LRC 09-13-2021 Searchable PacketCITY OF CUPERTINO
LEGISLATIVE REVIEW COMMITTEE
AGENDA
This will be a teleconference meeting with no physical location
Monday, September 13, 2021
10:30 AM
Amended Special Meeting
Amended on 9/9/21 at 6:20 p.m. to update Item 1 Attachment A
TELECONFERENCE / PUBLIC PARTICIPATION INFORMATION TO HELP STOP THE
SPREAD OF COVID-19
In accordance with Governor Newsom’s Executive Order No-29-20, this will be a
teleconference meeting without a physical location to help stop the spread of COVID-19.
Members of the public wishing comment on an item on the agenda may do so in the
following ways:
1) E-mail comments by 9:30 a.m. on Monday, September 13 to the Committee at
KatyN@cupertino.org. These e-mail comments will be received by the Committee members
before the meeting and posted to the City’s website after the meeting.
2) E-mail comments during the times for public comment during the meeting to the
Committee at KatyN@cupertino.org. The staff liaison will read the emails into the record,
and display any attachments on the screen, for up to 3 minutes (subject to the Chair’s
discretion to shorten time for public comments). Members of the public that wish to share a
document must email KatyN@cupertino.org prior to speaking.
3) Teleconferencing Instructions
Members of the public may observe the teleconference meeting or provide oral public
comments as follows:
Oral public comments will be accepted during the teleconference meeting. Comments may
be made during “oral communications” for matters not on the agenda, and during the
public comment period for each agenda item.
To address the Committee, click on the link below to register in advance and access the
meeting:
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Legislative Review Committee Agenda September 13, 2021
Online
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NOTICE AND CALL FOR A SPECIAL MEETING OF THE LEGISLATIVE REVIEW
COMMITTEE
NOTICE IS HEREBY GIVEN that a special meeting of the Legislative Review Committee is
hereby called for Monday, September 13 commencing at 10:30 a.m. In accordance with
Governor Newsom’s Executive Order No-29-20, this will be a teleconference meeting
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Legislative Review Committee Agenda September 13, 2021
without a physical location. Said special meeting shall be for the purpose of conducting
business on the subject matters listed below under the heading, “Special Meeting."
SPECIAL MEETING
ROLL CALL
POSTPONEMENTS
ORAL COMMUNICATIONS
This portion of the meeting is reserved for persons wishing to address the members on any matter not
on the agenda. Speakers are limited to three (3) minutes. In most cases, State law will prohibit the
members from making any decisions with respect to a matter not listed on the agenda.
PUBLIC COMMENT (including comments on all agenda items)
This portion of the meeting is reserved for persons wishing to address the Committee on any matter on
the agenda. Speakers are limited to three (3) minutes for any particular agenda item.
AGENDA REVIEW
In order to make the most efficient use of outside consultant time, Committee members will review and
discuss items on the agenda to assist in developing priorities and strategy for formal consideration of
those items when the consultant is present later in the meeting. No action will be taken on any agenda
items in this portion of the meeting.
ACTION ITEMS
1.Subject: Consider adopting a position on AB 1174 (Grayson) Planning and zoning:
housing: development application modifications, approvals, and subsequent permits
Recommended Action: Adopt an oppose position on AB 1174 and authorize the Mayor
to send a letter to the Governor
A - AB 1174 Summary Report
B - AB 1174 Analysis Senate Committee on Governance and Finance
FUTURE AGENDA SETTING
ADJOURNMENT
In compliance with the Americans with Disabilities Act (ADA), anyone who is planning to attend this
teleconference meeting who is visually or hearing impaired or has any disability that needs special
assistance should call the City Clerk's Office at 408-777-3223, at least 24 hours in advance of the
meeting to arrange for assistance. In addition, upon request, in advance, by a person with a disability,
meeting agendas and writings distributed for the meeting that are public records will be made available
in the appropriate alternative format.
