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SB-1094 Local planning.(2021-2022)

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Date Published: 05/02/2022 02:00 PM
SB1094:v96#DOCUMENT

Amended  IN  Senate  May 02, 2022
Amended  IN  Senate  April 19, 2022
Amended  IN  Senate  March 16, 2022

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Senate Bill
No. 1094

Introduced by Senator Becker

February 16, 2022

An act to amend Sections 65400, 65400.2, 65583.1, and 65589.9 of the Government Code, to amend Section 53559 of the Health and Safety Code, and to amend Section 75215 of the Public Resources Code, relating to land use.


LEGISLATIVE COUNSEL'S DIGEST


SB 1094, as amended, Becker. Local planning.
(1) Existing law requires the Department of Housing and Community Development, in consultation with each council of governments, to determine the existing and projected need for housing for each region, and requires the share of a city or county of the regional housing need to include that share of the housing need of persons at all income levels within the area significantly affected by the general plan of the city or county. Existing law requires the housing element to identify adequate sites for housing, as specified. Existing law allows the department to permit a city or county to substitute up to 25% of its obligation to identify adequate sites for any income category in its housing element if the city or county includes a program that commits the local government to provide units in that income category through the provision of committed assistance during the planning period covered by the element to low- and very low income households at affordable housing costs or affordable rents, as specified. Existing law provides that this provision does not apply to any city or county that has not met its share of regional housing needs for low- and very low income households, as specified.

This bill would allow sites that contain interim housing developments to be identified as adequate sites for very low and low-income categories if the housing element demonstrates that the units will be available for occupancy by individual families who are homeless or who are at risk of homelessness during the entire planning period and that the interim units are within a residential zone. The bill would define terms for these purposes.

This bill would authorize the department to permit a city or county to substitute up to 25% of its obligation to identify adequate sites for very low or low-income categories in its housing element if the city or county includes a program that commits the jurisdiction to funding a nonprofit home sharing program, as specified.

This bill would provide that any city or county that has not met its share of regional housing needs for moderate-, low-, and very low income households is not authorized to substitute up to 25% of its obligation to identify adequate sites through a committed assistance program.
(2) Existing law requires a city or county to provide by April 1 of each year an annual report to, among other entities, the Department of Housing and Community Development. The law requires that the annual report include, among other specified information, the number of net new units of housing, including both rental housing and for-sale housing, that have been issued a completed entitlement, building permit, or certificate of occupancy, and the income category, by area median income, that each unit of housing satisfies, as specified.
This bill would authorize the planning agency to include in the portion of its report detailing the number of net new units of housing single-room occupancy units and units, permanent hotel and motel converted units, floating homes, as defined, and other nontraditional housing units, as those terms are defined, that were developed in previous housing element planning periods if those units are subject to authorization by the department and were not counted in previous reports. department.
Existing law authorizes a planning agency to include in its annual report, for up to 25% of a jurisdiction’s moderate-income regional housing need allocation, the number of units in an existing multifamily building that were converted to deed-restricted rental housing for moderate-income households by the imposition of affordability covenants and restrictions for the unit, as specified. This authorization applies only to converted units that meet specified requirements, including that the rent for the unit prior to conversion was not affordable to very low, low-, or moderate-income households and the initial postconversion rent for the unit is at least 10% less than the average monthly rent charged over the 12 months prior to conversion. Existing law authorizes a city or county to reduce its share of regional housing need for the income category of the converted units on a unit-for-unit basis, as specified.
This bill would expand these provisions to authorize a planning agency to include the number of units in an existing multifamily building that were converted to deed-restricted rental housing for very low or low-income households.
(3) Existing law, for award cycles commenced after July 1, 2021, awards a city, county, or city and county that has adopted a housing element determined by the department to be in substantial compliance with specified provisions of the Planning and Zoning Law and that has been designated by the department as prohousing based upon its adoption of prohousing local policies, as specified, additional points in the scoring of prescribed program applications for housing and infrastructure programs, including the Affordable Housing and Sustainable Communities Program, the Infill Incentive Grant Program of 2007, and other state programs when already allowable under state law, pursuant to regulations adopted by the department.
This bill would remove the Affordable Housing and Sustainable Communities Program from the prescribed programs for which the department may award additional points and would provide that additional points shall be awarded for the qualifying infill area portion of the Infill Incentive Grant Program of 2007. The bill would also permit additional bonus points to be awarded under other state programs for which local governments are the sole or primary applicants when already allowable under state law.
(4) Existing law establishes the Infill Infrastructure Grant Program of 2019, which requires the Department of Housing and Community Development, upon appropriation of funds by the Legislature, to establish and administer a grant program to allocate those funds to capital improvement projects that are an integral part of, or necessary to facilitate the development of, a qualifying infill project or qualifying infill area, as those terms are defined, pursuant to specified requirements. Existing law prescribes conditions that the qualifying infill project or qualifying infill area shall meet in order to be awarded, including that the project or area be located in a city, county, or city and county that has submitted its annual progress reports and that has adopted a housing element that has been found to be in substantial compliance with specified law.
This bill would require that only a qualifying infill area shall be located in a city, county, or city and county that has submitted its annual progress reports and that has adopted a housing element that has been found to be in substantial compliance with specified law.
(5) Existing law establishes the Strategic Growth Council and sets forth its powers and duties relating to developing and administering a program for the purpose of reducing greenhouse gas emissions through projects that implement land use, housing, transportation, and agricultural land preservation practices to support infill and compact development and that support other related and coordinated public policy objectives, including, among others, preserving and developing affordable housing for lower income households. Existing law requires the council to develop guidelines and selection criteria for the implementation of the program, as specified.
This bill would prohibit the guidelines from disqualifying a project applicant that is a nonprofit or for-profit housing developer if the jurisdiction the project is proposed to be located in has not been found by the Department of Housing and Community Development to be in substantial compliance with specified law.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Section 65400 of the Government Code is amended to read:

