Strategic Growth Council Awards $257 Million

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The Strategic Growth Council awarded more than $257 million to 19 projects on June 28 in its third round of Affordable Housing and Sustainable Communities program funding, 71 percent of which will go to disadvantaged communities. The projects aim to help the state achieve its climate goals by reducing greenhouse gas (GHG) emissions through integrated housing and sustainable transportation planning. To date, the AHSC program has reduced GHG emissions equivalent to taking 320,000 cars off the road. Three of the projects funded through the program include:

  • Willowbrook 2, a mixed-use development that will turn a Los Angeles County-owned parking lots into a mixed-use develop of 100 affordable units and a daycare center through a partnership with LINC Housing Corporation
  • 71 units of affordable housing, which will be developed by Community Housing Works on a former industrially-zoned site along with a mile of walkways, six miles of bike access, and two buses connecting National City and San Diego State University.
  • 1950 Mission Street project, which will create 157 units of affordable housing with a 25 percent set-aside for formerly homeless families, as well as space for artist studios, commercial space, and a child care center, plus a short-term bike loan for residents to access improved bike lanes through a partnership with BRIDGE Housing and the City and County of San Francisco.

Best Practices in Consolidated Planning: Citizen Participation

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Image of San Diego Consolidated Plan Community Forum FlyerEvery day in communities nationwide, local government officials rely on citizen participation to inform their decisions about local affordable housing and community development needs. In fact, citizen participation is an essential component of the Consolidated Planning process required for communities that receive formula funding from the U.S. Department of Housing and Urban Development Office of Community Planning and Development (HUD CPD).

The Consolidated Plan citizen participation process can also provide community leaders with a valuable opportunity to build public will for critical affordable housing, homelessness, and community and economic development projects and programs. Communities that will be initiating their Consolidated Planning process in the next year or two should understand HUD’s citizen participation requirements and explore how they can enhance their existing citizen participation plans using the following best practices.

Citizen Participation Requirements

HUD’s citizen participation planning guidelines, which are described in the Code of Federal Regulations, emphasize local governments’ responsibility to promote widespread community involvement in the development, monitoring and reporting, and amendment of the Consolidated Plan. This includes:

• Describing the public hearing, public comment, and publication and distribution requirements for the Consolidated Plan
• Detailing methods of promoting the participation of local stakeholder organizations and residents
• Making the planning process and plan transparent and accessible to low- and moderate-income individuals, as well as non-English speakers and people with disabilities, who are most affected by the plan
• Ensuring that the Consolidated Plan includes anticipated funding levels from grant and program income, proposed activities, and efforts to minimize any displacement of individuals resulting from those activities
• Providing for technical assistance to groups representing low- and moderate-income residents in developing fund proposals for CPD-funded programs

Communities can also refer to the HUD Citizen Participation and Consultation Toolkit for a sample timeline, a list of key partners to engage in the process, and a self-assessment and planning tool communities can use to evaluate and improve on past citizen participation activities.

Best Practices for Citizen Participation

As part of the Consolidated Planning process, communities are required to employ activities in three different categories: traditional media, online, and data visualization. While communities can opt to incorporate only those activities that meet the “basic outreach” requirements, HUD has also defined additional activities that contribute to a “best practice” approach to engagement.

Traditional Media

Activities that fall within the traditional media category range from facilitating the public notice and meeting process to employing alternative methods of public notice, using alternative language media, and engaging public figures and the broadcast news media to encourage citizen participation. For example, the City of San Diego has planned seven community meetings, which will be accessible to non-English speakers and individuals with disabilities, to take place Monday through Thursday evenings from July 10-August 1, 2018. In Duluth, MN, the community development division advertises opportunities for participation on the local television news stations.

Online Media

Basic outreach for online media entails sending emails to relevant email distribution lists. In contrast, best practice approaches combine the use of email with social media, web-based surveys that allow respondents to provide data and comments, and virtual public meetings to engage those who are unable to attend in-person meetings. As part of the San Diego Consolidated Planning process, elected officials and community-based organizations received an email asking them to announce upcoming community meetings and the release of an online survey via their social media and email distribution lists, as well as at other community events. The City of San Diego also has a dedicated web page where community members can access more information about the Consolidated Plan process and materials.

Data Visualization

Best practices in data visualization build on the use of traditional maps that mark the locations of community assets and investments to include efforts to map the geographic distribution of citizen participation, themed maps related to a particular project or issues, and the use of alternative visual formats such as infographics. The King County Consortium (WA) seized the opportunity to hold a public hearing that allowed people to react to the draft of its plan by visiting a series of conversation stations that used visual aids and targeted questions to elicit feedback on specific themes. Working with the King County GIS Center, the Consortium also created an interactive map that allowed people to zoom in to see different public investments countywide.

LeSar Development Consultants is currently working with the City of San Diego to develop its 2020-2024 Consolidated Plan, and previously developed the 2015‐2019 Consolidated Plans for the City of San Diego, Kent County (MI), and Santa Clara County, as well as seven cities within that County.

For additional information and questions about the Citizen Participation Planning process, please contact Erica Snyder at erica@lesardevelopment.com.

Erica SnyderErica Snyder, Principal, specializes in guiding organizational strategy with an emphasis on strategic planning, change management, strategic positioning, and program development. She previously served as the Director of Homeless Housing Innovations at the San Diego Housing Commission, where she guided the development of Housing First homeless assistance programs, including the creation of the region’s first program to incentivize landlords to rent to households experiencing homelessness, preventing vulnerable populations from experiencing housing instability diverting households from shelter entry, and increasing the permanent supportive housing supply. She currently co-leads LDC’s strategic planning and community engagement practice.

