By Chris McCahill
A new California law gives transportation agencies the option to pay into an affordable housing fund to offset the increased travel demand associated with major road projects. The approach could achieve several goals at once: mitigating emissions from highway expansions, creating a new funding stream for affordable housing, and helping more people live in accessible neighborhoods, reducing their transportation costs.
Assembly Bill 130 establishes a new Transit-Oriented Development Implementation Fund (a.k.a. “mitigation bank”) to support affordable housing in “location-efficient” areas—dense neighborhoods and those near transit, which encourage less driving. California’s environmental review law (CEQA) has required mitigation efforts for projects that increase driving since a 2013 update, which focuses on overall vehicle use rather than traffic delay. The program created by AB130 offers road builders a new option to mitigate increases in vehicle miles traveled (VMT).
Efficient housing development has long been one of the recommended strategies for lowering VMT in Caltrans’ Mitigation Playbook, alongside investments in transit, biking, walking, and demand management. But for transportation agencies, development-based strategies can be hard to implement. They often require close coordination with housing developers and a bit of luck that the right opportunities arise at the right time. With the new mitigation bank, road builders can instead contribute funding, and the state’s Department of Housing and Community Development (HCD) will match those funds with eligible projects—many of which are already in the pipeline seeking financial support.
Over the next year, HCD will work with Caltrans, the State Transportation Agency (CalSTA), the Air Resources Board (CARB), the Office of Land Use and Climate Innovation (LCI), and others to determine what projects should be eligible and how mitigation fees will be calculated. That includes defining what counts as a “location-efficient” area, how close a housing project must be to a transportation investment, and much funding must go toward a project for it to count as a meaningful mitigation strategy.
Mitigation fees will be set high enough to ensure the resulting development can counterbalance any increased driving encouraged by the project. They’ll remain optional—only needed when other mitigation strategies aren’t feasible or don’t go far enough to comply with CEQA. However, the new option should make it easier for agencies to meet mitigation requirements.
While this is the first statewide policy of its kind, it builds on local efforts already underway in California. Caltrans’ Sustainable Transportation Planning Grants have supported the development of VMT banks in Los Angeles, Sonoma County, and San Luis Obispo County. Others have already been established or are in the works. These local efforts will likely complement the new statewide program, giving both state and local agencies a more practical path for addressing the interconnected challenges of transportation emissions and housing affordability.
Photo credit: Forsaken Films via Unsplash. License.