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After a record-setting budget and budget surplus last year, of $235 billion and $95 billion, respectively, economic gravity is setting in. Gov. Gavin Newsom announced a 2023-24 budget that slashes over $22 billion of intended spending in order to accommodate what is expected to be lower tax revenues.

Only a handful of land use measures made it on to local ballots in June -- but it was a varied, colorful bunch.

While few economists would call California's revenue streams optimal -- especially with the constraints of Proposition 13 -- the state hit the jackpot in 2021 with, by some measures, a surplus of over $95 billion above projections. That surplus is bigger than the entire annual budgets of all but eight states. This year's total general fund budget amounts to $235 billion, up from $196 billion last year.

"Coals to Newcastle" isn't exactly the right metaphor, but it's close. The delivery in question is not a boatload of anthracite but rather its opposite: a recent $ 1.1 billion donation from John Doerr, a partner at the vaunted Silicon Valley venture capital firm Kleiner Perkins, and his wife Ann, to Stanford University for the establishment of the Doerr School of Sustainability. It is envisioned as an interdisciplinary educational and research institution dedicated to fighting climate change.  The school will cover disciplines including energy, climate science, and sustainable development and environmental justice, and it will house up to 150 faculty members. I don’t doubt that an institution like Stanford will produce important work with those funds. And yet, the idea of fighting climate change by cloistering it in an ultra-exclusive institution, in a region that is already well versed in the ravages of climate chance, seems to miss the mark. To be sure, undoing, mitigating, or at least adapting to the effects of climate change requires study. But academic research takes time. And the climate effort needs many things that already exist, or, at least, that are coming into existence—especially in California. Dating back to the days of “An Inconvenient Truth,” the state adopted a raft of laws and regulations designed to promote dense development. They include AB 32 (greenhouse gas reduction), SB 375 , (dense development and coordination between land use and transportation), SB 743 (reducing vehicle miles traveled), and others—all of which take aim, in some way or another—at the carbon-intensive landscape that California built in the 20 th century and on the types of fuels we use. For planners, the most important elements of these laws are those that promote dense urban development that enables people to get around without individual cars and that align development with public transit and active transportation. In many cases, these regulations are designed to enable the California Environmental Quality Act—one of the country’s original pro-environment laws--to actually do what it's supposed to do. These policies are complicated insofar as they are bureaucratic. And they are controversial insofar as many Californians cling to the status quo, especially if it involves a single-unit home. But they are based on pretty simple principles. Regardless of what new model of electric Hummer comes along or how much your wifi-enabled thermostat knows about your bodily habits, the "technologies" and "policies" surrounding dense, car-phobic development are literally millennia old. In some cases, mitigating climate change doesn't require anything new -- it just requires less obstruction. Look at, for instance, CEQA's antagonism toward infill development or the affordable housing industry's disingenuous affection for parking minimums (which they like only because they allegedly make density bonuses relatively more attractive). Every planner knows about them, whether they went to Stanford or have just looked out the window.  That's one reason why, as delighted as I am for a proud California institution to get a windfall, the approach and the geography of this gift perplex me. Granted, Stanford is a global institution, and the school will have global impacts. But location still matters. California is already a leader on the climate front, in terms of policy, public sentiment, and technology. For all of California’s faults, obliviousness to climate change is not one of them. The hearts and minds that need changing are elsewhere. There's Texas, for instance – where the Doerrs went to college. Rather than plunk $1 billion down just a few miles Tesla’s main factory, why not do it in Houston – the home of ExxonMobil? Or maybe in Iowa, where ethanol corn still gets more respect than windmills. Or Florida, which promises to sink into the Atlantic any day now. Those would have been difficult choices (because, in part, many scholars and students might be uncomfortable living in some of those political climates). But they would have sent a far stronger message. Instead, the Doerrs chose to keep their money in their own backyard, comfortably within view of their fellow tech billionaires. And what backyards they are! Say what you will about New York billionaires, they live more sustainability than Woodside billionaires do. I don’t like to make ad hominem arguments. But, it’s possible that the Doerrs are focusing on academic and technological solutions to climate change because they—and so many others in Silicon Valley—are unschooled in the urbanist solutions. Despite having a darn good model of dense urbanism at the northern end of the San Francisco Peninsula, the cities of the South Bay exemplify what not to do. They rely on freeways and wide boulevards. They celebrate single-family homes and denigrate density. They price out almost all workers below executive level, forcing them to drive in or take infamous “Google Buses” and the like. For people who deal in futuristic nano-scale technology, the carbon footprint of the typical Silicon Valleyite is more like that of a brontosaurus. The advances that have come out of Silicon Valley in the past three decades eclipse anything in the previous history of human civilization. Unfortunately, many of them have arisen in the service of wealth creation rather than in the preservation of the human race, civil society, and the biosphere. Oh well. The Doerrs’ donation feels more like penance than a sincere attempt to marshal the financial and intellectual forces of his industry. $1 billion is a pittance for Silicon Valley. $1 billion is a tiny fraction of the funding that Kleiner Perkins has awarded and a rounding error compared to the value of the companies in which it has invested. Heck, it's only 10% of the Doerrs’ personal net worth. But, $1 billion is better than nothing, I suppose. I sincerely hope the Doerrs’ donation does some good. (In particular, I hope the institute brings on some psychologists to figure out how to talk sense into climate deniers.) John Doerr has been an effective angel investor in the world’s sexiest industry. In this instance, though, he and many other smart, wealthy, powerful people are going to have to figure out more humble ways to move heaven and earth. Until then, I guess we'll have to keep the coal shipments coming. Image courtesy of Ari He, via Flickr .