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Legislative Review Committee Agenda September 13, 2021
Any writings or documents provided to a majority of the members after publication of the agenda will
be made available for public inspection. Please contact the City Clerk’s Office in City Hall located at
10300 Torre Avenue, Cupertino, California 95014, during normal business hours.
IMPORTANT NOTICE: Please be advised that pursuant to Cupertino Municipal Code section
2.08.100 written communications sent to the Cupertino City Council, Commissioners or City staff
concerning a matter on the agenda are included as supplemental material to the agendized item. These
written communications are accessible to the public through the City’s website and kept in packet
archives. Do not include any personal or private information in written communications to the City
that you do not wish to make public, as written communications are considered public records and will
be made publicly available on the City website.
Members of the public are entitled to address the members concerning any item that is described in the
notice or agenda for this meeting, before or during consideration of that item. If you wish to address the
members on any other item not on the agenda, you may do so during the public comment.
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CITY OF CUPERTINO
Agenda Item
21-9846 Agenda Date: 9/13/2021
Agenda #: 1.
Subject: Consider adopting a position on AB 1174 (Grayson) Planning and zoning: housing:
development application modifications, approvals, and subsequent permits
Adopt an oppose position on AB 1174 and authorize the Mayor to send a letter to the Governor
CITY OF CUPERTINO Printed on 9/9/2021Page 1 of 1
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1 https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220AB1174
State Capitol Office ▪ 925 L Street • Suite 1404 • Sacramento, CA 95814 • Phone (916) 447-4086 • Fax (916) 444-0383
Federal Office ▪ 600 Pennsylvania SE • Suite 207 • Washington, DC 20003 • Phone (202) 546-8696 • Fax (202) 546-4555
Southern California Office ▪ 1401 Dove Street • Suite 330 • Newport Beach, CA 92660 • Phone (949) 399-9050 • Fax (949) 476-8215
Central California Office ▪ 744 P Street • Suite 308 • Fresno, CA 93721 • Phone (949) 399-9050 • Fax (949) 476-8215
Northern California Office ▪ 300 Frank Ogawa Plaza • Suite 204 • Oakland, CA 94612 • Phone (510) 835-9050 • Fax (510) 835-9030
MEMO
To: City of Cupertino
City Council Legislative Review Committee
From: Townsend Public Affairs, Inc.
Date: September 13, 2021
Subject: Consider adopting a position on AB 1174 (Grayson) Planning and zoning:
housing: development application modifications, approvals, and subsequent
permits
Bill Information
The official text of AB 1174 can be found here1.
Summary
This bill makes several changes to the streamlined, ministerial approval process established by
SB 35. Specifically, the bill would retroactively apply the following requirements to the Vallco
project:
1. The project approval would remain valid for three years from the date of the final
judgment (codifying HCD’s incorrect interpretation of the present statute). The approval
would thus remain valid until at least May 2023.
2. The project approval would then remain valid as long as construction activity, including
demolition and grading activity, remains “in progress”—i.e., (i) construction has begun
and has not ceased for more than 180 days, or (ii) for multi-phase projects, an initial
phase has been completed, and the project proponent has applied for and is diligently
pursuing a building permit for a subsequent phase.
3. If the applicant requests a project modification, the time during which the approval
remains valid would be extended for the number of days between the submittal of the
modification request and the date of its final approval, plus an additional 180 days.
4. The definition of “affordable rent” would be amended for projects having at least 500
affordable units approved before Jan. 1, 2019 (i.e., the Vallco project), such that the rent
for 70% of the units is likely to be somewhat higher (although still below market rate ).
5. The bill would prohibit the application of new objective building standards adopted after
the date of the first building permit application without the consent of the applicant.
6. The bill would prohibit the application of objective standards adopted after the date the
original development application was submitted in reviewing any application for a
“subsequent permit,” including building permits, encroachment permits, and final maps.
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7. For project modification requests, the bill would prohibit the application of new objective
planning standards to “underground space” (i.e., the parking garage) without the consent
of the applicant.
