AB 634 – Assemblywoman Wendy Carrillo’s Long Term Affordable Housing Supply Bill – Reaches Governor Newsom’s Desk

AB 634 addresses affordable housing shortages by allowing local governments to extend the affordability term for housing units created under both local and state housing programs beyond 55 years – resulting in longer term affordability on new housing developments and ensuring that communities are able to increase and preserve their affordable housing stock for the long term

(Sacramento, CA) – Both the Senate and Assembly have voted to send Assemblywoman Wendy Carrillo’s (AD-51, Los Angeles) AB 634 to Governor Gavin Newsom’s desk. AB 634 shores up the availability of affordable housing units by allowing a local government to require an affordability period longer than 55 years for units that qualify a developer for a density bonus, if the local government has an inclusionary housing ordinance that requires a percentage of residential units affordable to lower-income households for longer than 55 years.

“AB 634 adds an important tool to the toolbox local governments have at their disposal to address affordable housing supply and supports them in preserving affordable housing in the long term,” said Assemblywoman Carrillo. “The density bonus law was created as a tool to help address a shortage of affordable housing. However, the law has limited the affordability duration for rental set-aside units to 55 years. AB 634 clarifies that units in a development that are required to comply within the inclusionary housing ordinance, can be subject to affordability covenants lasting longer than 55 years,” she added.

Several State housing programs require that some new rental housing developments set aside some or all of the projects’ units for low and moderate-income households for a set number of years. For projects built years ago, most affordability terms were set at 15 to 30 years. More recently, California has enacted new laws, such as AB 2222, (2014) and made changes to the State’s Tax Credit Allocation program that increased the terms of affordability for most new rental housing developments to 55 years. For affordable for-sale units created by the State Density Bonus Law, only the initial sale of the affordable units is restricted to eligible buyers and requires an equity-sharing agreement with the local government upon resale.

In 2020, Los Angeles County finalized the development of its Inclusionary Housing Ordinance to establish mandatory affordable housing requirements for residential projects that meet certain criteria in the County’s unincorporated areas. The County’s ordinance rental housing developments to be affordable in perpetuity. However, in order to ensure compliance with the Density Bonus Law, if a developer is subject to inclusionary set-aside requirements and the developer elects to utilize the density bonus program, then the affordability duration for rental set-aside units under both programs would be 55 years.

Inclusionary housing is a policy that requires market-rate residential developments to set aside a certain percentage of housing units for extremely low, very low, lower, or moderate-income households.

 Assemblywoman Wendy Carrillo was elected as the representative of the 51st Assembly District in December of 2017. She is the Chair of Budget Subcommittee #4 on State Administration, and a member of the Appropriations, Budget, Health, Privacy and Consumer Protection, and Utilities and Energy Committees, as well as Chair of the Uplifting Girls and Women of Color in California Select Committee. Assemblywoman Carrillo represents the people of East Los Angeles, Northeast Los Angeles, and the neighborhoods of El Sereno, Echo Park, Lincoln Heights, Chinatown and parts of Silver Lake.