CITY ATTORNEY’S OFFICE MEMORANDUM
TO: Mayor, Mayor Pro Tem, Councilmembers, City Manager
FROM: David Martin, Director of Community Development
Jing Yeo, Planning Manager, Community Development
Doug Sloan, City Attorney
Susan Cola, Assistant City Attorney
Heidi von Tongeln, Chief Deputy City Attorney, Advisory Unit DATE: January 22, 2023
RE: AB 2011
Assembly Bill No. 2011 (Chapter 647, Statutes of 2022)(“AB 2011”) is a new state housing law that: (i) added new annual reporting requirements; (ii) added enforcement authority for violations of state housing laws enacted in 2022; and (iii) added new development rights for housing developers under the “Affordable Housing and High Road Jobs Act of 2022”.
I. New Reporting Requirements
AB 2011 added new requirements to the City’s annual report to the California Department of Housing and Community Development (“HCD”), including (i) progress on meeting the City’s share of regional housing needs for extremely low income households, (ii) the number of housing applications received in the prior year and whether each application was subject to a ministerial or discretionary approval process, (iii) the number of units of housing demolished; and (iii) information tracking the number of development applications submitted under the Affordable Housing and High Road Jobs Act of 2022. (Cal. Gov’t Code § 65400)
This bill also gave HCD new authority to determine that the annual progress report is deficient within 90 days of receipt and provides the City with 30 days to cure the deficiency.
II. New Enforcement Authority for Violations of New State Housing Laws AB 2011 gave additional authority to HCD to notify the California Attorney General of violations of new state housing laws, including (i) the failure to submit a compliant annual report to HCD after notice and opportunity to cure, (ii) imposing mandatory parking minimums contrary to specified laws, and (iii) violation of the Affordable Housing and High Road Jobs Act of 2022. (Cal. Gov’t Code § 65585)
AB 2011
III. The Affordable Housing and High Road Jobs Act of 2022 AB 2011 added new Chapter 4.1 (Cal. Gov’t Code 65912.11 et seq.) (titled the “Affordable Housing and High Road Jobs Act of 2022), which becomes effective July 1, 2023 and sunsets on January 1, 2033.
While the Affordable Housing and High Road Jobs Act of 2022 intends to build on and greatly accelerate the recent efforts by the state to facilitate the construction of more affordable housing, its utility is questionable given the new labor requirements imposed on housing developers as a condition to utilizing its by-right development benefits. The City, in its currently effective interim zoning ordinance (“IZO”) and anticipated up-zoning for the 6th Cycle Housing Element, has already provided similar or higher thresholds for by-right development, but without the costly and onerous labor requirements of this new law. Therefore, there is no evident economic incentive for developers to utilize this new by-right development authority in the City.
Though the utility of this law is doubtful, given its complexity, we have provided a summary of its major components, below.
Approval process:
This law would require housing to be “by right” if it conforms to the provisions below regarding affordability, location, objective standards, and labor. In being by right, it would not be subject to the City’s discretionary approval process and would be exempt from the California Environmental Quality Act. The City would still be able to apply objective standards and design review processes as long as they do not conflict with the provisions in the law and do not preclude development of the housing.
Affordability requirements:
This law requires at least 15 percent of new rental units be affordable to lower-income households or, alternatively, 8 percent for very-low income households, or, alternatively, 5 percent for extremely-low income households. Affordable rental units would be subject to a recorded deed restriction for a period of 55 years for rental units.
This law also offers a for-sale owner-occupied alternative that requires 30% of the units be affordable to moderate-income households or, alternatively, 15% of the units be affordable to lower-income households. Affordable for-sale owner-occupied units would be subject to a recorded deed restriction for a period of 45 years.
Location requirements:
This law facilitates the development of two kinds of housing – 100-percent affordable housing, and mixed-income housing. To qualify to utilize the by right provisions of this law, both kinds of housing projects must be located in zones where office, retail, or parking are a principally permitted use (defined as “a use that may occupy more than one-third of AB 2011
the square footage of designated use on the site and does not require a conditional use permit.”) Mixed-income housing projects would be limited to sites that abut a “commercial corridor,” which is a local road with a right-of-way of 70 to 150 feet (generally, four to six lanes), and has frontage along the commercial corridor of a minimum of 50 feet.
