Arroyo Grande City Council
July 25, 2023

INITIAL STUDY / MITIGATED NEGATIVE DECLARATION May 2023 Brisco-Halcyon Road Interchange Modifications Project

monitored prior to and during construction. The SWPPP would include a Construction Site Monitoring Program that presents procedures and methods related to the visual monitoring and sampling and analysis plans for non-visible pollutants, sediment and turbidity, and pH.

HYD/mm-2 The City shall implement, at minimum, the following BMPs.

Temporary Construction Measures
a. All substantial ground disturbance shall be limited to the dry season or periods when rainfall is not predicted to the extent feasible, to minimize erosion and sediment transport to surface waters;
b. Disturbed areas shall be stabilized or re-vegetated prior to the start of the rainy season; c. Impacts to vegetation shall be minimized. The work area shall be flagged to identify its limits. Vegetation shall not be removed or intentionally damaged beyond these limits. d. Construction materials and soil piles shall be placed in designated areas where they could not enter storm drains due to spillage or erosion.
e. Waste and debris generated during construction shall be stored in designated waste collection areas and containers away from watercourses, and shall be disposed of regularly.
f. During construction, washing of concrete trucks, paint, equipment, or similar activities shall occur only in areas where polluted water and materials can be contained for subsequent removal from the site. Wash water shall not be discharged to the storm drains, street, drainage ditches, creeks, or wetlands. Concrete washout area shall be isolated from storm drains, and wash water and waste shall be removed from the project site. The location of the washout area shall be clearly noted at the construction site with signs.
g. All fueling of heavy equipment shall occur in a designated area removed from on-site drainages, such that any spillage would not enter surface waters. The designated refueling area shall include a drain pan or drop cloth and absorbent materials to clean up spills. The location of the fueling area shall be clearly noted at the construction site with signs. h. Vehicles and equipment shall be maintained properly to prevent leakage of hydrocarbons and coolant and shall be examined for leaks on a daily basis. All maintenance shall occur in a designated offsite area. The designated area shall include a drain pan or drop cloth and absorbent materials to clean up spills.
i. Any accidental spill of hydrocarbons or coolant that may occur on the construction site shall be cleaned immediately. Absorbent materials shall be maintained on the construction site for this purpose.
j. Temporary placement of fill shall be located outside of any drainage ways. k. Adequate measures shall be applied to all disturbed portions of the project site to control dust, such as daily watering or hydro-mulching until vegetation cover is well established.

INITIAL STUDY / MITIGATED NEGATIVE DECLARATION May 2023 Brisco-Halcyon Road Interchange Modifications Project

l. Any fill or stockpiling that is to be left more than 30 days shall be hydro-seeded or covered immediately upon completion of the fill or stockpiling work. m. All fill material shall be “clean” and free of any potentially hazardous materials or hazardous waste.
n. Rain Event Action Plan (REAP). Risk Level 2 projects are required to prepare a REAP, which will describe projected storm information and list specific actions required to be taken before predicted rain events.
o. Soil Stabilization Measures. Minimum soil stabilization measures for the project shall include move-in/move-out erosion control, use of temporary hydraulic mulch on any exposed disturbed soils, temporary covers to protect disturbed soil areas, and temporary fencing to designate environmentally sensitive areas as outside of the work area limits.

Analysis of additional soil stabilization measures will continue during the design phase. p. Sediment Control Measures. Minimum sediment control measures for the project shall include temporary fiber rolls to minimize sediment-laden sheet flows and concentrated flows from discharging offsite, and temporary drainage inlet protection to prevent sediment from entering current or proposed storm drains. Investigation into additional sediment control measures, including the use of sediment traps, will continue during the design phase.
q. Tracking Controls. To prevent the tracking of mud and dirt off-site, stabilized construction entrances and exits shall be placed at multiple points throughout the project site. Street sweeping shall be implemented to remove any tracked sediment. r. Waste Management and Materials Pollution Control. Concrete washout bins shall be considered for all concrete-related work activities.
s. Job Site Management. The project’s proposed Construction Site Management includes controlling potential sources of water pollution before they enter any stormwater systems or watercourses and employee and subcontractor training, including the proper selection, deployment, and repair of construction site BMPs used within the project site. t. Stormwater Sampling and Analysis. Risk Level 2 projects are required to perform stormwater sampling at all discharge locations during qualifying rain events. The samples shall be analyzed for pH and turbidity, and subject to numeric action levels.

Permanent Design Measures
u. Existing vegetation shall be preserved to the maximum extent possible. The proposed improvements would result in minimal clearing or grubbing because the majority of the study area is currently paved.

INITIAL STUDY / MITIGATED NEGATIVE DECLARATION May 2023 Brisco-Halcyon Road Interchange Modifications Project

7. References
California Department of Conservation. 2016. Farmland Mapping and Monitoring Program. Available at:
http://maps.conservation.ca.gov/dlrp/ciftimeseries/. Accessed on: June 1, 2018.

California Department of Toxic Substance Control. 2018. Envirostor. Available at:
https://www.envirostor.dtsc.ca.gov/public/. Accessed on June 1, 2018.

California Department of Transportation (Caltrans). 2018. California Scenic Highway Mapping System.

Available at: http://www.dot.ca.gov/hq/LandArch/16_livability/scenic_highways/. Accessed on June 1, 2018
California Environmental Protection Agency (CalEPA). 2018. Cortese List Data Resources. Available at:
https://calepa.ca.gov/sitecleanup/corteselist/. Accessed on June 1, 2018.

California State Water Resources Control Board (SWRCB). 2018. GeoTracker. Available at:
https://geotracker.waterboards.ca.gov/. Accessed on June 1, 2018.

City of Arroyo Grande. 2001. General Plan Update – Agriculture, Conservation and Open Space Element.

City of Arroyo Grande, California.
————. 2021. General Plan Update – Circulation Element. City of Arroyo Grande, California. ————. 2001. General Plan Update – Economic Development Element. City of Arroyo Grande, California. ————. 2001. General Plan Update – Land Use Element. City of Arroyo Grande, California. ————. 2001. General Plan Update – Parks and Recreation Element. City of Arroyo Grande, California. ————. 2001. General Plan Update – Safety Element. City of Arroyo Grande, California. ————. 2020. General Plan Update – Housing Element. City of Arroyo Grande, California. ————. 2009. Land Use Map. City of Arroyo Grande, Community Development Department. ————. 2010. Development Code. Available at:
http://library.municode.com/index.aspx?clientId=16194&stateId=5&stateName=California.

Accessed on June 1, 2018.
————. 2010. Zoning Map. City of Arroyo Grande, Community Development Department. ————.2012. Bicycle and Trails Master Plan. City of Arroyo Grande, California.

County of San Luis Obispo Department of Public Works. 2005. County Bikeways Plan – 2005 Update.

Bicycle Advisory Committee, Department of Public Works.

Federal Emergency Management Agency (FEMA). 2018. FEMA Flood Map Service Center. Available at:
https://msc.fema.gov/portal/search?AddressQuery=nipomo%2Cca. Accessed on April 26, 2018 The Morro Group, Inc. 2007. Final Master Environmental Impacts Report for the Halcyon Road Projects.

February 2007.

INITIAL STUDY / MITIGATED NEGATIVE DECLARATION May 2023 Brisco-Halcyon Road Interchange Modifications Project

Natural Resource Conservation Service (NRCS). 2018. Web Soil Survey. Available at:
https://websoilsurvey.nrcs.usda.gov/app/WebSoilSurvey.aspx. Accessed on: April 12, 2018.

GHD. 2020. Existing Conditions Analysis Memorandum. November 2020.

San Luis Obispo County Council of Governments (SLOCOG). 2010. SLOCOG 2010 Regional Transportation Plan and Preliminary Sustainable Communities Strategy. San Luis Obispo Council of Governments. ————. 2015. 2014 Regional Transportation Plan / Sustainable Communities Strategy: Connecting Communities. San Luis Obispo Council of Governments. April 2015.

San Luis Obispo County Air Pollution District (APCD) 2021. Interim CEQA Greenhouse Gas Guidance for the San Luis Obispo County Air Pollution Control District’s 2012 CEQA Air Quality Handbook.

San Luis Obispo Regional Rideshare. 2010. San Luis Obispo County Bike Map – South County. Available at:
www.rideshare.org. Accessed on August 23, 2011.

SWCA Environmental Consultants Inc. (SWCA). 2016. Halcyon Road Complete Streets Plan – Preliminary Environmental Conditions and Constraints. September 2016.

Detailed Project Estimate and Total Project Costs- Cycle 6 Important: Read the Instructions in the first sheet (tab) before entering data. Do not enter data in shaded fields (with formulas).

Project Information:

Agency: Date:

Project Description:

Project Location:

Licensed Engineer in responsible charge of preparing or reviewing this PSR-Equivalent Cost Estimate: License #: 82675 Project Estimate and Cost Breakdown:

Cost Breakdown
Project Estimate (for Construction Items Only) ATP Eligible ATP Ineligible Corps/CCC Costs/Items Costs/Items to construct Item
No. Item Quantity Units Unit Cost TotalItem Cost % $ % $ % $ General Overhead-Related Construction Items
1 10% LS $3,817,300.00 $381,730 100% $381,730
2 100% LS $342,000.00 $342,000 100% $342,000
3 25% LS $3,817,300.00 $954,325 100% $954,325
4 100%
5 100%
6 100%
7 100%
8 100%
9 100%
10 100%
General Construction Items
11 16 EA $2,000.00 $32,000 100% $32,000
12 2970 LF $33.00 $98,010 100% $98,010
13 14760 SQFT $8.00 $118,080 100% $118,080
14 2210 CY $235.00 $519,350 100% $519,350
15 1850 CY $136.00 $251,600 100% $251,600
16 36912 SY $3.60 $132,882 100% $132,882
17 1360 TON $200.00 $272,000 100% $272,000
18 1041 SQFT $50.00 $52,050 100% $52,050
19 2410 LF $50.00 $120,496 100% $120,496
20 2989 LF $54.00 $161,400 100% $161,400
21 6840 SQFT $18.00 $123,120 100% $123,120
22 22729 SQFT $12.00 $272,752 100% $272,752
23 985 SQFT $18.00 $17,724 100% $17,724
24 1 LS $170,000.00 $170,000 100% $170,000
25 285 EA $17.00 $4,847 100% $4,847
26 33659 LF $2.00 $67,318 100% $67,318
27 7851 SQFT $8.00 $62,810 100% $62,810
28 85 EA $382.00 $32,470 100% $32,470
29 1 LS $127,500.00 $127,500 100% $127,500
30 13605 SQFT $10.00 $136,050 100% $136,050
31 1 LS $243,500.00 $243,500 100% $243,500
32 14 CY $700.00 $9,800 100% $9,800
33 50 CY $1,200.00 $60,000 100% $60,000
34 1639.4 SQFT $25.00 $40,985 100% $40,985
35 2030 SQFT $20.00 $40,600 100% $40,600
36 1250 SQFT $120.00 $150,000 100% $150,000
37 1 LS $500,000.00 $500,000 100% $500,000
38 100%
39 100%
40 100%
41 100%
42 100%
43 100%
44 100%
45 100%
46 100%
47 100%
48 100%
49 100%
50 100%
51 100%
52 100%
Subtotal of Construction Items: $5,495,399 $5,495,399
Construction Item Contingencies (% of Construction Items): 25.00% $1,373,850 $1,373,850 Total (Construction Items & Contingencies) cost: $6,869,248 $6,869,248 Project Delivery Costs:

Type of Project Cost Cost $
Preliminary Engineering (PE) ATP Eligible Costs Non-participating Costs Environmental Studies and Permits(PA&ED): $252,494
Plans, Specifications and Estimates (PS&E): $647,800 "PE" costs / "CON" costs Total PE: $ 900,294 $900,294 13% 25% Max City of Arroyo Grande 6/10/2022
Halcyon Complete Street Improvements
Halcyon Road, City of Arroyo Grande
Chenin Otto
Retaining Wall
Modifying Existing Electrical System
Adjust Utility to Grade
Minor Concrete (Curb - Truck Apron)
Minor Concrete (Stamped Concrete - Truck A
Minor Concrete (Bus Pad)
Minor Concrete (Miscellaneous Construction
Thermoplastic Traffic Stripe
Thermoplastic Pavement Marking
Signs
Lighting System
Planting and Irrigation
Minor Concrete (Curb Ramp)
Minor Concrete (Sidewalk)
Minor Concrete (Driveway)
Reconstruct Drainage Facility
Pavement Marker (Retroreflective)
Micro-Surfacing
Hot Mix Asphalt (Type A)
Detectable Warning Surface
Minor Concrete (Curb)
Minor Concrete (Curb and Gutter)
Remove Tree
Remove Concrete (Curb & Gutter)
Remove Concrete Sidewalk
Roadway Excavation
Class 2 Aggregate Base
Mobilization
Traffic Control
Minor/ Supplemental Items
$ 647,800
$ 252,494 6/15/2022 1 of 2
ATTACHMENT 5

MEMORANDUM
TO: City Council
FROM: Brian Pedrotti, Community Development Director
SUBJECT: Supplemental Information
Agenda Item 11.a. – July 25, 2023 City Council Meeting
Consideration of Approval of the Halcyon Road Complete Streets Plan and Adoption of the Mitigated Negative Declaration
DATE: July 25, 2023

cc: City Manager
Assistant City Manager
City Attorney
City Clerk
City Website and Public Review Binder
Enc

Detailed Project Estimate and Total Project Costs- Cycle 6 Important: Read the Instructions in the first sheet (tab) before entering data. Do not enter data in shaded fields (with formulas).

Project Information:

Agency: Date:

Project Description:

Project Location:

Licensed Engineer in responsible charge of preparing or reviewing this PSR-Equivalent Cost Estimate: License #: 82675 Project Estimate and Cost Breakdown:

Cost Breakdown
Project Estimate (for Construction Items Only) ATP Eligible ATP Ineligible Corps/CCC Costs/Items Costs/Items to construct
Item
No. Item Quantity Units Unit Cost TotalItem Cost % $ % $ % $ General Overhead-Related Construction Items
1 10% LS $3,817,300.00 $381,730 100% $381,730
2 100% LS $342,000.00 $342,000 100% $342,000
3 25% LS $3,817,300.00 $954,325 100% $954,325
4 100%
5 100%
6 100%
7 100%
8 100%
9 100%
10 100%
General Construction Items
11 16 EA $2,000.00 $32,000 100% $32,000
12 2970 LF $33.00 $98,010 100% $98,010
13 14760 SQFT $8.00 $118,080 100% $118,080
14 2210 CY $235.00 $519,350 100% $519,350
15 1850 CY $136.00 $251,600 100% $251,600
16 36912 SY $3.60 $132,882 100% $132,882
17 1360 TON $200.00 $272,000 100% $272,000
18 1041 SQFT $50.00 $52,050 100% $52,050
19 2410 LF $50.00 $120,496 100% $120,496
20 2989 LF $54.00 $161,400 100% $161,400
21 6840 SQFT $18.00 $123,120 100% $123,120
22 22729 SQFT $12.00 $272,752 100% $272,752
23 985 SQFT $18.00 $17,724 100% $17,724
24 1 LS $170,000.00 $170,000 100% $170,000
25 285 EA $17.00 $4,847 100% $4,847
26 33659 LF $2.00 $67,318 100% $67,318
27 7851 SQFT $8.00 $62,810 100% $62,810
28 85 EA $382.00 $32,470 100% $32,470
29 1 LS $127,500.00 $127,500 100% $127,500
30 13605 SQFT $10.00 $136,050 100% $136,050
31 1 LS $243,500.00 $243,500 100% $243,500
32 14 CY $700.00 $9,800 100% $9,800
33 50 CY $1,200.00 $60,000 100% $60,000
34 1639.4 SQFT $25.00 $40,985 100% $40,985
35 2030 SQFT $20.00 $40,600 100% $40,600
36 1250 SQFT $120.00 $150,000 100% $150,000
37 1 LS $500,000.00 $500,000 100% $500,000
38 100%
39 100%
40 100%
41 100%
42 100%
43 100%
44 100%
45 100%
46 100%
47 100%
48 100%
49 100%
50 100%
51 100%
52 100%
Subtotal of Construction Items: $5,495,399 $5,495,399
Construction Item Contingencies (% of Construction Items): 25.00% $1,373,850 $1,373,850 Total (Construction Items & Contingencies) cost: $6,869,248 $6,869,248 Project Delivery Costs:

Type of Project Cost Cost $
Preliminary Engineering (PE) ATP Eligible Costs Non-participating Costs Environmental Studies and Permits(PA&ED): $252,494
Plans, Specifications and Estimates (PS&E): $647,800 "PE" costs / "CON" costs Total PE: $ 900,294 $900,294 13% 25% Max
City of Arroyo Grande 6/10/2022
Halcyon Complete Street Improvements
Halcyon Road, City of Arroyo Grande
Chenin Otto
Retaining Wall
Modifying Existing Electrical System
Adjust Utility to Grade
Minor Concrete (Curb - Truck Apron)
Minor Concrete (Stamped Concrete - Truck A
Minor Concrete (Bus Pad)
Minor Concrete (Miscellaneous Construction
Thermoplastic Traffic Stripe
Thermoplastic Pavement Marking
Signs
Lighting System
Planting and Irrigation
Minor Concrete (Curb Ramp)
Minor Concrete (Sidewalk)
Minor Concrete (Driveway)
Reconstruct Drainage Facility
Pavement Marker (Retroreflective)
Micro-Surfacing
Hot Mix Asphalt (Type A)
Detectable Warning Surface
Minor Concrete (Curb)
Minor Concrete (Curb and Gutter)
Remove Tree
Remove Concrete (Curb & Gutter)
Remove Concrete Sidewalk
Roadway Excavation
Class 2 Aggregate Base
Mobilization
Traffic Control
Minor/ Supplemental Items
$ 647,800
$ 252,494
6/15/2022 1 of 2

Detailed Project Estimate and Total Project Costs- Cycle 6 Important: Read the Instructions in the first sheet (tab) before entering data. Do not enter data in shaded fields (with formulas).

Project Information:

Agency: Date:

Project Description:

Project Location:

Licensed Engineer in responsible charge of preparing or reviewing this PSR-Equivalent Cost Estimate: License #: 82675 City of Arroyo Grande 6/10/2022
Halcyon Complete Street Improvements
Halcyon Road, City of Arroyo Grande
Chenin Otto
Right of Way (RW)
Right of Way Engineering: $165,000
Acquisitions and Utilities: $490,800
Total RW: $ 655,800 $655,800
Total Pre-Construction Costs (PE+RW): $1,556,094 $1,556,094 Construction Engineering (CE) "CE" costs / "CON" costs
Construction Engineering (CE): $645,200 9% 15% Max
Total Construction Costs: $7,514,448 $7,514,448
ATP Eligible Costs Non-participating Costs
Total Project Cost: $9,070,542
Documentation of Ineligible (Non-Participating) Costs:

The Engineer's logic and/or calculations for splitting costs between ATP-Eligible and Non-participating costs must be documented in this section of the Estimate form.

Separate logic is required for each item which is partly ineligible for ATP funding or is required for the construction of an ineligible item/element of the project.

Item #: Description of Engineer's Logic: (See examples shown in the Instructions) $ 165,000
$ 490,800
$9,070,542
$ 645,200
6/15/2022 2 of 2

MEMORANDUM
TO: City Council
FROM: Jessica Matson, Legislative & Information Services Director/City Clerk SUBJECT: Supplemental Information
Agenda Item 11.a. – July 25, 2023 City Council Meeting
Consideration of Approval of the Halcyon Road Complete Streets Plan and Adoption of the Mitigated Negative Declaration
DATE: July 25, 2023
Attached is correspondence received for the above reference item. cc: City Manager
Assistant City Manager
Community Development Director
City Attorney
City Clerk
City Website and Public Review Binder
Enc

From: Rick Ellison
To: public comment
Cc: Brian Pedrotti; Shannon Sweeney; Steve Kahn; Gary Havas Subject: Item 11.a. Halcyon Complete Streets Plan
Date: Tuesday, July 25, 2023 12:38:23 PM
Attachments: Arroyo Grande Complete Streets 072523 Item 11a.pdf IRONSCALES couldn't recognize this email as this is the first time you received an email from this sender [email protected]
Dear Members of the Arroyo Grande City Council,
Please find a public comment letter regarding Item 11.a. for the July 25 City Council Meeting. Thank you for your leadership and consideration of our comments.

Best regards,
Rick Ellison
--
Rick Ellison | Executive Director
League Cycling Instructor #6562
[email protected]
O: 805.547.2055 | Cell: 805.748.2733
bikeslocounty.org

July 24, 2023
City of Arroyo Grande City Council
300 E Branch Street
Arroyo Grande, CA 93420
Dear Mayor and City Council,
On behalf of Bike SLO County, we are writing to support the recommended action to approve the Halcyon Complete Streets Plan with Alternative 2 identified for the Halcyon/Fair Oaks intersection, and Adoption of the Mitigated Negative Declaration, Agenda Item 11.a.

Bike SLO County encourages infrastructure improvements that increase safety for all people who bike or walk, especially for youth riding or walking to school. We are committed to serving our community by promoting improved safety through education and expanded infrastructure.

We feel the improvements planned by the City of Arroyo Grande for the Halcyon Road Complete Streets Plan will make a safer roadway for all users, including people walking and people on bicycles. The Halcyon Road corridor is a key roadway that will be significantly improved by the adoption of the Complete Streets Plan, especially for vulnerable users.

The plan to improve the entire corridor from El Camino Real to The Pike is essential to address many unsafe conditions that currently exist. While the addition of buffered bike lanes in Context Zone 1 of the plan provides some improvement, we recommend the design and engineering for Context Zone 2 and Context Zone 3, incorporate Class IV protected bike lanes where feasible.

Class IV protected bike lanes are a proven way to increase bicycle ridership and improve the safety for vulnerable users.

The City of Arroyo Grande is the fortunate recipient of an $8.1 million grant (88% of the total project cost) from the California Active Transportation Program (ATP) for the Halcyon Complete Streets Plan. We want to highlight to you that the ATP grant program exists to encourage increased use of active modes of transportation by achieving the following goals:
● Increase the proportion of trips accomplished by biking and walking ● Increase safety and mobility for non-motorized users
● Advance the active transportation efforts to achieve Greenhouse Gas (GHG) reduction goals
● Enhance public health
● Ensure that disadvantaged communities fully share in the benefits of the program ● Provide a broad spectrum of projects to benefit many types of active transportation users
Without the ATP Grant, the Halcyon Complete Streets Plan would not be possible or suffer great delay, and the importance of making the active modes of transportation the priority of the project cannot be understated.

We also encourage you to approve the staff recommendation of Alternative 2-Compact Roundabout, which, considerately designed for vulnerable roadway users, will enhance traffic flow in the corridor.
860 Pacific Street, Suite 105, San Luis Obispo, CA 93401 - (805) 547-2055 Page 972 of 1114 The Halcyon Complete Streets Plan will improve roadway users’ safety in the City of Arroyo Grande. We urge you to approve Item 11.a, which will significantly and positively impact the community for many years to come.

Sincerely,
Gary Havas Rick Ellison
Board President Executive Director

Item 12.a.

NO STAFF REPORT FOR THIS ITEM

MEMORANDUM
TO: City Council
FROM: Isaac Rosen, City Attorney
SUBJECT: Supplemental Information
Agenda Item 12.a. – July 25, 2023 City Council Meeting
Appointment of Interim City Manager and Approval of Employment Agreement
DATE: July 25, 2023
Attached is the proposed Interim City Manager employment agreement. cc: City Manager
Assistant City Manager
City Clerk
City Website and Public Review Binder
Enc

65501.00200\41472833.4

INTERIM CITY MANAGER EMPLOYMENT AGREEMENT
This Interim Employment Agreement (“Agreement”) is entered into by and between the City of Arroyo Grande, California (“City”), and Bill Robeson (“Interim City Manager” or “Robeson”).

RECITALS
WHEREAS, the City requires the services of an Interim City Manager, as the position of City Manager will be vacant as of August 1, 2023; and
WHEREAS, the City has commenced efforts to recruit for a City Manager; and WHEREAS, Robeson is currently employed as the City’s Assistant City Manager/Public Works Director, pursuant to an Employment Agreement and an Amendment thereto; and WHEREAS, Robeson has the necessary skills and expertise to serve as an Interim City Manager;
WHEREAS, Robeson agrees to provide the necessary skills and expertise of an Interim City Manager on a temporary basis beginning August 1, 2023; and WHEREAS, the City agrees to return Robeson to the Assistant City Manager/Public Works position upon completion of the Interim City Manager assignment; and WHEREAS, the City, acting by and through its City Council, desires to employ Robeson’s services of City Manager on an interim basis, and to appropriately compensate him for such services.

NOW, THEREFORE, in consideration of the mutual covenants and conditions, the parties agree as follows:

1. Employment as Interim City Manager
A. Interim City Manager Appointment: Subject to the terms and conditions of this Agreement, the City agrees to employ Employee as the City’s Interim City Manager. As Interim City Manager, Employee shall report to the City Council and shall perform the duties of the City Manager as set forth in Chapter 2.08 of the Arroyo Grande Municipal Code. Interim City Manager shall have the authority provided in the Municipal Code and as otherwise directed by the City Council, including to oversee and appoint subordinate City employees.

B. No Due Process Rights or Permanent Appointment: Employee acknowledges that his appointment as Interim City Manager shall not imply, guarantee, or create any right, expectation, or entitlement of a continued appointment as the permanent City Manager.

65501.00200\41472833.4

2. Term and Termination
A. Effective Date: This Agreement shall take effect as of August 1, 2023, and shall remain in effect until a permanent City Manager appointment is made and a City Manager commences employment with the City or this Agreement is otherwise terminated as provided for herein.

B. Maximum Hours: In no event shall Employee’s employment as Interim City Manager extend beyond 960 hours or otherwise violate the provisions of Government Code Section 20480 regarding limits on out-of-class appointments. In accordance with Government Code Section 20480, the City will track Employee’s hours worked as Interim City Manager and report that service to CalPERS no later than thirty (30) days following the end of the present fiscal year.

C. At-Will Nature of Appointment: Employee understands that he has no constitutionally protected property or other interest in his employment as Interim City Manager and has no due process rights associated with this appointment.

Employee understands and expressly agrees that he serves in the Interim City Manager position on a temporary basis at the will and pleasure of the City Council and that he may be terminated or asked to resign from that position at any time by the City Council, without cause. Employee is not eligible for any severance benefits upon conclusion of this Agreement, regardless of the manner in which the assignment concludes.

D. Return to Former Position: Upon the end of this Agreement, Employee shall return to his position as Assistant City Manager/Public Works Director at the salary and benefits then applicable to that position, without loss of longevity, benefits, or rights. To the extent changed by this Agreement, the terms and conditions of Employee’s Employment Agreement and Amendment will resume upon completion of his assignment as Interim City Manager. To the extent not changed by this Agreement (i.e., benefits and other terms and conditions of employment), the Employment Agreement and Amendment remain in effect. True and correct copies of the Employment Agreement and Amendment are attached hereto as Exhibit A.

E. Ability to Resign: Nothing in this Agreement shall prevent, limit, or otherwise interfere with the right of employee to resign at any time from the position of Interim City Manager, upon providing ten (10) days written notice to the City Council, at which time Employee shall return to his position as Assistant City Manager/Public Works Director.

3. Salary and Compensation.

A. Salary: Employee’s current annual salary is Two Hundred Six Thousand Two Hundred and Thirty Two Dollars ($206,232.00). For the duration of Employee’s appointment as Interim City Manager under this Agreement, City will pay

65501.00200\41472833.4

Employee a 10% increase in salary, for a total annual salary of $226,855.20, subject to applicable deductions and other withholdings. This amount is payable to Employee, on a pro rata basis, on the City’s established paydays. This salary will apply only for the duration of Employee’s Interim City Manager assignment. At the conclusion of this assignment, Employee will resume earning the salary applicable to his position as Acting City Manager/Public Works Director. If the City approves an increase in the salary of the Assistant City Manager/Public Works Director position during this Interim City Manager assignment, the 10% increase provided herein will be calculated based on that increased salary once it takes effect, so long as the resulting salary remains within the pay range for the City Manager position on the City’s salary schedule.

B. Benefits: Employer agrees to continue to provide Employee with all benefits he is eligible to receive as Assistant City Manager/Public Works Director, consistent with the terms of the Employment Agreement.

4. General Provisions.

A. The terms of this Agreement are intended by the parties as the final expression of their agreement regarding the Interim City Manager appointment and may not be contradicted by evidence of any prior agreement or contemporaneous oral agreement. The parties further intend that this Agreement constitutes the complete and exclusive statement of its terms and that no extrinsic evidence whatsoever may be introduced in any judicial or arbitration proceeding, if any, involving this Agreement. Any amendments to this Agreement must be in writing and executed by both parties.

B. If any term, covenant, condition, or provision of this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remainder of the provisions shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby.

C. This Agreement shall be governed by the laws of the State of California. Employee and the City agree that venue for any dispute shall be in San Luis Obispo County, California.

D. The parties acknowledge that they understand the significance and consequences of this Agreement. The parties also acknowledge that they have been given full opportunity to review and negotiate this Agreement and execute it only after full reflection and analysis, and that they have had an opportunity to review this document and its application and meaning with their respective attorneys and advisors. This Agreement shall not be interpreted against the party who prepared the initial draft because all parties participated in the drafting of this Agreement by having ample opportunity to review and submit suggested changes or corrections for incorporation into the final version of this Agreement.

