CP&DR News Briefs March 19, 2018: SB 3 Bond Measure; High Speed Rail Costs; One Bay Area Grants; and More

Noemi Wyss on
Mar 19, 2018
Gov. Jerry Brown and legislative leaders agreed to a $4 billion bond that would fund low-income housing and subsidize home loans for California veterans. This comes at the same time as the Legislature considers a package of legislation designed to address the state’s housing affordability crisis. SB 3 would authorize $3 billion to support construction of new homes for low-income residents and $1 billion for homeownership subsidies for veterans. Senate Bill 2 would add a $75 fee on mortgage refinancing and other real estate transactions to fund low-income home building. Assembly Speaker Anthony Rendon and Senate President Pro Tem Kevin de Leon are also negotiating a bond measure to fund improvements to water and parks infrastructure.

Estimated Cost of High Speed Rail System Rises by $13 Billion
The California High Speed Rail Authority released its 114-page draft business plan, which found the cost of the entire system would be between $77.3 to $98.1 billion, an increase of at least $13 billion from two years ago. The authority said the earliest trains could operate between San Francisco and Bakersfield in 2029 and the full system by 2033. The new estimates will force California leadership to double down on its political and financial commitments if it wants to see the system completed. One of the major uncertainties was the cost of the 36 miles of tunnels through mountains in Southern California, which could range from $26 billion to $45 billion. CEO Brian Kelly said if there were greater certainty about future funding it could reduce costs and risks with a best-case scenario projects costs are as low as $63.2 billion. Despite the challenges, nearly 1,700 construction jobs have been created in the Central Valley.

MTC Announces Recipients of 'One Bay Area' Grants
The One Bay Area Grant 2 (OBAG 2) County Program has pledged approximately $386 million in federal funds to go to 180 transportation projects in 95 jurisdictions across the Bay Area. OBAG 2 is the policy framework for the Metropolitan Transportation Commission's distribution in $862 million in federal Surface Transportation Program and Congestion Mitigation and Air Quality Improvement Program funds from Fiscal Year 2017-18 to 2021-22. The OBAG 2 County Program of Projects was approved by the MTC Commission at the end of 2017. A majority of the funds will be directed to active transportation projects including bicycle and pedestrian projects (15 percent), Safe Routes to School (8 percent), and Transportation for Livable Communities (34 percent) projects.  The commissioners also approved revisions to the OBAG 2 Project Selection and Programming Policy to clarify program details for the 80k by 2020 Challenge Grant initiative, a pilot program that incentivizes the production of affordable housing. These revisions also include increasing the number of jurisdictions eligible to receive the challenge grant from 10 to 15, clarify that the preservation of affordable housing units will be credited in the program, and adding a provision that at least one jurisdiction from each county will be awarded a challenge grant.

Irvine Ballot Measure Will Determine Future of Voter Approval
Irvine voters will decide June 5 if they want to keep the ability to vote on city development projects after Mayor Don Wagner proposed two ballot questions including one that would exempt development agreements approved by the City Council from voter approval. Residents however say this would again completely remove residents from the approval process. Resident Karen Jaffe is spearheading an effort to place a voter initiative on November’s ballot that would require a vote by city residents on developments that have more than 40 housing units, a commercial/industrial development bigger than 10,000 square feet, or converting public land to private use. Wagner accuses Jaffe and her supporters of being anti-growth and irresponsible. Mayor Pro Tem Christina Shea voiced support for Wagner’s ballot proposal saying the city is forecasted to have a $1.3 million drop in sales tax revenues due to online shopping. The other city charter amending proposals includes one that would increase the threshold to a two-thirds majority council vote before placing a tax increased proposal on ballots.

Los Angeles Creates Position of Chief Design Officer 
Los Angeles Mayor Eric Garcetti appointed Christopher Hawthorne as the first Chief Design Officer, a new post created to improve the quality of civic architecture and urban design across the city. Garcetti contends that Hawthorne will help bring a unified design vision to projects that are shaping the urban landscape, collaborate with city departments and public agencies to promote welcoming, economical and ambitious architecture and urban design. A key part will be to ensure transformative infrastructure and architectural projects are inclusive, accessible, and cost-effective. Hawthorne is a native of Berkeley, graduated from Yale where he studied political science and architectural history and has been serving as the architecture critic for the LA Times since 2004.  

Quick Hits & Updates
The San Francisco Foundation is teaming up with Facebook to fund affordable housing in Menlo Park and East Palo Alto. The foundation is contributing $1 million to Facebook’s Catalyst Housing Fund to build and protect affordable housing within 15 miles of the company’s hometown. Facebook created the Housing Fund in 2016 with $18.5 million and this will be the first outside contribution. The Foundation is one of the country’s largest community-based philanthropy organizations with over $1.4 billion in assets. It is also partnering with San Francisco and Enterprise Community Partners on the Hope-SP program. (See prior CP&DR commentary.)

