State Sen. Scott Wiener – the hot name in California housing right now – came to the annual UCLA Land Use Law and Planning Conference last week to deliver a message: The politics of housing have changed.

The estimated cost of constructing 119 miles of high-speed rail track in the Central Valley has increased by $2.8 billion to a total of $10.6 billion, possibly threatening the viability of the segment and the entire project. The estimate was provided by the main consulting firm on the project, WSP, who said the cost increases were driven by higher costs for land acquisition, issues relocating utility systems, need for safety barriers near freight lines, and demand by stakeholders for mitigation for various issues. The board also voted to name Brian Kelly as its new CEO. Kelly was secretary of the California Transportation Agency and said HSR remains crucial to the future transportation and economic needs of the state. The 77 percent increase above the original estimate for the segment, suggests the authority and its consultants underestimated the difficulties of buying land, obtaining environmental approvals, and much else. (See prior CP&DR coverage .) Riverside Supervisor Proposes New Salton Sea Plan Riverside County Supervisor Manuel Perez released the North Lake Vision which would seek to remedy some of the issues: high salinity levels, fish die-offs, fewer birds, odors, and the shrinking the Salton Sea. The $400 million plan includes the creation of an in-lake barrier, or dam, on the north end of the sea which would be filled with flows from the White Water River to create a healthy lake inside a “not-so-healthy one”. The plan would be subsidized with taxes generated by a bond measure that may be presented to voters within a year. The Riverside County Board of Supervisors is expected to decide whether to create an enhanced infrastructure finance district to fund the North Lake proposal. San Jose and Santa Clara Reach Truce Over Megadevelopment The cities of San Jose and Santa Clara have settled suits over two multibillion dollar projects: CityPlace and Santana West. The projects are designed to bring office parks, retail, and tens of thousands of jobs to the region, along with some new homes. Officials from both cities are concerned about impacts to schools, traffic, taxes, and housing supply. The mayors from the two cities issued a joint statement saying they would work together to provide additional funding from development fees for traffic improvements and affordable housing. Mayor of Santa Clara Lisa Gillmor said the settlement would allow development of CityPlace to get back on track after an 18-month delay. CityPlace developers will pay San Jose $4.5 million for traffic improvements near Levi's Stadium during the first construction phase, and up to $10 million as the second phase begins. San Jose, in return, agreed to drop its appeal of a judge’s ruling that validated Santa Clara’s environmental report for the project. The Santana West settlement calls for $3.7 million for traffic improvements around both cities, with Santa Clara receiving $5 million for transportation and affordable housing. (See prior CP&DR coverage .) S.F. Voters to Consider $100 Million Annually for Housing  Five San Francisco supervisors are placing a measure on the June 5 ballot that would raise about $100 million annually to pay for 10,000 low-and middle-income housing units and shelter accommodations for the city’s homeless population over the next ten years. The “Housing for All” ballot measure would ask voters to raise the tax levied on commercial property owners to 2 percent, a 1.7 percent increase, to raise the funds. Supervisor Ahsha Safaí said he has been in contact with the city’s business community and they have been “neutral or supportive” of the measure. Sacramento to Experiment with ‘Microtransit' Sacramento’s Regional Transit agency is  developing  plans to experiment with “microtransit” in its Citrus Heights neighborhood in February. The new service will rely on shuttle buses or vans that riders request via smartphone that can then pick up and drop them off where they want to go. It’s a brand new type of transportation service offered in some cities across the country by private startups, mass transit agencies, or a partnernship between the two. The driver will have an iPad on the dashboard showing the shortest route to get passengers to their individual destinations. The goal is to keep costs similar to the existing $2.75 for a bus or light-rail ride. The pilot program will cost about $25,000. The vision for microtransit service would be to ride to light rail or larger bus stations that would continue to run main routes to key population-dense areas such as downtown. Visualizing SB 827 TOD Housing Bill Sen. Scott Wiener announced a series of proposed housing bills, includes Senate Bill 827, which would override many local zoning controls on height, density, parking minimums, and design review within a certain distance of major public transit infrastructure in order to increase housing. A supporter of SB 827, Sasha Aickin, made a map depicting the effects the proposed bill would have on various cities throughout California. Aickin says nearly all of San Francisco would be upzoned to allow up to 85 feet on wider streets and 55 feet on narrower streets as would significant portions of Los Angeles, Long Beach, San Diego, Oakland, Berkeley, and to a lesser extent, Sacramento. Other cities like Bakersfield, Santa Cruz and San Bernardino would not see much impact from the bill. Brown Includes $3 Million for Housing in Budget, Takes Shot at Prop. 13 Gov. Jerry Brown released his initial budget for the 2018-2019 fiscal year. He’s proposing $190 billion in spending and putting $5 billion into the state’s "Rainy Day Fund." The budget includes $3 million from the General Fund to the California Housing and Community Development Department to implement his housing package. Gov. Brown mentioned during his budget press conference that budget volatility in the state stems from the 1978 passage of Prop. 13, which would take voters to fix it. According to Housing California, securing the passage of the Housing Bond and implementing the housing package is a top priority this year. Quick Hits & Updates Amazon announced 20 finalists for the $5 billion second North American headquarters for the company. Los Angeles was the only city west of the Rocky Mountains. The other California cities such as San Diego, Irvine, the Bay Area, and others were eliminated. Amazon will work with the finalists on diving deeper into their proposals, requesting additional information, and evaluating the feasibility of each potential partnership before making the final decision this year. (See prior CP&DR commentary .) After a seven-year delay, the