San Diego Adopts Aggressive Upzoning Policy The San Diego City Council tentatively approved a municipal code amendment to add a sixth development zone category for high-density housing near public transit and jobs-rich areas. The council’s unanimous vote will add “mixed-use” to the municipal code as the latest zoning category, after open space, agricultural, residential, commercial, and industrial. Under current zoning, such mixed-use developments require a special discretionary permitting process that’s often longer and costlier than other processes. Councilwoman Vivian Moreno expressed excitement for the boon such zoning will bring to the city, which she hopes will create walkable communities that provide residents access to commercial uses near their homes. “It’s refreshing to see this come forward after years of project applicants being required to process discretionary permits with additional cost, time and money,” she said to the Times of San Diego. High Speed Rail Undergoes Management Shakeup, Diversion of Funds Major changes are coming to  California High-Speed Rail  – with approvals and setbacks that have come to represent the push-and-pull of the elusive statewide rail vision. In February, facing a ballooning budget and significant slowdowns, Gov. Gavin Newsom announced he was temporarily curtailing the San Francisco-to-Los Angeles plan to focus on a Central Valley segment of the line. In May, the Trump Administration terminated a $929-million grant to fund the rail – claiming the High Speed Rail Authority exceeded agreed-to budgets and timelines. However, in a recent sign of progress, the Federal Railroad Administration assigned authority for environmental reviews to the state – which will streamline an often-delayed approval process. Additionally, the rail authority announced major management changes that limit ties to the consultant WSP, which has been advising the authority under a $700 million contract. Earlier this year, the Fair Political Practices Commission launched an investigation into financial conflicts of interest in the WSP's top management. But despite these signs of progress for the project, California lawmakers dealt a recent blow: Assembly Democrats launched a plan to divert money from the project’s current Central Valley segment to the higher-demand Southern California Metrolink and the Bay Area's  Caltrain . These lines are a part of the original vision for a high-speed network. Still, Brian Kelly, chief executive of the California High-Speed Rail Authority, sees this proposal as a setback: “It is a mistake to simply take money from one region and spend it in another,” he said to the Los Angeles Times. Report Estimates Quarter-Trillon Dollars in Wildfire Risk Statewide Serious risk of wildfire threatens nearly 500,000 homes worth a combined $268 billion, according to a recent analysis from real estate marketing firm Zillow. The analysis, based on Zillow’s housing data and risk maps from the U.S. Forest Service, found 477,039 homes categorized at “high" or "very high" risk of wildfire. This finding comes amid growing statewide concern for the impact of future wildfires on communities: more than $20 billion worth of property was destroyed by fires in 2017 and 2018, and more than 350,000 Americans currently live in towns and cities designated “very high fire hazard severity zones” by Cal Fire. According to Zillow’s analysis, the Riverside area has the most homes facing high risks, with a total of 113,520 properties worth $40 billion overall. Properties in Sacramento, Los Angeles, and San Diego metro areas also face notably high fire risks. Deficit-Ridden Adelanto Considers Disincorporation  Facing a projected $6.3 million fiscal deficit, the City of Adelanto is considering disincorporation – the first disincorporation in San Bernardino County’s history, and the first statewide since the 1970s. The city, which was incorporated in 1971 with the goal of bringing more revenue to the region, may have to disincorporate for the same reason. In 2014, facing a growing financial shortfall, City Manager Jim Hart proposed a 7.95 percent utility users tax – but it was rejected by 63 percent of voters. In 2015, Hart was ousted as city manager. With disincorporation, residents would be governed by the county Board of Supervisors 40 miles away in San Bernardino. To transition from city to county control, a funding mechanism, such as a tax, would need to be devised and adopted to pay for municipal services that would fall to the county. Should 25 percent of Adelanto’s registered voters sign a disincorporation petition this week, it will go to the Local Agency Formation Commission for San Bernardino County for a vote. Final approval will fall to a citizen vote. Maricopa flirted with disincorporation several years ago. (See prior CP&DR coverage .) Quick Hits & Updates  Los Angeles's 2016 Measure M transportation tax provides a model for auto-oriented regions looking to change transportation at the ballot box, according to a recent study published by the Eno Center for Transportation, a nonpartisan think tank. The paper situates Measure M, a half-cent sales tax increase to finance local transportation, within a larger discussion of transportation finance and politics. The study hails the measure as a success, for its work in upending the transportation status quo and doubling the county’s rail network. A gondola system may one day transport visitors to Los Angeles’s Griffith Park , according to Stantec, an engineering consulting firm hired to examine the feasibility of aerial transportation. This move responds to heavy traffic around and within the 4,200-acre park. Last year, the Los Angeles City Council authorized the analysis of 29 Griffith Park traffic mitigation measures. Stantec’s feasibility study will examine several alternatives for tramway lines, including stations at notable destinations like the Hollywood sign and Dodger Stadium. It will also study potential effects on the surrounding wildlife and community. The Santa Barbara City Council approved recent changes to its Coastal Land Use Plan, moving one step closer to finalizing development law for the city’s four-mile coastal zone. The plan, last updated in 1986, protects and balances use of coastal resources along the city’s coast – 65 percent of which is in public ownership. One change to the plan prohibits new private access stairways on the bluffs. Next, the council will finalize its Sea Level Rise Adaptation Plan, set to be reviewed in 2020.  