BILL ANALYSIS Ó
SENATE COMMITTEE ON TRANSPORTATION AND HOUSING
Senator Jim Beall, Chair
2015 - 2016 Regular
Bill No: AB 2783 Hearing Date: 6/21/2016
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|Author: |Eduardo Garcia |
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|Version: |4/25/2016 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant|Sarah Carvill |
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SUBJECT: Affordable Housing and Sustainable Communities Program
DIGEST: This bill requires the Strategic Growth Council to
consider changing the guidelines and selection criteria for the
Affordable Housing and Sustainable Communities Program to reduce
barriers for rural projects.
ANALYSIS:
Existing law:
1)Establishes the Strategic Growth Council (SGC), composed of
the secretaries and directors of seven agencies and
departments, to coordinate the activities, policies, and
funding programs of those entities in order to better achieve
specified policy goals. These goals include reducing
greenhouse gas (GHG) emissions, building affordable housing,
improving transportation, and encouraging sustainable land use
planning.
2)Establishes the Affordable Housing and Sustainable Communities
Program (AHSC) to reduce GHG emissions by funding projects
that implement land use, housing, transportation, and
agricultural land preservation practices that support infill,
compact development, and the following related policy
objectives:
a) Reducing air pollution
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b) Improving conditions in disadvantaged communities
c) Supporting public health and other specified
"co-benefits"
d) Improving connectivity among housing, jobs, and services
e) Increasing mobility options, including active
transportation
f) Increasing transit ridership
g) Preserving and developing affordable housing for
low-income households
h) Protecting agricultural lands
3)Directs the SGC to implement the AHSC by developing guidelines
and selection criteria reflective of program goals in
consultation with member agencies and departments and the
State Air Resources Board (ARB).
4)Requires the SGC to solicit input from stakeholders on the
guidelines and selection criteria by:
a) Conducting at least two public workshops prior to the
adoption of the guidelines and selection criteria
b) Publishing draft guidelines and selection criteria on
its website for at least 30 days prior to public meetings
c) Considering comments from local governments, regional
agencies, and other stakeholders in adopting the guidelines
and selection criteria
d) Repeating these outreach steps if the guidelines are
revised
e) Conducting outreach to disadvantaged communities to
encourage comments on the draft guidelines
5)Provides that projects must do all of the following to be
eligible for AHSC funding:
a) Achieve reductions in GHG emissions
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b) Support the implementation of either a sustainable
communities strategy or, in areas where one is not
required, a regional plan that includes policies to reduce
GHG emissions
c) Demonstrate consistency with state planning priorities
related to the environment, as specified in existing law
6)Requires that 50% of AHSC funds be spent on projects that
benefit disadvantaged communities, and defines "disadvantaged
communities" to mean communities identified by the California
Environmental Protection Agency (CalEPA) that 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
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.
This bill:
1)Instructs the SGC to consider the following changes to the
AHSC guidelines and selection criteria for projects proposed
within the program's Rural Innovation Project Area (RIPA):
a) Allow projects to meet nonmetropolitan density
requirements
b) Revise the definition of "net density" to exclude the
area in a development devoted to permanent streets,
drainage facilities, sidewalks, parks, public rights of
way, easements, encroachments, and dedicated open space
c) When calculating the loan limit for projects that
receive 4% low- income housing tax credits, allow $100,000
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to be added to the base amount for each restricted unit in
the project
d) Modify scoring so that points will be awarded to
proposals based on the extent to which an application
demonstrates that walkable corridors and features that
encourage biking will exist upon the completion of a
project
2)Requires the SGC to provide a written explanation to the
Assembly Committee on Housing and Community Development by
March 1, 2017, if it determines that it will not revise the
guidelines and the selection criteria as described.
3)Requires the SGC to conduct outreach to stakeholders,
including disadvantaged communities, when program guidelines
are revised.
COMMENTS:
1) Purpose. According to the author, rural communities
throughout the state have been placed at a competitive
disadvantage when attempting to access AHSC funds, and
changes in the law are needed to ensure that AHSC monies are
equitably distributed and can reach rural and disadvantaged
communities in the state. The author argues that these
communities have been overlooked, and that if this trend
continues they will not be adequately prepared to face
climate change. Also, the author states that lack of
investment in rural communities will widen the gap that
exists between inland and coastal communities in California.
The author points out that in the first AHSC funding cycle,
only 2 of the 36 funded projects were located in rural
communities. Despite the subsequent establishment of the
RIPA, the author states that there are threshold barriers
that impede rural communities from accessing AHSC funds.
One of these is the requirement that rural projects in
non-rural or metropolitan counties build to the same density
as suburban areas. The author argues that this is a major
barrier that will continue to hinder rural communities from
receiving the necessary investments they need from AHSC.
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2) Background: What is AHSC? AHSC is administered by the SGC
and funded by a 20% appropriation from the Greenhouse Gas
Reduction Fund. These funds are allocated by a competitive
process to projects that reduce GHG emissions by supporting
more compact, infill development patterns, encouraging
active transportation and transit usage, and protecting
agricultural land from sprawl development. HCD is
responsible for implementing the transportation, housing,
and infrastructure components of the AHSC program, and the
California Air Resources Board (ARB) is also involved in
program development. The first funding cycle (2014-2015)
saw 146 applications, of which 36 were funded. After those
awards were announced in fall 2015, the SGC held four
stakeholder meetings and revised the guidelines based on the
feedback it received. SGC received 130 for the second
funding cycle (2015-2016) and awards will be announced in
the fall.
