The state infrastructure bonds offer a host of opportunities for regional collaboration on housing, transportation, parks, and future planning. CCRL has been closely following the discussions on the process of fund allocation and criteria development for the recently-passed measures to ensure the regions of California are well-informed about the procedure and intended results of the forthcoming $20 billion public investment. Below is a brief summary of the programs within Proposition 1C (Housing and Emergency Shelter Trust Fund Act of 2006 in the amount of $850 million) that require legislation, and the key bills related to those programs. Legislative hearings are scheduled to begin in April.

Proposition 1C: Proposed Legislation for New Programs
As of March 27, 2007

CCRL's analysis about the infrastructure bonds is designed to ensure regional agencies and collaborative organizations are well informed and deeply engaged in the fund distribution process. CCRL is conducting an analysis of the key proposals for the Regional Planning, Housing, and Infill Fund of Proposition 1C to provide recommendations for making the best use of the $850 million fund. Details will be release in May '07. Based on the Senate Transportation and Housing Committee Hearing in February and the Senate Natural Resources Committee hearing and the Assembly Housing and Community Development Committee Hearing in March, along with key conversations with stakeholders and HCD staff, CCRL has identified some of the key questions that our larger report will address.

Critical Questions for Regional Stakeholders about Proposition 1C Funding

1. How can regional stakeholders best influence the criteria development process?
   The Assembly Housing and Community Development Committee (Wednesday, April 11 @ 9am) and the Senate Transportation and Housing Committee will be holding legislative hearings in the next few months. In addition, CalCOG and many regional collaboratives have been engaging on the bond issues and meeting with legislators.

2. How should "infill" be defined?
   According to the California Public Resources code, an "infill site" requires that at least 75 percent of the perimeter of the site is developed with urban uses. Housing California and the Planning and Conservation Leagues' proposal defines infill sites as "previously developed or surrounded by development with water and sewer trunk line service, and designated for development in the General Plan." Some stakeholders believe that infill refers to any area within an urban boundary, even development at the edge of the urban fringe. The way in which this term is defined in the legislation will dramatically affect the types of projects and/or jurisdictions that are likely to benefit.
   
   For more information about SANDAG's effort to link smart growth designs into new developments, see: http://www.sandag.org/index.asp?projectid=264&fuseaction=projects.detail

3. Should consistency with Regional Blueprint be required or encouraged with points?
   The Regional Blueprint Planning Program seeks to engage regional leaders, local government and key stakeholders in collaborative scenario planning to create "blueprints" for more efficient and effective transportation and land use. CCRL strongly supports linkages to regional blueprints and supports efforts to give regions the flexibility they require to address their housing and infrastructure needs. CalCOG has suggested that regional agencies should distribute bond funds according to their own project selection plans based on blueprint planning, and that rural areas too small to have a blueprint come up with their own spending plan. In addition, CalCOG has prepared a seven point requirement framework for rewarding performance based outcomes. For information from CalCOG's regarding the 2007 Infrastructure Bonds see http://www.calcog.org/legislation/documents/CALCOG_LegislativeReport_001.pdf
   
   Most stakeholders support bond criteria related to the regional blueprint planning process. However, there is debate about whether the bond criteria should require that an infrastructure project (or an infill development project) be included in and consistent with a regional blueprint plan or just receive more bonus points for voluntary compliance. The goal is to structure the process to encourage those jurisdictions in non-compliance to participate in regional blueprint planning in the future instead of just penalizing jurisdictions for past non-compliance.

4. Should funds go to local government for general improvements or to developers for specific projects?
   Developers argue that providing funds directly to projects will increase the likelihood that infrastructure projects will lead directly to housing construction. The argument is that with projects that are already in process, funds will be put to use quickly and effectively and that there is more assurance that the infrastructure improvements will result in actual units built. Developers, supporters argue, are better able to identify what infrastructure projects are most critical for development.
   
   HCD would prefer to deliver funds to local agencies like cities or counties. The idea is that cities are better-suited to identify infrastructure projects that can facilitate a number of development projects, whereas developers are more likely to seek funds for infrastructure projects with more limited benefits. HCD's proposal mandates that cities guarantee the development of a certain number of units as a result of the infrastructure improvement. If those units are not built within five years (barring exceptional circumstances), the city will require that the money be repaid. CalCOG proposes that regional flexibility be allowed for proposals not directly tied to housing projects and that performance be the key aspect to measuring effective programs.

5. Should there be some percentage of affordable housing required or should there be a set-aside for affordable housing development?
   The regions of California identified affordable housing during the 2006 Regional Growth Dialogues as a key issue sustainability issue. Technically, the language of the statute regarding the Infill Fund does not include any reference to affordability. HCD has suggested that the infill funds be used to supplement the supply of housing in the state, not to subsidize the development of below-market rate housing. Many localities have measures in place through inclusionary zoning ordinances and redevelopment requirements to require a certain level of affordability.
   
