california legislature—2023–24 regular session
ASSEMBLY BILL No. 1532
Introduced by Assembly Member Haney
February 17, 2023
An act to add Article 11.5 (commencing with Section 65658) to Chapter 3 of Division 1 of Title 7 of the Government Code, and to add Chapter 18.5 (commencing with Section 50898.50) to Part 2 of Division 31 of the Health and Safety Code, relating to housing.
legislative counsel’s digest
AB 1532, as introduced, Haney. Office conversion projects.
The Planning and Zoning Law requires the legislative body of each county and city to adopt a comprehensi ve, long-term general plan for the physical development of the county or city that includes, among other mandatory elements, a housing element. Under that law, supportive housing, as defined, is a use by right in zones where multif amily and mixed uses are permitted if the developer provides the planning agency with a plan for providing supportive services and the proposed housing development meets specified criteria.
The California Environmental Quality Act (CEQA) requires a lead agency, as defined, to prepare, or cause to be prepared, and certify the completion of, an en vironmental impact report on a project that it proposes to carry out or approve that may have a significant effect on the environment or to adopt a ne gative declaration if it finds that the project will not have that effect. CEQA does not apply to the approval of ministerial projects.
This bill w ould make an office con version project, as defined, that meets certain requirements a use by right in all areas re gardless of zoning. The bill would define “office conversion project” to mean the
99 conversion of a b uilding used for office purposes or a v acant office building into residential dwelling units. The bill would define “use by right” to mean that the city or county’s review of the office conversion may not require a conditional use permit, planned unit de velopment permit, or other discretionary city or county re view or appro val that would constitute a “project” for purposes of CEQA, as specified. By requiring the approval of housing crisis projects as a use by right, the bill would expand the e xemption for appro val of ministerial projects under CEQA.
This bill would exempt an office conversion project from impact fees, as defined, that are not directly related to the con version of an office building into residential dwelling units. The bill w ould allo w the proponent of an office conversion project to pay applicable impact fees over a 10-year period, subject to specified requirements.
This bill would authorize a local government to adopt an ordinance to implement these provisions and specify the process and requirements applicable to office conversion projects, provided that the ordinance is consistent with, and does not inhibit the objectives of the bill.
By imposing ne w duties on local go vernments in re viewing and approving office con version projects, the bill w ould impose a state-mandated local program.
This bill w ould, upon appropriation of the Le gislature, require the Department of Housing and Community De velopment to establish a program that a wards funding to office con version projects that are eligible as a use by right, as described above. The bill would establish the Office to Housing Conversion Fund, and provide that the moneys in the fund are to be made available to the department for purposes of the program.
The bill w ould include findings that changes proposed by this bill address a matter of state wide concern rather than a municipal af fair and, therefore, apply to all cities, including charter cities.
The California Constitution requires the state to reimb urse local agencies and school districts for certain costs mandated by the state.
Statutory provisions establish procedures for making that reimbursement.
This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.
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The people of the State of California do enact as follows:
line 1 SECTION 1. Article 11.5 (commencing with Section 65658) line 2 is added to Chapter 3 of Division 1 of Title 7 of the Government line 3 Code, to read:
line 4
line 5 Article 11.5. Office to Housing Conversion Act
line 6
line 7 65658. This article shall be known as, and may be cited as, the line 8 Office to Housing Conversion Act.
line 9 65658.1. For purposes of this article:
line 10 (a) “Impact fee” means any fee imposed pursuant to Chapter 5 line 11 (commencing with Section 66000).
line 12 (b) “Local government” means a city, including a charter city, line 13 a county, or a city and county.
line 14 (c) “Office con version project” means the con version of a line 15 building used for office purposes or a v acant office building into line 16 residential dwelling units.
line 17 (d) “Persons and families of low or moderate income” means line 18 the same as defined in Section 50093 of the Health and Safety line 19 Code.