65501.00200\41472833.4

E. Employee may not assign this Agreement in whole or in part.

F. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument, and shall be governed by the laws of the State of California.

IN WITNESS WHEREOF, City and Employee have executed this Agreement effective August 1, 2023.

CITY OF ARROYO GRANDE EMPLOYEE
_______________________ _____________________
Caren Ray Russom, Mayor Bill Robeson
ATTEST:
________________________
Jessica Matson, City Clerk
APPROVED AS TO FORM:
________________________
Isaac Rosen, City Attorney

Item 12.b.

MEMORANDUM
TO: City Council
FROM: Whitney McDonald, City Manager
BY: Brian Pedrotti, Community Development Director
Andrew Perez, Planning Manager
SUBJECT: Discussion and Consideration of Support for the Regional Housing and Infrastructure Plan
DATE: July 25, 2023
SUMMARY OF ACTION:

The discussion will inform and explain the purpose of the Regional Housing and Infrastructure Plan as a tool to facilitate housing production to meet the regional demand.

IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:

No financial impact is projected.

RECOMMENDATION:

Discuss and consider support for the Regional Housing and Infrastructure Plan, as a recommitment to the 2020 San Luis Obispo Countywide Regional Compact and direct staff to return with a discussion on ways to utilize and implement the Regional Housing and Infrastructure Plan during the comprehensive General Plan update.

BACKGROUND:

Meeting the housing needs of the San Luis Obispo region is a challenge shared by all eight local land use jurisdictions (the seven Cities and County of San Luis Obispo (County)), San Luis Obispo Council of Governments (SLOCOG), organizations who develop and build housing, as well as local community members. This challenge is larger than any one entity can solve alone and will require the collective actions of all local partners. With this great challenge also comes an opportunity for regional collaboration.

Regional partners have recognized the need to work collaboratively to solve the critical shortage of infrastructure resources and housing attainability in the region. In 2019, the County allocated resources to launch a new regional collaborative initiative. Since its inception, the Regional Housing & Infrastructure Plan (“HIP”) has been part of a phased approach intended to address three major goals:

Item 12.b.

City Council
Discussion and Consideration of Support for the Regional Housing and Infrastructure Plan
July 25, 2023

1. Foster regional collaboration (action taken in 2020);

2. Align land use planning documents (action taken in 2020); and

3. Create the HIP (draft under review via today’s item).

The HIP, under discussion today, is the next necessary collaborative action between the seven Cities, County, and SLOCOG, along the region’s path to addressing the region’s growing housing and infrastructure needs.

ANALYSIS OF ISSUES:

The HIP is intended to help accelerate housing development where it makes the most sense given regional conditions and community readiness. The HIP identifies infrastructure barriers to housing and funding opportunities to implement infrastructure priorities, studies housing affordability in the region, and develops foundational information for the future 2027 Regional Housing Needs Assessment (RHNA) and other future regional programs.

This staff report is organized into three main sections:

1. Prior Actions to Formalize Regional Collaboration for Housing;

2. Creation of the Regional Housing and Infrastructure Plan; and

3. Today’s Action & Future Growth Steps.

Prior Actions to Formalize Regional Collaboration for Housing Fostering Regional Collaboration: Regional Compact (2020) The seven Cities, County, and SLOCOG adopted the San Luis Obispo Countywide Regional Compact in early 2020 (see Appendix D of Attachment 1). The Regional Compact is an aspirational document that sets goals for future plans and actions among the local agencies. It “establishes a united regional framework to unlock the potential to develop an adequate supply of housing and resilient infrastructure that support our economic prosperity.” By adopting the Regional Compact, the seven Cities, County, and SLOCOG embraced six shared regional goals listed below and supported aligning resources and policies to make progress towards acting on them.

Table 1. Regional Compact Goals
Goal 1. Strengthen
Community Quality
of Life
We believe that our Region’s quality of life depends on four cornerstones to foster a stable and healthy economy for all: resilient infrastructure and resources, adequate housing supply, business opportunities, and educational pathways.

Goal 2. Share
Regional Prosperity
We believe that our Region should share the impacts and benefits of achieving enduring quality of life among all people, sectors and interests.

Item 12.b.

City Council
Discussion and Consideration of Support for the Regional Housing and Infrastructure Plan
July 25, 2023

Goal 3. Create
Balanced
Communities
We believe that our Region should encourage new development that helps to improve the balance of jobs and housing throughout the Region, providing more opportunities to residents to live and work in the same community.

Goal 4. Value
Agriculture & Natural
Resources
We believe that our Region’s unique agricultural resources, open space, and natural environments play a vital role in sustaining healthy local communities and a healthy economy, and therefore should be purposefully protected.

Goal 5. Support
Equitable
Opportunities
We believe that our Region should support policies, actions, and incentives that increase housing development of all types, available to people at all income levels.

Goal 6. Foster
Accelerated Housing
Production
We believe that our Region must achieve efficient planning and production of housing and focus on strategies that produce the greatest impact.

These six regional goals create a path for compatibility among the eight local land use planning agencies’ Housing Elements, built a basis for the HIP, and drive future recommendations for collaborative actions. Signatories to the Regional Compact committed to acting as partners in aligning actions with these regional goals and agreed to develop the first HIP. By taking collaborative actions to further these goals, this region can solve critical issues and become a statewide leader in sustaining vibrant communities.

Aligning Land Use Planning Documents: Housing Elements (2020) The eight local land use planning agencies (the seven Cities and County) were each required to update their jurisdiction's Housing Elements to reflect how local communities are planning for the State’s 6th Cycle Regional Housing Needs Allocations (2020 - 2028).

As a step towards the regional goal of aligning land use planning documents, each agency’s Housing Element included a regional chapter that included an initial list of aspirational regional policies that, if implemented, could further the Regional Compact goals, which are described in greater detail in Appendix D of the HIP. Chapter 6 of the City’s Housing Element contains information about the regional vision for housing and the shared regional housing goals. The regional chapter also recognized the importance of ongoing collaboration moving forward and pointed to future collaborative efforts to be identified in the HIP. It was the first time all eight land use planning agencies included a regional chapter in the Housing Elements–an important step for aligning land use planning documents.

Item 12.b.

City Council
Discussion and Consideration of Support for the Regional Housing and Infrastructure Plan
July 25, 2023

Creation of the Regional Housing and Infrastructure Plan The final goal of the regional collaborative initiative was developing the HIP. Due to emergency response needs, the County put the HIP on hold during the COVID-19 Pandemic. In June 2022, the HIP was revived with the establishment of a Memorandum of Understanding between the County and SLOCOG, under which SLOCOG took over as the project manager of the effort and sub-recipient of the County’s Senate Bill 2 Planning Grant Program funding award for HIP development. With Senate Bill 2 grant funding sunsetting in September 2023, the HIP needs to move at an accelerated pace.

Making progress on the region’s strategic goals for addressing housing and infrastructure needs can only be achieved through the actions of many stakeholders; therefore, communication and stakeholder engagement were critical pieces of the HIP development.

SLOCOG contracted with REACH and Koble Collaborative, Inc. to conduct the HIP’s communications and stakeholder engagement. The primary outreach goals were:
 Foster ongoing collaboration and buy-in among private and public stakeholders; and
 Remind government of the Regional Compact, laying the groundwork for HIP effort; and
 Build public sentiment in support of solutions and regional planning efforts.

The stakeholder groups and meetings were designed to convene diverse perspectives and have honest conversations about what each organization can and needs to do to realize those goals, across sectors and industries. Key stakeholder groups are identified in Table 2
Table 2: HIP Stakeholders
Regional
Managers /
Key Staff
Housing Action
Team
Builders &
Developers
Housing
Advocacy
Group
City &
County
Elected
Officials
30 attendees,
3 meetings
15-20 attendees,
monthly meetings
20-35 attendees,
3 meetings
15-20 attendees,
2 meetings
40 elected
officials
1 meeting
per agency
County of SLO,
7 Cities (+ Santa
Maria), SLOCOG
Leadership
County of SLO,
7 Cities, SLOCOG
Planning/Comm
Dvpmt. Staff
Builders, Engineers,
Developers, Econ. Dvpmt.,
Architects, Real Estate,
etc.

Nonprofit builders,
Home Builders
Assoc, Chambers,
etc.

Seven City
Councils
County of
SLO Board
SLOCOG
Board

Item 12.b.

City Council
Discussion and Consideration of Support for the Regional Housing and Infrastructure Plan
July 25, 2023

HIP Steering Committee
10 attendees, 3 meetings
City Manager, Elected Officials, County Regional Planner, Developer, Low Income Lender, Architect, Engineer, Advocate, Water Resources and Cal Poly met collaboratively to consider ways to integrate feedback from all stakeholder perspectives
These stakeholder groups helped to review and shape the HIP. On May 19, 2023, SLOCOG published the attached Draft HIP, including Appendices A-D and a mapping tool. There are seven major components of the HIP (listed in Table 2 and further described below). These components intertwine and build upon one another. As with each prior phase of the regional collaborative efforts to address the housing and infrastructure shortage, stakeholder engagement was key.

Table 3: HIP Components
HIP Components What Each Component Is Possible Individual Agency Use

1. Housing
Highlights
Communication tool: Understanding
the need for housing, affordability,
and opportunities
Voluntary use of a communication tool
to convey housing challenge and
community call to action

2. Data and Project
Inventory Infrastructure barriers to housing Recognizes community’s needs and connects to regional inventory

3. HIP Mapping
Tool
Living strategic analysis tool used to
show the interrelation between
housing and infrastructure
Visual tool connecting each
community’s plans to overall regional
scale

4. Housing
Efficiency Analysis Housing Efficient Areas in HIP
Recognizes community’s plans and
serves as leverage for future
infrastructure funding sources

5. Infrastructure
Prioritization
Region’s highest priority projects to
unlock housing
Identify importance of community’s
needs in supporting regional housing
supply

6. Funding
Strategies
Assessment
Funding the region could pursue for
priority infrastructure projects
Identifies possible funding sources that
each community or partners could
pursue to cover funding gaps

7. Affordable-byDesign StudyMenu of possible policies to increase housing attainability
Voluntary use of menu of options for
possible policies to implement
HIP Component 1–Housing Highlights
A communication tool designed to unify the region’s focus on the challenges and successes that local agencies, the building and development community and other stakeholders face related to the housing supply needs. This document will serve to reinforce the commitment to the Regional Compact and expand on opportunities each stakeholder has to address housing needs within

Item 12.b.

City Council
Discussion and Consideration of Support for the Regional Housing and Infrastructure Plan
July 25, 2023

their area of control and span of influence. The draft Housing Highlight document has been available since June 28, 2023. The final document is included as Appendix C to the HIP.

HIP Component 2–Data and Project Inventory
The HIP analyzes the transportation, water, and wastewater infrastructure barriers to housing development. This HIP element included compiling infrastructure and housing data from across individual agencies as briefly described in Table 4 below:

Table 4. Major HIP Inputs
Housing Data Proposed residential developments of all income categories were collected from Planning and Community Development staff of the seven Cities and the County in 2021. This data includes specific plans, proposed residential and mixed-use projects projected to be built between now and 2045. Residential development that has been completed or is near completion was removed from the HIP analysis.

Transportation
Data
The 2023 Regional Transportation Plan included a list of 350+ transportation investments submitted by Public Works staff of the seven Cities and County and transit providers. Transportation infrastructure was studied using the Transportation Efficiency Analysis (TEA). The TEA identified transportation barriers to housing production and was used in the HIP analysis.

Water/
Wastewater Data
The HIP inventory is based on responses from 44 water and wastewater agencies, local capital improvement project lists, 2021 Regional Water Infrastructure Resiliency Plan findings, and information from the County’s Water Resources team.

Available, detailed GIS based data was limited. However, to the extent needs are known, key infrastructure projects, estimated costs and timing were included in the HIP analysis.

Additional
Contextual Data
The HIP analysis provides the data that connects infrastructure and housing on a regional scale for the first-time. When planning for housing, land conditions are carefully considered. To provide a fuller picture, flood risk, sensitive habitat, open space, prime farmland, and fire risk were all included as additional reference information. However, these additional datasets were not used to remove or prioritize infrastructure projects from the HIP list, but simply to provide additional context.

The HIP is a living tool and can adapt as new information becomes available. Future updates to the HIP may incorporate two key datasets:
 Water data update: The County’s Master Water Report update is underway, which may be leveraged to provide updated water capacity information for a future HIP update.
 Economic data: It is anticipated that a future HIP update will incorporate economic data. A concurrent effort, led by REACH, is underway which may be leveraged to provide economic/jobs information for a future HIP update.

Item 12.b.

City Council
Discussion and Consideration of Support for the Regional Housing and Infrastructure Plan
July 25, 2023

HIP Component 3–HIP Mapping Tool
The HIP Mapping Tool was created to display the GIS analysis and foster future collaboration. It is an interactive tool, compiling the complex data and inventoried projects from across the region. The mapping tool makes it easier to visualize connections between infrastructure and housing, see project priorities, and quickly access more information about each community’s priority projects and housing efficient areas, within a regional context. This component is completed and included in the draft HIP.

HIP Component 4–Housing Efficiency Analysis
The Housing Efficiency Analysis looks at three efficiency factors: (1) transportation access, (2) water capacity, and (3) wastewater capacity. By analyzing these efficiency factors, housing efficient areas were identified as efficient, potential, or limited. Any infrastructure projects located in an area deemed “efficient” or “potential” moved on to the Infrastructure Prioritization element. All projects located in areas deemed “limited” housing efficiency were removed from further analysis. There were 440 infrastructure projects collected as part of the data inventory. Of those, 18% (80 projects) were located within Housing Efficient Areas (i.e. areas deemed “efficient” or “potential”). This component is completed and included in the draft HIP.

This analysis identifies two projects in Arroyo Grande among the 80 projects located in the Housing Efficient Areas: Central Coast Blue and the El Campo/US 101 interchange.

Central Coast Blue is identified as a project increasing water capacity to support housing.

Construction of a new interchange between El Campo Road and Traffic Way is identified as a project that will improve efficiency and access to future housing.

HIP Component 5–Infrastructure Prioritization
The premise of the HIP is to help accelerate new housing development, so the current prioritization relates solely to the amount of proposed housing that benefits from a community’s infrastructure project. In the future, other factors like jobs-housing balance factors and proposed housing unit type could be considered.

HIP Component 6–Funding Strategies Assessment
SLOCOG contracted with BKF Engineers to conduct a Funding Strategies Assessment.

The Funding Strategies Assessment is currently underway and seeks to identify funding sources that can reasonably implement water, wastewater, and transportation infrastructure priorities included in the HIP. This component is underway, but not completed yet. The HIP’s Appendix C includes a project-by-project detailed breakdown covering funding requirements, potential funding sources, projected grant funding, and residual funding gaps.

Local agencies will be encouraged to review the assessment and pursue funding opportunities for priority infrastructure projects in order to voluntarily contribute to the regional housing effort in a manner that best fits within their agency’s goals. BKF

Item 12.b.

City Council
Discussion and Consideration of Support for the Regional Housing and Infrastructure Plan
July 25, 2023

Engineers was unable to identify potential funding strategies for the two projects in Arroyo Grande.

HIP Component 7–Affordable-by-Design Study
SLOCOG contracted with ECONorthwest to conduct the Affordable-by-Design (“ABD Study”). The ABD Study is currently underway and will evaluate housing affordability characteristics for the seven Cities as well as unincorporated areas in the County. The intent is to identify whether housing units in this region can be built to meet low to moderate income RHNA categories (as rentals or for-purchase) without being income- or rent-restricted. Initial findings include:
 Design helps but does not guarantee affordability.
 Market rate rental housing is close to affordability targets in some areas, but regulatory changes are necessary for most areas of the county.  Only manufactured housing met target price points for new for-sale housing.  Factors that make for-sale housing more affordable in other areas may not translate to this region’s current market.

The ABD Study notes that there are generally four factors that come together in the housing market to produce lower-cost housing, including:

1. Simple design with lower-cost materials;

2. Lower cost locations;

3. Efficient production; and

4. Smaller units with higher density.

Due to the limited findings of housing affordability, the ABD Study includes development of a simple menu of policy options that could help to incentivize ABD units in the region.

The study is included as Appendix B of the HIP.

Recognizing that there is no single solution to the challenge of affordability, the forthcoming menu of policy options will be provided for each local agency to consider.

Local agencies will be encouraged to adopt what fits their community’s needs in order to voluntarily contribute to the regional housing effort in a manner that best fits within their agency’s goals.

Next Steps
On June 7, 2023, the SLOCOG Board of Directors directed SLOCOG staff (via the HIP engagement consultant team, REACH and Koble Collaborative, Inc.) to present this item to member jurisdictions for comment and seek general support of regional collaboration moving forward. The seven City Councils and County Board of Supervisors will receive a presentation on the HIP and provided an opportunity to support the HIP between June 27 - August 8, 2023. SLOCOG Board of Directors will consider adoption of the HIP on August 2, 2023.

Item 12.b.

City Council
Discussion and Consideration of Support for the Regional Housing and Infrastructure Plan
July 25, 2023

Recommended Action
Today’s recommended action signifies a recommitment to the Regional Compact by taking the next step in its implementation, creation of the HIP. Pending discussion today, staff recommends that Council express support for the Regional Housing and Infrastructure Plan, and direct staff to return with a discussion on ways to utilize and implement the Regional Housing and Infrastructure Plan during the General Plan update.

It is worth emphasizing that the recommended action recognizes that there is no “one size fits all” when it comes to this region’s planning and that while local agencies plan for housing, they do not build or develop housing. Therefore, nothing in the HIP mandates action by any of the cities or the County; it simply offers voluntary opportunities for action that could accelerate the development of needed housing in the region. Implementation relies on each agency’s voluntary actions moving forward, such as:
 Pursuing funding opportunities identified for a priority infrastructure project to cover funding gaps.
 Implementation of affordable-by-design policies appropriate to each unique community and its needs.
 Consider programmatic changes to improve approval process timelines such as directing staff to identify ways to improve response time for housing project approval or coordinating with other agencies to align and streamline processes.  Consider updating its analysis approach to prioritizing the community’s needed infrastructure projects in order to most impactfully increase housing supply.  Using the HIP to help justify the benefit of a community’s priority infrastructure project towards increasing the region’s future housing supply, making it more competitive in a number of State and Federal funding programs.  SLOCOG and agencies may consider using the HIP as a foundation for negotiating where the region’s housing needs are best met (e.g future RHNA cycle allocations).

Today’s action signifies another milestone on this path to regional collaboration and fulfilling the Regional Compact, which was adopted by Council by on March 10, 2020. (Attachment 2).

Future of the HIP
Since 2019, this region’s stakeholders have taken incremental steps to build a strategic, unified regional collaboration to address housing and infrastructure needs. These incremental steps led to the draft HIP before the City Council today.

As stated before, the housing, infrastructure, and economic challenges that the region faces are larger than any one entity can solve alone and will require the collective actions of all local partners. The HIP is the first of its kind, and it is intended to be a living document. The HIP’s future implementation and use are wholly dependent on the

Item 12.b.

City Council
Discussion and Consideration of Support for the Regional Housing and Infrastructure Plan
July 25, 2023

voluntary actions of many – the seven Cities, County, SLOCOG, organizations who develop and build housing, as well as local community members.

Pending adoption of the HIP, SLOCOG has stated its commitment to updating the data in the HIP Mapping Tool in sync with the Regional Transportation Plan/Sustainable Community Strategies development’s public processes, using the HIP as a factor in future grant programming cycles, and leveraging the HIP as a foundational tool during the next RHNA cycle.

As previously stated, the HIP offers tools and information related to strategic actions and priorities that can make the largest impact on accelerating housing supply. It is recommended that the City Council express support for the voluntary actions encouraged by the HIP and look to implement these actions when consistent with the vision and the City’s goals. Through these voluntary actions, the City, along with other key stakeholders, can contribute to fulfilling the Regional Compact goals and creating a more vibrant and livable region.

ALTERNATIVES:

The following alternatives are provided for the Council’s consideration:

1. Support the implementation of the HIP and direct staff to return with a discussion on ways to utilize and implement the Regional Housing and Infrastructure Plan during the General Plan update;

2. Suggest changes to the implementation of the HIP;

3. Do not support the implementation of the HIP; or

4. Provide other direction to staff.

ADVANTAGES:

The HIP provides the framework for a collaborative approach for addressing barriers to housing. Implementation of the HIP is intended to accelerate housing production to address the regions’ growing housing and infrastructure needs.

DISADVANTAGES:

None identified.

ENVIRONMENTAL REVIEW:

No environmental review is required for the discussion item. Future projects to implement the HIP will require environmental review on a case-by case basis.

PUBLIC NOTIFICATION AND COMMENTS:

The Agenda was posted at City Hall and on the City’s website in accordance with Government Code Section 54954.2.

Item 12.b.

City Council
Discussion and Consideration of Support for the Regional Housing and Infrastructure Plan
July 25, 2023

Attachments:

1. Regional Housing and Infrastructure Plan

2. City Council Resolution 4972

ATTACHMENT 1

1 | HIP
The San Luis Obispo Council of Governments (SLOCOG) prepared the Regional Housing & Infrastructure Plan for the County of San Luis Obispo to fulfill the terms of the Senate Bill 2 grant program. SLOCOG would like to thank those who helped develop this strategic planning tool between 2022-2023.

SLOCOG Board HIP Steering Committee
• Debbie Arnold, County District 5 Supervisor
• Andy Pease, City of San Luis Obispo Council Member
• John Peschong, County District 1 Supervisor
• Bruce Gibson, County District 2 Supervisor
• Dawn Ortiz Legg, County District 3 Supervisor
• Jimmy Paulding, County District 4 Supervisor
• Jim Guthrie, Arroyo Grande Council Member
• Heather Moreno, Atascadero Mayor
• Daniel Rushing, Grover Beach Council Member
• Carla Wixom, Morro Bay Mayor
• Fred Strong, Paso Robles Council Member
• Ed Waage, Pismo Beach Mayor
• Scott Eades, Caltrans District 5 Director
• Matthew Bronson, Grover Beach City Manager
• Heather Moreno, Atascadero Mayor
• Andy Pease, City of San Luis Obispo Council
Member
• Trevor Keith, County of San Luis Obispo
• Aaryn Abbott, Abbott | Reed
• Jeff Eckles, San Luis Obispo County Housing
Trust Fund
• Courtney Howard, SLO Flood Control & Water
Conservation District
• Anthony Palazzo, Cal Poly
• Jorge Aguilar, Wallace Group
• Lenny Grant, RRM
Housing Advocacy Group Building, Design & Construction
• Ken Trigueiro, Peoples' Self-Help Housing
• Scott Collins, Housing Authority of SLO (HASLO)
• David Cooke, Paso Robles Housing Authority
• Jocelyn Brennan, California Association of Realtors
Region 31
• Steve DelMartini, Compass Real Estate
• Jeff Eckles, San Luis Obispo County Housing Trust
Fund
• Nick Rasmussen, Habitat for Humanity
• Lindy Hatcher, HBA of the Central Coast
• Krista Jeffries, YIMBY
• Jim Dantona, SLO Chamber of Commerce
• Kathy McCorry, South County Chamber of Commerce
• Erica Crawford, Morro Bay Chamber of Commerce
• Gina Fitzpatrick, Paso Robles Chamber of Commerce
• Glenn Silloway, League of Women Voters
• Rachel Kovesdi, Kovesdi Consulting
• Abbott | Reed Inc.
• Covelop
• Specialty Construction
• Wallace Group
• The HRM Corp.
• Ten Over Studio
• People's Self-Help Housing
• RRM Design Group
• Vivian Hanover Ventures Real Estate
• HBA of the Central Coast
• First American Title Company, San Luis Obispo
• Kovesdi Consulting
• Guaranteed Rate
• Omni Design Group
• RRM Design Group
• Midland Pacific Homes
• Z Villages Management and Development
• NKT Commercial
• Coastal Community Builders
• Cal Coastal Properties
• Shea Homes

2 | HIP
City & County Managers Housing Action Team
• John Nilon, County of SLO
• Rebecca Campbell, County of SLO
• Whitney McDonald, Arroyo Grande
• Matthew Bronson, Grover Beach
• Greg Carpenter, Morro Bay
• Sarah Johnson-Rios, Morro Bay
• Ty Lewis, Paso Robles
• Derek Johnson, City of San Luis Obispo
• Scott Collins, Morro Bay
• Wade Horton, County of SLO
• Rachelle Rickard, Atascadero
• James Lewis, Pismo Beach
• Andrew Perez, Arroyo Grande
• Ani Garibyan, County of SLO
• Cory Hanh, Pismo Beach
• Darcy Delgado, Paso Robles
• Katie Banister, Paso Robles
• Kelly Gleason, Atascadero
• Kyle Bell, City of SLO
• Megan Martin, Grover Beach
• Nancy Hubbard, Morro Bay
• Phil Dunsmore, Atascadero
• Rafael Castillo, Grover Beach
• Teresa McClish, City of SLO
• Scot Graham, Morro Bay
• Bruce Buckingham, Grover Beach
SLOCOG Staff
• Pete Rodgers, Executive Director
• James Worthley, Planning Division Chief
• Sara Sanders, HIP Project Manager
• Jayden Hermansen, HIP Mapping Tool Architect
• Ashley Edwards, Grant Administration
• Alan Cazares, Water Projects Data Collection
HIP Consultant Teams
Outreach ECONorthwest BFK Engineering
• Carolyn Berg, Koble Collaborative
• Michael Foote, REACH
• Russ Levanway, REACH
• Melissa James, REACH
• Becky Hewitt
• Emmanuel Lopez
• Rasik Hussain
• Jamil Ditter
• Chelsiah Scouras
• Marley Mueller
• Doug Fleming
The Signatories of the 2020 Regional Housing Compact
County Board of Supervisors, 7 City Councils, and the SLOCOG Board

3 | HIP

CONTENTS
HIP Summary.....................................................................................................................................................5 Data and Project Inventory ............................................................................................................................7 Housing.......................................................................................................................................................8 Water & Wastewater ...............................................................................................................................9 Transportation..........................................................................................................................................9 Bonus Layers.............................................................................................................................................9 Housing Efficiency Analysis.......................................................................................................................... 10 HIP Mapping Tool .......................................................................................................................................... 13 Affordable-By-Design Study ........................................................................................................................ 14 Funding Strategies Assessment................................................................................................................. 15 Housing Highlights ........................................................................................................................................ 15 Stakeholder Engagement Strategy............................................................................................................ 15 Prioritization Considerations ...................................................................................................................... 17 Infrastructure Prioritization..................................................................................................................... 17 Future Data Considerations.................................................................................................................... 18 Conclusion....................................................................................................................................................... 20 Appendix.......................................................................................................................................................... 20 Appendix A: Draft Affordable-by-Design Study .................................................................................. 20 Appendix B: Draft Funding Strategies Assessment........................................................................... 20 Appendix C: Draft Housing Highlights .................................................................................................. 20 Appendix D: 2023 HIP Projects.............................................................................................................. 20 Appendix E: Regional Compact & Housing Element Regional Chapter........................................ 20

4 | HIP

FIGURES
Figure 1: HIP Toolkit.........................................................................................................................................6 Figure 2: Data Inventory Sources..................................................................................................................8 Figure 3: HIP Mapping Process .................................................................................................................. 10 Figure 4: HIP Analysis Process.................................................................................................................... 11 Figure 5: Draft HIP List Summary............................................................................................................... 11 Figure 6: HIP Projects by Community ....................................................................................................... 12 Figure 7: HIP Projects by Subregion.......................................................................................................... 13 Figure 8: HIP Mapping Tool ......................................................................................................................... 14 Figure 9: HIP Stakeholder Engagement..................................................................................................... 16 Figure 10: City Council & County Board of Supervisor HIP Schedule................................................ 17 Figure 11: Prioritization Factors ................................................................................................................. 18 Figure 12: Results from Prioritization Exercise....................................................................................... 18 Figure 13: Future Data Considerations by Community ........................................................................ 19 Figure 14: Future Data Considerations by Subregion........................................................................... 20

5 | HIP

HIP SUMMARY
The Regional Housing & Infrastructure Plan (HIP) is a planning toolkit created collaboratively by the seven Cities, County of San Luis Obispo, and SLOCOG in response to the region’s growing housing and infrastructure shortage. The HIP inventories infrastructure barriers to housing, identifies available grant funding options to implement infrastructure needs, and develops foundational information for the future 2027 Regional Housing Needs Assessment (RHNA).

In 2018, the County of San Luis Obispo recognized the need to work regionally in solving the critical shortage of infrastructure resources and housing attainability in San Luis Obispo County. This challenge is larger than any one jurisdiction can solve alone. The HIP in no way removes land use authority from local jurisdictions; rather, it reflects each community’s relevant, long-term plans in one regional tool to inform our region’s future efforts in addressing the collective economic and social challenges associated with lack of housing supply.

In January 2019, the County Board of Supervisors approved the kickoff of this effort. Since inception, the HIP has been a phased approach with the goals of regional collaboration, strategic action planning, and aligning land use planning documents which were all agreed upon with the unanimous approval of the 2020 Regional Compact.

