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Monday, February 8, 2016

Accessing Cap and Trade Funds for Housing

California was the first state in the nation to establish a cap and trade program in which polluting industries pay into a state-controlled fund in exchange for the right to exceed greenhouse gas emissions standards. A portion of the money generated from payments into this fund has been aside for smart growth transportation and development, including affordable housing. The program incentivizes development that is integrated into transportation infrastructure that shifts transportation trips from cars to public transit, biking and walking, and can demonstrate a reduction in projected greenhouse gas emissions. The program has been generating more revenue than initially forecast, as the funding allocation has grown from $120 million in 2015 to $320 million in 2016. Find more background here.

The Affordable Housing and Sustainable Communities Program (AHSC) is jointly managed by the California Strategic Growth Council (SGC), and Housing and Community Development Department (HCD). Below I highlight some key aspects of this program.

  • AHSC encourages joint applications between housing developers and public entities that build transportation infrastructure (transit authorities, counties, cities, etc.). Housing and connections to transit, pedestrian and bike improvements should be planned holistically, with the intent to facilitate use of these alternative forms of transportation by residents.
  • Projects to be funded with AHSC must have completed their CEQA and NEPA environmental review processes prior to application submission in order to qualify.
  • Match funding is a key scoring criteria.
  • Funding committed to housing development is made in the form of a permanent, residual receipts payment loan, with terms and loan limits similar to HCD's Multifamily Housing Program.
  • Housing projects can also apply for Housing Supported Infrastructure for off-site improvements. This funding is made in the form of a grant.
  • Housing projects must provide at least one secure off-street bike storage space for every two units. 
  • In future funding rounds, AHSC will not subsidize off-street parking costs. These costs will need to be funded by other sources.
As you can see,  putting together an application for this funding requires advance planning, even though the formal NOFA and guidelines have been released just a couple months before the application due date each of the last two years. There are two application phases, with the first due in March of each year. Therefore, Applicants should start planning to submit an application in September or earlier of the prior year.

More information about this year's NOFA can be found at the AHSC website. Feel free to contact me if you need assistance with this program.

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