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AB-73 Planning and zoning: housing sustainability districts.(2017-2018)

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Date Published: 03/29/2017 04:00 AM
AB73:v98#DOCUMENT

Amended  IN  Assembly  March 28, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 73


Introduced by Assembly Members Chiu, Caballero, Bonta, and Kalra
(Coauthors: Assembly Members Mullin, Santiago, Ting, Berman, and Gloria)

December 16, 2016


An act to amend Section 65582.1 of, and to add Chapter 11 (commencing with Section 66200) to Division 1 of Title 7 of, the Government Code, and to add Chapter 4.3 (commencing with Section 21155.10) to Division 13 of the Public Resources Code, relating to land use.


LEGISLATIVE COUNSEL'S DIGEST


AB 73, as amended, Chiu. Planning and zoning: housing sustainability districts.
(1) The Planning and Zoning Law requires a city or county to adopt a general plan for land use development within its boundaries that includes, among other things, a housing element. Existing law provides for various reforms and incentives intended to facilitate and expedite the construction of affordable housing.
This bill would authorize a city, county, or city and county, including a charter city, charter county, or charter city and county, to establish by ordinance a housing sustainability district that meets specified requirements, including authorizing residential use within the district through the ministerial issuance of a permit. The bill would authorize the city, county, or city and county to apply to the Office of Planning and Research for approval for a zoning incentive payment and require the city, county, or city and county to provide specified information about the proposed housing sustainability district ordinance. The bill would require the office to approve a zoning incentive payment if the ordinance meets the above-described requirements. requirements and the city’s housing element is in compliance with specified law. The bill would also require the Department of Housing and Community Development, each October 1 following the approval of the housing sustainability district, to issue a certificate of compliance if the city, county, or city and county meets specified criteria pertaining to the continued compliance with these provisions or to deny certification, as provided. The bill would provide that a city, county, or city and county with a housing sustainability district would be entitled to a zoning incentive payment, subject to appropriation of funds for that purpose, and require that 1/2 the amount be provided upon zone approval by the office and 1/2 the amount upon verification by the department of the issuance of permits for the projected units of residential construction within the zone, provided that the city, county, or city and county has received a certificate of compliance for the applicable year. The bill, if no construction has started in a housing sustainability district within 3 years of the date that the first 1/2 of the incentive payment has been made, would require the city, county, or city and county to return the full amount of zoning incentive payments it has received to the department.
The bill would authorize a city, county, or city and county to incorporate provisions in its housing sustainability district ordinance prescribing the contents of an application for a permit for residential development, to adopt design review standards, and to charge a project application fee to defray the costs of preparation, adoption, and administration of the housing sustainability district plan, as provided. The bill would also require that prevailing wages be paid, and a skilled workforce employed, in connection with all projects within the housing sustainability district, as provided. The bill would establish procedures for review of an application by an approving authority, including requiring the approving authority to conduct a public hearing on an application and issue a written decision within 120 days of receipt of the application. The bill, if a proposed development within a housing sustainability district includes any parcels being used for affordable housing, would require that the approving authority condition approval of the application on the applicant’s agreement to replace those affordable housing units. The bill would also prescribe procedures for review of a decision of the approving authority to deny or approve with conditions an application for a permit in the superior court.
The bill would require the department to publish a report containing specified information about the housing sustainability district program on its Internet Web site no later than November 1, 2018, and each November 1 thereafter.
(2) 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 environmental impact report (EIR) on a project that it proposes to carry out or approve that may have a significant effect on the environment or to adopt a negative declaration if it finds that the project will not have that effect. CEQA also requires a lead agency to prepare a mitigated negative declaration for a project that may have a significant effect on the environment if revisions in the project would avoid or mitigate that effect and there is no substantial evidence that the project, as revised, would have a significant effect on the environment.
This bill would require a lead agency, when designating housing sustainability districts, to prepare an EIR for the designation, as specified. The bill would require the Judicial Council, by July 1, 2018, to establish procedures applicable to actions or proceedings brought to attack, review, set aside, void, or annul the certification of the EIR or the approval of the designation that require the actions or proceedings, including any potential appeals, be resolved, to the extent feasible, within 270 days of the certification of the record of the administrative proceedings. The bill would require the lead agency to prepare and certify the record of the administrative proceedings, as specified. The bill would exempt from CEQA housing projects undertaken in the housing sustainability districts that meet specified requirements.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 65582.1 of the Government Code is amended to read:

