HomeMy WebLinkAboutMINUTES - 09152003 - MATERIALS AGENDA ITEM# 3.A
CONTRA COSTA COUNTY
COMMUNITY DEVELOPMENT DEPARTMENT
651 Pine Street, N. Wing - 4th Floor
Martinez, CA 94553
Telephone: 335-1214 Fax: 335-1222
TO: Board of Supervisors
• Ad Hoc Committee on ULL Voter Initiative
• Ad Hoc Committee on Smart Growth
FROM: Dennis M. Barry, AICP
Community Development Director
By: Patrick Roche, Principal Planner
Advance Planning Division
DATE: August 27, 2003
SUBJECT: Staff Report on Urban Limit Line Voter Initiative
I. Introduction/Background
On .lune 3, 2003, the Board of Supervisors directed staff to prepare a draft initiative for
Submittal to the voters at the March 2, 2004 election that would prohibit the expansion of the
Urban Limit Line without majority voter approval (a certified copy of the June 3, 2003 Board
Order is attached as Exhibit "A" to this report). The June 3, 2003 action established an ad hoc
committee, consisting of Supervisors DeSaulnier and Glover, to oversee preparation and
processing of the draft initiative for presentation and consideration by the Board of Supervisors.
Additionally,staff was directed to research and explore several related issues concerning the Urban
Limit Line Voter Initiative,including the means by which the initiative could be legally binding on
the 19 cities and LAFCO,and methods to ensure that the County would not incur any election costs
resulting from a ballot measure proposed by a property owner to modify the Urban Limit Line
outward.
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This staff report has been prepared for consideration by a joint meeting of two Board of
Supervisors established ad hoc committees, the Ad Hoc Committee on the ULL Vater Initiative
and the Ad Hoc Committee on Smart Growth.
2. Draft Initiative
Attached as Exhibit "B" to this report is a preliminary draft of the initiative based on the
Department's understanding of the Board's June 3, 2003 directive.
a. Initiative's Purpose and Effect: The draft initiative itself would not alter or change
the location of the existing Urban Limit Line. The primary purpose of the draft initiative is to
establish a neve procedural requirement that would require a countywide majority vote for the
expansion of the Urban Limit Line. The objective is to establish within the process for changing
the Urban Limit Line an "insurance policy" for voter approval and ratification of proposals to
expand the Urban Limit Line outward. The effect is to add voter participation in reviewing and
ratifying any proposal for the expansion of the Urban Limit Line of more than ten (10) acres,
essentially giving voters in Contra Costa County a direct role in the decisions about converting
land from non-urban use to an urban use.
b. Initiative's Kev Provisions: The draft initiative would amend the 1-and Case Element
of the Contra Costa CoL111ty Oencral Plan (1995-2010) and the 65/35 Land Preservation Ordinance
(Contra Costa County Ordinance Code, Chapter 82-1)by adding specific language requiring voter
ratification of any expansion of the Urban Limit Line of more than ten (10) acres. Note that the
initiative adds a new procedure - voter ratification of an Urban Limit Line expansion - to the
existing set of procedures that were originally approved by the voters in 1990 under Measure C.
The current ordinance requires that modifications to the Urban Limit Line be approved by a 4/5
vote of the Board, with substantial evidence in the record to support one of seven findings listed in
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the measure. The initiative does not otherwise alter those existing procedures. The suggested ten-
acre threshold for voter approval of an outward expansion tracks with the Board's stated interest in
providing an exception for minor modifications to the Urban Limit Line,as discussed in the June 3,
2003 Board Order.
C. The Four General flan Amendment Rule: The draft initiative specifically identifies
that the amendment of the Land Use Element would be one of the four amendments to the
mandatory elements of the General Plan that are allowed under state law during a calendar year.
3. Legal Research
a. Apply New Procedure-Voter Approval for Urban Limit Line Expansion--to Cities:
In the June 3,2003 Board Order,staff was asked to research hove the voter-approved Urban Limit
Line initiative could be made legally binding on the cities and LAFCO. County Counsel has
researched this matter and has concluded that a requirement for voter approval to expand the Urban
Limit Line cannot be made binding on the cities or LAFCO by countywide voter initiative. See the
memorandum from County Counsel attached as Exhibit "C" to this report.
b. County Must Pay Costs of an Election: In the June 3, 2003 Board Order, staff was
asked to research whether a private person or entity proposing an expansion of the Urban Limit
Line could be required to pay the cost for conducting an election to ratify the Board's decision to
expand the line. County Counsel has researched this matter and concluded that the Elections Code
does not permit the County enact an ordinance requiring that a private citizen or entity pay the
costs of an election. The language of the pertinent section of the Election Code is quite specific,
stating that "the preparation and conduct of elections as provided in this code shall be paid from
the county treasuries, except that when an election is called by the governing body of a city the
expenses shall be paid from the treasury of the city." [Emphasis added.] See the memorandum
from County Counsel attached as Exhibit "C" to this report.
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4. Scheduling/Elections_Deadline
In order to place the initiative on the March 2004 Primary Election Ballot,which is set for
March 2, 2004,the Assistant County Registrar has advised that the final wording of the initiative
should be submitted by Monday, November 17, 2003. This deadline has been imposed to allow
sufficient time to prepare and publish a notice of election,a notice to file arguments,and to prepare
a final ballot. This elections deadline has implications for when the Board of Supervisors should
consider and take action to submit the initiative for the March 2004 Primary Election.There is only
one Board meeting during the month of November, scheduled for November 4,2004. In order to
meet the submittal date requested by the County Elections Official, staff recommends that action
on the draft initiative be scheduled for the Board of Supervisors meeting on October 28, 2003,
which would allow consideration of this matter to be continued to the Board of Supervisors
meeting on November 4, 2003, if necessary.
S, Elections Costs
According to preliminary estimates provided by the Assistant County Registrar,the cost to
add this initiative to the March 2, 20094 ballot is between 570,000 and 5150,000. This world
include printing and inserting the initiative into the Voter Information Pamphlet for a county
measure consolidated to a regular countywide election elate. If voter ratification of a proposed
expansion to the Urban Limit Line is required in the fUtUre ,111d the issue is placed before the voters
as a regular election,the costs should be in the sante range. However, holding a special election in
the future for voter ratification on an Urban Limit Line expansion would be substantially more,and
could cost as much as $ 2 million according to the Assistant County Registrar.
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6. CEQA Considerations
The California. Environmental Quality Act (CEQA) is concerned with effects on the
physical environment. An action by a public agency is a"project"subject to review under CEQA
only if the action might result in a direct or indirect physical change in the environment. An
activity that is not a"project"is not subject to CEQA. CEQA Guidelines specifically exclude from
the definition of"project" activities of a public agency that are political or that do not involve a
physical change in the environment. Even if an activity is deemed a "project,"but it can be seen
with certainty that there is no possibility that the activity in question may have an effect on the
environment,the"project"may be exempt from CEQA based on the"the general rule that CEQA
applies only to projects which the potential for causing a significant effect on the environment."
(15 Calif. Code of Regulations, Section 15061(b)(3))
The draft initiative proposes an additional procedural requirement for voter approval of an
outward expansion of the Urban Limit Line of more than ten (10) acres. It does not propose to
alter the existing boundaries of the Urban Limit Line. In staff's view, the draft initiative would not
have a direct or even an indirect physical change on the environment, and therefore, would be
exempt from CEQA.
To avoid a potential legal challenge under Frien(ls of Sierra Hadr•e v. City ofSierra Madre
(2001 ) 25 Cal. 4`1' 165, 194195, staff recornmends that the. Board of Supervisors make a CEQA
finding at the tirne it considers and in the event it approves this proposed initiative. In the Friends
of:S'icriu Mafire case, the court held that, by voting to place a ]and use measure on the ballot, the
Sierra Madre City Council had approved a"project"sub}ect to CEQA. In acknowledgment of this
court ruling, the Board of Supervisors could approve the initiative for submittal on the March 2,
2004 ballot along with the adoption of a CEQA exemption under Section 15061(b)(3). Since the
initiative only proposes to add a procedural requirement, voter ratification to expand the Urban
Limit Line, and it does not alter the existing Urban Limit Line, it can be seen with certainty that
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there is no possibility the initiative will have a significant effect on the physical environment. The
Notice of Exemption would then be filed with the County Clerk.
Staff cautions that should the proposed initiative include anything more than the simple
addition of a procedural requirement for voter ratification to expand the Urban Limit Line (for
example,to change the boundary of the Urban Limit Line,or,to extend the term of the Measure C-
1990 ordinance beyond 2010), a fair argument could be made that, if approved,the initiative could
have an effect on the environment.This would require a more involved and lengthy environmental
review. The Community Development Department would need to prepare an initial study and
CEQA findings prior to October 28, 2003, the targeted date for the Board meeting to consider the
draft initiative. It is unlikely that a thorough CEQA review for a draft initiative including more
than the addition of a procedural requirement for voter ratification to expand the Urban Limit Line,
could be completed within the timeframe needed for the Board to approve an initiative for
submittal on the March 2, 2004 ballot.
Attachments
Exhibit "A": Board Carder on Urban Limit Line Ballot Proposal, dated June 3, 2003
Exhibit -B": Draft Initiative re: Vater Approval for Expansion of the ULL
Exhibit -C-: County Counsel Memorandum to Ad Hoc Committee on UI,L Voter Initiative
re: Binding Initiative on Cities and Election Costs
ce: Menibcrst Board orsupervisot-
C'ierk or the Board
COL111ty Administrator
County Counsel
CDD BGC File
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Exhibit "A"
Board Order on Urban Limit Line Ballot Proposal, dated June 3, 2003
r
TO: SC?ARC7 F SUPERV'IS /' ,� 1 M Contra
FROM: Silvano B. Marches!, County Counsel ` r , Costa
DATE: June 3, 2443 County
SUBJECT: Urban Limit Line Ballot proposal
SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION
R QMMENI T� IQM$
1. Direct staff to prepare a draft initiative for submittal to the voters at the March 2, 2004
election, which would prohibit modification of the Urban Limit Line outward without voter
approval.
2. Direct staff to explore means by which the initiative could be made binding on the cities and
on LAFCO, Including legislation.
3. Establish an ad hoc committee, consisting of Supervisors DeSaulnier and Glover, to
oversee the preparation of the above documents and to present drafts to the Board of
Supervisors.
BAQKC ROUN D:
At its meeting of May 13, 2043, during its discussion of the Shaping Our Future Summit, the Board
of Supervisors requested information regarding the options and mechanisms for strengthening the
existing Urbain Limit Line.
The Board may sponsor an initiative for inclusion in the March 2, 2004 primary election. We have
been advised that a ballot measure should be submitted to the County Clerk by November 18,
2043, and that the Cost of presenting It in the primary election is minimal. If, on the other hand, a
special election were needed, the Cast to the County probably would exceed 2 million.
We are also advised that, when an initiative is presented by petition, currently the cost is divided: all
the costs of obtaining signatures and processing it to the Board of Supervisors are borne by the
proponents. Once the Board decides to include a measure on the ballot, all the Costs through the
election are borne by the County.
CONTINUED ON ATTACHMENT: —YES SIGNATURE,
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COMMENDATION}`tECOMMESNDATiON OF COUNTYADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
. ✓'APPROVE OTHER
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SIC;NATURE S:
ACTION OF B ON June 3. 2003 APPROVE AS RECOMME=NDED x OTHER
VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE
UNANIMOUS{ABSENT 1�OI2 AND CORRECT COPY OF AN ACTION TAKEN
} AND ENTERED ON THE MINUTES OF THE
BOARD OF SUPERVISORS ON THE DATE
AI(ES: NOES: SHOWN.
ABSENT: ABSTAIN:
DISTRICT III SEAT VACANT ATTESTE=D Jima 3, 2003
CONTACT;. Siivano Marchesi(335-1810) JOHN SWEETEN,CLERK OF THE BOARD OF
SUPERVISORS AND COUNTYADMiNiSTRATOR
CC: County Administrator
Community Devejopment Department
BY DEPUTY
AhULL Hd Mw-4W
As indicated earlier, the Urban Limit Line is binding on the County in accordance with the existing
ordinance (Ord. Code, chap. 82-1). However, it does not prevent a city from submitting an application for
annexation or amendment of a sphere of influence outside the Urban Limit Line, and it does not prevent
LAFCO from approving such an annexation or sphere amendment. LAFCO currently has a policy by
which it generally denies annexations and sphere of influence amendments outside the Urban Limit Line
unless the proponent presents evidence demonstrating that the need for the annexation or sphere
amendment compellingly outweighs the public interest in limiting growth to areas within the Urban Limit
Line.
It is likely that legislation would be needed to ensure that the Urban Limit Line could not be undermined
by a LAFCO action approving an annexation, and placing the cost of processing a developer-initiated
ballot measure on the proponent. Further research is be needed for a determination of these issues.
At the Board's May 13, 2003 meeting, Board members expressed several potential directions to staff,
which the Board may wish to consider at this time:
• Prepare a draft initiative for consideration by the Board for placement on the ballot for the March 2,
2004 election.
• The initiative would contain the following provisions:
• Prohibit modification of the Urban Limit Line outward without voter approval by majority vote.
• Exception for minor modifications (e.g., fewer than 10 acres in area).
• Explore methods for ensuring that a ballot measure proposed by a property owner to modify the
Urban Limit Line outward does not result in County expense.
• Explore strategies for making a voter-approved Urban Limit Line initiative legally binding on the cities
of the County and on LAFCO, including legislation.
The Board also indicated Its intent to work with the cities on this matter and to establish an ad hoc
committee consisting of Supervisors DeSaulnier and Glover to direct and oversee the preparation and
processing of the draft initiative and any necessary draft legislation for presentation to the Board of
Supervisors.
A;UAI Bd M—v,4
Exhibit "B"
Draft Initiative re: Voter Approval for Expansion of the ULL.
PRELIMINARY DRAFT FOR DISCUSSION PURPOSES ONL Y
VOTER APPROVAL FOR EXPANSION
OF THE URBAN LIMIT LINE
Shall the People of the County of Contra Costa enact an ordinance amending
the sand Use Element of the Contra County General Plan (1995-2010) and
the 65/35 Land Preservation Plan Ordinance (Contra Costa County
Ordinance Code, Chapter 82-1) to require voter approval by majority vote
for an expansion of the Urban Limit Line of more than ten (10) acres?
TEXT FOR PROPOSED ORDINANCE
The People of the County of Contra Costa County hereby ordain as follows:
Section 1. Title
This ordinance shall be entitled the Voter Approval for Expansion of the
Urban Limit Line.
Section 2. Summary
This Ordinance amends the Land Use Element of the Contra Costa County
General Plan (19952010) and the 65/35 Contra Costa Land Preservation
Ordinance to require that any expansion of the Urban Limit Line of more
than ten (10) acres approved by the Board of Supervisors be ratified by a
majority vote of the people at a countywide election before it becomes
effective.
1 8/27/2003
PRELIM MARY DRAFT FOR t?ISCUSSIONPURPOSES COALY
Section 3. Statement of Purpose and Findings
The voters approve this ordinance based on the following facts and
considerations:
A. In November 1990 the voters approved Measure C: the 65/35
Contra Costa County Land Preservation Flan Ordinance which established
that urban development in Contra Costa County would be limited to no more
than thirty-five (35) percent of the land in the County and at least sixty five
(65) percent of all land in the County would be preserved for agriculture,
open space, wetlands, parks, and other non-urban uses. Measure C-1990
also established an Urban Limit Line to ensure preservation of identified
non-urban agricultural, open space, and other area by establishing a line
beyond which no urban land use could be designated during the term of the
General Plan, and to facilitate the enforcement of the 65/35 land
preservation standard. At page 3-15, Land Use Element, Contra Costa
County General Plan, and at Section 82-1.018, Chapter 82-1, there is
described the procedure by which the Urban Limit Line may be changed,
either by the Board of Supervisors or by voter referendum. To provide
additional protection to the County's non-urban and open space areas, as
well as the 65/35 land preservation standard, this ordinance would add the
requirement that, until December 31, 2410, the voters of Contra Costa
County must approve, by majority vote, any change by the Board of
Supervisors to the Urban Limit Line that expands of the Urban Limit Line
by more than ten (10) acres, before that change can become effective.
2 812712003
PRELIMINARY DRAFT FOR 0I5CU55ION PURP05E5 OM Y
Section 4. Inn lop mentation
To implement this ordinance, page 3-15 of the Land Use Element of the
Contra Costa County General plan (1995-2010) and Section 82-1.018 of
Chapter 82-1, 65/35 Land Preservation Plan Ordinance, Contra Costa
County Ordinance Code are amended as follows:
At page 3-15, Land Use Element, Contra Costa County general Flan (1995-
2010), under the subheading "CHANGES TO THE URBAN LIMIT LINE"
the following sentence is added:
"If the .Board of Supervisors approves an expansion of the
Urban limit line of more than ten (10) acres, this change to
the Urban Limit .Line will be subject to voter approval by a
majority vote before the change will become effective, unless,
by a 415 vote of the Board of Supervisors after a public hearing,
one of the following findings is made, based on substantial
evidence in the record: (i) that the expansion of the Urban
Limit .Line is necessary to avoid an unconstitutional taking of
private property, or, (ii) the expansion of the Urban .Limit .Line
is necessary to comply with state or federal law. "
To be consistent with the amended text in the General Plan, Section 82-
1 .01.8, Changes to the [.Urban Limit Line, of Chapter 82-1, 65/35 Land
Preservation Plan, Contra Costa County Ordinance Code is amended by
adding the following subsection (c):
"82-1.018 (c) If the Board of Supervisors approves an
expansion to the Urban Limit Line that of more than ten (10)
acres, this change to the Urban Limit Line will be subject to
voter approval by a majority vote before the change will
become effective, unless by 415 vote of the Board of Supervisors
3 8/27/2003
PRELIMINARY DRAFT FOR D15CUS sIOAI PURPOSE5 01%Y
after a public hearing, makes one of the following findings is
made, based on substantial evidence in the record: (i) that the
expansion of the Urban Limit Line is necessary to avoid an
unconstitutional taking of private property, or (ii) the
expansion of the Urban Limit line is necessary to comply with
state or federal law. "
Section 5. Effective Date
This ordinance shall become effective immediately upon approval by the
voters. Upon the effective date, the provisions of Section. 4. A) of this
ordinance are inserted into the Contra Costa County General Plan (1995-
2010), as one of the four consolidated general plan amendments for calendar
year 2004 allowed under state law and the provisions of Section 43) of this
ordinance are added to the Contra Costa County Ordinance Code as Section
82-1.018 (c ).
