Rolling up our Sleeves in 2018

We are excited to highlight RSG’s commitment to improving surrounding cities through our participation in a variety of professional organizations.  From positions of leadership to committee membership, RSG continues to find new ways to impart its insight and passion for helping and improving communities across California. 

California Association for Local Economic Development (CALED) -  RSG Principal Jim Simon serves as a committee member on CALED’s Legislative Action Committee and Tax Increment Financing Technical Committee.  Through his involvement with both committees, Jim has been instrumental in the drafting of proposed legislation in 2018 that may streamline and reduce costs for formation of enhanced infrastructure financing districts (EIFDs).  RSG Senior Associate Suzy Kim also serves as a member of CALED’s Tax Increment Financing Technical Committee.

San Diego Housing Federation (SDHF) – RSG Principal Tara Matthews has recently been appointed to the San Diego Housing Federation Policy Committee.  Through her contribution of leadership to the organization, Tara will be helping in the development and implementation of policies that cover a variety of topics from affordable housing in San Diego to local and state legislation.

Urban Land Institute (ULI) – RSG Principal Hitta Mosesman currently serves on ULI’s Women’s Leadership Initiative Council as a committee member.  Through her work with the organization, Hitta helps to further the organization’s overall mission of creating a path for the advancement of women in the real estate industry.  RSG Associate Dima Galkin is a member of ULI’s Public Realm Initiative Council, which aims to provide insight to all ULI members on best practices, case studies and innovations taking place within the industry. 

RSG Senior Analyst Brett Poirier serves as a member of ULI’s Young Leaders Group which looks to cultivate the use of ethical development practices and responsible land use in the industry’s up and coming leaders.  Brett is also a committee member of ULI’s Technical Assistance Panel, which performs outreach services through members volunteering their time to help address community land use issues.

Out and About

February 20-23rd - RSG will be continuing their presence this year at the annual CSMFO Conference being held in Riverside, California.  Hitta Mosesman, Principal, will be participating in a panel titled “Cannabis – Is it a solution to your General Fund Deficit?”  She, along with fellow panelists, will help shed some much-needed light on the decision for cities to utilize the recent law passage permitting the sale, cultivation and manufacturing of recreational cannabis to help subsidize funding for general fund budget deficits.  RSG will also host a booth in Exhibit Hall D where those interested can inquire about the various product and service lines we offer.

March 7-9th - RSG will be an exhibitor at the upcoming annual Housing California Conference in Sacramento, CA.  As a leader in the affordable housing industry, RSG looks forward to joining others at this event where industry leaders work together to make a collective positive impact in the housing industry.  Tara Matthews, Principal along with Greg Smith will be attending the conference and would love for you to stop by our exhibit to talk “housing”.

March 14-16th - RSG will be participating in CALED’s 38th Annual Training Conference held in Monterey, California as both a presenter and exhibitor.   The conference provides a collaborative space where leaders from California’s economic development industry can come together to network and learn new industry tools.  Jim Simon, Principal and CALED committee member will take part in a discussion titled “Do We Have Redevelopment Back?” in which the panel will discuss the tools available to economic developers on real estate projects and what lies ahead.    RSG’s Suzy Kim and Dominique Clark will also be present at our exhibit to discuss RSG’s strong presence in the Economic Development Industry as well as the products and services we offer. 

New Consequences for Housing Element Annual Reports

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The 2017 Legislative Housing Package passed 15 bills that enact new housing regulations in California.  Assembly Bill (AB) 879 and Senate Bill (SB) 35 placed increased importance on Housing Element Annual Progress Reports (Annual Reports) that are due to HCD by April 1 each year.  New consequences for failing to complete Annual Reports include court sanctions and losing local control over affordable multifamily housing development entitlements to a new streamlined approval process.   If your jurisdiction is behind on its Annual Reports, it could lose local control over affordable multifamily housing development entitlements as early as this year.

Charter Cities Must Complete Report

·         Charter cities used to be exempt from submitting an Annual Report.  They must now submit an Annual Report beginning with the 2017 report due April 1, 2018. 

Failure to Submit Annual Reports

·         Failure to submit an Annual Report within 60 days of the due date could result in court orders to compel compliance, and court sanctions if not completed as ordered.

·         Failure to submit the Annual Report for two or more consecutive years triggers SB 35 provisions streamlining affordable multifamily housing development approvals, losing significant local control over the entitlement process. 

New Annual Reporting Requirements

Local jurisdictions need to track new housing production data in 2018 to include in the Annual Report due April 2019, and ongoing years.  This includes data on:

·         Housing Development Applications and Approvals

·         Housing Production in progress (via entitlement, building permit, or certificate of occupancy)

·         Sites Identified or Rezoned to Accommodate RHNA Need (related to “No Net Loss” provisions passed by AB 166)

HCD will use new Annual Report data to determine if a locality has not issued enough building permits to satisfy its RHNA allocation by income category for a reporting period, subjecting it to SB 35 streamlining provisions until the next reporting period. 

