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Last week, I posted a blog from the American Planning Association, California Chapter, conference suggesting that the new guidelines to implement the streamlining of environmental review for infill projects under SB 226 might be making the whole process even more complicated. Relying on comments by Ron Bass and Terry Rivasplata of ICF International, I titled the blog, "Streamlining CEQA is Really Complicated," and I concluded that because CEQA is a complicated law, simplifying it really is a complicated matter. Well, the Governor's Office of Planning and Research disagrees. OPR Senior Counsel Chris Calfee, who worked on the guideline changes, wrote to CP&DR with a 1 1/2-page response, which I'll reproduce in its entirety below. Here are a couple of highlights from Calfee's response: On EIRs: As a practical matter, … infill projects can avoid lengthy EIRs and instead be approved on the basis of a checklist, without going through new public review, preparing responses to comments, or a statement of overriding considerations.  On criteria for the streamlining and related matters: Still think that SB 226 is too complex to be helpful?  Compare SB 226 to other CEQA streamlining for infill.  The Guidelines, for example, avoid the prescriptive criteria found in the statutory exemption for infill.  (Pub. Resources Code § 21159.24.)  They also avoid the inflexibility of the master EIR process.  (Pub. Resources Code § 21157 et seq.)  Under the proposed Guidelines, programmatic review need not specifically identify future infill projects, and it does not need to be less than five years old.  The programmatic review does not even need to be contained in one document, but can instead consist of a program EIR plus supplements and addenda.  Finally, unlike tiering in section 21094, the proposed Guidelines do not require the programmatic document to reduce all impacts to a less than significant level. Here is Calfee's complete response, with hyperlinks: SB 226:  Complex, or Simply New? A little over one year since Gov. Brown signed SB 226 (Simitian, 2011), CEQA Guidelines implementing its new infill streamlining provisions are now close to adoption.  This blog recently observed that SB 226 is too complex.  The Guidelines, though, are not really complicated – they are just new.  Get to know them, and you will find a valuable streamlining tool.  SB 226 streamlines the CEQA process for infill development.  For decades, state policy has favored infill because it conserves natural resources and is an efficient way to grow.  More recently, we have also recognized infill as a key strategy to reduce greenhouse gas emissions.  Since many urban environments are already impacted, however, new infill may contribute to existing cumulative impacts.  As a result, new environmental impact reports may be required, even for relatively small projects.  explanation=">explanation" proposed="proposed" Guidelines.="Guidelines."> SB 226 creates an easier path for infill development by narrowing the scope of impacts that need to be analyzed at the project level.  Impacts of a project that were already addressed at a programmatic level are not subject to CEQA, even if those impacts remain significant.  Impacts that are addressed by local development policies or standards, such as construction noise ordinances and traffic impact fees, are not subject to CEQA either, even if such policies do not fully mitigate the impact.  As a practical matter, this means infill projects can avoid lengthy EIRs and instead be approved on the basis of a checklist, without going through new public review, preparing responses to comments, or a statement of overriding considerations.  Even if an EIR is needed to address a new or more severe impact, that EIR is focused on just the new impact, and does not look at growth inducing impacts or a full range of alternatives.  The proposed new Guidelines Section 15183.3 and proposed Appendix N walk users through this process step-by-step.  To be eligible, a project needs to be within an incorporated city on an infill site (i.e., previously developed or mostly surrounded by other development), and be consistent with an adopted sustainable communities strategy or alternative planning strategy.  It also needs to implement the performance standards in proposed new Appendix M of the Guidelines.  While the statute requires the standards to promote a wide range of state goals, the Guidelines focused on the simplest way to achieve those goals: reducing vehicle travel.  To maximize flexibility in project location and design, the Guidelines created several options to satisfy those standards.  Generally, a project will be eligible if it locates in an area that already has lower than average regional vehicle miles traveled (something that MPOs are currently mapping using data developed during the SB 375 process), or by locating near public transit or project-users.  Since the performance standards are written into the Guidelines, and not embedded in the statute, they can be updated and refined as necessary. Still think that SB 226 is too complex to be helpful?  Compare SB 226 to other CEQA streamlining for infill.  The Guidelines, for example, avoid the prescriptive criteria found in the statutory exemption for infill.  (Pub. Resources Code § 21159.24.)  They also avoid the inflexibility of the master EIR process.  (Pub. Resources Code § 21157 et seq.)  Under the proposed Guidelines, programmatic review need not specifically identify future infill projects, and it does not need to be less than five years old.  The programmatic review does not even need to be contained in one document, but can instead consist of a program EIR plus supplements and addenda.  Finally, unlike tiering in section 21094, the proposed Guidelines do not require the programmatic document to reduce all impacts to a less than significant level. The Office of Planning and Research and the Natural Resources Agency did extensive outreach in developing the Guidelines, and actively sought input from working practitioners at the local and regional levels, as well as builders, environmental organizations and other stakeholders.  They took seriously concerns about complexity and ease of implementation.  According to comments submitted by the Association of Environmental Professionals, the proposed Guidelines "are clear, concise and well-organized."  Planners, agency staff and developers that spend a little time with them may find that they agree.

