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CP&DR News Briefs February 5, 2019: Bay Area Housing; Inglewood Arena CEQA Exemption; Owens Valley Selloff; and More

Brett Simpson on
Feb 3, 2019
Facebook CEO Mark Zuckerberg announced the founding of a new coalition to raise $540 million to address the Bay Area’s housing crisis. The group, dubbed the Partnership for the Bay’s Future, includes pledges from Facebook as well as the Chan Zuckerberg Initiative, Genentech, the San Francisco Foundation, the Ford Foundation, and other philanthropies, corporations, and foundations. Once raised, $500 million of the fund will be committed to community development projects, and $40 million will be awarded through grants to jurisdictions with affordable housing plans. This initiative comes amid mounting political pressure to hold tech corporations accountable for their impact on local housing prices and availability: in November, California Governor Gavin Newsom called for tech companies to lend $500 million to developers of middle-income housing. This fund also echoes Microsoft’s recent $500 million pledge to expand affordable housing in Seattle. Critics of voluntary tech initiatives consider them an insufficient alternative to higher taxation on high-earning corporations. “I do think that corporate contribution and philanthropy is important,” Fred Blackwell, CEO of the San Francisco Foundation and new member of the partnership, told the Los Angeles Times, “But I also think we need to have a really tough conversation about taxation and how that fits into this equation.” (See prior CP&DR commentary.)
 
Clippers Seek CEQA Exemption for Arena in Inglewood
The Los Angeles Clippers have applied for a program that streamlines environmental litigation in hopes of accelerating construction of a new arena in Inglewood. The program, established under 2011’s AB 900, allows California Environmental Quality Act lawsuits brought against “Environmental Leadership Development Projects” (ELDPs) to be expedited through the court system. To qualify as an ELDP, projects must be infill developments valued at least $100 million that meet specific sustainability and environmental impact targets. The Clippers’ planned site, dubbed the Inglewood Basketball and Entertainment Center, centers on an 18,000-seat arena, with surrounding practice areas, office space, hotel, and other structures. This plan faces competition from the Madison Square Garden Company’s existing bid for the site, which also faces environmental lawsuits. The proposed project joins Inglewood’s multiple ambitious construction plans, most notably a $5 billion mixed-use development with a stadium for the NFL’s Los Angeles Rams and Chargers. Similarly, the City of Inglewood is seeking to construct a transportation system to connect NBA and NFL venues with the Crenshaw/LAX Line and Downtown Inglewood. If the Clippers’ project is approved, a construction timeline forecasts completion in 2024. (See prior CP&DR coverage.)
 
Los Angeles to Sell Off Land in Owens Valley
The Los Angeles Department of Water and Power (DWP) has proposed a land sale in the Owens Valley that would ease tensions dating back over 100 years. DWP proposed selling 57 units of leased commercial property back to local residents. It would be the first private land ownership in Owens Valley since the early 1900s, throughout which L.A. County appropriated of 89 percent of Inyo County land. The DWP’s proposal, in which they would retain water rights, faces approval from the Los Angeles City Council in a few months. Lots among the 57 targeted properties could be sold by the end of this year. Owens Valley residents expressed enthusiasm for the plan, which they hope will jumpstart investment in local business and positively impact the economy. Critics cite historical DWP failures, including a 1997 attempt to sell back 75 acres that set the minimum bid far above market value for locals to purchase. The DWP’s current charter requires a competitive bid in auction for all commercial properties. However, the Brown Act will require the new proposal to grant lessees right of first refusal before the lease goes out to bid. Residents are hopeful that this will open opportunities to gaining a fair market price for land ownership. 
 
San Francisco Considers Tax on Vacant Retail Space
San Francisco Supervisor Aaron Peskin proposed a new tax on commercial property owners with prolonged vacancies. The tax aims to penalize landlords who keep their storefronts intentionally vacant to extract the highest rent possible from potential tenants. Peskin’s proposal, which would fine store owners $250 a day after a six-month vacancy, responds to a recent rise in empty lots in once-vibrant commercial neighborhoods. However, the proposal may unintentionally target owners facing external market pressures, such as competition from online retailers. In response to such concerns, Peskin said that he would work with the Department of Building Inspection todevelop criteria for discovering bad faith vacancies, including assessing whether landlords are actively showing spaces to potential renters. Peskin proposed to direct funds generated from the tax to provide relief for tenants and businesses displaced during seismic retrofit work. The proposal will face approval from the Board of Supervisors to earn a spot on the city’s November ballot.

