CC Exhibit 11-27-2017 Item No. 1 Housing Legislation PresentationIMPACT OF CALIFORNIA 2017
HOUSING LEGISLATION
City of Cupertino
November 27, 2017
Goldfarb & Lipman LLP
1300 Clay Street, 11th Floor
Oakland, California 94612
(510) 836-6336
goldfarb lipman attorneys
OVERVIEW
Changes in Processing Housing Applications
Return of Rental Inclusionary Requirements
Changes in the Annual Report
ADU Modifications
New Funding for Planning and Affordable Housing
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PROCESSING HOUSING APPLICATIONS:
OVERVIEW
Is the project a “housing development
project”?
Must advise on consistency within 30 –60
days of completeness
Specific findings required to deny or
reduce density if objective standards are
satisfied
Additional findings required to deny or
reduce density if project is affordable or
an emergency shelter
Does the project qualify for streamlining?
Must advise on consistency within 60 –90
days of submittal
Must complete “public oversight” within
90 –180 days
Is the project on a Housing Element site?
Must provide at least the number of units
listed in the Housing Element at the income
level shown in the Housing Element or
comply with ‘no net loss’ (Section 65863)
Also applies to non-residential approvals
on housing element sites
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PROCESSING HOUSING APPLICATIONS:
HOUSING ACCOUNTABILITY ACT (65589.5)
Applies to ALL “housing development projects” and
emergency shelters:
Residences only;
Transitional & supportive housing;
Mixed use projects with at least 2/3 the square
footage designated for residential use.
Affordable AND market-rate
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If complies with “objective” general plan, zoning,
and subdivision standards, can only reduce density
or deny if “specific adverse impact” to public health
& safety that can’t be mitigated in any other way.”
“Lower density” includes conditions “that have the same
effect or impact on the ability of the project to provide
housing”
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PROCESSING HOUSING APPLICATIONS:
HOUSING ACCOUNTABILITY ACT (65589.5(j))
Honchariw v. County of Stanislaus (2011)
If desire to deny or reduce density:
Identify objective standards project does not comply
with.
If project complies with all, must make public health &
safety finding.
Not objective: “suitability”
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PROCESSING HOUSING APPLICATIONS:
HOUSING ACCOUNTABILITY ACT (65589.5(j))
PROCESSING HOUSING APPLICATIONS:
AFFORDABLE HOUSING (65589.5(d))
Additional protections for projects:
Emergency shelters;
20% low income; or
100% moderate (120% of median) or
middle income (150% of median).
Must make specific findings to deny, reduce
density, or add condition making project
infeasible
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Must provide list of any inconsistencies with:
“Plan, program, policy, ordinance, standard,
requirement or similar provision”;
Within 30-60 days of completeness;
Explaining why inconsistent; or
“Deemed consistent.”
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PROCESSING HOUSING APPLICATIONS:
SB167/AB678; AB 1515
PROCESSING HOUSING APPLICATIONS:
SB167/AB678; AB 1515
City findings must be based on ‘preponderance of
the evidence,’ not merely ‘substantial evidence’
Also “deemed consistent” if: “substantial evidence that
would allow a reasonable person to conclude” is
consistent
Attorneys’ fees to both market-rate & affordable
$10K/unit fine if ignore court
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PROCESSING HOUSING APPLICATIONS:
HAA & CEQA
Schellinger Bros. v. City of Sebastopol (2009): must
complete CEQA before can invoke HAA
Sequoyah Hills HO Ass’n v. City of Oakland (1993):
upheld finding that legally infeasible to reduce
density due to HAA
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PROCESSING HOUSING APPLICATIONS:
SB 35: ‘STREAMLINING’
Determine if Exclusion Applies
Project site may not be on list of exclusions Project must not require subdivision unless LIHTC-
funded and/or meets labor requirements
Determine if Project is Eligible for Streamlining
2 or more units in urbanized area
zoned or planned for residential Meets all objective standards Meets affordable housing and
labor requirements
Determine if Jurisdiction is Subject to SB 35
Not enough building permits to satisfy RHNA No Annual Report for 2 Years
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PROCESSING HOUSING APPLICATIONS:
SB 35: ‘STREAMLINING’
Regional Housing Need Allocation (RHNA)
Cupertino: 53% low, very low, and extremely low;
22% moderate; 25% above moderate
Cupertino
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Lower Income
(Extremely Low,
Very Low
and Low)
Moderate Income Above Moderate
Income TOTAL RHNA
563 units 231 units 270 units 1,064 units
PROCESSING HOUSING APPLICATIONS:
SB 35: ‘STREAMLINING’
Requires ministerial approval of housing if HCD determines
city has not issued enough building permits to satisfy its
RHNA by income category or no annual report for 2 years
Eligible Projects:
Two or more multifamily units proposed
In urban area with 75% of perimeter developed
Site zoned or planned for residential use
Consistent with ‘objective’ planning standards
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PROCESSING HOUSING APPLICATIONS:
SB 35: ‘STREAMLINING’
Eligible Projects (cont.):
Must meet affordable housing requirements
Projects with 10 or more units must pay prevailing
wages
In Cupertino, must use “skilled and trained workforce” if
75 units or more
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PROCESSING HOUSING APPLICATIONS:
SB 35: ‘STREAMLINING’
Exclusions:
Site must not have contained housing occupied by tenants
within last 10 years
Site must not be in the coastal zone, agricultural land,
wetlands, fire hazard areas, hazardous waste sites, former
mobilehome park, fault zone, or other specified areas; in
floodplain, floodway, high fire hazard, must meet standards.