Innovations in Supportive Housing

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What does it take to build a house? On its face the answer is simple—land, building materials, and labor. Today, the challenge lies in obtaining those resources. It’s a challenge made even more difficult when that home is intended for residents with extremely low- or very low-incomes living in high-cost housing markets. Yet, barriers to development have not deterred the innovators currently driving the supportive housing movement in Los Angeles, which recently hosted the 2018 CSH Summit.

Rather than viewing these challenges as permanent barriers, they have inspired leaders from industries as diverse as housing, health care, corrections, and the care of seniors to re-examine—and often re-imagine—their policies, programs, and practices to foster collaborations that enhance both individual and community well-being.

Housing as Health Care

While the concept of housing as health care is not new, the definition of health has expanded. Programs no longer focus solely on community-based mental health and substance abuse treatment, but now include programs designed to mitigate the impact of chronic physical conditions such as spinal cord injuries, multiple sclerosis, and cerebral palsy. These programs emphasized the pivotal role that hospitals, health clinics, and Medicaid agencies play in coordinating, developing, and funding programs seeking to achieve health and housing outcomes.

Reducing Recidivism

Housing can be a significant stabilizing factor in reducing recidivism among justice-involved populations. For example, Los Angeles’ Just In Reach (JIR) program seeks to end chronic homelessness among people who frequently cycle through jails. Following refinements to the model used during the pilot program, in late 2017 JIR became the first public-private partnership in Los Angeles County funded through a Pay for Success model, which will allow the program to scale up to serve 300 individuals. Funding sources include $2.4 million in state and federal funding and $10 million in private investment, which are used to support project management, evaluation, and success payments. Other programs partnered parole and probation officers with homeless services professionals to create dedicated caseloads of individuals on community supervision who were also at-risk of homelessness and worked with Public Housing Authorities to improve access for people with criminal records and their families.

Serving Seniors and People with Disabilities

As America’s population ages and individuals with disabilities move into communities from institutional settings, advocates have increasingly recognized the need for accessible supportive housing. LDC Senior Principal Jonathan Hunter, who is also a former Western Region Managing Director of CSH, presented a workshop on integrating Housing First and universal access principles, as well as the value of lived experience, in creating equitable supportive housing for older adults and people with disabilities.

Other hot topics included the role of local government champions and the need for local funding sources, such as Los Angeles County’s Measure H and the City of Los Angeles’ Triple H measure, to effect system-wide change. Learn more about how Los Angeles is addressing the need for affordable and supportive housing by visiting the Everyone In campaign, powered by the United Way of Greater Los Angeles.

Governor Brown’s Last Budget Invests $5 Billion in Housing

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Photo of Gov. Brown Signing the 2018 California Budget with State Legislative LeadersWhen Governor Jerry Brown signed the 2018 California State Budget on June 27, he cemented an agreement he made with Democratic legislative leaders earlier in June that will pump $5 billion into programs that aim to increase housing production and reduce homelessness, including a one-time Homeless Emergency Aid Block Grant, first-year funding from SB 2: The Building Homes and Jobs Act, and a variety of programs funded through the Cap and Trade Program.

Homeless Emergency Aid Block Grant

The budget allocates $500 million to the Homeless Emergency Aid Block Grant, which will provide jurisdictions with a one-time flexible block grant to tackle immediate challenges related to homelessness. Of these funds, $150 million will be distributed to cities and counties with populations over 330,000 that meet specific requirements based on their regional proportion of the statewide Point-In-Time (PIT) Count. Other jurisdictions will split $250 million based on their homeless populations, with funding ranging from $2 million dollars for jurisdictions with a PIT Count of 250 or fewer people to $60 million for jurisdictions with a PIT count of 4,000-19,999. An additional $100 million will be distributed among Continua of Care with funding proportionate to its percentage of the PIT Count.

The program will be administered by the Business, Consumer Services, and Housing Agency in consultation with the Homeless Coordinating and Financing Council. An additional $500,000 will provide for the expansion and staffing of the Homeless Coordinating and Financing Council, which provides guidance on developing a statewide plan to address homelessness issues.

Cap and Trade

Since 2014-2015, the Strategic Growth Council (SGC) has received a continuous appropriation equal to 20 percent of the Cap and Trade Expenditure Plan for its Sustainable Communities Program, which facilitates transit-oriented housing and development. The FY 2018-2019 budget include $455 million.

SB 2: Building Homes and Jobs Act

The 2018 budget also includes $250 million in first-year funding from SB 2: The Building Homes and Jobs Act, which is expected to generate $250 million annually from a real estate recording fee. Half of the funds will go toward housing and homelessness planning grants. The Emergency Solutions and Housing Program, which will be administered by the California Department of Housing and Community Development, and Housing for a Health California Program will each receive $57.5 million. An emergency shelter in Orange County and a navigation center in Merced County will each receive $5 million.

Technical Changes to SB 35

In addition, SB 850—a housing-related trailer bill necessary to implement the budget—made several clarifying changes to the approval process for affordable multifamily housing projects outlined in SB 35 (Wiener), which was passed as part of the 2017 housing package.  The bill clarifies the percentage of affordable units required for ministerial approval when a locality is not meeting either its moderate-income or its low-income housing allocations, and identifies special flood hazard zones where projects are prohibited from using the streamlining provisions of SB 35. Finally, the bill clarifies that CEQA does not apply to actions taken by a state or local government to provide financial assistance to a development using the streamlining provisions.

