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Solimar Research

Promise of $130m draws out a specialists' debate on getting sustainable development right

Martha Bridegam on
Aug 20, 2014

It's only $130 million. That's all the Affordable Housing and Sustainable Communities (AHSC) program has to spend this coming year. Spread out statewide, it's enough money to help steer some projects toward the prescribed goal of reducing greenhouse gas (GHG) emissions through environmentally responsible development. It's not enough to build a lot from scratch.

The rules being drafted now to distribute that money will channel more funding later if the Legislature keeps its promise to give the program 20% of future cap-and-trade auction proceeds. (Streetsblog's Melanie Curry reported last week that six mayors of larger California cities paid a lobbying visit to Sacramento in part to make sure the promise held.) But in view of California's housing and infrastructure needs, $130 million isn't big money, not really.

When the Strategic Growth Council (SGC) held workshops last week on how to build program guidelines within the new statutory framework, the strength of the response testified to the level of municipal hunger for housing and infrastructure subsidies, as well as interest in sustainability for its own sake.

For the Oakland workshop of August 14, the limited supply of 150 free tickets, reserved via online registration, ran out several days in advance; the organizers announced a waiting list and asked to be told of cancellations.

Chances for projects in the works

Some participants assuredly had projects in mind that could benefit from even a small fraction of that AHSC money.

During the Oakland workshop, Steve Hernandez, a housing specialist with the San Leandro Community Development Department, spoke in a small-group session about his city's need for affordable housing funds. He noted Redevelopment was gone -- and with it the affordable housing set-aside of tax increment funds -- and that San Leandro's federal HOME program funds had declined by 65% since 2010.

He had a project in mind that AHSC could help: affordable housing across from the San Leandro BART station to be developed in cooperation with BRIDGE Housing. He explained later that the 115 affordable units of Phase 1 "will be underway," hence too far along to qualify for AHSC money, but the new program's Notice of Funding Availability (NOFA) "may coincide with the timeline of Phase 2," so "perhaps Phase 2 can be awarded AHSC program funds" to help build a further 85 units of senior housing planned for the site. (The project is the Cornerstone Apartments -- see http://www.sanleandro.org/depts/cd/projects/crossings.asp.)

Talk at the workshop wasn't so much about what to build first, as about choosing which increments to support: what tendencies to encourage most; who could or should benefit soonest from more compact, less vehicle-dependent planning; and just how much holistic multimodal public-private goodness could be realistically coaxed to bloom in each particular project using the frugal irrigation methods available.

Tyrone Roderick Williams, director of development with the Sacramento Housing and Redevelopment Agency, came to the workshop discussion with a large-scale project in mind: the remaking of Twin Rivers, an aging complex of single-story public housing buildings between the closed railyards and the curve of the American River north of downtown Sacramento. Described at http://www.shra.org/ChoiceNeighborhoodsInitiative/TwinRivers.aspx, the project is the recipient of a federal Choice Neighborhoods Planning Grant and part of a larger city plan to redevelop the River District-Railyards area.

At the workshop, Williams said Twin Rivers would replace the existing public housing with new units, add more housing, build a new transit station, and add support for a nearby school as part of a plan involving many public and private partners and funding sources. Documents on the Twin Rivers project Web site discuss goals of enhancing employment, education and health services for existing residents in and near the public housing, including the neighborhood's large homeless population.

In an interview after the meeting, Williams said AHSC might be able to help with the housing component of the project next to the transit station, though the city wouldn't determine its proposal to AHSC until the guidelines for the program emerged. He said nobody had yet mentioned amounts of money but it appeared types of funding could vary with a project's type and scale.

How many purposes can one project serve?

Williams had been one of several discussion participants warning against creating pressures on projects to serve too many GHG-reducing purposes at once. Later he clarified, "Those of us who are engaged in affordable housing are facing those pressures all the time." For example, under the competitive scoring system for low-income housing tax credit applications, "you get more points by putting more services and more aspects of the project into the budget" so "in an effort to try to score higher you include other things to help you get points but all of those things cost money." He said, "My hope is that we don't fall into that same situation where to be competitive you're trying to do so many things that by the time you get funded your project costs have gone through the roof in an effort to get funded."

Meea Kang, president of Domus Development and a board member of the California Infill Builders Federation, brought concerns to the same small-group discussion at the workshop about the difficulty of keeping neighborhood-serving businesses in the retail spaces of new affordable housing developments. For example (she wrote afterward), "it's difficult to lure new grocery stores into underserved communities." And "it is the developer that has to make the substantial upfront investment to build out the retail improvements and there is always a risk that the small business may not survive the first two years."

