AFFIRMATIVELY FURTHERING FAIR HOUSING (AFFH) Finding the Right Site 1 AFFIRMATIVELY FURTHERING FAIR HOUSING (AFFH) Finding the Right Site San Diego Housing Federation October 13, 2016 JUSTIN D. BIGELOW jbigelow@goldfarblipman.com M DAVE KROOT mkroot@goldfarblipman.com 510-836-6336 Affirmatively Furthering Fair Housing—Finding the Right Site   High housing costs, historic segregation by ethnicity and income, and the obligation to affirmatively further fair housing complicate site selection. Panelists will discuss state and federal mandates and HUD's AFFH Tool to navigate affordable housing production in San Diego County from the perspective of both local governments and developers. goldfarb lipman attorneys 1878960.2

Affirmatively Furthering Fair Housing Taking actions reasonably expected to further fair housing Combating discrimination Increasing housing choice Overcoming patterns of segregation Fostering inclusive communities Decreasing disparities in access to opportunity Replacing segregated patterns with integrated and balanced patterns Transforming racially or ethnically concentrated areas of poverty into areas of opportunity Fostering and maintaining compliance with civil rights and fair housing laws 24 C.F.R. § § 5.100 - 5.168 First-come first serve selection is favored by many public lenders because it continues to be considered a “neutral” admission strategy. On the next slide, I list excerpts from various funding programs, because they guide toward the traditional first-come/first-serve policies. But, they also acknowledge or suggest that lists can be reorder to accommodate certain preferences.

Local Role Program participants covered by the AFFH rule: Public housing agencies (PHAs) Jurisdictions required to submit a Consolidated Plans in connection with CDBG, HOME, HOPWA, or ESG funding Duty extends to all of a program participant’s activities and programs relating to housing and urban development CSH asked that I take a step back, first, and talk about waiting lists and lotteries. Affordable Housing has historically been administered through chronological admissions, waiting lists and lotteries. Tenant selection by first come first serve waiting lists or lotteries is intended to eliminate corruption, abuse and discrimination. Waiting list and lotteries limit housing providers discretion and subjectivity in tenant selection. They are designed to be objective.

Local Strategies Housing Element Comparable to a Consolidated Plan Component of General Plan Regional Housing Needs Allocation (Existing & Projected) Identify Sites & Accommodate Units Analysis of Constraints on Housing Establish Programs Comparable to a Consolidated Plan For example, HUD’s HOME regulations require tenant selection in chronological order insofar as is practicable. The HUD multifamily handbook calls for chronological admissions once preferences are accounted for. HCD’s current UMRs call for tenants to be selected based on order of application, lottery or other reasonable method approved by the Department.

Local Strategies Zoning for Affordable Housing Rezoning Increasing Density Relaxing Height Limits Reducing Parking Requirements Permitting Accessory Dwelling Units

Local Government Strategies Inclusionary Policies Housing can be built on-site or off-site, or fees can be collected & later used for affordable housing development For-Sale housing inclusionary programs are permissible Rental housing inclusionary programs are subject to Palmer Incentive or Concession confirmed in contract Nexus study to discern impact Options: In-lieu Fees, On-Site or Off-Site Units, Land Dedications

Local Strategies Expanding Funding Sources: HOME, CDBG, HOPWA, ESG Tax Increment Financing Infrastructure Financing Districts Community Revitalization & Investment Authority Bond Issuance Local Housing Trust Fund

Local Strategies Density Bonus Other Governmental Concessions Infrastructure Districts Rent Stabilization & Eviction Controls Expanded Fair Housing Ordinances

Local Strategies Financing HOME, CDBG, HOPA, ESG Infrastructure District Bond Issuance Local Housing Trust Fund Establishing program and funding criteria designed to further fair housing Preferences that overlay tenant selection often work to modify chronological admissions processes, but may also raise program funding and/or fair issues because they prioritize one type of tenant over another. Housing for the homeless is widely accepted and funded and generally, we have advised that housing providers with a mission and services to house the homeless may grant a preference to homeless families and individuals. Additionally, HUD has issued two recent notices intended to expand housing opportunities for the homeless through preferences. Preferences for people with disabilities or specific types of disabilities are more complicated, but supportive housing providers have made them work in many instances. [Other preferences we often see include local preferences, preferences for families with children, single gender, youth – all of which raise fair housing questions.]

Local Constraints Competing Political Interests Program participant may not have land use or other “opportunity” controls Balance economics, administration and fair housing goals The HEARTH Act interim rule contrasts with the tenant selection and preference rules in other housing programs. The Hearth Act Interim Rule applies only to certain housing programs, but other lenders and developers seeking to house the most vulnerable and underserved may start to rely on assessment systems as well. The Hearth Act calls for a centralized or coordinated assessment system to facilitate entry to housing by the homeless. An assessment system is much different from a chronological selection system – because you start to look at applicants as individuals as opposed to numbers. And you look closely at their needs and abilities. Your preference may end up running to people who are in most need of the services offered at the housing, and that need will need to be quantified in some way. In a community that is trained to avoid discrimination in tenant selection and that is used to first-come first serve, lotteries and chronological waiting lists and that still struggles through preference issues, a more personalized tenant selection process is going to cause legitimate concern.