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CP&DR News Briefs May 15, 2018: Climate Change; Rent Control Study; Economic Disparities; and More

Noemi Wyss on
May 14, 2018
A new California EPA report finds that the more intense forest fires, longer droughts, warmer ocean temperatures, and shrinking snowpack in the Sierra Nevada are an “unequivocal” evidence of climate change. The 350-page report tracks 36 indicators of climate change, including a comprehensive list of human impacts and the effects on wildlife, the ocean, lakes, rivers and the mountains. Although the state has had a 90 percent drop in black carbon from tailpipe emissions over the past half century, CO2 levels in the atmosphere and in seawater are increasing at a steady rate.  While temperatures have increased steadily since the early 1980s, the most alarming fact is that night temperatures have increased 2.3 degrees over the past century. The largest glaciers in the Sierra have shrunk by an average of about 70 percent since 1906 and water temperature in Lake Tahoe has warmed one degree since 1970. Senate Bill 32, puts California on course tor educe emissions an additional 40 percent below 1990 levels by 2030, the state expects to drop below 1990 levels within the next two years.

Report Contends Rent Control Leads to Higher Rents, Constrained Supply
The National Multifamily Housing Council (NMHC) Research Foundation released a report, The Impacts of Rent Control: A Research Review and Synthesis, evaluating rent control policies that cap rents and are usually implemented with the goal of improving housing affordability. The literature review includes cases from Los Angeles, San Francisco, and Santa Monica (as well as other non-California cities) between 1972 and 2017. The report found that rent control and stabilization laws lead to a reduction in available rental supply, lead to higher rents in the uncontrolled market, do a poor job at targeting benefits, and cause overcrowding or renters to live in units that are too small, large, or not in the right location. Other findings were that significant fiscal costs are associated with implementing a rent control program and that rent-controlled buildings can suffer from deterioration or lack of investment. Instead of using rent control policies, NMHC suggests working with public and private stakeholders to come together and find ways to build more housing and reduce housing costs. (See prior CP&DR coverage.)

Geographic Economic Disparities Widen in California 
Next 10 released three reports highlighting the deepening divisions in California’s economic prosperity, depending on residents’ income and where they live. The reports show job growth and wages has increased, low-income earners haven’t seen the same paycheck increases at a comparable pace. The first report, Current State of the California Housing Market, highlights the high cost of housing in the state and the slow housing construction rate. Most jurisdictions are far behind their RHNA housing goals. California Migration analyzes the main drivers for the over 1 million people who moved out of California between 2006 and 2016. As housing prices near an all-time high, low-paying workers are leaving the state for more affordable lives. The report, California Employment by Income, finds the average annual pay for those making under $27,000 has increased by only 17 percent while those making on average $55,000 have seen wages rise 29 percent. High-wage earners- those making an average of $83,000- saw 42.5 percent increases compared to ten years ago. The San Francisco-San Jose area saw the greatest growth in high-wage employment between 2007 and 2017, followed by San Diego, but the rest of the state’s major metro areas saw a decrease.

U.S. Supreme Court Declines to Take Up Railroad Case
The U.S. Supreme Court declined to take up the case between the North Coast Railroad Authority and two environmental groups regarding plans to restore nearly 150 miles of railroad between Napa and Willits. The California Supreme Court ruled that the railroad restoration project must comply with state environmental laws, which the railroad authority argues the federal law preempts it from having to conduct state environmental reviews. The decision now goes back to lower court, which has to figure out how to implement the state Supreme Court’s decision. The case stemmed from a 2011 suit filed by Californians for Alternatives to Toxics and Friends of the Eel River, which contended that the original environmental impact report for the railroad was inadequate. The case may be moot as state legislation is pending that would turn the right of way into a hiking and biking trail. 

Voters May Decide on $2 Billion Bond for Homelessness
State. Sen. Kevin de León (D-Los Angeles) is proposing a new ballot measure to redirect $2 billion on housing homeless Californians. This measure is a do-over for the 2016 measure that was passed by the Legislature to redirect $2 billion towards building homeless housing from a voter-approved 1 percent income tax surcharge on millionaires that funds mental health services. A Sacramento attorney sued and argued the move violated constitutional rules on approving loans without a public vote and that lawmakers shouldn't take money away from mental health treatment. This new version of the measure would go to voters in November. SB 1206 is schedule for its first hearing in the Legislature this week. It was co-authored by Sen. John Moorlach (R-Costa Mesa).