master-planned redevelopment of San Francisco’s Parkmerced neighborhood is finally set to break ground this year. The 152-acre project is expected to bring 5,679 new residential units, 230,000 square feet of retail space, 80,000 square feet of offices, and 60,000 square feet of parks to the neighborhood. The League of California Cities recently updated its SB 1 toolkit for cities to use to announce their funded projects and ensure residents have information on how their city will be investing in their local infrastructure. SB 1 includes approximately $750 million annually that will go directly to cities for street maintenance and rehabilitation projects. The California Department of Finance has highlighted the migration of Californians moving inland from coastal regions. Its research finds that inland counties are growing faster than that of urban coastal counties. Cities like Sacramento are attractive because of the region’s thriving job market and ample supply of affordable housing. The San Diego Association of Governments has spent $61 million on a program to accelerate high-priority bike projects but has delivered less than four miles, according to figures released in a staff report last week. A SANDAG principal planner said much of the $61 million has been spent on projects that are still in the design phase.  Adobe Systems recently paid $68 million for a lot in downtown San Jose that will become the fourth tower for the campus. The company estimates the tower would allow an additional 3,000 workers. The site is already approved for a large office development and construction equipment spent several days in December clearing small buildings and other debris. Google is also pushing ahead with plans for a transit-oriented village with between 6-8 million square feet of office space for 15,000 to 20,000 employees. (See prior CP&DR coverage .) Granum Partners, a Los Gatos property management company, applied to build a roughly 3,600 square foot, single-story office building for 15 employees on a former gas station site in Menlo Park. However, residents sent letters to City Council eliciting concern because of its close proximity to Willow Road and potential for a “traffic nightmare”. Because of existing construction on Caltrans’ shifting of Highway 101 access ramps, traffic has spilled onto the residents’ streets and made it impossible to get out of their driveways during the evening commute. The Santa Cruz County Regional Transportation Commission advanced four of six possible scenarios for further analysis for the county’s proposed rail corridor. The debate is what to do with the county’s existing rail with some wanting a bike/pedestrian trail with no rail and the other wants both. The four scenarios that will receive further study are: (1) only a trail; (2) trail plus passenger train; (3) trail, bus rapid transit and Watsonville freight service; and (4) trail, passenger train and county-wide freight service.

As 2017 wound down, Emily Badger published an impressive article in the New York Times about the growing divide between America’s superstar global cities and the country’s smaller, less prosperous cities. She was followed up by approving commentary from Paul Krugman. Neither piece has much to do with California – and that’s sort of the point. They both argued that the national network of producers, consumers, and suppliers that used to form a nice, mutually beneficial hierarchy has given way to what are, in many ways, separate universes, with Los Angeles, New York, San Francisco and others jetting around the world in business class and Akron, Erie, Hartford, and Rochester stuck on Greyhound. Many of these cities were once specialized industrial centers (Rochester: optics; Akron: rubber; Bethlehem : steel) or even superstars of their day (St. Louis, Cleveland, Detroit). Alan Mallach and Lavea Brachman, in a 2013 book published by the Lincoln Institute of Land Policy, calls them respectfully but lamentably “legacy cities.” This issue undergirded what was probably the most interesting question I got all year. A few months ago I gave a talk on California’s housing crisis to an audience consisting mainly of out-of-town housing developers visiting Los Angeles for ULI’s Fall Meeting. Given that nearly every article we wrote in CP&DR last year somehow involved housing – shortages, costs, battles over, plans for, legislation regarding – this was no small task. The question I got was one that probably no Californian ever would have thought to ask but that is likely on the minds of 90 percent of the rest of the country: If housing prices are so high in California and the prospects for lowering them, through added supply, are scant, how can we entice people not merely to "escape" California out of desperation but rather to embrace and reinvigorate places that need activity and talent?  On face, it may seem like an offensive question to ask in a banquet hall in downtown Los Angeles. California has always been about boosterism. But it’s one that – with 2017 behind us and many more years of high housing prices ahead of us – we would be wise to contemplate. The benefits for legacy cities are obvious: more warm bodies, more jobs, more tax revenues, more vibrancy, more human capital. California may reap benefits too. No jurisdiction ever wants to lose residents – nor the tax revenues and economic activity that they generate. But, as it stands now, California is hoarding residents, to its own detriment. The state’s cities, by competing with each other to see who can get away with approving the least amount of new housing, and the state – which until recently has done little to change cities’ attitudes – have witnessed job growth, capital accumulation, natural population increase, and in-migration (domestic and international; documented and undocumented) in defiance of all principles of sound planning. (At least on the housing side; transportation is doing a little bit better, with recent investments in public transit and other improvements.) The rising cost of living, coupled with declining quality of life for many residents, simply isn’t sustainable. Californians are already leaving. The state has experienced steady out-migration since the Great Recession – with a net loss of 110,000 in 2016 – much of it to other Sun Belt states like Arizona, Nevada, and our increasingly intense mega-state rival, Texas. San Franciscans are moving to Seattle and Angelenos to Las Vegas. There’s even been a trickle of out-migrants to states like Montana and Idaho, especially among those for whom California’s liberal politics are a bit much. A few tech folks have even discovered that not every day needs to seem like an episode of “Silicon Valley.” From a national perspective, the trouble is that many of these places are much like California: sprawling and new. Unfortunately, many legacy cities -- for all of their urbanistic charms -- go wanting. They shouldn't have to.  