Finding 3: The State's failure to invest in infrastructure has increased housing prices, aggravated growth-related disputes and diminished California's economic potential.
Over the last 15 years, the provision for infrastructure has become a significant factor in California's land-use controversies. As local governments have lost the ability to spread the costs of capital improvements throughout the community, much of those costs have been pushed onto new development -- increasing housing prices and discouraging economic development. Other needs, such as freeway interchanges and regional parks, have gone unmet, fueling concerns that growth is reducing the quality of life.
Recommendation 3: The State must invest in well-planned and efficient infrastructure to accommodate a growing population and capture economic opportunity.California must coordinate its investments. And it must better manage the demands on existing resources to stay economically competitive while preserving our quality of life. A coordinated state infrastructure policy has the potential of reducing a major source of controversy, while helping to pioneer new solutions to perennial growth-related problems. The Governor and the Legislature can implement this goal by:
- Establishing an infrastructure task force. The Governor should
create the task force through executive order. It should include
transportation, water supply, air and water quality, conservation,
agriculture and commerce officials. The task force should review the
State's existing infrastructure programs for consistency and
compatibility. It should provide technical assistance to local and
regional officials. And it should recommend policy changes to enable
better management of the State's infrastructure.
- Funding the State Infrastructure Bank. The Legislature and
Governor created the bank in 1994, but it has never been funded.
Funding the bank will help California communities to build for their
future, and provide a valuable incentive to do better planning. The state
task force should set up guidelines and review applications for funding
from the state infrastructure bank.
- Requiring locals agencies to complete infrastructure plans. The guidelines established for participation in the state infrastructure bank should include the requirement that participating communities have completed infrastructure plans. The plan should show how the community will accommodate the development projected in comprehensive general plans and consider market mechanisms, such as rush hour toll pricing, to encourage efficiency.
Finding 4: The State's long-held policies encouraging orderly growth are being undermined by the failure to address private sector concerns and reform obsolete local ordinances.
Research, innovation, experimentation and practical experience are yielding answers to some of California's most intractable growth-related problems: how to encourage redevelopment of aging neighborhoods; how to encourage efficient transportation patterns; and how to encourage mixed-use development. But the State lacks the mechanisms for recasting this knowledge as policy.
Recommendation 4: To equip California for a future that will look much different than today, the State must accelerate the land-use learning process. The State must help communities and regions learn from the mistakes and successes of others. And it must work with the private sector to encourage market-based solutions to innovation in development.The State should actively coordinate experts in California's universities, in local planning departments, private consulting services and elsewhere to create model zoning, parking and other land-use ordinances to eliminate the disincentives to redevelopment, infill and mixed-use projects. The State should work with lending and other financial institutions to identify concerns about mixed-use, higher density and infill development, and to craft market-based solutions to these concerns. The Governor and the Legislature can fill this role by:
- Directing the Business, Transportation and Housing Agency to
resolve private-sector concerns about investing in innovative
projects. The agency should work with lenders and other financial
institutions to identify concerns about investing in higher density, infill
and mixed-use projects. The agency should recommend regulatory or
other policy changes that could ease those concerns and encourage
investments in a greater variety of housing types.
- Directing the Office of Planning and Research to develop model zoning and parking ordinances. The office should tap the resources of the State's planning agencies, private consultants and universities to craft model ordinances that would create more flexibility, prevent density downzoning, and reduce requirements that undermine housing and transportation goals.
Introduction
I
n 1994, California's population
grew at the slowest rate in more than 20 years. Just under 400,000
newcomers arrived in the state. While that is a lull compared
to the frenetic pace of the 1980s, California still grew by more
people than any other state in the union.
Each newcomer arrives with the hope
of acquiring a safe and comfortable home, of secure employment,
of long-term health and a growing opportunity to enjoy the coasts
and deserts, mountains and valleys that have long lured people
to California. The success of those aspirations rest in large
part on how Californians, as individuals and collectively, make
use of the landscape.
At stake is the affordability of
housing, the viability of the economy and the livability of the
State's communities. At issue are the procedures used to approve
development proposals, and how the failings of those procedures
limit the ability to provide efficiently for the vast numbers
of people, changing family structures, and pay scales that have
not kept pace with the costs of homes and commutes. The risks
and uncertainties in the process discourages innovation that futuristic
planners assert would provide more affordable housing, reduce
reliance on automobiles and encourage social cohesion.
These problems are highly emotional
and technically complicated. They are not vanquished to history
by simple solutions. The experience of the last 10 years testifies
to their intransigence. Neither the growth backlash of the 1980s
or the severe recession of the early 1990s provided enough political
momentum to fundamentally alter how California decides what will
be built, how that growth will be financed, and what changes if
any should be encouraged in the shape of development.
Nevertheless, both events and the
political debate they sparked helped to identify persistent problems
with California's land-use policies. The Little Hoover Commission
undertook this study out of a belief that the problems have not
been fully resolved, yet remain critically important to the long-term
health of the State. That suspicion was quickly validated.
The Commission in January conducted
a round table discussion and invited some of those who fought
the growth management and competitiveness wars, as well as those
who were living day to day with the problems, looking for solutions
on the margin and hoping the statewide debate would be revived.
(See Appendix A for a complete list of participants.)
At that round table, the participants
expressed some consensus that development had to become more compact,
more multi-use and more transit-oriented. Communities needed
incentives to cooperatively solve subregional or regional problems
and the approval process needed to be improved to meet more efficiently
existing policy goals.
The Commission in April conducted
a public hearing in Los Angeles dedicated to these issues, using
the compact and mixed-use Playa Vista project in Los Angeles as
a case study. (See Appendix B for a list of witnesses.)
The Commission and its staff conducted
nearly 100 interviews, with developers and the lawyers who battle
on their behalf, with local officials and planners, with transportation
experts, academicians and researchers, environmental and community
activists. (See Appendix C for a list of those interviewed.)
In the resulting report, the Commission
has identified four fundamental problems and crafted four recommendations
that it believes will: reduce conflicts that exact a price on
the economy and the individual consumer; encourage the civic cooperation
necessary for creative governance, and reduce the risks that discourage
innovation in development essential to more efficiently providing
for another 10 million Californians over the next 15 years.
This introduction is followed by
a background section, the four findings and four associated recommendations,
a conclusion and appendices. The experience of the Playa Vista
development is incorporated throughout the document.
Background
|
Background
C
alifornia has struggled over the
last half century to seize the challenges of a population growing
at the same pace as India. Freeways, airports and entirely new
cities testify to the collective ambition, while environmental
policies attest to public priorities to protect natural assets,
human health and the community fabric that comprise the State's
allure.
This persistent growth -- from 6.9
million people in 1940, to 32 million today, and to an anticipated
49 million in the year 2020 -- drives the land-use debate.
The problems associated with growth
also are becoming more complex -- as cities expand and age, as
society diversifies, as technology redefines lifestyles and the
economy evolves globally, and as the long-term consequences of
development on natural resources become evident.
The ability of local governments
to solve these problems is undermined by state fiscal policies
that encourage communities to compete for large retail projects
and discourage affordable housing and primary businesses that
create economic wealth. The inability to finance infrastructure
inflames anti-growth sentiment -- a tension redoubling as new
middle-class neighborhoods no longer generate the revenue needed
to sustain police, fire fighting and parks.
This is the context of California's
land-use controversies, and it is described in this section as
a prelude to the Commission's findings and recommendations.
Land Use: Problems Defined and Redefined
T
he modern uses of land are an amalgam
of market forces that shape and are shaped by public policies.
Because of the extent of existing
development and the value of California's natural landscapes,
the conversion of new lands to urban uses has become a series
of zero-sum choices. Urbanizing agricultural land has a permanent
effect on the farm economy. Hillside development unravels pastoral
remnants. Constrained housing increases prices and reduces opportunity.
