Advocates for affordable housing and advocates for environmental justice have a lot in common, but their goals and assumptions don't always mesh fully. Now the new cap-and-trade law is forcing them to have a more serious conversation. They're especially having to work out grantmaking guidelines under the new Affordable Housing and Sustainable Communities (AHSC) program. It isn't easy. (For prior coverage of the AHSC guidelines debate see http://www.cp-dr.com/articles/node-3556.)

Some of the difficulty was on display at a September 3 workshop in Oakland, held to discuss CalEPA's proposals on how to define "disadvantaged communities" under all of the cap-and-trade programs regulated by SB 535, and related proposals from the Air Resources Board (ARB) on how to define when such communities receive benefits. With comment on these proposals due September 15, the conversations in small-group discussions at the workshop had a note of urgency.

Anxiety was especially high in the Bay Area because the whole region tended to score lower in the agencies' proposed statewide rating of disadvantage.

A sign-on letter organized by the SB 535 Coalition, with signers from housing, environmental justice, poverty and transit groups, said grants out of cap-and-trade proceeds should genuinely help disadvantaged groups of people in significant ways, with care taken not to actually burden them. They said programs should not simply commit to spend money in geographic areas defined as disadvantaged. (Comments on the proposals are posted publicly on the site maintained for the disadvantage guidelines and workshops at http://www.arb.ca.gov/cc/capandtrade/auctionproceeds/upcomingevents.htm.)

Housing advocates also questioned whether the CalEPA approach to defining disadvantage, which emphasizes environmental hazards, might direct additional housing toward areas that are defined as disadvantaged precisely because they are unhealthy to live in.

Another question was how directly the funding process should respond to the specific problems of a given disadvantaged place -- linguistic isolation, for example, or toxics from a particular industrial site, or extreme poverty in some far northern areas that have relatively low exposures to industry, agricultural chemicals or traffic.

Regional differences on an environmentally-oriented metric

At the center of the agencies' approach was CalEnviroScreen 2.0 (CES 2.0), the multiply workshopped, politically honed and visually astonishing mapping tool that CalEPA has developed to show intersections of environmental and social inequity. Available at http://oehha.ca.gov/ej/ces2.html, the tool now rates census tracts' levels of disadvantage according to measures of toxic exposures, environmental degradation, and aspects of public health and socioeconomic disadvantage (e.g., asthma and poverty) that increase vulnerability to environmental hazards.

Many Bay Area census tracts known for poverty and environmental hazards tend to score lower on CES 2.0 than areas with similar reputations in other regions of the state. CalEPA's proposed "cutpoint" for defining disadvantage is the worst 20% of statewide census tracts. Officials said that in the Los Angeles workshop some commenters from areas with very high disadvantage ratings actually called for the cutpoint to fall at 15%. In the Bay Area however, many areas with significant problems fell into a borderline area between the worst 20% and the worst 25% of census tracts according to statewide ratings. Hence some Bay Area advocates were calling for the cutpoint to fall at 25%.

The Bay Area has some tracts rated very high for disadvantage, especially along the east fringe of San Francisco Bay, toward San Jose and along Interstate 80. But there are some surprising results too.

Among the dense downtown neighborhoods of San Francisco, the highest disadvantage rating, of "86-90%", is shown for a tract east of Fifth Street near Moscone Center where many of the residents are seniors living in subsidized housing. Poverty, linguistic isolation, and exposure to environmental hazards are all real problems in that tract, but other downtown areas known for poverty amid gentrification, such as Sixth Street and the Tenderloin, show much lower disadvantage ratings.

The Bayview-Hunter's Point neighborhood on San Francisco's southeast waterfront, with its long record of economic disinvestment and toxic exposures, shows up with worse disadvantage ratings than many other parts of the city. But even the highest ratings there fall in the "76-80%" range, i.e. they are within the worst 25% but would not qualify as "disadvantaged" under the 20% cutpoint rule.

A similar result was worrying Janet Pygeorge, head of the Rodeo Citizens Association. Her concern is with Census Tract No. 6013358000, which covers the area of Rodeo around the Phillips 66 refinery on the Carquinez Strait. The tract has a CES 2.0 rating of "76-80%" with very high ratings for hazardous waste, asthma and traffic density, but lower concern ratings for some factors such as ozone, drinking water, pesticides and formal educational attainment. (Only agricultural pesticides, not urban ones, are considered in CES 2.0, a circumstance that led at least one commenter to ask if urban burdens were under-measured.)

Pygeorge said the area is vulnerable to releases from the refinery and has dilapidated public housing near there that would be first to suffer in the case of a major toxic event. She wrote after the meeting, "Nobody is at fault, but we are here, drowning." Her submitted comment on the disadvantage determination process, describing effects of toxics on her neighbors, is at http://bit.ly/1quGE5p.

Regarding the Bayview-Hunter's Point and Rodeo results, CalEPA Communications Director Alex Barnum said, "We are looking at that in the context of all the other comments."

A further comment by Nancy Rieser, of Crockett Rodeo United to Defend the Environment (CRUDE), supported a "Method 6" proposed by the Bay Area Air Quality Management District in addition to the five approaches proposed by CalEPA. Her comment, at http://bit.ly/1utoK3k, said "This method, which still relies on the CalEnviroScreen indicator data, ensures that communities with top ranks in a few indicators will be better represented." Her letter also suggested considering added factors including cost of living and urban pesticide use.

