Gov. Jerry Brown released his revised fiscal year 2018-19 budget proposal for the fiscal year that begins July 1. Known as the May Revise, the proposal includes $137.6 billion in General Fund spending and a total spending amount of $199.3 billion. The report addressed the annual need of 180,000 housing units to keep pace with population growth, but did not include any new funding specifically for affordable housing. Instead, it highlighted the possible future funding if voters approve the $4 billion Veterans and Affordable Housing Bond Act of 2018. The May Revise made clear that Gov. Brown sees homelessness as a local government responsibility and proposed $359 million in one-time spending and $64 million in on-going allocations for homelessness. Eight different programs were mentioned with increases in funding including a Homelessness Emergency Aid block grant of $250 million, CalWORKS Housing Support Program increase of $24.2 million, and Home Safe Pilot Program with a one-time $15 million funding. The May Revise includes $2.8 billion in new SB1 revenues for state and local transportation funding in FY 2018-19.
A variety of local and state programs will receive funding such as $1.2 billion for local streets and roads, $330 for the Transit and Intercity Rail Capital Program, and $1.2 billion for maintenance of the state highway system. The May Revise includes $630 million in general funds for office building projects in Sacramento. Other projects include $100 million each for the judicial branch, department of state hospitals, California State University, University of California systems, and levee repairs through DWR. California’s Community Colleges will receive $143.5 million and $174 million for the Department of Corrections and Rehabilitation. The May Revise specified additional funding for wildfire response and recovery that was not mentioned in the January budget.
Federal Court Upholds Berkeley’s Civic Center Historic Zone
A federal judge rejected arguments by the federal government and sided with the City of Berkeley when it created a historic overlay for the Civic Center in 2014, thereby making it difficult for the government to sell the post office and eight other buildings. USPS announced it was placing the main post office, a historic structure built in 1914, up for sale. In 2014 USPS agreed to sell the building for $9 million to Hudson McDonald, a developer, that, according to the judge, “intended to turn most of the post office to commercial use as, for example, a Target store.” Later that year, the City Council passed the Civic Center District Overlay which restricted the use of nine buildings clustered around Civic Center Park. USPS filed a lawsuit against the city, claiming that it had singled it out, thereby violating the supremacy clause of the Constitution. USPS also claimed that the creation of the overlay made the post office building impossible to sell.
SGC Coordinates Active Transportation Assistance for Five California Communities
In partnership with Caltrans and the California State Transportation Agency, the SGC has contracted with the Local Government Commission, California Walks, California Bicycle Coalition, and Rails-to-Trails Conservancy to provide technical assistance to five under-resourced communities across the state. The selected communities include the cities of Colton, Richmond and Willits, as well as San Joaquin and Riverside counties. The goal of this work is to assist these communities in scoping bicycle and pedestrian projects, cultivating partnerships, and applying to various funding sources, including the Active Transportation program and other California Climate Investments programs. The SGC's Executive Director Randall Winston explained in a statement, "This technical assistance is an exciting opportunity to provide tailored support to these five communities in a way that could have long lasting impacts on the health and well-being of their residents.”
Reports: Housing Prices Spur Out-Migration
The Pew Trusts released a report on demographic data that shows cities in Texas and Arizona have gained more population than New York City or Los Angeles for the first time in a decade. San Antonio grew by 24,200 people between 2016 and 2017 with Phoenix in second with 24,000. Los Angeles grew with 18,643 people. Another report from realtor.com found that larger share of residents are leaving Santa Clara County than any other county in California. San Mateo County was second and Los Angeles County third in the state. The median home price in Santa Clara County is $1.28 million and many residents are moving to Alameda, Sacramento, San Joaquin or Place counties were homes are less than half the cost of a home in Santa Clara County. The report found Santa Clara County residents are leaving California for Arizona, Nevada, Texas, and Idaho.
Lawsuit to Drain Hetch Hetchy Continues
A Berkeley environmental group is continuing its long-running battle of draining Hetch Hetchy Reservoirin Yosemite National Park. Restore Hetch Hetchy argues the reservoir built in 1923 violates California’s constitution, which requires water to be diverted in a “reasonable” way, and that other places to store Hetch Hetchy’s water exist. The group lost in court two years ago and will pursue its appeal in the Fifth District Court of Appeal in Fresno. San Francisco voters in 2012 rejected the idea of draining the reservoir which is the main water supply for more then 2.6 million Bay Area residents and provides clean, greenhouse gas free hydroelectric power.
Quick Hits & Updates
Kaiser Permanente plan to invest $200 million in the coming years in programs to grow affordable housing and mitigate homelessness in Bay Area cities and locations where the health system operates. While the exact projects the “impact-investing” dollars will go have not been determined, it will be focused on preserving and expanding affordable housing. Oakland Mayor Libby Schaaf said she asked Kaiser CEO Bernard Tyson to join the new Mayors and CEOs for U.S. Housing Investment group which made the announcement from Washington where it is lobbying Congress for more federal funding for homelessness.
Construction began on the former Alameda Naval Air Station for the first major market-rate multifamily development in four decades. However, some officials expressed concern as Tetra Tech EC Inc, the US Navy contractor that was accused of falsifying data at Hunters Point, was also the contractor at the Alameda base. Developers for the $1 billion project said they had no involvement with Tetra Tech and received safety confirmations from the Navy, state agencies, and their own environmental consultants. City officials said their contractors verified the Navy data as well.