Until California adds a few million units, the abandoned row houses of Philadelphia and the blue-collar houses of Cincinnati make great economic sense. Except, of course, for two things: 1) people are entitled to like where they live, regardless of hardships; 2) cheap housing isn’t worth much without jobs. Which brings me back to that developer’s question. It’s not a bad question, but she was asking the wrong person. She should have asked it of herself and of her colleagues in the room. In fact, that’s probably what she was doing. I was just the mirror off of which it refracted. California is not about to start a PR campaign to encourage people to move out. But, while the idea of “city branding” can be contrived and fraught, the Clevelands of the world have an opportunity to make their virtues – including cost of living – known to the world. For relatively little investment, they can partner with their local businesses and advertise their jobs to, say, graduates of UC’s and to programmers living out of their cars in Silicon Valley. They can appeal directly to tech companies that don’t need to be down the street from Y Combinator. They can remind millennials that they already have many of the urban amenities and old-fashioned bones that cities like Los Angeles and San Jose might never have. As many economic geographers (such as UC Berkeley's Enrico Moretti ) have pointed out, sometimes urban economies grow for completely arbitrary reasons. Microsoft could have been founded in Albuquerque (Bill Gates’s hometown) rather than then-depressed and soggy Seattle. I even think that a minor exodus could be healthy. A Californian who moves to Ohio or Missouri doesn’t just represent a unit of human capital for those places. He or she also creates a connection back to California – and those connections can go both ways, for mutual benefit. So, while California can and should remain rightfully proud of its economic might and global prominence, we might also consider the benefits of sharing the wealth.

Sen. Scott Weiner’s transit-housing bill SB 827 is making national headlines. The lefty news site Slate declared that the bill “would solve California’s housing crisis” and even my Houston buddy Michael Skelly has declared that it should be a model (for a city with no zoning – but ample parking requirements).

Following up on last year’s bumper crop of housing legislation, Sen. Scott Wiener has proposed Senate Bill 827, which would eliminate restrictions on the number of houses allowed to be built within a half-mile of train, light-rail, major bus routes, and other transit stations, and block cities from imposing parking requirements. This measure would dramatically increase new housing near transit stations across the state and effectively rewrite many local zoning ordinances. Those opposed to the measure say better ways to reduce greenhouse gas emissions would be eliminating gasoline-powered cars and eventually gas stations. The principal supporter of SB 827 is California YIMBY, a pro-housing organization. (See prior CP&DR coverage .) Judge Rules Against Sacramento in Gas Station Suit Sacramento Superior Court Judge Michael Kenny ruled that the City of Sacramento acted improperly two years ago when council members voted to deny developer Paul Petrovich’s application to build a gas station in his Crocker Village development. Kenny wrote that Councilman Jay Schenirer, who represents the project area, demonstrated an “unacceptable probability of actually bias” and failed to act in an open-minded manner. The judge ordered the city to “rescind” its permit denial and to hold a new hearing on the matter and directing Schenirer to recuse himself from the new hearing. Petrovich sued the city in early 2016 after the City Council denied his permit, 7-2. Petrovich claims Schenirer worked illegally with the Sierra Curtis Neighborhood Associated to deny the hearing. Schenirer is part of the neighborhood group, but also sent a series of emails and texts showing him helping to prepare a case against the gas station. (See prior CP&DR coverage .) Four California Metros Place among Milken Inst’s Best-Performing Cities The Milken Institute released a report on “Best-Performing Cities: Where America’s Jobs Are Created and Sustained” ranking the country’s top 25 large cities. In California, San Francisco-Redwood City-South San Francisco took the 4th place, San Jose-Sunnyvale-Santa Clara dropped from 1st place to 11th, Oakland-Hayward-Berkeley 16th, and Riverside-San Bernardino-Ontario moved from 44th to 20th position. Biggest gains among California cities from 2016 to 2017 were Visalia-Porterville from 98th to 54th, Modesto from 73rd to 33rd, and Oxnard-Thousand Oaks-Ventura from 112th to 81st. The largest drop came from Bakersfield which relies heavily on natural resources, in 2012 and 2013 the city made top 25 but is now ranked 161st. Another California region that fell significantly is Anaheim-Santa Ana-Irvine, which fell from 19th to 47th last year. Costa-Hawkins Repeal Fails in Assembly Committee Four members of the state Assembly Housing and Community Development Committee declined to support a proposed bill that would have repealed the Costa-Hawkings, which prohibits cities and counties from implementing most new rent control policies. Committee members said they were concerned that a large growth in rent control could slow already lagging housing production in the state. There were two hours of public testimony on the bill. Those in favor of the proposed legislation say, “At a minimum, we’re entitled to stability. That’s a human right.” Currently, 15 cities across the state have some form of rent control. Those in favor of rent control are collecting signatures for a possible November 2018 ballot measure that would repeal the law. (See prior CP&DR coverage of rent control.) New Fire Safety Rules and Map Forthcoming The California Public Utilities Commission adopted new fire safety rules in December but will extend the deadline until July for completing its fire hazards map.The map will show which parts of California face an elevated or extreme risk of wildfires.A commission spokeswoman says they are just weeks away from completing the development and adoption of the high fire threat map. The higher the risk in a particular area, the tougher the rules that will apply to electrical utilities operating there such as how often utilities must inspect their equipment, how far tree branches must be kept from electrical lines, and how companies prioritize safety-related repairs. UC Berkeley Studies Impacts of ADUs The Terner Center for Housing Innovation at UC Berkeley has released a preliminary study of statewide