Three New Laws Could Impact Housing in Pasadena

In a recent memo to City Manager Steve Mermell, Planning Director David Reyes provided an update on three housing bills signed by Gov. Gavin Newsom and how they impact Pasadena.

“Numerous new laws have been passed by the state Legislature and signed by the Governor during the 2020 session, and have become effective since January 1, 2021,” Reyes wrote. “Among these are three laws aimed at increasing housing production that are of particular relevance to the City of Pasadena.” 

Assembly Bills 1851, 2345 and 1561 are designed to produce housing on church property, provide incentives for developers to include affordable housing, and extend for housing entitlements issued prior to the pandemic, respectively. 

AB 1851 encourages religious institution affiliated housing by prohibiting local agencies from requiring the replacement of  parking spaces lost due to the construction of housing units. 

The bill would allow eliminating up to 50% of the number of spaces to make way for housing on church property.

Housing has been built on parking lots in several churches in California as a way to help combat the state’s affordable housing crisis. The City Council was receptive to the idea when it came before the council in October. 

Under the law, officials cannot deny approval of the housing project solely on the basis that it will reduce the total number of parking spaces available. Officials also cannot require the curing of any preexisting deficit of required parking spaces as a condition of approving the housing project. 

The law allows local agencies to require up to one parking space per unit for a religious institution-affiliated housing project. The parking requirement can be satisfied with the remaining number of parking spaces available after construction.

The Planning Department has started work on a faith-based housing ordinance that is intended to create a process to allow this type of housing. 

“AB 1851 addresses the parking component of that effort, and will be a significant consideration in the development of our local ordinance.” Reyes wrote. “Additionally, as we begin to update the City’s Housing Element to comply with the recently issued Regional Housing Needs Assessment (RHNA) allocation, religious institution affiliated housing has potential to become an important tool towards meeting our housing production goals.” 

AB 2345 is a state density bonus law that provides incentives for developers to include affordable housing within market-rate developments. 

The law provides a specified percentage of bonus density beyond what local regulations allow, in exchange for a corresponding percentage of affordable units. The law increases the density bonus from 35% to 50% in exchange for a proportionally higher percentage of affordable units. 

The law also slightly lowers the thresholds that would make projects eligible for concessions from local development standards, potentially making it easier to qualify for a greater number of concessions.

In 2019, the City Council passed an ordinance increasing the local inclusionary housing requirement from 15% to 20% and created a concession menu to incentivize developers to limit the number and scope of concessions they request. 

The council vote came prior to AB 2345 after city analysis showed that the city would receive the maximum amount of affordable housing possible without slowing the market for housing production or making it financially infeasible altogether.

A staff report in last week’s Planning Commission agenda revealed that the increase in the city’s inclusionary housing requirement is paying off so far. Seven development projects in the entitlement pipeline impacted by the increase in the Inclusionary Housing Ordinance built at least 17 net additional affordable structures, and there was no slowdown in housing projects.

“Based on this review, it appears that the amendments have been working relatively well and as intended,” the report stated. 

“They have not slowed or stopped production of housing in the city, have not caused a sudden influx of more affordable housing concession permit projects with increased height, and in some cases, have been enough of an incentive for projects to choose concessions on the menu rather than seeking additional relief through SDBL [state density bonus law.]”

The changes under the new law potentially make the city’s menu less of an incentive and may cause projects to seek larger concessions, according to the memo.

“An updated study may be necessary to better understand the potential effects of AB 2345 and develop recommendations to ensure the concession menu provides adequate incentive,” Reyes wrote.” 

Finally, AB 1561 grants an automatic 18-month extension for any housing entitlement issued prior to, and was effective on, March 4, and will expire prior to Dec. 31. 

The extension includes approval, permits, and entitlements relating to housing projects, including tentative maps, vesting maps, or parcel maps that facilitate subdivisions. 

The bill excludes development agreements, tentative maps that were previously extended under other state laws for at least 18 months, and various other application types. The law also grants a 30-day extension to the required time frame for Native American tribes to respond to agencies and request consultation for housing development projects, as provided for under the California Environmental Quality Act (CEQA). 

The extension could potentially push out the development timeline for local housing projects. It also extends the CEQA-required Native American tribe consultation timeline, thereby potentially extending the time it takes to complete the CEQA process and approve an entitlement application.