San Francisco will begin its process of issuing permits to motorized scooter rental companies meaning scooters could vanish from the streets for most of June. The city required the three companies renting scooters to stop operations on city sidewalks June 4 and not resume rentals until permits are issued. The three companies, Spin, LimeBikes, and Bird said they would comply while they work on the applications. Scooters left on City streets after June 4 will be fined $100 a day. (See prior CP&DR commentary.)
San Francisco Supervisor Hillary Ronen introduced legislation that orders five departments – Planning, Building Inspection, Public Works, Fire and the mayor’s Office on Disability- to put affordable housing projects at the front of the line. In each of the departments, a specific manager will be appointed to oversee affordable projects. Ronen has watched as seven affordable developments in her district, totaling 733 units, have been stalled for more than a year after approvals.
Los Angeles city officials have begun discussing how to regulate electric scooters and short-term bicycle rentals. The transportation department has proposed a one-year test program that would limit each company to no more than 2,500 vehicles within city limits, and would impose strict rules for parking and data sharing. The Los Angeles proposal would require scooters and bikes to be parked in the outer edge of the sidewalk and be locked to something.
LA Metro officials chose two possible routes through downtown for a light-rail line to Artesia. Metro’s directors unanimously backed two routes that would run underground through downtown and terminate in the Civic Center, the Financial District or at Union Station. The 20-mile line has secured $4 billion in funding, including $1.4 billion from measure M. The estimated completion date is 2041 but Metro hopes a private-sector company could pay for a portion of the project to start service by the 2028 Olympics.
According to a new USC Dornsife/LA Times poll, 54 percent of those surveyed said they supported a measure that would ease property tax protections established by Prop 13. Under the proposed 2020 initiative, local governments and schools could tax larger commercial and industrial properties based on their market values rather than the values based on when the properties were purchased. This could result in as much as $10 billion annually in new revenue.
LA City Council approved, unanimously, a plan for the development of a 1,153-room hotel complex across from the Convention Center by New York City-based Lightstone Group. The plan includes more than $103 million in public assistance during the project’s first decade as well as generous signage plan that allows the project to have digital signs. The City Council agreed to sell Lightstone a city-owned parking lot at Figueroa and Pico for $9.6 million. The vote comes a week after AEG announced its plans to build an 850-room hotel next to the Convention Center. AEG is also seeking taxpayer assistance for its project.
Beverly Hills real estate developer Arman Gabaee was arrested on a felony charge of bribing an LA County employee in exchange for a government lease worth $45 million. Gabaee provided the employee about $1,000 a month over a half year in exchange for leases, nonpublic information and other benefits. Gabaee also made an offer to purchase a $1.1 million home in Santa Rosa for the employee in exchange for signing off on a 10-year lease for the county’s Department of Public Social Services at a Gabaee property in Hawthorne.
Los Angeles County transportation officials have identified five properties, including parking lots in San Fernando Valley and a former bus yard in Venice Beach, that could be used to provide services or temporary housing for the county’s growing homeless population. The properties are owned by Metro and are either vacant or underused. A similar effort is underway in the City of LA where a $20 million initiative to build temporary homeless shelters on city-owned parking lots is underway.
Tech company Arx Pax is proposing a project in San Jose’s Alviso neighborhood that would use the “floating village” concept to protect the development from floods and earthquakes. The Self-Adjusting Floating Environment (SAFE) would deploy a group of pontoons beneath the buildings that “can protect people, property and communities from natural disasters” according to Greg Henderson, CEO and co-founder of the company. Henderson says the SAFE foundation allows development to occur at the fraction of the cost and makes site feasible that otherwise would not be fit for development.
San Juan Capistrano City Councilmembers said they could support the latest proposal to preserve the last piece of privately owned farmland in the city. The two previous proposals for the 35-acre property were blocked by the council over fears of traffic and over-development. The project includes 180 houses, a half-acre park, a public trail, and $2 million towards community facilities. The property owner field a lawsuit after the second proposed plan of 240-units was blocked complaining that the current zoning for agricultural uses left them no viable future for the property. The lawsuit was put on hold pending the outcome of the current development request.
According to consultant CannonDesign’s report, one-quarter of Santa Rosa’s city-owned buildings need so much work that they should either be sold or demolished instead of spending millions to update them. The report found 29 “troubled buildings” including City Hall complex, the police station, and the Bennett Valley Senior Center. City Council must now decide to follow the analysis of the city’s 114 buildings and structures from the consultant or override them to appease community groups that use the various buildings. Over the next five years, the city faces $32 million in direct maintenance costs on the buildings and the number climbs to $48 million in ten years.
A USC Dornsife/ LA Times poll found that 48 percent of respondents expressed at least some support for high-speed rail while 43 percent opposed. However, when asked if the state should stop working on the project in light of the high costs almost half the respondents said yes, while only 31 percent want to continue work.
Los Angeles City Council unanimously approved up to $4.9 billion to design, build, operate and maintain an elevated train that would bring passengers in and out of Los Angeles International Airport's central terminal area and carry them to a car rental facility, ground transportation hub, and a station on the Metro Crenshaw Line. The project would break ground this year and service is expected to begin in March 2023.
