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Last week I published a short op-ed in the Los Angeles Times suggesting that low-density development patterns are one of the reasons California cities are experiencing fiscal problems. But I have to admit I wasn't prepared for the type of pushback I got from readers, most of whom seemed to view me as an apologist for public employee unions or as a radical wishing to overturn Proposition 13. I tried to be careful about how I made my case–acknowledging that public employee pensions are a huge issue no matter what and also acknowledging that Stockton, in particular, made their problems worse with grandiose urban redevelopment projects. I made a particular point of the fact that, under Proposition 13, the buying power a city gets from a new development project declines over time, especially in relation to the cost of servicing the project. I borrowed this point from a talk I once saw given by Mike Multari, the former San Luis Obispo city planning director and longtime partner in Crawford Multari & Clark. Mike used to draw a chart depicting the revenue-cost curve of a typical development project over time, showing that eventually there's a crossover where the project runs a deficit. (I've replicated The Multari Curve crudely here.) Mike's point was that most of a development project's revenue bump comes at the beginning, with impact fees and a big increase in property tax, but the impact fees go away and after that property tax increases slowly because property isn't reassessed unless it is sold. His point was that the only way to cover the gap was to keep approving new projects and get a new "hit" of revenue. And it all comes crashing down when the new projects stop coming. Which is what happened in 2008. I guess I expected that some people wouldn't believe all this and suggest, instead, that sprawling development projects do make money for cities. Naively, I didn't expect anything else. The blowback  to the piece came in several waves. First were the online comments posted underneath the piece itself. My article was called everything from "baloney" to "fatuous nonsense" to "commie propaganda." Several people pointed to sprawling, non-union Texas as proof that I am wrong, as cities there are doing fine compared to cities in California (which, by the way, isn't true). Substantively, most of the comments were variations on the following themes: 1. I'm an apologist for public employee unions claiming that pensions aren't a problem. 2. I'm trying to divert attention from my own dismal record as a tax-and-spend liberal on the Ventura City Council. 3. I'm one of those crazy people who think Proposition 13 should be repealed. None of which I said or meant to imply in the article. Then came my appearance on Larry Mantle's normally thoughtful Air Talk show on KPCC . In the interest of balanced journalism, Larry recruited anti-anti-sprawl economist Wendell Cox to refute me. I like Wendell personally, but I don't care much for his research; in fact, I have devoted considerable effort on CP&DR blog space to tearing it apart. Wendell predictably argued that I was wrong but then, as he typically does, blamed everything on restrictive land-use regulation. I agreed with him that land-use regulations are often too restrictive and lock in large-lot zoning where it is unnecessary. Then at the very end of the show Wendell circled back to attack SB 375 and the horrors of 30-unit-per-acre zoning (imagine!). I wanted to reply by saying the market's going in that direction anyway – something Wendell and the other pro-sprawl economists stubbornly refuse to believe -- but Larry was pressed for time. Subsequently Wendell emailed me in very gentlemanly fashion, so I asked him if he agreed that the market was changing. He said that trying to predict the housing market today would be like trying to predict it in 1931 – his way of saying that the economic downturn has so skewed the market that you can't tell how it will turn out in the end. Sometimes I wonder whether these pro-sprawl guys have any Millenial kids. And what does all that have to do with the question of whether sprawl costs money? Then came the L.A. Times letters . As it turns out, nowadays not only does the L.A. Times publish online comments and letters in the paper but they have a whole separate online section called Postscript, in which  the author gets to respond to a letter-writer. They gave me two choices, and I chose to respond to Sidney Anderson of Mission Viejo , who said I was only half-hearted in my criticism of pensions and also claimed that I was in favor of repealing Proposition 13, which he claimed had saved his house. "Prop 13 and Sprawl. Sure." I responded by saying I actually agree with Mr. Anderson on pension reform and that smart growth can help balance a city's budget within the constraints of Proposition 13. But even this wasn't the end of it, because both the interchange with Sidney Anderson and several other letters appeared on the Times web site and in the newspaper, generating even more comments, which – for better or worse – I responded to, thus getting into the weeds of how cities are hemmed in by state pension laws. Which is not exactly where I expected to end up. I'm happy that the piece attracted so much attention and comment. I don't expect people to accept everything I say, but I didn't expect all the curves I've gotten in the last week. But one thing I have learned: A picture really is worth a thousand words. So in the future, in order to make my point, I'm just going to draw The Multari Curve.