65582.1.
 The Legislature finds and declares that it has provided reforms and incentives to facilitate and expedite the construction of affordable housing. Those reforms and incentives can be found in the following provisions:
(a) Housing element law (Article 10.6 (commencing with Section 65580) of Chapter 3).
(b) Extension of statute of limitations in actions challenging the housing element and brought in support of affordable housing (subdivision (d) of Section 65009).
(c) Restrictions on disapproval of housing developments (Section 65589.5).
(d) Priority for affordable housing in the allocation of water and sewer hookups (Section 65589.7).
(e) Least cost zoning law (Section 65913.1).
(f) Density bonus law (Section 65915).
(g) Accessory dwelling units (Sections 65852.150 and 65852.2).
(h) By-right housing, in which certain multifamily housing are designated a permitted use (Section 65589.4).
(i) No-net-loss-in zoning density law limiting downzonings and density reductions (Section 65863).
(j) Requiring persons who sue to halt affordable housing to pay attorney fees (Section 65914) or post a bond (Section 529.2 of the Code of Civil Procedure).
(k) Reduced time for action on affordable housing applications under the approval of development permits process (Article 5 (commencing with Section 65950) of Chapter 4.5).
(l) Limiting moratoriums on multifamily housing (Section 65858).
(m) Prohibiting discrimination against affordable housing (Section 65008).
(n) California Fair Employment and Housing Act (Part 2.8 (commencing with Section 12900) of Division 3).
(o) Community redevelopment law (Part 1 (commencing with Section 33000) of Division 24 of the Health and Safety Code, and in particular Sections 33334.2 and 33413).
(p) Housing sustainability districts (Chapter 11 (commencing with Section 66200)).

SEC. 2.

 Chapter 11 (commencing with Section 66200) is added to Division 1 of Title 7 of the Government Code, to read:
CHAPTER  11. Housing Sustainability Districts

66200.
 For the purposes of this chapter, the following definitions shall apply:
(a) “Approving authority” means an agency of a city, county, or city and county that is established in the city’s, county’s, or city and county’s housing sustainability district ordinance and designated to review permit applications for development within the housing sustainability district in accordance with Section 66205.
(b) “City, county, or city and county” includes a charter city, charter county, or charter city and county.
(c) “Department” means the Department of Housing and Community Development.
(d) “Developable area” means the area within a housing sustainability district that can be feasibly developed into residential or mixed used development, including land area occupied by or associated with underutilized residential, commercial, or industrial buildings or uses that have the potential to be converted for residential or mixed use, in accordance with the rules and regulations of the office, except for the following:
(1) Land that is already substantially developed, including existing parks and open space.
(2) Areas exceeding one-half acre that are unsuitable for development due to topographical features or environmental preservation.
(e) “Eligible location” means any of the following:
(1) An area located within one-half mile of public transit.
(2) An area of concentrated development.
(3) An area that, by virtue of existing infrastructure, transportation access, existing underutilized facilities, or location, is highly suitable for a residential or mixed use housing sustainability district.
(f) “Mixed use” means that up to 50 percent of the square footage of a proposed development is designated for nonresidential use.
(g) “Office” means the Office of Planning and Research.
(h) “Project” means a proposed residential or mixed use development within a housing sustainability district.
(i) “Housing sustainability district” means an area within a city, county, or city and county designated pursuant to this chapter that is superimposed over an area within the jurisdiction of the city, county, or city and county in which a developer may elect to develop a project in accordance with either the housing sustainability district ordinance or the city’s, county’s, or city and county’s otherwise applicable general plan and zoning ordinances.
(j) “Housing sustainability district ordinance” means the ordinance adopted by a city, county, or city and county pursuant to Section 66201 establishing a housing sustainability district.

66201.
 (a) A city, county, or city and county, upon receipt of preliminary approval by the office pursuant to Section 66202, may establish by ordinance a housing sustainability district in accordance with this chapter. The city, county, or city and county shall adopt the ordinance in accordance with the requirements of Chapter 4 (commencing with Section 65800).
(b) An area proposed to be designated a housing sustainability district pursuant to this chapter shall satisfy all of the following requirements:
(1) The area is an eligible location, including any adjacent area served by existing infrastructure and utilities.
(2) The area is zoned to permit residential use through the ministerial issuance of a permit. Other uses may be permitted by conditional use or other discretionary permit, provided that the use is consistent with residential use.

(3)Housing density in the area is at least 20 units per acre of multifamily housing on the developable land area or eight units per acre for single-family homes on the developable land area.