The amenity wars are heating up in Los Angeles. Swimming pools, quartz countertops, and in-unit washer-dryers are old news. I recently toured a soon-to-open residential development in which the refrigerators dispense not just regular ice cubes for sodas or cold brew but also tennis-ball sized spheres for the perfect old fashioned. To hear newly elected Mayor Karen Bass tell it, this is exactly the kind of development that housing-starved Los Angeles does not need. Bass, who took office in December, was recently interviewed by Liam Dillon and Ben Oreskes of the Los Angeles Times about her land-use agenda. Among her goals for the future and complaints about the status quo, she decried the proliferation of "luxury" developments. I'm not sure if she's seen those fridges yet, or the rates that the developer will be charging for the rentals, but I'm pretty sure that they'd fit the bill. "I do think the city needs everything," said Bass, meaning that the city needs a variety of housing types. She'd have been fine if she'd stopped there. But, she continued, "Well, let me let me qualify that. I’m not sure if the city needs more luxury housing. But luxury housing and market-rate housing are two different things." There’s no doubt that Los Angeles needs deed-restricted affordable housing. Bass says she's "not sure" about the rest, though. I'm sorry, but, given that housing is arguably the number-one issue in Los Angeles, I think the mayor should be sure about how much housing is needed and about who needs what sort of housing. In Los Angeles, any new market-rate housing is almost inevitably going to be "luxury" housing. Developers build "luxury" buildings because the city’s combination of high land prices, high construction costs, bureaucratic friction, and ravenous demand make properties that are "merely" market-rate untenable. Rents in Los Angeles are what they are, regardless of whether they include fancy cocktail ice. A two-bedroom dump anyplace that's not underneath a freeway goes for at least $3,500 per month. Even if developers are building "luxury" properties just for kicks, let's look at Bass's most provocative claim: that the development of luxury properties results in displacement and/or increased rents for incumbent residents. In response to Dillon's statement-question, "The construction of market-rate homes in disadvantaged areas does not cause gentrification or displacement, but instead prevents it," Bass responded with an oddly definitive diagnosis, backed up by anecdote: "That’s completely false. I’m sorry. The area that I lived in until a few weeks ago in South L.A. People who paid $150,000 for their homes. If you put a market-rate house next door, it’s going to be close to $1 million." This is pure nonsense. In the very same interview, Bass praises Los Angeles's rent controls, which govern the vast majority of its older, less expensive housing stock. In additional to limiting rent increases, rent control makes it almost impossible to evict a tenant including, and especially, for the purpose of jacking up the rent. Rick Caruso could build Buckingham Palace next door to your dingbat and it would--by law--have zero influence on the rent you pay. Caruso is, of course, the developer whom Bass defeated in November’s mayoral election. He’s famous for his high-end shopping centers like the Grove. One knock on him was that he would be too felicitous to his fellow developers, turning the city into one big construction site. Instead, we elected someone who doesn't seem to understand development at all. I happen to support the development of new housing (affordable and market-rate) in expensive areas, for many reasons. Even so, plenty of academic research contradicts Bass's claim about the impacts of new development in