Title
Recommendation to Discuss State Budget Trailer Bill, Concerning Streamlining Affordable Housing Approvals, and Consider Directing the Mayor to Send a Letter Opposing the Proposal in its Current Form. (City Manager 2110)
Body
To: Honorable Mayor and Members of the City Council
From: Jill Keimach, City Manager
Re: Recommendation to Discuss State Budget Trailer Bill, Concerning Streamlining Affordable Housing Approvals, and Consider Directing the Mayor to Send a Letter Opposing this Proposal in its Current Form
BACKGROUND
On June 15, 2016, the California Legislature adopted a $123 billion General Fund budget plan for the State of California. The final budget included spending increases from the Governor’s originally proposed budget in January, such as child care and single-parent welfare payments, and transferred $2 billion more than what is required by law to the state’s reserves, a strong priority for Governor Brown.
Another priority for the Governor is the Housing “by-right” proposal, a trailer bill included in the 2016-17 state budget, designed to increase affordable housing in communities. The California Department of Finance recently released an updated version of this proposal. The 2016-17 state budget also includes $400 million for Affordable Housing; however, that funding is contingent on lawmakers approving the by-right proposal. The proposed Trailer Bill, Streamlining Affordable Housing Approvals, will be delayed until August when the Legislature reconvenes from Summer Recess.
The California League of Cities is opposing this proposal. Of primary concern is the loss of local control. The proposal excludes elected City Councils from land use decisions. Another key concern is the removal of the public review process. Public hearings are important to communities, as they allow residents to inform decision makers of their support or opposition of a project, and this input often improves the outcomes of housing projects.
Given the League of Cities opposition to the Trailer Bill and the City’s Legislative Agenda opposing legislation that removes local control, the Council could consider sending a letter to the Chairs of Budget Subcommittee #4 opposing the Bill in its current form.
DISCUSSION
The current version of the proposal (Exhibit 2) amends Section 65919 of the Government Code to read:
“The Legislature finds and declares that there exists a severe shortage of affordable housing, especially for persons and families of low and moderate income, and that there is an immediate need to encourage the development of new housing, not only through the provision of financial assistance, but also through changes in law designed to do all of the following:
1) Expedite the local and State-supported residential development process.
2) Assure that local governments zone sufficient land at densities high enough for production of affordable housing.
3) Assure that local governments make diligent effort through the administration of land use and development controls and the provision of regulatory concessions and incentives to significantly reduce housing development costs and thereby facilitate the development of affordable housing, including housing for elderly persons and families, as defined by Section 50067 of the Health and Safety Code."
Changes to existing statutes that govern housing development are bring proposed, “to assure that economic contributions by taxpayers and the private sector to support housing are cost-effectively and efficiently deployed to promptly create new housing in locations at densities that have already been approved by local governments in general plans and zoning codes.”
Changes to existing statute include “By right approval for developments that are consistent with objective land-use standards as defined in Section 65913.3(a)(9) and adopted by a locality, including but not limited to housing overlay zones, specific plans, inclusionary zoning ordinances, and density bonus ordinances.”
If accepted as drafted, the proposal to streamline multifamily housing approvals would only apply to proposed multi-family housing developmens that meet the following criteria:
o Conforms with existing General Plan and Zoning standards and requirements, such as height limits, parking requirements, open space requirements, inclusionary housing requirements, and other local requirements;
o Is multifamily housing with two or more units per structure;
o Is infill housing, surrounded by urban uses;
o Meets affordability requirements of 20 percent of housing priced to be affordable to low-income households for 30 years, or less (e.g. 10 percent) if the project is within one-half mile of an existing or planned transit stop; and
o Is not developed on certain types of land, including farmland, wetlands, waste sites, fire hazard areas, earthquake fault zones, or a flood plain.
• Arguments in support of the Proposal:
o The state has built too little housing to accommodate its residents and this lack of supply is the cause of the state’s housing affordability crisis;
o The Legislative Analyst’s Office (LAO) supports this proposal as a first step toward addressing California’s housing shortage, and recommends that the Legislature strengthen and expand upon this proposal;
o Economists warn that the lack of affordable housing has deep costs to the economy and the environment;
o Many people are looking to the state for an additional investment in affordable housing, and the Governor is advocating for these changes before a further investment of $400 million is made;
o The City of Alameda has strong general plan and zoning requirements and standards to ensure that new multi-family housing developments are designed to be compatible with neighborhood character and local community priorities;
o The proposal will ensure that other California cities that have not been doing their fair share will increase their housing production;
o The proposal will eliminate frivolous CEQA lawsuits against cities that approve multi-family housing consistent with their local general plan and zoning standards;
o Research from the California Department of Housing and Community Development states the reviews and community approval processes add around 12 percent more to the cost of a project which could be used to provide additional housing to low-income households; and
o Groups that support the proposal include: LAO, Bay Area Council, California Realtors, and over 80 prominent members of the tech and business community including Alameda-based Jes Petersen, President & CEO, Webcor Builders.
• Arguments against the Proposal:
o The proposal minimizes opportunities for public review and project-level environmental review;
o In Alameda, the proposal will require significant changes to the design review process;
o This proposal does not solve the need for affordable housing or the current housing crisis;
o Alameda already requires residential development to include a high percentage of affordable units (25 percent at Alameda Point and 15 percent citywide) ; and
o Groups that are opposed to the proposal include: League of California Cities, State Building and Construction Trades Council, Natural Resources Defense Council.
Based on the arguments for and against the proposal outlined above and the City of Alameda’s 2016 Legislative Agenda, which states that the City opposes any legislation or regulations that preempt local authority, the Council can direct the Mayor to send the attached draft letter opposing the proposal in its current form. If the City Council is in favor or neutral about the Governor’s by right housing proposal, staff recommends taking no action.
FINANCIAL IMPACT
The Streamlining Affordable Housing Approvals Trailer Bill would have no impact to the City of Alameda’s General Fund. The approval of the proposal would direct $400 million in state spending to affordable housing. It is unknown if this funding would be directed at affordable housing in Alameda.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
Consideration of legislation and any action is consistent with the City’s 2016 Legislative Agenda.
ENVIRONMENTAL REVIEW
Consideration of the Trailer Bill concerning Streamlining Affordable Housing Approvals does not require environmental review because it is not a project as defined by the California Environmental Quality Act (“CEQA”). CEQA Guidelines, section 15378(b).
RECOMMENDATION
Discuss State Budget Trailer Bill, concerning Streamlining Affordable Housing Approvals, and consider directing the Mayor to send a letter opposing this proposal in its current form.
Respectfully submitted,
Jill Keimach, City Manager
By:
Sarah Henry, Public Information Officer
Financial Impact section reviewed,
Elena Adair, Finance Director
Exhibits:
1. Draft letter to Assemblymember Adrin Nazarian and Senator Richard Roth opposing the Streamlining Affordable Housing Approvals proposal
2. Streamlining Affordable Housing Approvals Trailer Bill Technical Modifications (6-10-16)