These are the frontiers of contention.
The boom-and-bust cycle of the late
1980s and early 1990s illustrates the dynamics between economics,
public sentiment and formal policies. As both the population
and the economy soared in the late 1980s, so did public demands
that growth be controlled. By 1989 more than 50 California cities
had capped the rate of growth. Another 323 cities had invoked
some kind of growth management policy.
One researcher concluded that the
tide of protest represented a fundamental change in public sentiment:
"For many residents, no-growth-ism, slow growth-ism and NIMBY-ism
(Not In My Backyard-ism), positions that once seemed to represent
a radical attack on the California dream, now represented the
only chance of preserving that dream."
Throughout California, however,
researchers documented that local measures did not stop growth.
At most, the measures pushed growth elsewhere -- to communities
interested and prepared for growth, and to communities less equipped
to stop it.
At the state level, the grassroots
no-growth wildfire prompted a debate that yielded three assessments
of the core problem:
- The problem is structural.
While local jurisdictions have authority over land-use decisions,
most growth-related problems have regional impacts. This perspective
offered regional governments as the solution.
- The problem is financial.
Growth problems are magnified because the State has stopped building
the infrastructure needed to make roadways, faucets and toilets
flow without constraint. This perspective gave rise to financial
reform proposals, including a state infrastructure bank to finance
community improvements.
- The problem is procedural.
The evolution of permitting
and environmental review did not produce a vehicle for communities
to reach a consensus on what would be built where. The result
is a series of growth battles over individual projects. This perspective
advocated detailed community and environmental planning.
These assessments led to several
attempts to re-engineer the way the environment is protected,
cities are planned and community infrastructure is built.
The Legislature sponsored a consensus
project conducted by the Center for California Studies at California
State University, Sacramento. Thirty diverse stakeholders sought
a collaborative solution and in January 1992 arrived at 13 "key
areas of emerging agreement." Among them: the need for a
consistent and clear state growth policy, for social equity in
land-use decisions, and for a system that provides certain protection
to environmentally sensitive lands and certainty to developers
who pursued projects on land designated for urbanization. They
agreed on a need for infrastructure improvements, affordable housing,
incentives for effecting change and the use of market-based solutions,
such as higher rush-hour tolls, to increase the efficiency of
public works.
Governor Pete Wilson responded to
the growth debate by assembling a Strategic Growth Council, which
in January 1993 advocated more coordinated state planning and
state funding of infrastructure, a streamlined process for approving
housing and comprehensive local planning, reforms to the California
Environmental Quality Act and permit streamlining.
Both groups also recommended that
development in California take on a new shape. The groups advocated
more compact development, which includes moderately higher densities,
a mixing of residential and commercial uses, infill development,
and cluster projects around mass transit stations. Such projects
are thought to provide more economically housing and transportation
for a changing population -- one composed of more single parents
and other non-traditional family structures, households with multiple
wage earners, and an increasing percentage of workers employed
in lower-waged, service-related jobs and in industries forced
to offer globally competitive wages.
The administration's report said:
The issue of housing is the most politically contentious in the growth management puzzle, but it is also the piece without which no others will fit. Higher densities, market-driven, inevitably must be some part of this piece. California cannot support a population growth past thirty million people based on existing housing and transportation patterns without unacceptable economic, social and environmental costs. If the State wishes to preserve mobility, open space and a viable agricultural industry, clean air and environmental quality, and an economy that works, it cannot continue to support traditional, low-density land use patterns based on large single-family detached dwellings, nor a transportation system based overwhelmingly on single-occupancy vehicle usage.9
Fundamental policy shifts are always
difficult to enact. But the political momentum for growth management
reforms eroded quickly as the economy slid into the post-Cold
War recession. The national downturn, aggravated in California
by deep cuts in federal contracts with defense and aerospace firms,
spurred a new political imperative to entice rather than manage
growth. During the recession, 600,000 Californians lost their
jobs in the private sector.
The severity of the recession triggered
studies and blue ribbon commissions. Chief among them was the
Council on California Competitiveness, which focused on reducing
regulations -- some relating to land-use -- as an inducement to
economic activity.
While the grand growth management
efforts failed, those elements of the legislative agenda that
were compatible with the economic stimulus reforms were enacted.
Among them were some reforms to CEQA, some state permit streamlining,
and the creation of an infrastructure bank that was never funded.
Into the 1995 session, legislation continued to be pursued in
that vein.
Meanwhile, more detailed analyses
of the California economy revealed faults that lie deeper than
defense cutbacks. Mortgage Securities, the San Francisco-based
brokerage firm, found that personal income, average hourly wages
and personal savings rates began to decline in the mid-1980s,
indicating a crumbling of the middle class long before the Berlin
Wall fell.
A study by the Association of Bay
Area Governments (ABAG) found that most Bay Area residents were
earning less in real terms in 1991 than area residents in 1978.
While the median gross income, adjusted for inflation, was the
same in 1991 as in 1982, the median was propped up by significantly
increased earnings by professionals and managers in the services,
high-tech and financial industries.
The study concluded: "Beyond
the present economic problems, the trend of income growth, as
reported by taxable income data, suggests a long-term fall in
the standard of living."
Chart 1 shows the trends in income distribution that ABAG researchers found when they compared 1978 taxpayers with 1991 taxpayers.
The chart shows that the percentage
of workers in the middle three income categories decreased during
the time period. However, the percentage of workers in the bottom
two income categories, and the highest category, increased.
The association believes the Bay
Area statistics resemble nationwide trends and document the need
for more careful strategies for retraining workers and providing
affordable housing as a way to ensure economic competitiveness.
The Southern California Association of Governments reached similar
conclusions:
Even if today's business climate were satisfactory, the challenge of maintaining regional economic competitiveness grows greater each year. Firms in an increasing number of industries have a choice of sites around the world for the location of new and expanded facilities. Firms can choose not just between Southern California, and Texas, but between California, Japan, Mexico, Malaysia and European locations.14
The characteristics of a better
economic climate, the association determined, are a competitive
work force, adequate infrastructure investment and preservation
of quality of life issues.
|
"One of the most fundamental
questions we face is whether California can afford to support
the pattern of urban and suburban development, often referred
to as 'sprawl,' that has characterized growth since World War
II." When officials at California's largest bank and the
State Resources Agency asked themselves that question -- and repeated
those words in their treatise "Beyond Sprawl" -- they
answered with what they hope will become a clarion's "No."
Bank of America and state officials,
along with the Low Income Housing Fund and Greenbelt Alliance,
offered the assessment to the Commission in January. The group
argues that low-density development accelerates environmental
conflicts and inner city decay while increasing infrastructure
costs and reducing the State's economic desirability. The current
suburban model, the group said, is obsolete given California's
large and still growing population. The group offered four steps
for getting beyond sprawl:
The Building Industry Association
criticized the report: "We find this to be less an objective
analysis of the benefits and burdens of new housing and economic
development than a one-sided, somewhat hysterical tome singling
out suburban housing as a pox upon California's physical and economic
landscape."
The report was embraced by others,
including Newsweek magazine, which cited it in a cover article
on remaking suburbia. And the creators of the document were surprised
by the vitriolic reaction, given that both the Governor's Strategic
Growth Plan and the Legislature's consensus project advocated
compact development to accommodate growth. The Reason Foundation
responded by warning that policies attempting to dictate land-use
outcomes often fail and stifle growth. The Commission also was
told that if the risks and costs of the development process were
reduced Californian builders would pursue a greater variety of
projects, including higher density and more mixed-use -- that
is, less sprawl.
The Bank of America's argument is
not new: 25 years ago the bank supported the conclusions of a
governor's task force that concluded sprawl was consuming valuable
farm land, forcing automobile use, increasing air pollution, aggravating
racism and adding to construction costs.