California Cities Lead Nation in Ethnic Inclusivity
A new report published by the Urban Institute found smaller cities have become more racially and economically inclusive compared to larger cities. The report analyzed 274 of the country’s largest cities over three decades. While economic and racial inclusion do not always trend together, the report did note a correlation with economically healthier cities tending to be more inclusive than economically distressed ones. California cities Fremont, Daly City, Torrance, Santa Clara, Elk Grove, West Covina, Sunnyvale, and Carlsbad all made top ten for their overall inclusion efforts. San Bernardino and Fresno were the only California cities that made the bottom ten list for economic inclusion.

Brookings Analyzes Sacramento Metro Economy
The Brookings Metropolitan Policy Program released an independent assessment of the economy of the six-county Sacramento region and examined the economic drivers of the region compared to national markets with similar characteristics. The report found that Sacramento region is relatively productive and prosperous, but the region has struggled over the past decade and is in the bottom-third of the 100 largest metro area in composite rankings measuring improvements in growth, prosperity, and inclusion. In order to take advantage of the changing market, the region must respond to globalization, technological change, demographic transitions, and declining national investment in economic growth and opportunity.


Quick Hits & Updates
The American Institute of Architects LA Chapter announced the winner of the competition to design the organization’s Mobile Center for Architecture and Design. Entry was open to students at architecture schools throughout the region. The winning design came from Woodbury University student Stephanie Green enables the AIA|LA to host a variety of activities within an eighteen-wheel truck. The Capsule “allows for the Mobile Center to be bigger than ‘just a container’ on the back of an eighteen-wheeler” observes past AIA|LA president Douglas Teiger.

LA Metro released its draft Vision 2028 Plan end of April and is having a four-week public comment period. The Metro Vision 2028 document is the agency’s big picture plan to improve mobility in LA County over the next decade. The Metro Board will consider adopting the Plan at their meeting on June 28.

San Diego City Council unanimously approved legislation that would shrink fees to build accessory dwelling units. The goal is to help alleviate a severe local shortage of affordable housing by incentivizing construction of more accessory units. San Diego only had 64 granny flat applications last November compared to 1,980 in LA, 583 in San Francisco, and 166 in San Jose. Fees to build granny flat units in San Diego ranged from $30,000 to $49,000 per unit. The new legislation lowers that by as much as 50 percent depending on a variety of factors.

The leading contenders in San Francisco’s mayoral race signed a campaign challenge to secure 1,000 units of housing for homeless people in their first year in office. Tipping Point Community charitable organization issued the challenge. Angela Alioto, London Breed, Jane Kim, Mark Leno and Amy Farah Weiss all signed the pledge.

LA City Council unanimously backed a proposed set of rules that would allow residents to host night-to-night rental only in their own homes, but bar the from renting out a house or apartments if it is not their primary residence. The rules must still be vetted by the Planning Commission, before the council can vote them into law.

The City of San Jose reached a tentative deal with AT&T to allow the installation of about 170 small cell devices on streetlights. The city would receive $5 million in lease revenues from the carrier over the next 15 year. City Council will consider the proposal at the next meeting.

The U.S. Navy released a map that would put large areas of the state off limits to future offshore wind farms, including all of San Diego and Los Angeles coastlines, extending up to the Central Coast. However, the military does not have the final say and federal and state officials, as well as wind energy companies and one member of congress, are working with the U.S. Department of Defense to develop a more flexible plan.

Anschutz Entertainment Group is advancing a $1.2 billion proposal to expand the LA Convention Center and the adjacent JW Marriott hotel. The center hasn’t been expanded since 1997 while San Diego and Anaheim invested in upgraded their facilities. The group is requesting tax incentives from the city for the project.  

Kanye West announced on twitter his plans to launch a new architecture arm called “Yeezy Home” that would include architectural and urban design. In the tweet, Kanye said he was calling for “architects and industrial designers who want to make the world better”. West says he was inspired by a recent visit to Los Angeles-based Southern California Institute of Architecture. 

A long-awaited mixed-use project at Pier 70 in San Francisco broke ground last week. Work will begin immediately on the project which includes 1,100-2,150 residential units and more than 1 million square feet of commercial space, with local retail and services, arts and light industrial space on 28 acres. Phase one consists of four buildings, one park, new utilities, and two new streets connecting Dogpatch and the waterfront.

According to data released by the Legislative Analyst’s Office, state taxes on legal marijuana sales in California are coming far short of projections. Approximately $34 million in the first quarter of 2018, about a third of the revenue that was anticipated. Gov. Jerry Brown’s budget proposal predicated that $175 million would pour in from excise and cultivation taxes in the first six months. The figures reflect how difficult it is to set up a large regulated market when an illegal one already. Some jurisdictions have banned marijuana cultivation and sales altogether while others have dragged their feet in passing regulations, which are required before a state license can be issued.