HomeMy WebLinkAboutStaff Report 4.E 11/18/2019,L Agenda Item #41
DATE: November 18, 2019
TO: Honorable Mayor and Members of the City Council through City Manager
FROM: Heather Hines, Planning Manager
SUBJECT: Approval of a Resolution Authorizing the Application for, and Receipt of,
SB 2 Planning Grants Program Funds.
RECOMMENDATION
It is recommended that the City Council approve a Resolution authorizing submittal of a Senate
Bill 2 Planning Grant Program (PGP) application for $310,000 towards activities to accelerate
housing production, promote the development of housing, and streamline the approval of housing
development, and designating the City Manager to submit and accept funding on behalf of the City
of Petaluma.
BACKGROUND
Senate Bill 2 (SB 2)
In 2017, Governor Brown signed a 15 -bill housing package which included the "Building Homes
and Job Act" (SB 2) (Chapter 364, Statutes of 2017). This bill establishes a permanent, on-going
source of funding dedicated to promoting and facilitating affordable housing developments. The
source of funding is secured through a recording fee on real estate documents. The recording fee
ranges from $75.00 to $225.00 depending upon the nature and scope of the property transaction
and began to be collected effective January 1, 2018. The fee is projected to generate up to $200
million in annual revenue statewide.
Revenues collected in the first calendar year (January through December 2018) were to be
allocated evenly into two funds, the first of which would be made available to local governments
for planning grants and the second fund would be made available to the
Department of Housing and Community Development (HCD) to assist persons experiencing or
at risk of homelessness. The revenue allocated to local governments is to be used for planning
activities to promote and facilitate the production of affordable housing throughout California and
administered to each eligible jurisdiction through the SB 2 Planning Grants Program.
SB 2 Planning Grants Program
On March 28, 2019, HCD launched the SB 2 Planning Grants Program. A Notice of Funding
Availability (NOFA) was released for the approximately $123 million in revenue
earmarked for local government grants in year one. Under the grant program local governments
are eligible for maximum grant awards based on population. The City of Petaluma falls within the
"medium localities" category (defined as a locality with a population between 60,000 and 200,000)
and is eligible for up to $310,000 in grant funding for year one of the grant program.
The purpose of the Planning Grants Program is to provide financial and technical assistance to
local governments to:
• Accelerate housing production
• Streamline the approval of housing development
• Facilitate housing affordability
• Promote the development of housing
• Ensure geographic equity in the distribution and expenditure of allocated funds
To be eligible for funding through the SB 2 Planning Grant Program, a jurisdiction must rneet the
following threshold requirements:
• Certified Housing Element
• Annual Progress Report on housing element
• Nexus to accelerating housing production
• Consistency with State Planning and other Planning Priorities within the last five years
The City of Petaluma has a certified Housing Element for the 2015-2023 cycle and submits
annual progress reports to the Department of Housing and Community Development.
Additionally, the City can demonstrate that planning activities over the last five years have been
consistent with State law and planning priorities, including zoning ordinance updates regarding
Density Bonus and Accessory Dwelling Ordinances, adoption of the Station Area Master Plan,
initiation of Vehicle Miles Traveled thresholds, and utilization of CEQA streamlined processing.
In establishing the SB 2 PGP eligibility, the state created Priority Policy Areas which include
preapproved activities that are automatically deemed to accelerate housing production and
therefore satisfy the criteria for demonstrating nexus to accelerating housing production. These
activities include:
• Rezone to permit housing by right
• Objective design and development standards
• Specific Plans or form -based codes coupled with CEQA streamlining
• Accessory dwelling units or other low-cost building strategies
• Expedited pen -nit processing
• Housing related infrastructure financing and fee reduction strategies
The administration of the Planning Grant Program calls for applications for the first-year grant
funding to be submitted by November 30, 2019. HCD anticipates that grant funds will be
awarded within approximately two to three months from the date of application filing. All grant
monies must be expended by June 30, 2022.
DISCUSSION
The SB 2 Planning Grant Program presents funding opportunity for planning efforts consistent
with existing policies, citywide goals, and recently discussed priorities associated with housing
production to create essential housing for all Petalumans. The following activities are proposed to
most efficiently utilize available grant funds currently available to Petaluma, meet the objectives
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as outlined in the Priority Policy Areas as identified in the SB 2 guidelines and that are
automatically deemed to accelerate housing production, and further Petaluma's housing
objectives.
Permit -Ready ADU
The City will be requesting approximately $60,000 to create permit ready plans for detached
Accessory Dwelling Units that meet all applicable code provisions. The purpose of these plans is
to reduce costs and processing times and stimulate the construction of ADUs. Permit -ready plans
will be developed to offer customization options to ensure that the design is complementary to
neighborhood context while providing fully approved plans that significantly decrease expense for
property owners to have individual plans created.
Objective Design and Development Standards
The City will be requesting approximately $60,000 to develop objective standards under the
Implementing Zoning Ordinance to facilitate non -discretionary permitting under state bills such
as SB -35 and similar.
