BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 2442


                                                                    Page  1


          CONCURRENCE IN SENATE AMENDMENTS


          AB  
          2442 (Holden)


          As Amended  August 19, 2016


          Majority vote


           -------------------------------------------------------------------- 
          |ASSEMBLY:  |63-8  |(May 19, 2016) |SENATE: | 39-0 |(August 23,      |
          |           |      |               |        |      |2016)            |
          |           |      |               |        |      |                 |
          |           |      |               |        |      |                 |
           -------------------------------------------------------------------- 


          Original Committee Reference:  H. & C.D.


          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.










                                                                    AB 2442


                                                                    Page  2


          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  
            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.


          The Senate amendments make conforming changes to avoid  
          chaptering conflicts with AB 2556 (Nazarian) and AB 2501  
          (Bloom), both of the current legislative session. 


          FISCAL EFFECT:  According to the Assembly Appropriations  
          Committee, no state fiscal impact.  Local agencies have the  
          authority to levy fees for related costs and thus, any local  
          costs are not reimbursable. 


          COMMENTS:  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 financial 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  








                                                                    AB 2442


                                                                    Page  3


          including extremely low-, very low-, low-, and 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:


          1)Ten percent of the total units for lower income households;


          2)Five percent of the total units of a housing for very low  
            income households;


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


          4)Ten percent 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:


          1)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. 


          2)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. 


          3)Three incentives or concessions for projects with at least 30%  








                                                                    AB 2442


                                                                    Page  4


            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 transition age foster youth, disabled  
          veterans, and homeless persons 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


          Analysis Prepared by:                                             
                          Lisa Engel / H. & C.D. / (916) 319-2085  FN:  
          0004844