Committee Activity
During each of the policy committee hearings, Assemblymember Grayson provided a brief
overview of the bill and the San Francisco Bay Area Planning and Research Association
(SPUR) served as the only witness on behalf of the bill. There were no questions or comments
raised by the members of either policy committees that considered the bill. Neither the author,
nor the witness, referred to any specific SB 35 projects or examples of why the bill was
necessary during the committee hearings.
However, the attached analysis on AB 1174 from the Senate Committee on Governance and
Finance (Attachment B) includes a section on the Vallco Town Center, as well as a section on
the City of Cupertino and Vallco in the comments section. In the comments section, there is a
comment that “Sand Hill explains their intent with AB 1174 is to avoid litigation.”
While the City has met with the Chairs and staff of the Assembly Local Government Committee
and the Senate Governance and Finance Committee, there was no known attempt by these
committee members to reach out to the City (or its representatives) regarding further information
for the background of this bill.
Status
AB 1174 was approved on the Senate Floor (37-0) on September 1st and received a concurrence
vote on the Assembly Floor (74-0) on September 2nd. The measure is in the process of being
sent to the Governor for his consideration. The Governor has until October 10 th to act on all
pending legislation.
Support
The author states, “The Legislature has made enormous efforts to dramatically increase our
housing supply. However, ambiguities in the law have been exploited by anti -growth community
groups to delay and derail desperately needed housing projects. For example, SB 35
streamlining approvals are currently valid three years after the project is approved. Some
jurisdictions have used lawsuits to extend the project timeline beyond this window, and then
revoke the streamlining provisions. Another issue arises when jurisdictions require a project to
comply with objective standards that were not in place at the time of project approval. This can
compel a project proponent to seek a modification, which can further delay or derail the
project. To address these challenges, AB 1174 specifies that the “shot clock” for a development
or modifications is paused when a project is sued, and clarifies that subsequent permit
applications must only meet the objective standards that were in place when the project was
initially approved. These changes are essential to facilitate the timely construction of housing at
all income levels to meet California’s critical housing needs.”
Supporters of AB 1174 include: San Francisco Bay Area Planning and Research Association (co-
sponsor); Bay Area Council (co-sponsor); California Apartment Association; California
Association of Realtors; California Building Industry Association; California Community Builders;
California YIMBY; Council of Infill Builders; Fieldstead and Company; Greenbelt Alliance; Habitat
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for Humanity; Hello Housing; Housing Action Coalition; Sand Hill Property Company; Silicon
Valley @ Home; The Two Hundred; and TMG Partners.
Opposition
There is no officially registered opposition to AB 1174.
Recommended Action
Adopt an oppose position on AB 1174 and authorize the Mayor to send a letter to the Governor .
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SENATE COMMITTEE ON GOVERNANCE AND FINANCE
Senator Mike McGuire, Chair
2021 - 2022 Regular
Bill No: AB 1174 Hearing Date: 7/8/21
Author: Grayson Tax Levy: No
Version: 6/23/21 Fiscal: Yes
Consultant: Favorini-Csorba
PLANNING AND ZONING: HOUSING: DEVELOPMENT APPLICATION
MODIFICATIONS, APPROVALS, AND SUBSEQUENT PERMITS
Makes numerous changes to the streamlined housing development approval process established
by SB 35 (Wiener, 2017).
Background
Planning and approving new housing is mainly a local responsibility. The California
Constitution allows a city or county to “make and enforce within its limits, all local, police,
sanitary and other ordinances and regulations not in conflict with general laws.” It is from this
fundamental power (commonly called the police power) that cities and counties derive their
authority to regulate behavior to preserve the health, safety, and welfare of the public—including
land use authority.
Planning and Zoning Law. State law provides additional powers and duties for cities and
counties regarding land use. The Planning and Zoning Law requires every county and city to
adopt a general plan that sets out planned uses for all of the area covered by the plan. A general
plan must include specified mandatory “elements,” including a housing element that establishes
the locations and densities of housing, among other requirements. Cities’ and counties’ major
land use decisions—including most zoning ordinances and other aspects of development
permitting—must be consistent with their general plans. The Planning and Zoning Law also
establishes a planning agency in each city and county, which may be a separate planning
commission, administrative body, or the legislative body of the city or county itself. Cities and
counties must provide a path to appeal a decision to the planning commission and/or the city
council or county board of supervisors.