low-cost areas. I'm particularly convinced by USC Planning Professor Dowell Myers's idea of "vacancy chains ," in which people who trade up to nicer, more expensive homes make less nice, less expensive homes for other people. This is how real estate works in growing cities. The real "luxury" units are the city's hundreds of thousands of single-family homes. The tiniest, oldest, ugliest cottage in Los Angeles goes for nearly $1,000 per square foot. Working class Angelenos can’t dream of affording those rates, and very few early-career professionals or young couples can pay that kind of money either. The former often double up, and the latter tide themselves over with cocktails and the hope that someday they'll have enough cash for a down-payment (or for an entire purchase, since many deals these days are all-cash). Bass seems to wonder who these tenants are, admitting, "I have never understood who lives in all that luxury housing." The subtext is well taken: any big-city major should prioritize the needs of lower-income residents. But, ignoring wealthier residents, and their market power, is not a sound basis for a housing policy. The fact of the matter is, the people who can afford those rents are the people paying those rents—and there are many thousands of them in Los Angeles. If that wasn't enough, Bass throws in a bit of xenophobia: "I do know that there’s a high vacancy rate, or put it this way, there’s absentee owners. People who don’t even live in the United States who own a lot of property here." Absenteeism is a legitimate concern, especially because neighborhoods with low occupancy rates can feel dead, and it's true that many overseas developers and investors are involved in Los Angeles real estate. But, the specter of "foreign owners" is usually raised to make development seem scary. If Bass thinks this is a genuine problem, she's now in a perfect position to propose an ordinance to tax or otherwise regulate absenteeism. From a policy perspective, very little of this makes sense. "Luxury" is not a land use designation. Absent deed restrictions or unusually prescriptive development agreements, developers can fit out buildings however they want and charge whatever they want. Unless Bass is considering a city ordinance to define "luxury" and restrict it, her comments amount to pure divisiveness. They alienate many housing advocates, most developers, and many upwardly mobile residents. And they play into the hands of the city's slow-growth establishment, who have historically exploited class rivalries and ignored economic reality mainly for the purpose of inflating their own property values. Here's what might: the Regional Housing Needs Allocation. As we at CP&DR have written before, the latest incarnation of RHNA, and the mechanisms Sacramento is now using to enforce it, obviates much of the hand-wringing and obstruction that takes place at the local level. Bass’s city has to accommodate 480,000 units over the next eight years, roughly half affordable and half market-rate (amenities optional). Los Angeles's housing element has already been approved, and the city is updating its zoning accordingly. The zoning is coming, and Bass going to have to sign off on it whether or not she likes it or not. Given the magnitude of the crisis in California, I hope Bass and other municipal leaders can drop the divisive rhetoric of political campaigning and embrace collaborative rhetoric that governance requires. The promotion of equitable development is one of the most difficult tasks a mayor can take on. Success requires thoughtfulness, openness, an appreciation for nuance, and a commitment to diversity. Those aren’t luxuries. They are necessities for everyone who lives in California and everyone who wants to live in California.

