Cross-border Housing Development

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Group Picture in TijuanaTijuana is experiencing a resurgence. Long recognized as a bustling border town, Tijuana has recently been grabbing headlines up and down the California coast as an arts hub, a thriving gastro-tourism destination, and a place where San Diegans can find affordable housing. LeSar Development Consultants has been following these trends closely, and last week traveled to Tijuana to meet with local developers and architects to discuss how the city of Tijuana is changing and their vision for its future.

Estación Federal

The LDC team first met with Miguel Marshall, CEO of Centro Ventures, just across the border from the San Ysidro port of entry in a neighborhood known as Colonia Empleados Federales. Centro Ventures led the redevelopment of a former gas station called Estación Federal into a live/work space that has become home to regional artists and entrepreneurs. Marshall and a local community leader, Mario Aragón, described how the land was granted to federal employees in the 1940s, when the addition of canals to tame the flooding of the Tijuana River and the presence of a pedestrian bridge border crossing created a boom in both the local economy and the housing industry.

After the pedestrian crossing was closed down and moved, the neighborhood experienced a downturn that is still visible today in the empty storefronts and abandoned developments. Just over a year ago, a new pedestrian bridge border crossing, known as “El Chaparral” in Mexico and “Virginia Avenue Bridge” in the US, was installed. The new crossing and the redevelopment of Estacion Federal have brought revitalization to the area.

20170721_102157When Marshall and his investment partners decided to redevelop the property, they immediately looked to make the space an art and culture hub. The concept of redevelopment of mixed use properties is somewhat new in Mexico, so Marshall and his team raised the initial funds for the purchase based on their business plan and then received several rounds of financing for construction before accumulating sufficient credit to obtain a mortgage through a small, regional bank.

Estación Federal currently has a variety of apartments ranging in price from $500 to $1,000 – many of which are rented by Americans working in the US. It also has six work spaces, and several commercial spaces.

Escuela Libre de Arqitectura

Three years ago, Tijuana also became home to a new architecture school, Escuela Libre de Arquitectura, which is rooted in the urbanist philosophy of founder and local architect and planner Jorge Gracia.

During a tour of the school, Gracia and his colleague, Orhan Ayyüce, talked about the importance of the people and narratives behind architectural development. Their “constellations” program teaches students about how place-making creates community hubs within neighborhoods. Gracia talked about how the narratives of kidnapping and the war on drugs had destroyed the city. As a working architect and planner, he also saw an opportunity to revitalize the city by creating a new generation of architects who understood how history and culture shape the environment.

ELA Recycling ProjectAt Escuela Libre de Arquitectura, students receive a hard hat on their first day to symbolize the importance of practical architecture and its relationships to urban planning, construction, and daily life. Students not only learn about design theory and trends, they also learn about mixed use development, how to work with clients, and sales. They also take part in three internships throughout their course of study, including both local and international internships that help them to understand the connection between architecture and place.

Following a tour of the school and Gracia’s studio, one of the students, Sarah, showed the LDC team her latest group project — a burned out building the group is reclaiming as a space for an upcoming architecture conference. The space will showcase reuse and recycling. The students were working with a few volunteers that day to sort the debris from the fire into neat piles that would be used as the raw materials for the redesigned space. As Gracia said, the students are learning how to build a better city.

To learn more about LDC’s policy services, contact Artemis Spyridonidis, Senior Associate, at artemis@lesardevelopment.com.

LeSar-Artemis-4x5Artemis Spyridonidis is covering 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.

San Diego Considering Pilot Program to Reduce ADU Fees

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ArtemisSenior Associate Artemis Spyridonidis addressed the San Diego City Council on July 24th, before it approved amendments to the Land Development Code and the Local Coastal Program to modify the City’s accessory dwelling unit (ADU) regulations.

Her comments focused on the Smart Growth and Land Use Committee’s recommendation that the City Council approve a two-year pilot program during which ADU fees would be reduced to a flat fee of $2,000 – down from the current fees of approximately $28,300. Although it wasn’t part of the resolution that day, the City Council may still have an opportunity to approve this program, and it’s our hope that the pilot program will be created, as it could create a great boost in ADU production.

LDC studied San Diego’s ADU fees and compared them to the fees of several other major cities. We found that there is a direct correlation between fees and the number of units built; the lower the fees, the more units built.

