SGC meeting begins to shape the Affordable Housing and Sustainable Communities program

Martha Bridegam on
Jul 16, 2014

The Strategic Growth Council (SGC) held a celebratory but serious public meeting July 10 to take stock of its budgetary good fortune under California's cap-and-trade program. [This article was updated July 29, adding links and the newly announced August dates of planned workshops on the program guidelines.]

Under the SB 862 budget trailer bill enacted in June, SGC suddenly has $130 million to fund the first year of a new Affordable Housing and Sustainable Communities (AHSC) program, and after that has been promised ongoing funding from 20% of the state's ongoing cap-and-trade auction revenues. Previously funded by one-time grants (see http://www.cp-dr.com/articles/node-3513), the council now has a permanent funding source.

Amid mutual congratulations, the July 10 meeting had aspects of a founding convention -- and moments of the uncertainty that blank pages induce -- and moments, too, of the early-stage shouldering that new prospects of public money induce.

SGC has a program to design. Not that it's starting from scratch: The money has destinations and priorities fixed by statute, and SGC can call on cooperating state agencies for staff to administer it. But the program as yet lacks precise rules for allocating the money and a definite pipeline for the money to flow through. The Council has to build both, largely in deference to a public process, more or less in a hurry.

The Affordable Housing and Sustainable Communities program will fund planning and construction to reduce greenhouse gas (GHG) emissions by means consistent with SB 375 and AB 32, coordinating energy-efficient transportation, land conservation and compact housing growth. Under requirements in the new SB 862 budget trailer bill and 2012's SB 535, half of the money must be spent on "housing opportunities for lower income households" and, as a separate requirement, half must benefit disadvantaged communities. Ten percent must be spent on programs actually within disadvantaged communities. Other environmental legislation passed since AB 32 conditions the program's responses to GHG reduction and its obligation to monitor success at the task.

Those rules left room for a lot of questions at the meeting. Would the program focus on urban transit-oriented development, or could it fund more varied and more rural projects? Among the goals of housing, conservation and transportation efficiency, would one predominate? Would one of the state agencies partnering with SGC assert primary control? How much power would locally affected people and organizations have over the nature of promised benefits to disadvantaged communities? How would larger nonprofits be involved? And -- as Bill Higgins of the California Association of Councils of Government (CALCOG) has suggested -- should regional planning entities help allocate the money?

Delegation to agencies of some powers, not all

The July 10 meeting's agenda was simple: Hear briefings from agencies, hear public comment, make basic delegations of new duties. The Council accepted a staff recommendation to delegate administration of one program component, the Sustainable Communities Agricultural Land Preservation Program (SCALPP), to the Natural Resources Agency or Department of Conservation (which is housed in Natural Resources), and administration of the rest to the Department of Housing and Community Development (HCD). At the initiation mainly of Natural Resources Secretary John Laird, and of the Council's public member, Bob Fisher, the Council removed a clause from the delegation phrasing that appeared to privilege those two agencies over others in working with SGC to develop the new program's rules. At the last minute members took out the word "separately" from a reference to the SCALPP program because it might imply lack of interest in coordinating land preservation with other aspects of projects.

Speakers from advocacy groups repeatedly asked for and got reassurances that the SGC itself would retain approval power over the program's guidelines and distributions. Laird particularly said he had been lobbied by callers suggesting money given to HCD to administer would get stuck there, "and you'll never see it again." Susan Riggs, deputy secretary for housing policy at the Business, Consumer Services and Housing Agency, parent agency to HCD, said the agencies given the delegated administration tasks would handle technical processes such as scoring and reviewing grant applications under SGC's direction. Council members and staff presenters confirmed to each other that additional agencies, prominently including Caltrans and the Air Resources Board (ARB), would consult as necessary, in a program especially meant to encourage projects combining multiple agencies' expertise. For example, SGC chair Ken Alex noted, only the ARB had the expertise to monitor and quantify projects' effects on GHG emissions.

[Update:] For an account of the meeting by the National Resources Defence Council that emphasizes the definition of roles, see http://switchboard.nrdc.org/blogs/aeaken/strategic_growth_council_clari.html.