Everybody in Northern California is proud of the World Champion Giants., but apparently the 49ers are a different story. The Department of Finance beancounters in Sacramento have nixed a negotiated agreement between the City of Santa Clara and other taxing agencies that would have allowed the city to keep $30 million in tax-increment funds to help finance the 49ers new $1.2 billion stadium. Voters approved a deal in 2010 that included $40 million in tax-increment funding for the stadium. In June, Santa Clara's Oversight Committee nixed the deal, but in August a compromise was reached. Stadium backers and school supporters have continued to engage in a publicity war ever since. According to the San Jose Mercury New s, the city will ask DOF to reverse its ruling, and if that fails the 49ers will reactivate a lawsuit to try to get the funds back. Of course, the 49ers say the stadium will begin construction anyway, since the RDA funds are such a minor portion of the financing program. Which makes you wonder why everybody's fighting so hard over the money. You can read the Mercury News story here .

If skepticism about growth is an indication that the economy is on the rebound, then Tuesday's land use elections throughout California might be called good news. About a dozen land use measures were on the ballot Tuesday and most cases the anti-growth forces won. Most of those that did win were focused on job creation. Several measures focused on downtown development in small cities, with mixed results. Meanwhile, transportation sales tax measures in two major counties -- Los Angeles and Alameda -- were narrowly defeated, each getting about 65% of the vote. Measure J in L.A. County would have extended the 2008 Measure R sales tax for 30 years -- from 2028 to 2058 -- essentially increasing the county's borrowing capacity to build the rail transit system even faster. Measure R has been a major source of transit-oriented planning money in recent years. In addition, a wide variety of open space financing measures were on the ballot -- and most passed. Although the land use ballot measures were -- as usual -- random and scattered, they suggest that voters were in a more anti-growth mood than you'd expect, given the lengthy slump in real estate development around the state. In only a couple of places did the pro-growth forces win, and some of those victories were sold as job creators. In Escondido in North San Diego County, Measure N passed, rezoning hundreds of acres of land to commercial use. In Berkeley , an update to the West Berkeley Plan -- also intended to create jobs -- is hanging on by 50.2%. In Napa County , voters rejected a downzoning of property owned by Pacific Union College in rural Angwin. Voters in rural, conservative Yuba County rejected a SOAR-style ballot measure that would have subjected changes in agricultural zoning to a vote. On the other side of the ledger, voters in Fullerton turned down a major project, the West Coyote Hills plan. A major project was also turned down in Del Mar. Here is a complete rundown of results: Alameda County City of Berkeley Measure T would create more flexibility in the West Berkeley plan, allowing 75-foot buildings and requiring community benefits in return. As of Thursday morning, Measure T was winning by only a few dozen votes. Los Angeles County City of Sierra Madre Sierra Madre is a small, mostly slow-growth community located in the foothills adjacent to Pasadena. The community has traditionally been opposed even to a stoplight at the main intersection in the downtown. However, Measure ALF -- which would permit development of a two-story, 75-room assisted living facility on Sierra Madre Boulevard across from City Hall -- won with 77% of the vote . Monterey County City of Pacific Grove Voters in this small, traditionally slow-growth community adjacent to Monterey rejected a proposal to double the allowable height of buildings downtown to 75 feet. Measure F failed by 59%-41%. Napa County Countywide voters rejected a proposal to downzone 25 acres of agricultural land in Angwin, in the hills above St. Helena, which was put on the ballot in an attempt to block Pacific Union College from pursuing additional development . Measure U lost by 60%-40%. City of Calistoga Only 13 miles away from Angwin, voters in Calistoga approved the expansion of the Silver Rose resort to include a hotel with 85 rooms, 21 houses, a new winery, and other amenities. Measure B passed 59%-41%. Orange County City of Fullerton Voters in the scandal- and recall-plagued City of Fullerton rejected the West Coyote Hills Specific Plan , which called for development of an old oil field in North Fullerton to include 760 homes on 500 acres of land. Chevron, the landowner, spend $1 million on the campaign. Measure W lost, 60.5% - 39.5%. San Diego County City of Del Mar Voters in the small beach city of Del Mar rejected the Village Specific Plan, which would have facilitated development in the downtown area. Opponents claimed the plan would have made traffic and parking in the downtown area worse by adding development without adding parking and narrowing the main street to two lanes with roundabouts. Measure J was defeated 58%-42%. City of Escondido In the North County inland city of Escondido, voters approved the city's new general plan. Escondido has required voter approval for even small general plan amendments since 1998. Measure N passed 53%-47%. San Mateo County Town of Atherton In the super-affluent Town of Atherton, voters rejected a plan to build a new library in a city park. Measure F lost, 69%-31%. Ventura County City of Simi Valley Voters in Simi Valley easily passed Measure N, an extension of the city's longtime growth management program , which limits housing construction to approximately 260 houses per year. Measure N won with 74.8% of the vote. City of Moorpark Meanwhile, in the neighboring City of Moorpark, voters declined to give the city authorization to pursue development of 200 affordable housing rental units over the next 10 years. The vote was a so-called Article 34 election, required under a 50-year-old amendment to the California constitution. Measure O lost 63%-37%. Yuba County The conservative farming county of Yuba County barely defeated a SOAR-style ballot initiative which -- like its counterparts in Ventura and Napa counties -- would have subjected future agricultural zone changes to a vote. The ballot measure was a followup to the 2008 voter defeat of the Yuba Highlands project . Measure T lost, 52%-48%.