For example, Portland, Oregon, charges approximately $1,300 in fees and approximately 350 ADUs have been built there each year since 2015. Santa Cruz charges around $12,800 in fees and approximately 50 units have been built each year since 2015. Finally, in San Diego, fees are approximately $28,300, and the city estimates that only 10 ADUs are built here each year. A two-year pilot program establishing a flat fee of $2,000 is a much needed policy change to encourage ADU development.

As naturally occurring affordable housing (NOAH), ADUs can help fight the displacement that typically occurs when neighborhoods gentrify and rents and housing prices climb, as they have in recent years in San Diego. This type of urban infill is also environmentally friendly, reducing commute times and urban sprawl. By allowing people to stay in their own communities, among their own neighbors, families, and friends, ADU development will help maintain networks that create wellbeing for all San Diegans.

To learn more about LDC’s policy services, contact Artemis Spyridonidis, Senior Associate, at artemis@lesardevelopment.com.

LeSar-Artemis-4x5Artemis Spyridonidis is covering 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.

LDC Working with Chair of San Diego City Council’s Select Committee on Homelessness

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Kris 2In July, LDC Senior Associate Kris Kuntz began supporting the chair of the San Diego City Council’s Select Committee on Homelessness, Chris Ward, as a subject matter expert. He is working closely with Councilmember Ward to identify and implement solutions to the city’s significant homeless population. Meeting on July 24th, the committee took the following actions:

a. Approved a memo with concepts to immediately address unsheltered homelessness.
b. Moving to come back at the next meeting with details on the concepts, including costs.
c. Approved their yearly work plan that includes exploring the option of declaring a homeless state of emergency and considering a 2018 ballot measure directed at homelessness.

krisFor more information about new strategies, program reforms and systems change to address homelessness, contact Kris Kuntz, Senior Associate, at kris@lesardevelopment.com.

Harvard Report Calls for Expanded Range of Housing Options

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Harvard_2017_Housing_ReportNational home prices reached pre-recession peaks last year despite home prices exceeding previous highs in only 41 of the nation’s 100 largest metro areas, according to a recent report by Harvard University’s Joint Center for Housing Studies. High-income neighborhoods saw significantly greater gains than low-income neighborhoods, resulting in regional growth patterns that show price appreciation along the East and West Coasts and declines in the Midwest and South.

The impacts of historically low construction on housing supply have disproportionately affected the entry-level housing market and tightened the rental market where prices have far outpaced inflation. While household growth rates have picked up largely due to gains among the millennial generation and immigrants, rates are expected to slow again as the baby-boom generation declines.

To meet the demand for affordable housing, the report calls for national policies to address the diversity of housing markets nationwide, and for state and local governments to take the lead on developing policies and securing resources to meet the unique needs of their communities. Read more…

For more information about innovative approaches to policy and real estate development, contact Jennifer LeSar, President and CEO at Jennifer@lesardevelopment.com.

Jennifer LeSarWith more than 25 years of experience in the real estate development and investment banking industries, Jennifer LeSar brings a diverse background to her work in community development and urban revitalization. Her technical expertise spans from policy and program development to the origination and underwriting of complex investments in equity funds, multi-family portfolios, and historic and low-income tax credit properties utilizing federal and state financing programs.

New AHSC Grant Guidelines Approved, ELP Advisors Again Provides Technical Assistance

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AHSC Sustainable CommunitiesCalifornia is gearing up for Round 3 of the Affordable Housing and Sustainable Communities (AHSC) grant program, and ELP Advisors will once again play a key role in providing technical assistance to select applicants.

On July 17th, the Strategic Growth Council (SGC) approved new guidelines for the next round of AHSC grantmaking. Earlier this month, the council announced that LDC’s affiliate, Estolano LeSar Perez Advisors, in partnership with Enterprise Community Partners, has once again been chosen to provide technical assistance to qualifying AHSC applicants. We are excited to continue our successful partnership with SGC and to team with Enterprise in providing comprehensive assistance to applicants across California.

The new AHSC guidelines make some important changes since the last round, many in response to feedback from applicants. We are hopeful that these changes will make the application process less cumbersome, more effective and allow a wider range of communities to be competitive for funding. Here’s a rundown of the major changes:

Bye bye, concept app: Repeat AHSC applicants will be happy to learn that concept applications are no longer required. They have been replaced with a checklist and an optional consultation with SGC staff. This change should greatly streamline the application process and give applicants a good idea of their competitiveness prior to investing time and money into a detailed application. A host of other, smaller changes are also aimed at streamlining and simplifying the process.