65400.
 (a) After the legislative body has adopted all or part of a general plan, the planning agency shall do both of the following:
(1) Investigate and make recommendations to the legislative body regarding reasonable and practical means for implementing the general plan or element of the general plan, so that it will serve as an effective guide for orderly growth and development, preservation and conservation of open-space land and natural resources, and the efficient expenditure of public funds relating to the subjects addressed in the general plan.
(2) Provide by April 1 of each year an annual report to the legislative body, the Office of Planning and Research, and the Department of Housing and Community Development that includes all of the following:
(A) The status of the plan and progress in its implementation.
(B) (i) The progress in meeting its share of regional housing needs determined pursuant to Section 65584 and local efforts to remove governmental constraints to the maintenance, improvement, and development of housing pursuant to paragraph (3) of subdivision (c) of Section 65583.
(ii) The housing element portion of the annual report, as required by this paragraph, shall be prepared through the use of standards, forms, and definitions adopted by the Department of Housing and Community Development. The department may review, adopt, amend, and repeal the standards, forms, or definitions, to implement this article. Any standards, forms, or definitions adopted to implement this article shall not be subject to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2. Before and after adoption of the forms, the housing element portion of the annual report shall include a section that describes the actions taken by the local government towards completion of the programs and status of the local government’s compliance with the deadlines in its housing element. That report shall be considered at an annual public meeting before the legislative body where members of the public shall be allowed to provide oral testimony and written comments.
(iii) The report may include the number of units that have been completed pursuant to subdivision (c) of Section 65583.1. For purposes of this paragraph, committed assistance may be executed throughout the planning period, and the program under paragraph (1) of subdivision (c) of Section 65583.1 shall not be required. The report shall document how the units meet the standards set forth in that subdivision.
(iv) The planning agency shall include the number of units in a student housing development for lower income students for which the developer of the student housing development was granted a density bonus pursuant to subparagraph (F) of paragraph (1) of subdivision (b) of Section 65915.
(C) The number of housing development applications received in the prior year.
(D) The number of units included in all development applications in the prior year.
(E) The number of units approved and disapproved in the prior year.
(F) The degree to which its approved general plan complies with the guidelines developed and adopted pursuant to Section 65040.2 and the date of the last revision to the general plan.
(G) A listing of sites rezoned to accommodate that portion of the city’s or county’s share of the regional housing need for each income level that could not be accommodated on sites identified in the inventory required by paragraph (1) of subdivision (c) of Section 65583 and Section 65584.09. The listing of sites shall also include any additional sites that may have been required to be identified by Section 65863.
(H) (i) The number of net new units of housing, including both rental housing and for-sale housing and any units that the County of Napa or the City of Napa may report pursuant to an agreement entered into pursuant to Section 65584.08, that have been issued a completed entitlement, a building permit, or a certificate of occupancy, thus far in the housing element cycle, and the income category, by area median income category, that each unit of housing satisfies. That production report shall, for each income category described in this subparagraph, distinguish between the number of rental housing units and the number of for-sale units that satisfy each income category. The production report shall include, for each entitlement, building permit, or certificate of occupancy, a unique site identifier that must include the assessor’s parcel number, but may include street address, or other identifiers.
(ii) For purposes of the information described in clause (i), the planning agency may count single-room occupancy units and units, permanent hotel and motel converted units, floating homes as defined in subdivision (d) of Section 18075.55 of the Health and Safety Code, and other nontraditional housing units that were developed in previous housing element planning periods as long as those units are subject to authorization by the department and have not been counted in previous reports. department.
(I) The number of applications submitted pursuant to subdivision (a) of Section 65913.4, the location and the total number of developments approved pursuant to subdivision (c) of Section 65913.4, the total number of building permits issued pursuant to subdivision (c) of Section 65913.4, the total number of units including both rental housing and for-sale housing by area median income category constructed using the process provided for in subdivision (c) of Section 65913.4.
(J) If the city or county has received funding pursuant to the Local Government Planning Support Grants Program (Chapter 3.1 (commencing with Section 50515) of Part 2 of Division 31 of the Health and Safety Code), the information required pursuant to subdivision (a) of Section 50515.04 of the Health and Safety Code.
(K) The progress of the city or county in adopting or amending its general plan or local open-space element in compliance with its obligations to consult with California Native American tribes, and to identify and protect, preserve, and mitigate impacts to places, features, and objects described in Sections 5097.9 and 5097.993 of the Public Resources Code, pursuant to Chapter 905 of the Statutes of 2004.
(L) The following information with respect to density bonuses granted in accordance with Section 65915:
(i) The number of density bonus applications received by the city or county.
(ii) The number of density bonus applications approved by the city or county.
(iii) Data from a sample of projects, selected by the planning agency, approved to receive a density bonus from the city or county, including, but not limited to, the percentage of density bonus received, the percentage of affordable units in the project, the number of other incentives or concessions granted to the project, and any waiver or reduction of parking standards for the project.
(b) If a court finds, upon a motion to that effect, that a city, county, or city and county failed to submit, within 60 days of the deadline established in this section, the housing element portion of the report required pursuant to subparagraph (B) of paragraph (2) of subdivision (a) that substantially complies with the requirements of this section, the court shall issue an order or judgment compelling compliance with this section within 60 days. If the city, county, or city and county fails to comply with the court’s order within 60 days, the plaintiff or petitioner may move for sanctions, and the court may, upon that motion, grant appropriate sanctions. The court shall retain jurisdiction to ensure that its order or judgment is carried out. If the court determines that its order or judgment is not carried out within 60 days, the court may issue further orders as provided by law to ensure that the purposes and policies of this section are fulfilled. This subdivision applies to proceedings initiated on or after the first day of October following the adoption of forms and definitions by the Department of Housing and Community Development pursuant to paragraph (2) of subdivision (a), but no sooner than six months following that adoption.
(c) The Department of Housing and Community Development shall post a report submitted pursuant to this section on its internet website within a reasonable time of receiving the report.
(d) For purposes of this section:
(1) “Single-room occupancy unit” means a unit that is operated as a separate living quarter and is occupied or will be occupied by a person who considers the unit their usual place of residence.
(2) “Nontraditional housing unit” means, consistent with the definition used by the United States Census Bureau, separate living quarters in which the occupants live and eat separately from any other persons in the building and which have direct access from the outside of the building or through a common hall.