With the demise of redevelopment in California, one idea put forth -- by me , among others -- is using publicly owned land as equity in a real estate deal as a way of subsidizing it. If you can't "write down" private land (selling it to a developer for less than your bought it), maybe you should look at real estate assets your city – or some other public agency – already owns. Recently, while attending the annual conference of the National Capital chapter of the American Planning Association, I ran across an interesting example from the D.C. metropolitan area that – at least in some ways – illustrates the point: the combined deal to redevelopment two public housing projects in Alexandria, Virginia. Having successfully redeveloped public housing projects to mixed-income projects under the federally funded HOPE VI program, the Alexandria Redevelopment and Housing Authority decided to try to do the same thing once the federal program wound down. In particular, ARHA wanted redevelop the Glebe Park housing project near Ronald Reagan National Airport into a mixed-income project. There was only one problem: Glebe Park had a $5 million mortgage on it, being held by the U.S. Department of Housing and Urban Development. So ARHA issued a request for proposals to developers that basically said, Hey, let us know if you think it's possible to use some other ARHA landholding to help make this deal work. "How do you do it with no money and no land value?" says Bryan Allen (A.J.) Jackson of EYA , a prominent mixed-income developer in the D.C. area that responded to the RFP. The answer was to find another piece of property, also ripe for redevelopment, that does have value. That property was the James Bland Homes , another public housing project farther south in Alexandria. The James Bland property is located in an historically African-American neighborhood, which means it's on the wrong side of Highway 1 -- west of the road and therefore separated from the beautiful, historic Old Town area and the Potomac River. (It's named for our nation's most famous African-American minstrel .) James Bland Homes Nowadays, however, the James Bland property is in the right place, because it's in between the Braddock Road Metro stop and Old Town. No matter the history of the neighborhood, ARHA is now sitting on a valuable piece of property. The details of the deal are complicated, but they basically boil down to this: The Glebe Park mixed-income project penciled out with a $5 million loss – the $5 million owed to HUD. The James Bland mixed-income project -- now called Old Town Commons -- penciled out with a $5 million profit – largely due to a much higher density (almost 50 units per acre as opposed to 23 for the old public housing project) and a strong condo and townhome market in the neighborhood. So ARHA worked with EYA to redevelop both sites and use the profits from one to subsidize the other. Public housing units from the two locations were replaced on a one-to-one basis at either James Bland, Glebe Park, or in scattered locations around Alexandria. Old Town Commons As tends to be the case with affordable housing projects, it wasn't easy. ARHA, EYA, and the City of Alexandria all had to provide patient capital. It took several years to get the deal done. And in order to maximize the value of the market-rate units, EYA had to provide some lofts that added to the height (they were set back from the other four floors) and, in some cases, had to segregate the market-rate and subsidized units into separate buildings. (This was also necessary to execute the low-income housing tax credit part of the deal, because EYA actually sold the subsidized units on a fee-simple basis to the tax credit investors.) You can criticize the Glebe Park/James Bland deal from a lot of perspectives. For Glebe Park, the James Bland surplus was just another layer of financing in a typical affordable housing deal -- making it even more complicated. Maybe ARHA could have made more money by just selling the James Bland property. And, although the new public housing is undoubtedly nicer than the old, the additional density means more height and much less onsite open space. Still, ARHA accomplished its goal: To use the asset value of its own real estate to make public redevelopment goals work. Not every city or public agency in California is fortunate enough to have a piece of land like James Bland -- historically low-value but suddenly in the right location. Indeed, California cities have gone to great lengths in the last year to assert that their former redevelopment agencies have hardly any properties that are worth anything. (That's partly because some of them transferred all valuable assets back to the city or some other entity in 2011.) But the James Bland/Glebe Park story does illustrate the fact that it's worthwhile for cities and other public agencies in California to dig through their real estate portfolios to see what they've really got.