DUBLIN, Ireland -- Mike McKeever and I traveled 5,000 miles east from California this week to debate SB 375 in front of a Trans-Atlantic audience of planning and policy wonks at University College Dublin. Characteristic of how we each look at things, when we sit down to answer questions, my water glass was mostly empty and his was mostly full. My presentation focused on the background of AB 32 and SB 375 and the challenges associated with implementing the regional Sustainable Communities Strategies, such as the one adopted by the Sacramento Area Council of Governments, of which McKeever is the executive director. The American sponsors of the symposium were the National Center for Smart Growth at the University of Maryland and the Lincoln Institute of Land Policy . My bottom line was this: Under SB 375, neither the state nor the regions can coerce local governments to follow the SCSs; and it's unlikely there are enough financial inducements available – especially with the loss of redevelopment – for the state and the regions to compel the locals to do the right thing. That leaves what I call nudging. Using the financial inducements that are available – including transportation investments – and the general flow of policy, the state and the regions will have to nudge local governments to move in the right direction. Yes, my presentation (which otherwise included the requisite Schwarzenegger action-hero images) ended with an homage to Monty Python. (Nudge, nudge, wink, wink, know what I mean?) Mike McKeever, as I acknowledged in my presentation, is one of the great planning nudges of all time.  McKeever, to his credit, was not nearly as glib and cynical as I was. But his bottom line was that you have to trust local elected officials to understand that smart growth policies are in their best interest. You need not assume that you have to muscle the locals from above because they're too stupid or parochial to figure this out. "If you can't win the hearts and minds of local leaders, you're never going to effect change," he said. As a former local elected official, I couldn't agree more. After spending two days listening to presentations about state and regional planning efforts throughout the United States and Europe, McKeever made two good points: 1. A state planning law like SB 375 actually creates and stimulates a discussion about planning goals and planning implementation that can elevate local electeds out of their parochialism if it's managed well. He pointed specifically to the SB 375 debate at the Southern California Association of Governments as an example.   2. States and the federal government should rely more on performance standards and allow regions and locals more flexibility in meeting goals. He posited that this approach could be tested usefully if Obama is re-elected. I could add, this could be equally true even if Romney is elected and somehow tries to make the Partnership for Sustainable Communities work from his perspective. Of course, Mike and I had this debate on the very day that the Irish government announced a massive consolidation/reduction of local government and rearrangement of both local planning power and state infrastructure power so that it is exercised at the regional level. But we're not tempted by all this. It's time to come home.

When Jerry Brown first proposed killing redevelopment -- back in January 2011, when he released his first budget -- he said he would replace it with some other economic development tool. After Brown succeeded -- when he released his second budget, in January 2012, just days after the Supreme Court killed redevelopment – his tune changed, ever so slightly. He said he would consider bringing redevelopment back if it didn't affect the state's general fund. Fair enough. Last month, however, Brown vetoed several bills that would have brought redevelopment back in some form but would not have taken any money from the general fund.   What gives? The answer is simple: Brown has decided that the gradually decomposing dead body of redevelopment isn't cold enough yet. Despite his steadfast rhetorical support for the revival of some kind of redevelopment tool, Brown has pretty consistently sent the message that the body of redevelopment has to be cold, deep in the ground, and long turned to dust before he approves a replacement. He wants, essentially, for the former redevelopment apparatus to scatter and the old assumptions and habits to slip into the history books. The September vetoes simply reaffirm his position. But it's hard to say how long we will all have to wait. Will he sign something in 2013? He might have that chance, since Senate leader Darrell Steinberg has already vowed to introduce a version of his SB 1156 – which amounted to a semi-revival of redevelopment, with a smart-growth twist – on Day One of the next legislative year. Or, will Brown wait until his second term, if there is one? Will California's cities have to wait until he's out of office altogether -- an event that is somewhere between two and six years away? Nobody really knows. You'd think he's feeling some pressure to do something. After all, his determination to keep redevelopment underground for the foreseeable future is at odds with his own rhetoric about building a sustainable California. Even Brown seems to