David Armijo, General Manager of the AC Transit district, which serves Alameda and Contra Cota Counties, also submitted a comment supporting "Method 6" and suggesting disadvantage had been undercounted in areas such as West Oakland and Richmond. See http://bit.ly/1m229Jz.

The Bay Area's lower ratings are in part because the region has comparatively clearer air, and it has a relatively small proportion of active industry and industrial agriculture. CalEPA officials noted the designers of the metric chose to weight current exposure indicators, such as toxic emissions from active industrial sites, more strongly than environmental degradation indicators, such as toxic materials buried in a Superfund site. They said the reason is that the exposure indicators are more likely to show a direct impact on health of people than the environmental indicators.

As several housing activists noted, CES also doesn't directly consider differences in local cost of living. It arguably under-counts the challenges faced by people who, in addition to the CES 2.0 disadvantages, face high prices for housing and other essentials. Hence it considers the differences in air quality between, say, San Francisco and Bakersfield, but it doesn't directly address the differences in housing or food prices.

(For comparison, HUD's map of Qualified Census Tracts, available for 2013 at http://www.huduser.org/QCT2013/qctmap.html, maps disadvantage very differently, noting census tracts where local incomes are exceptionally low compared with area median incomes, with area rent levels a secondary influence in the calculation. The results track CES 2.0 in some areas but diverge in others.)

Agency officials said "CalEPA could look into a way of incorporating a cost of living indicator into a future version of CalEnviroScreen." They said the disadvantage definition decision due this month would be based on the current version of the CalEnviroScreen tool with its existing 19 indicators. They said "CalEPA did consider including rent burden as a factor, but plugging it into the tool, it had a high correlation with other indicators," so they decided instead to use unemployment because that added more to the analysis.

Agency officials meanwhile noted there is a difference in capacity, in the sense of staffing and experience, between the Bay Area and the Central Valley. They suggested because organizations and local governments in that area often have greater capacity, they are likely to produce more grant applications.

People in some other areas of the state have felt slighted as well. Jim Kemp, executive director of the Santa Barbara County Association of Governments, wrote at http://bit.ly/1tQOaZT that the proposed processes "do not appear to recognize any 'disadvanted communities' whatsoever in 33 of California's 58 counties."

Why a 20% cutpoint, not 25%?

Agency officials said one reason why the department chose 20% as the cut point initially was that many indicators of vulnerability affect about 20% of the state's population: for example, lack of a high school diploma, unemployment (realistically viewed), and lack of adequate health care. Additionally, they felt the focus on these areas should be concentrated, not proportional to the population.

For most SB 535 programs, the officials noted, 25% is the minimum proportion of benefits required to serve disadvantaged populations according to current agency positions. So a 25% cutpoint would simply be imposing a fair-share rule that 25% of the funds should be spent on 25% of the population.

The SB 535 Coalition's group letter had argued that the requirement for 25% of cap-and-trade proceeds to "benefit" disadvantaged communities should be in addition to the separate requirement that 10% of the funds benefit projects within those areas.

Barnum said, "We plan to overshoot that 25%. We plan to maximize the benefits to disadvantaged communities. We view that 25% as a minimum."

In the AHSC program, 50% must benefit disadvantaged communities and 50% must provide housing opportunities for lower-income households.

Officials said the Fresno and Los Angeles groups spent more time discussing CalEPA's proposed alternative methodologies, which would change the use or weighting of the factors currently used by CES 2.0. They said the strongest focus was either on CES 2.0 as is, or on CalEPA's "Method 4", which would make weighting more similar between socioeconomic and pollution burdens.

Major themes at the Oakland workshop were the call for a 25% cutpoint, the concern about cost of living and housing costs, and calls for funding to address the specific types of disadvantage affecting each area respectively. Some commenters who worked in housing also questioned whether the CalEnviroscreen approach, which was largely developed before housing entered the cap-and-trade picture, was properly applied to the new purpose of funding affordable housing, especially in the AHSC program.

Felix AuYeung, a project manager with EAH Housing in San Rafael who attended the workshop, wrote afterward: "the other programs under Cap and Trade work well in terms of prioritizing capital directly into Disadvantaged Communities to invest in new infrastructure and transit, because it would directly improve that community. Housing, however, does not directly improve the conditions that make an area a Disadvantaged Community; in fact, many have argued that more housing in Disadvantaged Communities will put even more people directly in harm's way (for example, poor air quality)."

Regarding the comment at the workshop that programs should address the particular problems that are worst in a given area, Arsenio Mataka, Assistant Secretary for Environmental Justice and Tribal Affairs, said afterward that the administrative agencies were looking at that goal. He said if, for example, a project is planting trees in an area with high unemployment, it may be a helpful goal to hire unemployed people to plant the trees. While he called it a valuable thing to strive for, he said it might not be possible in every case.

Comments are due September 15 on the ARB and CalEPA drafts. They go to an Air Resources Board meeting September 18-19, and a CalEPA decision is due out by the end of the month. For an overview of public documents on the process see http://www.arb.ca.gov/cc/capandtrade/auctionproceeds/auctionproceeds.htm.