Qualifying commercial corridors in the City are included in the following zoning districts.
MUBL Mixed-Use Boulevard Low. This Zoning District is intended to facilitate the transformation of sections of boulevards into vibrant, highly walkable areas with broad, pedestrian-friendly sidewalks, trees, landscaping, and local-serving uses with new buildings that step down in relationship to the scale and character of adjacent low density neighborhoods. Allowable ground floor uses include active, local-serving retail, open spaces such as plazas, service-oriented commercial uses, and residential and hotel uses in limited areas. Residential development for all income levels is the predominant use above the first floor.
MUB Mixed-Use Boulevard. This Zoning District is intended to facilitate the transformation of underutilized and auto-oriented sections of boulevards into vibrant, diverse, and attractive pedestrian friendly mixed-use boulevards that support localserving retail and a diversity of housing types. The Mixed-Use Boulevard District provides an environment that will accommodate affordable, workforce, and market-rate housing, stepping down in height and mass when adjacent to residential neighborhoods, as well as a variety of local-serving uses. Allowable ground floor uses include local-serving retail uses, ground floor open spaces such as small parks and plazas, service-oriented commercial uses, and some small-scale office uses. Residential development for all income levels is the predominant use above the first floor in certain locations. In parts of the District, especially along the south side of Wilshire, medical and dental offices are allowed on all floors.
GC General Commercial. This Zoning District is intended to maintain areas for affordable and market rate housing and a broad range of commercial uses that provide necessary daily services such as auto sales and auto repair, convenience retail, hotels, hardware stores, and small restaurants while respecting adjacent residential neighborhoods and established neighborhood commercial areas.
NC Neighborhood Commercial. This Zoning District is intended to maintain and enhance small-scale neighborhood shopping districts that provide daily goods and services easily accessible from surrounding residential neighborhoods while also serving a sub-regional role. This District provides for a scale and character of development that is pedestrian-oriented and which tends to attract and promote a walk-in clientele.
Development within this District should maximize human-scaled elements while providing a sensitive transition between these uses and neighboring residential areas. Ground floor uses include active, local-serving retail and service commercial uses such as small restaurants, laundromats, dry cleaners, beauty/barber shops, and clothing and grocery stores. Uses above the ground floor include residential, commercial, and local-serving office uses. This District is comprised of four geographic areas:
Main Street. Main Street is a neighborhood commercial street that is home to many boutiques, restaurants, and neighborhood-serving businesses. Main Street has both local AB 2011
and regional appeal, providing an eclectic mix of activities that is unique to Southern California.
Ocean Park Boulevard. Ocean Park Boulevard is a local-serving boulevard with two vibrant, neighborhood-serving commercial areas. The boulevard is a complete street for pedestrians, bicycles, transit, and autos, with an enhanced streetscape and dining, retail, and service needs within walking distance of the Sunset Park and Pico neighborhoods.
Pico Boulevard. Pico Boulevard is a local-serving, commercial boulevard that provides an enhanced environment for pedestrians and includes a wider choice of local-serving retail, expanded mobility, and shared parking.
Montana Avenue. Montana Avenue serves as a local, commercial, and entertainment street that also draws regional visitors who enjoy its many cafés and boutique stores.
IC Industrial Conservation. This Zoning District preserves space for existing industrial uses that provide a job base, affordable space for small-scale industrial and manufacturing businesses, and a center of economic activity for the City. The District also provides a place for the adaptive reuse of industrial buildings into affordable workspace for artists and the creative industries. Allowable land uses within this District include light industrial uses, including businesses engaged in design, development, manufacturing, fabricating, testing, or assembly of various products, which provide important community services and employment for workers with various skills. This District also allows incubator business opportunities, including sustainable industries that are appropriate for the City, as well as small visual and performing arts studios and theaters. One hundred percent affordable housing is allowed in limited areas. Additionally, auto dealers are allowed to locate storage and service facilities in this area.