(3) Density ranges for multifamily housing for which the minimum densities shall not be less than those deemed appropriate to accommodate housing for lower income households as set forth in subparagraph (B) of paragraph (3) of subdivision (c) of Section 65583.2, and a density range for single-family attached or detached housing for which the minimum densities shall not be less than 10 units to the acre. A density range shall provide the minimum dwelling units per acre and the maximum dwelling units per acre.
(4) The development of housing is permitted, consistent with neighborhood building and use patterns and any applicable building codes.
(5) Limitations or moratoriums on residential use do not apply to any of the area. area, other than any limitation or moratorium imposed by court order.
(6) The area is not subject to any general age or other occupancy restrictions, except that the city, county, or city and county may allow for the development of specific projects exclusively for the elderly or the disabled or for assisted living.
(7) Housing units comply with all applicable federal, state, and local fair housing laws.
(8) The area of the proposed housing sustainability district does not exceed 15 percent of the total land area under the jurisdiction of the city, county, or city and county unless the office approves a larger area in furtherance of the purposes of this chapter.
(9) The total area of all housing sustainability districts within the city, county, or city and county does not exceed 30 percent of the total land area under the jurisdiction of the city, county, or city and county.
(10) The ordinance establishing the housing sustainability district provides for the manner of review by an approving authority, as designated by the ordinance, pursuant to Section 66205 and in accordance with the rules and regulations adopted by the office.
(11) Development projects in the area comply with the requirements of Section 66208, regarding the replacement of affordable housing units affected by the development.
(c) The city, county, or city and county may apply uniform development policies or standards that will apply to all projects within the housing sustainability district, including parking ordinances, public access ordinances, grading ordinances, hillside development ordinances, flood plain ordinances, habitat or conservation ordinances, view protection ordinances, and requirements for reducing greenhouse gas emissions.
(d) The city, county, or city and county may provide for mixed use development within the housing sustainability district.
(e) An amendment or repeal of a housing sustainability district ordinance shall not become effective unless the department provides written approval to the city, county, or city and county. The city, county, or city and county may request approval of a proposed amendment or repeal by submitting a written request to the department. The department shall evaluate the proposed amendment or repeal for the effect of that amendment or repeal on the city’s, county’s, or city and county’s housing element. If the department does not respond to a written request for amendment or repeal of an ordinance within 60 days of receipt of that request, the request shall be deemed approved.
(f) The housing sustainability district ordinance shall do all of the following:
(1) Provide for an approving authority to review permit applications for development within the housing sustainability district in accordance with Section 66205.
(2) (A) Require Subject to subparagraph (B), require that at least 20 percent of the residential units constructed within the housing sustainability district be affordable to very low, low-, and moderate-income households and subject to a recorded affordability restriction for at least 55 years.

(B)This paragraph shall not be construed to nullify an inclusionary zoning ordinance requiring a greater percentage of the residential units within a project to be affordable to very low, low-, and moderate-income households.

(B) For a city, county, or city and county that includes its entire regional housing needs allocation pursuant to Section 65584 within the housing sustainability district, the percentages of the total units constructed or substantially rehabilitated within the housing sustainability district shall match the percentages in each income category of the city’s, county’s, or city and county’s regional housing need allocation.
(C) Nothing in this section shall be construed to expand or contract the authority of a local government to adopt an ordinance, charter amendment, general plan amendment, specific plan, resolution, or other land use policy or regulation requiring that any housing development contain a fixed percentage of affordable housing units.
(3) Specify that a project is not deemed to be for residential use if it is infeasible for actual use as a single or multifamily residence.
(4) Require that an applicant for a permit for a project within the housing sustainability district do the following, as applicable:
(A) Certify to the approving authority that either of the following is true, as applicable:
(i) That the entirety of the project is a public work for purposes of Chapter 1 (commencing with Section 1720) of Part 7 of Division 2 of the Labor Code.
(ii) If the project is not in its entirety a public work, that all construction workers employed in the execution of the project will be paid at least the general prevailing rate of per diem wages for the type of work and geographic area, as determined by the Director of Industrial Relations pursuant to Sections 1773 and 1773.9 of the Labor Code. If the approving authority approves the application, then for those portions of the project that are not a public work all of the following shall apply:
(I) The applicant shall include the prevailing wage requirement in all contracts for the performance of the work.
(II) Contractors and subcontractors shall pay to all construction workers employed in the execution of the work at least the general prevailing rate of per diem wages.
(III) Except as provided in subclause (IV), the obligation of the contractors and subcontractors to pay prevailing wages may be enforced by the Labor Commissioner through the issuance of a civil wage and penalty assessment pursuant to Section 1741 of the Labor Code, which may be reviewed pursuant to Section 1742 of the Labor Code, within 18 months after the completion of the project, or by an underpaid worker through an administrative complaint or civil action. If a civil wage and penalty assessment is issued, the contractor, subcontractor, and surety on a bond or bonds issued to secure the payment of wages covered by the assessment shall be liable for liquidated damages pursuant to Section 1742.1 of the Labor Code.
(IV) Subclause (III) shall not apply if all contractors and subcontractors performing work on the project are subject to a project labor agreement that requires the payment of prevailing wages to all construction workers employed in the execution of the project and provides for enforcement of that obligation through an arbitration procedure. For purposes of this subclause, “project labor agreement” has the same meaning as set forth in paragraph (1) of subdivision (b) of Section 2500 of the Public Contract Code.
(V) Notwithstanding subdivision (c) of Section 1773.1 of the Labor Code, the requirement that employer payments not reduce the obligation to pay the hourly straight time or overtime wages found to be prevailing shall not apply if otherwise provided in a bona fide collective bargaining agreement covering the worker. The requirements of paragraph (2) of subdivision (c) of Section 1773.1 of the Labor Code do not preclude use of an alternative workweek schedule adopted pursuant to Section 511 or 514 of the Labor Code.
(B) For projects with a cost exceeding ___ dollars ($___), certify to the approving authority that a skilled and trained workforce will be used to complete the project. For purposes of this paragraph, “skilled and trained workforce” has the same meaning as provided in subdivision (d) of Section 2601 of the Public Contract Code. If the approving authority approves the application, the following shall apply:
(i) The applicant shall require in all contracts for the performance of work that every contractor and subcontractor at every tier will individually use a skilled and trained workforce to complete the project.
(ii) Every contractor and subcontractor shall use a skilled and trained workforce to complete the project.
(iii) Except as provided in clause (iv), the applicant shall provide to the approving authority, on a monthly basis while the project or contract is being performed, a report demonstrating compliance with this subparagraph. A monthly report provided to the approving authority pursuant to this clause shall be a public record under the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1) and shall be open to public inspection. An applicant that fails to provide a monthly report demonstrating compliance with this subparagraph shall be subject to a civil penalty of ten thousand dollars ($10,000) per month for each month for which the report has not been provided. Any contractor or subcontractor that fails to use a skilled and trained workforce shall be subject to a civil penalty of two hundred dollars ($200) per day for each worker employed in contravention of the skilled and trained workforce requirement. Penalties may be assessed by the Labor Commissioner within 18 months of completion of the project using the same procedures for issuance of civil wage and penalty assessments pursuant to Section 1741 of the Labor Code, and may be reviewed pursuant to the same procedures in Section 1742 of the Labor Code. Penalties shall be paid to the State Public Works Enforcement Fund.
(iv) Clause (iii) shall not apply if all contractors and subcontractors performing work on the project are subject to a project labor agreement that requires compliance with the skilled and trained workforce requirement and provides for enforcement of that obligation through an arbitration procedure. For purposes of this subparagraph, “project labor agreement” has the same meaning as set forth in paragraph (1) of subdivision (b) of Section 2500 of the Public Contract Code.
(5) Provide for relocation assistance for persons and families displaced from their residences due to development within the housing sustainability district.
(g) This section shall not be construed to affect the authority of a city, county, or city and county to amend its zoning regulations pursuant to Chapter 4 (commencing with Section 65800), except to the extent that an amendment affects a housing sustainability district.
(h) The city, county, or city and county shall comply with Chapter 4.3 (commencing with Section 21155.10) of Division 13 of the Public Resources Code.

