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.
|
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.
|
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 Technology showed
that states with strong environmental standards were not hit harder
by the recession: "On a state by state basis measurable economic
growth has not been stifled, state competitiveness has not been
undermined, and jobs have not been sacrificed at the alter of
environmentalism."
The Center for the Continuing Study
of the California Economy agrees that regulations were not a significant
cause of California's recession and are not the main obstacle
to prosperity. However, the center maintains: "Inappropriate
regulations that could be made more cost-effective should be re-examined,
whether the economy is growing or not. Business concerns about
regulation were here before the recession began and will be present
when California again outperforms the national economy."
The U.S. Office of Technology said
a constant search for improving the efficiency of environmental
protection is particularly important as more U.S. firms and their
workers pit their products and prices against global competitors:
"U.S. environmental standards are likely to remain among
the world's most stringent. In a more competitive global economy,
it will be important to find ways for U.S. industry to achieve
environmental goals while avoiding competitive handicap."
The California Business Roundtable
has found continuous support for streamlining permit procedures
-- 91 percent of business leaders and 76 percent of voters in
its 1993 survey. The poll also found support for consolidating
state agencies that issue permits -- 88 percent of business leaders
and 75 percent of voters. But while 74 percent of business leaders
favored reducing environmental regulations, less than a majority
of voters -- 45 percent -- supported such reductions.
So while there is a need to protect
public health and quality of life, there is a continuous need
to find more efficient ways of providing those safeguards. Specifically,
the Commission was told of several avenues that show promise:
- Bureaucratic cooperation.
A visible step taken
by the State during the recession to attract and defend jobs was
to develop Red Teams -- high-level officials or their representatives
from diverse agencies who worked collaboratively to resolve regulatory
concerns that jeopardized jobs. The team, for instance, helped
to resolve problems over water quality regulations with a paper
recycling plant proposed for West Sacramento. The federal government
has taken similar steps to ensure that it is speaking with one
voice on large and controversial projects, to make sure that project
developers and the public know they are trying to resolve problems
and not be the problem. Similar mechanisms should be available
for smaller projects.
- Incentives for change.
While streamlining laws have been on the books for years, public
agencies have lacked incentives to do jobs differently, and in
some cases funding mechanisms encourage agencies to delay their
involvement in projects and require as much mitigation as they
can. One suggestion offered was to increase incentives through
fee structures. The State Bar concluded: "If it were made
explicit that a responsible agency could recover its costs from
a project applicant seeking early review, CEQA could require that
the responsible agency provide such early review.
84 The Department of Fish and Game, for instance is allowed to collect a fee for reviewing CEQA documents.85 A recent court decision invalidated the fee because the department could not prove the fee reflected the actual cost of providing the service. In revising the fee structure, the department could be allowed to recover the higher costs for early participation, and be limited in the amount it could charge if it only considered the project after the CEQA review was completed.
- Effective mediation.
Virtually everyone who
has analyzed California's land-use controversies has described
the need for a dispute resolution process, particularly between
government agencies.
86 The Southern California Association of Governments is developing a mediation program it hopes will resolve disputes between its members for everything from competition for sales taxes to the traffic consequences of development.87 Florida's statewide growth policy requires every regional planning council to develop a dispute resolution process. The plan emplaced in the fast-growing South Florida area sets up a tiered strategy: First a neutral facilitator helps to articulates issues. If that doesn't lead to resolution, a mediator gets involved. If that doesn't work, formal arbitration or some other binding legal process is initiated.
88 In Georgia, local governments also must agree to participate in mediation for local growth plans to be certified by the state.89 - Performance-based regulations.
The progress made toward
a market-based air pollution program in Southern California has
increased interest in allowing permit holders more flexibility
in satisfying a variety of regulations. Current regulations often
dictate precisely how problems should be solved, making it difficult
to consider site-specific problems or opportunities. The Cal-EPA
has considered this as part of its consolidated permit process,
by allowing facility compliance plans that would describe how
a permit holder plans to reduce emissions. Similar flexibility
could be used to encourage new projects to design neighborhoods
to reduce traffic rather than pay for the improvements to accommodate
traffic.
Bank of America advocates regulations that allow flexibility in meeting established standards or allow for markets to be developed to reduce undesirable consequences such as air pollution, to conserve resources such as water, and to provide for mitigation such as wildlife habitat. Such approaches encourage innovation -- reducing the cost of compliance, allowing for more development within set standards, and taking the pressure off regulators to relax standards during economic recessions.
90
While CEQA was intended to be the
vehicle for making decisions, it remains just one of many steps
that must be taken to get government approval of projects. Previous
reforms have sought to streamline the various procedures involved,
while offering little in the way of a single process for balancing
competing public interests and efficiently modifying proposals
to satisfy those interests.
Recommendation 1: To speak with one voice,
the State should establish a single, timely process for assessing
the environmental consequences of proposals, compensating for
the harm projects will cause and resolving conflicts between public
agencies.
T
he State needs to move from a sequential
approval process to a unified one. In this regard, the California
Environmental Quality Act should act as the sole vehicle for determining
the potential consequences of the project, receiving public comment,
identifying ways the project could be modified to reduce or otherwise
compensate for those impacts, and for providing the necessary
approvals for the project to proceed. A unified process would
facilitate a balancing of public goals and reduce redundancies
in the process. Fiscal resources saved through a unified process
could be expected to result in lower prices and potentially better
environmental protection. Similarly, efficiencies in the process
could be expected to restore faith in government, improve the
business climate, and ease criticism of California's long-held
environmental goals.
This approach also would more fully
accomplish the goals of previous reforms:
- A unified process could provide
much of the benefits of the long-sought statewide plan by requiring
the lead agency under CEQA to resolve intergovernmental disputes.
- A unified process could eliminate
duplication without eliminating the essential steps of analyzing
potential impacts, receiving public comments and revising the
project to minimize harm and maximize public benefits.
- A unified process could give Californians
what CEQA promised. At the very least, a unified process would
provide as much benefit and more certainty than the current CEQA
process. But carried to its full potential, a unified process
would allow for lead agencies and the public to benefit from better
projects at reduced costs.
The Governor and Legislature can
accomplish this recommendation by:
The goal would not be to erode protections
or sacrifice an agency's expertise for efficiency. The goal is
to raise all issues early, to encourage a single revision to the
project's design and a single mitigation plan that makes the best
use of available resources.
Seeing the
Big Picture
|
|
Seeing the Big Picture
Finding 2: The failure of community planning
has resulted in a project-by-project review of regional growth-related
problems that is costly, time-consuming, ineffective, and discourages
the innovations that could provide more housing with fewer urban
impacts.
T
he current process puts too great
a burden on individual projects -- to determine how and where
communities should grow, and to solve communitywide problems such
as transportation, air pollution and loss of wildlife habitat.
Individual projects do contribute to these problems and should
contribute to their resolution.
However, the process for evaluating
these problems and creating a strategy for resolving them cannot
efficiently or effectively be done on a project-by-project basis.
Among the consequences of these project-level evaluations is
less environmental protection, higher costs, and a lack of innovation
in development design that is needed to give Californians a greater
choice in housing styles and an improved quality of life.
This section describes California's
project-by-project approach to communitywide problems and its
shortcomings, reforms that have been attempted, and why those
reforms have fallen short.
The Failings of General Planning
T
he road map to a community's future
is the general plan. The document, required by state law, must
include elements discussing land use, circulation, housing, conservation,
open space, noise and safety. The law requires that housing elements
be updated every seven years, and that they make provisions for
accommodating the community's share of housing for a variety of
income levels. It also requires an assessment of governmental
and market-based obstacles to providing that housing. The public
must be involved in crafting general plans, and the plans must
be formally adopted. An updated and complete general plan tells
the community where new housing can be expected, how the additional
traffic will be accommodated, and how other municipal services
and amenities will be provided.
But the State has long recognized
that general plans do not integrate all of the issues that are
needed to create an effective strategy for communities to get
where the maps say they are headed.91 The process
is diminished by a least four factors:
- Many communities do not update
their plans as often as needed.
The currency of a plan depends considerably on how fast a community
is growing. But few California communities are insulated from
growth, and researchers say few have invested the $100,000 to
$200,000 that it costs to update the plan for a typical city.92
- Some communities change general
plans frequently.
In communities where it is easy to amend general plan amendments
and rezone parcels, land speculation is encouraged, citizens do
not take the plan seriously and disputes are more common.93
- General plans often lack critical
elements of a growth plan.
Current law does not require infrastructure elements that would
evaluate the public works needed to satisfy growth, or how they
will be financed. General plans do not require biological elements
that could steer development away from the certain conflicts with
environmental agencies.
- Even well done and adhered
to plans are usually not very detailed.
While the plans may discuss the needs of a growing community,
they seldom offer enough specifics to enable officials and residents
to avoid and resolve conflicts.
The obsolescence of plans, and the
lack of resources to update them, is hard to overstate. For instance,
in Los Angeles, the land-use element of the general plan is comprised
of 35 different district plans. Twenty-eight of the plans are
at least 14 years old, and their obsolescence makes them more
of a hurdle for development than a facilitator.94
The Legislature in 1993 recognized
this problem, and attempted to provide a slight nudge to communities
with aging plans.95 Existing law required cities and
counties to update housing elements of their general plans at
least every five years. The 1993 amendment required the Governor's
Office of Planning and Research (OPR) to notify communities with
general plans older than eight years. If the plans were older
than 10 years, the state planners were directed to notify the
Attorney General. The law did not specify what the Attorney General
was supposed to do with the information.
OPR sent out 34 letters to communities
that according to its records had not updated their plans in the
last eight years. The letters started what OPR officials describe
as a "mini firestorm," with the fury coming from local
agencies that took umbrage at being told by the State that their
plans were obsolete.
The mayor of the City of Corcoran
accused the State of trying to "bully cities" into complying
with laws they could not afford:
During the past three years the City of Corcoran has experienced a 20 percent reduction in its revenues due to state take-aways... If the City of Corcoran were to comply with the veiled threat in your letter that we could face action by the Attorney General if we do not revise our General Plan, it would cost up to $75,000 in consultant fees ... If the State feels this is such a high priority, perhaps you should tell me what service we should eliminate, what two police officers we should lay off, or should we close down our municipal pool and Seniors Program, our only recreation programs?96
But even in cities that have met
the letter of the planning laws, researchers have found that a
lack of resources has prompted local agencies to push as much
planning as possible on to individual projects, when development
fees and the California Environmental Quality Act (CEQA) can be
used to fund the required studies.97
Trying to Fill the Void with CEQA
C EQA requires that individual projects ask and answer in detail the questions that ideally are addressed more broadly in general plans. When the questions have not been addressed at the general plan level, the issues often surface for the first time when a project is proposed and CEQA studies are launched. One analysis of this problem concluded that communities with older general plans rely more on CEQA to fulfill planning needs, and are sued more frequently.98 Another study found that communities are increasingly relying on the local permitting process to make growth decisions.99
|
Paul Doebler of Villa Marina East
Homeowners believes one lesson from Playa Vista is that CEQA performs
well its function of providing the public with information and
the ability to comment on development plans. He also believes
it proves that CEQA has been burdened by the lack of poor urban
planning.
General and community plans, he
said are "vague wish-list statements with colored maps."
And he believes the way to improve the process -- and ease the
burden on CEQA -- is for communities to do better planning with
more public involvement and realistic analyses of both a community's
problems and potential.
Playa Vista Project Manager Douglas
Gardner said that additional burden is especially heavy for infill
projects and compact development, because of the complexity of
the uses and the numerous neighbors who fear they will be affected
by the project.
"Beyond those concerns common
to most development, it can be argued that CEQA poses special
dilemmas to progressive land-use planning,' Gardner said. |
The planning chief for the Association
of Bay Area Governments anticipates that this trend will increase:
"As cities and counties continue to be strapped for funds,
resources to maintain general plans will increasingly fall short.
The lack of proper general plan maintenance will increasingly
expose proposed projects and localities to successful legal attack
when a neighborhood organization, environmental group or competing
business is seeking to overturn a development decision."100
There are three problems with this approach. The first is the
conflict that comes from putting inevitable debates over community
growth onto the backs of individual projects. The second is the
burden placed on individual projects to assess and try to resolve
communitywide growth-related problems. The third is it creates
a higher hurdle for compact development projects.
Land-use controversies find fertile
ground in CEQA, which requires detailed analysis of complicated
issues -- like a project's contribution to overall air pollution
-- and then allows anyone in the community who has participated
in the review process to challenge the decision in court.
Peter Calthorpe, a San Francisco
planner and architect who has pioneered new urban designs, believes
that effective community land-use planning is essential to achieving
community-supported development:
In sprawling America, the public perceives development can go anywhere. With no firm decision saying "development here, but not there," every project is thus subject to being a target for opposition on the basis of the broadest public interest and environmental claims. Every fight against development in a process where development is allowed anywhere is a "good" fight. The media usually perceive and report the issue this way.