   Affordable housing advocates and developers, such as Housing California, have strongly objected to this premise, stating that voters supported the bond in order to create more affordable housing units and that there is an expectation that funds be used to subsidize below-market rate housing. The trade-off is that the funds would likely create more infill development if not targeted specifically to affordable units. Some affordability criteria are likely to be included, but it is unclear if it will be a mandate, a minimum requirement, a ranking criteria or a separate pot of dedicated funds.

6. How closely should infill funds be tied to other Smart Growth measures?
   Proposition 1C presents an invaluable opportunity to advance better planning for growth at the state and regional level. Smart Growth principles such as blueprint planning, transit-oriented development, and more compact development in existing communities are all critical for creating the types of livable, prosperous communities all Californians deserve. Infill development relies on multi-pronged strategies including the diversion of development from agricultural lands, habitat and other open space. Ideally infill development will also help to relieve congestion as it places residents closer to existing public transit, local retail, parks, schools and jobs and will increase mass for increased public transit. Proposals vary in their inclusion of smart growth criteria such a density, and proximity to transit, jobs and other amenities. For instance, Housing California recommends requiring projects to have a net density of 10 units per acres in rural areas, 20 in suburban, and 30 in urban. AB 29 and AB 1231 propose other alternatives.

7. What, if any, types of geographic equity measures should be included?
   Depending on how narrowly defined "infill" is, and how much weight is given to proximity to transit and density, it is likely that suburban, exurban, and rural areas will have difficulty qualifying for this fund. Should there be some guarantee of funds for non-urban areas or should this particular fund be focused primarily on urbanized areas with existing transit, amenities and jobs? Currently, Arambula's proposed AB 997 would set-aside funds for cities with populations below 30,000 who might not fare as well as larger, more urbanized cities in terms of density, access to transit and other amenities. HCD proposes a reasonable geographic distribution of funds but does not explicitly include a mechanism. The regions of California will benefit from the equitable distribution of public resources that promotes efficiency and leverage public-private partnerships.

8. Should money go towards infrastructure only or for housing as well?
   According to the statute, the infill fund is for "capital outlays related to infill housing development ... including, but not limited to... park creation, development, or rehabilitation... Water, sewer, or other public infrastructure costs... Transportation improvements ... Traffic mitigation or brownfield cleanup that promotes infill housing development." There is disagreement about whether the funds should be used solely for infrastructure projects leading to infill housing or for housing as well. Affordable housing advocates such as Housing California support a "one-stop shop" approach where a project could receive funding for infrastructure needs as well as for housing development. The argument is that below-market rate development requires numerous sources of funding and that this approach makes it more likely that affordable projects will actually get built. HCD, and the League of Cities support grants solely for infrastructure improvements. For information from the League of California Cities website see: http://www.cacities.org/index.jsp?displaytype=11&zone=locc&section=&sub_sec=&tert=&story=26497

9. What types of infrastructure projects should qualify or be given priority?
   The bond statute lays out a number of examples of infrastructure that could qualify for grants. In older, central cities, expensive water and sewer line upgrades are often necessary for any type of new development. Other types of infrastructure may not be strictly necessary for development to occur, but can have significant impacts on the livability, walkability and overall health of a community. These types of improvements include parks, sidewalk and road improvements and traffic calming measures. Many of these types of infrastructure improvements increase the likelihood that a project will reduce vehicle-miles-traveled, as well as increase the attractiveness of a project for buyers, investors, and community members. The regions of California have engaged in a process of identifying infrastructure priorities through their blueprint plans and General Plans. CCRL supports consistency with regional blueprint planning and General Plans.

10. 10. How should these funds be coordinated with other state bonds, specifically the planning funds in proposition 84?
    Organizations like the California League Conservation of Voters, California State Association of Counties, and California League of Cities are advocating for overarching guidelines for bond implementation. In particular, coordination between the Regional Planning, Housing and Infill Fund in Proposition 1C and the Planning Fund in Proposition 84 is recommended. Assembly member Arambula has introduced a bill to combine the $90 million for planning in Prop. 84 with the Regional Planning, Housing and Infill Incentives Fund in Prop. 1C. Also, Assembly member Jones has introduced AB842 to mandate that projects be located in a city or county where the COG or county has adopted a regional plan to reduce vehicle miles traveled per household. CSAC supports investing funds in cities and counties that embrace regional blueprint planning, countywide collaborative planning, and plan for projects that are consistent with smart growth principles. CCRL supported AB857 and the principles of state-regional coordination and encourages better state coordination on the allocation of all public funds.