City Council Memorandum
TO: HONORABLE MAYOR AND CITY COUNCIL DATE: SEPTEMBER 5, 2023
FROM: COMMUNITY & ECONOMIC DEVEL OPMENT WARDS: ALL
DEPARTMENT
SUBJECT: 2023 CALIFORNIA LEGISLATIVE UPDATE
ISSUE:
Receive and file a summary of the California Legi slature’s 2023 Housing Bills with an update on the potential impacts for the City of Riverside.
RECOMMENDATION:
That the City Council receive and file the staff report on the California Legislature’s 2023 Housing Bills.
LEGISLATIVE BACKGROUND:
The State of California has bee n experiencing a chronic housin g shortage for many years now.
Population growth and barriers to housing development such as high land costs, restrictive local regulatory requirements, envir onmental regulations, and neig hborhood opposition to housing development have resulted in a housing crisis. In 2018, former Governor Brown finalized the 2025 Statewide Housing Assessment which identified housing challe nges in California and provided a legislative action plan intended to increase housing production. The report estimated that 1.8 million homes will need to be built by 2025 to ensure that housing produ ction meets household growth, yet on average, only 80,000 new homes are built per year. Governor Gavin Newsom and the State Legislature have identified the housing shortage as a legislative priority.
In September 2022, the Governor signed 40 housing bills into law that promote housing production across the State by str eamlining approval processes, estab lishing more local accountability, encouraging greater flexibility for housing development, and allowing for more density. 24 of these bills have been identified to have some level of impact on the City (Attac hment 1). These bills generally fall into three categories: Housing and Permit Streamlining, Density Bonus, and Accessory Dwelling Unit (ADU) regulations. The remaining 15 bills do not directly affect the City or its operations.
Community & Economic Development Department Staff presented th is legislative update to the City Council Land Use, Sustai nability and Resilience Committee on June 12, 2023, which requested the update be presented to the full Council.
2023 California Housing Bill Update ꞏ Page 2
DISCUSSION:
Attachment 1 summarizes the key bills with a brief description; an assessment of the bill’s potential impact, ranked Low, Moderate or High; City departments impacte d; and action needed, if any. Of the 24 bills, four were determined to be high-impact, seven were determined to be medium-impact and 13 were determined to be low-impact. This repor t will focus on the four high-impact housing bills and will provide an overview of other legislation related to establishing a local tenant preference program for affordable housing projects.
Bills with High Impact
The four bills which will likely have a high impact include:
A. AB 2097 (Friedman) – Housing and Permit Streamlining: Minimum Parking Requirements
1. Prohibits the City from imposing mini mum parking requirements on a residential, commercial, or other development project if the project is located within one-half mile from a major transit stop as defined by in State law. There are exceptions however:
a. Transient lodges uses such as hotel s and motels still need to provide minimum parking if required by the City.
b. Developers and property owners may still voluntarily provide parking. c. If the City wishes to impose minimum par king requirements on a qualifying AB 2097 project, specific findings must demon strate that not enforcing parking requirements would negatively impact the City’s ability to meet regional housing needs or would affect existing development within one-half mile of the proposed project site.
2. Properties and uses which were previously limited by minimum parking requirements now have more flexibility. The Pl anning Division will work with applicants to identify if a development project qualifie s. Affected areas are pre dominantly along the Magnolia, Market, and University corridors (Attachment 2), which have the highest levels of transit service.
B. AB 2011 (Wicks) – Housing and Permit Streamlining: Mi nisterial Affordable Housing in Office/Commercial Zones
1. Creates a CEQA-exempt, ministerial ap proval process for multifamily housing development projects on sites where office, retail or parking is the principally permitted use. There are two types of projects which qualify:
a. 100% affordable projects; and
b. Mixed-income projects within commercial corridors.
Additionally, development projects must pay prevailing wages to construction workers, among other labor standards, and meet site location and size criteria, specifically:
a. Projects cannot be located wit hin 500 feet of a freeway; and b. Mixed-income projects:
i. May not exceed 20 acres in size; and
ii. Must be located on a commercial corri dor with a right-of-way cross section greater than 70 feet.
2. City Council may choose to adopt a CEQA -exempt implementing ordinance; otherwise, no action is needed.
3. The Planning Division will c oordinate with applicants who submit under AB 2011 to ensure they are meeting eligibilit y criteria and provide feedback within specified timeframes.
Potentially affected areas in the City can be seen in Attachment 3. 2023 California Housing Bill Update ꞏ Page 3
C. SB 6 (Caballero) – Housing and Permit Streamlining: Housing in Commercial Zones
1. Allows residential and mix ed-use development on parcels z oned for retail, commercial, office, and parking without needing to rezone the property. Unlike AB 2011, SB 6 projects are not CEQA-exempt and there are no affordability requirements. Development projects will need to meet labor requirements including payment of prevailing wages and using a skilled and trained workforce.
2. City Council may choose to adopt a CEQA -exempt implementing ordinance; otherwise, no action is needed.
3. The Planning Division will coordinate with applicants who submit under SB 6 to ensure they are meeting eligibility criteria and to determine the appropriate entitlement path and level of CEQA review on a case-by-case basis. Potentially affected areas in the City can be seen in Attachment 4.
AB 2011 & SB 6 Comparison
Project Labor Requirements
AB 2011 SB 6 Note
Prevailing
Wage Yes Yes
Defined as the general prevailing
rate or per diem wages for the
type of work in the geographic
area.