Staff from SGC and cooperating state agencies presented a calendar calling for quick work on a double track.

Edie Chang, deputy executive officer with the ARB, told the panel the hope was to have draft interim guidance ready in August for agencies' use in September to "start getting money out the door later this summer and early this fall." Among its tasks, ARB has begun designing methodologies to measure various types' of projects' success in reducing emissions.

On a parallel, longer-range track, SGC planned three workshops, in Northern, Central and Southern California, for public discussion of the program's long-term guidelines.

[Updated:] On July 29, SGC announced at http://sgc.ca.gov/ that it would hold workshops on the guidelines as follows:

  • August 12, 2014, at Fresno City Hall, 1-4 p.m.
  • August 14, 2014, in Oakland's ABAG office, 1-4 p.m.
  • August 15, 2015, in LA's Caltrans district office, 9 a.m.-noon

For the main announcement document see http://sgc.ca.gov/docs/SGC_AHSC_Public_Workshop_Notice_August_2014_FINAL.pdf. The document includes links to register for the limited number of seats at each workshop.

At the July 10 meeting, SGC Deputy Director Allison Joe said the plan was to bring guidelines initially to the Council in October, then back for final approval in December, so a solicitation for funding proposals could go out to candidates in January. Deadlines for applicants would fall in March or April of 2015, with awards to follow in May or June.

Laird, who is one of several state agency chiefs serving on the Council, warned that the continuing funding was only "as good as the next budget vote, so keep that in mind." But discussion at the meeting presumed the first year's work would put a structure in place for longer-term use. (For detailed June budget bill coverage see http://www.cp-dr.com/articles/node-3509.)

SGC Executive Director Mike McCoy described a careful staff process seeking to propose enough structure to start operations, while purposefully leaving many details imprecise to avoid pressuring the public guideline-drafting process. He told the panel, "We worked very diligently to not have undue influence from any existing set of guidelines of anyone's, whether it be the SGC's or Housing and Community Development or transportation programs of various stripes... We started out with a seed document that was an amalgam of a couple of different programs, and decided that it had too much precision and we didn't want to preclude valuable discussion by the Council or the public, so we backed off from that..."

Staking out early claims

There was push-and-pull already in the public comment period, which was populated entirely by administrators and advocates closely familiar with past transportation and housing programs.

Speakers associated with the SB 535 Coalition and affordable housing and social equity groups, including Joshua Stark of TransForm, asked for careful definitions of who counted as low-income, which communities counted as "disadvantaged," and how to measure benefits to either. Some called for transit pass subsidies and emphasis on affordability for genuinely low-income residents. Several said funding awards should be conditioned on protections against displacement of low-income residents, and that projects causing displacement should not be funded. There were related calls for technical assistance to potential grantee groups in disadvantaged communities, where the capacity might not already exist to prepare competitive grant proposals.

Several speakers called for a full review of the program's new structure and direction after a year of operation.

And was there an ideal model in mind for AHSC projects, or should there be?

One project discussed at the meeting, but not exactly put forward as a prototype, was the Union City Intermodal transit-oriented project: 800 new housing units, of which 251 are affordable, surrounding a BART station built in the 1970s, with new public investment in the affordable units and in a new entrance and approaches that shortened the walk to the station from the new housing. Acting Director Randy Deems of HCD presented the project as an example of environmentally sound work done through the past Transit-Oriented Development (TOD) grant and Infill Infrastructure Grant (IIG) programs funded by Proposition 1C, the 2006 housing bond. Mark Evanoff, redevelopment manager for Union City, gave a more detailed, enthusiastic description of the project, saying it would need more funds to complete its buildout and making a pitch for release of 2011 redevelopment bond funds through the proposed AB 2493 and SB 1129.

But Rob Wiener of the California Coalition for Rural Housing said the new program shouldn't be entirely for transit villages at the kinds of transit stations that only can exist in urban areas. He said the existing TOD program, though worthy, has only awarded funds in 7 counties to date, and over half of that in Alameda and Los Angeles Counties. He pointed the Council's attention toward San Bernardino, the Inland Empire and San Joaquin Valley, all places with terrible air quality: "They are transit-poor. They don't qualify for TOD." On the other hand, he said, they are exemplars for projects reducing vehicle miles traveled (VMT) and for construction with zero net energy use -- projects that could qualify for funding under the new SGC program.

