Some Annexations May Now Be Infeasible Due to SB 244
The annexation process just became more complex, and perhaps too expensive in many cases, as the result of the Governor signing SB 244 (Wolk). The new law requires that nearby “disadvantaged unincorporated communities” be included as part of annexations for new development. Where a development project might have been embraced previously because it included things like missing links for existing streets, new commercial areas that generate sales tax, or new parks, cities must now ponder whether they can afford to provide city services and/or facilities to not only the new development, but also to the “disadvantaged unincorporated community” that will come along with it.
Under SB 244, Local Agency Formation Commissions (“LAFCO’s”) must deny annexations of 10 or more acres if a contiguous disadvantaged unincorporated community exists and is not also being annexed. LAFCO’s must also consider the needs of possible disadvantaged unincorporated communities that are within, or contiguous to, a city’s sphere of influence, and evaluate alternatives for providing missing infrastructure (e.g., sewer, paved streets, storm drains, etc.) and/or public services (e.g., police and fire) for the disadvantaged unincorporated communities. SB 244 also requires all cities, in performing mandated updates to their General Plans, to identify “disadvantaged unincorporated communities” that are not within city boundaries, but are within cities’ spheres of influence, and to evaluate their abilities to provide public services and/or facilities to those struggling areas.
A “disadvantaged unincorporated community” (sometimes also referred to as an “unincorporated island,” “fringe community,” or “legacy community”) is generally defined as a low income area with 12 or more registered voters in 10 or more dwellings that are located “in close proximity to one another.” This loose definition will surely lend itself to many questions in the years to come. For instance, how are boundaries of disadvantaged unincorporated communities going to be determined? What does “close proximity” mean? At what point are dwellings not considered to be in “close proximity” for purposes of SB 244?
While it has customarily been the mandate of LAFCO’s to focus on rational growth, SB 244 could lead to new financial and land planning battles. For example, it is possible that SB 244 could create a venue for counties to attempt to pass responsibilities for economically burdensome areas onto cities (LAFCO boards typically include two members of the County Board of Supervisors). In any event, municipal financial concerns as the result of SB 244 could bring some contemplated annexations to a halt. Also, anyone performing due diligence for land to be annexed as part of a development project should be aware of the potential impacts of SB 244.