Category Archive: Fair Housing

  1. HUD Proposes Revising Affirmatively Furthering Fair Housing Rule

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    On Aug. 13, HUD announced that it is seeking public comment on potential amendments to its Affirmatively Furthering Fair Housing (AFFH) regulations. The advance notice of proposed rulemaking, published in the Federal Register, affirms that the regulations aim to help communities fulfill their fair housing obligations, but that the approach outlined in the regulations “proved ineffective, highly prescriptive, and effectively discouraged the production of affordable housing.” HUD also asserted that the AFFH Data and Mapping Tool contained errors and that local governments had difficulty using it, which resulted in the need for “an unsustainable level of technical assistance.”

    “It’s ironic that the current AFFH rule, which was designed to expand affordable housing choices, is actually suffocating investment in some of our most distressed neighborhoods that need our investment the most,” said Carson. “We do not have to abandon communities in need. Instead we believe we can craft a new, fairer rule that creates choices for quality housing across all communities.”

    HUD seeks to amend the proposed rule to create a process focused on accomplishing positive results and encouraging actions to increase housing choice while providing greater local control, minimizing regulatory burdens on communities, and making more efficient use of HUD resources.

    The National Fair Housing Alliance (NFHA) stated that the AFFH changes would be “a significant setback for the millions of Americans that depend on our government to protect and enforce their civil rights.” NFHA also argued that the original AFFH rule provided a framework for jurisdictions to use federal funds to invest in affordable housing, transportation infrastructure, and other community amenities in neighborhoods that had previously experienced redlining and other discriminatory practices.[1]

    [1] Statement from the National Fair Housing Alliance, et al. Concerning the Recent AFFH Ruling (August 17, 2018).

  2. Legislature Extends Legacy of 2017 Housing Package

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    California lawmakers continued to build on the achievements of the 2017 housing package by passing a number of bills to address the ongoing housing crisis during the final days of the 2018 legislative session, which ended on Aug. 31. While issues related to land use planning, affordable housing development, fair housing efforts, and homelessness continued to figure prominently in the debate, the Legislature also passed a number of bills to mitigate risks associated with a second crisis: wildfire disasters.  Governor Brown has until Sept. 30, 2018, to sign or veto the bills.

    Land Use Planning

    Both AB 1771 and SB 828, which are awaiting Governor Brown’s signature, would address ongoing concerns that the current Regional Housing Needs Allocation (RHNA) distribution process is more often influenced by politics rather than data on housing needs.

    AB 1771, authored by Assm. Richard Bloom (D-Santa Monica), would substantively change the allocation process by requiring Councils of Government (COGs) to develop their RHNA allocation methodology in consultation with the state Department of Housing and Community Development (HCD) rather than waiting to consult with HCD until they are in the process of developing their allocation plans. The plans would need to integrate statutory objectives related to promoting infill development, advancing socioeconomic equity, achieving greenhouse gas targets, increasing the availability of affordable housing units relative to the number of low-wage jobs, and affirmatively furthering fair housing.

    AB 1771 also calls for COGs to employ a more transparent approach to developing and implementing the allocation process. For example, COGs would also need to electronically publish the results of its survey of members on the proposed methodology and information on how the proposed methodology achieves statutory objectives. The methodology would need to address factors such as housing need, housing burden, overcrowding, and the availability of housing to align with employment and wages. HCD would have 60 days following the public comment period to determine whether the methodology meets RHNA allocation statutory objectives. Another change contained within the bill would prohibit local governments from proposing the redistribution of housing allocations among themselves as part of an appeal process.

    SB 828, authored by Sen. Scott Wiener (D-San Francisco), seeks to establish a more transparent, equitable process for determining each jurisdiction’s Regional Housing Needs Assessment (RHNA). While each jurisdiction is required to plan for its fair share of the regional housing need, the current process does not adequately account for unmet needs due to historically low housing production. Further, the process has been criticized for favoring cities that can apply political pressure to reduce their allocations. SB 828 would allow HCD to include existing households in the number of total projected households when determining RHNA methodology. It would also prohibit COGs from using factors, such as the prior underproduction of housing or stable population numbers from the previous RHNA, in determining the jurisdiction’s future share of housing needs.