Wendell Cox, my favorite anti-anti-sprawl researcher, is at it again. This time, he's on New Geography , taking on the oft-quoted forecast of Southern California's future housing market by Professor Arthur C. Nelson of the University of Utah, which found that future demand will be mostly for multifamily housing and small lot (under 5,000 square feet)  detached homes. And – surprise! – Cox concludes that Nelson is wrong. Future demand in Southern California, he says, will be overwhelmingly on the side of (presumably) large-lot single-family homes. This, of course, is completely contrary to what every other housing researcher has found in recent years – not just for Southern California but for practically every large metropolis in the United States. Nelson based his projections largely on a series of public opinion surveys conducted by the Public Policy Institute of California and the National Association of Realtors. How did Cox reach his contrarian conclusion? By using the "revealed preference" theory . Revealed preference theory posits that you can figure out what people want by what they buy. And between 2000 and 2008, many more single-family homes were built – and therefore bought -- in Southern California than multi-family homes. As you can tell, "revealed preference" theory assumes that supply is a pure reflection of demand. If single-family homes were not what people wanted, then developers wouldn't build them. Right? Well, in a perfect market, maybe. But people have to live somewhere, and when it comes to housing, they select from among the choices they are offered, no matter what those choices are. This is, in fact, the main criticism of revealed preference – that there is no way to know what consumers would have done if they had been provided with other choices besides the one they had. And, unfortunately, there is probably no product in the United States where current supply more poorly reflects emerging demand than housing, for several reasons. First, it takes a long time to plan and build housing – sometimes several years, so the connection between supply and demand is already thin. Second, developers build what their lenders tell them to build, and lenders are like lemmings – they want to build the same thing that sold yesterday. In other words, housing supply often reflects yesterday 's demand, not tomorrow's. And third, as Cox himself likes to harp on, developers build what local governments will approve, which means market responsiveness gets all tangled up in regulation and politics. Local governments, seeking to allay concerns of current residents, tend to downzone developers far below housing densities that the market would bear. Indeed, Cox has devoted considerable effort trying to prove that local regulations foul up housing markets – especially in California. In one recent analysis , he concluded that all differentiation in housing prices nationwide can be attributed to regulation – and that California has the highest housing prices because it has the most onerous regulation. So which is it? Is the California housing market skewed because of over-regulation? Or is it a perfect reflection of market demand? Depends on which Cox article you read. More than most researchers, Cox tends to base research on assumptions that reflect his strong world view that sprawl and single-family living are the natural order of things, and that any government intervention in the market will screw up the natural order. As I have pointed out previously , in his piece on housing price and regulation, he concluded that all difference in housing price is due to regulation – but that wasn't surprising, because he started with the assumption that any difference in housing price must be due to regulation. Not long ago, Wendell and I debated each other on Larry Mantle's show on KPCC . The whole reason I was on the show was to talk about my recent L.A. Times piece , in which I argued that sprawl caused California cities to run operating deficits and therefore was bad for those cities' fiscal solvency. Wendell wasn't interested in this and moved all too quickly to his comfort zone about regulation. I agreed with him that the land use planning should be more responsive to the market – he liked that – but not two minutes later he was railing about SCAG's Sustainable Communities Strategy, and how it was going to force neighborhoods that have been 5 units an acre for decades to go to 30 units an acre. He didn't sound like a market-based economist. He sounded like a cranky NIMBY. But Cox clearly believes everything he says fits together. Indeed, in a new report that he contributed to – primarily authored by Joel Kotkin and praised by no less than David Brooks – the authors state: "… he dominant trend in urban planning favors restrictions against lower density housing favored by families, essentially raising its price." Practicing planners and developers of California: Raise your hand if you think the biggest problem with our system of land-use regulation is that it is squelching the market's desire for residential downzoning ! Meanwhile, as New Geography continues to give Wendell Cox lots of what we used to call "ink," serious housing experts are urging the nation to confront these changed conditions. On the day after Cox's piece appeared, the esteemed economist Barry Bluestone, director of the Dukakis Center at Northeastern University in Boston, issued the center's annual "Housing Report Card" . His conclusion? Millennials are not likely to trend toward suburban living anytime soon. Just keeping up with current trends will require the Boston region to double its multifamily housing construction in the next decade. Actually accommodating economic growth will require a tripling of multifamily construction. The recent Kotkin report to which Cox contributed, titled The Rise of Post-Familialism, argues that the current trend away from families – toward more singles and couples living in higher densities in urban places – is bad for the economy and ultimately bad for society. This is a perfectly legitimate argument and Kotkin argues it well. indeed, it's essentially an extension of Joel's recent shift toward a more values-based position. But it's an argument about what people should do -- a moral argument, in a way -- not an analysis of what people are doing. There's a difference between seeing something coming and not liking it – which is what Kotkin does in the report to which Cox contributed – and pretending something isn't coming because you don't want it to, which is what Cox does. Whatever you want to call that – advocacy, evangelism, whatever -- it's not market economics. Oh, and speaking of "revealed preference," Bluestone's numbers say that single-family homes in the Boston area have dropped in price by 20%, while condo prices have held steady. The average single-family home and the average condo are now the same price. This is not an isolated case: Across the U.S., Zillow.com data reveal that suburban fringe housing prices have fallen by a third or more yet prices for homes closer in have held their own if not increased. The world is changing, but Wendell Cox keeps expecting it to return to "normal". In Wendell's World, everybody wants to live in sprawl. But that's not the world that most of us -- or our kids -- live in anymore.

