eliminating public input, prohibiting CEQA, and removing nearly all local discretion.
  • SB 167 (Skinner)/AB 678 (Bocanegra): Prohibits a local agency from disapproving, or conditioning approval in a manner that renders infeasible, a housing development project for very low, low-, or moderate-income households or an emergency shelter unless the local agency makes specified written findings based on clear and convincing evidence in the record.
  • AB 72 (Santiago): Provides the Department of Housing and Community Development broad and nearly unlimited new authority to review any action by a city or county that it determines is inconsistent with an adopted housing element.
  • AB 73 (Chiu): Allows a city or county to create a housing sustainability district to complete upfront zoning and environmental review in order to receive incentive payments for development projects that are consistent with the district's ordinance
  • AB 1397 (Low): Requires lands in a city’s housing element to include vacant sites and sites that have “realistic and demonstrated potential” for redevelopment to meet a portion of the locality’s housing need for a designated income level
  • AB 1515 (Daly): Requires housing projects to be deemed consistent, compliant, and in conformity with an applicable plan, if there is substantial evidence that would allow a reasonable person to conclude that the housing development project or emergency shelter is consistent, compliant, or in conformity.
One important and unanswered question is what happens to housing bills that are not looped into the package. It is not clear whether several other key bills, including League-sponsored SB 540 (Roth) and League supported SB 3 (Beall), the $3 billion Affordable Housing Bond Act, and AB 71 (Chiu), which increases the state Low-Income Housing Tax Credit (LIHTC) Program by $300 million by removing the state income tax deduction for mortgage interest on second homes, will be part of the package of bills being voted on next week. SB 540, SB 3 and SB 2 (Atkins), the Building Homes and Jobs Act, comprise the League’s Blueprint for Housing bill package. 
The League is sponsoring SB 540 because it would give local governments new tools to plan for housing and create a more streamlined path that eliminates some of the delays and uncertainty that currently impede housing construction. This policy would help spur more affordable housing development, which is desperately need.
Under SB 540 cities and counties would identify priority housing areas — called Workforce Housing Zones — within their boundaries. The local government would conduct enhanced planning, important environmental reviews and public engagement at the front end with specific details as to what type of housing would be built within the zone. Because the local government has fully conducted the extensive environmental reviews at the front-end, no project-specific additional environmental reviews would be necessary. It is estimated that SB 540 would shave one to two years off the development timeline without compromising environmental protection, public health, local control or the rights of citizens to participate in local land use decisions.
SB 35, which is likely to be in the deal coming together next week, is counterproductive and is not likely to produce much affordable housing. It would take the Region Housing Needs Allocation (RHNA) goals and make them mandates for production even though cities themselves do not actually build homes. Under this measure, state demographers would estimate the state’s annual housing needs across various income (low, very-low, moderate, etc.) categories with specific allocations assigned to individual cities and counties; state officials will then closely monitor each city and county’s housing approvals; if state officials determine that a city or county is not approving housing at its assigned level that means it is the local government’s fault and as a penalty it loses community control over certain housing approvals and environmental review.
Projects in cities that would be subject to SB 35 would be approved ministerally without environmental review or public input. This is a lot to sacrifice for policy that lacks funding to help pay for affordable housing or provisions that will actually result in the production of affordable housing.
Next Steps
The League will continue to work with lawmakers and the Governor in the coming days on the final housing package. It is likely that more amendments are forthcoming and some could undermine local land use authority. Action may need to be taken when all of the housing bills go into print early next week.

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