The City of Fresno's policy of not requiring mitigations for developments' impact on state highways is illegal, according to the Fifth District Court of Appeal. In an expansive ruling, the court stepped into the middle of the long-running feud between Fresno and Caltrans over mitigation fees. Fresno has refused to impose fees on new development to pay for highway improvements, because city officials said Caltrans could not justify the fees. "The policy is illegal because CEQA does not allow agencies to approve projects after refusing to require feasible mitigation measures for significant impacts," Justice Rebecca Wiseman wrote for the court. The court also rejected the city's baseline for studying the project that brought about the litigation. The project is mix of offices, a shopping center and apartments on nearly 40 acres. In the environmental impact report, the city compared the impact of this project with impacts expected under full build-out of existing zoning for an office park, rather than comparing the project with the site's existing condition as vacant land. The court determined that the EIR was misleading. In December 2004, the Fresno City Council amended the general plan and the Woodward Park community plan, rezoned property and approved Zinkin Development Company's proposal for a 39-acre site at North Friant Road and North Fresno Street, one block off Highway 41. The project called for 274,000 square feet of offices, a 203,000-square-foot shopping center and, tentatively, 20 apartments. The city certified an EIR for the project and adopted a statement of overriding considerations because a variety of significant impacts could not be mitigated. The Woodward Park Homeowners Association and Valley Advocates sued, arguing that the city failed to require feasible mitigation for significant cumulative traffic impacts, performed an inadequate analysis of cumulative air quality impacts and project alternatives, rendered the general plan internally inconsistent and inconsistent with the community plan, and used an improper procedure to adopt the statement of overriding considerations. Fresno County Superior Court Judge Wayne Ellison rejected all of the project opponents' claims. The groups appealed a portion of the ruling, but the Fifth District actually expanded the issues. The court started with the environmental baseline. The city and developer argued that the EIR was adequate because it evaluated the project's impacts in relation to the vacant land and a hypothetical large office park permissible under existing zoning. That approach would have been acceptable, the court ruled, but it wasn't what happened. Instead, the EIR used the comparison with hypothetical development to obscure the project's true impacts, the court found. " he EIR never presented a clear or complete description of the project's impacts compared with the effects of leaving the land in its existing state," the court ruled. "Readers who have been told that the air pollution impact is slight and that the traffic generated will be less than the given benchmark should not have to stop and puzzle it out that these conclusions are based on a comparison with a large office park that is not, in fact, there. Those who did puzzle it out were still left wondering whether the impacts would be slight or major in relation to vacant land." The court found the EIR's required "no project" alternative invalid for similar reasons: The no project alternative was based on full build-out under existing zoning, not on leaving the site undeveloped. The court continued the theme into its consideration of the statement of overriding considerations. The court found that the EIR presented project alternatives as substantially more intensive than the proposed project, yet the statement of overriding considerations dismissed the alternatives as smaller and less economically beneficial. This misled the public, the court determined. The real difference between the project and alternatives was the inclusion of a shopping center in the Zinkin plan. "If the statement of overriding considerations had said accurately that the alternatives proposed ‘no shopping center or a smaller shopping center' instead of inaccurately ‘no development or development to a lesser degree,' it would have made a far different impression on the public. We do not have to look far to find a reason why the city might not have wanted to use the accurate language since many project opponents, especially neighbors, concentrated their fire on the shopping center component of the project," Justice Wiseman wrote for the court. Moreover, the city did not make the statement of overriding considerations available to the public prior to the public hearing at which the City Council approved the project. At that hearing, a city planner "misrepresented the contents of the statement" to a skeptical councilman, the court found. After identifying all of these legal inadequacies, the court considered the issue of highway mitigation. The city and Caltrans had argued about the number of peak hour trips the project would generate and the assessment of fees to fund offsetting Highway 41 improvements. Ultimately, Caltrans insisted on $306,000 to fund the project's fair-share of an $11 million southbound auxiliary lane. City staff members, however, advised the Planning Commission and the City Council that Caltrans had not provided adequate proof of a nexus between the project and the mitigation fee — and that charging such a fee would therefore be illegal. The city imposed no impact fee. In fact, the city has refused similar Caltrans' fee requests since at least 1998. "Simply stated: The city's practice is illegal," the court ruled. "There is no foundation for the idea that the city can refuse to require mitigation of an impact solely because another agency did not provide information. The seed of the city's confusion, as evidenced in the city staff report to the Planning Commission and City Council, is its belief that the city needs to require mitigation of this category of impacts only if Caltrans proposes a mitigation measure and then proves to the city's satisfaction that the measure is legal. This is not how CEQA works." "Here is another way of putting the point. The city may view this matter as a conflict between it and Caltrans. In referring to Caltrans in the context of this issue at oral argument, counsel for the city said it was ‘their issue' and argued that this court should not reach it because Caltrans had not appeared as a party. In reality, the conflict between the city and Caltrans is irrelevant to the city's obligation to require mitigation of impacts. The city's failure to resolve this conflict and require mitigation of these acknowledged impacts only punishes the public. CEQA does not permit this to happen," the court concluded. The court did not find the project in conflict with the general and community plans. The Case: Woodward Park Homeowners Association, Inc. v. City of Fresno , No. F049481, 07 C.D.O.S. 3914. Filed April 13, 2007. The Lawyers: For the homeowners association: Richard Harriman, (559) 226-1818. For the city: Geralyn Skapik, Burke, Williams & Sorensen, (951) 788-0100. For Zinkin Development: James McKelvey, Motschiedler, Michaelides & Wishon, (559) 439-4000.

Monterey County did not have to prepare an environmental impact report for a 28-lot subdivision in an area suffering from a severe groundwater overdraft, the Sixth District Court of Appeal has ruled. The court rejected the contention of the group LandWatch Monterey County that a fair argument could be made that the housing project may have a significant impact on water supply. The mitigated negative declaration the county prepared for the project "is supported by overwhelming, uncontradicted evidence that the project has an ample water supply, and with mitigation, its potentially adverse impacts to the groundwater supply will be rendered insignificant," the court ruled. The housing development is planned in Prunedale, a hilly area between Salinas and Gilroy that relies on groundwater. As far back as 1952, studies have shown that houses and farms have pulled more water out of the ground than is recharged into aquifers. The county has limited development in the area. Developer Donald Chapin Jr. submitted his application for a 28-lot, 143-acre subdivision in June 1999, about a year before the county imposed a development moratorium for the area. (The county exempted Chapin's project.) Chapin submitted hydrological test results and analyses that said a well that was part of an adjacent mutual water system could provide adequate water. In addition, the project was designed with detention ponds that would also serve as recharge basins. A couple draft initial studies of the project generated a great deal of response. In early 2001, LandSet and Geoconsultants, Inc., prepared a "comprehensive groundwater assessment report" (CGA report). It concluded that an on-site well alone could meet the project's need for an estimated 10.2 acre-feet of water annually, and that the ponds may return more water than that back into the ground. Not everyone was convinced. Jerry LeMoine, an environmental health specialist for the county Department of Health, sent an email to the planning department calling the groundwater report a "hoax." He said the project would need about 15 acre-feet of water, tests were conducted wrong, and the ponds were too shallow. He urged preparation of an EIR. A month later, he recanted and said the county's Water Resources Agency would provide future comments. After more reports and another draft of the initial study, the project finally made it to the county Planning Commission in February 2004. LandWatch argued that an EIR was necessary and that the project conflicted with the county general plan. Doug Kasunich, a neighbor who owns a water well drilling and maintenance company, testified about the area's water problems, including wells going dry and nitrate intrusion. However, a county Department of Health representative (not LeMoine) testified that groundwater was available for the project. The Planning Commission approved the subdivision and a mitigated negative declaration. LandWatch appealed, but the Board of Supervisors approved the project and the mitigated negative declaration. So LandWatch sued. The group argued that because the area has an undeniable water problem, the project obviously would have a significant adverse impact on water supply. The group also contended the project was in conflict with the general plan and the North County area plan. Monterey County Superior Court Judge Robert O'Farrell rejected all of the organizations contentions. On appeal, LandWatch pointed to internal county memoranda about the area's water problems, LandWatch's own comments during the administrative process, Kasunich's testimony and LeMoine's email as evidence supporting a "fair argument" that the project may cause adverse environmental impacts — the threshold for requiring an EIR. But the court ruled that LandWatch chose its evidence selectively, and the court discounted much of what LandWatch used for support. "In our view, general evidence of a sub-area wide overdraft and the prior countywide moratorium have no tendency to discredit the specific technical analysis and conclusions reached by qualified experts in site-specific studies or the testimony that there is an adequate water supply for the project," Presiding Justice Conrad Rushing wrote for the unanimous three-judge panel. "Nor does that general evidence cited by LandWatch reflect an alternative analysis upon which one could reasonably conclude that the existing water supply is inadequate." The court said that neither LeMoine nor Kasunich is a hydrologist or hydrogeologist, that LeMoine withdrew his statements, and that Kasunich, as an area resident, would naturally oppose the project. "The lack of pertinent qualifications to evaluate hydrological and hydrogeological issues render LeMoine's and Kasunich's views, and the assumptions behind them, lay speculation on matters that require qualified technical expertise," Rushing wrote. "Consequently, LeMoine's emails and Kasunich's letter do not constitute substantial evidence supporting fair argument that the CGA report and the technical data from LandSet upon which it based is erroneous or that the proposed system of detention/recharge ponds might not mitigate the 10.2 acre-feet of additional demand generated by the project." The court rejected the contention that, because it was based on studies supplied by the developer's consultants, the mitigated negative declaration was invalid. As for planning consistency, LandWatch argued that the project violated county general plan policy 53.1.3, which states: "The county shall not allow water consuming development in areas which do not have adequate water supplies." The court found that the project "has a proven and adequate water supply." Moreover, the court added, board of supervisors "could reasonably understand the general plan and its goals, policies and objectives as guides, rather than compulsory requirements, and treat Policy 53.1.3 as an advisory policy statement rather than a mandatory and absolute bar against approving new development that uses water, regardless of whether it would have adverse hydrological impacts." The North County area plan contemplates development in the area, the court added. The Case: LandWatch Monterey County v. County of Monterey , No. H028659, 2007 DJDAR 2347. Filed January 23, 2007. Ordered published February 21, 2007. The Lawyers: For LandWatch: William Parkin, Wittwer & Parkin, (831) 429-4055. For the county: Efren Iglesia, county counsel's office, (831) 755-5045. For the developer: John Bridges, Fenton & Keller, (831) 373-1241.

