SENATE COMMITTEE ON APPROPRIATIONS

Senator Anthony Portantino, Chair

2019 - 2020 Regular Session

AB 1226 (Holden) - State highways: property leases: assessment

Bill Summary:

AB 1226 would require the Department of Transportation (Caltrans) to conduct a feasibility assessment related the construction of facilities above certain highways that would be available and leased to local or state entities for affordable housing, transitional housing, emergency shelter, feeding program, or wraparound services purposes.

Fiscal Impact:

• One-time Caltrans contracting costs, likely in the hundreds of thousands of dollars, to conduct the feasibility assessment. For illustrative purposes, Caltrans’ “Freeway Cap Best Practices Guide” was produced through a $200,000 contract. Conducting a feasibility study would involve more detailed analysis, so costs are likely to be higher. (Motor Vehicle Account)
  
• Ongoing significant future cost pressures to the extent the construction of freeway caps and leasing the space to local entities for the specified purposes is determined to be feasible. (State Highway Account, federal funds, local funds)

Background:

Existing law authorizes Caltrans to lease areas above or below state highways (airspace) to public or private entities for a term of up to 99 years, and generally requires the leases to private entities to be competitively bid and at fair market value. Existing law authorizes Caltrans to lease specified properties in certain areas designated in statute for $1 per month and an administrative charge of up to $500 per year if the lease serves a specified public benefit, such as emergency shelter or feeding program purposes.

Existing law authorizes Caltrans to make land or airspace within a highway right-of-way constructed using federal funds available to a public entity, with or without charge, to accommodate needed passenger, commuter, or high-speed rail, magnetic levitation systems, and public mass transit facilities, as specified.

A freeway cap can be a structure, bridge, deck, covered tunnel, platform, or lid located above a freeway (typically a below-grade freeway) that supports development within the airspace above a right-of-way. In March of 2017, Caltrans issued the “Freeway Cap Best Practices Guide” to provide an overview of freeway caps and discuss the components involved in initiating and developing a cap project. It is not intended to be an all-inclusive procedure manual, but can be used as a reference guide for stakeholders interested in cap projects. The Guide notes that there are a number of existing caps in California, but spotlights the following three in particular that provide roadway overcrossings, park spaces, and pedestrian and bike facilities, as well as some light-frame structures for transit or small-scale commercial uses: Interstate 210/Foothill Boulevard Project in La Canada Flintridge, SR-210/Euclid Avenue Project in Upland, and Interstate 15/40^th Street Freeway Project in San Diego.

Proposed Law:

AB 1226 would require Caltrans to assess the feasibility of constructing facilities above urban highways that are built below grade that could be available or leased to local or state entities for affordable housing, transitional housing, emergency shelter, feeding program, or wraparound services purposes, or any combination of those uses, as specified. The bill requires Caltrans to submit the assessment to the Legislature and Governor by January 1, 2021, and specifies that its provisions sunset on January 1, 2022.

The bill would also specify that “airspace” and “areas above or below state highways” that may be leased by Caltrans to public or private entities pursuant to existing law explicitly includes all of the following:

• Surface under a viaduct structure.
• Space above traveled lanes.
• Space within a loop of an interchange.
• Space between the main lanes and on or off ramps.
• Area in cut or fill slopes.

Staff Comments:

Freeway caps can support various types of development, including parks, commercial/office space, transportation facilities, and wildlife crossings. Caps can support residential uses, but it is not common. The 2017 Caltrans Guide indicates that caps for housing could be explored further, but also notes that buildings and structures are generally the most expensive type of development, requiring stronger underlying cap infrastructure. Staff notes that while this bill seeks to explore the feasibility of freeway caps as a viable tool to address homelessness, affordable housing, and other related service needs, there is no requirement that such uses be cost-effective as part of the feasibility analysis. Costs for the assessment is likely to be in the range of $200,000 to $500,000, but costs to actually construct caps for these purposes are likely to be high. To the extent the assessment determines that construction of caps and leasing the space to local entities for the purposes specified in the bill is feasible, the bill could create future cost pressures to partner with local officials on developing those projects. As with other arrangements for leasing Caltrans right-of-way and airspace for emergency shelter and feeding programs, any future lease revenues related to developments on freeway caps would likely be minimal.