Section 6. Severability
If any portion of this ordinance is hereafter determined to be invalid by a
court of competent jurisdiction, all remaining portions of this ordinance shall
remain in full, force, and effect. Each section, sLrbsection, sentence, phrase,
part or portion of this ordinance world have been adopted and passed
regardless of whether any one or more section, subsections, sentences,
phrases, parts or portions was declared invalid or unconstitutional.
PRELIMINARY DRAFT FOR DISCUSSION PURPOSES ONLY
Section 7. Amendment or Repeal
Except as otherwise provided herein, this measure may be amended or
repealed only by the voters of Contra Costa County at a countywide election.
5 812712003
Exhibit "C"
County Counsel Memorandum, dated 8125/2003
ULL Voter Initiative
re: Bind Cities To Initiative and Election Costs
Office of the County Counsel Centra Costa County
651 Pine Street, 9th Floor Phone:(925)335-1800
Martinez, CA 94553 Fax: (925)646-1078
Date: August 25, 2003
To: Urban Limit Line Ad Hoc Committee
Smart Growth Committee
From: Silvano B. Marchesi, County Counsel ,!
By: Kelly M. Flanagan,Deputy County Counsel°
Re: ABSENT LEGISLATION,THE COUNTY CANNOT BIND CITIES`GVITH AN
URBAN LIMIT LINE INITIATIVE AND THE COUNTY WOULD BEAR THE
COSTS OF ANY ELECTION CONCERNING MODIFICATION OF THE ULL
Summary:
The County cannot, by initiative, impose a prohibition on modification of the Urban
Limit Line ("ULL") outward without voter approval on the cities within the County. The County
also cannot force private parties to pay for any election necessitated by an initiative requiring
voter approval to modify the ULL outward.
Background:
An initiative by which outward modification of the ULL would require voter
approval is being considered for the March 2, 2004 ballot. In connection with that initiative,we
have been asked to address whether the initiative could be made binding on the cities within the
County. We have also been asked to address whether those prompting an election to modify the
ULL outward could be made to pay the costs of that election. Our analysis of these issues
follows.
Discussion.,
A. The Cougty Cannot By Initiative Bind The Cities Within The Count
The legal basis for all land use regulation is the police power of the city or county to
protect the public health, safety and welfare of its residents. (Berman v. Parker(1954)348 U.S.
26.) Although established by common law, the police power is set forth in Article XI, section 7
of the California Constitution,which provides:
"A county or city may make and enforce within its limits all local police,
sanitary and other ordinances and regulations not in conflict with general
laws." (Emphasis added.)
Board of Supervisors
August 25, 2003
Pa e2
The California Supreme Court has described the police power as follows.
"Under the police power granted by the Constitution, counties and cities
have plenary authority to govern, subject only to the limitation that they
exercise this power within their territorial li
Board of Supervisors
August 25, 2003
Page 3
elections affecting those bodies,there is no provision in the Elections Cade which allows a
County to require that a private citizen or entity pay the costs of an election.
cc: Supervisor Gayle B. Uilkerna
Supervisor Millie Greenberg
z:\Temp snare\ULL Memo.wpa
AGEIUDA .ITEM # 3.B r9/j�12cx�.�1
DRAFT FOR DISC 1S5.ION PURPOSES OAX Y
TO: BOARD OF SUPERVISORS
FROM: AD HOC COMMITTEE ON SMART GROWTH
• Supervisor John Gioia, District i
• Supervisor Mark DeSaulnier, District IV
DATE: Se em be f 35eptember 15, 2003
SUBJECT: Progress Report On Implementation Of The Contra Costa Smart Growth
Action Plan, Including Recommended Next Steps For An Inclusionary
Housing Ordinance And Establishment Of A Housing Trust
I. Introduction/Background
In August and September 2000 the Board of Supervisors concluded a review of
the County's Urban Limit Line by adopting boundary modifications that placed
approximately 16,000 acres on the outside of the Urban Limit Line. In taking this action
the 'Board also adopted the Contra Costa Smart Growth Action Plan. The Action Plan
serves as the Board of Supervisors near-term policy framework for achieving smart
growth strategies aimed at managing urban growth and preserving or improving the
quality of life of residents while addressing the affordable housing needs and economic
opportunity. In addition to adopting the Contra Costa Smart Growth Action Plan, the
Board established an ad hoc committee, comprised of Supervisors DeSaulnier and Gioia,
to periodically meet and confer with staff on implementation of smart growth strategies
identified in the Action Plan. The purpose of this report is to update the Board of
Supervisors on progress toward implementation of the various elements to the Smart
Growth Action Plan and to iclenti I`y next steps necessary to complete program
implementation.
2. Progress Retort on Smart Growth Action .Plan Implementation
The Smart Growth Action Plan emphasizes that in addition to the Urban Limit
Line other actions are necessary to shift the growth patterns to new forms of more
sustainable development that allows for the phased expansion on the urban fringe along
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AGENDA ITEM # 3,B r9�L5 tow
DRAFT FOR DISCUSSION PURPOSES ONL Y
with economic investment and revitalization of established communities. The Action
Plan laid out a set of strategies and objectives that would be pursued in the near-term.
Significant progress has been made in pursuing the main objectives of the Smart
Growth Action Plan. This includes initiation of regional planning coordination through
the "Shaping Our Future" effort, completion of the City-County Inventory of Vacant and
Underutilized Land Inventory, implementation of infill development strategies through
the redevelopment and revitalization efforts in selected unincorporated communities by
the Contra Costa County Redevelopment Agency, and participation by the County in
financing affordable housing projects. A copy of the adopted Action Plan is attached as
Exhibit "A" to this report. Listed below each of the Action Plan elements is an annotated
note describing the status or progress toward implementation.
3. 1992 County Housing Trust Fund Task Force re:Inclusionary Housing Ordinance
and Housing_Trust Fund
A key element to the Action Plan calls for the exploration of "Smart Growth
Affordable Housing Goals" in order to attain the affordable housing goals and targets
identified by state and/or regional agencies. It suggests that consideration be given to
establishing a minimum percentage of units in newly approved residential projects be set
aside as affordable units. It also suggests that the County work together with the cities to
achieve affordable housing goals. The most common tools for obtaining such goals is
through the enactment of an inclusionary housin=g ordinance, which typically sets a
numerical goal for affordable units within new resideii Lil projects and provides for
payment of fees in lieu of building the affordable units, and the establishment of a
housing trust fund where in lieu fees and other funding sources are deposited to
specifically finance development of affordable housing.
This approach to affordable housing was previously considered by the County in
1992 through the Contra Costa County Housing Trust Fund Task Force. In the 1992
report the Task Force recommended the establishment of a County Housing Trust Fund.
They recommended that the trust fund should rely on a broad range of funding sources,
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ACEAIDA ITEM # 3.8 2LIoo3
and they included a proposal for an inclusionary housing ordinance. The 1992 report
expressed the concern of Task Force members that given the regional nature of the
housing market, the establishment of a program only within the unincorporated area,
could create an unlevel playing field. They were concerned that a residential project in
the unincorporated area would be burdened with obligations that were not found in an
adjoining city. The Task Force evaluated seventeen trust fund revenue sources based on
the following criteria(emphasis added in italics).
• The revenue source must represent a net new source of revenue for affordable
housing
• The use of the revenue source for affordable housing must not result in a
diversion of public funds from other programmed uses
• The County must have the legal authority to use the revenue source for affordable
housing, and if required, a reasonable nexus between the revenue source and its
use for affordable housing can be demonstrated
• The mechanism must generate a sufficient amount of revenue to support a
reasonable amount of affordable housing
• The collection of the revenue should be as progressive as possible, and not
unfairlt, burden specific economic sectors or populations
• The requirements and costs to collect, monitor, aml administer the revenue source
Whether the revenue source represented a countl is ,idc resource including the
cities
The 1992 report identified six finalist revenue sources rased on the evaluation
criteria. Although some of the information may now be dated, particularly as to true
revenue potential, the 1992 report provides a benchmark from which discussion and
analysis for establishing a housing trust fund in 2003. For a snore detailed discussion
about the 1992 report, see attached as Exhibit `B" a April 9, 2002 memorandum to the
Ad Hoc Committee on Smart Growth that outlines issues associated with establishing a
housing trust fund.
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AGENDA ITEM # 3.8 tsgL12oo.�1
DRAFT FOR DISCUSSION PURPOSES OY%Y
The final recommendations in the 1992 report, including an inclusionary housing
ordinance and housing trust fund, were not fully implemented at that time because the
County, along with region, state, and nation, entered into a deep and extended recession.
The Task Force recommendation for inclusionary requirements for large scale residential
General Plan Amendments, or negotiated as part of Development Agreements, were
eventually adopted as County policy within the Housing Element of the Contra Costa
County General Plan (1995-2010).
4. Recent National, State and Local Trends Related to Housing Trust Funds
More recent trends at the national, state, and local levels have shown a growing
interest in establishing a housing trust fund and in enacting an inclusionary housing
ordinance as one approach to attaining affordable housing goals.
The Center for Community Change is sponsoring a Housing Trust Fund Project.
This organization functions as a national clearinghouse to support communities in
establishing housing trust funds and they issue an annual progress report on housing trust
funds nationwide. There are now more 250 housing trust funds established in the United
States. Attached as Exhibit "C" to this report is a summary prepared by Supervisor John
Gioia from their 2002 progress report that describes the common characteristics of
housing trust funds at a national level.
At tE.c state lcvcf, die recent passage of Proposition 46 IiLis adklcd sonic
needed revenue to find affordahle housing projects and it specifically provides for
allocation of Proposition 46 revenue to a local housing trust fund. The basic parameters
for allocating Proposition 46 revenue to a local housing trust fund are as follows:
+ The trust fund must utilize a public or joint public and private fund established by
legislation, ordinance, resolution, or a public-private partnership to receive
specific revenue to address local housing needs.
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DRAFT FOR 4ISCtI.SSMAI PURPOSES L7A/1-Y
• The trust fund must receive on-going revenues from dedicated sources of funding
such as taxes, fees, loan repayments, or private contributions.
• The minimum allocation is S1 million and the maximum allocation is $2 million.
There is a total of$15 million ear-marked for existing trust funds, and $10 million
for new trust funds.
• To qualify for a trust fund allocation, a jurisdiction must have a current housing
element that the State Department of Housing and Community Development
(HCD) has determined is in substantial compliance with housing element law
(Section 65580). (According to the HCD housing element compliance report, as
of August 25/2003, nine jurisdictions in Contra Costa County have housing
elements in compliance with State law.)
• Funds are to be used for the construction of rental housing that is affordable to
households earning less than 60 percent of the area median income (544,700 for a
family of four in Contra Costa).
• The housing must be income restricted for 55 years.
In July 2003, HCD issued a Notice of Funding Availability of 523.8 for
Proposition 46 funds for matching grants to local agencies that operate local housing trust
fiends.
Also at the state level, in an important court ruling handed clown in Home
Builders Association of Northern Ctdifornia v. City of Napa (2001) 90 CA4th 188, the
California Appell�itc C'oLin upheld the City oi' Napa's inclusionary hoUr.11111. rM)MU,
ordinance. The City of Napa's ordinance allowed a developer theoption to `guild a
percentage of affordabic units, or, to pay an in lieu fee that would be placed in housing
trust fund established by the city.
Interest at the local level in establishing a housing trust fund for Contra Costa
County has most recently been initiated by Contra Costa Faithworksl and the Contra
Costa Labor Council. They have held several meetings with stakeholders and interested
parties about establishing a Contra Costa Housing Trust Fund.
5
AaEAIDA ITEM ` 3.B ,2/.r 5/2oo3
DRAFT FOR DISCUSSION PURPOSES ONLY
S. Recommendations /Next Stets
Given the passage of Proposition 46, a favorable court ruling on an inclusionary
housing zoning ordinance, and recent discussions initiated by the faith and labor
communities, the Ad Hoc Committee on Smart Growth recommends the following to the
Board of Supervisors:
1. Participate in a countywide process to establish a housing trust fund in Contra
Costa County that is broad based and collaborative to insure maximum financial
impact and regional equity.
2. Authorize the Community Development Department to provide technical
assistance and advice as part of the County's participation in a countywide
process to establish a housing trust fund. The Community Development
Department should review and, as appropriate, update the 1992 Contra Costa
County Housing Trust Fund Study. This review should focus on the range of
revenue sources, their revenue potential for a housing trust fund, and recommend
to the Board of Supervisors the appropriate mix of revenue sources as the
County's contribution to a a countywide housing trust fund.' Other Coturity
departments should be asked to cooperate in the update and identification of
potential revenue soLu-ces. This review should include but not be limited to the
followlw, potential revenuc sotirccs:
• docL€n?ent recording lee,
• condoniiniL1111 conversion fee.
• commercial development linkage lee, based on participation by County
and cities
• real estate transfer tax,
• transient occupancy tax ,
• business license tax,
The review should examine the impact that Proposition 218 has on revenue sources that were
originally identified in the 1992 report,or,on any new revenue sources, in particular the 2/3 vote
requirement.It should also identify if a potential revenue source would require state legislation.
6
AGENDA ITEM # 3.B 191'1512003)
DRAFT FOR DZSCUSSI'ON PURPOSES ONLY
• sales tax,
• Liveable Communities Trust (established per Board approval of Alamo Creek and
1paip)
• proceeds from sale of surplus county property,
• private/corporate and foundation funding,
• in lieu fees from an inclusionary housing zoning ordinance
3. Authorize the Community Development Department and County Counsel to
prepare an inclusionary housing zoning ordinance, including the required nexus
analysis, for consideration by the Board of Supervisors. This work on an
inclusionary housing zoning ordinance should be modeled upon the planning and
legal principles, including the provision of an in lieu fee that can be directed
toward a housing trust fund, that are contained in the City of Napa ordinance that
was upheld by the court.
Attachments
Exhibit"A": Contra Costa Smart Growth Action Plan with annotated status notes on
implementation progress
Exhibit"B": Memorandum from James Kennedy, Deputy Director-Redevelopment, dated
April 9, 2002, re: Housing Trust Funds
Exhibit "C": Supervisor John Gioia's Research Paper on Housing Trust Funds
7
Exhibit "A"
Contra Cosh Smart Growth Action Plan with annotated status notes on
implementation progress
PAA PROGRESS REPORT, AS OF SUMMER 2003
STATUS/RECOMMENDATION FOR AN ACTION ITEM IN ITALIC'S
CONTRA COSTA SMART GROWTH ACTION PLAN
SECTION 1. STATEMENT OF FINDINGS AND POLICY.
A. California and Contra Costa County's long-term economic health depends,in part, on a change in
our growth patterns -- to new forms of more sustainable development to expand wisely at the urban
fringe, and to renewed. economic growth and investment to revitalize existing communities, many of
which have been left behind, in the California economy. (California State Treasurer Smart Investments
Report,June 1999).
B. Re-investment in declining communities is essential to reverse the trend toward "two
Californias", one in poverty and the other enjoying an economic boom. Present land use patterns reflect
the growing separation between these two Californias. Our county and state cannot succeed in the long
term with thriving, successful suburbs and troubled inner cities and older neighborhoods. (California State
Treasurer Smart Investments Report, 1999)
C. Stronger regional cooperation and planning is required to ensure that communities work
cooperatively to foster sustainable growth goals. Many major public policy challenges facing our state
and County, from transportation to employment, from affordable housing to preservation of open space,
must he addressed from a regional perspective, as these problems transcend city and county boundaries.
(California State Treasurer Smart Investments Report, June 2000)
D. By the year 2005, the San Francisco Bay Area population is expected to grow by 450,000.
Providing sufficient housing for this growth among all income groups is crucial if we are to maintain the
region's social and economic vitality. (ABAG Regional Housing Needs Determination, .lune 2000).
E. A recent study concluded that Contra Costa County was the second least affordable county in the
Bay Area for home purchases. Developing countywide strategies to develop more affordable housing is
essential to Contra Costa County's Continued economic prosperity and duality of life.
SECTION 2. BOARD OF St?PERVISORS ACTION.
As an important first step toward achieving a smart growth strategy, the Board of Supervisors
("Board") has voted to move the Urban Lit-nit bine ("ULL") to restrict development, The Board adopts
this Smart Growth Action Plan in order to begin working with city representatives and the community to
achieve smart growth in Contra Costa County.
SECTION 3. SMART GROWTH ACTION PLAN.
The cities of Contra Costa County ("Cities") and Contra Costa County ("County") will work
together over the next eighteen (18) months to develop countywide smart growth goals and objectives.
This process will include significant community input and engagement. A countywide Smart Growth
Summit will be held in approximately eighteen (18) months to share each jurisdiction's work product and
recommendations. At this Smart Growth Summit, countywide Smart Growth Goals and Objectives will
be discussed and approved for implementation, including possible placement on the ballot. The County,
cities and the community will study and explore numerous smart growth strategies, including the
following,during the next 18 months;
1
PROGRESS REPORT,AS OF SUMMER 2003
STATUS/RECOMMENDATION FOR AN ACTION ITEM IN ITALICS
STA TU5: In 2000, the Mayors Conference and Board of Supervisors agreed to initiate
the Shaping Jur Future effort. The .Shaping Jur Future effort, which is now in progress,
is intended to develop a community-based, unified vision and implementation strategies to
guide growth and development within Contra Costa County, while preserving the quality life
for all Contra Costans. A draft Vision document has been prepared following a series of
countywide and local workshops. The draft Vision, which was presented before a
countywide workshop conducted on April 5, 2003, presents a proposal for a more compact
development pattern countywide to preserve and protect open space and agricultural lands.
It envisionsgrowth focused at regional centers in Concord, Walnut Creek, Richmond, and in
East County, linked by a network of transportation options Centers with moderate growth
intensity are envisioned in San Ramon, Bay Point, Richmond Hilltop, and Martinez, and it
identifies other centers of low to moderate growth intensity "village type development, It
assumes that conventional suburban development and large lot development will continue,
but such development will be oriented toward and served by these centers The draft
Vision document presumes that the Urban Limit line will be retained as aguiding principle
for growth management in Contra Costa County The draft Vision proposes that the
nineteen Cities and the County will enter into a compact(treaty), a voluntary agreement to
work together in the implementation of the Vision.
A. INVENTORY OF VACANT AND UNDER.-UTILIZED LAND.
Work with the City/County Relations Committee to complete the inventory of vacant and under-
utilized land within the County that is appropriate for infill development.
STATUS: City-County Inventory of Vacant and Underutilized Land was completed in late
2000. In Summer 2001, County updated the inventory of vacant and underutilized land
related to residential development in the unincorporated area for the Countys Housing
Element Update. Shaping Jur Future (50F) consultant team has used data from the
vacant and underutilized land inventory to supplement their analysis of the development
capacity for Contra Costa County under the SOF scenario.