SEC. 2.

 Section 65400.2 of the Government Code is amended to read:

65400.2.
 (a) For purposes of the housing element portion of the annual report required by paragraph (2) of subdivision (a) of Section 65400, for up to 25 percent of a jurisdiction’s very low income, low-income, or moderate-income regional housing need allocation, the planning agency may include the number of units in an existing multifamily building that were converted to deed-restricted rental housing for very low income, low-income, or moderate-income households by the imposition of affordability covenants and restrictions for the unit. The report shall clearly indicate that these were not newly constructed units, and shall provide all relevant project- and unit-level information as described in subparagraph (H) of paragraph (2) of subdivision (a) of Section 65400.
(b) For purposes of this section, a unit may be reported as a converted unit under subdivision (a) only if all of the following apply to the unit:
(1) The rent for the unit prior to conversion was not affordable to very low, low-, or moderate-income households.
(2) The unit is subject to a long-term recorded regulatory agreement with a public entity that requires the unit to be affordable to, and occupied by, persons of very low income, low-income, or moderate income for a term of 55 years.
(3) (A) The initial postconversion rent for the unit is at least 10 percent less than the average monthly rent charged over the 12 months prior to conversion.
(B) To determine the maximum rental rate in subsequent years, the initial postconversion rent for the unit shall be compared to the rent limit at the 100-percent income level established by the California Tax Credit Allocation Committee for the year of conversion, and the regulatory agreement shall limit the rent on the unit for the term of the regulatory agreement to that ratio multiplied by the 100-percent income level rent limit for the respective year.
(C) Notwithstanding subparagraphs (A) and (B), a project owner may shift rent restrictions on units within a given property so long as the overall distribution of regulated rents remain the same.
(4) The unit is in decent, safe, and sanitary condition at the time of occupancy following the conversion.
(5) The unit was not acquired by eminent domain as part of the conversion.
(6) The unit is subject to a governmental monitoring program to ensure continued affordability and occupancy by qualifying households.
(7) Unless the development is subject to a regulatory agreement with the California Tax Credit Allocation Committee, a public entity shall hold an assignable right to purchase the development, any interest in the development, or any interest in a partnership that owns the development for a price that does not exceed the principal amount of outstanding indebtedness secured by the building and all federal, state, and local taxes attributable to that sale.
(c) For any units that qualify to be reported pursuant to this section that were converted between the start of the projection period and the deadline for adoption of the housing element, a city or county may reduce its share of the regional housing need on a unit-for-unit basis, provided that the reduction does not exceed 25 percent of the need in the very low income, low-income, or moderate-income category.
(d) The Department of Housing and Community Development shall not be required to implement this section until January 1, 2023. However, for reports issued after January 1, 2023, planning agencies may report conversions pursuant to subdivision (a) that occurred on or after January 1, 2022.

SEC. 2.SEC. 3.

 Section 65583.1 of the Government Code is amended to read:

65583.1.
 (a) The Department of Housing and Community Development, in evaluating a proposed or adopted housing element for substantial compliance with this article, may allow a city or county to identify adequate sites, as required pursuant to Section 65583, by a variety of methods, including, but not limited to, redesignation of property to a more intense land use category and increasing the density allowed within one or more categories. The department may also allow a city or county to identify sites for accessory dwelling units based on the number of accessory dwelling units developed in the prior housing element planning period whether or not the units are permitted by right, the need for these units in the community, the resources or incentives available for their development, and any other relevant factors, as determined by the department. Nothing in this section reduces the responsibility of a city or county to identify, by income category, the total number of sites for residential development as required by this article.
(b) Sites that contain permanent housing units located on a military base undergoing closure or conversion as a result of action pursuant to the Defense Authorization Amendments and Base Closure and Realignment Act (Public Law 100-526), the Defense Base Closure and Realignment Act of 1990 (Public Law 101-510), or any subsequent act requiring the closure or conversion of a military base may be identified as an adequate site if the housing element demonstrates that the housing units will be available for occupancy by households within the planning period of the element. No sites containing housing units scheduled or planned for demolition or conversion to nonresidential uses shall qualify as an adequate site.
Any city, city and county, or county using this subdivision shall address the progress in meeting this section in the reports provided pursuant to paragraph (1) of subdivision (b) of Section 65400.
(c) (1) The Department of Housing and Community Development may allow a city or county to substitute the provision of units for up to 25 percent of the community’s obligation to identify adequate sites for any income category in its housing element pursuant to paragraph (1) of subdivision (c) of Section 65583 where the community includes in its housing element a program committing the local government to provide units in that income category within the city or county that will be made available through the provision of committed assistance during the planning period covered by the element to low- and very low income households at affordable housing costs or affordable rents, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, and which meet the requirements of paragraph (2). Except as otherwise provided in this subdivision, the community may substitute one dwelling unit for one dwelling unit site in the applicable income category. The program shall do all of the following:
(A) Identify the specific, existing sources of committed assistance and dedicate a specific portion of the funds from those sources to the provision of housing pursuant to this subdivision.
(B) Indicate the number of units that will be provided to both low- and very low income households and demonstrate that the amount of dedicated funds is sufficient to develop the units at affordable housing costs or affordable rents.
(C) Demonstrate that the units meet the requirements of paragraph (2).
(2) Only units that comply with subparagraph (A), (B), (C), (D), or (E) qualify for inclusion in the housing element program described in paragraph (1), as follows:
(A) Units that are to be substantially rehabilitated with committed assistance from the city or county and constitute a net increase in the community’s stock of housing affordable to low- and very low income households. For purposes of this subparagraph, a unit is not eligible to be “substantially rehabilitated” unless all of the following requirements are met:
(i) At the time the unit is identified for substantial rehabilitation, (I) the local government has determined that the unit is at imminent risk of loss to the housing stock, (II) the local government has committed to provide relocation assistance pursuant to Chapter 16 (commencing with Section 7260) of Division 7 of Title 1 to any occupants temporarily or permanently displaced by the rehabilitation or code enforcement activity, or the relocation is otherwise provided prior to displacement either as a condition of receivership, or provided by the property owner or the local government pursuant to Article 2.5 (commencing with Section 17975) of Chapter 5 of Part 1.5 of Division 13 of the Health and Safety Code, or as otherwise provided by local ordinance; provided the assistance includes not less than the equivalent of four months’ rent and moving expenses and comparable replacement housing consistent with the moving expenses and comparable replacement housing required pursuant to Section 7260, (III) the local government requires that any displaced occupants will have the right to reoccupy the rehabilitated units, and (IV) the unit has been found by the local government or a court to be unfit for human habitation due to the existence of at least four violations of the conditions listed in subdivisions (a) to (g), inclusive, of Section 17995.3 of the Health and Safety Code.
(ii) The rehabilitated unit will have long-term affordability covenants and restrictions that require the unit to be available to, and occupied by, persons or families of low or very low income at affordable housing costs for at least 55 years or the time period required by any applicable federal or state law or regulation.
(iii) Prior to initial occupancy after rehabilitation, the local code enforcement agency shall issue a certificate of occupancy indicating compliance with all applicable state and local building code and health and safety code requirements.
(B) Units that are located either on foreclosed property or in a multifamily rental or ownership housing complex of three or more units, are converted with committed assistance from the city or county from nonaffordable to affordable by acquisition of the unit or the purchase of affordability covenants and restrictions for the unit, are not acquired by eminent domain, and constitute a net increase in the community’s stock of housing affordable to low- and very low income households. For purposes of this subparagraph, a unit is not converted by acquisition or the purchase of affordability covenants unless all of the following occur:
(i) The unit is made available for rent at a cost affordable to low- or very low income households.
(ii) At the time the unit is identified for acquisition, the unit is not available at an affordable housing cost to either of the following:
(I) Low-income households, if the unit will be made affordable to low-income households.
(II) Very low income households, if the unit will be made affordable to very low income households.
(iii) At the time the unit is identified for acquisition the unit is not occupied by low- or very low income households or if the acquired unit is occupied, the local government has committed to provide relocation assistance prior to displacement, if any, pursuant to Chapter 16 (commencing with Section 7260) of Division 7 of Title 1 to any occupants displaced by the conversion, or the relocation is otherwise provided prior to displacement; provided the assistance includes not less than the equivalent of four months’ rent and moving expenses and comparable replacement housing consistent with the moving expenses and comparable replacement housing required pursuant to Section 7260.
(iv) The unit is in decent, safe, and sanitary condition at the time of occupancy.
(v) The unit has long-term affordability covenants and restrictions that require the unit to be affordable to persons of low or very low income for not less than 55 years.