Debates over the costs and benefits
of sprawl can quickly become high-centered. Without passing judgment
on suburban development, the Commission explored the impediments
to compact developments. This dialogue prompts important questions
that could yield solutions that a range of interests could support.
Among them: Why do builders build what they build and why do
consumers buy what they buy? How does government influence these
decisions and should it do anything differently? |
Other economists have concluded
that an overemphasis on regulations as a source for economic decline
can distract from the needs to encourage infrastructure investment,
worker training, adequate housing and other inputs to competitiveness.
The Center for the Continuing Study
of the California Economy concluded in a 1993 assessment: "Misunderstanding
over why and where California has experienced recent job losses
continues to create confusion in assessing the State's future
economic prospects."
From this lingering concern over
efficiently accommodating population growth while also restoring
economic competitiveness, a third wave of land-use reforms is
rising.
This platform squarely challenges
the suburban model of low-density and single-family development
and advocates higher density and mixed-use projects to provide
for a growing population, while easing the burden on transportation,
agricultural and natural systems.
The effort is characterized in the
policy document "Beyond Sprawl" prepared by the Bank
of America, the California Resources Agency, the Greenbelt Alliance
and the Low-Income Housing Fund. The report, presented as testimony
to the Commission in January, asserts that efficiency in development
is essential to long-term economic prosperity.
| Of the 17 million households formed nationwide
during the 1980s, only about one in four involved a married couple
or a married couple with children. |
At the heart of this dynamic are
demographic trends that accelerated in the 1980s. The percentage
of individuals living alone and single-parent families increased
from 29 percent in 1980 to 38 percent in 1990. Of the 17 million
households formed nationwide during the 1980s, only about one
in four involved a married couple or a married couple with children.
Nearly one in four involved people over 65 years of age.
New Jersey has created a statewide
plan that through zoning and fiscal incentives encourages reuse,
slightly higher densities, and compact development of targeted
lands. Ongoing studies by Rutgers University have estimated that
the plan will directly save $1.3 billion in infrastructure over
20 years and $400 million a year in operating costs to cities
and school districts. Much of the savings will come from more
efficient use of roads, sewer and water systems, and translate
into benefits of $12,000 to $15,000 per house. The plan also
is expected to keep prime agricultural lands in production, reduce
air and water pollution, and avoid development of 80 percent of
the environmentally sensitive lands that would otherwise be urbanized.
Land-Use Equals Housing Plus Transportation
A
significant portion of the land-use
debate -- physically, economically and socially -- revolves around
housing. Physically, housing takes up the largest share of any
land use in the urban landscape. In the land surrounding Santa
Monica Bay, for instance, 26 percent of the land is single-family
homes. In Southern California, land makes up 22 percent of the
sales price of a new home, twice the percentage of 45 years ago.
The trend, which is replicated statewide, reflects innovation
that has reduced the relative costs of materials and labor and
a reduction in the availability of suitable land.
The price and ultimately the shape
of housing also is influenced by the costs of building schools,
parks, arterial streets and other community necessities. Many
of these improvements were once financed with bonds repaid with
community property taxes. Since Proposition 13, those improvements
and the costs of planning are financed with fees or assessments
on new homes. The fees range from $10,000 to $30,000 for a typical
home.
| By the year 2000, California will have to build
1.2 million more owner-occupied homes and 680,000 rental units.
At current densities, that will require conversion of 300,000
acres of land -- 10 times that occupied by San Francisco. |
Even with these additional costs,
it is hard for the market to keep pace with the demands created
by rapid population growth. And the higher costs hinder the ability
to provide housing at a price that low-wage earners can afford.
During the 1980s, for instance, new cities far from the Southern
California urban core grew rapidly as the market responded to
the demand for affordable housing, often purchased by commute-willing
consumers. Palmdale grew by 460 percent in 10 years, Moreno Valley
by 322 percent, Lancaster by 102 percent.
The data also reveals a third trend:
In older urban areas, densities increased significantly. The density
resulted mostly because of recent immigrants doubling up in existing
housing. In Los Angeles County, Compton grew by 11 percent and
South Gate by 31 percent. Oakland, after two decades of declining
population, saw its population increase by nearly 10 percent.
Embedded in these trends is a combination of economics, cultural
traits and concerns about crime, the quality of education and
other social attributes -- in addition to the prime factor, population
growth.
Increasingly, planners have recognized
the links between housing and transportation. Low-density housing
and segregated land uses encourage automobile driving, which requires
still more land and capital to accommodate. Those patterns also
discourage transit use because while many people will walk one
block to catch a train, few will drive a mile and park their cars
to do so.
Faced with pollution-control regulations
and declining highway funds, policy makers have struggled to link
jobs and housing in a way that reduces traffic, energy use and
air pollution. The latest generation of federal and state clean
air and transportation legislation requires planners to consider
ways that new development can be designed to reduce automobile
travel. But the evidence indicates that to be successful, these
strategies would have to combine market incentives, regulations
and land-use patterns that make transit convenient, and investments
in transit infrastructure.
And modern lives are getting more
complicated, not less. The rise in double-wage earning families
means many households send two vehicles heading in different directions
each day. In some 1.4 million California families with children
under six years old, all parents in the household are working.
Chart 2 shows that in each of the
last four decades, the miles traveled on California roads has
grown significantly faster than the growth in population. In
projecting vehicle use rates only moderately higher than population
growth for the 1990s, Caltrans assumes personnel income will not
grow, that fuel efficiency will remain the same, and that fuel
prices will increase. What has not been factored into the calculations
is how land-use patterns can increase or decrease vehicle use
and the demands on infrastructure.
Similarly, home mortgage policies
usually do not consider transportation costs when calculating
the monthly expenses of a new home buyer. The worker who heads
to the Inland Empire or the Central Valley in search of the affordable
dream home ends up paying the cost in transportation. A worker
commuting from Modesto or Stockton into the Bay Area can spend
$7,000 a year more for transportation than someone living near
their workplace.
Noting this trend in other large
urban areas, a national study on affordable housing concluded:
Middle income workers, such as police officers, fire fighters, teachers, and other vital workers often live many miles from the communities they serve, because they cannot find affordable housing there. Workers who are forced to live far from their jobs commute long distances by car, which clogs roads and highways, contributes to air pollution and results in significant losses in productivity.31
What Gets Built Is What Can Get Built
T
he Building Industry Association
of Southern California asserts that the State's housing market
is inhibited by two prime circumstances. The first is the financial
burden on new construction to pay for community improvements.
The second is no-growth sentiment that constrains the availability
of land.
That sentiment often translates
into controversies and delays, additional studies and mitigation.
The higher costs and risks associated with the approval process
prompts developers to build projects that will be least controversial
and will contain the biggest profit margins, testified John Landis,
professor of city and regional planning at the University of California,
Berkeley's California Policy Seminar. Landis believes the market
is distorted by four factors: 1) Neighborhood opposition makes
it difficult to increase density or redevelop existing cities.
2) Suburban development is often down zoned to a lower density.
3) Current laws make it hard to establish new cites. 4) And for
fiscal reasons, local governments encourage developers to build
fewer large and expensive homes rather than more compact, affordable
units.
Some of these issues transcend the
state, while some of them are much more prominent in California.
A federal study found that opposition from neighbors to new development
shared the blame for the affordability crisis in many U.S. cities.
The study traced NIMBY-ism to concern over the preservation of
property values, community characteristics, service levels and
homogeneity. But the same study panel was told by the mayor of
Livermore that California's fiscal structure was forcing that
city to discourage housing: "Livermore, California, is bordered
by two jurisdictions that are major job centers, but that look
to Livermore to create the housing their workers require. Since
Livermore does not share in the revenue generated by development
in these employment centers, it is now actively encouraging commercial
development of its own while placing caps on residential projects."