San Francisco moved closer to cutting fees for affordable projects and backyard apartments, after the city’s Government Audit and Oversight Committee unanimously approved the bill introduced by Mayor London Breed. This bill, introduced in February, would cut building-inspection fees for affordable housing developers and those looking to legally create accessory dwelling units (ADUs) for rent in their backyards, garages, or storage spaces. Since Breed introduced the bill, 22 affordable housing projects have begun the permitting process – and would take on about $675,000 in total fees. Similarly, property owners have applied to build 99 ADUs in this time period, which would incur $280,000 in combined fees. The Placer County Board of Supervisors approved a controversial gondola between the Squaw Valley and Alpine Meadows ski resorts in Truckee. According to Squaw Valley Alpine Meadows, the California Express Gondola would extend an eight-passenger, 33-tower lift over 2.2 miles in a 13-to-16 minute ride, giving skiers and snowboarders access to both resorts without the need for shuttle or car service. The gondola has faced pushback from environmentalists for its proximity to the Granite Chief Wilderness. Before work can begin, plans for the gondola will go to the Forest Service for final review. Anticipating the arrival of new 5G technology from the wireless industry next year, the San Diego City Council approved aggressive new cell antenna regulations as part of its municipal code updates. The new regulations include special protections for the city’s historic areas and efforts to mitigate visual impacts. The advent of 5G technology will mean the installation of “small cell” antennas placed as close as a block apart on city streets. The regulations mandate concealment of radials and mounting brackets to reduce visual clutter. These mandates defend against new federal law, which requires cities to loosen regulations, speed up approval times and lower fees for 5G technology. (See prior CP&DR coverage .)  The City of Los Altos was sued for rejecting a proposed 66-foot office and housing building with an accompanying 18-space underground parking garage. The lawsuit, filed by the California Renters Legal Advocacy and Education Fund, claims that the city has rejected a project in compliance with state law. The site’s property owners pursued a streamlined permit under SB 35, a law that encourages housing development by fast-tracking proposals that meet certain requirements. The city council has claimed that the development does not in fact meet all of the requirements under SB 35 to be granted streamlining.

Hasan Ikhrata has wasted no time putting his stamp on the San Diego Association of Governments – and if he is successful it could bring significant changes to SB 375 regional planning around the state.

Caltrain Envisions $25 Billion Plan to Triple Ridership Caltrain will triple its ridership from 60,000 to 180,000, according to a $25 billion, decades-long “service vision” compiled by the agency. The vision includes several extensions, an increase in cars and stations to serve growing demand from Bay Area populations. Caltrain officials hope to anticipate a projected 40 percent increase in residents and workers along transit lines by 2040. Key proposals within the vision include a track extension into the Transbay Terminal in SoMa, as well as a plan to transition diesel cars to electric. However, officials must find a way to fund these innovations: the railway doesn’t reap sales or property tax revenue, and instead relies on a $30 million annual subsidy from the three counties it serves. According to Caltrain’s CEO and general manager Jim Hartnett, the agency is considering putting a sales tax measure on the ballot for funding next year. The final vision will go to Caltrain’s board of directors for approval in October. HUD Accuses Los Angeles of Discrimination; Withholds Funds U.S. Housing and Urban Development Secretary Ben Carson denied Los Angeles $80 million in funds, citing discrimination against disabled residents. In a recent letter, Carson rejected city officials’ requests for funding, citing the city’s failure to comply to federal accessibility laws in its proposed affordable housing projects. This comes as a blow to the city, which is struggling with affordable housing and homelessness crises. The money being withheld by HUD includes funds from the federal HOME Investment Partnerships Program, which pays for affordable housing for low-income families. According to Carson’s letter, local officials will have 45 days to resubmit or rework their funding application. They can also seek the funding by entering into an agreement that addresses the city’s outstanding violations on disabled housing. L.A. mayor Eric Garcetti claims that there are “no grounds” for withholding the funds. “These funds support an array of federal programs upon which millions of people rely, and withholding them will ultimately hurt the neediest among us,” Garcetti told the Los Angeles Times. “At a time of rising homelessness and a moment of record income inequality in America, the victims of this action will not be local government, but struggling Americans." Residential Building Permit Approvals Decline 12 Percent over 2018 Residential building permit approval rates decreased statewide, according to new data from California Department of Finance. According to the data, California communities approved an annual average of 110,000 new buildings in the first five months of 2019 – 12.2 percent fewer than the same period in 2018. Permits for multi-family units like apartments decreased by an even greater rate, falling by 42.2 percent to a seasonally adjusted average of 46,000 units per year. This data comes as a blow to Governor Gavin Newsom’s aggressive housing production goal of 3.5 million new units by 2025. To reach this goal, statewide production would have to increase fivefold. This year, the governor pushed stricter policy for new building: he allocated $1.75 billion for financing loans and tax breaks for affordable housing development in this year’s budget. He also attempted, and failed, to withhold