Rezone to Permit By -Right
The City will be requesting approximately $25,000 to process Zoning Map Amendments to permit
residential development on City owned opportunity sites to facilitate residential development on
underutilized parcels in partnership with affordable housing organizations. Additionally, the City
may look at other Zoning Text Amendments that provide greater opportunity for additional
housing capacity.
Expedited Permit Processing
The City will be requesting the remaining approximately $165,000 to facilitate the development
of a centralized permit center in the west wing of City Hall. This funding would be part of a larger
City budget to design, plan, and build the needed physical improvements for a customer -friendly
and efficient permit counter. This redesign would allow for creation of a one-stop shop and
upgrade to electronic permit processing systems. The overall intent being to provide a more
efficient and cost effective, streamlined submittal and processing system which in term will reduce
the cost and time for new and rehabilitated housing development in the City.
The Planning Grants Program guidelines require that the grant application be accompanied by a
City Council Resolution to endorse the City's grant request. The draft resolution provided for the
City Council's consideration authorizes the City Manager to file an application on behalf of the
City for up to $310,000, the maximum amount available for a medium locality in the first year of
SB 2 grant funding. Consistent with guidance from HCD regarding the Planning Grant Program
applications, the grant application may also include alternative projects consistent with the Priority
Project Areas to provide greater flexibility to modify preferred projects under the grant funding.
ENVIRONMENTAL REVIEW
The proposed zoning text amendments are exempt from the California Environmental Quality Act
(CEQA) pursuant to CEQA Guidelines Section 15378 in that the grant application does not have
a potential for resulting in either a direct physical change in the environment or a reasonably
foreseeable indirect physical change in the environment.
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FINANCIAL IMPACTS
There is no fiscal impact associated with this item. The SB 2 Planning Grants Program does not
require a local financial commitment or "match" from local jurisdictions requesting grant funding.
ATTACHMENT
Attachment 1 Draft Resolution
rd
Attachment 1
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PETALUMA
AUTHORIZING THE APPLICATION FOR, AND RECEIPT OF, SB 2 PLANNING GRANTS
PROGRAM FUNDS
WHEREAS, in 2017 Governor Brown signed a 15 -bill housing package which included the
"Building Homes and Jobs Act", also known as Senate Bill 2 (SB 2); and
WHEREAS, SB 2 establishes a permanent on-going source of funding dedicated to promoting
and facilitating affordable housing development in the State of California; and
WHEREAS, 50 percent of the revenues generating from year one of SB 2 are allocated to a fund
to be available to local governments through planning grants; and
WHEREAS, the SB 2 Planning Grant Program (PGP) was created to administer grant funds to
applicable jurisdictions; and
WHEREAS, the State of California, Department of Housing and Community Development
(Department) issued a Notice of Funding Availability (NOFA) on March 29, 2019 for its Planning Grants
Program (PGP); and
WHEREAS, the City Council of the City of Petaluma desires to submit an application for the
PGP program to accelerate the production of housing and will submit a 2019 PGP grant application as
described in the NOFA and SB 2 PGP Guidelines released by the Department; and
WHEREAS, the Department is authorized to provide up to $123 million under the SB 2 PGP
from the Building Homes and Jobs Trust Fund for assistance to Counties (as described in Health and
Safety Code section 50470 et seq. (Chapter 364, Statutes of 2017 (SB 2)) related to the PGP Program.
WHEREAS, the City of Petaluma is defined as a "medium locality" based on a population
between 60,000 and 200,000; and
WHEREAS, medium localities are eligible for up to $310,000 in grant funding for year one; and
NOW, THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
PETALUMA AS FOLLOWS:
SECTION 1. The City Council is hereby authorized and directed to apply for and submit to the
Department the 2019 Planning Grants Program application in the amount of $310,000 in response
to the NOFA released on March 28, 2019.
SECTION 2. In connection with the PGP grant, if the application is approved by the Department,
the City Manager is authorized to enter into, execute, and deliver a State of California Standard
Agreement (Standard Agreement) for the amount of $310,000, and any and all other documents
required or deemed necessary or appropriate to evidence and secure the PGP grant, the City's
obligations related thereto, and all amendments thereto (collectively, the "PGP Grant
Documents").
SECTION 3. The City shall be subject to the terms and conditions as specified in the Standard
Agreement, the SB 2 PGP Guidelines, and any applicable PGP guidelines published by the
Department. Funds are to be used for allowable expenditures as specifically identified in the
Standard Agreement. The application in full is incorporated as part of the Standard Agreement.
Any and all activities funded, information provided, and timelines represented in the application
will be enforceable through the executed Standard Agreement. The City Council hereby agrees to
use the funds for eligible uses in the manner presented in the application as approved by the
Attachment 1
Department and in accordance with the PGP NOFA, the PGP Guidelines, and 2019 PGP
Application.
SECTION 4. The City Manager is authorized to execute the City of Petaluma PGP application,
the PGP Grant documents, and any amendments thereto, on behalf of the City as required by the
Department for receipt of the PGP Grant.
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