FROM THE SOURCE
Twelve of the Fifteen housing bills Governor Jerry Brown signed in fall 2017 went into effect on January 1st, 2018. Below is a summary of four of the laws as they pertain to funding, housing, and development.
AB 1505: Inclusionary Housing Requirements Authorized in Rental Projects
AB 1505 supersedes a 2009 California Court of Appeal decision (Palmer/Sixth Street Properties LP v. City of Los Angeles), which held that the Costa-Hawkins Rental Housing Act precluded local agencies from imposing inclusionary housing requirements on rental projects that did not receive government assistance. In Palmer, the city of Los Angeles adopted a policy that required certain housing projects to include affordable housing units that would be subject to a 30-year rent restriction requirement (or pan an in-lieu fee). The Costa Hawkins law allows rental housing owners the right to set the initial rent level at the start of any tenancy.
Following approval of AB 1505, a city or county may now adopt an ordinance requiring that, as a condition of developing rental housing units, the housing project must contain a certain number of affordable rental units. Such inclusionary ordinances must include alternative means of compliance, including in-lieu fees, land dedication, the acquisition and rehabilitation of existing units and development of affordable units off site.
SB 2: New Funding Source for Housing
SB2, entitled the “Building Homes and Jobs Act”, provides a permanent source of funding for affordable housing by imposing a $75 fee on recorded documents. The fee-which is capped at $225 per transaction per parcel-will be levied on certain real estate transactions. Documents exempt from the fee include home sales and commercial real estate transactions.
AB 73: Housing Sustainability Districts
AB73 provides incentives to local agencies to create housing in Housing Sustainability Districts (HSD), with oversight from HCD, on infill sites with access to public transit. The law sets forth a procedure for a local agency to follow to establish an HSD (which includes a requirement that at least 20 percent of the housing units built within the HSD be affordable) after preparation of an Environmental Impact Report.
AB 1397: Residential Development Inventory
AB 1397 limits local governments from relying on housing inventory sites that do not have a realistic capacity for housing development. The new law changes the definition of land suitable for residential development in order to increase the number of multifamily sites. Identified sites must be “available” and “suitable” for residential development and have a “realistic and demonstrated potential” for redevelopment during the planning period. In addition, AB 1397 requires housing element inventory sites to have sufficient infrastructure, or to be included in a program to provide such infrastructure, to support and be accessible for housing development. The agency must specify the realistic unit count for each site and whether it can accommodate housing at various income levels.