housing

Housing is a Hot Topic at the California Capitol

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In its February 2018 Statewide Housing Assessment, the California Housing and Community Development Department stated that 180,000 homes would need to be produced annually between 2015-2025 to keep up with projected population and household growth. This is a goal that will likely go unmet, as California has only built an average of 80,000 homes per year over the last 10 years. As a result, California legislators have introduced multiple housing bills, many of which are aimed at streamlining housing production, increasing the state’s ability to control land use at the local level, and developing financing tools to fund increased housing production. A few of these bills, most notably ACA 1, SCA 1, AB 68, and SB 9 will significantly impact the state’s ability to meet its housing target. Here is a brief summary of these bills:

·         ACA 1 is focused on providing an additional funding source to enable construction of affordable housing and infrastructure. The additional funding would be available at a local level and would be focused on "workforce housing" (up to 150% AMI), thereby including the “missing middle” that is often neglected in housing legislation.  ACA 1 accomplishes this by reducing the local vote threshold (from a two-thirds vote to a 55-percent majority) for approval of an ad valorem tax to service bond indebtedness incurred to fund the construction, reconstruction, rehabilitation, or replacement of public infrastructure or affordable housing.

ACA 1 also includes provisions requiring that annual performance audits be made available to the public and a citizens’ oversight committee be formed, allowing the public to track progress and hold the issuer accountable for expenditures related to applicable projects. However, lawmakers should consider the administrative burden that these accountability provisions may create, as operation expenses will not be a cost covered by debt issuance. Link to bill.

·         SCA 1 would streamline the approval process for affordable housing developers and municipalities. SCA 1 would repeal Article 34 of the California Constitution, which was enacted in 1950 and prohibits the development, construction, or acquisition of a low-rent housing project by any state public body until electors of the public body approve the project with a majority vote. By requiring voter approval, Article 34 has slowed the approval process and increased the cost of affordable housing drastically. Link to bill.

·         AB 68 seeks to increase residential housing density in California by requiring that streamlined approval be given to permit applications for the development of Accessory Dwelling Units (ADUs) and Junior Accessory Dwelling Units (JADUs). This bill also prohibits a local ordinance from imposing minimum lot size, lot coverage, or floor area ratio requirement on ADUs.  Link to bill.

·         SB 9 is a financing tool that seeks to incentivize investment in affordable housing development. This bill authorizes a developer that is awarded a low-income housing tax credit to sell that credit to investors for each taxable year the credit is allowed indefinitely, thereby removing a January 1, 2020 sunset provision in existing law. Therefore, this change spurs investment in affordable housing projects for a longer, indefinite period of time than current law allows. Link to bill.

Senate Bill 2 Planning Grants Available Now!

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Does your community need funding to come up with a local solution to the housing crisis? Good news, Senate Bill 2 (“SB2”) might be the answer to your needs! With the passage of SB2, $123 million have become available to assist local governments with the implementation of planning activities to accelerate housing production.

Our first look at SB2 was in 2017 when it was one of the 15 bills in the 2017 Legislative Housing Package. We learned then that it establishes a permanent funding source for affordable housing and is designed to help local governments tackle the challenges of our housing crisis. This will be done by providing funding and technical assistance for the implementation of qualifying activities. Such activities include, but are not limited to, updates to general plans, local process improvements, updates to zoning ordinances, infrastructure financing plans, and pre-approved architectural and site plans, among many others. Can any of these address the needs of your community?

If your jurisdiction is currently considering the implementation of planning activities to increase housing production, SB2 Technical Assistance grants may provide the necessary financial assistance to implement such actions. Still confused, or wondering if your project qualifies? RSG is here to answer all your questions! Contact Irlanda Martinez (imartinez@webrsg.com) with any inquiries regarding SB2. Awards range from a minimum of $25,000, to a maximum of $625,000, depending on population size. Applications are due November 30, 2019 but RSG is here to help now!

Housing Propositions That Passed on November 6, 2018

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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

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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. 

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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:

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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.

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

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.    

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