The resulting project-by-project,
permit-driven land use process all but invites pitched battles
over projects. It is where many development issues are turned
into lengthy, wide-open ad-hoc policy debates with environmental
impact analysis often required.101
CEQA -- with its requirements for
public participation and its broad access to the courts -- makes
for a convenient battlefield. The law also appears to make projects
vulnerable over that portion of the CEQA process that researchers
say is least effective -- in analyzing and compensating for a
project's incremental contribution to regional problems.
CEQA requires projects to assess
their environmental consequences in light of other closely related
past, present or reasonably foreseeable future projects. If a
project by itself will have an insignificant effect, but when
considered in light of other projects it will have a significant
impact, an Environmental Impact Report (EIR) must be completed
and the project must be changed or compensate for that damage.
The goal is to make sure that dozens of environmentally insignificant
actions do not add up to a major problem.102
Cumulative impact analysis, however,
is costly and technically difficult, and thus more easily challenged
in court. A CEQA review by the California Chapter of the American
Planning Association and the Association of Environmental Planners
concluded that the cumulative impact requirement was sound policy,
but difficult to implement. The law often requires project applicants
to pay for analyses that concern entire regions. And the studies
often duplicate those performed by previous projects.103
Also among the costs of the requirement is the added uncertainty.
Two CEQA attorneys recently wrote:
Adequate preparation of (cumulative impact) analysis is probably the most uncertain area of CEQA practice and the hardest area in which to recommend general rules that may apply to a wide variety of projects. The uncertainties about the method and scope of analysis ... make it virtually impossible to complete an evaluation of cumulative impacts with any confidence that it will survive a legal challenge.104
The legal burden might be easier
to endure if developers, planners and public officials were confident
that the analyses were preventing California's paradise from being
incrementally lost. The planners association concluded that the
cumulative impact analyses that are being done for individual
projects have not resulted in effective strategies for dealing
with the problems that the studies document.
A recent university study of CEQA
concluded that "CEQA in practice has failed at effectively
addressing either cumulative or growth-inducing effects."105
Similarly, researchers at the California Policy Seminar at the
University of California, Berkeley, reported that most CEQA participants
agree that project-by-project review and mitigation of cumulative
impacts is not adequately solving environmental problems, and
what is needed is larger plans to resolve problems like diminishing
wildlife habitat or polluted streams. The researchers believed
those larger plans could then be used to establish standards for
calculating a project's contribution to the problem and its contribution
to the solution.106 Professor Landis, who managed
the study, testified:
CEQA has given us high quality development projects, lower residential densities, and site-based environmental impact mitigation, but it has done little to enhance the overall environment. Quite the contrary, our use of CEQA, with its project-specific focus has done little to enhance the overall environment and has distracted us from the need for large scale, long-term ecosystem and habitat planning, statewide long-term water planning and regional land conservation. While we have myopically focused on the environment in our respective backyards, the quality of the natural environment has continued to decline.
In a survey of California planning
officials, 87 percent said CEQA helps to ensure a thorough environmental
analysis, while only 61 percent said the law actually helps to
protect the environment.107 And those statistics
were supported by testimony from the Association of Bay Area Governments
(ABAG) that site-specific cumulative impact analysis is tedious
and often ineffective. ABAG's planning director said that the
political influences exercised through CEQA actually increase
the eventual impacts of growth:
Neighborhood pressure for reductions in project density often impacts neighboring communities, and leads to higher housing costs, inefficient transportation and sprawl. While coordinated local land use plans could significantly mitigate environmental impacts, existing CEQA procedures do not reward such action.
And the Southern California Association
of Governments believes CEQA's project-oriented review can result
in higher and unaccounted for environmental affects: "For
instance, if densities or zoning are reduced below levels that
allow construction of a balanced share of subregional growth,
there is no mechanism to ask what the environmental costs will
be to the region if housing must instead be built elsewhere."108
The intense scrutiny of individual
projects appears to have created a higher hurdle for compact development
than for low-density projects far from existing urban areas.
A review of the development approval process for Los Angeles concluded
that CEQA requirements were undermining the local planning goals
of revitalizing existing areas and increasing density around rail
stops. That analysis recommended standardizing the thresholds
for when certain levels of environmental review would be required.
The analysis also recommended raising the threshold for when
full EIRs would be required for projects near community centers
and transit stations to encourage those projects by reducing the
regulatory burden.109 That recommendation is similar
to one offered by the Governor's Strategic Growth plan.
The planning director of the City of Los Angeles believes that a different scope of study and different
standards should be developed for urban infill sites: "The
kinds of issues necessary for open land and wetlands are so different
than urban parcels that are really being redevelopment. I have
heard people say the law allows for variation, but the fact is
all EIRs cover pretty much the same issues in amazing detail."110
CEQA already recognizes that small
projects with higher densities and mixed uses are environmentally
beneficial. The law was amended in 1993 to relieve mixed-use
projects with fewer than 100 units, and which meet a series of
preconditions, from performing cumulative impact analysis.111
Opportunities for Additional Reforms
|
Playa Vista was endorsed by both
the Southern California Association of Governments and the South
Coast Air Quality Management District. Design elements that encourage
pedestrian and transit use, and provide for a mix of housing types
and jobs, are what regional planners see as elements that can
help the region accommodate more people on less land, while minimizing
economic and environmental costs. Despite the size of the project,
air pollution officials believe that it will not increase carbon
monoxide violations.
Similarly, the project's habitat
restoration plan won Playa Vista both the approval and support
of wildlife agencies and advocates. The project's plans not only
promised to protect what was left of wetlands, but to improve
the marsh and the creek feeding them. "If this ambitious project can be done successfully," the National Audubon Society wrote, "it can serve as a model for others." |
R
eformers who analyzed this problem
in the late 1980s concluded that communities should do more comprehensive
general plans to make it clear to residents and developers where
growth will be allowed. Along with the comprehensive plans, communities
would do Master Environmental Impact Reports, to determine how
the growth plans will effect big-picture issues like wildlife
habitat and polluted runoff, and to establish a strategy for compensating
for those impacts.
The concept was grounded in the
belief that better planning creates common expectations and reduces
confrontation: "Citizen involvement ahead of crisis, in
the planning and design of the community's future (a fearful prospect
for some elected officials), has been shown to produce positive
results, including a reduction in NIMBY-ism."112
By "front loading" the
development process with better planning and coordinated mitigation,
more certainty would be provided to developers and environmentalists.
Projects that are proposed after a Master EIR is completed do
not have to study cumulative impacts, growth inducing impacts
and irreversible significant impacts, if the project impacts fit
within those anticipated in the Master EIR.113
While some planners believe the
merits of Master EIRs have been overstated, still others maintain
that time will give a clearer picture of their effectiveness.
SCAG, for instance, has adopted a Master EIR for the Southern
California region that is expected to minimize the analysis that
individual communities will have to do in their own specific plans.
Success, SCAG hopes, will breed success. Similarly, the city
of Lancaster completed a Master Environmental Impact Report as
part of its last general plan update and is "tiering"
studies off of that analysis.
If there is agreement it is that
detailed up-front planning and analysis is still a good idea,
but not one that many communities can afford or are willing to
pioneer. There are several ways that the State could encourage
communities to do broader planning of growth issues, under Master
EIRs or some other strategy that relieves individual projects
of costly controversies without relieving them of their responsibility
to resolve growth-related problems. Among them:
- More incentives.
Some reformers believe
that more large-scale planning will be accomplished if communities
realize it would save them resources, time and controversy when
projects are proposed. The Association of Bay Area Governments
advocates limiting environmental reviews on projects in urbanized
areas, or when communities or even groups of communities have
completed detailed land-use strategies complete with mitigation
plans for environmental impacts. Similarly, communities could
be relieved of their obligation to complete elements of their
general plans if they join with neighboring communities to develop
plans for housing, transportation or any of the other elements
on a regional basis.
The CEQA Review Committee of the State Bar of California recommended that lead agencies be allowed to certify a project as having satisfied the cumulative impact analysis if it could show those concerns had been addressed in another regulatory venue. Similarly, the California Policy Seminar recommended that the cumulative impact analysis be waived for projects complying with a larger air, water or habitat conservation plan.
In addition to regulatory relief, incentives could be financial. One lesson of the fiscalization of land use is that incentives, even relatively small ones, work.114 If communities will lure regional malls for a 1 percent tax, what will they do for matching planning grants from the State? Some researchers have urged the State to promote consistency between CEQA and long-term planning by increasing incentives for conducting specific plans and requiring consistency between general plan and CEQA guidelines.
- Standardize thresholds. How
a project complies with CEQA is shaped in large measure by the
"significance" of its impacts. This "threshold
of significance" determines whether a project may comply
using a Negative Declaration or a full EIR. Thresholds determine
which impacts must be mitigated. And thresholds determine whether
a project has avoided or reduced its impacts.
About 13 percent of the agencies that regularly conduct CEQA reviews have standardized those thresholds to ensure consistency and add some certainty to the process.115 Santa Barbara County, for instance, has standardized when EIRs will be required, and what mitigation measures will be required for common impacts. San Diego County and the South Coast Air Quality Management District also have standardized thresholds.
Researchers believe such reforms make the process more predictable and encourage architects and planners to avoid problems in the first place or design mitigation into plans. The State Bar review of CEQA indicated that formal thresholds would assist both the public and project proponents to understand the relativity of project's impacts. And the American Planning Association advocates that agencies conducting CEQA reviews establish quantifiable thresholds.
When are Impacts Significant? Jack Broadbent, planning chief for the South Coast Air Quality Management District, believes the Playa Vista case shows the benefits of coordinating government reviews, and the potential for the State to facilitate communication between various agencies.
For starters, Broadbent believes the State could help local agencies develop more consistent procedures for gauging the environmental impacts a project will have, for determining what degree of environmental review is necessary,and for prescribing mitigation to make up for a project's impacts.
"This is an area that is very problematic," Broadbent said. "There is no place to go to determine significance of environmental issues. We think the state should be a better clearing house for this kind of information."
One Southern California planner who was negotiating the paperwork maze for a paging system said virtually every city he approached had a different CEQA threshold for the project -- a 10-foot by 10-foot box placed on top of existing buildings of at least four stories in height. Some said CEQA did not apply, while others required full initial studies.116
The Los Angeles Development Reform Committee recommended that the city standardize review thresholds. One university study concluded: "Even those planners who doubted the internal value of standardized thresholds in the CEQA review process believed that such thresholds would bring greater fairness and consistency to that process."117
Standardized thresholds also could prevent some lawsuits or negate the need to do studies as a defense against lawsuits. Many projects that would seem to satisfy the law with negative declarations end up completing full EIRs because the uncertainty in thresholds provides challengers whose real goal is to stop projects with the opportunity to attack them. Said one CEQA lawyer: "Standardizing thresholds could narrow the uncertain middle ground."118
- Regional cooperation. The
desire for wider analysis and resolution of cumulative impacts
necessitates regional cooperation. When the growth management
debate got bogged down over proposals for regional governments,
many reformers realized that what they were talking about was
regional governance. Often subregional, and usually temporary,
and always within the framework of existing government agencies,
these regional alliances could form to solve specific problems.
The Southern California Association of Governments has developed a bottoms-up decision-making process by creating 13 subregions to coordinate issues among cities, counties and special districts that may be grappling with the same problem. The Executive Director of the agency said the local officials decided to cooperate out of fear that the State would impose a regional structure:
They know they have problems. They know this region is in trouble. They know their communities are in trouble and they are trying to find a way collaboratively to solve their problems. They are not willing to equivocate on the environmental goals and the quality of life issues, but they know we have to have a more streamlined and effective way of making these decisions.
SCAG has set regional goals of increasing real per capita income, achieving quality of life objectives in state law, and ensuring that everyone in the region can participate in the first two goals. A key part of its strategy is to "make sense out of the development process." What SCAG members are looking for from the State, the executive director said, is integration of governmental requirements, coordinated permitting,and the flexibility to find better ways of implementing laws before those changes are put in statutes.
The Association of Bay Area Governments has offered $50,000 in seed money to subregional planning efforts -- bordering communities with a shared future willing to plan that future together.