New housing and anti-displacement requirements: The guidelines strengthen and, in some cases, add new requirements aimed at ensuring AHSC funds flow to communities that are complying with state housing law and protecting vulnerable communities from displacement.

Changes to include more rural projects: Thanks to changes to the net density requirements, projects across a wider spectrum of rural communities will now be eligible for AHSC.

Indian Tribes now eligible: Federally-recognized Indian Tribes are now eligible to apply for AHSC grants.

New threshold criteria: Several scoring elements that were optional last year have become mandatory, known in AHSC lingo as “threshold” requirements. These include certain housing affordability and urban greening elements.

You can review the new guidelines here.

With the guidelines adopted and the technical assistance team in place, Round 3 of AHSC grantmaking will get underway this fall. The notice of funding availability (NOFA) will be released in October, applications will be due in January, and awards will be announced in May.

Even before the NOFA is released, the council will begin the process of selecting applicants to receive free technical assistance from ELP Advisors and Enterprise. No details yet, but we expect there to be an announcement in August. We’ll keep you posted.

For more information about AHSC grants and technical assistance opportunities, please contact Autumn Bernstein, Principal, at autumn@elpadvisors.com.

LeSar-Autumn-5x7Autumn Bernstein, Principal, Estolano LeSar Perez (ELP) Advisors, is an expert in urban planning, transportation, housing, and environmental policy. She has 15 years of experience as a policy advocate, strategic advisor, non-profit executive and facilitator in communities across California. Autumn is a native of the San Francisco Bay Area and lives in El Cerrito.

Legislature Passes Cap and Trade, Delays Vote on Affordable Housing Measures

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After months of intense negotiations, Gov. Jerry Brown and state legislators reached an agreement to extend cap and trade until 2030. On Monday, the Legislature voted to approve two bills that will assure the continuation of the market-based climate program. Legislative leaders also announced that they are postponing a vote on several affordable housing bills until August.

Cap and Trade

Gov and State Lawmakers Unveil New Plan to Extend Cap and TradeYesterday’s vote on Assembly Bill 398 (Eduardo Garcia, D-Coachella) will require the California Air Resources Board to establish a firm upper limit for the price of allowances or permits to emit one metric ton of greenhouse gases. The current cap-and-trade system set a floor for prices but did not have a fixed ceiling to prevent prices from rising.

Assembly Bill 617 (Cristina Garcia, D-Bell Gardens; Eduardo Garcia, and Miguel Santiago, D-Los Angeles) requires stricter air pollution monitoring around industrial facilities and tougher penalties for violating pollution regulations. This benefits communities located near these facilities.

“Today’s vote on AB 398 to extend Cap and Trade marks an important milestone in the fight against climate change,” said Sen. Toni Atkins (D-San Diego), who previously led efforts to direct cap and trade funding toward transit-oriented affordable housing projects while serving as Speaker of the Assembly. “Without this extension, California would have been in serious danger of failing to meet our ambitious, world-leading climate goals.”

Passage of these bills represents a second milestone in assuring the future of cap and trade. In June, California’s Supreme Court upheld an appeals court’s approval of the program. Opponents had challenged the program as essentially amounting to an unauthorized tax.

Affordable Housing

Senate Bill 2 Leaps Forward in the State AssemblyAmid Monday’s debate on cap and trade, the Governor, Senate President pro Tempore Kevin de León, and Assembly Speaker Anthony Rendon issued a joint statement reaffirming their shared commitment to address California’s housing needs when the Legislature resumes in August.

“Astronomical housing costs are straining family budgets and stress employees who can’t afford to live where they work. That’s unacceptable, and it’s why the affordable housing crisis has been one of our top priorities. The package of legislation we are all working on will help ensure Californians won’t have to pay an arm and a leg to have a roof over their head.”

The package of bills under consideration includes the Building Homes and Jobs Act (SB 2), which was authored by Sen. Atkins and 12 co-signers and gained momentum on July 12th following an approval vote in the Assembly Housing and Community Development Committee and a motion that allowed the bill to bypass the Appropriations Committee and move directly to the Assembly Floor.

The Building Homes and Jobs Act establishes a permanent funding source that will increase California’s supply of affordable homes, create jobs, and spur economic growth. Ongoing revenues would be obtained through fees on real estate document filings, excluding residential and commercial property sales. Fees would not exceed $225 per transaction.