B. IDENTIFY TARGET AREAS AND STRATEGIES FOR INFILL.
1. Identify target areas where infill and revitalization/redevelopment efforts are desirable
and appropriate,recognizing that such development relieves growth pressures to expand the ULL; and
2. Identify constraints (e.g., regulatory obstacles, inadequate public facilities, fragmented
land ownership, lack of neighborhood amenities) to development in target areas and develop
comprehensive strategies for overcoming these constraints.
2
Q& PROGRESS REPORT,AS OF SUMMER 2003
STATUS/RECOMMENDATION FOR AN ACTION ITEM IN ITALICS
STATUS: A key mission of the Contra Costa County Redevelopment Agency is to pursue
infill development and revitalizationlredevelopment in targeted areas where it has been
demonstrated that such development is both desirable and appropriate. In a recent action,
the Board of Supervisors has adopted a redevelopment plan for the Montalvin Manor area,
which included the establishment of the Mixed Use (W) designation on two opportunity
sites within the newly adopted Montalvin Manor Redevelopment Plan. There r"s an on-going
feasibility study for a redevelopment plan in the El Sobrante community, which is
examining the potential to establish a mixed use development land use plan to stimulate
revitalization/redevelopment in the community`s commercial core. The County
Redevelopment Agency is also pursuing numerous infill development opportunities in North
Richmond, Rodeo, Pleasant Hill, and Bay Point redevelopment project areas.
See above for discussion about SOFeffort's and anticipated recommendations on a
proposed development pattern countywide that envisions growth focused at regional
centers with a compact development pattern linked by a network of transportation options.
C. REGIONAL ANIS AFFORDABLE HOUSING NEEDS_ JOBS/HOUSING BALANCE AND
LIVABLE WAGES AND JOBS.
I. Attainment of.Regional Housing Needs Goals.
In order to ensure the availability of decent affordable housing for all income groups,the County
and Cities will explore the development of policies which will enable each jurisdiction to meet its
identified regional housing need goals as calculated by the Association of Bay Area Governments
("ABAG") and as required by the California Department of Housing and Community Development.
These policies include areas where the County and Cities may cooperatively work together in developing
and implementing policies to attain these housing need goals.
2. Attainment of Affordable Housing Goals.
Explore the development of a "Smart Growth Affordable Housing Goals" in order to rneet
affordable housing goals as required by California state law. The Smart Growth Affordable Housing
Goals would set a minimum requirement that a certain percent (such as 15% or 20%) of all newly
approved housing units within any jurisdiction be affordable housing units. The Smart Growth Affordable
Housing Goals may also include policies that encourage cities within a subregion to work together and
with the County to achieve subregional affordable housing goals.
5 rA TU.STU.S': std Hoc Committee on ,smart Growth is considering a set of recommendations to
the Board of Supervisors on an Inclusionary Housing Ordinance and establishment of a
Housing Trust Fund.
3. Jobs/Housing Balance.
Explore the development of policies,which cause each jurisdiction to attain their General Plan or
ABAG goals with regard to improving the job/housing balance.
3
PROGRESS REPORT,AS OF SUMMER 2303
STATUS/RECOMMENDATION FOR AN ACTION STEM IN ITALICS
.5TATU5.* It is anticipated that the Shaping Jur Future effort will result in
recommendations and specific strategies for the 19 Cities and the County to attain stated
leneral Plan or ABA6goals for improving the imbalance between jobs and housing for 19
Cities and the County.
4, Livable Wages and Jobs.
Explore the development of policies which help jurisdictions attract jobs, which pay livable
wages and enable their residents to purchase an average priced home.
D. REGIONAL PLANNING COORDINATION.
Explore the development of strategies which encourage the County, Cities and special districts
(water, sewer, school, park, etc) to voluntarily join together and enter into cooperative planning
agreements which describe how the County, Cities and special districts will coordinate their planning
activities, including the role and responsibilities of each entity with respect to the approval of new
development and the infrastructure required to supply the new development.
5TATVS: In addition to the countywide Compact; it is antr'cipated that the Shrxping Jur
Future effort will encourage more voluntary cooperative planning agreements, where
appropriate, between the 19 Cities, the County, and Special Districts
E. COORDINATED REGIONAL LAND USE_PROBLEM SOLVfNG.
Explore the development of coordinated regional planning and problem-solving processes to
resolve land use issues and which include an opportunity for relevant state agencies, local governments,
stakeholders and the community to be involved.
F. TRANSFER OF DEVELOPMENT RIGHTS.
Explore the development of a "Transfer of Dcveloprnent Rights Program, which allows
development rights to be transferred from lots/parcels in one area to an area that is targeted for infill and
revitalization/redevelopment or is near transit stations.
G. CLEAR AND OBJECTIVE" APPROVAL. STANDARDS.
Explore how the County and Cities can develop new policies, which establish "clear and
objective" approval standards on applications for residential or economic development near transit
stations or within areas designated for revitalization/redevelopment.
K ESTABLISHMENT OF A LIVABLE COMMUNITIES TRUST.
Explore the establishment of a "Livable Conln3unities Fee" to be assessed on development by
the County and Cities. These fees would be deposited into a dedicated "Livable Communities Fund" and
be used to fund projects which: (1) clean up land for redevelopment or enhance the tax base and create
jobs near existing housing, (2) enable communities to meet affordable and regional "fair share'' housing
4
094 PROGRESS REPORT, AS OF SUMMER 2003
STATUS/RECOMMENDATION FOR AN ACTION ITEM IN ITALICS
goals through construction, development and renovation of affordable and senior housing, (3) promote
innovative land use planning and design principles that encourage mixed use and infill development, (4)
to promote economic revitalization in urban infill communities, or (5) to help fund transit and other
transportation improvements which foster smart growth principles. As incentive to implement smart
growth principles, this fund may be allocated to jurisdictions, which are implementing smart growth
strategies.
I. ADOPTION OF THE URBAN LIMIT LINE BY THE CITIES
The Cities should devise a process to adopt the Urban Limit Line under Measure C-1990 as
legally binding and enforceable in their respective jurisdictions.
STATUS: On June 3, 2003, the guard of Supervisors directed that a measure be
prepared for the March 2004 ballot that would prohibit the expansion of the Urban Limit
Gine without voter approval. Staff was directed to explore how the initiative would be
made binding on the 19 Cities and LAFCO. The Ad Roc Committee on Smart Growth and Ad
Roc Committee on ULL Voter Initiative will conduct a joint meeting on 913, 2003 to
consider staff report and draft initiative.
J. ADVISING LAFCO TO RESPECT SMART GROWTH PRINCIPLES.
Develop a policy, which requires the Local Agency Formation Commission ("LAFCO") to
respect and support the Smart Growth Goals and Objectives.
STA TUS: See '7"above.
K. INVESTIGATION OF OTHER SMART GROWTH STRATEGIES.
Over the next eighteen (18) months, the Cities and County will explore other smart growth
strategies to determine whether and how these strategies may be applicable and useful to their respective
jurisdiction. Stich other strategies include, but are not limited to, minimum density zoning in areas
designated for revitalization/infill and transportation efficient land use strategies.
S_TA TUS.- See discussion above on the Shaping Our Future effort recommendations
SECTION 4. DEVELOPMENT OF STATE AND REGIONAL SMART GROWTH POLICIES.
The County shall continue its leadership in working with the existing regional smart growth
planning efforts including the Inter-Regional Partnership and the Regional Agencies' Smart Growth
Strategy to develop regional smart growth strategies and model policies. Both these efforts have
produced an approved and funded work plan ending simultaneously in 2002. The Board shall request the
Contra Costa legislative delegation to introduce legislation in January 2001 to further the goals and
objectives of this Smart Growth Action Plan.
ADOPTED: 8/1/2000
UPDATED: SUMMER 2003
5
Exhibit "B"
Memorandum from James Kennedy, Deputy Director-redevelopment,
dated April 9, 2002, re: Housing Trust Funds
CONTRA COSTA COUNTY
COMMUNITY DEVELOPMENT DEPARTMENT
651 Pine Street, N. Viking - 4th Floor
Martinez, CA 94553
Telephone: 925.335.1275 Fax: 925.335.1265
TO, Ad-hoc Committee on Smart Growth
Supervisor John Gioia
Supervisor Mark be&
FROM: James Kenne ,
Deputy Dir /eelopmerif
DATE: Apr191,r2002
r"
SUBJECT, Housin ust Funds
WHAT ARE HOUSING TRUST FUNDS?
Increasing the availability of affordable housing has been a Long-standing goaLof Contra Costa County. Both
policy and action of the Board of Supervisors in the land use planning and financial areas have supported the
production/preservation of affordable housing. As jurisdictions in the region complete their blousing Elements
as required by the State law the availability of land to accommodate identified need is theoretically
demonstrated. The ability of jurisdictions - working with the delivery system of private oncl non-profit
developers,and the financial community—to fully address its housing obligations is limited by lack of financial
resources,particularly for very-lomi and low-income households..To*address the lack of resources the concept
of housing trust funds is being explored. '
Housing trust funds are a dedicated source of revenue available to help households achieve affordable housing.
Ideally they are new, renewable resources that are reinvested, over time, in additional affordable housing
activities.
HOUSING TRUST FUND TASK FORCE REPORT-- 1992
In 1992 the Contra Costa County Board of Supervisors accepted a report from its Housing Trust Fund Task
Force (copy included as Attachment A). In its evaluation of seventeen (17) different housing trust fund
revenue sources, it used the following evaluation criteria.
• The revenue source must represent a net new source of revenue for affordable housing;
1
• The use of the revenue source for affordable housing must not represent a diversion of public funds
from other programmed uses,
• The County must have the legal authority to use the revenue source for affordable housing and, if
required,a reasonable nexus between the revenue source and its use for affordable housing can be
demonstrated.
• The mechanism must generate a sufficient amount of revenue to support reasonable amount of
affordable housing;
• The collection of the revenue should be as progressive as possible,and not unfairly burden specif is
economic sectors or populations,
• The requirements and costs to.collect, monitor, and administer the revenue source; and
• Whether the revenue source represented a countywide resource including the cities.
The revenue sources evaluated as part of the 1992 Housing Trust Fund report are set forth in Table 1. The
final recommendations of the 1992 Report were not fully implemented because the County, along with the
region, the State, and the Nation, entered one of the deepest recessionary times in recent history.
Fundamentally, the view of the Board of Supervisors was that the imposition of any of the recommended
revenue sources would constitute an undue burden on the County's population and/or business community.Some
aspects were partially implemented,e.g.,inclusionary requirements were imposed for large residential general
plan amendments,or negotiated as part of development agreement.
The 1992 evaluation of the six finalist revenue sources is reproduced as Table 2.While the information
may be dated,particularly as to revenue potential, it does provide a benchmark from which future
discussion and analysis can take place.
The program recommended by the Housing Trust Fund Task Force in 1992 represented a careful balance of
approaches in which significant contributions were provided by the general population countywide(general
obligation bonds and landfill tipping fees),and by new home developers via an inclusionary housing program(for
which the County has jurisdiction only in the unincorporated territory). Given the regional nature of the
housing markets the Task Force was extremely concerned about creating an unlevel playing field in which
properties in one jurisdiction -- the unincorporated County -- were burdened with obligations not found
elsewhere,
AFFORDABLE HOUSING NEEDS/REVENUE REQUIREMENTS
A part of the state mandate to adopt a Housing Element to the General Plan is the Regional Housing Needs
Determination (RHND) process. In the RHND process each jurisdiction in the ABAG region is assigned a
portion of the region's projected need for housing. This assignment incorporates forecasts of population
growth, expected job growth,and available, land. Jurisdictions are expected to demonstrate how their land
use plan accommodates its portion of the regions housing need, The housing need is stratified by income group
--very low income(50% of median income or less), low income(51-80% of median income), moderate income
(80-120% of median income), and above moderate income (120% of median or above). The RHND process
2
resulted in a'housing need of 34,710 to jurisdictions in Contra Costa County,as shown in Table 3.
To assess the potential costs of producing the housing affordable to the targeted income groups we have
estimated the subsidy costs for delivering an affordable housing unit, and made assumptions regarding the
tenure(home ownership vs.rental). The estimated subsidy requirements are$789 million,as shown in Table4.
In addition to the new construction need,the existing population/housing stock has deficiencies that require
public assistance. According to estimates contained in locally prepared Consolidated Plans (submitted and
approved by the U.S. Department of Housing and Urban Development as a condition of receiving federal
housing/community development funds on an entitlement basis, i.e.,Community Development Block Grants, -
CC)BG-HOME Investment Partnership,Emergency Shelter grants-ESG-and Housing for Persons with AIDS-
HaPWA--)the number of households currently residing in the County with a housing need is 54,769 households.
This is comprised of households overpaying for housing, households living in overcrowded conditions, and
households living in substandard housing. These existing needs are set forth in Table 5. The estimated public
subsidy costs to address this existing need is $140.1 million, as set forth in Table 6. The total estimated
public subsidy costs to address future and existing housing need is $929.4 million(Table 7).
Available public resources currently dedicated to affordable housing programs are generally limited to federal
entitlement programs — CDBG, HOME, ESC, HOPWA --, locally administered redevelopment programs,and
state administrated competitive programs such as private activity bonds (multi-family housing bonds, and
mortgage credit certificates),and low income housing tax credits. We have estimated the annual amount of
such funds at $701.7 million, based on the assumptions set forth in Table 8. This revenue for affordable
housing represents only 7.6%of the estimated requirement,and is the basis for the Board's exploration of the
housing trust fund concept to develop additional, on-going sources of revenue for addressing affordable
housing needs.
LEGAL ISSUES
County Counsel has undertaken a review of legal issues related to the funding of a housing trust fund from
various revenue sources. Their conclusions and outline of issues is provided as Attachment B.
cc: John Sweeten, County Administrator
Tony Enea, Sr. Deputy County Administrator
Sharon Anderson, Assistant County Counsel
Dennis Craves, Deputy County Counsel
Dennis Barry, Director of Community Development
Kara Douglas, Sr. Housing Planner
File D1.14(e)
3
Table 3
Summary of Revenues Evaluated as part of 1992 Housing Trust Fund Report
Source Recommended Straus*
Inclusionary housing with an in - lieu fee component Recommended for adoption
Franchise fees on solid waste Recommended for adoption
General obligation bonds Recommended for adoption
Utility User Tax Not recommended -second cut
Housing Linkage Fee Not recommended -second cut
Documentation Transfer Tax Not recommended -second cut
Business License Fee Not recommended-f irst cut
Sales Tax Not recommended-first cut
Excess Bond Reserves Not recommended- first cut
Sale of County land Not recommended--f irst cut
UbAG Loan Not recommended-first cut
Housing Preservation/Condominium Conversion Fee Not recommended-f irst cut
Special Property Tax Levy Not recommended-first cut
Voluntary Contribution of Mortgage Impound Account Interest Not recommended-f irst cut
Voluntary Contribution of Interest on Sale Escrow and Tenant Not recommended-first cut
Security Deposits
Current County Housing Funds Not recommended-first cut
Redevelopment Tax Increment— Housing Set Asides Not recommended- f irst cut
Transient Occupancy Taxes Not recommended -first cut
*First cut sources were eliminated because
a) They were not net-new sources of revenues;
b) bid not generate sufficient revenue; and/or
C) Had obvious feasibility issues.
d) Diverted revenue from other uses
Second cut sources were analyzed against the criteria set forth but not recommended for the
inclusion in any adopted program.
4
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TABLE 3
Final RHND Allocations
Total Housing Need by Income Category
Contra Costa County and Cities
RHND
xAbove
Allocation LowModerate
Moderate
ANTIOCH 4,459 92.11 509 1,156 1,873
BRENTWOOD 4,073 906 476 958 1?733
CLAYTON '446 55 33 84 274
CONCORD 2,319 453 273 606; 987
DANVILLE 1 1,110 140 88 216 666
EL CERRITO 185 371 23 48; 77
HERCULES 792 101' 62 195 434
LAFAYETTE 194 303 171 42 105
MARTINEZ 1,341 248 139 341 613
MORAGA 214 32 17 45 1201
OAKLEY 1,208 209 125 3211 553
O:7RINDA 221 31 18 43 129
PINOLE 288 48 35 741 131
PITTSBURG 2,513 534 296 696 987
PLEASANT HILL 714 129 79f 175' 331
RICHMOND 2,603 471 273 625 1,234
SAN PABLO 494 147 69 123 155
SAN RAMOJN 4,447 599 372 9841 2,492
WALNUT CREEK 1,653 289 195 418 75
UNINCORPORATED 5,436 1,101 642 I,401 2,292
Total ,; 9'
2
Table 4
SUBSIDY REQUIREMENTS FOR ACHIEVING REGIONAL HOUSING NEEDS
Tenure Total Subsidy
Requirement
Owners ($000,000) Renters ($000,000) ($000,000)
Very Low Income' $108.7 $296.1 $404.8
Low Income2 $159.7 $85.8 $245.5
Moderate Income $106.9 $32.1 $139.0
Above Moderate Income4 -0- -0_ _0_
Total $789.3
' Assumes 90%of the need is addressed through the provision of rental housing,and 10%through home ownership.
I Assumes 67`/0 of the need is addressed through the provision of rental housing,and 33 %through home ownership.
3 Assumes 25%of the total need requires public subsidy,which is split 50-50 between rental and home ownership.
4 No public subsidy requirement required.
C:\DOCUME-I\jkennedy\LOCALS-1\Temp\H.Lotus.Notes.bata\-0059458.doc
Table 5
EXISTING HOUSING NEED IN CONTRA COSTA COUNTY
Households residing Households with a Households with
substandard/overcrowded cost burden* of a cost burden Total
(and not over paying). 30-49% of of >50%.
income.
Very Low Income 1,664 11,930 13,646 27,240
Low Income 1,4001 8,054 1,309 10,763
Moderate Income** 543 3,058 258 3,859
Above Moderate Income N/A NIA N/A
Total
41,$62
'Cost burden may also include substandard/overcrowded.
**80-95`Ya ANTI
Note: The figures set forth likely represent an undercount of the existing housing needs. These numbers are
based on the 1990 census and have not been adjusted for the 18%growth in population from 19901-2000. There is
no adjustment for the change in income relative to change in housing costs. (Cost of housing is increasing faster
than increases in income.) Finally, using available data, it is not passible to determine how many cost burden
households live in substandard housing.
C;\bOCUME-1\,j kennedy\LOCALS-1\Temp\H.Lotus.Notes.bata\w0059458.doc
Table 6
SUBSIDY REQUIREMENTS FOR ADDRESSING EXISTING HOUSING NEEDS*
Renter Households Owner Households Total
Very Low Income $48,396,584 $25,136,989 $73,533,573
Low Income $33,129,162 $12,323,276 $45,452,438
Moderate Income $12,217,500 $8,850,000 $21,067,500
Above Moderate Income NIA N/A N/A
Total $93,743,246 $46,310,265 $140,053,511
`Subsidy assumptions include the cost required to bring a substandard unit up to a decent quality,and the
presumed rental or mortgage subsidy required to bring housing costs down to 30% of a household's monthly income.
