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HCD Using Carrots, Sticks To Get More Housing

William Fulton on
Oct 10, 2018

In implementing the 2017 package of housing legislation, the California Department of Housing & Community Development is going to get more aggressive in using both carrots and sticks to push local governments to approve more housing.

That was the message from HCD Director Ben Metcalf and his staff at the California Chapter, American Planning Association conference in San Diego this week.

On the one hand, HCD is using its new power to engage in continuous review of housing elements – and the newly strengthened Housing Accountability Act – to hold local governments’ feet to the fire on housing elements and project approvals.

But on the other hand, HCD is about to release tens of millions of dollars in planning grants and technical assistance to help local governments do better planning for housing.

Meanwhile, everybody is trying to figure out how to interpret SB 35, the new law that allows developers to seek ministerial approval for some projects – and end-run the California Environmental Quality Act – under certain circumstances if cities are not meeting their state-mandated housing numbers.

At a session on Monday, Metcalf’s staff said that under the new continuous review process they have already contacted 46 jurisdictions at risk of having their housing elements decertified. HCD is providing most with technical assistance to comply, though two are about to lose their certification.

At the same time, however, HCD on Tuesday issued draft guidelines for the SB 2 planning grants. These grants are pretty open-ended, available to local governments that can make the argument that the planning tasks they are undertaking are designed to increase housing supply.

At Metcalf’s session on Monday, there was vigorous debate as to whether the SB 2 planning grants would be another source of funding for routine plan updates.

Mark Rhoades, who often works with developers, said the grants were not a way “to update your 2001 general plan.”

“No, no,” he said. “The point is, how do we get to the place where in a year or less we are updating and accelerating our reciew processes to get shovels in the ground?”

But Eric Phillips of Goldfarb & Lipman, who often represents cities, disagreed. “Updating your 2001 general plan is a great way to do this. Adopt specific plans at the same time and get the shovels in the ground.”

In addition to the planning grants, HCD recent put out a request for proposals for consultants to provide technical assistance. Some of the technical assistance will be provided straight to local governments, but much of it will also go to create a self-assessment tool for locals as well as creating a best practices toolkit. The goal, Metcalf’s staff said, was the help locals see what bottlenecks they have in housing approval.

There was considerable discussion at the conference about SB 35 and the fact that only three or so projects have sought approval so far using the law. Cupertino approved redevelopment of the Vallco Mall with SB 35 while Berkeley has rejected SB 35 approval of a mixed use project due to historic landmark concerns.

“We’re working on several applications right now,” Rhoades said. “They take time to put together.” Both both Rhoades and Metcalf said the use of SB 35 as leverage by developers is changing the balance of power with local governments.

Finally, a separate panel put together by Goldfarb & Lipman highlighted renewed interest in the Housing Accountability Act, a 1982 law that was mostly ignored up until the housing package was passed last year.

The law requires local governments to provide developers with written notification if their projects are inconsistent with local plans, and supposedly reduces local governments’ ability to deny reduced density if the project is consistent with local plans.

Dolores Dalton of Goldfarb & Lipman said that in lawsuits emerging from the Housing Accountability Act, usually developers seek a rehearing for their projects and also demand a Housing Accountability Act analysis for every project. “Some of our clients have not been agreeing to that,” she said. “Others see the opportunity to inform the public and give cover to elected officials.”

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