One such "subregion" -- the cities of Benicia, Fairfield and Vallejo and Solano County -- approved a joint powers agreement in 1994 that established a uniform farmland and open space preservation policy. The governments hope to protect ridge lines, recreational opportunities and a core of their traditional agricultural economy by designating such lands ahead of land speculators and development pressures. Ultimately, some lands may be purchased by a foundation and a system of trails established. In the long-term, the uniform policy also is expected to create more certainty in the development process while preventing developers from "playing" one city against another in development negotiations.119
A research project that analyzed efforts to resolve large-scale disputes with consensus-based negotiations concluded that this kind of regional cooperation was essential to breaking deadlocks:
The state should create strong incentives for regions to organize and for localities to join regional coordinating bodies and reach agreements. A primary incentive would be the requirement that state agencies follow regionally developed strategies that are consistent with the state goals, priorities and performance standards. Local governments could be offered at least two powerful incentives to cooperate with each other in the region. The State should make infrastructure funding contingent upon cooperation. It should also offer regions where there is cooperation the chance to influence state investment and regulatory decisions.120
-
Broad-scale permitting. Some laws have allowed
for general permits for diffuse problems. Currently the state
issues such permits to cities and counties for controlling polluted
runoff, rather than controlling every business, house or shopping
center. Similarly, some proposals for amending the federal Clean
Water Act call for bolstering "watershed" management
approaches. Under such a plan every community within a drainage
could share in cleaning up the worst polluters rather than requiring
everyone to clean up pollution to a certain degree. Such plans
are thought to increase the amount of pollution that can be cleaned
up for a given amount of money, as well as reduce the compliance
cost of regulating each pollution source. On the habitat side,
the State has been pioneering Natural Community Conservation Plans,
designed to protect the habitat of a wide variety of plants and
animals before they are individually protected by the rigid state
and federal endangered species acts.
The Southern California Association of Governments also is moving toward broader habitat planning. The association hopes that better planning will more effectively protect threatened species, shielding the region from still tighter regulatory controls. It also hopes the approach will clarify the costs to developers, creating more certainty in the development process.
All of these broad-scale planning efforts are intended to more effectively protect resources while reducing the conflict and regulatory burden on individual projects.
The common ground that planners, environmentalist and developers are looking for is certainty. Given the complexities of current growth patterns, competing regulations and fiscal realities, the general plan process cannot deliver that certainty. While cities have turned to CEQA to fill the void, there is growing agreement that some of the issues cannot be adequately solved at the project level. The costs, delays and ineffectiveness of project-by-project review of large-scale issues presents a powerful reason for all sides to search for a more efficient and effective way of resolving these issues.
Recommendation 2: Planning laws -- including
CEQA -- should be reformed to encourage local agencies to establish
regional strategies for protecting water quality, open space,
wildlife habitat and other natural assets. Projects complying
with those plans should be relieved from having to assess separately
those problems.
T
he State should create incentives
and provide technical assistance to communities that perform the
kind of big-picture planning called for in existing laws and policies.
This approach would provide significant regulatory relief to
cities and counties that for the most part now coordinate and
consider cumulative impacts on a project-by-project basis.
This approach would allow for more
creativity and efficiency in satisfying environmental regulations
-- and therefore increase the chances those goals will be met
and money will be saved. It also promises to reduce conflicts
over individual projects and between cities and counties.
The Governor and the Legislature
can accomplish this goal by:
-
Creating a revolving fund. Legislation should be
enacted to provide grants and loans that help communities pay
for Master Environmental Impact Reports, watershed-wide water
quality plans, regional habitat conservation plans or similar
documents. Communities could repay the fund as they receive existing
fees collected at the time of development.
Requiring local agencies to standardize CEQA thresholds.
CEQA should be amended to require lead agencies to establish
thresholds that would more consistently determine when different
levels of environmental review would be required and how impacts
can be mitigated. The thresholds for conducting environmental
impact reports for most infill and for small compact development
projects should be raised to require EIRs only in cases when there
is substantial evidence that the environment may be harmed. Regional
planning agencies should coordinate the standardization process
to encourage regional standards where most appropriate.
Rewarding regional cooperation. Legislation should
be enacted creating incentives -- including a priority system
for funding from the state infrastructure bank -- that reward
communities that prepare regional plans for transportation, open
space, habitat, air and water quality. Through an executive order,
the Governor should direct the Resource Agency, Environmental
Protection Agency and Office of Planning and Research to provide
technical assistance and regulatory flexibility to communities
that want to experiment with market-based or performance-oriented
regulatory compliance.
Necessary Groundwork
|
Necessary
Groundwork
Finding 3: The State's failure to invest in infrastructure
has increased housing prices, aggravated growth-related disputes
and diminished California's economic potential.
O
ver the last 15 years, the provision
for infrastructure has become a significant factor in California's
land-use controversies. A coordinated state infrastructure policy
has the potential of reducing a major source of controversy, while
helping to pioneer new solutions to problems such as transportation,
habitat protection, air and water pollution.
This chapter looks at the state's
historic policies, how those policies are failing, what has been
tried to correct these problems and what more could be done.
The Devolution of Infrastructure Policy
D
uring three decades of tremendous
modern growth, California's infrastructure policy was well-defined.
The State financed and built the major capital infrastructure
that tied cities and counties into regions, tied regions together
as a state, and linked California with the world. The State financed
universities and colleges. It spearheaded the State Water Project,
capitalized on federal highway dollars to champion freeway construction,
build sewer plants, and develop airports and shipping facilities.
Cities, counties and special districts
used the expanding property tax base and their ability to increase
property tax rates to fund local capital improvements -- roads
and sewers, parks and libraries, fire stations and schools.
Beginning in the mid-1970s: Federal
and state support for local government in general, and infrastructure
in particular, began to decline. Proposition 13 virtually eliminated
the ability of local governments to spread throughout their communities
the costs associated with development. And population growth
began to accelerate. The ability of local government to keep pace
with the physical needs of modern California was crippled at precisely
the time when those needs were increasing exponentially.121
The Executive Director of the Southern
California Association of Governments testified:
While we have the authority and tools to finance local infrastructure, we do not have the authority and tools to finance subregional and regional infrastructure. Rather, over the past decades, we have relied primarily on federal and state sources to fund these transportation, flood control, open space, endangered species and air quality requirements, all of which are declining. More recently, we have been using linkage fees on project development which have tended either to make project costs uncompetitively high or have discouraged projects.
California is not alone, just a
standout. A congressional joint economic committee estimates
that the failure to maintain infrastructure nationally will create
a $450 million backlog of unmet needs by the year 2000. Some
$50 billion of that deficit will be in California.122
About 5 percent of the state budget
is spent on capital improvements, with most of that money going
to pay debt service on bonds used to finance improvements. Thirty
years ago, 20 percent of the State budget was spent on infrastructure,
with most of those funds paying directly for construction of roads,
bridges, universities and other capital improvements. Similarly,
on a per capita basis, California's infrastructure spending has
declined, and is now among the lowest in the nation.
In recent years, the State has started
to spend more on school facilities, highways, prisons and other
capital projects. But the spending has not nearly caught up with
the demands created by a period of underinvestment, a growing
population and changing societal needs. According to the Department
of Finance, state agencies identify $83.5 billion worth of capital
improvements that will be needed in the next 10 years. From that
list, the Department of Finance estimated the need at $74.4 billion.
But assuming no new revenue sources -- or any additional natural
disasters -- the department estimates that the State will only
have $46.8 billion to invest in the highest priorities.123
The largest need will be transportation; and the $23.2 billion
that finance officials estimate will be available for capital
projects will not reduce current congestion. The second largest
category is school construction. The $13.54 billion that officials
say will be needed over the next decade assumes all enrollment
growth will be in year-round programs and that schools will operate
at 120 percent of capacity.
These trends create different problems
for different regions. For the San Joaquin Valley, for instance,
where one in five new Californians are expected to make their
home in the next 45 years, officials say investments in transportation
are falling far short of growing demands. The highway system,
which has exceeded its 20-year design life and was built for inter-regional
commerce, is becoming increasingly jammed with local traffic --
creating costly delays, compromising public safety and hindering
commerce.124
The Consequences
T
he consequences of this realigned
infrastructure policy can be seen in at least three areas: higher
housing prices; diminished services that contribute to anti-growth
sentiments; and a decline in the State's economic potential. Collectively,
these problems discourage innovation in planning and development.
In the post-Proposition 13 era,
new development has had to "pay its way." In addition
to providing local streets and sewer extensions, which many communities
required before the tax laws were changed, developers have been
required to provide community infrastructure like schools, fire
stations and parks. New projects also have had to pick up much
of the costs of protecting wildlife habitat and wetlands, and
in some places farmland and open space, which are increasingly
considered to be part of the physical infrastructure.
The first response by local governments
to Proposition 13 restraints was to increase fees charged as a
condition of approval. But as the financial demand on new development
increased, the State created mechanisms allowing those costs to
be spread over time. The most popular vehicle, the Mello-Roos
Community Facilities District, was created by a 1982 law allowing
districts to form, sell bonds and assess an annual parcel fee
to repay the debt. By the time the law was 10 years old, $3.25
billion worth of bonds had been sold by cities, counties, school
districts and redevelopment and other public agencies.125
The Legislature also has created other mechanisms, including
Marks-Roos pooled financing, infrastructure and integrated financing
districts that are less well known and less popular.
School impact fees also have become
common ways for extracting infrastructure costs from new development.
Since their creation in 1977, on the eve of Proposition 13, the
role of impact fees has grown quickly. In 1989, on the eve of
the recession, $531 million was collected for school housing,
mostly from new residential construction.126
Whether infrastructure has been
financed with one-time fees or spread out over time, the shift
has had the effect of raising housing prices. Embedded in the
sales prices of a home are fees typically in the range of $15,000
to $20,000. An analysis by the Bay Area Council found that in
the mid-1980s alone, building related fees increased an average
of 126 percent.127 In addition, property developed
since 1980, because of the addition of special taxes, assessments
and fees to finance public facilities, has an annual property
tax payment that approaches or exceeds pre-Proposition 13 levels.
A typical $160,000 home can have a combined annual tax of $4,000.128
The Southern California Association
of Governments (SCAG) believes that concentrating the community's
capital costs of growth on to new construction is a primary factor
in that region's inability to provide affordable housing. Chart
4 displays the 10 least affordable housing markets in the United
States, four of which are in California.
Chart 4 shows that California continues
to dominate the list of states with high housing costs. In San
Francisco, more than 50 percent of the median household's income
goes for housing. And even in Oakland and San Diego, approximately
36 percent of the median disposable income goes to housing.
Perhaps equally important, of the
70 metropolitan areas included in the survey, none of the 10 most
affordable cities were in California. The research, conducted
by Ernst &Young and the National Real Estate Index, found
that even interior cities such as Sacramento, Fresno, Bakersfield
and Riverside have housing costs above the national average.129
Some economists and policy makers
argue that it is appropriate to internalize the costs of growth
on to new construction, providing the market with a truer sense
of the costs that development imposes on society.
Others argue that the policy unfairly
charges occupants of new homes -- not necessarily newcomers.
Higher home prices also have social and economic consequences,
including less home ownership. And increasingly, new development
is asked to pick up costs for facilities that have widespread
community benefits, such as open space and parks. In large measure,
those needs are either financed with fees, exactions on new development,
or left unmet -- aggravating traffic, limiting recreational opportunity
and diminishing community aesthetics.
One of the State's leading infrastructure
experts writes:
There are now many demonstrably effective financing devices that work by squeezing money out of current development projects, or at least out of their subsequent occupants. That is probably fair enough if the financed facilities will serve mostly the residents and businesses in the new development. Local streets, sewers, street lights and perhaps fire stations, libraries and parks may well fall into this clean category. Things get murky when development projects are required to finance facilities that provide some benefits to new inhabitants and some benefits to residents of future developments yet to be formulated or proposed or residents and businesses of the existing community. In both cases, it seems sensible to try and find ways to spread the burden of financing more wisely.130
On the southern edge of Sacramento,
a steady stream of planners, architects and academicians have
come to see the new suburbia rising from low-lying grasslands.
The Laguna West project, designed by Peter Calthorpe, received
national publicity for mixing housing and jobs, encouraging community
involvement with narrow streets and front porches, a town hall
and recreational facilities.
But for all of the attention, and
all of the efforts to build quality of life into the project,
the houses have sold slowly. Certainly the recession had a major
impact. But the project also was saddled with constructing a $12
million freeway interchange -- funded by Mello Roos bonds that
increased annual costs of Laguna West residents -- that is used
by thousands of other commuters in the region.
The provision of infrastructure
-- who pays for it and who suffers when it is not provided --
has become a significant factor in growth-related conflicts.
While longtime residents get frustrated with crowded streets,
crowded parks, lost open space and water shortages, some communities
have been willing to push costs on to new developments as a way
of curbing growth.
One analysis in a national trade
publication predicted that the issue of financing growth will
be increasingly used as a weapon in the State's growth wars:
At issue is whether citizens groups and local governments will allow developers to build the number of units demanded in the marketplace, and at what costs. Opposition to new residential development has not declined during the recession. Local governments across California are under severe financial stress and they are looking for ways to raise revenues while externalizing costs. Residential development will continue to be a target for such efforts through impact fees, increased infrastructure service costs and expanded environmental regulation. These costs will in turn be passed on to buyers and renters -- thereby raising the cost of housing.131
Some communities, however, also
see the provision of infrastructure as a way to reduce conflicts
by encouraging growth without sacrificing quality of life. Some
communities are considering open space, recreational areas, wildlife
habitat and agricultural preserves as part of the infrastructure
that needs to be provided or protected over the long run. By
thinking about these resources as infrastructure, planners hope
to satisfy regulatory needs more efficiently and avoid regulatory
gridlock, as well as quell concerns of existing residents that
every square inch is going to be developed.
