BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 2783


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          Date of Hearing:  April 20, 2016


               ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT


                                  David Chiu, Chair


          AB 2783  
          (Eduardo Garcia) - As Amended March 28, 2016


          SUBJECT:  Affordable Housing and Sustainable Communities Program


          SUMMARY: Requires the Strategic Growth Council (SGC) to revise  
          their adopted guidelines and selection criteria for affordable  
          housing project that qualify under the Affordable Housing and  
          Sustainable Communities Program (AHSC) for the Rural Innovation  
          Project Area (RIPA).     Specifically, this bill:  


          1)Requires the SGC to revise their adopted guidelines and  
            selection criteria for affordable housing project that qualify  
            under the AHSC for the RIPA as follows:


             a)   Projects shall be allowed to build at nonmetropolitan  
               density requirements based on net density. 


             b)   Defines "net density" to mean the total number of  
               dwelling units per acre of land to be developed for  
               resident or missed use excluding permanent streets,  
               required drainage facilities, sidewalks, parks, public  
               rights of way, easements, encroachments, and dedicated open  
               space.









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             c)   For projects that receive 4% low-income housing tax  
               credits, one hundred thousand dollars $100,000 per  
               restricted unit shall be added to the base amount for loan  
               limit calculations purposes. 


             d)   Scoring must be awarded based on the extent to which an  
               application demonstrates walkable corridors and  
               incorporates features that encourage bicycling which will  
               exist upon completion of the project. 


          EXISTING LAW:  


          1)Establishes the SGC made up of the California Business  
            Consumer Services and Housing Agency (BCSH), California Health  
            and Human Services (CHHS), California Environmental Protection  
            Agency (CalEPA), California State Transportation Agency  
            (CalSTA), the California Department of Food and Agriculture  
            (CDFA) and the California Natural Resources Agency (CNRA); the  
            director of the Governor's Office of Planning and Research  
            (OPR).


          2)Directs the SGC to develop guidelines and selection criteria  
            for the implementation of the AHCS to reduce greenhouse gas  
            emissions through projects that implement land use, housing,  
            transportation, and agricultural land preservation practices  
            to support infill and compact development and that support  
            related and coordinated public policy objectives including the  
            following:


             a)   Reducing air pollution;


             b)   Improving conditions in disadvantaged communities;








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             c)   Supporting or improving public health or other  
               co-benefits;


             d)   Improving connectivity and accessibility to jobs,  
               housing, and services;


             e)   Increasing options for mobility, including the Active  
               Transportation Program;


             f)   Increase transit ridership;


             g)   Preserve and develop affordable housing for lower income  
               people; and


             h)   Protect agricultural lands to support infill  
               development. 


          1)Requires a project to demonstrate the following to be eligible  
            for funding from the AHSC program:


             a)   Demonstrate that it will achieve a reduction in  
               greenhouse gas emissions;


             b)   Support implementation of an adopted or draft SCS, or if  
               a SCS is not required for the region a regional plan that  
               includes policies and programs that reduce greenhouse gas  
               emissions. 










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             c)   Demonstrate consistency with the state planning  
               priorities established to achieve the state's environmental  
               goals. 


          1)Requires that at least 50% of the funding for AHSC benefit  
            projects in disadvantaged communities. 


          2)Requires SGC when revising its guidelines to develop the  
            guidelines and selection criteria, conduct at least two public  
            workshops (one in northern California and one in southern  
            California) to receive and consider public comments, and  
            publish the draft guidelines on its Internet Web site at least  
            30 days prior to the public meetings. 


          3)Requires SGC to consider comments from local governments,  
            regional agencies, and other stakeholders in adopting  
            guidelines and selection criteria. 


          4)Requires the SGC to conduct outreach to disadvantaged  
            communities to encourage comments on the draft guidelines from  
            those communities. 


          5)Defines "disadvantaged communities" to mean communities  
            identified by the CalEPA based on geographic, socioeconomic,  
            public health, and environmental hazard criteria, and may  
            include, but are not limited to, either of the following:

             a)   Areas disproportionately affected by environmental  
               pollution and other hazards that can lead to negative  
               public health effects, exposure, or environmental  
               degradation; and 











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             b)   Areas with concentrations of people that are of low  
               income, high unemployment, low levels of homeownership,  
               high rent burden, sensitive populations, or low levels of  
               educational attainment.

          


          


          FISCAL EFFECT:  Unknown


          COMMENTS:  


          In 2014, Legislature created the AHSC program funded through  
          cap-and-trade proceeds. SB 862 (Senate Budget and Fiscal Review  
          Committee) Chaptered 862, Statutes of 2014 continuously  
          appropriated 35% of the cap-and-trade funds for investments in  
          transit, affordable housing, and sustainable communities.  Of  
          this, 10% is for transit and inter-city rail capital programs  
          administered by the Department of Transportation (Caltrans) and  
          the California Transportation Commission (CTC); 5% is for low  
          carbon transit operations through the State Transit Assistance  
          formula; and 20% is for affordable housing and sustainable  
          communities, with half of this funding going to affordable  
          housing projects that demonstrate a reduction in greenhouse  
          gases.