66202.
 (a) (1) A city, county, or city and county that has proposed an ordinance establishing a housing sustainability district in accordance with this chapter may apply to the office for preliminary approval of a housing sustainability district. The office shall make a preliminary determination as to the eligibility of the proposed housing sustainability district for approval.
(2) The office shall grant approve an application for preliminary approval for a zoning incentive payment if it determines both that the proposed housing sustainability district ordinance meets the requirements of this chapter. chapter and the city’s, county’s, or city and county’s housing element is in compliance with Article 10.6 (commencing with Section 65580) of Chapter 3. If the office denies the application, it shall inform the applicant city, county, or city and county of the deficiencies in its application. A city, county, or city and county may reapply upon correcting those deficiencies identified in the office’s denial.
(3) The office shall transmit its determination to the applicant city, county, or city and county and to the department.
(b) A city, county, or city and county that has proposed an ordinance establishing a housing sustainability district shall submit all of the following information with its application:
(1) A description of the boundaries of the proposed housing sustainability district.
(2) A description of the developable land within the proposed housing sustainability district.
(3) A description of other residential development opportunities within the city, county, or city and county, including infill development and reuse of existing buildings within already developed areas.
(4) A copy of the city’s, county’s, or city and county’s housing element, adopted in accordance with Article 10.6 (commencing with Section 65580) of Chapter 3.
(5) A copy of the housing sustainability district ordinance adopted pursuant to Section 66201.
(6) A copy of the environmental impact report prepared pursuant to Section 21155.10 of the Public Resources Code.
(7) A copy of the city’s, county’s, or city and county’s design review standards, if any, developed pursuant to Section 66207.
(8) Any other materials that establish the city’s, county’s, or city and county’s compliance with the requirements of Section 66201.
(c) Following preliminary approval of an application pursuant to subdivision (a) and upon receipt of acknowledgment that the housing sustainability district ordinance has taken effect, the office shall confirm approval within 45 days of receipt of the application.

66203.
 (a) On or before October 1 of each year following the approval of a city’s, county’s, or city and county’s housing sustainability district by the office under Section 66202, the department shall issue a certificate of compliance if it finds that the city, county, or city and county has satisfied all of the following requirements:
(1) The city, county, or city and county has in effect a housing sustainability district ordinance adopted pursuant to Section 66201.
(2) The housing sustainability district complies with the minimum requirements of subdivision (b) of Section 66201.
(3) The city, county, or city and county has only denied a permit for a residential development consistent with its housing sustainability district ordinance, the provisions of its housing element, or the requirements of this chapter.
(4) The city, county, or city and county has not adopted a design review standard pursuant to Section 66207 that adds unreasonable costs to a residential or mixed use development, or impairs the economic feasibility of a proposed development, within the housing sustainability district.
(b) If the department finds that a city, county, or city and county does not satisfy all of the requirements of subdivision (a), the department may deny certification of the housing sustainability district. A denial pursuant to this subdivision shall not affect the validity of the housing sustainability district ordinance or the application of the ordinance to a development or proposed development within the housing sustainability district.
(c) The department may require a city, county, or city and county to provide any information it deems necessary to review that city’s, county’s, or city and county’s housing sustainability district as required by this section.