Annual Reports due by April 1 must continue to include the Housing Successor Annual Report for redevelopment housing successors that are not Housing Authorities (Housing Authority reports are due by October 1 and December 31).

Contact Suzy Kim, Senior Associate, at skim@webrsg.com or 714.316.2116, if you have questions or need assistance preparing your Annual Report to retain local control over housing development and avoid court sanctions.

Written by Suzy Kim, a Senior Associate at RSG

AB 1598: A New Affordable Housing Tool?

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On October 13, 2017, Governor Brown signed Assembly Bill (“AB”) 1598 into law. Legislators have said that the bill, which became effective on January 1, 2018, creates a new financing tool for affordable housing. But what is this new tool exactly?

In some ways, the tool isn’t really new at all, but rather the expansion of an old tool. Building upon AB 2 from 2015, which allowed cities and counties to create Community Revitalization and Investment Authorities (“CRIAs”), AB 1598 allows cities and counties to create “affordable housing authorities.” Affordable housing authorities are authorized to use property tax increment and sales tax revenue contributed by consenting taxing entities to finance low- and moderate-income housing and affordable workforce housing.  Authorities may issue bonds payable from the pledged revenues. Schools and successor agencies, however, are not permitted to contribute from their share of tax revenue.

Affordable housing authorities must adopt and then implement a detailed affordable housing program. Unlike former redevelopment agencies, the authorities are not required to spend proceeds only in “blighted” areas. However, housing funds expended must be spent in proportion to the city/county’s Regional Housing Need Allocation (RHNA) requirements. A board made up of elected officials and local residents or employees is required to oversee each affordable housing authority.

If you are interested in learning more about whether your community could benefit from forming an affordable housing authority, please contact us at RSG today. We’re happy to help.

Written by Dominique Clark, an Associate at RSG

Facing a Unique Economic Development Challenge? Consider Taking a LEAP!

Recently, RSG partnered with the California Association for Local Economic Development (CALED) to assist with the expansion of CALED’s Local Economic Advisory Program, often simply referred to as LEAP. LEAP is an innovative technical assistance program helping cities, counties, and other communities across California achieve their economic development objectives. The program features one- or two-day events during which four leading economic development experts visit a community to tackle a specific strategic, policy, or program challenge presented by community leaders. The event culminates with the experts’ presentation to elected officials, staff, and business leaders, outlining near-term recommendations and action steps.

What kind of economic development challenge could be meaningfully addressed by a team of experts in just one or two days? Below are what we’ve found to be the top 3 characteristics of challenges that make perfect candidates for LEAP:

1.       A specific, clearly defined challenge…but no clear direction on where to start

2.       Visionary City/County staff eager to utilize an out-of-the-box approach to address the challenge

3.       Community leaders that are willing and available to participate in the process

Interested in participating in LEAP? Click here to learn more about the program!

Growing Number of San Diego County Households Paying More Than 30% of Income on Housing Expenditures

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As the California housing market continues to suppress any effects of the subprime mortgage crises, housing expenditures have swelled to levels that are considered not affordable for an alarming number of citizens. Counties such as San Francisco, San Jose, Los Angeles, Orange, and San Diego are among the least affordable markets with more and more households spending well beyond 30% of their income to keep a roof over their heads.

In San Diego County, 47% of all occupied units are spending more than 30% of its income on housing expenditures according to the U.S. Census Bureau, American Community Survey 5-Year Estimates. That number is even higher for renter-occupied units at 57%, with five cities throughout the County over 60%. Vista (44% owner, 65% renter), San Marcos (47% owner, 63% renter), and Escondido (41% renter, 64% renter) each rank among the Top 5 least affordable cities for owner- and renter-occupied units compared to Poway (31% owner, 52% renter) and Solana Beach (32% owner, 51% renter) which are among the most affordable in both categories. The City of San Diego is among the average at 36% owner-occupied and 54% renter-occupied units spending more than 30%.

The growing concern for housing affordability in San Diego County has become a wide-spread issue that is no longer isolated to the less affluent communities. The need for local governments to assess their current housing stock is among the first steps toward finding a solution that is right for its residents.    

RSG Speaking Engagements

September 28 - RSG Principal, Hitta Mosesman (resume here), was a speaker on the framing panel at the Orange County Housing Summit at Chapman University.  Ms. Mosesman presented on the effect ecommerce has had on land use and housing development in Orange County.

