City Council
Report
City Council Meeting: June 11, 2019
Agenda Item: 3.F
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To: Mayor and City Council
From: David Martin, Director, City Planning
Subject: Adoption of SB2 Housing Grant Resolution
Recommended Action
Staff recommends that the City Council:
1. Adopt the attached resolution authorizing the application for grant funds in the amount of $310,000 from the State of California Department of Housing and Community Development
2. Authorize the City Manager to execute all necessary documents to apply for the grant, and if awarded, accept and administer the grant, including any renewals.
3. Authorize budget changes as outlined in the Financial Impacts and Budget Actions section of this report, in the event that the grant is awarded.
Summary
Santa Monica has an extensive history that prioritizes a range of housing types (including affordable housing) to preserve and promote a diverse and sustainable community. This report seeks authorization to submit an application for grant funds to the State of California Department of Housing and Community Development for an amount of up to $310,000. The grant would be used to analyze incentives or changes to project requirements to stimulate housing production, which may include permit streamlining, height and floor area adjustments, fee reductions and modifications to affordable housing requirements in the Downtown and Citywide. Additionally, the grant funds could be used to study policies, programs and ordinances to protect and support tenants currently living in the city’s existing housing stock. This analysis would be used to propose changes to City housing policy and regulations, and may involve implementation through the citywide Zoning Ordinance and/or specific and area plans.
The State’s grant program is available to local jurisdictions, and is offered specifically for the purpose of providing funding and technical assistance to help cities prepare, adopt, and implement plans and process improvements that streamline housing approvals and 2 of 4
accelerate housing production. Per HCD guidelines, grant funds may be subject to repayment if the plan or process improvement developed with grant funds is not ultimately adopted.
Discussion
In recent years, California’s ongoing housing shortage has underlined the need for local jurisdictions to revisit their regulatory frameworks governing housing production. In Santa Monica, the discussion has been particularly dynamic, as the community and decision-makers have wrestled with a variety of local, regional and State-level factors that contribute to production, affordability, and equity. From time to time, the City has made changes to rules and regulations related to housing in response to these factors.
Two recent examples include the adoption of the Downtown Community Plan’s distinct project requirements for affordable housing, and the recent removal of the Extremely Low Income option from the list of options to satisfy the affordable housing obligation citywide. Further, on March 26th 2019 the Council authorized an expenditure to fund a feasibility study to analyze potential changes to the centerpiece of the City’s inclusionary housing framework, the Affordable Housing Production Program.
In 2017, Governor Brown signed a 15-bill housing package aimed at addressing the state’s housing shortage and high housing costs. This package included the Building Homes and Jobs Act (SB2, 2017), which established a $75 recording fee on real estate documents to increase the supply of affordable homes in California. Through the subsequent SB2 grant program, $123M in funds collected from this fee have been set aside to provide funding and technical assistance to all local governments in California to help cities and counties prepare, adopt, and implement plans and process improvements that streamline housing approvals and accelerate housing production.
This grant program is meant to facilitate planning activities that will foster an adequate supply of homes affordable to Californians at all income levels.
Staff is preparing a grant application for submittal to the State’s Housing and Community Development department to fund a range of economic analyses, physical prototype modeling and policy and program evaluation that will better inform policy 3 of 4
discussions about housing production in Santa Monica. This grant opportunity can provide the City with objective market information and prototype analysis to potentially adjust existing standards, regulations and project requirements as they pertain to promoting development that is consistent with Santa Monica’s priorities and adopted plans. This multi-pronged effort would be an opportunity for the City to look at the mechanics behind housing production and conservation more holistically, and to tie together the various internal and external factors that contribute to or prevent feasibility and implementation. If awarded, staff anticipates returning to Council with a recommendation to amend an existing contract with HR&A Advisors previously authorized by Council to study modified AHPP requirements so that additional analysis could be conducted on barriers and incentives to housing production across the board.
Additional sub-consultants to perform physical modeling, policy and program review as it relates to housing conservation and tenant protections, and creation of revised standards may also be necessary.
The maximum grant amount provided by SB2 for a jurisdiction of Santa Monica’s size is $310,000. The outcomes of the analytical study may include the following eligible activities:
1. Updates to general plans, community plans, specific plans, local planning initiatives related to implementation of sustainable communities strategies, or local coastal plans;
2. Updates to zoning ordinances;
3. Environmental analyses that eliminate the need for project-specific review; and
4. Local process improvements that improve and expedite local planning.
The SB2 program will not initially utilize a competitive process to award funds. Funds will be available to eligible applicants upon request (“over the counter”) for an eightmonth over-the-counter period, commencing from the date of the NOFA, which was released in late March 2019.
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Financial Impacts and Budget Actions
Staff seeks authority to apply for a grant of up to $310,000 from the State of California Housing and Community Development Department. If awarded, staff recommends the following budget changes to the miscellaneous grants fund.
FY 2019-2020 Grant Budget Changes
Establish Revenue Budget Appropriate Funds
Account Number(s) Amount Account Number(s) Amount
TBD $310,000 TBD $310,000
Total $310,000 Total $310,000
If awarded, the grant would, upon Council approval, augment economic analysis being conducted by HR&A Advisors on the feasibility of modifying the citywide Affordable Housing Production Program (AHPP). This increase in scope to analyze development standards, fee structures, permit streamlining and other mechanics of housing production would necessitate a contract modification. Additional, but separate, analysis on preserving existing housing stock would require a separate contract with qualified housing policy professionals.
Per HCD guidelines, grant funds may be subject to repayment if the plan or process developed using grant funds is not ultimately adopted.
If renewals are awarded, budget changes will be included in subsequent year budgets, contingent on Council budget approval.
Prepared By: Peter James, Principal Planner
Approved Forwarded to Council
Attachments:
A. Reso - PCD - SB2 Grant Funds - 06.11.2019
B. Written Comments