road repair money from cities that didn’t meet their housing goals – and instead compromised with a fine. But data shows that new housing numbers are still moving in the wrong direction. Senator Scott Weiner, whose building bill SB 50 was shelved in the Legislature in May, commented on the new data. "Even though there’s a perception that we’ve accelerated housing production in California, we haven’t,” he said to the Sacramento Bee. "We’ve fallen dramatically far short of where we need to be and it’s getting worse. And this is threatening the state’s future.” Survey Ranks “Walkable Places” Nationwide; Bay Area Ranked 5th California urban hubs nabbed top national rankings for walkability, according to the WalkUP rankings from Smart Growth America. The analysis ranks the levels of walkable urbanism within the nation’s largest metro areas, and identified 761 extremely walkable places, or “WalkUPs,” that deliver an outsized economic performance despite their minute portion of total U.S. land mass. According to the research, such areas deliver high proportions of office, retail, and multi-family homes per square feet. Nationally, the San Francisco Bay Area ranks fifth in walkable urbanism, Sacramento ranks nineteenth, Los Angeles ranks twentieth, and San Diego ranks twenty-fifth. The “San Francisco Bay Area” region includes San Francisco, Oakland, and San Jose; the study notes that Silicon Valley maintains a "retro-drivable suburban development pattern" despite its high concentration of knowledge workers. The findings also note that most of Los Angeles’s walkable urban space is located in its suburbs. Quick Hits & Updates  In response to an approved high rise development on a site occupied by Amoeba Music in Hollywood, a prominent anti-development group is suing the City of Los Angeles on the grounds of culture significance. In addition to filing a lawsuit, the AIDS Healthcare Foundation and its subsidiary the Coalition to Preserve L.A. filed a monument application for the Sunset Boulevard site. The lawsuit also claimed that the proposed 26-story complex with up to 200 apartments and 7,000 square feet does not produce sufficient affordable housing. Amoeba Music plans to relocate to another Los Angeles site. The Redlands Passenger Rail  program broke ground in downtown Redlands, beginning construction on the nine-mile, $355.4 million link from San Bernandino to Redlands. The new corridor will add four stations, including downtown Redlands. The Santa Fe Depot will connect riders to the Arrow line and its low emission diesel train, as well as a Metrolink platform toward Los Angeles. The San Bernandino Transit Center connection will link riders to Los Angeles Union Station, LAX, Orange County, and more. The project is expected to be completed in 2022. Caltrans and state representatives spoke in opposition of building a park or housing on freeway stubs off of the Los Angeles County 710, taking the much-anticipated project off the table. When Caltrans killed plans to close the 4.1-mile 710 Freeway Gap between El Sereno, South Pasadena and Pasadena by surface or tunnel, the L.A. county MTA awarded these cities $515 million for local roadway projects. Of that, $100 million were earmarked for Alhambra to pursue a project on the southern stub – including the possibility of parkland. However, state representatives have since expressed concerns about increased congestion from closing the structures.  As part of a multi-pronged effort to ease anticipated traffic to the Warrior’s Mission Bay arena, San Francisco transportation officials announced that tickets to any event at the new Chase Center arena will come with a free Muni day pass. The 18,000-seat arena will offer limited parking spaces, and officials are preparing for a crush of traffic to the site. In February, Mayor London Breed created a working group of more than a dozen city departments to increase infrastructure and operations for the influx of thousands of event attendees to the area. For transportation officials, this includes increased Muni rides, a Muni platform expansion, and a new ferry service to the site.  In a split decision, the San Francisco Board of Supervisors rejected a November 2019 bill asking voters to add an extra layer of oversight to the Department of Homelessness and Supportive Housing. Mayor London Breed has lobbied strongly against the bill, arguing that the added layer of bureaucracy wouldn’t be worth the increased attention to homelessness. The department, created in 2016, reports directly to the mayor and is one with the few major departments in the city without an oversight commission. The oversight measure instead will be considered for the March 2020 ballot. In the latest of a series of legal battles over the Cupertino Vallco Mall development project, the Cupertino City Council settled a lawsuit with former city attorney Randolph Hom – who alleged retaliation, discrimination, and breach of contract in connection with his involvement in the redevelopment plan. Hom was fired by the city after he argued that the proposed $3 billion Vallco Mall redevelopment violated the city’s general plan. The city council denies all wrongdoing, but agreed to pay the $205,000 settlement to avoid further legal proceedings. (See prior CP&DR coverage .)  The Cupertino City Council nixed any future office development at the Vallco Shopping Center site should current plans fall through. The current council opposes the approved plans, which were required as part of the 2017 SB 35 streamlined approval process for developments that comply with affordable housing requirements. The council members say that adding up to 2 million square feet of office space will exacerbate the housing shortage by attracting even more workers. Senator Scott Weiner, who authored SB 35, recently accused the council of attempting to sabotage future housing projects at the site. The Los Angeles City Council unanimously approved a 60-story skyscraper project in South Park, and also approved the project for the Sustainable Communities Environmental Assessment, which allows for CEQA streamlining for projects near transit. The Canadian developer Onni bought the site in 2016 and plans to convert a block into a retail/residential center, adding two new towers and preserving the two Los Angeles Times buildings on the property.

