The process of building affordable housing in California is full of twists and turns. It includes some strange sights: developers roaming neighborhoods, cameras in hand, desperately seeking fresh meat. Not cheap sites, but literally meat—chicken breasts, ground beef, a scrap of chorizo, or a plastic tub of refrigerated liver.

Why? The availability of fresh meat near a project can mean a difference of tens of millions of dollars in funding.

Pushed by advocates of smart growth who want more housing in locations where life is supportable without a car, California offers of a 9% tax credit for affordable housing funnels money to sites that are within walking distance of amenities—including grocery stores. What is a grocery store? Well, according to the California Tax Credit Allocation Committee (TCAC), it’s a place that sells fresh meat and produce. And although you might find a banana at 7-Eleven, those Slim Jims on the counter won’t pass for fresh meat according to TCAC. Thus the quest for a local store with something cold and bloody.

The TCAC meat requirement would be merely an interesting anecdote, were it not—thanks to global warming—a harbinger of things to come. The pedestrian-oriented policies of the tax credit program were established in response to relatively fragmented smart-growth advocacy efforts. But now, California is implementing landmark climate change legislation that provides a framework that could result in far more sweeping regulation and funding incentives for urban-centered growth. And that could mean that affordable housing developers reliant on tax credits and state funding programs will be roaming more hungrily in search of amenity-rich, transit-oriented city sites, while exurban parcels—and even sites at the less pedestrian-oriented corners of cities and suburbs—languish.

AB 32 and its smart-growth follow-on, SB 375, are fostering a gradually increasing tangle of policies, regulations, and incentives pushing for infill development. While the enforcement mechanisms of both laws are less than draconian, they are not entirely toothless. SB 375 provides incentives for cities to plan for and actually build infill housing by linking transportation dollars to local land use policies. While land use decisions remain firmly local—and thus subject to the reliably antidensity leanings of most citizens—change may be on its way as local jurisdictions see that getting money to fix potholes may depend on building more apartments, whether they want to or not.

In other words, communities that sprawl will lose dollars; those that grow compactly will gain. This has major implications for where affordable housing opportunities will lie.


The Basics 

AB 32
AB 32 (California Global Warming Solutions Act of 2006) requires the state to limit emissions and provides a legal framework (still very much evolving) for regulating land use as a generator of emissions. It requires that the state reduce greenhouse gas (GHG) emissions to 1990 levels by 2020 and establishes the California Air Resources Board (CARB) as the lead agency to implement the law. In December 2008, the CARB board approved a Scoping Plan that lays out the actions the state will take to achieve this goal. The state intends that measures in the Scoping Plan be
in place by 2012.

Most of the Scoping Plan focuses on issues other than land use, such as cap-and-trade programs for electricity generation and industry and vehicle efficiency standards. However, one of the eighteen emissions reduction measures focuses squarely on reducing vehicle miles traveled (VMT) through more transit-oriented development. The implementing mechanism for this measure is SB 375.

SB 375
SB 375, passed in October 2008, builds on AB 32 by requiring that regions plan for more compact growth. It requires that regional planning agencies assign housing production targets that are consistent with regional sustainability and transportation plans. And it requires that those sustainability and transportation plans set specific targets for reducing greenhouse gas emissions.

The specific targets for emissions reductions—and the link to transportation funding dollars—mean that SB 375 could result in projects that get built, not just plans that collect dust on city hall shelves.

Here’s how SB 375 is expected to work.

Emissions targets: The California Air Resources Board sets emissions reductions targets for each region relating to transportation and land use. These are scheduled to be finalized in September 2010.

Sustainable Communities Strategies: These emissions reduction targets will shape Sustainable Communities Plans that all 18 California regions must prepare through their Metropolitan Planning Organizations (e.g. the Southern California Association of Governments). Each region must show how it will reach emissions reductions targets by putting housing, stores, jobs, and transit closer together.

Regional Transportation Plans: The Sustainable Communities Strategy will be the part of each Regional Transportation Plan. Herein lies the power of SB 375: money. Whereas Sustainable Communities Strategies are new, Regional Transportation Plans are well-established frameworks for distributing hundreds of millions of dollars in state and federal transportation funds. Whether or not cities and counties care about sustainability, they care very much about the dollars that are directed by the Regional Transportation Plans.

Federal regulations require that Regional Transportation Plans be internally consistent—so the funding outlined in a plan must be consistent with the plan’s Sustainable Communities Strategy. That is, transportation funding will have to be designed to achieve GHG reduction goals.