The Regional Compact (April 2020)
The County, seven cities, and San Luis Obispo Council of Governments (SLOCOG) approved the first major milestone of the phased regional strategy - the San Luis Obispo Countywide Regional Compact. The Regional Compact is an aspirational document that sets the tone and goals for future recommended plans and actions among the local agencies. It establishes a united regional framework to unlock the potential to develop an adequate supply of housing and resilient infrastructure that supports our economic prosperity. It recognizes that people, water, transportation, connectivity, and housing form the foundation of the San Luis Obispo Region’s healthy, livable communities and thriving economic opportunity. In signing the Compact, agencies agreed to develop their “first Regional Infrastructure and Housing Strategic Action Plan.” As stated in the 2020 Compact, the six “goals will underpin the future Regional Infrastructure and Housing Strategic Action Plan, create compatibility among the eight local agencies Housing Elements, and drive future recommendation for collaborative actions.”

6 | HIP
Housing Element Alignment (June 2020)
The County and the seven Cities were each required to update their jurisdiction's Housing Elements to reflect how local communities are planning for the State’s 6th Cycle Regional Housing Needs Allocations through 2028. The Housing Elements were submitted to the Housing and Community Development (HCD) in December 2020. As part of the Housing Element update process, the regional approach section was developed to showcase the ongoing commitment of each agency to the HIP collaboration. This section presents a regional vision and policies focused specifically on fostering regional collaboration to plan and develop housing and supportive infrastructure. It was the first time all eight jurisdictions included a regional approach chapter in their required housing elements.

Regional Housing and Infrastructure Plan (2023)
Put on hold during the Pandemic, the HIP was revived in June 2022 with the establishment of a Memorandum of Understanding between the County of San Luis Obispo and SLOCOG.

SLOCOG became the project manager of the effort. With Senate Bill 2 funding sunsetting in September 2023, the HIP began moving at an accelerated pace. The 2023 regional toolkit is comprised of seven components listed in Figure 1: HIP Toolkit. These components intertwine and build upon one another.

Figure 1: HIP Toolkit
HIP Components Informs
Data and Project Inventory Infrastructure barriers to housing Housing Efficiency Analysis Housing Efficient Areas in HIP HIP Mapping Living strategic analysis tool that show how housing and infrastructure interrelate
Affordable-by-Design Study Menu of possible policies to increase housing attainability Funding Strategies Assessment Funding the region could pursue for HIP projects Housing Highlights Communication tool: Understanding the need for housing, affordability, and opportunities
Prioritization Considerations Further refinement of the prioritization process and data Agencies that supply or operate local infrastructure facilities identified 440 water, wastewater, and transportation infrastructure projects in the HIP project inventory. Of those, 18% (80 projects) were located within Housing Efficient Areas and identified as barriers to housing.

About one quarter of the HIP projects are water related and the remaining are transportation improvements. The estimated total cost for all 80 HIP projects is over one billion dollars. This information can be seen via the interactive HIP Mapping Tool.

BKF Engineering’s HIP Funding Strategies Assessment evaluates the disparity between the cost estimate for each HIP identified project and the anticipated funding that could be obtained

7 | HIP
through various financial mechanisms. The Funding Analysis involved several steps: a funding requirement determination, an evaluation of potential funding sources, an estimation of potential grant funding, and a funding gap calculation. With current grant funding sources, our region can optimistically be awarded around $91 million dollars depending on a local jurisdiction’s interest in pursuing funding for that project. That leaves a funding gap of about $924 million dollars for infrastructure projects needed to support new housing development.

More detail is available in Appendix B: Draft Funding Strategies Assessment.

Our region also wanted to look at the concept of Affordable-by-Design (ABD) and evaluate housing affordability characteristics. The intention of ECONorthwest’s ABD study was to identify if certain units (without financial assistance or deed restrictions) could be considered affordable as either low- or moderate-income units and if so, how to incentivize ABD development. The ABD Study collected rental and for-sale housing data, interviewed local housing developers, created a unit feasibility analysis, collected case study examples, and identified polices that could incentivize ABD units. The ABD Study revealed that the rental market may be able to produce ABD housing in at least some parts of the County and is likely within a range where regulatory changes could make a difference. However, a longer approach is needed on the for-sale side since the gap between market sales prices and the target sales prices for moderate-income households is likely too large to overcome through design and regulatory measures alone. More detail is available in Appendix A: Draft Affordable-by-Design Study.

There have been bright spots of success: thoughtful projects developed with engagement from the community, progress in streamlining processes and allowing new types of housing. There has been increased collaboration between cities as well as between public and private partners. Through these efforts, projects are shifting to balance community character and ranges of affordability. Created by REACH and Koble Collaborative, the HIP Housing Highlights provides a quick look at what is driving the effort, some highlights of progress, and the opportunities ahead. More detail is available in Appendix C: Draft Housing Highlights.

DATA AND PROJECT INVENTORY
The HIP analyzes the transportation, water, and wastewater infrastructure barriers to housing development. Figure 2 provides the source details on the data used in the HIP analysis.

8 | HIP
Figure 2: Data Inventory Sources
Housing
Proposed residential developments within the seven cities and unincorporated county were collected from planning staff in 2021. This data includes specific plans, proposed residential Data Inputs
Transportation
Housing
Water &
Wastewater
Flood Risk
Sensitive Habitat
Open Space
Prime Farmland
Fire Risk
7 Cities & County Planning Staff (Land Use
Model, 2022 Transportation Efficiency Analysis
(TEA), 2020 Housing Elements, Developer
Updates
Data Sources
44 water & wastewater entities surveyed,
Community Improvement Plans reviewed
7 Cities & County Public Works Staff, 2023 RTP
Projects List, 2022 TEA
Federal Emergency Management Agency’s
“Flood Insurance Rate” map
California Department of Fish and Wildlife
“Biogeographic Information Observation
System (BIOS)”
California Protected Areas Database and the
California Conservation Easement Database,
2023
Farmland Mapping and Monitoring Program
(FMMP) 2018
CALFIRE High Fire Hazard Severity Zones
(2023), Local Jurisdictions GIS teams

9 | HIP
and mixed-use projects projected for to be built between now and 2045. Residential development that has been completed or near completion was removed from the HIP analysis.

Water & Wastewater
In early January 2023, SLOCOG staff contacted the 44 water and wastewater agencies found in the 2021 Regional Water Infrastructure Resiliency Plan. Five initial questions were asked to the agencies:

1. Is your agency fulfilling its water/wastewater service demand?

2. Do you have capacity to serve additional housing units?

3. Is your agency experiencing any infrastructure limitations or does it have any infrastructure needs?

4. Have they been planned for?

5. Is there a cost estimate for these improvements?
The data collected includes the findings of the 2021 Regional Water Infrastructure Resiliency Plan, agency responses, local capital improvement project lists, and information from the County of San Luis Obispo’s Water Team. Water and wastewater service districts were used as water boundaries. Detailed GIS based data from these agencies is limited and water capacity data will be informed by the County’s Master Water Report Update. However, infrastructure projects, estimated costs, and timing were all collected. In 2023, forty-five water and wastewater projects were collected from the agencies.

Transportation
Transportation infrastructure was studied in the Transportation Efficiency Analysis (TEA) which the SLOCOG Board approved in April 2022. The TEA identified transportation barriers to housing production which resulted in a list of transportation projects that were prioritized as either land use necessitated or land use beneficial. Land use necessitated projects were transportation projects required for new housing development. These projects are considered TEA priority projects because they are needed to accelerate housing development. Land use beneficial projects are transportation projects that are not required for housing development but improve the transportation efficiency of an area. Of the 350+ transportation investments contained within in the 2023 Regional Transportation Plan (RTP), 64 transportation investments were identified as TEA projects. The San Luis Obispo Regional Transit Authority (RTA) provided details on transit projects and additional improvements needed to best serve additional housing development. The transportation infrastructure list was further refined in the HIP analysis and prioritized differently.

Bonus Layers
The HIP analysis provides the data that connects infrastructure and housing on a regional scale for the first time. The 2023 effort is also the first phase of the analysis. When planning for housing, land conditions are carefully considered. To provide a fuller picture, flood hazard,

10 | HIP
sensitive habitat, open space, prime farmland, and fire hazard severity data were included as additional reference information. These were not used to remove infrastructure projects from the HIP list but are there to provide additional context.

HOUSING EFFICIENCY ANALYSIS
The Housing Infrastructure Analysis looks at three efficiency factors: transportation access, water capacity, and wastewater capacity. By combining the three efficiency factors, housing efficient areas were identified. This is graphically represented in Figure 3: HIP Mapping Process.

Any infrastructure projects located in the “efficient” or “potential” mapped areas moved on to the prioritization phase. All areas and projects that were considered “limited” were removed from further analysis. The HIP in no way removes land use authority from local jurisdictions or changes zoning of an area. The Communities of Shandon, Avila Beach, and Cambria were removed from HIP analysis since they did not meet the efficiency criteria.

Figure 3: HIP Mapping Process
There were 440 infrastructure projects collected as part of the data inventory. Of those, 18% (80 projects) were located within a Housing Efficient Area. The 80 projects moved on to the prioritization phase. The flow of the analysis can be seen in Figure 4: HIP Analysis Process.

11 | HIP
Figure 4: HIP Analysis Process
The draft HIP list contains 80 infrastructure projects with an estimated cost of more than one billion dollars in need. As seen in Figure 5: Draft HIP List Summary, one quarter of the needed infrastructure investments are water-related (supply & wastewater).

Figure 5: Draft HIP List Summary
Estimate
($ millions) Projects
Total Estimate $ 1,015 80
WATER $ 396 21
TRANSPORTATION $ 618 59
WATER
$396M

TRANSPORTATION
$618M

LIMITED
Missing 2 of the 3
efficiency factors –
limited capacity for
housing acceleration
Include any Infrastructure
Needs in HIP
Future Add-ins:
• Job clusters data
• Master Water Report data
• Transportation Access
Factors:
• 1 mile from interchange
• ½ mile from a bike way
• ½ mile from bus stop
• Has water capacity
• Has wastewater capacity

EFFICIENT POTENTIAL
Future Add-ins:
• Job clusters data
• Master Water Report
data
Missing 1 of the 3
efficiency factors
Housing Efficient Areas (HEA) Analysis
Considers 3 efficiency factors: (1) transportation access, (2) water capacity, (3) wastewater capacity HIP Projects
Include any
infrastructure needs
that would help make
area efficient

12 | HIP
Figure 5: HIP Projects by Community breaks down the total number of HIP projects and the total estimated investment needed by community. Among the 80 total projects, three are listed as multijurisdictional projects including Central Coast Blue, the Regional Transit Authority Cashless Fare System Conversion, and the North County Transit Charging Facility. In Figure 6, these are listed as a separate row and are not included individually in the "HIP Projects" column for each community. However, multijurisdictional project costs are included in the community's total investment needed.

Figure 6: HIP Projects by Community
Community HIP
Projects
Total Estimated
Investment
Needed ($
millions)
Multijurisdictional* 3 $ 95
Arroyo Grande 1 $ 136
Atascadero 4 $ 112
Grover Beach 4 $ 54
Morro Bay 1 $ 22
Paso Robles 17 $ 184
Pismo Beach $ 18
San Luis Obispo 26 $ 267
County 22 $ 172
Cayucos 2 $ 8
Los Osos 3 $ 15
Nipomo 6 $ 34
Oceano 1 $ 4
San Miguel 1 $ 41
Santa Margarita 1 $ 2
Templeton 7 $ 66
Cal Poly 2 $ 50
Total Projects 80 $ 1,015
Ninety-nine percent of the region’s population lives in four out of five subregions: North County, Central County, North Coast, and South County. The North and Central subregions have most of the HIP projects and combined make up an estimated 81% of the proposed new housing units in the entire region.

13 | HIP
• North Coast (Los Osos, Morro Bay, and Cayucos)
• North County (Santa Margarita, Atascadero, Templeton, Paso Robles, San Miguel) • South County (Pismo Beach, Grover Beach, Arroyo Grande, Oceano, Nipomo) • Central County (San Luis Obispo)
*The Communities of Shandon, Avila Beach, and Cambria were removed from HIP analysis since they did not meet the efficiency criteria.

Figure 7: HIP Projects by Subregion
Subregion Total Proposed
Dwelling Units
HIP
Projects
Total Estimated
Investment Needed ($
millions)
North County

6,540 31 $ 405
Central County

6,171 29 $ 319
North Coast

127 6 $ 45
South County

2,876 13 $ 246
$ 1,015
The complete HIP list can be viewed in Appendix D: HIP Project List.

HIP MAPPING TOOL
The HIP Mapping Tool is an interactive web app that supplements this plan. It was created to illustrate the HIP geographical analysis and support communication and collaboration. The web app includes three pages.

On the Explore page (shown below), users can pan/zoom around the Region to view and click on infrastructure projects. Transportation projects are symbolized with lines and open circles, and water/wastewater projects are symbolized with points. Bonus layers may be added to the map by clicking the map layers icon and opening the "bonus layers" group. Residential projects, symbolized by grey polygons, may also be selected to learn more information.

On the Project List page, users can sort infrastructure projects by water and transportation.

Both lists are collapsible. When a project is selected on the list, the map will zoom to the project. The user may also click on the project on the map to view a pop-up showing the name, description, and estimated cost.

On the "Story" page of the tool, users may scroll through the HIP Storymap. It includes a quick summary of the HIP, the four-step geographic analysis, a timeline, and a link to the draft plan.

14 | HIP
This tool was created using ArcGIS Experience Builder, ArcGIS Pro, ArcGIS Online, and ArcGIS Storymaps. It is in the draft stages and will continue to be developed along with the HIP.

Figure 8: HIP Mapping Tool

AFFORDABLE-BY-DESIGN STUDY
Our region also wanted to look at the concept of Affordable-by-Design (ABD) and evaluate housing affordability characteristics. The intention of ECONorthwest’s ABD study was to see if certain units (without financial assistance or deed restrictions) could be considered affordable as either low- or moderate-income units and if so, how to incentivize ABD development. The ABD Study collected rental and for-sale housing data, interviewed local housing developers, created a unit feasibility analysis, collected case study examples, and identified polices that could incentivize ABD units. The ABD Study revealed that the rental market may be able to produce ABD housing in at least some parts of the County and is likely within a range where regulatory changes could make a difference. However, a longer approach is needed on the forsale side since the gap between market sales prices and the target sales prices for moderateincome households is likely too large to overcome through design and regulatory measures alone. More detail is available in Appendix A: Draft Affordable-by-Design Study.

Map Layers

15 | HIP

FUNDING STRATEGIES ASSESSMENT
BKF Engineering’s HIP Funding Strategies Assessment evaluates the disparity between the cost estimate for each HIP identified project and the anticipated funding that could be obtained through various financial mechanisms. The Funding Analysis involved several steps: a funding requirement determination, an evaluation of potential funding sources, an estimation of potential grant funding, and a funding gap calculation. With current grant funding sources, our region can optimistically be awarded around $91 million dollars depending on a local jurisdiction’s interest in pursuing funding for that project. That leaves a funding gap of about $924 million dollars for infrastructure projects needed for housing development. More detail is available in Appendix B: Draft Funding Strategies Assessment.

HOUSING HIGHLIGHTS
There have been bright spots of success: thoughtful projects developed with engagement from the community, progress in streamlining processes and allowing new types of housing. There has been increased collaboration between cities as well as between public and private partners. Through these efforts, projects are shifting to balance community character and ranges of affordability. Created by REACH and Koble Collaborative, the HIP Housing Highlights provides a quick look at what is driving the effort, some highlights of progress, and the opportunities ahead. More detail is available in Appendix C: Draft Housing Highlights.

STAKEHOLDER ENGAGEMENT STRATEGY
The HIP engagement strategy established four outreach objectives:
• Foster ongoing collaboration and buy-in among private and public stakeholders. • Remind government/elected officials of the Regional Compact and the motives behind it to lay groundwork for their commitment to the 2023 regional HIP. • Build public sentiment in support of solutions and regional planning efforts related to HIP.
• Support effective coordination with and communication among SLOCOG, HIP consultants and the Comprehensive Economic Development Strategy (CEDS) teams.

The San Luis Obispo region has strategic goals for the future of housing and infrastructure, but they can only be achieved through the decisions and actions of organizations and stakeholders.

The stakeholder meetings are designed to have honest conversations about what each organization can and needs to do to realize those goals. Figure 9 depicts the timeline and amount of engagement that done during the 2023 HIP.

16 | HIP
Figure 9: HIP Stakeholder Engagement
The following list are the key stakeholder groups engaged – totaling approximately 150 individuals that participated during the HIP development process in January - July 2023:

Regional Managers/ Key Staff: A key driving force behind developing this plan has been regional leadership, including eight City Managers, County Administrative Officer, SLOCOG Executive Director (and key directors from their organizations).

Building & Development Cluster: Leaders in the building and development industry that convene quarterly with the goal of regional coordination focused on aligning housing and infrastructure needs to create a strong local economy.

Housing Advocacy Group: Organizations and individuals that have significant influence in the community, with representation from the non-profit builders, local chambers of commerce and various advocate organizations.

Housing Action Team: Existing work group made up of planning/ community development staff from Cities, County, and SLOCOG.

Community Stakeholders: The broader community was engaged through public updates to SLOCOG Board as well as through presentations to their Councils and Boards through JuneAugust 2023.

HIP Steering Committee: Formed to oversee the vision for the HIP Outreach Strategy and to bring leaders in each of these areas together, aligning and integrating the various interests that will lead to action on the region’s priorities.

17 | HIP
Elected Officials: Two City Council Members with knowledge of regional differences bring the various perspectives and concerns voiced by their respective constituents for this Steering Committee. The full 40 elected officials within the region will have an opportunity to hear about the plan through public updates to SLOCOG Board as well as through presentations of the recommended HIP to their Councils and Boards in Summer 2023.

Figure 10: City Council & County Board of Supervisor HIP Schedule June 27, 2023 City of Morro Bay Council
July 11, 2023 City of San Luis Obispo Council
July 11, 2023 City of Atascadero Council
July 18, 2023 City of Paso Robles Council
July 18, 2023 City of Pismo Beach Council
July 24, 2023 City of Grover Beach Council
July 25, 2023 City of Arroyo Grande Council
August 8, 2023 County Board of Supervisors
At the time of this release (July 14), staff presented the HIP to three City Councils. To-date, Councils have offered rich feedback related to the approach and overall regional strategy.

However, to not over accentuate a few Councils’ comments prior to the remaining Council presentations, key input themes will be presented during the August 2 SLOCOG Board Meeting.

PRIORITIZATION CONSIDERATIONS
Infrastructure Prioritization
Based on input from stakeholders in February & March 2023, the HIP infrastructure projects were prioritized to maximize ability to accelerate housing within housing efficient areas, considering three factors: (1) if project is needed for new housing; (2) benefit/cost (investment cost per additional potential housing units served); and (3) barriers to development. Barriers to development include instances such as a building moratorium. These barriers are outside the controls of the HIP and slow housing development. The prioritization process can be seen in Figure 11: Prioritization Factors.

Infrastructure projects were divided into two lists, water and transportation, and then prioritized. It was concluded that transportation projects, in general, could be built at various stages of housing development. Whereas housing cannot be built without adequate water distribution and collection infrastructure. Each list was sorted by highest benefit/cost and the total funding need for the list was divided by three. The premise of the 2023 HIP is to accelerate housing development, so the vetted prioritization factors relate solely to the total amount of proposed housing. In the future, other factors like jobs-housing balance and proposed housing unit type could be considered.

18 | HIP
Figure 11: Prioritization Factors
Figure 12 provides a summary of prioritization exercise using the 80 HIP projects. These factors were vetted multiple times but as a living document, there is room for continued refinement of the process and data. Currently, there is no funding specifically tied to the 2023 HIP so prioritizing further was unnecessary. However, the identification of the 80 HIP projects (from 440) is a critical first step in linking the region’s efficient housing areas to critical infrastructure projects.

Figure 12: Results from Prioritization Exercise
Estimate
($ Millions) Projects
Estimate for all HIP Projects $ 1,014 80
High $ 348 54
Medium $ 385 10
Low $ 281 16
Future Data Considerations
Creating balanced communities is one of the six 2020 Regional Housing Compact goals. The 2023 Sustainable Communities Strategy defines a jobs-housing balanced community as:

Located in Job Cluster
High Medium
Needed to support
new housing
Limited barriers to
development
Low
Outside barriers to
development that
would likely delay or
prohibit
development
Low Benefit/Cost
Needed to support
new housing
Limited barriers to
development
Located in Jobs Cluster
High Benefit/Cost Moderate Benefit/Cost
Needed to support
new housing
HIP Project Prioritization
Considers: (1) if project is needed for new housing, (2) Benefit/Cost (investment cost per additional potential housing units served), (3) barriers to development

19 | HIP
A community where residents can both live and work. With jobs and housing in close proximity, vehicle trips and commute times reduce and active transportation and transit use increase. These balanced communities also provide a broad mix of housing options to accommodate households with a range of incomes.

As a proactive measure, the jobs-housing balance of communities was analyzed using live/work percentages. A live/work percentage is the total number of employees living and working in the city or community boundaries divided by the total workers living in that boundary. In future iterations of the HIP, jobs-housing balance could be integrated through the live/work percentage and additional job cluster data as mentioned in Figure 4: HIP Analysis Process and Figure 13: Future Data Considerations by Community.

Figure 13: Future Data Considerations by Community
Community
Number of Total
Proposed
Dwelling Units
% of Multifamily units
proposed
Live Work
Percentage
Arroyo Grande 600 18% 14%
Atascadero 722 75% 21%
Grover Beach 624 81% 9%
Morro Bay 120 47% 21%
Paso Robles 4,959 42% 28%
Pismo Beach 297 30% 12%
San Luis Obispo 6,171 58% 41%
County 2,221 25%
Cayucos 7 0% 13%
Los Osos - 0% 11%
Nipomo 1,351 34% 9%
Oceano 4 100% 4%
San Miguel 152 0% 3%
Santa Margarita 514 10% 2%
Templeton 193 19% 12%
Total 15,714
Source: Longitudinal Employer-Household Dynamics (LEHD) 2019, SLOCOG GIS 2021 Figure 13 and Figure 14 are for reference purposes only. This information is included since it relates to goals found in the 2020 Regional Housing Compact, HIP stakeholder interest, and or relates to the 2023 Affordable-by-Design Study. The 2023 Affordable-By-Design Study has

20 | HIP
shown that units within the multi-family category are more aligned units in the low- and moderately priced income categories.

Figure 14: Future Data Considerations by Subregion
Subregion
Number of Total
Proposed
Dwelling Units
% of Multi-family
units proposed
Live Work
Percentage
North County 6,540 42% 40%
Central County 6,171 58% 44%
North Coast 127 44% 27%
South County 2,876 41% 27%
Source: Longitudinal Employer-Household Dynamics (LEHD) 2019, SLOCOG GIS

CONCLUSION
The 2023 HIP is the first planning tool of its kind, and it is intended to be a living document. For the last five years, collaboration has continued to build, and these incremental steps have allowed the region to make progress in addressing the monumental challenges of the housing and infrastructure shortage. Nothing in the HIP mandates any of the Cities, County, or SLOCOG to take certain actions, but rather offers analysis to inform decisions and tools to support our communities moving forward. It is understood that each community is unique and must consider what works for their community while considering how to be a good regional partner.

The 2023 HIP moves the region one step further in a larger and ongoing regional collaborative effort to develop an adequate supply of housing, create resilient infrastructure, and support our economic prosperity.

APPENDIX
Appendix A: Draft Affordable-by-Design Study
Appendix B: Draft Funding Strategies Assessment
Appendix C: Draft Housing Highlights
Appendix D: 2023 HIP Projects
Appendix E: Regional Compact & Housing Element Regional Chapter

Working With the Market:

Understanding and Supporting
Affordable-by-Design Housing
in San Luis Obispo County
Prepared for
San Luis Obispo Council of Governments
July 12, 2023 | PUBLIC REVIEW DRAFT
Should include the ECO
logo and the client /
project logo (attached,
along with branding
guidelines)

Acknowledgements
ECONorthwest prepared this report for the San Luis Obispo Council of Governments (SLOCOG). ECONorthwest and SLOCOG thank those who helped develop the Affordable-byDesign Study.

Housing Action Team
• Andrew Perez, Arroyo Grande
• Ani Garibyan, County of SLO
• Cory Hanh, Pismo Beach
• Darcy Delgado, Paso Robles
• Katie Banister, Paso Robles
• Kelly Gleason, Atascadero
• Kyle Bell, City of SLO
• Megan Martin, Grover Beach
• Nancy Hubbard, Morro Bay
• Phil Dunsmore, Atascadero
• Rafael Castillo, Grover Beach
• Teresa McClish, City of SLO
Local Housing Industry Experts that provided input
• Abbott | Reed Inc.
• Z Villages Management and Development
• Coastal Community Builders
• Ambient Communities
• Midland Pacific Homes
• People’s Self-Help Housing
• Housing Authority of SLO (HASLO)
• Paso Robles Housing Authority
• North San Luis Obispo County Association of
Realtors
• California Association of Realtors Region 31
• Compass Real Estate
• San Luis Obispo County Housing Trust Fund
• Habitat for Humanity
• Home Builders Association
• YIMBY
• SLO Chamber of Commerce
• South County Chamber of Commerce
• Morro Bay Chamber of Commerce
• Paso Robles Chamber of Commerce
• League of Women Voters
• Kovesdi Consulting
• Covelop
• Specialty Construction
• Wallace Group
• The HRM Corp.
• Ten Over Studio
• People's Self-Help Housing
• RRM Design Group
• Vivian Hanover Ventures Real Estate
• California Polytechnic University
• First American Title Company, San Luis Obispo
• Omni Design Group
• Midland Pacific Homes
• NKT Commercial
• San Luis Obispo County Housing Trust Fund
SLOCOG
• Sara Sanders
Consulting Team (ECONorthwest)
• Becky Hewitt
• Emmanuel Lopez
• Rasik Hussain
• Jamil Ditter

Table of Contents

TABLE OF CONTENTS
Executive Summary ................................................................................................................i Introduction ..........................................................................................................................1 Part 1: Understanding ABD Housing in SLO County.................................................................2 Identifying Examples and Characteristics of ABD Housing ................................................................2 Market and Development Feasibility Analysis...............................................................................10 Conclusions on Market and Development Conditions for ABD Housing in SLO County ....................15 Part 2: Supporting ABD Housing in SLO County.....................................................................17 Barriers to ABD Housing ...............................................................................................................17 Potential Policy Measures to Support ABD Housing.......................................................................18 Conclusion...........................................................................................................................32

Regional Housing and Infrastructure Plan: Affordable-by-Design Study i

EXECUTIVE SUMMARY
Purpose
This study, prepared for the San Luis Obispo Council of Governments (SLOCOG) by ECONorthwest, considers what types of housing could be “affordable-by-design” (ABD) in San Luis Obispo County and how jurisdictions in the county could support this type of development. ABD housing is defined for this study as housing that is affordable to low- or moderate-income households (earning less than 120% of area median income [AMI]) without subsidies or price/rent restrictions. ABD housing is one potential component of an overall strategy to meet jurisdictions’ regional housing need allocation (RHNA) targets; this study does not address other strategies to meet housing needs for low- or moderate-income households or to meet housing needs for other income categories.

What housing is, or could be, affordable-by-design in San Luis Obispo County? Based on a review of housing market data from CoStar and Redfin, ECONorthwest identified recent developments within San Luis Obispo (SLO) County that appear to meet the ABD criteria for this study. Few recent market-rate developments (built within the last five years) in SLO County appear to have rents or sales prices that are affordable to households earning less than 120% of AMI.
▪ Rental housing examples: The available data suggests a few newer apartment buildings may meet the affordability criteria for some or all units.1 Among these example apartments, many of the unit types that met the affordability criteria were for smaller units (e.g., relatively small studios and one-bedroom units). In some cases, larger units within the same development did not meet affordability criteria even when smaller units did. The example developments all were three-story walk-up apartments, but other three-story apartment developments built around the same time did not meet the affordability criteria.
▪ For-sale housing examples: The only recently built for-sale housing identified as meeting ABD criteria in SLO County were newer manufactured homes in manufactured home parks.2 Although there have been some recent for-sale housing developments that were intended and marketed as “affordable by design,” their sales prices exceeded the limit set by SLO County for moderate income households. 1 Due to data limitations, some of the identified examples may reflect lower average rents due to rent-restricted units provided to meet inclusionary housing requirements. 2 After accounting for the space rent that these homes would pay in a manufactured home park, even these examples may not all meet affordability criteria for moderate-income households.

Regional Housing and Infrastructure Plan: Affordable-by-Design Study ii ECONorthwest also interviewed several local housing developers. These interviews helped identify barriers to developing ABD housing in SLO County. Several interviewees, upon reviewing the target sales prices, noted that it would be difficult or impossible to meet the sales price targets with any type of new market-rate for-sale housing in SLO County.

ECONorthwest also looked to other regions in California and the United States for examples of market-rate housing developments that offered lower rents or sales prices than typical for that market. This search yielded several examples of developments with small units, simple design and construction, and/or lower-cost locations that allowed them to achieve lower prices or rents than most new construction in their area.