Zoning and approval processes. Local governments use their police power to enact zoning
ordinances that shape development, such as setting maximum heights and densities for housing
units, minimum numbers of required parking spaces, setbacks to preserve privacy, lot coverage
ratios to increase open space, and others. These ordinances can also include conditions on
development to address aesthetics, community impacts, or other particular site-specific
considerations.
Local governments have broad authority to define the specific approval processes needed to
satisfy these considerations. Some housing projects can be permitted by city or county planning
staff “ministerially” or without further approval from elected officials, but most large housing
projects require “discretionary” approvals from local governments, such as a conditional use
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AB 1174 (Grayson) 6/23/21 Page 2 of 6
permit or a change in zoning laws. This process requires hearings by the local planning
commission and public notice and may require additional approvals.
SB 35 (Wiener, 2017). In 2017, the Legislature enacted a substantial package of legislation
aimed at addressing the state’s housing crisis. Among other legislation, the Legislature enacted
SB 35 (Wiener) to provide for a streamlined, ministerial process for approving housing
developments that are in compliance with the applicable objective local planning standards —
including the general plan, zoning ordinances, and objective design review standards. SB 35 was
intended to enable developments that face local opposition, but are consistent with local
objective development standards, to be constructed. To be eligible for streamlining under SB 35,
a specified percentage of the total housing units in the development must be affordable to lower-
income households (those under 80 percent of area median income), as follows:
10 percent, if the locality has not issued building permits for enough above moderate-
income—greater than 120 percent of area median income (AMI)—units to meet their
RHNA requirement. If a project is located within the nine-county Bay Area, the project
may instead include 20 percent of the units affordable to moderate income households
(up to 120 percent AMI).
50 percent, if the locality has not issued building permits for enough lower-income units
to meet their RHNA requirement; or
The percentage in a local inclusionary zoning ordinance if it is higher than the
requirements above.
All but 30 cities and counties in California are subject to some streamlining under SB 35 because
they have not issued building permits to housing units sufficient to meet their RHNA at one or
more income levels.
SB 35 also included certain requirements for labor standards, such as the use of a skilled and
trained workforce on an eligible project. However, SB 35 exempts projects of 10 housing units
or less from the affordability requirements and labor standards.
Last year, the Legislature added a process to SB 35 for determining if a project would affect
tribal cultural resources (AB 168, Aguiar-Curry). This process includes a consultation between
the California Native American Tribes traditionally affiliated with the project area and the
relevant local government to identify tribal cultural resources and agree upon mitigation
measures needed to preserve them.
SB 35 sunsets on January 1, 2026.
Vallco Town Center. The Vallco Town Center development (Vallco) will involve the
demolition of a defunct mall in Cupertino and the construction of: 2,402 residential units, half of
which will be affordable to low and very low-income levels as required by SB 35; 400,000
square feet of retail and entertainment uses; and 1.8 million square feet of office space.
Vallco received approval from the City of Cupertino under SB 35 in October 2018, and
demolition has begun. As one of the first, and the largest, development to go through the SB 35
process, Vallco has attracted significant attention. The project has faced opposition from local
groups as well as some members of the Cupertino City Council. As a result, Vallco’s experience
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AB 1174 (Grayson) 6/23/21 Page 3 of 6
may illuminate challenges that future developments seeking to employ SB 35’s process may also
encounter.
The Legislature has enacted numerous measures in recent years to address challenges that Vallco
has encountered following receipt of its SB 35 approval, including:
AB 831 (Grayson, 2020), which was referred to the Senate Governance and Finance
Committee, but that referral was rescinded due to the COVID-19 pandemic. AB 831
prohibited unreasonable delay by local governments in issuing subsequent permits for SB
35 projects, among other changes.
