Some of Our Favorite Small Businesses

Small Business.jpg

Holiday greetings from the RSG team!  As we head into the Thanksgiving weekend, we are reminded of family, football and food.  Followed, sometimes too closely, by shopping.  While all retailers and restaurants get lots of sales in this time of year (some as much as half of their total volume occurs during the holiday season), we thought we would give a shout out to some of our favorite small businesses in advance of Small Business Saturday.  We encourage you to mention yours in the comments below and patronize small businesses. 

Jim Simon, Principal: I enjoy a bargain as much as anyone, and have found not only great deals but terrific service on luggage at Avion Luggage Sales & Repair, located at 2800 W. Warner in Santa Ana.  It’s my go-to for luggage purchases over anything online.  I also have to mention our former RSG’er Brandon Fender’s The Good Beer Company at 309 W. 4th Street in downtown Santa Ana, especially if you’re a fan of fruity and sour craft beers – you can see the entire operation right there as you taste in our former premises.

Dima Galkin, Associate: I can’t go too long without getting a dose of shopping at the Last Bookstore at 453 S. Spring St in Downtown Los Angeles. There’s always a great find somewhere on the shelves. The live performances are entertaining. And I can geek out with the sales associates about favorite hard-boiled detective novelists. Mine is Raymond Chandler, but I won’t hold it against anyone who claims Dashiell Hammett.

Alex Ostrowski, Research Assistant: As a Taco Tuesday fanatic, you can regularly find me feasting upon arepa tacos at La Colombiana or street tacos at La Siesta (their entire menus are great too!) . Both restaurants are located on El Camino Real in San Clemente and are family owned and operated. While I never thought possible, they may have successfully filled the void of my long time favorite spot in college, La Barca, a hidden gem located on Vermont Avenue in Los Angeles.

Suzy Kim, Senior Associate: One of my favorite corners in Berkeley is on Cedar Street and San Pablo Avenue. I step into Bartavelle Cafe to order some coffee and a delicious scone or sandwich. While I’m waiting for my food, I step into Kermit Lynch Wine Merchant to pick up some wine. The owner spends half the year traveling around Italy and France to source wine (life goals). If the line is not too long, I’ll pick up a fresh loaf of Edible Schoolyard bread from Acme Bakery.  I jokingly refer to the stop as my “holy trinity”: coffee, wine, and bread.

Hitta Mosesman, Principal: Newport Beach has many boutique fitness classes as well as unique food options that range from vegan to rich and indulgent.  My weekend would not be complete without a spin class at Newport Workout.  The class is led by a former triathlete with a large, two decade-long following who inspires participants with great music and energy.  After working up an appetite, a bowl or scramble at Vibe Organic Kitchen and coffee at Kean is a great way to recharge.  Lido Bottle House right on the water in Newport Harbor is a great way to unwind with friends.

Irlanda Martinez, Analyst: As the 2018 Most Brunches Attended record holder at RSG, chances are you will find me (and my dog) at Downtown Fullerton’s Rialto Café having brunch every Sunday. The history-meets-hipster café is family-owned, delivers in cuisine and hospitality, and is the epitome of a local gem. After brunch, we like to head over to my dog’s favorite store for a treat. The family-owned Anaheim Feed & Pet Supply in Anaheim offers a large variety of pet food and supplies at significantly lower prices than a common pet retail store. With this, I present to you, the perfect Millennial Sunday.

Housing Propositions That Passed on November 6, 2018

Voters Check.jpg

Proposition 1 – Veterans and Affordable Housing Bonds

What it Does

Provides a total of $4 billion in funding for housing - $3 billion for existing state affordable housing programs and $1 billion for veterans’ home purchase program.

What Does the Funding Go Toward?

  • Cal-Vet Farm & Home Loan Program

  • Multifamily Housing Program

  • Infill Infrastructure Grant

  • Transit Oriented Development

  • Joe Serna Farmworker Program

  • Local Housing Trust Match Program

  • CalHome

  • CalHFA Home Purchase Assistance

When will the Funding be Available?

A Notice of Funding Availability (NOFA) is expected to be released in Spring 2019.

Link To a Summary and Full Text:

https://ballotpedia.org/California_Proposition_1,_Housing_Programs_and_Veterans%27_Loans_Bond_(2018)

Proposition 2 – No Place Like Home

What it Does

Provides $2 billion of funding Statewide for permanent supportive housing for persons who are

  1. Experiencing homelessness, chronic homelessness or who are at risk of chronic homelessness;

  2. Are in need of mental health services.

Who Can Get this Funding?

