June 8, 2017

The Legislature has been busy working on over 100 housing-related bills introduced in the 2017-2018 legislative session. As counties recall, the last legislative session ended without the successful passage of major legislation to provide necessary subsidies for the development for housing sold or rented at below-market rates. Last year, the Governor conditioned his support for additional funding for affordable homes last year on the approval of an overhaul of local processes for approving housing developments. The administration has continued to push for development streamlining as a precondition for additional state subsidy for housing development.

Housing Funding
Key housing funding bills include CSAC-supported SB 3 (Beall), which passed the Senate last week on a two-thirds vote. This bill would ask the voters to authorize $3 billion in general obligation bonds to fund affordable housing programs statewide. SB 2 (Atkins), which would impose a recording fee to fund below-market development, is the other major housing funding bill under consideration in the Senate. The Assembly is considering AB 71 (Chiu), which would increase funding for state low-income housing tax credits by $300 million by eliminating the state mortgage interest deduction for some second homes. Neither of these tax-levy bills was subject to the June 2 house of origin deadline. The Assembly has also put forward a $400 million housing proposal within the budget process, although the Administration has indicated that the housing funding and streamlining discussion should go forward outside of the budget process.

Permit Streamlining
On the permit streamlining side, the Senate and Assembly both passed “opt-in” bills that would allow local governments to designate areas where housing development will be streamlined in exchange for state incentives (SB 540, Roth and AB 73, Chiu). The Senate also passed SB 35 (Wiener) which creates a pathway for streamlined development processes in jurisdictions where housing production has lagged behind Regional Housing Needs Allocation (RHNA) “goals.” SB 35 is a significant change in California housing policy, as it ties RHNA “performance” to a new, state-imposed process for development review that developers can elect to use. The bill has limited applicability to counties, however, because projects eligible for streamlining must be located in an incorporated area unless a Board of Supervisors specifically designates specified lands as an “urbanized area” with input from the Office of Planning and Research pursuant to Public Resources Code Section 21071(b)(2)(A).

Housing Accountability Act
In addition to the major streamlining and funding bills, the Legislature is considering changes to the State’s so-called “anti-NIMBY” law. CSAC continues to work with the authors of bills that seek to enhance the Housing Accountability Act (SB 167, Skinner and AB 678, Bocanegra), securing amendments to ensure that the Act protects against the unwarranted denial of housing developments, while not interfering the ability of local governments to impose warranted conditions and provide necessary infrastructure to support developments. CSAC is seeking comments on AB 1515 (Daly) which inverts the normal burden of proof for determining whether a project is consistent with local zoning.

County Feedback Needed – Adequate Sites and Fair Housing
CSAC also continues to seek feedback on two bills that make changes to the identification of adequate sites and zoning capacity for low-income housing. SB 166 (Skinner) attempts to ensure that there is, throughout the entire planning period, an adequate supply of land zoned to accommodate a jurisdiction’s share of low- and very-low income housing, while AB 1397 (Low) imposes restrictions on the size of parcels that can be identified as sites for low- and very-low-income housing and adds additional conditions related to the provision of infrastructure to such parcels.

AB 686 by Assembly Member Santiago is designed to address concerns about the potential repeal of a federal rule, in place since 2015, which requires local governments that receive funding from the US Department of Housing and Urban Development to adopt actionable plans to “affirmatively further fair housing.” AB 686 would add similar planning and reporting requirements to state law, but could potentially expose counties to additional litigation for any action that does not affirmatively further fair housing. Unlike the current federal framework, where the planning requirement is linked to the receipt of Community Development Block Grant funding, AB 686 would not be accompanied by additional funding. CSAC is very interested in feedback from counties on the potential implications of this bill.