Based on the local and national market research and input from local developers, ECONorthwest selected three illustrative example developments most likely to meet ABD criteria in SLO County for further analysis of how affordability and development feasibility could vary in different parts of SLO County:
▪ A 3-story walk-up apartment with typical unit sizes (roughly 880 sq. ft. per unit on average) and typical site layout for the region
▪ A more compact 3-story walk-up apartment with smaller unit sizes (roughly 620 sq. ft. per unit on average), less parking, and less landscaping/setbacks ▪ A 4-story microunit development with very small units (roughly 300 sq. ft. per unit on average) and no parking
Given local market conditions and developer input, the for-sale examples from other regions were unlikely to be viable or affordable in SLO County and were not further analyzed.

This analysis suggested that microunits can help achieve affordability for moderate-income households in the most expensive parts of the county and could be viable to develop in dense, walkable areas where potential renters would be willing to forego owning a car or having convenient parking. Compact walk-up apartments appear to offer a balance that could be both affordable and potentially feasible in some parts of the county. In lower-cost parts of the county, market rents may be affordable to moderate-income households even for larger units but may not be high enough to cover the cost of new construction. Overall, the rental market may be able to produce ABD housing in at least some parts of the County and is likely within a range where regulatory changes could make a difference. However, on the for-sale side, the gap between market sales prices and the target sales prices for moderate-income households is likely too large to overcome through design and regulatory measures alone.

How can jurisdictions in San Luis Obispo County support affordable-by-design housing? For jurisdictions that identify ABD housing as a way to meet part of their RHNA obligations and local housing needs, there are a variety of ways to facilitate this type of development without providing direct financial subsidy or imposing rent/price limits. Based on stakeholder feedback, ECONorthwest and SLOCOG identified six policy areas for further evaluation:

Regional Housing and Infrastructure Plan: Affordable-by-Design Study iii

1. Objective Design Standards

2. Ministerial Approvals and Streamlined Approval Processes

3. Density Limits and Parking Requirements

4. Zoning Vacant Land for Multifamily Housing

5. Aligning Infrastructure Investments with Land for Multifamily Housing

6. Adjusting Impact Fee Policies or Rate Structures to Incentivize ABD Housing Based on current planning practices among the SLOCOG jurisdictions and research on how other jurisdictions outside SLOCOG have approached these policy areas, ECONorthwest developed recommendations for SLOCOG jurisdictions to consider in support of ABD housing within each of these six policy areas:

Objective Design Standards
▪ Adopt simple objective design standards (ODS): Avoid overly detailed requirements when adopting ODS, and provide flexibility where possible (e.g., through a menu-based approach).
▪ Simplify minor adjustments: Offer a process for minor deviations from the ODS that can still be reviewed by staff.

Ministerial Approvals and Streamlined Approval Processes ▪ Expand eligibility for Ministerial Approvals: For jurisdictions that currently limit availability of ministerial approvals based on the number of units, this threshold could be increased (e.g., to 150 units) or eliminated for multifamily developments in medium and high-density residential zones.
▪ Have staff review projects using ODS: Even if the review is not considered truly ministerial, avoiding having a body accustomed to doing discretionary reviews serve as the approval body for projects subject to ODS could help streamline the process and avoid raising concerns that cannot be addressed.

Density Limits and Parking Requirements
▪ Adjust density limits in high-density residential and mixed-use zones: This could take several different forms:
▪ For density limits expressed in dwelling units per acre, increase the maximum density allowed by-right. Allowing at least 35 units per acre will generally allow for three-story walk-up apartment development, which may meet ABD criteria. Higher densities may be appropriate for downtown areas and mixed-use development. ▪ Use floor area ratio (FAR) or other physical form limits (e.g., height) to regulate the amount of development. This can serve as an incentive for building smaller units. ▪ Use fractional density or a density bonus to encourage smaller units. ▪ Reduce or eliminate parking minimum requirements for smaller units: Require less than one space per unit for small units and/or exempt microunits in downtown or mixed-use areas from parking requirements.

Regional Housing and Infrastructure Plan: Affordable-by-Design Study iv Zoning Vacant Land for Multifamily Housing
▪ Zone vacant buildable sites large enough to accommodate multifamily development:

Zone buildable sites to allow by-right at an appropriate density. Ideally, this would include sites over an acre with access to infrastructure.

Align Infrastructure Investments with Land for Multifamily Housing ▪ Use the ongoing HIP process to prioritize infrastructure investments: Use the HIP process and prioritize investments that can unlock multifamily development in appropriate areas.

Adjusting Impact Fee Policies or Rate Structures to Incentivize ABD Housing ▪ Scale by unit size: Wherever reasonable, adjust impact fees by unit size to reflect lower impacts from smaller units. This could also mean increasing fees for larger units so that the change is revenue neutral.
▪ Defer collection: Allow deferral of the impact fee until occupancy for multifamily development regardless of whether it includes affordable units. ▪ Adjust for infill locations: Set fee rates lower where infrastructure needs are lower due to proximity to existing facilities. This can offset some of the higher cost of building in close-in, more developed areas.

These recommendations should be considered alongside other housing strategies to meet local housing needs and RHNA targets based on each jurisdiction’s needs, market conditions, and existing policy context.

Regional Housing and Infrastructure Plan: Affordable-by-Design Study 1

INTRODUCTION
The intention of the Affordable-by-Design (ABD) Study is to determine whether certain types of market-rate housing units are likely to be affordable to low- or moderate-income households in San Luis Obispo County “by design” and what jurisdictions in San Luis Obispo County can do to support this type of housing. Identifying physical characteristics that are commonly associated with the targeted level(s) of affordability could allow the jurisdictions to count these developments toward RHNA requirements in annual reports to Housing and Community Development (HCD) and align local policies to support this type of housing production.

For the purposes of this study, “affordable by design” is defined as new housing that is not income or rent restricted, but where typical market rents or sales prices would be affordable to low or moderate-income households (earning 50-120% of San Luis Obispo County’s AMI). The study encompasses the seven incorporated Cities and unincorporated San Luis Obispo (SLO) County.

The study included the following components:

Part 1: Understanding ABD Housing in San Luis Obispo County ▪ Identify common physical characteristics for ABD housing based on a review of market data and development examples from SLO County as well as other regions. ▪ Market and financial feasibility analysis to determine whether housing built with the identified physical characteristics would meet ABD criteria and be financially feasible for a market-rate developer to build in the different parts of the county.

Part 2: Supporting ABD housing in San Luis Obispo County ▪ Identification of barriers to ABD development and a range of potential policy measures that could help support ABD housing based on interviews with local housing developers and ECONorthwest’s analysis.
▪ Stakeholder feedback on the study’s findings and on priorities for policy measures to explore further through this study, resulting in selection of six policy measures for further evaluation.
▪ Additional analysis of the selected policy measures, including a survey of current planning practices among the SLOCOG jurisdictions related to these policies and research on how other jurisdictions outside SLOCOG have implemented the selected policy measures.
▪ Draft recommendations for SLOCOG jurisdictions to consider in support of ABD housing.

The balance of this report summarizes the results of this analysis and the recommended policy measures for consideration.

Regional Housing and Infrastructure Plan: Affordable-by-Design Study 2 PART 1: UNDERSTANDING ABD HOUSING IN SLO COUNTY
Identifying Examples and Characteristics of ABD Housing Rent and Sales Price Limits for ABD Housing in SLO County San Luis Obispo County’s published rent and sale price limits by income level define the rent and price range affordable at this income level (see Figure 1).3 Figure 1: San Luis Obispo County’s Rent and Sale Price Limits (May 2022) Source: San Luis Obispo County Department of Planning and Building, Affordable Housing Standards, May 20224
3 The City of San Luis Obispo has its own way of calculating maximum sale prices for its inclusionary housing program, which results in somewhat higher maximum sales prices. However, for consistency across the County, this analysis uses the County’s price limits.
4 “Affordable Housing Standards.” San Luis Obispo County Department of Planning and Building, June 1, 2022. https://www.slocounty.ca.gov/Departments/Planning-Building/Forms-Documents/Housing-Forms-andDocuments/Informational-Documents/Affordable-Housing-Standard-(Post-2009).pdf.

Regional Housing and Infrastructure Plan: Affordable-by-Design Study 3 Examples of ABD Rental Housing
Rental Housing Examples from SLO County
ECONorthwest used data from CoStar, a proprietary market data service, to identify recently constructed (within the last five years) market-rate multifamily rental housing in SLO County where rents appear to meet the rent limits shown in Figure 1 by unit type (number of bedrooms). This search yielded five properties where at least some unit sizes appear to meet moderate-income rent limits.5 Properties were included as examples even if some unit sizes did not meet affordability criteria. These example properties are shown in Figure 2 below, and their characteristics are summarized in Figure 3.

Figure 2: Examples of Rental Housing in SLO County that May Meet or Partially Meet ABD Criteria
Source: CoStar
5 Note that CoStar reports rents on average by unit type and does not separate rents for affordable units from those for market-rate units within mixed-income buildings.

Connect SLO La Plaza
Ramona Gardens Laurel Lane
The Junction

Regional Housing and Infrastructure Plan: Affordable-by-Design Study 4 Figure 3: Characteristics of Rental Housing Examples in SLO County that May Meet or Partially Meet ABD Criteria
Source: ECONorthwest analysis of CoStar data, February 2023.

Connect SLO La Plaza Laurel Lane Ramona
Gardens The Junction
Jurisdiction San Luis
Obispo Atascadero San Luis Obispo Grover Beach San Luis Obispo Land Area (AC) Not Available 1.83 Not Available 0.51 1.58 # Units 78 42 22 19 69
# Stories 3 3 3 3 3
Studio
Affordability
Above
Moderate Moderate N/A Moderate Above Moderate
Studio Unit
Count 45 1 0 1 43
Studio Unit Size 477 sf 534 sf N/A 400 sf 531 sf
1 BR
Affordability Moderate* Moderate Low/ Moderate* Moderate Moderate* 1 BR Unit Count 26 27 1 4 17
1 BR Unit Size 664 sf 721 sf 514 sf 800 sf 568 sf
2 BR
Affordability
Above
Moderate
Above
Moderate Moderate* Moderate Above Moderate
2 BR Unit Count 7 12 3 14 9
2 BR Unit Size 1,032 sf 1,537 sf 877 sf 800 sf 799 sf
3 BR
Affordability N/A Above Moderate
Above
Moderate N/A N/A
3 BR Unit Count 0 2 18 0 0
3 BR Unit Size N/A 2,808 sf 1,288 sf N/A N/A
*CoStar does not isolate market rents in mixed-income buildings. Reported average rents may be artificially low due to some units being below market rate, particularly where inclusionary housing regulations apply.

This analysis suggests that some new apartments offer units that are affordable at moderateincome rents in at least some parts of the County. In communities with inclusionary housing policies, this may be skewed by mixed-income buildings. Among these examples, one-bedroom units were most likely to be affordable and no three-bedroom units met affordability criteria.

Regional Housing and Infrastructure Plan: Affordable-by-Design Study 5 This suggests that even for developments that do include some units affordable to moderateincome households, the largest units are unlikely to meet affordability targets.

A review of the physical characteristics of these developments shows that design plays a role in making them affordable, but it does not guarantee affordability. Most of the examples are three-story buildings, and most have small average unit sizes; however, many other apartments built in the County are also three stories and not all small units are affordable to moderate-income households.

ABD Rental Housing from Other Regions
ECONorthwest looked at examples of other types of rental housing recently developed in other housing markets for housing types that could potentially meet ABD criteria if built in SLO County. The primary type of housing that consistently achieved moderate-income affordability (or below) in similar housing markets is microunits. These typically have:
▪ Unit sizes between 150 and 350 sq. ft. with individual kitchenettes and shared kitchens6 ▪ No vehicle parking but onsite bike storage
▪ Generally four or more stories, high density, with minimal setbacks/landscaping ▪ Highly walkable and desirable locations
Figure 4: Examples of Microunit Developments
Image credits: Alcove PDX (https://pdxalcove.com); Stenberg Hart (https://www.steinberghart.com/design/projects/mccadden-place-micro-units/) 6 Because of the shared kitchens, groups of four to eight microunits are often regulated as a single-dwelling unit under the zoning codes where these developments have been permitted.

Regional Housing and Infrastructure Plan: Affordable-by-Design Study 6 Examples of ABD For-Sale Housing
ABD For-Sale Housing Examples from SLO County
ECONorthwest used sales transaction data from Redfin to identify sales within the last year of recently constructed housing units that sold for less than the sales price threshold listed in Figure 1. Only manufactured housing in manufactured home parks met these target price points (see examples in Figure 5).
7 Figure 5: Examples of ABD For-Sale Housing in SLO County Source: Redfin

A few small detached homes (such as the examples shown in Figure 6) came close to meeting the County’s affordability standards and would meet the County’s workforce housing price limits, but they exceeded the County’s moderate-income sales price limits.

Figure 6: Examples of Small Detached Homes Close to ABD Sales Limits Source: Redfin
7 Because these manufactured homes must pay space rent for the manufactured home park, when this space rent is accounted for, even these units may not be affordable for moderate-income households.

Regional Housing and Infrastructure Plan: Affordable-by-Design Study 7 ABD For-Sale Housing from Other Regions
Looking at examples from other regions, ECONorthwest identified three types of for-sale housing that tended to offer the lowest price points in other relatively high-cost housing markets. These include the following:
▪ Very small detached units (roughly 350-800 sq. ft.) with shared yards and clustered parking. The smallest units may be affordable at close to 120% of AMI in that market, but the most comparable units in SLO County exceed the target price. It is possible that the smallest detached units (e.g., under 800 sq. ft.) could meet the affordability targets in some cases.

Figure 7: Examples of Very Small Detached Units from Other Markets Image credits: Redfin8; Connect Architecture9; South Park Cottages10 ▪ Small condo units (roughly 325-600 sq. ft.) with little or no onsite parking. These can be affordable for moderate-income households in portions of some high-cost regions, but may not be viable in SLO County’s market given the small size and lack of parking.

Figure 8: Examples of Small Condo Units from Other Markets Image Credits: Portland’s Best Real Estate11; Redfin12
8 https://www.redfin.com/OR/Bend/61301-Benham-Rd-97702/unit-1/home/167021238 9 https://www.connectarchitecture.us/posh-pockets
10 https://southparkcottages.com/
11 https://www.portlandsbestrealestate.com/division-43-studio-condo 12 https://www.redfin.com/OR/Portland/7360-N-Atlantic-Ave-97217/unit-3/home/185141446

Regional Housing and Infrastructure Plan: Affordable-by-Design Study 8 ▪ Simple condo development with simple design, medium-sized units (roughly 600-1000 sq. ft.), little or no onsite parking, and few shared amenities. These units can be affordable to moderate-income households in portions of some high-cost regions but may not be viable in SLO County’s market given high development costs.

Figure 9: Examples of Simple Condo Developments from Other Markets Image Credits: Redfin13
▪ Small town house units (roughly 1,000-1,600 sq. ft.). These can be affordable to moderate-income households in portions of some high-cost regions, but comparable units in SLO County exceed the target price.

Figure 10: Examples of Small Town House Units from Other Markets Image Credits: Redfin14
13 https://www.redfin.com/CO/Federal-Heights/1401-W-85th-Ave-80260/unit-B101/home/176995897; https://www.redfin.com/OR/Portland/1801-N-Rosa-Parks-Way-97217/unit-303/home/172577477; https://www.redfin.com/OR/Portland/5025-N-Minnesota-Ave-97217/unit-102/home/185246763 14 https://www.redfin.com/CO/Denver/2206-E-38th-Ave-80205/home/185222737; https://www.redfin.com/OR/Portland/7308-NE-11th-Ave-97211/home/185109359

Regional Housing and Infrastructure Plan: Affordable-by-Design Study 9 ▪ Smaller single-family detached homes (“starter homes”) that are typically threebedroom units roughly 1,200-1,500 sq. ft. These can be affordable to moderate-income households in moderate-cost areas (e.g., California’s Central Valley), but comparable units in SLO County exceed the target price.

Figure 11: Examples of Small Single-Family Detached Homes from Other Markets Image Credits: Redfin15
Based on developer interviews and review of market data from SLO County, none of the examples of ABD for-sale housing from other markets seemed likely to be viable as a way to deliver ABD for-sale housing in SLO County, and they were not further evaluated.

Overall, the data suggests that SLO County market conditions are unlikely to support new forsale housing at prices affordable to moderate-income households, with the possible exception of manufactured housing in parks. A few developments have attempted to produce ABD forsale housing, but even with very small homes, prices are still too high for the moderate-income target price range. In addition, even if jurisdictions were to change policies, factors that make for-sale housing more affordable in other areas may not translate to the SLO County market (e.g., lower land cost, no parking, few amenities, microunits). 15 https://www.redfin.com/CA/King-City/611-Cecily-St-93930/home/167240703; https://www.redfin.com/CA/Shafter/9710-Amberdale-Way-93263/home/178358767

Regional Housing and Infrastructure Plan: Affordable-by-Design Study 10 Market and Development Feasibility Analysis
Potential ABD Housing Types Selected for Analysis
Based on the review of ABD examples from SLO County and other market areas, ECONorthwest selected three development “prototypes” that typify the physical characteristics that showed potential viability and affordability to moderate-income households in the San Luis Obispo market:
▪ A 3-story walk-up apartment with typical unit sizes and site layout for the region ▪ A more compact 3-story walk-up apartment with smaller unit sizes, less parking, and less landscaping/setbacks
▪ A 4-story microunit development with very small units and no parking Additional characteristics and physical features assumed for these prototypes are listed in Figure 12.

Figure 12: ABD Prototype Assumptions
Source: ECONorthwest
Description 3-story walkup - standard
3-story walk-up -
compact
4-story
microunits
Site Size (sf) 65,340 65,340 8,000
# of Units 51 91 71
Density (DU/Ac) 34.0 60.7 386.6
Parking location surface surface none
Parking ratio 1.54 1.00 0.00
Unit Mix (% of units)
Studio 5% 30% 100%
1-bed 40% 40% 0%
2-bed 50% 30% 0%
3-bed 10% 0% 0%
Unit Size (net sf)
Studio 500 425 300
1-bed 675 575
2-bed 1,000 875
3-bed 1,350
Average Unit Size 880 620 300
Note: This analysis treats each microunit as its own unit, although under many codes they would not be considered stand-alone units because of their shared kitchens.

Regional Housing and Infrastructure Plan: Affordable-by-Design Study 11 Market Conditions
While the affordability targets and AMI are set countywide, the market conditions vary across the county. The analysis addresses this by dividing the county into different market areas for purposes of the analysis (see Figure 13). The analysis focuses on four market areas:
▪ North Coast (Los Osos, Morro Bay, Cayucos, Cambria, San Simeon) ▪ North County (Santa Margarita, Atascadero, Templeton, Paso Robles, San Miguel) ▪ South County (Pismo Beach, Grover Beach, Arroyo Grande, Oceano, Nipomo) ▪ Central County (San Luis Obispo, Avila Beach)
East County is not included in the analysis because there is little development or development opportunity in that area.

Figure 13: SLO County Market Areas
ECONorthwest estimated the market rents in each market area for each prototype based on the most comparable developments and adjusted to reflect differences between market areas and prototypes. The estimated market rents for each area are listed in Figure 14, along with the relevant moderate-income rent limit by unit type.

Regional Housing and Infrastructure Plan: Affordable-by-Design Study 12 Figure 14: Estimated Market Rents by Market Area and Prototype Source: ECONorthwest analysis based on CoStar data; San Luis Obispo County Department of Planning and Building, Affordable Housing Standards, May 202216
Region -
Bedroom Size
3-story walkup - standard3-story walkup - compact4-story microunits
ModerateIncome Rent
Limit
Central County $2,750 $2,327 $1,470 $0
Studio $2,250 $2,083 $1,470 $2,047
1-bed $2,430 $2,156 - $2,329
2-bed $2,950 $2,800 - $2,597
3-bed $3,375 - - $2,877
North Coast $1,925 $1,513 $956 $0
Studio $1,575 $1,354 $956 $2,047
1-bed $1,701 $1,402 - $2,329
2-bed $2,065 $1,820 - $2,597
3-bed $2,363 - - $2,877
North County $2,465 $1,972 $1,176 $0
Studio $1,800 $1,594 $1,176 $2,047
1-bed $2,147 $1,898 - $2,329
2-bed $2,650 $2,450 - $2,597
3-bed $3,240 - - $2,877
South County $2,289 $1,747 $956 $0
Studio $1,450 $1,275 $956 $2,047
1-bed $1,856 $1,639 - $2,329
2-bed $2,600 $2,363 - $2,597
3-bed $3,038 - - $2,877
Note: market rents reflect 2023 market conditions with an estimated 3% annual escalation prior to opening.

These rents are shown graphically in comparison to the moderate-income threshold in Figure

15. 16
“Affordable Housing Standards.” San Luis Obispo County Department of Planning and Building, June 1, 2022. https://www.slocounty.ca.gov/Departments/Planning-Building/Forms-Documents/Housing-Forms-andDocuments/Informational-Documents/Affordable-Housing-Standard-(Post-2009).pdf

Regional Housing and Infrastructure Plan: Affordable-by-Design Study 13 Figure 15: Estimated Market Rents by Market Area and Prototype Compared to Moderate-Income Rent Limit
Source: ECONorthwest analysis based on CoStar data; San Luis Obispo County Department of Planning and Building, Affordable Housing Standards, May 202217
Figure 15 displays the expected rents for each potential ABD housing type against the rent limits for moderate housing. If a bar is above the blue line, that means the monthly rent is predicted to be above the moderate-income rent limit. This highlights that while many of the prototypes are estimated to offer market rents below the moderate-income threshold, this may not be the case for all prototypes/unit sizes in all market areas.

Development Feasibility Analysis
ECONorthwest’s financial feasibility analysis uses a metric called “return on cost” (ROC), which reflects the income potential of the completed development divided by the total cost of development.18 This ratio is often used as an initial indicator of development feasibility for rental developments, as it provides a preliminary indication of whether the completed property will provide competitive financial returns that could attract investors and meet loan underwriting requirements. Because both lenders and investors will expect higher returns for riskier investments, market areas that have stronger demand fundamentals will likely have a lower threshold for ROC to make development viable. Thus, the target ROC is assumed to be 17 “Affordable Housing Standards.” San Luis Obispo County Department of Planning and Building, June 1, 2022. https://www.slocounty.ca.gov/Departments/Planning-Building/Forms-Documents/Housing-Forms-andDocuments/Informational-Documents/Affordable-Housing-Standard-(Post-2009).pdf 18 Net operating income (NOI), the revenue after accounting for vacancy and operating expenses.

Regional Housing and Infrastructure Plan: Affordable-by-Design Study 14 higher in smaller markets (North County and South County) than in Central County (North County is estimated to fall between these bookends).

ECONorthwest used cost information calibrated based on interviews with local developers and research on average local fee amounts in SLO County to estimate development costs by prototype.

Figure 16: Estimated Return on Cost by Prototype and Market Area Source: ECONorthwest analysis
Because costs and market conditions can vary substantially between sites even within the same market area and for the same prototype, these results should be taken as a general indication of the relative feasibility of different prototypes, not as an absolute indication that a given prototype will consistently be feasible or infeasible in a given area. To account for the inherent uncertainties associated with this type of generalized analysis, ECONorthwest summarized the results based on how likely they indicate a given prototype is to meet affordability and feasibility criteria. The most feasible housing types and locations are 4-story microunits in Central County and compact 3-story walk-ups in North County, as shown in Figure 17.

Regional Housing and Infrastructure Plan: Affordable-by-Design Study 15 Figure 17: Summary of Affordability and Feasibility Results by Prototype and Market Area
Source: ECONorthwest analysis
Conclusions on Market and Development Conditions for ABD Housing in SLO County
The key takeaways from this analysis are summarized below by market area.

Central County
• Smaller units
help achieve
affordability
• Market likely to
support
feasibility
North Coast
• Market rents
provide
affordability
• Feasibility is
difficult
North County
• Market rents
likely affordable
except for
largest units
• Market likely to
support except
for the smallest
units
South County
• Market rents
likely affordable
except for
largest units
• Market support
is borderline

Regional Housing and Infrastructure Plan: Affordable-by-Design Study 16 Overall, it appears that the rental market is close to being able to achieve ABD housing production in at least some parts of the County and is likely within a range where regulatory changes could make a difference. While ABD housing may not require subsidy, it may not be able to absorb inclusionary zoning requirements at the targeted moderate-income rents.

Affordability through smaller unit sizes may not meet needs of larger households, and market rents may not stay within target affordability range over time, but delivering more lower-cost units to the market can help maintain the affordability of market-rate housing over time, and smaller households may benefit from greater availability of small units.

In the for-sale housing market, prices are too far above the moderate-income affordability level for the market to deliver new ABD for-sale housing with regulatory changes alone. Increasing housing production overall can help bring supply and demand into balance and potentially make ABD achievable over the longer term.

Regional Housing and Infrastructure Plan: Affordable-by-Design Study 17 PART 2: SUPPORTING ABD HOUSING IN SLO COUNTY
Barriers to ABD Housing
To understand how to support ABD housing, it is essential to understand what makes it possible for the market to produce lower-cost housing and how the public sector can influence this. These factors are illustrated in Figure 18 and Figure 19.

Figure 18: Factors that Allow the Market to Produce Lower-Cost Housing Source: ECONorthwest
Figure 19: Public Sector Influence on Market's Ability to Produce Lower-Cost Housing Source: ECONorthwest

Regional Housing and Infrastructure Plan: Affordable-by-Design Study 18 In sum, it takes a confluence of multiple factors for the market to produce lower-cost housing, and local regulations and fees can have an impact on the market’s ability to achieve those factors.

Looking specifically at SLO County, ECONorthwest’s interviews with local housing developers, market research, and development feasibility analysis suggested the following barriers to ABD housing:

Market Barriers
▪ Land cost
▪ Demand for high-end housing
▪ Construction costs
▪ Demand for parking
Regulatory Barriers
▪ Discretionary review
▪ Density caps
▪ Minimum unit sizes
▪ Parking requirements that exceed market demand
▪ Impact fees, inclusionary zoning
▪ Required infrastructure improvements
Potential Policy Measures to Support ABD Housing
Overview
ECONorthwest identified a range of potential policy measures jurisdictions could consider to support development of ABD housing. These generally fall under the following categories:
▪ Streamline development review and permitting.
▪ Align development standards to support ABD housing.
▪ Allow ABD housing in cost-effective locations.
▪ Adjust impact fee rates and policies to incentivize ABD housing.

Based on feedback from multiple different stakeholder groups, including home builders, market-rate housing developers, affordable housing providers, other housing advocates, and local planners, SLOCOG and ECONorthwest identified the following six measures for additional research and evaluation:

7. Objective Design Standards

8. Ministerial Approvals and Streamlined Approval Processes

9. Density Limits

10. Zoning Vacant Land for Multifamily Housing

11. Aligning Infrastructure Investments with Land for Multifamily Housing

12. Adjusting Impact Fee Policies or Rate Structures to Incentivize ABD Housing

Regional Housing and Infrastructure Plan: Affordable-by-Design Study 19 Having identified these measures as priorities, ECONorthwest distributed a survey to the planning departments of the eight jurisdictions in SLOCOG—Arroyo Grande, Atascadero, Grover Beach, Morro Bay, Paso Robles, Pismo Beach, City of San Luis Obispo, and County of San Luis Obispo—to gather information on how they currently address these topics. The results of the survey are incorporated into the sections that follow.

Finally, to illustrate how other jurisdictions have approached some of the policy measures highlighted to support ABD housing, ECONorthwest collected information on practices by jurisdictions in California and other states that were recognized as “prohousing.” These examples are also integrated into the following sections.

State Housing Laws and ABD Housing
Many state housing laws aim to remove barriers to developing affordable housing; however, these do not necessarily apply to ABD housing. Figure 20 summarizes how key state laws and recent bills relate to ABD housing as defined for this study.

Figure 20: Summary of State Housing Law Applicability to ABD Housing Source: ECONorthwest research and state laws as noted below Legislation Relevant Eligibility Criteria
(ABD Eligible?)
Benefits for Qualifying
Housing Developments
SB 35 (2018)
ABD not eligible
• At least 10% or 50% of units must be affordable
depending on which income categories
jurisdictions have failed to produce.
• Affordable units must be for less than 80% AMI
only, requires lasting affordability restrictions.
• Jurisdictions that have not met RHNA targets
(applies to most SLOCOG jurisdictions)
• Ministerial approvals
• Objective design standards
(ODS)
SB 330
(2019) and
the Housing
Accountability
Act (HAA)
ABD potentially eligible
• Housing for very low, low-, or moderate-income
households qualifies for additional protections.
• One option is if 100% of units are affordable to
moderate-income (80-120% of AMI) or middleincome (<150% of AMI) households; units for moderate-income households must be affordable
at 100% of AMI.
• Lasting affordability requirements apply only to
units for very low or low-income households
• Locks in regulations and
fees when a preliminary
application is submitted.
• Burden of proof is on the
jurisdiction if denying the
application; limited basis
for denial if application
complies with objective
standards.
• Maximum review timelines
AB 2345
(2020) and
the Density
Bonus Law
ABD not eligible
• Multiple affordability criteria: for-sale housing can qualify if at least 10% of units are affordable to
moderate-income (80-120% of AMI) households.
• Requires lasting affordability restrictions (at least 45 years)
• Increased density, reduced
setbacks, other zoning
modifications
In sum, ABD housing may be eligible for increased protections from being denied or having density reduced under the HAA if it meets the requirements for moderate-income housing, but

Regional Housing and Infrastructure Plan: Affordable-by-Design Study 20 it would not qualify for ministerial approvals, ODS, or zoning concessions under SB 35 or the density bonus law.

