Affordable Housing

RSG's Housing Right Now Workshop (April 24th, 2019)

housing wrkshp pic.PNG
 

Last Wednesday, RSG collaborated with law firm Rutan and Tucker, LLP to host a workshop ambitiously titled “Everything You Need to Know about Housing Now.” The event quickly sold out, illustrating just how eager city and county staff are to learn more about recent housing legislation and how it affects their communities. Held in RSG’s Irvine office, the event was attended by city and county staff from the counties of Los Angeles, Orange, Riverside, San Diego, and Ventura.

The workshop presenters were attorneys Bill Ihrke and Kathy Jenson and RSG principals Tara Matthews and Hitta Mosesman, which allowed workshop attendees to hear about both the legal and practical implications of recent housing bills:

  • Bill delved into the nuances of several pieces of legislation, focusing primarily on Senate Bill (SB) 35, which streamlines the approval process for infill developments in local communities that failed to meet their Regional Housing Needs Allocation (RHNA).

  • Hitta provided several case studies of cities that have already received applications for projects from developers looking to take advantage of the streamlined approval process allowed by SB 35.

  • Kathy explained how recent housing legislation and the California Coastal Commission’s new focus on “no net loss” affects coastal communities.

  • Tara guided attendees through strategic steps to take to ensure compliance with the new housing legislation, including getting involved early in the RHNA process, updating local planning and zoning policies as needed, applying for SB 2 technical assistance grants by the November 30th deadline, maintaining a current inventory of existing affordable units and staying up to date on compliance monitoring, and filing the required annual reports.

In light of California’s housing crisis and the need for 100,000 new housing units each year, State legislators are looking to hold communities responsible for doing their part in creating more housing in California. For better or for worse, the recent Legislative Housing Package created several new requirements and implications for every California community. If you’re interested in learning more about how your community is impacted, please contact us at RSG today. We’re happy to help!

RSG at the 2019 Housing California Conference

housing pic.PNG
 

This year’s Housing California Conference marked the 40th anniversary of the organization’s tireless efforts to build a California with affordable and dignified housing for all. This year’s conference was flooded with celebration of recent legislative wins for housing, passion for the solutions, and enthusiasm for the future. With attendees ranging from community organizers, to housing developers, to state legislators, it is evident that housing is at the forefront of every Californian’s priorities.

The importance of housing and growth of its public support were highlighted by a significant increase in attendance – 2019 out-shined 2018 with approximately 50% more attendees. The estimated 2,200 attendees had the opportunity to attend an array of workshops ranging from public policy, to funding sources, to community engagement. With such a diverse collection, there were learning opportunities for everyone.

While the conference provided us with a variety of topics, it was tough to miss some common themes that resonated throughout most of the workshops – nimbyism, homelessness, and funding. Such themes highlight the fact that with growing support, there are also growing concerns. Fortunately, California’s strong, pro-housing leadership at the state level is actively making strides to provide cities across the state with the necessary tools to combat such obstacles as made evident by the Department of Housing and Community Development’s (HCD) palpable presence at the conference.

RSG left this year’s conference feeling energized about the direction California is heading in, and the growing public support for affordable housing. It was exciting to see how this 40th annual conference presented an educational experience that encompassed an inclusionary and progressive vision for affordable housing. We are eager to see the opportunities and solutions that will arise in future legislation and look forward to celebrating more wins at the 2020 conference in San Diego.

SB2 and You: What you need to be ready

sb2 eblast photo.PNG
 

SB2 was first introduced in 2017 as one of 15 bills in the 2017 Legislative Housing Package. In it’s design to create a permanent funding source for affordable housing, the bill has led to $128 million becoming available in funding and technical assistance grants to help local governments implement activities aimed at addressing the challenges of our housing crisis, which include updates to general plans, local process improvements, updates to zoning ordinances, infrastructure financing plans, and pre-approved architectural and site plans, among many others.

With applications for Technical Assistance grants due November 30, 2019, RSG wants to make sure that you are ready to take advantage of this funding source.  Per the Housing and Community Development Department, applicants must meet all of the threshold requirements for participation in the program as provided in the grant guidelines and listed below:

  • Housing element compliance – The applicant must have a housing element that has been adopted by the jurisdiction’s governing body by the deadline specified in the NOFA and subsequently determined to be in substantial compliance with state housing element law pursuant to Gov. Code Section 65585.