The Ninth U.S. Circuit Court of Appeals has upheld a district court ruling that strikes down San Diego County's ordinance regulating the location and appearance of cell phone antennas and other wireless facilities. The Ninth Circuit found that the county's wireless telecommunications facilities zoning ordinance violated the federal Telecommunications Act of 1996 because the ordinance "has the effect of prohibiting wireless communication services." The Ninth Circuit did little to explain how the ordinance prohibits services except to note that it gives county officials discretion and requires public hearings on conditional use permit applications. The state Supreme Court is currently reviewing the legality of the same ordinance under state law ( Sprint Telephony PCS v. County of San Diego, No. S145541 ). Local zoning regulation of wireless telecommunications equipment has become the source of a great deal of litigation. Much of that litigation concerns local governments' application of their regulations. The case decided by the Ninth Circuit, however, concerned a challenge to the validity of the ordinance itself. The county adopted its wireless telecommunications ordinance (WTO) in 2003. The ordinance created a four-tier system for granting conditional use permits for wireless facilities. The level of review and amount of information required of an applicant varied based on the location, visibility and height of proposed structures. The ordinance required facilities to be compatible with adjacent uses, camouflaged when appropriate and consistent with community character. Sprint challenged the ordinance, arguing that it violated 47 U.S.C. § 253(a), a section of the Telecommunications Act that says: "No state or local statute or regulation, or other state or local legal requirement, may prohibit or have the effect of prohibiting any entity to provide any interstate or intrastate telecommunications service." The county cited a different part of the act, § 332(c)(7), which preserves the authority of local government to decide on the placement of wireless service facilities. U.S. District Court Judge Judith Keep initially ruled for Sprint — and found that the company could seek damages under federal civil rights law (28 U.S.C. § 1983). After Keep died, Judge Ted Moskowitz took over the case. He blocked the county from enforcing the ordinance but said § 1983 damages were not permissible under the Telecommunications Act. Both sides appealed. In its opinion, a unanimous three-judge panel of the Ninth Circuit compared § 253(a) (which the court called the "removing barriers" provision) with § 332(c)(7) (which the court termed the "preserving local zoning authority" provision). The court noted that using the former section to preempt an entire local zoning ordinance "is a new and different application" of the Telecommunications Act (TCA). The county argued that § 332(c)(7) protects the zoning ordinance and that any other reading of the act would render that section moot. But the court determined that the county's argument "ignores the plain meaning and structure of the TCA." Under the federal law, a telecommunications provider may choose to challenge the facial validity of an ordinance under § 253(a), or may choose to challenge the individual application of an ordinance under § 332(c)(7). " ut that choice does not imply that one section must undermine the other. Interpreting § 253(a) to preempt certain local wireless zoning ordinances does not negate the substantive and procedural elements of § 332(c)(7)," wrote Judge Myron Bright, an Eighth Circuit judge sitting by assignment to the Ninth Circuit. After parsing the two sections, the court then spent only three paragraphs determining that § 253(a) preempts San Diego County's ordinance. The court found the case similar to City of Auburn v. Qwest Corp ., 260 F3d 1160 (9th Circuit 2001), in which the court struck down a Washington city's ordinance requiring payment for use of public right-of-way. The court in Auburn determined that the ordinance restricted service in violation of the TCA. " he district court focused on the WTO's application submission requirements, the discretion reserved to the zoning authority, the public hearing requirements, and the criminal penalties for violation of a use permit. The court concluded that the combination of these factors had the effect of prohibiting wireless service in a matter similar to the impermissible franchising ordinance in Auburn," Bright wrote, agreeing with the lower court. "We conclude that the WTO imposes a permitting structure and design requirements that present barriers to wireless telecommunications within the county, and is therefore preempted by § 253(a)." However, the court ruled that § 253(a) did not create a right enforceable through federal civil rights law. After reviewing the legislative history, the court concluded, " cost-conscious Congress would not have exposed local governments to § 1983 damages that, as Sprint contends in this case, could amount to millions of dollars." The Case: Sprint Telephony PCS v. County of San Diego , Nos. 05-56076, 05-56435, 07 C.D.O.S. 2650, 2007 DJDAR 3406. Filed March 13, 2007. The Lawyers: For Sprint: Daniel Pascucci, Buchanan Ingersoll, (619) 578-5000. For the county: John Sansone, county counsel's office, (619) 531-4860.

