BILL ANALYSIS Ó
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator Wieckowski, Chair
2015 - 2016 Regular
Bill No: AB 2783
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|Author: |E. Garcia, Eggman, C. Garcia, Gomez, Steinorth |
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|Version: |6/23/2016 |Hearing |June 29, 2016 |
| | |Date: | |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Joanne Roy |
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SUBJECT: Affordable Housing and Sustainable Communities Program
ANALYSIS:
Existing law:
1) Creates the Strategic Growth Council (SGC). (Public Resources
Code (PRC) §75121).
2) Establishes the Affordable Housing and Sustainable
Communities (AHSC) Program. (PRC §75210 et seq.).
a) Provides that the purpose of the AHSC program is to
reduce greenhouse gas (GHG) 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 as specified.
b) Directs SGC to develop and administer the AHSC program,
and develop guidelines and selection criteria for
implementation.
c) To be eligible for funding from the AHSC program,
requires a project to demonstrate the following:
i) Reduction in GHG emissions;
ii) Implementation of an adopted or draft
Sustainable Communities Strategy (SCS); if an SCS is
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not required for the region, a regional plan that
includes policies and programs that reduce GHG
emissions;
iii) Consistency with the state planning priorities
established to achieve the state's environmental
goals.
d) Provides a list of eligible types of projects for
funding, such as:
i) Intermodal, affordable housing projects that
support infill and compact housing.
ii) Transit capital projects and programs
supporting transit ridership.
iii) Transit-oriented development projects,
including affordable housing and infrastructure at or
near transit stations or connecting those
developments to transit stations.
e) Requires that at least 50% of the funding for AHSC
benefit projects in disadvantaged communities.
f) Requires SGC when revising its guidelines to develop
the guidelines and selection criteria, conduct at least
two public workshops to receive and consider public
comments, and publish the draft guidelines on its Internet
website at least 30 days prior to the public meeting.
3) Defines "disadvantaged communities" to mean communities
identified by the California Environmental Protection Agency
(CalEPA) based on geographic, socioeconomic, public health,
and environmental hazard criteria, and may include, but are
not limited to, either of the following (Health and Safety
Code (HSC) §39711):
a) Areas disproportionately affected by environmental
pollution and other hazards that can lead to negative
public health effects, exposure, or environmental
degradation; or
b) Areas with concentrations of people that are of low
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income, high unemployment, low levels of homeownership,
high rent burden, sensitive populations, or low levels of
educational attainment.
4) Defines "rural area" as an area that meets specified
criteria, including: a) the area is eligible for financing
under the Rural Development Administration of the US
Department of Agriculture; the area is located in a
nonmetropolitan area as defined in HSC §50090; or, the area
is either an incorporated city with a population of 40,000 or
less, or an unincorporated area which adjoins a city having a
population of 40,000 or less, as specified. (HSC §50199.21).
5) Establishes the Greenhouse Gas Reduction Fund (GGRF) in the
State Treasury, requires all moneys, except for fines and
penalties, collected pursuant to a market-based mechanism be
deposited in the fund and requires the Department of Finance,
in consultation with the California Air Resources Board (ARB)
and any other relevant state agency, to develop, as
specified, a three-year investment plan for the moneys
deposited in the GGRF. (Government Code §16428.8).
6) Prohibits the state from approving allocations for a measure
or program using GGRF moneys except after determining that
the use of those moneys furthers the regulatory purposes of
AB 32 (Núñez and Pavley, Chapter 488, Statutes of 2006), and
requires moneys from the GGRF be used to facilitate the
achievement of reductions of GHG emissions in California.
(HSC §39712).
This bill:
1) Requires SGC to consider revisions to the guidelines and
selection criteria for affordable housing projects that
qualify for funding under the AHSC Program for a rural
innovation project area (RIPA), as follows:
a) Allow projects to be built at nonmetropolitan density
requirements based on net density.
b) Revise the definition of "net density."
Modify the Rural Innovation Project Area (RIPA) within AHSC
by lowering density requirements.
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c) Provide additional loan assistance for projects that
receive 4% low-income housing tax credits, by increasing
the amount to $100,000 per restricted unit to be added to
the base amount for loan calculation purposes.
d) Require scoring to consider the extent to which an
application demonstrates walkable corridors and
incorporates features that encourage bicycling, which will
exist upon completion of the project.
2) If SGC determines that it will not make revisions, requires
SGC to provide the Legislature an explanation by March 1,
2017.