The California Supreme Court ruled Thursday that the conversion of a mobile home park from rental to ownership status is subject to the Coastal Act and also to the Mello Act, which lays down procedures for replacing affordable housing in the coastal zone. The court's key ruling in Pacific Palisades Bowl, Mobile Estates, LLC v. City of Los Angeles is that a mobile home conversion -- which involves a subdivision of property, is a "development" under the Coastal Act even if an immediate change in density or intensity is not contemplated. Relying on Public Resources Code section 30106 , the Supreme Court said: " Any subdivison under the Subdivision Map ... is, by definition , a species of change in the density of intensity of use of land and is a 'development'." The court also noted that while Pacific Palisades Bowl appears to assume that the Coastal Act is intended to alter only increases in density, in fact the law uses the word "change". The court also rejected Palisades Bowl's argument that the Mello Act does not apply, noting that the law (contained in Gov. Code Section 66590 ) requires local governments to find replacement housing for low- and moderate-income residents in the coastal zone if they plan to approve projects that will convert or demolish affordable housing. Palisades Bowl also argued that the Mobilehome Park Resident Ownership Program, which was enacted prior to the Mello Act, should take precedence over the Mello Act. But the court noted that the MPROP program, which is designed to facilitate the purchase of mobile home parks by residents, is a state policy that does not override the Mello Act. The use of the Subdivision Map Act to convert mobile home parks from rental to ownership is the latest tactic by mobile home park owners to get out from under mobile home rent control ordinances. Mobile home residents typically own their residences but rent the "pad" on which their residence sits from a mobile home park owner. Over several decades, dozens of cities in California have enacted "mobile home rent control" ordinances limiting the increases on the pad rents. Park owners have argued in court, mostly unsuccessfully, that mobile home rent control constitutes an unlawful transfer of asset value from owners to tenants. In those cases when courts have acknowledged that the value of asset transfer has occurred, they have also concluded that the asset transfer was permissible in the service of a larger public purpose.

Five years ago, the planning and development world in California was flush with money. With 20% of the nation's planners and at least that percentage of real estate developers, the state was awash in plans. Big general plans were paid for by flush general funds. Redevelopment agencies had plenty of money to update their redevelopment plans and then subsidize the resulting projects. Ambitious specific plans to accommodate flashy new projects – both infill and greenfield – were paid for by developers itching to build. That world feels like a lifetime ago for most planners and developers in California today. Although the state's real estate prices are inching upward and construction has clawed its way upward from an astounding low in 2009, business is still slow. The planning and development apparatus has shrunk significantly – maybe permanently – since the heady days of the ‘00s. Indeed, the whole development industry in California has shrunk so much that the Construction Industry Research Board – always the most reliable source of information for new housing starts in the state – has basically gone out of business.  And even more worrisome is the fact that most of the funding sources that have covered the planning gap since 2008 are on their way out. The $6-billion redevelopment machine is already gone. Proposition 84's $60 million or so in planning grants will be depleted after one more round of funding. Developers themselves aren't interested in funding big planning efforts these days. And the federal Sustainable Communities planning grant program was zeroed out in the current fiscal year after being funded at $150 million previously. It may come back at a lower level – maybe $50 million nationwide – but it will probably provide funding for, at most, a few projects in California over the next couple of years. Not for decades have local planning departments been so thinly staffed; and never have there been so many unemployed planners in California. Yet California's development context is changing dramatically and odds are that local governments around the state are going to have to revise and update a lot of plans in the next few years. For one thing, the whole climate-change thing has altered the regulatory context. Greenhouse-gas reduction strategies are now more or less mandatory, and as a result "climate action plans" are becoming common. Also, the real estate bust has resulted in a fundamental change in what developers want to build – or, at least, what they can get financed. The rush both single-family suburban tracts and mixed-use infill projects has more or less stopped, and developers are now pushing rental apartment projects – often much more dense than the mixed-use projects envisioned by old plans -- because that's what banks will lend on. And finally, all those plans done during the real estate boom – eight, 10, 12 years ago – are getting old. That means, at least in theory, that they are legally vulnerable. To be sure, some local governments are squeezing their own funds to pay for plans they have to do. Most cities are taking housing elements seriously, though the going rate for them is headed downward. More and more cities are also doing climate action plans – largely because doing such a plan up-front and devising citywide strategies for greenhouse gas emissions reduction is actually less expensive than going project-by-project. (In the case of both housing elements and CAPs, fear of getting sued is a big factor.) And a surprising number of cities are still doing general plan updates with money they've squirreled away, though these efforts tend to be more focused and less wide-ranging than they used to be. Overall, though, there's not much planning going on. So how will it get done over the next few years? There are three answers: transportation money, developers, and (horror or horrors) efficiency. And