    SB 828 would further require the final regional housing need allocation plan to demonstrate government efforts to reverse racial and wealth disparities throughout a region. Specifically, COGs would be required to compare local overcrowding and vacancy rates, as well as the percentage of cost-burdened households, with those of a healthy housing market. Before passing the bill, the Assembly cut language that would have required a city or county to identify an inventory of available land equal to 125 percent of its RHNA requirements for each income category or identify zoning and other strategies to address needs.

    The Legislature also passed AB 829, which was authored by Assm. David Chiu (D-San Francisco) and designed to discourage local legislative bodies from requiring developers to obtain a letter of acknowledgement or other documentation prior to seeking state funding for a project in their district. Senate amendments refocused the bill’s language to prohibit the use of state funding in any project that requires documentation from a local legislative body or one of its members. The bill was introduced following a Los Angeles Times article on Los Angeles city councilmembers power to block housing developments in their district by requiring, but not providing, such documentation.

    In addition, AB 2923, authored by Assms. David Chiu (D-San Francisco) and Timothy Grayson (D-Concord), would streamline the approval process for transit-oriented development (TOD) on infill sites owned by Bay Area Rapid Transit (BART) and located within a half-mile of a BART station. The bill would also require the BART Board of Directors to establish TOD zoning standards by July 1, 2020. Cities and counties within the BART service area would have two years or until July 1, 2022, to adopt an ordinance conforming to the BART TOD zoning standards. If signed into law, the bill would enable BART to fulfill its goal of building 20,000 new units of housing, including 7,000 units of affordable housing, on the 250 acres of developable land it owns by 2040.

    Governor Brown has already signed, AB 3194, which updates the Housing Accountability Act to prohibit jurisdictions from rejecting a development of very low-income, low-income, or moderate-income housing or an emergency shelter without evidence to demonstrate that it would have a “specific, adverse impact upon the public health or safety.”  Authored by Assemb. Tom Daly (D-Santa Ana), the law prohibits jurisdictions from requiring rezoning for projects that meet objective general plan standards when local zoning is inconsistent with the general plan.

    The governor also signed AB 1406, which was authored by Assm. Todd Gloria (D-San Diego). The new law amends the Education Code to extend the allowable term of specific types of lease agreements entered into by a school district to 99 years and aligns the law with Civil Code. The Education Code had previously prevented school districts from entering a lease-leaseback agreement or lease-to-own agreement of more than 40 years with the entity that constructed the school facility. The maximum term under which school districts can co-locate with another entity through a joint-occupancy agreement has also been extended from 66 to 99 years.

    Affordable Housing Development

    Introduced by Sen. Ben Allen (D-Santa Monica) and co-authored by Assms. Jesse Gabriel (D-Van Nuys) and Lorena Gonzalez Fletcher (D-San Diego), SB 961 would streamline the process for developing affordable housing near transit in enhanced infrastructure financing districts (EIFDs) in certain situations. EIFDs are government entities established by cities or counties for the specific purpose of financing public and private infrastructure and facilities, including low- and moderate-income housing. This bill would enable EIFDs to enact and form a Second Neighborhood Infill Finance and Transit Improvement Act (NIFTI-2), which allows for the issuance of bond financing to support affordable housing near transit without voter approval.

    SB 961 also sets forth procedures public financing authorities must follow to develop and adopt an infrastructure financing plan to expend NIIFTI-2 funds. Cities or counties would be allowed to allocate tax revenues to a NIFTI-2 by adopting a resolution, under certain conditions. Specifically, the district would be required to use at least 40 percent of the total funds it receives for rental or owner-occupied housing affordable to households earning 60 percent or less of the area median income (AMI). Rental housing funded through the EIFD would need to remain affordable for 55 years, and owner-occupied housing would have affordability restrictions for 45 years. Half of the total housing funds would be used to develop permanent supportive housing for people experiencing homelessness or households earning less than 30 percent AMI.

    The bill was amended in the Assembly to require an EIFD to set aside at least 10 percent of its total funds to cover capital costs for greening efforts or active transportation capital projects. Other amendments established requirements for public hearings and guidelines to address potential landowner and resident protests of the financing plan.