Modeled on the Building Homes and Jobs Act bill (AB 1335 — Atkins), SB 2 would address the urgent need for affordable housing funding lost through the elimination of Redevelopment Agencies in January 2012. The bill would generate an estimated $200 million annually following implementation in 2018.

According to the bill’s sponsors, the California Housing Consortium and Housing California, SB 2 will create approximately 29,000 jobs for every $500 million raised, primarily in the construction sector. The bill would also leverage an additional $2.78 billion in federal, local, and private sector investment.

Other bills that will be under consideration by the Legislature include:

Senate Bill 3, the Affordable Housing Bond Act of 2018 (Beall, D-San Jose), which would authorize a ballot measure asking voters statewide to approve $3 billion in bond financing for rental housing and existing housing programs in the November 2018 election.

Senate Bill 35 (Wiener, D-San Francisco), which would eliminate multiple local planning reviews for individual projects that meet certain zoning and affordability standards. Under provisions negotiated with the State Building and Construction Trades Council of California, projects of more than 10 units that qualify for expedited approval would pay union-level wages to construction workers, and developers of some larger projects would have to agree to union-standard work rules or apprenticeship programs.

Assembly Bill 45, the California School Employee Housing Assistance Grant Program (Thurmond, D-Richmond), which would require the California Housing Finance Agency (CalHFA) to administer a $25 million predevelopment grant and loan fund for the creation of affordable housing for school district employees.

For more information about innovative approaches to policy and real estate development, contact Jennifer LeSar, President and CEO at Jennifer@lesardevelopment.com.

Jennifer LeSarWith more than 25 years of experience in the real estate development and investment banking industries, Jennifer LeSar brings a diverse background to her work in community development and urban revitalization. Her technical expertise spans from policy and program development to the origination and underwriting of complex investments in equity funds, multi-family portfolios, and historic and low-income tax credit properties utilizing federal and state financing programs.

Cecilia Estolano Reappointed to California Community Colleges Board of Governors

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Cecilia V. EstolanoCongratulations to Cecilia Estolano, Co-CEO of Estolano LeSar Perez Advisors, on her reappointment to the California Community Colleges Board of Governors. She is currently serving as the Board President.

The California Community Colleges is the largest system of higher education in the United States with more than 2.1 million students on 114 campuses. For every $1 California invests in students who graduate from college, it will receive a net return on investment of $4.50.

“I am honored to serve on the Board of Governors, and advocate for the quality educational opportunities that every student deserves,” said Estolano. “Our community colleges are the backbone of California’s workforce training and higher education system. I look forward to continuing to work with students, faculty, staff, administrators, and community leaders who help to make California Community Colleges the nation’s most affordable and effective portal to higher education and career advancement.”

The Board of Governors, which is appointed by the governor, sets policy and provides guidance for the 72 districts and 114 colleges that constitute the system, selects the chancellor, and formally interacts with state and federal officials and other organizations.

Estolano was first appointed to the board in 2014, and served as vice president before becoming president.

Register Now for the 2017 California Economic Summit

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CES logoRegister for the 2017 California Economic Summit taking place in San Diego on November 2-3, and save $100 on registration through August 31 using LeSar Development Consultants’ special code: LESAR17.

Join the state’s largest existing coalition of public- and private-sector leaders, coming together for the sixth annual Summit to advance three ambitious goals:

• Create a unifying triple-bottom-line vision for increasing economic security and upward mobility
• Expand the strength and diversity of the Summit network to increase its influence on state and local policy decisions
• Mature the Summit as a formal civic partner with government to advance triple-bottom-line policies

The Summit highlights progress on The 2017 Roadmap to Shared Prosperity, which offers detailed action plans to improve the workforce pipeline, increase the supply of housing near jobs and transit, and expand regional water management of the state’s vital water supplies.

register_now

Jennifer LeSar, CEO of LeSar Development Consultants and Chair of the Summit Host Committee, was among the local leaders who collaborated to bring the Summit to the San Diego region.

For more information about innovative approaches to policy and real estate development, contact Jennifer LeSar, President and CEO at Jennifer@lesardevelopment.com.

