CC SR 20191106 H - SB 2 Grant Authorizing ResoRANCHO PALOS VERDES CITY COUNCIL
AGENDA REPORT
MEETING DATE: 11/06/2019
AGENDA HEADING: Consenta Calendar
AGENDA DESCRIPTION:
Consideration and possible action to adopt a resolution authorizing the City to apply for
an SB 2 planning grant to facilitate and streamline the development process for mixed-
use projects in certain commercial zoning districts
RECOMMENDED COUNCIL ACTION:
(1) Adopt Resolution No. 2019-__, a Resolution of the City Council of the City of
Rancho Palos Verdes authorizing application for, and receipt of, SB 2 Planning
Grants Program funds.
FISCAL IMPACT: There is no fiscal impact associated with filing an application for an
SB 2 planning grant. If successful, the City is eligible to receive up to $160,000 through
this program.
Amount Budgeted: None
Additional Appropriation: N/A
Account Number(s): 332-300-0000-3302
[State Grants]
ORIGINATED BY: Kit Fox, AICP, Interim Deputy Director of Community Development
REVIEWED BY: Ara Mihranian, AICP, Director of Community Development
APPROVED BY: Doug Willmore, City Manager
ATTACHED SUPPORTING DOCUMENTS:
A. Resolution No. 2019-__ (page A-1)
B. SB 2 Grant Program Guidelines (page B-1)
C. Map of the City’s Commercial Zones (page C-1)
BACKGROUND AND DISCUSSION:
In 2017, then-Governor Brown signed into law a package of 15 housing-related bills.
Included among these was Senate Bill No. 2 (SB 2), known as the Building Homes and
Jobs Act, which established a $75 recording fee on real estate documents to increase
the supply of affordable housing in California. Fifty percent of the revenues collected in
this first full year of the program are to be allocated to local planning grants. Under the
terms of the SB 2 Grant Guidelines (Attachment B), Rancho Palos Verdes is eligible to
receive up to $160,000 in funding though this non-competitive grant program, which is
administered by the California Department of Housing and Community Development
(HCD). Applications for SB 2 grant proposals are due November 30, 2019.
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The purpose of the SB 2 Planning Grant Program (PGP) is to provide funding and
technical assistance to all local governments in California to help cities and counties
prepare, adopt, and implement plans and process improvements that streamline
housing approvals and accelerate housing production. Eligible applicants must:
Have an HCD-compliant general plan housing element;
Have submitted a recent housing element Annual Progress Report;
Demonstrate a nexus to accelerating housing production; and,
Demonstrate that the applicant is consistent with State Planning Priorities
(Government Code §65041.1) or other planning priorities.
Applicants proposing activities in at least one of the following Priority Policy Areas are
automatically deemed to demonstrate a nexus to accelerating housing:
Rezone to Permit By-Right: Rezoning for significant additional housing capacity
without or lesser discretionary review or establishing zoning to permit residential
development by-right, particularly multifamily, without discretionary action.
Objective Design and Development Standards: Developing objective design
standards or pre-approved site and architectural plans that facilitate non-
discretionary permitting.
Specific Plans or Form-Based Codes Coupled with CEQA Streamlining:
Designating and rezoning for additional housing capacity or preparing specific
plans or form-based codes that include zoning and development standards and
plan-level environmental analysis that can be used to streamline future housing
projects and facilitate affordability.
Accessory Dwelling Units or Other Innovative Building Strategies: Encouraging
ADUs and other innovative building types through actions above state law, such
as outreach, fee waivers, pre-approved plans, website zoning clearance
assistance, and other homeowner tools or finance tools. Also, establishing other
approaches to intensify existing lower-density residential areas to encourage
significantly more residential development (e.g., duplexes, triplexes) in these
areas.
Expedited Processing: Speeding up approvals and permit processing, including
instituting programs that streamline or consolidate the review process or create a
separate process for expedited review of housing projects.
Housing-Related Infrastructure Financing and Fee Reduction Strategies:
Develop and implement approaches to local housing-related infrastructure
financing. Create plans and programs to finance and increase infrastructure with
accompanying enhanced housing capacity, such as enhanced infrastructure
financing districts. Fee reduction and rationalization approaches, such as
reassessing fees to adhere to best practices in reducing costs, deferrals, sliding
scales or proportionate impacts fees (e.g., ADUs, transit-oriented and infill
development, special needs housing), or fee transparency measures including
publicly available fee calculators.
Eligible PGP activities may include:
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Updates to general plans, community plans, specific plans, local planning related
to implementation of sustainable communities strategies, or local coastal plans
Updates to zoning ordinances
Environmental analyses that eliminate the need for project-specific review
Local process improvements that expedite local planning and permitting
Staff has reviewed the PGP objectives and criteria in light of the City’s historic and
anticipated future development patterns. Since the City’s residential areas are largely
built out and the City Council has prioritized the preservation of undeveloped areas for
open space purposes, future opportunities for the development of new affordable
housing are most likely to be accommodated in the City’s commercial areas. The City’s
current zoning regulations do not permit residential development in any commercial
districts. As such, Staff believes that creating an overlay zoning district and
development standards for mixed-use projects (i.e., commercial and residential) would
incentivize and streamline the development of affordable housing units. Staff also
envisions that the adoption of the mixed-use overlay zone would include program-level
CEQA review, which would help to streamline CEQA review for future projects that are
consistent with the overlay zone development standards.
Staff is still finalizing our PGP proposal and is open to suggestions from the City Council
regarding its details and scope. At this point, however, Staff envisions that the overlay
zone would potentially be applied in the Commercial-Limited (CL), Commercial-
Neighborhood (CN), Commercial-Professional (CP) and Commercial-General (CG)
zones (Attachment C). Staff recommends not applying this overlay zone to sites within
the coastal zone (i.e., seaward of Palos Verdes Drive West and South).
As was mentioned above, the PGP application deadline is November 30, 2019, and a
complete application requires the submittal of an authorizing resolution by the City
Council. The draft authorizing resolution presented tonight (Attachment A) is base d on a
template provided by HCD. If adopted at tonight’s meeting, Staff will proceed with our
PGP application for submittal to HCD by the application deadline.
