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3 Predictions For The Coming Year

Dec 28, 2009

The close of one year always induces predictions for the coming year. Putting one's forecast in print even virtual print is a dangerous business. But I can't help myself.

No one knows for certain what will happen in 2010. Some of our top stories from 2009 were easy to see coming. The state budget mess, the continued focus on SB 375 and the ongoing home construction slowdown were not surprises. But one year ago, few people would have predicted that a Sonoma County city with a fine reputation among planners would lay off all of its planners, that state lawmakers would exempt a 500-acre development project from CEQA, or that lawmakers and Gov. Schwarzenegger would agree on significant water legislation.

With that, I offer three predictions for 2010.

Redevelopment deadlines will get delayed by at least 30 years. The state budget deficit is already at $17 billion. That figure is only going to grow, and it seems that lawmakers and the administration have already made all of the "easy" budget decisions. The coming budget scramble promises to be a wild one. During the last budget go-round, the City of Industry proposed letting the state take a cut of property tax increment revenues in exchange for a lengthy extension of redevelopment activity, whether or not blight still exists. The proposal failed, but I think it will return.

With many redevelopment project areas scheduled to sunset during the next few years, and with the state desperate for funding, we just might have a marriage of convenience here. I'm betting more than a few redevelopment agencies would be willing to trade a cut of tax increment revenue 10%? 20%? for another 30 or 40 years of redevelopment authority. And I'm betting state officials are willing to make the trade for, say, $750 million a year, which is about 15% of current tax increment receipts.  I'm not arguing this is a good policy choice. But it is expedient, and expediency is king of Sacramento.

The SB 375 backlash will start to hit. Truly reducing the amount that people drive is going to take enormous changes in land use development and growth patterns. There's some acceptance of the needed planning changes. But reducing driving also is going to require aggressive measures that discourage people from driving and that's going to necessitate very unpopular decisions.

We've all heard the pitch from true believers that cities should be designed for people, not for cars. Sounds great until you realize this notion means placing the needs of pedestrians, cyclists and public transit ahead of motorists. This, in turn, means dividing up the public right-of-way to provide more room for sidewalks, bike lanes, and light rail and bus lines and a lot less room for cars. It means fewer and smaller parking lots. It probably means some form of "congestion pricing." Such ideas will start to come into tighter focus when the Air Resources Board sets regional greenhouse gas emissions reductions targets in September. Good luck selling these ideas to millions of people who are used to driving everywhere.

Housing production will increase. OK, this is any easy one. In 2009, housing production was at the lowest level ever recorded. It's not going to go down further. The turnaround will not be rapid, but it's coming. 

We all read the recent news stories about California's slow population growth of late. Keep in mind, though, that even when population increases slowly, the state still adds a lot of people. From July 2008 to July 2009, the population jumped 353,000. That increase equates to a need for roughly 140,000 housing units or about 40,000 fewer than builders produced in 2008 and 2009 combined. In other words, market demand is going to necessitate more housing production.

Happy New Year.

- Paul Shigley