In a victory for landlords, an appellate court has ruled that a Hollywood property owners did not have to analyze the impact on renters of an apartment conversion to a boutique hotel because the owner had already taken the building off the market under the terms of the state’s Ellis Act. The case turned on the question of the proper baseline for the environmental analysis.

San Diego County’s approval of a 24-parcel subdivision of 40-acre lots has been thrown out by an appellate court, which concluded that the county’s action violates the Williamson Act.

CP&DR Vol. 34 No. 7 July 2019

Report Calls for More Multifamily Development  California needs to build more apartments to close its housing gap, according to a new report from the UC Berkeley Terner Center for Housing Innovation. The report , “Is California’s housing market broken?” uses new local land use data from the Terner Center California Residential Land Use Survey. The data showed that most California cities are building very few multifamily dwellings. The report also found that, economically speaking, local housing markets are working in the opposite direction than expected: high-rent communities build fewer, rather than more, new apartments. This is because statewide, cities use zoning and community approval processes to deter development of new multifamily buildings. The data showed that cities with “anti-apartment zoning" have been successful: cities that set lower allowable densities and building heights build fewer apartments. Additionally, the report showed that the ad hoc, discretionary local permitting process makes new building longer, riskier, and more expensive. The authors suggest stronger policy to financially incentivize new building, not merely on-paper zoning revisions. “California’s governor and states legislature will need strong spines to face down recalcitrant homeowners,” the authors conclude.  Federal Tax Cuts Take Toll on Statewide Housing Development  According to an analysis by the Sacramento Bee, corporate tax cuts delayed or killed 15,000 affordable housing projects in California since their 2017 passage. The data showed that this corporate tax rate reduction – from 35 to 21 percent – had the unintended consequence of diminishing the potential benefits of the federal low-income housing tax credit. The analysis showed that companies were willing to invest about 10 to 15 percent less than they had before the 2016 election. According to Matt Schwartz, president and CEO of the California Housing Partnership, this has meant a 23 percent decrease in affordable housing production: from about 24,000 units in 2016 to less than 19,000 in 2018. It has also delayed or ended 10,000 proposed housing units in 2017 and 5,500 in 2018. This amounts to about a $1.4 billion decrease in affordable housing statewide between 2016 and 2017, and a $400 million less in 2018 than in 2016. "That has really painful effects, even if it doesn’t sound that big,” Schwartz said. “For the folks on the waiting list for this housing, it makes a huge difference. These are people in fragile conditions, living paycheck to paycheck or some of them even homeless.” San Francisco Strives for Zero Emissions by 2040 The City and County of San Francisco released its “Electric Vehicle Roadmap” with the goal of reaching zero-emissions transportation by 2040. Measures proposed include providing incentives for zero-emission vehicles, developing greater charging infrastructure, focusing on grid integration of renewable energy and EV charging capacity, raising public awareness of electric mobility; and advocating for emission-free technology in future mobility projects. The roadmap sets incremental targets to reach this goal: including requiring all commercial parking lots and garages with more than 100 spaces to build EV charging stations for at least 10 percent of the stations by 2023. The city is also including a lower rate in their proposed TNC Traffic Congestion Tax for electric vehicles, are transitioning Muni cars to electric power. “Of course we’d like to see walking, biking, and public transit prioritized,” said Mayor London Breed in the Roadmap announcement. “But if San Franciscans are going to drive, we hope they go electric.”  Groups Sue to Protect Mountain Lion Habitat  Seeking greater protections for Southern Californian mountain lions, the Center for Biological Diversity and Mountain Lion Foundation formally petitioned the California Fish and Game Commission to protect the species under the California Endangered Species Act. The petition follows a March 2019 study finding that the species could face extinction in little over a decade, due to inbreeding caused from isolated territories disconnected by private properties and highways. Should mountain lions gain protected status, state and local agencies will have to take measures to manage threats – such as creating wildlife corridors under freeways. The Department of Fish and Wildlife has three months to make an initial recommendation to the Fish and Game Commission, which will then vote on the petition at a public hearing later this year. Quick Hits & Updates  After months of protests against a temporary 200-bed homeless shelter approved by the San Francisco Port Commission, a coalition of local residents filed a CEQA lawsuit to block construction of the shelter. The coalition, Safe Embarcadero for All, argued that the city didn’t gain approval from the State Lands Commission, which has oversight over waterfront development, and that it didn’t go through the full environmental review process. The $37,000 navigation center, planned to replace a parking lot near the