ALTERNATIVES:
In addition to the Staff recommendation, the following alternative is available for the City
Council’s consideration:
1. Direct Staff to develop a different proposal for SB 2 grant funding, and
continue this matter to November 19, 2019, for adoption of an authorizing
resolution.
2. Direct Staff not to apply for SB 2 grant funding.
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RESOLUTION NO. 2019-__
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
RANCHO PALOS VERDES AUTHORIZING APPLICATION
FOR, AND RECEIPT OF, SB 2 PLANNING GRANTS
PROGRAM FUNDS
WHEREAS, the State of California, Department of Housing and Community
Development (Department) has issued a Notice of Funding Availability (NOFA) dated
March 28, 2019, for its Planning Grants Program (PGP); and,
WHEREAS, the City Council of the City of Rancho Palos Verdes desires to submit
a project application for the PGP program to accelerate the production of housing and will
submit a 2019 PGP grant application as described in the Planning Grants Program NOFA
and SB 2 Planning Grants Program Guidelines released by the Department for the PGP
Program; and,
WHEREAS, the Department is authorized to provide up to $123 million under the
SB 2 Planning Grants Program from the Building Homes and Jobs Trust Fund for
assistance to Counties (as described in Health and Safety Code section 50470 et seq.
(Chapter 364, Statutes of 2017 (SB 2)) related to the PGP Program.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RANCHO PALOS
VERDES RESOLVES AS FOLLOWS:
Section 1: The Rancho Palos Verdes City Council is hereby authorized and
directed to apply for and submit to the Department the 2019 Planning Grants Program
(PGP) application in the amount of $160,000.
Section 2: In connection with the PGP grant, if the application is approved by
the Department, the City Manager is authorized to enter into, execute, and deliver a State
of California Agreement (Standard Agreement) for the amount of $160,000, and any and
all other documents required or deemed necessary or appropriate to evidence and secure
the PGP grant, the City’s obligations related thereto, and all amendments thereto
(collectively, the “PGP Grant Documents”).
Section 3: The City shall be subject to the terms and conditions as specified in
the Standard Agreement, the SB 2 Planning Grants Program Guidelines, and any
applicable PGP guidelines published by the Department. Funds are to be used for
allowable expenditures as specifically identified in the Standard Agreement. The
application in full is incorporated as part of the Standard Agreement. Any and all activities
funded, information provided, and timelines represented in the application will be
enforceable through the executed Standard Agreement. The Rancho Palos Verdes City
Council hereby agrees to use the funds for eligible uses in the manner presented in the
application as approved by the Department and in accordance with the Planning Grants
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Resolution No. 2019-__
Page 2 of 2
NOFA, the Planning Grants Program Guidelines, and 2019 Planning Grants Program
Application.
Section 4: The City Manager is authorized to execute the City of Rancho Palos
Verdes Planning Grants Program application, the PGP Grant Documents, and any
amendments thereto, on behalf of the City as required by the Department for receipt of
the PGP Grant.
PASSED, APPROVED and ADOPTED this 6th day of November 2019.
Mayor
ATTEST:
City Clerk
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss
CITY OF RANCHO PALOS VERDES )
I, EMILY COLBORN, City Clerk of the City of Rancho Palos Verdes, hereby certify that
the above Resolution No. 2019-__ was duly and regularly passed and adopted by the
said City Council at a regular meeting thereof held on November 6, 2019.
CITY CLERK
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Senate Bill 2
Planning Grants Program
Year 1 Guidelines
State of California
Governor Edmund G. Brown Jr.
Alexis Podesta, Secretary
Business, Consumer Services and Housing Agency
Ben Metcalf, Director
Department of Housing and Community Development
Zachary Olmstead, Deputy Director
Department of Housing and Community Development
Division of Housing Policy Development
2020 West El Camino Avenue, Suite 500
Sacramento, CA 95833
December 2018
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The matters set forth herein are regulatory mandates, and are adopted in accordance with
the authorities set forth below:
Quasi-legislative regulations … have the dignity of statutes … [and]… delegation of
legislative authority includes the power to elaborate the meaning of key statutory
terms…
Ramirez v. Yosemite Water Co., 20 Cal. 4th 785, 800 (1999)
In consultation with stakeholders, the California Department of Housing and Community
Development (Department) may adopt Guidelines to implement this section, including
determining allocation methodologies. Any guideline, rule, policy, or standard of general
application employed by the Department in implementing this chapter shall not be subject
to the requirements of the Administrative Procedure Act (Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Gov. Code).
NOTE: Authority Cited: Health and Safety Code section 50470, subdivision (d).
The Department reserves the right, at its sole discretion, to suspend or amend the
provisions of these Guidelines, including, but not limited to, grant award amounts.
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INTRODUCTION
Chapter 354, Statutes of 2017 (SB 2, Atkins) was part of a 15 bill housing package signed
by Governor Brown that was aimed at addressing the state’s housing shortage and high
housing costs. Specifically, it establishes a permanent source of funding intended to
increase the affordable housing stock in California. The revenue from SB 2 will vary from
year to year, as revenue is dependent on real estate transactions with fluctuating activity.
The legislation directs the California Department of Housing and Community Development
(Department) to use 50 percent of the revenue in the first year to establish a program that
provides financial and technical assistance to local governments to update planning
documents and zoning ordinances in order to streamline housing production, including, but
not limited to, general plans; community plans; specific plans; implementation of
sustainable communities strategies; and local coastal programs. Eligible uses also include
new environmental analyses that eliminate the need for project-specific review and local
process updates that improve and expedite local permitting.
Guidelines for the SB 2 Planning Grants program are organized into seven Articles as
follows:
Article I. General provisions: This Article includes information on the purpose of the
Guidelines, program objectives, and definitions used throughout the document.
Article II. Eligibility and threshold criteria: This Article describes the eligibility requirements
for applicants and proposals in order to apply for funds under the SB 2 Planning Grants
program.
Article III. Eligible activities and uses: This Article describes eligible uses for the SB 2
Planning Grants funds, including priority policy areas and ineligible uses.
Article IV. Award amounts and distribution: This Article describes award amounts and
geographic distribution.
Article V. Application review: This Article describes the application review process.
Article VI. Administration: This Article describes administrative functions such as terms,
non-performance remedies and reporting requirements.