66204.
 (a) A city, county, or city and county with a housing sustainability district approved by the office under Section 66202 shall be entitled to a zoning incentive payment, upon appropriation of funds by the Legislature for that purpose, in the following amounts:
Projected Construction of New Residential UnitsAmount of Payment
20 or fewer$___
21 to 100$___
101 to 200$___
201 to 500$___
501 or more$___
The amount of payment provided to a city, county, or city and county pursuant to this section shall be based on the number of new residential units constructed within the housing sustainability district. Replacement units constructed in accordance with Section 66208 shall not be considered new residential units for purposes of this section.
(b) The office shall issue the first half of the zoning incentive payment to the city, county, or city and county upon preliminary approval of the housing sustainability district ordinance and issuance of the environmental impact report pursuant to Section 21155.10 of the Public Resources Code. The department shall issue the second half of the zoning incentive payment within 10 days of submission of proof of issuance of building permits by the city, county, or city and county for the projected units of residential construction within the zone, provided that the city, county, or city and county has received a certificate of compliance for the applicable year pursuant to Section 66203.

66205.
 (a) (1) A city, county, or city and county may incorporate provisions in its housing sustainability district ordinance prescribing the contents of an application for a permit for residential development.
(2) The city, county, or city and county may charge an application fee to persons seeking government approval of a project within the housing sustainability district. A fee charged pursuant to this paragraph shall be established to defray the costs of preparation, adoption, and administration of the housing sustainability district plan, including costs incurred related to the implementation of Chapter 4.3 (commencing with Section 21155.10) of Division 13 of the Public Resources Code. As nearly as can be estimated, the fee charged shall be a prorated amount in accordance with the applicant’s relative benefit derived from the housing sustainability district plan.
(3) The housing sustainability district ordinance may provide for referral of an application for a permit to any officers, agencies, boards, or bureaus of the city, county, or city and county for review and comment. A reviewing officer, agency, board, or bureau shall provide any comments on an application within 60 days of receipt.
(b) The applicable provisions of the city’s, county’s, or city and county’s general plan and housing sustainability district ordinance in effect at the time an application is submitted to the approving authority shall govern the application for the purposes of the following:
(1) The processing and review of the application.
(2) The pendency of any appeal of a decision of the approving authority.
(3) If the application is approved, for five years following approval of the application.
(4) If the application is denied, to any further application for the same proposed development filed within two years following the date of the denial, unless the applicant elects to proceed under the city’s, county’s, or city and county’s general plan and housing sustainability district ordinance in effect at the time when he or she submits that further application.
(c) (1) The applicant shall file an application for a permit with the clerk of the city, county, or city and county and with the approving authority.
(2) The authority shall conduct a public hearing in accordance with the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5) and issue a written decision on the application within 120 days of receipt of the application, unless extended by agreement between the approving authority and the applicant. The approving authority shall file a copy of its written decision with the clerk of the city, county, or city and county.
(3) If the approving authority fails to act within 120 days, or within the period agreed upon by the approving authority and the applicant, as applicable, the application shall be deemed approved. In the event an application is deemed approved pursuant to this paragraph, the applicant shall provide notice to any interested parties and notify the clerk of the city, county, or city and county within 14 days of the application being deemed approved. The notice provided to interested parties shall specify that any appeals must be filed within 20 days following the clerk’s receipt of the notice.
(4) The approving authority shall issue to the applicant a copy of its written decision, including the name and address of the owner of the property proposed to be developed, an identification of the property proposed to be developed, the development plans, and certification that a copy of the decision has been filed with the clerk of the city, county, or city and county.
(d) (1) In reviewing an application for a permit pursuant to this section, the approving authority shall consider the requirements of the housing sustainability district ordinance and of this chapter, including the requirement that the applicant replace affordable housing units affected by the proposed development pursuant to Section 66208.
(2) The approving authority may deny an application only for the following reasons:
(A) The proposed development project does not fully comply with the housing sustainability district ordinance.
(B) The applicant has not submitted all of the required information or paid an application fee required by the housing sustainability district ordinance and necessary for an adequate and timely design review or assessment of potential impacts on nearby property.
(C) The approving authority determines, based upon substantial evidence in light of the whole record of the public hearing on the project, that a physical condition on the site of development that was not known and could not have been discovered with reasonable investigation at the time the application was submitted would have a specific adverse impact upon the public health or safety and that there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact. As used in this subparagraph, “specific adverse impact” means a significant, quantifiable, direct, and unavoidable impact based on identified objective written public health or safety standards, policies, or conditions, as in existence at the time the application is deemed complete.
(e) The clerk of the city, county, or city and county shall certify the following, as applicable, on a copy of the written decision of the approving authority:
(1) No appeal has been filed, or has been dismissed or denied, within 20 days of the issuance of the decision of the approving authority.
(2) The application is deemed approved by reason of the failure of the approving authority to issue a decision within 120 days of submission of the application.