Ferry Building, is a crucial part of Mayor London Breed’s homelessness production goals. Newport Beac h residents may not develop on public beaches, according to a ruling from the California Coastal Commission. The city attempted to amend its Local Coastal Program to allow for homeowners to pay a fee for up to 15 feet of encroachments on Peninsula Point. Many such encroachments, including landscaping and other property, have been in place for years and extend as far as 80 feet onto public beaches. However, the commission struck down even the attempted compromise, in favor of public access for all and removal of all current encroachments. As part of its plans for mega-expansion throughout the Bay Area, Google entered into a $15 billion agreement with real estate developer LendLease to transform downtown San Jose, Sunnyvale, and Mountain View. Major mixed-use projects in each of these cities will help Google realize its $1 billion commitment to build up to 20,000 homes in the Bay Area. Notably, Google has already proposed a transit-oriented community near Diridon Station in San Jose. Stockton City Hall will likely be transformed into market-rate housing and retail, after the city council voted unanimously to grant exclusive negotiating rights for the building to developer Cort Companies. The developer’s plans will preserve the facade of the 93-year-old historic building, but add 35 housing units and retail space to its interior. Plans for three adjacent buildings include an 80-unit family residence and and community center. Los Angeles’s Hollyhock House, designed by Frank Lloyd Wright, was designated a UNESCO World Heritage Site – the first such honor for the city. The house joins 1,121 World Heritage Sites around the world – 869 of which are awarded cultural status. It is one of eight Wright-designed buildings to share the designation, joining sites such as New York City’s Guggenheim Museum and Fallingwater in Pennsylvania. Los Angeles completed a four-year, $4.3 million restoration to the grounds and the home in 2015. Riverside County Transportation Commission is considering a ballot measure to double a half-cent sales tax increase to finance freeway widening and other big transportation projects. Officials claim that doubling the existing 1989 half-cent Measure A would generate $3 billion to $6 billion over 30 years – giving the area funds to build greater transportation improvements faster. A final decision to put the item on the 2020 ballot would come next year. The San Bernardino County Transportation Authority has broken ground on its Redlands Passenger Rail Project, which will add a nine-mile rail connection between the University of Redlands and the San Bernandino Transit Center. The project will house the Arrow commuter line, which will add low-emission passenger trains for conversion to zero-emission – the first-ever zero emission train vehicles in North America. Toll roads are likely coming the Riverside County highways during the 2020s, according the the Riverside County Transportation Commission. The commission is launching a $1.4 million engineering study to examine the feasibility of extending Corona’s 91 Freeway toll lanes to downtown Riverside, and adding toll lanes on the 60 and 215 freeways in Jurupa Valley, Riverside and Moreno Valley. Funds from toll lanes will go to transportation infrastructure projects. San Francisco Supervisors killed Mayor London Breed’s proposed charter amendment to streamline affordable and teacher housing projects. Breed’s proposal would have saved such projects millions of dollars, and between six and 18 months per project. To get the amendment on the November ballot, Breed would have needed majority supervisor support – which she failed to obtain. All 11 Kern County municipalities failed to meet their state affordable housing production goals, and four failed to submit an annual housing development progress report at all, according to a recent report from the California Department of Housing and Community Development (HCD). According to the 2017 SB 35 law, cities that fail to report their annual progress update are required to adopt a streamlined permitting system for new housing. The Highland Greenspot Village & Marketplace project will finally move forward more than a decade since its inception, after the Highland City Council certified a new environmental report allowing the city to buy the land from the county. The initial plans at the "“Golden Triangle" off of Greenspot Road envisioned a bustling center with 800 residential units and about 75 acres of mixed-use and commercial space, as well as the city’s first movie theater. The U.S. Fish and Wildlife Service has designated the entire site critical habitat for the endangered San Bernardino kangaroo rat – and any development plans will need to address their protection. The Federal Transportation Administration awarded $100 million to L.A. Metro’s Purple Line subway extension to Westwood. The grant will fund construction of the third segment of the line connecting Century City with Westwood, a 2.6-mile stretch that will include two new stations. L.A. Metro has requested a total of $1.3 billion in funds from the FTA, and the total extension project is projected to cost $3.6 billion. The 51,000-acre N3 Cattle Company ranch in the East Bay is for sale for $72 million – the largest current land offering in the state. The ranch’s principle owners, who have held the land for 85 years, claim that they aren’t interested in a piecemeal sale – and hope to sell to conservationist groups. The massive property spans four counties: Alameda, San Jose, San Joaquin, and Stanislaus.