Article VII. Technical assistance: This Article describes technical assistance.
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SB 2 Planning Grants Program: Year 1 Guidelines
Table of Contents
ARTICLE I. GENERAL PROVISIONS ............................................................................................. 1
Section 100. Purpose and Scope ............................................................................................... 1
Section 101. Program Objectives ............................................................................................... 1
Section 102. Definitions .............................................................................................................. 1
ARTICLE II. ELIGIBILITY AND THRESHOLD CRITERIA ............................................................... 5
Section 200. Eligible Applicants .................................................................................................. 5
Section 201. Threshold Criteria .................................................................................................. 6
ARTICLE III. ELIGIBLE ACTIVITIES AND USES ............................................................................ 7
Section 300. Eligible Activities .................................................................................................... 7
Section 301. Ineligible Activities.................................................................................................. 8
Section 302. Eligible Uses .......................................................................................................... 9
ARTICLE IV. AWARD AMOUNTS AND DISTRIBUTION ................................................................ 9
Section 400. Award Amounts ..................................................................................................... 9
Section 401. Geographic Distribution ....................................................................................... 10
ARTICLE V. APPLICATION REVIEW AND AWARD ..................................................................... 10
Section 500. Application Review................................................................................................ 10
ARTICLE VI. ADMINISTRATION .................................................................................................. 11
Section 600. Grant Execution and Term ................................................................................... 11
Section 601. Payment and Accounting of Grant Funds ............................................................. 12
Section 602. Accounting Records and Audits ........................................................................... 12
Section 603. Remedies of Non-performance ............................................................................ 13
Section 604. Reporting ............................................................................................................. 14
ARTICLE VII. TECHNICAL ASSISTANCE .................................................................................... 14
Section 700. Method ................................................................................................................. 14
Section 701. Geographic Distribution ....................................................................................... 15
ATTACHMENTS
1 – Nexus to Accelerating Housing Production Form
2 – State Planning and Other Planning Priorities Form
3 – Reporting Forms
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CA HCD Guidelines - 1 - SB 2 Planning Grants Program Year 1
ARTICLE I. GENERAL PROVISIONS
Section 100. Purpose and Scope
(a) These Guidelines (hereinafter “Guidelines”) implement, interpret, and make specific
the Chapter 364, Statutes of 2017 (SB 2, Atkins) (hereinafter “SB 2”) as authorized
by Health and Safety Code section 50470.
(b) These Guidelines establish terms, conditions, and procedures for a local
government to submit an application for planning grants funds to the Department.
NOTE: Authority cited: Health and Safety Code section 50470, subdivision (d). Reference
cited: Health and Safety Code section 50470, subdivision (b)(1)(A).
Section 101. Program Objectives
(a) The principal goal of this program is to make funding available to all local
governments in California for the preparation, adoption and implementation of
plans that streamline housing approvals and accelerate housing production.
(b) This grant program is meant to facilitate planning activities that will foster an
adequate supply of homes affordable to Californians at all income levels. It is
designed to help local governments meet the challenges of preparing and adopting
land use plans and integrating strategies to promote housing development.
(c) Funded activities are intended to achieve the following program objectives:
Accelerate housing production
Streamline the approval of housing development affordable to owner and
renter households at all income levels
Facilitate housing affordability for all income groups
Promote development consistent with the State Planning Priorities
(Government Code section 65041.1)
Ensure geographic equity in the distribution and expenditure of allocated
funds
NOTE: Authority cited: Health and Safety Code section 50470, subdivision (d) and
Government Code section 65041.1. Reference cited: Health and Safety Code section 50470,
subdivision (b)(1)(A).
Section 102. Definitions
All terms not defined below shall, unless their context suggests otherwise, be interpreted
in accordance with the meanings of terms described in Health and Safety Code section
50470.
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CA HCD Guidelines - 2 - SB 2 Planning Grants Program Year 1
(a) “Accelerating Housing Production” means improving the timing, cost, feasibility,
approval and amount of development through various mechanisms such as zoning
incentives (e.g., increased density and heights, reduced parking requirements),
upzoning, zoning amendments to permit residential in non-residential zones,
corridor planning, development standards modifications, non-discretionary review,
financing strategies, sliding scale fee modifications, facilitating adequate
infrastructure to support development, approval streamlining that addresses
quickness and ease of entitlements, and other mechanisms that promote
production or remove or mitigate regulatory barriers.
(b) “Affordability” means a housing unit that satisfies at least one of the following
criteria:
1. It is available at an “affordable rent” as that term is used and defined in Section
50053 of the Health & Safety Code;
2. It is offered at an “affordable housing cost”, as that term is used and defined in
Section 50052.5 of the Health & Safety Code; or
3. It is available at an “affordable rent” or an “affordable housing cost” according to
the alternative percentages of income for agency-assisted rental and cooperative
housing developments pursuant to Department regulations adopted under Health
and Safety Code section 50462(f).
(c) “Annual Progress Report” (APR) means the housing element Annual Progress
Report required by Government Code section 65400 on the prior year’s activities
and due to the Department April 1 of each year.
(d) “Department” means the California Department of Housing and Community
Development.
(e) “Disaster Recovery Area” means a locality experiencing a state o r federally
declared disaster in the last five years, where proposed planning activities will
significantly address the present and future housing needs of the disaster,
including climate adaptation.
(f) “Fund” means the Building Homes and Jobs Trust Fund pursuant to Health and
Safety Code section 50470.
(g) “High-quality transit corridor” means an existing corridor with fixed route bus
service with service intervals no longer than 15 minutes during peak commute
hours. An existing stop along a high-quality transit corridor may include a stop
currently in service or a planned and funded stop that is included in an adopted
regional transportation improvement program.
(h) “Housing” means any development that satisfies both of the following criteria:
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CA HCD Guidelines - 3 - SB 2 Planning Grants Program Year 1
1. At least two-thirds of the square footage of the development must be
designated for residential use; and
2. Includes a house, an apartment, a mobile home or trailer, a group of rooms,
or a single room that is occupied as separate living quarters, or, if vacant, is
intended for occupancy as separate living quarters. Separate living quarters
are those in which the occupants live separately from any other individuals
in the building and which have a direct access from the outside of the
building or through a common hall.