66206.
 (a) If the approving authority denies an application for a permit submitted in accordance with Section 66205 or has approved it with conditions rendering the project infeasible for residential use, the applicant may appeal that decision by filing a complaint in the superior court.
(b) An appeal pursuant to this section shall be filed within 20 days after the approving authority has filed its decision to deny or conditionally approve the application with the clerk of the city, county, or city and county. The applicant shall provide notice of the appeal and a copy of the complaint to the clerk of the city, county, or city and county. The applicant shall, within 14 days of filing the complaint, serve written notice and provide a copy of the complaint to all defendants by certified mail. The court shall dismiss the complaint if the applicant does not, within 21 days of filing the complaint, file an affidavit with the clerk of the court certifying that the notices required by this paragraph have been provided.
(c) The complaint shall allege the specific reasons why the approving authority’s decision does not satisfy the requirements of the housing sustainability district ordinance, the provisions of this chapter, or other applicable law. The complaint shall name the approving authority as a defendant.
(d) The approving authority shall have the burden of proving that its decision satisfies the requirements of the housing sustainability district ordinance, the provisions of this chapter, or other applicable law based on substantial evidence in light of the whole record.

66207.
 (a) A city, county, or city and county may, in accordance with the regulations adopted by the office, adopt design review standards applicable to development projects within the housing sustainability district to ensure that the physical character of development within the district is complementary to adjacent buildings and structures and is consistent with the city’s, county’s, or city and county’s general plan, including the housing element. However, a design review standard shall not add unreasonable costs to a residential or mixed use development, or unreasonably impair the economic feasibility of a proposed development, within the housing sustainability district. Design review of a development within a housing sustainability district shall not constitute a “project” for purposes of the California Environmental Quality Act (Division 13 (commending with Section 21000) of the Public Resources Code).
(b) Design review standards adopted pursuant to this section shall be adopted at the same time as the housing sustainability district ordinance and submitted to the office with the city’s, county’s, or city and county’s application pursuant to Section 66202. Any subsequent additional design review standards or amendment of existing design review standards shall be subject to written approval by the department in the same manner as specified in subdivision (e) of Section 66201, relating to the amendment or repeal of a housing sustainability district ordinance.

66208.
 (a) If a proposed development within a housing sustainability district includes any parcels being used for affordable housing at the time the application is submitted to the approving authority, the approving authority shall condition its approval of the application on the applicant’s agreement to replace those affordable housing units.
(b) For the purposes of this section, the following definitions shall apply:
(1) “Affordable housing” shall mean a parcel of property that meets any of the following criteria:
(A) The parcel includes rental dwelling units that are or, if the dwelling units have been vacated or demolished in the five-year period preceding the application, have been subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of lower or very low income.
(B) The parcel is subject to rent or price control through a public entity’s valid exercise of its police power.
(C) The parcel includes a housing development that is currently occupied by low- or very low income households.
(2) “Replace” shall mean either of the following, as applicable:
(A) If any affordable housing units described in subdivision (a) are occupied on the date of application, the proposed housing development shall provide at least the same number of units of equivalent size or type, or both, to be made available at affordable rent or affordable housing cost to, and occupied by, persons and families in the same or lower income category as those households in occupancy. If the income category of the household in occupancy is not known, it shall be rebuttably presumed that lower income renter households occupied these units in the same proportion of lower income renter households to all renter households within the jurisdiction, as determined by the most recently available data from the United States Department of Housing and Urban Development’s Comprehensive Housing Affordability Strategy database. For unoccupied affordable housing units described in subdivision (a) in a development with occupied units, the proposed housing development shall provide units of equivalent size or type, or both, to be made available at affordable rent or affordable housing cost to, and occupied by, persons and families in the same or lower income category as the last household in occupancy. If the income category of the last household in occupancy is not known, it shall be rebuttably presumed that lower income renter households occupied these units in the same proportion of affordability as the occupied units. lower income renter households to all renter households within the jurisdiction, as determined by the most recently available data from the United States Department of Housing and Urban Development’s Comprehensive Housing Affordability Strategy database. All replacement calculations resulting in fractional units shall be rounded up to the next whole number. The replacement units shall be subject to a recorded affordability restriction for at least 55 years.
(B) If all affordable housing units described in subdivision (a) have been vacated or demolished within the five-year period preceding the application, the proposed housing development shall provide at least the same number of units of equivalent size or type, or both, as existed at the highpoint of those units in the five-year period preceding the application to be made available at affordable rent or affordable housing cost to, and occupied by, persons and families in the same or lower income category as those persons and families in occupancy at that time, if known. If the incomes of the persons and families in occupancy at the highpoint is not known, then one-half of the required units shall be made available at affordable rent or affordable housing cost to, and occupied by, it shall be rebuttably presumed that low-income and very low income renter households occupied these units in the same proportion of low-income and very low income persons and families, and one-half of the required units shall be made available for rent at affordable housing costs to, and occupied by, low-income persons and families. renter households to all renter households within the jurisdiction, as determined by the most recently available data from the United States Department of Housing and Urban Development’s Comprehensive Housing Affordability Strategy database. All replacement calculations resulting in fractional units shall be rounded up to the next whole number. The replacement units shall be subject to a recorded affordability restriction for at least 55 years.
(C) Notwithstanding subparagraph (B), for any dwelling unit described in subparagraph (A) that is or was, within the five-year period preceding the application, subject to a form of rent or price control through a local government’s valid exercise of its police power and that is or was occupied by persons or families above lower income, the city, county, or city and county may do either of the following:
(i) Require that the replacement units be made available at affordable rent or affordable housing cost to, and occupied by, low-income persons or families. If the replacement units will be rental dwelling units, these units shall be subject to a recorded affordability restriction for at least 55 years. If the proposed development is for-sale units, the units replaced shall be subject to paragraph (2).
(ii) Require that the units be replaced in compliance with the jurisdiction’s rent or price control ordinance, provided that each unit described in subparagraph (A) is replaced. Unless otherwise required by the jurisdiction’s rent or price control ordinance, these units shall not be subject to a recorded affordability restriction.
(D) For purposes of this paragraph, “equivalent size” means that the replacement units contain at least the same total number of bedrooms as the units being replaced.