Regional Housing Needs Allocations

SB 375 also affects the process by which regions ask local jurisdictions to plan for housing.

More Teeth for Housing Advocates

SB 375 calls for significant changes to how Regional Housing Needs Allocation (RHNA) numbers are generated by regional planning agencies. RHNA is a big part of life for planners, redevelopment and housing agencies, and developers. Many cities chafe against RHNA allocations they feel require them to build more housing than they have capacity for—with “capacity” more often defined by local politics than physical space. Affordable housing advocates look to RHNA numbers as a way to force cities to build needed housing. Developers of affordable housing pay attention to RHNA numbers because they offer some indication as to where opportunities may lie. In the past, those indications were less than reliable, because communities sometimes ignored their allocations, refusing to allow more housing to be built.

There is no real enforcement mechanism for the allocations. And RHNA is about planning, not production; cities are compliant if they put housing sites on paper; they’re not required to ensure that housing actually gets built.

SB 375 may make it harder for cities to ignore housing allocations. For the first time, local jurisdictions will be required to adjust their zoning to allow for increased housing. They may not be able to get away with simply listing sites in the housing elements of their general plans that will never actually see housing on them.

While general plans are essentially city blueprints that establish broad land use concepts and areas, it is the zoning regulations that overlie the general plans that actually determine what is allowed to be built. In the past, cities might designate an area—for example, an abandoned shopping center—as a location for housing in the general plan, and thereby meet their RHNA requirements. But the general plan doesn’t actually give the landowner the right to build housing there. First, the site would need to be rezoned. This is often where affordable housing projects get held up; neighborhood opposition can sometimes derail a rezoning even if the general plan says housing is supposed to go there.

Under SB 375, cities and counties have only three years to zone sites to match the housing elements of their general plans. If the local jurisdiction fails to rezone, it loses the right to disapprove projects that are consistent with the Sustainable Communities Strategy. So if an affordable housing developer finds a good housing site listed in a community’s housing element, chances are much improved that he or she will be able to build the project.

Timing of Housing Elements

SB 375 also aligns the timing of housing elements with regional transportation plans. In the past, cities updated the housing elements of their general plans every five years, while transportation plans were updated every eight years. Now the housing elements will be updated every eight years, in synch with the transportation plans. And in another stick aimed at getting cities to plan for housing, cities that do not produce an adequate housing element on time will have to do an update every four years.

More Housing in Denser Cities

SB 375 may also change where regional housing production goals are assigned. The methodology by which regional planning agencies make their city-by-city and county-by-county assignments of housing allocations is a complex and often controversial subject. But the bottom line is that SB 375 is likely to assign more housing to already dense cities rather than to lower-density communities. The reason? Increasing the density of a sprawling suburb won’t necessarily reduce vehicle miles traveled in the region, because there isn’t public transit in place to move those folks around, and even a doubled density may be insufficient to support new infrastructure. By contrast, increasing the number of people living in cities and compact suburbs where transit and amenities are already in place may have a bigger impact on regional emissions, because those people will tend to walk to stores and take transit to work.

California Environmental Quality Act

The California Environmental Quality Act (CEQA) was designed to give citizens information on the environmental impact of developments in their communities. Over time, however, it has been used as a tool used by NIMBY advocates to delay or even kill environmentally sound, transit-oriented affordable housing projects. CEQA’s merits (or lack thereof) have been debated for years, but SB 375 may make CEQA less useful to antidensity project opponents. As SB 375 is implemented, exemptions and streamlining provisions will be available for certain projects that are consistent with a region’s Sustainable Communities Strategy. That means projects with positive regional environmental impacts—for example, high-density infill projects near transit nodes or corridors—in theory get the fast track.

However, the complexities of definitions in this section of SB 375 mean that the impact on actual projects is still unclear.

Outcomes Still Foggy

Not just the CEQA provisions, but also many other aspects of SB 375 are still being worked out among dozens of regional planning agencies and hundreds of local jurisdictions, along with environmental and social justice advocacy groups and building and transportation industry representatives. SB 375 will be getting top billing for some time to come at city planning conferences, land use law seminars, and meetings of associations of local governments. Expect fierce arguments over just what level to set emissions targets at and how to reach them; how to assign
housing allocations; and where to channel transportation dollars. In addition, state funding programs in the Department of Housing and Community Development, and the state’s tax credit programs, may also be influenced by SB 375, even though they are not directly regulated by it.

Despite the uncertainties, one thing looks likely: the proximity of a meat counter to a proposed development is likely to become more, not less, important as global warming legislation becomes the fully implemented law of the land.