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AB-1532 Office conversion projects.(2023-2024)

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Date Published: 02/17/2023 09:00 PM
AB1532:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Assembly Bill
No. 1532

Introduced by Assembly Member Haney

February 17, 2023

An act to add Article 11.5 (commencing with Section 65658) to Chapter 3 of Division 1 of Title 7 of the Government Code, and to add Chapter 18.5 (commencing with Section 50898.50) to Part 2 of Division 31 of the Health and Safety Code, relating to housing.


LEGISLATIVE COUNSEL'S DIGEST


AB 1532, as introduced, Haney. Office conversion projects.
The Planning and Zoning Law requires the legislative body of each county and city to adopt a comprehensive, long-term general plan for the physical development of the county or city that includes, among other mandatory elements, a housing element. Under that law, supportive housing, as defined, is a use by right in zones where multifamily and mixed uses are permitted if the developer provides the planning agency with a plan for providing supportive services and the proposed housing development meets specified criteria.
The California Environmental Quality Act (CEQA) requires a lead agency, as defined, to prepare, or cause to be prepared, and certify the completion of, an environmental impact report on a project that it proposes to carry out or approve that may have a significant effect on the environment or to adopt a negative declaration if it finds that the project will not have that effect. CEQA does not apply to the approval of ministerial projects.
This bill would make an office conversion project, as defined, that meets certain requirements a use by right in all areas regardless of zoning. The bill would define “office conversion project” to mean the conversion of a building used for office purposes or a vacant office building into residential dwelling units. The bill would define “use by right” to mean that the city or county’s review of the office conversion may not require a conditional use permit, planned unit development permit, or other discretionary city or county review or approval that would constitute a “project” for purposes of CEQA, as specified. By requiring the approval of housing crisis projects as a use by right, the bill would expand the exemption for approval of ministerial projects under CEQA.
This bill would exempt an office conversion project from impact fees, as defined, that are not directly related to the conversion of an office building into residential dwelling units. The bill would allow the proponent of an office conversion project to pay applicable impact fees over a 10-year period, subject to specified requirements.
This bill would authorize a local government to adopt an ordinance to implement these provisions and specify the process and requirements applicable to office conversion projects, provided that the ordinance is consistent with, and does not inhibit the objectives of the bill.
By imposing new duties on local governments in reviewing and approving office conversion projects, the bill would impose a state-mandated local program.
This bill would, upon appropriation of the Legislature, require the Department of Housing and Community Development to establish a program that awards funding to office conversion projects that are eligible as a use by right, as described above. The bill would establish the Office to Housing Conversion Fund, and provide that the moneys in the fund are to be made available to the department for purposes of the program.
The bill would include findings that changes proposed by this bill address a matter of statewide concern rather than a municipal affair and, therefore, apply to all cities, including charter cities.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

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


SECTION 1.

 Article 11.5 (commencing with Section 65658) is added to Chapter 3 of Division 1 of Title 7 of the Government Code, to read:
Article  11.5. Office to Housing Conversion Act

65658.
 This article shall be known as, and may be cited as, the Office to Housing Conversion Act.

65658.1.
 For purposes of this article:
(a) “Impact fee” means any fee imposed pursuant to Chapter 5 (commencing with Section 66000).
(b) “Local government” means a city, including a charter city, a county, or a city and county.
(c) “Office conversion project” means the conversion of a building used for office purposes or a vacant office building into residential dwelling units.
(d) “Persons and families of low or moderate income” means the same as defined in Section 50093 of the Health and Safety Code.
(e) “Use by right” means that the city’s or county’s review of the office conversion project may not require a conditional use permit, planned unit development permit, or other discretionary city or county review or approval that would constitute a “project” for purposes of Division 13 (commencing with Section 21000) of the Public Resources Code. Any subdivision of the sites shall be subject to all laws, including, but not limited to, a city or county ordinance implementing the Subdivision Map Act (Division 2 (commencing with Section 66410)).