Applicants can only be counties (with or without a housing development sponsor). Available funding will be allocated by the State on both a competitive and non-competitive basis. The Competitive funding available makes up the majority at $1.8 billion, and total Non-Competitive funding is estimated at $190 million.

When will the Funding be Available?

The State issued a Notice of Funding Availability (NOFA) in October of this year for the first round of competitive funding. Applications will be due on January 19, 2019. No Place Like Home Program Guidelines are available at http://www.hcd.ca.gov/grants-funding/active-funding/docs/NPLHGuidelines082519-v1.pdf.

Link To a Summary:

https://ballotpedia.org/California_Proposition_2,_Use_Millionaire%27s_Tax_Revenue_for_Homelessness_Prevention_Housing_Bonds_Measure_(2018)

California 2018 Legislative Update

Housing Laws.jpg

Streamlining

AB 2162 – Supportive Housing by Right

  • Streamlined ministerial approval for projects that include supportive housing

  • CEQA not required for supportive housing projects that comply with local requirements, are 100% lower income and 25% of units are supportive.

AB 3194 – Housing Accountability Act

  • Limits local government determination of project inconsistency with zoning ordinance if the zoning doesn’t allow the maximum residential use, density or intensity in general plan.

  • Requires finding of a significant, quantifiable, direct, and unavoidable impact to disapprove or condition approval of projects if compliance with applicable, objective general plan, zoning, and subdivision standards and criteria.

SB 765 – SB 35 Clean Up

  • 100% affordable projects are exempt from the “skilled and trained workforce” labor requirement.

  • Only objective standards may be applied, including those related to subdivisions.

  • All local agency approvals for project are exempt from CEQA.

Density Bonus

AB 2753– Density Bonus Application

  • Jurisdictions must notify density bonus applicants in writing w/in 30 calendar days of application of completeness.

  • Local government must notify applicant of re-submitted density.

  • Bonus application in writing w/in 10 business days of resubmittal.

  • Local government has 60 days from complete application to approve or disapprove a density bonus.

  • Application deemed completed and density bonus granted if deadlines not met.

SB 1227 - Density Bonus for Student Housing

  • Requires up 35% density bonus projects with at least 20% of the total rental beds for very low income students enrolled in higher education at accredited institutions.

 Density Bonus (continued)

AB 2372 - Floor Area Ratio Bonus for Affordable Housing

  • Allows local government to adopt ordinance to grant floor area ratio (FAR) bonus in lieu of a density bonus. Project requirements include:

  • Multifamily development of 5+ units.

  • Located in urban infill site within transit priority area or within ½ mile of major transit stop.

  • Zoned for 20 units per acre.

  • Either 11% of affordable units for Very Low Income or 20 of affordable units for Low Income.

AB 1771 & SB 828 – RHNA

  • Requires modifications of regional RHNA allocation methodologies

  • RHNA must account for overcrowded housing units and cost burdened households, units lost related to a state of emergency

  • Gives HCD oversight authority over RHNA allocations

Fair Housing

AB 686– Housing Discrimination

  • Codifies recent HUD rules on jurisdictions’ obligation to further fair housing.

  • Housing elements and other planning documents must analyze how zoning programs/development approvals address/ reverse historical segregation patterns caused by past zoning practices.

CEQA Exemptions

AB 1804 – Infill Exemption for Counties

  • CEQA exemption applicable to unincorporated areas of counties.

  • Developments have minimum density and location requirements (must be urbanized area.)

AB 2341– Limited Aesthetic Impact Exemption

  • CEQA exemption for rehabilitation or replacement of existing, vacant structure (within building envelope) with residential development.

Charter Cities

AB 1333 – Charter Cities

  • Government Code provisions now apply to Charter Cities.

  • Consistency requirement applicable to general plan, specific plans and zoning.

  • No Net Loss” requirements apply to housing element inventory sites.

  • Specific findings required for growth control measures.

 Maps and Permits

AB 2913– Extension of building permits

  • Extends residential building permits from six months to one year.