    Two other bills, intended to make it easier to build accessory dwelling units, did not make it through the Legislature. AB 2890, authored by Assm. Phil Ting (D-San Francisco), would have further revised Accessory Dwelling Unit laws to prohibit local ordinances from imposing certain standards that constrain ADU development and required HCD to establish small home building standards. SB 831, introduced by Sen. Bob Wieckowski (D-Fremont) and coauthored by Sens. Toni Atkins (D-San Diego), Nancy Skinner (D-Berkeley), and Scott Wiener, would have significantly rewritten ADU statutes. The bills did not pass at least in part because local governments have only updated local ADU ordinances to comply with recent laws, which went into effect less than two years ago.

    Fair Housing

    The Legislature also took a proactive stance to ensure that all housing and community development programs combat patterns of discrimination and segregation by actively addressing disparities, promoting inclusive communities, and upholding civil rights and fair housing law regardless of whether they receive HUD funding.

    Authored by Assm. Miguel Santiago (D-Los Angeles), AB 686 would require public agencies to be consistent with the final rule to Affirmatively Further Fair Housing, promulgated by the U.S. Department of Housing and Urban Development during the Obama Administration. This would require Housing Elements due on or after January 1, 2021, to include an assessment of fair housing with an analysis of fair housing issues and trends contributing to disparate access to housing; goals, strategies, and actions to address factors that contribute to limited housing choice and access to opportunity; metrics to track progress toward goals; and the identification of land suitable for residential development.

    On August 28, Governor Brown signed AB 2219, authored by Assm. Phil Ting (D-San Francisco). This bill requires landlords to accept security deposits and rent from a third party in a form other than cash or electronic funds transfer. The third party must provide a signed acknowledgement that they are not the tenant. The new law seeks to prevent homelessness by requiring landlords to accept funds from individuals and/or organizations other than the tenant. The third-party payments do not constitute a contract between the landlord and third party, and the law does not prevent landlords from terminating a tenant rental agreement.

    Homelessness

    As part of ongoing efforts to address the public health impact and costs of homelessness, the Legislature passed bills to facilitate supportive housing development, support efforts to reduce youth homelessness, provide matching funds to support employment programs for people experiencing homelessness, and create the Orange County Housing Trust.

    Jointly authored by Assms. David Chiu and Tom Daly, AB 2162 expedites supportive housing development by making it a by-right use in multifamily and mixed use zones under certain conditions. The bill would allow ministerial approval of projects that are 100 percent affordable for low-income households earning up to 80 percent of AMI if 25 percent or 15 of the units, whichever is greater, are set aside for supportive housing. Projects would be required to have a 55-year affordability restrictions, no minimum parking requirements for supportive housing units located within a half-mile of transit, and a plan for on-site supportive services with named partners, proposed funding sources, and staffing commitments. Senate amendments would cap by-right development requirements at 50 units or less in cities or unincorporated areas of a county with a population of less than 200,000 and an annual Point-In-Time count of less than 1,500, although a city or county could approve by-right development for projects of over 50 units. If signed by Governor Brown, the bill would apply to all areas even where local governments are meeting RHNA.

    A second bill, SB 1152, authored by Sen. Ed Hernandez (D-Montebello), would require hospital discharge policies and procedures to include specific processes for discharging people experiencing homelessness to ensure that they are not discharged without having a safe place to go. The law would require hospitals to inquire about an individual’s housing status; notify patients about options for housing, shelter, and supportive services based on their best interest and preferences; and identify a post-discharge destination. Assembly amendments eliminate requirements related to coordinating referrals and providing transportation in excess of 30 minutes or 30 miles, and delay implementation until July 1, 2019. In addition, hospitals would be required to maintain a discharge log of patients experiencing homelessness rather than report to the Office of State Health Planning and Development.

    The Legislature also passed SB 918, known as the Homeless Youth Act of 2018 and co-authored by Sen. Scott Wiener and Assm. Blanca Rubio (D-Baldwin Park), which would establish additional requirements for the Homeless Coordinating and Financing Council focused on the specific needs of youth experiencing homelessness. As of the January 2017 Point-In-Time Count, California was home to more than 15,000 homeless youth, 38 percent of the total homeless youth population nationwide. The requirements include setting goals and outcomes measures; enhancing systems integration and coordination; guiding the coordination of policy, practice, and funding in coordination with stakeholders; identifying best practices; and, providing program development and technical assistance, as funding is available. Assembly amendments eliminated a grant program focused on youth homelessness.

