Pleasanton council discusses impacts of recent state housing legislation

The Pleasanton City Council received a recap from city staff this week about the probable local impacts of the so-called “housing package,” a group of state legislation signed into law by Gov. Jerry Brown last fall to address housing availability and affordability across California.

The conversation Tuesday night focused on three of the bills that city officials anticipate will have the most impact on the city’s housing development review procedures — new laws that target streamlined approvals for certain project types, housing density and affordability, and inventory of land for residential development.

And even those bills might not have as significant an effect on Pleasanton as on other cities in the next few years in light of multi-family housing projects recently built or approved here, but the key impacts will start to be felt more and more as the city enters the 2020s, city staff told the council.

“The playing field has changed,” City Manager Nelson Fialho said during the hour-long discussion at the Pleasanton Civic Center.

“Housing production in general is a touchy subject in our community, invites extreme reactions from both sides,” Fialho added. “The new legislation really does change the way we go about addressing these issues going forward … (so) it’s important to have these discussions, not only tonight but periodically over the coming months.”

More than 130 bills were introduced in Sacramento during the last legislative session to address the state’s housing situation. Of those, 15 were signed into law by Brown in September and started taking effect in the new year.

“From the state’s perspective, without any intervention much of the population increase is expected to push people farther from job centers, from our higher-performing schools, from transit. And it’s going to constrain opportunities for future generations,” city community development director Gerry Beaudin said.

The housing package breaks down generally into five categories, Beaudin said: directly financing affordable housing, streamlining local review processes, increasing local accountability and reporting requirements, inclusionary zoning and preserving the affordability of existing subsidized housing.

The legislation covers a range of specific requirements, but the three of most immediate concern for Pleasanton are Senate Bills 35 and 166 and Assembly Bill 1397.

SB 35 creates a new streamlined approval process for high-density housing projects in cities and counties that haven’t seen the construction of the numbers and types of units called for by their Regional Housing Needs Allocation (RHNA) — which quantifies each local jurisdiction’s “fair share” of the statewide housing need.

Eligible apartment or condo projects would need only staff-level approval within months, and without a full public consideration process, full environmental review or being subject to a referendum, Beaudin said.

To qualify, a developer’s project must meet specific criteria, including the site being residentially zoned and surrounded by development on at least 75% of its borders. It also can’t be in environmentally sensitive areas, the developer must pay prevailing wages to construction workers and 10% to 50% of the units must be low-income affordable — 50% in Pleasanton’s case short-term, Beaudin said.

“So you’re telling us that in our city, it would have to be 50% affordable … and also you’d have to pay prevailing wage,” Mayor Jerry Thorne said, with a chuckle, to confirm city staff’s conclusion that a streamlined project is highly unlikely in the short-term.

Given the requirements, city staff thinks only five high-density sites in Pleasanton’s Housing Element site inventory are currently eligible for streamlined processing, though no proposals are on the table.

The locations are the eastern Dublin-Pleasanton parking lot on Owens Drive, Stoneridge Shopping Center, the vacant Roche property at 4300 Hacienda Drive, the vacant Kaiser site at 5600 Stoneridge Mall Road and the Sheraton/Marriott hotel site at 5990 Stoneridge Mall Road.

Pleasanton’s east side would not qualify under SB 35 in the short-term because the site is not surrounded by other development and could be environmentally sensitive, Beaudin said.

But the impacts of SB 35 could really start being felt after the city’s Housing Element update in 2023, which will incorporate new RHNA mandates, including new marks for total housing and affordable units that will need to be generated in Pleasanton over the following eight years, he added.

SB 166 targets affordable housing requirements for new residential projects across individual cities.

Prior state law included “no net loss” provisions, which allowed cities to “down-zone” a site or approve projects with less density than specified in the city’s adopted Housing Element as long as adequate alternative housing sites in the city existed, Beaudin said.

The new legislation requires cities to demonstrate those findings not only for total housing numbers, but also for different affordability income categories identified for the site in the Housing Element inventory, Beaudin said. That means if an apartment project comes forward with fewer affordable units than designated for the site, the city would need to rezone other sites as replacement locations for high-density housing.

SB 166 is another bill that isn’t expected to have much impact during the current RHNA cycle, but that could change when the numbers are updated in four years, according to Beaudin.

And AB 1397 stipulates that potential housing sites must have a realistic capacity to accommodate new development, and it prohibits repeating proposed housing sites in the city’s inventory for more than two RHNA cycles, Beaudin said. That means the five aforementioned high-density potential sites might have to be removed from the 2023 Housing Element and new sites identified.