Project may not involve a subdivision unless financed with
low income housing tax credits and pays prevailing wage or
uses “skilled and trained workforce”
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PROCESSING HOUSING APPLICATIONS:
SB 35: ‘STREAMLINING’
No parking standards may be imposed if the project is:
Located within one-half mile of public transit
Located within an architecturally and historically significant
historic district
In an area where on-street parking permits are required
but not offered to the occupants of the development
Within one block of a car share vehicle
No more than 1 space/unit for all other projects
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PROCESSING HOUSING APPLICATIONS:
SB 35: ‘STREAMLINING’
Within 60 to 90 days of submittal:
Provide list of all inconsistencies with ‘objective’ zoning and
design review standards in effect at submittal or project
“deemed consistent”
‘Objective’ means “no personal or subjective judgment by a public
official and uniformly verifiable by reference to an external and
uniform benchmark.”
Development is consistent with density requirements if it is within
the maximum density permitted by general plan or zoning
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PROCESSING HOUSING APPLICATIONS:
SB 35: ‘STREAMLINING’
Within 90 to 180 days of submittal:
Complete any design review or “public oversight” of a
housing development
Prohibited from in any way “inhibiting, chilling or
precluding” the ministerial approval of a project
Review must be “objective and be strictly focused on
assessing compliance with criteria required for streamlined
projects”
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PROCESSING HOUSING APPLICATIONS:
SB 35 AND HCD
HCD intends to designate the eligible cities shortly
after Jan 1
A preview of the Housing Element Open Data
Project has been sent to local governments; made
up of two housing element data resources:
Housing Element Implementation spreadsheet
Annual Progress Report Permit summary
Jurisdictions have a three-week review period
before this information is available publically on
HCD’s website
PROCESSING HOUSING APPLICATIONS:
ADEQUATE RHNA SITES
Must designate specific sites that can “accommodate” the RHNA at
each income level during the planning period (65583.2)
Sites “accommodating” lower income housing must be at “default
density” of 20 du/A in Cupertino
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APN Zone DU/A Acres Units Use Income
Category
041-0042-002 R-3 20-30
du/ac 2.0 40 Vacant Lower
037-0400-027 R-2 10-20
du/ac 0.75 7 Duplex Moderate
038-0100-040 R-1 5-10
du/ac 4.5 22 Vacant Above
Moderate
039-1100-039 CMU 20 du/ac 1.5 25 Parking Moderate
PROCESSING HOUSING APPLICATIONS:
‘NO NET LOSS’OF INVENTORY SITES (65863)
Applies when:
Any site in inventory either downzoned to reduce
density; or approved at lower density than shown;
OR
Site approved with fewer units at the income level
shown in the inventory.
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OK if:
Reduction consistent with GP and Housing Element; and
Remaining sites in Element are adequate at all income
levels. Must quantify unmet need and remaining capacity by
income level.
If remaining sites are not adequate, can ID “additional,
adequate, and available sites” so ‘no net loss.’
Solely city’s responsibility unless developer’s application had
lower density; developer has no responsibility for income
level. City cannot deny because developer’s project results
in need for additional sites.
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PROCESSING HOUSING APPLICATIONS:
‘NO NET LOSS’ REQUIRED FINDINGS
Remaining sites in Housing Element adequate to
meet the RHNA at all income levels; or
City approved more units on some site than shown in
inventory or has other units at that income category;
or
Other sites NOT in Housing Element can make up
difference; or
Another site “identified and made available.” Time
limit of 180 days for income category only.