  • One or more extensions of 180 days can be granted if justifiable cause

AB 2973– Subdivision map extensions (Central Valley)

  • 2 years for tentative subdivision maps in certain Central Valley jurisdictions 1771

RSG's 2018 Conference Season

We had a great time out and about visiting with all of you these past few months! In just a few short weeks, RSG attended the League of California Cities, Non Profit Housing of Northern California Conference, SCANPH, and San Diego Housing Federation. 

conference game.jpg

Those that attended the above housing conferences had a chance to come by our booth and take a guess at our booth game! The stakes were high with a chance to win a $100 gift card to Amazon. Congratulations to our winners and thank you to everyone who tested their knowledge! For those who are curious, here are the answers:

conference answers.jpg

Compliance Monitoring Workshop - Sept. 25

RSG is hosting a compliance monitoring workshop on September 25th at 9:00 am to 1:00 pm in Irvine! It will be focused on basic compliance issues including file documentation and forms, and income and assets. Beneficial for all property managers, compliance staff, owners, and compliance directors. Lunch will be provided. 

Please click the button below to purchase your ticket for the event! 

 

Can Public Agency Land Use Help Save Us from the State Housing Crisis?

Along with being well known for its near perfect weather and plethora of offerings for tourists, California has now also become known for facing one of the worst housing crises in the nation.  A study done in 2016 by the McKinsey Global Institute found that California was ranked 49th out of all 50 states in housing units per capita and losing close to $140 billion per year due to the shortage of housing.  Based on California’s HCD Annual Progress Report data compiled in early 2018, more than 97% of the state’s jurisdictions are failing to meet the goals for developing affordable housing.  This harsh reality has left the state to ponder what resolutions could be utilized for tackling this dire dilemma.

Some recent proposed solutions to the housing crisis have come in the form of the 2017 Legislative Housing package signed into effect by Governor Jerry Brown in September of last year which includes 15 bills aimed at addressing the housing crisis.  However, with the housing crisis being as wide spread and serious as it is, it will likely require solutions in addition to recently passed legislature.  Circulate San Diego recently released a report examining the conversion of the underutilized Metropolitan Transit System parking lots into affordable housing as a solution to the state’s housing crisis.  Their report identified that this plan would not only generate up to 8,000 new homes with 3,000 of those designated for low income use, but the plan also aligns with similar policies and practices already in use by fellow transit agencies like the LA County MTA, Bay Area Rapid Transit and Santa Clara Valley Transportation Authority.

The report from Circulate San Diego begs the question: Could an answer to the state housing crisis lie in the use of other under used public agency land too?  In addition to transit systems, other public agency properties including school districts, utility districts and water districts, may provide some respite in the struggle to reign in the housing crisis.  This possible solution does not come without it’s fair share of challenges which may include the need to enhance or remove the existing infrastructure, zoning restrictions and community engagement of the surrounding area which for low income and affordable housing specific development may give way to objections from those with the “not in my backyard” perspective.  Despite the possible challenges that may lie ahead with the use of public agency land for housing development, state officials may find this a solution worth considering in the struggle to resolve the state housing crisis.

Housing and Homelessness

Funding Continums of Care Throughout California

The State legislature is continuing to make housing a priority throughout the state as recently evidenced by the 2018 Housing Package, which increases the funding originally requested in the budget, and also takes strides to make the process of solving for the homelessness crisis more efficient and streamlined.

The Housing and Homelessness package, expected to be adopted June 15, includes $500 million in emergency block grants, which is twice the amount that was originally expected after negotiations and revisions in May 2018. The General Fund block grants are for emergency aid to local governments responding to the homelessness crisis and will include $250 million for Continuums of Care (CoCs), $150 million in direct allocations to cities or counties with populations over 330 thousand, and $100 million allocated based on an area’s homeless population, also toward CoCs.

The choice to fund homelessness programs though CoCs will ensure funding is funneled toward local strategic efforts that comprehensively attempt to work to end the homeless crises specific to those communities. CoCs develop long-term strategic plans and manage year-round efforts to address the needs of the homeless in their specific geographic areas. Recognizing there are a wide variety of causes for homelessness, and thus a wide variety of solutions for homelessness, these continuums provide tailored solutions for their communities. Because of the way CoCs are designed, this emergency funding will be used efficiently as possible at the local level.

In addition to one-time grants for CoCs, the package also moves the Homeless Coordinating Council to the Business, Consumer Services and Housing Agency, and includes $500 thousand to fund the newly housed council, dedicating one third of its staff to homeless youth. It also provides $370 thousand from the Housing for Veterans Fund for two positions to execute loan closings and mitigate litigation costs related to the Veterans Housing and Homelessness Prevention Program.