The Secretary of State reported 25 percent of the 365,880 signatures required by June 25 have been collected to amend Costa-Hawkins in the “Affordable Housing Act” ballot measure. The ballot measure is created by Michael Weinstein, president of the AIDS Healthcare Foundation, Christina Livingston, state director of Alliance of Californians for Community Empowerment Action, and Elena Popp, founder of Eviction Defense Network. 

The San Diego City Council unanimously approved legislation that aims to create more housing for middle-income residents, including market-rate “micro” units averaging 600 square-feet. The incentives approved allow developers to build larger housing projects if they set aside some of the units for low-income seniors, former foster youth, disabled military veterans or homeless people. Developers will be allowed to double the size of the project if it consists entirely of units between 600 and 800 square-feet.

The City of Los Angeles hopes to finish its modernization and expansion of the Convention Center by 2022 according to minutes from last month’s meeting of the Board of LA Convention and Tourism Development Commission. The current project is a public-private partnership between the city and AEG. AEG had proposed an expansion of the J.W. Marriott through a 38-story, 750-room tower on an existing parking lot but pulled the plans after the city announced its own plans to construct additional hotels on the Convention Center campus. 

San Francisco Supervisor Aaron Peskin pledged to sue the state to overturn Senate Bill 827 should it be approved. The state bill would increase housing density and heights near transit routes. However, Senator Wiener, author of the bill, critiqued Peskin’s challenge and said “with the average San Francisco rent for a two-bedroom at nearly $5,000 a month, I recommend that Supervisor Peskin focus les son lawsuits and inflammatory rhetoric and more on making sure everyone has a home.” (See prior CP&DR coverage.)

Sacramento Superior Court Judge Allen Sumner agreed with a Republican lawmaker that the official title for Proposition 70, a ballot measure laying out rules for future climate change revenues collected by the state, must be rewritten otherwise voters in June would be misled. The ballot title was originally written as “Limits Legislature’s Authority to Use Cap-and- Trade Revenues to Reduce Pollution” and will be changed to “Requires Legislative Supermajority Vote Approving Use of Cap-and-Trade Reserve Fund.” Prop 70 would require the Legislature to take a one-time vote in 2024 on how revenues collected from cap-and-trade are spent.

According to a study by the Governors Highway Safety Association between January and June 2017, 352 people were struck and killed by motor vehicles in California. The majority of state pedestrian fatalities occur in LA County and 20 pedestrians died in San Francisco. In 2014, San Francisco instituted the Vision Zero SF program, which seeks to eliminate all traffic fatalities by 2024.

According to a new study published in Proceedings of the National Academy of Sciences, new houses are being built fastest in places where they are most likely to burn: wild fringes of urban areas, such as neighborhoods surrounded by canyons, hills, or other open land covered in flammable vegetation. In Southern California between 1990 and 2010, new homes went up twice as fast on the edge of developed lands than in the region as a whole. Riverside County leads the area with over 190,000 more houses built in high-risk areas during that period, an increase of about 75 percent.

According to a report from the Real Estate Research Council of Southern California, the city and county of San Diego issued 4 percent fewer residential building permits in 2017 than the previous year. Overall building was down because of a reduction in apartment and condo construction, despite an increase in single-family home construction. Building permits for 9,580 new housing units were pulled in 2017, which is down from 9,972 in 2016 and 9,975 in 2015. Most of Southern California saw increased building permits in 2017, up seven percent among the seven counties, compared to 2016. Only San Diego and Orange counties saw less demand.

According to a report from the California Housing Partnership, homeowners received $5.8 billion in subsidies through the ability to deduct interest on their mortgages and property taxes from state tax bills while renters only received $215 million in housing subsidies. The rental subsidies are for low-income renters and a state tax credit for developers to help finance low-income rental projects.

Banning City Councilmembers expressed concerns about a proposal to build a bypass to the 10 freeway that the Riverside County Transportation Department wants to construct in the southern part of the city. The bypass would offer an alternative route in case the freeway is closed or at a complete standstill. The councilmembers are worried about wear and tear, cost of upkeep of city streets, traffic through residential areas, and security if trucks are using the bypass to avoid nearby California Highway Patrol inspection station.

Banning City Councilmembers expressed concerns about a proposal to build a bypass to the 10 freeway that the Riverside County Transportation Department wants to construct in the southern part of the city. The bypass would offer an alternative route in case the freeway is closed or at a complete standstill. The councilmembers are worried about wear and tear, cost of upkeep of city streets, traffic through residential areas, and security if trucks are using the bypass to avoid nearby California Highway Patrol inspection station.