User fees and rates include the fees charged for the use of public infrastructure or goods (e.g., toll road or bridge, water or wastewater system). Such fees and rates are typically set to cover a system’s operating and capital expenses each year, which can include debt service for improvements to the system. The revenues generated from user fees help offset operations and maintenance costs. It is sometimes possible to use some portion of user fee or rate revenue toward financing the costs of new infrastructure, though doing so may require raising rates.
Value capture is not one thing but a bundle of tools that raise revenue by capturing the value generated by public infrastructure improvements and/or a strong or strengthening real estate market. Value capture can entail the creation of a new assessment, tax, or fee (such as a special localized tax or development impact fee), the diversion of new revenues generated by an existing tax (as in tax increment financing), or a revenue-sharing agreement that allows a government agency to share in some of the revenues generated by developing publicly owned land (known as joint development).
Grants are funds that do not need to be paid back and are typically provided by a higher level of government to a lower level (e.g., from the federal government to states or localities; from states to local governments) or by a philanthropic entity.
With affordable housing being one of California’s top priorities, there are currently several policies and strategies available to support and incentivize local governments to increase affordable housing production across the state. CEQA streamlining districts have become a key strategy to increase and incentivize affordable housing by streamlining the CEQA review process. This section focuses on two types of CEQA streamlining districts: Housing Sustainability Districts and Workforce Housing Opportunity Zones.