C:\bOCUME -I\jkennedy\LOCALS-i\"hemp\H.Lotus.Notes.bnte\-0059458.doc
Table 7
ESTIMATEb PUBLIC sUBSIbY COSTS TO ADDRESS EXISTING AND FUTURE HOUSING !NEEDS
Public Subsidy ($000,000)
Requirement
Future Housing Needs $789.3
Existing Housing Needs $140.1
Total
$929.4
Source: Tables 44 6
C,\DOCUME-I\jkennedy\LOCA LS—I\Temp\H.Lotus.Notes.bata\-0059458.doc
Table 8
ESTIMATED ANNUAL REVENUES FOR AFFORDABLE HOUSING IN CONTRA COSTA COUNTY
Source Annual Amount
Federal Entitlement Funds
Community Development Block Grants' $4,247,500
HOME Investment Partnership' $3,751,000
Emergency Shelter Grants $138,000
Housing for People with AID's $379,940
Local
Redevelopment Housing Set-Aside $18,257,900
State
Mortgage Credit Certificates4 $5,000,000
Multi-Family Bonds $30,000,000
Low Income Tait Credit6 $8,930,000
Total $70,704,340
i The County(on behalf of the unincorporated area plus 14 smaller cities),and the cities of Richmond,Concord, Walnut Creek,
Pittsburg,and Antioch receive CDBG funds:amount for housing is assumed to be 50% of total entitlement grant.
2 County(on behalf of unincorporated plus all cities except Richmond)and City of Richmond.
3 Twenty percent of FY 01/02 Property Tax Increments received by local redevelopment agencies as reported by the County
Auditor-Controller,
4 Formula amount set by California Debt Limit Allocation Committee.
sEstimate of annual amount received based on historical average—competitive process administered by California Debt Limit
Allocation.
6 Formula amount set by California Tax Credit Allocation Committee, 2002 amount.
C.\DOCUME-i\jkennedy\LOCALS-1\Temp\H.Lotus.Notes.Data\-0059458.doe
( ATTACHMENT A
CONTRA COSTA COUNTY
HOUSING TRUST FUND .TASK FORCE
SUMMARY REPORT
AND
F7i E O E Y DA TIONS
c7
June 1992
Executive Summary
EXECUTIVE SUMMARY
The Contra. Costa County Board of Supervisors wishes to establish an Affordable
Housing Trust Fund for purposes of increasing the availability of affordable housing
in Contra Costa. Priorities for the use of Dousing Trust Fund revenues as defined
by the Board include programs and projects which will provide increased
homeownership opportunities for Contra Costa residents and employees, and increase
the availability of rental housing for very-low and low-income households. As an
initial step in developing the Trust Fund, the Board created the Housing Trust Fund
Task Force and charged them with the following responsibilities
1. Identify and evaluate alternative revenue sources for the initial
capitalization and ongoing support of a Contra Costa County Housing
Trust Fund;
2. Identify and evaluate alternative institutional and operational
structures for the Trust Fund, and
3. Provide recommendations to the Board of Supervisors regarding these
issues.
I. ACTIVITIES OF THE TASK FORCE
The Task. Farce gathered data and made policy decisions about what revenues to
utilize to finance Trust Fund activities, how to structure the Trust Fund, and what
next steps should be taken to implement Task Force recommendations.
The Task Force was assisted in its efforts by a consulting team comprised of Keyser
Marston Associates, Inc. (KMA), CGMS Incorporated, and Howard, Rice,
Nemerovski, Canady,, Robertson, & Falk. The consultants prepared a series of
technical analyses to support the Task Force's deliberations. The Task Force and
consultants held a series of six workshops beginning in October 1991. The
workshops were as follows
October 17, 1991 Discussion of Affordable Housing Trust Fund goals,
initiation of consultant effort.
December 12, 1991 Initial presentation of first round analysis of revenue
sources.
January 16, 1992 Identification of six finalist revenue sources as candidates
for in-depth analysis. Initial presentation of alternative
administrative and institutional structure for the Housing
Trust Fund.
February 29, 1992 presentation of legal context affecting use of revenue
mechanisms, and in-depth analysis of the six finalist
candidates. Task Force voted to recommend adoption of
three revenue sources.
March 19, 1992 Discussion of alternative administrative structures, given
Task Force adoption of revenue package. Outline of Trust
i
Fund program issues.
April 16, 1992 Adoption of a two-tiered approach to structuring the
Trust Fund dependent on the revenues which finance fund
activities.
May 21, 1992 Discussion of operating and program issues which the
Trust Fund Advisory Board will finalize upon its
appointment.
June 18, 1992 Adoption of the final recommendations of the Task Force.
II. REVENUE SOURCES FOR A HOUSING TRUST FUND
A. First Phase Evaluation
Fifteen potential revenue sources for the Housing Trust Fund were evaluated.
Criteria for the first-round evaluation include the following:
• Housing Trust Fund revenues must represent a net new source of
funding for affordable housing development in Contra Costa County,
which can be used for affordable housing.
• The County must have the legal authority to utilize a revenue source
for the Housing Trust Fund.
= The mechanism selected must generate sufficient revenues to support
a reasonable level of affordable housing development.
• The tax or fee burden resulting from the collection of revenues should
be progressive (meaning the burden should increase with income, or
ability to pay), and should not unfairly burden specific economic
sectors or segments of the population.
Exhibit B (page 30) shows the sources eliminated from future analysis on the basis
of the first phase evaluation, and the rationale for their elimination.
B. ' Second Phase Evaluation
Six revenue mechanisms were identified as having potential for financing a Trust
Fund. These potential sources are shown in Exhibit A (page 29). The evaluation
criteria for the consultants' in-depth analysis of the six finalist sources were as
follows
• The amount and variability of the potential revenues generated.
• Where the financial burden of the funding source is borne, the degree
of progressivity, and the degree of impact of the tax or fee on the
affected parties.
• The requirements and costs to collect, monitor, and administer the
revenue source. This includes an assessment of staffing requirements
2
and skills needed.
An examination of the legal requirements for use of the mechanism,
including need for legislative authority, voter approval, or nexus
demonstration.
Outline of the necessary implementation steps to utilize the mechanism.
Issues related to involvement of the cities as well as the County in
adopting or administering the revenue source.
C. Task Force Recommendations Regarding Revenue Sources
In making its deliberations the Task Force acknowledged that:
1. There are few revenue options available to finance a .Housing Trust
Fund for Contra Costa County, and each alternative will impose a.
burden on some segment of the population or business community.
Given the County's current budget constraints and its vigorous efforts
to utilize available resources to finance general government activities,
there are a limited number of opportunities to tap net new sources of
revenues for the county to support an Affordable Housing Frust Fund.
These opportunities are further constrained by the legal limitations on
raising revenues in a General Law County in the post-Proposition 13
era, as described in Appendix A.
2. Approval of the electorate is required for most of the revenue
alternatives available to the Housing Trust Fund. Linkage fees and
Inclusionary Housing are the only options which clearly do not require
a vote of the people for adoption. The authority to impose additional
franchise fees on solid waste exists only within the development
entitlement process or as part of a franchise agreement. To the extent
that the County currently receives unrestricted franchise fee monies,
the County, at its sole discretion, could choose to allocate those fees
(or any other source of County revenue) to the Housing Trust Fund.
The Task Farce is aware of the difficulty of gaining voter approval for
tax ballot measures and in particular the extremely low first-time
passage rate of measures requiring a two-thirds voter . majority.
However, it has been noted that some of the recent ballot measures have
eventually been approved on the second or third try.
3. Most of the resource alternatives available to the Trust Fund generate
revenues solely from the unincorporated area of the county. The only
sources that can generate funds on a county-wide basis are the general
obligation bond, and the franchise fee on solid waste.
After reviewing these issues, the Task Force recommended adoption of the following
revenue sources for the Housing Trust Fund: inclusionary zoning with an in lieu fee
component; solid waste tipping fee; and general obligation bond.
3
The rationale for adoption of the three mechanisms is described below:
Inclusionary Zoning Will provide significant numbers of new affordable
housing, either as a percent of new construction
within the County's jurisdiction or through payment
of in-lieu fees. Will formalize an existing policy now
applied to large scale properties seeking negotiated
Development Agreements.
Solid Waste 'Tipping Will provide substantial revenues from a county-
Fee wide revenue base. However, the impact on each
rate payer is small; an average household might pay
as little as $5 per year for a fee which raises
$800,000 per year.
General Obligation Will provide a large, one time source of'revenues.
Bond A $56 million band would cost $20 per year for the
average home with an assessed value of $200,000.
Voter approval is clearly required.
The Task Force's rationale for elimination of finalist revenue sources were as follows
Housing Linkage Fees The revenue potential from the unincorporated area
Is limited, and the expense and effort required to
design, gain support for, and institute a linkage fee
would outweigh the revenue potential. There are
also competitive issues raised by establishing a
Linkage fee program in the unincorporated area
only.
Document Transfer Tax County currently collecting legally permitted
maximum rate. Rate increase would require new
state legislation and a judicial finding that
Proposition 62 is unconstitutional. Therefore, does
not appear to be a legally feasible option.
Utility User Tam. Passage of the tax was judged to be politically
infeasible, given the regressivity and unpopularity
of the tax.
III. ADAUNISTRATIVE STRUCTURES BASED ON REVENUE SOURCES
A. Initial Administrative Structure Evaluation
Five administrative structure options were presented to the Task Force. Each had
five essential characteristics to be considered:
Composition, which refers to the representative make up of the Housing
Trust Fund Board in terms of interest groups, areas of expertise and
geographic distribution.
4
• Size, which refers to the number of members of the Housing Trust Fund
Board.
• Initial Appointing Authority, which refers to the body that appoints the
Housing Trust Fund Board.
• Perpetuation Method, which refers to the method in which vacancies on
the Trust Fund Board would be filled.
• Decision .Nuking Authority, which refers to whether the Housing Trust
Fund Board has final decision making authority or is advisory to
another body who makes the final decisions.
The five administrative structure options were described with a summary of their
positive and negative characteristics (see Appendix D) .
Based on the initial evaluation of the five administrative options, two potential
administrative structures were presented for the second evaluation. The key issue
affecting choice between these options is whether revenue is generated from the
County unincorporated area only or is drawn from the, cities as well. Thus, one
option included representatives from the cities in the decision making and the other
did not.
B. Task Force Recommendations - Administrative and Operational Structure
The Task Force recommendations concerning an appropriate .institutional and
administrative structure for the Housing Trust Fund depend, in part, on the specific
revenue sources ultimately adopted. If inclusionary zoning in lieu fees from the
unincorporated area of the County represent the only revenue source, then the Task.
Force recommends that the Housing Trust Fund be controlled by the County.
Alternatively, if the Housing Trust Fund also includes revenues from the
recommended countywide sources (general obligation bonds and/or solid waste
franchise fees) , then the Task Force recommends shared control of the Housing
Trust Fund by Contra Costa cities and the County. The latter recommendation is
based on a recognition that if revenues are contributed by the cities, then the cities
will want and should have a role in determining how those revenues are utilized. In
addition, active support of the cities will be needed to ensure passage of the ballot
measures required to enact the countywide revenue source. In order to elicit their
support, it is likely that the cities will require a role in decisions concerning Housing
Trust Fund activities.
County Only Structure
As the County has the fiduciary responsibility for the Housing Trust Fund, and
would be the legal lender of the Housing Trust. Funds to any recipient, the Task
Force recommended that the Board of Supervisors should be the final decision maker
in the County Only structure. However, rather than require that each Housing
Trust Fund Advisory Board decision be reviewed and acted upon by the Board of
Supervisors, the Task Force recommended that a process be used whereby the Board
5
of Supervisors would ratify the decisions of the Housing Trust Fund Advisory Board
by a majority vote of the Board.
Decision Making Authority
The Housing Trust Fund Advisory Board should develop policy
recommendations, adapt program criteria, review.project proposals and make
all funding decisions (such as which projects to fund, the amount of each
award, and the conditions under which funds would be loaned), consistent
with overall priorities established by the Board of Supervisors. The decisions
of the Housing Trust Fund Advisory Board would be forwarded to the Board
of Supervisors for ratification by majority vote.
Composition
The Board of Supervisors will be responsible for appointing an Advisory
Board representing a broad spectrum of interests and abilities. Factors to be
considered should include:'knowledge of and concern for affordable housing,
technical expertise,'representation of relevant interest groups and sensitivity
to needs and concerns of low income housing consumers.
Initial Appointin& Authority
The Board of Supervisors should make the initial appointments to the housing
Trust Fund Advisory Beard. Terms on the Housing Trust Fund. Advisory
Board should run for three years. Initially staggered terms would allow for
program continuity.
perpetuation Method
The Housing Trust Fund Advisory Board should submit for approval to the
Board of Supervisors names of possible replacements to fill vacancies which
occur on the Housing Trust Fund Advisory Board. Reappointments will be
possible.
Size
The Housing Trust Fund Advisory Board should consist of nine to eleven
members.
Countywide Structure
In order to gain the support of the cities in raising Housing Trust Fund dollars, the
Task Force recognized that the cities would need to have a meaningful role in the
decision making process. Therefore, the Task Force unanimously recommended that
cities should be involved as equal partners with the County if revenue sources for
the Housing Trust Fund included funds drawn from cities. Clearly, a seat for each
city in the County would create an administratively unwieldy body, so the Task
Force looked to existing models whereby the cities and the County jointly make
decisions for specific resources. For example, the Transportation Authority model,
like the Housing Trust Fund, administers funds generated from a countywide
resource (a sales tax) . The members of the Authority would be appointed by the
6
cities and the County.
The Housing Trust Fund Authority that would be created would have all the powers
and responsibilities that the Board of Supervisors has under the County Only
structure. Assignment of decision making responsibility for the allocation of
countywide revenue sources will require that the Board of Supervisors, at its sole
discretion, vote to contract with the Authority Board.for this purpose. The contract
may include specific conditions required to ensure fulfillment of the Board's
fiduciary responsibility for countywide revenues.
The Task Force felt that, in addition to representation by the cities in the decision
making process, it was critical to duplicate for the Countywide structure the broad-
based representation of the Housing Trust Fund Advisory Board established for the
County Only model. Therefore, the Task Force recommended the composition of the
Housing Trust Fund Advisory Board be the same for both structures. Also, for
efficiency and effectiveness reasons, it made the same recommendations with respect
to terms, terra limits and size for both the County Only and the Countywide models.
The Task Force wanted to ensure that projects could be processed efficiently and
that local funding decisions would not unnecessarily delay funding commitments from
other governmental and private resources. Therefore, the Task Force recommended
that the ratification process proposed for the Countywide structure be the same as
that proposed for the County Only structure, substituting the Housing Trust fund
Authority for the Board of Supervisors. Trust Fund decisions concerning the use
of inclusionary housing in-lieu fees would be an exception to this decisionrna ing
process. The Task Force recommended that decisions concerning the use of these
revenues be subject to ratification by the jurisdiction (County or cities) contributing
the fees.
7
HOUSING TRUST FUND TASK FORCE
Su=e Wriest McPeak Carol Galante
Contra Costa County BRIDGE Housing Corporation
Board of Supervisors
Susan Jackson
Tom.Powers IMCO Realty Services
Contra Costa County
Board of Supervisors Lynn Osborn
League of Women Voters
Ralph Petty
Contra Costa Mayors Conference Steve Roberti
Central Labor Council
Beverly McDowell
Contra Costa Mayors Conference Merlin Wedepolil
Shelter, Inc.
Gayle`CTilkensa
Contra Costa Mayors Conference Rosemary Tumbaga
Pittsburg Economic and Housing
Barbara Johnson Development Corporation
Congressman George Miller
Ralph Copperzrsan
Gary Hanes Advisory Council on Aging
L.S. Department of Housing and
Urban Development Paul J. Schulze
Greater Richmond Interfaith Program
Cathy Creswell
California Department of Housing Frank Zamora
and Community Development Central Labor Council
Perfecto Villarreal Nikki Mazaisz
Housing Authority of Contra Costa. Wells Fargo Bank
Guy Bjerke Bob Summers
Building Industry Association Chevron USA
Darlene Houk Rickard Lujan
Contra. Costa Board of Realtors United Council of Spanish Speaking
Organizations
Merle Gilliland
Contra Costa.Council Carol Severin
Satellite Senior Domes
Miye A. Goishi
Contra Costa Legal Services Staffs
Sat Spataro Tim Kennedy
Building&Construction Trades Kathleen Hamm
Council Contra Costa County Community
Development Department
Rolf Pendali
Bay Area Council
_ _ Section I
...................................................................... ................
SECTION I - INTRODUCTION
This report summarizes the activities and final recommendations of the Task Force,
which was appointed to evaluate adoption of a Housing Trust Fund to create
additional funding for low and moderate income housing in Contra Costa County.
The Contra. Costa County Board of Supervisors wishes to establish a Housing Trust
Fund for purposes of increasing the availability of affordable housing in Contra
Costa. Priorities for the use of Trust Fund revenues as defined by the Board
include program's and projects which will provide increased homeownership
opportunities for Contra Costa residents and employees, and increase the availability
of rental housing for very-low and low-income households. As an initial step in
developing the Trust Fund, the Board created the Housing Trust Fund Task Force
and charged them with the following responsibilities
I. Identify and evaluate alternative revenue sources for the initial
capitalization and ongoing support of a Contra Costa County Housing
Trust Fund,
2. Identify and evaluate alternative institutional and operational
structures for the Trust Fund, and
3. provide recommendations to the Board of Supervisors regarding these
issues.
The activities covered in this report occurred during the period between October,
1991 and June, 1992 when.the Task Force was assisted in its efforts by a consulting
team headed by geyser Marston Associates, Inc. (KMA). KMA., in addition to
managing the consultant team effort, provided analysis of revenue alternatives
available to finance Trust Fund activities. CGMS Incorporated analyzed the
alternative administrative and operational structures available to the Trust Fund,
and the firm of Howard, Bice, Nemerovski, Canady, Robertson & Falk provided an
analysis of the legal issues affecting use of revenue alternatives for the county. The
consultants' reports and analyses are shown in the appendices. The consultants
have prepared this final report with input from the County.
The consultant provided technical analyses and presented findings to the Task Force
in a series of six work. sessions. Over the study period, the Task Force gathered
data and made policy decisions concerning alternative revenue sources for an
Affordable Housing Trust Fund, appropriate administrative and operational
structures, and implementation measures required to establish a Housing Trust Fund
in Contra: Costa County.