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PROCESSING HOUSING APPLICATIONS:
‘NO NET LOSS’ OPTIONS
PROCESSING HOUSING APPLICATIONS:
HAA, SB 35, AND SB 166 STRATEGIES
Critical to assemble complete packet of “plans,
programs, policies, ordinances, standards,
requirements”
Detailed list of eligibility requirements for SB 35
Review “consistency” when review for completeness
Create ‘objective’ guidelines
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Maximize inclusionary percentages; ensure actual
production of units is required, either off-site or on-site
Review all projects proposed on Priority Housing Sites
to determine if findings need to be made. Keep log of:
All housing element sites;
All approved housing by income category on other sites;
All sites not in housing element identified as ‘available.’
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PROCESSING HOUSING APPLICATIONS:
‘HAA, SB 35, AND SB 166 STRATEGIES
RETURN OF RENTAL
INCLUSIONARY HOUSING
AB 1505 restores the ability of cities and counties to
adopt inclusionary housing policies for rental projects
The Bill explicitly supersedes the California Court of
Appeal’s 2009 decision in Palmer/Sixth Street
Properties LP v. City of Los Angeles (Palmer)
The policies must meet certain standards and the
Department of Housing and Community Development
(HCD) may review the policies in certain circumstances
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RETURN OF RENTAL INCLUSIONARY HOUSING:
ORDINANCE REQUIREMENTS
The City may require new rental housing to include
percentage of affordable units
Ordinances must provide “alternative means of
compliance” with inclusionary requirements
Alternatives may include, but are not limited to:
In lieu fees
Land dedication
Off-site development of units
Acquisition and rehabilitation of existing units
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RETURN OF RENTAL INCLUSIONARY HOUSING:
CUPERTINO’S ORDINANCE
Existing Inclusionary Ordinances:
May be implemented after January 1, 2018.
If the ordinance was adopted before September 15,
2017, no HCD review or economic feasibility study
required
Cupertino: Existing Ordinance
Ordinance says rental inclusionary requirements will be
enforced when permitted: 9% very low, 6% low
Provides many alternatives
City can begin enforcing on January 1, 2018
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SB 35 & AB 879
Housing Element annual reports
required from all jurisdictions
New requirements regarding
report contents
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HOUSING ELEMENTS AND
ANNUAL REPORT ISSUES
HOUSING ELEMENTS & ANNUAL REPORTS:
CURRENT ANNUAL REPORTS
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HOUSING ELEMENTS & ANNUAL REPORTS:
NEW ANNUAL REPORTS
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Prior year Applications
Housing development
applications received
Units in all applications:
approved & disapproved
Sites rezoned to
accommodate RHNA
Sites identified or
rezoned for No Net Loss
Production Report
Net new units entitled,
permitted, or occupied
For sale or rental
RHNA income category
Assessor Parcel Number
SB 35 Report
Applications & sites
Units by type & RHNA
HOUSING ELEMENTS & ANNUAL REPORTS:
NEW ANNUAL REPORTS
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HCD to publish new reporting forms
HCD will publish each report online
Annual Reports due by April 1 each year
HCD states new info not required until April 2019 report
Potential court order if not received by May 31
Failure to submit two or more consecutive Annual Reports
triggers SB 35 streamlining
HOUSING ELEMENT REQUIREMENTS
HCD may revoke finding of housing element compliance
May review actions or “failure to act” that is inconsistent with an
adopted housing element or state housing element law, including
failure to implement housing element program
HCD authorized to refer violations to Attorney General
May also notify AG that city is in violation of HAA, no net loss,
density bonus law, or anti-discrimination provisions.
No $$ for AG to prosecute
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ACCESSORY DWELLING UNITS
AB 494/SB 229 continue to
ease ADU restrictions
‘Interior ADUs’ in all districts
permitting s-f homes
Less ability to limit tandem
parking and parking in
setbacks
HCD expressly authorized to
review ordinances
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NEW HOUSING FUNDING SOURCES
SB 2: Permanent Source for
Housing—Recording Fee
Estimated $200-$300
million/year for local
governments and HCD to fund
affordable housing
development
SB 3: $4b Veterans and
Affordable Housing Bonds
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NEW HOUSING FUNDING SOURCES:
SB 2: PERMANENT SOURCE FOR HOUSING
70%
30%
Allocation of Funds
Local Governments HCD
Year 1 Year 2 and Beyond . . .