Note: accessory dwelling units (ADU) and junior accessory dwelling units (JADU)
pursuant to Gov. Code sections 65852.2 and 65852.22 meet the definition above.
(i) “Local government” or “Locality” means any city, including a charter city, county,
including a charter county or city and county, including a charter city and county.
(j) “Location Efficient” means either of the following definitions (1) within one half of a
mile of a major transit stop or high-quality transit corridor, or (2) where the
household per capita vehicle miles traveled is below the regional average per
capita vehicle miles travelled, as determined by a regional travel demand model.
(k) “Lower-Income” means households whose incomes are less than 80 percent of
area median income pursuant to Health and Safety Code section 50079.5.
(l) “Lower-income Community” means a locality with a median household income at or
below 80 percent of the state median income.
(m) “Major Transit Stop” means a site containing an existing rail transit station, a ferry
terminal served by either a bus or rail transit service, or the intersection of two or
more major bus routes with frequencies of service intervals of 15 minutes or less
during the morning and afternoon peak-commute periods. An existing “Major
Transit Stop” may include a planned and funded stop that is included in an adopted
regional transportation improvement program.
(n) “Moderate-Income” means households whose income is above 80 percent of area
median income but does not exceed 120 percent of area median income pursuant
to Health and Safety Code section 50093.
(o) “Objective zoning standard”, “objective subdivision standard”, and “objective design
review standard” means standards that involve no personal or subjective judgment
by a public official and are uniformly verifiable by reference to an external and
uniform benchmark or criterion available and knowable by both the development
applicant or proponent and the public official prior to submittal. “Objective design
review standards” means only objective design standards published and adopted
by ordinance or resolution by a local jurisdiction before submission of a
development application, which are broadly applicable to development within the
jurisdiction.
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CA HCD Guidelines - 4 - SB 2 Planning Grants Program Year 1
(p) “Other Planning Priorities” means planning, policies, programs or investments to
promote housing choices and affordability to lower and moderate income
households, the encouragement of conservation of the existing affordable housing
stock and efforts to take into account current and future impacts of climate change,
including hazard mitigation.
(q) “Priority Policy Areas” means any of the following:
1. Rezone to Permit By-right: Rezoning for additional housing capacity without or
lesser discretionary review or establishing zoning to permit residential
development by-right, particularly multifamily, without discretionary action
pursuant to Government Code Section 65583.2(h) and (i).
2. Objective design and development standards: Developing objective design
standards or pre-approved site and architectural plans that facilitate
non-discretionary permitting.
3. Specific plans or Form Codes coupled with CEQA streamlining: Designating and
rezoning for additional housing capacity or preparing specific plans or form codes
that include zoning and development standards and plan-level environmental
analysis that can be used to streamline future housing projects and facilitate
affordability.
4. Accessory Dwelling Units and other innovative building strategies: Encouraging
ADUs and other innovative building types through ordinances, outreach, fee
waivers, pre-approved plans, website zoning clearance assistance, and other
homeowner tools or finance tools.
5. Expedited processing: Speeding up approvals and permit processing, including
instituting programs that streamline or consolidate the review process or create a
separate process for expedited review of housing projects.
NOTE: Priority policy areas are subject to change and will be defined in the Notice of
Funding Availability (NOFA).
(r) “Program” means the program developed to implement the first year of the Fund
pursuant to Health and Safety Code section 50470(b)(1)(A).
(s) “State Planning Priorities” means priorities which are intended to promote equity,
strengthen the economy, protect the environment, and promote public health and
safety in the state, including in urban, suburban, and rural communities pursuant to
Gov. Code Section 65041.1.
(t) “Streamlined Housing Production” means improving the entitlement process
through actions such as removing, mitigating or minimizing local regulatory
requirements, reforming the local approval process to reduce processing times, the
number of local discretionary approvals and permits needed for projects, improving
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CA HCD Guidelines - 5 - SB 2 Planning Grants Program Year 1
approval certainty, establishing non-discretionary processes, modifying
development standards such as reducing parking requirement and increasing
height limits or other efforts such as taking the fullest advantage of existing
streamlining mechanisms provided in state law.
(u) “Under-resourced Localities” means
1. Lower-income community that meets either of the following criteria: (1) a
population less than 25,000 (2018 Department of Finance (DOF) population
estimate, report E-5) and two or less planners (as reported to the Office of
Planning and Research (OPR) in 2018) or (2) a population less than 50,000 and
three or less planners.
or
2. A locality demonstrating to the Department a significant lack of planning
capacity based on population size, poverty levels, median household incomes
relative to the state median incomes, unemployment rates, number of planners,
and budget size.
NOTE: Authority cited: Health and Safety Code section 50470, subdivision (d). Reference
cited: Health and Safety Code section 50470.5 and 50470, subdivision (b)(1)(A).
ARTICLE II. ELIGIBILITY AND THRESHOLD CRITERIA
The Program does not use a competitive process to award funds. All localities that meet
the eligibility requirements outlined below will be funded as provided in these Guidelines.
Section 200. Eligible Applicants
(a) Eligible applicants are limited to local governments.
(b) Local governments may partner through legally binding agreements with other forms of
governments or entities where the proposal will have a direct effect on land -use or
development within the locality. This includes, but is not limited to, partnerships with
other localities, regional governments, housing authorities, school districts, special
districts, community based organizations, or any duly constituted governing body of an
Indian Reservation or Rancheria. Multi-jurisdictional partnerships between local
governments are encouraged to coordinate with regional governments, leverage regional
and state investment, promote consistency with the sustainable communities strategy,
and affirmatively further fair housing.
NOTE: Authority cited: Health and Safety Code section 50470, subdivision (d). Reference
cited: Health and Safety Code section 50470, subdivision (b)(1)(A).
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CA HCD Guidelines - 6 - SB 2 Planning Grants Program Year 1
Section 201. Threshold Criteria
Applicants must meet all the following threshold requirements for participation in the Program:
(a) Housing element compliance: The applicant must have a housing element that has
been adopted by the jurisdiction’s governing body by the deadline specified in the
NOFA and subsequently determined to be in substantial compliance with state housing
element law pursuant to Gov. Code Section 65585.