In an important ruling for infill development, the Third District Court of Appeal has ruled that the City of Sacramento properly used the truncated environmental review process under SB 375 in analyzing a 15-story condo project in Midtown Sacramento, rejected a citizen group’s contention that the region’s sustainable communities strategy can’t be used as the basis for environmental review because it does not contain densities and intensities at the local level as a general plan would.

In a similar way to housing production, California is trying to make it easier to build solar power facilities while at the same time maintaining some semblance of local control over relevant land use regulations. One recent battle over local control of solar facilities pitted the City of Hesperia against the Lake Arrowhead Community Services District – a special district providing water and wastewater that sought to build a solar facility.

Any public-sector planner in California who is not yet aware of the pot of money available from Senate Bill 2 must work for a city that either has slid into the ocean, or is so wealthy that free money — in the six-figure range — does not warrant the bother of filling out a 12-page application.

State Reviews Cities’ Progress on Housing A record-high 86 percent of cities have submitted their housing development progress updates, but almost all are falling short of their goals, according to the California Department of Housing and Community Development. All cities are required to submit annual housing development progress updates – but just a few years ago, less than 50 percent of cities met this requirement. Following the passage of SB 35 in 2017, cities that fail to submit the update are automatically required to streamline new housing developments. Still, the numbers reported fall far behind targets: only three percent of California jurisdictions are on track to reach their targets on all income levels, and only five percent are on track to reach their low-income housing goals. In February, Governor Gavin Newsom met with noncompliant cities to help them create plans for compliance. In response, six cities have regained compliance – most recently, Fillmore gained state approval for its housing element. Legal Settlement Scuttles Housing Development in Desert Hot Springs A proposed housing development has stalled in Desert Hot Springs , after the city reached a settlement with two environmental groups and agreed to further environmental review before moving forward. The proposed Mission Creeks Trails development would have added over 2,000 homes, commercial development, and walking trails near the base of the 154,000-acre Sand to Snow National Monument. However, according to the lawsuit from the Sierra Club and the Center for Biological Diversity, the plans fail to accommodate the sensitive wildlife habitats in the area for species including the burrowing owl and the Palm Springs pocket mouse. Desert Hot Springs is facing statewide pressure to meet its housing goals – it was among the noncompliant cities that Governor Gavin Newsom met with in February to discuss future affordable housing development. The city’s updated housing element will be complete in the fall. Navy Considers Transit Hub at Point Loma  The Navy expressed interest developing a “San Diego Grand Central Station,” at its Naval Base Point Loma Old Town Complex . Recently, the Department of the Navy, Commander Navy Region Southwest and the San Diego Association of Governments (SANDAG) announced a “memorandum of understanding,” acknowledging a mutual interest in developing a transit hub at the 70-acre SPAWAR site that will provide direct transit to the airport. That means that the military branch can ask the private sector to include a transit center in its redevelopment solicitation, and allows the agencies to share data as they work through the environmental review process. This is the first major agreement reached as part of SANDAG’s massive transportation overhaul vision – which focuses on new rail lines rather than road fixes. Additionally, this would qualify for funding under the San Diego Regional Airport Authority’s recent 10-year funding pledge to raise over $350 million. “This is the beginning of what I expect to be a long partnership with the Navy,” said Steve Vaus, who chairs the SANDAG board and is the mayor of Poway. “The MOU creates the opportunity for SANDAG and the Navy to do something very special in the region, clearing a path for us to work on a major transportation hub and providing a transit link to the airport.” California Housing Costs Rise Faster than Rest of Nation The increase in housing costs in California metro areas outpace  that of other regions, according to the 2019 State of National Housing Report. The report, published by Harvard University’s Joint Center for Housing Studies, uses U.S. Census Bureau data to analyze trends in housing price burdens across the nation. The report finds that California leads the country in high housing cost burden: of the twenty regions nationwide with over 40 percent of households classified as “cost-burdened,” seventeen are in California. Furthermore, Los Angeles county residents have the highest proportion of “cost-burdened” households, at 46 percent. Notably, the report also finds that all ten regions where less than 25 percent of its recently sold homes are classified “affordable” to the median home buyer are in California. Finally, Bay Area regions show by far the greatest change in land prices over the 2012-2017 period. Many Bay Area cities surpass a 100 percent increase in land price – and San Benito hit the national high at a whopping 200 percent price increase. Only a handful of cities in Washington, Oregon, and Florida came close to the sharp increase in land price changes endemic to many California cities. Quick Hits & Updates The California Department of Housing and Community Development announced the release of a Notice of Funding Availability  for $178 million in funds for the Multifamily Housing Program. This funding provides loans to individuals, public agencies, or private entities. Applications are due August 20.  