Today's Law As Amended


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AB-2553 Vertical housing districts.(2017-2018)



As Amends the Law Today


SECTION 1.

 Chapter 2.100 (commencing with Section 53398.100) is added to Part 1 of Division 2 of Title 5 of the Government Code, to read:

CHAPTER  2.100. Vertical Housing Zones
53398.100.
 (a) The Legislature finds and declares that with the dissolution of redevelopment agencies, public benefits will accrue if local agencies, excluding schools, are able to finance multifamily housing projects near high-transit areas through excess property tax financing.
(b) Recognizing that multifamily housing near transit is a critical component to solving the state’s housing crisis, the Legislature has enacted legislation to promote such development through various means, including government-funded grants, required sustainable planning, and project streamlining.
(c) However, in order to successfully drive this type of development, additional legislation is needed to further incentivize higher-density development by developers. This law advances this goal by complementing and working in synergy with other housing and transit laws, including the Density Bonus Law (Section 65915), the streamlined approval process established by Section 65913.4, and exempting transit priority projects from the California Environmental Quality Act that meet requirements set out in Chapter 4.2 (commencing with Section 21155) of Division 13 of the Public Resources Code.
(d) The development of multifamily housing near high-transit areas will also reduce greenhouse gas emissions by reducing travel times and activate and revitalize underused land in transit-rich urban areas.
53398.101.
 Unless the context otherwise requires, the definitions contained in this section shall govern the construction of this chapter.
(a) “County” means a county or a city and county.
(b) “Excess property tax” means property tax collected in excess as defined in Section 53398.104.
(c) “High-transit area” means an area located within one-half mile of a major transit stop, as defined by Section 21064.3 of the Public Resources Code, or a high-quality transit corridor, as defined by Section 21155 of the Public Resources Code.
(d) “Legislative body” means the city council, board of supervisors, or governing body of a taxing entity.
(e) “Landowner” means any person shown as the owner of land on the last equalized assessment roll or otherwise known to be the owner of the land by the legislative body. The legislative body has no obligation to obtain other information as to the ownership of land, and its determination of ownership shall be final and conclusive for the purposes of this chapter. A public agency is not a landowner or owner of land for purposes of this chapter, unless the public agency owns all of the land to be included within the proposed zone.
(f) “Multifamily housing project” means a project in a vertical housing zone where 70 percent of the gross floor area is developed as residential housing.
(g) “Parcel” means that unit of land identified on a recorded subdivision map or assigned an assessor’s parcel number by the county assessor of the county in which the unit of land is located.
(h) “Taxing entity” means any governmental taxing agency that levied or had levied on its behalf a property tax on all or a portion of the property located in the proposed vertical housing zone in the fiscal year before the designation of the vertical housing zone, but not including any county office of education, school district, or community college district.
(i) “Vertical housing project fund” means a fund established for each vertical housing zone project to provide excess property taxes.
(j) “Vertical housing zone” means an area in a high-transit area that a city or county has designated as such to make available excess property tax for vertical housing zone projects. If at least 51 percent of the area of a parcel is located within the high-transit area designated by the city or county that adopts the resolution described in subdivision (a) of Section 53398.102, that parcel shall be deemed to be included within the vertical housing zone.
(k) “Vertical housing zone project” means a multifamily housing project in a vertical housing zone that has applied for and received excess property tax pursuant to this chapter.
53398.102.
 (a) The legislative body of a city or county may enact a resolution, by majority vote, to designate a high-transit area located within the jurisdictional boundaries of that city or county as a vertical housing zone.
(b) The legislative body shall include all of the following in the resolution establishing a vertical housing zone adopted pursuant to subdivision (a):
(1) A statement that a vertical housing zone is proposed to be established pursuant to this chapter and describe the boundaries of the proposed zone, which may be accomplished by reference to a map on file in the office of the clerk of the city or in the office of the recorder of the county, as applicable.
(2) State that portions of the vertical housing district are within a high-transit area.
(3) Attach a map identifying high-transit areas in the established district.
(4) A provision that provides excess property tax attributable from the city or county and participating taxing entities within the vertical housing zone can be used, pursuant to Section 53398.104, to finance multifamily housing projects within the vertical housing zone.
(5) A statement of the needs and goals of the vertical housing zone.
(6) A statement that the vertical housing zone will incentivize the development of denser and taller housing projects in the high-transit area designated by the city or county.
(c) Upon the establishment of a vertical housing zone, the legislative body of the establishing city or county shall direct the city clerk or county recorder, as applicable, to mail a copy of the resolution creating the zone to each landowner within the zone.
53398.103.
 (a) A taxing entity may agree to participate in a vertical housing zone established pursuant to Section 53398.102 by adopting a resolution by majority vote of the taxing entity’s legislative body.
(b) A taxing entity that agrees to participate in a vertical housing zone pursuant to subdivision (a) shall, in that resolution, agree to provide excess property tax to a vertical housing zone project pursuant to Section 53398.104.
53398.104.
 (a) (1) The receipt of property tax revenue by a city, county, or participating taxing entity pursuant to this chapter shall be divided as follows:
(A) That portion of the taxes that would be produced by the rate upon which the tax is levied each year by or for each city, county, and participating taxing entity upon the total sum of the assessed value of the taxable property in the vertical housing zone project as shown upon the assessment roll used for taxation of the property by the taxing entity, last equalized before the approval of the vertical housing zone project pursuant to Section 53398.106, shall be allocated to, and when collected, shall be paid to, the participating taxing entities as taxes by or for the participating taxing entities on all other property are paid.
