The Strategic Growth Council (SGC) released a semiformal response on Friday to critiques received in October on its proposed design of the new Affordable Housing and Sustainable Communities (AHSC) program.

Phrased as an informal memorandum, the six-page document listed proposed changes to the September draft AHSC guidelines. It created a limited, informal second chance for the public to comment on the program creators' changing approaches -- something that had not definitely been promised as of the formal public comment period's ending on October 31. The December 19 text said no formal public comment period would follow the memo's issuance, but it asked any informal commenters to "focus on the proposed revisions and updates" and said comments could be sent to It said a proposed final version of the guidelines would be posted January 9, 2015 in preparation for the January 20, 2015 Council approval hearing.

The changes included some concessions to advocates, notably with the California Coalition for Rural Housing, which had argued that the September draft of program rules would disfavor projects in suburban or rural settings. Several more proposed changes addressed housing, but it seemed unlikely they would satisfy housing advocates who had suggested the AHSC program might live up to the second part of its name more than the first.

Among the housing revisions, the most prominent were decreases in required densities and total numbers of housing units.

The September proposed requirements had imposed minimum base densities in program-funded "housing developments" of 60 units per acre in a "large city downtown," 40 in another "urban center" or 20 elsewhere. The revisions proposed reducing the minimums to the default density standards for affordable housing under existing housing element law: 30 units per acre in urban areas, 20 in suburban ones and 15 in rural ones -- in other words, a 50% reduction in urban and suburban density standards. The revisions also called for lifting requirements that housing developments to be funded by the program each create or preserve 100 residential units in metropolitan areas or 50 units elsewhere.

Groups including the Rural Smart Growth Task Force coalition had asked for an increase in the minimum percentage of affordable units in AHSC-funded projects, but the term "Affordable Housing Development" still appeared to mean a project where at least 20% of total units are "affordable".

The revisions did strengthen the rules on both replacement of affordable units and anti-displacement strategies, extending them to all AHSC-funded projects rather than specific housing and disadvantaged-communities categories. At least one commenter at the October 6 SGC meeting had asked for this change.

A further proposed revision reads: "The $15 million maximum for a single developer may be waived, if necessary, to meet statutory affordable housing and Disadvantaged Community set asides."

Several commenters had asked for more discussion because the September draft left some specifics to be filled in later, and also because some viewed its program requirements as insufficiently explained. As of late November, SGC expanded the time for discussion by moving back its approval meeting from December 11 to January 20 but did not immediately say how it would use the extra time.

(Prior presentations and partial videos of discussion workshops are on the SGC's page for AHSC program design, though written public comments have not yet been posted.)

The new program, created by a June 2014 budget bill, will have $130 million to allocate in the 2014-15 fiscal year and after that has been promised 20% each year of the Greenhouse Gas (GHG) Reduction Fund of proceeds from the state's cap-and-trade carbon auctions -- presumably a much larger amount. Since then a multiagency team of state officials, led by the SGC, has been hurrying to build a three-dimensional program out of a legislative mandate that was stronger on aspirations than specifics -- with the goal of making initial grants by June 2015.

The September draft had acknowledged it was leaving several kinds of business unfinished. For example, it left specifics for later on how to measure projects' successes in reducing greenhouse gases (GHGs). Although it proposed a point-based scoring system, it left specific point values to be filled in. The draft had few specifics about the roles of Metropolitan Planning Organizations (MPOs). And during all but the last few hours of the comment period on October 31, the draft was lacking an important piece of context: the Air Resources Board (ARB) decision on which census tracts would count as "disadvantaged" for purposes of set-asides under the AHSC and other cap-and-trade programs.

The December 19 memo didn't clarify the scoring numbers but it did help to fill the other gaps:

  • The final page of the new memo contained an "Update on California Air Resources Board Interim Guidance on Greenhouse Gas Reduction Quantification." It suggested the guidance would continue to rely heavily on estimates of vehicle miles traveled (VMT) and promised more detail in the January 9 final AHSC proposal. In the meantime it said the interim guidance "will use components of the California Emissions Estimator Model," linking to the model at For projects that are larger or have other special features, it said the guidance would borrow from VMT reduction metrics "originally developed for Congestion Mitigation and Air Quality Improvement (CMAQ) projects." For those it referred to the document, "Methods to Find the Cost-Effectiveness of Funding Air Quality Projects."
  • On October 31, the last day of the AHSC guidelines comment period, the ARB issued its decision on the definition of disadvantage for purposes of cap-and-trade set-asides. It was a politically cautious choice, designating the most disadvantaged 25% of census tracts as rated by CalEPA's CalEnviroScreen 2.0 metric. That decision helps commenters to understand which census tracts will be eligible for set-asides as "disadvantaged" -- but it doesn't resolve whether a project in a geographically defined "disadvantaged community" necessarily serves local residents who experience disadvantages.
  • For the MPOs, the revisions stated more definitely that they would allow the MPOs notice and an opportunity to make recommendations on both "concept applications" and full applications for grants, but the memo repeated that the MPOs' role is only advisory. It added that councils of governments "were erroneously included" in a definition that suggested they could be eligible applicants for AHSC funds, whereas in fact councils of governments were not eligible.

The revisions also would include "Intercity Rail" among forms of transit used to qualify projects, would allow grants to cover up to three years of operational costs as well as start-up costs for programs, would cap "Program Uses" at 30% instead of 10% of a total funding request, and would remove a requirement that no more than half of a Capital Use Project grant could be for transit, transportation or "green infrastructure". A provision treating the public agency with jurisdiction over a project as a required applicant would be removed unless the agency itself had "an interest or stake" in the project, including as a landowner.