    If signed into law, AB 3085, authored by Assm. Ian Calderon (D-Whittier), would establish the New Beginnings California Program within the Department of Community Services and Development. The program would provide up to $50,000 in matching funding for up to 50 cities or Continuum of Care (CoC) programs to pursue a homeless employment program of their own or expand on an existing one. Cities and CoCs would be able to contract with a qualifying local service provider to operate the program. To qualify, programs would need to connect individuals experiencing homelessness and living in supportive housing with employment through the city, a contracted service provider, or a private entity or prepare people for employment by providing relevant services and resources. Hourly wages must meet or exceed minimum wage. The city or CoC would be required to provide matching funds from charitable contributions or other grant funding.

    AB 448, authored by Assms. Tom Daly and Sharon Quirk-Silva (D-Fullerton), would allow Orange County and any city in the county to create the Orange County Housing Trust, a joint powers authority (JPA) that can receive public and private funding and authorize debt instruments to streamline shelter and permanent supportive housing development. The JPA would fund the development of housing for individuals and families experiencing homelessness or those with extremely low- to low incomes within Orange County. The legislation was propelled forward by an Orange County Grand Jury report on the benefits of supportive housing and a UC Irvine study that showed the County could save an estimated $42 million on healthcare, law enforcement, and other local and county expenditures by funding supportive housing. The County would also be able to better leverage available funding to attract increased funding from the state.

    One of the bills that stalled in the Legislature was SB 792, which would have required the Homeless Coordinating and Financing Council to develop and implement a statewide strategic plan to assist CoC lead agencies better implement HUD-recommended activities and better meet HUD requirements.  SB 1010, which would have created a pilot program to provide supportive housing to parolees with mental health conditions experiencing homelessness, also did not pass the Assembly Committee on Appropriations, in part because the California Department of Corrections and Rehabilitation has already established a similar program with one county and because it would require CDCR to pay for mental health treatment for which counties already receive funding.

    Wildfire and Disaster Mitigation

    Governor Brown has already signed AB 1797, the first of several bills to result from the state’s most disastrous wildfire season on record. Authored by Assm. Marc Levine (D-San Rafael), the law will require insurers to conduct a replacement cost estimate that conforms to the State Department of Insurance’s methodology and rules when they sell or renew a residential insurance policy. This bill originated following recent wildfires, after which numerous consumers learned that their insurance coverage was based on outdated replacement costs and therefore inadequate to fully cover the cost of repairing or rebuilding their homes.

    SB 824, authored by Sen. Ricardo Lara (D-Bell Gardens), would further protect consumers by preventing insurers from cancelling or not renewing residential insurance policies in fire-prone regions unless such actions were related to nonpayment, conviction of a crime related to increasing a property hazard, or fraud. Amendments specify that the regulations would not apply if the policy renewal threatened the insurer’s financial solvency.

    SB 894, authored by Sens. Bill Dodd (D-Napa) and Mike McGuire (D-Healdsburg) and co-authored by Assemb. Levine, would allow disaster victims with insufficient insurance coverage on their primary dwelling to combine payments under other policy limits up to the total cost of rebuilding or replacing the home. Insurers would also be required to renew policies for at least two renewals or 24 months, with a 12-month extension, following a total loss.

    Two companion bills, AB 1772 and AB 1800, each address different aspects of the Senate bill. AB 1772, authored by Assms. Jim Wood (D-Santa Rosa) and Cecilia Aguilar-Curry (D-Winters), would give wildfire victims 36 months to rebuild their homes and businesses following a catastrophic wildfire and extend the time policyholders can collect the full amount of the insurance payment. AB 1800, authored by Assemb. Marc Levine, would permit policyholders to collect the full replacement cost of their home after a total loss, even if they opted not to rebuild, decided to replace the home at another location, or purchased a home elsewhere.

    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 seven Housing Elements and eight Consolidated Plans for jurisdictions throughout California. She can be reached at diana@lesardevelopment.com.

    Kris Kuntz, Principal, is passionate about creating innovative solutions to address homelessness. Prior to joining LDC, he performed agency-wide evaluation activities for San Diego’s largest homeless services agency, that included a drop day center, emergency shelter, transitional housing, rapid re-housing, permanent supportive housing, and a federally qualified health center.  He was an integral part of Project 25, San Diego’s successful homeless high utilizer project and worked with Managed Care Organizations to sustain the project after the United Way’s initial investment. To learn more about LDC’s work with homeless assistance systems, contact him at kris@lesardevelopment.com.