A state appellate court has upheld the City of Gilroy's housing element against a challenge filed by affordable housing advocates. The court ruled that, under the housing element law in effect when Gilroy updated its housing plan in 2002, the city did not have to provide a site-specific inventory and analysis. The decision by a unanimous three-judge panel of the Sixth District Court of Appeal appears to conflict with a 1997 decision regarding the City of San Diego's housing element. In Hoffmaster v. City of San Diego , 55 Cal.App.4th 1111, the court rejected a housing element because it lacked information about specific sites and policies for homeless shelters and transitional housing (see CP&DR Legal Digest , August 1997). The court ruled in Hoffmaster that a broad inventory of land available for housing development was inadequate. In the Gilroy case, housing advocates argued that the city did not identify residentially zoned land by parcel, failed to analyze those sites, did not identify enough sites to meet the city's fair share of affordable units, and did not provide adequate sites for "by right" multi-family residential development. The Sixth District suggested that the advocates might have a good argument under today's statute, but not under the law prior to 2004 amendments. "The Legislature made amendments to the housing element law in 2004 after Gilroy's adoption of its 2002 general plan to read, in essence, as plaintiffs contend we should read the prior law," Justice Wendy Clark Duffy wrote for the court. "In other words, plaintiff's arguments largely point not to legal insufficiencies in Gilroy's 2002 housing element but instead to inadequacies and inefficiencies in the prior statutory language." Like other cities in the greater Bay Area, Gilroy had a December 31, 2001, deadline to update its housing element. Under the Association of Bay Area Government's regional housing needs allocation, Gilroy had to plan for 1,240 units of housing affordable to low- and very low-income households. The city submitted its draft housing element and a background report in December 2001 to the Department of Housing and Community Development (HCD), which found the draft plan to be out of compliance with state law. Gilroy and HCD went back and forth, with the city ultimately adopting a housing element that the state found inadequate because the plan did not include a site-specific land inventory, and did not provide analysis and removal of governmental constraints to affordable housing development. Housing advocates filed suit in May 2004, arguing that the city violated the housing element law (Government Code §§ 65580-65589.8) and the "least cost zoning law" (§ 65913 et seq.), which requires cities and counties to zone adequate land for housing development. Santa Clara County Superior Court Judge William Elfving ruled that the housing element complied with the law. On appeal, the Sixth District first dealt with the standard of review. Housing advocates pointed to HCD's conclusions for support, but the court ruled that HCD's "informal interpretation of statutory requirements is in no way binding on us." On the merits, the city argued that the law in 2002 required no more than an aggregate listing of vacant sites and locations having potential for redevelopment, along with a general analysis of zoning and public facilities to serve new units. The court agreed, rejecting housing advocates' argument that 2004 statutory amendments in AB 2348 (Mullin) simply clarified requirements for site specificity. " rior to the 2004 amendments to the housing element law, substantial compliance with § 65583, subdivision (a)(3), required only general analysis of zoning and public facilities to the inventoried sites, as catalogued or listed in the aggregate," the court ruled. The court also rejected housing advocates arguments, based on Hoffmaster , that the city could count only sites immediately available for development — an argument that implies specific sites must be identified and obstacles to development removed. The court said the housing advocates were overreaching. "The statutory language did not require that sites be immediately available for development in order for them to be ‘adequate.' Nor did it require a showing of the feasibility of development on individual sites. Nor did it require that actions designed to ameliorate developmental or zoning constraints be scheduled to occur at any particular point early in the planning period so that actual development could be completed within that period. Instead, the statute simply required a statement of administrative plans scheduled to occur over a five-year period," the court ruled. "While the city could have offered more specificity, and while the element does not express that its programs and action items will yield the desired results soon enough in the planning period to permit full development within that period, these were not required for substantial compliance with the statute," Justice Duffy continued. Similarly, the court ruled, the least cost zoning law "does not require immediate action and permits a locality to act within the planning period to meet regional housing needs." The Case: Fonseca v. City of Gilroy , No. H028369, 07 C.D.O.S. 3141, 2007 DJDAR 3952. Filed March 23, 2007. The Lawyers: For Fonseca (housing advocates): James Zahradka II, Law Foundation of Silicon Valley, (408) 280-2423. For the city: Andrew Faber, Berliner Cohen, (408) 286-5800.

WASHINGTON _ Home builders are hoping that the U.S. Supreme Court will overturn a Ninth U.S. Circuit Court of Appeals decision that could broaden the impact of the federal Endangered Species Act on residential and commercial construction. But environmental groups are pressing the justices to require the Environmental Protection Agency (EPA) to ensure that states take endangered species concerns into account before giving states authority to issue construction permits under a federally mandated water pollution control program. Lawyers for the government and the environmental group Defenders of Wildlife appeared to muddy the dispute, however, during hour-long arguments before the high court on April 17. The attorneys were arguing a case challenging the EPA's decision to allow the state of Arizona to take over administration of the program. The program, established under the Clean Water Act, requires a permit before anyone may discharge a pollutant into a waterway from any "point source," including construction sites. The justices themselves appeared divided along ideological lines, with liberals favoring the environmental group's position and conservatives inclined to side with the EPA. But the justices also pressed repeatedly for basic information about the operation of the federal program — officially titled the National Pollutant Discharge Elimination System (NPDES) — and what role if any the Endangered Species Act plays in the EPA's current administration of the program. In California, the state's administration of the program dates to the 1970s and is not directly affected by the case. But California water agencies filed a brief warning that the Ninth Circuit's decision could jeopardize water contracts with the U.S. Bureau of Reclamation if that agency was legally required to comply with the Endangered Species Act too. The Ninth Circuit's decision, issued August 22, 2005, came in a petition filed by Defenders of Wildlife challenging the EPA's decision to transfer authority for the NPDES program to Arizona. Representing the agency, Deputy Solicitor General Edwin S. Kneedler told the justices that 40 states are currently administering the program under EPA-approved transfers of authority. In its ruling, however, the Ninth Circuit held that EPA could not transfer authority to the state without first complying with a provision of the Endangered Species Act requiring consultation with the Fish and Wildlife Service. The service's local office had objected to the transfer, but in Washington, EPA and the service agreed on allowing the state to take over the program. The National Association of Home Builders intervened in the case and joined the government in urging the Supreme Court to reverse the Ninth Circuit's decision. "Wildlife as protected by the Endangered Species Act can't trump all other concerns," Duane Desiderio, the Home Builders' staff vice president for legal affairs, said after oral arguments. "They have to be harmonized with other statutes." In arguments before the court, Kneedler contended that the Clean Water Act requires EPA to let states take over administration of the program if nine specific criteria are met. The government attorney said the law reflects Congress's "strong preference for state protection of waters." But Eric Glitzenstein, a Washington attorney and Defenders of Wildlife board member, said the Endangered Species Act also requires any federal agency to avoid actions that may jeopardize a plant or animal species. He said the law requires EPA to "make a good faith effort to use the consultation process provided by to devise mechanisms to protect species." The court's four liberal justices appeared to challenge Kneedler's argument. "We've got two statutes, each of which is mandatory," Justice David H. Souter remarked. "Why do you not have an obligation to do what you can with respect to the Endangered Species Act?" But Chief Justice John G. Roberts Jr. asked Glitzenstein whether EPA could refuse to let a state take over operation of the program because of other federal laws, such as the Occupational Safety and Health Act. "So EPA can leverage their approval into any area of law?" Roberts asked with evident incredulity. Both lawyers narrowed the conflict somewhat during the course of the argument. Kneedler stressed that EPA retains oversight over state administration of the program, including the power to object to a permit issued by the state agency. For his part, Glitzenstein forecast that consultations with the Fish and Wildlife Service would typically result in agreement on steps the state agency could take to protect species. Glitzenstein also suggested the justices could sidestep a ruling by simply remanding the case to the Ninth Circuit in the light of EPA's change in position. The agency had previously acknowledged that it had to consider the Endangered Species Act before transferring authority for the program to a state, but changed its position during the litigation. In its brief, the Association of California Water Agencies warned that the Ninth Circuit's decision could jeopardize water delivery to California farms and cities. "If you take the Ninth Circuit's decision literally, you could say that the Bureau of Reclamation could divert water from cities and farmlands in order to protect endangered species," explained Roderick Walston, a former state deputy attorney general now in private practice in Walnut Creek, who wrote the brief. "That could have a devastating effect on the economy in California and in other states." For the home builders group, Desiderio said that upholding the Ninth Circuit's decision could require Endangered Species Act review for every construction site one acre in size or larger even if the construction posed no threat to endangered species. "That can't be what Congress intended with either the Clean Water Act or the Endangered Species Act," he said. But Mike Senatore, senior litigation director for Defenders of Wildlife, echoed Glitzenstein's argument that the two statutes can be reconciled. "We think they're creating a conflict where we don't think one necessarily exists," Senatore said. "There are ways that both statutes can be complied with, and that is in fact what the EPA has done in past situations." A decision in the consolidated cases, National Association of Home Builders v. Defenders of Wildlife , 06-340, and Environmental Protection Agency v. Defenders of Wildlife , 06-549, is due by the end of June. Kenneth Jost, former editor of the Los Angeles Daily Journal , is Supreme Court editor for Congressional Quarterly and CQ Press.