1. The jurisdiction’s adopted housing element will be deemed to have met this
requirement if the adopted element is received by the Department on or prior to
the date specified in the NOFA and the Department subsequently determines
the adopted housing element to be in substantial compliance pursuant to Gov.
Code Section 65585 without further amendment.
2. However, applicants not meeting housing element requirements may be
considered to meet this threshold requirement at the discretion of the
Department and based on factors such as significant progress in meeting
housing element requirements (e.g., a draft found to meet statute, rezoning
near completion), proposing activities to meet housing element requirements
(e.g., rezoning to accommodate housing needs pursua nt to Gov. Code Section
65583(c)(1)) and adoption of a compliant element prior to the award of funds.
3. No documentation is necessary to meet this threshold requirement if an
adopted housing element has been found in substantial compliance by the
Department.
A jurisdiction’s current housing element compliance status can be obtained by
referencing the Department’s website at http://www.hcd.ca.gov/community-
development/housing-element/index.shtml or by contacting Paul McDougall at
paul.mcdougall@hcd.ca.gov.
(b) Annual Progress Report (APR) on the housing element: The applicant must submit
the APR to the Department as required by Gov. Code section 65400 for the current or
prior year by the date established in the NOFA.
1. Charter cities are not exempt from this specific Program requirement and must
submit an APR to be eligible for the Program.
2. Please be advised that the Department will not accept other reports in lieu of the
APR. Housing Authority Financial Reports, Redevelopment Reports, and other
similar reports will not be accepted as meeting this requirement. If uncertain of
the status of the report submittal for a jurisdiction, please contact the
Department for more information.
3. The proposed use of the planning grant shall be included in the locality’s funding
plan and annual progress reports pursuant to Gov. Code section
50470(b)(2)(B)(ii)(II) and (III).
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4. No documentation is necessary to meet this threshold requirement.
(c) Nexus to accelerating housing production: The applicant must propose and
document plans or processes that accelerate housing production. The application must
demonstrate a significant positive effect on accelerating housing production through
timing, cost, approval certainty, entitlement streamlining, feasibility, infrastructure
capacity, or impact on housing supply and affordability. An application not utilizing
priority policy areas must include an explanation and documentation of the nexus plans
or processes impact on accelerating housing production based on a reasonable and
verifiable methodology and must utilize the Department’s form (see Attachment 1). A
verifiable methodology may include a statement of support from a non -profit or for-
profit developer that is active in the locality.
Applicants proposing priority policy areas do not require a nexus demonstration and
are automatically deemed to accelerate housing production without any
documentation.
(d) State Planning and Other Planning Priorities: Applicants must demonstrate that the
locality is consistent with State Planning or Other Planning Priorities. Consistency may
be demonstrated through activities (not necessarily proposed for SB 2 funding) that
were completed within the last five years. Applicants must self-certify utilizing the
Department’s form (see Attachment 2).
NOTE: Authority cited: Health and Safety Code section 50470, subdivision (d). Reference
cited: Health and Safety Code section 50470, subdivision (b)(1)(A).
ARTICLE III. ELIGIBLE ACTIVITIES AND USES
Section 300. Eligible Activities
(a) Eligible activities must demonstrate a nexus to accelerating housing production.
(b) Eligible activities may include:
1. Updates to general plans, community plans, specific plans, local planning related to
implementation of sustainable communities strategies, or local coastal plans;
2. Updates to zoning ordinances;
3. Environmental analyses that eliminate the need for project-specific review; and
4. Local process improvements that improve and expedite local planning.
Applicants proposing priority policy areas are automatically deemed to accelerate housing
production without any documentation or demonstration to the Department.
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(c) Eligible activities are not necessarily jurisdiction-wide and may include a smaller
geography with a significant impact on housing production. For example, eligible activities
may include a housing development-related project with a significant community level
impact or planning or process improvement for a project with an ongoing community
impact beyond the project. Eligible activities also include an overlay district, project level
specific plan or development standards modifications proposed for significant areas of a
locality, such as corridors, downtown or priority growth areas.
(d) Eligible activities may include the creation or enhancement of a housing sustainability
district pursuant to AB 73 (Chapter 371, Statutes of 2017), workforce housing
opportunity zone pursuant to SB 540 (Chapter 369, Statutes of 2017), zoning for by-
right supportive housing, pursuant to Government Code section 65651 (Chapter 753,
Statutes of 2018), zoning incentives for housing for persons with special needs,
including persons with developmental disabilities, rezoning to meet requirements
pursuant to Government Code Section 65583.2(c) and other rezoning efforts to
facilitate supply and affordability, rezoning for multifamily housing in high resource
areas (according to Tax Credit Allocation Committee/Housing Community
Development Opportunity Area Maps), pre-approved architectural and site plans,
regional housing trust fund plans, SB 2 funding plans, and infrastructure financing
plans.
(e) Eligible activities may include environmental hazard assessments, data collection on
permit tracking, feasibility studies, site analysis, or other background studies that are
ancillary and part of the proposed activity.
(f) Eligible activities may be part of a larger planning effort (e.g., a comprehensive zoning
code update) if proposed activities have not been completed prior to the NOFA date,
are distinct, and demonstrate a nexus to accelerating housing production .
NOTE: Authority cited: Health and Safety Code section 50470, subdivision (d). Referen ce
cited: Health and Safety Code section 50470, subdivision (b)(1)(A).
Section 301. Ineligible Activities
(a) Activities unrelated to housing production.
(b) Activities that obstruct or hinder housing production, e.g. moratoriums, downzoning,
planning documents with conditional use permits that significantly impact approval
certainty and timing, planned development, or other similarly constraining processes.
(c) The Department may consider proposals that include activities under subdivisions (a)
and (b) if a significant housing component is also present and the net effect on
accelerating housing production is positive. For example, an applicant may propose
combining an open-space designation, downzoning, or anti-displacement measures
with by-right upzoning that has a significant net gain in housing capacity.
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NOTE: Authority cited: Health and Safety Code section 50470, subdivision (d). Reference
cited: Health and Safety Code section 50470, subdivision (b)(1)(A).
Section 302. Eligible Uses
(a) Grant funds shall be used for the costs of preparing and adopting the proposed activity.
(b) Program grant funds may not be used for administrative costs of persons employed by the
grantee for activities not directly related to the preparation and adoption of the proposed
activity.