recognize this. In his veto message for SB 1156 he wrote: "The planning and investment that is envisioned in this bill would help develop and redevelop a California that is thriving." Not a surprising statement. After all, the bill explicitly tied new redevelopment efforts to implementation of SB 375, the 2008 regional planning law designed to implement the state's climate change law. Brown is passionate about the climate change issue and, in inheriting SB 375 from the Schwarzenegger years, he has made it a centerpiece of his growth policy, which is being implemented primarily through the efforts of his Strategic Growth Council. And although SB 1156 would have revived tax-increment financing in a limited way, the bill would not have included property taxes that flow to schools, meaning the state general fund would be held harmless. Yet Brown vetoed the bill anyway. He said he wanted to wait until after the redevelopment wind-down process is complete before considering new approaches like that contained in SB 1156. Brown used similar reasoning in rejecting AB 2144 by Assembly Speaker John Perez, which would have made it easier for local jurisdictions to create infrastructure financing districts. He said he did not want the locals to "focus" on IFDs while winding down redevelopment. It's hard to know whether Brown is using his veto power to punish California cities for their recalcitrant approach during the 2011 budget negotiations--but it's possible. As you'll recall, he proposed killing redevelopment only two months after the cities won passage of Proposition 22, a constitutional amendment that prohibited the state from raiding redevelopment funds to balance the budget. The cities subsequently chose not to negotiate on redevelopment -- and eventually lost a big gamble when the Supreme Court ruled against them in a lawsuit they brought, citing Prop. 22's provisions in killing redevelopment altogether. Punishment aside, there is a certain logic to Brown's approach -- if you accept the premise that the state's goal should be to protect the general fund at any cost. Cities engaged in the wind-down process are currently negotiating with their Oversight Committees to determine which old redevelopment projects should go forward -- and how much tax increment should continue to flow to those projects, as opposed to the general funds of local taxing entities. While cities and Oversight Committees are working well together throughout the state, the state Department of Finance is often using its power to hinder or block the resulting wind-down plan.  Given DOF's hard-line approach, you can imagine how Steinberg's bills might look to the Brown administration: Say some city has successfully negotiated a wind-down plan that essentially keeps a redevelopment project afloat, at least in a limited way. Then the city negotiates with its county under SB 1156 to create a new tax-increment flow to further augment the project, and possibly takes an infrastructure financing district to a vote. Before you know it, the local redevelopment agency is back in business -- through a patchwork of wind-down money, SB 1156 increment, and possibly IFD funds.  In and of itself, that's not something that would concern the state. But if this happens in enough cities, then redevelopment as an industry begins to emerge once again -- with the consultants, the lawyers, the developers, and maybe even a trade association. And before you know it, the redevelopment industry is lobbying to restore tax-increment financing on a larger scale -- even if it means grabbing a piece of the state's general fund. OK, not likely. But this is clearly the scenario that the Brown administration wants to avoid. Which is why the death of redevelopment isn't enough and the carcass has to decompose before Brown will consider something new. Cities would be in a stronger position to bring redevelopment back if they could argue that all entities that receive property taxes -- and the state itself -- would increase their coffers if tax-increment financing were revived. After all, that was the argument the redevelopment industry always made before. But there was always little hard evidence that the diversion of $6 billion in property tax funds generated a strong return on investment for local agencies; and the big drop in property values during the real estate bust has killed that argument altogether. So maybe those interested in reviving redevelopment need to take a different, more comprehensive approach. The Brown Administration appears committed to the implementation of SB 375 and to a general strategy of encouraging compact development patterns, often around transit stops. Maybe a limited revival of redevelopment -- meaning, yes, tax-increment financing -- should be viewed as part of a broader effort to implement SB 375, along with all those Proposition 84 planning grants, CEQA exemptions for infill development, housing elements that encourage upzoning around transit stations, the remaining infill funds from the 2006 housing bond, and a whole variety of other implementation tools. It might even turn out that redevelopment -- targeted properly to true infill locations, especially those that are transit rich -- will save the state enough money in other costs to please the beancounters and undertakers alike.