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50%50%
Allocation of Funds
Local Governments HCD
Year 1 (Jan 2018-Dec 2018):
50% to local governments to streamline housing
production
Update planning documents and zoning ordinances
Must submit requests to HCD
50% to HCD to combat homelessness
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NEW HOUSING FUNDING SOURCES:
SB 2: PERMANENT SOURCE FOR HOUSING
Year 2 and Beyond (Jan 2019 –beyond):
70% to local governments to support affordable
housing, homeownership opportunities, and other
housing-related programs
30% to HCD for specified purposes
“Workforce housing”: 20% of ALL funds for affordable
owner-occupied “workforce housing”
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NEW HOUSING FUNDING SOURCES:
SB 2: PERMANENT SOURCE FOR HOUSING
IMPACT OF CALIFORNIA 2017
HOUSING LEGISLATION
City of Cupertino
November 27, 2017
Goldfarb & Lipman LLP
1300 Clay Street, 11th Floor
Oakland, California 94612
(510) 836-6336
goldfarb lipman attorneys
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Year Approved Projects Type Very Low
0-50% AMI
Low
51-80% AMI
Moderate
81-120% AMI
Above Moderate
100%+ AMI Total Units
2014 Accessory Dwelling Units ADU 0 0 8 0 8
Single Family Homes *Single-Family 0 0 0 34 34
2015
Biltmore Multi-Family 0 0 0 7 7
Main St.Multi-Family 0 0 0 120 120
Accessory Dwelling Units ADU 0 0 4 0 4
Single Family Homes *Single-Family 0 0 0 47 47
2016
Accessory Dwelling Units ADU 0 0 7 0 7
Single Family Homes *Single-Family 0 0 0 26 26
Marina Multi-Family 16 0 2 170 188
Hamptons Net New Multi-Family 0 7 30 563 600
Hamptons Redevelopment Multi-Family 17 24 30 871 942
Hamptons Existing
(1997)Multi-Family 17 17 0 308 342
2017
Accessory Dwelling Units ADU 0 0 9 0 9
Single Family Homes *Single-Family 0 0 0 43 43
The Veranda Multi-Family 18 0 0 1 19
TOTAL (NET NEW)34 7 60 1,011 1,112
RHNA ALLOCATION (2014-2022)356 207 231 270 1,064
DEFICIT/SURPLUS (322)(200)(171)741 48
* Single family homes that are considered new construction may be counted toward the City's RHNA per HCD
Units approved and/or built between 2014 and Nov. 27, 2017
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Year
Approved Project
(including planning
approvals)
Type Very Low
0-50% AMI
Low
51-80% AMI
Moderate
81-120% AMI
Above Moderate
100%+ AMI
Units toward
RHNA per
HCD
2014 Accessory Dwelling Units ADU 0 0 8 0 8
Single Family Homes *Single-Family 0 0 0 34 34
2015
Biltmore Multi-Family 0 0 0 7 7
Main St.Multi-Family 0 0 0 120 120
Accessory Dwelling Units ADU 0 0 4 0 4
Single Family Homes *Single-Family 0 0 0 47 47
2016
Accessory Dwelling Units ADU 0 0 7 0 7
Single Family Homes *Single-Family 0 0 0 26 26
Marina Multi-Family 16 0 2 170 0
Hamptons Net New Multi-Family 0 7 30 563
0
Hamptons
Redevelopment Multi-Family 17 24 30 871
Hamptons Existing
(1997)Multi-Family 17 17 0 308
2017
Accessory Dwelling Units ADU 0 0 9 0 9
Single Family Homes *Single-Family 0 0 0 43 43
The Veranda Multi-Family 18 0 0 1 0
TOTAL (NET NEW)34 7 60 1,011 305
RHNA ALLOCATION (2014-2022)356 207 231 270 1,064
DEFICIT/SURPLUS (322)(200)(171)741 (759)
* Single family homes that are considered new construction may be counted toward the City's RHNA per HCD
Units allowed toward RHNA by HCD between 2014 and Nov. 27, 2017
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Comparison of Sites and RHNA in context of Housing Accountability Act (No Net Loss)
Income Category Sites RHNA
(units)
Remaining
RHNA
Surplus/
Shortfall
(+/-)
Units Approved as
of Nov. 27, 2017
Surplus/
Shortfall
(+/-)
Total RHNA 1064
RHNA Credits (62)
Building Permits (Jan. 2014 -May 31, 2014)*30
Expected ADU production (2014 -2022)32
Remaining RHNA 1002
Extremely Low and Very Low 1400 356 34 (322)
Low __207 7 (200)
Moderate __196 33 (163)
Above Moderate __243 243**0
Total 1400 1002 398
Shortfall (685)
Remaining Housing Priority Sites at affordable densities:
Vallco (389 units) and Oaks (200 units)589
Total Shortfall (96)
* Draft Housing Element prepared in June 2014, therefore credit calculated as of May 31, 2014
** Only allowed a credit of up to 243 units even though 734 above moderate income level units approved at Marina Plaza, Hamptons and
The Veranda projects
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