line 20 (e) “Use by right” means that the city’ s or county’s review of line 21 the office con version project may not require a conditional use line 22 permit, planned unit de velopment permit, or other discretionary line 23 city or county review or approval that would constitute a “project” line 24 for purposes of Division 13 (commencing with Section 21000) of line 25 the Public Resources Code. Any subdivision of the sites shall be line 26 subject to all laws, including, but not limited to, a city or county line 27 ordinance implementing the Subdi vision Map Act (Di vision 2 line 28 (commencing with Section 66410)).
line 29 65658.2. (a) An office con version project that meets the line 30 requirements of subdivision (b) shall be a use by right in all zones, line 31 regardless of the zoning of the site, and subject to ministerial line 32 review, as provided in this article.
line 33 (b) (1) (A) An office conversion project shall dedicate at least line 34 10 percent of the total amount of housing units created by the line 35 project to persons and families of low or moderate income. line 36 (B) The project proponent shall commit to record, prior to the line 37 issuance of the first b uilding permit, a land use restriction or line 38 covenant providing that an y lower or moderate income housing 99 AB 1532 — 3 —
line 1 units required pursuant to paragraph (1) shall remain available at line 2 affordable housing costs or rent to persons and families of low or line 3 moderate income for no less than the following periods of time:
line 4 (i) Fifty-five years for units that are rented. line 5 (ii) Forty-five years for units that are owned. line 6 (2) The project proponent provides the local government with line 7 an enforceable commitment that all contractors and subcontractors line 8 performing w ork on the project will use a skilled and trained line 9 workforce for any proposed rehabilitation, construction, or major line 10 alterations in accordance with Chapter 2.9 (commencing with line 11 Section 2600) of Part 1 of Division 2 of the Public Contract Code. line 12 (3) The city or county shall require the recording of covenants line 13 or restrictions implementing this paragraph for each unit included line 14 in the project.
line 15 (c) (1) An office conversion project subject to this section shall line 16 not be subject to an y review by a city council, county board of line 17 supervisors, planning commission, or other planning o versight line 18 board. If a local government’s planning director or any equivalent line 19 local go vernment staf f, including all rele vant planning and line 20 permitting departments, determines that an office con version line 21 project submitted pursuant to this article is consistent with line 22 subdivision (b), it shall approve the project.
line 23 (2) Upon a determination that an office conversion project is in line 24 conflict with any of the standards specified in subdivision (b), the line 25 local go vernment shall pro vide the project proponent written line 26 documentation of which standard or standards the project conflicts line 27 with, and an e xplanation for the reason or reasons the project line 28 conflicts with that standard or standards, as follows:
line 29 (A) Within 60 days of the submission of the office coercion line 30 project to the local government if the project contains 150 or fewer line 31 housing units.
line 32 (B) Within 90 days of the submission of the office coercion line 33 project to the local government if the project contains more than line 34 150 housing units.
line 35 (d) A local government shall not impose either of the following line 36 on an office conversion project:
line 37 (1) Any new parking requirements that were not imposed on line 38 the original office use.
line 39 (2) Any new open space requirements that were not imposed line 40 on the original office use.
99 — 4 — AB 1532
line 1 (e) (1) Notwithstanding an y other la w, an office con version line 2 project shall be exempt from all impact fees that are not directly line 3 related to the construction of an office b uilding into residential line 4 dwelling units.
line 5 (2) Notwithstanding any other la w, a local go vernment shall line 6 not impose an y fee on an office con version project to co ver the line 7 cost of code enforcement or inspection services, or to other fees line 8 collected to pay for the cost of enforcement of local ordinances or line 9 state law.
line 10 (3) (A) Notwithstanding Chapter 5 (commencing with Section line 11 66000), any impact fees imposed pursuant to this article shall, at line 12 the request of the project proponent, be collected o ver a 10-year line 13 period, with the first payment being due upon the date of the final line 14 inspection, or the date the certificate of occupanc y is issued, line 15 whichever occurs first.
