Real Estate Round-Up: AB 1568 is a "stick" to promote housing

Assembly Bill 1568, written by Assemblymember Kevin McCarty, D-Sacramento, is on Gov. Gavin Newsom’s desk for signature. It is the first bill with a “stick” to promote housing development across the state. The bill prohibits a city or county, on or before Jan. 1, 2025, from applying for state grants, except for specified transportation funding, if the city or county is found to be in violation of state housing law.

If the Department of Housing and Community Development determines that a city or county has violated state housing law or its housing element is out of compliance, the city or county is prohibited from applying for a state grant; however, the application can be processed if the state grant funds would assist the city or county with complying with state housing law or if the fund source of the grant is protected by Article XIX of the California Constitution, the Highway Users Tax Account.

The background of this bill comes from Assembly Bill 72, written by Assemblymember Miguel Santiago, D-Los Angeles, which gave the department the authority to revoke a local government’s housing element if the department determined a city or county acts or fails to act to substantially comply with the housing element and state housing law.

So, what is the state housing law? State housing law includes the Housing Accountability Act, the act of downsizing a site or reducing the density on a site in its housing inventory, the Density Bonus Law, or discriminating against affordable housing within a development. The Housing Accountability Act was signed into law in 1982 and allows for infill development, by speeding approvals by utilizing underused or vacant parcels for development. The act was passed in recognition of the statewide lack of housing as a critical problem and became known as the “anti-NIMBY” law.

The Department of Housing and Community Development has authority to refer a violation to the attorney general. Earlier this year, the attorney general sued Huntington Beach for failing to adopt a compliant housing element. Approximately 37 cities and counties currently do not have compliant housing elements.

Currently, cities and counties are to adopt a housing element, provide an inventory of sites suitable to accommodate regional housing needs and create a program that allows for rezoning sites to meet the regional housing needs.

Newsom proposed linking housing goals with transportation funding. By Dec. 31, 2022, the governor proposed the State Transportation Agency and the Office of Planning and Research, after a stakeholder process, propose opportunities to link transportation and other non-housing funding, including funds in the Streets and Highways Account, with housing goals. Housing element and annual report compliance are included as potential policies to measure housing goals. Streets and highway funds would be withheld beginning July 1, 2023, from local governments that do not have a compliant housing element and have not zoned or entitled for its annual goals, based on the most recent Regional Housing Needs Allocation.

As I prepared for this article, I was struck by the history of the housing shortage problem. Noting that the Housing Accountability Act was passed into law in 1982, and today, nearly 40 years later, is finally making it to the central theme of the legislators and the governor. AB 1568 has the “stick” to get every city and county on board with a plan that works. The future date of implementation provides ample room for cities and counties to comply before the sanctions would go into effect. I believe that could be modified if cities and counties do not implement real housing answers to this long-standing problem.

So, how can Fallbrook continue to have a “seat at the table, rather than be on the menu?” As long as it is less expensive to purchase an already existing home, encouraging new construction of primary homes is a difficult proposition. As I mentioned last week, the community of Fallbrook can embrace accessory dwelling units as a partial solution. The village could also examine repurposing some of the under-utilized or vacant properties close to downtown that could offer additional residential opportunities and would potentially bring additional shoppers to support current businesses, shops and restaurants. Join me as Fallbrook seeks to keep its seat at the table.

Kim Murphy can be reached at [email protected] or (760) 415-9292 or at 130 N. Main Ave., in Fallbrook. Her broker license is #01229921, and she is on the board of directors for the California Association of Realtors.