When Alameda City Council holds a workshop on the city's inclusionary zoning ordinance at this evening's meeting, the main questions will be about how to best optimize the competing concerns of subsidizing somewhat more "affordable" housing units vs. enabling slightly more overall housing development projects to potentially "pencil."
This tension has been discussed at the Planning Board's meetings over the past year of review, and it's also on display in the correspondence attached to the agenda item.
A second question has also been tucked into agenda item's staff report: How many OBAG 4 carrots do we want to eat?
Acronyms, Competitive Fundraisers, and the Principal Lunching on the Roof
OBAG 4 is the next cycle of OBAG, the most important regional grant program administered by MTC. (FYI, MTC is Bay Area's MPO.) Most of the money for OBAG comes from federal sources including STBG and CMAQ. For this upcoming cycle, MTC will make more of these OBAG funds available to local jurisdictions in full compliance with TOC policies, including IZ ordinances. ABAG is providing technical assistance to jurisdictions needing or wanting to further improve their compliance with TOC policies. (FYI, the TOC policies are set to implement the plans of PBA 2050+, which itself serves as the combined RTP and SCS for the Bay Area)... apologies, I'll stop with all the acronyms, and instead tell a story about my kids' elementary school.
The students have recently finished a read-a-thon fundraiser. Parents and grandparents and caregivers have pledged to donate based on how many minutes their kids read. The collected donations will be used to cover the expense of the school's STEAM lab. The organizers have stoked the students by making it a competition: The classes with the most minutes read (and reported) will earn parties. And if the entire school reaches an overall target, the principal will eat lunch in "outer space" (that is, up on the roof of the school). With all the external motivation, it's actually gotten a bit too competitive, with some classes comparing on an online leaderboard their reported minutes of reading. In any case, this story hopefully serves as a more visceral example of what's going on with all those acronyms: organizations enacting incentives in order to encourage positive behaviors aligned with adopted policy goals.
In one case, the goals are to enjoy reading and raise money for the school’s parent-funded programs. In the other, the aims are to permit more housing, provide stability for renters, enable transit use, and improve traffic safety.
For students, the incentives are class parties and embarrassing the principal. For cities, the incentive for complying with TOC and IZ policies is cash — in the form of access to more OBAG 4 funds.
How the Bay Area Uses Carrots (and Occasionally Sticks)
This carrot-heavy structure is typical of the Bay Area's regional governance agencies, including MTC and ABAG. (BAAD [née BAAQMD] does know how to wield sticks, although they call them rules.) As the region’s metropolitan planning organization, MTC distributes federal and state funds — and bridge tolls — to the Bay Area’s 101 cities and nine counties, herding cats to each adopt policies aligned with regional plans for housing, transit, and traffic safety.
(Carrots and cats? In addition to an excess of acronyms, this blog post has mixed metaphors. By the way, OBAG stands for the One Bay Area Grant. But "oh-BAG 4" rolls off the tongue better than "One Bay Area Grant Four," which sounds almost like the latest sequel in an action movie franchise.)
In this round, Alameda and other jurisdictions may be able to qualify for a higher tier of incentives by scoring 85+ points on the Transit-Oriented Communities policies (that's the "TOC" acronym). The top tier will come with access to OBAG 4 set-asides — real money for infrastructure — and Alameda should want to be there, even more so than the students want their parties.
For example, OBAG 3 funds have just paid for the modern roundabout almost finished with construction at Central Avenue/Fourth Street/Ballena Blvd.
Where Alameda Should Aim on the TOC Scorecard
That diagram almost shares some aspects in common with the PBIS diagrams used by Alameda's public schools. (PBIS being an acronym that also means lots of carrots, only a few sticks.) The localities that score 0 - 39 points on their policy compliance are proposed to be eligible only to receive funding to cover technical support to enhance their policies. While it's not expressed in negative terms, they can't get OBAG funding for physical projects until they first remediate their local policies. The goal is to put communal resources toward everyone's advancement, while avoiding investing in infrastructure for a subpar status quo. In the broad middle of the spectrum, cities/towns/counties may apply for all OBAG 4 funds. At the far end of the spectrum, those who do their best and score 85+ policy points are entitled to apply for that and more — an additional set-aside pot of funds.