There is significant evidence, and
it is a widely held perception, that California's underinvestment
in infrastructure is dulling its economic edge. Infrastructure
investment traditionally focuses on land-related improvements,
such bridges, highways and sewers, and social-related issues such
as education. Investments in both areas attract companies looking
for places to locate or expand -- by providing the work force
to produce goods and the physical improvements to provide for
those people, as well as the movement of ingredients and products.
Service-oriented businesses may be less interested in the physical
movement of goods. But in large metropolises, providing the physical
needs of a work force increases in importance.
The role of infrastructure investment
as an economic stimulant is controversial. The latest debate
sprung from assertions made during the late 1980s -- and fueled
by the recession and politics of the 1992 presidential campaign
-- that declining public investment in infrastructure was largely
responsible for declining productivity in private industry.
That argument was countered by economists
who believed the nation would benefit more if that same capital
were invested in private ventures. Infrastructure demand, they
argued, was inflated because it was "priced" too low.
That is, that fees, tolls and taxes didn't cover the true cost
of providing the roads, water, sewers and airports, encouraging
the demand for infrastructure to exceed supply.132
The debate yielded some conclusions
that are important policy considerations for California. Among
them is that different projects can yield vastly different economic
benefits. The first road into a region, for instance, is economically
critical, while the fourth or fifth road will be economically
marginal. Similarly, providing critical links can be better for
maintaining the integrity of a transportation or water system
facing increasing demands than entirely new highways. And finally,
that managing demand for public goods can be more beneficial economically
than trying to provide unlimited supply.
| "The challenges are about the inability, to date, of California to develop a strategy for economic competitiveness for the 1990s. While there is a broad agreement that education, infrastructure, quality of life and business costs and regulations are key locational determinants, there is no agreement on priorities." |
In California, those lessons may
prove critical as the State tries to provide for a growing population,
a dynamic economy, increasingly global trade and rapidly evolving
technologies. In Los Angeles alone, planners do not expect housing
development to keep pace with job growth, requiring more workers
to commute from outlying cities: "This could severely impact
the transportation system, leading to excessive congestion, increased
fuel consumption and higher levels of air pollution." This,
in a region where transportation officials say the freeway system
is nearing completion, yet where stretches of highway are congested
for three hours on a typical week day.133
The Center for the Continuing Study
of the California Economy believes that California's economic
growth is restrained by underinvestment in public services, primarily
because local governments have few options for making those investments.134
In a recent evaluation of the California
economy, the center reported:
The challenges are about the inability, to date, of California to develop a strategy for economic competitiveness for the 1990s. While there is a broad agreement that education, infrastructure, quality of life and business costs and regulations are key locational determinants, there is no agreement on priorities. Despite numerous studies urging more investment in education and infrastructure, there is no agreement on a funding plan.
An important element of infrastructure
is the transportation system, particularly in regions involved
in trade. Chart 5 shows traffic congestion as measured in time
and dollars in several western U.S. cities.
Chart 5 shows that traffic exacts
formidable costs in major California cities, particularly when
compared with cities in states competing for California jobs.
The same trends hold true on a per
capita basis, as well. Traffic congestion costs the typical Los
Angeles resident $670 a year, compared to $80 in annual costs
to the typical resident of Salt Lake City.
The California Council for Environmental
and Economic Balance believes the infrastructure deficit has caused
the State to lose its economic edge, has increased social tensions
and has resulted in more environmental damage:
No conscientious homeowner would let a house deteriorate to the current shape of our California home. Our State's infrastructure has been the solid foundation of California's economic miracle. The decline of that infrastructure is the most serious crisis we face, and is an important factor underlying the economic malaise California faces in the 1990s and beyond.
Fortune Magazine, when it assesses
cities that are best for business looks at transportation, airports,
roads and seaports; research universities that create spinoff
businesses and a high-caliber labor pool; a network of high quality
business services, and a good quality of life, including cultural
and recreational amenities.
The Commission also heard evidence
that infrastructure neglect is discouraging innovation in development
-- different housing types, mixes of residential and commercial,
higher densities, clustered projects around transit sites. In
addition, the mechanisms that have been enacted since Proposition
13 for funding local infrastructure do not work as well for infill
development as they do for urbanizing open lands.
From the developers' perspective, higher building costs reduce the amount of risk that they are willing to take -- risks associated with proposals that are different than public officials, neighbors and consumers have accepted in the past. From the public perspective, without investment infrastructure, the best laid plans may never leave paper.
Sacramento County's 1992 general
plan update has received national attention for trying to preserve
recreation and habitat corridors, while planning for large population
increases. The plan has been viewed as putting into practice
much of what has been learned about urban systems during the last
30 years. The Sacramento County staff has traveled throughout
the nation to explain both the mechanics of the plan and how the
county managed to get it done.
A linchpin of the plan is higher
density homes clustered around light rail lines to allow continued
development of suburban areas without adding to traffic congestion
and air pollution. The area already has some of the worst air
quality in the nation. And transportation plans show that if
something is not done differently, the amount of traffic on the
road is expected to double in the next 20 years and the time
lost to delays will increase by more than 4,000 percent.135
The county's general plan calls for overall housing densities
to increase slightly in new neighborhoods. But more significantly,
it calls for clustering higher-density housing around transit
stops to increase the number of affordable homes and put enough
people within walking distance of transit stops to make transit
feasible.
The plan included an urban service
boundary, a physical limit where it anticipates development will
stop. The boundary is expected to save money by allowing infrastructure
to be sized accordingly the first time, discourage land speculation,
and hopefully reduce the political pressure to rezone land from
agriculture to urban.
But the plan is already unraveling
because the region does not have the money to expand the transit
system. And without the transit system, the higher density homes
are without reason. Policy makers are having a hard time defending
the cluster projects against neighborhood complaints -- people
who bought pastoral and want pastoral, but are willing to be surrounded
by low-density suburbia.
As a result, land that had been
set aside around an existing railroad easement may be downzoned
to accommodate neighborhood concerns. But downzoning will mean
the area set aside for development will not be able to accommodate
the expected population growth, increasing the chances that development
will encroach into areas the plan earmarked for recreational open
space and wildlife habitat. And without the higher densities,
it is unlikely that even when money becomes available to expand
the rail system, there will be the ridership to support transit.136
Infill projects also are disadvantaged
by current infrastructure schemes. Funding mechanisms that have
become popular since Proposition 13 function best when the costs
can be spread over several hundred homes and special taxes can
be approved before anyone is around to protest.
|
New Projects in Old Neighborhoods
Projects in the interiors of cities,
such as Playa Vista, must pay for infrastructure, just as development
on the fringe.
But replacing or upgrading existing
infrastructure can add additional costs, and the process of knowing
exactly what will be required can be more difficult in old cities
than new suburbs.
Councilwoman Ruth Galanter testified:
"Local governments are in a
terrible pickle. We are stuck without ways to pay for regional
infrastructure and neighborhood improvements.
"And as a result we have this
patchwork of fees that make the process more complicated. We
do not have a way to weigh all of the costs and all of the benefits
and say to the developer, 'Here is what it will cost you.'"
Maguire Thomas Partners' Douglas
Gardner said that uncertainty is magnified by the fact that many
cities have not properly maintained or improved infrastructure,
and look to new developments to provide the infusion of capital.
"Under such circumstances, developers are asked to provide mitigations which address not only project impacts, but which inevitably seek in at least some measure to remediate inherited infrastructure systems deficit," Gardner said. |
A Mello-Roos tax assessment requires
approval of two-thirds of the voters in a district. If there
are fewer than 12 registered voters in the district, the vote
is held among the landowners, one vote per acre.137
Most often the districts are set up for a large parcel of land
before it is developed, and so the approval is accomplished with
a landowner vote, with most of the votes held by the developers.
A 1992 study by the California Debt
Advisory Commission reported that the vast majority of the districts
had approved their assessments with landowner votes. Most of
the bonds also were sold to finance improvements in counties where
large tracts of land were being converted from non-urban uses.
In turn, Mello-Roos is less likely
to win broad support if it is to be used to modernize infrastructure
in an older neighborhood to accommodate an infill project, even
if existing residents will benefit from the new interchange, the
park, the school or sewer line.
As one municipal attorney observed:
If a group of cooperating landowners wants to fund infrastructure for their project by imposing a special tax on their areas, they can do so, even over the objections of a number of local residents. This cooperation is more likely to occur in a rural than an urban setting, because with larger rural parcels, there are fewer owners whose cooperation is necessary and fewer potential opponents.138
The academic director at the Streisand
Center for Conservancy Studies testified that the inability of
cities to improve infrastructure in existing areas can undermine
otherwise sound plans to accommodate growth:
In the most recent plan, the City of Los Angeles could not allocate development to the communities that had the most infrastructure capacity first because most areas are deficient in infrastructure and require huge investments just to replace failing systems communitywide. And second, because most infrastructure capacity that did exist was in low density, higher income neighborhoods that would most strongly resist densification and mixed use.139
In addition to discouraging solutions,
the Streisand Center's director believes the deteriorating infrastructure
contributes to the spiraling decline of inner cities and the continued
pressure on natural resources in rural areas. Without significant
investment, she testified:
It is hard to see how the population growth will be absorbed other than through more homelessness, more overcrowding, more middle class exodus from Los Angeles, decreasing serviceablity of existing infrastructure and decreasing quality of life. If we are to avoid this Blade Runner future, ways to finance major regional improvements to infrastructure must be developed.
Restoring a State Role
S
tate policy makers have struggled
with this problem because as California's capital needs continue
to grow, public support for general obligation bonds and special
fees continues to wane. Those who have sought solutions to California's
growth wars and those who have sought to restore the State's economic
reputation have all identified the need for infrastructure investment,
but few have crafted a strategy for winning voter approval for
the additional revenue that would be needed for substantial expenditures.
One consensus solution was the creation
of a State Infrastructure Bank, which was approved by the Legislature
and the Governor in 1994. The bank, fashioned after similar entities
in more than 20 other states, would attempt to use a minimal amount
of state resources to leverage a significantly larger amount of
investment by local agencies. Its creators believe that a state
investment of $200 million could yield $5 billion worth of investment.
The bank, however, has not been funded and exists only on paper.
The bank would work by using tools at the State's disposal to
lower borrowing costs or enable local agencies to finance projects
in markets they might not otherwise be able to tap. Among the
tools the bank could use to encourage investment:
-
Create a guarantee trust fund.
With bond proceeds, the bank could set up a reserve fund equal
to the maximum annual debt of all of its bonds. The State also
would pledge its "moral obligation" to restore the fund
if it is ever drawn upon. Such trust funds enhance the credit
rating of the bonds and lower borrowing costs.
- Create a state aid intercept
program. This program
would allow the bank to intercept payments of state funds to local
agencies if that local agency were to default on a bond. The program
can improve bond ratings and lower costs. The law currently allows
cities and counties to designate motor vehicle license fee as
a revenue stream for guaranteeing funds and reducing borrowing
costs.
- Create a state appropriation
backing program.
Under this program,
the bonds could technically be repaid by the State, with the local
agencies making lease payments for facilities constructed from
bond revenues. This strategy also can lower the borrowing costs.
The law grants the bank the authority
to issue bonds, provide guarantees and leverage other public investments.
It can invest in streets, highways, parking, bridges, sewage treatment,
flood control, libraries, parks, port facilities, railroad facilities,
airports, environmental mitigation and defense conversion projects.
A significant portion of the debate
over the bank was whether it should be used as a way to encourage
local agencies to engage in planning and development strategies
adopted at the state level. The law contains a requirement that
the agency applying for assistance from the bank make a self-determined
finding that the capital improvement project is consistent with
the State's Environmental Goals and Policies Report.
Redefining Infrastructure
B
eyond the issue of funding the bank,
California still faces the question of making sure that additional
investments are made wisely. The interest in redefining infrastructure
is driven by three factors: 1) Fewer resources are available to
meet increasing demands. 2) Some traditional infrastructure solutions
may not be as effective in providing for 40 million people as
they did 20 million people. 3) Regulations and public demands
are expanding the public goods that a community must provide to
grow without conflict.
While some agencies talk about ways
to increase public support for infrastructure investment, few
believe that at any time in the near future the State will return
to making substantial investment from the general fund.
The Southern California Association
of Governments believes that educating business leaders and the
public is necessary to increase revenues for investment. But the
association also advocates more fundamental changes to the State/local
fiscal relationship to restore accountability and realign the
ability to raise funds with the ability to spend funds: "Serious
investigation is needed to find ways to assist local government
in financing the enormously expensive cost of region-serving infrastructure."140
SCAG also believes that a coherent
statewide investment policy is needed if the region is going to
solve the problem created by years of declining investment. The
association is particularly concerned about its ability to capture
its share of increasing global trade without the physical improvements
needed to efficiently move goods through the clogged region.