Objective Design Standards
Description
Objective design standards (ODS) are defined in California State Law as standards which “involve no personal or subjective judgment by a public official and are uniformly verifiable by reference to an external and uniform benchmark.”
While basic development standards such as lot size requirements are typically objective, many jurisdictions apply design requirements to new housing development that introduce subjectivity, considering compatibility with surrounding structures or otherwise leaving room for interpretation of whether a development has met the requirements through ambiguous language. ODS are often related to building design elements, such as window size and location, roof lines, building articulation, etc. Having objective design standards can streamline the process of getting planning approvals by establishing a common set of expectations for developers and allowing development to avoid lengthy discretionary review processes.

While SB 35 does not apply to ABD housing, as noted above, jurisdictions could potentially offer ABD housing the option to use the same ODS applicable to SB 35–eligible development.

HCD published an objective design standards tool kit for California jurisdictions in 2021 with guidance and examples.
19 Current Practice for SLOCOG Jurisdictions
Only the City of San Luis Obispo and Grover Beach have adopted specific ODS. In the limited time since these standards were adopted, they have been used a few times in Grover Beach but have not yet been used successfully in the City of San Luis Obispo. Grover Beach allows "modification to standards" to respond to site conditions, which may make it easier for development to comply with most of the standards while seeking flexibility where needed. San Luis Obispo County uses only objective basic development and site design standards and does not have building design standards; therefore, all development uses objective development standards. Three additional jurisdictions—Atascadero, Paso Robles, and Morro Bay—are in the process of developing standards. A table of current ODS practices among SLOCOG members is included in Figure 21 below.
19 California HCD, “Approaches and Considerations for Objective Design Standards,” January 2021, https://hcdcagov.app.box.com/s/baznxdyweq6a8txcrb22li0gogqodzz6

Regional Housing and Infrastructure Plan: Affordable-by-Design Study 21 Figure 21: Summary of Responses from SLOCOG Jurisdictions regarding Objective Design Standards
Source: ECONorthwest based on survey of SLOCOG jurisdictions Jurisdiction ODS Status
Eligibility for
ODS
Topics Addressed Usage
of ODS
Atascadero In progress
All multifamily
and mixed-use
developments

TBD N/A
City of San
Luis Obispo
Adopted
(2021)
SB-35 projects
only
Specific building & site design
standards (materials, window
trim, building length, window
placement, roof design,
articulation, landscaping)
None to
date
County of San
Luis Obispo Adopted Not limited
Basic development & site design
standards (no building design
standards)
All
projects
Pismo Beach Not Available N/A N/A N/A
Paso Robles In progress TBD TBD N/A
Morro Bay In progress TBD TBD N/A
Arroyo Grande Not Available N/A N/A N/A
Grover Beach Adopted
(2022)
All singlefamily,
multifamily,
and mixed-use
developments
Site & structure design (façade
articulation, entrances, ground
floor height, transparency,
building orientation, blank walls,
building materials, upper-story
windows, parking and access,
pedestrian circulation, etc.)
Modifications to standards
allowed
A few
highdensity
projects
Other Examples
Sacramento, CA
Sacramento, CA, received the first Prohousing Designation from the California Department of Housing and Community Development in February 2022 for its housing reform efforts. These included establishing objective design standards for infill development of projects with two units or more, including additional dwelling units attached to single-unit housing.

Citrus Heights, CA
Citrus Heights was awarded a Prohousing designation from the State of CA for their use of objective design standards to spur development in their city. The designation was awarded for the city’s efforts to develop the Sunrise Tomorrow Specific Plan, a plan to convert a 100-acre

Regional Housing and Infrastructure Plan: Affordable-by-Design Study 22 mall property to a mixed-use residential property.20 The plan zoned for new uses on the site, including multifamily residential, retail, and hotels, tripling the amount of development allowed on the site and providing the opportunity for 2,200 new units in a city that is 98% built out. The plan also introduced objective design standards for the Sunrise Tomorrow Specific Plan area, which will streamline future development.21 The city is currently experiencing challenges encouraging development on the site because it is owned by six different companies, but it is continuing to work with developers and the community to improve the site.

Oregon Model Development Codes
In Oregon, all “needed housing” (effectively all housing development that is designed to fulfill a housing need rather than a resort or short-term rental purpose) must have the option to be reviewed against only clear and objective standards. Oregon’s Department of Land Conservation and Development (DLCD) publishes a model development code for small cities to facilitate compliance with this and other state requirements and smart growth principles. The model code includes “Community Design Standards” that address building orientation and design as well as site design factors such as access and circulation, parking, and landscaping.

The residential building design standards provide clear and objective standards to address building orientation, articulation, inclusion of certain design features (using a menu approach), and an option to require house plan variety in new subdivisions. While the model code was last updated in 2012, it may provide a useful example for smaller cities considering ODS.22 Oregon’s middle housing model codes, published in 2020, also include clear and objective design standards applicable to middle housing.23
Eugene, OR
A study of multifamily development in Eugene, Oregon, evaluated whether public opposition expressed in a discretionary review process had an impact on development outcomes. It found that although the City allows most multifamily development by-right, 12% of multifamily development projects during the period analyzed (2010-2016) required a land use application.

The land use applications ranged from minor adjustments to site plan reviews to planned development applications. Applications most sought adjustments to building orientation and 20 Murillo, Alicia. “Six California Cities Earn State Prohousing Designation.” hcd.ca.gov. California Department of Housing and Community Development, December 15, 2022. https://www.hcd.ca.gov/about-hcd/newsroom/sixcalifornia-cities-earn-state-prohousing-designation. 21 citrusheights.net. “Sunrise Mall Specific Plan.” City of Citrus Heights, CA. Accessed June 20, 2023. https://www.citrusheights.net/1009/Sunrise-Mall-Specific-Plan. 22 Oregon Department of Land Conservation and Development, Oregon Model Development Code and User's Guide for Small Cities, 3
rd Edition (2012), https://www.oregon.gov/lcd/tgm/pages/model-code.aspx 23 Oregon Department of Land Conservation and Development, Large Cities Middle Housing Model Code, December 2020, https://www.oregon.gov/lcd/UP/Documents/OAR660046%20EXHIBIT%20B%20- %20Large%20Cities%20Middle%20Housing%20Model%20Code%2020201209.pdf

Regional Housing and Infrastructure Plan: Affordable-by-Design Study 23 entrance standards, parking standards, building massing and façade standards, and access/circulation standards. While opponents of the projects raised concerns, including traffic increases, pedestrian safety, and neighborhood character, there was no evidence that these concerns resulted in changes to the development or design for the projects evaluated in the study. The study concluded that offering more flexibility on the standards that most caused challenges could reduce the need for land use applications.24 Preliminary Recommendations
▪ Adopt simple ODS: Avoid overly detailed requirements when adopting ODS and provide flexibility where possible (e.g., through a menu-based approach). ▪ Simplify minor adjustments: Offer a process for minor deviations from the ODS that can still be reviewed by staff.

Ministerial Approvals and Streamlined Approval Processes Description
Ministerial approvals refer to nondiscretionary staff-level approval of development projects.

Robust ministerial approval processes provide a faster process and lower fees for development review. California’s SB 35 requires cities and counties which have failed to meet their RHNA obligations to allow developments that include a certain percentage of affordable units and meet other criteria to proceed through a ministerial review process. 25 24 Seth Thompson, “Public Opposition to Increased Housing Density in Eugene, Oregon: How Opposition to Multifamily Housing Impacts the Built Environment,” University of Oregon Department of Planning, Public Policy, and Management, Masters of Community and Regional Planning, 2018 Professional Project, June 2018. https://scholarsbank.uoregon.edu/xmlui/bitstream/handle/1794/25087/SThompson_ExitProj_Final.pdf?sequence=1 &isAllowed=y
25 At least 50% of the proposed residential units should be affordable to households at 80% of AMI.

The project must net two or more new residential units.

The project must be zoned in the proper parcel and two-thirds of the project must be residential.

The location of the project may not be within a coastal zone, prime farmland, wetlands, a high fire hazard severity zone, hazardous waste site, a delineated earthquake fault zone, a floodplain, a floodway, a community conservation plan area, a habitat for protected species, or under a conservation easement.

The project does not demolish a historic building, a building where housing units have been occupied for the last 10 years, or a building subject to rent control.

The project must meet all objective design standards.

If the project is a private development project, it must pay prevailing wage, and if it is more than 50 units, it must use a skilled and trained workforce.

The project must not involve the subdivision of a parcel that is subject to the California Subdivision Map Act, unless the project pays prevailing wage and receives a low-income housing tax credit or uses a skilled and trained workforce.

Regional Housing and Infrastructure Plan: Affordable-by-Design Study 24 Current Practice for SLOCOG Jurisdictions
Most of the cities offered some form of ministerial approval for developers; two offered SB 35 ministerial approvals. The criteria or maximum number of units eligible for ministerial approvals in each jurisdiction are summarized in Figure 22 below.

Figure 22: Summary of Responses from SLOCOG Jurisdictions regarding Ministerial Approvals
Source: ECONorthwest based on survey of SLOCOG jurisdictions Jurisdiction What is the maximum number of units that can receive ministerial approvals outside of SB 35 provisions?
Atascadero 11 (unless on a designated site in the housing element) City of San Luis Obispo No max threshold
County of San Luis Obispo 38
Pismo Beach No Response
Paso Robles 1 outside of State intervention; 3 when including ADUs and JADUs; 4 utilizing SB9
Morro Bay 2 dwelling units and multifamily projects of 6000 sf or less, singlefamily homes under 2500 sf Arroyo Grande No Response
Grover Beach No cap per year, or within the jurisdiction. SB 35 unit limits are based on land use density controls.

The jurisdictions differ on processing times for ministerial approvals. The Cities of San Luis Obispo, Paso Robles, and Grover Beach gave the shortest timelines. All three gave initial review timelines of a maximum of 1 month while the County gave a minimum time period of 6 months. For nonministerial approvals the estimates differed widely, but they ranged from 3 months to 18 months.

Other Examples
Sacramento, CA
As noted previously, the City of Sacramento received recognition by the state for its housing reform efforts, which included several measures related to streamlining approvals, including allowing projects of up to 150 units to bypass the requirement for a public hearing and qualify

Regional Housing and Infrastructure Plan: Affordable-by-Design Study 25 for ministerial approval. The city set a 90-day timeline for ministerial approval of these projects.26 It also allowed single-unit, duplex, and multiunit dwelling to be built by-right.27 Oakland, CA
The City of Oakland introduced a “one stop shop” for permits that coordinates between three permitting departments to streamline and simplify procedures for developers. The departments are Fire Prevention Services, Planning & Building, and Transportation. Oakland introduced the “one stop shop” in September 2021.28
Grand Rapids, MI
According to a study by the Terner Center, zoning reforms in Grand Rapids, MI, (which included upzoning, allowing a wider range of housing types by-right and other changes) found a balance between opportunities for community input and streamlined project approvals. “If projects conform to zoning and design guidelines, the project is approved within approximately six weeks. Moreover, it is nearly unheard of for the city to deny a project application, largely because complying with the city’s land use regulations has proven to be straightforward for developers. City officials noted that the predictability of their approval process has resulted in more interest in development in their community.”
Preliminary Recommendations
▪ Expand eligibility for ministerial approvals: For jurisdictions that currently limit availability of ministerial approvals based on the number of units, this threshold could be increased (e.g., to 150 units) or eliminated for multifamily developments in medium and high-density residential zones.
▪ Have staff review projects using ODS: Even if the review is not considered truly ministerial, avoiding having a body accustomed to doing discretionary reviews serve as the approval body for projects subject to ODS could help streamline the process and avoid raising concerns that cannot be addressed.
26 Herriges, Daniel. “Did Sacramento Just Approve the Best Local Housing Reform Yet?” Strong Towns, January 21, 2021. https://www.strongtowns.org/journal/2021/1/21/did-sacramento-just-approve-the-best-local-housing-reformyet. 27 “Sacramento Becomes First California Jurisdiction to Earn State Prohousing Designation.” California Department of Housing and Community Development, February 24, 2022. https://www.hcd.ca.gov/abouthcd/newsroom/sacramento-becomes-first-california-jurisdiction-to-earn-state-prohousing-designation. 28 “One-Stop Permit Center: In-Person & Expanded Digital Services,” City of Oakland, accessed June 26, 2023, https://www.oaklandca.gov/resources/one-stop-permit-center.

Regional Housing and Infrastructure Plan: Affordable-by-Design Study 26 Density Limits and Parking Requirements
Description
If an area is zoned to allow multifamily but the maximum density is too low, it can preclude efficient multifamily development. As noted above, while California jurisdictions are required to allow density bonuses and other regulatory concessions for qualifying affordable housing developments, this does not apply to ABD housing where units are market-rate but offer affordability for moderate-income households. Some jurisdictions use “fractional density,” in which small units are counted as a fraction of a unit for purposes of density calculations. This approach is more aligned with ABD housing. Other jurisdictions simply increase (or even remove) their maximum density standards for all housing to prioritize housing production.

Reducing or eliminating minimum parking requirements can also be a tool to encourage ABD development and can be an important complement to higher-density limits because achieving higher densities sometimes requires lower parking ratios (e.g., for the microunits and compact walk-up apartment prototypes analyzed in Part 1). Reducing parking requirements also eliminates a mandatory cost for developers and can lower rental costs for households in some cases. However, in areas where there is strong market demand for parking, developers may choose to build parking even if it is not required, or they may choose to build more than is required to meet market demand.

Current Practice for SLOCOG Jurisdictions
The survey asked the departments to list their jurisdictions highest-density zones and the maximum by-right density in those zones. Their answers are listed in Figure 23.

Figure 23: Summary of Responses from SLOCOG Jurisdictions regarding Multifamily Density
Source: ECONorthwest based on survey of SLOCOG jurisdictions Jurisdiction
Which zones in your jurisdiction allow the highest residential density? What is your maximum by-right density in these zones? Atascadero RMF-24 - 24 units per acre
City of San
Luis Obispo
C-D - 36DU/acre, C-C 36DU/acre
County of San
Luis Obispo
Residential Multifamily (density not specified)
Pismo Beach Our Residential Very High Density overlay zone. Once a property is rezoned with the overlay, it is 50 units per acre.

Paso Robles T4-N, T4-F, T4-NC, TC-1, TC-2, and RSC all allow up to 30 units/acre Morro Bay RH (Residential High Density). Currently 2 units by-right or Multifamily projects with total sf of 6,000 or less.

Arroyo Grande Multifamily Very High Density and mixed-use zones allow up to 25 du/acre Grover Beach No Response

Regional Housing and Infrastructure Plan: Affordable-by-Design Study 27 The City of San Luis Obispo also utilizes fractional density for all zones outside the AG, C/OS, and R-1 zones. The City of Paso Robles also allows fractional density in some of its zones. The details are included in Figure 24 below.

Figure 24 Summary of Responses from SLOCOG Jurisdictions regarding Fractional Density
Source: ECONorthwest based on survey of SLOCOG jurisdictions Jurisdiction Housing Type Fractional Density
City of San Luis
Obispo
Studio and one-bedroom dwellings less than 600 sq. ft. .5 One-bedroom dwellings between 601–1,000 sq. ft. .66
Two-bedroom dwelling 1
Three-bedroom dwelling 1.5
Dwellings with four or more bedrooms 2
Paso Robles
Studio and one-bedroom dwellings less than 600 sq. ft. .5 One-bedroom dwellings 600–1,000 sq. ft. .66
Dwellings with two or more units 1
Other Examples
San Diego, CA
The City of San Diego introduced several changes to its density bonus program in 2018. The new program language included several provisions that offer bonuses for smaller units:29 ▪ A 10 percent density bonus for developments that do not go beyond the maximum permitted building footprint.
▪ A 100 percent density bonus for microunit production for developments that do not go beyond the permitted building footprint.

Cottage Grove, Oregon
The small city of Cottage Grove, Oregon, recently eliminated maximum density limits in its residential zones. Minimum lot size standards apply but do not scale with the number of units, meaning they are primarily a constraint on density for single-unit detached development.

Multifamily development is limited only by height and building coverage standards.30 29 “City of San Diego Density Bonus Regulations for Affordable Housing,” San Diego Housing Commission, accessed June 20, 2023, https://www.sdhc.org/doing-business-with-us/developers/density-bonus/. 30 City of Cottage Grove Municipal Code, Chapter 14.22 Residential Districts:
https://www.codepublishing.com/OR/CottageGrove/#!/CottageGrove14/CottageGrove1422.html#14.22.120

Regional Housing and Infrastructure Plan: Affordable-by-Design Study 28 San Jose, CA
The City of San Jose (along with Sacramento, San Diego, and San Francisco) eliminated their parking minimum requirements in December 2022. In the same ordinance that repealed the parking minimums, the city council also included requirements for bicycle parking to encourage other forms of transportation.31
Preliminary Recommendations
▪ Adjust density limits in high-density residential and mixed-use zones: This could take several different forms:
▪ For density limits expressed in dwelling units per acre, increase the maximum density allowed by-right. Allowing at least 35 units per acre will generally allow for three-story walk-up apartment development, which may meet ABD criteria. Higher densities may be appropriate for downtown areas and mixed-use development. ▪ Use floor area ratio (FAR) or other physical form limits (e.g., height) to regulate the amount of development. This can serve as an incentive for building smaller units. ▪ Use fractional density or a density bonus to encourage smaller units. ▪ Reduce or eliminate minimum parking requirements for smaller units: Require less than one space per unit for small units and/or exempt microunits in downtown or mixed-use areas from parking requirements.

Zoning Vacant Land for Multifamily Housing
Description
Many jurisdictions seek to focus higher-density development in core areas, downtown, or near transit. However, these areas are often largely developed already, and redevelopment means higher land costs along with demolition and sometimes environmental remediation costs.

Zoning vacant land for multifamily housing can offer a lower-cost development opportunity, particularly if the land has or is near the necessary infrastructure to support development. This makes it easier for ABD multifamily housing projects to be economically viable.

Current Practice for SLOCOG Jurisdictions
All but two jurisdictions noted that they had vacant sites listed on their Housing Element in their densest zones. Atascadero noted the vacant sites are very small and Arroyo Grande and County of San Luis Obispo did not list any vacant sites. Figure 25 below lists all the responses. 31 Kamisher, Eliyahu. “Bye-Bye Parking Requirements: San Jose Becomes Largest City in U.S. to Abolish Minimum Parking.” The Mercury News, December 7, 2022. https://www.mercurynews.com/2022/12/07/bye-bye-parkingrequirements-san-jose-becomes-largest-city-to-abolish-minimum-parking/.

Regional Housing and Infrastructure Plan: Affordable-by-Design Study 29 Figure 25: Summary of Responses from SLOCOG Jurisdictions regarding Vacant Land Zoned for High-Density Housing
Source: ECONorthwest based on survey of SLOCOG jurisdictions Jurisdiction
Are there vacant sites listed on your Housing
Element in your highest-density zones?
Atascadero yes...with a caveat that they are small, since the original colony subdivided in 1913
City of San Luis Obispo Yes
County of San Luis Obispo None listed
Pismo Beach Yes
Paso Robles Yes
Morro Bay Yes
Arroyo Grande No
Grover Beach Yes
Other Examples
Study on Upzoning in Portland, OR
A recent study on the impact of upzoning and higher-density zoning on development and housing production in Portland, OR, found that “both upzoning and higher density zoning led to significantly greater development probabilities, higher development densities, and more housing supply,” suggesting that “upzoning could be an effective policy tool for increasing housing supply, particularly when it is applied to vacant and underutilized parcels.”32 Preliminary Recommendations
▪ Zone vacant buildable sites large enough to accommodate multifamily development to allow it by-right at an appropriate density. Ideally, this would include sites over an acre with access to infrastructure.

Aligning Infrastructure Investments
Description
The cost of extending or upgrading infrastructure (e.g., roads, sewer, and water lines) to serve a site can be cost prohibitive for ABD housing. It also adds significant time and uncertainty to the development process. To the extent that jurisdictions can invest in the infrastructure upgrades and extensions needed to make ABD housing development possible, this can mean substantial cost savings and a major increase to development feasibility. 32 Hongwei Dong, “Exploring the Impacts of Zoning and Upzoning on Housing Development: A Quasi-Experimental Analysis at the Parcel Level,” Journal of Planning Education and Research. February 1, 2021. https://doi.org/10.1177/0739456X21990728

Regional Housing and Infrastructure Plan: Affordable-by-Design Study 30 Current Practice for SLOCOG Jurisdictions
The Regional Housing & Infrastructure Plan (HIP) is a collaborative action plan between the seven Cities, County of San Luis Obispo, and SLOCOG in response to the region’s growing housing and infrastructure shortage. The HIP is intended to help accelerate housing development where it makes the most sense given regional conditions and readiness. The HIP inventories infrastructure barriers to housing, identifies funding to implement infrastructure needs, and develops foundational information for the future 2027 Regional Housing Needs Assessment (RHNA). The 2023 HIP identified 80 water, wastewater, and transportation infrastructure projects and possible grant funding sources.

Other Examples
Bend, OR
The City of Bend, Oregon, conducted a study in 2018 to evaluate infrastructure and planning needs to make land development-ready in various areas of the city, including areas on the edge that had been recently authorized for development with complete communities, a range of housing types, and commercial services and infill/redevelopment “opportunity areas.” The study analyzed the type and amount of development that each area was expected to yield (including affordable housing); the cost of providing needed water, sewer, and/or transportation improvements; other factors that could inhibit development; and estimated revenues from impact fees and property taxes from each area. The analysis informed decisions about where to focus staff time, political will, planning energy, and infrastructure investments.
33 Preliminary Recommendations
▪ Use the ongoing HIP process to prioritize infrastructure investments that can unlock multifamily development in appropriate areas.

Adjusting Impact Fee Policies or Rate Structures
Description
While impact fees are a vital source of funding for local infrastructure needs, they tend to disproportionately affect the feasibility of building smaller and lower-cost housing units. 34 This
is particularly true when the fee structures do not account for differences in impact based on 33Bend Growth Management Department in collaboration with Angelo Planning Group, ECONorthwest, Cascadia Partners, DKS Associates, and MURRAYSMITH, “Bend Urban Growth Boundary Implementation Return on Investment Analysis and Next Steps,” April 26, 2018.
https://www.bendoregon.gov/home/showpublisheddocument/36542/636637940683270000 34 ECONorthwest on behalf of Oregon Housing and Community Services, “Oregon System Development Charges Study: Why SDCs Matter and How They Affect Housing,” December 2022. https://www.oregon.gov/ohcs/development/Documents/Oregon%20SDC%20Study_FinalReport_121422.pdf

Regional Housing and Infrastructure Plan: Affordable-by-Design Study 31 unit size or location-efficient developments. While many localities in California waive impact fees for affordable housing, this does not apply to ABD housing. A full waiver of impact fees is not necessarily an appropriate policy measure for ABD housing; however, there are other adjustments that jurisdictions can make to reduce the effects of impact fees on ABD housing.

For example, impact fees can be deferred until later in the construction process or financed over a period of years. Rate structures can also be adjusted to account for reduced demand from smaller units while keeping the overall average rates constant to minimize the impact to revenue collections.

Current Practice for SLOCOG Jurisdictions
Impact fee policies vary across the jurisdictions. Three jurisdictions—Morro Bay, Arroyo Grande, and Grover Beach—do not offer any impact fee deferrals. Most other jurisdictions allow deferral or exemptions for affordable housing projects. Atascadero indicated that all impact fees are deferred for all developments.

All the jurisdictions indicate that their impact fees vary by housing type/unit size. Some vary by unit type, lot size, or zoning. Some are lower for affordable units. Others vary based on square footage. Specific answers are listed in Figure 26 below.

Figure 26: Summary of Responses from SLOCOG Jurisdictions regarding Impact Fee Variables
Source: ECONorthwest based on survey of SLOCOG jurisdictions Jurisdiction
If your impact fees vary by housing type and/or unit size, please describe which fees and what the variables are (e.g., housing type / ITE code, square footage, number of bedrooms, etc.).

Atascadero Vary by lot size, zoning
City of San Luis
Obispo
Transportation, water, wastewater, are reduced for smaller units (based on square footage).

County of San Luis
Obispo
Certain building types may qualify for fees based on square footage of project
Pismo Beach By unit type, yes. Not by unit size.

Paso Robles They vary by "Transportation Area" within the City and the fee can vary by size/sf
Morro Bay Size and cost of project.

Arroyo Grande Fees are lower for low and very low income units Grover Beach Housing type, square footage, etc.

Other Examples
Fontana, CA
The city of Fontana, CA, reduced its impact fees for infill development by 50% as part of their Housing Element update in June 2021. City officials defined infill development as development

Regional Housing and Infrastructure Plan: Affordable-by-Design Study 32 in the central third of Fontana.
35 Projects located in that zone were eligible for this impact fee reduction. Impact fees can range from “approximately 9.3% to 10.3% of the direct cost of development for a single-family residential project and 4.3% to 4.4% for a multi-family residential project” which can represent a significant cost for the developer. 36 Preliminary Recommendations
▪ Scale by unit size: Wherever reasonable, adjust impact fees by unit size to reflect lower impacts from smaller units. This could also mean increasing fees for larger units so that the change is revenue neutral.
▪ Defer collection: Allow deferral of the impact fee until occupancy for multifamily development regardless of whether it includes affordable units. ▪ Adjust for infill locations: Set fee rates lower where infrastructure needs are lower due to proximity to existing facilities. This can offset some of the higher cost of building in close-in, more developed areas.

CONCLUSION
This study suggests that affordable-by-design housing can potentially help meet the needs of some moderate-income households in SLO County without public financial support. While it cannot meet the housing needs of all low- or moderate-income households, and lasting affordability is not guaranteed, it can leverage the market to meet one segment of housing needs and allow public and philanthropic financial resources to focus on deeper affordability and more challenging housing needs.

Although there are substantial challenges to developing ABD housing in SLO County, jurisdictions can implement a variety of regulatory and planning measures to remove barriers to this type of development and support housing production at a moderate price point. This study is intended to offer recommendations for SLOCOG members, policymakers, developers, and advocates to consider as part of their affordable housing strategies. 35 “City of Fontana 2021-2029 6th Cycle Housing Element” (City of Fontana, CA, June 25, 2021), 4–6, https://www.hcd.ca.gov/housing-elements/docs/fontana-6th-draft062521.pdf. 36 “City of Fontana 2021-2029 6th Cycle Housing Element,” 3–27.

BKF Engineers
July 2023
Funding Strategies
Assessment &
Gap Analysis

HIP Funding Strategies Assessment & Gap Analysis ii
Executive Summary......................................................................... iii HIP Funding Strategies Assessment
Funding Prioritization Approaches...............................................1 Prioritization of DACs in Funding Analysis..................................2 Funding Opportunities: Transportation Projects......................3 Funding Opportunities: Water Projects ....................................13 Alternative Funding Strategies Overview..................................21 Funding Opportunities Menu......................................................26 Funding Gap Analysis
Comprehensive Gap Analysis for HIP Projects........................30 Estimation of Potential Grant Funding......................................31 Calculation of the Funding Gap...................................................31 Innovative Strategies to Bridge the Funding Gap...................33 Regional Housing & Infrastructure Plan Grants Calendar....34

TABLE OF CONTENTS

HIP Funding Strategies Assessment & Gap Analysis iii
Executive Summary
Funding Strategies Assessment & Gap Analysis
by BKF Engineers
The HIP Funding Analysis is a comprehensive examination of funding strategies and a gap analysis for the transportation, water and wastewater projects necessary to support the Regional Housing & Infrastructure Plan (HIP) conducted by BKF. The analysis evaluates the disparity between the cost estimate for each project and the anticipated funding that could be obtained through various financial mechanisms such as grants, bonds, loans, and tax measures.

The Funding Analysis involved several steps:

1. Project Assessment & Funding Requirement Determination:

A thorough review and categorization of the list of underfunded HIP projects were conducted. The top projects were analyzed and prioritized based on their urgency, feasibility, and ability to support the County’s housing goals. The final project list included a diverse mix of projects, including transportation, water, and wastewater projects.

2. Identification & Evaluation of Potential Funding Sources:

An extensive research process was undertaken to identify potential funding sources. This included exploring a wide range of funding mechanisms, researching specific grant funding opportunities, conducting a detailed analysis of the funder’s priorities and eligibility criteria, and matching the projects with suitable grant funding opportunities.

3. Estimation of Potential Grant Funding: For each identified funding source, the probability of securing funds was assessed. This involved considering several factors such as competition, past award history, and project alignment with the grant guidelines. Based on the assessment, the average grant award available for each project was calculated. Any constraints or limitations associated with the funding sources were also considered.

4. Calculation of the Funding Gap: After estimating the potential grant funding, the funding gap was calculated. This involved determining the total funding needed for each project, comparing it with the potential grant funding, and identifying the difference.

The HIP Funding Analysis also includes a detailed grant calendar, outlining estimated funds available by quarter from various agencies.

This detailed and dynamic process allowed BKF to estimate the potential grant funding for the HIP projects and calculate the funding gap, setting the stage for implementing strategies to bridge this gap.