AB 1485 (Wicks, 2019), which the Senate Governance and Finance Committee approved
at its July 10th, 2019, hearing on a vote of 7-0. AB 1485 allowed housing projects in the
Bay Area to qualify for SB 35 by including 20% moderate-income units, among other
changes.
SB 765 (Wiener, 2018), which was not referred to the Senate Governance and Finance
Committee. SB 765 changed the treatment of proposed subdivisions under SB 35, among
other changes.
Nearly three years after the initial approval by the City of Cupertino, Vallco has not yet
commenced building structures on the site, although significant demolition and grading work has
been completed.
The Bay Area Council and the San Francisco Bay Area Planning and Research Association
(SPUR) want the Legislature to enact further changes to SB 35 to assist the Vallco project.
Proposed Law
Assembly Bill 1174 makes numerous changes to specific provisions of SB 35, as outlined below.
Current law provides that an SB 35 approval remains valid for three years following approval of
the project, and allows a city or county to extend that approval for an additional year, at its
discretion. Approvals never expire for projects that include public investment in housing
affordability outside of tax credits and that designate at least 50 percent of the units for
affordable housing. SB 35 also extends the approval for other projects indefinitely until after
litigation is resolved or if vertical construction on the site has begun and is in progress, meaning
that the applicant has begun construction and has not ceased for more than 180 days, or specified
actions on building permits have been taken. AB 1174 changes “vertical construction” to
“construction activity” and makes clarifying changes to the tolling of the approval for litigation.
Current law allows a developer to request a modification to an approved SB 35 project prior to
the issuance of the final building permit. The local government must approve the modification if
it determines that the modification is consistent with the objective planning standards that were
in place when the original development application was first submitted, unless the modification
would increase the square footage or number of residential units by 15 percent or more, or 5
percent if new standards are needed to mitigate a specific, adverse impact from the modification.
AB 1174 extends the validity of an SB 35 approval for the time from submittal of a modification
request to the date of the request’s final approval, plus an additional 180 days.
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Current law allows building standards code changes to be applied to all modifications. AB 1174
allows building code standards to only be applied to modification applications that are submitted
prior to the first building permit application, unless agreed to by the developer.
Current law requires local governments to issue subsequent permits needed for an approved SB
35 project if the application substantially complies with the development as it was approved, and
requires the local government to process the permit without unreasonable delay. AB 1174
requires a local government to consider applications for such permits based on the objective
standards that were in effect when the original development application was submitted, unless
the development proponent agrees to a change in objective standards.
AB 1174 applies these changes retroactively to developments approved prior to January 1, 2022,
and makes other clarifying and technical changes and includes findings and declarations to
support its purposes.
State Revenue Impact
No estimate.
Comments
1. Purpose of the bill. According to the author, “The Legislature has made enormous efforts to
dramatically increase our housing supply. However, ambiguities in the law have been exploited
by anti-growth community groups to delay and derail desperately needed housing projects. For
example, SB 35 streamlining approvals are currently valid three years after the project is
approved. Some jurisdictions have used lawsuits to extend the project timeline beyond this
window, and then revoke the streamlining provisions. Another issue arises when jurisdictions
require a project to comply with objective standards that were not in place at the time of project
approval. This can compel a project proponent to seek a modification, which can further delay or
derail the project. To address these challenges, AB 1174 specifies that the “shot clock” for a
development or modifications is paused when a project is sued, and clarifies that subsequent
permit applications must only meet the objective standards that were in place when the project
was initially approved. This measure will also clarify that construction activity must have begun
on the site to maintain its permit, and that underground space does not count towards square
footage when calculating development changes. These fixes are essential to ensure to facilitate
the timely construction of housing at all income levels to meet California’s critical housing
needs.”
