Revised Budget Cuts Funds for Transit, Active Transportation
Governor Newsom's "May revise" of his 2024-25 budget includes significant cuts to one-time and ongoing spending by over $33 billion through 2025-26, affecting key programs aimed at increasing affordable housing. Earlier cuts to housing programs announced in January were followed by deeper reductions in May, including the elimination of funds for the Multi-Family Housing Program, Adaptive Reuse Program and Foreclosure Intervention Housing Preservation Program. The budget also proposes shifting $3.6 billion from the General Fund to the Greenhouse Gas Reduction Fund, impacting transit, clean energy and zero-emission vehicle programs. Additionally, reductions and shifts affect transit funding, active transportation programs, ZEV fueling infrastructure and broadband investments, indicating broader implications for land use and transportation development.
State Commission Recommends Upgrades and Reforms to CEQA Process
The Little Hoover Commission, in a recent report titled "CEQA: Targeted Reforms for California’s Core Environmental Law," suggests six reforms to the California Environmental Quality Act (CEQA), including raising the standing requirement for filing a CEQA lawsuit and restricting late submission of public comments. The report also recommends a broad exemption for infill housing under CEQA and proposes in-depth study of several related issues, including funding to train judges and clearer guidelines for significance thresholds and mitigation. The report recommends studying the following potential reforms and updates: creation of specialized CEQA courts, bonding for CEQA plaintiffs, effect of vehicle miles traveled analysis, and consistency in analytical modes. The Commission's recommendations aim to reinforce CEQA's original purpose while streamlining its processes, ensuring that it continues to effectively protect California's natural resources.
Major Mall Redevelopment in San Francisco Makes Progress
The San Francisco Planning Commission unanimously approved a development plan for the Stonestown Galleria, an underperforming mall in the city's southwest corner, paving the way for full approval by the Board of Supervisors. Developer Brookfield will transform the mall -- which, with parking lots, covers several city blocks -- into a new neighborhood with 3,500 housing units and a green, walkable town center. While some residents expressed concerns about potential traffic congestion, the commissioners praised the plan as a model for infill development to meet the state's housing goals. The project includes amenities like parks, child care centers and a new main street of retailers and restaurants. It aims to generate jobs and contribute to the city's economic recovery while addressing housing needs and enhancing public spaces. The development will include six acres of parks and 150,000 square feet of retail space. The development agreement requires 20% of units to be affordable; the developer cay pay in-lieu fees.
Report Unpacks Housing Affordability in California
UC Berkeley's Terner Center for Housing Innovation's new new measure of housing affordability -- presented in their "Affordability for Whom? tool" -- reveals that many counties in California are becoming exclusive to wealthier households, leaving insufficient housing options for others. The tool, which can be used to study the affordabilities for different counties and cities statewide, found a fourth of all Los Angeles County residents "find it difficult to get by," followed by San Francisco at 22%. The new tool highlights the importance of aligning affordability metrics with policy goals and refining methodologies like California's RHNA process to drive affordable housing supply where it's most needed. Additionally, the paper stresses efforts to increase homeownership affordability, such as facilitating the construction of smaller, lower-cost units and reforms to construction laws, are crucial for addressing broader goals like racial equity and economic growth.
CP&DR Coverage: Fulton on Housing Production vs. Population Growth
In 2023, according to the Department of Finance, California’s population grew by 67,000 people – the first increase since the pandemic began and the state’s population began declining. But the amount of housing grew by double that amount – 120,000 units or so. CP&DR looked at DOF’s estimates of change in population versus change in housing units since the 2020 Census – almost four years, during most of which California’s population declined. And the bottom line is that during that time, the supply of housing increased by 3% and the population declined by 1%. the current housing crisis isn’t entirely the result, strictly speaking, of fewer housing units being built. It’s also the result of rapidly changing social and demographic trends bumping up against housing trends – both in new construction and the market supply of older homes – that change much more slowly.
Quick Hits & Updates
The federal government has committed $3.38 billion to connect Caltrain and high-speed rail to the Salesforce Transit Center in San Francisco, marking significant progress in a longstanding initiative. This funding will support extending the Caltrain commuter rail line, constructing underground tunnels and facilitating seamless transit connections, with over two-thirds of the project's estimated cost now covered by various funding sources.
Campo, an unincorporated community near San Diego, has been put up for sale for $6.6 million, encompassing 28 buildings including former Army barracks and commercial properties. The town, frozen in time with buildings from the 1940s, has seen increased rents and is considered a potential redevelopment opportunity despite challenges such as its distance from major job centers and the scorching summer heat.
