Budget Revision Copes with Revenue Shortfall; Allocates $1.5 Billion to Local Jurisdictions
The COVID-19 pandemic prompted dramatic changes to Gov. Gavin Newsom’s proposed 2020-21 budget, originally released in January and recently updated in the “May Revise.” With state revenues expected to fall by $54 billions for the current and upcoming fiscal years, compared to projections, the May Revise reduces the upcoming year’s budget from $222 billion to $203 billion. Most notably for local governments, the May Revise allocates some of the state’s federal CARES Act funding to local governments: $450 million will be allocated to directly to cities and $1.3 billion to counties, which may allocate further funds to cities. That's on top of $1.5 billion in CARES funding already allocated to large cities and counties. The May Revise maintains previously announced programs to preserve and increase the state’s housing supply, including initiatives to streamline permitting and to leverage existing state and federal housing funds. The May Revise maintains $500 million in low-income housing state tax credits; the SB 2 real estate transaction fee, estimated at $277 million for 2020-21, for affordable housing; allocates $452 million from Cap-and-Trade auction proceeds for infill development. The May Revise includes the following reductions to housing and land-use related programs: $250 million in mixed-income development funds over the next three years; $200 million in infill infrastructure grant funds; $115 million in other housing program funds.
Overcrowded Housing Puts Essential Workers at Risk of COVID-19
While most Californians have been staying home to reduce coronavirus transmission, the Public Policy Institute of California reports that overcrowded homes among California's essential workforce means a large number of Californians face substantial risk of illness within their own households. Physical distancing and self-isolation can be virtually impossible in crowded homes. As the high cost of housing is a stark reality for nearly two-thirds of Californians, finding affordable housing can mean cohabiting with several other people. California's overcrowding rate is well above the national average; the share of housing units with more than one occupant per room is 8.3 percent compared with 3.4 percent across the nation. essential workers - who make up one-third of California's labor force --are required to be physically present. Essential workers are more likely than nonessential workers to live in overcrowded housing--16 percent versus 12 percent. That share is almost double for workers in farming (31 percent), and food preparation/serving (29 percent). A recent study confirms there is a clear link between COVID-19 deaths and essential workers who live in overcrowded homes, though the relationship is muddied by regional differences.
Transportation Agencies May Lose $11 Billion Due to Pandemic
As California’s transportation agencies look to plan in the context of uncertain revenue streams because of the COVID-19 pandemic, findings from the Mineta Transportation Institute suggest that revenue shortfalls are not inevitable, even if the economy recovers slowly. The study used a spreadsheet model and well-known data sources to project transportation revenues under multiple economic recovery scenarios. The mean total projected revenues in 2030 range from $9.4 billion to a high of $11.4 billion in a scenario that pairs a fast economic recovery with Zero Emission Vehicle stimulus policies. Across all six scenarios, gasoline taxes remain at least half of revenues through 2030. But the user fees levied on ZEVs could replace and even exceed the state revenue that will be lost because of declining gasoline sales tax revenue. ZEVs are, on average, more expensive than standard cars, and that additional value accrues to the state through existing Transportation Improvement Fees.
Opposition to Development Derives from Antipathy Toward Developers
A new study from the UCLA Lewis Center for Regional Policy finds new challenges for planners who are interested in addressing housing shortages through increased market-rate supply. Anti-developer sentiment, it turns out, is a powerful driver of anti-development attitudes. The survey of 1,300 randomized respondents in Los Angeles County evaluated how attitudes change in response to different context, or frames, including traffic and parking, neighborhood character, strain on services, and developer profit. The results showed that developer profit has the largest association with opposition to development by 20 points relative to a control group when survey respondents are told a developer will likely earn a large profit from the building. (See related CP&DR commentary.)
CP&DR Podcast: Senate Bill 35; Horton Plaza; Telecommuting; Online Meetings; Project for Public Spaces
On the recent episode of the CP&DR podcast, Bill Fulton and Josh Stephens discuss the latest planning news, and Josh interviews Meg Walker, senior placemaker at the Project for Public Spaces, about the impact of the COVID-19 pandemic on attitudes toward and the future of public space.
Quick Hits & Updates
In a split decision with wide-ranging implications, the United States Supreme Court ruled that states are not allowed to copyright their building codes or annotated guidance for those regulations. The decision could help make these codes more widely available as a public resource, and has implications for software companies seeking to automate code compliance processes.
To better understand the connection between concentrated disadvantage and neighborhood change and eviction, a study funded by UCLA's Institute on Inequality and Democracy analyzed publicly available California eviction court records for the state's largest counties over a decade. The findings indicate that court-based evictions are significantly more likely to occur in neighborhoods with low-income households and racial minorities than in areas experiencing rapid neighborhood changes.
A federal magistrate has dismissed Oakland's antitrust suit against the National Football League over the Raiders' impending move to Los Vegas, finding no evidence that the NFL's actions - the $378 million fee it charged the Raiders, or its refusal to expand beyond 32 teams - interfered with competition or violated the city's rights.
To accommodate much-need housing for farmworkers, Ventura County is exempting a proposed housing development from the county's Save Open Space and Agricultural Resources (SOAR) initiative that requires voter approval to rezone agricultural land. With 360 planned units, the Somis Ranch farmworker housing project would be the largest farmworker housing development in the county.
The UCLA Center for Neighborhood Knowledge published a resource for public agencies and community organizations that help vulnerable renters. The study identifies the neighborhoods with the highest concentration of renters in Los Angeles County at the greatest risk of losing their jobs and homes because of the COVID-19 crisis. The study also identifies the challenges of implementing new temporary renter protection policies and recommends steps local officials and communities can use to target resources in recovery efforts.
Mayor London Breed announced a plan to improve conditions in San Francisco's Tenderloin district, following a lawsuit against the city for failing to address the crowds of people encamped on Tenderloin's sidewalks. The plan's goals include offering "safe sleeping alternatives," and hygiene stations, along with closing streets to encourage social distancing.
UC Berkley's Terner Center is recommending a federally-supported emergency rental assistance directly to the millions of households who are unable to make rent due to pandemic-related job and income loss. The center's analysis shows that nearly 16.5 million renter households have at least one worker in an industry likely to be immediately affected by efforts to slow COVID-19 spread.
Los Angeles is putting measures in place to protect tenants from landlords who have reportedly attempted to skirt eviction moratoriums. Under a law passed by the City Council, renters could win penalties of up to $10,000 per violation, with disabled or senior tenants eligible for more. Tenant advocates have complained about landlords posting legally unenforceable eviction notices and attempting to lay claim to stimulus checks from tenants who don't understand their rights.
The Berkeley City Council has signaled it may drop the option for developers to pay a fee in lieu of including affordable housing in otherwise market-rate projects if those projects are 10 or more units and within any of the city's federal Opportunity Zones. Created by the 2017 Tax Cuts and Jobs Act, an opportunity zone is a federally designated community where new investments are eligible for preferential tax treatment. (See related CP&DR coverage.)