As far as an OBAG 5 goes — and equivalents in other regions around the country — that's up to Congress. Let's just say that the Speaker of the House has seemed busier recently with other matters than surface transportation reauthorization.
While I don't express my own competitiveness through my kids (they've been doing a fine job reading and listening to audiobooks out of their own motivation and without more external cajoling), I will express it through this blog: The City of Alameda should aim to get as many TOC points as possible!!! Let's go get as much of those regional grants as possible for Alameda! Go! Go! Go!
IZ as a Gateway to Regional Funding
The staff report for tonight's City Council workshop on the inclusionary zoning ordinance includes the following:
Inclusionary housing requirements are becoming increasingly important for eligibility in regional funding programs that support housing, transportation, and infrastructure. The Association of Bay Area Governments (ABAG) and the Metropolitan Transportation Commission (MTC) administer several such funding sources. One key upcoming opportunity is the Transit Oriented Communities (TOC) Program, expected in 2026, which will direct significant resources to cities that align local land use and affordable housing policies with regional goals. Guidance issued by ABAG/MTC in May 2025 specifies minimum inclusionary standards to qualify for TOC housing and infrastructure funding. For rental housing, cities must require at least 15% of units to be affordable, with the average affordability level at or below 80% of Area Median Income (AMI), and no affordable units reserved for households earning above 120% of AMI. For ownership housing, the average affordability level must be 120% of AMI or below, with no designated affordable units reserved for households above 150% of AMI. If a city cannot meet these standards, either in the percentage of affordable units required or the income levels served, it must demonstrate that meeting those standards would be financially infeasible for market rate developers to achieve in current market conditions, in which case a waiver from those requirements may be granted by the funding agencies. Otherwise, the City may lose access to regional funding. Aligning the City’s inclusionary requirements with TOC eligibility would improve the City’s competitiveness for major infrastructure, transportation, and housing grant opportunities in future years.
Meeting the full TOC policy goals should be a priority for Alameda City Council as they refine the city's inclusionary zoning ordinance.
Time to Be a Top Performer
Going further, the City Council should use this as an opportunity to check with staff and make sure Alameda is on track to meet all of the possible policy checkboxes — to maximize our possible TOC policy points. Ideally this is all completed in advance, so the moment that OBAG 4 grants become available, Alameda will be able to get access to all of the available levels of funding.
Some of the TOC policies apply citywide, such as the inclusionary zoning aspects, as well as anti-displacement protections. Also required citywide is a "complete streets" policy, which the City of Alameda adopted back in 2013 in order to qualify for an earlier cycle of OBAG grants.
Other policies need only be targeted to the areas closest to Alameda's major transit stations — specifically the three ferry terminals identified as "Tier 4" TOC Policy Areas.
Here's one example of how Alameda is primed to be a top TOC performer: To meet the TOC policy, minimum-parking requirements must be removed from potential developments in a 1/2-mile radius around key transit stations of Tiers 1 - 3. Alameda has already done so — across the entire city! (It's up to project developers to propose how much off-street parking is appropriate to build and pay for as part of each development, so as to not mandate and overbuild subsidized "free" off-street parking.) This is the sort of policy accomplishment, which ties together both land-use and transportation goals, worth documenting for ABAG (the land-use cat herder) and MTC (the transportation cat herder).
No doubt City of Alameda staff have already received reference materials from ABAG/MTC detailing the TOC policies for those specific station areas, as well as the city at large, and how to properly document all of that.
Just as the room parents at my kids' school have been emailing and Parentsquare'ing and Konstella'ing all the other parents to encourage everyone to report their reading hours, this blog is checking in to make sure that Alameda is aiming to be at the lead of this pack — in terms of IZ and every other possible policy acronym that can qualify Alameda for as many regional funding sources as possible.