(c) A jurisdiction that receives funds under this Program may use a subcontractor. The
subcontract shall provide for compliance with all the requirements of the Program. The
subcontract shall not relieve the jurisdiction of its responsibilities under the Program.
(d) Applicants will enter into a State Standard Agreement (Standard Agreement) for
distribution of funds. Program grant funds must be spent by the anticipated end of the
grant term (June 30, 2022).
(e) Unless otherwise noted, no costs incurred prior to the execution date of the Standard
Agreement may be charged to Program funds. After the contract has been executed by
the state, eligible expenditures may be incurred and expended for the project(s) subject to
the terms and conditions of the Standard Agreement.
NOTE: Authority cited: Health and Safety Code section 50470, subdivision (d). Reference
cited: Health and Safety Code section 50470, subdivision (b)(1)(A).
ARTICLE IV. AWARD AMOUNTS AND DISTRIBUTION
Section 400. Award Amounts
(a) The minimum award is $25,000.
(b) The maximum award amount is a sliding scale based on population estimates from the
Department of Finance (DOF) (2018 DOF Population Estimates, E-5), as follows:
1. $500,000 for large localities (greater than 200,000 people)
2. $250,000 for medium localities (60,000 to 200,000 people)
3. $125,000 for small localities (less than 60,000 people)
For a link to the 2018 DOF Population Estimates, E-5, see
http://www.dof.ca.gov/Forecasting/Demographics/Estimates/E-5/.
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CA HCD Guidelines - 10 - SB 2 Planning Grants Program Year 1
(c) Applicants seeking partnerships with other local governments will be additive. For
example, two large localities could submit a proposal for up to $1,000,000.
(d) The maximum or minimum award amounts may be adjusted based on the amount
collected in the Fund.
(e) The maximum or minimum awards may be adjusted in the event the Department
considers a supplemental round of funding.
NOTE: Authority cited: Health and Safety Code section 50470, subdivision (d). Reference
cited: Health and Safety Code section 50470, subdivision (b)(1)(A).
Section 401. Geographic Distribution
(a) The Department will ensure geographic equity in the distribution and expenditure of funds
through marketing, outreach and technical assistance to potential applicants.
(b) In the event of a supplemental round of funding, the Department will ensure geographic
equity through criteria such as minimum set-asides, under-resourced localities, disaster
recovery, and location efficient communities (e.g., access to transportation).
NOTE: Authority cited: Health and Safety Code section 50470, subdivision (d). Reference
cited: Health and Safety Code section 50470, subdivision (b)(1)(C).
ARTICLE V. APPLICATION REVIEW AND AWARD
Section 500. Application Review
(a) The Program will not initially utilize a competitive process to award funds. Funds will be
available to eligible applicants upon request (“over the counter”).
(b) Funds will be available for an eight-month over-the-counter period, commencing from the
date of the NOFA.
(c) The Department may extend the over-the-counter period.
(d) Applicants must submit an application to be eligible for funding. An application form will be
available upon release of the NOFA and will include forms to demonstrate meeting
threshold requirements, a proposed budget and timeline, and a request for letters of
support from key stakeholders and decision-makers in the adoption process.
(e) The Department may request additional information to complete the initial application for
funding.
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(f) Applications recommended for funding are subject to conditions specified by the
Department. Applicants will receive an official letter of award after the Department
approves funding recommendations.
(g) If funds are not fully awarded at the conclusion of the over-the-counter period, the
Department may consider a supplemental funding round.
1. The supplemental funding round will be available to prior applicants and localities
that have not submitted a request for funding. The supplemental funding round will
either use the initial complete application for funding, a new application where
localities have not submitted a request for funding, or a new application and NOFA.
2. Localities that have not submitted a previous request for funding will receive top
priority in the supplemental funding round, subject to the minimum and maximum
award amounts described in Section 400. All other applicants for the supplemental
funding round will be subject to scoring criteria. Scoring criteria will include priority
policy areas, under-resourced localities, disaster recovery, and location efficient. A
tiebreaker will use factors such as impact on housing supply and affordability, level
of housing need, and affirmatively furthering fair housing.
3. The Department may adjust scoring criteria to accommodate changes in conditions
and circumstances, such as the results of the initial funding round and equitable
geographic distribution.
NOTE: Authority cited: Health and Safety Code section 50470, subdivision (d). Reference
cited: Health and Safety Code section 50470, subdivision (b)(1)(A).
ARTICLE VI. ADMINISTRATION
Section 600. Grant Execution and Term
(a) The Department will notify the grantee if they have been selected for a grant award.
(b) After the Standard Agreement and attachments have been finalized, the grantee will be
provided instructions for signing all required documents. The grantee must submit all
supporting materials and a signed Standard Agreement within the timeline provided in the
instructions or risk forfeiting the grant award.
(c) The grant term begins on the day the Department and the grantee have both signed the
completed Standard Agreement. The Department will notify the grantee and partners
when work may proceed.
(d) The end of the grant term will be determined by the state based on the availability of grant
funds and the administrative requirements for liquidation. The anticipated grant term runs
through June 30, 2022.
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CA HCD Guidelines - 12 - SB 2 Planning Grants Program Year 1
NOTE: Authority cited: Health and Safety Code section 50470, subdivision (d). Reference
cited: Health and Safety Code section 50470, subdivision (b)(1)(A).
Section 601. Payment and Accounting of Grant Funds
(a) Grant funds cannot be disbursed until the Standard Agreement has been fully executed.
(b) The grantee will be responsible for compiling and submitting all invoices and reporting
documents. Grantees will submit for reimbursements to the Department based on ac tual
cost incurred.
(c) The grantee must bill the state based on clear deliverables outlined in the Standard
Agreement. Only approved and eligible costs incurred for work after the NOFA date,
continued past the date of the Standard Agreement and completed during the grant term
will be reimbursable. Approved and eligible costs incurred prior to the NOFA date are
ineligible.
(d) Work must be completed prior to requesting reimbursement.
(e) Grant fund payment will be made on a reimbursement basis; advance payments are not
allowed. The grantee and partners must have adequate cash flow to pay all grant -related
expenses prior to requesting reimbursement from the Department. Project invoices will be
submitted to the Department by the grantee on a quarterly basis .