Tom Sargent, a principal of San
Francisco-based Equity Builders Inc., said for these and other
economic-related reasons home builders were encouraged during
the 1980s to compete for the low-risk, upper-end market. Between
1980 and 1990, Sargent said suburban builders erected homes that
were 20 percent larger, 70 percent more expensive, in lower density
neighborhoods and for smaller families. The increase in size
and median price of homes in California is displayed in Chart
3.
Chart 3 shows that both home prices
and size increased through the 1980s. Both variables dipped during
the recession before resuming the upward trend in 1994.
So while middle-class incomes were
holding steady and lower income people were doubling up in inner
cities, new housing got larger and less affordable. And the
trends continue. From 1990 to 1993, the population of Los Angeles
County grew by 1.8 million people. The number of households,
however, increased by only 380,000 -- approximately half of the
household formation rate and indicating a pent-up demand for housing.
The political dynamics of this equation
is changing for the worse. While researchers have documented
the negative consequence of the inter-city race for the sales
tax, economic woes has increased that competition. The competition
has spurred contentious fights and lawsuits between cities that
want regional malls, warehouse retail outlets and auto dealerships,
often at the expense of housing and primary businesses that are
the foundations of a regional economy.
With the shift in emphasis from property taxes to sales taxes for funding local government comes increased incentives on the part of the cities and counties to encourage the development of shopping centers and auto malls instead of housing and manufacturing in an effort to boost sales tax revenue. Housing development, particularly low and moderate income housing, cannot provide enough tax revenue to pay for the local services that would have to be provided.36
In 1992 and again in 1993 the state
budget was balanced by taking nearly $4 billion in property tax
revenue that would have gone to local governments each year and
shifting that money to schools. The long-term consequence is
that local governments can expect even fewer new housing projects
to generate enough revenue to cover even the basic municipal services
of police, fire fighting and parks.
For instance, the Yolo County city
of Davis recently approved a project that will include 367 houses,
295 senior units and 180 multi-family units. It will include
32,000 square feet of retail and 20,000 square feet of office
space -- homes for 1,713 people and a workplace for 167. The
city approved the project despite an economic analysis showing
that by the year 2000, it will cost the city and county $124,000
more to provide services to the new neighborhood than the neighborhood
will generate in revenue. Much of that deficit was due to the
tax break given to senior housing. But even if the seniors complex
were eliminated the project would result in a $12,000 annual deficit
for the city.
In nearby Woodland, planners say
new projects must sell homes for $300,000 a piece -- the extreme
upper end in the small city -- in order to generate a positive
revenue flow to pay for city services. And in cities weary of
trying to compensate for the negative consequences of growth,
the financial squeeze is expected to fuel discontent that is already
constraining the market. Among the responses being considered
by some cities is an "economic impact fee" -- another
exaction on new projects to require home buyers and builders to
pay up front for services that will be received in future years.
"Our current development problems are the result of tremendous population growth, and a collective desire to defer the fiscal and environmental costs associated with that growth," Professor Landis testified. "When, not if, but when the demand for housing again picks up, and when, not if, we again unnecessarily constrain development, housing will become even less affordable. Unless we do something."
|
On the last piece of real estate
of its kind -- more than 1,000 acres of mostly flat and bare land,
edging the Pacific and surrounded by urban Los Angeles -- plans
are being approved for what planners describe as the community
of the future. The city within a city would recycle water for
irrigating landscapes, compost sludge with yard clippings, and
run free non-polluting shuttles to the beach. Homes and offices
would be built to exceed codes in order to consume less energy.
The developer would not only avoid a vast marsh, but expand
and restore it. Half of the land will be wildlife or public recreational
areas. The project was endorsed by the Audubon Society and the
LA Eco-Cities Council.
But the project's Environmental
Impact Report is eight feet thick and cost "several million
dollars" to produce. "I don't believe any human being
has read it. I don't believe any human being is ever going to
read it cover to cover," said Jim Thomas of the Los Angeles
developing firm Maguire Thomas Partners. The firm has been sued
once, expects to be sued again and has negotiated deals with neighboring
cities to prevent still more lawsuits. It must win the informal
consent or formal approval from 79 city, county, state and federal
agencies and departments. Many of those agencies have different
visions of the future and how this project fits into it.
For its size alone, Playa Vista
is unusual. The Commission, however, considered the project as
a case study to illuminate problems in the development approval
process that affect projects large and small, and to identify
possible solutions. Playa Vista also contains many of the attributes
that planners nationally believe are essential to efficiently
accommodate population growth -- a mix of commercial and residential
uses, a variety of housing styles and prices, and other factors
intended to discourage auto use and long commutes and to encourage
community spirit.
What the Commission found was a
process that does not reward creativity and in some cases discourages
innovation, a process with multiple sources of conflict and few
avenues for resolution, a process that calls for comprehensive
review yet requires review after review.
The events involving the large parcel
just north of Los Angeles International Airport reflects larger
California trends. For decades, it served as a private aviation
facility for Howard Hughes. The Spruce Goose and several Hughes
movies were made there while the city grew around it. After Hughes
died, the Summa Corporation planned to fill in the Ballona wetlands
with 2,000 new homes, build a regional shopping center and high
rises. Neighbors, environmentalists and regulatory agencies fiercely
opposed the plan. After a decade of controversy, the project
failed.
When Maguire Thomas Partners took
over Playa Vista, the firm held a series of meetings with neighborhood
and regulatory interests. The success of those efforts and subsequent
redesigns they spawned are reflected in the view of stakeholders
such as Heal the Bay Director Mark Gold, who said the proposal
"seems to be the best opportunity for restoration of the
wetlands."
Homes for 28,785 people, a place
to work for 19,767, and the best chance to save a remnant marsh.
But for all the project has had going for it, Thomas believes
the difficulties it has encountered would make most developers
go broke, and especially smaller ones who might otherwise try
such "compact" projects on smaller scales. "If
no one else came to Los Angeles, we still wouldn't have the ability
to accommodate our children," Thomas testified. "And
you have to ask the question, 'If you are not going to accommodate
growth, who is going to leave?'"
Throughout this report, Playa Vista
is used as an example of the challenges and opportunities facing
Californians in the struggle over how to grow. |
Conflicting Goals
|
|
Conflicting Goals
Finding 1: Competing state policies invite land-use
conflicts that complicate the project approval process -- squandering
fiscal resources, short-changing environmental protections and
discouraging compact development.
C
onsiderable effort has been made
in recent years to streamline the process for obtaining permits
and for reviewing proposals under the California Environmental
Quality Act (CEQA). Many of the reforms are too new to evaluate.
But even if these reforms are completely successful, the public
review and approval process of development projects will remain
fractured.
Duplication in the process is costly.
More importantly, duplication makes it difficult to truly balance
public priorities and to recognize both environmental and economic
limits. Complicated procedures and multiple approvals -- each
a potential source for conflict and delay -- are particularly
onerous to mixed-use and higher-density projects that many planners
believe are essential to more efficiently providing for a growing
California.
This chapter describes the CEQA
process and the permitting process, the problems associated with
both, reform efforts that have been tried, and new avenues for
reform.
CEQA's Promise
T
he Legislature in 1970 added to
the annals of California law both a grand vision for the Golden
State and the prescription for achieving it. The California Environmental
Quality Act requires informed decision making that is open to
public scrutiny. It requires that an array of goals -- from preserving
the echoes of history to reducing the excessive noise of future
projects -- collectively guide nearly all decisions of civic concern.
The law specifically requires decision makers to protect the
quality for life of future Californians, as well as contemporary
ones.
| The law designed as a plowshare to yield California a future of "productive harmony" has been wielded by some as a sword in the State's ceaseless growth wars. |
From this extraordinarily broad mandate, CEQA grew over time to play an even larger role in the State's maturation than originally envisioned. In the absence of detailed community planning, CEQA has become the de facto process for making thousands of minor decisions, while on a project-by-project basis becoming the primary venue for determining how and where communities will grow. As such, the law designed as a plowshare to yield California a future of "productive harmony" has been wielded by some as a sword in the State's ceaseless growth wars. Intended to infuse balance and foresight into public decisions, CEQA has been reduced at times to a series of legal gates opened with exactions. And while intended to be a framework for decision making, the process does not deliver a final decision.