This report is organized as follows
■ Executive Summary - summarizes the final recommendations and activities of
the Task Force.
a Section I: Introduction
I Section II. Recommendations - summarizes the recommendations of the Task
Force. These recommendations were ratified by the Task. Force at the work
session of June 18, 1992.
Section III: Rationale for Revenue Mechanisms - provides a rationale and a
summary of key next steps for the recommended package of revenue
mechanisms. Vote that Appendix B provides a detailed description of each
finalist revenue mechanism, describes the revenue potential and identifies
where the financial burden of each mechanism is borne; outlines
implementation issues, identifies administrative requirements, and establishes
legal requirements for the use of each alternative.
Section IV: Rationale for Administrative and Operational Structure - describes
the issues which were considered in deciding on how to organize the Trust
Fund, in particular with regard to whether the Fund is financed from county-
wide resources, or limited to resources from the unincorporated area.,
10
__ _ SectionII
..............................................
SECTION II - RECOMMENDATIONS OF THE TASK FORCE
The Beard of Supervisors should establish an Affordable Housing Trust Fund to
maximize the availability of affordable housing for Contra Costa County. Task Force
recommendations regarding funding resources, operational and institutional
structure are described below.
A. AFFORDABLE HOUSING TRUST FUND - REVENUE SOURCES
The Task Force recommends three revenue sources for the support of a Contra Costa
County Housing Trust fund: an inclusionary housing program with an in lieu fee
component; a solid waste tipping fee; and a general obligation bond. It should be
noted that the Task Force did not establish specific priorities among these revenue
sources; therefore, they are recommended for consideration by the Board of
Supervisors on an equal basis. Specific Task Force recommendations with regard
to each revenue source are summarized in the following.
o Recommendation. - Inclusionary Housing Program
The Board of Supervisors should amend the General Plan and Zoning Ordinance to
provide for an inclusionary housing program. This program would require that a
portion cif all newly constructed housing units be priced at levels affordable to low
and moderate income households. This program should include an optional in lieu fee
provision whereby developers could meet the inclusionary requirement through
payment of a fee. In lieu fee revenues should be dedicated to the Housing Trust
Fund for use in funding affordable housing programs and projects in the County.
o Recommendation - Landfill `Pipping Fee
The Board of Supervisors should levy a fee on each ton of solid waste added to the
county landfill(s) if it is determined that current legal authority exists to do so.
The revenues raised by this fee should be dedicated to the Housing Trust Fund to
support preservation and production of affordable housing throughout the county.
This fee would raise revenues in both the Cities and unincorporated area.
a Recommendation - General Obligation Bond
The Board of Supervisors should propose a ballot measure to finance affordable
housing throughout the county by a general obligation (G.O.) bond. G.O. Bond
revenues would be dedicated to finance acquisition and improvement of real property
to meet a portion of the County's affordable housing goals.
B. AFFORDABLE HOUSING TRUST FUND - INSTITUTIONAL STRUCTURE
An administrative structure to govern the Housing Trust Fund and implement
programs must be established. Task Force recommendations concerning an
appropriate institutional and administrative structure for the Housing Trust Fund
depend, in part, on the specific revenue sources ultimately adopted for the Housing
Trust Fund. If inclusionary funds from the unincorporated area of the County
represent the only revenue source, then the Task Force recommends that the
Housing Trust Fund be controlled by the County. Alternatively, if the Housing
Trust Fund also includes revenues from the recommended countywide sources
11
(general obligation bunds and/or landfill tipping fees) , then the Task Ford
recommends shared control of the Housing Trust Fund by Contra Costa cities and the
County.
o Recommendation W County Only Revenue Source
If the Housing Trust Fund is capitalized solely with funds generated from an
inclusionary housing program in the unincorporated County, the administrative
structureshould consist of a Housing Trust Fund Advisory Board and the Board of
Supervisors.
Decision laking Authority
The Housing Trust Fund Advisory Board should develop policy recommendations,
adopt program criteria, review project proposals and make all funding decisions
(such as which projects to fund, the amount of each award, and the conditions under
which funds would be loaned), consistent with overall priorities established by the
Board of Supervisors. The decisions of the Housing Trust Fund Advisory Board
should be forwarded to the Board of Supervisors for ratification by majority vote.
Composition
Membership on the Housing Trust Fund Advisory Board should include broad
representation of housing interest groups and areas of need in Contra Costa County,
as well as experience and technical expertise in affordable housing development.
Factors to be considered in appointing Board members include the following:
Knowledge and concern about affordable housing needs in Contra. Costa.
County;
• Technical expertise in affordable housing development, including the ability
to assist the County in leveraging resources for this purpose;
•
Representation of relevant interest groups and geographic areas, including
members of various ethnic and gender groups, senior citizens, and the
business community; and
•` Sensitivity and commitment to affordable houeing development and the needs
of low/moderate income households.
Specific groups which should be considered for representation on the Housing Trust
Fund Advisory Board include the following: housing producers and related groups,
including for-profit and nonprofit developers, lenders and realtors; affordable
housing advocates and representatives of special housing interest groups (the
elderly, disabled, homeless, and minorities); and geographic representatives of
Fast, Central and West Contra Costa County.
A member of the Housing Trust Fund Advisory Board may have more than one of the
characteristics or represent more than one of the groups listed above. The Board
of Supervisors would be responsible for creating the appropriate balance.
1
Initial Appointing Authority
The Board of Supervisors should make the initial appointments to the Housing Trust
Fund Advisory Board. Appointments would be made by the Board as a whole. The
Board of Supervisors should advertise openings on the Housing Trust Fund
Advisory Board and solicit applications. The Board should then select from among
the applications it receives.
In order to ensure continuity, terms on the Housing Trust Fund Advisory Board
should run for three years. Initially, one-third of the Housing Trust Fund Advisory
Board members should have one year terms, one-third should have two year terms
and one-third should have three year terms (alternatively, the Task Force
suggested that the initial terms be two, three and four year terms) .
Perpetuation Method
The Housing Trust Fund Advisory Board should submit to the Board of Supervisors
names of possible replacements to fill vacancies which occur on the Housing Trust
Fund Advisory Board. The Board of Supervisors should select from among the
names presented by the Housing Trust Fund Advisory Board. The Task Force
recommends that there be no term limits for Housing Trust Fund Advisory Board
members; therefore, reappointment of an existing Advisory Board member is
permitted.
Size
The Housing Trust Fund Advisory Board should consist of nine to eleven members.
0 Recommendation. - Countywide Revenue Source
if the Housing Trust Fund is capitalized with funds generated from a general
obligation bond issue and/or a franchise fee on solid waste disposal, the
administrative structure should consist of a Housing ''frust Fund Authority,
composed of elected officials or other designated representatives of the County and
cities, and a Housing Trust Fund .Advisory Board.
Decision Making Authority
The Housing Trust Fund Authority should be established by participating
jurisdictions (both the Cities and the County) as a separate legal entity with
authority to make decisions on Housing Trust Fund policies and the use of selected
countywide revenues (GO bond, solid waste franchise fee) for affordable housing
development. At its sole discretion, the County Board of Supervisors must vote to
contract with the Authority Board for the purpose of allocating county revenues.
The contract may include specific restrictions or other conditions required to ensure
fulfillment of the Board's fiduciary responsibility for the countywide revenue
sources.
As with the County Only model, the Trust Fund Authority will be assisted in its
decision making role by the Trust Fund Advisory Board. Specifically, the Advisory
Board should develop policy recommendations, adopt program criteria, review
project proposals, and make funding decisions consistent with overall priorities and
13
policies established by the Trust Fund Authority. The advisory Board's decisions
would then be forwarded to the Trust Fund Authority for ratification by majority
vote.
Trust Fund Advisory Board decisions concerning the use of revenues from
inclusionary fees should be subject to ratification by the jurisdiction which provided
the fees. Specifically, decisions concerning the use of fee revenues provided
through a County inclusionary program should be referred to the Board of
Supervisors for ratification by majority vote. Similarly, decisions concerning the
use of fee revenues provided through a City program should be referred to the
appropriate City Council.
Composition
•
Housing Trust Fund Authority - The Housing Trust Fund Authority should
be comprised of elected officials or other designated representatives of the
County and cities.
• Housing Trust Fund Advisory Board - As with the County Only structure, a
broad spectrum of interests and abilities should be represented on the
Housing Trust Fund Advisory Board. The characteristics of members to be
considered would be identical to those listed above in the discussion of the
County Only model. The Housing Trust Fund Authority would be responsible
for creating the appropriate balance.
Initial Appointing Authority
• Housing Trust Fund Authority - The County and the cities would be
responsible for appointing the members of the Housing Trust Fund Authority.
Each appointee would have one vote.
Terms on the Housing Trust Fund Authority should run for three years.
Again, to ensure continuity, one-third of the Housing Trust Fund Authority
members should have initial terms of one year, one-third should have two year
terms, and one-third should have three year terms (alternatively, the Task
Force suggested that the initial terms be two, three and four years) .
• Housing; Trust Fund Ad,,,-isory Board - The Housing Trust Fund Authority
should make the initial appointments to the Housing Trust Fund Advisory
Board. Appointments would be made by the Authority as a whole. The
Housing Trust Fund Authority should advertise openings on the Housing
Trust Fund Advisory Board and solicit applications. The Authority should
then select from among the applications it receives.
The length of the terms plus the staggered time periods used for the initial
terms should be the same as for the Housing Trust Fund Authority.
1A
Perp Btuation Method
• Housing Trust Fund Authority - When a vacancy occurs or at the end of a
Housing Trust Fund Authority member's term, the applicable original
appointing authority should select a replacement. For example, if a city
representative left the Housing Trust Fund Authority, the cities, as the
original appointing authority, would designate a new representative.
There should be no term limits for Housing Trust Fund Authority members;
therefore, reappointment of an existing Authority member is permitted.
Housin€r Trust Fund Advisory Board - Whenever a vacancy on the Housing
Trust Fund Advisory Board occurs or upon the end of an existing member's
term, the Housing Trust Fund Advisory Board should submit names of
possible replacements to the Housing Trust Fund Authority. The Authority
should select from among the names presented by the Housing Trust Fund
Advisory Board. There should be no term limits for Housing Trust Fund
Advisory Board members; therefore, reappointment of an existing Board
member is permitted.
Size
• Housing Trust Fund Authority - The size of the Housing Trust Fund
Authority should range from nine to eleven members.
Housing Trust Fund Advisory Board - The size of the Housing Trust Fund
Advisory Board should range from nine to eleven members.
15
.......................
___
Section III
SECTION III - RATIONALE FOR. SELECTION OF REVENUE ALTERNATIVES
This section describes the rationale for Task Force recommendations on funding
alternatives for the Trust Fund. First, the legal context in which the County can
utilize revenue .mechanisms is described. Next, the specific rationale for selection
of each of the recommended revenues is summarized, along with key implementation
and administrative requirements.
Lastly, the revenue mechanisms which were analyzed but not recommended by the
Task Force are described in summary form; first those mechanisms eliminated in the
Task. Force's final round of deliberations, and then those identified by the consultant
as being infeasible.
A. EVALUATION PROCESS
1. :First Phase Evaluation
Fifteen potential revenue sources for the Mousing Trust Fund were evaluated.
Criteria for the first-round evaluation include the following:
a. Housing Trust Fund revenues must represent a net new source of
funding which is available to be used for affordable housing
development in Contra Costa County.
b. The County must have the legal authority to utilize a revenue source
for the Housing Trust Fund. -
c. The mechanism selected must generate sufficient revenues to support
a reasonable level of affordable housing development.
d. The tax or fee burden resulting from the collection of revenues should
be as progressive as possible (meaning the burden should increase with
income, or ability to pay), and should not unfairly burden specific
economic sectors or segments of the population.
Exhibit A (page 29) shows the sources eliminated from future analysis on the basis
of the first phase evaluation, and the rationale for their elimination.
2. Second Phase Evaluation
Six revenue mechanisms were identified as having potential for financing a Trust
Fund. These potential sources are shown in Exhibit B (page 30) . The evaluation
criteria for the consultants' in-depth analysis of the six finalist sources were as
follows:
a. The amount and variability of the potential revenues generated.
b. Where the financial burden of the funding source is borne, the degree
of progressivity, and the degree of impact of the tax or fee on the
affected parties.
C. The requirements and costs to collect, monitor, and administer the
17
revenue source. This includes an assessment of staffing requirements
and skills needed.
e. An examination of the legal requirements for use of the mechanism,
including need for legislative authority, voter approval, or nexus
demonstration.
f. Outline of the necessary implementation steps to utilize the mechanism..
g. Issues related to involvement of the cities as well as the County in
adopting or administering the revenue source.
B, TASK FORCE RECOMMENDATIONS REGARDING REVENUE SOURCES
In making its deliberations the Task Force acknowledged that:
o There are few revenue options available to finance a Housing Trust Fund for
Contra Costa. County, and each alternative Mill impose a. burden on some
segment of the population or business community.
Given the County's current budget constraints and its vigorous efforts to
utilize available resources to finance general government activities, there are
a limited number of opportunities to tap net new sources of revenues for the
county to support an. Affordable Housing Trust Fund. These opportunities
are further constrained by the legal limitations on raising revenues in a
General Law County in the post-Proposition 13 era, as described in .Appendix
A.
0 Approval of the electorate is required for most of the revenue alternatives
available to the Trust Fund. Linkage fees and Inclusionary Housing are the
only options which clearly do not require a vote of the people for adoption.
The authority to impose additional franchise fees on solid waste exists only
within the development entitlement process or as a part of a franchise
agreement. To the extent that the County currently receives unrestricted
franchise fee monies, the County, at its sole discretion, could choose to
allocate those fees (or any other source of County revenue,) to the Dousing
Trust Fund.
The Task Force is aware of the difficulty of gaining voter approval for tax
ballot measures and in particular the extremely lova first-time passage rate of
measures requiring a two-thirds voter majority. However, it has been noted
that some of the recent ballot measures have eventually leen approved on the
second or third try.
o Most of the resource alternatives available to the Trust Fund generate
revenues solely from the unincorporated area of the county. The only sources
that can. generate funds on a county-wide basis are the general obligation
bond, and the franchise fee on solid waste.
After reviewing these issues, the Task Force recommended adoption of the following
revenue sources for the Housing Trust Fund: inclusionary housing program with
in lieu fees; solid waste tipping fee; and general obligation bond.
l8
The rationale for adoption of the three mechanisms is described below:
Inclusionary Zoning Will provide significant numbers of new affordable
housing, either as a percent of new construction
within the County's jurisdiction or through payment
of in-Lieu fees. Will formalize an existing policy now
applied to large scale properties seeking negotiated
Development Agreements.
Solid Waste Tipping Will provide substantial revenues from a county-
Fee wide revenue base. However, the impact on each
rate payer is small; an average household might pay
as little as $5 per year for a fee which raises
$800,000 per year.
General Obligation Will provide a large, one time source of revenues.
Bond A $56 million bond would cost $20 per year for the
average home with an assessed value of $200,000.
Voter approval is clearly required.
Full descriptions of revenue mechanisms and the potential for their utilization are
found in Appendix B.
C. LEGAL ISSUES AFFECTING USE OF REVENUE MECHANISMS
A few basic principles govern nearly every revenue option available to the county
for housing trust fund purposes. This section describes the general principles
applicable to taxes and fees. It also describes the distinction between general and
special taxes, as well as the three different types of fees recognized by the courts.
Finally, it gives a brief summary of the spending limits imposed by the Gann
Initiative.
"Taxes are raised for the general revenue of the governmental entity to pay for a
variety of public services." (County of Fresno v. Malmstrom, 94 Cal. App. 3d 974,
983 (1979) .) Accordingly, with a tax, there is no need to show a connection between
the activity which is taxed and the purpose for which the tax proceeds are
expended.. In general, a county may tax one activity, put the money in its general
fund or in some special fund, and expend it for an entirely unrelated purpose.
(See, e.g., Fenton v. City of Delano, 162 Cal. App. 3d 400, 405 (1984) , a tax is a
public burden imposed without reference to particular benefits to individuals) . In
contrast to a tax., a fee must bear a reasonable relationship to a burden created or
benefit received by the person charged the fee.
1. General and Special Taxes
The major constraints governing the imposition of taxes by local governments in
California derive from Proposition 13 and Proposition 62. These initiatives have
divided taxes into two. categories: general and special. A general tax is deposited
in the taping entity's general fund (assuming the taxing entity is not a limited
purpose special district), while a special tax is collected and earmarked for a specific
purpose. (See Rider v. County of San Diego, 1 Cal. 4th 1, 14-15 (1991); City and
County of San Francisco v. Farrell, 32 Cal. 3d 47 (1982)) . However, a special tax
need not be levied for services that specifically benefit the taxed property or
19
business (subject to the relatively loose constraints of the Equal Protection Clause).
(See County of Fresno v. 1Vlalmstrom, 94 Cal. App. 3d at 984.)
Proposition 13, enacted in 1978, requires that local public entities obtain a two-
thirds vote to impose new special taxes. It also prohibits special takes in the form
of sales or transaction taxes on sales of real property. Proposition 62, adopted in
1986, reiterates Proposition 13's requirement that special taxes receive a two-thirds
vote, extends Proposition 13's prohibition on real estate sales or transaction taxes
to general taxes, and requires that other local general taxes be passed by a two-
thirds vote of a local entity's governing board and a majority vote of the electorate.
As discussed in more detail below, the constitutionality of Proposition 62 is, at
present, an unsettled question.
The distinction between general and special taxes found in Propositions 13 and 62
has an important consequence for the financing of affordable housing through tax
proceeds. Because Proposition 13 requires that a "special tax" receive a two-.thirds
vote of the electorate, and a special tax is a tax levied for a specific purpose, any
tax levied by the county the proceeds of which are legally restricted for the purpose
of financing affordable housing would require a two-thirds vote. Conversely, if the
proceeds of the tax are allocated in the County's General Fund, and then
appropriated by the Board of Supervisors for affordable housing, the tax can be
implemented by the Board and (depending on whether Proposition 62 is
constitutional) a majority vote of the electorate. California general law counties,
including Contra..Costa County have limited Statutory Authority to impose new
general taxes.