Housing Measures on the November Ballot

Finally, the FY 2018-2019 budget places two housing-related measures on the November 2018 ballot. Proposition 1, the Veterans and Affordable Housing Bond Act, would authorize a $4 billion general obligation bond to fund affordable housing and the CalVet veterans homeownership program. If passed, the bond would provide $277 million in funding in 2018-2019. Proposition 2, the No Place Like Home bond, would speed up the release of $2 billion in bond funding for supportive housing for individuals with mental illness.

The following table provides a complete summary of the $5.1 billion in state and federal funds for housing and homelessness programs included in the FY 2018-2019 budget.[1]

2018-2018 Housing and Homelessness Funding
(in millions)
Department Program Amount
Department of Housing and Community Development Veterans and Affordable Housing Bond Act Programs (SB3) $277
No Place Like Home Program $262
Building Homes and Jobs Fund Programs (SB2) $255
Federal Funds $122
Housing for Veterans Funds $75
Infill Infrastructure Grant Program Reappropriation $51
Multifamily Housing Program – Supportive Housing $39
Office of Migrant Services $6
Housing Related Parks Program Reappropriation $2
Various $15
California Housing Finance Agency Single Family 1st Mortgage Lending $1,500
Multifamily Conduit Lending $300
Multifamily Lending $200
Single Family Down Payment Assistance $108
Special Needs Housing Program $30
Homeless Coordinating and Financing Council Emergency Homeless Aid Block Grants $500
Strategic Growth Council Affordable Housing Sustainable Communities $455
Tax Credit Allocation Committee Low Income Housing Tax Credits (Federal) $259
Low Income Housing Tax Credits (State) $97
Farmworker Housing Assistance Tax Credits $3
Department of Veterans Affairs CalVet Farm and Home Loan Program $264
Department of Social Services CalWORKS Housing Support Program $71
CalWORKS Homeless Assistance Program $43
Senior Home Safe Program $15
CalWORKS Family Stabilization, Housing Component $3
Department of Health Care Services Homeless and Mental Illness Program $50
Whole Person Care Pilot Program, Health Homes Program, Mental Health Services Act Community Services and Supports, California Community Transitions Program N/A
Office of Emergency Services Domestic Violence Housing First Program $13
Transitional Housing Program $10
Domestic Violence Shelters and Services $10
Specialized Emergency Housing $5
Homeless Youth and Exploitation Program $2
Department of Public Health Housing Opportunities for Persons with AIDS (HOPWA) $3
Housing Plus Program $2
California Department of Corrections and Rehabilitation Integrated Services for Mentally-Ill Parolees $3
Specialized Treatment of Optimized Programming, Parole Service Center, Day Reporting Center, Female Offender Treatment and Employment Program N/A
Total   $5,050
[1] State of California. California State Budget – 2018-2019

Diana ElrodDiana Elrod, Principal, brings more than 30 years of consulting and public sector experience to her work co-leading LDC’s housing policy and real estate finance team. Before joining LDC, she provided strategic counsel and conducted research on Housing and Community Development for the Cities of Lafayette, Belmont, Palo Alto, San Jose, San Mateo, and the County of Santa Clara. She also has completed Housing Elements and Consolidated Plans for jurisdictions throughout California. She can be reached at diana@lesardevelopment.com.

U.S. Senate Appropriations Committee Rejects Proposed Cuts to HUD Funding

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The Senate Appropriations Committee on June 7 rejected the Administration’s proposed cuts to the U.S. Department of Housing and Urban Development (HUD) budget by advancing a bill that includes $44.5 billion in discretionary appropriations, increasing funding by $1.8 billion above FY 2018 levels.

The Administration had proposed $41.2 billion in FY 2019 funding for HUD, which would have reduced funding by $11.5 billion over FY 2018, eliminated the Community Development Block Grant (CDBG) and HOME Investment Partnership programs, and instituted higher rent levels and work requirements for some programs. The Administration’s proposal also would have resulted in shifting more of the costs of building affordable housing to state and local governments.

“This bipartisan bill is the product of considerable negotiation and compromise,” said U.S. Senator Susan Collins (R-Maine), chair of the Subcommittee in an official statement. “The funding in this legislation will allow us to invest in our nation’s infrastructure, while fully funding the renewal of housing assistance for low-income seniors and other vulnerable populations, such as teenagers and veterans who are homeless.”

Rental Assistance

The bill includes $42.8 billion in rental assistance funding, which currently supports an estimated 5 million families nationwide. The budget reflects modest increases for tenant- and project-based rental assistance programs, as well as public housing capital and operating funds. Included within the rental assistance funding is $40 million for new vouchers dedicated to homeless veterans. The Administration’s FY 2019 proposed cuts to all three programs and would have eliminated capital funds to repair and maintain public housing.

The bill renews funding for Housing for the Elderly at the same level as FY 2018 and includes $51 million that would be used to produce new dedicated housing units for seniors. The bill also reduces the FY 2019 appropriation for Housing for Persons with Disabilities to $154 million; however, the decrease reflects on partial-year funding to reflect the time required to put an estimated 30,000 new vouchers funded in FY 2018 into circulation.

