March 6, 2017

2017 Legislative Session Has Begun!


Every February, our State Senators and Assemblymembers are busily introducing new legislation covering a wide variety of topics.   This year, as in past years, there are many worthy bills before the State Legislature during the 2017-18 Legislative Session that seek to respond to the State’s housing crisis.

In this policy update we will highlight the bills where SV@Home has taken a support position, and others that respond to key issues that we are currently evaluating or watching.

SV@Home Supports:

AB 71 (Chiu, co-sponsor Kalra)  Taxes: credits: low-income housing: allocation increase.

This bill would increase the amount of Low Income Housing Tax Credits for the State by an estimated $270-350 million annually by redirecting savings from the elimination of the Mortgage Interest Deduction for second/vacation homes. It is estimated that the bill would result in an added 3,000 new homes annually. AB 71 is set to be heard on March 8th at 9am in the Assembly Housing and Community Development Committee—State Capital, Room 126.

SB 2 (Atkins) Building Homes and Jobs Act.

Senator Atkins has reintroduced the bill affectionately known as the Permanent Source Bill that creates a permanent source of State funding for affordable housing by collecting a $75 document recording fee (no more than $225 per transaction) on non-point of sale real estate transactions. It is estimated that this bill, which requires a 2/3rds vote of the Legislature,  would provide between $250 and $300 million annually for housing.  This is a significant source, but much smaller than the $1 billion annually in funding that was available prior to the dissolution of redevelopment.  In Santa Clara County, redevelopment brought in $60 million annually for affordable housing preservation and development. SB 2 made it out of the Senate Transportation and Housing Committee with a 9-3 vote on February 28th.  It now heads to the Senate Governance and Finance Committee, date TBD.

SB 3 (Beall) Affordable Housing Bond Act of 2018.

This bill would enact the Affordable Housing Bond Act of 2018, authorizing the issuance of $3 billion in bonds for affordable housing if approved by the voters during the November 6, 2018 election.  If approved by the Legislature and signed by the Governor, this would require a 2/3rds vote of the people.  It also requires a 2/3rds vote to get to the Governor’s desk.  These funds would serve as a critical leverage to Measure A funds in Santa Clara County. SB 3 made it out of the Senate Transportation and Housing Committee with a 10-2 vote on February 28th.  Next on the agenda for the bill is the Senate Governance and Finance Committee—no date yet.

AB 1505 (Bloom) Land use: zoning regulations.

Housers have worked for years to respond to the Palmer versus Los Angeles legal decision that took away local government powers to implement inclusionary programs for rental housing.  This bill would reinstate the authority of local \governments to require, as a part of a local zoning ordinance, that housing developments include units affordable to lower- and moderate income households.  Prior to Palmer, this tool created tens of thousands of affordable units over the years. In San Jose alone, hundreds of affordable units that otherwise would have been constructed were lost as a result of this ruling.   As folks may remember, an identical bill made it to the Governor’s desk in 2014, but was vetoed because there was an ongoing lawsuit challenging ownership inclusionary programs.  While that lawsuit was not relevant to the Palmer restrictions, the good news is that it was decided in favor of local government thereby removing the Governor’s previously stated concerns.

Other Bills of Prime Interest

AB 72 (Santiago and Chiu) Attorney General: enforcement: housing laws.

This bill would provide State enforcement of the Housing Accountability Act, giving the Attorney General the power to oversee compliance.  The Housing Accountability Act is a law that, among other things, makes it illegal for a city to refuse to permit projects that are within their zoning and compliant with their general plan.  Unfortunately, this happens all too often—projects are denied or the number of units proposed is reduced, even though the zoning and General Plan would allow.  A recent case is the Los Gatos North 40 Project.  Currently, the only recourse is through legal means—the North 40 developers are now in litigation with Los Gatos.

AB 943 (Santiago) Land use regulations: local initiatives: voter approval.

This bill would require that any ordinance that would “curb, delay, or deter growth or development within a city” receive a 2/3rds vote of the electorate.  Voters have been bringing forward initiatives to overturn projects.  One of the most notable in the South Bay was the Maybell Project in Palo Alto, a 60-unit affordable senior development with 12 market-rate townhomes right on CalTrain.  The Council approved the projects, and the voters successfully challenged it at the ballot box.  If opponents had to reach a 2/3rds voter threshold, fewer of these challenges would be made, and even fewer would get the needed votes.

ACA 4 (Aguiar-Curry) Local government financing: affordable housing and public infrastructure: voter approval.

This bill would change the current requirement for voter approval of affordable housing funding measures from 2/3rds to 55%.  Obtaining a 2/3rds vote is challenging for any initiative, but particularly challenging for housing.  In Santa Clara County, voters recently approved a $950 million bond for affordable housing.  While the bill received just over the 2/3rds needed, it required significant effort and nearly $2.5 million to ensure victory.

SB 35 (Wiener) Planning and Zoning: affordable housing: streamlined approval process.

This bill would create a streamlined approval process for development in jurisdictions that have not produced their fair share of housing.  Proposed developments would be streamlined if they meet local zoning, affordability, and environmental requirements, and if they pay prevailing wages.  SV@Home is supportive of streamlining efforts and ensuring that all jurisdictions do their part to respond to their housing needs.  We are watching this bill and have not yet taken a position.

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