BILL ANALYSIS
AB 641
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 641 (Torrico)
As Amended June 28, 2007
Majority vote
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|ASSEMBLY: |65-9 |(May 21, 2007) |SENATE: |23-15|(September 4, |
| | | | | |2007) |
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Original Committee Reference: L. GOV.
SUMMARY : Prohibits local governments from requiring the payment
of local developer fees before the developer has received a
certificate of occupancy, pursuant to a specified exemption, for
any housing development in which at least 49% of the units are
affordable to low- or very low-income households.
The Senate amendments exempt developer fees levied for school
construction purposes from the provisions of the bill.
EXISTING LAW :
1)Prohibits a local government that imposes any fees or charges
on a residential development for the construction of public
improvements or facilities from requiring the payment of those
fees or charges until the date of the final inspection, or the
date the certificate of occupancy is issued, whichever occurs
first.
2)Exempts a local government from the above prohibition if it
determines that the fees or charges will be collected for
public improvements or facilities for which an account has
been established and funds appropriated, and for which the
local government has adopted a proposed construction schedule
or plan prior to final inspection or issuance of the
certificate of occupancy; or, the fees or charges are to
reimburse the local government for expenditures previously
made.
AS PASSED BY THE ASSEMBLY , this bill prohibited local
governments from requiring the payment of local developer fees
before the developer has received a certificate of occupancy,
pursuant to a specified exemption, for any housing development
AB 641
Page 2
in which at least 49% of the units are affordable to low- or
very low-income households.
FISCAL EFFECT : None
COMMENTS : While local governments are generally prohibited from
requiring payment of residential development fees until the date
of final inspection or the issuance of a certificate of
occupancy, they may collect these fees as early as the initial
application filing if they find that the fees are for public
improvements or facilities (e.g., lighting, sidewalks, and other
infrastructure), or are reimbursement for expenditure already
made by the local government. According to the author, these
fees range from $300,000 to nearly $1 million for affordable
housing projects, and can account for up to 25% of the cash
needed up front for the project.
According to the author, the requirement to pay development fees
before a certificate of occupancy is issued creates a powerful
disincentive for the construction of affordable housing.
Developers are required to borrow more money during
construction, which exerts upward pressure on the price of the
housing in the development. This bill's supporters believe that
deferring fee payment until the issuance of a certificate of
occupancy on affordable housing projects would result in lower
housing costs and an added incentive to undertake such
development projects.
Analysis Prepared by : J. Stacey Sullivan / L. GOV. / (916)
319-3958
FN:
0001727