 Community Planning and Development

Similar to the House bill, the Senate bill renews funding for community planning and development at $12.9 billion, and rejects the Administration’s proposal to eliminate the CDBG and HOME programs. These programs, which provide entitlement funds for state and local governments to build housing and address other development needs, continue to have strong bipartisan support.

Other community development initiatives funded in conjunction with the HUD appropriation include the Choice Neighborhoods Initiative and the Neighborhood Reinvestment Corporation. The Senate bill provides $100 million for the Choice Neighborhoods Initiative, which provides funding for state and local governments to redevelop HUD-assisted housing. The bill reflects a $50 million funding cut from FY 2018, but does not eliminate the program as recommended in the Administration’s budget. The House bill proposed maintaining funding at FY 2018 levels and giving priority to previous planning grant recipients when awarding implementation grants.

The Neighborhood Reinvestment Corporation, which supports an estimated 250 community development organizations nationwide that provide housing and counseling services through the NeighborWorks’ network, would see a budget increase of $7 million under the Senate appropriations bill. The Administration had proposed winding down the program over two years.

 Homeless Assistance

The Senate bill maintains FY 2018 funding levels for the United States Interagency Council on Homelessness at $3.6 million, and increases funding for Homeless Assistance Grants by $100 million to $2.6 billion with an emphasis on housing and services for specific populations, including youth and survivors of domestic violence. Specifically, the bill includes $80 million to support Continuums of Care in developing comprehensive approaches to ending youth homelessness, and $20 million to fund 2,500 rental assistance vouchers for youth aging out of foster care. The bill also provides $50 million to assist an estimated 3,750 survivors of domestic violence to secure housing through Rapid Re-Housing programs.

The bill also includes $40 million for the HUD Veterans Assistance Supportive Housing program, providing 5,100 new vouchers for veterans experiencing homelessness.

The table below highlights how the Administration, House, and Senate FY 2019 budgets differ from the enacted FY 2018 budget:

U.S. Department of Housing and Urban Development Program Budget

Program

FY 2018 Enacted

FY 2019 Proposed

FY 2019 House

FY 2019 Senate

Tenant-Based Rental Assistance Programs

$22 billion

$20.5 billion

$22.4 billion

$22.8 billion

Project-Based Rental Assistance Programs

$11.5 billion

$11.1 billion

$11.7 billion

$11.7 billion

Public Housing Operating and Capital Funds

$7.3 billion

$3.28 billion

$7.3 billion

$7.5 billion

Housing for the Elderly

$678 million

$601 million

$632 million

$678 million

Housing for People with Disabilities (Section 811)

$229.6 million

$140 million

$154 million

$154 million

Community Planning and Development

$7.7 billion

$2.7 billion

$7.6 billion

$7.8 billion

Community Development Block Grant

$3.4 billion

$3.4 billion

$3.3 billion

HOME Investment Partnerships Program

$1.4 billion

$1.2 billion

$1.4 billion

Housing Opportunities for Persons with AIDS (HOPWA)

$375 million

$330 million

$393 million

$375 million

Choice Neighborhoods Initiative

$150 million

$150 million

$100 million

Neighborhood Reinvestment Corporation

$140 million

$27.4 million

$150 million

$147 million

McKinney-Vento Homeless Assistance Grants[2]

$2.5 billion

$2.4 billion

$2.5 billion

$2.6 billion

U.S. Interagency Council on Homelessness

$3.6 million

$630,000

$3.6 million

$3.6 million

The Senate bill also includes $26.6 billion in FY 2019 discretionary appropriations for the U.S. Department of Transportation, $698 million less than the FY 2018 enacted budget. Congress must pass the FY 2019 appropriations before September 30 or issue a continuing resolution to avoid a government shutdown.

Sources:

U.S. House of Representatives Appropriations Committee. (2018). Departments of Transportation, and Housing and Urban Development, and Related Agencies Appropriations Bills, 2019 Report.

U.S. Senate Committee on Appropriations. (2018). Subcommittee Approves FY 2019 Transportation, HUD Appropriations Bill.

U.S. Senate Committee on Appropriations. (2018). Summary: Subcommittee Approves FY 2019 Transportation, HUD Appropriations Bill.

California House, Senate Continue Efforts to Increase Supply of Affordable Housing

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Picking up where they left off at the end of the 2017 legislative session, California lawmakers in both the House and Senate advanced several bills aimed at increasing the supply of affordable housing. These include efforts to modify laws related to the Regional Housing Needs Assessment (RHNA) and Housing Element, override local zoning requirements, and produce accessory dwelling units.

RHNA/Housing Accountability

SB 828 Land Use: Housing Element, authored by Sen. Scott Wiener (D-San Francisco), would require the State’s Housing and Community Development Department (HCD) to address the underproduction of housing.  This bill would require cities and counties to meet 125% of their RHNA requirements in their inventories.  Where that is not possible, cities and counties would be required to identify ways in which it will accommodate their RHNA, such as through rezoning. HCD would be required to complete a comprehensive assessment on the unmet needs for each region, and include the results of the assessment in regional allocations for the next housing element cycle. HCD would have to establish a methodology for the comprehensive assessment on unmet need that considers median rent or home prices and, in communities with high rates of income growth, sets a high rate of new housing production for all income levels to ensure equity and stabilize home prices. SB 828 would also prohibit a Council of Government (COG) from underestimating allocations for local jurisdictions based on predicted additional unmet need allocations.  This bill would require the final regional housing need plan to reflect equitable allocations for housing of all income levels, and not demonstrate disparities that promote racial or wealth disparities throughout a region.