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SENATE COMMITTEE ON TRANSPORTATION

Senator Jim Beall, Chair

2019 - 2020 Regular

Bill No: AB 1226 Hearing Date: 7/9/2019

SUBJECT: State highways: property leases: assessment

DIGEST: This bill requires the California Department of Transportation (Caltrans) to assess the feasibility of constructing facilities above highways that would be made available and leased to agencies for purposes that help address the needs of the state’s homeless population.

ANALYSIS:

Existing law:

1. Grants Caltrans broad authority to acquire by eminent domain any property necessary for state highway purposes.
2. Authorizes Caltrans to lease to public agencies or private entities the use of areas above or below state highways. Generally, leases to private entities have to be made on the basis of competitive bids and at fair market value.
3. Authorizes Caltrans to make land or airspace available, with or without charge, to a public entity to accommodate needed passenger, commuter, or high-speed rail, magnetic levitation systems, and highway and non-highway mass transit facilities.
4. Authorizes Caltrans to lease to several local entities airspace under a freeway or property for emergency shelter or feeding programs at a rate of $1 per month.

This bill:

1. Requires Caltrans to assess the feasibility of constructing facilities above highways built below grade in urban areas that would be made available and leased to a city, county, or other political subdivision or another state agency for affordable housing, transitional housing, emergency shelter, feeding program, or wraparound services purposes, or any combination of these purposes.
2. Requires Caltrans to submit the assessment to the Governor and the fiscal and policy committees of the Legislature that oversee transportation programs on or before January 1, 2021.
3. Sunsets this requirement on January 1, 2022.
4. Provides clarifying definitions for “airspace” and “areas above or below state highways” as they pertain to Caltrans property leases.

COMMENTS:

1. Author’s statement. According to the author, “To address the ongoing homelessness crisis in California we must use all tools at our disposal. This includes rethinking available space to better serve the community. As of this year, 130,000 Californians do not have a home. Los Angeles County alone recorded 50,000 people experiencing homelessness. The high costs of living in California make it near impossible for someone that has lost their home to find alternative housing in the same neighborhood. While other bills address issues with local control in resolving homelessness across the state, AB 1226 takes a different approach and evaluates what can be done with state lands. Specifically, AB 1226 will evaluate the efficacy of building over freeways in order to provide the public with the necessary resources and services to stay rooted in the communities they call home. In urban centers, construction above below-grade airspace can help create much-needed surface area for affordable housing, transitional housing, emergency shelters, and food programs close to jobs, schools, and areas of recreation.”
2. Freeway Caps. “Freeway caps” are a structure, bridge, deck, tunnel, platform, or lid located above a freeway that supports development in the freeway right-of-way.

In March of 2017, Caltrans released a best practices guide relative to freeway caps. The guide notes, “Caps are becoming increasingly popular across the United States as they provide a way to create new developable space above freeways. This new space can be developed to meet community and/or regional needs and is especially valuable in urban areas where vacant land is scarce.” The guide further asserts, “Caps can improve communities in a number of ways. They can provide parks in park-deficient urban areas, provide a sense of place in the community, and stimulate community development and revitalization. Caps can contribute to demand for new development, increases in property values, growth in retail sales, new employment, increased tourism, and increased quality of life. Additionally, caps can repair the fabric of communities by providing physical unity and social remediation where communities may have been divided in the past by freeway construction.” Examples of several recently constructed freeway caps include the “Park Over the Highway” in St. Louis, Missouri and “Klyde Warren Park” in Dallas, Texas. Both parks resulted from coordination among many stakeholder groups and partner agencies, along with funding from a variety of private and public sources.

1. Homelessness. While Caltrans currently has the authority to enter into one-dollar leases for excess property specifically for homeless shelters and feeding programs under certain circumstances, studying the feasibility of constructing and using freeway caps to provide a potential tool to address homelessness is a relatively new concept. The author points to a November 2015 Los Angeles Times article that reported on freeway encampments in Los Angeles. The article notes that the number of freeway encampments and vehicles occupied by homeless individuals increased by 85 percent from 2013 to 2015 in Los Angeles.

Moreover, according to the U.S. Housing and Urban Development Department (HUD) 2018 Annual Homeless Assessment Report to Congress, in January 2018 California had 24% of the nation’s homeless population (about 129,972 individuals).  California also contains 47% of the nation’s unsheltered homeless population (89,543), including people living in vehicles, abandoned buildings, parks, or on the street. Los Angeles contains the highest number of homeless people in the state, at 49,955, where 75% of those are unsheltered.  People experiencing homelessness face a variety of challenges including food and income insecurity, as well as health problems; the homeless population faces a higher risk of exposure to communicable diseases such as influenza, strep throat, sexually transmitted diseases, Hepatitis C, HIV/AIDS, and tuberculosis, among others.