October 20 – RSG Principal, Jim Simon  (resume here) was the guest instructor at the City of Anaheim’s Project Manager University speaking on the topic of Economic Development Financing Fundamentals. 

October 24 - Jim Simon and Dominique Clark, Associate, (resume here) led a Real Estate Development and Reuse class at the Economic Development Certificate Program hosted by CSU Fresno and CALED.  This is Mr. Simon’s 4th time teaching this course.

October 26 - Jim Simon was a speaker at the CALAFCO conference in San Diego on October 26 in San Diego.  Mr. Simon presented “Local Agencies Fiscal Health: What is LAFCO’s Role.”

February 2018 (exact date to be determined) – Hitta Mosesman will participate on a panel on recreational cannabis and unfunded pension liabilities at the California Society of Municipal Finance Officers (CSMFO) 2018 Annual Conference in Riverside California.

California Housing Bills Cheat Sheet

An unprecedented number of housing bills were passed during the recent legislative session.  The review of all of these bills can be daunting with everyone’s busy schedule.  Here’s a breakdown of what you need to know about each major bill with a link to the legislative summary for more detailed information.  Enjoy!

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From Hurricanes to The Solar Eclipse - the Economic Impacts of Nature

With the onslaught of hurricanes in the southeastern states and Caribbean, safety is the number one things that comes to people’s minds. After the initial rescue and relief are provided, what about the longer-term need for recovery and rebuilding? Think tanks are providing suggestions, like how to coordinate federal assistance efficiently and how to rebuild in a more resilient way to minimize damage from similar future events.

Estimated total recovery costs for the communities hit by Hurricanes Harvey, Irma and Maria are nearly $300, including direct impacts (like property damage) and secondary impacts (like economic disruption). There is an economic silver lining. Recoveries usually provide a small economic boost as rebuilding efforts create jobs and circulate earnings.

On the positive side - not all natural events are economic disasters. The solar eclipse in August of this year is one such natural event.  I had the opportunity and pleasure to see the total solar eclipse from a little community in Idaho. Small towns located in the eclipse’s path of totality from Oregon to South Carolina prepared for years ahead of time for the tenfold population increases generated by visitors. I witnessed the economic impact of the event as restaurants were packed and even ran out of food and as local entrepreneurs catered to visitors’ needs and desire for memorabilia.

With appropriate planning and coordination, we can maximize the benefits resulting from positive events while minimizing the impacts of disasters.

Written by Dima Galkin, an Associate at RSG

Cannabis –Unfunded Pension Liabilities Solution?

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The passage of the Adult Use Marijuana Act in 2016 has opened the door to what is expected to be a multi-billion-dollar industry in California - increasing economic output and generate jobs as well as generating revenue for services. Local jurisdictions can now choose to allow cannabis sales, cultivation, manufacturing and other activities and can levy excise taxes.  Most cities that initiated ballot measures (with most passing the 2/3 vote) projected millions of dollars in excise taxes annually (after January 1, 2018) that would go toward General Fund budget deficits and liabilities, including unfunded pension liabilities.  This is unfortunately a time when few new sources of expanded revenue sources exist for cities, and this revenue source is piquing the interest of many communities throughout the State.

But cannabis is a relatively new phenomenon in the State and is a sensitive subject that causes concern for residents, businesses and city officials. What will communities look like with dispensaries and other cannabis businesses?  How will public safety be impacted? How can jurisdictions start a conversation about cannabis and determine whether it is an option that should be evaluated?

Many of our current city clients have reached out to us to discuss the implications of cannabis in recent months – on both the pros and cons.  During these conversations, clients have indicated that because of legalization on a State level, even those communities who prohibit cannabis businesses will likely be affected by the legal usage (similar to alcohol usage).  Some clients, like the City of Bellflower, have decided to evaluate the fiscal and economic impacts to conservatively and accurately predict the net revenues potentially generated, new jobs created and economic stimulus to the community. A summary of this analysis can be found at the City's  website.

Attendance at two local cannabis conferences in September made it clear that the cannabis industry has a large number of consultants, attorneys, accountants and advisors on their side.  Cities should similarly have professionals that understand the industry (but are independent and neutral parties) to provide information to make informed decisions regarding cannabis, if that is what they choose.  Just as cities will bring in experts to help negotiate development agreements or conduct real estate analysis for a potential project, cities can make confident, well-informed decisions when armed with their own reliable data.  In addition, a third-party review of developer agreements and/or permits for cannabis businesses is also advisable to ensure that the terms, conditions and agreements are beneficial to the city.  For more information, please contact Hitta Mosesman, Principal, at RSG at hmosesman@webrsg.com or (714)316-2137.

Written by Hitta Mosesman, a Principal at RSG