SCAG is not alone in believing that large infrastructure needs
and limited revenues increases the need for California to set
priorities and coordinate investments to insure they are compatible.
The Center for the Continuing Study
of the California Economy has noted: "California doesn't
have a long-term public investment strategy." The State does
not know which projects it should fund, how it will fund them,
or how it will link those investments with better management tools
such as congestion pricing.
Some researchers believe that failing
to use infrastructure more efficiently places "an invisible
but powerful drag on productivity, profitability, household standard
of living and human welfare." For example, American households
spend 15 to 22 percent of their income on transportation, compared
to Japanese, who spend 9.4 percent of their income on transportation.141
Planner Peter Calthorpe believes
state infrastructure funds can be a powerful incentive to encourage
local government to pursue more efficient land-use patterns and
to do better community planning: "Regions which optimize
those dollars on coherent regional and community plans should
be rewarded. Regions which squander them on sprawl should suffer
the same disinvestment that any poorly planned business would."
Scarcity is widening the support
for efficiency strategies that a decade ago would have been too
flammable to discuss.
The Southern California Association
of Governments urges the exploration of such market-based solutions
as scaled-back parking subsidies, deregulation of transit and
congestion pricing, which would charge drivers a toll (or a higher
toll where one exists) to drive during commute times. A similar
plan is being considered for Bay Area bridges. Raising the peak-time
toll on the Bay Bridge from $1 to $3 would reduce the delay by
10 minutes and result in an annual net savings of $3.5 million.
Even considering the higher toll, every commuter would save $100
a year in time and fuel.142 National studies have
suggested that daily roundtrip "congestion fees" between
$2 and $3 may reduce peak traffic by 10 percent to 15 percent.143
Traditionally, infrastructure policies
have not even required consideration of strategies to reduce peak
demands. Instead, policies encouraged transportation, water suppliers
and others to satisfy peak demands. And in many cases demand
has grown faster than it might otherwise have because usage is
not linked to price.144 But just as power, telephone
and other utilities have reduced capital costs with time-sensitive
pricing, other infrastructure suppliers are looking for pricing
and other market-based mechanisms to control demand.145
The federal Intermodal Surface Transportation
Efficiency Act of 1991 has helped to redefine planning -- putting
a greater emphasis on alternative transportation modes and maximizing
the use of existing transportation facilities. The act also encouraged
better linkages between land-use, transportation and air quality
planning.
|
While community activists and city
officials have been concerned about Playa Vista's impacts on regional
infrastructure, the project hopes to reduce the impacts that might
come from a traditional high-density project.
Alternative transportation systems,
mixed land-uses and a pedestrian environment are all intended
to reduce dependency on the automobile. The same narrower streets
that are intended to encourage walking will also take up less
valuable land. The more walking people do to neighborhood stores,
the less parking that is necessary.
"This more efficient development
pattern, accompanied by a critical mass of mixed-uses, creates
more self-sufficient communities which can accommodate more growth
with less per capita infrastructure costs," project officials
believe. |
California Transportation Directions,
a project that involved state, regional and local officials, advocated
better links between transportation and land planning, and better
coordination between various transportation planning agencies.
A primary goal of the strategy, the group concluded, should be
to design new neighborhoods to encourage alternatives to single-occupancy
vehicle use, to make better use of existing infrastructure, and
to coordinate future investments to ensure efficiency.146
Some experts believe that infrastructure
projects should have to pass more rigid analysis of economic
efficiency and cost-effectiveness. User fees and bond votes not
only create revenue streams, but provide clear signals to just
how much citizens are willing to pay for the improvements.
The Mojave Desert city of Lancaster
is looking to pricing to create more efficiency in sewer pipes
and asphalt. After a decade of intense growth, the city adopted
a new infrastructure plan in 1993 that sets developer fees closer
to the actual cost of providing service. The farther the project
is from existing development, the more expensive the fees. City
officials tried a more traditional urban limit line to encourage
concentric growth, but no matter where they drew the line a landowner
looking to develop was on the outside. So city officials then
calculated a multiplier to reflect the higher costs of serving
distant areas. To simplify implementation they used the formula
to establish fee zones. Building a project adjacent to existing
neighborhoods can save the developer and future homeowner $2,200
a house over a home built in the next tier out.147
Planners are looking for economic
solutions, not only because funding is scarce, but because from
an engineering standpoint there is doubt that traditional solutions
can keep pace with modern demands. The General Accounting Office
estimates that Americans spend 1,252 billion hours a year stuck
in traffic at a cost of $168 billion. Assuming the trends continue,
congestion will increase 452 percent to 6,906 billion hours by
2005.148
Not only is there not enough money
to provide public facilities as they were provided in the past,
but some communities are adding more "goods" onto their
shopping list. As growth continues, parks become crowded, open
space diminishes and wildlife habitat comes into conflict with
the path of progress. In many cases, either communities or the
law require developers to take these less-traditional infrastructure
needs into account.
The Governor's Strategic Growth
team concluded that the failure to plan for infrastructure and
the piecemeal approach to environmental protection were both contributingto growth-related conflicts. It advocated more unified approaches
to meeting both needs as a remedy.
Similarly, the Peace-Bergeson Act
creating the state infrastructure bank states that investment
policies "should be coordinated with any future legislative
plan involving growth management strategies designed to make economic
growth compatible with environmental protections."149
The law allows the bank to participate in projects intended to
satisfy the needs of growing regions for coordinated habitat preservation,
open space and recreational facilities.
Broad consensus has developed that
the State has failed to adequately invest in infrastructure.
But at issue is more than the need for new revenues. California
must better manage existing infrastructure, find new solutions
to its infrastructure needs, and redefine infrastructure to include
all of a community's growth-related needs -- in some places that
will be concrete and in some places that will be wetlands.
Recommendation 3: The State must invest in
well-planned and efficient infrastructure to accommodate a growing
population and capture economic opportunity.
C
alifornia must coordinate its investments.
It also must better manage the demands on existing resources
to stay economically competitive while preserving quality of life
of its residents. 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 accomplish this recommendation 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 with infrastructure planning problems.
And it should recommend policy and legislative changes to enable
better management of the State's infrastructure.
- Housing, economic development, farm land preservation and environmental goals are being undermined by obsolete ordinances that discourage innovation.
- Obsolete zoning, parking and other local
ordinances are a burden on compact developments because they prevent
mixed uses, encourage solo automobile use and discourage neighborhoods
designed to accommodate pedestrians.
- Builders, designers and lenders have
a variety of concerns about investing in innovative development
and even traditional attached housing projects. Those concerns
need to be resolved if California is to provide affordable housing
to its growing and changing population.
- The State can fill a leadership role
by bringing together researchers, planners, lenders, designers
and community leaders to create model ordinances that would encourage
innovation in development.
- Encourage consideration of long-term
fiscal and environmental costs and benefits of a development project
in addition to short term costs and benefits.151
- Encourage adequate planning for
a variety of housing styles and price ranges to provide for all
segments of the population.152 And encourage higher
densities in housing projects in order to provide affordable housing.153
- Encourage preservation of open space
and discourage the premature and unnecessary conversion of agricultural
lands. The law states that protecting farmland benefits urban
dwellers by discouraging "discontiguous urban development
patterns which unnecessarily increase the costs of community services
to community residents."154
- Provide for transportation of all
segments of the population in ways that do not risk public safety,
pollute the environment or disrupt communities.155
- Private Sector Concerns
- Obsolete Ordinances
- Easing Private Sector Concerns
- Creating Model Zoning Ordinances
- Creating density floors rather than
just density ceilings to ensure that land fulfills its potential
to accommodate growth needs.
- Creating priorities of which lands
should be developed first, effectively creating degrees of certainty
that will help developers negotiate the process.
- Revising building codes that currently set higher standards for mixed-use projects.
- Rethinking Parking Ordinances
- 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.
- Lynn Scarlett, vice president, The Reason Foundation, in testimony to the Commission.
- Stephen Levy, director of the Center for the Continuing Study of the California Economy, in testimony to the Commission.
- Madelyn Glickfeld and Ned Levine, The New Land Use Regulation "Revolution: Why California's Local Jurisdictions Enact Growth Control and Management Measures, University of California at Los Angeles, 1990.
- John D. Landis, Do Growth Controls Work?, California Policy Seminar, University of California, 1992.
- Ibid.
- Interview with Steve Sanders, Senate Office of Research.
- Center for California Studies, Summary of Findings, Growth Management Consensus Project, California State University, Sacramento, 1992.
- Strategic Growth: Taking Charge of the Future, Report of the Growth Management Council to Governor Wilson, January 1993.
- Ibid.
- John D. Landis, Subhrajit Guhathakurta and Michael Smith-Heimer, "An Insider's Guide to the California Market," Mortgage Banking, September 1994.
- Council on California Competitiveness, California's Jobs and Future, Peter Ueberroth, Chairman. April 1992.
- Bradley Inman, "Industry Endures its Darkest Days," The Sacramento Bee, August 2, 1992.
- Association of Bay Area Governments, Trends in Income: An Analysis of California Income Tax Returns for San Francisco Bay Area Counties, Working Paper 94-2. September 1994.
- Southern California Association of Governments, "The Economy," Regional Comprehensive Plan, June 1994.
- Center for the Continuing Study of the California Economy, California County Projections, Palo Alto, CA, 1993.
- Bank of America, California Resources Agency, Greenbelt Alliance, The Low Income Housing Fund, Beyond Sprawl: New Patterns of Growth to Fit the New California, January 1995.
- Peter Calthorpe, The Next American Metropolis, New York: Princeton Architectural Press, 1993.
- Robert Burchell, Impact Assessment of the New Jersey Interim State Development and Redevelopment Plan, Executive Summary, Rutgers University, Center for Urban Policy Research, February 28, 1992.
- Southern California Association of Governments, "Housing," Regional Comprehensive Plan and Guide, September 1994.
- Ibid.
- Steven Hayward, A Primer on the Growth Controversy in California: How to Think About Growth, Public Finance, Housing Regulation, and Transportation, The Claremont Institute, Sacramento. November 1, 1991.
- Richard Sybert and T. Anthony Quinn, Analysis of the 1990 Census in California, Governor's Office of Planning and Research and Governor's Interagency Council on Growth Manaaement, October 1991.
- Anthony Downs, New Visions for Metropolitan America, Washington, D.C.: The Brookings Institution, 1994.
- John D. Landis, et al., How Shall We Grow? Alternative Futures for the Greater San Francisco Bay Region, California Policy Seminar, University of California, 1993.
- San Joaquin Valley Unified Air Pollution Control District, Air Quality Guidelines for General Plans, Final Draft, September 22, 1994.
- Robert Cervero, "Surviving the Suburbs: Transit's Untapped Frontiers," Access, Research from the University of California Transportation Center, Spring 1993.
- Judith McBrine, "Attracting Working Parents with Young Children to High Occupancy Commute Methods," Proceedings, Transportation Solutions for Today, Tomorrow and Beyond, Fourth National Conference for Small and Medium-Sized Areas, May 1994.
- Caltrans, California Motor Vehicle Stock, Travel and Fuel Forecast, Office of Traffic Improvement, November 1993.
- Tom Sargent, principal, Community Equity Builders, in testimony to the Commission.
- Metropolitan Transportation Commission, 1994 Regional Transportation Plan for the San Francisco Bay Area, 1994.
- Thomas Kean and Thomas Ludlow Ashley, Not in My Backyard: Removing Barriers to Affordable Housing, Report to President Bush and Secretary Kemp by the Advisory Commission on Regulatory Barriers to Affordable Housing, Washington: U.S. Department of Housing and Urban Development, 1991.
- Southern California Association of Governments, "The Economy," Regional Comprehensive Plan. June 1994.
- Kean. OD cit.
- Center for the Continuing Study of the California Economy, California County Projections 1993, Palo Alto, CA.
- SCAG, "The Economy," Op. cit.
- Steven Sheffrin and Terri Sexton, "Equity and Efficiency in the California Tax System, California Fiscal Reform: A Plan for Action, California Business-Higher Education Forum, 1994
- Economic & Planning Systems, Inc., City and County Fiscal Study for the Evergreen Project, Prepared for the City Davis and County of Yolo, April 19, 1994.
- Janet Ruggiero, planning director, City of Woodland, in interview with Commission staff.
- Robert B. Olshansky, The California Environmental Quality Act and Local Planning, University of Illinois at Urbana - Champaign, December 1994.
- Office of Permit Assistance, 1994 California Permit Handbook, California Trade and Commerce Agency.
- Con Howe, planning director, City of Los Angeles, in testimony to the Commission.
- Olshansky, Op. cit.
- Ibid.
- CEQA Task Force, California Chapter American Planning Association and Association of Environmental Professionals, Streamlining CEQA: An Action Agenda, March 12, 1993.
