Tag Archive: 2017 housing package

  1. Yes on Props 1, 2: Ballot Measures Critical to Developing Housing

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    San Diego Square Senior ApartmentsThis November, the decisions voters make about two ballot measures—the Housing Assistance Bond and No Place Like Home—the Proposition 1 Housing Assistance Bond and Proposition 2 No Place Like Home—have significant implications for California communities as they address housing affordability.

    Proposition 1: Housing Assistance Bond, would allow the state to issue $4 billion in general obligation bonds to investors to fund existing affordable housing programs. Specifically, the bond would provide:

    • $1.8 million to build or renovate affordable multifamily housing;
    • $450 million for transit-oriented infrastructure development;
    • $450 million for down payment assistance or other funding to assist low- and moderate-income homebuyers;
    • $300 million for rental and owner-occupied housing for farmworkers; and
    • $1 billion for home loan assistance for veterans.

    The measure, which qualified for the ballot based on a two-thirds vote from the Legislature and approval by Governor Jerry Brown as part of the 2017 Housing Package, would support an estimated 30,000 multifamily units, 7,500 farmworker households, 15,000 homebuyers, and 3,000 veterans. If passed, the measure would enable the state to provide grants or low-cost loans to local governments, nonprofits, and developers through a competitive process to fund a portion of construction costs. Interest on the bond would be repaid using the state’s General Fund at approximately $170 million annually for 35 years. While opponents chafe at the cost burden to taxpayers, supporters such as United Way, the League of Women Voters, the League of California Cities, and the California State Sheriffs’ and Firefighters’ Associations view Proposition 1 as a much-needed measure to address the affordable housing crisis and argue that a portion of the funds will be recouped as payments on home loans.

    Proposition 2: No Place Like Home, if passed, would allow the state to redirect $140 million per year in Mental Health Services Act funding to repay up to $2 billion in bonds to fund permanent supportive housing for people experiencing or at-risk of homelessness who need mental health services. Counties would be able to use these funds to acquire, design, construct, rehabilitate, or preserve permanent supportive housing. Only those supportive housing developments that use low-barrier tenant selection practices and provide voluntary, individualized supportive services would be eligible for funding. Counties would also need to commit to providing mental health services and coordinating other supportive services as a condition of funding.

    Currently, the state needs court or voter approval to use Mental Health Services Act funds for permanent supportive housing through No Place Like Home (NPLH). Counties will be able to apply to the California Department of Housing and Community Development for NPLH funds, which are categorized as loans repayable to the state, on either a non-competitive or competitive basis contingent on voter approval.

    Research has shown that housing paired with treatment, commonly referred to as permanent supportive housing, helps people with severe mental illness live healthy, stable lives and reduces public health costs. Supporters of the measure include the California affiliate of the National Alliance on Mental Illness. Opponents argue that the measure, if passed, would shift funding away from treatment for people with severe mental illness to pay for housing and does not address restrictive zoning laws that make it difficult to build housing.

    Together, Propositions 1 and 2 provide significant revenue streams to address California’s growing housing affordability and homelessness crisis and aim to produce housing types California’s private market has failed to adequately produce in California. The propositions have received widespread support from organizations and elected leaders statewide, including Assm. David Chiu (D-San Francisco) and Senate President pro tempore Toni Atkins (D-San Diego).

    Diana 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.

  2. Bay Area Begins to Feel Effect of SB 35

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    Developers across the Bay Area have begun to leverage SB 35, one of the bills in the 2017 Housing Package, to accelerate housing production for households at all income levels across California. Authored by Sen. Scott Wiener (D-San Francisco) SB 35 provides for a streamlined and ministerial approval process for developments in jurisdictions that have failed to meet their Regional Housing Needs Allocation (RHNA) goals. To take advantage of SB 35, the development must be proposed for an infill site, comply with existing residential and mixed-use zoning, allocate at least 10% percent of its units to affordable housing, and conform to the prevailing union wage.[1]

    In March, Blake Griggs Properties became one of the first developers to invoke SB 35 for a 260-unit housing project in Berkeley which has been delayed for almost five years by a lengthy environmental review. The proposed multifamily residential project would replace a parking lot and earmark 50% of the projected units for lower-income housing.[2]

    Sand Hill Property Company, another Bay Area developer, has used SB 35 to streamline the approval process for a redevelopment plan envisioned for the derelict Vallco Shopping Mall in Cupertino. The proposed project is a mixed-use complex that promises to set aside two-thirds of its development area to housing, and also designate half the projected 2,400 multifamily units as affordable housing. SB 35 requires the City of Cupertino to respond to the developer’s proposal within 180 days.[3]

    San Francisco-based nonprofit Mission Economic Development Agency (MEDA) also invoked SB 35 to build a 130-unit, 100% affordable housing project in San Francisco’s Mission District. Once a critic of SB 35, MEDA is now hoping that the law will override, or at least expedite, San Francisco’s cumbersome entitlement process for the proposed project.[4]

    While proponents are hoping that SB 35 would break through legislative barriers, cut lengthy approval processes, and trigger construction of badly needed affordable housing, critics have voiced concern that SB 35 decreases the authority of local governments over land use, deprives local communities of their rights to oppose a project, and increases the extent of state intervention in local affairs. Moreover, in many communities, the new development’s conformance with “neighborhood character” is still a controversial issue. Affordable housing advocates, MEDA included, render SB 35 as a “one-size-fits-all” policy, arguing that the bill requires a scant amount of affordable housing and it may even cause displacement and gentrification in low-income neighborhoods.[5]

    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] Leginfo, “Senate Bill No. 35,” Published on September 29,2017. Date of Access 04-24-2018. https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201720180SB35. And, California Department of Housing and Community Development, “California’s 2017 Housing Package,” 2017, Date of Access 04-24-2018. http://www.hcd.ca.gov/policy-research/lhp.shtml

    [2] San Francisco Business Times, “Stalled for five years, 260-unit Berkeley housing project will be California’s first to use streamlined approvals,” Published March 8, 2018. Date of Access: 04-26-2018. https://www.bizjournals.com/sanfrancisco/news/2018/03/08/berkeley-housing-affordable-sb35-approval-wiener.html

    [3] Vallco Town Center, “The Future of Vallco,” April 2018, Date of Access: 04-25-2018. http://revitalizevallco.com

    [4] San Francisco Chronicle,” Mission housing project invokes law to exchange review for affordable units,” Published on April 7, 2018. Date of Access 04-24-2018. https://www.sfchronicle.com/politics/article/Mission-housing-project-invokes-law-to-exchange-12815332.php

    [5] Ibid.