there's a wild card: The state's cap-and-trade money. Transportation Money The conventional wisdom is that there isn't enough transportation money around. State and federal gas tax rates haven't gone up in 20 years, while people are driving less in cars that get better mileage. The federal Highway Trust Fund is bankrupt – propped up by loans from the federal general fund – and the state's accounts aren't much better off. But many transportation agencies are doing pretty well, thanks largely to countywide transportation sales taxes, and increasingly these agencies are shifting funds to planning on the theory that better land use planning affects travel demand – and also makes it easier to implement SB 375. L.A. Metro, for example, is about to dole out $10 million to localities in Los Angeles County for a program commonly known as "TOD III" – the third round of funding for transit-oriented development planning efforts. It's important to note, however, that this money will go only in one direction – away from greenfield development and toward infill, mixed-use stuff. Developers OK, developers have no money at the moment. But they do have chutzpah, entrepreneurial skill, and access to people with capital. And especially on the urban/infill side, they recognize that the end of redevelopment left a big hole. They can't easily drop their infill projects into urban locations unless there's a plan in place that makes it easy for them to do so, as well as public (or public-private) efforts to assemble land and build infrastructure. So look for savvy developers to figure out how to construct a public-private or non-profit alternative to redevelopment, which can engage in large-scale plans and find new ways to finance infrastructure coordinated with private development. Civic San Diego – the transmogrified Centre City Development Corp. – is the closest thing so far, though it's still basically a city entity. Efficiency Oftentimes, nobody involved in the planning process has much incentive to increase productivity and efficiency in planning processes. Government agencies begin with either a set pot of money (for their own plans) or money from developers (especially for environmental review); and often they don't track their own staff time against planning projects very well. Consultants are in the business of spending the money the government has. And, frankly, a lot of the most expensive parts of the planning process, especially public meetings, are labor-intensive and therefore expensive. Nevertheless, look for developers, government agencies, and consultants alike to come up with more efficiencies to stretch the dollars farther. There have been a variety of attempts over the years to figure this out, ranging from computerized, do-it-yourself planning templates to – among large firms – outsourcing work to offices in Asia, where labor is cheaper. But nobody has ever really cracked this question. There'll be a lot of pressure in the next couple of years to do so. Wild Card: Cap-and-Trade Funds The state just held its first, apparently successful, cap-and-trade auction, generating money from greenhouse-gas emitters. There'll be a huge scramble in Sacramento over what to do with this money, but it's likely that at least some of it will flow toward planning – especially if the planning is designed to reduce greenhouse gas emissions. It's up to the Office of Planning & Research and the Strategic Growth Council to lean on the Air Resources Board to make this happen, but the most likely outcome is that some money will be used to replace the dwindling Prop. 84 planning resources.

A couple of months ago, we reported on four post-redevelopment models emerging in California, based on a presentation by Paul Silvern of HR&A: Alhambra, Oakland, San Diego, and Los Angeles. Now Silvern and his colleagues at HR&A -- along with ICF and Renata Zimril -- have proposed a whole new post-redevelopment economic development structure for Los Angeles. Unsurprisingly, the recently released HR&A report -- commissioned by L.A.'s chief administrative officer and chief legislative analyst -- calls for the creation of a consolidated Economic Development Department. But if the proposal is adopted by the city, it would represent revolutionary change for a city that has long been characterized by a large, sluggish bureaucracy that has difficulty being nimble enough to compete on economic development. Perhaps most interesting is how HR&A proposes to fund the new operation: With the money the city now receives in its general fund because redevelopment was killed. One oft-overlooked point about the end of redevelopment is that it created a "windfall," if one might call it that, for city general funds. Redevelopment agencies typically received somewhere between 60% and 100% of property tax increment from inside redevelopment project areas. Now that the money is distributed to taxing agencies just like all other property tax money, cities are getting about 15% of it into their general funds. For the City of Los Angeles, that's about $20 million a year. Most cities will no doubt vacuum up this new revenue and use it to keep the police department whole or pave more streets. But a few cities -- and apparently Los Angeles is among them -- are viewing these funds as possible seed money for a new, post-redevelopment economic development effort. HR&A's report also calls on the city to: -- Reposition economic development as a high-priority citywide effort that isn't so bogged down in the politics of city council offices or the regulatory churning of the city bureaucracy. -- Create the position of deputy mayor for economic development. -- Spin off a citywide economic development nonprofit that will have more flexibility to do deals than the city government. -- Manage the city's real estate assets more strategically, either to generate revenue or maximize their value in creating new economic activity. HR&A looked at lessons learned from eight recognized leaders in economic development, including two in California -- San Diego and San Francisco. No other city in California is Los Angeles, of course. But the HR&A report provides some interesting fodder for the ongoing discussion in local circles around the state about how to maintain a viable economic development effort in the post-redevelopment era.

