BILL ANALYSIS Ó AB 744 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 744 (Chau and Quirk) As Amended August 18, 2015 Majority vote -------------------------------------------------------------------- |ASSEMBLY: | |(June 4, 2015) |SENATE: |22-15 | (August 31, | | |52-24 | | | |2015) | | | | | | | | | | | | | | | -------------------------------------------------------------------- Original Committee Reference: H. & C.D. SUMMARY: Requires a local government, upon the request of a developer that receives a density bonus, to reduce the minimum parking requirements for a housing development, if it meets specified criteria. Specifically, this bill: 1)Provides that if a development is 100% affordable to lower income families then upon the request of a developer, a city, county, or city and county, shall reduce the minimum parking requirements for the development, as follows: a) If the development is located within one-half mile of a major transit stop and there is unobstructed access to the major transit stop from the development, the ratio shall not exceed 0.5 spaces per unit. AB 744 Page 2 b) If the development is a for-rent housing development for individuals who are 62 years of age or older, the ratio shall not exceed 0.5 spaces per unit. The development must have either paratransit service or have unobstructed access, within one-half mile, to fixed bus route service that operates at least eight times per day. c) If the development is a special needs housing development, the ratio shall not exceed 0.3 spaces per unit. The development must have either paratransit service or have unobstructed access, within one-half mile, to fixed bus route service that operates at least eight times per day. 2)Provides that when a developer agrees to include the maximum number of very low- or low-income units under Density Bonus Law, and the development is within one-half mile of a major transit stop and with unobstructed access to the major transit stop from the development, then upon the request of the developer a city, county, or city and county shall not impose a parking ratio that exceeds 0.5 spaces per bedroom. 3)Requires the above specified parking ratios to be inclusive of handicapped and guest parking. 4)Defines "unobstructed access" as a resident being able to access the transit stop without encountering natural or constructed impediments. 5)Defines a "major transit stop" as a site containing an existing rail transit station, a ferry terminal served by either a bus or rail transit service, or the intersection of two or more major bus routes with a frequency-of-service interval of 15 minutes or less during the morning and afternoon peak commute periods. AB 744 Page 3 6)Provides that this bill does not preclude a city, county, or city and county from reducing or eliminating a parking requirement for developments of any type or location. 7)Allows a city, county, or city and county that conducted an area-wide or jurisdiction-wide parking study within the last seven years to impose a higher vehicular parking ratio that does not exceed the standard under Density Bonus Law. The study must be based on substantial evidence and include, but not be limited to, an analysis of parking availability, differing levels of transit access, walkability access to transit services, the potential for shared parking, the effect of parking requirements on the cost of market-rate and subsidized development, and the lower rates of car ownership for very low- and low- income individuals, including seniors and special needs individuals. Any new study shall be paid for by the city, county, or city and county. 8)Requires the city, county, or city and county which has completed a parking study and imposes a higher standard to make findings supporting the need for the higher parking ratio. 9)Provides that no reimbursement is required pursuant to California Constitution Article XIII B, Section 6, because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this bill. The Senate amendments: 1)Strike the requirement that a local government, upon the request of a developer that receives a density bonus, eliminate minimum parking requirements for specified categories of 100% affordable projects near transit, and instead provide reduced parking ratios for these projects. AB 744 Page 4 2)Provide that the parking ratios are inclusive of handicapped and guest parking. 3)Require projects to have unobstructed access to transit, and defines unobstructed access as when a resident is able to access the transit stop without encountering natural or constructed impediments. 4)Require seniors only or special needs projects to have either paratransit service or be located within one-half mile of fixed bus route service that operates at least eight times per day. 5)Require seniors only projects to comply with specified existing laws regarding senior housing. 6)Increase the duration of the parking study to seven years and make changes to the parking study criteria. 