This bill aims to look at the feasibility of constructing and utilizing freeway caps as a tool to address homelessness throughout the state. As this proposed use is unprecedented, it seems reasonable to first study its feasibility prior to taking any further action.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

Assembly Votes

Floor: 62-5

Approps: 15-0

Trans: 12-1

POSITIONS: (Communicated to the committee before noon on Wednesday,

June 3, 2019.)

SUPPORT:

Alameda County Transportation Commission

Milpa

Union Station Homeless Services

OPPOSITION:

None received.

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ASSEMBLY THIRD READING

ATR Bill Id:AB 1226

Author:(Holden)

As Amended Ver:April 8, 2019

Majority vote

SUMMARY:

Requires the California Department of Transportation (Caltrans) to assess the feasibility of constructing facilities above highways that would be made available and leased to agencies for purposes that help address the needs of the state's homeless population.

Major Provisions

1. Requires Caltrans to assess the feasibility of constructing facilities above highways built below grade in urban areas that would be made available and leased to a city, county, or other political subdivision or another state agency for affordable housing, transitional housing, emergency shelter, feeding program, or wraparound services purposes, or any combination of these purposes.
2. Requires Caltrans to submit the assessment to the Governor and the fiscal and policy committees of the Legislature that oversee transportation programs on or before January 1, 2021.
3. Defines "wraparound services" as those services provided in addition to emergency shelter that are necessary to meet the individual's needs to successfully transition into permanent housing and to successfully live in the community.
4. Sunsets this requirement on January 1, 2022.

COMMENTS:

The authority for Caltrans to enter into airspace leases is in existing law, but Caltrans is generally obligated to secure fair market value lease rates for airspace under freeways or other available parcels, based on the estimated highest and best use of the property. Notable exceptions to the fair market value requirement authorize Caltrans to lease unused parcels of land below market rates to various cities and counties for the purposes of emergency shelters and feeding programs. In each of these exceptions, the Legislature has found that submarket rate leases for these particular uses serves a public purpose.

This bill proposes a unique concept for putting state property to use addressing homelessness. While all airspaces for the purposes of emergency shelters and feeding programs to date have been for the space below elevated structures, the author believes there may be potential for building "caps" over below-grade freeways and using that airspace above the right of way for such purposes.

Freeway caps are not a new concept, but they have recently increased in popularity. Freeway caps are typically built for park space and to connect communities divided by major freeways. Two recently completed freeway cap projects include the "Park Over the Highway" in St. Louis, Missouri and "Klyde Warren Park" in Dallas, Texas. Both parks resulted from coordination among many stakeholder groups and partner agencies, along with funding from a variety of private and public sources.

In 2017, Caltrans released a Best Practices Guide for Freeway Caps as a reference for stakeholders interested in cap projects. In the Guide, Caltrans points out that freeway caps provide opportunities to maximize urban real estate through a wide variety of uses. The Guide does not address, however, either the costs associated with construction of caps or whether or not these caps could be utilized specifically for locals to help address their homelessness challenges.

Committee comments: Recently, a number of measures have been introduced by legislators to authorize Caltrans to lease airspace under freeways at below-market rates for the purposes of attempting to address the state's homelessness needs. In this year's January budget proposal, Governor Newsom proposed trailer bill language to authorize Caltrans to enter into airspace leases under freeways statewide for the purpose of conducting a temporary emergency shelter or feeding program under certain prescribed circumstances. The Governor's proposal, if enacted, should provide access to locals of any desired airspace under freeways for these purposes.

The fact is that California's homelessness crisis is significant, and may call for radical ideas to truly address it. Because they have few other options, homeless people are choosing to camp on the state's property regardless of the efforts to keep them out. According to Caltrans, its maintenance crews encountered roughly 7,000 homeless camps on state highway rights of way in 2017, with cleanup costs reaching more than $10 million.

This bill directs Caltrans to conduct this assessment in order to inform the Legislature of the potential to use airspace above our expansive state highway system to help further address the state's needs. The costs of such proposals may ultimately be too prohibitive to pursue, but it is worth the effort to assess this option given the state's enormous need.