Last week, i n my Insight column available to CP&DR subscribers, I suggested that there were two possible reasons Gov. Brown vetoed SB 1156 and the other redevelopment bills. First, there's still bad blood between him and the cities. And second, he doesn't want to do anything that would stimulate the revival of a redevelopment lobby in Sacramento. Yesterday, at a redevelopment panel at the American Planning Association, California Chapter, annual conference -- they're calling it APACA now, not CCAPA -- San Jose Planning Director Joe Horwedel reminded me of another possible reason, related to the first two: Brown does not want to bring back redevelopment unless it's accompanied with very strict state oversight as to how tax-increment money is used. Horwedel's point was a good one, because -- in my view -- this was one of the biggest sticking points between the state and the cities. Most other states have very strict oversight of tax-increment financing; some even have a statewide cap with an allocation process, similar to low-income housing tax credits. California had one standard you had to meet -- blight -- and no oversight. Had the cities been willing to accept a statewide cap and strict state oversight, redevelopment might exist today. But the leaders of the League of California Cities decided that no redevelopment at all would be better than that kind of redevelopment. And now we have no redevelopment -- and strict state oversight at the Department of Finance regularly vetoes decisions made by the oversight committees in the remnant redevelopment projects. SB 1156, the best Steinberg bill that Brown vetoed , was a pretty solid piece of legislation -- taking the state general fund out of the game, making tax-increment voluntary and collaborative, and tying it to SB 375. But it still didn't really involve any state oversight. I still think state oversight is going to have to be part of any eventual tax-increment deal, whether cities like it or not. Yesterday's redevelopment panel, which I was part of, contained some good ideas about how we might move forward. Mostly the ideas focused on refocusing redevelopment on projects, rather than districts, which is more typical of tax-increment arrangements in other states. Ken Hira of Kosmont Companies in Los Angeles described several post-redevelopment deals for retail projects, which are totally doable without redevelopment because of you can still do a sales-tax sharing deal. Bill Anderson of AECOM in San Diego, the president-elect of the national APA, suggested some possible changes to the Mello-Roos law to make it easier to form urban community facilities districts. (Currently, CFDs require a two-thirds vote -- of voters if there are more than 12 in the district, or of property owners if there are less.) Anderson's comments reminded me of the tax-increment approach I heard about a couple of weeks ago when I was doing a Smart Growth America technical assistance project in Gwinnett County, Georgia, outside of Atlanta. Georgia allows tax-increment financing districts (known as tax-allocation districts, or TADs) with the consent of school districts, which have to surrender some property tax money. In the case of the declining Gwinnett Place Mall, the school districts went along with project-level TAD because they saw that their property tax revenue would vanish unless something was done. Of course, in California, the schools don't care, because they're backfilled by the state. But maybe there's a way to persuade the beancounters at the Department of Finance that project-level tax increment can sometimes save and increase property tax revenue in a way that benefits the general fund.

Ever since the passage of SB 226 -- the law designed to streamline environment review for infill projects -- the state has been working on changes to the California Environmental Quality Act Guidelines to implement the law. There's a draft of the guidance out (you can find it here ), and CEQA-sters Ron Bass and Terry Rivasplata of ICF International did a good job of laying out what the draft says at a session at the American Planning Association, California Chapter, conference. The bottom line, according to Bass: The guidance is "streamlining by complexity. This is supposed to be streamlining but it's extremely complex." There's no question that Bass is correct. But that's not the fault of the draft guidelines. It's inherent in CEQA itself. CEQA's an incredibly complex law. Carving out exemptions can be simple, but streamlining is inevitably complex. For creating infill exemptions, the definition of infill is, of course, crucial. In the guidance, infill is defined as: -- Being 75% surrounded by existing urban development -- Meeting the new statewide performance standards for infill contained in the new Appendix M -- Being consistent with an adopted Sustainable Communities Strategy or Alternative Planning Strategy. If you qualify, you can do an SCS Environmental Assessment (spelled out in SB 375) or even an Infill EIR, which covers only impacts not previously analyzed, doesn't have to examine alternative locations or densities and doesn't need to look at growth-inducing impacts. "We're creating new stuff here that we have not seen in common practice," says Rivasplata, who acknowledged that he's not sure what an SCS EA or an Infill EIR will look like. The performance standards will apply to various land uses and will include things like, a lower-than-average vehicle miles traveled (VMT) with the Transportation Analysis Zone (TAZ) or within 1/2 mile of a state-specified transit corridor (the same 15-minute headways specified in other laws like SB 375). Bass joked that the streamlined rules will "only apply in Europe". The SB 226 guidance even contains a new checklist (Appendix N), which is not only about impacts but about things like, whether you meet the infill requirement. You can track the rulemaking process by signing up for a listserve here.