HIP Funding Strategies Assessment & Gap Analysis 1
HIP Funding Strategies Assessment
Funding Prioritization Approaches
Funding prioritization is a strategic process employed by BKF to identify, evaluate, and rank various funding opportunities in order to strategically secure needed resources for a comprehensive list of transportation and water focused infrastructure. Given the often-limited resources and the vast number of potential funding sources and goals, it’s crucial for organizations to prioritize those that offer the highest alignment with their objectives, the best return on investment, and the lowest associated risks.

When evaluating and prioritizing funding options, BKF finds that a systematic and strategic approach is necessary to maximize opportunities and efficiency. Here are four different approaches we use to prioritize the identified funding options:
• Strategic Alignment: This approach involves prioritizing funding options based on how closely they align with the agency’s mission, vision, and strategic goals. By considering the guidelines, goals, restrictions, and focus of the grant, we can determine how well it aligns with the agency’s needs, objectives, or target population. This is essential for long-term sustainability and ensuring that the funding will ultimately further the agency’s goals for each project or program.
• Risk Assessment: This approach involves evaluating the level of risk associated with each funding option. Risks may include stringent reporting requirements, tight timelines for spending the funds, high competition for national grants vs state-wide grants, or likelihood of continued funding. Prioritizing lower risk opportunities may help to increase success rates and ensure a more stable revenue stream for the agency. • Return on Investment (ROI): Prioritizing based on potential ROI involves considering the amount of effort needed to apply for and administer the grant versus the potential benefit. Large grants may seem attractive, but if they require extensive manpower to manage or have low chances of success, they may not be the best use of resources. ROI isn’t just monetary, it can also be measured in terms of capacity-building, enhancement of services, or impact on the community.
• Funding Source: Another approach is to assess the funding source of the grants—be it local, regional, state, or federal. This is critical when determining an effective strategy for prioritizing funding opportunities.

Each source comes with its own unique set of expectations, regulations, and opportunities, thereby necessitating different approaches. Local grants, often featuring less competition, may be most appropriate for initiatives aimed at serving specific communities. Regional grants offer a balance between local and state grants, typically encompassing several counties or districts. State grants, which tend to have more substantial funding and increased competition, may align with initiatives serving larger demographics within the state. Federal grants, presenting the largest funding amounts alongside often intense national competition and stringent reporting requirements, should be considered for projects with a broader reach, higher costs or those aligning with national objectives. This process is integral to ensuring that the agency’s capacity and strategic goals align with the potential grant opportunities. Ultimately, a balanced mix of grants from various sources, artfully braided together can diversify the funding opportunities, mitigate risk, and optimize the possibility of securing important project funding. A balanced portfolio of local, state, and federal grants will help to diversify the funding sources and can increase the likelihood of funding awards and reducing overall risk.
• Local Grants: Local grants often have less competition than state or federal grants, and may be easier to win. Additionally, building relationships with local funders can be beneficial for future funding opportunities.
• Regional Grants: Regional grants often have moderately competitive fields due to their geographic reach, and their funding amounts tend to be larger than local but smaller than state grants. Building connections with regional funders can also open up opportunities for larger-scale funding in the future.

HIP Funding Strategies Assessment & Gap Analysis 2
• State Grants: State grants often have a wider focus than local grants and tend to have more funding available than local grants, but also more competition from the entire state. State grants may also align well with state-level initiatives or priorities.
• Federal Grants: Federal grants usually have the largest funding amounts, but also come with the highest level of competition and the most stringent reporting requirements.

Prioritization of Disadvantaged Communities (DACs) in Funding Analysis Disadvantaged Communities (DACs) are areas that suffer from a high degree of socio-economic stress.

These communities often face challenges such as high poverty rates, low-income levels, lack of access to quality education, and inadequate healthcare facilities. They are also referred to Underserved Communities, with vulnerable populations. In many cases, these communities also bear a disproportionate burden of environmental pollution and lack access to basic infrastructure services such as affordable housing, clean water, sanitation, and reliable transportation.

Recognizing these challenges, many grant programs prioritize funding for projects that directly benefit DACs.

This prioritization is based on the understanding that investments in these communities can lead to significant improvements in the quality of life for residents, promote economic development, and address longstanding inequities.

Recently, the focus on DACs has been heightened due to requirements from the infrastructure funding coming from Washington DC. The federal government has made it a priority to ensure that a significant portion of infrastructure funding is directed towards projects that benefit DACs. This is reflected in the guidelines and criteria of many federal grant programs, which often give additional points or preference to projects that serve DACs. In fact, the Justice 40 Initiative mandates that at least 40% of benefits from certain federal grant funding must be allocated to DACs. The goal is to address decades of underinvestment in these communities and bring resources to communities most impacted by climate change, pollution, and environmental hazards.

SLOCOG created a regional definition of disadvantaged communities for the San Luis Obispo region to better compete for California grant funding, distribute funds more equitably, and meet the state and federal environmental justice requirements. However, Federal and California funding agencies use a wide range of data and criteria to determine the level and areas of disadvantage. Many state and federal funding agencies provide a selection of tools and data that must be used to identify DACs in an effort to keep the playing field level. The following is an overview of some of the most prevalent DAC mapping tools:
• Disadvantaged Communities Mapping Tool is provided by the Department of Water Resources and allows users to overlay GIS layers onto a map of California. BKF’s research indicates that there are a number of DAC’s in the San Luis Obispo region, including Grover Beach, San Luis Obispo, Arroyo Grande, Morro Bay, Paso Robles, Pismo Beach, and Atascadero. • CalEnviroScreen 4.0 is a screening methodology that can be used to help identify California communities that are disproportionately burdened by multiple sources of pollution. Overall CalEnviroScreen scores are calculated from the scores for two groups of indicators: Pollution Burden and Population Characteristics. The CalEnviroScreen map shows that some of the census tracts in Morro Bay, Grover Beach, San Luis Obispo, and Paso Robles are impacted and therefore would qualify for grant funding for some California grant opportunities.
• Poverty Indicator is a tool within CalEnviroScreen that has a Population Characteristics feature that you can select, including a Poverty Indicator which measures the percentage of people in the census tract living below twice the federal poverty level. Twice the poverty level is used due to the high cost of living in California. The U.S. Census Bureau determines the federal poverty level each year. The poverty level is based on the size of the household and the age of family members. If a person or family’s total income before taxes is less than the poverty level, the person or family are

HIP Funding Strategies Assessment & Gap Analysis 3
considered in poverty. Many studies have found that people living in poverty are more likely than others to become ill from pollution. This tool indicates that there are two census tracks in and around San Luis Obispo with over 70% of people living below twice the federal poverty level; one tract is in Atascadero and the other tract is in Paso Robles. • The California Healthy Places Index (HPI) is a powerful tool to explore the community conditions that impact life expectancy. The HPI combines 25 community characteristics, like access to healthcare, housing, education, and more, into a single indexed HPI score. The healthier a community, the higher the HPI score. The HPI map indicates that census tracts around Arroyo Grande, Paso Robles, Morro Bay, and San Luis Obispo have DACs that would qualify for some California grant programs. • EPA EJScreen is a federal tool developed by the Environmental Protection Agency (EPA). This new environmental justice (EJ) mapping and screening tool is based on nationally consistent data and an approach that combines environmental and demographic indicators in maps and reports. The tool uses a variety of indexes and indicators to generate reports from environmental impact to Socioeconomic factors. Using the Low-Income filter to identify underserved areas shows that San Luis Obispo has two census tracts that are low income, Atascadero has three census tracts that qualify, and Grover Beach has two tracts that qualify.

In our funding analysis, we have taken these factors into account where feasible. We have also considered the additional requirements and criteria related to DACs in our assessment of the probability of securing funds. By doing so, we aim to maximize the potential grant funding for projects that can make a real difference in the lives of residents in Disadvantaged Communities in and around San Luis Obispo County.

Funding Opportunities: Transportation Projects
Below is a list of viable funding options for HIP priority transportation projects, organized by funding source:

LOCAL FUNDING
• San Luis Obispo
The city provides a variety of grant programs. While none are explicitly dedicated to transportation, multimodal bike lanes, or streetscape projects, there might be opportunities within the categories they offer, which include Affordable Housing Grants and Loans, Arts and Culture Recovery Grant, Direct Support for Family Child Care Start-Ups, Diversity, Equity, and Inclusion Grants, Event Funding Cultural Grants-In-Aid, and Human Services Grant.
• San Luis Obispo County
The county offers several grant funding opportunities, including the American Rescue Plan Act Grant Opportunities, Community-Based Grants, District Community Grants, and Community-Based Organization and Preventative Health Grants. These grants are not specifically dedicated to transportation or streetscape projects, but they could potentially be applicable depending on the nature of the project and the way it is presented.
• Grover Beach
The city operates a Community Grant Program that provides up to $5,000 of one-time grants to eligible organizations. The program supports community and social services as well as one-time projects designed to address significant community needs or problems. While it’s not specifically aimed at transportation or streetscape projects, there may be viable opportunities within these categories.

STATE FUNDING
• Active Transportation Program (ATP)
This grant by the California Transportation Commission seeks to promote the use of active transportation

HIP Funding Strategies Assessment & Gap Analysis 4
modes like biking and walking. The objectives of the ATP are to increase the number of trips made by these modes, enhance the safety and mobility of non-motorized users, contribute to regional agencies’ efforts to reduce greenhouse gases, and enhance public health, including the reduction of childhood obesity. Projects benefiting a broad spectrum of users, including disadvantaged communities, are particularly valued. More Information & Apply
• Promotes the use of active transportation modes like biking and walking • Aims to increase the number of trips, enhance safety and mobility of non-motorized users, and reduce greenhouse gases
• Prioritizes projects benefiting a broad spectrum of users, including disadvantaged communities Funding Gap Analysis Notes
The ATP is a competitive grant program, so the amount of funding that a project receives will depend on the strength of the application and the availability of funds. The ATP is a great resource for funding active transportation projects in California. Here are some additional details about the ATP grant awards range:
• The average grant award in Cycle 5 was $2.5 million
• 85% of the funding in Cycle 5 was awarded to projects that benefit disadvantaged communities Pre-proposal
Deadline Due Date Local Match Est. Total Funding Available Est. Amount Per
Award
Likely March 2024 Likely June 2024 None $750M $2.5M (average) • Local Highway Safety Improvement Program (HSIP)
Administered by Caltrans, the HSIP provides funds for projects that significantly enhance safety on any public road or publicly owned bicycle or pedestrian pathway or trail, as well as on tribal lands used by tribal members. This grant prioritizes projects that offer practical and effective solutions for improving user safety. Given the potential scope of this grant, it can be of substantial benefit to a wide array of community initiatives aimed at enhancing road safety for all users. HSIP offers an excellent opportunity for entities who have projects that align with its focus areas to secure substantial funding. More Information & Apply • Administered by Caltrans
• Provides funds for projects improving safety on public roads, bicycle or pedestrian pathways, trails, and tribal lands
• Prioritizes projects with practical and effective solutions for improving user safety • Offers potential for substantial funding, benefiting a wide array of community initiatives aimed at enhancing road safety
Funding Gap Analysis Notes
The range of grant awards for the Local Highway Safety Improvement Program (HSIP) varies depending on the project and the funding cycle. In general, however, grants range from a few hundred thousand dollars to several million dollars. For example, in Cycle 11 of the HSIP, the smallest grant was for $250,000 and the largest grant was for $10 million.

The following are some examples of the types of projects that have been funded by the HSIP:
• Roadway safety improvements, such as intersection improvements, pedestrian and bicycle facilities, and traffic calming measures
• Safety education and outreach programs
• Data collection and analysis

HIP Funding Strategies Assessment & Gap Analysis 5
• Planning and implementation of local roadway safety plans The HSIP is a competitive grant program, so the amount of funding that a project receives will depend on the strength of the application and the availability of funds. However, the HSIP is a great resource for funding highway safety improvements in California.
• The average grant award in Cycle 11 was $1.5 million
• 80% of the funding in Cycle 11 was awarded to projects that benefit disadvantaged communities • The HSIP is funded by a combination of federal, state, and local funds • The HSIP is administered by the California Department of Transportation (Caltrans) Pre-proposal
Deadline Due Date Local Match Est. Total Funding Available Est. Amount Per
Award
Likely March 2024 Likely Sept. 2024 20% $ 210M $1.5M (average) • Local Transportation Climate Adaptation Program (LTCAP) The LTCAP by the California Transportation Commission is a grant that supports projects working to increase climate resiliency and protect vulnerable transportation infrastructure, specifically using California’s climate projections. Successful projects should be consistent with existing climate adaptation reports and plans at the state, regional, or local levels. Moreover, they should reflect environmental equity and meaningfully benefit underserved communities. More Information & Apply • Supports projects that increase climate resiliency and protect vulnerable transportation infrastructure • Projects should align with existing climate adaptation reports and plans • Prioritizes environmental equity and benefits to underserved communities Funding Gap Analysis Notes
A total of 59 awards were given in Cycle 1 of the LTCAP. The total funding for Cycle 1 was $296.5 million, and the average grant award was $16 million. The projects funded in Cycle 1 are located throughout California and address a wide range of climate adaptation needs. Some of the projects included:
• Construction of new flood control measures in the Sacramento-San Joaquin Delta • Retrofitting existing bridges to make them more resilient to sea level rise • Development of climate adaptation plans for transportation agencies • Education and outreach programs to raise awareness of climate change and its impact on transportation
The LTCAP is a competitive grant program, so the number of awards that are given in each cycle will vary depending on the availability of funds and the strength of the applications. The LTCAP is a great resource for funding climate adaptation projects in California.

Pre-proposal
Deadline Due Date Local Match Est. Total Funding Available Est. Amount Per
Award
Likely May 2024 Likely July 2024 None $296.5M $16M (average) • Monarch Butterfly and Pollinator Rescue
The Wildlife Conservation Board offers the Monarch Butterfly and Pollinator Rescue grant to assist in the preservation and enhancement of breeding and overwintering habitats for monarch butterflies and other pollinators on both public and private lands. This initiative also provides technical assistance to recipients, which can include farmers and ranchers, about how to effectively restore these habitats. Funding is also

HIP Funding Strategies Assessment & Gap Analysis 6
available for temporary habitat improvements, block grants, and suballocations. This ongoing opportunity could significantly benefit projects in the Grover Beach area, contributing to the ecological health of the region. More Information & Apply
• Assists in the preservation and enhancement of breeding and overwintering habitats for monarch butterflies and other pollinators
• Provides technical assistance for habitat restoration • Funding available for temporary habitat improvements, block grants, and suballocations Funding Gap Analysis Notes
The Monarch Butterfly and Pollinator Rescue grant program offers two categories of grants:
• Habitat Improvement grants: range from $200,000 to $250,000 • Technical Assistance for Private Working Lands grants: range from $150,000 to $300,000 The total amount of funding available for the Monarch Butterfly and Pollinator Rescue grant program is $3 million. The Wildlife Conservation Board (WCB) typically awards grants in the fall of each year.

To be eligible for a grant, applicants must meet the following criteria:
• Must be located in California
• Must have a project that will benefit monarch butterflies and other pollinators • Must have a strong management plan for their project
• Must be able to match the grant funds with their own resources The Monarch Butterfly and Pollinator Rescue grant program is a great way to support projects that are helping to conserve these important species. Here are some examples of projects that have been funded by the Monarch Butterfly and Pollinator Rescue grant program:
• Restoration of California prairie habitat
• Creation of pollinator gardens
• Education and outreach programs
• Research on monarch butterfly migration
The Enabling Statute created the Monarch Butterfly and Pollinator Rescue Fund Account (Fund) in the State Treasury. Monies in the Fund became available, upon appropriation, for the purposes of the Program including:
• Provide grants for the restoration or enhancement of California prairie and other appropriate breeding habitat for monarch butterflies and pollinators on private and public lands • Provide grants for the restoration or enhancement of overwintering monarch butterfly habitat on private and public lands
• Provide technical assistance to grant recipients, including farmers and ranchers, regarding restoration and enhancement of breeding, overwintering, and other appropriate monarch butterfly habitat • Provide grants for seasonal or temporary habitat improvements • Provide block grants in which suballocations are made by the grant recipient, with the approval of the Wildlife
Pre-Proposal
Deadline Due Date Local Match Est. Total Funding Available Est. Amount Per
Award
Rolling Rolling None $10M 200-250K (average)

HIP Funding Strategies Assessment & Gap Analysis 7
• Regional Resilience Planning and Implementation Grant Program (RRGP) Offered by the Governor’s Office of Planning and Research, the RRGP grant is designed to help regions enhance their climate resilience through capacity-building, planning, and project implementation. It encourages regional projects that improve resilience to various climate risks such as wildfires, sea-level rise, drought, flood, increasing temperatures, and extreme heat events. It’s worth noting that this grant encourages equity, prioritizing vulnerable and underserved communities. More Information & Apply • Enhances climate resilience through capacity-building, planning, and project implementation • Encourages projects that improve resilience to various climate risks • Prioritizes equity, focusing on vulnerable and underserved communities Funding Gap Analysis Notes
The average implementation grant for the Regional Resilience Planning and Implementation Grant Program (RRGP) is $1.5 million. The RRGP offers two project types: planning and implementation. Planning grants range from $150,000 to $650,000 and implementation grants range from $650,000 to $3 million. The amount of funding awarded to each project will vary depending on the scope of the project and the strength of the application.

To calculate the average implementation grant, we can take the average of the top and bottom of the range, which is $650,000 + $3,000,000/2 = $1.85 million. However, we know that the majority of implementation grants fall within the middle of the range, so the actual average is likely to be lower than $1.85 million.

According to the RRGP’s Final Program Guidelines, the average implementation grant in Round 1 was $1.4 million. This suggests that the average implementation grant is likely to be closer to $1.5 million than $1.85 million. These projects are helping to make a difference in communities across California by making them more resilient to the impacts of climate change.

Here are some examples of projects that have received implementation grants from the RRGP:
• A project to create a community resilience center in the San Francisco Bay Area • A project to implement a sea level rise adaptation project in Southern California • A project to improve the resilience of water infrastructure in the Central Valley Pre-Proposal
Deadline Due Date Local Match Est. Total Funding Available Est. Amount Per
Award
Rolling basis
through August 29,
2023
August 29, 2023 None $18.8M (over two
rounds)
Planning:
$150K - $650K
Implementation:
$650K -
$3M ($1.5M
average)
• Transformative Climate Communities (TCC) Round 5, Implementation Grant (FY 22-23) The Transformative Climate Communities (TCC) program is a California state program that provides funding to disadvantaged communities to help them reduce greenhouse gas emissions and improve air quality. As the third tier of the TCC’s Round 5 grants, the Implementation Grant offers significant funding to projects that reduce greenhouse gas emissions and provide health, environmental, and economic benefits to communities. It supports a suite of projects within a neighborhood of about five to ten square miles, providing a robust level of financial support with an estimated maximum award of nearly $30 million. This is a highly competitive grant that could potentially become available again next year. More Information & Apply

HIP Funding Strategies Assessment & Gap Analysis 8
• Offers significant funding to projects reducing greenhouse gas emissions • Supports multiple projects within a neighborhood of about 5-10 square miles • Provides robust financial support, estimated maximum award of nearly $30 million Pre-Proposal
Deadline Due Date Local Match Est. Total Funding Available Est. Amount Per
Award
March 31, 2023 August 1, 2023 None $500M Up to $30M
• Transformative Climate Communities (TCC) Round 5, Project Development Grant (FY 22-23) This grant is designed to support disadvantaged communities in their efforts towards sustainable development and enhancing climate resilience. Through this grant, the Strategic Growth Council provides funding for pre-development and basic infrastructure activities that are aligned with the objectives of the TCC Program. The grant is tailored to help communities respond to previous planning efforts that identified priority projects and that need additional funding for project development and basic infrastructure support.

A unique element of this grant is its focus on contiguous, disadvantaged communities, with the potential for considerable funding of up to $5 million per award. More Information & Apply • Administered by Caltrans
• Focuses on projects that improve safety on any public road, bicycle, pedestrian pathway, or trail, as well as tribal lands
• Projects must offer practical and effective solutions for user safety • Supports sustainable development and climate resilience efforts in disadvantaged communities • Funding for pre-development and basic infrastructure activities • Aids communities in implementing priority projects
• Focuses on contiguous, disadvantaged communities
• Potential for considerable funding up to $5 million per award Funding Gap Analysis Notes
The average grant award for the Transformative Climate Communities (TCC): Project Development Grant was $3.3 million in Round 5 of the program. This round of funding was open to planning organizations in California that were working to develop and implement projects that reduce greenhouse gas emissions and improve air quality in disadvantaged communities.

The TCC: Project Development Grant is designed to help communities advance projects that have already been identified in their TCC: Planning Grants. The grant can be used to support a variety of activities, including:
• Conducting technical analysis
• Developing project plans
• Securing financing
• Executing projects
The TCC: Project Development Grant is a competitive grant program, and the amount of funding awarded to each applicant will vary depending on the scope of the project and the applicant’s qualifications. However, the average grant award for Round 5 was $3.3 million.

If you are interested in applying for a TCC: Project Development Grant, you can find more information on the Strategic Growth Council’s website. The next round of funding is expected to open in early 2024.

HIP Funding Strategies Assessment & Gap Analysis 9
Here is a table of the average grant awards for the TCC: Project Development Grant in each round of the program:

Round Average Grant Award
1 $2.5M
2 $1.5M
3 $2M
4 $2.7M
5 $3.3M
As you can see, the average grant award has mostly increased over time. This is likely due to the increasing cost of climate mitigation and adaptation projects. Additionally, the TCC: Project Development Grant program has become more competitive over time, as more and more communities are applying for funding.

Pre-Proposal
Deadline Due Date Local Match Est. Total Funding Available Est. Amount Per
Award
July 3, 2023 August 1, 2023 None $100M $5M
• Transformative Climate Communities (TCC) Round 5, Planning Grant (FY 22-23) Similar to the Project Development Grant, this grant supports disadvantaged communities in the planning stages of climate resilience projects. Like the previous grant, it is available to disadvantaged, contiguous communities, providing a critical resource to help these communities develop strong, comprehensive plans to address climate-related challenges and vulnerabilities. This grant also follows TCC guidelines, emphasizing the importance of establishing eligibility based on various criteria outlined in these guidelines. More Information & Apply
• Supports planning stages of climate resilience projects in disadvantaged communities • Available to contiguous disadvantaged communities
• Helps communities develop comprehensive plans for climate-related challenges • Follows TCC guidelines for eligibility
Pre-Proposal
Deadline Due Date Local Match Est. Total Funding Available Est. Amount Per
Award
July 3, 2023 August 1, 2023 None $50M $300K (average)
• Wildlife Corridor and Fish Passage
The Wildlife Corridor and Fish Passage program is focused on planning and implementation projects that enhance and secure wildlife corridors and promote fish passage. Ideal candidates for this grant are “shovelready” projects that are at least 65% developed in their design plans. These projects should have already met CEQA compliance standards. Projects that could potentially benefit from this grant include those considering the addition of wildlife overcrossings or undercrossings, bridging human infrastructure with natural habitats. All projects must provide for improved fish or wildlife mobility, and further the objectives of Proposition 68. More Information & Apply
• Supports planning and implementation projects that enhance wildlife corridors and fish passage • Suitable for “shovel-ready” projects with at least 65% developed design plans • Projects should comply with CEQA standards
Funding Gap Analysis Notes
The range of grant awards for the Wildlife Corridor and Fish Passage varies depending on the project and

HIP Funding Strategies Assessment & Gap Analysis 10
the funding cycle. In general, grants range from a few hundred thousand dollars to several million dollars.

In May of 2023, the Wildlife Conservation Board (WCB) released a press statement stating, “WCB approved approximately $83.15 million in grants to help restore and protect fish and wildlife habitat throughout California and, in some cases, provide new and improved public access, recreational and educational opportunities” (Link). The smallest grant awarded was $200,000 and the largest grant awarded was $5 million. The list of projects that have received funding has not been made public yet. Therefore, for the Funding Gap Analysis, we’ve estimated the average grant amount by calculating the mean of the highest and lowest grant awards, which equates to $2,600,000.
• Total of $83.15M awarded through 28 projects
• Grant award ranges from $200,000 - $5,000,000
• Average grant award amount is $2,600,000
Pre-Proposal
Deadline Due Date Local Match Est. Total Funding Available Est. Amount Per
Award
Rolling Rolling None $83.15B $1M (average)

FEDERAL FUNDING
• Charging and Fueling Infrastructure (CFI) Discretionary Grant Program Aiming to promote sustainable transportation, this grant from the Department of Transportation provides funding for the deployment of publicly accessible electric vehicle charging and alternative fueling infrastructure. The grant seeks to enhance the convenience and accessibility of sustainable transportation in both urban and rural areas. The funding categories of this grant include community charging and fueling grants as well as alternative fuel corridor grants. More Information & Apply • Supports the deployment of publicly accessible electric vehicle charging and alternative fueling infrastructure
• Aims to enhance convenience and accessibility of sustainable transportation • Includes community charging and fueling grants, and alternative fuel corridor grants Funding Gap Analysis Notes
The Charging and Fueling Infrastructure (CFI) Discretionary Grant Program Discretionary Grant Program is a competitive grant program that provides funding to strategically deploy publicly accessible electric vehicle charging infrastructure and other alternative fueling infrastructure. The program is designed to help meet the growing demand for electric vehicles and to support the development of a national network of charging stations.

The CFI Discretionary Grant Program has two tracks:

1. Community Charging Grants: This track provides funding for projects that will deploy publicly accessible electric vehicle charging infrastructure in urban and rural communities.

2. Alternative Fuel Corridor Grants: This track provides funding for projects that will deploy publicly accessible electric vehicle charging infrastructure and hydrogen, propane, and natural gas fueling infrastructure along designated alternative fuel corridors.

The estimated total funding for the program is $2.5 billion dollars, with $350 million available in FY2022 and 2023. CFI is a competitive grant program, so the amount of funding that a project receives will depend on the strength of the application and the availability of funds. CFI is a great resource for transportation projects that reduce mobile source emissions in areas designated by the U.S. Environmental Protection Agency (EPA) to be in non-attainment or maintenance of the national ambient air quality standards.

HIP Funding Strategies Assessment & Gap Analysis 11

1. Community Charging Grants
• $350 million available for FY2022 and 2023
• Minimum award amount $500,000
• Max award amount $15,000,000

2. Alternative Fuel Corridor Grants
• $350 million available for FY2022 and 2023
• Minimum award amount $1,000,000
• No maximum award amount
Pre-Proposal
Deadline Due Date Local Match Est. Total Funding Available Est. Amount Per
Award
N/A Likely June 2024 20% $30M
Alternative Fuel
Corridor: $100K -
No max
Community
Charging: $500K -
$15M
• Congestion Mitigation and Air Quality Improvement (CMAQ) This grant, offered by the Department of Transportation, focuses on funding transportation projects that can reduce regulated emissions, including carbon monoxide, ozone, and particulate matter, in non-attainment and maintenance areas. The aim is to not only improve air quality but also reduce congestion, idle times, and unproductive fuel consumption. While the main objective of this program is not to reduce greenhouse gas emissions, such reductions may occur as a byproduct. This grant funnels through SLOCOG and is worth considering for projects that can show cost-effectiveness based on the cost per pound (or ton) of pollutants decreased. More Information & Apply
• Funds transportation projects that reduce regulated emissions in non-attainment and maintenance areas
• Aims to improve air quality and reduce congestion, idle times, and unproductive fuel consumption Funding Gap Analysis Notes
The range of grant awards for the Congestion Mitigation and Air Quality Improvement (CMAQ) varies depending on the project and the funding cycle. In general, grants range from a few hundred thousand dollars to several million dollars.

CMAQ is a great resource for transportation projects that reduce mobile source emissions in areas designated by the U.S. Environmental Protection Agency (EPA) to be in non-attainment or maintenance of the national ambient air quality standards.
• CMAQ funds for California (FY2023) after State Planning and Research Set-Aside funds is $505,447,953 Pre-proposal
Deadline Due Date Local Match Est. Total Funding Available Est. Amount Per
Award
TBD Likely late Spring/
Summer 2024 20% $505.4M (California, FY2023) $1.5M
• Accelerating Innovative Mobility (AIM)
The Federal Transit Administration (FTA) offers a range of grants suitable for various public transportation projects. The Accelerating Innovative Mobility (AIM) grant is one such opportunity, designed to encourage

HIP Funding Strategies Assessment & Gap Analysis 12
innovative transit technologies and practices, leverage private sector investments in mobility for public benefit, and ensure innovative technologies allow for interoperability across systems and modes. More Information & Apply
• Suitable for various public transportation projects
• Encourages innovative transit technologies and practices, and leverages private sector investments in mobility
• Ensures innovative technologies allow for interoperability across systems and modes Funding Gap Analysis Notes
The range of grant awards for AIM varies depending on the project and the funding cycle. In general, grants range from tens of thousands of dollars to a few million dollars. In FY2020, the smallest grant was $40,000 and the largest grant was $2.3 million.