At the workshop she suggested that, to encourage genuinely local businesses in underserved communities, program money might be used for tenant improvements -- for example, to convert a warehouse to a farmers' market. That would serve GHG reduction, she said, because people wouldn't have to drive so far to the store. She suggested sometimes housing and retail might be best "decoupled" as separate side-by-side projects in different buildings, where the retail use might require its own separately managed support program.

As a developer she had a different perspective from Williams' on the problem of trying to do too much. She said, "every local government is going to know that these projects are going to get funded," so from her experience "you've got every other agency coming at you with barriers." She clarified later that she had in mind, for example, "utility districts, special fee districts, various departments," and "expensive impact fees or mitigation requirements or both." Meaning that each agency would like to see the funded project contribute to a needed improvement in that agency's own area. Her concern being that such demands would together "overburden the project to fix all the problems of the past."

Kang suggested the process should allow the agencies to work together and support projects while cooperating to reduce overall fees and burdens in order to get more built.

Ignacio Dayrit, a brownfields redevelopment specialist from the Bay Area, put in, "Bingo, it's Prop 13." Kang agreed. Dayrit said, "Someone had to say that."  Because, he said, "If you've owned property for more than ten, 15 years, you're not paying your fair share of anything [in taxes]." That is, the burden falls on the developer to pay for infrastructure needs.

(Williams, in his interview, responded to a question about the idea of a cooperative application process by saying any application of the type sought "will require a partnership" by its nature, as at Twin Rivers.)

A professionalized process

The people who reserved and used the Oakland workshop's 150 tickets -- developers, planners, officials, advocates -- were nearly all policy or planning professionals in some way.

That led to a well-informed level of discussion -- for example, when Dayrit noted that only federal subsidies remained deep enough to serve the poorest tenants, he didn't have to spell out the point that "affordable housing" is "only affordable to the middle income" range. Participants already understood the difficulty, for private nonprofits, of using tax-credit housing subsidies to house tenants at incomes below 50% of area median.

On the other hand, it was a conversation held more among professionals than among directly affected community members.

Devilla Ervin, a fourth-generation West Oakland resident now in his second year of Americorps service at West Oakland Middle School, came to the workshop as a member of a community activist group, New Voices are Rising. Wearing a business-casual polo shirt, he said he quickly decided, "I'm a little underdressed." (Most participants arrived in suits or similar, though one tall bearded man wore denim overalls.)

Ervin told the small-group session that West Oakland was seeing "a lot of development thrown at us" and people "coming in telling us what the community should look like." Out of an extended family formerly based in West Oakland, he said he and his cousin remained in town, but the rest were mainly displaced: "Sacramento, Stockton, Tracy, Lodi." (Ervin's related comments on Plan Bay Area, prepared through a project of Breakthrough Communities and Six Wins Coalition/New Voices are Rising, are at http://www.mtc.ca.gov/planning/plan_bay_area/comments/Invididuals/Ervin_Devilla_5-16-13.pdf.)

Among his concerns related to GHG reduction, Ervin said he personally hoped to buy a house and, when he did so, didn't want that to lose his current strong access to transit. He was concerned that new families moving to new development in West Oakland were often sending their children to Claremont or other schools out of the area -- so although the new arrivals' children could walk to West Oakland Middle School, they were actually traveling elsewhere each day. And he worried that new development near transit could displace low-income transit riders, only to replace them with more affluent residents who could afford not to depend on transit, hence might use it less.

Asked if he had thoughts about who was or wasn't in the room, he wrote later, "Yeah, I was a little disappointed with the lack of community voice in the room especially from the youth. Our young people are the ones that are going to inherit the cities that reflect the decisions we make today. They should have been there. Other than that I think it was a very informative and worthwhile investment of my time."

Defining 'disadvantaged communities'

Discussion at the workshop returned often to questions that the meeting officially needed to sidestep due to the regulatory division of labor: What constitutes a "disadvantaged community"? And when can a disadvantaged community be said to benefit?

Formally speaking, those questions are largely to be answered by another process.

As established by SGC's opening actions on the program (see http://www.cp-dr.com/articles/node-3529), the AHSC program will be directed by SGC, but in close cooperation with several other state agencies, with administrative duties delegated to the Department of Housing and Community Development for the main stream of funding, and to the Natural Resources Agency for the smaller fraction reserved to protect agricultural land from sprawl.

