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HomeMy WebLinkAboutItem 10d - Senate Bill 2 Planning Grant Program Funds DATE: November 19, 2019 TO: Honorable Mayor and City Council FROM: Jason Kruckeberg, Assistant City Manager/Development Services Director Lisa Flores, Planning & Community Development Administrator Prepared by: Alana Bautista, Management Aide SUBJECT: RESOLUTION NO. 7285 AUTHORIZING APPLICATION FOR AND RECEIPT OF SB 2 PLANNING GRANT PROGRAM FUNDS Recommendation: Adopt SUMMARY California continues to experience a major housing shortage, with the state’s housing supply not keeping pace with demand. According to the Department of Housing and Community Development (“HCD”), California needs more than 1.8 million additional homes by 2025 to maintain pace with projected household growth. In 2017, Governor Brown signed a comprehensive 15-bill housing package aimed at addressing the State’s housing shortage and high housing costs. It included Senate Bill ("SB”) 2, known as the Building Homes and Jobs Act, which established a $75 recording fee on real estate documents to increase the supply of affordable homes in California. The SB 2 Planning Grants Program provides one-time funding and ongoing technical assistance to all eligible local governments in California to adopt and implement plans and process improvements that streamline housing approvals and accelerate housing production. Each City has the opportunity to apply for funds in a non-competitive environment to put toward housing-related projects specific to each City. It is recommended that the City Council adopt Resolution No. 7285 authorizing application for, and receipt of, SB 2 Planning Grant Program Funds. BACKGROUND The SB 2 Planning Grants Program provides funding and technical assistance to all local governments in California to help cities and counties prepare, adopt, and implement programs that assist in the creation of housing. Funding will help cities and counties: Resolution No. 7285 SB 2 Planning Grants Program Funds November 19, 2019 Page 2 of 4 • Accelerate housing production • Streamline the approval of housing development affordable to owner and renter households at all income levels • Facilitate housing affordability, particularly for lower-and moderate-income households • Promote development consistent with the State Planning Priorities • Ensure geographic equity in the distribution and expenditure of the funds The Notice of Funding was released by HCD on March 28, 2019, for $123 million for the SB 2 Planning Grants Program, and funding will be allocated into two phases: Year 1 (2019), and Year 2 and beyond. Throughout Year 1, half of the revenues generated are dedicated to local governments. Under the program’s guidelines, Arcadia is considered a “small city” (population of 60,000 or less) and is eligible for up to $160,000 in grant funding. For applications submitted through November 30, 2019, the grants are non- competitive. All eligible cities and counties that submit applications meeting the SB 2 Planning Grants Program Year 1 Guidelines may receive some funding. The eligibility requirements for a local government are as follows: 1. Have an HCD-compliant housing element, 2. Have submitted a recent Annual Progress report, 3. Demonstrate a nexus to accelerating housing production, and 4. Demonstrate that the application is consistent with State Planning Priorities or other planning priorities The City meets all of the four criteria listed above. In addition, the program states that applicants proposing activities in at least one of the “Priority Policy Areas” listed below are automatically deemed to demonstrate a nexus to accelerating housing production without any further justification needed: • Rezone to Permit By-Right housing development • Objective Design and Development Standards • Specific Plans or Form based Codes Coupled with CEQA Streamlining • Accessory Dwelling Units or Other Innovative Building Strategies • Expedited Processing • Housing Related Infrastructure Financing and Fee Reduction Strategies DISCUSSION Given the fact that funds are available to all local governments in the State on a non- competitive basis, the Development Services Department would like to take advantage of the funding. The SB 2 Planning Grants Program allows for a range of activities that can be implemented to accelerate housing production and streamline housing approvals. The Development Services Department has put together a framework of Resolution No. 7285 SB 2 Planning Grants Program Funds November 19, 2019 Page 3 of 4 potential projects that are all eligible under the program’s guidelines. Consultants will be utilized for this work, and the scope of all projects will be refined and brought back to the City Council for ultimate approval and the expenditure of funds. Although the exact scope of the work is not yet established, the following is a general list of projects: 1. Sites inventory evaluation – Funding would be utilized to leverage the data from the City’s Geographic Information System to carefully evaluate sites throughout the City for additional units or density opportunities. The sites inventory would evaluate land and square footage as well as the adaptive reuse potential of specific buildings. 2. Objective design standards, which will include community outreach – Many of the housing production goals at the State level focus on the adoption of objective design standards that can be applied to various development types. This adds certainty to the development process and, theoretically, makes housing processing more streamlined. The Development Services Department would be evaluating these standards for multi-family housing projects and R-3 zoned properties, and would also evaluate these standards for projects in the Downtown Mixed Use zone and Downtown Design Plan area. 3. Update the Density Bonus Ordinance – Funding would be utilized to review and modernize the City’s Density Bonus laws, to enable opportunities for applicants to obtain higher densities in certain projects, through the application of desired elements within the project. The application for SB 2 funding is due by November 30, 2019. The three projects listed above will be proposed in the application. Items 2 and 3 directly meet the “Priority Policy Areas” provided by the program. In addition, Item 1 is also a qualified expenditure under the program if it is directly related to additional housing production. It appears clear from the program criteria that all of these items will be eligible for funding by the program. It is also important to note that all of this work will be part of the City’s Housing Element Update. The Housing Element is one of the seven state-mandated elements of the City’s General Plan and provides the framework to address the existing and projected housing needs of all economic segments of the community. On December 3, 2013, the City Council adopted the 2014-2021 Housing Element Update and an Addendum to the Certified Final Environment Impact Report for the City’s General Plan. The next required cycle to update the Housing Element is approaching; the projects outlined above will assist in the development of the Update and should lower the cost of the Update by providing the needed research in advance. Resolution No. 7285 SB 2 Planning Grants Program Funds November 19, 2019 Page 4 of 4 ENVIRONMENTAL ANALYSIS The proposed application will not have a potential for causing a significant effect on the environment and this activity is therefore exempt from the California Environmental Quality Act (“CEQA”) per Section 15061(b)(3) of the CEQA Guidelines. FISCAL IMPACT SB 2 grant funding will be distributed on a reimbursement basis. Applicants can submit invoices for reimbursement quarterly based on deliverables completed. Projects funded by the grant must be encumbered by June 30, 2020, and funds must be expended by June 30, 2022. All monies for the proposed projects will be from the grant and no City funds are necessary. It is recommended that the City Council authorize application for the maximum eligible grant amount of $160,000 in SB 2 Planning Grant Program funds. Based on preliminary estimates for the application, the requested funding will be between $110,000 and $160,000. As mentioned, once the various projects have been refined in scope, they will be placed on a future City Council agenda for review and approval prior to the expenditure of any funds. RECOMMENDATION It is recommended that the City Council determines that this project is exempt under the California Environmental Quality Act (“CEQA”), and adopt Resolution No. 7285 authorizing application for and receipt of SB 2 Planning Grants Program Funds. Attachment: Resolution No. 7285