Beaudin acknowledged the California Department of Housing and Community Development is still working to create new regulations and guidelines related to the new housing legislation, so the full impact of all 15 bills is difficult to hone in on right now.

He said city officials would monitor the forthcoming new state regulations while also working to prepare for the 2023 Housing Element update and potential review of the city’s land-use policies and standards.

They also plan to watch for new legislative proposals from Sacramento.

“Typically, when the Legislature puts as much time and energy into a topic like they did with housing last year, they’re going to move on and watch it play out a little bit. But that really hasn’t been the case this time,” Beaudin said.

Among the new housing bills already introduced early in 2018 is SB 827 from Sen. Scott Wiener (D-San Francisco), which would eliminate discretionary review of projects around transit stations and transit corridors and institute no density limits, no parking requirements and building heights of 55 to 85 feet tall for those projects — a proposal council members bristled at Tuesday night.

In closing, Thorne said he and the mayors of Dublin and Livermore are “talking about inviting the authors of these bills out (here) to drive them around and just show them what kind of impact they could have on a community, which hopefully would have a real impact — but you can’t count on that.”

Rest of housing package

Here’s a roundup of the remaining bills in the state’s 2017 housing package, as recapped by Beaudin in his staff report to the council.

SB 167/AB 678 (Housing Accountability Act). SB 167 and the identical AB 678 increase the burden of proof required for a local government to reject or require downsizing of a housing project that includes affordable units.

AB 879 (Annual Reporting & Fees). This bill adds more technical requirements to provide additional data for required annual reports, which document the City’s actual housing production each year, starting with the Annual Progress Report due April 1, 2019. It also directs HCD to evaluate the reasonableness of local government fees by June 30, 2019. These requirements will likely necessitate additional staff time to comply with the new requirements.

AB 72 (Compliance Review by HCD). This bill authorizes HCD to find a city out of compliance with State housing law at any time, instead of the current practice where compliance is determined in conjunction with Housing Element certification by HCD; and to refer violations of State housing law to the Attorney General if deemed to be inconsistent with the City’s adopted housing element.

SB 2 (Building Homes and Jobs Act— Recordation Fee). This bill provides funding for affordable housing by imposing a $ 75 fee on each recorded document up to a maximum of $225 per transaction per parcel ( payable by the property owner). These fees are not a concern.

SB 3 (Veterans and Affordable Housing Bond Act of 2018). This bill places a bond on the November 2018 ballot. The bond measure would raise 3 billion for existing state affordable housing programs and $ 1 billion for CalVet, the home purchase assistance program for veterans.

SB 540 (Workforce Housing Opportunity Zone). This bill allows cities, at their option, to create Workforce Housing Opportunity Zones, or areas within the city or county that are designated for expedited housing development, with at least half of the homes required to be affordable to households with low or moderate incomes.

AB 73 (Housing Sustainability Districts). This bill allows cities and counties to create Housing Sustainability Districts, which function similarly to SB 540′ s housing zones. Housing and Sustainability Districts require at least 20 percent of the homes required to be affordable and would allow streamlined environmental and planning review.

AB 1515 (Reasonable Person Standard). This bill provides a ” reasonable person standard” when a developer legally challenges a local jurisdiction’ s decision to reject a proposed housing project. It requires courts to give less deference to evidence presented by local governments, and more consideration of alternative reasonable evidence that would allow a reasonable person to reach that conclusion.

AB 1505 (The Palmer Fix). This bill is known as the “the Palmer Fix.” Since the Court of Appeals 2009 decision in Palmer/Sixth Street Properties v. City of Los Angeles, most local agencies have not been able to require affordable housing in rental projects. This bill provides authorization for these requirements, so long as an alternate means of compliance, such as in lieu fees, is also provided. The restrictions imposed by the Palmer case has not been an issue for Pleasanton as the City has been able to satisfactorily negotiate affordable components of all proposed projects.

AB 1521 (Enhanced Preservation Notice Law). This bill strengthens the existing Preservation Notice Law by requiring sellers of a subsidized housing development to accept an offer from a qualified buyer if specified requirements are met. This law also provides HCD with additional tracking and enforcement responsibilities.

AB 571 (Farmworker Housing). This bill allows individual farmworker housing projects to qualify for more public funding and allows projects with 50 percent of units for farmworkers (instead of 100 percent) to qualify, making these types of projects more financially viable.