(B) That portion of the levied taxes each year specified for the city, county, and participating taxing entities in excess of the amount specified in subparagraph (A) shall be allocated to, and when collected, shall be reserved in the respective vertical housing zone project fund for each city, county, and participating taxing entity. When the term of the vertical housing zone project is completed, all moneys thereafter received from taxes on the vertical housing zone project shall be paid to the respective city, county, and participating taxing entities as taxes on all other property are paid.
(C) That portion of any ad valorem property tax revenue annually allocated to a city or county pursuant to Section 97.70 of the Revenue and Taxation Code for the city, county, or participating taxing entity that has agreed to participate pursuant to Section 53398.103, and that corresponds to the increase in the assessed valuation of the vertical housing project, shall be allocated to, and, when collected, shall be reserved to the respective vertical housing project fund of the city, county, and participating taxing entities.
(2) When the term of the vertical housing zone project is completed, the revenues described in paragraph (1) shall be allocated to, and when collected, shall be apportioned to, the respective city, county, and participating taxing entities.
(b) A multifamily housing project located within a vertical housing zone shall, upon submitting an application pursuant to Section 53398.106, receive excess property tax revenue from the city, county, or participating taxing entity, pursuant to subdivision (a), if the following requirements are satisfied:
(1) The land of the proposed multifamily housing project is within a vertical housing zone.
(2) The multifamily housing project is entitled by the proper land use authority, legislative body, or otherwise, to develop the fully allowable residential density, including, but not limited to, any height limits, floor area ratio, and unit limit consistent with any applicable building code.
(3) If a local jurisdiction has an inclusionary housing program in place at the time of the application, the developer shall comply with the local inclusionary housing program.
(4) The multifamily housing project complies with Section 53398.105.
(c) (1) A vertical housing zone project that satisfies the requirements of this section and is approved pursuant to Section 53398.106 shall receive excess property taxes collected on the project for 30 years, except that a project may receive excess property taxes for 35 years if it complies with the requirements of subdivision (d), beginning with the year the project is deemed completed.
(2) A vertical housing zone project is deemed completed when a certificate of occupancy has been issued by a building official for the city or county in which the project is located.
(d) A vertical housing zone project shall receive excess property taxes for 35 years provided the developer of the project agrees to comply with one of the following:
(1) Offer affordable units pursuant to a local inclusionary housing program, the Density Bonus Law (Section 65915), or other state laws or local ordinances.
(2) If no inclusionary housing units are required by a local inclusionary housing program and inclusionary housing units are not being provided pursuant to the Density Bonus Law (Section 65915) or other state laws or local ordinances, the developer provides either:
(A) Eleven percent of the total units of a vertical housing zone project for very low income households, as defined in Section 50105 of the Health and Safety Code.
(B) Twenty percent of the total units of a vertical housing zone project for low-income households, as defined in Section 50079.5 of the Health and Safety Code.
(e) A developer seeking a vertical housing zone project designation for a multifamily housing project may request a waiver from project permitting fees and impact fees from the permitting agency of the city or county.
53398.105.
 A vertical housing zone project shall comply with the following requirements:
(a) A vertical housing zone project may not be located on a site that would require demolition of one of the following types of housing:
(1) Housing that is subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of moderate, low, or very low income.
(2) Housing that is subject to any form of rent or price control through a public entity’s valid exercise of its police power.
(3) Housing that has been occupied by tenants within the past 10 years.
(b) A vertical housing zone project may not be located on the following sites:
(1) A site previously used for housing that was occupied by tenants that was demolished within 10 years before the developer submits a vertical housing zone project application.
(2) A site that would require demolition of a historic structure that was placed on a national, state, or local historic register.
(3) A site with property containing housing units that are occupied by tenants, and units at the property are, or were, subsequently offered for sale to the general public by the subdivider or subsequent owner of the property.
53398.106.
 (a) A developer of a multifamily housing project within a vertical housing zone may apply for a vertical housing zone project designation by filing an application with the city or county that established the vertical housing zone. The application shall include all of the following:
(1) A project description packet, including proposed construction, current state of the site, the number of units at both affordable and market rates, and nonresidential uses proposed for the site.
(2) All applicable and necessary entitlements demonstrating that the project is entitled to build the full height and density as described in paragraph (2) of subdivision (b) of Section 53398.104.
(3) A statement that any affordable units on site will remain affordable for 55 years by recordation of a covenant.
(b) The city or county shall approve applications for designation of a multifamily housing project as a vertical housing zone project upon a completed application submitted pursuant to subdivision (a).
(c) Upon approval, the developer and the city or county shall execute a binding agreement that includes both of the following:
(1) A commitment by the city or county to provide excess property tax to the vertical housing zone project, upon completion, for a period of 30 or 35 years, as provided in Sections 53398.104 and 53398.107.
(2) A commitment by the developer that it will do all of the following:
(A) Develop the project fully as entitled.
(B) Comply with Section 53398.105.
(C) Comply with subparagraph (3) of subdivision (b) of Section 53398.104, as applicable.
53398.107.
 Following the receipt of excess property tax proceeds pursuant to Section 53398.104, the city, county, and participating taxing entities shall annually disburse the funds to completed vertical housing zone projects pursuant to agreements entered into under subdivision (c) of Section 53398.106.