Rich people living in subway-close high-rises? Poor people flooding the suburbs? Man, it's not the ‘90s anymore, is it? It's been 15 years since the Rodney King riots kicked off a dismal period in L.A. – an era of recession, declining real estate prices, natural disasters, and assorted other maladies. It's also been 10 years since the publication of my book The Reluctant Metropolis , which quickly appeared (to my astonishment) on the Los Angeles Times best-seller list – perhaps because, like so many other L.A. books during the '90s, my book kind of celebrated the depressive zeitgeist of the era. Things are different in L.A. now. Mini-malls are no longer burned down – they're razed for high-rises. There aren't very many aerospace factories or, for that matter, any kind of factories. (L.A. has been losing 50,000 manufacturing jobs a year on average.) People are bemoaning the fact that the value of their $600,000 house is flat. Here's maybe the most peculiar turnabout – and the one that has the most important implications for planning in the years ahead: The L.A. market today is driven by affluent people who want to live an urban lifestyle and poor people who want to live a suburban lifestyle. A couple of weeks ago I went to an event at "The Mercury," a condominium high-rise in a converted '60s office building at Wilshire and Western, across the street from the Wiltern Theater and catty-corner from the Red Line station. A decade ago you couldn't give this building away. Today, the condos are going for almost $700 a square foot – meaning a two-bedroom apartment will sell for almost a million bucks. Another condo tower is being built from scratch on top of the Red Line station. Believe it or not, it has become hip to have a lot of money and live without a car in L.A. A planner's dream, right? But that's only half the story. The other half is being played out in more suburban areas, where families of modest means are doubling and tripling up in houses, not as renters but as owners. They are quite literally overcrowding their way into the American dream. And when it comes to transportation, they're moving in the opposite direction: They've got more cars than ever. Throughout Southern California nowadays, the typical suburban neighborhood is jammed with cars and trucks – and with neighborhood disputes over where to park them. The bottom line is that rich people ride the Red Line now, while many Southern California residents don't want poor people in their neighborhood because of the traffic. Even Mike Davis couldn't have predicted this turnabout back in the '90s. - Bill Fulton

LOS ANGELES _ The California Supreme Court has heard oral arguments in two unrelated land use cases that could have profound impacts for planners, developers and property owners. One case involves a City of Hanford zoning ordinance that restricts who may sell furniture; the second case concerns whether an airport land use compatibility plan is subject to environmental review. The court heard oral arguments in both cases on the same day in early April. Decisions are due by July 3. The zoning case involves a four-year-old Hanford ordinance that prohibits the selling of furniture outside the downtown district. The ordinance contains a significant exception: Stores of at least 50,000 square feet located in an outlying planned commercial (PC) zoning district may devote up to 2,500 square feet to furniture sales. Adrian and Tracy Hernandez, owners of Country Hutch Home Furnishings and Mattress Gallery, a 4,000-square-foot store in the PC zone, filed a lawsuit claiming that the ordinance violated the constitution's equal protection clause. A trial court judge ruled for the city, but the Fifth District Court of Appeal struck down the ordinance because the disparate treatment of large and small stores in the same zone "does not bear a rational relationship to the goal of preserving downtown Hanford" (see CP&DR Legal Digest, May 2006). The Fifth District's ruling appeared partially at odds with the same court's decision, issued only one week earlier, to uphold a City of Turlock ordinance regulating big box stores' sale of groceries in Wal-Mart Stores, Inc. v. City of Turlock, (2006) 138 Cal.App.4th 273. Cities and counties urged the state Supreme Court to overturn the Hanford decision, saying it would hinder their planning abilities. During oral argument, Steven Mayer, Hanford's attorney, said that the ordinance serves two goals: It protects the economic vitality of downtown and provides a "hospitable environment" for department stores such as Gottschalk's, Target and The Home Depot. He described the ordinance as "a sort of grandfather clause" for existing department stores. As long as restraining trade is not the only reason for an ordinance, it is reasonable and constitutional, argued Mayer, who cited the Turlock decision for support. But Russell Ryan, the Hernandez's attorney, said there was no rational basis for the city to single out small stores, and that the ordinance was not a grandfather clause, as new department stores have moved in since the city adopted the law. "They discriminated specifically against the smaller retailers," Ryan said of city officials. "They were encouraging the very people who impact the city the most because of their buying power." The seven justices appeared divided. Justice Joyce Kennard pressed Mayer about the importance of case law that says cities cannot use zoning to regulate competition. Mayer responded by arguing that previous cases say only that regulation of competition cannot be the sole purpose for an ordinance. In fact, Mayer said, the number of furniture stores has increased from nine to 14 since the city adopted the ordinance, and city officials tried to steer the Hernandezes to a prime location at the city's busiest intersection. "If the city was into prohibiting competition, they did a very bad job of it," Mayer told the court. Ryan met significant resistance from Chief Justice Ronald George, who said there was evidence that the city was trying to keep department stores which threatened to leave town if they were prohibited from selling furniture. Ryan responded that there was no suggestion in the record that such stores would not be allowed to sell furniture. He also repeated his contention that a "proliferation of big box stores" would hurt downtown more than small stores would. Afterward, Ryan conceded, "Chief Justice George doesn't seem sympathetic to our arguments." Still, Ryan said he was able to make his two primary points — that the sort of furniture sold at the various stores is not different, and that his client offers no more threat to downtown than Wal-Mart does. "The landowner always has a bit of an uphill battle because the city or county always has the discretion," said Ryan. "Obviously, every city and county in the state has an interest in what happens in this case." Mayer agreed the case is crucial to local government. "If we prevail, the court will re-affirm the traditional deference given to cities and counties in land use zoning." But a ruling upholding the appellate court decision would be "a drastic change in the law," he said. The second case concerns the Travis Air Force Base Land Use Compatibility Plan (TALUP). The Solano County Airport Land Use Commission adopted the plan in 2002. It essentially called for freezing existing general plan designations and zoning within a compatibility zone — based on airplane noise levels — covering hundreds of thousands of acres from Vallejo to Dixon. The commission concluded the plan was not a "project" under the California Environmental Quality Act and therefore was exempt from environmental review. Muzzy Ranch Company, which owns 5,000 acres in the vicinity of Travis, sued, arguing that the Commission should have completed an environmental study. A Solano County Superior Court judge ruled for the Commission, but the First District Court of Appeal ruled that the Commission should have studied the plan's impacts, specifically the likelihood that the plan would displace housing development (see CP&DR Legal Digest, March 2005). During oral argument, the state Supreme Court appeared ready to uphold the appellate court ruling. The justices hit Deputy County Counsel James Laughlin with numerous questions and interruptions. Several justices questioned the factual basis for the conclusion that the plan is not a project for CEQA purposes. If the Commission freezes zoning in one area, "would that not impact the environment beyond the area of its control?" asked Justice Kathryn Werdegar. "If you can't build here, you're going to increase development there." Laughlin said that Werdegar was making a supposition that reached past the Commission's control. He argued that the plan is merely advisory — not regulatory — because the county and four cities covered by the plan may choose to override the plan's recommendations. He also said the plan does nothing more than maintain the status quo, which could not be a project under CEQA. The justices were clearly skeptical and several pressed Laughlin about whether a "common sense" exemption to CEQA could apply. Laughlin said there was evidence to support a common sense exemption, but Justice Marvin Baxter asked how such evidence could exist when the Commission undertook no analysis at all. Richard Jacobs, the landowners' attorney, contended the plan is not merely advisory and actually trumps local general plans. "I think it's essentially a multi-jurisdictional general plan," he told the court, in that the compatibility plan guides the long-term development of the county. The compatibility plan covers hundreds of square miles and, under state law, cities and the county must comply unless they make certain findings, he argued. "There are a number of conflicts between this plan and the general plans of Solano County and the four cities," Jabobs contended. Afterward, Jacobs called this "the CEQA case of unintended consequences." It may appear that the Commission's plan is environmentally beneficial, when in fact it blocks development from logical infill areas near Travis, he said. "In many ways, it's the opposite of smart growth and urban infill," Jacobs said. "They're forcing you to develop in suburban or more rural locations." Jacobs questioned how a land use plan that cost more than $500,000 — and whose main purpose was to preclude development around Travis — could be exempt from environmental review. "It puts a very significant portion of the county off-limits to future residential development," he contended. Laughlin said he was uncomfortable with the court's focus on a common sense exemption. "It's never been our position that it applied. We never briefed it, and the other side never briefed," he said. A ruling that CEQA applies would make airport compatibility planning more expensive and weaken the commission's purpose, which is to ensure airport operations and protect the public, Laughlin said. "They are supposed to protect people. But if they have to apply CEQA, does that mean they will have to water down their recommendations?" Laughlin continued, "Do we have to weigh the environmental impacts of a recommendation that schools shouldn't be located at the end of a runway?" The state Supreme Court is considering the case after three recent appellate court rulings provided a less-than-clear definition of a "project" under CEQA (see CP&DR Legal Digest, April 2007). The cases are Hernandez v. City of Hanford, No. S143287, and Muzzy Ranch Co. v. Solano County Airport Land Use Commission, No. S131484.