(vi) For units located in multifamily ownership housing complexes with three or more units, or on or after January 1, 2015, on foreclosed properties, at least an equal number of new-construction multifamily rental units affordable to lower income households have been constructed in the city or county within the same planning period as the number of ownership units to be converted.
(C) Units that will be preserved at affordable housing costs to persons or families of low or very low incomes with committed assistance from the city or county by acquisition of the unit or the purchase of affordability covenants for the unit. For purposes of this subparagraph, a unit shall not be deemed preserved unless all of the following occur:
(i) The unit has long-term affordability covenants and restrictions that require the unit to be affordable to, and reserved for occupancy by, persons of the same or lower income group as the current occupants for a period of at least 55 years.
(ii) The unit is within an “assisted housing development,” as defined in paragraph (3) of subdivision (a) of Section 65863.10.
(iii) The city or county finds, after a public hearing, that the unit is eligible, and is reasonably expected, to change from housing affordable to low- and very low income households to any other use during the next eight years due to termination of subsidy contracts, mortgage prepayment, or expiration of restrictions on use.
(iv) The unit is in decent, safe, and sanitary condition at the time of occupancy.
(v) At the time the unit is identified for preservation it is available at affordable cost to persons or families of low or very low income.
(D) Units in a motel, hotel, or hostel that are converted with committed assistance from the city or county from nonresidential to residential by the acquisition of the unit or the purchase of affordability covenants and restrictions for the unit, are not acquired by eminent domain, and constitute a net increase in the community’s stock of housing affordable to low- and very low income households. For purposes of this subparagraph, a unit is not converted by acquisition or the purchase of affordability covenants unless all of the following occur:
(i) The unit is part of a long-term recovery response to COVID-19.
(ii) The unit is made available for people experiencing homelessness as defined in Section 578.3 of Title 24 of the Code of Federal Regulations.
(iii) The unit is made available for rent at a cost affordable to low- or very low income households.
(iv) The unit is in decent, safe, and sanitary condition at the time of occupancy.
(v) The unit has long-term affordability covenants and restrictions that require the unit to be affordable to persons of low or very low income for not less than 55 years.
(vi) This subparagraph shall remain in effect only for the sixth revision of the housing element pursuant to Section 65588.
(E) All spaces in a mobilehome park, as defined in subdivision (a) of Section 18214 of the Health and Safety Code, that is acquired with committed assistance from the city or county where any of the following apply:
(i) The mobilehome park will be acquired with financing that includes a loan from the department pursuant to Section 50783 or 50784.5 of the Health and Safety Code.
(ii) At least 50 percent of the current residents in the mobilehome park to be acquired are lower-income households and the entity acquiring the park agrees to enter into a regulatory agreement for a minimum of 55 years that requires both of the following:
(I) All vacant spaces shall be rented at a space rent that does not exceed 50 percent of maximum rent limits established by the California Tax Credit Allocation Committee at 60 percent of the area median income.
(II) The space rent for existing residents at the time of the acquisition of the property, both during the 12 months preceding the acquisition and during the term of the regulatory agreement, shall not increase more than 5 percent in any 12-month period.
(3) This subdivision does not apply to any city or county that, during the current or immediately prior planning period, as defined by Section 65588, has not met any of its share of the regional need for affordable housing, as defined in Section 65584, for moderate-, low-, or very low income households. A city or county shall document for any housing unit that a building permit has been issued and all development and permit fees have been paid or the unit is eligible to be lawfully occupied.
(4) For purposes of this subdivision, “committed assistance” means that the city or county enters into a legally enforceable agreement during the period from the beginning of the projection period until the end of the third year of the planning period that obligates sufficient available funds or other in-kind services to provide the assistance necessary to make the identified units affordable and that requires that the units be made available for occupancy within two years of the execution of the agreement. “Committed assistance” does not include tenant-based rental assistance.
(5) For purposes of this subdivision, “net increase” includes only housing units provided committed assistance pursuant to subparagraph (A) or (B) of paragraph (2) in the current planning period, as defined in Section 65588, that were not provided committed assistance in the immediately prior planning period.
(6) For purposes of this subdivision, “the time the unit is identified” means the earliest time when any city or county agent, acting on behalf of a public entity, has proposed in writing or has proposed orally or in writing to the property owner, that the unit be considered for substantial rehabilitation, acquisition, or preservation.
(7) In the fourth year of the planning period, as defined by Section 65588, in the report required pursuant to Section 65400, each city or county that has included in its housing element a program to provide units pursuant to subparagraph (A), (B), (C), (D), or (E) of paragraph (2) shall report in writing to the legislative body, and to the department within 30 days of making its report to the legislative body, on its progress in providing units pursuant to this subdivision. The report shall identify the specific units for which committed assistance has been provided or which have been made available to low- and very low income households, and it shall adequately document how each unit complies with this subdivision. If, by the end of the third year of the planning period, the city or county has not entered into an enforceable agreement of committed assistance for all units specified in the programs adopted pursuant to subparagraph (A), (B), (C), (D), or (E) of paragraph (2), the city or county shall, not later than the end of the fourth year of the planning period, adopt an amended housing element in accordance with Section 65585, identifying additional adequate sites pursuant to paragraph (1) of subdivision (c) of Section 65583 sufficient to accommodate the number of units for which committed assistance was not provided. If a city or county does not amend its housing element to identify adequate sites to address any shortfall, or fails to complete the rehabilitation, acquisition, purchase of affordability covenants, or the preservation of any housing unit within two years after committed assistance was provided to that unit, it shall be prohibited from identifying units pursuant to subparagraph (A), (B), (C), (D), or (E) of paragraph (2) in the housing element that it adopts for the next planning period, as defined in Section 65588, above the number of units actually provided or preserved due to committed assistance.
(d) A city or county may reduce its share of the regional housing need by the number of units built between the start of the projection period and the deadline for adoption of the housing element. If the city or county reduces its share pursuant to this subdivision, the city or county shall include in the housing element a description of the methodology for assigning those housing units to an income category based on actual or projected sales price, rent levels, or other mechanisms establishing affordability.

