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CP&DR News Briefs May 21, 2019: Vallco Mall; RHNA Study; $9B Levi's Stadium Development; and More

Brett Simpson on
May 19, 2019
The Cupertino City Council tossed an alternative plan for a massive mixed-use project at the Vallco Shopping Mall property, effectively green-lighting a previously proposed plan at the site via provisions of Senate Bill 35. The alternative, called the “Vallco Specific Plan,” was drafted by a past city council in response to complaints from community members about the developer’s plans for a large mixed use development. It included more overall housing units than what developer Sand Hill Property Company proposed, and required them to pay school impact fees and contribute to community projects. Sand Hill has already gained fast-tracked consideration under SB 35, which forces cities to expedite developments that include affordable housing. In the absence of a council-approved alternative, that plan -- including 2,402 apartment units, 1.8 million square feet of office space, 400,000 square feet of retail, and a 30-acre rooftop park -- goes into effect. Better Cupertino, a citizens group opposing the project, has filed a lawsuit challenging the city’s approval of the development. (See prior C&PDR coverage.)

Study Criticizes Complexity, Ineffectiveness of State Housing Allocation
The Regional Housing Needs Assessment (RHNA) process fails to identify true housing needs, according to a recent examination of the California Housing Element by the UCLA Lewis Center for Regional Policy Studies. The UCLA paper, which responds to Governor Gavin Newsom’s announced intentions to reform the Housing Element law, identifies many issues with the RHNA. First, it claims the RHNA creates a “needless tension between subsidized and market-rate housing.” It also asserts that RHNA numbers are the result of a political process in which affluent cities lobby to keep their numbers low, and that the law asks cities to plan for more than 10 times the amount of subsidized housing that can be funded. It identifies another issue with RHNA: the law steers housing production away from places where housing is most expensive and necessary by basing “housing needs” on projections of population, rather than prices. Finally, the paper argues that RHNA needlessly pits market-rate and affordable housing against one another, when both are necessary to advance affordability. The paper proposes a reform for the flawed policy: “Rather than engage in a complicated process of prediction and allocation,” the authors write, "California should simply require that all cities build a 'fair share' of affordable housing.”

$8 Billion Mixed-Use Development Proposed Next to Levi’s Stadium
A proposed $8 billion, 240-acre development by Related Cos. will create over 9 million square feet of offices, housing, hotels, and retail across from the San Francisco 49er’s Levi’s Stadium site in Santa Clara. The project, set to break ground next year, will transform a golf course into the first large-scale mixed-use development in the South Bay Area. Plans for the neighborhood will include 5.4 million square feet of new commercial office space, 1,280 new residential apartments, 400 extended-stay apartments, 1 million square feet of shopping, dining and entertainment spaces, and two hotels. The project is estimated to create 25,000 jobs and generate nearly $17 million a year in taxes, fees, and lease revenue. "This 240-acre redevelopment represents one of the most ambitious and transformative opportunities in the area’s history," Related Cos. Chairman Stephen M. Ross said. “The commercial offerings were designed for visionary companies who demand a globally competitive work place with innovative, sustainable design and outstanding amenities to attract and retain a talented workforce.” Renowned firm Foster+Partners will serve as master planner and lead design architect. 

Newsom’s May Budget Revise Increases Funding for Homelessness, Housing
Governor Gavin Newsom’s recently-published "May Revise” budget increases homelessness services from $650 million to $1 billion. This change responds to the growing statewide homelessness issue: California is home to one quarter of the nation's homeless people, and also has the highest share of unsheltered homeless people – 69 percent – of any state. However, critics claim that Newsom’s plan, which focuses on short-term, emergency services and shelters, overlooks the need for more permanent housing. “If you look at what’s going to actually solve the problem, it’s a systematic investment in these longer-term solutions,” said Linda Hershey, Executive Director of Housing California. “Otherwise, we’re just going to keep putting more people into the homelessness situation.” The governor’s January budget included $1.75 billion General Fund to increase housing production. The May Revision maintains this commitment to spur housing production, but refocuses $500 million to remove barriers to building mixed-income housing.

Berkeley Study Correlates Housing Supply with Local Regulations
The UC Berkeley Terner Center for Housing Innovation published the California Land Use Data Set, a comprehensive survey which examines policies that affect the production, location, and preservation of state housing at the jurisdiction-level. Based on data collected from August 2017 to October 2018, the survey considers the effects of local land use on housing supply in a given region, and its effects on sustainability, economic mobility, and access to opportunity. The survey was completed in partnership with the California Department of Housing and Community Development, and includes responses from 252 cities and 19 unincorporated county areas. The Terner Center also published an accompanying report which reviews trends in survey responses in areas like zoning, affordable housing, and rental regulations.

Quick Hits & Updates

Following through on months of threats, the Trump Administration officially cancelled its $929 billion grant for construction of the California high speed rail in the Central Valley. The Federal Railroad Administration cited the project’s failure to forecast accurate schedules, reach key milestones, and demonstrate commitment to deadlines. The administration also warned that it will attempt to recapture $2.5 billion in grants already spent by the state. (See prior CP&DR coverage.)

San Jose rent increases have outpaced its stagnant tech salaries, according to a new study by Rent Cafe. The study found that over the last three years, rent in San Jose has increased by almost seven percent, while average tech salaries have dropped by nearly one percent. Authors of the study note that the area's housing market inflation may cause even its highest-paid workers to relocate. Tech workers in San Francisco and the East Bay fared better: in these areas, the average wage increased 14 percent while rents grew by nearly six percent.

