Bill Text: CA AB2553 | 2017-2018 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

---

Bill Title: Vertical housing districts.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Introduced - Dead) 2018-04-25 - In committee: Hearing for testimony only. [AB2553 Detail]

Download: California-2017-AB2553-Amended.html

---

Amended  IN  Assembly  March 22, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill

No. 2553

---

Introduced by Assembly Member Friedman
(Principal coauthor: Assembly Member Rubio)

February 15, 2018

---

An act to add Chapter 2.100 (commencing with Section 53398.100) to Part 1 of Division 2 of Title 5 of the Government Code, relating to housing.

LEGISLATIVE COUNSEL'S DIGEST

AB 2553, as amended, Friedman. Housing opportunity zones. Vertical housing districts.

Existing law authorizes the legislative body of a city or a county to establish an enhanced infrastructure financing district to finance public capital facilities or other specified projects of communitywide significance, including, but not limited to, the acquisition, construction, or rehabilitation of housing for persons of low and moderate income for rent or purchase.

This bill would authorize an affected taxing entity or entities, as defined, to form a vertical housing district to finance the development of vertical housing zone projects. The bill would authorize the public financing authority of the district to establish a vertical housing zone or zones within the district. The bill would authorize the district to receive incremental property tax revenues from the affected taxing entities and would authorize the public financing authority of the district to provide those funds, pursuant to specified agreements, to vertical housing zone projects that meet specified requirements for a period of 15 or 20 years following completion of the project.

This bill would express the intent of the Legislature to enact legislation that would authorize the creation of housing opportunity zones to encourage infill development within high transit areas

Digest Key

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

---

Bill Text

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

SECTION 1.

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

CHAPTER  2.100. Vertical Housing Zones and Districts

53398.100.

 (a) The Legislature finds and declares that with the dissolution of redevelopment agencies, public benefits will accrue if local agencies, excluding schools, are able to finance multifamily housing projects near high-transit areas through tax increment financing.

(b) The financing of multifamily housing projects near high-transit areas serves a public purpose by incentivizing and supporting the development of housing to alleviate the state’s housing crisis, reducing greenhouse gases emissions by locating housing near transit and thereby reducing travel times, and activating underused land near high-transit areas and revitalizing surrounding neighborhoods.

53398.101.

 Unless the context otherwise requires, the definitions contained in this section shall govern the construction of this chapter.

(a) “Affected taxing entity” means any governmental taxing agency that levied or had levied on its behalf a property tax on all or a portion of the property located in the proposed district in the fiscal year prior to the designation of the district, but not including any county office of education, school district, or community college district.

(b) “County” means a county or a city and county.

(c) (1) “District” means a vertical housing district.

(2) A vertical housing district is a district within the meaning of Section 1 of Article XIII A of the California Constitution

(d) “High-transit area” means an area located within one-half mile of a major transit stop, as defined by Section 21064.3 of the Public Resources Code, or a high-quality transit corridor, as defined by Section 21155 of the Public Resources Code.

(e) “Legislative body” means the city council, board of supervisors, or governing body of an affected taxing entity.

(f) “Landowner” means any person shown as the owner of land on the last equalized assessment roll or otherwise known to be the owner of the land by the legislative body. The legislative body has no obligation to obtain other information as to the ownership of land, and its determination of ownership shall be final and conclusive for the purposes of this chapter. A public agency is not a landowner or owner of land for purposes of this chapter, unless the public agency owns all of the land to be included within the proposed district.

(g) “Multifamily housing project” means a project in a vertical housing zone where 70 percent of the gross floor area is developed as residential housing.

(h) “Parcel” means that unit of land identified on a recorded subdivision map or assigned an assessor’s parcel number by the county assessor of the county in which the unit of land is located.

(i) “Public financing authority” means the governing board of the district established pursuant to this chapter.

(j) “Vertical housing district” means a legally constituted governmental entity separate and distinct from the city or county that established it pursuant to this chapter for the sole purpose of financing multifamily housing projects in a high-transit area as authorized by this chapter. A vertical housing district shall be a local agency for purposes of Chapter 9 (commencing with Section 54950).

53398.102.

 (a) A district may be established by a city or county and another affected taxing entity or entities located within that city or county by a resolution adopted by the legislative body of the city or county and the governing body of each of the other entities at a noticed public hearing held pursuant to Chapter 9 (commencing with Section 54950).

(b) In forming a district, the legislative body shall do all of the following:

(1) State that a vertical housing district is proposed to be established pursuant to this chapter and describe the boundaries of the proposed district, which may be accomplished by reference to a map on file in the office of the clerk of the city or in the office of the recorder of the county, as applicable.

(2) State that portions of the vertical housing district are within a high-transit area.