The Funders' Network, in partnership with the Urban Sustainability Directors Network, has announced the opening of Round 15 of the Partners for Places grant program. Partners for Places is accepting proposals for the creation of a community-focused sustainability, climate action, and sustainability. The application deadline for Round 15 is July 30. The San Diego County Regional Airport Authority entered into a 10-year agreement with airline partners to improve transportation access to the airport, including a potential trolley route. The pact includes a half-billion dollar investment to fund infrastructure projects between the city and the airport, including access roads, increased transit connections, and rapid bus and trolley lines. The Airport Authority is working with the city and transportation agencies to draft potential connections, but will not receive any additional funding from agencies. Marking the end of a historic local industry, San Fernando Valley’s last commercial orange grove is for sale – likely to be replaced by new upscale single-family housing. The property, once surrounded by similar orchards, has since become surrounded by housing. Marketing materials for the $13.9 million sale include a site plan to split 14 acres into 26 half-acre lots for development into single-family homes. The City of Los Angeles’s ban of short-term vacation rentals from services like Airbnb officially went into effect. The home-sharing ordinance, passed in December, bars any short-term rentals of properties other than someone’s permanent residence – or where a person lives at least six months out of the year. This ordinance combats a growing trend in an already-stifled housing market of non-residents transforming units and buildings into hotel-like businesses. The ordinance also bans short-term rentals in rent-controlled units, nonresidential buildings or temporary/mobile units. Home-sharing in permanent residences will be monitored and regulated with a home-sharing registration codes required for listings. San Francisco teacher housing may get the same approval streamlining as affordable projects, following a measure proposed by four supervisors. The measure, which follows a similar proposal by Mayor London Breed earlier this year, would allow 100% affordable and educator housing on more than 3,000 publicly owned sites, and would streamline their approval. The San Francisco Unified School Distrcit is seeking developers for teacher housing sites citywide. In small but significant step forward for the massive and ambitious second BART Transbay Railway project, the BART Board of Directors approved a $50 million contract for up to 10 years of consulting planning services. The consultants, HNTB Corporation of Oakland, will help BART understand how to move forward with a complex mega-project that spans 21 Bay Area cities. The project addresses the growing need for a second bay-crossing line, and will examine both underwater and aboveground rail options. BART has $110 million toward planning the crossing from its 2016 Measure RR bond, as well as $50 million from a Measure 3 funds and $1 million from the Capitol Corridor Joint Powers Authority. Following community backlash for approving the demolition of over 100 rent-controlled apartments this year, the Mountain View City Council adopted stricter affordable housing requirements. In a unanimous decision, the council amended the city’s below-market-rate ordinance. The new measure requires for-sale townhouse projects to have15 percent of the units available to residents earning between 80 to 120 percent of the area’s median income, which is about $120,000, and 10 percent of units available to residents earning between 120 and 150 percent of the area’s median income. The council hope that this ordinance will allow more residents, particularly families, to feasibly buy homes. The Sacramento-Yolo Port Commission approved the $5 million sale of a 21-acre site for a new light industrial manufacturing development. The developer, the Trammel Crow Co, plans to build a 237,600 square foot manufacturing building as well as a 108,000 expansion building. The site, which will begin its first phase of constriction this year, is expected to create at least 300 new jobs. Two California cities claimed 2019 All American City Awards from the National Civic League. Every year, the League recognizes ten communities that created healthy communities through inclusive civic engagement. This year, Rancho Cordova was recognized for a program that promotes urban farming and nutrition, its mentorship program for at-risk youth, and its housing community for homeless veterans. West Hollywood was recognized for its advocacy for the marginalized: including an advisory board for Russian speakers, its celebration of the LGBTQ community, and the housing, healthcare, and services provided to its homeless population. The Bay Area Water Emergency Transit Agency unanimously approved a hovercraft ferry feasibility study. The above-water floating ferry service, which transit agencies considered a long shot just last year, may potentially serve towns in the Carquinez Straits, the South Bay, San Francisco, and Treasure Island. The feasibility study will examine operating costs for the service, compared to traditional ferry costs. It will also consider environmental costs, with input from the California Department of Fish and Wildlife to assess the impact on the bay. Revitalization of Sunset Strip in  West Hollywood  should target more pedestrian accessibility, according to findings from a recent survey commissioned by the City of West Hollywood and Gehl Studio. The study, titled “The Sunset Experience, Piloting Change on the Sunset Strip Toward Public Life Improvement,” found that few people walk on the 1.6-mile Strip: traffic estimates show 88 pedestrians per hour, and 2,144 vehicles per hour in the area. It also found that the sidewalks don’t support people waiting for restaurants, and few people sit outside. Finally, the study showed broad public support for a parklet installation, as well as for more activities available beyond bars and restaurants.