- Public Resources Code 21167.1 (b) and interview with Sacramento County Superior Court Judge James T. Ford.
- James T. Ford, "Resolving Land Use & Environmental Disputes: Is There a Better Way," Land Use Forum, Summer 1993.
- Tina A. Thomas, "CEQA Turns Twenty-One: In Defense of CEQA," Land Use Forum, Spring 1993.
- Michael H. Zischke and Stephen L. Kostka, "CEQA Turns Twenty-One: A Call for Reform," Land Use Forum, Spring 1993.
- Office of Permit Assistance, Op. cit.
- Richard Sybert and Robert Cervantes, Statewide Plan Coordination in California, Governor's Office of Planning and Research and Governor's Interagency Council on Growth Management, October 1992, and Robert Cervantes, in interviews with Commission staff.
- Ibid.
- John D. Landis, assistant professor, University of California at Berkeley, in testimony to the Commission.
- Senate Office of Research, Prosperity, Equity and Environmental Quality: Meeting the Challenge of California's Growth, California Legislature, July 1991.
- Howe, Op. cit.
- Charles Damm, South Coast District Director, California Coastal Commission, in testimony to the Little Hoover Commission.
- Ibid.
- Todd Kaufman and Wendy Umino, Streamlining the Permitting Process for Business Development and Regulatory Compliance, Assembly Office of Research. February 1992.
- Victor Holanda, director Office of Permit Assistance, in interviews with Commission Staff
- Ruggiero, Op. cit.
- Holanda, Op. Cit.
- Center for the Continuing Study of the California Economy, California Economic Growth 1994, Palo Alto, CA.
- Kathryn Tobias, chief counsel, California Integrated Waste Management Board, in an interview with Commission staff
- Hayward, Op. cit.
- Government Code 65041 and 65048.
- Office of Planning and Research, An Urban Strategy, Environmental Goals and Policy Report, State of California, February 1978.
- Cervantes, Op. cit.
- Center for California Studies, Op. cit.
- Council on California Competitiveness, Op. cit.
- Judith Innes, Judith Gruber, Michael Neuman and Robert Thompson, Coordinating Growth and Environmental Management Through Consensus Building, California Policy Seminar, University of California, 1994.
- Scarlett, Op. cit.
- Kaufman, Op. cit. and Holanda, Op. cit.
- Robert Merritt, "The Permit Streamlining Act: The Dream and the Reality," Land Use Forum.
- Carol G. Whiteside, director, Governor's Office of Intergovernmental Affairs, in testimony to the Commission.
- SCAG, "The Economy," Op. cit.
- Permit Streamlining and Bureaucratic Reform in the City of Los Angeles: Report and Recommendations, Development Reform Committee, Daniel P. Garcia, chairman, February 7. 1995.
- AB 919 (Dills) Chapter 1131, 1993.
- "California Environmental Quality Act: Assessment and Recommendations," CEQA Review Committee, State Bar Association, January 1995.
- Paul Thayer, consultant, Assembly Natural Resources Committee, in an interview with commission staff.
- James Burroughs, chief counsel, California Resources Agency, in interview with Commission staff.
- Howard Sarasohn, chief, Environmental Division, Caltrans, in interview with Commission staff.
- General Accounting Office, Highway Planning: Agencies are Attempting to Expedite Environmental Reviews, But Barriers Remain, Report to the Chairman, Subcommittee on Transportation, Committee on Appropriations, House of Representatives, August 1994.
- Stephen Meyer, Environmentalism and Economic Prosperity: Testing the Environmental Impact Hypothesis, Massachusetts Institute of Technology, 1992.
- Office of Technology Assessment, Industry, Technology and the Environment: Competitive Challenges and Business Opportunities, U.S. Congress, 1993.
- State Bar, Op. cit.
- Public Resources Code 21089.
- Senate Office of Research, Op. cit.; SCAG, Op. cit.; and Center for California Studies, Op. cit.
- Mark Pisano, executive director, Southern California Association of Governments, In testimony to the Commission.
- Gary Binger and Ted Weinstein, Collaborative Planning Case Studies, Association of Bay Area Governments, Oakland, September 1994.
- Judith Eleanor Innes, "Implementing State Growth Management in the U.S.: Strategies for Coordination," in Growth Management and Sustainable Development by Jay Stein, Sage Publications.
- Bank of America, et al., Op. cit.
- Government Code 65421. 92 Olshanskv. OD. cit.
- Robert A. Johnston, Seymour Schwartz, and Steve Tracy "Growth Phasing and Resistance to Infill Development in Sacramento County, APA Journal, Autumn 1984. Also, Robert A. Johnston, Seymour Schwartz and Thomas Klinker, "Successful Plan Implementation: The Growth Phasing Program of Sacramento County," APA Journal, October 1978. Also Robert A. Johnston, in an interview with Commission staff.
- Development Reform Committee, Op. cit.
- Government Code 65040.5.
- Correspondence from Corcoran Mayor Donald Pauley to Robert Cervantes, planning chief, Office of Planning and Research, March 3, 1994.
- Olshansky Op. cit.
- Ibid.
- Landis, How Shall We Grow, Op. cit.
- Gary Binger, planning chief, Association of Bay Area Governments, in testimony to the Commission.
- Calthorpe, Op. cit.
- Public Resources Code 21083(b).
- American Planning Association, Op. cit.
- Zischke and Kosta, Op. cit.
- Olshansky, Op. cit.
- John D. Landis, Rolf Pendall, Robert Olshansky, William Huang, Fixing CEQA: Options and Opportunities for Reforming the California Environmental Quality Act, California Policy Seminar, University of California, January 1995.
- Olshansky, Op. cit.
- SCAG, "The Economy," Op. cit.
- Development Reform Committee, Op. cit.
- Howe, Op. cit.
- Public Resources Code 21158.5.
- Elizabeth Plater-Zyberk, "It Takes a Village to Raise a Child," a presentation to The Aspen Institute: Domestic Strategy Group 1994.
- Public Resources Code 21158.
- Innes, Op. cit.
- Olshansky, Op. cit.
- Stephen Graham, Southern California Planning Congress, in an interview with Commission staff.
- Landis, Fixing CEQA, Op. cit.
- Tobias, OP. cit.
- Bob Berman, Citizens Advisory Committee, Solano County, in an interview with Commission staff.
- Innes, Op. cit.
- Landis, How Shall We Grow?, Op. cit.
- California Council for Environmental and Economic Balance, "The Howard Jarvis Taxpayers Association Proposed 'Protect Proposition 13 Act,"' Policy Briefing Paper, March 1994.
- Russell S. Gould, "Capital Outlay and Infrastructure Report 1994," Department of Finance, State of California.
- Caltrans, California Transportation Plan, (Technical Addendum), March 30, 1994.
- California Debt Advisory Commission, Mello-Roos Financing in California, Sacramento, September 1991.
- Ibid.
- The Bay Area Council, Taxing the American Dream: Development Fees and Housing Affordability in the Bay Area, May 1988.
- California Council for Environmental and Economic Balance, Op. cit.
- Ernst and Young, 1994 Study of Housing Costs.
- Dean Misczynski; "Infrastructure Finance: What Works? What Might Work?," Land Use Forum. Spring 1992.
- Landis, "An Insider's Guide to the California Market," Op. cit.
- Hulten, Charles. R and Robert M. Schwab. "Is There Too Little Public Capital in the U.S.?" Paper presented to the Conference on Infrastructure Needs and Policy Options for the 1990s. American Enterprise Institute, Washington D.C., Feb. 4, 1991.
- Brian Smith, planning chief, Caltrans, in correspondence and interviews with Commission staff.
- Center for the Continuing Study of the California Economy, County Projections, Op. cit.
- Sacramento Area County of Governments, Metropolitan Transportation Plan, September 1993.
- Steve Tracy, planner, County of Sacramento, in an interview with Commission staff.
- Government Code 53326(b).
- Barry Steiner, "Mello Roos Act," Land Use Forum, Spring 1992.
- Madelyn Glickfeld, academic director, Streisand Center for Conservancy Studies, in testimony to the Commission.
- SCAG, "The Economy," Op. cit.
- Henry Richmond, Rationale and Program Design: National Land Use Policy Institute, National Growth Management Leadership Project, October 1994.
- Greig Harvey, The Suitability of Bay Area Toll Bridges For a Congestion Pricing Experiment, Prepared for the University of California Transportation enter Conerence on Congestion Pricing, San Francisco, February 1991.
- Land Use Digest, reporting on findings by the National Research Council presented at 1993 symposium, August 1994, Urban Land Institute.
- Office of Technology Assessment, Op. cit.
- Hayward, Op. cit.
- California Transportation Directions, Appendix, July 1990.
- David Ledbetter, City of Lancaster, in an interview with Commission staff.
- Richmond, Op. cit.
- Government Code 63000(G).
- Government Code 65030.
- Government Code 65030.2.
- Government Code 65584.
- Government Code 65915.
- Government Code 51200.
- Government Code 14000.
- John Holtzclaw, Turn Off the Road to Poverty, Integrating Environmental Considerations into Transportation Planning, FHWA Conference, October 1994, and in an interview with Commission staff.
- Landis, "An Insider's Guide to the California Market," Op. cit.
- Dwight Hansen, California Building Industry Association, in an interview with Commission staff.
- Government Code 65850- 1.
- Peter Calthorpe, in testimony to the Commission.
- Kee Warner and Harvey Molotch, Growth Control: Inner Workings and External Effects, California Policy Seminar, University of California, Berkeley, 1992.
- Landis, How Shall We Grow, Op. cit.
- Plater-Zyberk, Op. cit.
- James Howard Kunstler, "Zoned for Destruction," New York Times Op-Ed, Monday August 9, 1993.
- Government Code 65852.55.
- George Liebmann, "How to Revise California's State Zoning Enabling Act," The Claremont Institute. June 16, 1992.
- Kean, Op. cit.
- Michael Southworth and Eran Ben-Joseph, "Street Standards and the Shaping of Suburbia." APA Journal. Winter 1995.
- Howe, Op. cit.
- Scarlett, Op. cit.
- Landis, testimony, Op. cit.
- Government Code 65583.5.
- Development Reform Committee, Op. cit.
- Howe, Op. cit.
- Regulating the American Dream: The Housing Crisis in California, Conference Summary, The Claremont Institute, July 1, 1993.
- Gary Schoennauer, planning director, City of San Jose, in an interview with Commission staff.
- Steve Weissman and Judy Corbett, Land Use Strategies for More Livable Places, Local Government Commission, Sacramento 1992.
- Hayward, Op. cit.
- Glickfeld testimony, Op. cit.
- Landis, Growth Controls. Op. cit.
- The Planning Center, Village One Specific Plan Feasibility Study, Prepared for the City of Modesto, April 11, 1995.
- Richard Willson, "Suburban Parking Requirements: A Tacit Policy for Automobile Use and SDrawl." APA Journal, Winter 1995.
- Don Shoup, "An Opportunity to Reduce Minimum Parking Requirements," APA Journal. Winter 1995.
- Health and Safety Code 65089.
- Shoupe, Op. cit.
- Willson, Op. cit.
Funding the State Infrastructure Bank. The Legislature
and Governor created the bank in 1994, but it has never been funded.
Funding the bank will not only help California communities to
begin building for their future, but provide them 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 to provide funding priority to those communities that have
done planning that will reduce growth-related conflicts and enable
streamlined project approval procedures.
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 an infrastructure plan. 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 and other demand-reducing tools,
to encourage efficiency.
State Leadership
|
State Leadership
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.
T
he State has longstanding policies
that local governments must encourage housing for all income types.
State policies encourage redevelopment of blighted areas, conservation
of open space, higher residential densities -- all the ingredients
of compact development that have been advocated by a wide variety
of reformers. But these policies are routinely undermined by
a lack of effective planning and by a variety of policies and
regulations that do as much to limit the variety in development
as to limit development itself. The compounding affect of these
problems is more of the same growth patterns and more of the same
growth-related conflicts.
Research, innovation, experimentation
and practical experience are yielding answers to some of California's
most intractable land-use problems. But the State lacks the mechanisms
for recasting this knowledge as policy.
This chapter looks at some of the
existing policies and how they are undermined or are otherwise
ineffective. And it looks at ways the State can go about encouraging
changes at the local level.
Existing Policies Aim High
C
alifornia has long recognized the
need to provide for a variety of housing, revitalize inner city
areas, encourage the efficiencies that come with concentric growth
and a variety of transportation modes, and preserve the opportunities
of future generations by safeguarding recreational and open spaces
and agricultural lands. Similarly, the State provides for local
ordinances to regulate development: to insure the compatibility
of neighboring land uses, to accommodate traffic and parking,
to ensure that communities balance social, economic and environmental
needs. It expressed that intention specifically when it created
the Office of Planning and Research in 1976:
The Legislature finds and declares that California's land is an exhaustible resource, not just a commodity, and is essential to the economy, environment and general well-being of the people of California. It is the policy of the state and the intent of the Legislature to protect California's land resource, to insure its preservation and use in ways which are economically and socially desirable in an attempt to improve the quality of life in California.150
Existing state policies:
D
espite the policies, most analysis
of California's land-use patterns identify the need for more affordable
housing, more concentric development and streamline approval procedures.