So, in the battle between the California Environmental Quality Act and the Housing Accountability Act, which law wins?

Here's a deal for you:  Enviros agree to a variety of reforms to the California Environmental Quality Act -- especially constraints on the ability to sue, including possibly limiting standing and prohibiting lawsuits if the umbrella state or federal environmental law has been complied with. In return, developers agree to ditch the conclusion of Ballona Wetlands Land Trust v. City of Los Angeles , in which the California Supreme Court ruled that natural environmental conditions such as sea-level rise are not subject to CEQA analysis -- for example, in examination of a beachfront project that could be affected by rising waters. Crazy? Maybe. But it's a deal that prominent CEQA lawyer Michael Zischke of Cox, Castle & Nicholson says could be on the table in Sacramento.  Ballona Wetlands is driving environmentalists crazy because it means they can't use CEQA to deal with sea-level rise. Speaking at Friday's UCLA Land Use Law and Planning Conference in Los Angeles, Zischke said it's a deal that developers might actually take -- largely because, he says, they won't be giving up much. "My view is that Ballona is not that helpful because you probably want to look at sea-level rise anyway and put it on the record" in order to reduce the risk of litigation and loss in the courtroom, he said. Meanwhile, even though the California legislature is more Democratic than ever as a result of last fall's election, that doesn't mean CEQA is sacrosanct. On another panel, lobbyist Tony Rice, who represents many local governments, noted that Sen. Michael Rubio, D-Shafter, has now been installed as chair of the Senate Committee on Environmental Quality. Rubio  made a last-ditch effort for CEQA reform in August , only to back off when Senate leader Darrell Steinberg took him to the woodshed.  Rice also mentioned that Rubio's arrival at CEQ coincided with staff changes on the committee. Although he didn't mention any names, longtime CEQ staffer Randy Pestor -- viewed as the legislative staff's leading defender of CEQA -- recently retired.

As this blog has reported , the standard conservative critique of smart growth and "good" planning sometimes doesn't seem very logical. Sometimes these critiques were based on the assumption that any government intrusion into land markets is bad – whether it creates higher density or lower density – and sometimes they're based on the assumption that smart growth inevitably promotes higher-density development when what the market really wants is low-density development. Indeed, my good friend Wendell Cox sometimes espouses both these views at the same time. Which is why the conservatives who came to the defense of smart growth the other day at the New Partners for Smart Growth conference in Kansas City were so refreshing. They didn't agree with everything smart growthers advocate – indeed, they were assiduous in shooting down anything that smelled like big government – but they did a good job of identifying the situations in which conservatives should support smart growth. Virginia blogger Jim Bacon and Long Island law professor Michael Lewyn both landed in more or less the same place: Traditional suburban zoning represents heavy-handed government regulation that robs people of their liberty and property rights. "What kind of society outlaws granny flats?" asked Bacon, who runs a blog called Bacon's Rebellion . Lewyn, a professor at Tauro Law School , went further and articulated a heavy conservative critique of minimum parking requirements, saying not only that they rob people of their property rights but also that they hinder real estate development by taking property out of play. "If the spaces are above ground, these requirements are taking money from your hands," Lewyn said. "If they're underground, you pay have to pay money to build the parking units." In addition, Bacon hit hard on the fiscal effects of smart growth and sprawl. He said conservatives should be opposed to the practice – especially common in red states – of having the government pay for all the infrastructure costs associated with new development. "That's crony capitalism," he said. This is a mighty different critique than we typically see from Cox, his buddy Joel Kotkin , and academics like my USC Price School colleague Peter Gordon . They typically begin with the assumption that low-density development is the natural order of things and therefore any move toward higher density must be the result of government regulation. Indeed, as I have previously reported, not long ago on Larry Mantle's Los Angeles radio show , Wendell and I agreed that regulations should be lightened so that developers can be more responsive to the marketplace – but he then railed about SB 375, saying that it would cause (I am paraphrasing here from memory) "30 units an acre in neighborhoods that have five 5 units an acre for decades and decades." The idea that the market might want higher density and property owners ought to have the right to cash in on this changing market didn't seem to occur to him. In that sense Cox represents trods a well-worn path in conservative suburbia – the desire to retain one's own property rights while making sure nobody else is able to cash in on theirs. Bacon, in particular, called his fellow conservatives out on this paradox and went on to say that conservative Republican politicians are more than happy to exploit it. "In Virginia," he said, "Republicans see their constituents as their red spots on the electoral map. They've written off the urban areas. They are focused on the areas that consume a lot of gasoline and are committed to existing form of development." There was one area where both Bacon and Lewyn appeared to strongly part company with the smart growthers: Both strongly opposed government-funded public transit. Transit is, of course, a core part of the smart growth agenda and virtually all major transit systems in the United States – and in the world, for that matter – are run by public agencies that make up for farebox deficits with tax revenue. To both Bacon and Lewyn, this appears to be top-down government intrusion at its worst. "The traditional municipal-transit model is broken," Bacon said. "None make a profit, all are undercapitalized and starved for resources. Why would that be? Gee, maybe because they are government monopolies dealing with labor unions."