     

     

     

     

     

  3. Four Actions to Remedy Housing Segregation

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    “The Color of Law” Author Richard Rothstein with LeSar Development Consultants staff at “Charting the Course: Celebrating the 50th Anniversary of the Fair Housing Act”

    In The Color of Law: A Forgotten History of how our Government Segregated America, author Richard Rothstein tackles the misconception that private prejudice coupled with private lending practices led to racial segregation in America. Instead, he contends that government policies—including lack of enforcement of the Fair Housing Act—promoted the patterns of segregation that still exist today. At the San Diego Regional Alliance for Fair Housing Conference, which took place in early April, Rothstein recommended four action steps to reverse housing segregation in the United States:

    (1) Promoting the purchase of market rate homes by local government for sale at lower prices to populations affected by housing segregation

    (2) Withholding mortgage interest deductions from communities that refuse to desegregate;

    (3) Reforming low-income housing tax credits to promote development outside of low-income communities; and,

    (4) Enhancing Section 8 vouchers to allow renters to live outside of low-income communities.

    Promoting Local Government Purchase and Sale of Homes

    To increase residential integration, Rothstein suggests local governments could buy homes in predominantly white neighborhoods and offer them at a subsidized price to households affected by housing segregation.

    Withholding Mortgage Interest Deductions from Segregated Communities

    Although the tax reform bill that passed last year downsized the mortgage interest deduction, it is still regressive, benefitting wealthier households more than others. The deduction subsidizes homeownership, redistributing wealth to richer households, and encourages the construction of larger, more expensive housing. Additionally, the government spends four times more on subsidies for mortgages than supporting renters or people who live in affordable housing.[1] Rothstein suggested that communities that refuse to desegregate and continue to block low-income projects in their neighborhoods should have their mortgage income deductions withheld until residential integration in their community is implemented.

    Reforming LIHTC to Develop Projects Outside of Low-Income Communities

    Rothstein argues that federal subsidies such as the Low Income Housing Tax Credit program (LIHTC), which subsidizes the development of affordable housing, and Section 8 vouchers promote racial segregation in communities. A review of federal data by the New York Times found that in the nation’s largest metropolitan areas, low-income housing projects that use federal tax credits are disproportionality built in high poverty and high minority neighborhoods.[2]

    Enhancing Section 8 Vouchers

    Many of the 2.2 million households that receive Section 8 vouchers remain in low-income neighborhoods and are unable to rent in more affluent areas. Rothstein proposes reforming these federal programs to remedy segregation, by improving the Housing Choice Voucher Program to allow low-income renters to live in middle income neighborhoods.

    Whatever resolutions are proposed to address housing inequality, Rothstein argues that combatting deeply entrenched segregation will require a better public understanding that it is a result of decades of policymaking by local, state and federal governments. Only by accepting that segregation is a government-sponsored system can we create equally effective government policies to reverse it.

    Artemis Spyridonidis 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] https://www.citylab.com/equity/2015/04/the-us-spends-far-more-on-homeowner-subsidies-than-it-does-on-affordable-housing/390666/

    [2] https://www.nytimes.com/2017/07/02/us/federal-housing-assistance-urban-racial-divides.html?smid=tw-share&_r=1

  4. Fair Housing Conference Examines Laws, History of Segregation

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    “The Color of Law” Author Richard Rothstein with LeSar Development Consultants staff at “Charting the Course: Celebrating the 50th Anniversary of the Fair Housing Act”

    San Diego housing advocates gathered on April 6 at “Charting the Course: Celebrating the 50th Anniversary of the Fair Housing Act,” which featured a keynote by Richard Rothstein, author of The Color of Law: A Forgotten History of How Our Government Segregated America. Rothstein emphasized how a history of explicit government policies created a system designed to segregate residents by race—known as de jure segregation—that has shaped our neighborhoods and communities. He also argued that understanding the history of housing segregation is essential to dismantling both unlawful practices and the myth that housing segregation occurred accidentally or through private activity. The conference also featured sessions on the history of living patterns in San Diego and the role of technology, public policy, construction, and preservation in creating more inclusive communities.

