Proposed Affordable Housing Bills

The affordable housing crisis in California is a well-known fact and over 130 bills have been proposed by State lawmakers to address and hopefully improve one of the State’s most urgent needs.  The link below to a recent Los Angeles Times article provides a brief and basic summary of all proposed bills:
http://www.latimes.com/politics/la-pol-sac-housing-bills-taxes-affordable-20170319-story.html
 

What is the Return on Investment for Infrastructure Improvements?

Infrastructure improvements are a sizable investment of public funds - it makes sense that evaluating the return on investment is a good first step in determining how communities prioritize these funds.   RSG recently completed an economic study assessing the impacts resulting from different rail improvement options along the Carlsbad portion of the Los Angeles-San Diego-San Luis Obispo (LOSSAN) corridor.  This study calculated the economic/fiscal effects of the different options on regional economic output including:

•    Jobs created
•    New development
•    Property values/taxes
•    Sales taxes
•    Value of lives saved/accidents avoided
•    Value of reductions in noise and traffic

RSG’s study is part of an overall Feasibility Study prepared by the San Diego Association of Governments (SANDAG).  A link to the City of Carlsbad website that provides an overview of the Study (as well as links to the actual reports) is provided below:
http://www.carlsbadca.gov/news/displaynews.asp?NewsID=1321&TargetID=61
 

Written by Hitta Mosesman
 

RSG Principal Hitta Mosesman Featured Speaker at Housing CA Conference (Sacramento) - March 2017

Housing California is the State’s leading housing organization with a mission to educate lawmakers and others on stabilizing housing, creating more housing opportunities, and implementing proven solutions that reduce the number of homeless men, women, and children in communities. The focus of Housing California is Land Use, Budget and Funding, and Homelessness.  The annual 2017 Housing CA conference, with over 1,400 in attendance, was “Block by Block – Improving Neighborhood Health.”   Workshops focused on all aspects of housing and homelessness, including financing, funding sources, policy, advocacy and new and emerging affordable housing solutions.

Hitta Mosesman, partner and principal with nearly 20 years of consulting experience in affordable housing, finance, real estate and community development, was a featured panel speaker on Community Land Trusts (CLTs) as an innovative method of ensuring affordable housing for generations.  The panel included Mark Asturias, Executive Director of the Irvine Community Land Trust (and City of Irvine’s Housing Manager), Jean Diaz, Executive Director of the San Diego Land Trust and Stephen King, Executive Director of the Oakland Land Trust.  The panel’s joint presentation focused on explaining CLT structures and benefits, as well as the different CLT models (home ownership, rental and co-op).  A link to the presentation is provided below.

https://media.wix.com/ugd/209952_d643b5c0976d49508c0e70fc98150613.pdf

 

SB 711 - Providing EIFDs/CRIAs a Larger Share of Property Taxes

RSG is one of the most active consultants working on a variety of area and project based tax increment financing districts in California.  But despite the interest in EIFDs, CRIAs and other tools, many communities find these fall short of what is needed simply because their own share of the tax levy is so small – often less than 10 cents on the dollar.  What gave rise to redevelopment agencies was the restriction on how cities could raise property tax rates after Proposition 13; cities found that redevelopment allowed more taxes to be retained and invested locally for projects to grow the economic base, provide the largest source of affordable housing assistance outside of tax credits, and fund all types of infrastructure. The newer tools are less helpful because they are limited to how much a local agency may be able to muster up from its own (often small) share of property taxes.

SB 711 proposes a focused change to this tool by allowing the State’s Strategic Growth Council to decrease what a city (or county) would have otherwise lost to the Educational Revenue Augmentation Fund to provide a larger share of the property taxes for certain TIF districts.  Expanding EIFDs and CRIAs by creating a more useful revenue stream will help the state achieve GHG and VMT goals, while making local communities healthier, affordable and prosperous.  ERAF took anywhere from 25% or more of a city or county’s share of the local taxes away – permanently.  This could be a big deal if communities get behind this. Take a look at the sponsor’s SB 711 fact sheet.  The California League of Cities are seeking support from local communities. 

Small Town Revitalization

A feature in this month’s Planning magazine highlights the efforts of nonprofit regional planning organizations to revitalize small towns in New York State. These organizations seek to bring people back to cities and walkable communities with “good, urbanistic street networks and underutilized building stock.”

Regional planning organizations provide services to municipalities, such as demographic and issues research, strategic planning, and grant writing. The priorities of the organizations described in the article are to keep and attract young people while also preserving an area’s character.

Despite the vast distance that separates them, many California towns have much in common with their New York counterparts. Many were founded early, before automobiles, which means their development patterns could be similar. Similarly, an historic, underutilized building stock presents an asset for towns on both coasts. With such shared features, successful strategies for revitalization are more similar than one may initially expect.

If your town might be interested in developing a revitalization strategy, please contact RSG to help you through the process.

Written by Dima Galkin, an Associate at RSG

The Day After Thanksgiving

 

Often referred to as Black Friday, the day after Thanksgiving used to be the busiest day of the year for shopping in retail stores. It was the launching point for the critical holiday shopping season, which accounts for 30% of annual retail sales. Recent trends show decreasing store turnout for the retail market’s biggest shopping weekend – from 133 million people shopping in stores in 2014 to 102 million in 2015

Now consumers seem to be “navigating from the physical to the digital,” according to Fortune. Online shopping grew 19% from 2014 to 2015 for the holiday weekend, reaching $6.1 billion in 2015.

While huge numbers of people still shop in stores, online shopping is a trend that continues to grow faster each year. Black Friday is still a big event, but shoppers research and buy products online in ever-increasing numbers.