The Oakland Port Authority unanimously approved a tentative exclusive negotiation process with the Oakland A’s baseball team, giving them four years to conduct an environmental impact report of its proposed Howard Terminal stadium. This marks the first of many needed approvals for the team’s proposed 35,000-seat stadium and multi-use development project on Oakland’s waterfront. And this approval is only tentative; the authority has expressed environmental, traffic, and safety concerns about building at the Howard Terminal site.

The San Diego Association of Governments released more details about its ambitious new transportation project, including hundreds of miles of high-speed commuter rail and a new congestion pricing policy. The multibillion dollar project, which replaces previous highway expansion plans, will likely take decades to build, and will require voter approval for new tax funding. North and East County officials, looking for near-term traffic relief solutions, have already objected to the plans’ preliminary details.

Los Angeles Metro announced yet another delay on its Regional Connector twin tunnel rail expansion project – this time until mid-March 2022. Already, Metro has increased the project’s budget twice to $1.75 billion, and delayed it once previously. Once completed, the 1.9-mile tunnel will connect three rail lines into two new mega routes to decrease commute time. The project is still on track for its 2023 deadline set by federal officials, who contributed a $670-million grant and a $130-million low-interest loan for the project.

After adopting a “Housing Crisis Workplan” to expedite new building in 2018, San Jose city officials are proposing consolidating four development phases into two. This effort will expedite 8,000 new apartments in the area, including 1,500 affordable units. This will help the city along its goal to develop 15,000 market-rate and 10,000 affordable units by 2022. In parallel, the city is working on a proposal to fast track transit improvements.

Caltrans officially released its parklet permit guide for major highways, following bids from cities and counties to build more pedestrian areas where highways pass through downtown.  The guide outlines Caltrans’ many requirements for approval: for example, parklets can only be built on sections with speed limits of 30 mph or lower, they must be open to the public, and must be renewed annually with Caltrans. Additionally, they must be applied for and built by local agencies, not businesses or other organizations. Currently, there is only one highway parklet in the state, built in Redding in 2015. (See prior CP&DR coverage.)

Following his report suggesting that cities “de-emphasize” building in high-risk fire areas, Governor Gavin Newsom clarified that he does not discourage building in wildfire zones. Instead, Newsom challenged cities to rethink density in high-fire areas, and to build with greater fire protections. Last year, the now-retired head of the state’s Forestry and Fire Protection Department said that the government should consider blocking new construction in high hazard areas. But the governor said that he has never seen concrete proof that halting new construction is the most viable solution. The governor also cited the state’s affordable housing crisis as a reason to consider more creative protections before blocking new development altogether.

The California Natural Resources Agency will be accepting project proposals for the Green Infrastructure Grant Program from May 13, 2019 through June 28, 2019. Approximately $18.5 million in awards will be funded by the program. Applicants submitting the most competitive proposals will be invited to participate in the next level of the competitive process, anticipated late Summer/early Fall 2019.The Green Infrastructure Grant Program, funded by Proposition 68, will fund multi-benefit green infrastructure projects in or benefitting disadvantaged or severely disadvantaged community. 

In efforts to lay the groundwork for future 5G technology, San Diego mayor Kevin Falcouner struck a deal with Verizon to streamline the permitting process for building mobile network “small cells.” Small cells boost a network’s range and increase the number of accessible high speed connections for any given area. In exchange, Verizon will install more than $100 million of power efficient light poles, give 500 smartphones to the city’s Police Department, and give 50 tablets to the city’s Fire-Rescue.

The City and County of San Francisco and a coalition of California water suppliers sued the State Water Resources Control Board for its new wetlands protections law. The law, unveiled last month, introduces an expansive definition of “wetlands,” and increases regulations for dredging or filling in water bodies. The lawsuit claims that the new requirements overstep state authority by introducing costly water regulations in areas that the federal government deems open to development. (See prior CP&DR coverage.)
 
In a sign of progress for the long-stalled Salton Sea Management Plan, the Imperial Irrigation District board of directors voted to allow access for state wetlands projects at the Salton Sea. In exchange, California the state of California will implement project operations and taxpayers will cover costs of potential lawsuits or penalties. The state has fallen behind on its 10-year plan to suppress dust and protect habitat over 3,700 acres of the threatened 350-square-mile sea. The area has been a point of focus both for wildlife loss and for public health concerns due to increasing toxic dust pollution. (See prior CP&DR coverage.)

The California Coastal Commission will impose a record-high $15.58 million fine against a coastal developer. The commission ruled that Sunshine Enterprises violated a state public beach access law by building a high-priced coastal hotel after receiving a permit for a moderately-priced hotel. The commission delayed a vote on levying an additional $5.9 million in mitigation fees to build lower-priced alternatives nearby.

The Department of Conservation has $950,000 for local and regional planning grants to support the integration of natural and working lands, specifically agricultural lands, into local and regional planning documents. This funding is made available through Proposition 68 The California Drought, Water, Parks, Climate Coastal Protection, and Outdoor Access for All Act of 2018 passed by California voters in June 2018. Public comment on the guidelines will be accepted until May 20 and grant applications due July 31.