According to the Author:

According to the author, "In heavily populated areas like [Los Angeles] County, it is especially hard to find places to build emergency shelters, transitional housing, affordable housing, food programs, and green space close to schools and jobs. Though important to our infrastructure, freeways cut through cities, fragment communities, and affect accessibility to economic opportunity. Infill development over freeways has great potential in addressing homelessness, issues with affordable housing, and interconnectivity between communities."

Arguments in Support:

Writing in support, Alameda County Transportation Commission states, "Building over freeways not only provides an opportunity to serve those in need, but 'capping' these highways may rejuvenate neighborhoods long separated by a highway."

Arguments in Opposition:

None

FISCAL COMMENTS:

According to the Assembly Appropriations Committee, minor, absorbable costs to Caltrans to conduct the assessment.

VOTES:

ASM TRANSPORTATION: 12-1-2

YES: Frazier, Aguiar-Curry, Berman, Chu, Daly, Diep, Friedman, Gipson, Grayson, Medina, Nazarian, O'Donnell

NO: Cunningham

ABS, ABST OR NV: Fong, Bigelow

ASM APPROPRIATIONS: 15-0-3

YES: Gonzalez, Bloom, Bonta, Calderon, Carrillo, Chau, Diep, Eggman, Gabriel, Eduardo Garcia, Maienschein, Obernolte, Petrie-Norris, Quirk, Robert Rivas

ABS, ABST OR NV: Bigelow, Brough, Fong

UPDATED:

VERSION: April 8, 2019

CONSULTANT: Eric Thronson / TRANS. / (916) 319-2093 FN: 0000437

Date of Hearing: May 8, 2019

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

ABPCA Bill Id:AB 1226

Author:(Holden) – As Amended Ver:April 8, 2019

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill requires Caltrans to assess the feasibility of constructing facilities above highways that would be made available and leased to agencies for purposes that help address the needs of the state’s homeless population.

FISCAL EFFECT:

Minor, absorbable costs to Caltrans to conduct the assessment.

COMMENTS:

Background and Purpose.

In recent years, the state has enabled Caltrans to lease space under a freeway or other real property for use as emergency shelters, sometimes at below market costs. The author has the novel proposal of flipping the idea on its head, that is, making the space above highways available to address the needs of the state’s homeless population. While such space is generally unused, it is unclear how it would be utilized as shelter. Capping a freeway is possible; however, doing so tends to be very expensive. It might be better to use the money that would go to capping freeway instead to provide services and shelter to the homeless directly.

Analysis Prepared by: Jay Dickenson / APPR. / (916) 319-2081

Date of Hearing: April 22, 2019

ASSEMBLY COMMITTEE ON TRANSPORTATION

Jim Frazier, Chair

ABPCA Bill Id:AB 1226 (

Author:Holden) – As Amended Ver:April 8, 2019

SUBJECT: State highways: property leases

SUMMARY: Requires the California Department of Transportation (Caltrans) to assess the feasibility of constructing facilities above highways that would be made available and leased to agencies for purposes that help address the needs of the state’s homeless population. Specifically, this bill:

1. Requires Caltrans to assess the feasibility of constructing facilities above highways built below grade in urban areas that would be made available and leased to a city, county, or other political subdivision or another state agency for affordable housing, transitional housing, emergency shelter, feeding program, or wraparound services purposes, or any combination of these purposes.
2. Requires Caltrans to submit the assessment to the Governor and the fiscal and policy committees of the Legislature that oversee transportation programs on or before January 1, 2021.
3. Defines “wraparound services” as those services provided in addition to emergency shelter that are necessary to meet the individual’s needs to successfully transition into permanent housing and to successfully live in the community.
4. Sunsets this requirement on January 1, 2022.

EXISTING LAW:

1. Grants Caltrans broad authority to acquire by eminent domain any property necessary for state highway purposes.
2. Authorizes Caltrans to lease to public agencies or private entities the use of areas above or below state highways. Generally, leases to private entities have to be made on the basis of competitive bids and at fair market value.
3. Authorizes Caltrans to make land or airspace available, with or without charge, to a public entity to accommodate needed passenger, commuter, or high-speed rail, magnetic levitation systems, and highway and non-highway mass transit facilities.
4. Authorizes Caltrans to lease to several local entities airspace under a freeway or property for emergency shelter or feeding programs at a rate of $1 per month.