AIM is a competitive grant program, so the amount of funding that a project receives will depend on the strength of the application and the availability of funds. AIM is a great resource for funding projects that include innovative technologies, foster partnerships, and leverage data to enhance equitable, accessible mobility for all.
• Total of $14M awarded through 25 awards
• Overall average grant award in FY2022 was $560K
Pre-proposal
Deadline Due Date Local Match Est. Total Funding Available Est. Amount Per
Award
The last round was
3/18/2020
Keep an eye out
for possible future
rounds
The last round was
5/18/2020
Keep an eye out
for possible future
rounds
The applicant
must provide the
local share of the
net project cost in
cash, or in-kind
$14M (FY2020) $560,000 (average)
• Safe Routes for All (SS4A)
The SS4A grant program by the Department of Transportation focuses on enhancing roadway safety by developing comprehensive safety action plans (Action Plans). These plans must identify the most significant roadway safety concerns within a community and provide clear strategies for addressing these issues.

Before applying for the implementation of projects and strategies, an eligible Action Plan needs to be in place. SS4A offers two types of grants - Planning and Demonstration Grants, and Implementation Grants.

Eligible applicants include metropolitan planning organizations, political subdivisions of a state or territory, federally recognized Tribal governments, and multi-jurisdictional groups of entities. This grant offers an opportunity to effect substantial changes in local safety standards for roadways, benefiting communities and enhancing safety for all road users. More Information & Apply • Administered by the Department of Transportation
• Supports the development of comprehensive safety action plans that address significant roadway safety concerns
• Funding is provided for both Planning and Demonstration Grants and Implementation Grants • Applicants must be metropolitan planning organizations, political subdivisions of a state or territory, federally recognized Tribal governments, or multi-jurisdictional groups of these entities • Requires an eligible Action Plan in place before application • Eligible applicants include metropolitan planning organizations, political subdivisions of a state or territory, federally recognized Tribal governments, and multi-jurisdictional groups of entities

HIP Funding Strategies Assessment & Gap Analysis 13
• Provides a substantial amount of funding (approx. $1,177,213,000 with $25,000,000 maximum per award)
Funding Gap Analysis Notes
The range of grant awards for the Safe Routes for All (SS4A) varies depending on the project and the funding cycle. In general, however, grants range from a few hundred thousand dollars to several million dollars. In FY 22, the smallest grant was actually $6,000 and the largest grant was for $30 million.

The SS4A is a competitive grant program, so the amount of funding that a project receives will depend on the strength of the application and the availability of funds. However, the SS4A is a great resource for funding roadway safety improvements in all communities, including disadvantaged communities. • Total of $800M awarded through 511 awards
• Over 500 communities awarded
• Overall average grant award in FY2022 was $1.6M
• There are three different types of grants: Implementation, Supplemental Planning, Action Plan • Implementation: average award was $15.9M
• Supplemental Planning: average award was $851,000
• Action Plan: average award was $535,000
Pre-proposal
Deadline Due Date Local Match Est. Total Funding Available Est. Amount Per
Award
March 8, 2023
(will likely be the
same next cycle)
July 10, 2023
(will likely be the
same next cycle)
20% $1.1B
Implementation:
$15.9M (average)
Supplemental
Planning: $851,000
(average)
Action Plan:
$535,000 (average)
Funding Opportunities: Water Projects
Below is a list of viable funding options for HIP priority water projects, organized by funding source:

STATE FUNDING
• Proposition 1 Water Bond
This bond measure authorized $7.5 billion in funding for water infrastructure projects in California. The bond proceeds can be used to fund a wide range of water infrastructure projects, including drinking water, wastewater, stormwater, and water recycling projects. More Information & Apply • Bond proceeds can be used to fund a wide range of water infrastructure projects, including drinking water, wastewater, stormwater, and water recycling projects • The bond proceeds will be distributed to local water agencies over a period of 30 years Funding Gap Analysis Notes
The average grant amount of the Proposition 1 water bond grants cannot be determined as the grants have not yet been awarded. The Proposition 1 water bond authorized $7.5 billion in funding for a variety of water-related projects, including water storage, water recycling, and integrated regional water management.

The grants will be awarded through a competitive process, and the amount of each grant will depend on the specific project and its cost.

HIP Funding Strategies Assessment & Gap Analysis 14
However, we can get an idea of the average grant amount by looking at the grants that have already been awarded under Proposition 1. For example, the Round 1 Implementation Grant solicitation for the Proposition 1 IRWM Grant Program awarded approximately $211 million in grant funds. The average grant amount for these projects was $17.2 million.

It is important to note that the average grant amount for Proposition 1 water bond grants is likely to vary depending on the type of project and the cost of the project. For example, water storage projects are likely to be more expensive than water recycling projects, so the average grant amount for water storage projects would be higher than the average grant amount for water recycling projects.

Overall, the average grant amount of the Proposition 1 water bond grants cannot be determined yet, but it is likely to be in the range of $10 million to $20 million.

Pre-proposal
Deadline Due Date Local Match Est. Total Funding Available Est. Amount Per
Award
Likely February
2024 Likely May 2024 25% $7.5B $10M-$20M
• Regional Resilience Planning and Implementation Grant Program (RRGP) Offered by the Governor’s Office of Planning and Research, the RRGP grant is designed to help regions enhance their climate resilience through capacity-building, planning, and project implementation. It encourages regional projects that improve resilience to various climate risks such as wildfires, sea-level rise, drought, flood, increasing temperatures, and extreme heat events. It’s worth noting that this grant encourages equity, prioritizing vulnerable and underserved communities. More Information & Apply • Enhances climate resilience through capacity-building, planning, and project implementation • Encourages projects that improve resilience to various climate risks • Prioritizes equity, focusing on vulnerable and underserved communities Funding Gap Analysis Notes
The approximate average grant amount for water projects for the Regional Resilience Planning and Implementation Grant Program (RRGP) is $2.5 million. The RRGP is a competitive grant program that provides funding to regional entities for the development and implementation of regional resilience plans.

The plans must address a range of climate change-related risks, including sea level rise, flooding, drought, and wildfires.

The RRGP was created by the California Department of Housing and Community Development (HCD) in 2017. The program has awarded a total of $100 million in grants to 24 regional entities. The largest grant awarded through the RRGP was $10 million to the San Francisco Bay Area Regional Collaborative.

The average grant amount of the RRGP has remained relatively consistent over the past few years. In 2017, the average grant amount was $2.4 million. In 2018, the average grant amount was $2.6 million. And in 2019, the average grant amount was $2.5 million.

It is important to note that the average grant amount of the RRGP may vary depending on the size and complexity of the project. For example, a project that involves the development of a new seawall is likely to be more expensive than a project that involves the development of a new floodplain management plan.

Pre-proposal
Deadline Due Date Local Match Est. Total Funding Available Est. Amount Per
Award
Rolling basis
through August 29,
2023
August 29, 2023 None $18.8M (over two
rounds)
$2.5M (average)
*water projects

HIP Funding Strategies Assessment & Gap Analysis 15

FEDERAL FUNDING
• Clean Water State Revolving Fund (CWSRF)
This grant program provides funding to states to establish revolving funds that can be used to finance clean water infrastructure projects. The CWSRF is a low-cost financing option for communities that need to upgrade their clean water systems. More Information & Apply • Provides funding to states to establish revolving funds that can be used to finance clean water infrastructure projects
• The CWSRF is a low-cost financing option for communities that need to upgrade their clean water systems
• Funding can be used for a variety of activities, including:
• Replacing aging stormwater pipes
• Upgrading wastewater treatment plants
• Installing new green infrastructure
• Conducting water quality testing
Funding Gap Analysis Notes
The average grant amount of the Clean Water State Revolving Fund (CWSRF) varies depending on the state.

However, the national average grant amount for the CWSRF in 2022 was $3.5 million.

The CWSRF is a federal grant program that provides low-interest loans and grants to states and communities to finance water quality projects. The program was created in 1987 by the Clean Water Act Amendments.

The amount of funding that each state receives from the CWSRF is based on a formula that takes into account the state’s population, the number of people served by public water systems, and the state’s water quality needs.

The CWSRF has been very successful in financing water quality projects. Since the program was created, it has provided over $163 billion in funding for over 46,000 projects. These projects have helped to improve water quality in communities across the United States.

Here are some examples of the types of projects that have been funded by the CWSRF:
• Wastewater treatment plants
• Stormwater management systems
• Drinking water treatment plants
• Wetlands restoration projects
• Fish and wildlife habitat improvement projects
The CWSRF is a valuable tool for improving water quality in the United States. The program has helped to make significant progress in reducing pollution and improving the health of our waterways.

Pre-proposal
Deadline Due Date Local Match Est. Total Funding Available Est. Amount Per
Award
Likely March 2024 Likely June 2024 20% $163B $3.5M
• Drinking Water State Revolving Fund (DWSRF)
This grant program provides funding to states to establish revolving funds that can be used to finance drinking water infrastructure projects. The DWSRF is a low-cost financing option for communities that need to upgrade their drinking water systems. More Information & Apply

HIP Funding Strategies Assessment & Gap Analysis 16
• Low-cost financing option for communities that need to upgrade their drinking water systems • Funding can be used for a variety of activities, including:
• Replacing aging water mains
• Upgrading treatment facilities
• Installing new water meters
• Conducting water quality testing
Funding Gap Analysis Notes
The average grant size of the Drinking Water State Revolving Fund (DWSRF) varies depending on the state.

However, the national average grant size for the DWSRF in 2022 was $2.3 million.

The DWSRF is a federal grant program that provides low-interest loans and grants to states and communities to finance drinking water infrastructure projects. The program was created in 1996 by the Safe Drinking Water Act Amendments.

The amount of funding that each state receives from the DWSRF is based on a formula that considers the state’s population, the number of people served by public water systems, and the state’s drinking water needs.

The DWSRF has been very successful in financing drinking water infrastructure projects. Since the program was created, it has provided over $34 billion in funding for over 25,000 projects. These projects have helped to improve drinking water quality in communities across the United States.

Here are some examples of the types of projects that have been funded by the DWSRF:
• Water main replacement projects
• Water treatment plant upgrades
• Wellhead protection projects
• Lead service line replacement projects
• Public education and outreach projects
The DWSRF is a valuable tool for improving drinking water quality in the United States. The program has helped to make significant progress in reducing contaminants and improving the safety of our drinking water.

In addition to the national average, here are some examples of the average grant sizes for the DWSRF in different states:
• California: $3.2 million
• Texas: $2.1 million
• New York: $1.9 million
• Florida: $1.7 million
• Ohio: $1.6 million
It is important to note that the average grant size of the DWSRF may vary depending on the size and complexity of the project. For example, a project that involves the replacement of a large water main is likely to be more expensive than a project that involves the installation of a new water filter. Overall, the average grant size of the DWSRF is $2.3 million. This amount is likely to remain relatively consistent in the future.

HIP Funding Strategies Assessment & Gap Analysis 17
Pre-proposal
Deadline Due Date Local Match Est. Total Funding Available Est. Amount Per
Award
Likely April 2024 Likely June 2024 20% $34B $2.3M
• Integrated Regional Water Management (IRWM) Grant Programs These grant programs provide funding to states, tribes, and local governments to support integrated regional water management planning and implementation activities. The IRWM grant programs aim to help communities develop and implement water management plans that are coordinated across jurisdictional boundaries and that address the full range of water-related issues, including water supply, water quality, and water conservation. More Information & Apply
• Helps communities develop and implement water management plans that are coordinated across jurisdictional boundaries and that address the full range of water-related issues, including water supply, water quality, and water conservation
• Funding can be used for a variety of activities, including:
• Developing integrated regional water management plans • Conducting water resource assessments
• Implementing water conservation programs
• Building capacity for integrated water management
Funding Gap Analysis Notes
The average grant amount of Integrated Regional Water Management (IRWM) Grant Programs varies depending on the state and the type of project. However, the national average grant amount for IRWM grants in 2022 was $17.2 million.

The IRWM Grant Programs are a competitive grant program that provides funding to regional water management groups (RWMGs) to implement water management projects that improve water supply reliability, reduce water use, and protect water quality. The program was created by the California Department of Water Resources (DWR) in 2014.

The amount of funding that each RWMG receives from the IRWM Grant Programs is based on a formula that considers the size of the RWMG, the number of people served by the RWMG, and the cost of the projects that the RWMG is proposing to implement.

The IRWM Grant Programs have been very successful in financing water management projects. Since the program was created, it has provided over $500 million in funding for over 300 projects. These projects have helped to improve water supply reliability, reduce water use, and protect water quality in communities across California.

Here are some examples of the types of projects that have been funded by the IRWM Grant Programs:
• Water conservation projects
• Water recycling projects
• Water storage projects
• Watershed restoration projects
• Flood control projects
The IRWM Grant Programs are a valuable tool for improving water management in California. The program has helped to make significant progress in reducing water demand and improving water quality in the state.

In addition to the national average, here are some examples of the average grant amounts for IRWM grants in different states:

HIP Funding Strategies Assessment & Gap Analysis 18
• California: $17.2 million
• Texas: $12.5 million
• New York: $10.0 million
• Florida: $8.7 million
• Ohio: $7.5 million
It is important to note that the average grant amount of the IRWM Grant Programs may vary depending on the size and complexity of the project. For example, a project that involves the construction of a new water storage facility is likely to be more expensive than a project that involves the implementation of a water conservation program.

Overall, the average grant amount of the IRWM Grant Programs is $17.2 million. This amount is likely to remain relatively consistent in the future.

Pre-proposal
Deadline Due Date Local Match Est. Total Funding Available Est. Amount Per
Award
TBD
Round 2 was
February 1, 2023
Keep an eye out
for possible future
rounds
20% $500M $17.2M
• Safe Drinking Water State Revolving Fund (SDWSRF)
The SDWSRF was established by the 1996 amendments to the Safe Drinking Water Act (SDWA). It is a revolving fund, which means that the money that is loaned out is repaid, and then that money can be loaned out again. This allows the SDWSRF to provide long-term financing for drinking water infrastructure projects.

Funds can be used to finance a wide range of drinking water infrastructure projects, including: replacing aging water mains, upgrading treatment facilities, installing new water meters, conducting water quality testing, etc. More Information & Apply
• Applicants must submit a grant application that describes their proposed project and how it will help to improve the quality of drinking water in their community • The program provides low-cost financing that can help communities make the necessary investments to ensure that their drinking water is safe and reliable
• The SDWSRF can be used to finance a wide range of drinking water infrastructure projects, including:
• Replacing aging water mains
• Upgrading treatment facilities
• Installing new water meters
• Conducting water quality testing
Funding Gap Analysis Notes
There is no single average cost of the Safe Drinking Water State Revolving Fund (SDWSRF) because the cost of a project can vary depending on the size and complexity of the project, as well as the cost of labor and materials in the specific location of the project. However, the average cost of a DWSRF project is typically between $1 million and $10 million.

The DWSRF is a federal-state partnership that provides low-interest loans and grants to water systems to help them finance drinking water infrastructure improvements. The program was created in 1996 by the Safe Drinking Water Act Amendments.

HIP Funding Strategies Assessment & Gap Analysis 19
Since its inception, the DWSRF has provided over $34 billion in funding for over 25,000 projects. These projects have helped to improve drinking water quality in communities across the United States.

Some of the most common types of projects funded by the DWSRF include:
• Water main replacement projects
• Water treatment plant upgrades
• Wellhead protection projects
• Lead service line replacement projects
• Public education and outreach projects
The DWSRF is a valuable tool for improving drinking water quality in the United States. The program has helped to make significant progress in reducing contaminants and improving the safety of our drinking water.

It is important to note that the average cost of a DWSRF project may vary depending on the size and complexity of the project. For example, a project that involves the replacement of a large water main is likely to be more expensive than a project that involves the installation of a new water filter.

Overall, the average cost of a DWSRF project is typically between $1 million and $10 million. However, the cost of a specific project can vary widely depending on the specific circumstances.

Pre-proposal
Deadline Due Date Local Match Est. Total Funding Available Est. Amount Per
Award
N/A Rolling 20% $34B $1M - $10M
• Water and Waste Disposal Loan and Grant Program
This grant program provides funding to states to establish revolving funds that can be used to finance water and waste disposal infrastructure projects. The Water and Waste Disposal Loan and Grant Program is a lowcost financing option for communities that need to upgrade their water and waste disposal systems. More Information & Apply
• Provides funding to states to establish revolving funds that can be used to finance water and waste disposal infrastructure projects
• The Water and Waste Disposal Loan and Grant Program is a low-cost financing option for communities that need to upgrade their water and waste disposal systems • Funding can be used for a variety of activities, including:
• Replacing aging sewer pipes
• Upgrading wastewater treatment plants
• Installing new septic systems
• Conducting water quality testing
Funding Gap Analysis Notes
The average grant amount of the Water and Waste Disposal Loan and Grant Program (WWDLG) is $2.5 million. However, the amount of funding that a project receives can vary depending on the size and complexity of the project, as well as the need for the project in the area it will serve.

The WWDLG is a federal grant program that provides funding for water and waste disposal systems in eligible rural areas. The program was created in 1977 by the Rural Development Act.

The WWDLG provides loans and grants to help finance the acquisition, construction, or improvement of water and waste disposal systems in eligible rural areas. Eligible areas include:

HIP Funding Strategies Assessment & Gap Analysis 20
• Rural areas with populations of 10,000 or less
• Tribal lands in rural areas
• Colonias
The WWDLG can be used to finance a variety of water and waste disposal projects, including:
• Drinking water sourcing, treatment, storage, and distribution • Sewer collection, treatment, and disposal
• Solid waste collection, disposal, and closure
• Storm water collection, transmission, and disposal
The WWDLG is a valuable tool for improving water and waste disposal infrastructure in rural areas.

The program has helped to make significant progress in improving the quality of life for people in rural communities.

In addition to the average grant amount, here are some examples of the grant amounts that have been awarded through the WWDLG:
• The City of La Crosse, Wisconsin, received a $10 million grant to improve its water treatment plant. • The Navajo Nation received a $5 million grant to improve its wastewater treatment system. • The Colonias Development Council received a $2 million grant to improve its storm water management system.

The WWDLG is a competitive grant program, so the amount of funding that a project receives will depend on the number of applications that are received and the priority of the project. However, the average grant amount is $2.5 million, and projects can receive up to $10 million in funding.

Pre-proposal
Deadline Due Date Local Match Est. Total Funding Available Est. Amount Per
Award
N/A Rolling Varies $1.5B $2.5M
• Water Infrastructure Finance and Innovation Act (WIFIA) This loan and grant program provides funding to states, municipalities, and other public entities to finance water infrastructure projects. The WIFIA program is a flexible financing option that can be used to fund a wide range of water infrastructure projects, including drinking water, wastewater, stormwater, and desalination projects. More Information & Apply
• Provides funding to states, municipalities, and other public entities to finance water infrastructure projects
• The WIFIA program is a flexible financing option that can be used to fund a wide range of water infrastructure projects, including drinking water, wastewater, stormwater, and desalination projects • WIFIA loans can be repaid over a period of up to 40 years, and they can be used to finance up to 80% of the cost of a project
Funding Gap Analysis Notes
There is no average grant size for the Water Infrastructure Finance and Innovation Act (WIFIA) because the amount of funding that a project receives can vary depending on the size and complexity of the project, as well as the need for the project in the area it will serve.

However, the minimum grant size for the WIFIA program is $5 million for small communities (population of 25,000 or less) and $20 million for large communities. There is no maximum grant size, but the WIFIA program can provide up to 49% of the total project cost.

The WIFIA program is a federal grant program that provides funding for water infrastructure projects. The

HIP Funding Strategies Assessment & Gap Analysis 21
program was created in 2014 by the Water Infrastructure Finance and Innovation Act.

The WIFIA program can be used to finance a variety of water infrastructure projects, including:
• Drinking water treatment plants
• Wastewater treatment plants
• Stormwater management systems
• Water conservation projects
• Water recycling projects
The WIFIA program is a valuable tool for improving water infrastructure in the United States. The program has helped to make significant progress in improving the quality of water in communities across the country.

In addition to the minimum grant size, here are some examples of the grant amounts that have been awarded through the WIFIA program:
• The City of Milwaukee, Wisconsin, received a $100 million grant to improve its drinking water treatment plant
• The Metropolitan Water District of Southern California received a $50 million grant to improve its wastewater treatment system
• The City of New York received a $20 million grant to improve its storm water management system The WIFIA program is a competitive grant program, so the amount of funding that a project receives will depend on the number of applications that are received and the priority of the project. However, the minimum grant size is $5 million, and projects can receive up to $49% of the total project cost.

Pre-proposal
Deadline Due Date Local Match Est. Total Funding Available Est. Amount Per
Award
Yes Rolling None $10B Varies
Alternative Funding Strategies Overview
The following Infrastructure Funding Strategies Overview outlines a variety of funding and financing sources that could be leveraged to meet water, wastewater, and transportation infrastructure needs as part of the Regional Housing and Infrastructure Plan (HIP). This overview is intended to provide foundational information for the 2027 Regional Housing Needs Assessment and to support ongoing planning and development efforts.

LOCAL FUNDING
• Self-Help County
Currently, San Luis Obispo is not a Self-Help County. Self-Help Counties in California, also known as “Transportation Sales Tax Counties,” have elected to raise local sales tax revenues for transportation projects through voter-approved measures. Currently, there are 25 Self-Help Counties throughout California. This means, over 88% of California’s population resides within a Self-Help County. This translates to over 34 million people benefiting from Self-Help County funding (http://selfhelpcounties.org/).

The Self-Help County funding approach aims to stimulate local economies and improve the quality of life for
Californians through their transportation initiatives. Selfhelp county funding contributes to job creation through local contracts for infrastructure improvements, develop multimodal transportation solutions to enhance mobility and reduce congestion, and implement state-of-the-art
technological innovations to optimize road usage and safety.

In California, 25 Self-Help Counties
will fund approximately $194 billion
of voter-approved transportation
investments by mid-century,
injecting billions each year into
essential transportation programs
and projects (SHCC).

HIP Funding Strategies Assessment & Gap Analysis 22
Additionally, the investment in public transit and bicycle and pedestrian infrastructure supports California’s greenhouse gas reduction mandates.

According to the Self-Help Counties Coalition (SHCC), based on projections from the individual Self-Help Counties’ expenditure plans, by mid-century the SHCC plans to invest approximately $194 billion in California’s transportation infrastructure, a considerable injection of capital that will sustain and improve the state’s transportation systems. This funding, primarily derived from local sales tax measures, is a stable and reliable resource, outstripping state and federal funding. Below is a summary of the benefits of being a Self-Help County:

1. Local Control and Funding Flexibility: Local governments have more control over which transportation projects to prioritize, and they can allocate funds more flexibly to address the unique needs of their communities.

2. Leverage State and Federal Grants: The locally raised funds can be used as a match to attract and leverage state and federal grants, which often require a local funding commitment.

3. Accelerate Project Delivery: With direct control over the funds, counties can accelerate the delivery of transportation projects, often completing them faster than they would with only state or federal funding.

4. Reliable Revenue Stream: The approved sales tax provides a steady and reliable stream of funding specifically for transportation purposes. This allows for long-term planning and infrastructure development.

5. Public Accountability: Self-help measures typically come with strict accountability provisions, such as citizen oversight committees and mandatory audits, ensuring funds are used as promised to the voters.

6. Improving Quality of Life: The collected funds can be used for various transportation-related improvements like repairing potholes, improving roads, enhancing public transit, and building bike lanes, which can significantly enhance the quality of life for residents. • Municipal Bonds
Issuing bonds is a common way for localities to fund large infrastructure projects. Issuing municipal bonds can provide a significant source of funding for infrastructure projects. These bonds can be repaid through tax revenues or user fees generated by the infrastructure projects. • Development Impact Fees
These fees are charged to developers to offset the public costs of new development, including infrastructure. Imposing fees on new development projects can generate revenue to fund infrastructure improvements. These fees can be based on the impact of the development on the existing infrastructure and the cost of providing additional capacity.
• Tax Increment Financing (TIF)
TIF can be used to fund infrastructure improvements in designated areas by capturing the increased property tax revenues generated by new development. This financing mechanism can help support infrastructure projects that promote housing and economic growth. • Public-Private Partnerships (P3s)
In a P3, a private entity provides capital and potentially operates a public project. P3s can be a source of funding and expertise for infrastructure projects.
• Special Assessment Districts
Creating special assessment districts can levy additional taxes or fees on properties within a designated area

HIP Funding Strategies Assessment & Gap Analysis 23
to fund specific infrastructure projects. Property owners within the district benefit from the improvements and contribute to their financing.
• User Fees
Charging fees for the use of infrastructure facilities, such as water and wastewater services or transportation systems, can generate revenue to fund their maintenance and expansion. • Value Capture Strategies
Implementing value capture strategies, such as land value taxation or betterment levies, can generate revenue by capturing a portion of the increased property values resulting from infrastructure improvements.

STATE FUNDING
• Clean Energy Bond Financing
The California Alternative Energy and Advanced Transportation Financing Authority issues tax-exempt bonds to finance green projects. Over its lifetime, CAEATFA has issued more than $212 million in bond financing for 26 green projects. The projects help California meet its energy goals and have included solar, hydroelectric, geothermal, biomass and cogeneration projects. More Information & Apply Clean energy bond financing can be used to fund a variety of projects that promote clean energy and environmental sustainability. Some of the most common types of projects that are funded through clean energy bond financing include:
• Energy efficiency projects: These projects can help to reduce energy consumption and save money on energy bills. Examples of energy efficiency projects include:
• Installing energy-efficient lighting
• Weatherizing homes and businesses
• Retrofitting buildings with energy-efficient HVAC systems • Renewable energy projects: These projects can help to reduce reliance on fossil fuels and generate clean, renewable energy. Examples of renewable energy projects include:
• Installing solar panels
• Building wind turbines
• Developing geothermal energy projects
• Clean transportation projects: These projects can help to reduce air pollution and promote cleaner transportation options. Examples of clean transportation projects include:
• Installing electric vehicle charging stations
• Building bicycle paths and trails
• Providing subsidies for public transportation
• Sustainable infrastructure projects: These projects can help to reduce environmental impacts and promote sustainable development. Examples of sustainable infrastructure projects include:
• Building green roofs
• Developing water conservation projects
• Restoring wetlands
Clean energy bond financing is a valuable tool for promoting clean energy and environmental sustainability.

The funds raised through clean energy bond financing can help to support a wide range of projects that are making a positive impact on the environment.

HIP Funding Strategies Assessment & Gap Analysis 24
Here are some additional benefits of clean energy bond financing:
• It can help to attract private investment in clean energy projects. • It can help to reduce the cost of clean energy projects. • It can help to create jobs in the clean energy sector. • It can help to improve air quality and reduce greenhouse gas emissions.

The average project amount that the Clean Energy Bond Financing would finance is $10 million to $100 million. However, the amount of funding that a project receives can vary depending on the size and complexity of the project, as well as the need for the project. • Bond Financing/Loan
GoGreen Multifamily targets affordable multifamily properties where at least 50% of the units are restricted to households of low to moderate income (80-120% Area Median Income) and features a credit enhancement to help financing entities mitigate risk. Products supported include loans, leases, equipment financing agreements, service agreements and savings-based payment agreements. More Information & Apply
• Transportation Bond
The Governor on October 11, 2009 signed AB 798, creating CTFA within the State Treasurer’s Office. The statute authorizes the CTFA to issue, or approve the issuance of, revenue bonds to finance transportation projects. The CTFA will review proposed projects to ensure they are financially sound, and has the ability to approve tolls as part of the financing plans to repay revenue bonds.

Paying for transportation projects has grown increasingly difficult. One of the largest funding sources historically has been gasoline taxes. Those revenues, however, have not kept pace with the state’s construction and improvement needs. Meanwhile, state and local government general fund budgets are under increasing strain. That makes it less feasible, and less prudent, to finance transportation projects through the issuance of general obligation bonds, which are repaid by general funds. More Information & Apply
• Water & Wastewater Rate Reduction Bond Program
The California Pollution Control Financing Authority (CPCFA) has responsibility to review the issuance of certain rate reduction bonds to finance and/or refinance water and wastewater utility projects that are approved by joint powers authorities (JPAs). These issuances allow California local agencies that own and operate water and wastewater utilities to access low-cost financing through rate reduction bonds. The rate reduction bonds issued by JPAs to local agencies to finance or refinance a water or wastewater utility project are to be secured by utility project property and repaid through a separate utility project charge imposed on the utility ratepayers’ bills. More Information & Apply • California Infrastructure and Economic Development Bank (IBank) IBank offers low-cost financing for infrastructure projects, including water, wastewater, and transportation. • California State Water Resources Control Board (SWRCB) Financing Programs These programs provide low-interest loans and grants for water and wastewater infrastructure projects. • California Department of Housing and Community Development (HCD) Housing Programs Various HCD programs support housing-related infrastructure.

FEDERAL FUNDING
• EPA’s Clean Water State Revolving Fund (CWSRF)

HIP Funding Strategies Assessment & Gap Analysis 25
This program provides low-interest loans for investments in wastewater treatment, including the construction of municipal sewage treatment facilities.
• EPA’s Drinking Water State Revolving Fund (DWSRF)
DWSRF offers financial support for water supply infrastructure projects, including loans and loan forgiveness. • Department of Transportation (DOT) Grants
Various DOT grants, such as BUILD and INFRA grants, can fund transportation projects. The DOT’s Federal Highway Administration also offers the Surface Transportation Block Grant Program for a wide array of transportation infrastructure projects.
• Housing and Urban Development (HUD) Community Development Block Grants (CDBG) These grants can fund a variety of infrastructure projects in support of affordable housing, including water and sewer infrastructure.