66209.
 (a) The office shall be responsible for the administration of this chapter with respect to the approval of a housing sustainability district pursuant to Section 66202 and the award of the first half of the incentive payment pursuant to Section 66204. The department shall be responsible for the administration of this chapter in all other respects, including the continued compliance of a housing sustainability district with this chapter and the award of the second half of the incentive payment pursuant to Section 66204.
(b) (1) The department shall conduct, or cause to be conducted, an annual review of the housing sustainability district program. The department may require participating cities and counties to provide data on housing sustainability districts within their jurisdiction as necessary to conduct this review and prepare the report required by this subdivision.
(2) The department shall publish a report on its Internet Web site no later than November 1, 2018, and each November 1 thereafter. The report shall include all of the following:
(A) The status of the program through the fiscal year prior to the publication of the report.
(B) An identification and description of cities and counties seeking preliminary determination from the office.
(C) An identification of approved housing sustainability districts and the incentive payments awarded for each pursuant to Section 66204.
(D) A summary of the land area within both proposed and approved housing sustainability districts and the purposes for which it is zoned.
(E) The number of projects under review by an approving authority, proposed residential units, building permits issued, and completed housing units as of the date of the report’s publication.
(F) An estimate, for the current and immediately succeeding fiscal year, of the number and size of proposed new districts, potential number of residential units allowed in new districts, and anticipated construction activity.

66210.
 If no construction has started in a housing sustainability district within three years of the date that the first half of the incentive payment pursuant to Section 66204 has been made, the city, county, or city and county shall return the full amount of zoning incentive payments it has received under this chapter to the department. Amounts repaid pursuant to this section shall be used for further incentive payments.

SEC. 3.

 Chapter 4.3 (commencing with Section 21155.10) is added to Division 13 of the Public Resources Code, to read:
CHAPTER  4.3. Housing Sustainability Districts

21155.10.
 (a) A lead agency shall prepare an environmental impact report when designating a housing sustainability district pursuant to Section 66201 of the Government Code to identify and mitigate, to the extent feasible, environmental impacts resulting from the designation. The environmental impact report shall identify mitigation measures that may be undertaken by housing projects in the housing sustainability district to mitigate the environmental impacts identified by the environmental impact report.
(b) Notwithstanding any other law, the procedures established pursuant to subdivision (c) shall apply to an action or proceeding brought to attack, review, set aside, void, or annul the certification of the environmental impact report prepared pursuant to this chapter or the approval of the designation.
(c) On or before July 1, 2018, the Judicial Council shall adopt a rule of court to establish procedures applicable to actions or proceedings brought to attack, review, set aside, void, or annul the certification of the environmental impact report for the designation or the approval of the designation that require the actions or proceedings, including any potential appeals therefrom, be resolved, to the extent feasible, within 270 days of certification of the record of proceedings pursuant to subdivision (e).
(d) (1) The draft and final environmental impact report shall include a notice in not less than 12-point type stating the following:

THIS EIR IS SUBJECT TO SECTION 21155.10 OF THE PUBLIC RESOURCES CODE, WHICH PROVIDES, AMONG OTHER THINGS, THAT THE LEAD AGENCY NEED NOT CONSIDER CERTAIN COMMENTS FILED AFTER THE CLOSE OF THE PUBLIC COMMENT PERIOD FOR THE DRAFT EIR. ANY JUDICIAL ACTION CHALLENGING THE CERTIFICATION OF THE EIR OR THE APPROVAL OF THE DESIGNATION IN THE EIR IS SUBJECT TO THE PROCEDURES SET FORTH IN SECTION 21155.10 OF THE PUBLIC RESOURCES CODE. A COPY OF SECTION 21155.10 OF THE PUBLIC RESOURCES CODE IS INCLUDED IN THE APPENDIX TO THIS EIR.