  5. HUD Suspends Fair Housing Rule

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    U.S. Department of Housing and Urban Development

    On January 5, 2018, the U.S. Department of Housing and Urban Development (HUD) announced that it had suspended the Affirmatively Furthering Fair Housing (AFFH) final rule, an Obama-era effort aimed at addressing racial discrimination in housing. HUD also extended the deadline for local governments to submit an Assessment of Fair Housing (AFH) from 2018 until after October 31, 2020, and in many cases until 2025. HUD also discontinued reviewing AFHs, claiming that program participants needed additional time and technical assistance to adjust to the new AFFH process.[1]

    The AFFH final rule, released in July 2015, embodied a long-awaited effort to give teeth to the federal Civil Rights-era Fair Housing Act, which requires local governments to take active steps to end racial segregation.[2] AFFH requires local governments to use the Assessment of Fair Housing Tool for Local Governments, which was approved by the Office of Management and Budget, to assist them in meeting their statutory obligation to affirmatively further fair housing.[3] According to the HUD notice, local governments will not be required to submit an AFH using the tool, but must comply with existing obligations to affirmatively further fair housing. Local governments with an AFH already accepted by HUD must continue to execute their stated goals. Local governments with completed AFHs not accepted by HUD are encouraged to use those drafts to conduct the required Analysis of Impediments to Fair Housing Choice.[4]

    Although the HUD notice does not revise AFFH or change the AFH requirement, fair housing advocates fear that the rule’s suspension signals that the Trump Administration is moving toward halting AFFH implementation, negatively affecting local jurisdictions’ proactive steps to tackle racial segregation in communities nationwide.[5]

    Reza Mortaheb, Research Analyst, employs his experience as an architect and urban planner to cover federal housing policy and research on Accessory Dwelling Units (ADUs). To learn more about these issues, contact him at reza@lesardevelopment.com.

    [1] Federal Register / Vol. 83, No. 4 / Friday, January 5, 2018. https://www.gpo.gov/fdsys/pkg/FR-2018-01-05/pdf/2018-00106.pdf. P.684

    [2] The United States Department of Justice, “Fair Housing Act,” https://www.justice.gov/crt/fair-housing-act-2. Date of Access: January 23, 2018.

    [3] The US Department of Housing and Urban Development, “HUD Rule on Affirmatively Furthering Fair Housing,” https://www.huduser.gov/portal/affht_pt.html#final-rule. Date of Access: January 23, 2018.

    [4] Federal Register / Vol. 83, No. 4 / Friday, January 5, 2018. https://www.gpo.gov/fdsys/pkg/FR-2018-01-05/pdf/2018-00106.pdf. P.684

    [5] CityLab, “The Trump Administration Just Derailed a Key Obama Rule on Housing Segregation,” By Kriston Caps, January, 4, 2018. https://www.citylab.com/equity/2018/01/the-trump-administration-derailed-a-key-obama-rule-on-housing-segregation/549746/. Date of Access: January 23, 2018.

  6. Legislators’ Push for Affordable Housing Package Dominates News Cycle

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    Efforts to address California’s housing shortage took center stage in Sacramento last week as Gov. Jerry Brown and legislative leaders struck a deal on three key measures—Senate Bills 2, 3, and 35. The measures have been the subject of intense debate as leaders statewide seek to stimulate development and improve housing affordability.

    Senate Bill 3, authored by Sen. Jim Beall (D-San Jose) was amended August 28th to increase the bond to $4 billion and renamed. The amended bill would authorize $3 billion in bonds for the construction of new low-income housing, and add $1 billion to extend the Cal-Vet Farm and Home Loan Program, which provides homeownership subsidies to veterans. The Building Homes and Jobs Act (SB2), authored by Sen. Toni Atkins (D-San Diego), was also amended to provide for more local government control of the funds generated from real estate document fees. The third measure, Senate Bill 35 authored by Sen. Scott Wiener (D-San Francisco), would streamline local planning reviews for new construction. Both SB2 and SB3 require a two-thirds approval by the Legislature.

    The news and opinion pieces highlighted below offer a robust picture of the debate taking place statewide:

    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.

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

  7. 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.

  8. 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.

  9. 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.

  10. 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.