CEQA now spans 150 pages of the
Public Resources Code. The CEQA Guidelines crafted to help local
agencies implement the law cover another 200 pages. And CEQA,
more than many other laws, has been shaped by a myriad of court
rulings -- nearly 300 appellate opinions -- that collectively
guide a series of subjective decisions necessary to negotiate
the CEQA process. Those codes, guidelines and rulings shape some
30,000 environmental documents prepared each year.
The evolution of one paragraph reveals
the simple hope of CEQA's creators, and the rocky reality in which
that hope has struggled to germinate. As first approved, paragraph
(G) of Public Resources Code Section 21001 declared it a goal
of the State to "ensure that the long-term protection of
the environment shall be the guiding criteria of public decisions."
Nine years into the CEQA vision -- at a time of soaring inflation,
interest rates and fuel prices -- the Legislature amended the
paragraph to "ensure the long-term protection of the environment,
consistent with the provision of a decent home and suitable
living environment for every Californian, shall be the guiding
criterion in public decisions."
While environmental protection and
development are not incompatible, they can easily conflict on
the ground. And despite continuous evolution, an overriding fault
remains: CEQA is not the unified decision vehicle described in
its goals. In most cases CEQA is only the first step in a regulatory
process that requires individually obtaining permission from independent
and narrowly focused government agencies to build new neighborhoods,
shopping centers or production facilities.
"It is very important to recognize
that we have lost our way on the intent of CEQA," testified
the planning director for the City of Los Angeles. "No longer
do people do Environmental Impact Reports or go through an environmental
review to provide decision makers with accurate knowledge on the
environmental consequences of the discretionary action. It is
motivated much more by avoiding litigation or winning litigation."
The CEQA Path and Where It Leads
C
EQA has four stated purposes: 1)
To inform the public and decision makers about the potential significant
environmental consequences of a proposal. 2) To identify waysthat damage can be avoided or reduced. 3) To prevent avoidable
damage by requiring feasible changes to projects, including mitigation.
4) And to disclose to the public why the government approves
a project that will have significant environmental consequences.
The CEQA review is conducted by
the public agency that is responsible for making the primary decision
on a project. That "lead agency" is supposed to coordinate
its review with other public agencies that have responsibilities
relating to the project, including issuing permits.
The lead agency completes an initial
study to determine if a project may have significant impacts on
the environment. It must examine impacts on land, air, water,
minerals, flora, fauna noise, and objects of historic and aesthetic
significance. The initial study can lead to three potential ways
to satisfy CEQA:
- If the lead agency finds the project
will have no significant impacts, the agency completes what is
known as a Negative Declaration, a checklist documenting its decision.
- If the lead agency finds that a
project may have a significant impact, but those impacts could
be reduced to insignificance by revising the design or otherwise
compensating for the damage, the lead agency can issue a "mitigated"
Negative Declaration.
42 - If a project may have significant effects that are not easily avoided, the agency must do an Environmental Impact Report (EIR), often completed under contract with outside consultants and virtually always paid for by the developer.
A 1990 survey found that about 4
percent of the development projects subject to CEQA are required
to complete a full EIR. And for every EIR required, 20 projects
satisfy the law with a Negative Declaration. The basic steps
of an EIR include:
- Notice of Preparation.
The lead agency prepares a notice stating the scope of the study
and the alternatives that will be analyzed. Other agencies and
individuals may comment on the notice to influence the study design.
- Draft EIR.
The draft study describes the project's potential impacts, the
possible alternatives and mitigation measures. The draft report
is circulated for public review and comment. If the review process
identifies significant new information that was not analyzed in
the draft report, a revised draft must be prepared and recirculated.
- Final EIR.
The final document incorporates the comments, and is certified
by the lead agency. The lead agency must find that each significant
impact -- when feasible -- will be mitigated to insignificance.
If every impact cannot be mitigated, the agency may find that
there are overriding social or economic reasons for approving
a project, despite those impacts. One study determined that three
in five CEQA reviews are approved with some impact that is not
fully mitigated.
43
Developers complain that the process
does not necessarily end there. A survey of government agencies
discovered 353 CEQA lawsuits filed between 1986 and 1990, or about
three lawsuits for every 1000 CEQA reviews conducted. Nearly
all of the lawsuits were filed by project opponents against cities
and counties. A common legal challenge asserts that a CEQA study
did not adequately analyze the potential consequences of the project.
While few CEQA reviews end up in
court, the threat of lawsuits is pervasive. The fear stems in
part from CEQA provisions -- intended to provide full public
participation -- that grant essentially anyone legal standing
in a court challenge. As a result, CEQA documents are commonly
"bulletproofed" to ensure they will stand up to legal
challenges. Analyses of routine issues are sometimes based on
worst-case scenarios. And while that strategy repels complaints
that the study was inadequate, it often portrays consequences
as worse than they will be, increases mitigation costs and inflames
public concerns.
The American Planning Association,
in its review of the law, described the costs of bulletproofing,
and the reasons why many CEQA experts believe the lawsuit provisions
are abused:
The perceived threat of a lawsuit
has been an important reason for increased effort, cost and time
in the CEQA process, as well as a major contributor to the "bloating"
of environmental documents. Legal challenges have been used as
a means to simply delay or halt a project when petitioners' interests
are really to pursue economic or other motives unrelated to environmental
concerns.
|
Douglas Gardner, the project manager
for Playa Vista, said CEQA has evolved into a legal process, rather
than an environmental or informational one.
"As project sponsors and jurisdictions
know well, the real vulnerability with EIRs is not in disclosing
likely project impacts, but rather in not disclosing any conceivable
impacts," Gardner said.
As a defense against potential lawsuits,
Gardner said the EIR for Playa Vista describes the worst-case
scenario for issues such as traffic congestion, which he believes
unnecessarily raises public concern while requiring mitigation
in excess of the likely impact the project will create.
One community activist testified
that the "bulletproofing" of Playa Vista's CEQA documents
made them less useful: Hedge words inserted to defend against
inevitable uncertainties diminished the documents' value. Minor
points were repeated, while the interpretations of raw data on
key issues were minimized. However, Paul Doebler of the Villa Marina East Homeowners said CEQA does not cause litigation, disagreements do. Most of Playa Vista's neighbors have not entered into the lawsuits, Doebler said, because they were satisfied with the education process.
|
Proposals to limit lawsuits quickly
clash with the strong desire to protect public access to the process.
For the most part, reforms that have been implemented are intended
to streamline litigation rather than limit it. For instance,
large counties were required under a 1993 bill to assign a judge
to CEQA cases, a reform that shows significant promise in speeding
up court reviews and encouraging consistency, but is too new to
evaluate in detail.
Sacramento County Superior Court
Judge James T. Ford, the "CEQA judge" in the capital,
believes many of the lawsuits brought under the environmental
law are the product of the inevitable dissatisfaction that comes
from the political process: "Because the political decision
cannot be challenged directly in court, the attack usually focuses
on the process." He believes lawsuits could be prevented
if more analyses fully described impacts and "honestly"
stated which ones will be mitigated.
CEQA defenders say the process forces
better decisions. Even the lawsuits, defenders say, force agencies
to make honest assessments of a project's impacts and to publicly
justify their decisions. One Sacramento attorney and CEQA expert
argues the law has had the effect of requiring projects to include
costs -- such as air pollution and traffic congestion -- that
historically were passed on to society. She wrote: "CEQA
forces local agencies to take a step back, consider the long-term
implications of their actions, and factor the environment into
their decision making calculations. Simply repeating the 'jobs/growth'
mantra is not enough."