(f) In unusual circumstances, the Department may consider alternative arrangements to
reimbursement and payment methods based on documentation demonstrating cost
burdens, including the inability to pay for work.
(g) Supporting documentation may include, but is not limited to: purchase orders, receipts,
progress payments, subcontractor invoices, time cards, etc .
(h) Invoices must be accompanied by reporting materials where appropriate. Invoices without
the appropriate reporting materials will not be paid. The Department may withhold 10
percent of the grant until grant terms have been fulfilled.
NOTE: Authority cited: Health and Safety Code section 50470, subdivision (d). Reference
cited: Health and Safety Code section 50470, subdivision (b)(1)(A).
Section 602. Accounting Records and Audits
(a) The grantee must establish a separate ledger account for receipts and expenditures of
grant funds and maintain expenditure details in accordance with the attached Work Plan
and Budget. Separate bank accounts are not required.
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CA HCD Guidelines - 13 - SB 2 Planning Grants Program Year 1
(b) The grantee shall maintain documentation of its normal procurement policy and
competitive bid process (including the use of sole source purchasing), and financial
records of expenditures incurred during the course of the project in accordance with
generally accepted accounting principles.
(c) The grantee agrees that the state or designated representative shall have the right to
review and to copy any records and supporting documentation pertaining to the
performance of the Standard Agreement.
(d) The grantee agrees to maintain such records for possible audit for a minimum of three (3)
years after final payment, unless a longer period of records retention is stipulated .
(e) Subcontractors employed by the grantee and paid with moneys under the terms of this
Standard Agreement shall be responsible for maintaining accounting records as specified
above.
(f) At any time during the term of the Standard Agreement, the Department may perform or
cause to be performed a financial audit of any and all phases of the award. At the
Department’s request, the awardee shall provide, at its own expense, a financial audit
prepared by a certified public accountant. The State of California has the right to review
project documents and conduct audits during project implementation and over the project
life.
NOTE: Authority cited: Health and Safety Code section 50470, subdivision (d). Reference
cited: Health and Safety Code section 50470, subdivision (b)(1)(A).
Section 603. Remedies of Non-performance
(a) In the event that it is determined, at the sole discretion of the state, that the grantee is not
meeting the terms and conditions of the Standard Agreement, immediately upon receiving
a written notice from the Department to stop work, the grantee shall cease all work under
the Standard Agreement. The Department has the sole discretion to determine that the
grantee meets the terms and conditions after a stop work order, and to deliver a written
notice to the grantee to resume work under the Standard Agreement.
(b) Both the grantee and the Department have the right to terminate the Standard Agreement
at any time upon 30 days written notice. The notice shall specify the reason for early
termination and may permit the grantee or the Department to rectify any deficiency(ies)
prior to the early termination date. The grantee will submit any requested documents to the
Department within 30 days of the early termination notice.
(c) There must be a strong implementation component for the funded activity through this
Program, including, where appropriate, agreement by the locality to formally ado pt the
completed planning document. Localities that do not formally adopt the funded activity
could be subject to repayment of the grant.
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CA HCD Guidelines - 14 - SB 2 Planning Grants Program Year 1
NOTE: Authority cited: Health and Safety Code section 50470, subdivision (d). Reference
cited: Health and Safety Code section 50470, subdivision (b)(1)(A).
Section 604. Reporting
(a) During the term of the Standard Agreement, and according to the annual deadline
identified in the Standard Agreement, the awardee shall submit, upon request of the
Department, a performance report that demonstrates satisfaction of all requirements
identified in the Standard Agreement.
(b) Upon completion of all deliverables within the Standard Agreement, the awardee shall
submit a close out report. See Attachment 3.
NOTE: Authority cited: Health and Safety Code section 50470, subdivision (d). Reference
cited: Health and Safety Code section 50470, subdivision (b).
ARTICLE VII. TECHNICAL ASSISTANCE
Section 700. Method
(a) Five percent of the SB 2 planning funds will be available for the Department and the
Governor’s Office of Planning and Research (OPR) to provide technical assistance to
localities requesting grant funds to update planning documents, zoning ordinances,
environmental analyses, or local processes to meet the objectives of the Program.
(b) Technical assistance provided by the Department and OPR to localities will include at
least three phases, including assistance in meeting threshold requirements, providing
tools, models and best practices to supplement proposed activities related to accelerating
housing production, and direct assistance to applicants.
(c) The Department will coordinate with OPR on technical assistance related to the SB 2
planning funds.
(d) With minor exceptions and accounting for equitable geographic distribution, technical
assistance will be used on priority policy areas.
(e) Technical assistance will incorporate the Department’s responsibility to affirmatively further
fair housing.
NOTE: Authority cited: Health and Safety Code section 50470, subdivision (d). Reference
cited: Health and Safety Code section 50470, subdivision (b)(1)(A).
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CA HCD Guidelines - 15 - SB 2 Planning Grants Program Year 1
Section 701. Geographic Distribution
(a) The Department will prioritize geographic distribution in the provision of technical
assistance to potential applicants.
(b) Geographic distribution considerations include minimum set-asides, under-resourced
localities, disaster recovery, or location efficiency (e.g., access to jobs and a variety of
transportation modes).
NOTE: Authority cited: Health and Safety Code section 50470, subdivision (d). Reference
cited: Health and Safety Code section 50470, subdivision (b)(1)(A).
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CA HCD Guidelines - 16 - SB 2 Planning Grants Program Year 1
Attachment 1
Nexus to Accelerating Housing Production
Form
(Only for proposals not using the priority policy
areas)
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Department of Housing and Community Development 1 SB 2 Planning Grants
Locality: ____________________________
Planned Activity: ____________________________
Applicants shall demonstrate how the application includes a nexus to accelerating housing production. Applicants selecting priority policy
areas are automatically deemed to demonstrate a nexus to accelerating housing production and do not need to complete this form.
Please complete the following chart by providing information about the current conditions and expected outcomes with respect to the
planned activity and housing production.