It bears emphasis that the critical factor:distinguishing a special tax from a general -
ta.x i.s'wh.ether the use.of its proceeds is legally restricted: thus, a general tax does
not become a special tax merely because its proponents identify the purposes for
which its proceeds will eventually be appropriated for the levying entity's general
fund. (City of Oakland. v. Digre, 205 Cal. App. 3d 99, 104 (1988)) . However,
because a general tax must be placed in the County's General Fund., it may not
provide a continuing source of secure finding for housing, since the county cannot
make a legal commitment that would specifically limit use of the funds. Accordingly,
the funds generated by a general tax would (at least in theory) be available for
appropriation for purposes other than housing. ,
The only "special taxes" for which Proposition 13 requires a two-thirds vote are
those levied by "cities, counties, and special districts.t' Thus, if the counter levies
3,While the spending decisions made about general fund monies in the annual
budget process usually cannot commit monies from future years' general funds, there
are exceptions to this rule. Such a continuing commitment may represent a practical
alternative to a guaranteed Rousing Trust Fund appropriation. For example, long-
term leases may be a significant exception to the limits on long-term appropriation
commitments in California, since the courts have held that such leases merely
constitute an obligation to pay "from time to time" and not a long-term obligation of
the public body. Krenwinkle y. Citi of Los Angeles, 4 Cal. 2d 611 (1935) . Such
leases may well be suited to low income housing assistance, which may be structured
to impose affordability controls which run with the land, e.g. , via a ground lease.
20
a special tax, a two-thirds vote is required. However, a "special tax" levied by a
''special district" that was formed prior to the adoption of Proposition. 13 in 1978 and
which does not have the power to levy a property tax is exempt from the two-thirds
requirement. (Los Angeles County Transportation Commission v. Richmond, 31 Cal,
3d 197 (1982)) .
The Legislature has authorized counties to set up new "authorities" for specific
purposes, and authorized these entities to levy a sales tax at the rate of .25 or .5%.
Rev. & Tax Code §7285.5. However, to survive judicial scrutiny, the entity levying
such a tax would have to demonstrate that it was not formed for the purpose of
circumventing Proposition 13, by satisfying the six-factor test set forth in (Rider
v. County of Sar_ Diego, 1 Cal. 4th 1 (1991)) .2 If an entity did not meet the Rider
tests, revenue measures would require approval of two thirds of the voters.
2. Fees: General Principles
If an exaction is a "fee," and not a "tax," it is exempt from the requirements of
Propositions 13 and 62. Three different kinds of fees have been upheld by the
California courts since the adoption of Proposition 13: development fees, services
fees, and regulatory fees.
a. Development Fees
A development fee is "an exaction imposed as a precondition for the privilege of
developing . . . land. Such fees are commonly imposed on developers by local
governments in order to lessen the adverse impact of increased population generated
by the development." (Russ Building Partnership v. City and County of San
Francisco, 199 Cal. App. 3d 1499, 1504 (1987), appeal dismissed, 484 U.S. 909
(1988)) . As long as such fees are limited to the cost of providing services required
by the proposed developments, they have been found not to be "special taxes."
(See;-:e.g. , Russ Building Partnership v. City and County of San Francisco, supra;
Trent Meredith, Inc. v. City of Oxnard, 114 Cal. App. 3d 317 (1981) ; Mills v.
County of Trinity, 108 Cal. App. 3d 656 (1980) . See also Terminal Plaza Corp. V.
City and County of San Francisco, supra, upholding fee imposed on condominium
conversion permits; Briarwood Properties, Ltd. v. City of Los Angeles, 171 Cal.
2Under Rider, a tax levied by a new limited purpose special agency will be
covered by Proposition 13's two-thirds vote requirement if a court concludes that the
agency was "created to raise funds for . . . county purposes to replace revenues
lost by reason of the restrictions of Proposition 13." Id. at 11. The factors to be
considered in determining whether the agency was created to circumvent
Proposition 13 include "the presence or absence of (1) substantial [County] control
over agency operations, revenues or expenditures, (2) [County] ownership or
control over agency property or facilities, (3) coterminous physical boundaries,
(4) common or overlapping governing boards, (5) [County] involvement in the
creation or formation of the agency, and (6) agency performance of functions
customarily or historically performed by [counties] and financed through levies of
property taxes." Id. at 11-12. Since this test was only promulgated by the
California Supreme Court several months ago, there are no cases which apply it to
newly-created special districts and, therefore, no clear out guidelines on how it
would be interpreted.
21
App. 3d. 1020 (1985) , relocation assistance payments imposed on condominium
conversion not a "special tax".)'
Development fees have several distinguishing characteristics. While most taxes are
compulsory, development fees are triggered by the voluntary decision of a developer
to improve property. (California Building Industry Association v. Governing
Board, 206 Cal. App. 3d 212, 236 (1.988) ; Russ Building Partnership, 199 Cal. App.
3d at 1505; Terminal Plaza Corp. , 177 Cal. App. 3d at 907; Trent Meredith, Inc. ,
114 Cal. App. 3d at 328.) Similarly, the revenue generated by these fees is devoted
not to general governmental purposes, but to meeting the obligations imposed on the
exacting agency by the new development. (Russ Building Partnership, 199 Cal.
App. 3d at 1545; Trent Meredith, Inc. , 114 Cal. App. 3d at 327.) Thus, the money
raised by these development fees is designed to meet neva needs, not to replace
revenue lost as the result of the enactment of Proposition 13. (Russ Building
Partnership, 199 Cal. App. 3d at 1505.)
b. Service Fees
A second type of fee upheld by the California courts since the passage of
Proposition 13 is the "service fee." This is a fee levied by government either for the
purchase of government services or the right to conduct private activities on
government property. For example, in Alamo Rent-A-Car, Inc. v. Board of
Supervisors (221. Cal. App. 3d 198 (1999)), the Court of Appeal upheld an "off-
airport rental car fee" pursuant to which rental car.agencies serving passengers at
the John Wayne Airport were required to pay a fee equal to nine percent of their
gross receipts. The court held that this fee was not a special tax because it was
levied only on "specific entities which choose to operate on, and derive financial
benefit from, the [county's] Airport, a self-financing activity." (Id. at 205.)
Similarly, when government engages in proprietary activities other than operating
an airport, such as supplying water, power and other utility services, the fees it
charges for these services should not be held to be special taxes as long as they do
not exceed the cost of providing the service. (See Government Code §50076,
"special tax" shall not include any fee "which does not exceed the reasonable cost of
providing the service . . . for which the fee is charged and which is not levied for
general revenue purposes"; cf.. Beaumont Investors v. Beaumont-Cherry "galley
Water District, 165 Cal. App. 3d at 284, plaintiff and defendant agreed that a "faci-
lities fee" enacted by a water district as a charge for connecting a new development
to a water system would not be a special tax if it were reasonably related to the cost
of providing the service for which it was imposed).
C. Regulatory Fees
A third type of fee upheld since the enactment of Proposition. 13 is the "regulatory
fee." "[T)he 'special tax' referred to in Section 4 of Article XIII A does not embrace
fees charged in connection with regulatory activities which fees do not exceed the
3Conversely, when the local entity imposing the "fee" has been unable to show
that the fee is limited to the cost of providing services necessitated by the
development, the fee has been held to be a special tax. See, e. . , Beaumont
Investors v. Beaumont-Cherry Valley Water District, 165 Cal. App. 3d 227 (19a5) .
22
reasonable cost of providing services necessary to the activity for which the fee is
charged and which are not levied for unrelated revenue purposes." (Pennell v. City
of San Vose, 42 Cal. 3d 365, 375 (1986) , aff'd, 435 U.S. 1 (1988), quoting Mills v.
County of Trinity, 108 Cal. App. 3d at 659-60) . Thus, in Pennell, the California
Supreme Court upheld a $3.75 annual "rental unit fee" designed to pay for the
administration of a rent control ordinance. (42 Cal. 3d at 374-75.) Similarly, in San
Diego Gas & Electric Co. (SDG&E) v. San Diego County Air Pollution Control
District, 203 Cal. App. 3d 1132 (1988) , the Court of Appeal upheld fees which
allocated certain costs of operating an Air Pollution Control District among all
monitored polluters. And in Mills v. County of Trinity, the Court of Appeal held
that fees for processing subdivision zoning and other land use applications would not
be "special taxes" as long as the fees did not exceed the reasonable cost of the
regulatory activities related to the applications. (1.08 Cal. App. 3d at 663.}
3. The "Gann Limit"
Under Article XIII B of the California Constitution, adopted in 1979, each entity of
local government is limited in the amount of tax proceeds it may appropriate during
every fiscal year. The "proceeds of taxes" within the Gann limit include regulatory
license fees, user charges and user fees, to the extent that such proceeds exceed
the costs reasonably borne by the entity providing the regulation, product or
service. Cal. Const. , art. XIII B, §8(c). In essence, the growth of appropriations
is limited to the increase in population and cost of living. Cal. Const. , art. XIII B,
Depending on the overall growth of the County's budget, the County's Gann limit,
and the particular revenue sources used for a Housing Trust Fund, the Gann limit
could restrict growth of the Fund. If the Gann limit is reached, an election could be
held to raise it. However, a fee supported by a proper nexus study is not subject
to the Gann limit. (See Russ Building Partnership v. City and County of San
Francisco, 199 Cal. App. 3d at 1507.) The Gann limit also does not affect the
County's power to issue bonds. (Cal. Const. , art. XIII B, §7.)
D. INCLUSIONARY HOUSING PROGRAM
The Task Force recommends adoption of a broad scale inclusionary housing program
because such a program directly increases the supply of affordable housing by
requiring developers to include affordable units in new developments or pay fees
which are then used to support affordable housing development in the community.
The county already has an informal policy in place in negotiating Development
Agreements for large scale residential projects. This program would be an expansion
and standardization of this informal policy. The Board's authority to adopt this
program is limited to the unincorporated area.
The revenue potential of an inclusionary housing program depends on the level of
housing construction, affordable price requirements, and the amount of the in lieu
fee requirement. The preliminary illustrative estimate found that if a program were
in place, and the in lieu option were selected by developers, then each $1,000 per
unit of fee would raise revenues on the order of $400,006 per year based on housing
production rates over the past five+ years. (Note that the County's existing
negotiated agreements have provided for fees at $3,333 per unit. ) Residential
projects that meet the affordable definition would not be subject to the fee.
23
An inclusionary program needs to be designed and developed with the input and
advice from a crass-section of affected and interested parties. The full program
should address and make recommendations regarding the following specific terms:
• The affordability targets or income level of households that the units should
be affordable to. It is noted that different targets are usually set for single
family vs. multifamily units. The program may set the targets as it chooses.
The percentage of units to be wade available at affordable prices or rent
levels. Again, these percentages. usually differ for single family and multi-
family units.
• In lieu options, including but not limited to payment of a fee, dedication of
land on-site or off-site, and off-site construction of units.
• Placement of units within projects. Generally it is a goal that units are
dispersed, but some level of clustering may be permitted within larger
projects.
• Comparability of affordable units to market units within a project -- exterior
appearance, interior aspects.
Offset provisions or measures that allow developers to reduce the overall cost
of affordable units, such as density bonuses, relaxed design restrictions, or
possible fee modifications.
Term of affordability for ownership units, or length of time units must remain
affordable, resale restrictions, and/or subsidy recapture provisions.
1. Program Design
A well-designed inclusionary program should be based on careful study of each of
the above items and a thorough understanding of how the program relates to the local
market and economics of development by the private sector. The Board of
Supervisors should charge the Community Development Department staff and a
specially assembled committee to develop specific recommendations for an
inclusionary housing program and report those recommendations to the Board. The
specially assembled committee should include a balanced representation from a broad
spectrum of interested persons, including representatives from the building and real
estate industries (both single:and multi-family) , design professionals, and housing
advocates. The specifics of the program to be developed include such details as
determination of the affordability targets (or the household income levels to be
served by the program) ; the percentage of units to be affordable; the level of in lieu
fees and other options, exclusions, and exemptions; and burden reducing offsets
such as density bonuses.
2. City Policy
The Board of Supervisors should urge all Contra Costa cities to adapt similar
inclusionary policies, and to coordinate these programs to maximize the supply of
affordable housing throughout the county.
24
3. Legal Requirements
Many California cities and counties have enacted inclusionary housing programs.
Although the validity of these programs has not been tested in the California courts,
a series of cases in New Jersey have upheld the constitutional validity of
inclusionary zoning requirements and in lieu fees. Many legal analysts believe that
the California Constitution would similarly support inclusionary programs.
The Board of Supervisors could adopt an inclusionary housing program without voter
approval.
4. Administrative Requirements
The major administrative requirements of an inclusionary program are in designing
the program and in monitoring projects for compliance once the policy is in place.
These requirements are described in detail in Appendix B. In lieu fee revenues
would be collected with, other fees currently imposed upon application for a building
permit. Depending on the final program design, additional staff time may be
required to administer the program.. The county already has staff with the expertise
needed for these tasks.
E. LANDFILL TIPPING FEE
The county has the authority to collect franchise fees from solid waste disposal,
which represents a county-wide revenue base. A tipping fee would be collected at
the time solid waste is deposited in county franchised landfills. This fee would be
entirely separate from the impact mitigation fees currently under discussion. The
major reasons that the Task Farce has proposed use of the landfill tipping fee to
finance the Trust Fund are as follows
• The landfill tipping fee could raise a significant level of annual revenues on
an ongoing basis. A $1 or $2 per ton fee could generate $0.8 to $1.0 million
per year, and would provide a relatively stable revenue base over time.
• The landfill tipping fee is a broadly based revenue measure; it would be borne
by virtually every household and business in the county.
• Because the fee is so broadly based, significant revenues can be generated
from a very small fee on each household or business. The very preliminary
projection shows that a fee of $1 per ton would likely amount to an annual
burden of less than. $5 per household. Thus, even though the fee is
regressive, the impact on residents would likely be minimal.
1. Legal Requirements
Landfill tipping fees can only be adopted by the Board of Supervisors through the
development entitlement process or as part of a franchise agreement. Consequently,
new or increased solid waste franchise fees can only occur if the Board has new or
additional discretionary landfill entitlements before it. To the extent that the
County currently receives nonrestricted franchise fee monies, the County, in its
sole discretion, could choose to reallocate the fees to the Housing Trust Fund.
25
2. Program Design
The Board of Supervisors should conduct research on a number of topics related to
how to structure a landfill tipping fee and to develop support for use of the tipping
fee to fund affordable housing. This effort should identify a recommended fee level
per household and per businesses, how the fee would be passed on to consumers
(and any exemptions based on income, etc. ), use of the proceeds, target population
and housing needs to be served, etc.
3. Political Acceptance
The County's solid waste disposal costs are significantly higher than current costs
in other communities. Increasing solid waste disposal cost by adding a tipping fee
may prove politically difficult.
4. Administrative Regwirements
Further research is needed to understand the characteristics of the County's
households and businesses, leading to a more precise allocation of the annual solid
waste generation (and the resulting tipping fee) in the county among households and
businesses, income groups, etc. A program designed to reduce regressivity could
be developed, but may not be necessary given the small size of the financial burden.
Collection of the fee would likely require dedication of additional staff resources,
including a new monitoring system, an annual audit, and a new payment system to
achieve'collection of monthly versus quarterly payments from disposal companies.
Because this revenue source would be generated county-wide, there is an
opportunity to fund affordable housing development throughout the county,
including bath the incorporated and unincorporated areas. In a county-wide
program, participation from city leadership is recommended in making decisions
about resource allocation, funding priorities, and development guidelines.
F. GENERAL OBLIGATION BONUS
The Task Force has recommended adoption of a G.0. Bond as a financing mechanism
for the Trust Fund because it represents the largest single potential revenue
source. The Bond issue also represents a countywide revenue base. Assuming
current market conditions, a levy of $0.10 per $1,000 of assessed valuation would
support a $56 million bond issue. At this rate, the owner of a home assessed at
$200,000 would pay $20 per year. A G.0. Bond provides a mechanism to:
(1) Increase property taxes, subject to voter approval, and dedicate that'
property tax assessment to a special purpose, and
(2) Capitalize the property tax assessment to achieve an upfront pool of funds.
The bond issue is a one-tine revenue source, which is repaid over the term of the
bond (typically 18 to 20 years) . A second bond issued during that period would
result in an additional assessment. Due to potential voter resistance, the county
should not necessarily assume that a second bond for the Trust Fund could be issued
during she 15 to 20 year amortization period of the first bond.
26
1. Legal Requirements
The G.0. Bond requires approval from a two-thirds majority of voters. Bonds may
be either taxable or tax exempt, dependent on the uses to which the proceeds will
be dedicated.
2. Citizen's Campaign Committee
The Board of Supervisors should assist in formation of a broadly based committee to
support a G.0. Bond election, within the bounds of its legal authority to do so. The
committee should include representatives of the cities, housing interest groups, the
building and real estate industries, housing advocates, and other interested and
knowledgeable persons.
3. Political Feasibility
The Task. Force acknowledges that it has been historically difficult to achieve a two-
thirds voter majority for a wide variety of public needs. Thus, the.band issue
should be structured to maximize the potential for political acceptance, even though
that may narrow the range of the County's housing needs that are served by the
G.O. Bond.
4. Administrative Requirements
The bond will be supported by a special property tax assessment which would be
collected as a normal part of the property tax collection. pro6ess. The county
treasurer/tax collector can charge a fee to the program for the extra cost to collect
and disburse the tax.
G. REVENUE MECHANISMS NOT RECOMMENDED BY THE TASK FORCE
1. Finalist Mechanisms
The finalist candidates for consideration as revenue mechanisms for the Contra Costa
housing Trust fund are shown.in Exhibit A (page 29) . The Task Force reviewed the
analysis of all of these mechanisms, and voted on which should be recommended for
adoption.
The Task Force rationale for elimination of finalist revenue sources is described in
the following:
Housing Linkage Fess The revenue potential from the unincorporated area is
limited, and the expense and effort required to design,
gain support for, and institute a linkage fee would out-
weigh the revenue potential. Also, there are concerns
regarding potential competitive issues related to a linkage
fee program operative in the unincorporated area only.
Document Transfer Tax County currently collecting maximum. Increase requires
permissive state legislation and declamation that
Proposition 62 is unconstitutional. Does not appear to be
a legally feasible option.
27
Utility User Tax passage of the tax was judged to be politically infeasible,
given the regressivity and general unpopularity of this
tax.
2. Revenue Mechanisms Considered Infeasible
In the first cut evaluation of revenue alternatives for the Housing Trust Fund,
based on the consultant analyses, the Task Force evaluated a wide variety of
alternatives which have been utilized or contemplated in other communities.
Alternatives which were judged to be legally, financially, or administratively
infeasible, are shown in Exhibit B (page 30) . These options were eliminated from
further consideration at the end of Task Ia.
28
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EXHIBIT B
REVENUE SOURCES ELIMINATED IN FIRST PHASE EVALUATION")
HOUSING TRUST FUND
CONTRA COSTA COUNTY
Bales Tax: County already collects state-mandated maximum
rate.
Excess Bond Reserves: Based on a general understanding of recent IRS
rulings, future excess reserves, if any, could not be
used to fund Trust Fund activities.
Sale of County Land Assets: County has dedicated Asset Management Revenues
to generate funds for General Fund. Asset base
reportedly limited.