SB 1771 Planning and Zoning: Regional Housing Needs Assessment, authored by Sen. Richard Bloom (D-Santa Monica), would require jurisdictions to adopt long-term plans that address the development of land not only inside their jurisdiction, but in some cases, outside local boundaries as well.  As is currently the law, COGs would be required to create and adopt a “Final Regional Housing Needs Allocation Plan,” but which would now  be required to allocate housing needs according to certain specified objectives, including doing so in an equitable manner by dispersing housing typologies, affordability levels, and housing tenure  (whether owner or rental) across the region. It would also revise many of the current requirements of the RHNA plan.  Plans would be required to further objectives, rather than simply be consistent with them as is currently required.  COGs would be required to include data showing both the number of low-wage jobs within a jurisdiction as well as the number of housing units which are affordable to those workers.  In addition, COGs will be required to project the number of low wage workers and the number of housing units needed to house them during the planning period.   This would be a new focus on existing and projected demand, replacing the previous requirement to respond to housing demand. It would also limit the grounds upon which a jurisdiction could appeal to the COG to these three: the methodology was not informed by survey information submitted by the jurisdiction; the jurisdiction has undergone significant and unforeseen changes; and, the methodology used to calculate the RHNA was in violation of state law.

AB 3194 Housing Accountability Act: Project Approval, authored by Assemblymember Tom Daly (D-Santa Ana), would prohibit a jurisdiction from disapproving, or placing infeasible conditions upon, a development of very low-income, low-income, or moderate-income housing (including emergency shelters), unless a preponderance of the evidence shows that the development would have a “specific, adverse impact upon the public health or safety.”  The State of California defines “preponderance of the evidence” as evidence that outweighs, not in its quantity but rather in its effect, the evidence of the other side.[1]  In 2017, AB 1515 (Daly) added the requirement for “substantial evidence,” which is defined as “being of ponderable legal significance,” and “which is reasonable in nature, credible, and of solid value.”[2] The proposed requirement for a preponderance of the evidence is a higher standard and could result in a higher number of housing developments being covered by the Housing Accountability Act (HAA). If approved, this bill would impart the protections of the HAA to projects that are both inconsistent with zoning and consistent with the objective general plan standards. Such projects would be deemed approved without having been rezoned.

Overriding Local Zoning Requirements

AB 2923 San Francisco Bay Area Rapid Transit District: Transit-Oriented Development, introduced by Assemblymembers David Chiu (D-San Francisco) and Timothy Grayson (D-Concord) and coauthored by Kevin Mullin (D-San Mateo), Richard Bloom (D-Santa Monica), and Phil Ting (D-San Francisco), would require the board of the San Francisco Bay Area Rapid Transit District (BART) to adopt new TOD guidelines for certain BART-owned land.  The new guidelines would establish minimum zoning requirements for land within 1/2 mile of a current or future BART entrance, on contiguous parcels that are at least .25 acres in size.  The bill would also require the board to adopt streamlining measures for TOD projects, and require that projects within these areas include 20 percent affordable housing. The effect of this bill, if approved, could be that jurisdictions where BART stations are located would have little control over what is built in their communities.

SB 827 Planning and Zoning: Transit-Rich Housing Bonus, authored by Sen. Wiener (D-San Francisco), the bill would have promoted multi-family housing near transit. Among other things, SB 827 would have allowed developers to circumvent zoning in transit areas, and build to height, parking, and density levels that exceed zoning limits. The proposed height limit would have been five stories in areas within a half mile of a transit or subway station, and developers would also have benefited from reduced parking and density restrictions. Advocates of the bill purported it to be a nail in the coffin of residential racial segregation, forcing housing into neighborhoods that were historically zoned low-density in order to perpetuate the segregation of race and class.  The bill failed to pass in the Committee on Transportation and Housing.

Accessory Dwelling Unit Requirements

Interior view of an accessory dwelling unitAB 2890, authored by Sen. Ting (D-San Francisco), would require local jurisdictions to consider permit applications for ADUs within 60 days of receipt.  Current law allows jurisdictions up to 120 days to consider such permits.  It would also require that jurisdictions that condition permits on owner-occupancy to not monitor those units more than once per year. This bill would expand the law to allow for ministerial approval of ADUs on both single-family and multifamily lots, and prohibit certain requirements such as lot coverage standards, minimum lot size, and floor area ratio. If passed, HCD would be required to proposed small building standards by 2020, which would provide further oversight into  local ordinances.  If an ordinance is found to be in violation of the law, HCD could additionally notify the Attorney General.

SB 831 Land Use: Accessory Dwelling Units, introduced by Sen. Wieckowski (D-Fremont) and coauthored by Sen. Toni Atkins (D-San Diego), Sen. Nancy Skinner (D-Berkeley), and Sen. Wiener (D-San Francisco), would require jurisdictions to designate, in their ADU ordinances, any areas where ADUs would be excluded because of certain health and safety concerns.  It would delete the authority to include lot coverage standards.  It would also prohibit jurisdictions from taking the square footage of the proposed ADU into account when determining the allowable FAR or lot coverage. In addition, a permit for the development of an ADU would be automatically approved if not considered within 60 days of its submittal.  It would prohibit requirements to replace off-street parking that is lost due to the development of an ADU. It would also prohibit the use of any other local policy, ordinance, or regulation as a means to inhibit the development of ADUs. This bill would not only prohibit local ordinances from owner-occupancy conditions, but also make void any such existing requirements. It would also prohibit a jurisdiction from considering an ADU as a “new residential use,” for purposes of determining fees.  School fees would be an exception; however, they would be limited to $3,000.