The Commission was told that some of the policies are unfulfilled
because of a variety of private sector concerns, chief among them
the concern lenders have about innovative development patterns.
Others believe the goals are being undermined by other policies
that regulate the market in ways perverse to the State's goals
of orderly development.
The lesson of the last 20 years
in California is that declaring the importance of rational land
planning does not ensure it. Even enacting ordinances that try
to negate broad social, political and economic forces can have
little affect on the outcomes of development.
From the developer's perspective,
those forces are measured in the costs of getting a project approved,
including: the chances that the project will be delayed because
of opposition by existing neighbors or environmental groups; the
costs of having to buy political peace, either by reducing the
project's size or increasing contributions to community projects;
and the potential costs of litigation if the efforts to appease
local concerns are unsuccessful.
Over time, as markets have become
more competitive and buyers more concerned about long-term economic
trends, developers have increasingly tried to avoid those costs
rather than trying to pass those costs on to consumers. The Commission
was told that the easiest way for developers to avoid these costs
is to go to the edge of development -- where infrastructure and
land costs are often less, where roads are less crowded, where
city halls are less bureaucratic, and where neighbors tend to
be newcomers themselves and for the most part will tolerate more
single-family homes such as their own. And there, they propose
projects that local officials are most likely to accept -- larger,
upscale, property tax revenue-producing, single-family homes.
John Landis, who teaches a class
at UC Berkeley on how to develop land, testified:
The effect of our cumulative ramping-up of development requirements, environmental regulations and fees has been to massively increase up-front entitlement risks and costs... The easiest way for builders and developers to respond to risk is to build only those types of products which they know will sell. That is, to avoid innovation, to avoid variety, and instead, to compete head-on for the exact center of the marketplace.
Communities constructed during the
1960s -- largely before anti-sprawl ordinances, open space preservation
ordinances and fair-share housing ordinances -- often contained
higher densities, greater design and housing variety that those
constructed during 1980s, Landis said. "We must begin thinking
about how to simplify the regulatory process so as to encourage
choice. And one of the choices that some households will make
will be for greater densities."
|
Playa Vista's developers said that
for several reasons private companies involved in the construction
industry -- from lending industries to insurance companies --
are concerned about backing mixed-use, higher density and infill
development projects. The project developers also believe the
State's role is to help identify those concerns and find solutions.
Project Manager Douglas Gardner
said some lenders do not believe there is a market for Playa Vista-type
developments, while the market cannot be tested until successful
projects are built. "Unfortunately, the lending community
is more prone to consider what happened yesterday for its 'comparables,'
as opposed to what might make more sense today or tomorrow."
Gardner also said developers, including
Maguire Thomas Partners, are leery about the liability issues
associated with higher density development, as an increasing number
of condominium homeowner associations bring lawsuits for construction
defects on the eve of the 10-year liability window.
"It is not sufficient to proclaim
the endorsement of new land-use planning models, however obvious
their benefits may be, without mechanisms which insure that the
private sector will be encouraged to pursue them," Gardner
said. "At this juncture, the risks appear to outweigh the
benefits for much of the development community, which is a primary
reason why much development, particularly badly needed housing,
continues to be built in outlying areas rather than within urban
boundaries. Unless proper economic incentives are established
for the accommodation of growth within our urban areas, it is
unlikely that this pattern will be reversed."
|
The factors of controversy and risk
go beyond developers. Controversy influences local politicians,
who must answer to neighborhood activists, who may oppose growth.
And controversy influences lenders, who have seen public opposition
to even routine projects translate into losses. Landis observed:
"It is safer to invest in what has sold before than to help
revitalize cities through development of innovative and attractive
high density mixed-use development, which may or may not have
a market. No mid-level loan officer ever lost his or her job
by saying no to a nontraditional project."
From that point on, other analysts
believe, Californian workers and businesses get locked into higher
transportation costs, more traffic congestion and air pollution
levels, which increase compliance costs for businesses. Studies
also have concluded that low density development essentially precludes
the options of effective, market-based mass transportation projects
in the future.156
In addition to the factors previously
discussed, there is evidence that a variety of other less obvious
and less-known factors have influenced the market in other ways.
Policy analysts are just beginning to fully understand the negative
impact that 1986 tax reform laws have had on the construction
of apartments. From a peak of 168,000 units in 1986, construction
of multifamily housing in California fell to 15,000 units in 1993.
While some of that decline has been attributed to the national
credit crunch, analysts also blame the federal tax code changes
that reduced the profitability of investing in rental housing
by as much as one-third.157
Similarly, controversies over the defect liability laws as they apply to condominium projects is having a chilling effect throughout the design and construction industry. Current law holds builders responsible for construction defects for 10 years after construction. Increasingly, homeowner associations have pursued lawsuits against builders on the eve of the 10-year liability window, seeking repairs of what homeowners argue is faulty construction and what builders consider routine wear and tear. While the law applies evenly to all types of home construction, most of the disputes have arisen with homeowner's associations, who have the ability to spread the risks of filing lawsuits over their entire memberships. The trend is discouraging reputable builders and associated industries from venturing into the attached home market. So even if builders are willing to assume the risk of being sued over a leaky roof 10 years after a project is complete, architects are increasingly reluctant to have their names attached to the drawings.158
|
Playa Vista Project Manager Douglas
Gardner said the volumes of local codes -- all of them well intended
and many of them out of date -- can create a large burden for
any developer who tries to do something different than what has
been done in the past.
"A significant obstacle to
the implementation of progressive land use planning lies in the
existing regulatory framework, which is often comprised of zoning
regulations and codes which simply do not permit, much less encourage
experimentation," Gardner said. "A good deal of post-war
planning is based on restrictive zoning, which discourages mixed
uses and can promote economic and social segregation.
"It is difficult, for example,
to design a pedestrian-oriented public street after DOT (Department
of Transportation), the Fire Department, the Bureau of Engineering,
the Bureau of Street Lighting and the Street Tree Division have
all weighed in with their requirements."
For instance, to maximize urban
space and encourage community gatherings, many planners are calling
for small neighborhood parks. But the city will not accept them
because they cost too much to maintain.
"The implementation of progressive
development plans, therefore, requires the dedication of the developer's
time and resources to the negotiation of project features, which
in fact should be encouraged," Gardner said. "Most
developers simply cannot afford this, especially if they are not
motivated in any way to do so, such as with accelerated processing
times."
|
California's zoning law, along with
zoning laws in most states, was based on the Standard State Zoning
Enabling Act promulgated by the U.S. Department of Commerce in
1926. The state code allows cities and counties to regulate land
and buildings to control how they physically appear and how they
are used. The codes may establish broad zones for various uses,
such as residential, commercial and industrial. They also can
regulate the size of lots, how much of those lots can be occupied
by buildings, driveways, setbacks and signs.159
As planning, construction technology,
and the interplay between land use patterns and social costs have
become better known, the State and cities also have adopted statutes
intended to create minimum standards: to keep buildings from falling
down or quickly burning down; to accommodate traffic and vehicle
parking in commercial districts; and to ensure access for emergency
vehicles.
Over time, research also has shown
that while such standards may have accomplished what they set
out to, they have had other undesirable consequences, as well.
The most simple example is the segregation through zoning ordinances
of housing and commercial uses. The complete separation has encouraged
automobile use for the most simple of errands.160
Now on Sunday evenings, thousands of Californians climb into their
cars to drive several blocks to return the weekend's rented videos.
In reviewing California's land-use
ordinances, a variety of experts have identified regulations that
may be discouraging more efficient land patterns.
A UC Berkeley study found that state law requires that any variation from existing zoning ordinances is subject to environmental studies, which for some projects could be a large deterrent from straying from strictly defined norms.161
Zoning laws are frequently blamed
for encouraging development at densities less than the market
would dictate. Those concerns become even more important as research
shows that small to moderate density increases would significantly
reduce the land consumed by urban development. An analysis of
projected growth in the Bay Area, for instance, showed that by
increasing density from 17.3 persons per acre to 26.9 persons
per acre would reduce land consumption by nearly 50 percent --
from an additional 103,000 acres urbanized by 2010 to 66,445 acres
urbanized under a "compact" model.162
Planner Elizabeth Plater-Zyberk,
who has worked nationwide to encourage innovation in development
types, believes local ordinances have resulted in requirements
that increase building costs while discouraging higher uses of
scarce land resources: "Existing zoning ordinances, often
outdated, over-complicated and more often than not circumvented
in the political process, continue to produce bad results, including
the isolation of housing types by income."163
James Howard Kunstler, author of
"The Geography of Nowhere: The Rise and Decline of America's
Man-Made Landscape," writes that zoning laws were enacted
with the noble intention of separating obnoxious industry from
homes:
"After World War II, we took that idea to absurd extremes. We decided that shopping, too, was an obnoxious activity and that people should not dwell anywhere near it. That is why so many strip malls are one-story high. (It is also why there are no corner stores in suburban housing subdivisions.) The fact that we have built so few apartments over stores in the last 50 years is one reason the country has a crisis in affordable housing."164
The Legislature recognized that
some of these ordinances can go too far and regulate uses out
of existence when in 1986 it amended state zoning laws to allow
for second units or "granny flats."165
Such additions can provide significant housing at affordable prices
without significantly changing the character of a neighborhood.
Other experts believe the state law is still too restrictive,
and advocate that secondary units be allowed as a right, provided
there is adequate parking.166 A national study found
deregulating granny flats would result in 3 million more affordable
housing units.167
Similarly, local street standards
are often based on state and federal models that were developed
to maximize traffic flow, often at the expense of a variety of
other urban considerations. Increasingly, planners are looking
for variances from those standards to implement designs that encourage
pedestrian, bicycle travel, and transit use. Writes one planner:
"Since federal agencies have not advocated changes, lesser
agencies are reluctant to do so.... Consequently, local planners
and citizen groups rarely challenge existing street standards.
Unconventional approaches to suburban layout face a nearly impossible
barrier to approval."168
Toward Reality-Based Ordinances
T
he planning director for the city
of Los Angeles believes most of regulatory problems associated
with land-use are at the local level. However, he said, the State
shares some responsibility for the problems, as well as the responsibility
to attempt reforms.169
The Commission was told that the
State, in considering reforms, should consider how laws directly
or indirectly shape the market, by encouraging consumers to spend
their money in certain ways or encouraging producers to provide
certain products. The research director of the Reason Foundation
offers this advice to reformers:
In examining the prospects for reforming state land-use policies, it is important to retain the focus on decision-making processes and how they relate to incentives of individuals, developers and public agents to make choices about where to live and work and what goods to consume.170
Current policies often fail, the
research director believes, because they attempt to prescribe
outcomes and have a tendency to distort market signals and push
decisions upward: "All three characteristics of current planning
have the effect of limiting flexibility, limiting dynamic adjustments
in a changing world, and de-linking decisions from clear signals
about the costs of those decisions."
Similarly, other analysts believe the best way that policy makers could encourage innovation, density and variation in housing styles is to provide more flexibility in regulations: "We need to promote a much wider degree of choice for our residents: choices in housing styles and living arrangements, choices in densities, choices in neighborhoods, and choices in transportation modes. Choice cannot be regulated into existence. Indeed, regulation stifles choice."171
Some analysts advocate a wholesale
review of policies and ordinances that have been layered page
by page into regulatory stacks: to determine which are still effective;
which can be made more flexible; which have outlived their usefulness
and should be abolished; and in particular, which are creating
incentives to do things that existing policies are trying to counteract.
The Bank of America, in its assessment
of California's sprawling development patterns, called for a legal
framework that would provide certainty about where development
would be encouraged, where it would be allowed, and where it would
be discouraged. Such a system, the Bank believes, would be the
first step toward sending "the right economic signals to
investors."
The bank also advocated streamlining
permitting procedures in inner cities, while requiring exurban
development to pay the full marginal costs of providing urban
services to distant areas.
Inner-city developers say it is
harder to get financing for mixed-use projects because of the
risks involved. Planners told the Commission that the preferences
of a secondary financing market can greatly influence the viability
of innovative residential projects.
As part of housing elements, local
agencies are suppose to assess available financing and secondary
financing to determine if there are nongovernmental obstacles.172
So while the Legislature has recognized at times the need to
work with the financing industry to encourage investments in housing,
the dialogue is not complete.
Some cities, such as Tucson, have
recognized the additional regulatory burden of infill development
and have counteracted it by reducing or waiving development fees.
In the Arizona town, the program is credited with increasing
housing starts within the city limits to twice the housing starts
outside the city -- benefiting city coffers as well by increasing
the tax assessments to formerly vacant land.