Streetcars are the hottest thing in the downtown revitalization business these days. They're in operation in Portland and Seattle and in planning and construction stage in places like Washington, D.C., Oklahoma City, Cincinnati, Fort Lauderdale and Kansas City. And don't worry – California will get its share of streetcars as well, especially Southern California. The Downtown Los Angeles streetcar appears all but certain to be open by around 2016, and three Orange County cities – Anaheim, Santa Ana, and Fullerton – are exploring the idea. At last week's New Partners for Smart Growth conference in Kansas City, one of L.A.'s leading streetcar advocates – Shiraz Tangri, a lawyer for Alston & Bird and the general counsel for LA Streetcar Inc. – laid out the game plan for how the downtown streetcar will be built. A critical piece of the puzzle was put into place last fall, when downtown voters approved a Mello-Roos District to help finance the streetcar. It's one of the few cases in California history that a Mello has been successfully adopted in an urban location – which, all by itself, may be a harbinger of things to come. At first glance, streetcars would not seem to have much of a place in the 21st Century. These self-propelled single-car vehicles are much slower even than light-rail trains and they typically run in the street with regular traffic. Yet they're catching on all over the country as a more efficient downtown circulator than the typical bus or shuttle – and one that will generate new real estate development along the way. That's clearly what's happened in Portland, where the streetcar connects downtown with the hopping Pearl District and with the South Waterfront, where it connects to an aerial tram to Oregon Health Sciences University, which is located atop a nearby hill. Other cities are trying to replicate the Portland story. Virtually all streetcar projects seek to connect disparate destinations in or near downtowns. They're all starting with only a few miles of service and compared to other rail transit investments they're cheap -- $100 million or so on average. But, as Tangri pointed out in his presentation in Kansas City, no city in the country is better poised to use the streetcar well than L.A. "It's a history project and an identity project," he said of the L.A. streetcar. "We should be the most pedestrian-friendly city in the world. We have a great climate. It is incredibly dense." Downtown Los Angeles is already experiencing an amazing renaissance. The opening of the Staples Center in 1999 and the city's pathbreaking adaptive reuse ordinance shortly thereafter kickstarted a rejuvenation that has increased downtown's population from 10,000 to 50,000. Downtown is the hub of a burgeoning regional transit system that is likely to double in size over the next decade, thanks largely to Measure R.  Even so, as Tangri pointed out in his Kansas City talk, Downtown L.A. is big – it's a long way from Staples to the hip lofts east of City Hall – and it can be tough to get around. Furthermore, some parts of Downtown have not shared in the rebirth. For example, along Broadway – once Downtown's premiere shopping street – the upper floors of 12-story buildings remain mostly empty even as neighborhoods all around have new life. (Tangri says there is 1 million square feet of vacant space on Broadway.) Indeed, Broadway is the focal point of the streetcar project; Councilmember Jose Huizar has assigned the same staff member to be the point person for both the streetcar and Broadway. Like so many other streetcar projects around the country, the L.A. project is being put together entirely outside the traditional public transit structure. (L.A. Metro is supportive but has nothing to do with the project.) And as Tangri and others often point out, when business leaders promote – and pay for – a transit project, it's going to have different a completely different goal: economic development rather than mobility. "We talk a lot about transit-oriented development," he said, "But this is development-oriented transit." Though some cities around the country are relying on state and federal funds to help pay for their projects, L.A. – like other cities, including Kansas City – is relying almost entirely on what amounts to a parcel tax.  Among other things, the Mello is levied as a gradient – those close to the line pay more. And, as Tangri and other streetcar experts frequently say, you've got to link those places that are hot in the real estate market with those that aren't. It's a way of extending the hot market to new locations. The Mello-Roos victory last November is an especially interesting and important aspect of the L.A. streetcar effort. Originally a Proposition 13 workaround, Mellos have traditionally been used only in greenfield locations because they require two-thirds voter approval. In areas with few voters, the vote is among property owners only, which means developers and local governments have typically negotiated an infrastructure finance deal and than the developer (often the sole landowner) votes the Mello district into existence. Cities have usually stayed away from urban Mellos because they fear voters won't go for the extra tax. In Downtown L.A., though, all those new hipsters helped the cause. Whereas many property owners may have been reluctant to tax themselves for the streetcar, the new downtown residents – the voters – were more than willing deliver the two-thirds vote for the additional tax, which of course falls in the property owners and not – at least not directly – on those residents who are renters. The streetcar vote could flip traditional California thinking about urban Mellos on its head. Tangri said the streetcar should begin construction next year and open in 2016. This is a similar timetable for many other streetcar projects around the country.