  •  Annual Progress Report (APR) on the housing element - The applicant must submit the APR to the Department as required by Gov. Code section 65400 for the current or prior year by the date established in the NOFA.

  • Nexus to accelerating housing production - The applicant must propose and document plans or processes that accelerate housing production. The application must demonstrate a significant positive effect on accelerating housing production through timing, cost, approval certainty, entitlement streamlining, feasibility, infrastructure capacity, or impact on housing supply and affordability.

  • State Planning and Other Planning Priorities - Applicants must demonstrate that the locality is consistent with State Planning or Other Planning Priorities. Consistency may be demonstrated through activities (not necessarily proposed for SB 2 funding) that were completed within the last five years.

 Whether it be an inquiry as to if your project qualifies or a question about the application process, RSG is here to answer all your questions! Contact Irlanda Martinez (imartinez@webrsg.com) with any inquiries regarding SB2.

Point-Counterpoint!

And now let’s join RSG Principals Tara Matthews and Jim Simon do their impression of Jane Curtin and Dan Aykroyd debating the changes they’d like to see to help California communities, moderated by Suzy Kim, Senior Associate. 


Suzy:  So, we know the new “gigamajority” of Democratic control in the California State Legislature and a new governor have got people buzzing about more tax increment financing tools to bring capital back to local communities.  With EIFDs, CRIAs, NIFTI’s and other tools, does California really need “Redevelopment 2.0” and “Affordable Housing and Infrastructure Agencies” proposed by Assembly Bill 11 (Chiu), or Local-State Sustainable Investment Incentive Program proposed by Senate Bill 5 (Beall)?  We’ve asked two of our Principals to debate these questions.  First off is Tara Matthews, Principal from our Vista office.  Tara’s work tends to focus around the areas of affordable housing.  Tara is also a member of the San Diego Housing Federation.  Tara will be debating with Jim Simon, Principal from our Irvine office who is also an Advisory Boardmember and technical committee co-chair of the California Association for Economic Development (CALED).

Starting with you Tara, how do you feel the current tools available to communities meet the needs for affordable housing and economic developers?

Tara: What tools? Just kidding, there have been efforts to generate a permanent source of funding, but I honestly don’t think they are very effective which is why we haven’t seen them utilized by many communities.  Many of the tools double or even triple dip on revenue generated in communities, meaning that the “bucket of money” everyone is fighting for is very limited. This coupled with the costly process to get your hands on the bucket of money makes the tools very inefficient.
Jim: Like Tara, I’d agree that the current tools offer limited financial incentives to communities unless other agencies participate. 

Suzy: And why are these issues in your opinion?

Jim: Because we are asking a single taxing agency to bear the risk for stimulating economic growth that benefits all taxing agencies, as well as the state itself.  This is particularly true in the case of economic development investments that can expand the economic base, provide living wage jobs, and fund needed infrastructure investment.  As it stands now, communities with the greatest needs aren’t afforded any advantage over those that simply have the fortune of having a larger share of the property tax base.
Tara: Plainly stated, there is no great incentive to use these tools to address economic and housing issues. After you run the numbers and look at various legal requirements and restrictions, the drawbacks often outweigh the benefits.  Many of the other taxing agencies that have a greater share of the revenue just don’t want to part with it.

Suzy: What kinds of changes do you feel are needed to make these tools better?

Tara: Finding a way to make these tools benefit more of the taxing agencies and thus enticing more participation to reach common goals. One idea is to more clearly define a pass-through payment formula and removing “opt-in” provisions.  Thus, making it easier to create a permanent financing source for capital projects.
Jim: I think AB 11 needs to establish some formula for any pass-through negotiations, with either a fixed formula or a maximum share. 

Suzy: Ok, let’s talk about SB 5 and AB 11.  Do you feel that either of these bills is going the help communities with affordable housing or economic development?

Jim: I’m not sure yet.  I like the idea of the State finally getting involved in supporting community development again, but there are a lot of unknowns here.  
Tara: TBD. SB 5 is very intriguing since it’s the most different from existing tools and provides a clearer path to funding. But I agree with Jim that it is exciting to see the focus on community development again coming from the State Legislature.

Suzy: What would you like to see changed in SB 5 or AB 11 to improve the situation?