UDAC Loan Repayments: Reportedly, no such funds are available.
Housing Preservation/Condominium Conversion No significant amount of on-going demolition or'
Fee.: conversion activity predicted at this time.
Special Property Tax Levy: Expressly prohibited by State law without voter
approval.
Voluntary Contribution of Mortgage Impound By law, these funds must be placed in an interest
Account Interest: bearing account to the benefit of the borrower.
Voluntary Contribution of Interest on Sale Escrow Judged infeasible due to growing political awareness
and Tenant Security Deposits: that interest on these funds should accrue to the
depositors. Also extremely complex to administer.
Current County Housing Funds: Existing Housing Resources such as Community
Development Block Grant allocation and HOME
Funds do not represent net new housing funds.
Tax increment Housing Set Aside Funds: Not net new housing revenue source. Legal (and
potentially political) obstacles to pooling City/County
funds, without complex distribution scheme.
Transient Occupancy Tax: Limited revenue potential.
{#' Includes revenue sources used in other communities with Housing Trust Funds.
Source: Keyser Marston Associates, Inc. May 1992
SectioniV
SECTION IV - RATIONALE FOR RECOMMENDED
HOUSING TRUST FUND STRUCTURE
The Housing Trust Fund Task Farce reviewed and discussed five basic options for
the administrative structure of the Housing Trust Fund. These options are
summarized in Exhibit C (page 38) . Each option is comprised of the following five
characteristics: -
• decision snaking authority, which refers to whether the Housing Trust Fund
Advisory Board is the final decision maker or is advisory to another body,
• composition, which deals with the representative make-up of the Housing
Trust Fund Advisory Board in terms of interest groups, geographic
distribution, expertise, etc. ;
• initial appointing authority, which refers to the body that appoints the first
Housing Trust Fund Advisory Board members;
• perpetuation method, which deals with the way in which vacancies on the
Housing Trust Fund Advisory Board are filled; and
• size, which refers to the number of members on the Housing Trust Fund
Advisory Board.
The Task Force recognized that the structure of the Housing Trust Fund Advisory
Board would be, in part, dependent on the revenue sources selected to create the
Housing Trust Fund, and so devised two structures, blending features of the five
options. The first, referred to as the County Only structure, would be implemented
if the Housing Trust Fund were capitalized solely with inclusionary housing in-lieu
fees collected only from housing projects in the unincorporated County. In this
case, the Housing Trust Fund would be controlled by the County. The second,
called the Countywide structure, is recommended in the event the Housing Trust
Fund includes countywide revenues generated through a general obligation bond
issue and/or a franchise fee on solid waste disposal. This structure shares control
of the Housing Trust Fund by the County and the cities. The latter recommendation
is based on a recognition that if revenues are contributed by the cities, then the
cities will want and should have a rale in determining how those revenues are used.
In addition, active support of the cities will be needed to ensure passage of the
ballot measures required to enact the countywide revenue sources. In order to elicit
this support, it is likely that the cities will require a role in decisions concerning the
Housing Trust Fund activities.
A. COUNTY ONLY STRUCTURE
As the County has the fiduciary responsibility for the Housing Trust Fund, and
would be the legal lender of Dousing Trust Fund resources to any recipient, the
Task Force recommends that the Board of Supervisors be the final decision maker in
the County Only structure. However, rather than requiring that each Housing
Trust Fund Advisory Board decision be reviewed and acted upon by the Board of
Supervisors, the Task Force recommends that a process be used whereby the Board
of Supervisors would ratify the decisions of the Housing Trust Fund Advisory Board
by a majority vote.
31
The Task Force believes the Rousing Trust Fund Advisory .Board could become a
catalyst for the development of affordable housing in Contra Costa County, and
recommended a Board composition that would bring in a diverse group of interests,
experience and resources in structuring effective housing policies, programs and
projects. The Advisory Board will provide an opportunity for building
publiciprivate partnerships.
The Task. Force recommends that the Board of Supervisors appoint the initial
members of the Housing Trust.Fund Advisory Board. Such.members would be jointly
appointed on an at-large basis by the Board of Supervisors. The Task Force
believed that a balanced membership on the Dousing Trust Fund Advisory Board
could be more easily'achieved through at-large rather than individual appointments.
The Task Force recommends that Advisory Board members serve a three year term.
In order to provide continuity and take advantage of cumulative Board experience,
there should be no term limits restricting the number of terms served by a Board
member. In addition, initial terms should be staggered in order to avoid the
discontinuity and loss of experience which would result if all terms expired
simultaneously. Specifically, one-third of the members of the first Advisory Board
should be appointed for one year, one-third for two gears, and one-third for three
years. Following the initial appointments, all terms would be for three years.
The Task: Force further recommends that the Board of Supervisors be responsible
for fiWn.g any vacancies that occur on the Housing Trust Fund Advisory Board.
However, the Task Force thought that the Dousing `frust Fund Advisory Board
should have a role in this process too, based on its experience and knowledge of the
type of projects to be funded and the expertise needed to ensure a well-functioning
Advisory: Board. Therefore, the Task Force recommends that nominations .for vacant
seats on the Advisory Board be developed by the Advisory Board and sent to the
Board of Supervisors for selection and appointment.
The recommended size of nine to eleven members is based on the following
considerations. First, a quorum is more easily obtained than with a smaller group.
Second, a nine to eleven member Beard would provide sufficient numbers from which
to create subcommittees. Third, a group this size would be easier administratively
than a larger group. Finally, a Board of nine to eleven can accommodate the
representational considerations that.were important to the Task.Force,without being
unwieldy.
B. COUNTYWIDE STRUCTURE
The Task Force unanimously recommended that Contra Costa County's cities should
be involved as equal partners with the County if the sources of the Housing Trust
Fund include funds drawn from cities. The Task Force recognized that in order to
gain the support of the cities in raising Housing Trust Fund dollars the cities would
meed to have a meaningful role in the decision-making process. Also, and perhaps
more importantly, the Task Force believed that if Housing Trust Fund revenues are
contributed by the cities, then the cities will vaunt and should have a role in
determining how those revenues are utilized.
Clearly, a seat for each city in the County would create a large and administratively
unwieldy body, so the Task Force looked to existing models whereby the cities and
32
the County jointly make decisions for specific resources. It cited the Transportation
Authority model as one approach that might be applicable to the proposed Housing
Trust Fund because, Like the Housing Trust Fund, the Transportation Authority
administers funds generated from a countywide resource (a sales tax) . If this model
were used the Housing Trust Fund would have two city representatives from each
of four County sub-regions, two members of the Board of Supervisors and one at-
large member appointed by the Contra Costa County Mayors' Conference, for a total
of eleven members.
The Housing Trust Fund Authority that would be created would have all the powers
and responsibilities that the Board of Supervisors has under the County Only
structure.
The Task Force recommended that, in addition to the representation by the cities in
the decision making process, it was critical to duplicate for the Countywide structure
the broad-based representation of the dousing Trust Fund Advisory Board
established for the County Only model. Therefore, the Task Force recommended
that the composition of the Housing Trust Fund Advisory Board be the same for both
structures. Also, for efficiency and effectiveness reasons, it made the same
recommendations with respect to terms, term limits and size for both the County Only
and Countywide models.
The Task Force wanted to ensure that projects could be processed efficiently and
that local funding decisions would not unnecessarily delay funding commitments from
other governmental and private resources. Therefore, the Task Force recommended
that the decision making process proposed for the County Only structure likewise
be used for the Countywide structure, substituting the Housing Trust Fund
Authority for the Board of Supervisors (with the. exception of county--generated
inclusionary housing in-lieu fees) . In practice, this means that the decisions of the
Housing Trust Fund Advisory Board would be sent to the Housing Trust Fund
Authority for ratification. A majority vote of the Housing Trust Fund Authority
would be required to ratify the decisions of the Housing Trust Fund Advisory
Board.
C. MERGER STRUCTURE
The Task Force felt that at the time the county-wide revenue sources were in place
there would be no need for separate Housing Trust Fund.Advisory Board appointed
by the Board of Supervisors, and that a single Advisory Board appointed by the
Housing Trust Fund Authority should be established. This would eliminate the
confusion in the community that could occur if there were two Boards each
administering its own funds and would maks the process most efficient from a
staffing perspective. However, decisions of the Housing Trust Fund Advisory Board
regarding county-generated. inclusionary housing funds would be sent to the Board
of Supervisors for final ratification instead of the Housing Trust Fund Authority,
while decisions regarding projects to be funded with inclusionary fees generated
from cities would be forwarded to the applicable city for ratification. The Task
Force believed this to be an appropriate approach since the inclusionary funds would
be specific to a particular jurisdiction.
33
D. STAFFING RESPONSIBILITIES
;Regardless of which of the three revenue sources are used or the administrative
structure of the Housing Trust Fund, the Housing Trust Fund Advisory Board, the
Housing Trust Fund Authority and the Board of Supervisors all would be staffed by
the housing personnel of the County's Community Development Department. (The
only exception to this would be in the case of ratification by a city council of the
Housing Trust Fund Advisory's Board decision regarding inclusionary housing fees
generated .from within that city. Then, that city's staff would staff the city
council).
The administrative staff will need to have a range of skills to carry out the Housing
Trust Fund programs. These skills include the following: program design and
development, lending and underwriting, ,project review and analysis, preparation
of staff reports, loan funding, public speaking, long term monitoring, project
closing and overall program management. The Task Force felt that the County
housing staff had these skills and that, in addition, a portion of the necessary
support staff (e.g. , accounting, clerical, personnel administration) were already
on board.
Funding staff and administrative costs are issues to be considered. The County
housing division may not be able to staff Housing Trust Fund activities without
hiring additional personnel. Therefore, a portion of the Housing Trust Fund
revenues may be needed to cover administrative expenses.
The administrative staff will be responsible for assisting the appropriate Housing
Trust Fund board to design and develop the programs and deli-rer program funds to
individual projects or program recipients. Following are typical staff duties for two
alternative ways in which the Housing Trust Fund can finance affordable housing.
'.These are meant to illustrate the range of staff responsibilities, depending on the
method selected by the Board of 'Supervisors for investing Housing Trust Fund
monies in projects. The first, the Project .Approach, invests Housing Trust Fund
monies in specific projects carried out by nonprofit or for-profit developers. The
second, the Program Approach, assists individuals such as first time buyers
receiving downpayment assistance .from the Housing 'frust Fund.
Project Ap_pToach
Lead Agency Bole and Responsibiilities
Notice of Funding Availability (_(NOFA)
Draft NOFA
Obtain approval from governing entity
Publish NOFA
NOFA Period Administration
4 Public relations and speaking
Y Conduct workshops on application preparation
• Answer day to day questions
34
Pra'ect Selection
• Initial review of applications to determine completeness
•
Underwrite projects to determine feasibility
Meet with applicants and review site
Prepare staff recommendations and report, including conditions
•
Conduct loan committee meeting to wake loan decisions
Draft letters of approval or rejection
Loan Closin
' Due diligence to close loan, includingtitle reports, appraisals,
reports, engineering, clearing loan onditions, verifcation of other
lending sources
Document preparation., including legal review
• Closing and recordation of documents
Physical funding of loan
Progress Monitoring
' Approve progress payments and cut checks
• Project inspections during construction
Labor standards
• Insurance
Construction progress
• Safety
Problem Resolution During Construction
•
Requirements of other funding sources
• Shortfalls
Contractor disputes
Project Closeout
Balance accounts and adjust loan documents if needed
• Issue final cheek
Record notices of completion
C?n�;oing Monitorin
Annual monitoring of affordability requirements such as incomes and
rents
Physical inspection of property
° Annual financial statement review
Loan Servicing
• Payment collection (depending on loan terms)
Overall accounting
• Payoffs
35
Responsiveness
• Tenant complaints
• Neighborhood complaints
Financial workouts, if necessary
Administration
• Prepare annual budget and work program
• Financial management of Housing `Frust Fund money, including
collection of Housing 'Frust Fund revenue and making investments
• Hire and supervise consultants, including legal
• Staff the Housing Trust Fund Advisory Board, including policy
development, agenda setting, staff reports
• Prepare annual audit and report
• Prepare report for approval by Board of Supervisors or Housing Trust
Fund Authority, as applicable, and staff meeting
Program Apprc ch
Lead AggApy Role and Responsibilities
Program Design
• Design program requirements such as second mortgages for existing
housing or for specific projects, combining seconds with below market
first mortgage financing such as mortgage revenue bonds or MCC's
• Obtain program approval from Housing Trust Fund Advisory Board and
Board. of Supervisors/Housing Trust Fund Authority
• Obtain program approval from secondary mortgage market
• Identify cost effective delivery system (i.e. , loan originator and
servicer)
Program !Marketing
• Public relations and speaking
• Conduct homeownership workshops for prospective applicants
• Answer day to day questions
Applicant Selection
• Initial review of applications to determine completeness
• Provide housing counseling to applicants
• Establish applicant pool (e.g. , lottery, first come first served)
• Draft letters of approval or rejection
• Manage appeal process
Loan Closing
• Due diligence to close loan, including title reports, appraisals, clearing
loan conditions, verification of other lending sources, hazard insurance
Document preparation, including legal review
• Closing and recordation of documents
36
Physical Funding of loan
Ongoing Monitoringr
Annual monitoring of occupancy
Physical inspection of property
Loan Servicing
Payment collection (depending on loan terms)
• Overall accounting
•
Payoffs
Administration
Prepare annual budget and work program
Financial management of Housing Trust Fund money, including
collection of Housing Trust Fund revenue and making investments
Hire and supervise consultants, including legal
• Staff the Housing Trust Fund ,Advisory Board, including policy
development, agenda setting, staff reports
Prepare annual audit and report
Prepare report for approval by Board of Supervisors or Housing Trust
Fund Authority, as applicable, and staff meetings
k7 f HTFFinal
37
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Attachment B
HOUSING TRUST FUND TASK FORCE
ADDITIONAL RECOMMENDATIONS
(May 21, 1992 )
The Housing Trust Fund Task Force by consensus agreed to recommend
the following program policies for consideration by the Board of
Supervisors in their efforts to establish a Contra Costa County
Housing Trust Fund (HTF) . These policies are in addition to those
recommended in Contra Costa County Housing Trust Fund Task Force
Summary Report and Recommendations.
Recommendations - Operating and Financial Policies
o In order to maximize the total resources available for
affordable housing development, to the extent feasible Trust
Fund revenues should be used to leverage other public and
private resources .
o In order to take maximum advantage of opportunities for
affordable housing development, Trust Fund investment policies
should be flexible and should permit predevelopment loans,
bridge financing, and gap loans.
o Project application and funding procedures should be as
expeditious as possible in order. to avoid unnecessary, costly
delays in affordable housing development.
Recommendations -- Homeowner Programs
o The purpose of an HTF Homeowner Program should be to assist
households who would not otherwise be able to achieve
homeownership to acquire housing.
o Homeowner assistance should be targeted to first-time
homebuyers earning 120 percent or less of area median income,
adjusted for household size. The maximum subsidy should be
relatively shallow in order to enable the program to assist a
relatively broad segment of the population.
o The Task Force recognizes that limiting the HTF Homeowner
Program to a relatively shallow subsidy may result in a program
which assists households primarily at the upper end of the
eligible income range. In order to assist lower income
households, the Task Force recommends that projects be
encouraged to combine the maximum allowable HTF subsidy with
other public and private resources to achieve the deeper
subsidies required to achieve homeownership for this group.
The Task Force further recommends that there be no limit to the
maximum total public subsidy permitted per household.
0 In selected target areas where a general increase in
homeownership is desirable, the first-time homebuyer
requirement should be waived.
Recommendations - Multifamily Rental. Housing_ Programs
o Multifamily rental housing projects should be targeted toward
households earning 60 percent or less of area median income,
adjusted for family size.
o The Task Force recommends against establishing program
requirements concerning the minimum percentage of units in a
project which must be affordable to the targeted papulation
(households with incomes at or below 60 percent . of area
median) . Instead, the Task Force recommends flexibility with
regard to income mix, and would actively encourage the
development of mixed-income -projects .
o In developing funding criteria, the Task Force recommends that
the focus be on HTF revenues required per assisted unit, rather
than the particular income mix or total units contained in a
proposed project.
o The Task Force recommends that the term of required
affordability for assisted projects be maximized. However, the
Task Force realizes that the ability to achieve this objective
will be limited by economic feasibility issues and the need to
leverage other resources. Therefore, the Task Force recommends
that multifamily rental projects assisted with HTF revenues
remain affordable for a minimum of twenty years, with a longer
period of affordability required where feasible.
Issues Lacking Task Force Consensus
The Task Force discussed, but was not able to reach a consensus on
the following policy issues :
o The Task Force generally agreed that there is some need for
resale restrictions in the HTF Homeowner Program. However,
there was a lack of consensus concerning whetheror not the
primary focus of this , program should be to assist qualified
households or to increase the affordable housing stock
available for- homeownership.
a. Those who felt the focus should be on assisting households
to achieve homeownership favored an equity--share or return
of subsidy approach, whereby the assisted household
essentially repays the HTF subsidy upon sale of the unit.
These funds are then available to assist additional
qualified households .
b. Those who felt the program focus should be on increasing
the supply of affordable housing, recommended resale
controls to require assisted homeowners' selling within a
specified period to sell to another qualified buyer at a
defined price.
o The Task Force did not reach a consensus concerning the share
of Trust Fund revenues which should be allocated to
homeownership vs . multifamily rental programs and projects .
a. Those proposing a higher allocation of HTF revenues for
homeownership programs argued that these programs . offer a
greater social benefit in terms of providing access to
permanent housing for Contra Costa families; provide
resources to a group for whom. relatively little public
housing assistance is available; directly assist the local
housing industry and the County's economy;' and are
politically more acceptable than low/moderate income
multifamily rental housing projects . Consequently,
according to this view, an emphasis on homeowner programs
will be directly beneficial in achieving voter approval of
HTF revenue sources (e.g. , General Obligation Bond) .
b. In contrast, those Task Force members supporting a larger
allocation for multifamily rental housing presented the
following views; affordable rental housing programs assist
those in greatest need of housing assistance and,
therefore, have a greater social benefit than homeownership
programs; the need for multifamily rental housing far
outweighs available resources; and, because rental housing
programs address the area of greatest need, these programs
may have greater political acceptability than
homeownership.
k3/kh/recsum
ATTACHMENT B
Office of the County Counsel Contra Costa County
651 Pine Street, 9th Floor Phone: (925) 335-1833
Martinez, CA 9455 Fax: (925) 646-1078
Date: March 19, 2002
To: Dennis Barry, Community Development Director
Attn: Patrick Roche, Principal Planner
Advanced Planning Division
From: Silvano B. Marchesi,.Cou n 1-----•''
By: Dennis Graves
Senior Financial Couns
Re: Legal Issues re potential revenue sources for Housing Trust Fund
You recently asked that we review legal issues relating to funding the Housing Trust
Fund (HTF) from various revenue sources proposed by the County HTF committee.