Artemis Spyridonidis, Senior Associate, covers housing policy issues, including structural solutions to the housing affordability crisis, consolidated plans, housing elements, accessory dwelling unit policy implementation, and regional issues across the state of California. For information about linkage fees and other housing policy issues, contact Artemis Spyridonidis, at artemis@lesardevelopment.com.

[1] Glage v. Hawes Firearms Co. (1990), 226 Cal.App.3d 314, 325, quoting People v. Miller (1916), 171 Cal. 6149, 652.

[2] Kuhn v. Department of General Services, (1994) 22 Cal.App.4th 1627, 1633, 29 Cal.Rptr.2d 191; Mohilef v. Janovici, (1996) 51 Cal.App.4th 267, 305, fn. 28, 58 Cal.Rptr.2d 721.

When Process Is Politics: 2018 California Primary Election Recap

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When California adopted a primary system that advanced the top two vote-getters regardless of party to the November election, advocates anticipated that moderate candidates with broader appeal would benefit. Yet, news coverage leading up to and following the primary, which took place June 5, was dominated by concerns about the system’s real effect: splitting votes. In addition, same day registration and a glitch in Los Angeles County’s voter rosters added to concerns about how the voting process might impact the races.

State Office

Lt. Gov. Gavin Newsom (D) beat out two fellow Democratic contenders, former Los Angeles Mayor Antonio Villaraigosa and California State Treasurer John Chiang, with 33.4% of the vote and will run against San Diego businessman John Cox (R), who earned 26.2% of the vote November. If elected, Newsom states he will focus on increasing investments in affordable housing, promote the use of Enhanced Infrastructure Financing Districts to fund infrastructure projects, and work with the private sector to create workforce housing. Cox aims to repeal the gas tax increase and reduce regulations on businesses as a path to stimulating economic growth.

Two Democrats, Eleni Kounalakis and Ed Hernandez, will advance to the general election for lieutenant governor. Kounalakis, who previously served as the U.S. ambassador in Hungary, edged out Hernandez, a former state Assemblymember and Senator, as the top vote-getter. Prior to her appointment as ambassador, Kounalakis held the position of President of her family business, AKT Development, which develops housing for middle-class families.

Secretary of State Alex Padilla, Controller Betty Yee, and Attorney General Xavier Becerra all advanced to the general election. Fiona Ma (D), who received 43% of the vote, will compete against Greg Conlon (R) to succeed John Chiang (who lost his bid to become Governor) as California State Treasurer.

State Assembly

Senate Democrats no longer hold the supermajority necessary to pass tax and fee increases following the defeat of Josh Newman, who lost the 29th District seat over a vote to raise gas taxes. Republican Assemblywoman Ling Ling Chang will now hold the office representing Orange County.

U.S. Senate Races

California Senate President pro Tempore Emeritus Kevin De Leon (D) advanced to the November election despite receiving only 11.3% of the vote against incumbent Sen. Diane Feinstein (D), who received 43.8% of the vote in a crowded field of 19 candidates. Feinstein has backed legislation to expand the definition of homelessness so that more children and families who currently do not qualify would have access to federal housing assistance.

De Leon served as pro Tempore last year when Gov. Brown signed the historic housing package, and was one of the authors of SB 1206, which asks voters to approve the use of Mental Health Services Administration bond funds for the No Place Like Home program, which aims to dedicate $2 billion for permanent supportive housing for individuals with severe mental health issues who are experiencing or at risk of chronic homelessness.

U.S. House Races

In the Bay Area, House Minority Leader Nancy Pelosi (D) advanced easily to the general election in San Francisco (12th District) finishing ahead of Lisa Remmer (R) and five other candidates. Pelosi has a long history of supporting Low-Income Housing Tax Credits, the redevelopment of public housing, and programs that provide housing for individuals experiencing homelessness, especially those with HIV/AIDS. Remmer is running on a platform of school choice for parents, cutting H1B visas, and securing the nation’s borders to prevent illegal immigration.

Rep. Mark DeSaulnier (D-11th District) also easily advanced to the November election, where he will face John Fitzgerald (R) to represent Contra Costa. DeSaulnier supports permanently expanding tax credits for low-income homebuyers, as well as programs to provide housing for homeless veterans and students.

In San Mateo, Rep. Jackie Speier (D-14th District), who received 77.7% of the vote, will face Republican challenger Cristina Osmena in November. Rep. Eric Swalwell (D-15th District) of Hayward-Livermore, Rep. Ro Khanna (D-17th District) of Fremont-Milpitas, and Rep. Anna Eshoo (D-18th District) of Silicon Valley-Santa Cruz will all face Republican challengers in November Rep. Barbara Lee (D-13th District) ran unopposed in Berkeley-San Leandro, as did Rep. Zoe Lofgren (D-19th District), who represents San Jose.

In the Los Angeles area, two Democrats are vying against each other in two races. Rep. Judy Chu is running against Bryan Witt in the San Gabriel Foothills (27th District). The closest runner-up to Rep. Nanette Barragan to represent South Los Angeles-Compton (44th District) was Compton Mayor Aja Brown who dropped out of the race in April. Barragan has supported efforts to protect seniors from losing their homes and introduced the Housing Homeless Veterans Act.