line 16 (B) The payment of impact fees paid o ver the 10-year period line 17 pursuant to this subdi vision shall be distrib uted evenly over the line 18 payment term.
line 19 (4) (A) A project proponent that utilizes paragraph (3) shall be line 20 required to execute a contract to pay the fees, or applicable portion line 21 thereof, within the time specified.
line 22 (B) The obligation to pay the fees shall inure to the benefit of, line 23 and be enforceable by, the local government that imposed the fee line 24 or charge, regardless of whether it is a party to the contract. The line 25 contract shall contain a legal description of the property affected, line 26 shall be recorded in the office of the county recorder of the county line 27 and, from the date of recordation, shall constitute a lien for the line 28 payment of the fees, which shall be enforceable against successors line 29 in interest to the property owner or lessee at the time of issuance line 30 of the b uilding permit. The contract shall be recorded in the line 31 grantor-grantee index in the name of the public agency issuing the line 32 building permit as grantee and in the name of the property owner line 33 or lessee as grantor. The local government shall record a release line 34 of the obligation, containing a legal description of the property, in line 35 the event the obligation is paid in full, or a partial release in the line 36 event the fee or charge is prorated.
line 37 (C) The contract may require the property o wner or lessee to line 38 provide appropriate notification of the opening of any escrow for line 39 the sale of the property for which the b uilding permit was issued line 40 and to provide in the escrow instructions that the fee or charge be 99 AB 1532 — 5 —
line 1 paid to the local go vernment imposing the same from the sale line 2 proceeds in escrow prior to disbursing proceeds to the seller. line 3 (f) A local go vernment shall not adopt or impose an y line 4 requirement, including, b ut not limited to, increased fees or line 5 inclusionary housing requirements, that applies to a project solely line 6 or partially on the basis that the office conversion project is subject line 7 to this section.
line 8 65658.3. A local go vernment may adopt an ordinance to line 9 implement this article and specify the process and requirements line 10 applicable to office conversion projects, provided that the ordinance line 11 is consistent with, and does not inhibit the objectives of, this article. line 12 65658.4. The Legislature finds and declares that this article line 13 addresses a matter of state wide concern rather than a municipal line 14 affair as that term is used in Section 5 of Article XI of the line 15 California Constitution. Therefore, this article applies to all cities, line 16 including charter cities.
line 17 SEC. 2. Chapter 18.5 (commencing with Section 50898.50) is line 18 added to Part 2 of Division 31 of the Health and Safety Code, to line 19 read:
line 20
line 21 Chapter 18.5. Office to Housing Conversion Grants line 22
line 23 50898.50. For purposes of this Chapter:
line 24 (a) “Department” means the Department of Housing and line 25 Community Development.
line 26 (b) “Office conversion project” means a project that is eligible line 27 as a use by right pursuant to Article 11.5 (commencing with Section line 28 65658) of Chapter 3 of Di vision 1 of Title 7 of the Go vernment line 29 Code.
line 30 50898.51. (a) Upon appropriation by the Le gislature, the line 31 department shall establish a grant program that awards funding to line 32 office conversion projects consistent with this chapter. line 33 (b) The funding a warded under this chapter shall be a warded line 34 based on the square footage of the office conversion project. line 35 50898.52. (a) There is hereby created in the State Treasury line 36 the Office to Housing Conversion Fund.
line 37 (b) Moneys in the fund shall, upon appropriation by the line 38 Legislature, be made available the department for purposes of this line 39 chapter.
99 — 6 — AB 1532
line 1 SEC. 3. If the Commission on State Mandates determines that line 2 this act contains costs mandated by the state, reimb ursement to line 3 local agencies and school districts for those costs shall be made line 4 pursuant to Part 7 (commencing with Section 17500) of Division line 5 4 of Title 2 of the Government Code.
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