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January 28
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Leaving Death Valley

Public-sector planners in California may now apply for planning grants called for in Senate Bill 2, passed by the Legislature in 2017.

At $123 million in non-competitive grants, it’s the biggest planning grant program the state has come up with in the recent past.

Senate Bill 2’s primary goal is to increase the state’s housing supply amid its crippling supply and affordability crisis through a surcharge on real estate transactions. Much of the monies will go towards actual housing production and resident assistance, but, in the program’s first yet, 50 percent will is being set aside to help cities and counties lay the groundwork for new housing.

The theory goes that developers cannot build — and cannot build at reasonable costs — if cities have not adopted policies, processes, and zoning regulations to accommodate and streamline developers’ applications.

The bill sets aside enough money for literally every jurisdiction in the state to apply for and receive a grant. Grants are standardized according to jurisdiction size: up to $625,000 for localities with populations of more than 200,000; up to $310,000 for localities between 200,000 and 60,000; and up to $160,000 for localities of fewer than 60,000. Multiple localities may submit joint applications.

Ultimately, the grants cannot directly cause housing to be built, and it’s difficult to estimate the number of units that could result from the planning grants. But the statewide nature of the program suggests that the aggregate result could be significant.

“The cities don’t develop housing,” said Karalee Browne, program manager at the Institute for Local Government. “The impact (Senate Bill 2) is going to have is that cities are going to be more ready to help developers. Their processes are going to be faster and more nimble. I think the planning is going to be in place so when a developer comes with a project, they’re going to be more able to react to it.”

The notice of available funding went out in March, and applications will be accepted through November, though the deadline may be extended. Grants will be awarded and put under contract by June 2020. Importantly, the Department of Housing and Community Development, which administers the program, is encouraging applicants by making the process as straightforward as possible.

There is one major impediment to eligibility, however: Cities must have housing elements that are compliant with Regional Housing Needs Allocation numbers. RHNA complicates has been a contentious issue of late, as many cities have shirked their responsibilities.

“We’ve heard from a couple cities that were afraid if they applied for this money that there would be expectations going forward. I think those expectations are there anyway,” said Browne. “I think we all recognize that there’s a housing crisis in our state and cities and counties want to do their part to bring housing to their communities.”

There may be circumstances under which cities can use Senate Bill 2 monies to update their housing elements. Generally, though, the grants are designed to encourage innovative, additive approaches to housing — not to merely bring cities into compliance.

“It’s been encouraging to be creative, to be flexible with local governments and design something that achieves multiple objectives,” said HCD Housing Policy Manager Paul McDougall.

“I think we’ve been very clear that this money is not to pay for status-quo things,” said Browne. “This is money that’s geared towards catalytic change that’s going to facilitate new housing.”

Crucially, the planning monies offered by Senate Bill 2 are, unlike most grant programs, noncompetitive. SB 2 seeks to proactively support cities, giving cash-strapped cities that want to add housing the means to do so and giving wealthy, housing-resistant cities fewer excuses to resist.

“There is enough money for every jurisdiction to apply….. That’s exciting because there hasn’t been this kind of planning money before…for things that keep getting pushed back and back and back,” said Jennifer Gastelum, associate principal of PlaceWorks, which is doing outreach for the Senate Bill 2 program. (Disclosure: CP&DR Publisher Bill Fulton sits on the board of PlaceWorks.)

She added: “The thing that is a little scary for jurisdictions…is that the application is just 12 pages, and a few of those pages are just checkboxes. It’s a bit of a shift from what applications from HCD previously looked like.”

Early reviews are positive.

“It was relatively easy and it was fairly clear,” said Brian Foote, planning manager for the city of Redlands, which submitted one of the first applications. “They have staff assigned to help potential applicants, and the staff that I worked with were very helpful.”

Grant guidelines invite cities to propose a wide range of projects and programs as long as cities demonstrate how they will increase housing supply. Projects can be as straightforward as upzoning of a district or as indirect as upgrading of information technologies to speed up developers’ applications.

They can also include updating of design standards, regulations for accessory dwelling units, permit processing, density bonuses, and incentive zoning, among others. They can apply to general plans, community plans, specific plans, local planning related to the implementation of sustainable community strategies, or local coastal plans.

The grand guidelines list six “priority areas,” with many sub-areas, that HCD staff identified. As long as a project pertains to one (or more) of those 23 areas, it is eligible for expedited processing.

“Though we recognize that it is an over-the-counter process where we don’t have scoring criteria, we do want to encourage certain activities even though the statute is really broad,” said McDougall. “We know that certain things will have a strong effect on housing. We call these ‘priority policy areas.’ Folks that select those priority policy areas have a more streamlined application.”

Commensurate with the program’s ambitions and largesse, HCD has conducted an unprecedented outreach campaign to inform cities about the grants and encourage them to apply. The department has partnered with nonprofit organizations such as the Institute for Local Government and private-sector firms such as PlaceWorks, among others, to publicize the program, conduct outreach events, and, importantly, provide technical assistance to departments that wish to apply.

“Our overall goal for the program is access for the entire state,” said McDougall. “We’ve at least had some sort of contact with almost three-fourths of the state, which I think is pretty darn good. We’ve already been from Redding down to Imperial.”

HCD has also published sample ordinances that cities can adapt and adopt with relative ease.

“We’re trying to put together model ordinances, examples of environmental impact reports, specific plans, design standards – all the things that the program focuses on — we are building this library for people to use these tools,” said Gastelum. “The thought is that they’ll take what we have as a base.”

With many of the public presentations complete, HCD recently launched its “Accelerated Housing Production” website, with a GIS database designed to help cities identify projects and navigate the grant application process. The site will be updated to include toolkits and resources on specific policy areas that will help local governments accelerate housing production.

Additionally, the webpage will host our first-ever local housing strategies map that tracks which jurisdictions in California have implemented the Senate Bill 2 priority policy areas and other best practices. This map will also include information on HCD’s outreach efforts, submission of planning grant applications, and jurisdictions eligibility for the planning grants program.

HCD has received a handful of submissions already and will be reviewing them on a rolling basis. The first submission came from the Inland Empire city of Redlands, whose application for its proposed Redlands Transit Villages plan may turn out to be the poster child for the Senate Bill 2 grant program.

The plan, which is still being drafted, calls for the city to add roughly 2,400 units near three forthcoming rail stops on the Redlands Rail Passenger Project that will connect with Southern California’s Metrolink commuter rail, which broke ground in July. Transit orientation meant that the project hits nearly all of SB 2’s goals.

“There’s about 23 different categories, and I think we satisfied 21 of those,” said Foote. “A guiding principle to encourage more development in the core of the city, specifically around the train stations. The long-term benefit would be that the periphery of the city is preserved. We have hills to the south, cultural land to the east, and open space to the north.”

Redlands’ grant application, which has been tentatively approved, will expedite the drafting of the plan’s environmental impact report.

The city of Folsom also turned in an early application for a completely different project: an updated system for electronic permit processing.

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