and local policies to promote development of accessory dwelling units (ADUs). “ Early Lessons and Impacts of California’s State and Local Policy Changes ” shows significant increases in ADU applications: Los Angeles increased from 90 applications in 2015 to 1,980 in 2017 and San Francisco from 41 to 593 in the same time period. While these application numbers are encouraging, there are still a number of barriers when considering building an ADUs such as development fees, school fees, and code requirements. Federal Proposal May Open California Waters to Drilling President Trump’s proposal to open up coastal California to new oil and gas drilling, while unsettling to many environmentalists, may not amount to much. Ralph Faust, a former general counsel for the California Coastal Commission, said the high price of oil offers little incentive to the energy industry to pursue expensive drilling projects. The Interior Department released plans to offer 47 leases off the Atlantic and Pacific coasts to new oil and gas exploration and drilling through a five-year leasing program that would begin in 2019. The Trump plan must go through a public comment period and an extensive environmental review. The state coastal commission also has the authority to review activities in federal waters.

Any planner with an ounce of awareness should support social justice and fight for anyone who feels excluded from the bounties of global capitalist urbanism. I try to count myself among those ranks. And yet, as I reflect on the gentrification debates of 2017, I grow increasingly anxious for what the future holds. For at least the last two years, we have been running a race between the adoption of municipal and statewide policies to promote responsible housing development and the reactionary frustration of marginalized stakeholders and left-wing activists. In places like Los Angeles’s Boyle Heights and San Francisco’s Mission, those frustrations have already erupted, into a combination of protests and combative – if not necessarily productive – political organizing. Even less productive: the indifference of many residents in static, wealthy neighborhoods. I’ve issued my share of criticism of the current wave of anti-gentrification protests and rhetoric. They rightfully express anger, but they often misdirect it. They demonize market-rate development and consider anything new — even something as benign as a coffee house — to be a symptom of cultural erasure and capitalist exploitation. (Case in point: the passionately written but intellectually bankrupt book How to Kill a City .) Most interestingly, these groups tend to protest the one thing that can solve a housing crisis: more housing. Housing in amounts that, barring a major and unlikely transformation of the industry, can be provided only by for-profit developers. They include the Los Angeles Tenants Union, Defend Boyle Heights, the Coalition to Preserve L.A., Our Mission No Eviction and many smaller groups. Many of these groups and their supporters recently amassed at Los Angeles’s first ever “ Resist Gentrification Action Summit .” I could not attend, and I’m sure the organizers were not crushed. They didn’t exactly send me a gold-leaf invitation.  The upshot of the event, and many of these protests, is that new development must serve local populations and that the only good development is nonprofit development (or some related form of cooperative or subsidized development.) They often claim that market-rate development equals displacement or that new development raises housing costs community-wide. But that’s only true a) if new development replaces existing housing; and b) if nearby housing isn’t rent-controlled.  They’re basically saying that they’ll reflexively support anyone who currently lives in a rent-controlled unit but everyone else who seeks housing — no matter how wealthy or poor they might be — should just move along.  To a great extent, these communities deserve their grievances and their own solutions. Many disadvantaged communities in the United States, including plenty in California, were created by the segregationist policies of the 20th century. They were designed to be disenfranchised, separated from decent schools, decent jobs, and political power. I’m willing to give a degree of deference to residents who feel, accurately or not, that they’ve been exploited for generations.  And yet, Los Angeles still has a housing shortage. Like all housing shortages, it victimizes the poor more so than anyone else. And, like all crises, solving this one requires everyone’s participation — lest the rich further marginalize the poor. That’s not so much a moral position as it is an Archemedian reality. Human beings take up space. If they can’t take up space in one place, they will take it up in another place. And if space is scarce, wealthy humans will pay for the space they need. If these communities are going to, at the same time, decry the invasion of newcomers and oppose most development, then they face but one option: they must promote development elsewhere. If gentrification is evil, then let’s do the opposite. I challenge leaders in disadvantaged communities — and everyone else who believes in equity — to stop decrying the invasion of those communities and start promoting the development of other communities. Since they are, essentially, trying to keep capitalism out of their neighborhoods, they might as well go whole-hog and explain why other neighborhoods, where people have done very well by capitalism, should accept it. That strategy might sound hypocritical — because it is — but that doesn’t make it unjust.  What if activists brought their passions and arguments to advantaged communities? They should speak to Neighborhood Councils and homeowners associations. They should lobby planners and elected officials. They should explain why their livelihood depends on development in places that might be five or even ten miles away from their own homes. In Los Angeles, I’m thinking of places like West L.A., Hancock Park, Miracle Mile, and Westwood, among others. These are all neighborhoods that do just fine for themselves and that frequently oppose new development. They need to hear from outside voices. They need to understand the pain that their choices are causing. They need to be compelled, inspired, or, if needed, guilted into inviting more people to share in their prosperity. If gentrification threatens poor neighborhoods, then we have no choice but to welcome poor residents into rich neighborhoods.  