Background
1) Strategic Growth Council. SGC was established by SB 732
(Steinberg, Chapter 729, Statutes of 2008), and is tasked
with coordinating state agency activities so they assist and
support the planning and development of sustainable
communities that strengthen the economy, ensure social
equality, and enhance environmental stewardship. The
objectives of SGC include:
a) Improving air and water quality.
b) Protecting natural resources and agricultural lands.
c) Increasing the availability of affordable housing.
d) Promoting public health.
e) Improving transportation.
f) Encouraging greater infill and compact development.
g) Revitalizing community and urban centers.
h) Assisting state and local entities in the planning of
sustainable communities and meeting AB 32 goals.
SGC is comprised of agency secretaries from the California
Business Consumer Services and Housing Agency, Health and
Human Services, CalEPA, State Transportation Agency,
Department of Food and Agriculture, and the Natural Resources
Agency; the director of the Governor's Office of Planning and
Research; and three public members appointed by the Governor,
Senate Committee on Rules, and Speaker of the Assembly.
2) Affordable Housing, and Sustainable Communities (AHSC)
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Program. SB 862 (Committee on Budget and Fiscal Review,
Chapter 36, Statutes of 2014) established the AHSC Program to
reduce GHG emissions through projects that implement land
use, housing, transportation, and agricultural land
preservation practices to support infill and compact
development. The broader AHSC Program is implemented in two
components: a) the housing and infrastructure-focused AHSC
Program; and, b) the Sustainable Agricultural Lands
Conservation (SALC) Program, which focuses on protection of
agricultural lands under threat of conversion to
non-agricultural uses.
SB 862 provided a continuous appropriation of 35% of
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; 5% for low
carbon transit operations; and 20% for affordable housing and
sustainable communities.
A primary goal of the AHSC Program furthers the objectives of
the California Global Warming Solutions Act (AB 32, Núñez and
Pavley, Chapter 488, Statutes of 2006), and The Sustainable
Communities and Climate Protection Act of 2008 (SB 375,
Steinberg, Chapter 728, Statutes of 2008). The AHSC Program
invests in 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. The AHSC Program also supports
related and coordinated public policy objectives, including
the following:
Reducing air pollution;
Improving conditions in disadvantaged communities;
Supporting or improving public health and other
co-benefits as defined in HSC §39712;
Improving connectivity and accessibility to jobs,
housing, and services;
Increasing options for mobility, including the
implementation of the Active Transportation Program;
Increasing transit ridership;
Preserving and developing affordable housing for
lower income households; and,
Protecting agricultural lands to support infill
development.
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SGC administers, and Department of Housing and Community
Development (HCD) implements, the AHSC Program. In addition,
SGC and HCD coordinate with the Air Resources Board to manage
the program, including developing program guidelines,
evaluating applications, preparing agreements, monitoring
agreement implementation, and reporting.
AHSC is a competitive grant/loan program funded by GGRF
moneys. Eligible projects include those that will achieve
GHG emission 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
through shortened or reduced vehicle rip length or mode shift
transit, bicycling, or walking. Funding applicants track
metrics in accordance with the Air Resources Board's Funding
Guidelines. Fifty percent of all funding in this program
must benefit disadvantaged communities.
1) Rural Innovation Project Area (RIPA) projects. RIPA projects
are a component of the AHSC Program, where the focus is on
projects in rural areas, as defined. According to SGC, for
RIPA projects, and across other project areas, the key to
maximizing GHG reduction for housing projects will be higher
densities, reducing parking, and incorporating mixed use
elements in to the development. For both housing and
transportation projects, proximity to a central business
district and providing some kind of subsidy to incentivize
transportation use will help yield greater GHG reductions.
2) Cap-and-trade auction revenue. Since November 2012, ARB has
conducted more than14 cap-and-trade auctions, generating over
$4 billion in proceeds to the state. The latest auction in
May 2016 fell sharply below expectations as buyers purchased
a mere 2% of the carbon credits, which will provide $10
million for state programs.
State law specifies that the auction revenues must be used to
facilitate the achievement of GHG emissions reductions and
outlines various categories of allowable expenditures.
Statute further requires the Department of Finance, in
consultation with ARB and any other relevant state agency, to
develop a three-year investment plan for the auction
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proceeds, which are deposited in the GGRF.
a) Disadvantaged communities. SB 535 (de León, Chapter
830, Statutes of 2012) requires the Department of Finance,
in the investment plan, to allocate at least 25% of
available moneys in the GGRF to projects that provide
benefits to disadvantaged communities, and at least 10% to
projects located within disadvantaged communities.