Schools have honor rolls, big-box stores have employees of the month, and now the California Department of Housing and Community Development has “Prohousing cities.”

Following the January 31 deadline by which the 109 or so jurisdictions of the Bay Area were supposed to have adopted certified housing elements, it's hard to tell whether many of them are being savvy to a fault or simply tempting fate.

Two weeks ago, dozens of Bay Area jurisdictions failed, in one way or another, to meet the state-mandated deadline for adopting housing elements compliant with the sixth cycle of the Regional Housing Needs Assessment process and certified by the Department of Housing and Community Development.

It was probably inevitable that debates over food, writing, and gentrification would collide in what is arguably one the country’s best food cities, richest literary cities, and most out-of-its-gourd land-use cities.  The stew in question comes from Soliel Ho, a restaurant critic for the San Francisco Chronicle. They recently wrote an essay that asks, "Have I been actively complicit in normalizing gentrification?" The essay answers mostly in the affirmative.  Food and urbanism have been linked since cities were invented. So, Ho’s inquiry is entirely on-point. Ho is correct that, especially these days, real estate agents refer to restaurants as "amenities" and that "neighborhoods get whiter in addition to more affluent." They admit to "passively casting the surroundings of the restaurants we review as 'changing' or 'up-and-coming,'" which is a woefully glib way that many observers of urban development – myself included – sometimes refer to complex neighborhood changes. But here’s where the souffle collapses. There’s an argument to be made that, at the very least, new restaurants signify gentrification, and they have been routinely indicted by anti-gentrification activists . To wonder whether writing about a restaurant – its menu, service, ambience, mouthfeel, whatever – feeds gentrification seems like a new flavor of liberal guilt.  Ho offers a sweeping economic theory of gentrification centering on "neoliberal policies that prioritize more lucrative land use and endless growth over policies that might ensure existing residents’ right to shelter." Never mind that San Francisco has grown anemically, from 775,000 residents in 1950 to all of 874,000 in 2020, or that building anything in the city -- including, say, a residential tower with 73 affordable units -- is nearly impossible. Ho ignores an entire library of academic research on the incredibly complex topics of gentrification and displacement in favor of a verdict rendered by instinct: "Any random person you talk to might not know exactly how gentrification works, but they can probably talk about what it sounds and tastes like." Even if we can define gentrification -- by instinct or (perhaps better?) by professional consensus -- who’s really to blame for it? Do we blame a food writer who probably makes half the city’s average annual income? A chef-entrepreneur who waited 14 months for permits and is probably six-figures in debt? A young couple who bought a starter condo in the only neighborhood they could afford? An incumbent restauranteur or shopkeeper who offers new dishes or products to appeal to new residents? A developer who thinks 100 rental apartments might improve upon a vacant lot?  The ghost of Adam Smith?  One the one hand, there’s nothing wrong with urban theorizing. If you can criticize pork loin for being oversalted, you can criticize a city for being inequitable. And yet, Ho's mea culpa is itself unwitting. They join a long, nearly sacred tradition of bemoaning gentrification and then completely failing to place blame on the people and entities that most deserve it.  The fact is, the only people who are not flagellating themselves over gentrification are usually the ones who are actually responsible for it. Here are a few suspects that elude Ho’s grasp: Owners of commercial properties who want to prop up their property values by limiting equitable development Longtime, wealthy residential property-owners who want to restrict the city's housing supply (and, in so doing, inflate property values) Old-timers who reflexively fear change, whatever form it may take Radical leftists and fellow travelers who oppose anything that smells of capitalism Planners who don’t have the fortitude, or the permission, to promote managed, equitable growth Attorneys itching for fights (and fees) Organized anti-growth groups Nonprofit developers who want to protect their turf And, of course, elected officials who are aligned with, or at least afraid to take on, any of these constituencies You don’t see any of them accepting blame in the pages of major newspapers. That doesn’t mean they don’t deserve it. What that means is that people thoughtful enough to at least ask the question, like Ho, end up holding the bag. The actual proponents of gentrification probably love her essay, because it distracts from their culpability. They get to pile on and blame those bourgeois restauranteurs and precious coffee roasters. And radical activists, many of whom fancifully believe that all residential development should be 100% affordable, probably loved Ho's piece because it conforms with their critique of "predatory" capitalism. Let's also not forget about San Francisco's notorious permitting process. Only the most deep-pocketed restauranteurs can bear the expense, take the time, and weather the uncertainty required to satisfy the city's fastidiousness. The restaurants that open have to be high-end in order to overcome that barrier (not to mention pay the rent). If Ho and other critics want to support new, but presumably modest, restaurants founded by and appealing to longtime residents of the Mission or SoMa, they might turn their eyes toward the San Francisco Department of Public Health, the San Francisco Office of Small Business, the Board of Supervisors, and all the other city offices whose regulations and procedures routinely threaten to choke off the new businesses that they are supposed to support. Until capitalism crumbles, there will be expensive food and cheap food, and expensive housing and really expensive housing. Taking jabs at restaurants or coffee shops or yoga studios won’t change that. The rise of “gentrification,” however defined, does not mean that that restaurants are evil. It means, in part, that there’s not enough housing, and not enough housing for people of all income levels. It means, fundamentally, that the city isn’t functioning properly. It means that it is inequitable in many ways and failing to serve the highest purpose of a city: to uplift diverse people and unit dives people—at Michelin-starred temples, greasy spoons, and everywhere in between. Author's note: This piece has been updated to reflect Ho's preference for they/them pronouns.

It’s probably safe to say that, among the dozens of California cities that failed to adopt state-certified housing elements on time in the past few months, very few of them like the builder’s remedy. But, there’s dislike, and then there’s outright revolt.