Naturally, stakeholders in Hancock Park or Westwood will ask why they should support more housing and new residents when many of their counterparts in Boyle Heights or Leimert Park do not. The answer is that what appears to be unfair in the short term is actually entirely fair in the long term. The poor neighborhoods of urban America have been kept poor for a very long time, sometimes unintentionally, sometimes insidiously. Segregation has been imposed on them. Anti-gentrification attitudes may seem like just another version of segregation — and perhaps they are — but it would be on their own terms. In these cases, segregation might equal protection.  Likewise, activists in poorer communities might wonder why they have to be the ones to take action, spend time, and raise their voices against spatial injustice to educate people in wealthy communities. I have no satisfying answer for them, other than this: if they don't do it, no one else will. Ultimately, it's a worthy cause that will help Angelenos of all persuasions. If the critics of gentrification simply want to fight, I cannot help them. If the opponents of development simply want to oppose, I cannot help them either. Cities are where people congregate, mingle, and help each other be the best they can be. If they are willing to see themselves as citizens and collaborators, they can walk proudly into unfamiliar -- not enemy — territory and help their fellow citizens understand their concerns and work towards solutions.  That’s a meeting I will gladly attend, no gold leaf necessary.

Five decades and six months after the Summer of Love, the age of legalized cannabis has arrived in California. As of January 1, cities may officially permit the sale and commercial production of smokeable marijuana and other wacky products to consenting adults, not just those who have back pain or faint appetites. Once confined to crowds of peaceniks in Golden Gate Park, marijuana is finally free. Within limits, of course. California’s marijuana regulations, as ordered by Proposition 64, which passed comfortably in 2016 after many prior defeats, defines minimum standards for locating cannabis-related facilities. It includes sensible restrictions like minimum distances to schools and types of signage allowed (neon green crosses, and punny names have become the signifiers of choice). The regulations also permit cities and counties to impose stricter regulations – or to ban commercial activities entirely. Jurisdictions must decide whether they want to satisfy their residents’ demands and reap tax sales tax revenue – or whether marijuana is too unseemly for their fair cities. (See prior CP&DR coverage .) This discussion came up in a meeting of the land use committee of my local Neighborhood Council in West Los Angeles, on which I sit. One of my colleagues, clearly unnerved by the whole notion of legalized marijuana – and by the conflict between federal and state law – encouraged us to resist any form of commercial marijuana on “ethical” grounds. I’m not about to predict Jeff Sessions’s inclinations on this matter. But let’s talk about “ethics”. Let us not doubt that every decision concerning the built environment includes ethical components. Every publicly useable or visible building, whether large or small, ugly or fair, imposes itself on other people. Every imposition is, by definition, an ethical choice. When, for instance, Apple’s Jonathan Ive says We didn't make Apple Park for other people – referring to the company’s new intergalactic doughnut in Menlo Park -- he’s making an ethical statement, whether he likes (or knows) it or not. That’s because, of course, “other people” have to look at it, contend with traffic generated by it, etc. In autocracies like Turkmenistan or the Apple Corp., ethical considerations – for better or worse – might not matter a whit. But in democracies, they matter quite a bit. And they naturally apply to storefronts that sell marijuana. My colleague was right to raise the issue. I, personally, do not have an ethical problem with selling or using cannabis. If, though, we’re going to condemn one form of legal commerce on ethical grounds, we might as well take a look at all the others while we’re at it. The neighborhood in question is not exactly Haight-Ashbury. It’s a predictable upscale collection of hair salons, restaurants, juice bars, and fitness studios. How many of my neighbors smoke a bowl after doing downward dogs is anyone’s guess. If we care about ethics, though, a few of our existing, perfectly legal establishments may warrant scrutiny. Starting with the obvious, what about the bars, wine stores, and grocery stores? The antisocial effects of alcohol are exhaustively documented. For every stoner who has stubbed his toe while high, someone has lost a life to drunk driving. What about the dry cleaners, desoiling $100 business shirts and $2,000 evening gowns with chemicals that would peel your skin off? What about vacant lots, growing uglier by the day, offending passers-by and denying would-be residents the chance to live there? What about the chain restaurants, clogging arteries and paying scarcely minimum wage in the expectation that diners will show their largesse? What about the hair salons, where the cost of a blow-dry could feed a homeless person for a week? What about the homeless themselves, camping on our sidewalks rather than being housed with dignity? What about the former redlining, blockbusting, HOA covenants, and discriminatory lending practices whose echoes still resound in neighborhoods rich and poor? What about the gas stations, dispensing a product that has swallowed more money, instigated more wars, supported more dictators, and blackened more lungs than probably any other in human history? What, indeed, about the “ethics” of selling marijuana? We need not condemn every land use decision humanity has ever made. We have arrived at this point largely through convention, inertia, rational analysis, and good faith. In some cases, we have inherited, and perpetuated, landscapes created by coercion and acculturation that took place before any of us were born and, in many cases, before our cities were ever built. We need not have ethical crises with every step we take or every mile we drive. And yet, we should not apply asymmetrical standards just because something is new. The appeal of “grandfathering” depends entirely on who your grandfather is. Surely it’s reasonable not to want our children to be tempted by cannabinoid fantasies. But do we want them buying gasoline? Do we want them spending all of their allowance on hair care? Do we want them to shrug as they pass the destitute veteran on the sidewalk? Do we really want them to grow up in neighborhoods scarcely less segregated than those in which we grew up and which instilled our values in us? These questions do not yield easy answers, whether you’re discussing them stone-cold sober at a community meeting or drawing deep thoughts out of a tight, fat, and – finally -- legal joint. A version of this piece appears on Common Edge Collaborative . 