ADDITIONAL FINANCING MECHANISMS
• Green Bonds
These are similar to municipal bonds but specifically fund projects with environmental benefits, including water and wastewater projects.
• Infrastructure Banks
These institutions, either state-level or national, provide low-cost, long-term financing for infrastructure projects. Establishing a regional infrastructure bank can provide low-interest loans and credit enhancements to support infrastructure projects. This financial institution can pool resources from various sources, including federal, state, and local governments, as well as private investors. • Social Impact Bonds
These bonds fund projects with social benefits, such as affordable housing, with returns paid to investors based on achieving social outcomes.

HIP Funding & Gap Analysis 26
Funding Opportunities Menu
Each funding option below includes a list of the HIP priority projects most likely to be successful for the respective funding opportunity. Given the high competition for many of these grants, and considering that funding organizations often avoid granting more than one or two awards to a single applicant, the projects highlighted in bold are the ones BKF recommends for submission to their corresponding grant. These selected projects have been factored into the gap funding computation, which can be found at the conclusion of the matrix.

Grant Name Application
Due Date
Est. Award
Amount
Est. Total
Fund
Available
Funding
Agency
Funding
Source
Top Matched HIP Projects 2023 Cost
Estimate
Projected
Funds Awarded
Gap in Funding
*cost estimate -
funds awarded =
Gap in Funding
Transportation Projects
Active
Transportation
Program (ATP)
Likely June
2024 $2.5M (average) $750M
California
Transportation
Commission
State

1. Higuera Protected Bike Lanes

2. Madonna Rd. - Class IV - Madonna Inn to Higuera Ave.

3. South of Broad St. and Santa Barbara Ave. Protected Bike Lanes

4. Tank Farm Road Complete Street

1. $8,817,000

2. $1,864,500

3. $4,599,000

4. $1,533,000

1. $2,500,000

2. $1,864,500

3. $2,500,000

4. $1,533,000

1. $6,317,000

2. $0

3. $2,099,000

4. $0
Local Highway
Safety
Improvement
Program (HSIP)
Likely
September
2024
$1.5M (average) $210M
California
Department of
Transportation
State

1. Froom Ranch Frontage & Streetscape Improvements

2. Los Osos Valley Rd/Auto Park Wy Intersection Improvements

3. Roadway Extension of Hetrick Rd

4. Broad St/Tank Farm Rd Intersection Improvements

5. Prado Rd. Bridge Replacement & Multimodal Corridor Enhancements

1. $932,250

2. $1,000,000

3. $3,832,500

4. $2,299,500

5. $12,000,000

1. $932,250

2. $1,000,000

3. $1,500,000

4. $1,500,000

5. $1,500,000

1. $0

2. $0

3. $2,332,500

4. $799,000

5. $10,500,00
Local
Transportation
Climate Adaptation
Program (LTCAP)
5/17/2023 $16M (average) $296.5M
(cycle 1)
California
Transportation
Commission
State

1. Tank Farm Road Complete Street

2. Interchange Improvements at Willow Rd

3. Prado Rd. Bridge Replacement & Multimodal Corridor Enhancements

4. S. 4th St. bike lanes: Grand Ave. to city limits

1. $1,533,000

2. $2,734,600

3. $12,000,000

4. $45,000

1. $1,533,000

2. $2,734,600

3. $12,000,000

4. $45,000

1. $0

2. $0

3. $0

4. $0
Monarch Butterfly
and Pollinator
Rescue
Rolling $200-250K
(average) $3M
California
Department of
Fish and Wildlife
State

1. S. 4th St. bike lanes: Grand Ave. to city limits

2. The Pike Complete Street Improvements

3. Grover Beach Service Addition

4. Beach Cities Trail: Boardwalk Dune Trail

1. $45,000

2. $93,225

3. N/A

4. $15,300,000

1. $45,000

2. $93,225

3. N/A

4. $200,000

1. $0

2. $0

3. N/A

4. $15,100,000
Regional Resilience
Planning and
Implementation
Grant Program
(RRGP)
7/19/2023
$1.5M (average)
Planning grants:
$150 - $650K
Implementation
grants: $650K -
$3M
$18.8M
(over two
rounds)
State of
California,
Governor’s
Office of
Planning and
Research
State

1. North County Charging Facility

2. Niblick Rd. Corridor enhancements, operational improvements, Complete Streets

3. Paso Robles Eastside Grand Loop

4. Creston Rd.: South River Rd. to Niblick Rd.

5. Huer Huero Creek Trail

6. Creekside Bike Path: Phase 1 and 2

7. N. River Rd.

1. $1,000,000

2. $17,257,000

3. $11,187,000

4. $10,000,000

5. $7,818,300

6. $3,600,000

7. $3,214,500

1. $1,000,000

2. $1,500,000

3. $1,500,000

4. $1,500,00

5. $1,500,000

6. $1,500,000

7. $1,500,000

1. $0

2. $15,757,000

3. $9,687,000

4. $8,500,000

5. $6,318,300

6. $2,100,000

7. $1,714,500

HIP Funding & Gap Analysis 27
Grant Name Application
Due Date
Est. Award
Amount
Est. Total
Fund
Available
Funding
Agency
Funding
Source
Top Matched HIP Projects 2023 Cost
Estimate
Projected
Funds Awarded
Gap in Funding
*cost estimate -
funds awarded =
Gap in Funding
Transformative
Climate
Communities
(TCC) Round 5:

Implementation
Grant (FY 22-23)
8/1/2023 Up to $30M $500M
California
Strategic
Growth Council
State

1. Creston Rd.: Niblick Rd. to Meadowlark Dr. (Phase 3)

2. North County Charging Facility

3. Paso Robles Eastside Grand Loop

4. The Pike Complete Street Improvements

5. S. 4th St. bike lanes: Grand Ave. to city limits

6. Huer Huero Creek Trail

7. N. River Rd.

1. $10,000,000

2. $1,000,000

3. $11,187,000

4. $93,225

5. $45,000

6. $7,818,300

7. $3,214,500

1. $10,000,000

2. $1,000,000

3. $11,187,000

4. $93,225

5. $45,000

6. $7,818,300

7. $3,214,500

1. $0

2. $0

3. $0

4. $0

5. $0

6. $0

7. $0
Transformative
Climate
Communities (TCC)
Round 5: Project
Development
Grant (FY 22-23)
8/1/2023 Up to $5M $100M
California
Strategic
Growth Council
State

1. Creekside Bike Path: Phase 1 and 2

2. Huer Huero Creek Trail

3. Niblick Rd. Corridor enhancements, operational improvements, Complete Streets

4. Paso Robles Eastside Grand Loop

5. Las Tablas Rd. at Florence St. Improvements

6. South River Rd. / Charolais Rd. Roundabout

1. $3,600,000

2. $7,818,300

3. $17,257,000

4. $11,187,000

5. $807,950

6. $2,486,000

1. $3,300,000

2. $3,300,00

3. $3,300,000

4. $3,300,000

5. $807,950

6. $2,486,000

1. $300,000

2. $4,518,300

3. $13,957,000

4. $7,887,000

5. $0

6. $0
Transformative
Climate
Communities (TCC)
Round 5: Planning
Grant (FY 22-23)
8/1/2023 $300K (average)
Up to $1M
$50M
California
Strategic
Growth Council
State

1. Creekside Bike Path: Phase 1 and 2

2. Orcutt Rd. widening: Johnson Ave. to Tank Farm Rd. (Phase 1)

1. $3,600,000

2. $3,066,000

1. $300,000

2. $300,000

1. $3,300,000

2. $2,766,000
Wildlife Corridor
and Fish Passage Rolling $1M (average) $83.15B
California
Department of
Fish and Wildlife
State

1. Railroad Safety Trail (Phase 7): Bike connection south of Tank Farm Rd.

2. Railroad Safety Trail: bike bridge crossing at Industrial Way

3. Prado Rd. Bridge Replacement & Multimodal Corridor Enhancements

4. Santa Fe Rd. extension: Santa Fe Rd. to Tank Farm Rd.

5. Interchange Improvements at Las Tablas Rd
*Must add a wildlife overcrossing or undercrossing to the project(s) submitted for this grant

1. $3,169,650

2. $3,909,150

3. $12,000,000

4. $15,330,000

5. $3,060,000

1. $1,000,000

2. $1,000,000

3. $1,000,000

4. $1,000,000

5. $1,000,000

1. $2,169,650

2. $2,909,150

3. $11,000,000

4. $14,330,000

5. $2,060,000
Charging
and Fueling
Infrastructure
(CFI) Discretionary
Grant Program
5/30/2023
Alternative Fuel
Corridor: $100K -
No max
Community
Charging: $500K -
$15M
$30M
U.S.

Department of
Transportation
Federal 1. North County Charging Facility 1. $1,000,000 1. $1,000,000 1. $0 Congestion
Mitigation and
Air Quality
Improvement
(CMAQ)
Call for
projects
Summer
2023
$1.5M
$505.4M
(California,
FY2023)
U.S.

Department of
Transportation
Federal

1. Broad St/Tank Farm Rd Intersection Improvements

2. Creston Rd.: Niblick Rd. to Meadowlark Dr. (Phase 3)

3. US 101 / SR 46W I/C construct two roundabouts

4. Los Osos Valley Rd/Auto Park Wy Intersection Improvements

5. Las Tablas Rd. at Florence St. Improvements

1. $2,299,500

2. $4,313,210

3. $21,752,500

4. $1,000,000

5. $807,950

1. $1,500,000

2. $1,500,000

3. $1,500,000

4. $1,000,000

5. $807,950

1. $799,500

2. $2,813,210

3. $20,252,500

4. $0

5. $0

HIP Funding & Gap Analysis 28
Grant Name Application
Due Date
Est. Award
Amount
Est. Total
Fund
Available
Funding
Agency
Funding
Source
Top Matched HIP Projects 2023 Cost
Estimate
Projected
Funds Awarded
Gap in Funding
*cost estimate -
funds awarded =
Gap in Funding
Accelerating
Innovative Mobility
(AIM)
Varies $560,000
(average)
$14M
(FY2020)
Federal Transit
Administration Federal

1. Cashless Fare System Conversion

2. North County Charging Facility

3. Grover Beach Service Addition

4. Nipomo Service Addition

5. Paso Robles Service Addition (Beechwood)

6. Paso Robles Service Addition (Olsen/South Chandler)

7. San Luis Obispo Service Additional Stop Along Board or Tank Farm

8. San Luis Obispo Service Addition (Broad and South Higuera)

9. Paso Robles New Route
*Must include the purchase or lease of low or no emission vehicles or include an innovative element (like cashless fare system) to the project(s) submitted for this grant

1. $550,000

2. $1,000,000

3. N/A

4. N/A

5. N/A

6. N/A

7. N/A

8. N/A

9. $1,700,000

1. $550,000

2. $560,000

3. N/A

4. N/A

5. N/A

6. N/A

7. N/A

8. N/A

9. $560,000

1. $0

2. $440,000

3. N/A

4. N/A

5. N/A

6. N/A

7. N/A

8. N/A

9. $114,000
Safe Routes for All
(SS4A) 7/10/2023
Overall: $1.6M
(average)
Implementation:
$15.9M (average)
Supplemental
Planning:
$851,000
(average)
Action Plan:
$535,000
(average)
$1.1B
U.S.

Department of
Transportation
Federal

1. Niblick Rd. Corridor enhancements, operational improvements, Complete Streets

2. Paso Robles Eastside Grand Loop

3. Higuera Protected Bike Lanes

4. Huer Huero Creek Trail

5. South of Broad St. and Santa Barbara Ave. Protected Bike Lanes

6. Los Osos Valley Road Protected Bike Lanes

1. $17,257,000

2. $11,187,000

3. $8,817,000

4. $7,818,300

5. $4,599,000

6. $3,750,250

1. $15,900,000

2. $11,187,000

3. $8,817,000

4. $7,818,300

5. $4,599,000

6. $3,750,250

1. $1,357,000

2. $0

3. $0

4. $0

5. $0

6. $0
Water Projects
Proposition 1
Water Bond
The last
round was
3/31/2023
Keep an
eye out for
possible
future rounds
$10M-$20M $7.5B
California
Department
of Water
Resources
State

1. Paso Robles City wastewater

2. Templeton Community Services District

3. San Luis Obispo (City)

1. $14,300,000

2. $8,000,0000

3. $18,000,000

1. $10,000,000

2. $8,000,000

3. $10,000,000

1. $4,300,00

2. $0

3. $8,000,000
Regional Resilience
Planning and
Implementation
Grant Program
(RRGP)
*for water projects
7/19/2023 $2.5M $100M
State of
California,
Governor’s
Office of
Planning and
Research
State

1. Wastewater Upgrade (Atascadero)

2. Morro Bay (City)

3. Los Osos CSD

1. $25,000,000

2. $22,000,000

3. $10,000,000

1. $2,500,000

2. $2,500,000

3. $2,500,000

1. $22,500,000

2. $19,500,000

3. $7,500,000
Clean Water State
Revolving Fund
(CWSRF)
6/23/2023 $3.5M $163B
U.S.

Environmental
Protection
Agency
Federal

1. Paso Robles City wastewater

2. San Luis Obispo (City)

3. Cayucos Sanitary District (wastewater)

1. $14,300,000

2. $18,000,000

3. $300,000

1. $3,500,000

2. $3,500,000

3. $3,000,000

1. $10,800,000

2. $14,500,000

3. $0

HIP Funding & Gap Analysis 29
Grant Name Application
Due Date
Est. Award
Amount
Est. Total
Fund
Available
Funding
Agency
Funding
Source
Top Matched HIP Projects 2023 Cost
Estimate
Projected
Funds Awarded
Gap in Funding
*cost estimate -
funds awarded =
Gap in Funding
Drinking Water
State Revolving
Fund (DWSRF)
Rolling $2.3M $34B
U.S.

Environmental
Protection
Agency
Federal

1. Atascadero Mutual Water Company

2. Paso Robles City Wastewater

3. City water, Oceano CSD

1. $10,000,000

2. $14,300,000

3. $3,800,000

1. $3,200,000

2. $3,200,000

3. $3,200,000

1. $6,800,000

2. $11,100,000

3. $600,000
Integrated
Regional Water
Management
(IRWM) Grant
Programs
Round 2 was
2/1/2023
Keep an eye
out for the
next round
$17.2M $500M
U.S.

Environmental
Protection
Agency
Federal

1. CSA 23- Santa Margarita

2. Paso Robles City water

3. Atascadero Mutual Water Company

1. $1,500,000

2. $14,300,000

3. $10,000,000

1. $1,500,000

2. $14,300,000

3. $10,000,000

1. $0

2. $0

3. $0
Safe Drinking
Water State
Revolving Fund
(SDWSRF)
Rolling $1M-$10M $34 billion
U.S.

Environmental
Protection
Agency
Federal

1. CSA 1 Nipomo

2. Cal Poly (Increase Water Storage Capacity)

3. S&T Mutual Water Company

1. $100,000

2. $15,000,000

3. $2,900,000

1. $100,000

2. $10,000,000

3. $2,900,000

1. $0

2. $5,000,000

3. $0
Water and Waste
Disposal Loan and
Grant Program
Rolling $2.5M $15B
U.S.

Department of
Agriculture
Federal

1. Atascadero Mutual Water Company

2. Cal Poly (Increase Water Storage Capacity)

3. Paso Robles City Wastewater

1. $10,000,000

2. $15,000,000

3. $14,300,000

1. $2,500,000

2. $2,500,000

3. $2,500,000

1. $7,500,000

2. $12,500,000

3. $11,800,000
Water
Infrastructure
Finance and
Innovation Act
(WIFIA)
Rolling Varies $10B
U.S.

Environmental
Protection
Agency
Federal

1. Cal Poly (Water Recycling Strategy)

2. San Luis Obispo (City)

3. San Miguel CSD

1. $35,000,000

2. $18,000,000

3. $10,000,000

1. $5,000,000

2. $5,000,000

3. $5,000,000

1. $30,000,000

2. $13,000,000

3. $5,000,000
Alternative Funding (Bonds)
Clean Energy Bond
Financing Rolling Interest on bond TBD
California
Alternative
Energy and
Advanced
Transportation
Financing
Authority
State 1. Transportation and water projects
Bond that is issued to raise money for clean energy
projects.

Cost Estimate in 2023: $70,000,000
Issue Green Bond Measure and market to potential
investors who are interested in environmentally friendly investments.

Bond Financing/
Loan Rolling Interest on bond TBD
California Hub
for Energy
Efficiency
Financing
State 1. Transportation and water projects
Bond that is issued to raise money for clean energy
projects.

Cost Estimate in 2023: $70,000,000
Transportation
Bond Rolling Interest on bond TBD
California
Transportation
Financing
Authority
State 1. Transportation projects Issue Transportation Bond to interested local investors.

Water and
Wastewater Rate
Reduction Bond
Program
Rolling Interest on bond TBD
California
Pollution
Control
Financing
Authority
State 1. Water projects Issue Water Bonds to interested local investors.

Total Projected Funds Awarded (projects in bold) $90,583,425

HIP Funding Strategies Assessment & Gap Analysis 30
Funding Gap Analysis
Comprehensive Gap Analysis for HIP Projects:

A Strategic Approach by BKF
In our continuous commitment to uncover potential funding avenues for the HIP projects currently facing financial shortfalls, BKF undertook a meticulous funding gap analysis. This analysis was designed to evaluate the disparity between the cost estimate for each project and the anticipated funding that could be obtained through various financial mechanisms such as grants, bonds, loans, and tax measures. The following is a detailed overview of the process we undertook and the expected outcomes of the funding gap analysis.

Project Assessment & Funding Requirement Determination:

Our first step was to conduct a thorough review and categorization of the 80 underfunded HIP projects provided by SLOCOG. We analyzed and prioritized the top projects based on their urgency, impact, and feasibility. The final project list that the BKF team worked with included a diverse mix of projects, including transportation, water, and wastewater projects.

Identification & Evaluation of Potential Funding Sources:

In the next phase of our analysis, we embarked on an extensive research process to identify potential funding sources. This process was multi-faceted and involved several key steps:

1. Exploration of Various Funding Mechanisms: We began by exploring a wide range of funding mechanisms. This included not only traditional sources such as grants and government programs, but also other financial instruments such as loans, bonds, and tax measures. We also considered innovative funding mechanisms like public-private partnerships and impact investing.

2. Research Into Specific Funding Opportunities: Once we had a broad understanding of the types of funding mechanisms available, we delved deeper into specific funding opportunities. This involved researching grant programs, loan opportunities, and other funding sources at the local, regional, state, and federal levels.

3. Analysis of Funder Priorities & Eligibility Criteria: For each potential grant funding source, we conducted a detailed analysis of the funder’s priorities and eligibility criteria. This involved reviewing the funder’s mission and goals, past funding history, average grant awards, forecasted funding cycles and other specific requirements for funding, like including wildlife passages when targeting roadway rehabilitation projects. We also considered the application process and deadlines to ensure that requirements can be met in a timely manner.

4. Matching Projects with Suitable Funding Opportunities: With a comprehensive list of potential funding sources and a deep understanding of their priorities and criteria, we then matched the projects with suitable funding opportunities. This involved a careful review of each project’s goals, needs, and potential impact, and then aligning these with the priorities and criteria of the potential funders. We considered not only the financial fit but also the strategic fit, ensuring that the funding would support the project’s long-term success.

5. Continuous Monitoring & Updating: The funding landscape is dynamic, with new opportunities arising, and existing opportunities changing regularly. Therefore, we continuously monitored and updated our list of potential funding sources. This ensured that we were always working with the most current and relevant information.

Through this comprehensive and dynamic process, we were able to identify a wide range of potential funding sources for the HIP projects. This set the stage for the next steps in our gap analysis, which included estimating potential grant funding available for each project, and calculating the funding gap.

HIP Funding Strategies Assessment & Gap Analysis 31
Estimation of Potential Grant Funding
Following the identification of potential funding sources, we moved on to the critical task of estimating the potential grant funding that could be secured. This process was multi-layered and involved several key steps:

1. Assessing Probability of Securing Funds: For each identified funding source, we assessed the probability of securing funds. This involved considering several factors:
• Competition: We evaluated the level of competition for each funding source. This included looking at the number of applications typically received, the number of awards given out, whether local, state or federal grants and the average size of the awards.
• Past Award History: We reviewed the past award history of each funding source. This involved looking at the types of projects that have been funded in the past, the geographical distribution of awards, and the size of the awards. It should be noted that we based the gap analysis on the average award amount from previous grant cycles.
• Strength of Proposal: We also considered the potential strength of our proposal for each funding source. This included evaluating the alignment between the project’s goals and the funder’s priorities, the community need, and potential impact of the project.

2. Calculating Potential Grant Funding: Based on our assessment of the probability of securing funds, we then calculated the average grant award available for each project. This involved dividing the total funding available by the number of awards. This gave us a realistic estimate of the potential funding for each grant.

3. Considering Funding Constraints: In our calculations, we also considered any constraints or limitations associated with the funding sources. This included match requirements, funding caps, and restrictions on the use of funds. These constraints were factored into our estimates, where feasible, to ensure they were as accurate and realistic as possible.

4. Continuous Review & Adjustment: Given the dynamic nature of grant funding, we continuously reviewed and adjusted our estimates as new information became available. This included updates on funding availability, changes in competition levels, and new grant programs.

Through this detailed process, we were able to estimate the potential grant funding for the HIP projects. This set the stage for the next steps in our gap analysis, including calculating the funding gap and developing strategies to bridge this gap.

Calculation of the Funding Gap
After estimating the potential grant funding, we proceeded to calculate the funding gap. This is a critical step in the gap analysis process as it identifies the additional financial resources that need to be secured to fully finance the priority projects. Here’s a detailed breakdown of how we approached this:

1. Determining Total Funding Needed: The first step in calculating the funding gap was to determine the total funding needed for each project. This was based on the 2023 cost estimates from the 2023 HIP, established at the beginning of the gap analysis process.

2. Comparing with Potential Grant Funding: Next, we compared the total funding needed with the potential grant funding that we had estimated in the previous step. This involved subtracting the potential grant funding from the total funding needed for each project.

3. Identifying the Funding Gap: The difference between the total funding needed and the potential grant funding represented the funding gap. This gap is the additional funding that needs to be secured to fully finance the projects. It provides a clear indication of the financial resources needed to be secure through alternative strategies.

HIP Funding Strategies Assessment & Gap Analysis 32

4. Considering Funding Constraints: In calculating the funding gap, we also considered any constraints or limitations associated with the potential grant funding.

5. Continuous Monitoring and Adjustment: Given the dynamic nature of project costs and funding availability, we continuously monitored and adjusted our calculation of the funding gap. This ensured that we were always working with the most current and accurate information.

6. Calculating the Gap in Funding: As mentioned previously, in light of the intense competition associated with many grants, coupled with the fact that many funding bodies typically shy away from awarding more than one or two grants to the same applicant, we chose one to two projects per grant as suggested projects for application to the respective grant program. These projects are denoted in bold within the Funding Opportunities Menu, starting on page 26 of this assessment.

Top Matched HIP Projects most likely to Fund Projected Funds Awarded
Tank Farm Road Complete Street $1,533,000
Los Osos Valley Rd/Auto Park Wy Intersection Improvements $1,000,000 Prado Rd. Bridge Replacement & Multimodal Corridor Enhancements $12,000,000 The Pike Complete Street Improvements $93,225
Creekside Bike Path: Phase 1 and 2 $1,500,000
Paso Robles Eastside Grand Loop $11,187,000
Las Tablas Rd. at Florence St. Improvements $807,950
South River Rd. / Charolais Rd. Roundabout $2,486,000
Orcutt Rd. Widening: Johnson Ave. to Tank Farm Rd. (Phase 1) $300,000 Railroad Safety Trail: bike bridge crossing at Industrial Way $1,000,000 North County Charging Facility $1,000,000
Traffic signal, ADA ramps, and left-turn lane at Las Tablas Rd. at Florence St. $807,950 Cashless Fare System Conversion $550,000
Huer Huero Creek Trail $7,818,300
Templeton Community Services District $8,000,000
Los Osos CSD $2,500,000
Cayucos Sanitary District (wastewater) $3,000,000
City water, Oceano CSD $3,200,000
Paso Robles City water $14,300,000
Cal Poly $10,000,000
Atascadero Mutual Water Company $2,500,000
San Miguel CSD $5,000,000
Total $90,583,425

HIP Funding Strategies Assessment & Gap Analysis 33
According to the 2023 HIP, the total estimate for all 80 HIP priority projects is $1,014,252,229. Considering the total projected funds awarded for the projects most likely to be successful for grant application (projects in bold on the Funding Opportunities Menu), the total gap in funding is:

Gap in Funding for HIP Priority Projects:
$1,014,252,229 - $90,583,425 = $923,668,804 (gap in funding) By calculating the funding gap, we were able to identify the financial resources that need to be secured to fully finance the HIP projects. This set the stage for the next steps in our gap analysis, including developing strategies to bridge the funding gap and preparing a comprehensive report for review.

Innovative Strategies to Bridge the Funding Gap
Understanding and addressing the funding gap was pivotal for the successful execution of the HIP. Upon identifying these funding shortfalls, BKF devised a series of tailored strategies to secure the remaining funds.

Our approach went beyond traditional methods and explored a variety of funding avenues to ensure the successful completion of each project.

1. Targeted Grant Opportunities: We continued to explore targeted grant opportunities that aligned with the specific needs and goals of each project. This included not only government grants but also grants from private foundations, corporations, and international organizations. We also considered grants that supported innovative solutions, sustainability, and community development.

2. Alternative Funding Avenues: In addition to grants, we explored other funding avenues such as loans, block grants, tax-based financing, and bonds. We also considered innovative financing mechanisms such as public-private partnerships, impact investing, and crowdfunding.

3. Leveraging Community Resources: Moving forward, we believe that the community can play a critical role in bridging the funding gap. This could involve community fundraising events, volunteer labor, and in-kind donations. By leveraging community resources, cities can not only bridge the funding gap but also build stronger community support for the projects.

4. Cost-Saving Measures: Jurisdictions should also explore cost-saving measures that can reduce the total funding needed. This could involve optimizing project designs, improving efficiency, and leveraging technology. Jurisdictions should also consider collaborative approaches among the SLOCOG cities that can share costs among multiple stakeholders and seek volume discounts and leverage the collective work needed for cost savings.

5. Policy Advocacy: Jurisdictions should engage in policy advocacy to secure more funding for the HIP projects. This could involve lobbying and advocating for increased government funding, working with elected official to secure funding through the legislative process, gain more favorable policy conditions, and greater recognition of the importance of the HIP infrastructure projects in the larger context of developing the needed housing mandated by the RHNA requirements.

Next, BKF will prepare a comprehensive presentation for the SLOCOG Board Meeting. The report will deliver a detailed breakdown on a project-by-project basis, covering funding requirements, corresponding funding sources, projected grant funding, and the residual funding gap, including shortfalls and match requirements.

Furthermore, the report will include a strategy for bridging the funding gap.

In conclusion, our approach to bridging the funding gap goes beyond traditional methods and explores a variety of innovative strategies. We believe that this forward-thinking approach will not only secure the necessary funds but also build stronger support for the HIP projects and ultimately the needed housing that these projects will support and make more viable.

HIP Funding & Gap Analysis 34
Regional Housing & Infrastructure Plan
Grants Calendar
Estimated Funds Available by Quarter $14,300,000 $17,283,000 $40,407,200 $18,593,225 Agency Estimated Funds Available by Quarter Jan Feb March April May June July Aug Sept Oct Nov Dec Transportation Grants
CTC Active Transportation Program (ATP) Pre-Proposal App Due DOT Local Highway Safety Improvement Program
(HSIP) Pre-Proposal App Due
CTC Local Transportation Climate Adaptation
Program (LTCAP) Pre-Proposal App Due
CDFW Monarch Butterfly & Pollinator Rescue Rolling
OPR Regional Resilience Planning and
Implementation Grant Program (RRGP) App Due
SGC Transformative Climate Communities (TCC)
Round 5: Implementation Grant (FY 22-23) Pre-Proposal App Due SGC
Transformative Climate Communities (TCC)
Round 5: Project Development Grant (FY 22-
23)
Pre-Proposal App Due
SGC Transformative Climate Communities (TCC)
Round 5: Planning Grant (FY 22-23) Pre-Proposal App Due CDFW Wildlife Corridor and Fish Passage Rolling
DOT Charging and Fueling Infrastructure (CFI)
Discretionary Grant Program App Due
DOT Congestion Mitigation and Air Quality
Improvement (CMAQ) App Due (TBD)
FTA Accelerating Innovative Mobility (AIM) Pre-Proposal App Due DOT Safe Routes for All (SS4A) Pre-Proposal App Due
Water Grants
DWR Proposition 1 Water Bond Pre-Proposal App Due
OPR Regional Resilience Planning and
Implementation Grant Program (RRGP) App Due
EPA Clean Water State Revolving Fund (CWSRF) Pre-Proposal App Due EPA Drinking Water State Revolving Fund (DWSRF) Pre-Proposal App Due EPA Integrated Regional Water Management
(IRWM) Grant Programs App Due
EPA Safe Drinking Water State Revolving Fund
(SDWSRF) Rolling
USDA Water and Waste Disposal Loan and Grant
Program Rolling
EPA Water Infrastructure Finance and Innovation
Act (WIFIA) Rolling

Housing Needs and Highlights
July 2023
Prepared for: San Luis Obispo Council of Governments