Will we see another large drop-off in store shopping this year? If recent trends are an indicator, shoppers will fill their mobile shopping carts, and Black Friday will just be another option. What could this mean for local sales tax revenues and the retail real estate market?

Written by Brett Poirier, an Analyst at RSG

CEQA Litigation: Harmful for Housing?

Litigation abuse under the California Environmental Quality Act (CEQA) undermines Californiaʹs environmental, social equity, and economic priorities, according to a Holland & Knight report, the first comprehensive study of lawsuits filed under CEQA. Analyzing all CEQA lawsuits filed from 2010 to 2012, the report systematically documents widespread abuse of CEQA litigation.

 

The study says that 49% of all CEQA lawsuits targeted taxpayer-funded projects with no business or other private sector sponsors. Projects designed to advance California’s environmental policy objectives – transit, renewable energy, and housing -- are the most frequent targets of CEQA lawsuits. Infill projects are the overwhelming target of CEQA lawsuits. CEQA litigation is overwhelmingly used in cities, targeting core urban services such as parks, schools, libraries, and even senior housing. 64% of those filing CEQA lawsuits are individuals or local “associations,” primarily the domain of Not In My Backyard (NIMBY) opponents and special interests.

According to the report, ending CEQA litigation abuse is the most cost-effective way to restore the state's middle-class job base, make housing more affordable, ensure that taxpayer funds are spent on projects, and improve the future of the nearly nine million Californians living in poverty. The authors recommend three moderate reforms to curtail the abuse:

  1. Require those filing CEQA lawsuits to disclose their identity and interests.

  2. Eliminate duplicative lawsuits aimed at derailing plans and projects that have already completed the CEQA process.

  3. Preserve CEQA’s existing environmental review and public comment requirements, as well as access to litigation remedies for environmental purposes, but restrict judicial invalidation to projects that would harm public health, destroy irreplaceable tribal resources, or threaten the ecology.

Written by Dima Galkin, an Associate at RSG

Which Factors Most Affect Housing Affordability?

Photo credit: Bay Area Council Economic Institute

Photo credit: Bay Area Council Economic Institute

High housing costs have impacted the overall Bay Area economy. The Bay Area Council Economic Institute (BACEI) recently published a study on how public policies affect the number of San Francisco households burdened by housing costs.

The study lists some of the policies that could increase housing affordability. Most beneficial, the BACEI analysis shows, are expedited completion of major projects and accelerating the permitting process for all housing development. Other policies that improve housing affordability, albeit to a lesser extent, included

  • easing restrictive building codes,
  • creating a fund for below-market-rate housing,
  • a density bonus for buildings with more than 30 percent affordable units,
  • restricting ownership of second homes,
  • allowing accessory dwelling units to be constructed on all properties zoned for residential use,
  • facilitating development of more micro units,
  • providing a density bonus for buildings with 100 percent below-market-rate units, and
  • reducing parking requirements.

On the other hand, BACEI found that certain San Francisco policies worsened housing affordability, most significantly eliminating rent control, an indefinite moratorium on development, and a 25% inclusionary housing requirement.

RSG can help cities analyze which policies would be effective in their specific situation and implement policies that they have already enacted. Call us today to identify what your city can do to improve local housing affordability.

Written by Jim Simon, a Principal at RSG

How Federal Housing Finance Favors Single-Use Development Over Mixed-Use Development

Image courtesy of the American Planning Association

Image courtesy of the American Planning Association

Federal loan programs supporting new development favor single family-residential development over mixed-use development, according to Regional Plan Association (RPA), a metropolitan planning organization for the New York metro area. As the RPA explains, the Federal Housing Administration, Fannie Mae and Freddie Mac loans, loan guarantees, and mortgages typically cap commercial floor space or income at 15 to 25 percent of multi-family projects. Commercial rent is discounted by underwriting rules designed to reflect risk, compounding the problem.

While many Americans prefer to live in mixed-use areas where they can walk to various amenities, development is not meeting this demand. The mixed use pattern has historically been the most common and should not be placed at a disadvantage by federal housing finance programs.

Recent research on loan performance, according to the RPA, indicates that loans in walkable, mixed-use neighborhoods are less risky than those in single-use, single-family neighborhoods. Thus, updated rules could also reduce loan program costs.

The RPA recommends updating federal housing finance rules that would allow for a greater variety of new development for all types of communities. While some rules have been relaxed, the changes are too small to increase the number of qualifying projects.

Written by Dima Galkin, an Associate at RSG

League of California Cities Annual Conference Game Results

At the beginning of October, RSG hosted a booth at the League of California Cities Annual Conference in Long Beach. It was wonderful to see our friends and clients from all over California, as well as to meet new people in the business of providing better futures for our communities.

As consultants, RSG’s focus is always on providing useful answers and strategies to challenging issues in local government. Inspired by some of the projects on which we are currently working, our booth featured a game for conference attendees to identify the largest problems facing cities today. Participants were asked to place an orange chip in the bucket which best represented that issue for them. Here are the results!

  •  Prepare a long-range budget forecast for current / future public safety costs? 53 chips
  •  Increase in facilitated community engagement events / meetings? 40 chips
  •  Use social media to promote economic development in your city? 39 chips
  •  Partner with County and / or utilized Housing Authority / SB 341 money for homeless programs? 23 chips
  •  Leverage former RDA assets on tax credit projects? 20 chips
  •  Pass ordinances defining allowable areas for AIRBNB / VRBO? 14 chips

A big THANK YOU to everyone who stopped by our booth! We enjoyed connecting with you, and hope to hear from you soon.

Written by Evanne Holloway, an Analyst at RSG