For similar reasons, Rachel Iskow of Mutual Housing California, said she feared the new SGC program, like TOD, would "effectively become one more contributor to the 'two-California' phenomenon," aiding the more prosperous coastal cities while inland towns suffered from poverty, air pollution and unhealthy housing. As an alternative example to the TOD transit village model, Iskow offered a project of her own, planned for the small town of Woodland. She said Woodland's only public transit is a bus system with low service levels, but the development will be a zero net energy project, exclusively for agricultural workers and their families, allowing them to live in healthy housing near a bus stop, with lowered utility bills and a chance to contribute to the grid through their new rooftop solar panels. It wouldn't be TOD, she said, but it would help "close the green divide and California's own divide."

Less frequent speakers leaned toward preserving farms and open land against sprawl, especially at urban boundaries. Jeanne Merrill of the California Climate and Agriculture Network called strongly for integrating the conservation of agricultural land with the rest of the sustainable communities goals. She argued projects should have to show how they will avoid converting agricultural land or open space, and that the project should not fund projects counter to those goals. Further, she called for long-term permanent protection of land at risk of development, calling conservation easements the best tool for the task. Uniquely, she argued that SCALPP land preservation projects in disadvantaged communities should be counted toward the required percentages of disadvantaged-community spending under SB 535.

But Laird warned that conservation easements and other traditional open-space preservation measures can be expensive enough for one such project to eat the whole new program's budget, creating a need instead to "leverage this or stretch the reach as far as we can."

[Update:] Since the meeting the Sacramento Bee's Jeremy White has published a look at the AHSC program's possibilities from an agricultural land preservation point of view. See http://www.sacbee.com/2014/07/19/6568511/cap-and-trade-could-aid-preservation.html.

A role for regional government councils?

Bill Higgins of the California Association of Councils of Government (CALCOG) called attention to a pre-hearing letter submitted as public comment by State Sen. Darrell Steinberg, the legislator most credited with bringing through funding for the sustainable communities program. (See http://www.sgc.ca.gov/docs/Public_Comment_Letters_071014.pdf.) Steinberg had written that SGC should be the lead agency in ranking projects and distributing funds, and that councils of governments should be involved formally as they have been on prior SB 375 implemntation, emissions reduction should be maintained as the chief goal, and there should be flexibility for future changes.

Higgins asked for more clarity on how to involve the Metropolitan Planning Organizations (MPOs) in the new program, and separately suggested "regional delegation" could be an element of the program as well as competition for grants. Expanding on his comments after the hearing, he wrote: "We believe strongly that MPOs and regional agencies outside of MPOs are the right level of government to make project level determinations about funding. It's what MPOs and RTPA do with existing sources of federal and state funding. Our members have existing staff expertise—we do not have to staff up. And it makes sense that the agencies responsible for implementing the SB 375 mandate have discretion over project selection. To be sure, the state should have a significant role in setting clear, comprehensive guidelines about how such funds could be awarded. But as Senator Steinberg noted, putting this 'knowledge and expertise' to use is 'crucial to the success' of the AHSC program."

Higgins also suggested a longer view might be in order on grantmaking. At the meeting he said, "What's good for this year might not be good for five years from now." He suggested creating a process to offer "funding certainty" for new kinds of projects. Later he wrote, "Members of the council stated that they needed to develop a program quickly to demonstrate effectiveness to the Legislature before the next budget cycle. While it is understandable, there should be an acknowledgement that more effective programs could be developed with more time. The short term need for speed should not affect long-term design options that may be more sustainable and equitable.The Council should commit to continuing to examine longer-term options during and after the first year."

A full video recording of the meeting is at http://www.sgc.ca.gov/s_071014_meetingmaterials.php with links to the meeting agenda, handouts, and pre-meeting comment letters.

[SGC Deputy Director Allison Joe, who was among staff presenters at the meeting, has provided editorial assistance to CP&DR in the past. She did not participate in the drafting of this article.]