For more details on developments since the Fall of 2008, check out CP&DR's SB 375 Resources Page. 

SB 375, the anti-sprawl bill signed by Gov. Arnold Schwarzenegger last night, is both more and less powerful than it's advertised to be, and whether it leads to sweeping change depends on how aggressively California's regional planning agencies implement it.

It's more powerful than advertised because it contains potentially revolutionary changes in California's arcane processes of regional planning for transportation and housing – largely by mandating the creation of "sustainable" regional growth plans. And those changes could become more important on Friday, when the California Air Resources Board is expected to double the greenhouse gas emissions reduction targets that local governments must meet through land-use planning.

It also has the potential to significantly rearrange the Regional Housing Needs Assessment process, and provides significant breaks under the California Environmental Quality Act for certain types of transit-oriented projects.

But it's less than revolutionary on the land-use front, largely because it's incentive-based.

Despite the headlines, the law doesn't "tie state transportation funding to land use;" it merely charges regional planning agencies, which are run by local elected officials, with making sure their own funding decisions are consistent with the new regional plans. Local governments don't have to comply with the plans.

And no on-the-ground change is likely to be seen for at least three years – until the regional planning agencies actually adopt the "sustainable communities" growth scenarios called for in the law.

The bottom line is that the law won't be sweeping unless the state and the regional planning agencies take it seriously. After all, California has adopted potentially sweeping land-use reform before – for example, AB 857, which contains clear and broad-ranging anti-sprawl language – but that reform has simply not been implemented. And there is clearly enough wiggle room for the regional planning agencies not to take the law seriously if they choose.

Schwarzenegger said Tuesday, "This legislation constitutes the most sweeping revision of land-use policies since Gov. Ronald Reagan signed the California Environmental Quality Act."

Senate leader Darrell Steinberg (D-Sacramento) said the bill "will be used as the national framework for fighting sprawl and transforming inevitable growth to smart growth. This is a historic day for California." 

Schwarzenegger signed the bill only hours before the deadline on Tuesday – and with more suspense than anybody expected. At the Commonwealth Club in San Francisco last Friday, the governor was equivocal about whether he would sign the bill. Unconfirmed reports suggest that California's transportation lobby attempted behind the scenes to persuade the administration to veto the bill at the last minute – but those efforts failed. In the end, Schwarzenegger simply had to sign the bill, since it implements his much vaunted AB 32 and was endorsed by local governments, homebuilders, and environmentalists.

The bill contains five important aspects that California planners should understand:

1. Creation of regional targets for greenhouse gas emissions reduction tied to land use.

2. A requirement that regional planning agencies create a plan to meet those targets, even if that plan is in conflict with local plans.

3. A requirement that regional transportation funding decisions be consistent with this new plan.

4. Tethering together regional transportation planning and housing efforts for the first time.

5. New CEQA exemptions and streamlining for projects that conform to the new regional plans, even if they conflict with local plans.

1. Regional Targets

Under the law, the California Air Resources Board has two years – until September 30, 2010 – to give each of California's metropolitan planning organizations a greenhouse-gas emissions reduction target for cars and light trucks – but only through changes in the development pattern.

As many commentators have observed, reducing emissions from cars and light trucks is a "three-legged stool." One leg involves greater fuel efficiency from new vehicles – a requirement called for under former Assemblymember Fran Pavley's AB 1493, which is currently in dispute between the state and federal governments. The second leg involves reducing the carbon content of fuels – a requirement called for under Schwarzenegger's low-carbon emissions standards.

The third leg of the stool is changes in the growth pattern that reduce overall driving. The regional targets will cover only this third leg of the stool.

Under the CARB's "Scoping Plan," required under AB 32, about 20% of overall emissions reduction must come from cars and light trucks. But 1.2% must come from local governments – and that figure is likely to double with the release of a revised Scoping Plan.

The process by which CARB sets the targets is technical, but the agency will be required to set up a "Regional Targets Advisory Committee" that includes all stakeholders, including local governments, builders, and planners. MPOs can propose their own target. The target will be revised every 8 years to conform to the new, unified housing and transportation planning schedule set up by the bill.

2. The Sustainable Communities Plan Requirement

Once the MPOs have received the regional targets in late 2010, they will be required to create a "Sustainable Communities Strategy" that lays out how the emissions reduction will be met. Technically, this strategy becomes part of the Regional Transportation Plan – an important point, because it tethers the sustainable strategy to federal transportation planning law.

The Sustainable Communities Strategy was the subject of major debate in the Legislature – and as these strategies are shaped by the MPOs (whether in 2011 or before)  they are likely to serve as a lightning rod for discussion about the future growth patterns in every region. But the way SB 375 came out of the Legislature, the Sustainable Communities Strategy isn't quite as bulletproof as you might think.

It does incorporate the RHNA requirement to provide housing to accommodate all income groups – for the simple reason that, if housing targets weren't incorporated, the emissions reduction target could be met simply by cutting growth. But provisions requiring incorporation of resource and open space land considerations were watered down.