2. Just sue already. The City of Cupertino has consistently identified what it considers to be
loopholes in SB 35 to slow down or attempt to halt the project. For example, they have imposed
new conditions, balked at minor modifications, and attempted to withhold permits for excavation
and encroachment after the project’s approval. So far, they have been successful in delaying the
project for almost three years, to the point where Vallco’s SB 35 approval is about to expire prior
to the commencement of construction. The Vallco developer, Sand Hill Properties, and other
advocates have returned to the Legislature in every year following the passage of SB 35 to revise
its provisions in an attempt to head off the City’s efforts, spending significant time and
resources. Sand Hill explains that their intent with AB 1174 is to avoid litigation. But local
governments are a crafty bunch, and Cupertino will likely find additional ways to hold up Vallco
even with the changes in AB 1174. Furthermore, SB 35 already prohibits a local government’s
review and issuance of subsequent permits from “inhibiting, chilling, or in any way precluding
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the development.” Cupertino’s actions seem clearly intended to delay this project. Litigation
may be the only way to ensure that Vallco is successfully constructed.
3. The exception that swallows the rule. SB 35 intentionally limited the length of time that
approvals would remain valid for most projects to three years, so that the legislation would result
in the rapid construction of much needed new housing units. Existing law allows developers to
submit modifications to the project, but currently the clock ticks down on their approval while
they are working on those modifications, consistent with that intent. AB 1174 tolls the clock on
the approval while a local government is reviewing the modifications, but also goes further to
automatically grant an additional 180 days with each modification request. Since local
governments are limited in their ability to deny modifications or impose new conditions on them,
this provision would potentially allow a project developer to extend approvals indefinitely. The
Committee may wish to consider limiting the number of modifications a developer can submit.
4. Let’s be clear. SB 35 currently requires “vertical” construction to have commenced for a
project to qualify for the extension of an SB 35 approval. The City of Cupertino argues that
because no structures have been erected on the site, vertical construction has not commenced and
Vallco’s SB 35 approval will expire at the end of September. AB 1174 changes “vertical
construction” to “construction activity,” but leaves it up to the Department of Housing and
Community Development to define what construction activity means in its guidelines for SB 35
projects. Absent some clarification, relatively minor activity such as erecting a fence around a
site might qualify as construction. The Committee may wish to consider amending AB 1174 to
include a definition of construction activity.
5. Charter city. The California Constitution allows cities that adopt charters to control their own
“municipal affairs.” In all other matters, charter cities must follow the general, statewide laws.
Because the Constitution doesn't define "municipal affairs," the courts determine whether a topic
is a municipal affair or whether it's an issue of statewide concern. AB 1174 says that its statutory
provisions apply to charter cities but does not include the Legislature’s reasoning supporting that
conclusion. The Committee may wish to consider amending AB 1174 to include findings
explaining that the production of affordable housing is a matter of statewide concern.
6. Mandate. The California Constitution requires the state to reimburse local governments for
the costs of new or expanded state mandated local programs. Because AB 1174 adds to the
duties of local officials, Legislative Counsel says that the bill imposes a new state mandate. AB
1174 disclaims the state's responsibility for providing reimbursement by citing local
governments’ authority to charge for the costs of implementing the bill's provisions.
7. Incoming! The Senate Housing Committee approved AB 1174 at its July 1st hearing on a vote
of 8-0. The Senate Governance and Finance Committee is hearing it as the committee of second
reference.
Assembly Actions
Assembly Housing and Community Development Committee: 8-0
Assembly Local Government Committee: 7-0
Assembly Appropriations Committee: 16-0
Assembly Floor: 71-0
Support and Opposition (7/5/21)
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Support: Bay Area Council (co-sponsor); SPUR (co-sponsor); California Apartment
Association; California Association of Realtors; California Building Industry Association;
California YIMBY; Casita Coalition; Council of Infill Builders; Fieldstead and Company, INC.;
Greenbelt Alliance ; Habitat for Humanity California ; Hello Housing; Housing Action Coalition;
Lisc San Diego; Midpen Housing; Sand Hill Property Company; Silicon Valley @ Home; The
Two Hundred; TMG Partners
Opposition: None submitted.
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