(2) The draft environmental impact report and final environmental impact report shall contain, as an appendix, the full text of this section.
(3) Within 10 days after the release of the draft environmental impact report, the lead agency shall conduct an informational workshop to inform the public of the key analyses and conclusions of that report.
(4) Within 10 days before the close of the public comment period, the lead agency shall hold a public hearing to receive testimony on the draft environmental impact report. A transcript of the hearing shall be included as an appendix to the final environmental impact report.
(5) (A) Within five days following the close of the public comment period, a commenter on the draft environmental impact report may submit to the lead agency a written request for nonbinding mediation. The lead agency shall participate in nonbinding mediation with all commenters who submitted timely comments on the draft environmental impact report and who requested the mediation. Mediation conducted pursuant to this paragraph shall end no later than 35 days after the close of the public comment period.
(B) A request for mediation shall identify all areas of dispute raised in the comment submitted by the commenter that are to be mediated.
(C) The lead agency shall select one or more mediators who shall be retired judges or recognized experts with at least five years’ experience in land use and environmental law or science, or mediation.
(D) A mediation session shall be conducted on each area of dispute with the parties requesting mediation on that area of dispute.
(E) The lead agency shall adopt, as a condition of approval, any measures agreed upon by the lead agency and any commenter who requested mediation. A commenter who agrees to a measure pursuant to this subparagraph shall not raise the issue addressed by that measure as a basis for an action or proceeding challenging the lead agency’s decision to certify the environmental impact report or the designation of the housing sustainability district.
(6) The lead agency need not consider written comments submitted after the close of the public comment period, unless those comments address any of the following:
(A) New issues raised in the response to comments by the lead agency.
(B) New information released by the public agency subsequent to the release of the draft environmental impact report, such as new information set forth or embodied in a staff report, proposed permit, proposed resolution, ordinance, or similar documents.
(C) Changes made to the designation after the close of the public comment period.
(D) Proposed conditions for the designation, mitigation measures, or proposed findings required by Section 21081 or a proposed reporting and monitoring program required by paragraph (1) of subdivision (a) of Section 21081.6, where the lead agency releases those documents subsequent to the release of the draft environmental impact report.
(E) New information that was not reasonably known and could not have been reasonably known during the public comment period.
(7) The lead agency shall file the notice required by subdivision (a) of Section 21152 within five days after the approval of the designation.
(e) (1) The lead agency shall prepare and certify the record of the proceedings in accordance with this subdivision and in accordance with Rule 3.1365 of the California Rules of Court.
(2) No later than three business days following the date of the release of the draft environmental impact report, the lead agency shall make available to the public in a readily accessible electronic format the draft environmental impact report and all other documents submitted to or relied on by the lead agency in the preparation of the draft environmental impact report. A document prepared by the lead agency after the date of the release of the draft environmental impact report that is a part of the record of the proceedings shall be made available to the public in a readily accessible electronic format within five business days after the document is prepared or received by the lead agency.
(3) Notwithstanding paragraph (2), documents submitted to or relied on by the lead agency that were not prepared specifically for the project and are copyright protected are not required to be made readily accessible in an electronic format. For those copyright-protected documents, the lead agency shall make an index of these documents available in an electronic format no later than the date of the release of the draft environmental impact report, or within five business days if the document is received or relied on by the lead agency after the release of the draft environmental impact report. The index must specify the libraries or lead agency offices in which hardcopies of the copyrighted materials are available for public review.
(4) The lead agency shall encourage written comments on the project to be submitted in a readily accessible electronic format, and shall make any such comment available to the public in a readily accessible electronic format within five days of its receipt.
(5) Within seven business days after the receipt of any comment that is not in an electronic format, the lead agency shall convert that comment into a readily accessible electronic format and make it available to the public in that format.
(6) The lead agency shall indicate in the record of the proceedings comments received that were not considered by the lead agency pursuant to paragraph (6) of subdivision (d) and need not include the content of the comments as a part of the record.
(7) Within five days after the filing of the notice required by subdivision (a) of Section 21152, the lead agency shall certify the record of the proceedings for the approval or determination and shall provide an electronic copy of the record to a party that has submitted a written request for a copy. The lead agency may charge and collect a reasonable fee from a party requesting a copy of the record for the electronic copy, which shall not exceed the reasonable cost of reproducing that copy.
(8) Within 10 days after being served with a complaint or a petition for a writ of mandate, the lead agency shall lodge a copy of the certified record of proceedings with the superior court.
(9) Any dispute over the content of the record of the proceedings shall be resolved by the superior court. Unless the superior court directs otherwise, a party disputing the content of the record shall file a motion to augment the record at the time it files its initial brief.
(10) The contents of the record of proceedings shall be as set forth in subdivision (e) of Section 21167.6.

21155.11.
 This division does not apply to a housing project undertaken in a housing sustainability district designated by a local government if both of the following are met:
(a) The housing project meets the conditions specified in the designation for the housing sustainability district.
(b) The housing project is required to implement appropriate mitigation measures identified in the environmental impact report prepared pursuant to Section 21155.10 to mitigate environmental impacts identified by that environmental impact report.