Republicans finished first in two primary races. Rep. Steve Knight (25th District) is running against Katie Hill (D) to retain his seat, and Ryan Downing is challenging Rep. Linda Sanchez (38th District) in Eastern Los Angeles. Rep. Grace Napolitano (D-32nd District) of the San Gabriel Valley ran unopposed.

Democrats finished first in six of seven races and will run against Republicans in the general election. Candidates include Rep. Adam Schiff (28th District) of Burbank-Glendale, Reps. Tony Cardenas (29th District) and Brad Sherman (30th District) of the San Fernando Valley, Rep. Ted Lieu (33rd District) of Coastal Los Angeles, Rep. Karen Bass (37th District), and Maxine Waters (43rd District).

In the San Diego region, Diane Harkey (R) will advance with 25.5% of the vote in a bid to fill Rep. Darrell Issa’s seat in the 49th District. Harkey, who has represented Southern California as a member of the State Board of Equalization since 2014, emphasized streamlining tax laws and regulations during her campaign.

Currently Democrats Mike Levin and Sara Jacobs are vying for the second spot, trailed by Democrat Doug Applegate and Republicans Kristin Gaspar and Rocky Chavez. Levin’s priorities include sustainable energy and environmental protection, providing affordable health coverage, and fighting for campaign finance reform. Jacobs’ platform include expanding access to affordable housing and protecting individuals from housing discrimination.

Rep. Duncan Hunter (R-50th) also advanced with nearly 50% of the vote, and will defend his seat against Democrat Ammar Campa-Najjar (D) in November. A former Labor Department official with the Obama administration, Campa-Najjar worked to expand the nation’s apprenticeship program and help small businesses secure federal contracts.

In Central and South San Diego County, Reps. Juan Vargas (D-51), Scott Peters (D-52), and Susan Davis (D-53) each won their races with more than 55% of the vote. All will likely face Republicans in the general election.

Local Races

In San Francisco, the Mayor’s race was still too close to call with ballots yet to be counted as long as they arrive by Friday, June 8. As of Wednesday evening, Mark Leno led Board of Supervisors President London Breed by less than a percentage point in the bid to replace Ed Lee as Mayor through ranked choice voting. Breed briefly held the position of Acting Mayor of San Francisco following Lee’s unexpected death in late 2017.

San Diego City Council Drastically Reduces ADU Fees

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The San Diego City Council voted unanimously on April 30 to drastically reduce permitting fees in the city for both accessory dwelling units (ADUs) and junior accessory dwelling units (JADUs).  LDC Senior Associate Artemis Spyridonidis attended the meeting to share the firm’s research findings and support the reduction in fees. LDC’s research on fees and production rates throughout California demonstrates a positive correlation between low permit fees and higher production of ADUs.

Councilmember Scott Sherman lauded the reduction in fees: “It’s so hard in San Diego to find a place you can afford when you’re first starting out…This is a great first step. It’s not going to solve the problem overnight, but it’s going to make it a lot easier for people to afford to be able to build these, providing housing stock.”

Councilmember Georgette Gomez celebrated the Council’s vote: “This will have a positive outcome at the end of the day…we’re going to see more of these permits being requested to develop these units that are going to be naturally affordable, that are going to help more San Diegans with a bit of income but also to make housing affordable…”

The vote, which included both fee reductions and waivers, will help the city achieve the goal it adopted in March 2018 to build 6,000 ADUs in the next 10 years. Table 1 below compares the previous costs associated of permitting ADUs with the new cost structure approved by City Council on April 30:

Table 1. REDUCED/WAIVED FEES[1] 

Fee Type Previous ADU Fees

Approved ADUs Fees(as of April 30, 2018)

Water Capacity Fee $1,524 $0
Sewer Capacity Fee $2,062 $0
General Plan Maintenance Fee $275 $0
Developmental Impact Fee $24,000-29,000

$8,000-13,000

Total Fees for Established Communities

$27,861-32,861

$8,000-13,000

Proposed Facilities Benefit Fees*

$44,000-49,000

$8,000-13,000

Total Fees for Newer Communities $76,681-81,681 $16,000-26,000
*Levied only in newer communities

To keep the City’s Development Services Department at full cost recovery, $100,000 will be transferred from the General Fund.

Homeowner Elizabeth DeWitt spoke of the benefit to her family: “The $30,000 it costs now – they told me it might cost me about $50 to build the room – I can’t do that if the fees are $30,000.  We’re in a housing crisis in San Diego. This would help me with my son, and I’m sure it would help a lot of others.”  There were no speakers in opposition.

[1] Additional fees, such as School Fees and SANDAG’s Regional Transportation Congestion Improvement Program Fees, are not included in this table.

Artemis Spyridonidis, Senior Associate, covers housing policy issues, including structural solutions to the housing affordability crisis, consolidated plans, housing elements, accessory dwelling unit policy implementation, and regional issues across the state of California. For information about ADUs and other housing policy issues, contact Artemis Spyridonidis, at artemis@lesardevelopment.com.

Requiem for SB 827

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Image of baby grand piano in shadowSB 827 died April 17, 2018, in the Senate’s Transportation and Housing Committee. Authored by Sen. Scott Wiener (D-San Francisco), the bill would have promoted multi-family housing near transit. Supporters claimed it would have been a nail in the coffin of residential racial segregation, forcing housing into neighborhoods that were historically zoned low-density in order to perpetuate the segregation of race and class.