By statute the program must spend half its money on affordable housing, and it also must spend a potentially (but not necessarily) overlapping half to benefit disadvantaged communities.

(At each of last week's three SGC workshops -- in Fresno, Oakland and Los Angeles -- staff made an opening presentation explaining the statutes, institutional history and program mandates. For the 45-minute Fresno version of the presentation see http://sgc.ca.gov/s_affordablehousingandsustainablecommunitiesprogram.php.)

Discussion moderators from SGC and HCD directed further discussion about the meaning of "benefit to disadvantaged communities" toward a separate set of workshops on defining disadvantaged communities under the SB 535 rules that apply to all cap-and-trade grant programs, to be held August 25 through September 3 by the Air Resources Board (ARB) and CalEPA. Discussions on agricultural land protection were also deferred to their own set of workshops, to be scheduled for October.

At the August 14 Oakland workshop, Allison Joe, deputy director of the SGC, said in the opening group session that, although ARB's timetable for developing guidelines is longer than SGC's, "We have all been working with ARB very closely to ensure that what we do, and what we develop at this point, will adhere to and actually align with what will be developed as guidance next year, so there's a little bit of a dance but there's some really good coordination going on that's actually really helped our overall program by being able to work with ARB so closely."

The rules reserving benefits for disadvantaged communities brought hope to some workshop participants from areas of the state that broadly qualify for such status. But they drew worried questions from some urban policy veterans who asked what would count as a benefit, and what overlap might be presumed to exist between a disadvantaged place and a disadvantaged group of people. And several participants seemed uncertain exactly where the line fell between SGC's rulemaking authority and that of the environmental agencies. (A discussion group leader offered an illustration on the difficulty of defining a benefit: if a bike path passes through a disadvantaged community, does it provide enough of a benefit to that community?)

In preparation for the August 25 - September 3 workshops, the ARB began to post guidance on its workshop site at http://www.arb.ca.gov/cc/capandtrade/auctionproceeds/upcomingevents.htm explaining potential applications for CalEPA's CalEnviroScreen tool to the definition process.

The screening tool, which appears in its newest form at http://oehha.ca.gov/ej/ces2.html, provides compelling maps that apply CalEPA's disadvantage formula statewide at census tract level. The widest spreads of red and orange colors indicating disadvantage are across the San Joaquin Valley; they reappear in poorer neighborhoods of each major city, notably in inland LA County and between Ontario and San Bernardino.

The CalEnviroScreen standard is based on a weighted combination of pollution burdens, population characteristics that imply vulnerability to further effects of pollution, and socioeconomic disadvantages: low formal educational attainment, linguistic isolation, poverty and unemployment. A CalEPA paper posted on the workshop site August 19 offers five alternative measures consisting of either the unchanged formula, or choices based on narrowing or re-weighting the mix of factors.

On the workshop site, ARB promised imminently to post an interim guidance draft for "maximizing benefits to disadvantaged communities."

'Benefit' to whom?

Jeffrey Levin, policy director for the East Bay Housing Organizations, was among those wary of assumptions in "disadvantaged communities" definitions. He wrote later, "We have two sets of concerns about this process. The first is whether 'disadvantaged communities' should be defined based on populations or geographic places. We think it's important to focus on populations as well as places. Second, investments need to be guided by principles and criteria that ensure that lower income households are the primary beneficiaries of the investment, and that lower income communities do not suffer adverse impacts."

He warned, "We have all seen examples where investment in a 'disadvantaged community' brings little or no benefit to lower income households, and where such investment actually causes harm," as with transit-oriented development in areas defined as disadvantaged that does not itself contain affordable housing.

Where such choices displace lower-income people "from transit-rich areas to the periphery of the region," he wrote, "they become more dependent on automobiles and that means more GHG emissions. And the transit may actually lose ridership because the more affluent new residents tend to be less likely to use transit as much as lower income residents."

Meanwhile, he suggested, it might sometimes help disadvantaged populations to place affordable housing in higher-income areas instead of lower-income ones. "In short - we are very supportive of Transit Oriented Development, but it needs to be done in a way that clearly promotes social equity." Goals of EBHO included mandatory affordable housing in transit-oriented development and early planning for affordable housing in areas that may become expensive in time because of private development.