The Nature Conservancy acquired the Cojo-Jalama Ranches through a $165 million gift from a couple who has long sought to protect the stretch of Santa Barbara County coastline from development. The property consists of roughly 24,000 acres, stretching south of Vandenberg Air Force Base along the coast and several miles inland; it includes Point Conception. It will be renamed the Jack and Laura Dangermond Preserve, founders of ESRI, who donated the money. The twin parcels contain oak woodlands, coastal prairies, beaches, and up to 50 rare and endangered species. The Nature Conservancy intends to maintain the cattle operations on the property and keep it closed to the public while it conducts an 18-month study of its resources. Controversial Sacramento Development to Proceed on Wetlands The Sacramento Planning Commission approved , 3-1, developer Angelo K. Tsakopoulos’ controversial plans to develop open space in Sacramento County’s vineyard area that residents believed would remain a protected wetland preserve. Silver Springs Lot P is owned by Tsakopoulos but in 1991 the county enacted strong protections that would ensure the property north of Elk Grove would remain a nature preserve. Residents say they purchased large $1 million homes because of the location adjacent to a 91.5 acre open space preserve. AKT Development plans to build 46 homes on half-acre lots with 50 acres remaining as permanent preserve with walking trails and maintenance for invasive species. The project must still have approval from the county Board of Supervisors and be signed off by the US Army Corps of Engineers. Long Beach Ramps Up Urban Agriculture Program The City of Long Beach is giving vacant lot owners tax incentives by entering a contract with the city to use empty lots for agricultural purposes for five years. The Urban Agriculture Incentive Zone Program is also being applied in San Francisco, San Jose, Sacramento, and Santa Clara. The goal of the program is economic growth, community development, access to local organic produce, and improving of deteriorating air quality. In the Long Beach program, vacant lots must be between 0.10 and 3 acres in size, have no habitable structures, and comply with zoning codes. While the program has many benefits it needs a community-minded property owner with a vacant lot and no plans to develop in the next five years paired with a sophisticated urban farming nonprofit. It is estimated the starting capital is around $15,000 to $20,000 to cover soil remediation, fencing, water access, security and other operating expenses. UCLA Luskin Releases Policy Briefs on L.A. Housing Crisis UCLA’s Luskin School of Public Affairs has released a series of policy briefs surrounding affordable housing stock in the region. One brief finds that some low-cost housing has been lost in Los Angeles that majority of new multifamily units (both market rate and affordable) have been replacing single-family homes or on land not previously used for residential development. The study also found most of the new multifamily housing was not being built on the wealthier Westside but mostly in central and south Los Angeles.  Another looks at repealing Proposition U, which in 1986 cut the floor area ratio (FAR) in half for most of the city’s commercial and manufacturing-zoned land. LA City Council has included two new Residential Accessory Services (RAS) zoning designation to facilitate housing development with ground floor commercial uses but these RAS zones are rare. The study suggests the value of each commercial parcel is lower due to diminished development potential. (See prior CP&DR  commentary .) The final brief looks at opposition to new housing throughout the state and the importance of addressing opposition to new and affordable housing and density. The study found many neighborhood councils in LA cite “lack of engagement with the community”, “neighborhood character” or “too much density” as reasons to oppose housing projects. The recommendations for addressing housing opposition problems are enhancing and enforcing existing housing laws, making the planning process more inclusive, and shifting the scale of land use decisions from local to regional/state. Quick Hits & Updates Two San Francisco supervisors have introduced a measure for the June ballot that would split the existing San Francisco Municipal Transportation Agency into two departments. The proposal would split parking and traffic management from Muni, and hopefully help address concerns of the city’s allegedly mismanaged transit policies. Del Mar City Councilmember Terry Sinnott was unanimously elected as the new board chairman of SANDAG. Sinnott roused controversy recently when, in a brief interview after his election, he declined to acknowledge the scientific consensus that climate change is caused by human activity and the burning of fossil fuels. SANDAG is currently conducing a nationwide search for a new executive director. The San Francisco Planning Department presented the results of the 2016 Commerce and Industry Inventory to the Planning Commission. Between 2015 and 2016, the city added 27,048 new jobs but the number of building permits declined two percent. While the city did not tally the number of actual new units added, the U.S. census estimate says the city added roughly 2,600 new homes meaning one new home per every 10.4 new jobs. Sen. Dianne Feinstein and East Bay Congressman Mark DeSaulnier are promoting a new vehicular and rail crossing over the San Francisco Bay. The two suggest the effort be undertaken under Regional Measure 3, a $4.5 billion measure that the MTC hopes to place before voters next June. A 2012 MTC study shows the cost of putting a vehicle-rail bridge from near SFO to the southern edge of San Leandro at $12.4 billion and three different