OC Office Campus. This Zoning District is intended to provide for office and advanced technology uses, scientific research, and administration, and limited manufacturing of related products which require large expanses of floor area on large parcels.
Development intensity is intended to provide for office uses and other uses within a campus-like environment that will be compatible with abutting residential neighborhoods, especially in terms of scale and building mass.
HMU Healthcare Mixed Use. This Zoning District is intended to provide for the future orderly expansion of the City’s hospitals and related health care facilities in order to meet the needs of both the community and region while protecting the integrity of the surrounding residential neighborhoods. The District fosters the evolving needs of the healthcare community with expanded medical office uses and outpatient services along with retail and non-medical services.
Lincoln Transition (LT). This Zoning District is intended to facilitate the transformation of underutilized and auto-oriented sections of Lincoln Boulevard into a vibrant, diverse, and pedestrian-friendly mixed-use boulevard that supports local-serving retail and a diversity of housing types. The Lincoln transition District provides an environment that will accommodate housing and mixed-use development that steps down in height and AB 2011
mass when adjacent to residential neighborhoods to the east, and provide a variety of commercial uses. Allowable ground floor uses include local-serving retail uses, ground floor open spaces such as small parks and plazas, service-oriented commercial uses, and some small-scale office uses with housing on upper building floors.
Bayside Conservation (BC Promenade). This Zoning District is intended support the existing mix of pedestrian-oriented retail, restaurant, and services on the Third Street Promenade and maintain the human‐scale environment created by the buildings, representing the traditional height and scale of the early 20th century. Some of these buildings retain their historic façades at ground level or on upper building floors. Newer building forms are required to be set back at upper floors to maintain the Promenade’s historic scale.
Bayside Conservation (2nd and 4th Streets). This Zoning District is intended to preserve the ambiance of this well‐loved, human-scaled environment along 2nd and 4th Streets in the Downtown. This District supports a lively mix of active storefronts, restaurants, pedestrian-oriented services with the opportunity for housing and office uses on upper building floors. This District promotes adaptive re-use of existing buildings and maintenance of the traditional storefront development pattern at the ground floor.
Neighborhood Village (NV). This Zoning District is intended to maintain the existing mix of housing and commercial uses and provide more opportunities for local serving pedestrian‐activating uses to activate the street. Ground floor residential uses are desired for mid‐block projects, and all new uses should be incorporated in a way that respects existing residential uses in the District.
Transit Adjacent (TA). This Zoning District is intended to support increased activity near the Expo Light Rail. This area includes large properties adjacent to the freeway and the light rail station that can accommodate a broad mix of uses and services such as local and regional serving retail, multifamily housing, Class‐A office, creative employment, hospitality uses, and community gathering spaces. This District provides a mix of convenient goods and services in proximity to transit serving residents and visitors so they may shop on their walk to and from the station. Additional employment sites are accommodated near transit so employees may commute to and from work via light rail to reduce single-occupancy vehicle trips associated with office and other employment uses.
Wilshire Transition (WT). This Zoning District is intended to support the smaller, local serving uses that provide easily accessible goods and services to the surrounding neighborhood and also to provide opportunity for housing above the ground floor of new development. The proposed scale for the District is established to be complementary to its urban context in the Downtown and provide new buildings that are consistent with the scale of nearby residential uses.
Ocean Transition (OT). This Zoning District is intended to promote public and private enhancements to make Ocean Avenue a more consistently enjoyable walking experience and more integrated into the larger Downtown multi‐modal circulation network. Standards for the District support the overall improvement of the pedestrian experience, restaurants AB 2011
with outdoor dining, small-scale retail and services, and housing and office uses on upper floors.
All Zones in the Bergamot Area Plan
Development Prohibitions:
This law includes provisions that would preclude development on environmentally unsafe or sensitive area, per previously established objective standards. It would also require development to occur within infill areas, which would help reduce commutes and, commensurately, greenhouse gas emissions.
To protect existing communities, projects would not be allowed to demolish existing housing, with the exception of housing that is owner-occupied by a higher income household that chooses to sell their property to enable a development of greater density.