(3) Attach a map identifying high-transit areas in the established district.

(4) State that incremental property tax revenue from the city or county and any other participating affected taxing entities within the district may be used, pursuant to Section 53398.107, to finance multifamily housing projects within the district.

(5) State the need for the district and the goals the district proposes to achieve.

(c) Upon the creation of a district, the legislative body of the establishing city or county shall direct the city clerk or county recorder, as applicable, to mail a copy of the resolution creating the district to each landowner within the district.

53398.103.

 (a) The public financing authority shall have a membership consisting of either of the following:

(1) If a district has only one participating affected taxing entity, the public financing authority’s membership shall consist of three members of the legislative body of the participating entity, and two members of the public chosen by the legislative body. The appointment of the public members shall be subject to the provisions of Section 54974.

(2) If a district has two or more participating affected taxing entities, the public financing authority’s membership shall consist of three members from the legislative bodies of the participating entities, and a minimum of two members of the public chosen by the legislative bodies of the participating entities. The appointment of the public members shall be subject to the provisions of Section 54974.

(b) Members of the public financing authority established pursuant to this chapter shall not receive compensation but may receive reimbursement for actual and necessary expenses incurred in the performance of official duties pursuant to Article 2.3 (commencing with Section 53232) of Chapter 2.

(c) Members of the public financing authority are subject to Article 2.4 (commencing with Section 53234) of Chapter 2.

(d) The public financing authority created pursuant to this chapter shall be a local public agency subject to the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950)), the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1), and the Political Reform Act of 1974 (Title 9 (commencing with Section 81000)).

53398.104.

 (a) The public financing authority may, by a majority vote, designate areas as vertical housing zones within the district.

(b) The resolution to create a vertical housing zone shall include all of the following:

(1) (A) A statement that the entirety of the vertical housing zone or zones is within a high-transit area.

(B) Where at least 51 percent of the area of a parcel is located within a high-transit area, that parcel may also be included in a vertical housing zone.

(2) A statement that the vertical housing zone will incentivize the development of denser and taller housing projects in that area.

(3) A map and legal description of the vertical housing zone or zones.

(4) (A) A statement that incremental property tax revenue from the city or county and any other participating affected taxing entities may, pursuant to Section 53398.107, be used to finance multifamily housing projects within vertical housing zones.

(B) Specify the maximum portion of the incremental property tax revenue of the city or county and of each affected taxing entity proposed to be committed to a project located in a vertical housing zone for each year during which the district will receive incremental tax revenue for each vertical housing zone project. The portion need not be the same for all affected taxing entities. The portion may change over time.

(C) A projection of the amount of tax revenues expected to be received by the district in each year during which the district will receive tax revenues, including an estimate of the amount of tax revenues attributable to each affected taxing entity for each year.

(c) The public housing authority shall notify nonparticipating taxing entities that levy property taxes on property within a vertical housing zone of the creation of the vertical housing zone.

(d) Upon the creation of a vertical housing zone, the public financing authority shall direct the city clerk or county recorder, as applicable, to mail a copy of the resolution to create the vertical housing zone to each landowner within the district.

53398.105.

 (a) (1) The receipt of property tax revenue by district taxing entities from a vertical housing zone project pursuant to this section shall be divided as follows:

(A) That portion of the taxes that would be produced by the rate upon which the tax is levied each year by or for each of the affected taxing entities upon the total sum of the assessed value of the taxable property in the district as shown upon the assessment roll used in connection with the taxation of the property by the affected taxing entity, last equalized prior to the effective date of the resolution adopted pursuant to Section 53398.107 to create the project, shall be allocated to, and when collected shall be paid to, the respective affected taxing entities as taxes by or for the affected taxing entities on all other property are paid.

(B) That portion of the levied taxes each year specified for the city, county, or other affected taxing entity that has agreed to participate pursuant to Section 53398.102 in excess of the amount specified in subparagraph (A) shall be allocated to, and when collected shall be paid into, a project fund of the district. Unless and until the total assessed valuation of the taxable property in a district exceeds the total assessed value of the taxable property in the district as shown by the last equalized assessment roll referred to in subparagraph (A), all of the taxes levied and collected upon the taxable property in the district shall be paid to the respective affected taxing entities. When the term of the vertical housing zone project is completed, all moneys thereafter received from taxes upon the taxable property in the district shall be paid to the respective affected taxing entities as taxes on all other property are paid.

(C) That portion of any ad valorem property tax revenue annually allocated to a city or county pursuant to Section 97.70 of the Revenue and Taxation Code for the city, county, or other affected taxing entity that has agreed to participate pursuant to Section 53398.102, and that corresponds to the increase in the assessed valuation of taxable property shall be allocated to, and, when collected, shall be apportioned to, a project fund of the district for all lawful purposes of the district.