At the meeting, Dayrit, the brownfields redevelopment specialist, worried that programs encouraging infill tended to lead to construction in areas that often lack services, where it's easier to build, that often tend to be "disadvantaged communities to begin with," so when housing for disadvantaged people is built there, "the concentration of these disadvantaged communities in existing disadvantaged communities" gives the impression of creating a "ghetto or unattractive neighborhood." He noted, for example, the appearance of strong opposition to new services for homeless people in Hunter's Point in San Francisco -- though also that affordable housing might also be opposed in an affluent neighborhood.

Public health cautions

Solange Gould, a PhD candidate at UC-Berkeley working with the Public Health Institute, brought some public health warnings to the "unintended consequences" part of the discussion, which she clarified after the workshop:

  • While she joined the public health consensus in favor of walking and biking -- for personal health and "community cohesion" as well as GHG reduction -- she warned against inviting people to walk and bike in risky traffic situations, instead calling for "good infrastructure that separates cars and people as much as possible."
  • Gould wrote, "Disadvantaged communities are often more exposed to heat with lack of vegetation or green canopies" and "Studies of extreme heat have shown large racial disparities in heat-related deaths. There are maps that show that low-income and communities of color are more likely to live in areas with little tree canopy and permeable surfaces and are thus more vulnerable to urban heat islands." She suggested projects should get priority if they are in urban heat islands and add mitigations such as vegetation, white roofs, permeable surfaces, open space or other mitigations.
  • Proximity to transit, while mainly a good thing, has special risks for the many low-income tenants who live with asthma, cancer or respiratory illnesses. (Vulnerability to respiratory illness is among the CalEnviroScan criteria for disadvantage.) So Gould suggested siting transit-oriented development more than 500 feet from freeways or, if that can't be done, then "really high-quality indoor air ventilation systems" such as MERV 13 systems. She wasn't calling for all such costs to fall on the developer but said "reducing those health care costs is worth the cost of the indoor air filter." She suggested they could be financed as in the State of Oregon's "on-bill financing program, in which the energy savings from home energy upgrades pay off the bill from the installation."

More ideas and arguments:

  • Rob Wiener of the California Coalition for Rural Housing raised a question during the main presentation about the choice of rental apartments as examples in the opening presentation, asking staff to confirm that the legislation was "tenure-neutral" -- allowing homes to be built for single-family ownership as well as multifamily rental. A staff member responded that in the prior transit-oriented development program, the possibility was left open to build single-family homes for sale, but no qualified applications came in for that approach, and there were also relatively few applications for acquisition/rehab of existing affordable housing.
  • Rico Mastrodonato of the Trust for Public Land brought a message in favor of urban parks and open space, including to reduce heat effects and sequester carbon, along the lines of a paper his group has published at https://www.tpl.org/quantifying-greenhouse-gas-benefits-urban-parks
  • Ervin responded to a comment about the need for urban open space by saying West Oakland had several parks already but people were afraid to use them.
  • Kang argued against requirements for infill developers to pay for transit passes. Clarifying her comments later, she wrote, "If infill developers have to factor in the cost of transit passes, it will raise the cost of market rate housing and make affordable housing very hard to underwrite." Despite a suggestion in the discussion that computer-tracked passes like the Bay Area's "Clipper Card" might make such costs more predictable, Kang wrote, "In my opinion if the new housing is located near reliable transit and are located in walkable communities new residents will choose to get out of their cars. The new housing should not be overburdened with the additional cost of transit passes."
  • Dayrit, who is a consultant to the Center for Creative Land Recycling, had a comment related to his work there: that a property to be redeveloped would have "transaction costs associated with environmental site assessments" that ought to be included as an eligible activity.
  • Gould and Dayrit mentioned the perennial Bay Area transit advocates' goal of building more new housing, including affordable housing, in suburbs as well as urban centers. Dayrit argued for walkable density in suburbs as a good in itself: "people are afraid to talk about density."
  • Gould said support for local schools should be part of efforts to draw households to newly developed areas.

Workshop materials and comment instructions are on the SGC site at http://sgc.ca.gov/s_affordablehousingandsustainablecommunitiesprogram.php and on the ARB workshop site at http://www.arb.ca.gov/cc/capandtrade/auctionproceeds/upcomingevents.htm. Comments on the ARB and CalEPA materials are due September 9. A summary by Streetsblog's Melanie Curry, who was at the Oakland meeting, is at http://la.streetsblog.org/2014/08/19/ca-seeks-input-for-affordable-housing-and-sustainable-communities-program/ .

Allison Joe briefly provided editorial assistance to CP&DR in the past.