alignments of a new BART tube would be roughly $8.2 billion to $11.2 billion. The Bay Area Council and Silicon Valley Leadership Group say they’re focusing on first passing Regional Measure 3. The Santa Rosa City Council will consider an immediate ban on evictions of low-income residents while the state of emergency remains in effect. According to Santa Rosa housing officials, since the fires, 15 residents paying federally subsidized rent have been issued 90-day eviction notices. The Council has the ability to pass the measure as an “urgency” ordinance, meaning it would only take five votes to pass and would go into effect immediately. The NRDC filed suit against the cities of Pasadena and Murrieta for their failure to comply with the state’s Water Conservation Landscaping Act. The lawsuit alleges both cities failed to adopt new landscaping standards by December 1, 2015; issued permits for hundreds of units and associated landscaping since then without applying the state-required standards; and failed to submit required reports to the state on the content and enforcement of their local landscape requirements. According to a survey by the San Francisco Transportation Authority, a majority (70 percent) of San Francisco voters think businesses including Uber, Lyft, and food-delivery services, should pay more taxes. The poll is an effort to figure out how to pay for an estimated $22 billion in transit and street improvements which are needed between now and 2045 according to a mayoral transportation task force. Santa Rosa City Council members are in a 3-3 deadlock on changing the zoning of a 40-acre Fountaingrove commercial property to allow for 237 new homes. The area was decimated by the fire in October and half of the councilmember are worried about putting future residents in harm’s way. The other councilmembers say the entire city is in an earthquake danger zone but that disasters are a fact of life. The council is hoping to get some more information to help decide how to treat new housing request in burn areas and will come back to the issue in February. A new BART station in Richmond opened  recently. The station includes new pedestrian and bicycle-friendly entrances. Part of the new entryways function is to extend the Nevin Avenue Streetscape project, completed earlier this year, as a pedestrian-friendly connection between BART and the Civic Center. The area is also part of the TOD downtown plan with between 900 to 1,000 new housing units planned in the near future within walking distance of the station. Los Angeles City Councilmember David Ryu effectively killed an effort to put a one-mile stretch of Sixth Street between La Brea Avenue and Fairfax Avenue on a “road diet”. Numerous neighborhood organizations and safe streets advocates are discouraged by the statement and efforts to make LA streets safer. Ryu said in a statement that his office will move forward with adding left-turn pockets at some intersections, peak-hour left-turn restriction at Burnside Avenue, and several crosswalks. Scotts Valley acting community development director, Taylor Bateman, refused  to consider an application saying the developer’s concept proposed too much housing and conflicted with the general plan. The project proposed 44 apartments, eight town homes, and 24,891 square feet of commercial space. The developer Granum Partners and land-use consultant Charlie Eadie are appealing the decision to the city Planning Commission. Garden Grove City Council approved , 6-0, a development agreement for a 769-room three hotel resort on 5.18 acre property on Harbor Boulevard. Land & Design and the American subsidiary of the Shanghai Construction Group paid $852,571 in fees. The city is giving the site to the developer, paying up to $250,000 in improvements to the site, and giving tax subsidies worth at least $17.6 million. The final vote was to set a five-year deadline for the developer to complete construction of the project. The City of San Diego and San Diego County Water Authority are closing in on a deal to construct a giant new hydroelectric facility in East County. The $1.8 billion project would make enough green energy to power 325,000 homes. The two agencies are looking for a private developer to shoulder much of the cost and risk. The final deal would require approval from San Diego City Council and isn’t expected until the spring. The Midpeninsula Regional Open Space Agency Board of Directors unanimously granted property rights at Mount Umunhum to the Amah Mutsun Tribal Band. The cultural conservation easement provides permanent rights recorded on the deed to the 36 acres that once was occupied by the Almaden Air Force Station to the tribe. The tribe will be allowed to build a garden in a flat area and can hold up to six ceremonies a year on the summit where the public is excluded. Additionally the tribe can apply to build a roundhouse for educational and ceremonial purposes.

CP&DR Vol. 32 No. 12 December 2017

The Thomas Fire started in a Ventura County park near Santa Paula one evening and within only a few hours – aided by winds up to 80 miles an hour – reached the beachfront city of Ventura, my former hometown. By the next afternoon 400 homes had burned down – most of them in hillside neighborhoods, but a few of them down in the flats where the winds blew embers. For two weeks the fire threatened towns up and down the Ventura/Santa Barbara coast. Now it’s contained, but not before burning almost 300,000 acres and winning the distinction of being the biggest wildfire in California history.

An appellate court has ruled in favor of the City of Wildomar and Wal-Mart in a long-running and acrimonious dispute with San Diego-based environmental lawyer Cory Briggs over a proposed Wal-Mart store in Wildomar, a city in western Riverside County.