The package continues to prioritize ensuring the sale of Department of Transportation (Caltrans) surplus property is maintained as affordable housing. This proposal supports Caltrans administration of the "Roberti Act" Affordable Sales Program on the State Route 710 corridor. Finally, the package provides $50 thousand for Gateway Cities Council of Governments for a housing strategy assessment.

The Depot at Santiago: A Great Example of Affordable Housing

santiago 1.jpg

By Joseph Pangalinan, Analyst, and Dima Galkin, Associate

June 14 marked the grand opening of The Depot at Santiago, a 70-unit affordable housing complex with 15 one-bedroom units, 24 two-bedroom units, and 31 three-bedroom units, with 10 units reserved to house formerly homeless families. The project, three-and-a-half years in the making and developed by long-time, well-renowned affordable housing developer C&C Development, is located across the street from the Santa Ana Transportation Center. The Kennedy Commission, a group advocating for families in need of affordable housing, helped secure community approval for the project. The complex holds a community room, a laundromat open to the broader community, an outdoor play area for children, and a dance studio programmed by The Wooden Floor.

We attended the grand opening with Greg. The momentous occasion featured speeches from Santa Ana council members and award presentations with state and national legislators. The Depot at Santiago houses families who make 30% and 60% of the area median income (AMI). The exterior seems indistinguishable from newer market-rate housing in the area. The model unit that was made available for tours during the event showed that the families occupying these units will be able to reside in spacious, dignified housing that provides the same amenities as market-rate housing.

With 70 units and more than 1,800 applicants, the project represents a step in the right direction in addressing Southern California’s affordable housing shortage, but also highlights the long road ahead in providing an affordable place to live for those who need it. If you know of other great examples of new affordable housing developments, share them with us!

santiago 2.jpg
santiago 3.jpg
santiago 4.jpg
santiago 5.jpg
santiago 6.jpg

Tax Credits - Income Averaging

One of the most recent changes to TCAC’s regulations is allowing income averaging. For those that are unfamiliar with this change, below is a simple breakdown. Currently, TCAC limits affordability to 30-60% of the area median income (“AMI”). The AMI restricts how much the project can rent the units for. With the new regulations, projects can include limits that exceed 60% AMI, up to 80% AMI. However, the average AMI requirement for all units has not changed. So, developers will have to compensate the higher 61%-80% AMI units, with a lower AMI on other units.

With this flexibility the developer can get creative and potentially improve their projects financial feasibility. The new change can bring in more operating income. The additional income will support more debt and help close the gap in project financing, or reduce the soft financing that the project may require from a public jurisdiction. How the developer ultimately uses this regulation change to revise the projects affordability mix is up to them. However, this appears to be a very powerful tool for proposed developments with project-based vouchers.

 

Will Opportunity Zones Be the Key to Economic Development in Low Income Communities?

By Alex Ostrowski, Research Assistant, and Dima Galkin, Associate

The passage of the Tax Cut and Jobs Act of 2017 brought a new tax incentive program that may motivate taxpayers to increase their investments in distressed communities. This economic development tool allows each state to designate certain high poverty census tracts as Opportunity Zones and encourages taxpayers to invest in these zones through “Opportunity Funds,” offering three primary benefits.

The program is similar to earlier tax-incentivized programs, like empowerment zones and enterprise zones. First, taxpayers can defer paying tax on capital gains realized from the sale of an asset if it is reinvested in an Opportunity Fund. Taxpayers can also receive an increase in basis for capital gains reinvested, allowing them to exclude up to 15% of the original capital gain from taxation. Finally, a taxpayer can receive a permanent tax exclusion from capital gains realized from a sale or exchange of an investment in the Opportunity Fund if that investment is held for at least ten years.

Opportunity360 created a mapping tool to identify which census tracts have been designated as Opportunity Zones, including 879 in California. Recent opinions on the new program have been mixed, as seen in this list of commentaries gathered by James Brasuell of Planetizen.

It’s unclear what the lasting impact of Opportunity Zones will be for the designated census tracts, but there is hope that these low-income communities will see a heightened level of redevelopment investment in the coming years, stimulating an increase in tax revenue, subsequent long-term investment, and improved quality of life.

Does your community include an Opportunity Zone? What impact do you think the legislation will have on investment in low-income communities? Contact us to share your thoughts or to get more information.