(2) When the term of the vertical housing zone project is completed, the revenues described in this subdivision shall be allocated to, and when collected, shall be apportioned to, the respective city, county, or affected taxing entity.

(b) A multifamily housing project within a vertical housing zone is eligible to receive incremental property tax revenue from the district, pursuant to subdivision (a), if the following requirements are satisfied:

(1) The land of the proposed multifamily housing project is completely within a vertical housing zone of a district.

(2) The multifamily project is entitled by the proper land use authority, legislative body, or otherwise, to develop the fully allowable residential density, including, but not limited to, any height limits, floor area ratio, and unit limit consistent with any applicable building code.

(3) If a local jurisdiction has an inclusionary housing program in place at the time of the application, the developer shall do one of the following:

(A) Participate in the local inclusionary housing program.

(B) Provide 20 percent of the units of the project as workforce housing for 60 years at rental rates calculated as follows:

(i) The workforce set-aside rent shall be not more than 90 percent of the current market rent of the non-set-aside units in the project.

(ii) Multiply the workforce set-aside rent by 12. Divide the result by a 30-percent United States Department of Housing and Urban Development housing cost ratio standard. The resulting amount shall be divided by the area median income. The resulting amount shall be applied to the workforce set-aside rent for a period of 60 years.

(4) The multifamily housing project complies with Section 53398.106.

(c) (1) A vertical housing zone project that satisfies the requirements of this section and is approved pursuant to Section 53398.107 shall receive incremental property taxes collected on the project for 15 years, except as provided in paragraph (3), beginning with the year the project is deemed completed.

(2) A vertical housing zone project is deemed completed when a certificate of occupancy has been issued by a building official for the city or county in which the project is located.

(3) (A) A vertical housing zone project that provides workforce housing or complies with local inclusionary housing requirements pursuant to paragraph (3) of subdivision (b) shall receive incremental property taxes for 20 years.

(B) A vertical housing zone project that is not subject to local inclusionary housing requirements may elect to provide workforce housing pursuant to subparagraph (B) of paragraph (3) of subdivision (b). A vertical housing zone project that elects to provide workforce housing pursuant to this subparagraph shall receive incremental property taxes for 20 years.

(d) A developer seeking a vertical housing zone project designation for a multifamily housing project may request a waiver from project permitting fees and impact fees from the permitting agency of the city or county belonging to the district.

53398.106.

 If the vertical housing zone project requires the demolition of housing that meets any of the following, a developer shall provide on-site housing as a replacement for units demolished at levels of affordability at the time of last occupancy prior to demolition:

(a) The housing is subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of moderate, low, or very low income.

(b) The housing is subject to any form of rent or price control through a public entity’s valid exercise of its police power.

(c) The housing has been occupied by tenants within the past 10 years.

53398.107.

 (a) A developer of a multifamily housing project within a vertical housing zone of a district may apply for a vertical housing zone project designation by filing an application with the public financing authority. The application shall include all of the following:

(1) A project description packet, including proposed construction, current state of the site, the number of units at both affordable and market rates, and nonresidential uses proposed for the site.

(2) All applicable and necessary entitlements demonstrating that the project is entitled to build the full height and density as described in paragraph (2) of subdivision (b) of Section 53398.105.

(3) A statement that any affordable units on site will remain affordable for 60 years by recordation of a covenant.

(b) (1) The public financing authority shall approve applications for vertical housing zone project designations by majority vote.

(2) Prior to voting on whether to approve an application pursuant to paragraph (1), the public financing authority shall direct the city clerk or county assessor to notify landowners within a 150-foot radius of the multifamily housing project 20 days prior, by mail, of the initial public meeting to consider the designation of a vertical housing zone project.

(c) Upon approval, the developer and the public financing authority shall execute a binding agreement that includes both of the following:

(1) A commitment by the public financing authority to provide a property tax increment to the vertical housing zone project, upon completion, for a period of 15 or 20 years, as provided in Sections 53398.105 and 53398.108.

(2) A commitment by the developer that it will do all of the following:

(A) Develop the project fully as entitled.

(B) Comply with Section 53398.106.

(C) Comply with subparagraph (3) of subdivision (b) of Section 53398.105, as applicable.

(D) Not seek additional public funding in the form of grants, loans, or other aid.

53398.108.

 Following the receipt of property tax increment proceeds pursuant to Section 53398.105, the district shall annually disburse the funds to completed vertical housing zone projects pursuant to any agreements entered into pursuant to subdivision (c) of Section 53398.107.

SECTION 1.

It is the intent of the Legislature to enact legislation that would authorize the creation of housing opportunity zones to encourage infill development within high transit areas.