As business sales move increasingly away from bricks-and-mortar retail locations, the question of where the sale actually occurs – and therefore which city gets the sales tax – is growing in importance. In particular, cities have increasingly sought to recruit business-to-business sales offices in hopes of capturing the sales tax. And a new Court of Appeal ruling suggests that’s the right strategy. The First District Court of Appeal recently ruled that state Board of Equalization acted properly in switching a medical supply company’s point of sale – and $17 million in sales taxes – from Fontana, Lathrop, and San Bernardino, where the company’s warehouses were located, to Ontario, where a subsidiary company opened a sales office as part of a deal with the Ontario Redevelopment Agency. The First District reversed a trial judge, rejecting the argument that Ontario should not be considered the point of sale in light of the fact that there appeared to be no “paper trail” suggesting a transfer of ownership of the sales items from the parent company to the subsidiary before they were sold to the customer. Rather, the appellate court chose to give the Board of Equalization great deference in the matter. Given the lengthy administrative proceeding in front of the board, the court ruled, “it is for the Board in the first instance to interpret and administer an intensely detailed and fact-specific sales tax system governing an enormous universe of transactions.” The case involved Medline, a medical supply company based in Illinois that historically did business in California through a series of sales agents and maintained warehouses in Lathrop and Fontana (though the Fontana warehouse was later moved to San Bernardino). In 2005, however, Medline made a deal with the City of Ontario. Under the agreement, Medline created a California-based subsidiary, MedCal Sales, which was located in space in Ontario subleased from Medline. MedCal reported Ontario as the point of sale and in return Ontario rebated 50% of MedCal’s sales tax back to the company. Once this new arrangement was implemented in 2007, six years of administrative hearings in front of the Board of Equalization commenced. During this administrative proceeding, the Board’s staff expressed concern that there was no legal document memorializing the transfer of ownership of the medical supplies from Medline to Medcal prior to the sale to the final customer. Nevertheless, in 2014, the board ruled in favor of Medcal and Ontario and against the warehouse cities. The board wrote: “We find credible and persuasive the statements made by taxpayer’s representatives that the outside sales staff principally negotiated the subject sales and that they were assigned to work out of taxpayer’s Ontario office when they became employees of taxpayer. This means their selling activities are attributed to the Ontario office even when such activities are done from their homes, on the road traveling to meet customers at their places of business, or at the customers’ places of business. Thus, the sales are subject to sales tax based on the undisputed fact that title to the goods passed inside California and based on our finding that the Ontario office participated in the sales by virtue of the activities of the outside sales staff. Since the negotiations by the outside sales staff are associated with the Ontario office, we find taxpayer is required to hold a seller’s permit for that office.” The warehouse cities then sued and secured a favorable ruling from Alameda County Superior Court Judge Evelio M. Grillo, who found “that the BOE failed to apply established California law on the transfer of title, and that under the correct application of California law there is no substantial evidence for the BOE’s factual finding that MedCal (the sales entity) transferred title to the customers and was responsible for paying the sales tax.” But in a unanimous opinion written by Justice James A. Richman, the First District Court of Appeal not only reversed Grillo’s ruling but criticized him for viewing the entire case from the perspective of the warehouse cities. “It must be conceded that the tenor of the trial court’s lengthy order is troubling,” Richman wrote. “It appears to reflect a de novo review, with no suggestion of deference to the final result of the extensive administrative proceedings. It does seem to approach the matter from the perspective of Cities—stating what does not support the Board instead of looking to see what does—thus appearing to put the burdens of persuasion and proof on the Board. Also, it is disconcerting to see the statements made at the hearing by Medline officers—which obviously could support the Board’s decision—virtually dismissed out of hand.” Referring to extensive case law, Richman wrote: “Cities cannot merely point to evidence that supports the trial court’s decision, nor can they selectively cull the administrative record for the bits and pieces that may not support the Board. Cities must go beyond that, establishing that the evidence in the administrative record is so comprehensively one-sided that the Board’s decision was not only against the weight of that evidence, it was a decision so lacking in support that it cannot command the assent of reasonable minds.” He concluded that the board could have gone either way in the case with legitimacy, thus making the court’s deference to the board the primary issues in the case. “So, which entity is the ‘retailer’ that made the “sale” that involved “transfer of title”? (§§ 6015, 6006, subd. (a).) Is it MedCal, as the Board’s staff initially concluded and the Board ultimately concluded, or is it Medline, as the Board’s staff and Appeals Division intermediately concluded? Given the administrative U-turns, either result could command substantial evidence from this administrative record, and neither would be compelled as a matter of law. Either result could be reached by reasonable administrators.” The Case: City of Fontana v. California Department of Tax and Fee Administration, No. A147642 (November 28, 2017). The Lawyers: For “warehouse cities” (Fontana, Lathrop, and San Bernardino): Leslie Allen Hausrath, Wendel, Rosen, Black & Dean, lhausrath@wendel.com For state tax officials: Anne Michelle Burr, Deputy Attorney General, AnneMichelle.Burr@doj.ca.gov For City of Ontario: Charles L. Coleman III, Holland & Knight, ccoleman@hklaw.com