Skilled &
Trained
Workforce
No1 Yes
Developer will need to work
closely with labor unions to meet
workforce requirement. Otherwise,
developer will need to meet public
bidding requirements.
Compliance
Oversight Yes Yes
Developer will need to submit
monthly reports indicating
compliance with labor
requirements or face a fine
(~$10,000). California Labor
Commission & City oversight.
Other Project Requirements
AB 2011 SB 6 Note
Housing Type Multifamily, affordable
or mixed-income
Multifamily,
market-rate
SB 6 multi-family projects may be
market rate whereas AB 2011
multi-family projects must have an
affordable component.
Mixed-Use
Allowed Yes2 Yes
SB 6 projects may be mixed-use if
at least 50% is dedicated to
residential use.
Notice to
Commercial
Tenants &
Relocation
Assistance
Yes Yes
Both AB 2011 & SB 6 require the
developer notify commercial
tenants of the proposed project &
must provide relocation assistance
to certain tenants.
1 While AB 2011 does not require a skilled and trained workforce, for projects with 50 of more units, contractors must let employees participate in an apprenticeship program and make certain healthcare contributions. 2 AB 2011 projects may have a commercial/retail component; implementing ordinance may be necessary. 2023 California Housing Bill Update ꞏ Page 4
D. AB 2234 (Rivas): Housing and Permit Streamlining – Post Entitlement Applications
1. Establishes specific timeframes for re viewing and approving applications for post- entitlement permits for housing projects; makes electronic permit processing mandatory; requires disclosure of required application materials.
a. Post entitlement applications relat ed to housing projects can include grading permits, building permits, fire permits, utilities design plans, and permits for off- site improvements.
b. The City must also publish complete, approved examples of permit application packages for a variety of housing types online by 2024.
2. AB 2234 would expedite the review process fo r projects after entitlements are approved.
In general, the City already complies with most of the requirements of this bill, including specified review timeframes and electroni c permitting and plan review. However, affected City departments will need to review process deadlines and coordinate to publish checklists and complete approved examples of post entitlement applications.
Other Housing Legislation
At the direction of the Land Use, Sustainability & Resilience Committee during the June 12, 2023, meeting, staff is providing additional information on SB 649 (Cortese) – Affordable Housing & Local Tenant Preference Program.
SB 649 authorizes local governments to adopt residency preference policies for affordable housing projects for low-income residents who are at risk of displacement based on specified circumstances (i.e., rent-burdened households or residents who live or work in the City) for projects financed with low-income tax credits or tax-exempt bonds. This bill gives cities the authority to implement an ordinance for local tenant preferences while still complying with fair housing laws. An implementing ordinance must include:
1. A clearly defined population which is eligible for tenant preference;
2. Findings that demonstrate a valid and nondiscriminatory govern ment interest for the local tenant preference;
3. A declaration that t he ordinance has undergone a fair housing review; and
4. A detailed summary of the strategies and policies enacted by the City to address housing supply and equitable housing access.
Jurisdictions must also publish its ordinance on line and annually report its tenant preference program to the Department of Housing and Community Development.
While the City does not currently have an adopted tenant preference program, standard practice is to stipulate in all its affordable housing contract s that preference for affo rdable units be given to Riverside residents (Attachment 5). If the City were interested in pursuing a local tenant preference program, extensive research, legal analysis, data collection on displacement characteristics in the City and community outreach would be required.
STRATEGIC PLAN ALIGNMENT:
This item contributes to Strategic Priority 2 – Community Well-Being: Ensure safe and inclusive neighborhoods where everyone can thrive, and Goals 2.1 and 2.2.
This Project aligns with the following Cross-Cutting Threads:
1. Community Trust – The Update aligns with the Community Trust Cross-Cutting Thread as 2023 California Housing Bill Update ꞏ Page 5
the update provides needed information for both the Committee members and the public on changes to housing-related legislation recently signed into law.
2. Equity – The Update aligns with the Equity Cr oss-Cutting Thread in that it provides information on State Legislation that relates to further housing opportunities for all residents in the City.
3. Fiscal Responsibility – The Update aligns with the Fiscal Responsib ility Cross-Cutting Thread as changes to regulations to housing projects will help to streamline housing projects and provide additional housing options for all residents.
4. Innovation – The proposed project aligns with the Innovation Cross-Cutting Thread as it will result in updated processes and regulations that promote innovation and creativity in future housing developments.
5. Sustainability and Resiliency – The proposed project aligns with the Sustainability and Resiliency Cross-Cutting Thread as it cons iders existing and future housing needs for residents.
FISCAL IMPACT:
There is no fiscal impact related to this report.
Prepared by: Jennifer A. Lilley, AICP, Comm unity & Economic Development Director Certified as to
availability of funds: Edward Enriquez, A ssistant City Manager/Chief Financial Officer Approved by:
Rafael Guzman, Assistant City Manager
Approved as to form: Phaedra A. Norton, City Attorney
Concurs with;
___________________________
Gaby Plascencia, Chair
Land Use, Sustainability, and Resilience Committee
Attachments:
1. 2023 California H ousing Legislation
2. AB 2097 Map
3. AB 2011 Map
4. SB 6 Map
5. Local Tenant Preference Contract Language Exam ple – City of Riverside Housing Authority
6. Presentation