Just as researchers have found that
communities lack the resources to update general plans, it is
reasonable to assume that they lack the resources to review their
ordinances for efficacy and cull the nation for innovative ideas
and proven models. Yet that is what is needed.
The extensive review of Los Angeles'
land-use regulations found numerous cases where the zoning ordinance
restricted common practices or duplicated regulations. Current
practices required a conditional use permit over child care facilities
and restaurants in manufacturing zones, outdoor eating areas for
ground floor restaurants and the sales of alcoholic beverages
by large supermarkets and hotels. The panel recommended that such
uses could be more efficiently regulated with development standards
than with a permit process.173
To help implement the city's plan
to encourage higher density and mixed-use infill projects, the
city is modifying its rules for implementing the State's density
bonus law. Rather than requiring a conditional use permit, the
city is setting performance standards. When the standards are
met, the developer can build the additional units. On related
issues, the city is reducing its parking requirement for projects
near transit stations or main bus routes, and changing its regulations
for mixed-use projects to allow their approval "by right"
rather than the current discretionary ordinance.174
Among the outcomes at a 1993 housing conference co-sponsored by the Claremont Institute and the state Department of Housing and Community Development was a growing recognition that minimum-density standards should be established to prevent downzoning.175
San Jose has recently created a
land-use designation around light rail stations that contains
no density limits and makes it easier for landowners to rezone
their land to residential units. The innovation could be a good
test of reducing regulations in order to encourage greater densities
and redevelopment around transit lines.176
On more theoretical level, planning
experts have long grocery lists of ways to reform zoning and related
ordinances. Some of them have worked in other states. Some of
them may only work in some communities. But many of them are
worthy of a closer look by the State's best planners. Among them:
The "Ahwanhee Principles," a land-use strategy derived by the nonprofit Local Government Commission, suggests six revisions to zoning codes that it believes would encourage development of more efficient land-use patterns: Eliminate prescribed street widths and setbacks that preclude pedestrian-oriented neighborhoods. Eliminate single-use zones that separate residential and commercial uses. Create flexible zoning that allows a variety of uses that satisfy certain performance goals. Allow for landowners to sell or swap development rights as an economic incentive for compacting development. Create regulatory incentives for housing in commercial areas. Create design standards to prescribe desired characteristics, such as pedestrian-friendly developments.177
Some cities have experimented with performance-based zoning, which allows developers to pursue any project on any parcel of land provided they can satisfy traditional community concerns such as traffic, noise and safety. Fort Collins, Colorado, for instance, has 44 criteria that it uses to judge development proposals, including such standard factors as landscaping and parking. For each planning criteria, the project is awarded positive or negative points, and in some cases the criteria are weighted to encourage compliance with a unique concern of a given area. The Urban Land Institute believes the system has encouraged a greater mix of uses and higher residential densities, essentially by allowing market demands to have a greater influence over development.178
The academic director for the Streisand
Conservancy said the State has the opportunity to help communities
revamp local ordinances that can have profound effects on what
gets built where:
The State ought to lead the way in modernizing building, plumbing and electric codes to encourage conservation, shared use and multi-use buildings.... The State ought to look at encouraging private land readjustment and development rights pooling by landowners who want to recycle their land into development that meets modern market needs and provides adequate infrastructure and amenities.179
Some of the best ideas may be homegrown.
The city of Lodi in 1981 established an ordinance intended to
protect the area's farm economy by requiring all annexations to
go before the electorate; of 23 proposals, only two were approved.
Nevertheless, the community grew faster than San Joaquin County
as a whole, because in addition to restricting outward growth
the city encouraged inward growth by reducing fees and making
it easier to get projects approved inside the city limits. Among
the benefits of the strategy was a revitalized central commercial
area. While the courts struck down the law in 1989, the experience
offers valuable lessons about ways that local governments can
encourage efficient growth patterns.180
Research conducted in recent years
on parking requirements is perhaps the best example of how well-intended
laws make it nearly impossible for the State to meet its various
growth needs.
Most local agencies have minimum
parking requirements, many of them based on an off-the-shelf formula
intended to satisfy a project's peak parking demands -- shopping
centers on Christmas Eve. One study estimated that parking facilitieson average are oversized by 20 percent.181
What the research shows is the ordinances
add unnecessary costs to all projects, encourage suburban development
and encourage all workers, irrespective of their destination,
to individually drive their cars to work.182 The ordinances
give suburban projects an advantage over urban sites because while
parking places in downtown structures typically costs $12,000
a piece, paved parking spaces at suburban office complexes typically
costs $6,000.
Suburban and downtown workers are
both encouraged to drive because many employers provide free parking.
A recent survey in Southern California found that 99 percent
of all auto trips involved free parking; 93 percent of Southern
California commuters park for free.183 Researchers
also have found that one of the best inducements to carpooling
is the elimination of parking subsidies, which average $79 a month.
Requiring workers to pay for their parking has shown to reduce
driving by 36 percent. That reduction can potentially reduce
traffic, air pollution and the need for greater infrastructure
investment, as a full one-third of the vehicles on the road during
peak times are commuters.
The consequences of required parking
facilities is particularly onerous considering many large employers
in California are required under air pollution control regulations
to implement programs aimed at encouraging carpooling.
The Legislature began to put this
research to use -- and potentially create more efficient policy
-- by passing a law in 1992 requiring California employers who
now pay out money for employee parking to offer that subsidy in
cash to employees. The law also allows parking requirements to
be reduced when the cash-out is offered.184 An urban
planning professor at the University of California, Los Angeles,
believes: "By shifting subsidies from parking to people,
cashing out employer parking will encourage commuters to do what
planners have long exhorted them to do: carpool, ride mass transit,
bicycle or walk to work."185
Similarly, the chair of the urban
and regional planning department at California Polytechnic State
University, Pomona, believes it is time for a broad overhaul of
parking policies to bring them in line with other policy goals.
Among the reforms that should be explored are letting the market
establish the full need for parking and reducing requirements
to accommodate average rather than peak demands.186
As time passes, the full effect of regulations can be felt, and some of California's numerous land use regulations are working at cross purposes. In some cases, regulations directly discourage innovation, such as the zoning provisions that require special permits for mixed uses. Elsewhere, regulations increase risk, which discourages reinvestment in older neighborhoods and innovation in design.
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.
T
he State should actively coordinate
experts at 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:
Conclusion
A
s long as the Pacific crashes into
the California coast, there will be struggles about where to build
and what to save. For the last 20 years, Californians have grappled
with ways to make those choices rationally and deliberately.
The next step in this evolution is to make these choices efficiently.
Californians must take a hard look
at the procedures used to plan the future of its communities,
to approve individual development projects, to finance and manage
public works, and to protect the air and water and other environmental
assets that residents depend on for their physical health and
mental well-being.
Those policies must be reformed
to reflect a maturing understanding that while public decisions
need to be made carefully, they also need to be made expeditiously.
There is no correlation between the length of the process and
the soundness of the decision.
What California needs is a development
approval process that allows for balancing what will always be
competing needs of economic growth, social equity and environmental
protection.
What California needs is a process
that -- while it holds individual projects accountable for their
contributions to large-scale problems -- regionally assesses and
resolves these problems.
What California needs is a process
for ensuring that existing infrastructure is used wisely, and
that necessary investments are made.
What California needs is to learn
from each others' mistakes and to share successes. Land-use is
local, but it does not need to be parochial.
What California does not need to
do is lower its sights.
Few issues have polarized Californians
as have issues involving growth. There are those who see growth
as destructive. There are those who see regulations as destructive.
Both can be right. The challenge is to prove that both sides
can be equally wrong.
Because California will continue
to grow, all Californians share in common the need for these reforms.
At issue is how healthy our cities will be and how productive
of an economy those cities will sustain. At issue is whether
Californians build communities, or just buildings. At this point
in California's history, growth appears to be inevitable -- progress
does not.
APPENDIX
Carol Whiteside
Director
Governor's Office of Intergovernmental
Affairs
Frederick Cannon
Vice President, Investor Relations
Bank of America Corp.
Director
Center for the Continuing Study
of the California Economy
Calthorpe & Associates
James Thomas
Managing Partner
Maguire Thomas Partners
The Irvine Company
Tom Sargent
Partner
Equity Community Builders
Gary Binger
Planning Director
Association of Bay Area Governments
Burke, Williams and Sorenson
John Kirlin
Professor
University of Southern California
Sacramento Center
V. John White
Environmental consultant
Lynn Scarlett
Vice President
Reason Foundation
Madelyn Glickfeld
Academic Director
Streisand Center for Conservancy
Studies
John Landis
Professor, City & Regional Planning
University of California, Berkeley
Benjamin Kaufman
Freilich, Kaufman, Fox and Sohagi
Doug Gardner
Playa Vista Project Manager
Maguire Thomas Partners
David Vena
Playa Vista Project Attorney
Latham & Watkins
Ruth Galanter
Councilwoman
City of Los Angeles
Con Howe
Planning Director
City of Los Angeles
Charles Damm
South Coast District Director
California Coastal Commission
Mark Pisano
Executive Director
Southern California Association
of Governments
Jack Broadbent
Planning Chief
South Coast Air Quality Management
District
Paul Doebler
Representative
Villa Marina East Homeowners
Mary Anderson
California Business Roundtable
Ian Baird
Duffel Financing and Construction
DeAnn Baker
California State Association of
Counties
Bob Berman
Citizens Advisory Committee Solano
County
Linda Best
Hasseltine Best Consultants
Gary Binger
Assn. of Bay Area Governments
David Booher
California Council for Environmental
and Economic Balance
Ray Brady
Assn. of Bay Area Governments
Robert Burchell
Rutgers University
James Burroughs
Resources Agency
Fred Cannon
Bank of America
Thomas Carey
Towbes Group
Joe Caves
Environmental consultant
Robert Cervantes
Office of Planning and Research
Robert Cervero
UC Berkeley
Joe Chinn
Economic and Planning Systems
John Compaglia
Bryan & Murphy Planners
Judy Corbett
Local Government Commission
David Crow
San Joaquin Air Pollution Control
District
Charles Damm
California Coastal Commission
Gary Darling
Resources Agency
Peter Detwiler
Senate staff
Paul Doebler
Villa Marina East Homeowners
Thomas Friery
City of Sacramento
David A. Gold
Morrison & Foerster
Douglas Gardner
Maguire Thomas Partners
Madelyn Glickfeld
Streisand Conservancy
Darrel Goering
Sacramento County Planning
Art Goulet
Ventura County
Stephen Graham
S. California Planning Congress
Dwight Hansen
Building Industry Association
Allan Hendrix
Caltrans Deputy Director
Albert Herson
Jones & Stokes Associates
Rex Hime
California Business Properties Association
Stanley Hoffman
Stanley Hoffman Associates
Victor Holanda
Department of Permit Assistance
John Holtzclaw
Sierra Club
Robert Johnston
University of California, Davis.
Todd Kaufman
Assembly Office of Research
David Kilby
California Chamber of Commerce
John Kirlin
University of Southern California
G.U. Kruger
Construction Industry Research Board
John Landis
UC Berkeley
Richard LaVergne
California Housing Finance Agency
David Ledbetter
City of Lancaster
Stephen Levy
Center for the Continuing Study
of the California Economy
Thomas Lindemuth
Hydro Environmental technologies
Kip Lipper
Assembly Natural Resources Committee
Carl Loeber
New Directions for San Jose
Richard Lyon
Building Industry Association
Michael Mantell
Resources Agency
Robert McCleary
Contra Costa Transportation Authority
Robert Merritt
McCutchen, Doyle, Brown and Enersen
Dean Misczynski
California Research Bureau
Peter Morrison
Rand
Robert Olshansky
University of Illinois
Randy Pestor
Assembly Local Government Committee
Mark Pisano
Southern California Association
of Governments
Jan Pope
LaSalle Partners
Tony Quinn
Braun Ketchup
Eileen Reynolds
California Association of Realtors
John Robertson
Massachusetts Municipal League
Terry Rivasplata
Office of Planning and Research
Janet Ruggiero
City of Woodland
Steve Sanders
Senate Office of Research
Lynn Scarlett
Reason Foundation
Gary Schoennauer
San Jose
Ernest Silva
League of California Cities
Brian Smith
Caltrans planning division
Margaret Sohagi
Freilich, Kaufman, Fox & Sohagi
Howard Sarasohn
Caltrans
Timothy Taylor
DeCuir and Somach
Paul Thayer
Assembly Natural Resources Committee
Tina Thomas
Remy & Thomas, Sacramento
Kathryn Tobias
California Integrated Waste Management
Board
Steve Tracy
Sacramento County Planning
David Vena
Latham & Watkins
Rick Vossekuil
Chicago Title
Carol Whiteside
Governor's Office of Local Assistance
Pat Weston
Caltrans
Tim Yoemans
Environmental Planning Systems
Heleene Saleen-York
Bay Area Council
Endnotes