FISCAL EFFECT: Unknown

COMMENTS: The authority for Caltrans to enter into airspace leases is in existing law, but Caltrans is generally obligated to secure fair market value lease rates for airspace under freeways or other available parcels, based on the estimated highest and best use of the property. Notable exceptions to the fair market value requirement authorize Caltrans to lease unused parcels of land below market rates to various cities and counties for the purposes of emergency shelters and feeding programs. In each of these exceptions, the Legislature has found that submarket rate leases for these particular uses serves a public purpose.

This bill proposes a unique concept for putting state property to use addressing homelessness. While all airspaces for the purposes of emergency shelters and feeding programs to date have been for the space below elevated structures, the author believes there may be potential for building “caps” over below-grade freeways and using that airspace above the right of way for such purposes.

Freeway caps are not a new concept, but they have recently increased in popularity. Freeway caps are typically built for park space and to connect communities divided by major freeways. Two recently completed freeway cap projects include the “Park Over the Highway” in St. Louis, Missouri and “Klyde Warren Park” in Dallas, Texas. Both parks resulted from coordination among many stakeholder groups and partner agencies, along with funding from a variety of private and public sources.

In 2017, Caltrans released a Best Practices Guide for Freeway Caps as a reference for stakeholders interested in cap projects. In the Guide, Caltrans points out that freeway caps provide opportunities to maximize urban real estate through a wide variety of uses. The Guide does not address, however, either the costs associated with construction of caps or whether or not these caps could be utilized specifically for locals to help address their homelessness challenges.

According to the author, “In heavily populated areas like L.A. County, it is especially hard to find places to build emergency shelters, transitional housing, affordable housing, food programs, and green space close to schools and jobs. Though important to our infrastructure, freeways cut through cities, fragment communities, and affect accessibility to economic opportunity. Infill development over freeways has great potential in addressing homelessness, issues with affordable housing, and interconnectivity between communities.”

Committee comments. Recently, a number of measures have been introduced by legislators to authorize Caltrans to lease airspace under freeways at below-market rates for the purposes of attempting to address the state’s homelessness needs. In this year’s January budget proposal, Governor Newsom proposed trailer bill language to authorize Caltrans to enter into airspace leases under freeways statewide for the purpose of conducting a temporary emergency shelter or feeding program under certain prescribed circumstances. The Governor’s proposal, if enacted, should provide access to locals of any desired airspace under freeways for these purposes.

The fact is that California’s homelessness crisis is significant, and may call for radical ideas to truly address it. Because they have few other options, homeless people are choosing to camp on the state’s property regardless of the efforts to keep them out. According to Caltrans, its maintenance crews encountered roughly 7,000 homeless camps on state highway rights of way in 2017, with cleanup costs reaching more than $10 million.

This bill directs Caltrans to conduct this assessment in order to inform the Legislature of the potential to use airspace above our expansive state highway system to help further address the state’s needs. The costs of such proposals may ultimately be too prohibitive to pursue, but it is worth the effort to assess this option given the state’s enormous need.

Previous legislation. AB 1898 (Mathis), 2018, would have required Caltrans to lease at a discount to a city or county any airspace under a freeway or other real property in a disadvantaged community for various purposes. AB 1898 was held on suspense in the Assembly Appropriations Committee.

AB 3061 (Gloria), Chapter 442, Statutes of 2018, authorized Caltrans to lease at a discount airspace under a freeway or other real property to the City of San Diego for emergency shelter or feeding programs.

AB 3139 (Bonta), Chapter 443, Statutes of 2018, authorized Caltrans to lease at a discount airspace under a freeway or other real property to the City of Oakland for emergency shelter or feeding programs.

SB 519 (Beall), Chapter 444, Statutes of 2018, authorized Caltrans to lease at a discount airspace under a freeway or other real property to both the City of Los Angeles and City of San Jose for emergency shelter or feeding programs.

SB 120 (Kopp), Chapter 750, Statutes of 1993, authorized Caltrans to lease to San Francisco any airspace under a freeway or property for an emergency shelter or feeding program at a rate of $1 per month.

REGISTERED SUPPORT / OPPOSITION:

Support

None on file.

Opposition

None on file.

Analysis Prepared by: Eric Thronson / TRANS. / (916) 319-2093