As the popularity of inclusionary zoning for affordable housing has grown, so has the number of cities and counties who have a stake in affordable homeownership problems. Experts in those programs, however, warn that they are fraught with dangers and require extensive monitoring to ensure that units remain affordable. The bottom line, say program experts, is that getting the affordable for-sale unit built and occupied is only about two-thirds of the work. Maintaining affordability for the prescribed term is the final third — and agencies that do not take adequate legal steps to preserve affordability, allocate enough money for administration and acquire expertise are almost certain to encounter programs. "The homeownership programs are incredibly administration intensive, and probably more work than most cities anticipate," said Barbara Kautz, an attorney with Goldfarb & Lipman in Oakland who has advised numerous local government officials on the issues. "The agency that's most likely to run into problems is one that doesn't do any monitoring." Inclusionary zoning is only one method for a city or county to provide affordable, for-sale housing. Local governments also employ other policies, but nearly all have the same potential pitfalls. Horror stories abound. In Santa Barbara County, an internal audit released earlier this year found dozens of instances in which the buyer of a price-restricted house was not living in the unit and often was renting it out. The audit also uncovered more than 30 instances in which the buyer also purchased other property, which was not specifically prohibited but called into question the buyers' eligibility. In Huntington Beach, homeowners sued the city because they contended resale price restrictions were illegal. In the City of San Mateo, the owner of an affordable unit sold the house at market price and reaped a substantial windfall before the city even realized what had happened. In Monterey County, buyers of affordable units put county supervisors in an awkward position by arguing that the county was preventing hardworking buyers from building equity needed to purchase market-rate housing. "We found that about 75% of the people were in compliance with their covenants, and about 25% were not," Santa Barbara County Auditor-Controller Robert Geis said. Anecdotes suggest that none of these situations is unique. "You're going to get these real-life scenarios that hit you in the face. We probably get a couple new scenarios every year," said Sandy Council, who administers San Mateo's program. "There are a lot of details that don't seem apparent up front." In a paper on inclusionary housing ordinances prepared for the League of California Cities' Institute for Local Government, attorney Bill Higgins wrote: "The potential factual situations here are endless. What happens if the owner dies and their heirs do not qualify to live in the unit? What if they do qualify? Does it make a difference whether a person has lived in a unit for two years, 10 years, or 20 years in terms of the percentage of appreciation they realize? What if the owner wants to rent the property out? What if the owner added a bedroom to the unit? Or built a pool? What if the owner failed to properly maintain the unit? "These and 100 questions like them will keep staff and real estate attorneys working as long as the program exists. No policy can be designed to address all of these concerns. Indeed, these answers will vary from community to community depending on the underlying political goals of the program. Nevertheless, it is helpful to think through some of these issues in advance and design administrative procedures accordingly," Higgins wrote. About 170 cities and counties now employ inclusionary zoning as a means of providing affordable units — even though developers generally oppose it and the state Department of Housing and Community Development (at least for now) frowns on it. Most inclusionary policies require 10% to 20% of new units to be available to very low-, low- or moderate-income households. Units typically have affordability covenants for at least 30 years that require resale only to qualified buyers and at restricted prices. Studies conflict on the effectiveness of inclusionary zoning. Proponents argue that it is one of the few ways in which local governments can ensure that affordable units actually get built without major public subsidy. Opponents contend inclusionary policies simply shift the subsidy burden to buyers of new market-rate homes. Whether it is utilizing inclusionary zoning or other policies, a city or county will need to decide up front the purpose of the program. You cannot have both wealth-creation and long-term affordability, said Tom Casey, who runs the HomeBricks program for nonprofit developer Bridge Housing. For example, in San Francisco the goal is solely to provide affordable housing; thus, resale restrictions are very tight, Casey explained. But in the Napa County city of American Canyon, local officials are eager to attract first-time buyers. So in American Canyon, the city and the buyer share price appreciation, said Casey, whose organization administers the city's program. Both approaches have drawbacks. In the San Francisco model, the affordable unit buyer may never build enough equity to acquire a market-rate unit and may not have incentive to maintain the affordable unit. In the American Canyon model, a level of affordability is lost with every resale, so the city has to put money into the program continually to keep units affordable. In a paper called "Ensuring Continued Affordability In Homeownership Programs," Kautz and Polly Marshall, another Goldfarb & Lipman attorney, wrote of four required elements: "First, the agency must ensure that the developer actually constructs the units. Second, the deed restrictions and other documents guaranteeing affordability must be recorded in ways that are recognizable to lenders and title companies. Third, decision-makers and homeowners must clearly understand the restrictions so that they are not surprised at the time of resale. Last, the agency must have adequate staff or make other provisions to monitor the units, to identify programs at an early date, and to take legal action when needed." In San Mateo, the city subsidized construction of a below-market-rate housing development but set up no real system for follow-up. City officials mistakenly thought the hard work was done, Council said. When one of the units went on the market one year later, the city began to exercise its right of first refusal to acquire the property. But that turned into a cumbersome process. So the city set up an administrative system. The city controls the buyer-selection process and maintains the waiting list. One real estate broker who understands the city's affordability restrictions is involved in all sales. City staff members have authority to make deals so that there are no delays waiting for a City Council meeting. And city staff members have developed expertise. Recording the right documents is key to protecting the public agency's interest, Kautz said. Title officers often do not understand or simply ignore resale price restrictions, so Kautz and others advise recording deeds of trust, which are instruments that everyone in the industry recognizes. These documents help ensure that a public agency learns ahead of time when something is happening with a property and has time to exercise the agency's rights. "Selective amnesia" appears to be a common affliction among buyers of affordable units, especially in hot real estate markets. People take out second mortgages based on the market-rate value of the home, or they attempt to sell their unit at market price. When confronted with restrictions on home equity loans or resale price, the owner will protest that they were never told. Kautz said she has dealt with about 20 cases in which the second mortgage (or "junior lien") exceeded the restricted value of the unit. For this reason, Kautz advises agencies to prepare disclosures that explain terms of resale restriction, promissory notes and deeds of trust in plain language. If the buyer is not fluent in English, the disclosure may need to be in a different language. Some agencies do extensive homebuyer education upfront, and applications to purchase often specify resale restrictions. Casey, of HomeBricks, suggests letting buyers take home disclosure notices so that buyers do not have to make decisions at the time of closing. Some agencies have taken to videotaping buyers when restrictions are explained and documents signed. Ongoing monitoring even when nothing appears to be happening with a property is essential, Kautz added. Some agencies do this themselves, some contract with a county housing authority, and some hire a nonprofit housing corporation such as HomeBricks. A few private management companies are starting to specialize in this area, and U.S. Communities Compliance Services (part of a joint powers authority sponsored by the League of California Cities and the California State Association of Counties) provides monitoring and reporting assistance. Monitoring often involves reviewing county assessor's and recorder's records, and verifying owner-occupancy. Some monitoring may be informal, such as asking questions if a for-sale sign goes up and "windshield surveys" to check on home maintenance. There is no such thing as a self-monitoring affordable housing program, Kautz warns. Contacts: Barbara Kautz, Goldfarb & Lipman, (510) 836-6336 Tom Casey, HomeBricks, (415) 989-1111. Sandy Council, City of San Mateo, (650) 522-7223. Robert Geis, Santa Barbara County auditor-controller, (805) 568-2100. Institute for Local Government Housing Resource Center: www.ca-ilg.org/hrc U.S. Communities Housing Compliance Services: www.housingcompliance.org/

The owners of a 22,000-acre ranch in San Diego County are making preliminary moves to develop their property, located several miles east of Escondido. However, environmentalists, public land advocates and even a pro-growth county supervisor are already lining up in opposition. The property is Rancho Guejito, which is both one of the last intact Spanish land grants remaining in California and the largest parcel of undeveloped, privately owned land in San Diego County. Environmentalists have long wanted to protect the property, which is mostly untouched except for cattle grazing on portions of the site. "It's one of the most important conservation properties in California," said Dan Silver, president of the Endangered Habitats League. The administration of Gov. Ronald Reagan took steps toward acquiring Rancho Guejito for a state park, but Jerry Brown killed the plan when he came to the governor's office in 1975. As a result, Benjamin Coates, a Philadelphia oil and shipping magnate, acquired the property, which he maintained as his private ranch. Coates died in 2004, but his widow, Nancy Coates, assured the public that there were no plans to develop the property. However, it appears that two other people, including daughter Theodate Coates, are the trustees in control of the property — and they have enlisted a phalanx of attorneys, planners, engineers and lobbyists. Last year, they acquired 100 acres to link the ranch with Highway 78. Early this year, the property owners asked the City of Escondido to consider annexing Rancho Guejito for development of "a university medical school research campus," housing, commercial centers and other things. City officials have made no commitment but are intrigued by the prospects of roughly doubling the city's territory. "It is being looked at, but it's not being processed as a development project or as a specific development request at this point," said Jonathan Brindle, Escondido's community development director. City planners and administrators are putting together a two-year action plan of major planning projects, including a general plan update, for the City Council to consider. One possibility is to include the Rancho Guejito annexation as part of a general plan revision, Brindle explained. Rancho Guejito is not in the city's current sphere of influence, nor is it mentioned in the city's existing general plan. Proposals are "very, very sketchy at this point," said Michael Ott, executive officer of the San Diego County Local Agency Formation Commission. "This would necessitate a major sphere update for the city, and a municipal services review," he said. LAFCO would require detailed development plans and an environmental impact report before it could even begin considering annexation, he said. One consideration is that Rancho Guejito lies several miles outside of Escondido, and a number of properties, including the San Diego Wild Animal Park, lie in between. The North County Times reported in March that representatives of the property owners had communicated with San Diego County officials about possible development for years. However, county officials showed no interest, and an update of the county's general plan proposes designating the property for parcels of at least 160 acres. So the property owners (whose representatives did not respond to CP&DR requests for interview) turned their attention to the City of Escondido. Thus far, the property owners are without public allies. San Diego County Supervisor Bill Horn, whose district includes Rancho Guejito but not Escondido, has emerged as a leading opponent of development on the site. In a recent op-ed piece in local newspapers, Horn called the property a "treasure." "The people of our region have trusted the Coates family for 30 years and now feel betrayed," wrote Horn, a conservative who usually advocates for property rights. In this instance, though, Horn advocates using state bond money and other public funds to acquire the property. Silver, of the Endangered Habitats League, said the annexation proposal "isn't grounded in reality" and would be "dead on arrival" at LAFCO. "What these trustees don't understand is that development on this site would face massive obstacles," Silver said. "There's no water for the project, no services, no infrastructure." Both Silver and Rick Halsey, a board member on the San Dieguito River Valley Conservancy, said development of Rancho Guejito would forever change the nature of the region. "You've got to consider all the costs — the ecological cost of removing the last viable piece of old California that is like before we got here," said Halsey, who runs the California Chaparral Field Institute. "What's the price of losing that? It's a value judgment." The conservancy on which Halsey serves has recommended that the San Dieguito River Park Joint Powers Authority add the ranch to its planning area as one step toward protecting the site. The JPA's planning area covers about 80,000 acres stretching from Del Mar to Anza Borrego Desert State Park. About 75% is in public ownership, and the agency continues to acquire parcels from willing sellers. Rancho Guejito property owners have urged the JPA not to place the ranch in its planning area; a decision is scheduled this month. A report by the Conservation Biology Institute of Corvallis, Oregon, helps explain the opposition to development. According to the institute, Rancho Guejito provided a "geographical and cultural bridge between the coast and mountain settlement patterns of Indians." Numerous Native American cultural sites remain intact, as do the remains of Spanish ranching operations. The ranch is also an ecological gateway between coastal habitats and the high elevations of Cleveland National Forest, according to the institute. The ranch has one of the largest remaining stands of rare Englemann oaks in Southern California, and is home to a large population of endangered Stephens' kangaroo rats. Planners working on the North County multiple species conservation plan initially excluded Rancho Guejito from the plan area because they assumed the property would remain undeveloped. They are now re-evaluating the plan's boundaries. One possibility is that the landowners intend to sell to a public entity but are going through the motions of development in order to drive up the price. The property owners' representatives have denied this is their strategy. Contacts:? Jonathan Brindle, City of Escondido Community Development Department, (760) 839-4553. Michael Ott, San Diego County Local Agency Formation Commission, (619) 531-5400. Dan Silver, Endangered Habitats League, (213) 804-2750. San Dieguito River Valley Conservancy: http://www.sdrvc.org / Conservation Biology Institute report: www.consbio.org/cbi/projects/show.php?page=ranchoguejito

For the first time in 12 years, the Democrats are in charge of Congress. That ought to mean there is a long wish list somewhere regarding domestic policy issues, including issues associated with planning and development. So far, we haven't seen much publicity on domestic policy – the Democrats, as more than a few media outlets have observed, are more interested in investigation than legislation. But as the congressional session unfolds, it won't be long before the new majority begins to focus on the two major federal policy levers that affect land use – the Big Carrot of transportation funding and the Big Stick of environmental regulation. In each case, a crisis appears to be forcing Congress's hand. In the case of transportation, the federal Highway Trust Fund is going broke. In the case of the environment, there's tremendous political pressure on Congress to pass a bill that would reduce greenhouse gas emissions. In dealing with both the Big Carrot and the Big Stick, Congress is going to have to go after one of the most fundamental factors shaping land use in America: cars. No one in the nation's capital directly controls the way land is used or the way local development patterns unfold. Traditionally, however, the feds have indirectly influenced planning though transportation and environmental policy. On the transportation side, federal gas tax revenues have provided huge amounts of money for both highway and transit projects. On the environmental side, tough laws such as the Endangered Species Act and the wetlands permitting provisions under the Clean Water Act have affected land use patterns by forcing developers to steer clear of sensitive areas. Curiously enough, hardly anything in the federal government's policy approach toward these two issues changed while Democrats were out of power. Federal transportation policy shifted significantly in 1991, when the Intermodel Surface Transportation Efficiency Act (ISTEA) was passed by a Democratic Congress and signed by the first President Bush, who desperately needed a "jobs bill." ISTEA placed more emphasis on flexible funding, transit, and environmental enhancements – a pattern that remains today. Similarly, current practices in environmental policy, especially the Endangered Species Act (ESA), were set in the late '80s and early '90s, during the administrations of Bush 41 and Clinton. Not a single word of the ESA changed during the 12 years Republicans controlled the House — not even during the four years Republicans held both houses of Congress and the White House. Obviously, administrative practices have changed since the current President Bush took office in 2001, weakening the law, at least according to environmentalists. But the basic approach to endangered species protection – especially the focus on habitat conservation plans, which has shaped the landscape in Southern California, the Inland Empire, and the Central Valley – has not changed. What has changed, however, is the context. Over the last 12 years, gasoline has doubled in price and the issue of global warming has gained tremendous traction, both inside the Beltway and on the street. Even most skeptics now believe global warming is really occurring as a result of human activity, though many politicians disagree about how severe the effects will be and what should be done. As a result, the internal-combustion engine is under attack as never before. This has affected the political landscape for both the Big Carrot and the Big Stick, and it is likely to frame new policies in both arenas. There is no doubt that Democrats in Congress will push a bill to reduce greenhouse gas emissions. The only question is when. Some say the push will come quickly, while others suggest that the Dems may deliberately wait until next year in order to put political pressure on the Republicans during the presidential campaign. In any event, a federal law on greenhouse gases – like California's AB 32 (see CP&DR Insight , February 2007) – will almost certainly be constructed as, essentially, an air quality bill. It may even be an amendment to the Clean Air Act. The basic problem, after all, is the emission of pollutants into the air. As with other air pollution problems, some greenhouse gases are from stationary sources like smokestacks and some are from vehicles. Two-thirds of greenhouse gas emissions come either from burning fossil fuels to generate electricity or from burning fossil fuels to move vehicles. So, other than cars, the major target for a greenhouse gas bill is the electric utilities. And the utilities, somewhat surprisingly, are in favor of a federal greenhouse gas bill. That's largely because many states are moving forward with their own bills, and the utilities would rather have one national regulatory system. This in itself has implications. If the utilities promote a bill in Congress, they likely will try to shift most of the emissions reductions onto vehicles. And that has potential implications for land use. A lot of greenhouse gas reduction can emerge from use of higher-mileage vehicles such as hybrids and cleaner-burning internal-combustion engines. But nobody thinks that you can reduce emissions sufficiently just by turning over the fleet and employing new technology. You're also going to have to reduce driving overall. The California plan assumes 12% of emission reductions will come from land use changes. How does the federal government encourage people to drive less? Probably not with the Big Stick. Most people cringe at the thought of the feds extending their regulatory reach into this area. That leaves the Big Carrot – the idea of using transportation money to provide incentives to state and local governments to change their land use policies. Unfortunately, however, the Big Carrot is getting smaller every year – partly as a result of environmental consciousness on the part of drivers and consumers. The feds get transportation money from the federal excise tax on gasoline, which is a flat 18.3 cents per gallon – a figure that does not change no matter what the price of gas is. (There's tax on other fuels as well – 24.3 cents on diesel fuel, for example, and much less on natural gas.) These taxes currently generate close to $40 billion a year, of which more than 80% goes to the Highway Trust Fund. But growth in gas tax revenue is slowing. Growth in vehicle miles traveled overall is declining, and consumers are now buying more fuel-efficient vehicles, including hybrids. Highway Trust Fund revenues are expected to rise only 10% to 15% from 2006 to 2011 — from about $34 billion to between $37 billion and $39 billion. There is no reason to believe the revenue situation will get better. But the federal government is now spending more money from the Highway Trust Fund than it takes in, somewhere right around $40 billion a year. This is plausible for the moment because the trust fund has a surplus. But soon the trust fund will fall into deficit, possibly as early as next year, as the result of huge federal appropriations – including well-publicized "earmarks" for specific projects requested by Members of Congress – over the past few years. In other words, The Big Carrot has been eaten. So, if the feds truly want to reduce greenhouse gas emissions, they'll have to tackle land use. It's politically impossible to tackle land use with the Big Stick. So the feds will have to use the Big Carrot. Except there's no money in the Big Carrot – unless the feds increase fuel taxes, but even a fuel tax hike will probably only cover the deficit. It's a political box. In the short run, planning and development in California may well be affected more deeply by AB 32 than any federal law. But in the long run, the feds will have to make some tough decisions about how to use the Big Carrot and the Big Stick to deal with global warming.