Critics, however, say CEQA has tainted the approval process with risk and costs that do not necessarily translate into environmental protection:
"Legal uncertainties also allow
a variety of non-environmental players to manipulate CEQA to their
advantage -- competing developers trying to stop a project, unions
seeking leverage in contract negotiations, NIMBY neighbors seeking
to stop any developers, or cities trying to keep their tax base
from migrating to other areas," wrote a pair of veteran CEQA
attorneys. "Although it is important not to strip environmental
protection based on economic fears, we believe that the relationship
between CEQA's goals and the amount of time and paperwork that
is thrown at those goals is seriously out of balance."
Ideally, Environmental Impact Reports
or Negative Declarations would provide all of the information
necessary for a developer to move through the process of obtaining
state and local permits and other approvals.
Conflicts Begin At The Top
F
or small and simple projects proposed
for areas where growth is expected, most of the required permits
are issued by local agencies: building permits, grading permits,
sewer connection permits, conditional use permits. Projects do
not have to become very large or very complex before crossing
a threshold requiring a state permit. And stumbling over that
line may become even easier in the future, as developers must
chose between previously developed sites, which are often contaminated
by previous uses and must be cleaned up under state law, or venture
farther into wild lands protected by state laws.
For instance, projects must receive
state permits if they are within the coastal zone, adjacent to
San Francisco Bay, in the Lake Tahoe watershed or the floodways
of the Central Valley. State permits are required if a project
will alter a streambed, encroach on tidelands or submerged waters,
and either dredge or fill wetlands. Projects that will generate
air or water pollution need permits, as do those that will store
or use hazardous materials. Permits are required if the project
involves power transmission lines, pipelines, railroad crossings
or encroach in any way on a state highway or park land. Developers
may have to obtain similar permits from federal agencies, as well.
The various permit procedures reflect
a variety of formal policies intended to influence or outright
regulate land use -- housing, transportation, air and water pollution,
recreation and open space.
In search of inherent incongruities,
the Office of Planning and Research in 1992 analyzed 40 long-term
plans prepared by such state agencies as the Housing and Community
Development, the Department of Fish and Game, and the Office of
Criminal Justice Planning. The study concluded that the plans
were not prepared to ensure or even encourage compatibility: "There
is a noticeable lack of coordination among each of these plans.
There is a lack of consistency in format, time horizons, public
participation in their preparation, sources of data used, monitoring
and evaluation procedures and other factors."
But even more importantly, officials
recognized that the lack of coordination at the state policy level
can result in costly conflicts at the project level. "The
inherent goals of the transportation plan don't have to disagree
with wildlife habitat," said the planning chief for the Office
of Planning and Research. But once planning and construction
of freeways get started, conflicts with environmental agencies
have become routine.
- Housing vs. farmland.
State law requires that
all cities provide for their share of California's population
growth, and specifically their share of low-income housing. The
Department of Housing and Community Development calls for an expedited
permitting process for housing projects. But that directive conflicts
with the Department of Conservation's goals of protecting farm
land, in part by carefully regulating its conversion.
- Housing vs. wildlife habitat.
The State's goal to provide adequate housing also frequently
conflicts with state laws protecting wildlife habitat, wetlands
and timber lands.
- Highways vs. farm and wild
lands. Caltrans'
goal of expanding the transportation system sets up confrontations
with state policies for protecting farm and wild lands. "Coordination"
usually doesn't take place until a project has been planned, funded
and is undergoing CEQA review, the study said, "where it
is handled in an adversarial manner."
- Water and transportation plans vs. clean air policies. The study said water and transportation policies are encouraging urban growth in areas with the worst air pollution in the State and in areas where topography will trap additional pollution resulting from development.
Given that these plans are prepared
by single-purpose agencies, the divergence is a predictable byproduct.
And with few avenues for compromise, the escalation of conflicts
is inevitable. As one analyst observed:
Especially when linked with federal policies, state policies have developed into a fragmented and complex system, dominated by single-focus agencies with dedicated revenue sources. Boundaries of state agencies don't even coincide, let alone regional agencies boundaries or with natural geographic boundaries. Most of the fragmented systems have been regulatory-oriented, preventing economic approaches and actually encouraging illicit behavior like habitat destruction.52
The construction of highway bypasses
in the 1960s and 1970s -- Interstate 680 in Contra Costa County,
Interstate 15 in northern San Diego County, Interstate 405 in
Orange County and Interstate 80 in Sacramento County -- had direct
consequences on farmland preservation policies. More recently,
the University of California's criteria for siting a new campus
has been criticized for not considering the State's air quality,
transportation and other infrastructure plans.
Coordination problems are vertical
as well -- between state, regional and local agencies. The City
of Los Angeles, for instance, has been debating for months with
the California Coastal Commission over a land-use plan for Venice
Beach. It is not that the two levels of government disagree about
important issues such as public access. Rather, the debate is
over whether the plan must be prepared to the city's requirements
or the more detailed requirements of the Coastal Commission.
Playa Vista: Permission Pending
The Playa Vista project will require
41 different city approvals, 16 different county approvals, 17
different state approvals and five different federal permit approvals.
"When you are working with
these different governmental entities," developer Jim Thomas
testified, "you have different mitigation requirements.
Each one wants their problem solved with little regard to the
other problems."
The traffic consequences, for instance,
are reviewed by city , county, state and federal officials --
each using different formulae. Water pollution issues also are
addressed at every level of government.
As part of the CEQA process, the
developers agreed to restore native plants at the base of the
Westchester Bluffs. But after CEQA was completed, the developers
were told by city drainage officials that the area will have to
be covered with concrete to prevent erosion.
In some respects, however, the project
has avoided many of the inter-jurisdictional disputes that can
develop. Secretary of Interior Bruce Babbitt, recognizing the
political importance of the project, facilitated a formal agreement
that commits the federal agencies involved to jointly review the
project, negotiate a single mitigation plan for any environmental
impacts, and mediate any inter-agency disagreements. |
The Coastal Commission also has
felt the friction of multiple agencies with overlapping jurisdictions.
An agency official testified that efforts to timely process permit
applications are periodically stymied because the Commission cannot
get agencies such as the Department of Fish and Game or the regional
water quality control boards to comment on proposed projects.
In another case involving residential
development in the coastal sage habitat of northern San Diego
County, the Coastal Commission received a permit application in
which the CEQA process had been completed without satisfying federal
wildlife officials that endangered species habitat would be protected.
In that case, the Commission believes its overlapping jurisdiction
over sensitive habitats allowed it to broker a compromise.
Tracking the number and types of
conflict is difficult. State agencies are required to report
annually on the time it takes to process permits, which could
describe in part the resistance between policies and proposals.
But few agencies gather that information.
The city planner of Woodland in
Yolo County said the lack of coordination aggravates the difficult
job facing California's communities, the task of accommodating
growth needs while easing the concerns of existing residents that
streets will become more crowded and the air will become unsafe
to breath. Reform efforts to link some policies -- such as transportation
and air pollution -- blur the lines of authority, which creates
tensions that are then aggravated because agencies do not have
the resources to fill their traditional role in traditional ways.
Put most simply: "If we are going to do housing,"
the planner said, "the State must build the roads."
The State has repeatedly tried to
create mechanisms for resolving disputes. Recent reforms require
settlement conferences and allow for mediation in CEQA cases,
or for administrative appeals within permitting agencies. Still,
both project applicants and even some regulators complain that
there is not a routine process for resolving disputes before the
conflict escalates. In some cases it is not even a matter of
breaking logjams, but of balancing the demands that will be placed
on projects to ensure that resources are addressing the most significant
problems. As the chief of the Office of Permit Assistance, put
it: "There is no air traffic controller."