7)Provide that no reimbursement is required pursuant to California Constitution Article XIII B, Section 6, because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this bill. 8)Make technical, clarifying changes. FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs. COMMENTS: Background: California is facing a housing affordability crisis on many fronts. According to the United States Department of Housing and Urban Development, California AB 744 Page 5 has six of the most expensive rental markets in the country. Nationwide, rents in 2014 grew the fastest in the San Jose and San Francisco metropolitan areas, increasing by 14.4% and 13.5%, respectively. Between 2006 and 2011, rents increased throughout the state by an average of 10%. Lower-income households represent a majority of renter households. Out of 5.1 million renters in California, 60% are in lower-income households, while one in four renter households are in the extremely low-income. One in two renters in California pay in excess of 30% of their income towards housing and one in four renters pay half of their income towards housing. The funding sources to support construction of affordable housing have drastically diminished over the last five years. The dissolution of redevelopment agencies eliminated up to $1 billion in funding that was available for affordable housing construction. The last statewide housing bond was approved in 2008 and the proceeds of those bonds have been exhausted. Density Bonus Law: To help address California's affordable housing shortage, the Legislature enacted density bonus law to encourage the development of more affordable units. Under current law, a city or county must grant a density bonus, concessions and incentives, prescribed parking requirements, as well as waivers of development standards upon a developer's request when the developer includes a certain percentage of affordable housing in a housing development project. This bill would amend density bonus law to allow developers that agree to either include a percentage of affordable units or where the development is 100% affordable to lower income families and individuals to request a city or county reduce parking ratios. Cost of parking spaces: Affordable housing is expensive to build in California due to both the amount of subsidy needed to make the housing affordable and the cost of local regulatory requirements. In some cases, cities and counties apply minimum parking standards to housing developments that may not reflect the demand from tenants for parking. These projects may be close to transit stations or home to seniors or individuals with AB 744 Page 6 special needs who drive less frequently and have fewer vehicles. Parking spaces, which sometimes go unused, can significantly increase the cost of construction. The average construction cost per space, excluding land cost, in a parking structure in the United States is $24,000 for aboveground parking and $34,000 for underground parking. Certain types of parking, podium or subterranean, can increase parking costs by 6% or more relative to other types of parking. Parking study: This bill would allow a city or county to impose a higher parking ratio than those outlined in this bill if the city has conducted a study within the last seven years that includes substantial evidence that supports the need for a higher parking ratio. The city could only increase the parking ratio to the existing standard that is allowed under Density Bonus Law. This provision was included to address concerns raised by local governments who argued they needed a means to increase parking beyond the requirements of this bill. Sustainable development goals: California has taken steps over the last several years to establish programs and policies to help incentivize regional and local planning efforts. AB 32 (Núñez), Chapter 488, Statutes of 2006: The California Global Solutions Act of 2006 requires California to reduce greenhouse gas (GHG) emissions to 1990 levels by 2020. SB 375 (Steinberg), Chapter 728, Statutes of 2008, supports the state's climate action goals to reduce GHG emissions through coordinated transportation and land use planning with the goal of more sustainable communities. A key component of reducing GHG emissions is moving people out of their cars and onto public transit. Cities and counties are required to adopt sustainable community strategies to show how development will support reduction in GHG emissions. Purpose of this bill: According to the author, this bill aligns local land use decisions more closely with the goals of AB 32 and SB 375 by reducing the parking required for projects that are close to transit and serve individuals who have fewer cars. Much of California's existing parking requirements are based on AB 744 Page 7 low-density and single-purpose land use designations. Parking is costly to build and maintain and can increase the cost of projects in existing development areas. Senate amendments: Prior to the Senate amendments, this bill would have eliminated the minimum parking requirements for specified categories of 100% affordable projects near transit that qualify for a density bonus, and would not have required a nexus to transit for seniors or special needs projects. To address concerns raised by local governments, the Senate amendments provide reduced parking ratios for these projects, and require seniors and special needs projects to have access to paratransit or be within one-half mile of a fixed bus route that runs at least eight times per day. The parking ratios are inclusive of handicapped and guest parking. Analysis Prepared by: Rebecca Rabovsky / H. & C.D. / (916) 319-2085 FN: 0001472