In August, California’s Department of Housing and Community Development (“HCD”) announced it had begun

awarding $123 million under SB 2’s Planning Grants Program to cities and coun- ties that applied for additional funds. Under HCD guidelines, local jurisdic- tions have until November 30, 2019 to submit applications.

To echo the ECA President’s Message from last month’s issue, we are in the “Middle of the biggest construction boom in decades, and it is starting to tax resources…” Financial resources are paramount to the construction industry’s success. Despite the financial market’s recurring turbulence, we must continue to look towards longterm success regardless of the current market stresses. And the State of California has taken steps to foster, and even accelerate, growth in much needed areas.

In 2017, former Governor Jerry Brown signed a series of housing bills designed to address California’s housing shortage and increasing costs of living. One of those bills, the Building Homes and Jobs Act (SB 2, 2017), began to generate revenue to address these issues. It is now 2019 and current Governor Gavin Newsom has indicated similar support.

Applicants may receive funds for eligible activities, which includes the following: (1) updated to local regulatory plans; (2) updates to zoning ordinances; (3) environmental analyses that elimi- nate the need for project-specific review; (4) local process improvements that expedite local planning and permitting. Eligible activities include creation of

“Plans and programs to finance and increase infrastructure with accompany- ing enhanced housing capacity. . . .” In addition, applicants may identify discrete improvements needed to expand infrastructure capacity and facilitate additional development, such as “replace- ment or upgrade of sewer line.”

All applicants must meet the following minimal requirements: (1) HCD- complaint housing element; (2) submitted a recent Annual Progress report; (3) demonstrate compliance with Government Code § 65041.1 or other planning priorities; and (4) demonstrate a nexus to accelerating housing production. Several priority policy areas were identified that are automatically deemed to accelerate housing production.

LargercitiessuchasCalifornia’scapital, the City of Sacramento, and small cities like my hometown, the City of San Jacinto, have already received awards. Only seven other cities have received six figure sums as of August 15, 2019. The largest amount awarded thus far was to the City of Long Beach, a total of $625,000. Local jurisdictions must submit their applications by November 30, 2019. HCD further announced a poten- tial for a supplemental round of awards before 2023.

From another President’s Message, Mr. Brendan Slagle wrote in March 2019, “The California construction market has been climbing out of the deep hole left by the 2008 Crash. Right now the problems facing our businesses have more to do with managing success than fighting for survival.”

Although SB 2’s measly $123 million budget is insignificant compared to other aspects of the construction industry, we must ensure effective management of these funds earmarked to maximize our opportunities. Cities and counties must seek to capitalize on SB 2’s funding to revise and eliminate any unreasonable, overbearing regulations that hinder our longterm success. With under 2% of available funds distributed, we will expect the large volume of remaining applicants to submit their requests by the fourth quarter’s deadline. Anyone with a stake in the housing market should be looking to local jurisdictions to obtain these funds to manage our problems in the best of times so we may have the best opportunity to succeedintheworstoftimes.

By Adriana Kalajian, Carno Law Group, Director of Media Communications Email: [email protected]