Other similar bills have been successful in the recent past.  The state legislature has already begun to approve bills that have slowly chipped away at the powers of local government to deter the development of housing. SB 1069 (Wieckowski; codified as Cal. Gov. 65582.1), §AB 2299 (Bloom; codified as Cal. Gov. Code §65852.2) and AB 2406 (Thurmond; codified as Cal. Gov. Code §65852.22), which went into effect on January 1, 2017, prohibit local jurisdictions from barring the production of Accessory Dwelling Units (ADUs). On January 1, 2018, both SB 35 and SB 166 became effective.  SB 35 (Wiener; codified as Cal. Gov. Code §65400) penalizes certain jurisdictions that have not met their RHNA assessments by eliminating multiple local planning reviews and creating a streamlined, ministerial approval process for certain infill developments. (See “Bay Area Begins to Feel Effect of SB 35”). SB 166 (Skinner; codified as Cal. Gov. Code §65863), prohibits local governments, in most situations, from permitting a project at a rate lower than the already-established density allows.

Similarly, but certainly with more severe repercussions, SB 827 would have allowed developers to circumvent zoning in transit areas, and build to height, parking, and density levels that exceed zoning limits. The proposed height limit would have been five stories in areas within a half mile of a transit or subway station, and developers would also have benefited from reduced parking and density restrictions. The bill also provided that projects within a half mile of “high-quality” bus lines offering service at 15-minute intervals or more frequently during peak times would benefit from reduced parking and density restrictions, but not the new height limit.

Opponents claimed that it would ruin neighborhoods, devalue homes, allow incongruous development, and unfairly create a strain on infrastructure and transportation. Proponents claimed that the increase in units would drive down rents, giving renters a sigh of relief, and a greater swatch of neighborhoods from which to choose. With the third-lowest homeownership rate in the country after D.C. and New York, California clearly needs more housing. Currently, only 55% of Californians own their home. SB 827 may have been laid to rest, but we undoubtedly need to continue to pursue ways to increase development throughout the state.

Artemis Spyridonidis, Senior Associate, covers housing policy issues, including structural solutions to the housing affordability crisis, consolidated plans, housing elements, accessory dwelling unit policy implementation, and regional issues across the state of California. For information about linkage fees and other housing policy issues, contact Artemis Spyridonidis, at artemis@lesardevelopment.com.

Changes to LIHTC and Updates from TCAC

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When President Trump signed the Omnibus Spending Bill into law on March 23, 2018, the Low-Income Housing Tax Credit (LIHTC) Program experienced its first expansion in almost a decade. Last month’s newsletter provided a brief synopsis of the increase in tax credit allocations and the new “Income Averaging” provision. This month provides a more in-depth look at income averaging and relevant regulations changes proposed by the California Tax Credit Allocation Committee (TCAC).

Understanding Income Averaging

The new “Income Averaging” (IA) provision, which was originally introduced as part of the Affordable Housing Credit Improvement Act, creates a third set-aside option that allows affordable housing projects to use imputed income limitations assigned to the units rather than individual household incomes to qualify for tax credits. Specifically, projects need to set aside at least 40% of the units—25% in areas with high housing costs—for individuals with income levels equal to or less than the imputed income limitations assigned to the units.

Federal law also requires that imputed income limitations should not exceed 60% of area median income (AMI) and that rents assigned to the units should not exceed 30% of the imputed rate. However, the IA provision allows units to be rented to households with income levels as high as 80% of AMI if the average overall household income for the units remains at or below 60% of AMI.

Prior to the IA provision, only those units at 60% of AMI or below could receive a tax credit subsidy towards its development costs. As a result, developers and localities can plan a housing community with a greater mix of tenant incomes and still receive the full benefits of the tax credit subsidy, as long as the average AMI target for these units does not exceed 60% AMI.

The IA provision allows projects to leverage tax credits for households across a broader socioeconomic spectrum, and the higher-rent units can offset the lower-rent units making those low-income units more feasible for developers.  The provision will also benefit renters at 60-80% of AMI who previously would not have qualified for LIHTC.

Proposed Changes to TCAC Requirements

The IA provision also prompted the California Tax Credit Allocation Committee (TCAC) to propose two regulation changes that would exceed the minimum federal standard. The proposed changes, as well as the rationale provided by TCAC staff and public comments, will be considered at the May 16, 2018, TCAC meeting. The proposed TCAC regulation changes are as follows:

a.  To qualify for competitive 9% tax credits, the average imputed income for the units would not be allowed to exceed 50% of AMI in any project that includes low-income units for households above 60% AMI.

b. To qualify for non-competitive 4% tax credits, projects that include units targeted at 60% to 80% of AMI would need to achieve average overall project targeting at or below 59% of AMI.

These TCAC provisions allow for the flexibility in the unit mix as contemplated by the new federal rules, while ensuring that average affordability of projects remains low in order to serve the California residents with the greatest need.

Liz Tracey, Senior Principal, is an expert on affordable housing and community development finance using tools such as the Low-Income Housing Tax Credit and New Markets Tax Credits. For information about community development financing resources, contact Liz Tracey at liz@lesardevelopment.com.

Reza Mortaheb, Research Analyst, is an architect, urban planner, and urban researcher who monitors how federal and state housing policy affects housing affordability and community development. Reza can be reached at reza@lesardevelopment.com.