(e)(1)Sites that contain interim housing developments may be identified as an adequate site for the very low and low-income categories if the housing element demonstrates that the units in those developments will be available for occupancy by individuals and families who are homeless or who are at risk of homelessness during the entire planning period of the element and that the interim housing developments are within a residential zone.

(2)For purposes of this subdivision, both of the following shall apply:

(A)“Individuals and families who are homeless or who are at risk of homelessness” means persons and families that meet the qualifying definitions under Part 578.3 of Title 24 of the Code of Federal Regulations.

(B)“Interim housing development” means any facility with the primary purpose of providing a temporary shelter and services for the homeless in general or for specific populations of the homeless, and which does not require occupants to sign leases or occupancy agreements.

(f)(1)The Department of Housing and Community Development may allow a city or county to substitute up to 25 percent of the community’s obligation to identify adequate sites for the very low or low-income categories in its housing element pursuant to paragraph (1) of subdivision (c) of Section 65583 if the city or county includes in its housing element a program committing the jurisdiction to fund the provision of a nonprofit home sharing program in its jurisdiction or subregion at an increment equivalent to the local cost to create and maintain a home sharing match for the duration of the planning period covered by the element. The units provided through the nonprofit home sharing program must be available at an affordable cost to persons or families of low or very low income for the duration of the planning period. As a requirement of its annual funding awards from the jurisdiction, the nonprofit home sharing provider must provide an annual outcome report to the jurisdiction providing that funding demonstrating the continued existence and affordability of the units.

(2)For purposes of this subdivision, both of the following shall apply:

(A)“Home sharing” is defined as a living arrangement in which two or more unrelated people share a house or apartment.

(B)“Nonprofit home sharing program” is defined as a program that provides a service that helps to match a person who has an extra room or separate unit available with a home seeker who is looking for a place to live.

SEC. 3.SEC. 4.

 Section 65589.9 of the Government Code is amended to read:

65589.9.
 (a) It is the intent of the Legislature to create incentives for jurisdictions that are compliant with housing element requirements and have enacted prohousing local policies. It is the intent of the Legislature that these incentives be in the form of additional points or other preference in the scoring of competitive housing and infrastructure programs. It is the intent of the Legislature that, in adopting regulations related to prohousing local policy criteria, the department shall create criteria that consider the needs of rural, suburban, and urban jurisdictions and how those criteria may differ in those areas.
(b) For award cycles commenced after July 1, 2021, jurisdictions that have adopted a housing element that has been found by the department to be in substantial compliance with the requirements of this article pursuant to Section 65585, and that have been designated prohousing pursuant to subdivision (c) based upon their adoption of prohousing local policies, shall be awarded additional points or preference in the scoring of program applications for the following programs:
(1) The Transformative Climate Communities Program established by Part 4 (commencing with Section 75240) of Division 44 of the Public Resources Code.
(2) The qualifying infill area portion of the Infill Incentive Grant Program of 2007 established by Section 53545.13 of the Health and Safety Code.
(3) Additional bonus points may be awarded to other state programs for which local governments are the sole or primary applicants when already allowable under state law.
(c) The department shall designate jurisdictions as prohousing pursuant to the emergency regulations adopted pursuant to subdivision (d) and report these designations to the Office of Planning and Research, and any other applicable agency or department, annually and upon request.
(d) By July 1, 2021, the department, in collaboration with stakeholders, shall adopt emergency regulations to implement this section.
(e) On or before January 1, 2021, and annually thereafter, the Department of Finance shall publish on its internet website the list of programs included under subdivision (b).
(f) For purposes of this section, the following definitions shall apply:
(1) “Compliant housing element” means an adopted housing element that has been found to be in substantial compliance with the requirements of this article by the department pursuant to Section 65585.
(2) “Prohousing local policies” means policies that facilitate the planning, approval, or construction of housing. These policies may include, but are not limited to, the following:
(A) Local financial incentives for housing, including, but not limited to, establishing a local housing trust fund.
(B) Reduced parking requirements for sites that are zoned for residential development.
(C) Adoption of zoning allowing for use by right for residential and mixed-use development.
(D) Zoning more sites for residential development or zoning sites at higher densities than is required to accommodate the minimum existing regional housing need allocation for the current housing element cycle.
(E) Adoption of accessory dwelling unit ordinances or other mechanisms that reduce barriers for property owners to create accessory dwelling units beyond the requirements outlined in Section 65852.2, as determined by the department.
(F) Reduction of permit processing time.
(G) Creation of objective development standards.
(H) Reduction of development impact fees.
(I) Establishment of a Workforce Housing Opportunity Zone, as defined in Section 65620, or a housing sustainability district, as defined in Section 66200.
(J) Preservation of affordable housing units through the extension of existing project-based rental assistance covenants to avoid the displacement of affected tenants and a reduction in available affordable housing units.

SEC. 4.SEC. 5.

 Section 53559 of the Health and Safety Code is amended to read:

53559.
 (a) The Infill Infrastructure Grant Program of 2019 is hereby established to be administered by the department.
(b) Upon appropriation by the Legislature of funds specified in Section 53559.2, the department shall establish and administer a grant program to allocate those funds to capital improvement projects that are an integral part of, or necessary to facilitate the development of, a qualifying infill project or qualifying infill area, pursuant to the requirements of this section.
(c) (1) The department shall administer a competitive application process for grants funded by the allocation specified in paragraph (1) of subdivision (a) of Section 53559.2 for selected capital improvement projects for large jurisdictions pursuant to this subdivision. The department shall release a notice of funding availability no later than November 30, 2019.
(2) In its review and ranking of applications for the award of capital improvement project grants, the department shall rank the affected qualifying infill projects and qualifying infill areas based on the following priorities:
(A) Project readiness, which shall include all of the following:
(i) A demonstration that the project or area development can complete environmental review and secure necessary entitlements from the local jurisdiction within a reasonable period of time following the submission of a grant application.
(ii) A demonstration that the eligible applicant can secure sufficient funding commitments derived from sources other than this part for the timely development of a qualifying infill project or development of a qualifying infill area.
(iii) A demonstration that the project or area development has sufficient local support to achieve the proposed improvement.
(B) The depth and duration of the affordability of the housing proposed for a qualifying infill project or qualifying infill area.
(C) The extent to which the average residential densities on the parcels to be developed exceed the density standards contained in paragraph (4) of subdivision (e).
(D) The qualifying infill project’s or qualifying infill area’s inclusion of, or proximity or accessibility to, a transit station or major transit stop.
(E) The proximity of housing to parks, employment or retail centers, schools, or social services.
(F) The qualifying infill project or qualifying infill area location’s consistency with an adopted sustainable communities strategy pursuant to Section 65080 of the Government Code, alternative planning strategy pursuant to Section 65450 of the Government Code, or other adopted regional growth plan intended to foster efficient land use.
(3) In allocating funds pursuant to this subdivision, the department, to the maximum extent feasible, shall ensure a reasonable geographic distribution of funds.
(4) For purposes of awarding grants pursuant to the competitive application process required by this subdivision:
(A) “Qualifying infill area” means a contiguous area located within an urbanized area (i) that has been previously developed, or where at least 75 percent of the perimeter of the area adjoins parcels that are developed with urban uses, and (ii) in which at least one development application has been approved or is pending approval for a residential or mixed-use residential project that meets the definition and criteria in this section for a qualifying infill project.
(B) (i) “Qualifying infill project” means a residential or mixed-use residential project located within an urbanized area on a site that has been previously developed, or on a vacant site where at least 75 percent of the perimeter of the site adjoins parcels that are developed with urban uses.
(ii) A property is adjoining the side of a project site if the property is separated from the project site only by an improved public right-of-way.
(d) (1) The department shall administer an over-the-counter application process for grants funded by the allocation specified in paragraph (2) of subdivision (a) of Section 53559.2 for capital improvement projects for small jurisdictions, pursuant to this subdivision. A notice of funding availability shall be released no later than November 30, 2019.
(2) Eligible applicants shall submit the following information in the application request for funding:
(A) A complete description of the qualifying infill project or qualifying infill area and documentation of how the infill project or infill area meets the requirements of this section.
(B) A complete description of the capital improvement project and requested grant funding for the project, how the project is necessary to support the development of housing, and how it meets the criteria of this section.
(C) Documentation that specifies how the application meets all of the requirements of subdivision (e).
(D) (i) Except as provided in clause (ii), a financial document that shows the gap financing needed for the project.
(ii) For a qualifying infill project located in the unincorporated area of the county, the department shall allow an applicant to meet the requirement described in clause (i) by submitting copies of an application or applications for other sources of state or federal funding for a qualifying infill project.
(E) (i) Except as provided by clause (ii), documentation of all necessary entitlement and permits, and a certification from the applicant that the project is shovel-ready.
(ii) For a qualifying infill project located in the unincorporated area of the county, the department shall allow the applicant to meet the requirement described in clause (i) by submitting a letter of intent from a willing affordable housing developer that has previously completed at least one comparable housing project, certifying that the developer is willing to submit an application to the county for approval by the county of a qualifying infill project within the area in the event that the funding requested pursuant to this subdivision is awarded.
(3) The department may establish a per-unit formula to determine the amount of funds awarded pursuant to this subdivision.
(4) For purposes of awarding grants pursuant to the over-the-counter application process required by this subdivision:
(A) “Qualifying infill area” means a contiguous area located within an urbanized area that meets either of the following criteria:
(i) The area contains sites included on the inventory of land suitable and available for residential development in the housing element of the applicable city or county general plan pursuant to paragraph (3) of subdivision (a) of Section 65583 of the Government Code, and at least 50 percent of the perimeter of the area shall adjoin parcels that are developed with urban uses.
(ii) The capital improvement project for which funding is requested is necessary, as documented by an environmental review or some other adopted planning document, to make the area suitable and available for residential development, or to allow the area to accommodate housing for additional income levels, and the area otherwise meets the requirements for inclusion on the inventory of land suitable and available for residential development in the housing element of the applicable city or county general plan pursuant to paragraph (3) of subdivision (a) of Section 65583 of the Government Code. At least 50 percent of the perimeter of the area shall adjoin parcels that are developed with urban uses.
(B) “Qualifying infill project” means a residential or mixed-use residential project located within an urbanized area on a site that has been previously developed, or on a vacant site where at least 50 percent of the perimeter of the site adjoins parcels that are developed with urban uses.
(e) A qualifying infill area for which a capital improvement project grant may be awarded pursuant to either subdivision (c) or (d) shall meet both of the following conditions:
(1) Be located in a city, county, or city and county in which the general plan of the city, county, or city and county has an adopted housing element that has been found by the department, pursuant to Section 65585 of the Government Code, to be in compliance with the requirements of Article 10.6 (commencing with Section 65580) of Chapter 3 of Division 1 of Title 7 of the Government Code.
(2) Be located in a city, county, or city and county that, at the time of application, has submitted its annual progress reports for 2017 through the most recently required annual progress reports.
(f) A qualifying infill project or qualifying infill area for which a capital improvement project grant may be awarded pursuant to either subdivision (c) or (d) shall meet all of the following requirements:
(1) Include not less than 15 percent of affordable units, as follows:
(A) For projects that contain both rental and ownership units, units of either or both product types may be included in the calculation of the affordability criteria.
(B) (i) To the extent included in a project grant application, for the purpose of calculating the percentage of affordable units, the department may consider the entire master development in which the development seeking grant funding is included.
(ii) Where applicable, an applicant may include a replacement housing plan to ensure that dwelling units housing persons and families of low or moderate income are not removed from the low- and moderate-income housing market. Residential units to be replaced shall not be counted toward meeting the affordability threshold required for eligibility for funding under this section.
(C) For the purposes of this subdivision, “affordable unit” means a unit that is made available at an affordable rent, as defined in Section 50053, to a household earning no more than 60 percent of the area median income or at an affordable housing cost, as defined in Section 50052.5, to a household earning no more than 120 percent of the area median income. Rental units shall be subject to a recorded covenant that ensures affordability for at least 55 years. Ownership units shall initially be sold to and occupied by a qualified household, and shall be subject to a recorded covenant that includes either a resale restriction for at least 30 years or equity sharing upon resale.
(D) A qualifying infill project or qualifying infill area for which a disposition and development agreement or other project- or area-specific agreement between the developer and the local agency having jurisdiction over the project has been executed on or before the effective date of the act adding this section, shall be deemed to meet the affordability requirements of this paragraph if the agreement includes affordability covenants that subject the project or area to the production of affordable units for very low, low-, or moderate-income households.
(2) Include average residential densities on the parcels to be developed that are equal to or greater than the densities described in subparagraph (B) of paragraph (3) of subdivision (c) of Section 65583.2 of the Government Code, except that a project located in a rural area as defined in Section 50199.21 shall include average residential densities on the parcels to be developed of at least 10 units per acre.
(3) Be located in an area designated for mixed-use or residential development pursuant to one of the following:
(A) A general plan adopted pursuant to Section 65300 of the Government Code.
(B) A sustainable communities strategy adopted pursuant to Section 65080 of the Government Code.
(C) A specific plan adopted pursuant to Section 65450 of the Government Code.
(D) A Workforce Housing Opportunity Zone established pursuant to Section 65620 of the Government Code.
(E) A Housing Sustainability District established pursuant to Section 66201 of the Government Code.
(g) Funds awarded pursuant to this section shall supplement, not supplant, other available funding.
(h) The department shall adopt guidelines for the operation of the grant program. The guidelines shall include provisions for the reversion of grant awards that are not encumbered within two years of the date an award was made, and for the recapture of grants awarded, but for which development of the related housing units has not progressed in a reasonable period of time from the date of the grant award, as determined by the department. The guidelines shall not be subject to the requirements of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.
(i) For each fiscal year within the duration of the grant program, the department shall include within the report to the Governor and the Legislature, required by Section 50408, information on its activities relating to the grant program. The report shall include, but is not limited to, the following information:
(1) A summary of the projects that received grants under the program for each fiscal year that grants were awarded.
(2) The description, location, and estimated date of completion for each project that received a grant award under the program.
(3) An update on the status of each project that received a grant award under the program, and the number of housing units created or facilitated by the program.
(j) Notwithstanding paragraph (4) of subdivision (e), a city with a population greater than 100,000 in a standard metropolitan statistical area or a population of less than 2,000,000 may petition the department for, and the department may grant, an exception to the jurisdiction’s classification pursuant to subdivisions (d) to (f), inclusive, of Section 65583.2 of the Government Code, if the city believes it is unable to meet the density requirements specified in paragraph (4) of subdivision (e). The city shall submit the petition with its application and shall include the reasons why the city believes the exception is warranted. The city shall provide information supporting the need for the exception, including, but not limited to, any limitations that the city may encounter in meeting the density requirements specified in paragraph (4) of subdivision (e). Any exception shall be for the purposes of this section only. This subdivision shall become inoperative on January 1, 2026.