As the example above demonstrates,
projects must negotiate a fractured process, guided by independent
agencies charged with conflicting goals, in which disputes are
ultimately settled in court, where the decision rests more on
legalities than on the merits of a project.
The consequences of conflicts go
beyond the viability of individual developments or the direct
costs of the protracted process:
- Conflict adds to the haze
of uncertainty in the economic atmosphere.
The Center for the Continuous Study of the California Economy
believes growth is restrained by "a lack of institutional
arrangements to resolve regional growth management issues and
conflicts."
61 - Conflict increases the costs
of noncontroversial projects.
Cities and counties now require applicants of large projects to
indemnify the government against a CEQA lawsuit, adding costs
even in cases where lawsuits are not filed. It is not uncommon
for cities to require a full-blown EIR just because the project
is controversial. And if the government agency doesn't seek shelter
behind an EIR, CEQA lawyers commonly advise their clients to do
a full analysis to stave off an obvious lawsuit. Each precaution
costs thousands of dollars.
62 - Conflict can hurt the environment.
The most common response
to public controversy over new housing projects is to lower the
density -- virtually assuring that still more land will be urbanized
to accommodate the needs of a growing population. A national
survey of home builders found that in states with environmental
review requirements, 90 percent had changed plans because of those
reviews. The most common change was a reduction in density.
63
Searching for Efficient Compliance
P
revious reformers have attempted
to resolve CEQA problems by calling for a unified state plan with
clear priorities, by advocating streamlined permitting, by linking
state and local procedures, and revising CEQA. The reforms have
either not been implemented, or failed to provide the desired
improvement.
"The real problem is we have
trouble coming up with a common vision," said Robert Cervero,
a professor of planning at the University of California, Berkeley,
whose research focuses on the connection between land use and
transportation.
State law already requires that
every four years the Office of Planning and Research prepare a
land-use plan called an Environmental Goals and Policy Report.
Two reports have been prepared,
in 1973 and 1978. The 1978 document advocated steering growth
first toward renewing existing urban and suburban areas, then
filling in land that could be served by existing infrastructure,
and then when necessary contiguously expanding urban areas.
The plan detailed 42 steps to achieve
the goals, including CEQA relief in established neighborhoods,
model tax sharing agreements, career criminal laws, and a tax
on land speculation.
The State roared past 30 million
in 1990, with the plan largely ignored. The Deukmejian administration
set aside the report, and when a revised plan was prepared in
1984 it failed to receive the governor's approval.
Yet essentially all reform efforts
-- those initiated to manage growth and those initiated to jump
start the economy -- advocated a detailed state plan as essential
to balance economic, social and environmental concerns.
| "A principal obstacle to coordination at all levels is the conflicting messages and mandates that come from different state agencies." |
The Legislature's Growth Management
Consensus Project called for "Guiding State Policies"
as the first item under the areas it could agree upon: "The
State should adopt internally consistent, coordinated and integrated
policies to direct California's growth-related decisions in eight
interrelated areas: agricultural and natural resources protection;
conservation and development; air quality; transportation; affordable
housing; economic development; physical and social infrastructure;
and social equity."
The Governor's Strategic Growth
report called for a coordinated plan as a vehicle for streamlining
and simplifying state policies. The Council on California Competitiveness
wrote: "California must clearly identify statewide objectives
and require regional and local agencies to conduct their activities
in concert with those objectives. Better planning at all levels
of government provides predictability in land use for resources
protection and for development."
More recently, researchers at UC
Berkeley's California Policy Seminar, after studying efforts to
resolve public controversies with consensus-type negotiations,
concluded that multiple agencies are a central source of conflicts:
A principal obstacle to coordination at all levels is the conflicting messages and mandates that come from different state agencies. Experience elsewhere demonstrates that at least a few goals and broad principles at the state level are necessary to provide a framework for more specific plans by state agencies and regions and to establish criteria for resolving conflicts in agency missions.69
And finally, short of outright conflict,
government is ineffective when its various components are not
coordinated. The vice president of research for the Reason Foundation,
testified:
State and local agencies responsible for guiding resource, transportation, housing, and other related land-use policies seldom coordinate their approaches or integrate their goals. Likewise land-use policies in one jurisdiction often are inconsistent with policies in neighboring jurisdictions.70
Californians who were born the sameyear that the Legislature enacted permit streamlining laws are
old enough to vote. Yet California is still struggling to reduce
the paper and the multiple venues required to get the government's
permission to put land to economic use.
The Legislature -- responding to
concerns that local and state permitting had become an endless
maze, especially for manufacturing facilities -- passed in 1977
what has become known as the Permit Streamlining Act. The law
set deadlines for governments to act on permit applications, and
allowed those permits to be "deemed approved" when the
agency failed to act.
In 1981, the Legislature passed
the Permit Reform Act, which among other things required state
agencies to file annual reports on their permitting activities.
In 1983, the Legislature created the Office of Permit Assistance
and directed it to help local agencies develop expedited permit
processes and authorized the office to mediate disputes between
applicants and the permitting agency.
The laws have been largely unsuccessful.
For instance, the 1983 amendments directed the Office of Permit
Assistance to develop a consolidated permit application form,
but the form was so complicated it went virtually unused. Annual
reports on permit activity are seldom, if ever, filed. And a
1992 evaluation by the Assembly Office of Research showed that
little progress had been made toward devising more efficient permitting.
Similarly, the effectiveness of
action deadlines have been limited. Under the law, if state or
local agencies do not act on a permit application within a prescribed
deadline, the action can be "deemed approved." The
provision is similar to statutes in place in Massachusetts. The
California courts have upheld the validity of permits that were
approved by government default, but restricted the deadlines to
actions that were adjudicatory in nature, rather than legislative.
Issuing a building permit, for instance, is adjudicatory, while
changing the general plan or zoning is legislative. Because most
large projects require some legislative action, that distinction
significantly limited the pressure that deadlines placed on government
agencies. The laws also have been seldom used because it requires
applicants to invoke the act, often with the help of the courts,
and "deemed approved" permits may still have to undergo
public scrutiny.
During the recession of the early
1990s, the Legislature again tried to institutionalize streamlining
by passing SB 1185, which called for a single permit system, primarily
for the pollution, waste and hazardous-materials permits that
are required of manufacturing facilities. Establishing a single
process has been difficult, largely because of the legal requirements
that each agency must fulfill to ensure it is protecting public
health and the environment -- requirements that cannot be easily
reassigned to another agency. Most agencies also have public
review requirements, making consolidation difficult. The state
Environmental Protection Agency in 1995 published regulations
to implement a pilot project for a consolidated permit. The process
would allow an applicant to work with a single agency to acquire
all necessary permits, and provides for an expedited appeal process
if the applicant believes the agency has not acted swiftly or
correctly in processing its application.
In addition to the legislation,
Governor Wilson in September 1992 issued Executive Order W-35-92.
The order directed the agencies to review and streamline their
procedures to the extent allowed by law, and then recommend legislation
to make future improvements. It directed the Office of Permit
Assistance to develop a consolidated permit application (as required
by the 1983 law). The work was to be accomplished by April 1993.
The office has nearly completed
a plan for a pilot project that would electronically consolidate
permits from various state agencies, similar to Cal-EPA's pilot
project for pollution and hazardous material permits. This project
could yield valuable information about using technology to cut
red tape. It also could yield lessons in how to encourage cooperation
between agencies. But the various permitting agencies will still
lack the resources and the legal authority or obligation to consolidate
their permit reviews with the CEQA process.
The director of the Office of Permit
Assistance said the job of consolidating permits is technically
more difficult than most people recognize, that streamlining will
not work unless the processes are truly integrated, and unless
various agencies cooperate. The director believes the pilot project
could clear all three hurdles and create a model that can then
be extended statewide.
|
Los Angeles City Councilwoman Ruth
Galanter said time is money for developers, and since governments
would have more troubles if they waived fees, they should find
ways to cut review times. Galanter, who was elected because she
opposed the first version of Playa Vista, believes state and local
governments must coordinate their requirements at the beginning
of project reviews.