Jennifer LeSarWith more than 25 years of experience in the real estate development and investment banking industries, Jennifer LeSar brings a diverse background to her work in community development and urban revitalization. Her technical expertise spans from policy and program development to the origination and underwriting of complex investments in equity funds, multi-family portfolios, and historic and low-income tax credit properties utilizing federal and state financing programs.

LDC Welcomes New Senior Associate

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Jessica-IMG_7723-square webWe are pleased to welcome Jessica Ripper, Senior Associate, to LeSar Development Consultants. Jessica manages marketing and business development and also covers organizational development and systems change, with an emphasis on health and human services. She specializes in partnering with multidisciplinary teams to advance policies and programs to improve the quality of life for children and families, and has extensive experience translating complex social issues into compelling stories, reports, and tools that influence the media, policymakers, donors, and community leaders to take action. She also has a background in developing training curricula, conducting organizational assessments, and performing qualitative data analyses. While at the Annie E. Casey Foundation, Jessica helped to develop Evidence2Success, a framework to guide public investment in evidence-based programs for children and youth by strengthening partnerships among public systems, schools, and communities. She has also worked with the County of San Diego Child Welfare Services and Walden Family Services, and for the Alexander Graham Bell Association for the Deaf and Hard of Hearing, and Goodwill Industries International in the Washington, D.C., area.

For more information about innovative approaches to policy and real estate development, contact Jennifer LeSar, President and CEO at Jennifer@lesardevelopment.com.

Jennifer LeSarWith more than 25 years of experience in the real estate development and investment banking industries, Jennifer LeSar brings a diverse background to her work in community development and urban revitalization. Her technical expertise spans from policy and program development to the origination and underwriting of complex investments in equity funds, multi-family portfolios, and historic and low-income tax credit properties utilizing federal and state financing programs.

Promoting Housing Affordability: Collaboration Key to Improving Policy, Market Conditions

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Two recent events—the Terner Center for Housing Innovation Conference and the release of the UCLA Anderson Forecast—examined the role of market conditions and public policy in the current housing crisis, and what can be done to improve housing affordability in high-cost regions.

LA Aff HousingAt the Terner Center for Housing Innovation Conference, Enrico Moretti, Professor of Economics at the University of California – Berkeley, pointed to the weak housing supply as a “self-inflicted problem” related to zoning and land use restrictions, CEQA (California Environmental Quality Act), construction delays, and the proliferation of lawsuits. He also cited new research showing that underdevelopment limits access to jobs, which results in opportunity costs of $7,000 per year for the average Bay Area worker. It also contributes to rising inequality and depresses the State’s economy.

The situation is similar in Los Angeles, where the growing number of rent-burdened households makes it difficult for people to escape poverty and increases the need for renter assistance, according to Stuart Gabriel, Professor of Finance and Arden Realty Chair at the University of California – Los Angeles Anderson School of Management.

What can be done to address these issues? Solutions raised by the speakers and panelists include:

• Updating zoning codes to allow for ADUs and multi-family development,
• Implementing consequences for localities that fall short of RHNA goals, and
• Revising parking requirements that restrict development, especially as transportation innovations transform commuting and travel.

In addition, speakers at both events cited the need for greater regional and local collaboration. In a conversation with the Terner Center’s Carol Galante, Shaun Donovan, former Secretary of the U.S. Department of Housing and Urban Development, acknowledged Congress’s limited appetite for investing in infrastructure and the economy and encouraged regional and local leaders to come together to build the public will for local solutions. He also cited examples of successful interagency collaboration from the Partnership for Sustainable Communities, which brought together the U.S. Department of Housing and Urban Development, U.S. Department of Transportation, and the U.S. Environmental Protection Agency to help communities improve access to affordable housing, increase transportation options, and lower transportation costs while protecting the environment.

Along similar lines, one of the panels at the UCLA Anderson Forecast discussed the need to help planning agencies and communities rethink the meaning and importance of “affordable” housing as part of the larger housing continuum. By building housing across every income level, communities will not only reduce inequality, they will also strengthen the economy.

For more information about innovative approaches to policy and real estate development, contact Jennifer LeSar, President and CEO at Jennifer@lesardevelopment.com.

Jennifer LeSarWith more than 25 years of experience in the real estate development and investment banking industries, Jennifer LeSar brings a diverse background to her work in community development and urban revitalization. Her technical expertise spans from policy and program development to the origination and underwriting of complex investments in equity funds, multi-family portfolios, and historic and low-income tax credit properties utilizing federal and state financing programs.