And because it's part of the RTP, the Sustainable Communities Strategy is subject to certain provisions of federal transportation law that could undercut the anti-sprawl efforts – especially a provision stating that the RTP must be based on "current planning assumptions" in the region that take general plans into account. "If a certain type of development pattern is unlikely to emerge from local decision-making," League of California Cities lobbyist Bill Higgins noted recently, "it will be difficult for the regional agency to say that it reflects current planning assumptions."

In addition, Higgins and other local government lobbyists succeeded in inserting language saying that the Sustainable Communities Strategy is not a land-use plan and SB 375 does not confer land-use authority on the MPOs. As Higgins said last week at the CCAPA conference in Hollywood, this means that local governments' own General Plans don't have to conform to this Sustainable Communities Strategy.

As is typically the case in planning, the Sustainable Communities Strategy can contain only "feasible" measures to reduce greenhouse gas emissions. If the end result doesn't hit the CARB target, the MPO must develop a second plan – the "Alternative Planning Strategy," which is technically separate from the RTP but nevertheless must lay out an alternative plan to meet the target. The alternative strategy becomes important in the CEQA exemptions below.

3. Transportation Funding Consistency

Here is where the rubber meets the road – sort of. From the beginning, SB 375 has been advertised as the law where, at last, state transportation funding decisions are tied to land use. This is technically true – but only technically. Under 375, there are no state bureaucrats in Sacramento doling out transportation money to cities and counties based on whether the local anti-sprawl efforts are sufficient. Instead, the bill uses the existing system – which gives most of the power to make transportation funding decisions to the regional MPOs.

So the only thing SB 375 says is that the Regional Transportation Plan has to be internally consistent – meaning the action items and financing decisions called for in the RTP must be consistent with the Sustainable Communities Strategy. This means SB 375 is subject to the same major structural issue as the RTP itself: Ultimately, the decisions at the regional level are made by MPO board members, who are local elected officials. And, as we all know, it's unlikely that elected officials sitting as regional planning board members will pull the trigger on each other.

In other words, SB 375 talks tough about tying state and federal transportation dollars to land use decisions, but the bill does not alter the current regional planning structure, which delegates decision-making authority to local officials sitting as MPO board members.

4. Connection to Regional Housing Needs Assessment

SB 375 also changes the state Housing Element law in important ways – and, for the first time, links regional planning efforts for transportation and housing. Under the bill, all transportation and housing planning processes are put on the same eight-year schedule – that is, the plans must be updated once every eight years. (There's a penalty for jurisdictions that don't meet the Housing Element schedule: They must prepare Housing Elements every four years instead.)

The law also strengthens the language on required rezonings: If a local jurisdiction must rezone property as a result of the Housing Element, it must do so within three years and it must include minimum density and development standards for the site.

Most important, however, is the fact that the RHNA allocation numbers must conform to the Sustainable Communities Strategy. This has important consequences for the RHNA process and Housing Element implementation. The regional planning agencies are required to provide local governments with a housing allocation representing their "fair share" of regional growth. But the Sustainable Communities Strategy is likely to concentrate future development around transit stops. The end result of the RHNA process in the future is likely to look something like what the Association of Bay Area Governments has recently done in this arena – cutting a deal among the local governments to allow more housing in transit-rich areas, and rearranging the RHNA numbers to accommodate that goal.

5. CEQA Exemptions and Streamlining

In terms of planning practice, the most powerful provisions of SB 375 have to do with CEQA Exemptions and Streamlining. Under the new law, certain types of development projects are exempt from CEQA – or qualify for streamlined review – if they conform to the Sustainable Communities Strategy. And these projects qualify for streamlined review even if they conflict with local plans. Of course, such projects can't qualify for an exemption or streamlined review until a Sustainable Communities Strategy is adopted, which is likely about three years from now.

But the list of caveats is long, meaning the eventual impact of the CEQA provisions may not be as significant as you might think.

Two types of projects qualify for CEQA breaks under SB 375 – residential or mixed-use projects, and "transit priority projects".

Under the law, a residential or mixed-use project that conforms to the Sustainable Community Strategy qualifies for CEQA streamlining. Specifically, the CEQA review does not have to cover growth-inducing impacts; and it does not have to cover either project-specific or cumulative impacts dealing with climate change.

More significant is the "transit priority projects." These projects can qualify for either a full CEQA exemption or a streamlined environmental assessment if they meet certain criteria.

"Transit priority projects" are projects that meet the following criteria:

1. Contain at least 50% residential use
2. Have a minimum net density of 20 units per acre
3. Have a floor-area ratio for the commercial portion of the project at 0.75
4. Be located within ½ mile of either a rail stop, a ferry terminal, or a bus line with 15-minute headways.

Under the law, projects can qualify for a full CEQA exemption if:

• They are no bigger than 8 acres or 200 units
• They can be served by existing utilities
• They will not have a significant effect on historic resources
• Their buildings exceed energy efficiency standards
• They provide ANY of the following:
     - 5 acres of open space
     - 20% moderate income housing
     - 10% low income housing
     - 5% very low income housing.

Under the law, "transit priority projects" that don't meet these criteria still qualify for a truncated environmental assessment similar to the truncated environmental assessment permitted for residential and mixed-use projects specified above.

– Bill Fulton