Growth control on hold

As cities like Morgan Hill and Gilroy struggle to slow the construction of new housing with self-imposed slow-growth measures, they fear that the new Housing Crisis Act of 2019 could reverse their efforts.

The new state law signed this month by Gov. Gavin Newsom redefines the housing development approval process for municipalities in an effort to provide more housing options and alleviate California’s housing shortage.

The new law—which will go into effect Jan. 1, 2020—will allow unlimited residential permits and expedited building permits, and limits public review of proposed housing projects, local design requirements and some parking requirements in Morgan Hill, according to city staff. 

City officials and growth control advocates have lamented the fact that new law, SB 330, upends more than 30 years of strict, voter-approved residential construction limits in Morgan Hill. 

City Hall sent out a public notice last week announcing that SB 330 will suspend the latest version of Morgan Hill’s growth control ordinance—approved as Measure S by 77 percent of the voters in November 2016—for five years while the new law is in effect. That ordinance otherwise set a cap of 215 new housing units per year, and allowed the city council to set that number even lower at the beginning of each fiscal year. 

 According to the bill text, the law “prohibits a local agency from disapproving, or conditioning approval in a manner that renders infeasible, a housing development project for very low, low-, or moderate-income households or an emergency shelter unless the local agency makes specified written findings based on a preponderance of the evidence in the record.”

The act specifies that “one way to satisfy that requirement is to make findings that the housing development project or emergency shelter is inconsistent with both the jurisdiction’s zoning ordinance and General Plan land use designation as specified in any element of the General Plan as it existed on the date the application was deemed complete.”

It also requires a local agency that proposes to disapprove a housing development project that complies with General Plan and zoning standards, or to approve it on the condition that it be developed at a lower density, now has “the burden of proof,” instead of the developer.

The act requires a court to impose a fine on a local agency under certain circumstances and requires that the fine be at least $10,000 per housing unit in the housing development project on the  date the application was deemed complete.

The city could continue to keep areas as open space, but that would mean higher-density housing in the downtown corridor or other areas of the city. 

Mayor Rich Constantine said the state Housing Crisis Act of 2019 would limit the city’s ability to build affordable housing, even if it advances statewide affordable housing efforts. “I totally understand the need for housing in California, but I don’t believe SB 330 is the way to go about it,” Constantine told the Times. “All SB 330 does is allow market rate housing; we’ve been able through our growth control to build affordable housing.”

From 2007 to 2014, 84 percent of affordable homes constructed in Morgan Hill were designated for moderate and above moderate household incomes, according to the city’s General Plan Housing Element, which was last updated in 2015. That income level applies to households that earn more than 80 percent of the median. 

The median household income in 2013 was about $106,000. Also from 2007 to 2014, developers built 198 homes in Morgan Hill that were designated for extremely low, very low and low household incomes. These account for the remaining 16 percent of affordable homes built here during that period. 

“The City of Morgan Hill has a longstanding history of supporting thoughtful and integrated affordable housing throughout its community utilizing the RDCS growth measure program,” Community Engagement Director Maureen Tobin said in an interview with the Times. 

“In this new era,” Tobin added, “we will be challenged to continue to create quality housing and vibrant neighborhoods, but also comply with the new state housing laws that are designed to accelerate housing production and limit Cities’ ability to shape projects.” 

Morgan Hill also has a lengthy history of voter-approved growth control. In 1977, voters passed the city’s first Residential Development Control System, which set a long-term population cap that limited the number of homes to be built in the city limits each year. Voters have extended the ordinance—which also requires developers to compete for building allotments by adding features to their projects that gain points—every time it has returned to the ballot, including the latest extension at the 2016 polls. 

One way developers have been able to gain points toward housing allotments under the city’s growth control system is by committing a portion of their proposed units for buyers who qualify for affordable housing. 

That system is on hold for five years under the state’s Housing Crisis Act of 2019. Under the state law, the city “cannot manage the pace or number of housing permits issued each year” until after 2025, according to Morgan Hill city staff.