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SCG Gears Up to Give $400 Million in Grants

LOS ANGELES — The Strategic Growth Council and partner agencies went from 0 to $120 million in the span of a few short months this year. Spurred by the passage of a budget bill last year, guidelines for the new Affordable Housing and Sustainable Communities grant program came out in January, initial applications were accepted March, and just last month 28 grant awardees were announced. 

With a new funding year fast approaching and potentially $400 million at stake, the SGC is trying to keep up its momentum — and correct some of the glitches that many have identified in this year's lightening round. 

On Monday, SGC staff and several council members convened in Los Angeles to hear from stakeholders. They were met with ample amounts of kudos and critiques from the three dozen or so public officials, activists, and others who offered official verbal comments. (A similar workshop was held last week in Sacramento.)

Staff and council members alike pledged their intention to make next year's selection process as fair and equitable as possible, while remaining faithful to the program's mandate to directly effect reductions in greenhouse gas emissions. SGC Chair Ken Alex said, with a hint of frustration, that this requirement likely prevents AHSC funds from going to planning efforts. Rather, funds must go to specific projects and programs that reduce GHG emissions, typically through reducing car trips. 

"The overriding purpose of what we're doing with this grant fund is to reduce greenhouse gas emissions," said Alex. "We're doing it in the context of transportation and housing, but….we as a legal matter always need to quantify those emissions reductions."

SGC intends to revise the guidelines in August, release a draft in the fall, and vote on a final draft before January 1. 

While commenters praised SGC's efforts and acknowledged the challenge of devising a new program in a short time frame, criticisms fell along several distinct themes: 

SCAG's Slight. Officials at the Southern California Association of Governments and throughout the SCAG region reacted with dismay at the relatively small number of projects that were invited to submit full AHSC applications, with a disproportionate share of projects being located in the Bay Area. The SCAG finished strong, though, winning 9 of 28 awards.

Not surprisingly, given the event's location in downtown Los Angeles, several speakers still smarted. They reminded the council that the region has 50 percent of the state's population and 66 percent of the state's disadvantaged communities. Many felt that the region's 22 percent share of AHSC funding was patently inequitable. They also questioned jurisdictional funding limits that took otherwise qualifying projects out of contention in both the SCAG region and the Bay Area. These limits, capping the amount a single city or developer could receive, were instituted to promote geographic diversity.

Rural Reductions. Several speakers urged the council to consider ways to improve rural communities' chances or even to set aside a certain amount of funds for them. Speakers explained that rural communities' low densities and typical lack of transit prevent them from meeting many of the program's basic criteria. Many poor rural communities, they argued, can benefit significantly — in terms of both environmental benefits and economic development — from AHSC funds. Alex said that the the GHG reduction mandate could stifle efforts to direct funds to rural communities.

Subsidiarity. Can any body based in Sacramento possibly evaluate individual development projects scattered in every corner of the state? That question led some  to lobby for what one speaker referred to as "subsidiarity." They encouraged SGC to look to the recommendations of MPO's in part to ensure that selected projects were upholding the respective MPOs' Sustainable Communities Strategies and to acknowledge MPOs' more intimate knowledge of their local needs. 

Leading from Behind. One of the program's chief criteria is that of leverage, with AHSC monies being leveraged at a ratio of about 6 to 1 in the initial round. Some speakers felt that SGC awards should not always be used to supplement existing funds but rather could be some of the first dollars put into a project and therefore act as seed money to attract further funding. 

In his closing statements, Alex tried to address many of these concerns, while pledging that SCG councilmembers and staff were dedicated to incremental improvement. The result will not be perfect, though. "Everybody needs to recognize that it's not going to come out perfectly," said Alex. "There are endless balances. Each time we allocate funds in different ways there are winners and losers." He noted, for instance, that disadvantaged communities in one region are competing against disadvantaged communities in other regions. Wealthy communities are not going to take funds away from poor ones. 

While Alex acknowledged the dissatisfaction of many SCAG representatives, he encouraged SCAG to be proactive in next year's application processHe said, "SCAG needs to recognize that it needs to do some self-evaluation and see if there are ways that it can improve." He called the 22 percent number "a little artificial" because many SCAG projects did not meet minimal selection criteria in the first place. The responsibility for achieving equity is "on all of us," he said.

Commentary

Even if awards are a zero-sum game, the overall sum is going to get a lot bigger next year. With potentially three times as much money available (funded by the state's cap-and-trade system), there will be many more winners and, therefore, more opportunities for the SGC to appease competing interests. Though this likely means that a slew of worthy projects will receive funding, it also raises the possibility that certain interest groups will clamor for new criteria and set-asides that could detract from the objective process that SGC tried to establish this year. These riches mean that SGC will have to be ever more diligent to maintain objectivity and ensure equity. 

It also remains to be seen whether there are $400 million worth of projects that will have the same GHG impacts as did the small, elite group of 28 that were chosen this year. It's more than likely, though, that the promise of grant monies will spur cities and developers to put AHSC criteria into their designs, thus creating exactly the types of projects that the program intends to promote. 

Resources and Related CP&DR Articles: 

Workshop Presentation Materials 

SCAG Wins In AHSC Grant Funding Recommendations

Strategic Growth Council Posts AHSC Program Revisions Informally

Cities Hustle for $120 Million in Funding from SGC

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Josh Stephens on The Urban Mystique at SPUR: January 19
On Tuesday, January 19, please join CP&DR Contributing Editor Josh Stephens and our friends at SPUR for a conversation about his book The Urban Mystique and the ineffable complexities that make all cities wondrous, maddening, and fascinating.
Registration: https://www.spur.org/events/2021-01-19/urban-mystique

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