Can the entire San Joaquin Valley embrace the idea of regional planning – or at least agree on a common vision for how to accommodate future growth? That's the question facing the architects of the San Joaquin Valley Blueprint Process, an ambitious effort to create some "big picture" strategies to deal with growth in the area. But the blueprint is only one of several regionwide efforts to grapple with growth of all kinds, including population growth, real estate development, and the Valley's economic base. Along with the state-sponsored California Partnership for the San Joaquin Valley, the Blueprint is really a test to see whether the disparate parts of this large and fragmented part of California can work together. The Valley is a huge area – eight counties stretching from Stockton to Bakersfield. It is growing rapidly, with a current population of almost 4 million people expected to double in the near future. Though the whole region has been traditionally known for farming, it is increasingly divided into subregions with different interests. The three northern counties – San Joaquin, Stanislaus, and Merced – increasingly tilt in their orientation toward the Bay Area. The four middle counties – Madera, Fresno, Tulare, and Kings – are still agricultural in nature but urban growth is rapid, often for no discernible reason. To the south, Kern County is still focused largely on oil but is also beginning to see suburbanization from Los Angeles. Regional cooperation has always been difficult to accomplish. Few organizations or officeholders share a regional view of public policy, and parochial interests have generally prevailed. There are some exceptions. The agricultural lobby has worked together effectively for decades – witness the Central Valley Project water system – and more recently the counties worked through their councils of governments to get $1 billion in last year's state transportation bond for Highway 99. It was the only earmark in the $20 billion bond. The air district has also provided a regional approach, at least on one issue. Generally, however, policymakers in the Valley have tended to think on a countywide, rather than regionwide, level. Over the past few years, "regional blueprint" efforts have been undertaken in California's four large metropolitan areas – the Bay Area, metropolitan Los Angeles, San Diego, and Sacramento. Typically sponsored by the area's council of governments (COG), the blueprint begins with a consensus among regional elected officials on the "big picture" for accommodating future growth. (In all four cases, a high-density, "smart growth" scenario has been agreed upon.) Then the COG works with the local governments and other agencies to find ways to implement the regional vision using local powers – often with the COG's financial assistance. In Sacramento, this idea has become so deeply embedded in the political culture of the region that just about any high-density or compact development project is now known as a "blueprint" project. In metropolitan Los Angeles, the much-maligned Southern California Association of Governments is throwing millions of dollars into assisting local governments implement smart growth strategies and projects that conform to the adopted SCAG "Compass" or "2%" vision (see CP&DR Insight , August 2006). Even when these blueprints have involved multiple counties, however, they have been sponsored by a council of governments that covers the entire region. In the case of the San Joaquin Valley, each of the eight counties has its own COG. So the success of the blueprint project depends in large part on the willingness of the single-county COGs to work together – and on the ability of the air district, as well as state agencies that deal with the San Joaquin Valley, to implement the vision that emerges. This is where the California Partnership for the San Joaquin Valley comes in. Created by Gov. Arnold Schwarzenegger by executive order in 2005, the Partnership is mostly an attempt to pull together the state's wide-ranging agencies – dealing with everything from transportation to wildlife to education to health – and coordinate their efforts in the Valley. The Partnership has provided most of the money required to do the blueprint (the air district has provided the rest), but the Partnership also has lots of other things going on besides the blueprint. (For example, the Partnership recently awarded $2.5 million in "seed grants" for a wide variety of projects in the Valley, ranging from $75,000 for tourism to $125,000 for "health enterprise zones.") Meanwhile, the blueprint itself has been organized in typically decentralized fashion. It is being administered by the Merced County Council of Governments, but much of its work is being facilitated by the Great Valley Center, a Modesto-based regional nonprofit. The work is overseen by the "Blueprint Regional Advisory Committee" – a group whose acronym, BRAC, is unfortunately the same as the federal government's base-closure committee. It is this decentralization that makes the San Joaquin Valley Blueprint effort such a challenge. One of blueprint's major efforts, for example, is sponsoring a "blueprint" visioning effort in each individual county. Blueprint workshops are currently taking place in various parts of the Valley, sponsored by the individual COGs. These workshops are asking participants to provide their view of Valleywide issues, but inevitably most of the participants are focused on local issues. So one of the challenges is to determine how to meld these countywide blueprint ideas into a regional vision for the whole Valley. Just as important, however, is the challenge of implementation. Because there is a separate COG for each county, it will be difficult for the region as a whole to adopt a consistent vision from north to south. In other places where blueprint efforts have been undertaken – not only in California but in Oregon, Utah, and elsewhere – the regional effort has been supported by elected officials who are board members of a regional COG and often by regional civic groups as well. Envision Utah in Salt Lake City has had implementation "legs" partly because the nonprofit civic group established to promote it has continued to raise money and seek out demonstration projects throughout the Wasatch Front. In most of the California examples, the regional COG has played this role. With a weaker regional structure, the San Joaquin Valley may have a harder time in the implementation phase. However, it is possible that state agencies will step in and fill that gap in the Valley, especially if the state-led Partnership effort can embrace whatever comes out of the blueprint process. For example, one pending bill – AB 1055 (Blakeslee) – would require the State Transportation Improvement Program (the STIP, or list of transportation projects of statewide importance) to coordinate with regional farmland and open space efforts. The clear goal here is to use Caltrans's environmental mitigation requirements to help implement a regional natural resources strategy, especially in the Central Valley. The Valley blueprint effort highlights one of the biggest problems in planning today – not just in California but everywhere. Problems and solutions are regional, but the political power to deal with those problems lies in the state Capitol and at the local level. The blueprint effort suggests that the San Joaquin Valley is getting more serious about using both state and local power to accomplish regional goals. It remains to be seen, however, whether the policymakers themselves will be able to overcome the parochial impulse in city halls and county administration buildings up and down the San Joaquin Valley.