For all the jurisdictions in California that are upset about the invocation, or potential invocation, of the now-notorious "builder's remedy" provision of the Housing Accountability Act, the City of Huntington Beach has protested most emphatically. In its shadow, however, are several cities that appear no less determined to retain local control and oppose proposed housing projects to which they object. Whereas Huntington Beach is actively suing the state to exempt itself from the builder's remedy (and other housing laws), the Town of Los Altos Hills and the City of Sonoma are relying on technicalities to essentially wish their housing elements into compliance and therefore assert that the builder's remedy is moot. Both jurisdictions are part of the Association of Bay Area Governments region, whose deadline for certification and adoption of housing elements was January 31. Sonoma has thus far blocked the builder's remedy application for The Montaldo, a multifamily development slated for a two-acre site that currently contains only a single-family house. The Montaldo was previously proposed for 55 units. The builder's remedy version calls for 64 units, all of which would be designated for middle-income residents. But Sonoma gave two different reasons why the builder’s remedy application should be rejected. According to a statement from Sonoma planner Alaina Lipp, the application for the larger version of The Montaldo, submitted February 6, was deficient. "The Planning Department evaluated the SB 330 preliminary application against statutory requirements and the City’s checklist and found that several elements were missing from the preliminary application package," said Lipp. "The Planning Department did a courtesy review and notified the applicant that an SB 330-compliant preliminary application had not been submitted due to the missing elements." City spokesperson Sarah Tracy said, though, that the city's housing element is in fact compliant -- meaning that a builder's remedy application would be moot, regardless of how complete or incomplete it is. The city's position is based not on HCD approval but rather on what amounts to "self-certification." "The City of Sonoma approved its 6th Cycle Housing Element as required by the State on January 31st and is prepared to maintain that its housing element is substantially compliant, and that California Dept. of Housing and Community Development certification is not required for a housing element to be found substantially compliant with state law," wrote Tracy in an email to CP&DR. "State law provides that a city may adopt its own findings explaining why its housing element is substantially compliant with state law (Section 65585(f))." HCD's database of housing elements lists Sonoma's as "under review." Officials from HCD have rejected the notion of self-certification. A March 16 memo by HCD Deputy Director Megan Kirkeby suggests that the adoption of a housing element that HCD has not explicitly approved is, essentially, a pointless exercise. Kirkeby's memo states, "a jurisdiction does not have the authority to determine that an adopted element is in substantial compliance by may provide reasoning why HCD should make a finding of substantial compliance... HDC recommends that a jurisdiction adopt only after receiving a letter from HDC finding the draft meets statutory requirements." Los Altos Hills is taking a similar approach. It faced builder's remedy applications for three relatively small projects (including one project with two variants) and determined that all four applications were "incomplete." In a recent online town hall meeting, the city attorney explained that, despite being considered out of compliance by HCD, he believes the recent draft of the housing element submitted to HCD satisfies the department's comments on a previous draft and will be found in compliance and certified, thereby retroactively exempting the city from the builder's remedy. "The Los Altos Hills Housing Element not only addresses all of the required components under state housing element law, and incorporates and addresses all of HCD’s findings received, it also addresses issues raised by the public during the public review period," wrote Mayor Linda Swan in a recently published opinion piece. Swan cites several programs designed to satisfy HCD's housing element requirements, including the town's first multi-family overlay zone; support for accessory dwelling units and SB 9 units (such as duplexes); and several measures to streamline housing approvals. A press release dated March 15 touts the town's promotion of housing in the 5th RHNA cycle (the previous cycle), in which it permitted 241 units, compared to its RHNA requirement of 121. According to the press release, "the accomplishment demonstrates the Town’s commitment to addressing the critical housing shortage in California and providing more affordable housing opportunities for its residents." Ultimately, however, jurisdictions' self-satisfaction may not shield them form legal action. In collaboration with HCD, Attorney General Rob Bonta has indicated that he is willing to sue willfully noncompliant jurisdictions. He recently announced a suit against Huntington Beach and has threatened to file more. This is in addition to suits filed by nonprofit and advocacy groups. (Previous CP&DR coverage of the Huntington Beach situation can be found here .) "Sonoma and Los Altos Hills are almost definitely breaking the law, as certified by HCD," said Matthew Lewis, spokesperson for California YIMBY. "I think these smaller towns think they can get away with it and are daring the attorney general to sue them."

Between state-imposed housing production goals, Department scrutiny of housing elements by the Department of Housing and Community Development, builder’s remedy threats, lawsuits by the state, and—in at least one case—lawsuits against the state, California cities have had their hands full complying with new state housing laws and their respective obligations.