Bay Area Housing Finance Authority (BAHFA)

Bay Area Housing Finance Authority (BAHFA), established by AB 1487 passed in 2019, is a regional housing finance authority which will be trying to strengthen the partnership between ABAG and MTC and find funding to support Plan Bay Area.

SB 50

This is a bill proposed by Sen. Wiener which would intensify development, primarily near transit.  It reduces parking requirements and permits heights that are greater than city zoning codes may allow.  It was reconsidered briefly in 2020 as Wiener failed to get enough support during 2019 and is considered dead.  The bill was attacked especially by smaller cities on the basis of lack of local control.

Proposition 13

Proposition 13 was an amendment to the California Constitution enacted in 1978 through an initiative process. It was declared constitutional by the U.S. Supreme Court in 1992. Prop. 13 limits the property tax to an annual increase of assessed value to an inflation factor not to exceed 2% per year. It also reduced property taxes at the time by assessing property values at their 1975 value. It prohibits reassessment except for changes in ownership. Prop. 13 was largely supported as a way not to price older Californians out of their homes through high taxes. In November 2020, there is a ballot proposition supported by LWVC calling for a “split roll”, whereby commercial property would not be protected in the same way.

Palmer decision

In Palmer/Sixth Street Properties L.P. v. City of Los Angeles, the California Court of Appeal held that local inclusionary requirements (also known as BMR requirements) applied to rental housing and in-lieu fees based upon those requirements violated the Costa-Hawkins Act, the State law governing rent control. The Court concluded that since Costa-Hawkins allows landlords to set the initial rent for a new unit and to increase the rent to market levels whenever a unit is vacated (vacancy decontrol), Los Angeles could not limit the initial rental rate of the Palmer units. Since the in-lieu fee was based upon the number of BMR units required, the in-lieu fee was inextricably intertwined with the preempted rent control option disallowed by Costa-Hawkins. In-lieu fees adopted after Palmer were based on new nexus studies. Effective Jan. 1, 2018, AB 1505 has “fixed” Palmer and allows local inclusionary (BMR) units in rental housing once again.

Unbundled parking

Unbundled parking is the practice of separating payment for rent of the apartment from the rent for a parking space. If the tenant opts not to drive, the tenant can save money by not paying the additional cost of the parking place.

Transportation Demand Management (TDM)

Transportation Demand Management (TDM) is the application of strategies and policies to reduce travel demand, especially in single-occupancy vehicles, or to distribute the demand over space or time. Some techniques include expanding alternatives (i.e., wider use of free Marguerite bus system in Palo Alto in exchange for Stanford being allowed to construct more buildings), providing incentives for alternatives (i.e., owners of apartments providing Clipper cards or other incentives to tenants to encourage them to use public transit), and charging for the right to drive a car into the inner-city. Recently, Mountain View has been requiring TDM in exchange for granting developers the capacity to build new office space, especially in North Bayshore.

Transit-oriented development (TOD)

Transit-oriented development (TOD) is the focus of Plan Bay Area as well as SB 375.

The concept is to encourage mixed use (housing, office and/or retail) within close proximity to good public transit. Most often, this is within 1/2 mile of BART, Caltrain, light rail or bus routes with a high frequency.

Transitional Housing

Transitional Housing under California law is buildings configured as rental housing, but operated under program requirements that require termination of assistance and recirculating of the assisted unit to another eligible program recipient at a predetermined future point in time that shall be no less than six months and no more than two years from the beginning of assistance.

Tax increment funds

Tax increment funds are the increase in the total real estate taxes paid in the RDA district after the base year in which the RDA was created accrued to the RDA. Tax increment funds were used to pay for eligible activities within the RDA.

State Density Bonus Law

State Density Bonus Law provides that if a developer agrees to build a certain percentage of units as BMRs (or Senior Housing with no BMRs) the developer is entitled by law to additional density. The law is very specific as to what income levels must be targeted, and for each percentage of the project built as BMRs, a specific additional density must be granted by the city. The Palmer court specifically allowed this exception regarding requiring BMRs. In addition to increased density, developers who include BMRs are entitled to incentives and waivers of local zoning if necessary to make the project financially feasible. The law has been especially controversial in Los Altos. The City adopted a list of “on-menu” incentives, making these easily available to developers. Some developers “double-dipped”, asking for 2 height waivers, for example. The Council is considering specifically prohibiting “double-dipping”. Several bills are pending in the state legislature in 2020 that would increase and/or/modify density bonuses.