The end result of all the wrangling between the state and local governments over housing policy in this legislative session was a trailer bill that opens the door to big fines for local governments that don’t have valid housing elements and get slapped by a judge in court over the issue. There is no new Regional Housing Needs Assessment methodology (at least so far), no withholding of transportation dollars for cities that don’t meet the standard (at least so far) – and, perhaps most significant from the local governments’ point of view, no penalty for failing to produce housing rather than plan for housing. Which raises the question yet again about whether the housing element – one of the seven required elements of a California general plan – is or can be an effective policy tool to produce more housing in the state. California legislators certainly seem to think so: A half-dozen or more bills in the last two years have either beefed up housing element requirements or included penalties for cities that don’t have housing elements that meet the approval of the Department of Housing & Community Development. But that may be simply because housing elements are the main policy tool out there in California, not necessarily the best one. Housing elements have long been recognized as a painful bureaucratic exercise and it’s always been questionable how effective they are in producing more housing. Indeed, housing policy experts often debate what the real purpose of housing elements is; some say its original purpose was fair housing – that is, to ensure that affordable housing was fairly distributed among cities and counties – rather than housing production.  Much as they dislike housing elements, local governments do seem to take comfort in the fact that the state’s policy approach is about planning rather than production, since – as the League of California Cities frequently reminds everyone – cities and counties don’t actually build housing themselves. The only empirical study on the topic – produced by political scientist Paul Lewis, then of the Public Policy Institute of California and now at Arizona State University – found virtually no correlation between a valid housing element and actual housing production.  But Lewis conducted his study almost two decades ago and the California housing crunch has gotten a lot worse since then. And both Gov. Newsom and the Legislature continue to focus on housing elements and the RHNA process as the state’s key policy tool to increase production. Among the new legislation adopted since 2017 are the following laws: *A bill that allows the Department of Housing & Community Development to review housing elements at will, rather than on a schedule, and refer housing element violations to the Attorney General’s Office (AB 72 of 2017). *A controversial bill (SB 35 from 2017) that allows developers to trump local control over development in certain circumstances when a city doesn’t have a valid housing element.  *Two bills (AB 1771 and SB 828 from 2018) that move the state in the direction of requiring cities to take account of past housing shortfalls in undertaking the RHNA process. And now comes this year’s budget trailer bill, AB 101, which adds the fines. Specifically, the bill permits the Attorney General to order a jurisdiction to bring its housing element into compliance within 12 months or face fines of up to $100,000 a month. (The fines would be deposited into the same affordable housing trust fund account that holds funds from last year’s SB 2 real estate transfer tax.) Gov. Newsom has not signed the bill yet but probably will do so soon. If you add all this up, it looks pretty powerful. RHNA methodology will be revised in a way that will almost certainly jack up the number of housing units each jurisdiction must plan for, meaning it will be much harder for cities and counties to write valid housing elements. HCD can review a housing element and find it out of compliance at any time. Developers can override local control when housing elements aren’t in compliance. And if the Attorney General files suit, then a judge can impose crippling fines on the local government. But take a closer look. With the exception of SB 35 – which allows developers to override local control under certain circumstances – the laws all rely heavily on HCD and the Attorney General’s Office to be aggressive in pursuing errant jurisdictions. And the state’s metropolitan planning organizations will continue to be highly motivated to engage in RHNA methodologies that keep the housing target as low as possible, because that’s in the political interest of their member cities and counties. Furthermore, in reality, HCD has a reputation for engaging in extremely bureaucratic housing element reviews and the Attorney General’s Office hardly ever brings a lawsuit on a housing element case.  It’s true that, right after Newsom was inaugurated, the state sued Huntington Beach over its housing element – a lawuit that got everybody’s attention. But according to leading housing element lawyer Barbara Kautz of Goldfarb & Lipman, fewer than 50 lawsuits have ever been filed over housing elements. Most of them are brought by housing advocates and poverty lawyers, not by the Attorney General, and most of them are settled over fairly narrow issues of interest to the plaintiffs.  So in the absence of major reform at HCD and a more aggressive approach at the Attorney General’s Office, it’s unclear how much impact all the housing element legislation will really have. And maybe that will stimulate a discussion of how to streamline the very complicated RHNA and housing element process so that it is simple, elegant – and achievable. Recently, UCLA planning professors Paavo Mankonnen and Michael Manville put forth a proposal to simplify the whole process, with two elements: *First, require every jurisdiction to plan for 10% more housing than it currently has. *And second, institute a state override for affordable housing projects in any jurisdiction that does not have at least 10% income-restricted units.  The UCLA proposal isn’t perfect – you could probably spend the rest of the day picking it apart. But it does highlight the fact that the current system – no matter what new laws are piled on top of it – is complicated and clearly isn’t accomplishing the goal of meeting the demand for new housing. In the absence of a muscular HCD and an aggressive Attorney General, you could do worse in thinking about where to start in reforming state housing policy.