The Pittsburg City Council adopted the "Envision Pittsburg" 2040 general plan, marking a milestone in the city's development strategy for the next two decades, focusing on infrastructure, sustainability and community input. The plan, the result of extensive public outreach and collaboration, aims to accommodate future growth while reflecting the community's values, although some concerns were raised during public comments regarding specific designations and land use decisions.
BART faces projected deficits surpassing $300 million annually by fiscal 2027 and officials are banking on a 2026 tax measure for survival, as federal and state aid dwindles post-pandemic. Without voter approval, service cuts loom, potentially triggering a transit death spiral, while rising costs and remote work trends exacerbate the agency's financial woes.
A recent poll conducted in Los Angeles found that the high cost of housing is driving many residents, especially young adults and renters, to consider leaving the city. Nearly three-quarters of renters and those under 35 have contemplated moving out of the city due to housing costs, highlighting widespread dissatisfaction and concerns about affordability.
San Francisco's Muni transit system faces a significant financial shortfall, prompting residents to propose a grassroots ballot measure to tax ride-hailing companies and support Muni. Organizers aim to generate up to $30 million annually for Muni by taxing companies like Uber and Lyft between 1% and 4.5% on revenue earned in the city. While the proposal seeks to address Muni's funding challenges, some officials express concerns about potential conflicts with existing efforts, highlighting the city's ongoing struggle to sustain transportation services.
A federal judge dismissed a climate lawsuit filed by 18 California youth against the U.S. Environmental Protection Agency, citing lack of legal standing, but granted permission for the plaintiffs to amend their complaint by May 20. The lawsuit alleges that the EPA violated the children's constitutional rights by permitting pollution from fossil fuels and the plaintiffs plan to resubmit their allegations in an amended complaint to address concerns about legal standing.
The Wilton Rancheria tribe recently regained control of a 77-acre parcel outside Sacramento, marking a historic victory for the Indigenous LandBack movement and fulfilling a long-held desire for self-determination. After decades of struggle, the tribe signed the land into a federal trust, symbolizing a return to ancestral territory and providing hope for other tribes seeking to reclaim lost lands and heal from generational traumas.
A proposal by Los Angeles-based researchers suggests that providing monthly payments of $750 to $1,000 to homeless individuals would enable them to secure informal housing arrangements like boarding homes or shared apartments. By leveraging the existing informal rental market and providing direct financial assistance, the plan aims to address homelessness caused by economic setbacks, potentially saving on public services costs while ensuring subsidized housing remains available for those with more complex needs.
San Francisco may consider a business tax overhaul in November to make the city more competitive and support struggling small businesses amidst remote work fallout. The proposed measure aims to cut taxes for small companies, shift the main business tax from payroll to sales and garner support from various sectors despite potential tax increases for some industries.
An analysis of eight Southern California municipalities responses to the state's 2018 law mandating affirmative action for fair housing in their General Plans' housing elements found that, despite creating numerous programs, most did not effectively advance fair housing goals, with affluent cities continuing to concentrate affordable housing sites in less affluent neighborhoods, highlighting implementation challenges of the affirmatively further fair housing mandate.
The Los Angeles International Airport's Automated People Mover project will receive an additional $200 million, bringing its total budget to $2.9 billion, after approval by the Board of Airport Commissioners. The project, initially expected to open in 2024, has faced delays due to disputes between the contractor and the airport, with completion now expected by late 2025, impacting the airport's plans for the 2026 World Cup and the 2028 Summer Olympics.
A recent audit of San Francisco's homelessness department revealed significant shortcomings, including failure to adequately track spending and performance metrics, as well as leaving hundreds of supportive housing units vacant. Despite increased spending, homelessness in the city has risen, prompting concerns about the effectiveness of current strategies. The audit highlighted the need for improved oversight, standardized performance monitoring and better utilization of resources to address the ongoing homelessness crisis.
The Redwood City City Council unanimously voted to permanently close Broadway to vehicles, following a successful temporary closure pilot program during the COVID-19 pandemic. Despite concerns over parking loss, the decision was made to create a pedestrian mall from Jefferson Avenue to Main Street, funded by a projected budget of $670,000 sourced from public parking revenue, the general fund and a local nonprofit.
HCD will collaborate with the University of California, Davis to conduct a comprehensive Farmworker Housing Study, mandated by Assembly Bill 1654, aiming to understand and address the housing needs of farmworkers in the state, with a focus on gathering community input, conducting interviews and analyzing data to inform state policy recommendations by 2027.
A statewide audit of the Local Streets and Roads Program -- initiated in 2017 and originally aimed to alleviate the degradation of streets and roads in California by allocating funding to cities and counties -- found state agencies effectively administer program processes while many cities struggle to improve road conditions despite appropriate fund usage, with the State Controller lacking adequate resources to ensure compliance with spending requirements.
