On September 29, 2017, Governor Brown signed into law a 15-bill housing package. A few of the key components, including approval streamlining, are summarized below. The housing package did not include AB 915, which would have authorized the City and County of San Francisco to impose local inclusionary requirements on bonus units created under the State Density Bonus Law. San Francisco adopted legislation in August that imposes inclusionary housing requirements on bonus units in the form of a fee, and the Legislature’s failure to pass AB 915 creates uncertainty about its enforceability.
The California Supreme Court has just granted broad authority to counties and cities to impose documentary transfer tax (“DTT”) on certain transfers of interests in legal entities. Before June 29, 2017, tax practitioners’ prevailing view was that documentary transfer tax generally could not be imposed on transfers of interests in legal entities. There were two exceptions. First, for transfers of partnership interests that caused a partnership to terminate for tax purposes. Second, for charter cities that were permitted to enact their own DTT ordinances and had, in fact, enacted broader DTT rules. No more. On June 29, the California Supreme Court decided in 926 North Ardmore Avenue, LLC v. County of Los Angeles1 that all California counties and cities may impose DTT on certain transfers of interests in legal entities.
Barring any last-minute surprises, the Board of Supervisors will finally adopt compromise inclusionary housing legislation on July 18th that would, as shown in our summary comparison chart, make many major changes to the City’s existing program. The key provisions of the legislation affecting large projects with 25 or more residential units can be found in our prior blog post on this topic.
Recent noteworthy changes, including an important change to existing grandfathering protections for certain pipeline projects, are summarized below.
The California Court of Appeal for the Sixth Appellate District recently held, in Aptos Council v. County of Santa Cruz, 10 Cal. App. 5th 266 (2017) that environmental review under the California Environmental Quality Act (CEQA) need only analyze environmental impacts of development resulting from a zoning amendment if the development is reasonably foreseeable. This decision provides helpful guidance to municipalities considering zoning and land use plan amendments that permit development at higher densities.
The Land Use and Transportation Committee of the Board of Supervisors is now scheduled to consider compromise inclusionary housing legislation on June 12th, following a continuance at the Committee’s June 5th hearing. As shown in our summary comparison chart, the legislation would generally retain existing grandfathering protections as to the total percentage of affordable units for certain pipeline projects, but would make many other major changes to the City’s existing program.
As reported in our prior blog post, Assemblymember Phil Ting (D – San Francisco) introduced amendments to the State Density Bonus law (AB 915) that would specifically require all local jurisdictions to impose their local inclusionary housing requirements on density bonus units, unless the jurisdiction expressly exempts them by ordinance.
Having trouble keeping up with the seemingly endless torrent of new housing laws? You are not alone. Here is our summary of the key pending State and San Francisco legislation aimed at increasing housing/affordable housing production:
The State Density Bonus law has been in effect for almost 40 years, but it has required a prolonged housing crisis to push San Francisco to adopt a local implementing ordinance. Last year the Board of Supervisors adopted the 100 Percent Affordable Housing Program for affordable housing projects, but was unable to agree on a program for market-rate projects. Supervisor Katy Tang has now introduced legislation that would consolidate existing and add new density bonus programs to local law.
The Affordable Housing Bonus Program (AHBP) renames the existing 100 Percent Affordable Housing Program and adds three new components: 1) the HOME-SF Program; 2) the Analyzed State Density Bonus Program (ADSBP), and 3) the Individually Requested Bonus Program (IRBP).
We reported in December that State Senator Scott Wiener marked his first day in state office by introducing legislation (SB 35) to address barriers to housing production. Senator Wiener has introduced amendments to SB 35 that would create a streamlined, ministerial (i.e., not triggering CEQA) approval process for certain infill projects in localities that (1) fall short on regional housing needs assessment (RHNA) production goals, or (2) fail to provide annual housing production reports to the State for two consecutive years before the infill project’s application. SB 35 has been passed by the Senate Transportation and Housing Committee, and is now before the Governance and Finance Committee for further consideration.
Assemblymember Phil Ting (D – San Francisco) introduced new amendments to the State Density Bonus law on March 15, 2017 that would specifically require local jurisdictions to impose their local inclusionary housing requirements on density bonus units, unless the jurisdiction expressly exempts them by ordinance.