Application Nexus to Accelerating Housing Production
Type (Select At least One) Baseline*
Projected** Difference*** Additional notes
Timing (e.g., reduced number of days of processing)
Development cost (e.g., land, fees, financing,
construction costs per unit)
Approval certainty and reduction in discretionary
review (e.g., prior versus proposed standard and level
of discretion)
Entitlement streamlining (e.g., number of approvals)
Feasibility of development
Infrastructure Capacity (e.g, number of units)
Impact on housing supply and affordability (e.g.,
number of units)
Other
* Baseline – Current conditions in the jurisdiction (e.g. 6-month development application review)
**Projected – Expected conditions in the jurisdiction because of the planning grant actions (e.g. 2-month development application review)
***Difference – Potential change resulting from the planning grant actions (e.g., 4-month acceleration in permitting, creating a more expedient development process)
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Department of Housing and Community Development 1 SB 2 Planning Grants
Attachment 2
State Planning and Other Planning Priorities
Form
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Department of Housing and Community Development 1 SB 2 Planning Grants
Locality: ____________________________
Applicants shall report on meeting state objectives by showing activities completed prior to application submittal in one or more of the State
Planning Priorities (i.e., Infill and Equity, Resource Protection, Efficient Development Patterns) or Other Planning Priorities (i.e., Affordability,
Conservation, Climate Change)
Please select one or more of the areas in the following chart by marking X in the completed box and describe the action and completion date.
STATE PLANNING PRIORITIES
(Select one or more)
Action Completed Describe Action and
Completion Date
Promote Infill and Equity
Rehabilitating, maintaining, and improving existing infrastructure that supports
infill development and appropriate reuse and redevelopment of previously
developed, underutilized land that is presently served by transit, streets, water,
sewer, and other essential services, particularly in underserved areas.
Seek or utilize funding or support strategies to facilitate opportunities for infill
development.
Other (describe how this meets subarea objective)
Promote Resource Protection
Protecting, preserving, and enhancing the state’s most valuable natural
resources, including working landscapes such as farm, range, and forest lands;
natural lands such as wetlands, watersheds, wildlife habitats, and other
wildlands; recreation lands such as parks, trails, greenbelts, and other open
space; and landscapes with locally unique features and areas identified by the
state as deserving special protection.
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Department of Housing and Community Development 2 SB 2 Planning Grants
Actively seek a variety of funding opportunities to promote resource protection in
underserved communities.
Other (describe how this meets subarea objective)
Encourage Efficient Development Patterns
Ensuring that any infrastructure associated with development, other than infill
development, supports new development that does the following:
(1) Uses land efficiently.
(2) Is built adjacent to existing developed areas to the extent consistent with
environmental protection.
(3) Is located in an area appropriately planned for growth.
(4) Is served by adequate transportation and other essential utilities and
services.
(5) Minimizes ongoing costs to taxpayers.
Other (describe how this meets subarea objective)
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Department of Housing and Community Development 3 SB 2 Planning Grants
OTHER PLANNING PRIORITIES
(Select one or more)
Action Completed Describe Action and
Completion Date
Affordability and Housing Choices
Incentives and other mechanisms beyond State Density Bonus Law to
encourage housing with affordability terms.
Efforts beyond state law to promote accessory dwelling units or other strategies
to intensify single-family neighborhoods with more housing choices and
affordability.
Upzoning or other zoning modifications to promote a variety of housing choices
and densities.
Utilizing surplus lands to promote affordable housing choices.
Efforts to address infrastructure deficiencies in disadvantaged communities
pursuant to Government Code Section 65302.10.
Other (describe how this meets subarea objective)
Conservation of Existing Affordable Housing Stock
Policies, programs or ordinances to conserve stock such as an at-risk
preservation ordinance, mobilehome park overlay zone, condominium
conversion ordinance and acquisition and rehabilitation of market rate housing
programs.
Policies, programs and ordinances to protect and support tenants such as rent
stabilization, anti-displacement strategies, first right of refusal policies, resources
to assist tenant organization and education and “just cause” eviction policies.
Other (describe how this meets subarea objective)
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Department of Housing and Community Development 4 SB 2 Planning Grants
Climate Adaptation
Building standards, zoning and site planning requirements that address flood and
fire safety, climate adaptation and hazard mitigation.
Long-term planning that addresses wildfire, land use for disadvantaged
communities, and flood and local hazard mitigation.
Community engagement that provides information and consultation through a
variety of methods such as meetings, workshops, and surveys and that focuses
on vulnerable populations (e.g., seniors, people with disabilities, homeless, etc.).
Other (describe how this meets subarea objective)
I certify under penalty of perjury that all of the information contained in this SB 2 Planning Grants State Planning and Other Planning
Priorities Form is true and correct.
Certifying official’s name: ____________________________________
Certifying official’s title: ________________________
Certification date: __________________
Certifying official’s signature: _______________________________________
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Department of Housing and Community Development 1 SB 2 Planning Grants
Attachment 3
Close Out Reporting Form
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Department of Housing and Community Development 2 SB 2 Planning Grants
SB 2 Planning Close Out Reporting Template
Brief Summary
- Overview of the project
- Project start date and duration
- Project goals and relevance to SB 2 Planning Grants Program goals
- Outcomes
Lead Agency and Partnerships
- List lead agency and partnerships (including names, titles, organizations, and roles and
responsibilities of each)
- What did those collaborative relationships and processes look like?
Drivers
- Did any local, state, or federal legislation or mandates drive the project? (SB 35, AB 1397, etc.)
- Was it a community driven effort?
- Were there additional funding opportunities present?
Engagement Process
- Who were your stakeholders?
- What did the engagement process look like?
- What role did stakeholders play in the process? (Keep in mind: training, education, council
formation, technical assistance, etc.)
- What were the outcomes of the engagement process?
Challenges
- What challenges were encountered?
- What solutions were encountered or created?
- Are there areas for improvement of policy alignment at the state or federal level to help achieve
this project more easily?
Outcomes
- What are the current or projected outcomes? Benefits?
- Were outcomes as anticipated?
- Have new opportunities arisen as a result of this project?
- What are the next steps?
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Department of Housing and Community Development 3 SB 2 Planning Grants
SB 2 Planning Close Out Reporting Template
Replicability
- What aspects of the project could be replicated in other communities?
- Useful resources and tools? For a specific region or sector?
Additional Resources
- Links to the project itself
- Links to resources used throughout and any other relevant resources
Further Information
- Who can be reached to ask more questions about this project?
o Name
o Number and/or email
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