Though painful, the unwinding of redevelopment would seem to be a pretty straightforward process for most cities: Designate yourself as the successor agency, negotiate with your oversight committee to keep as much stuff going as possible, and try to keep the state Department of Finance from vetoing the whole situation. But don't overlook the opportunities being created by a forced reorganization of planning and economic development functions. "The chaotic process of unwinding redevelopment has been painful and difficult," said Paul Silvern of HR&A at a panel Tuesday at the annual conference of the American Planning Association, California Chapter , "But it presents interesting opportunities, especially for planners playing a new role – more connected and better connected to the implementation side, particularly in smaller cities." Silvern of HR&A a "continuum" of post-redevelopment strategies, while Kevin Keller of L.A. City Planning – and the current president of APACA – talked about how Los Angeles was moving away from redevelopment to more conventional planning anyway. Silvern laid out the varied strategies of four cities: Alhambra, Oakland, San Diego, and Los Angeles. Although all except Alhambra are large, the examples could be instructive. He emphasized that the end of tax-increment might actually allow cities and counties to view economic development more broadly again. Among other things, he noted that many cities that are now receiving increased general fund property taxes as a result of the end of redevelopment – a 15% bump on average – are considering setting aside all or some of those funds for redevelopment-type purposes. The Alhambra Approach As CP&DR reported last spring , Alhambra was the first and most aggressive small city to move on redevelopment – following the longstanding approach of City Manager Julio Fuentes, who was the last president of the California Redevelopment Association before it folded. Within a few days, Alhambra had granted the city and its economic development division all the specific powers of a redevelopment agency except that of tax-increment, including eminent domain for economic development purposes, writing down land, and so forth. The Oakland Approach Oakland was especially hard hit by redevelopment because the city had, over time, increasingly used tax-increment funds to pay for positions in general fund departments such as police. The city has used the end of redevelopment as a way of reorganizing a huge number of city functions – consolidating planning and building into one department, and economic and workforce development into another. The city has also created an Office of Neighborhood Investment, which staffs the successor agency. The San Diego Approach As CP&DR indicated last spring might happen , San Diego has retained its unusual structure of farming out development/redevelopment activities to nonprofit agencies created by the city. Center City Development Corp. was often viewed as a highly successful example of an innovative approach – a nonprofit development entity that contracted with the city to execute redevelopment plans, process permit approvals, and conduct planning. Southeast Development Corp. followed the same model. CCDC and SEDC have been merged into a new entity called "Civic San Diego," which retains the permitting functions, serves as the successor agency, provides economic development services in the two areas, and operates the downtown parking management district. Though tax-increment is gone, Civic San Diego is funded by a wide variety of revenue sources including the new post-redevelopment administrative fees, permit application fees, and parking revenues. The Los Angeles Approach For decades, the mayor-controlled Community Redevelopment Agency ran the show, while a variety of other agencies did bits and pieces of economic development and the city council largely sat on the sidelines. That's part of the reason the council, in dramatic fashion, rejected the idea of the city serving as a successor agency. While the governor-appointed board of the successor agency winds down redevelopment, the city is looking at consolidating all other functions into some kind of central economic development office or division. Meanwhile, the Department of City Planning had already begun to take over some functions downtown, where redevelopment project areas were scheduled to expire beginning in 2013 anyway. Keller said the city has already adopted new design guidelines for downtown and expanded its transfer of development rights ordinance (known in Los Angeles as TFAR, for Transfer fo Floor Area Ratio). "We were already taking on ‘Bringing Back Broadway'," he said, and noted that the city is looking to other new sources of funding such as business improvement districts and planning funds from Measure R, which are funneled through L.A. Metro.

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.