After a preliminary note on Proposition 218, we present our conclusions and outline the
issues regarding each potential source.
Preliminary note on Proposition 218
Proposition 218 is the primary law guiding this review. Proposition 218 is an "omnibus"
law, passed in 1996 to clarify the law and "close the loopholes of Proposition 13 and
Proposition 62" by requiring voter approval of almost all governmental monetary
impositions.
Although the statutory provisions of Proposition 62 of 1986 (Gov. C. Secs. 53720-
53730) remain in place, Proposition 218 enacted Constitutional provisions that largely
duplicate and supersede the statutory provisions of Proposition 62. Provisions of
Proposition 62 that have not been duplicated by Proposition 218 and still have operative
force are Government Code Sections 53724.(regarding implementing local taxes by
resolution or ordinance submitted for voter approval) and 53728 (regarding the fiscal
penalty for failure to comply with Proposition 62),
Proposition 218 concerns-special and general taxes (Art. XIIIC, Secs. i(a), (d), 2,
Art.XI11D; Sick. 3(a)), fees/charges on property or relating to property ownership (Art
XIIID, Secs. 2(e),(h), 3(a)(4), 6(a)(1), b(3),(4),(5)), and special assessments (ArtlIID,
Secs. 2(b),(i), 3(a)(3), 4). Proposition 218 does not cover developer fees, non-property
related'fees/charges (eg, various service charges), or fees/charges imposed under the
power to regulate business activity (eg, franchise fees). (Art. XIIID, Sec, 1(b), 2(a),(h),
1
3(a)(4), 6(a)(1),b(3),(4),(5); Apartment Assn. of Los Angeles County v City of Los
Angeles[20011 24 C 4th 830,842.)
Conclusions
Although not subject to the voter approval requirements of Proposition 218, it does not
appear feasible to raise sufficient funds from increased franchise fees to significantly
assist in funding the Housing Trust Fund.
Although land use development fees (eg, the type recently imposed by Napa) are not
subject to Proposition 218, the threshold question is whether the requisite capital could
be raised without the fees being so high as to violate legal standards and become
confiscatory.
The Housing Trust Fund could be funded by bonds or special taxes (eg, parcel tax,
utility user tax, increased sales tax [if the County is not already at its maximum sales tax
rate)), but a 2/3 voter approval would be required for all such sources of funding.
Discussion
The following discussion covers each potential source of revenue identified for the
Housing Trust.Fund.
1. lneluslonary Housing Ordinance and Other Development Fees
Inclusionary Housing Ordinance in lieu fee
An inclusionary housing ordinance in lieu fee, imposed on developers to fund affordable
housing in papa, was upheld by the California Court of Appeal in Home Builders v Napa
(2001) 90 CA4th 188. The California Supreme Court did not hear the case, but a
petition for certiorari has been filed with the US Supreme Court. (70 US Law Week
3410.)
Although we have not seen the petition, it apparently raises (inter alfa) the issue of
whether the papa Housing Trust Fund in lieu fee complies with the land use law
NollanlDolan standard of a reasonable nexus and rough proportionality between the
exaction and the impacts of the development. (See Dolan v City of Tigar(1994) 114
SCt 2309 and Nollan v California Coastal Commission (1987) 107 SCt 3141.} It
probably will be April or May before the Supreme Court decides whether to hear the
case. If the Court does decide to hear the case, it could well be another year before a
decision is rendered.
2
Proposition 218 specifically excludes fees properly imposed as a condition of property
development. (Art. XiIID, Sec. 1(b).) Thus, the Napa affordable housing development
fee would not be subject to the stringent requirements of Proposition 218 and, unless
overturned by the US Supreme Court, could provide a model for such a Contra Costa
fee.
Even though not subject to Proposition 218, such a fee would have to meet the
requirements of the development fee law (Gov. C Secs. 66000-66024), which (inter alis)
codifies the NollanlDolan requirements of a reasonable nexus and rough proportionality
between the exaction and the impacts of the development. In the present context, this
law would appear to require a demonstration that 1) new residential development
materially impacts affordable housing (eg, by increasing the price of land available for
affordable housing) and 2) given this impact, the amount of in lieu development fee
exacted as a condition of development is reasonable. (See Gov. C. Secs. 66001,
66005.) Should these land use law standards not be met, the exaction could be
deemed confiscatory.
Housing Linkage Fees;Mitigation Bank Fees
Few specifics have been provided on these fees, but they apparently are exacted under
the County's police power in accordance with the requirements of Government Code
Sections 66000 at seq. Being imposed as a condition of development, these fees also
would not be subject to Proposition 218 (ArtXIIID, Sec.1(b)), but would have to meet the
land use law standards of Government Code Sections 66000-66024.
2. Non development or regulatory fees which are not imposed on property or
Incidental to property ownership
Fees on solid waste collection/disposal franchise
These fees are imposed on a garbage collection company pursuant to the County's
franchise power. (See Ord. C. Sec. 418-7.202.) The fee is per ton of refuse
collected/disposed and is imposed upon the franchisee garbage collection company
pursuant to its franchise agreement with the County. (Ord. C. Sec. 4187.602-4.)
This fee is not intended to cover the cost of collection and disposal but rather is a
charge to the franchisee for the privilege of exercising an exclusive franchise from which
it can make a profit. The fee is an incident of the County's police power, ie, a
"regulatory fee" intended to cover the costs of regulating the franchisee. As such, it is
imposed on the franchisee business, not directly on real property nor on a person as an
incident of property ownership, so Proposition 218 should not apply. (See Apartment
Assn. of Los Angeles County v City of Las Angeles, supra, 24 C 4th 880, 842; see also,
Art. XIII'D, Sec. 2(e), defining "fee" to include any imposition incident to property
3
ownership, and Sec. 3(a), specifying the reach of Proposition 218 to be to impositions
that are an incident of property ownership.)
The proceeds of such franchise fees apparently go to the County General Fund. Thus,
to the extent used for the Housing Trust Fund, the general fund would suffer a loss.
Subject to any applicable law, the County could increase the franchise fee when the
franchise is next renewed and could earmark the increased funds for the Housing Trust
Fund. Since existing franchise agreements are not to be renewed for some time, and
since the County only controls franchises for some of the unincorporated territory, this
source may not significantly assist in funding the Housing Trust Fund.
CATV Franchise Fee
The County exacts a franchise fee from CATV operators, imposed at a maximum of 5%
of the operator's revenues. (Ord. C. Sec. 58-6.002; 41 USC Sec. 542(b).) Like the solid
waste fee discussed above, this fee is imposed under the County's power to regulate
this type of activity.
As with the solid waste collection franchise fee, the CATV franchise fee is imposed on
the franchisee business, not directly on real property nor on a person incident to
property ownership. Accordingly, Proposition 218 should not apply. (See Apartment
Assn. of Los Angeles County v City of Los Angeles, supra, 24 C 4th 630, 842; see also,
Art. X111D, Sec. 2(e).)
The County already imposes the maximum 5% fee on all franchises, so an increased
fee could not be earmarked for the Housing Trust Fund at time of renewal of any
franchise.
3. Assessments
Special assessments, or special benefit assessments, are impositions such as
assessment district assessments for physical improvements (eg, curb and gutter)
directly benefiting property. (Art. X111D, Sec. 2(b),(i).) Such assessments are subject to
rigid requirements to insure that the financial burden does not exceed the special
benefit the property receives. (Art. XIl1D, Sec. 4.) Such impositions thus could not
generate excess funds to support the Housing Trust Fund.
4. Special taxes
The proceeds of a tax would not go to the General Fund, but rather would be
designated for the Housing Trust Fund. Thus, the tax would be a special tax, requiring
a 2/3rds voter approval, as opposed to a general tax, which requires only a majority
voter approval. (Art.X111C, Sec. 1(d), 2.)
4
a. Utility User Tax
The County does not currently have such a tax, but could impose such a tax under
Revenue and Taxation Cade Section 7284.2. However, this would only be for the
unincorporated area and would be subject to a 2/3 voter approval. (Art. XIIIA, Sec. 4;
XIIIC, Sec. 1(d), 2(d).)
b. Transient occupancy tax
The County has such a tax, per Ordinance Code Chapter 64-4 and Revenue and
Taxation Code Section 7280, The Ordinance Code has no limitation on the use of the
proceeds of such a tax.
The tax is imposed as a percentage of a lodging bill. If the percentage allowed under
our Ordinance were to be increased, it would require a 2/3 vote. (Art. XIIIC, Sec. 2(d).)
c. Documentary transfer tax(R+TC 11901 et seq)
The County has such a tax. (See R+TC Sec. 11911, Ord. C. Chap. 64-6.) The
ordinance code contains no restrictions on the use of the proceeds of such a tax..
This tax is imposed on the documents by which real property is transferred, and in an
amount reflecting the consideration paid for property. (R+TC 11911(a); Card. C. Sec. 64-
6.402, 64-6.404.) Since imposed according to the consideration paid and incidental to
the transfer of real property, it can be argued that any increase in the tax would be an
ad valorem property tax precluded by Art. XIIIA, Sec.1 and XIIiD, Sec, 3(a).
If an increase were legal, and if the rate allowed under our Ordinance could be
increased, it would require a 2/3 vote. (Art. XIIIC, Sec. 2(d).) However, we already
impose the maximum allowed by law (55 cents per $100 of value), so we could not
increase this amount. (R+TC Sec. 11911, Ord. C. Chap, 64-6.)
d. Parcel tax
Such a tax is possible, subject to the following conditions. First, it could not be imposed
according to value, so it probably would have to be imposed at a flat rate per parcel or a
series of rates according to the use of parcel (eg, four different rates imposed according
to whether the parcel is single family residential, multiple residential, commercial, or
industrial). (Art. XIIIA, Sec. 4) Second, since it would be a special tax, it would require
approval of 2/3 of the voters. (Art. XIIIC, Sec. 1(d), 2(d), Art. XIIID, Sec. 3(a)(2).)
e. Increased sales tax
5
To the extent not already earmarked for a specific purpose (eg, BART 112% tax), the
sales tax goes into the general fund and could be used for the Housing Trust Fund or
any other proper governmental purpose. of course, to the extent used for the Fund, it
would not be available for other purposes.
There is a statutory limit that the County's sales tax cannot exceed, in conjunction with
sales taxes of other agencies. (R+TC Sec. 7285.3.) If a sales tax is to be pursued,
someone should verify this limit so as to determine whether there is any room for an
increase in the sales tax.
An increased County sales tax for the Housing Trust Fund would be a special tax,
subject to 2/3 voter approval. (R+TC Sec. 7285.5; Art. XIIIC, Sec. 1(d), 2(a),(d).)
4. Charges/fees on property or Incident to property ownership
As noted above, Proposition 218 does not cover development fees or regulatory fees.
(Art. XI I I D, Sec. 1(b); Apartment Assn. of Los Angeles County v City of Los Angeles,
supra, 24 C 4th 830, 842.) The present point relates to non-development
fees/charges, imposed upon property or an Incident of property ownership. This type of
fee/charge is covered by Proposition 218. (Art. XIIID, Sec. 2(e), 3(a)(4), 6.)
Under Proposition 218, charges or fees are allowed only to provide a service or benefit
to property commensurate with the cost of the imposition {Art. XIIID, Sec. 2(e), 6(b)),
and then only upon majority vote approval of the affected property owners or a 213 vote
of the overall electorate. (Art. XIIID, Sec. 6(b),(c)). The proceeds of such fees cannot
be used as a substitute for general taxes, eg, cannot be used to provide a service or
benefit available to the public at large. (Art. XIIID, Sec. 6(b)(5).) There are special
procedures (eg, notice to affected landowners) for such fees, (Art. XIIID, Sec. 6(a).)
Sind available only to provide a service or benefit commensurate with the amount of
the imposition, property related charges or fees do not appear feasible to raise revenue
for this type of Fund. Moreover, to the extent such a fee/charge actually were to exceed
the cost of providing a property related service (eg, to the extent used to fund the
Housing Trust Fund), it would be deemed a special tax subject to a 2/3 special tax vote.
(Art. XIIIC, Sec, 2; XIIID, Sec. 6(b).)
5. Bands
A 2/3 voter approval would be required for bonds. {Art. XIIIA, Sec 1(b), XIIID, Sec.
3(a)(1).) Bonds are amortized by an "override" amount above the 1% ad valorem
property tax, and the proceeds must be used only for acquisition or improvement of real
property. (Id.) Depending upon its provisions for use of funds, the Housing Trust Fund
may satisfy the requirement that proceeds of bonds be used only for acquisition or
6
improvement of real property, but an opinion of bond counsel should be sought in the
event the County seriously considers this source of funding.
6. Tax on Petroleum Refining and Production
Aside from a small amount of natural gas, we have no production in this County. As to
a tax on refining, we would have to have legislation passed to specifically authorize
such a tax. Although not a property related tax, a tax on the business of refining would
be subject to approval by 2/3 special tax vote. (Art. XIIIA, Sec. 4., Art. XIIIC, Sec. 2(d).)
We may have a difficult time getting such legislation.
cc: James Kennedy, Redevelopment director
Tony Enea, Senior Deputy Administrator
c:housing trust fund issues.doc-3.doo
7
Exhibit "C"
Supervisor John Gioia's Research Paper on Housing Trust Funds
HOUSING TRUST FUNDS
The Housing Trust Fund Project of the Center for Community Change issues an
annual progress report on housing trust funds. This report is one of the most complete
descriptions of the various types of trust funds--state, county, city and multi-
jurisdictional. The 2002 Progress Report describes housing trust funds as "distinct
accounts that receive dedicated sources of public funds to support affordable housing."
These funds are used to provide quality affordable housing to those most in need,
especially lower income households. Since housing trust funds are usually designed and
administered locally, they usually represent some of the most flexible funds available to
address affordable housing needs.
CHARACTERISTICS OF HOUSING TRUST FUNDS
Administration
Most housing trust funds are administered by a public or quasi-public agency.
Other alternatives involve administration by a Community foundation.
An oversight board is usually established to govern the trust fund's operations.
These boards can be broadly representative of the housing community(including banks,
realtors, developers, non-profit development companies, housing advocates, labor,
service providers, and lower income residents). The boards may be advisory or may have
decision-making authority.
According to the Housing Trust Fund Project's 2002 Progress Report, "virtually
all of the county housing trust funds have a board appointed to provide oversight
responsibilities for the trust fund....their responsibilities range from advisory to decision-
making." These oversight boards are usually appointed by the County elected officials
(commissioners or supervisors) and broadly represent those involved in affordable
housing.
There are other unique models for hoLEsing trLIst fiords. Examples include:
(I) The Santa Fe, New Mexico Housing "frust Fend is one of the most unique trust
funds in the U.S. The oversight for this find is provided by the Santa Fe Affordable
Housing Roundtable which was created in 1992 by the City of Santa Fe and local non
profit organizations to address the need for affordable housing. The Roundtable also
share information about housing, lobbies for affordable housing initiatives, and supports
each other's individual projects. Decisions are reached by consensus.
(2) The Housing Trust of Santa Clara County was created in 1997 by the Board of
Supervisors, Silicon Valley Manufacturing Group, Santa Clara County Collaborative on
Housing and Homelessness, and Community Foundation Silicon Valley. This fund is a
public/private 501c(3)partnership whose goal is to create more long-term affordable
1
housing, first-time homebuyer opportunities, and housing assistance for extremely low
income households. The Trust now has a working coalition of over 70 public and
private sector housing leaders, lenders, environmental organizations, and city and county
officials.
(3) ARCH (A Regional Coalition for Housing) was established through a cooperative
agreement between King County, Washington and several cities in the county. It was
created in 1993 and allows ARCH members to jointly administer their housing funds in a
regional strategy. The City Councils of the members adopt an Interlocal Agreement,
approve ARCH's annual work program and budget, and take action on the use of local
resources. An Executive Board is made up of the Chief Executive of each participating
jurisdiction. This Board oversees the operation of ARCH and a Citizens Advisory Board
(composed of 1.2-15 residents)makes recommendations on use of funds and advocates on
affordable housing issues. Each participating jurisdiction contributes fiends to ARCH
based on funding goals.
Programs
Housing trust funds usually provide funding through loans and grants. Examples
of funded programs include new housing construction, pre-development activities,
housing rehabilitation, acquisition, emergency repairs, supportive services, capacity
building for non-profits, education and counseling activities, accessibility, first-time
home purchase, transitional housing, homeless programs, and rental assistance.
Housing trust fund monies are often coordinated with other available funding
(such as CDBO, HOME). Often, the funds serve as a match for other state or federal
funding. Nearly half of the trust funds surveyed by the Center for Community Change
indicated that they have developed a system of coordinated application and
administrative processes for distributing housing funds.
Funding is usually based on requirements such as the inconne of the recipients and
the term of affordability ofthe housing units. Many housing trust funds require that the
Funded projects remain affordable to the target population for a deFined annount of tirne.
Maintaining long-term affordability is a goal of nearly all of the trust funds.
Many existing housing trust funds focus on serving the housing needs that are
unmet by other local, state or federal programs with emphasis on serving the lowest
income residents.
Revenue Sources
The most difficult aspect of creating a successful housing trust fund is identifying
a dedicated on-going source of revenue to support the trust fund. While most housing
trust funds receive a dedicated source of revenue, some do not. There are a range of
revenue sources that have been used.
2
The most common revenue stream for a state housing trust fund is the real estate
transfer tax and the most common dedicated revenue source for city housing trust funds is
a linkage program (impact fees placed on non-residential development to offset the
impact of the development on the housing market). The most common revenue source
for county trust funds is the document recording fee.
Other revenue sources used, depending on their availability, include: inclusionary
housing in-lieu fees, condominium conversion fees, density bonuses, general fund, transit
occupancy tax, business license tax, property tax., sales tax, redevelopment funds, sale of
city/county owned land, and private/corporate and foundation funding.
Some approaches to dedicating revenue include:
1. increasing a tax or fee and placing the increased revenue into the fund
An example is increasing the real estate transfer tax or document recording fee
and dedicating the increased revenue into the housing trust fund.
2. Creating a new tax or fee and committing the revenue into the fund
Examples are condominium conversion fees or the establishment of a linkage
program or inclusionary housing program where all of the funds are dedicated
for housing.
3. Committinp-revenues from an existing tax or fee into the fund
This approach involves committing a portion of existing revenues into the
housing trust fund that would otherwise go into the general fund or to commit
all or a portion of increased revenues or growth in revenues generated from
an existing tax or fee into the housing fund. Examples include TOT,
doc-,iment recording fees, and certain developer fees.
3
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