Housing for a Healthy California Program Releases Final Guidelines
The California Department of Housing and Community Development (HCD) has just released the Final Housing for a Healthy California (HHC) Program Guidelines. The Guidelines incorporate feedback from participants through public comment letters, and additional conversations and research during the public outreach period. AB 74 was signed into law in September of 2017, which authorized HCD to develop and implement the HHC program. The goal of the HHC program is to reduce the overutilization of emergency departments, inpatient care, nursing home stays, and use of corrections systems and law enforcement resources for people who are chronically homeless or homeless and a high-cost health user. The HHC program will provide funding on a competitive basis to deliver supportive housing opportunities through grants to counties for capital and operating assistance or operating reserve grants and capital loans to developers. Two separate Notices of Funding Availability will be released in spring 2019, one for each article.

Quick Hits & Updates
San Francisco Mayor London Breed announced her intention to place a $300 million bond for affordable housing on the ballot by March 2020. Breed also requested officials move up the date to vote on a $600 million bond that would update public safety infrastructure –– including police and fire stations  –– to better withstand earthquakes. The reorganization of the city’s bond schedule would delay a $255 million bond for parks and open space until November 2020.
 
Orange County received an additional $149 million in funding from the federal government for its first modern streetcar, which will begin running in 2021. The streetcar will run 4.1 miles from Santa Ana’s train station to the transit station in Garden Grove. The project is set to cost $408 million; a total of $217 million will come from federal funding with additional funding from the state.
 
San Francisco Supervisor Aaron Peskin introduced the Housing Preservation and Expansion Reform Act, which would implement higher fines for illegal demolitions and require approval for housing expansions that increase square footage by more than 10 percent. The legislation comes after illegal demolitions of several homes in San Francisco, including a Willis Polk-designed home at Lombard St. on Russian Hill. Peskin told the San Francisco Chronicle the bill would outline what constitutes a “demolition” and preserve affordable housing in the city.

Oakland’s Mayor and City Council proposed an ordinance that would require hundreds of apartments to be seismically retrofitted to comply with earthquake safety codes. The ordinance targets “soft-story residential buildings”: multi-unit, wood-frame structures with weak first stories built before 1991. The city estimates that Oakland has 24,000 units in 1,400 to 2,400 soft-story buildings. The program will inspect and classify Oakland homes, then allow residents six years to make the fix.

BART reported a decline in use of airport commuter trains to San Francisco and Oakland international airports, citing competitive pressure from ride-hailing services. BART estimates that it has lost 10 percent in fares from SFO, and 6% of its rides from Oakland airport, amounting to over $4 million in total losses.


The new Richmond commuter ferry to San Francisco took its inaugural trip on January 10, with 164 riders aboard the 225-person capacity boat. The ferry offers six trips to and from Richmond each weekday, and plans to expand services pending the outcome of a lawsuit against Regional Measure 3, which will increase bridge tolls to pay for alternative transit.

The Burlingame City Council unanimously approved a new master development and policy plan. The new plan boasts less stringent zoning laws, allowing for taller and denser residential projects, increased residencies in commercial and industrial areas, and increased development near the Millbrae BART and CalTrain stations. The council also approved an urgency ordinance to update regional zoning regulations to greenlight development projects while the plan comes into effect.
 
The San Diego County Board of Supervisors appealed a Superior Court’s late December decision to reject its Climate Action Plan. The December ruling took issue with the county’s carbon offset credits, which allowed housing developers to purchase carbon credits to offset local greenhouse gas emissions. This appeal is the latest response in a continuous legal battle between the Sierra Club and San Diego County over its Climate Action Plan, which has failed approval three times since 2012.

On Jan. 24 the Natural Resources Agency released for public comment the draft Regional Forest and Fire Capacity Program Guidelines. These guidelines and more information on the program can be found on the Department of Conservation’s webpage, and will be open for public comment through Feb. 8.

San Diego officials are proposing zoning changes near new trolley stations along Morena Boulevard that would allow 10-story housing projects and change the street grid between I-5 and the University of San Diego. The proposal is the Morena Corridor Specific Plan and would increase density of housing projects while providing new protected paths for bicyclists and pedestrians, an artisan district, a linear park, wider sidewalks, public plazas and green spaces.  The existing area is mostly blighted, auto-oriented industrial area. San Diego City Council is expected to consider the plan for approval this year.


The Los Angeles City Council unanimously approved new rules on short term rentals such as Airbnb. The new law goes into effect in July, and allows Angelenos to only host STR in their primary residence, not in secondary homes or investment properties. A primary residence is defined as a place where the host lives at least half of the year. The host must register with the city, pay lodging taxes, keep records for city inspections, and make sure they have working smoke detectors, fire extinguishers and information on emergency exits.
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