65658.2.
 (a) An office conversion project that meets the requirements of subdivision (b) shall be a use by right in all zones, regardless of the zoning of the site, and subject to ministerial review, as provided in this article.
(b) (1) (A) An office conversion project shall dedicate at least 10 percent of the total amount of housing units created by the project to persons and families of low or moderate income.
(B) The project proponent shall commit to record, prior to the issuance of the first building permit, a land use restriction or covenant providing that any lower or moderate income housing units required pursuant to paragraph (1) shall remain available at affordable housing costs or rent to persons and families of low or moderate income for no less than the following periods of time:
(i) Fifty-five years for units that are rented.
(ii) Forty-five years for units that are owned.
(2) The project proponent provides the local government with an enforceable commitment that all contractors and subcontractors performing work on the project will use a skilled and trained workforce for any proposed rehabilitation, construction, or major alterations in accordance with Chapter 2.9 (commencing with Section 2600) of Part 1 of Division 2 of the Public Contract Code.
(3) The city or county shall require the recording of covenants or restrictions implementing this paragraph for each unit included in the project.
(c) (1) An office conversion project subject to this section shall not be subject to any review by a city council, county board of supervisors, planning commission, or other planning oversight board. If a local government’s planning director or any equivalent local government staff, including all relevant planning and permitting departments, determines that an office conversion project submitted pursuant to this article is consistent with subdivision (b), it shall approve the project.
(2) Upon a determination that an office conversion project is in conflict with any of the standards specified in subdivision (b), the local government shall provide the project proponent written documentation of which standard or standards the project conflicts with, and an explanation for the reason or reasons the project conflicts with that standard or standards, as follows:
(A) Within 60 days of the submission of the office coercion project to the local government if the project contains 150 or fewer housing units.
(B) Within 90 days of the submission of the office coercion project to the local government if the project contains more than 150 housing units.
(d) A local government shall not impose either of the following on an office conversion project:
(1) Any new parking requirements that were not imposed on the original office use.
(2) Any new open space requirements that were not imposed on the original office use.
(e) (1) Notwithstanding any other law, an office conversion project shall be exempt from all impact fees that are not directly related to the construction of an office building into residential dwelling units.
(2) Notwithstanding any other law, a local government shall not impose any fee on an office conversion project to cover the cost of code enforcement or inspection services, or to other fees collected to pay for the cost of enforcement of local ordinances or state law.
(3) (A) Notwithstanding Chapter 5 (commencing with Section 66000), any impact fees imposed pursuant to this article shall, at the request of the project proponent, be collected over a 10-year period, with the first payment being due upon the date of the final inspection, or the date the certificate of occupancy is issued, whichever occurs first.
(B) The payment of impact fees paid over the 10-year period pursuant to this subdivision shall be distributed evenly over the payment term.
(4) (A) A project proponent that utilizes paragraph (3) shall be required to execute a contract to pay the fees, or applicable portion thereof, within the time specified.
(B) The obligation to pay the fees shall inure to the benefit of, and be enforceable by, the local government that imposed the fee or charge, regardless of whether it is a party to the contract. The contract shall contain a legal description of the property affected, shall be recorded in the office of the county recorder of the county and, from the date of recordation, shall constitute a lien for the payment of the fees, which shall be enforceable against successors in interest to the property owner or lessee at the time of issuance of the building permit. The contract shall be recorded in the grantor-grantee index in the name of the public agency issuing the building permit as grantee and in the name of the property owner or lessee as grantor. The local government shall record a release of the obligation, containing a legal description of the property, in the event the obligation is paid in full, or a partial release in the event the fee or charge is prorated.
(C) The contract may require the property owner or lessee to provide appropriate notification of the opening of any escrow for the sale of the property for which the building permit was issued and to provide in the escrow instructions that the fee or charge be paid to the local government imposing the same from the sale proceeds in escrow prior to disbursing proceeds to the seller.
(f) A local government shall not adopt or impose any requirement, including, but not limited to, increased fees or inclusionary housing requirements, that applies to a project solely or partially on the basis that the office conversion project is subject to this section.

65658.3.
 A local government may adopt an ordinance to implement this article and specify the process and requirements applicable to office conversion projects, provided that the ordinance is consistent with, and does not inhibit the objectives of, this article.

65658.4.
 The Legislature finds and declares that this article addresses a matter of statewide concern rather than a municipal affair as that term is used in Section 5 of Article XI of the California Constitution. Therefore, this article applies to all cities, including charter cities.

SEC. 2.

 Chapter 18.5 (commencing with Section 50898.50) is added to Part 2 of Division 31 of the Health and Safety Code, to read:
CHAPTER  18.5. Office to Housing Conversion Grants

50898.50.
 For purposes of this Chapter:
(a) “Department” means the Department of Housing and Community Development.
(b) “Office conversion project” means a project that is eligible as a use by right pursuant to Article 11.5 (commencing with Section 65658) of Chapter 3 of Division 1 of Title 7 of the Government Code.

50898.51.
 (a) Upon appropriation by the Legislature, the department shall establish a grant program that awards funding to office conversion projects consistent with this chapter.
(b) The funding awarded under this chapter shall be awarded based on the square footage of the office conversion project.

50898.52.
 (a) There is hereby created in the State Treasury the Office to Housing Conversion Fund.
(b) Moneys in the fund shall, upon appropriation by the Legislature, be made available the department for purposes of this chapter.

SEC. 3.

 If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.