"We need the developers and
someone from each of our agencies in the same room so we can tell
the developers, 'This is what we need to know and these are the
kind of extractions we will want to extract.' We need to make
sure that none of the agencies come in late, like the Fire Department
did in this case when it said, 'You can't have the streets this
way.'" Galanter advocates that whenever more than two state agencies are involved in any kind of state review, they should have to meet at the outset "to make sure the runoff from the road Caltrans wants doesn't pollute the wetlands that Fish and Game is interested in." At the end of the meeting, she said, the agencies should have reached an agreement or have worked out a way to reach an agreement.
|
- Linking State and Local Policies
The complexity of the permitting
process stems in part from the policy that land-use authority
rests with local governments, while many of the problems and conflicts
are regional in nature and of statewide significance. The fractured
authority contributes to the periodic call for regional governments.
One lesson of the growth management debate was that few communities
favor another layer of government, and so any hope of resolving
regional problems would have to rest with regional coordination
among existing government agencies.
The Southern California Association
of Governments, which believes the region's regulatory climate
is choking off business, is searching for ways to "reduce
the cost of meeting legitimate goals."
A difficulty of many state efforts
is that ultimately they rely on local agencies to implement and
blend those reforms with local procedures, which often need reforming
as well. Los Angeles Mayor Riordan's Development Reform Committee
concluded in its review of local procedures: "The City's
Environmental Review Process has become a vehicle for ignoring
the State's 'permit streamlining laws' and the rationale for imposing
scores of sometimes impossible conditions on projects. ... The
City's administration of CEQA, with its truly tortuous bureaucratic
requirements, is far more cumbersome than other California jurisdictions."
The city's process is so complex
that an engineering firm published a map summarizing the overlapping
jurisdictions. The map is frequently used by city staffers.
When the latest round of regulatory
reform started, so much distance lay between the CEQA and the
permitting process that a law had to be passed outlawing a practice
by some state agencies of refusing to even accept permit applications
until the CEQA review was completed. The Legislature required
permitting agencies to begin processing applications before the
CEQA process was completed.
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Jack Broadbent, planning director
for the South Coast Air Quality Management District, said Playa
Vista is a model for improving the design of a project to reduce
automobile use and air pollution. Broadbent attributed the design
improvements to a series of meetings held between the developers
and regulators to identify issues and understand the regulations.
"Up-front project planning
was key to resolving conflicts or problems later," he testified.
"Clear and consistent communication was important to resolving
problems."
Playa Vista Project Manager Doug
Gardner said the lack of institutional arrangement to reach that
level of planning at all levels of government, and especially
between agencies with different interests, is what is missing.
Gardner said the problem of too many governments is particularly
true in large cities, and poses a formidable burden to developers
willing to try innovative projects in neighborhoods in need of
economic rejuvenation. "The absence of effective mechanisms for reconciling conflicting demands and providing appropriate mitigation measures acceptable to and implementable within all affected jurisdictions in such a context constitutes yet another hurdle to development," he said.
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Earlier amendments to the law required
the lead agency to consult with permitting agencies. And other
state agencies are required to raise issues early in the CEQA
process if they expect those issue to be addressed in the final
report. The law, however, stops short of requiring permitting
agencies to raise issues in CEQA that it will want addressed at
permitting, or to comment on mitigation plans that could be modified
to meet permit requirements, as well.
Most of the 1993 reforms focused
on trying to integrate CEQA and the community planning process.
Amendments allowed for communities to conduct Master Environmental
Impact Reports; individual projects that followed the master plans
would only have to study impacts not anticipated in the master
document. While reforms also were attempted in the permit process,
little effort was made toward integrating CEQA and the permitting
process.
A recent study of CEQA conducted
by the California Policy Seminar at the University of California,
Berkeley recommended that the Legislature's top priority should
be getting state agencies to consistently participate in the CEQA
process. Rather than simply mandating participation, the study
recommended creating fee structures that will enable resource-poor
agencies to get involved in an expanded scoping process at the
beginning to better identify the issues that need to be addressed
in order to satisfy all regulatory concerns.
The State Bar of California, in
its review of CEQA, supported the use of Master Environmental
Impact Reports, but cited as a major obstacle the need for better
coordination between all the various agencies -- sewer districts,
air pollution districts, transportation districts.
While the CEQA guidelines encourage
cooperation, the bar noted that the law does not require EIRs
to even list the permits that will be necessary. And while the
law recommends coordination between the agencies conducting CEQA
reviews and those that will issue permits, the bar concluded that
the law should require permitting agencies to "meaningfully"
participate early in the CEQA process. In addition to institutional
inertia, consolidation faces two hurdles:
Legal procedures.
Individual agencies
are expert in their fields and are often obligated by law to follow
specific procedures. Many of those requirements do not allow
for balancing, or discourage compromise, or bind agencies to public
decision procedures that discourage negotiations.
Funding.
Many agencies lack the
resources to be actively involved in a project through the design
and study phase. Many of them can only collect fees at the time
of permitting.
These two factors put the developers
and the agencies -- the projects and the environment -- in a
double bind. A primary goal of CEQA is to avoid environmental
damage by modifying project design. But because agencies are
strapped for funds, they do not want to review a project until
the CEQA document has been completed. Projects often change as
a result of CEQA, and for efficiency sake permitting agencies
only want to review a project once. But unless the permitting
agencies are involved in CEQA, the project may have to be changed
two or three times to satisfy the sequential mandates.
Caltrans -- as a frequent applicant
for environmental permits -- has tried to resolve this problem
by negotiating an agreement allowed under federal law with the
U.S. Army Corps of Engineers, the U.S. Fish and Wildlife Service,
and the U.S. Coast Guard, all of which must approve projects that
will damage wetlands or affect navigation.
Traditionally, highway projects
would undergo years of transportation analysis, then wait in line
for funding, and then be engineered in detail -- long before CEQA
or the permitting process would begin. By the time environmental
agencies were asked to review and approve the project, the plans
were figuratively -- and almost literally -- in concrete.
Under the agreement, each agency
will review and comment on plans at each stage, beginning with
the project's conception. Caltrans has agreed not to proceed to
the next step in its planning until all of the permitting agencies
approve. The permitting agencies, in exchange for the opportunity
to influence Caltrans when environmental harm can be best avoided,
had to reassign staff and be willing to give conditional approval
earlier in the process.
"If nothing else, it has clarified
the different roles and what information each one needs. It gives
formality to nebulous permit processes and it has made everyone
realize that you must make decisions with less than complete information,"
said Caltrans' environmental chief.
The Caltrans project grew out of
an effort by the Federal Highway Administration to integrate the
federal version of CEQA -- the National Environmental Policy Act
(NEPA) -- and the permit process required by the Clean Water Act
for projects that damage wetlands. Federal highway officials
found projects increasingly delayed by the sequential process,
NEPA reviews followed by separate permitting. The most publicized
dispute involved a Connecticut project in which 14 years of planning
ended when the U.S. Army Corps of Engineers denied a wetlands
permit because transportation planners had failed to pursue, as
the Clean Water Act requires, a less-damaging alternative -- widening
an existing highway rather than building a new one through a marsh.
A review by the General Accounting Office concluded that among
the obstacles to integrating NEPA and wetland permitting procedures
was a lack of adequate resources within the agencies.
Opportunities for Additional Reform
A s the dust clears from the recession, research shows that regulations per se cannot be blamed for economic woes or credited with economic prosperity. So far, the evidence shows that environmental regulations by themselves do not greatly hinder or help the economies of individual U.S. States. Two studies conducted at the Massachusetts Institute of Technolo