Part 1: New California Housing Laws
The California Department of Housing and Community Development was given more tools to hold cities accountable for housing-element compliance. Spanning 140 pages, Assembly Bill 101, signed last week, is unlike most bills from this session. The other laws generally take effect in January, but most of AB 101 took effect immediately. Here are the highlights:
Regulatory
- Judicial Enforcement: After HCD flags a noncompliant housing element, the Attorney General is now required to seek a court order directing the city to bring its housing element into compliance. To secure compliance, the court is directed to retain jurisdiction, hold status conferences, and impose fines, and may appoint a receiver to step in, take the process over from the city, and “bring the jurisdiction’s housing element into substantial compliance.”
- Financial Enforcement: Cities with compliant housing elements get preference in applying for housing and infrastructure programs. Cities that don’t comply are ineligible for certain programs.
- “Low Barrier Navigation Center” Now Allowed by Right in Zones Allowing Multifamily or Mixed Uses: Supportive housing has no limit on length of stay and is already allowed as a “use by right” wherever multifamily residential and mixed uses are allowed, subject only to ministerial standards that apply to multifamily generally. This bill introduces “Low Barrier Navigation Center” as a “low-barrier, service-enriched shelter focused on moving people into permanent housing,” such as supportive housing — and allows an LBNC by right wherever multifamily or mixed uses are allowed on any basis.
- Qualifying Threshold for Streamlining Easier to Satisfy: Before, an applicant had to show that 2/3 of the square footage of the project was residential to qualify for streamlining. Now, proposed density-bonus units and area must be included in the 2/3 calculation. The bill also adds the Department of Public Health and the State Water Resources Control Board to the list of state agencies that may clear a hazardous waste site for streamlining.
Financial
- HCD and Housing Finance Directors Added to Tax Credit Allocation Committee: Before, the Committee was just the Governor, Controller and Treasurer. The bill adds these housing directors to the Committee, potentially changing the Committee’s perspective on how to allocate tax credits to housing projects.
- New $650 Million Grant Program to Address Homelessness: The bill establishes the Homeless Housing, Assistance, and Prevention Program and puts the Business, Consumer Services, and Housing Agency in charge of distributing $650 million in one-time grant funds for regional coordination and expanding or developing “local capacity to address homelessness challenges.” The deadline to apply for funds is Feb. 15.
- New $250 Million Grant Program to Accelerate Housing Production and Satisfy RHNA: The bill establishes the Local Government Planning Support Grants Program and puts HCD in charge of allocating $250 million in one-time grants to cities, counties and councils of government (half to cities and counties, half to COGs). The funds are for technical assistance, preparation and adoption of planning documents, and “process improvements” to “accelerate housing production and … facilitate compliance with” sixth-cycle regional housing needs assessments. The amount available to a particular city depends on its population. The deadline for cities and counties to apply for funds is July 1 (COGs have until January 2021).
- HCD May Now Use CalHome Program Funds to Make Grants for ADUs and Disaster Relief: The bill authorizes HCD to use existing, continuously appropriated CalHome Program funds to make grants to local agencies and nonprofits for the construction or rehabilitation of accessory dwelling units and junior ADUs, as well as to assist disaster victims.
- Housing Trust Grant Funds Now Available for Native American Tribes and ADUs: Previously, only local housing trusts were eligible for grants from the Local Housing Trust Fund Matching Grant Program. Now, Native American Tribes may receive funds from this Program. Permissible uses of the funds have also been extended to include construction or rehabilitation of ADUs and junior ADUs.
- New $500 Million Grant Program for Infill Infrastructure: The bill establishes the Infill Infrastructure Grant Program of 2019 and puts HCD in charge of allocating $500 million in grant funds to capital improvement projects that are needed to facilitate development of qualifying infill projects and areas. HCD will release a notice of funding availability by Nov. 30.
- $500 Million in Additional Tax Credits: The bill provides for an additional $500 million in tax credits to qualifying low-income housing projects and changes some of the criteria to qualify.
- $500 Million Added to Self-Help Housing Fund for Special-Needs Housing: The bill appropriates $500 million to HCD for the Self-Help Housing Fund to facilitate low- and moderate-income housing for people with intellectual or developmental disabilities.
With California’s housing shortage reaching crisis levels, the state Legislature and Gov. Gavin Newsom approved a slew of new bills this session aimed at helping the situation. Using a mix of carrots and sticks, these laws will change how cities and counties address housing shortages in their own communities. Watch for more Legal Alerts analyzing the new laws and how they impact your agency.
Also in BB&K’s Housing Series:
Coming Up in BB&K’s Housing Series This Week:
- New laws related to accessory dwelling unit regulation
- A roundup of other new housing related laws
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