BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 2442


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          Date of Hearing:  April 20, 2016


                       ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT


                           Susan Talamantes Eggman, Chair


          AB 2442  
          (Holden) - As Amended April 14, 2016


          SUBJECT:  Density bonuses.


          SUMMARY:  Requires local agencies to grant a density bonus, when  
          an applicant for a housing development agrees to construct  
          housing for transitional foster youth, disabled veterans, or  
          homeless persons.  Specifically, this bill:


          1)Requires a local agency to grant one density bonus, when an  
            applicant for a housing development seeks and agrees to  
            construct a housing development that contains 10% of the total  
            units for transitional foster youth, disabled veterans, or  
            homeless persons, as those terms are defined in code.  


          2)Requires the units to be subject to a recorded affordability  
            restriction of 55 years and to be provided at the same  
            affordability level as very low-income units.


          3)Specifies, for housing developments meeting the criteria of  
            1), above, that the density bonus shall be 20% of the number  
            of the type of units giving rise to a density bonus, as  
            specified, thus making the density bonus for 1), above,  
            consistent with density bonus that a developer receives for  








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            senior housing units.


          4)States that no reimbursement is necessary because a local  
            agency has the authority to levy service charges, fees, or  
            assessments sufficient to pay for the program or level of  
            service mandated by this act.


          EXISTING LAW:  


          1)Defines a "foster youth" to mean a person who is currently in  
            foster care, and "former foster youth" means a person who is  
            an emancipated foster youth and who is up to 24 years of age.


          2)Defines "disabled veteran" to mean any veteran who is  
            currently declared by the United States Veterans  
            Administration to be 10% or more disabled as a result of  
            service in the armed forces.  Proof of such disability shall  
            be deemed conclusive, if it is of record in the United States  
            Veterans Administration.


          3)Requires all cities and counties to adopt an ordinance that  
            specifies how they will implement state density bonus law.


          4)Requires cities and counties to grant a density bonus when an  
            applicant for a housing development of five or more units  
            seeks and agrees to construct a project that will contain at  
            least any one of the following:


             a)   10% of the total units for lower-income households;











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             b)   5% of the total units of a housing for very low-income  
               households;



             c)   A senior citizen housing development or mobilehome park;  
               and,



             d)   10% of the units in a common-interest development (CID)  
               for moderate-income households.



          1)Requires the city or county to allow an increase in density of  
            20% over the otherwise maximum allowable residential density  
            under the applicable zoning ordinance and land use element of  
            the general plan for low-income, very low-income, or senior  
            housing, and by 5% for moderate-income housing in a CID.



          FISCAL EFFECT:  This bill is keyed fiscal.


          COMMENTS:  


          1)Bill Summary.  This bill requires a local agency to grant one  
            density bonus, when an applicant for a housing development  
            seeks and agrees to construct a housing development that  
            contains 10% of the total units for transitional foster youth,  
            disabled veterans, or homeless persons, as those terms are  
            defined in code, and requires the units to be subject to a  
            recorded affordability restriction of 55 years and to be  
            provided at the same affordability level as very low-income  
            units.  Additionally, the bill specifies that the density  
            bonus shall be 20% of the number of the type of units giving  








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            rise to a density bonus, thus making the density bonus for the  
            bill consistent with the density bonus that a developer would  
            receive for senior housing units.


            This bill is an author-sponsored measure.


          2)Author's Statement.  According to the author, "Many at-risk  
            populations can benefit from affordable housing options, made  
            available by providing existing incentives to build density  
            housing. In existing law, income level and age are the only  
            factors available for housing developers and local governments  
            to consider, when making the commitment to build a housing  
            project that has been granted a multiple density bonus. AB  
            2442 adds that a Multiple Density Bonus can be obtained by a  
            housing developer, if an agreement is made to build housing  
            and set aside ten percent of the housing units for former  
            foster youth, disabled veterans, and/or formerly homeless  
            individuals. These units would be made available for 
          55 years at the affordability rate of very low-income units.  
          3)Background.  Density bonus law was originally enacted in 1979,  
            but has been changed numerous times since.  The Legislature  
            enacted the density bonus law to help address the affordable  
            housing shortage and to encourage development of more low- and  
            moderate- income housing units.  Density bonus is a tool to  
            encourage the production of affordable housing used by both  
            market rate and affordable housing developers. In return for  
            inclusion of affordable units in a development, developers are  
            given an increase in density over a city's zoned density and  
            concessions and incentives.  The increase in density and  
            concessions and incentives are intended to financially support  
            the inclusion of the affordable units. 


            All local governments are required to adopt an ordinance that  
            provides concessions and incentives to developers that seek a  
            density bonus on top of the city's zoned density in exchange  
            for including extremely low-, very low-, low-, and  








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            moderate-income housing. Failure to adopt an ordinance does  
            not relieve a local government from complying with state  
            density bonus law. Local governments must grant a density  
            bonus when an applicant for a housing development of five or  
            more units seeks and agrees to construct a project that will  
            contain at least any one of the following:


             a)   10% of the total units for lower-income households;

             b)   5% of the total units of a housing for very low-income  
               households;





             c)   A senior citizen housing development or mobilehome park;  
               and,



             d)   10% of the units in a common-interest development (CID)  
               for moderate-income households.



            A developer can submit a request to a local government as part  
            of their density bonus application for incentives and  
            concessions.  Developers can receive the following number 


            of incentives or concessions:
             a)   One incentive or concession for projects that include at  
               least 10% of the total units for lower-income households,  
               at least 5% for very low-income households, or at least 10%  
               for moderate-income households in a common interest  
               development 









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             b)   Two incentives or concessions for projects with at least  
               20% lower-income households, at least 10% for very  
               low-income households, or at least 20% for moderate-income  
               households in common interest developments. 


             c)   Three incentives or concessions for projects with at  
               least 30% lower-income households, at least 15% for very  
               low-income households, or at least 30% for moderate-income  
               households in common interest developments. 


            Typically, housing developments that serve special needs  
            populations are financed using public funding to reduce the  
            debt service on the projects. It's unclear whether or not  
            market rate developers would opt to dedicate at least 10% of  
            the units in development to a transition age foster youth,  
            disabled veterans, and homeless person in return for increased  
            density and concessions and incentives.  In addition, these  
            populations would be captured under the existing percentages  
            for very low- and low-income households. 





          1)Arguments in Support.  Supporters argue that this bill will  
            establish new fiscal incentives for housing developers to  
            dedicate units specifically for this population of youth, and  
            will thus expand the availability of affordable housing for  
            these youth and enhance their opportunities and outcomes.


          2)Arguments in Opposition.  None on file.


          3)Double-Referral.  This bill was heard in the Housing and  
            Community Development Committee on April 13, 2016, where it  








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            passed with a 6-1 vote.





          








          REGISTERED SUPPORT / OPPOSITION:




          Support


          Hillsides


          Bonita Unified School District


          David & Margaret Youth and Family Services


          Michael D. Antonovich, Supervisor, County of Los Angeles


          Individual letters (126)











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          Opposition


          None on file




          Analysis Prepared by:Debbie Michel / L. GOV. / (916) 319-3958