Additionally, the development could not lead to the demolition of a historic structure, including City-designated historic resources.
Objective Standards:
To utilize the by right provisions of this law, housing projects would need to meet the objective standards specified in the law. All projects would need to be multi-family projects where no more than one-third of the space can be for a non-residential use.
For 100-percent affordable projects, the residential density would need to meet or exceed the density considered geographically appropriate for affordable housing projects in Housing Element Law. Generally, that density is 30 units per acre in urban areas, 20 units per acre in suburban areas, and 10 units per acre in rural areas. The site must otherwise meet the local government’s height limits, objective zoning standards, and objective design review standards.
Mixed-income housing projects would need to meet or exceed the density and height standards in the table below. These standards are distinguished by the type of community, width of the commercial corridor, and proximity to transit. The local government may allow higher densities and height limits at their discretion.
Location Metropolitan Jurisdiction Non-Metropolitan Jurisdiction Minimum
Project
Density
Minimum
Project
Height
Minimum Project
Density
Minimum
Project
Height
Commercial corridor with
a width of 70’ to 100’
40 units/acre 35 feet 30 units/acre 35 feet
Commercial corridor with
a width of 100’ to 150’
60 units/acre 45 feet 50 units/acre 45 feet
AB 2011
Commercial corridor
within ½ mile of a major
transit stop
80 units/acre 65 feet 70 units/acre 65 feet
For reference, the following table shows the up-zoning mandated by the certified 6th Cycle Housing Element:
Citywide Rezoning
Zone FAR Height
MUBL – N. of I-10 3.25 70’
MUBL – Pico 2.00 45’
MUBL – Pico w. of Lincoln 2.50 55’
MUBL – Lincoln 2.50 55’
MUB 3.25 70’
GC (SMB) 3.25 70’
GC (Lincoln) 2.50 55’
GC (Pico) 2.00 45’
NC 2.25 50’
NC (Main) 2.50 55’
NC (Ocean Park) 2.50 55’
NC (Montana) 2.50 55’
IC 3.00 65’
OC 2.75 60’
HMU 2.50 70’
Downtown Rezoning
LT (East) 3.00 65’
LT (West) 3.00 65’
NV 3.50 65’
BC (Promenade) 3.00 65’
BC (2nd and 4th) 3.50 65’
TA 3.50 65’
OT 3.00 65’
WT 3.00 65’
Bergamot Area Plan Rezoning
BTV 4.0 84’
MUC North of
Pennsylvania or South of
Expo Bike Path
4.0 84’
MUC 4.0 84’
CCS 2.50 55’
CAC 2.50 55’
AB 2011
Mixed-income projects must meet specified setback standards regarding any frontages along the commercial corridor, any side street, and rear property lines. These setback standards are designed to focus the development along the commercial corridors, and away from the rear of the property.
The City may not require parking for mixed-income projects, except that projects must meet requirements around accessible parking for people with disabilities, electric vehicle parking spaces, and bicycle parking. Developers would be allowed to determine the amount of parking needed to meet the demands of the new residents.
Prevailing Wage Requirements:
This law would require compensation consistent with standards in place for public works projects by requiring projects to pay prevailing wages. The prevailing wage encompasses an hourly pay, as well as compensation for other benefits should the employer not provide them, including health care, vacation, and pension.
This law includes an enforcement component by the Labor Commissioner, an underpaid workers, or a joint labor-management cooperation committee established under federal law. These provisions would help bolster enforcement capacity of the labor standards and help ameliorate concerns about wage theft.
This law requires that all contractors on projects of 50 or more units participate in a stateapproved apprenticeship program or request the dispatch of apprentices from a program.
This law allows for a locally negotiated Collective Bargaining Agreement to supersede the labor provisions in this law.
Given the potential impacts of these labor requirements on housing development feasibility, this law tasks HCD with undertaking two studies (one before January 1, 2027 and one before January 1, 2033) to determine the outcomes of this law. This law also tasks local government (e.g., the City) with monitoring prevailing wage compliance of these projects.