SEC. 5.SEC. 6.

 Section 75215 of the Public Resources Code is amended to read:

75215.
 (a) Prior to awarding funds under the program, the council, in coordination with the member agencies and departments of the council, the State Air Resources Board, and other state entities, as needed, shall develop guidelines and selection criteria for the implementation of the program.
(b) Prior to adoption of the guidelines and the selection criteria, the council shall conduct at least two public workshops to receive and consider public comments. One workshop shall be held at a location in northern California and one workshop shall be held at a location in southern California.
(c) The council shall publish the draft guidelines and selection criteria on its internet website at least 30 days prior to the public meetings.
(d) In adopting the guidelines and selection criteria, the council shall consider the comments from local governments, regional agencies, and other stakeholders. The council shall conduct outreach to disadvantaged communities to encourage comments on the draft guidelines from those communities.
(e) The council shall adopt guidelines or selection criteria that include both affordable housing rental units and owner-occupied affordable housing units.
(f) Program guidelines may be revised by the council to reflect changes in program focus or need. Outreach to stakeholders shall be conducted, pursuant to subdivisions (a), (b), and (c) before the council adopts changes to guidelines.
(g) Upon the adoption of the guidelines and selection criteria, the council shall, pursuant to Section 9795 of the Government Code, submit copies of the guidelines to the fiscal and appropriate policy committees of the Legislature.
(h) Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code does not apply to the development and adoption of the guidelines and selection criteria pursuant to this section.
(i) Program guidelines shall not disqualify a project applicant that is a nonprofit or for-profit housing developer if the jurisdiction the project is proposed to be located in has been found by the Department of Housing and Community Development not to be in substantial compliance with the requirements of Article 10.6 (commencing with Section 65580) of Chapter 3 of Division 1 of Title 7 of the Government Code pursuant to Section 65585 of the Government Code.