To meet the SB 535 mandate, the Office of Environmental
Health Hazard Assessment, under CalEPA's guidance,
developed a tool (termed CalEnviroScreen) to assess and
rank census tracts across the state that are
disproportionately affected by multiple types of pollution
and areas with vulnerable populations. CalEPA has
designated 25% of census tracts in California as
disadvantaged communities for the purpose of investing
cap-and-trade proceeds.
Additionally, SB 862 (Committee on Budget and Fiscal Review,
Chapter 36, Statutes of 2014) requires ARB to develop
guidelines on maximizing benefits for disadvantaged
communities by agencies administering GGRF funds.
b) Legal consideration of cap-and-trade auction revenues.
The 2012-13 Budget analysis of cap-and-trade auction
revenue by the Legislative Analyst's Office noted that,
based on an opinion from the Office of Legislative
Counsel, the auction revenues should be considered
mitigation fee revenues, and their use requires that a
clear nexus exist between an activity for which a
mitigation fee is used and the adverse effects related to
the activity on which that fee is levied. Therefore, in
order for their use to be valid as mitigation fees,
revenues from the cap-and-trade auction must be used to
mitigate GHG emissions or the harms caused by GHG
emissions.
In 2012, the California Chamber of Commerce filed a lawsuit
against the ARB claiming that cap-and-trade auction
revenues constitute illegal tax revenue. In November
2013, the superior court ruling declined to hold the
auction a tax, concluding that it is more akin to a
regulatory fee. In February of 2014, the plaintiffs filed
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an appeal with the 3rd District Court of Appeal in
Sacramento. That case is currently pending.
Comments
1) Purpose of Bill. According to the author, "In over three
years of guideline and program feedback, almost none of rural
communities' recommendations have been treated with the
gravity they deserve and the only response has been creating
the RIPA, but with the same thresholds and scoring criteria
as the other two project prototypes. The longer we wait to
make substantive, meaningful changes in the RIPA, the more
good quality rural housing projects will be denied access and
the more money will be left on the table."
2) AHSC Program and rural projects. In the first round of
funding in 2015, out of the 36 projects that received
funding, two projects were in rural areas. SGC convened four
stakeholder meetings over the fall of 2015 to receive public
comment and consider changes to the program. Recognizing
that rural projects were not able to compete well against
urban projects, SGC changed the guidelines to set aside 10%
of the total AHSC funding for rural areas. As a result,
applicants in rural areas now compete against other rural
projects rather than against urban projects, which generally
have an advantage of being able to show a greater reduction
in vehicle-miles traveled (VMT).
In January 2016, SGC released a notice of funding availability
for the AHSC Program, which included the new RIPA 10%
set-aside and guidelines. In the current round of
applications for AHSC funding, a total of 130 applications
were received in all categories, 23 of which for RIPA.
Awards are expected to be announced in September 2016.
Because the current round of AHSC Program funding, which is the
first time utilizing the newly revised guidelines, will be
awarded in a few months, the Committee may wish to consider
whether this bill is premature and if it would be prudent to
see whether the guideline revisions satisfactorily address
the RIPA funding issue before potential legislative action.
3) Lowering the density requirement seems antithetical to the
goal of reducing GHG emissions. AB 2783 proposes to require
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SGC to consider lowering the net density requirement for
affordable housing projects that qualify under RIPA. The
revisions of the guidelines have recently been through a
public process with public input; and the revisions reflect a
reasonable way to ensure that affordable housing projects in
rural areas are competitive for funding while achieving the
goals of the AHSC program. The fundamental criteria for
programs/projects funded by cap-and-trade moneys is that the
money is spent on actions that reduce GHG emissions. Since
one of the purposes of the AHSC Program is to reduce GHG
emissions by increasing affordable housing near transit,
requiring the consideration of lowering the density
requirements would likely not help achieve AB 32 GHG
emissions reductions goals.
DOUBLE REFERRAL: This measure was heard in Senate
Transportation & Housing Committee on June 21, 2016, and passed
out of committee with a vote of 10-0.
SOURCE: California Coalition for Rural Housing
SUPPORT:
California Institute for Rural Studies
California Rural Legal Assistance Foundation
Center for Sustainable Neighborhoods
Creswell Consulting
Leadership Counsel for Justice & Accountability
Public Interest Law Project
Self-Help Enterprises
Sierra Business Council
OPPOSITION:
None received
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