A bill that is shaping up to be one of the most far-reaching pieces of planning legislation in years has won unanimous backing from the state Senate Transportation and Housing Committee. Senate Bill 303 by Sen. Denise Ducheny (D-San Diego) would: • Require general plan housing elements to cover a 10-year period and be updated every five years; • Require zoning needed to carry out the first five years of the housing element be in place at the time of element adoption; • Mandate that every element of the general plan be updated every 10 years; • Require cities and counties to make findings regarding each identified housing site's development capacity. • Prohibit a City Council or Board of Supervisors from rejecting or downsizing a project that is consistent with the housing element unless the council or board casts a 4/5ths vote and makes specific findings. Local government representatives and the California Chapter of the American Planning Association have expressed serious reservations about the bill, which they say is infeasible for many local governments to implement. One question raised in a committee bill analysis concerns funding for the extensive amount of planning and environmental review that local governments would have to perform. In a column for the San Diego Union-Tribune , Ducheny wrote, "We need to ensure that our local governments across the state are doing their part, as is already required under state law, to meet the housing demand for California, not just waiving a finger in the direction of parcels that will never realistically support the homes they're identified for." However, the bill met significant resistance in late April at the Senate Committee on Environmental Quality, where lawmakers argued over the bill's likely impact and who would pay for implementation. Numerous amendments to SB 303 have been proposed. The state attorney general's office has sued San Bernardino County because the county did not consider the global warming impacts of a newly adopted general plan. The state filed the lawsuit in mid-April, days after three environmental groups filed a similar lawsuit against the county. That suit argues that the county should limit development in remote areas. The county adopted the general plan in March after a four-year process. County officials noted that there are no state guidelines for addressing global warming in the planning process. Prospects f or a liquefied natural gas terminal off the coast of Malibu dimmed dramatically in April. First, the State Lands Commission voted 2-1 to reject an environmental impact report for the project and deny a lease of state waters for the project's pipelines. Three days later, the Coastal Commission voted unanimously to reject the EIR and project permits. The project proponent, Australian mining company BHP Billiton, still has some recourse in court and with the federal government. Company officials have not been forthcoming about their strategy in light of the rejections and, in fact, the company refused to participate in the Coastal Commission's hearing. Both the State Lands Commission — composed of Lt. Gov. John Garamendi, Controller John Chiang, and Deputy Finance Director Anne Sheehan, who supported the project — and the coastal panel concluded that ships and gas processing would have unacceptable impacts on air quality in Ventura and Los Angeles counties. Coastal commissioners also cited likely impacts to birds and marine species. BHP Billiton proposes a 970-foot-long, floating port 14 miles off the coast. It would process liquefied natural gas (LNG) brought in several times a week by ship (see CP&DR Environment Watch , September 2005). Supporters say there is great demand for what they call a clean-burning fossil fuel. Gov. Schwarzenegger has called LNG a "bridge" to renewable energy. Public opposition due to pollution, impacts to wildlife and potential security threats was overwhelming at two all-day hearings. About 2,000 people rallied in opposition during the State Lands Commission meeting in Oxnard, and more than 500 people packed the Coastal Commission hearing in Santa Barbara. The two rejections came only three months after the City of Long Beach said it would no longer consider plans from Mitsubishi and ConocoPhillips to build an LNG terminal. The city determined the proposed facility posed too much of a safety risk at the harbor. There are other LNG terminals proposed along the South Coast, but the Long Beach and BHP Billiton projects were widely seen as having the best chances of approval. The Los Angeles City Council has greatly increased the relocation fees that property owners must pay to tenants when the property owner converts apartments to condominiums. Property owners will now have to pay tenants who have lived in their units for less than five years $6,810, while tenants of more than five years are eligible for $9,040 — both up from $3,450. Renters who are at least 62 years old, disabled or who have minor children are eligible for roughly double those amounts, up from $8,550. Renters whose income is 80% or less of median are eligible for between $9,040 and $17,080. In a city where the majority of the 4 million residents are renters, about 12,000 apartments have been converted to condos or destroyed since 2001. Advocacy groups say that conversions are devastating to people who lose their rent-controlled apartments. The City Council also directed planning and building officials to draft an ordinance that would prohibit demolition of rental units if the vacancy rate is less than 5% or if the cumulative effect on the rental market were significant. The council also told staff to report back within 45 days on raising impact fees to fund replacement housing. The City of San Diego has settled a lawsuit over condominium conversions by agreeing to limit the number of conversions to 1,000 a year. Over the last several years, the city has approved the conversion of about 17,000 apartments to condominiums. Affordable housing advocates have decried the conversions' effect on low-income renters, while supporters say the newly constituted condominiums provide entry-level units for first-time buyers (see CP&DR , January 2006). Housing advocates sued, arguing that the city had to perform environmental review of the conversion projects. The city settled the suit in late March, and the City Council is scheduled to consider an ordinance limiting conversions this month. A f ederal judge in San Francisco has struck down a rule for managing national forests and grasslands that the U.S. Forest Service adopted in 2005. District Court Judge Phyllis Hamilton found the regulations invalid because the government adopted them without public review and without analyses required by the National Environmental Policy Act and the Endangered Species Act. The rule in question gave economic activity equal priority with maintaining ecological health in management plans for national forests and grasslands. The rule also sought to reduce public involvement in management plan preparation. Environmentalists charged that the rule would ease drilling and logging restrictions while slashing protections for flora and fauna. An appeal to the Ninth U.S. Circuit of Appeals is likely. The case is Citizens for Better Forestry v. U.S. Department of Agriculture , No. 05-1144. The Baldwin Hills Conservancy should remain in business for another five years, according to a Legislative Analyst's Office (LAO) recommendation. In 2000, state lawmakers created the conservancy for a two-square-mile area where the cities of Los Angeles, Inglewood and Culver City converge. The area has been, and portions remain, an oil field, so there is no urban development. Lawmakers charged the conservancy with facilitating the acquisition of open space and parkland, and enhancing wildlife habitat. The LAO found that the conservancy has funded or facilitated public acquisition of 155 acres, coordinated recreational and educational programs, and worked well with local government and interest groups. But there is more work to be done. About 655 acres of privately owned open space remain available for potential public acquisition, and most newly acquired lands have not been developed for public use or habitat, according to the LAO. The conservancy is scheduled to sunset on January 1, 2008. AB 3 (Bass) would extend the conservancy indefinitely, although the LAO recommended only a five-year extension. The LAO's report is available at: www.lao.ca.gov . Pasadena has approved a redevelopment proposal for a portion of the Ambassador College campus after years of planning and conflict. The proposed project by developer Dorn Platz on 20 acres of the former 49-acre campus calls for 248 senior and assisted living units in a six-story building, 70 condominiums, the reconfiguring of existing apartments and dormitories into 46 apartments, and retrofitting historic buildings for educational, institutional and office uses. Formerly the home of the Worldwide Church of God, the property was sold for development in 1999. Just west of thriving Old Pasadena, the site is considered extremely valuable by developers, city officials and historic preservation advocates. Two earlier proposals for 1,900 and 1,435 housing units met extreme hostility from residents, who argued in favor of preserving the site's extensive gardens and lawns, and its historic structures. Dorn Platz acquired 20 acres in 2004 and took a new run at development. The project approved in April preserves nearly three-fourths of the site as open space, including the 2.1-acre "great lawn" that the developer will donate for a city park. Gangi Development has broken ground on a 26-unit mixed-use project in Glendora's downtown village, the first project of its kind in at least 50 years in the San Gabriel Valley city. In addition to the condominiums, the project will contain about 6,000-square-feet of office and retail space, and 69 parking spaces. The city's redevelopment agency assembled the 48,000-square-foot parcel, which had been the site of four houses and vacant property, said Al Lavin, the city's redevelopment manager. The city then solicited proposals from developers before choosing Gangi, who purchased the property for $500,000. The project provides the first housing in Glendora's downtown village. "We have some substantial residential around it, but no residential encroaching into the downtown commercial area," Lavin said. A former councilman in the City of Colma pleaded guilty in April to two counts of mail fraud as part of a plea agreement that recommends an 18-month prison sentence. Philip Lum Jr. admitted that he accepted numerous airline tickets to the Philippines from the Lucky Chances Casino in 1999 and 2000. Lum did not report the tickets on disclosure forms and later voted for permits for the card room. Another former councilman, Ronald Maldonado, has admitted under oath that he also failed to report airline tickets provided by the casino. A hearing in his case is scheduled for June, while Lum's formal sentencing is set for July.