3) AHSC and rural projects. In the 2014-2015 cycle, 12
projects were proposed for rural areas, of which 2 (17%)
were funded. In contrast, the success rate for non-rural
projects was 27%. Recognizing that rural projects were not
able to compete well against urban projects, SGC established
the RIPA, an application category specifically for rural
projects, for the 2015-2016 funding cycle. The SGC set
aside 10% of the total funding for projects in this
category. Applicants in rural areas now compete against
other rural projects rather than against urban projects that
can generally show a greater reduction in vehicle miles
traveled (VMT). However, they must still meet "threshold"
requirements to be funded, and projects may not be able to
earn points toward their overall score if they are rated on
metrics that are not appropriate for rural areas.
4) The trouble with density. This bill urges the SGC to make
two changes to the guidelines that would ease density
requirements for affordable housing projects in rural
communities. Supporters of this bill characterize density
requirements as a "threshold barrier" because GHG reductions
are calculated in part based on project density. In the
existing guidelines, projects that are located in
Metropolitan Statistical Areas (MSAs) are subject to higher
minimum density requirements than projects that are not
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located in MSAs. MSAs are designated at the county level,
however, so they may capture smaller geographic areas that
are "rural" by one of the definitions that are used to
qualify a project for submission under the RIPA. This bill
aims to address this discrepancy by encouraging the SGC to
allow any project that is "rural" enough for the RIPA to use
the non-MSA minimum density requirement of 15 units per
acre.
This bill also urges the SGC to consider changing how
density is calculated for rural projects. Current density
requirements are based on "net density," which is
specifically defined in the guidelines such that some uses
of exterior space on a development site are included in the
project area and some are excluded. This bill advocates
changing the specific inclusions and exclusions for rural
projects only, effectively increasing the "net density" of
these projects and making it easier for them to meet minimum
density requirements. Supporters of the bill claim this is
necessary because basic infrastructure is already in place
in urban areas, while rural projects often must build their
own sidewalks, streets, parks, drainage ponds, and septic
systems. This increases the physical footprint of rural
developments, decreasing density.
5) Maximum loan-limit calculations. Under the current
guidelines, projects that receive 4% low income housing tax
credits may add $60,000 per restricted unit to the base
amount when calculating maximum loan limits. The bill
suggests adding $100,000 per restricted unit. Such a change
would increase the maximum loan by $40,000 per restricted
unit, making it easier to finance affordable housing
projects in rural areas.
6) Scoring modification. This bill urges the SGC to consider
changing how the walking and biking benefits provided by
rural projects are scored in the application process.
Currently, the guidelines utilize the "Walk Score" and "Bike
Score" for the project site. These metrics are provided on
a public website by a private company as a service to
Realtors and prospective homebuyers and renters. Supporters
of this bill argue that the methodology is not appropriate
for all applications and does not accurately characterize
many rural areas. Additionally, the company provides scores
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for sites as they currently exist; walk and bike scores do
not take into account improvements that would be made as
part of the proposed project. The change this bill asks the
SGC to consider reflects the way scores for active
transportation access were calculated in the guidelines for
the first funding cycle, which provided specific parameters
for evaluating existing walking and biking infrastructure
and incorporating project improvements.
7) Rural versus reductions. AHSC is funded by the proceeds
of the cap-and-trade auction, and programs that receive
these monies must reduce GHG emissions. Within the context
of affordable housing projects, GHG reductions are achieved
by housing that provides connectivity to public
transportation and increases the density of existing
development. The former is often more difficult to
meaningfully achieve in a rural setting, and the changes
urged by this bill would reduce density requirements. It is
important to bear in mind that the SGC must balance the need
for an equitable geographic distribution of projects with
the goal of reducing GHGs as much as possible, and the
changes suggested in this bill may undermine the latter
objective.
8) Is the bill necessary? Existing law already requires that
the SGC solicit and consider feedback from a variety of
stakeholders in developing and revising the guidelines and
selection criteria for AHSC. Additionally, after the first
funding cycle, the SGC went above and beyond the required
two public workshops, instead holding four events to inform
revisions to the guidelines. In response to the concerns of
rural stakeholders, the SGC established the RIPA and
dedicated funding to rural projects. While the author has
drawn attention to additional changes that may be necessary
to support strong proposals from rural areas, the robust
public process that is already in place for this program and
the SGC's responsiveness to the rural issue indicate that
legislation may not be necessary to address ongoing
difficulties.
9) Report to the Legislature. While this bill does not force
the SGC to revise the guidelines, it does require it to
provide a written explanation to the Assembly Committee on
Housing and Community Development if the suggested changes
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are not made. The implementation of AHSC has implications
for transportation and environmental policy as well as
housing and community development, however, and there is
broad interest in both the Senate and the Assembly in these
policy areas. The author and the committee may wish to
consider amendments that direct the SGC's explanation of a
decision not to revise the guidelines to the Legislature as
a whole.
10) Clean up. An earlier version of this bill would have
required the SGC to make the specified changes to the AHSC
guidelines. When the bill was amended to direct SGC to
consider revisions, the wording of the suggested changes was
not altered, and they are still phrased as commands. The
author and committee may wish to consider minor,
nonsubstantive amendments that align the presentation of the
suggested changes in the bill with the fact that the SGC is
only being asked to consider them.
11) Double-referral. This bill is double referred to the
Committee on Environmental Quality.
Assembly Votes:
Floor: 67-0
Appr: 20-0
H. & C.D.: 7-0
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes
Local: No
POSITIONS: (Communicated to the committee before noon on
Wednesday,
June 15, 2016.)
SUPPORT:
California Coalition for Rural Housing (sponsor)
A Better Community
Coachella Valley Housing Coalition
Comite Civico del Valle
La Union Hace La Fuerza
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Pueblo Unido CDC
Rural Community Assistance Corporation
OPPOSITION:
None received
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