          The AHSC program is administered by the SGC and HCD. HCD is  
          responsible for implementing the transportation, housing, and  
          infrastructure components of the AHSC program. According to the  
          guidelines, "The AHSC program is designed to implement the GHG  
          emissions reductions through fewer shorter vehicle trips. The  
          AHSC program will fund integrated land use and transportation  
          projects supporting low-carbon transportation options. Promoting  
          mode shift to low-carbon transportation will require strategies  








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          that link residential areas, major employment centers and other  
          key destinations to accessible reliable, affordable safe,  
          comfortable transit, and active transportation options.  The  
          AHSC provides grants and/or loans to projects that will achieve  
          GHG reductions and benefit disadvantaged communities through  
          increasing accessibility of affordable housing, employment  
          centers, and key destinations via low-carbon transportation  
          resulting in fewer vehicle miles travelled (VMT) through  
          shortened or reduced vehicle trip length or mode shift transit,  
          bicycling, or walking.  Funding applicants track metrics in  
          accordance with the Air Resources Board's Funding Guidelines.

          In the first round of funding, two projects in rural areas were  
          funded from the affordable housing set-aside.  The SGC convened  
          four stakeholder meetings over the Fall of 2016 to receive  
          public comment and consider changes to the program.  Recognizing  
          that rural projects were not able to compete well against urban  
          projects, the SGC changed their guidelines to set-aside 10% of  
          the total funding for AHSC for rural areas.  As a result,  
          applicants in rural areas compete against other rural projects  
          rather than against urban projects that can generally show a  
          greater reduction in VMT.   


          In January, the SGC released a NOFA for the AHSC program which  
          included the new RIPA set aside and guidelines. In response they  
          received a total of 130 applications in all categories, 23 of  
          the applications are for RIPA.  HCD is in the process of  
          determining which applicants will be asked to move to the next  
          phase of the process and submit full applications.


          The intent of programs funded by cap-and-trade proceeds is to  
          reduce greenhouse gas emissions to achieve goals set in AB 32.    
          In order to meet this standard affordable housing project must  
          combine both density and proximity to public transportation in  
          order to result in fewer vehicle miles travelled which will  
          reduce our overall greenhouse gas production. The effect of this  
          bill is to reduce the density required for RIPA projects below  








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          what is required in the AHCS guidelines and potentially  
          undermine the goal of the program.   


           Arguments in support:   According to the, The California  
          Coalition of Rural Housing, "AB 2783, a measure that will help  
          eliminate barriers to rural communities to access the AHSC  
          program to build safe affordable housing.  Rural communities  
          throughout the state have been systematically overlooked and as  
          a result have not received investments from the AHSC program  
          which will help these communities increase their access to  
          affordable housing while also achieving greenhouse gas  
          reductions.  In 2015, there were no rural affordable housing  
          projects that received funding from the AHSC. Out of the 36  
          projects that did received funding, two projects were in rural  
          communities but those did not result in the building of much  
          needed affordable housing in rural areas of the state.  Despite  
          the RIPA being established by the SGC to address inequitable  
          distribution of fund, there are still threshold barriers that  
          hinder rural communities in the state having access to the  
          investments needed to help combat climate change while also  
          achieving other co-benefits, such as maximize overall economic,  
          public health and environmental benefits, improve air quality,  
          and lessen effects of climate change in California." 


           


          Arguments in opposition  :  According to the Metropolitan  
          Transportation Commission, "in response to concerns that the  
          AHSC program did not provide sufficient funding to rural areas  
          in its first two rounds, the AHSC guidelines for 2015-16 include  
          a target of 10% for RIPA proposals, though the target is not  
          binding in the event there aren't sufficient qualifying  
          applications. MTC does not oppose the RIPA target, but we do  
          oppose lowering what is already a relatively low density  
          requirement (20 units/acre, suburban standard) to the  
          non-metropolitan area standard of 15 units/acre. As an  








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          illustration the city of Calistoga has submitted for AHSC  
          funding an affordable housing development project for seniors  
          with an estimated density of 35 units/acre. The minimum density  
          requirements for the AHSC guidelines were developed with  
          extensive public input.  Given the purpose of the AHSC program  
          is to reduce GHG emission by boosting the availability of  
          affordable housing in near transit, lowering the density  
          requirements undermines that goal."    


           


          Policy concerns  :  





           In the Fall of last year, the SGC revised the guidelines for the  
          AHSC program to provide greater access for rural areas of the  
          state by eliminating competition between rural and urban  
          projects and allowing rural projects to compete against each  
          other.  The committee may wish to consider allowing this process  
          to play out before pursing changes to the program. 





          Climate change is a dynamic and evolving situation that the  
          state needs to be able to respond to through policy and funding  
          mechanisms in an efficient and thoughtful manner. Locking  
          program guidelines into statute may undermine that process and  
          the fundamental purpose of the AHSC program, to reduce our GHG  
          emissions and slow climate change. The committee may wish to  
          consider if making changes to the guidelines through this bill  
          will invite other stakeholders who are dissatisfied with the  
          guidelines process to pursue changes through the legislative  








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          process.  


           


          


          REGISTERED SUPPORT / OPPOSITION:




          Support


          Burbank Housing Development Corporation


          California Coalition for Rural Housing


          Coachella Valley Housing Coalition


          Comité Civico del Valle 


          La Union Hace La Fuerza


          Peoples' Self Help Housing Corporation


          Pueblo Unido CDC


          Redwood Valley Little River Band of Pomo Indians








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          Opposition


          Metropolitan Transportation Commission




          Analysis Prepared by:Lisa Engel / H. & C.D. / (961) 319-2085,   
          Lisa Engel / H. & C.D. / (916) 319-2085