Tara: Lessen reporting requirements if the entities illustrate collaborative solutions or meet specific goals, such as creating affordable housing in proportion to RHNA requirements working in collaboration with County or State entities, while improving surrounding infrastructure.  I guess an easy way to say this is – reward good behavior.  Some of the administrative burdens placed on communities makes it difficult to administer and takes away funding that could be used towards completing projects.
Jim: First, it feels like the amount of oversight the State needs to play is a bit heavy to me.  I also think they need to give local communities an opportunity to make a program work by requiring some basic level of participation from at least a few taxing agencies. And, maintenance should be an allowable use of expenditures.

Suzy: Finally, how much should be set aside for affordable housing in your opinion?

Jim: I personally feel that anything more than 50% is too much.  There is very little funding available for local communities to create a sustainable economic development program to combat issues like gentrification, stagnant wages, and limited wealth building in communities. 
Tara: Well affordable housing is my passion and I would love to see as large of a set-aside as possible.  But I also recognize that the communities must balance multiple issues and failing infrastructure is a major issue. Additionally, once housing is built those residents need a thriving community to live in, meaning that economic development is also a critical need. So, I think I would be willing to say that a 50/50 split would be fair, though I’d like to see the 50% that isn’t set-aside for housing spent in or around areas that are serving affordable housing projects and housing development.

Suzy: So are you saying that affordable housing funding is a bigger priority than economic development?

Tara: Since you are putting me on the spot, I have to stay true to my passion…yes.  But I feel that a thriving community is at the intersection affordable housing, a strong business community, and workforce training options.  When it comes to economic development, everything is interlinked.
Jim: I believe affordable housing is a key aspect of a successful economic development program, but not the only one.

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)

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

Thinking Ahead: Housing Successor Needs

Housing Successor Diagnostic_RSG April 2018.jpg

California has an increasing need for affordable housing but not enough public dollars to fund that need.  In response to a growing affordability crisis, the State Legislature is paying closer attention to existing funding sources and housing assets.  This means housing successors are under increased scrutiny to maximize their assets on a local level.  Even agencies caught up with local reporting need to think ahead to leverage assets and remain in compliance. 

Are you sure your housing successor complies with the law?  Are there outstanding items you need to address?  RSG will be sending each of our housing successor clients a Housing Diagnostic that evaluates your agency’s needs and identifies steps to maximize assets, assist low income households, and ensure future compliance.  Meeting income and age targets, taking action to dispose of or develop properties, spending funds to avoid an excess surplus, and SB 35 streamlining are a sample of the topics covered.  Producing results is more important than ever as HCD and State legislators take a closer look at existing housing funds.  If RSG does not consult your housing successor but you are interested in a diagnostic, contact Suzy Kim, Senior Associate, at skim@webrsg.com or (714) 316-2116.

Don't Miss out on Funding Opportunities - Complete your Housing Element Annual Progress Reports!

Housing Successor.jpg

With the passage of the 2017 Legislative Housing Package, the State has placed more importance on local government compliance with Housing Element regulations and the submission of Housing Element Annual Progress Reports (Annual Reports). Senate Bill (SB) 35 states that non-compliance with Annual Reports will now require cities and counties to use a streamlined and ministerial process for approving multi-family housing developments that satisfy the jurisdiction’s planning standards and requirements. Non-compliance occurs when either the jurisdiction has not issued enough building permits by income category to satisfy its regional housing need, or because it has failed to submit two consecutive Annual Reports.  Additionally, the California Department of Housing and Community Development (HCD) has indicated that non-compliant jurisdictions may not be eligible to apply and receive funding for affordable housing through State administered programs, such as the funding generated from SB 2: Building Homes and Jobs Act.

 

As of February 25, 2018, HCD has determined that ALL but 12 cities and counties are subject to SB35 streamlining provision. HCD updates this information at least quarterly to incorporate new or corrected data provided by jurisdictions.

 

Annual Reports are due to HCD by April 1st each year.  Although this deadline has passed, it is not too late to get into compliance.  Some cities are retroactively filing reports for 2015 through 2017.

 

Charter cities should note that even though charter cities were not required to complete Annual Reports until 2018, HCD believes that SB 35 streamlining requirement applies if a charter city has not completed an Annual Report for the last two years (2016 and 2017 ).  We recommend that if you have not met this requirement that you do so now.

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.

 

AB 1598: A New Affordable Housing Tool?

affordable housing.jpg
 

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

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

RSG_FINAL_POSTER_COMP.jpg

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.