Read: AB 2334

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DCP, State Housing Update

Assembly Bill (AB) 2334 | Density Bonus: Very Low Vehicle Travel Areas Allows 100% affordable housing projects to receive added height and unlimited density if the project is located in an urbanized very low vehicle travel area, where at least 80% of the units are restricted to lower income and no more than 20% are for moderate-income households.

Note: This bill defines “very low vehicle travel area” to mean an urbanized area, as defined by the Census Bureau, where the existing residential development generates vehicle miles traveled (VMT) per capita that is below 85% of either regional or city VMT per capita.

STATUS: Became law 09/28/22 Chaptered by Secretary of State – Chapter 653, Statutes of 2022

SUMMARY

Allows a housing development project in 17 specified counties to receive added height and unlimited density if the project is located in an urbanized very low vehicle travel area, at least 80 percent of the units are restricted to lower-income households, and no more than 20 percent are for moderate-income households.

Senate Amendments

Include chaptering amendments to address a conflict with AB 682 and limit the bill’s provisions to the Counties of Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano, Sonoma, Los Angeles, Orange, Riverside, San Bernardino, San Diego, Ventura, Sacramento, and Santa Barbara.

COMMENTS

Density bonus law: The density bonus law was originally enacted in 1979 as an incentive to encourage housing developers to produce affordable units which can be offered at below-market rates. In return for including a certain percentage of affordable units, housing developers receive the ability to add additional units for their project above the jurisdiction’s allowable zoned density for the site (thus the term “density bonus”). In order to qualify for a density bonus, a developer of multifamily housing (5+ units) must agree to build housing that includes at least one of the following:

1) 10% of all units for lower-income households;
2) 5% of all units for very low-income households,
3) Specified senior housing;
4) 10% of all units in a common interest development for moderate-income individuals and families;
5) 10% of all units for transition-age foster youth, disabled veterans, or individuals experiencing homelessness; or
6) 20% of all units for lower-income students within a student housing development.

The affordability requirements for units built via density bonus run for a minimum of 55 years. Additionally, the density bonus law specifies concessions and incentives (e.g., setback requirements) around development standards and reduced vehicle parking requirements that projects can receive to offset the cost of building affordable units. Both market rate and 100 percent affordable housing projects can use the provisions, and all local governments are required to adopt a density bonus ordinance. However, failure to adopt an ordinance does not exempt a local government from complying with state density bonus law.

The housing-climate nexus. California is facing dual crises: a rapidly warming climate due to greenhouse gas emissions (GHG) and a housing crisis stemming from an undersupply of housing which the Department of Housing and Community Development (HCD) recently attributed to “decades of underproduction underscored by exclusionary policies” in its 2022 update to the Statewide Housing Plan1. Housing affordability remains a major challenge for many of California’s most economically-vulnerable households, and, according to data from the 2019 American Communities Survey, over half of the state’s renters are considered cost-burdened, which is defined as paying more than 30 percent of their income towards housing.

At the same time, in order to meet the state’s GHG reduction goals, it is crucial that we rapidly reduce emissions across a variety of sectors, including housing and transportation. In terms of transportation, lowering vehicle miles traveled (VMT) remains an important objective, and Appendix C of the State’s 2017 Climate Change Scoping Plan update states: “California must reduce vehicle miles of travel (VMT) – alongside improvements in vehicle and fuel technology – in order to meet our ambitious greenhouse gas (GHG) reduction goals for the transportation sector.” The document goes on to highlight infill development as a strategy for longer-term VMT reductions.

Similarly, HCD’s 2022 Statewide Housing Plan update lists one of the state’s objectives as the production of more “affordable and climate-smart housing”. Among the specific actions listed under this objective is the encouragement of “new housing development in existing communities to reduce vehicle miles traveled (VMT) and mitigate climate change while simultaneously addressing housing need.”2 Efforts to increase production of dense urban infill housing also support climate adaptation objectives by providing more housing options in city centers and alleviating cost pressures that push households to suburban and rural areas that tend to face higher wildfire risks.

Incentivizing Affordable Infill Housing to Support California’s Climate Change Mitigation Goals: California has taken a number of steps to promote more sustainable urban infill housing, including through the use of the density bonus law. Specifically, in 2019 the Legislature passed and Governor Newsom signed into law AB 1763 (Chiu), a bill that allowed for an enhanced density bonus for certain affordable housing projects located within one-half mile of a major transit stop. AB 1763 allows affordable housing projects to receive unlimited density and a height increase of 33 feet or three stories. To receive this enhanced density bonus, at least 80 percent of the units must be reserved for lower-income households, and no more than 20 percent can be for moderate-income individuals and families.

While AB 1763 made it easier to build dense, affordable housing near transit, many parts of the state lack the level of public transportation service necessary to qualify for the enhanced density bonus the legislation allowed. However, within these areas of the state, it is still important to promote housing in urbanized areas that allow residents to reduce their reliance on vehicle travel. This bill proposes to expand AB 1763’s enhanced density bonus provisions to cover very low vehicle travel areas in urbanized areas where existing residential development generates VMT that is below 85%t of either the region or city’s per capita VMT. Additionally, the bill’s provisions are limited to housing developments located in the following 17 counties: Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano, Sonoma, Los Angeles, Orange, Riverside, San Bernardino, San Diego, Ventura, Sacramento, and Santa Barbara.

The Governor’s Office of Planning and Research (OPR) recently released maps that indicate very low VMT areas within certain regions. Specifically, the maps include regional VMT calculations within Metropolitan Planning Organizations (MPOs). Additionally, under SB 743 (Steinberg, 2013), guidelines for evaluating transportation impacts under the California Environmental Quality Act (CEQA) were updated to better assess transportation-related environmental impacts of proposed development projects. A number of California cities and counties have already produced maps of VMT in their jurisdiction under SB 743, which could be used to implement this bill. In rural areas outside of an MPO, the county’s VMT calculations would be used to determine what areas are considered very low VMT.

According to the Author

“We have seen firsthand the essential role affordable housing has played during the pandemic, providing shelter, support, and community to some of our state’s most vulnerable groups—including seniors and veterans, teachers and firefighters, disabled persons, and the far too many working families that cannot afford the rising cost of market rents. With a gap of 1.2 million homes affordable to low-income households and roughly 150,000 people experiencing homelessness every day, the state must continue to strengthen policies that increase the number of affordable units being constructed.

AB 2334 promotes housing construction by expanding California’s Density Bonus Law, creating opportunities for 100% affordable housing developments to earn an enhanced density bonus in areas with low vehicle miles traveled. This bill will address the state’s affordability crisis and further environmental sustainability goals.” Arguments in Support This bill’s sponsor, California Housing Consortium argues that this bill “will increase the supply of affordable housing by allowing all location-efficient 100% affordable housing developments qualify for the enhanced density bonus.” CHC also notes that it will further sustainability through infill development. The Terner Center for Housing Innovation at UC Berkeley also writes in support of the measure that we can expect both more affordable housing and for the housing units produced to be located in places that will result in lower transportation costs for residents.

1 https://statewide-housing-plan-cahcd.hub.arcgis.com/
2 https://storymaps.arcgis.com/stories/94729ab1648d43b1811c1698a748c136