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Well, it was a bad week in court for environmentalists and neighborhood activists.

Massive Fresno Expansion Put on Hold The City of Fresno is indefinitely shelving the ambitious plan for a 45,000-home community in southeast Fresno known as the Southeast Development Area (SEDA). The plan, though discussed for years, has not yet been adopted by the city council. Challenges including financing the multi-billion-dollar project and discrepancies in population projections have halted progress. Fresno City Manager Georgeanne White emphasized the need for thoroughness in reassessing the feasibility of the 9,000-acre development. Concerns over who will bear the financial burden, public or developers, complicate the project, with public subsidies off the table. White indicated that thge city does not have enough bonding capacity to cover SEDA's infrastructure. Additionally, environmental and labor groups have raised significant objections, citing flawed environmental reviews and environmental costs. As discussions continue, the city faces a pivotal decision between pursuing the SEDA project or exploring alternative avenues for housing development. (See related CP&DR coverage .) Lawsuit Seeks to Stop Delta Tunnel Project Environmental groups filed a lawsuit against the California Department of Water Resources over the Delta Conveyance Project, citing ecological harm. The project aims to divert vast amounts of Sacramento River water, endangering species in the San Joaquin Delta. The tunnel, at 36 feet wide and 45 miles long, would significantly reduce freshwater flow to the delta, impacting Delta smelt and Chinook salmon. The lawsuit alleges violations of the California Environmental Quality Act due to deficient environmental impact reports. A recent court ruling deemed the project's funding efforts unlawful, halting the $16 billion revenue bond issuance. This single-tunnel project replaces the abandoned twin-tunnel California WaterFix project, sparking controversy among environmental advocates. Audit Slams VTA over BART Extension to San Jose A report by the Valley Transportation Authority's auditor general criticizes the agency for a lack of transparency and misleading communication regarding the San Jose BART extension, which has faced significant cost increases and delays. The assessment reveals that VTA internally used higher cost projections while publicly downplaying them, causing concerns about the project's $12.2 billion price tag. VTA applied for federal grants using a $9.1 billion estimate, but continued to cite a lower figure of $6.9 billion publicly. The agency ignored warnings from federal monitors about rising costs and only disclosed the higher estimate months after securing funding. VTA officials maintain they acted with credibility in their grant application, but acknowledge the need for improved communication. The BART extension aims to connect San Jose with downtown through a subterranean tunnel, adding four stations to the transit network. San Francisco Near Top of Ranking for "Urban Mobility Readiness" UC Berkeley and the Oliver Wyman Forum ranked 65 large cities based on their preparedness for the future of urban mobility, ranking San Francisco as fourth best city for urban mobility. San Francisco can credit its ranking to its "market attractiveness" as the city continues to be a central hub of private and public investments with an emphasis in new technology like automated and electric vehicles. The study also noted San Francisco's challenges with public transit, emphasizing their low public transit ridership following the pandemic. The study suggests San Francisco disincentivize car ownership and encourage public transit through more stops and stations along commuter lines and focus on bus and tram services as opposed to developing additional metro and rail stations. Los Angeles ranks 23 on the list as the only other California city represented in the study. CP&DR Coverage: Cities Struggle to Hire Planners At a time when many public-sector planning departments in California face more work than ever, many are also finding that hiring and retaining professional staff is harder than ever. Just as the Covid-19 pandemic reshuffled the populations of many California cities—with residents seeking more living space and wider open spaces — it also put lingering constraints on planning departments themselves. Many midcareer planners took early retirement or themselves moved to suburban or exurban areas, and the state's housing shortage means that many planners cannot afford to live in cities that are hiring. Meanwhile, in order to lessen the housing shortage, the state has placed new burdens on local agencies in the form of complicated Housing Elements and other long-range planning requirements. Quick Hits & Updates Senator Scott Wiener introduced SB 951, aimed at reducing the authority of the California Coastal Commission over neighborhood areas along San Francisco's Ocean Beach, removing privately owned urban parcels from commission oversight. While Mayor London Breed supports the legislation, critics worry about its broader implications for coastal preservation and the balance between housing development and environmental protection. Proposed water conservation regulations for urban areas in California, aimed at adapting to climate change, face criticism from the Legislative Analysts Office for being costly and overly complex, with concerns raised about their implementation challenges and potential disproportionate impacts on lower-income residents. While supporters argue that the regulations are necessary for long-term water efficiency and climate resilience, critics worry about the practicality and fairness of the proposed measures, particularly in light of their estimated costs and limited potential water savings compared to agricultural consumption. Huntington Beach is appealing a federal judge's decision against it regarding California's housing mandates, arguing that as a charter city, it has independence in local governance. The city's move comes after a ruling that it lacked standing to challenge state requirements to zone for housing units, sparking a political debate over local control and state overreach. Hermosa Beach's City Council approved an unusual land value recapture program to encourage affordable housing development, requiring fees from developers building market-rate housing to support affordable housing initiatives. The program aims to capture increased land value in designated zones and has drawn both support and criticism from experts, with concerns raised about its potential impact on development feasibility and effectiveness in raising revenue for affordable housing. The Coastal Commission certified the updated community growth plan for San Diego's Barrio Logan, aiming to improve public health by separating residents from industrial activities and prohibiting new industrial facilities in certain areas. The plan, the first update since 1978, includes measures to triple housing, create a buffer zone between housing and industry, and build new parks, addressing concerns about pollution and industrial encroachment in the neighborhood. The Department of Housing and Community Development announced over $63 million in Excess Sites Local Government Matching Grants (LGMG) to accelerate the development of 975 affordable homes across ten projects statewide. This initiative, part of Governor Gavin Newsom's strategy to address the housing crisis, leverages excess state properties for housing development, with more than $80 million in local government funding matched. These grants support projects in cities like San Francisco, Riverside, Clearlake, Los Angeles, South Lake Tahoe, Placerville, and Atascadero, aiming to provide affordable housing for various income levels and community needs. Federal funding has been approved for the high-speed rail project between the Inland Empire and Las Vegas, aiming for completion before the 2028 Olympics. The Brightline West project, facilitated by a $2.5 billion bond approval, targets a two-hour journey from Rancho Cucamonga to Las Vegas, poised to enhance connectivity and economic competitiveness in the region. The Fifth National Climate Assessment, published by the federal government, presents dire findings about climate change impacts, including unprecedented temperature increases, frequent wildfires and ongoing drought in the West. Despite the challenges, the report emphasizes the need for action and possibility. The water shortage in the Southwest, including California, is a persistent issue exacerbated by climate change, with reduced snowpack affecting the region's variable water supply. Addressing the problem requires reducing consumption, starting with changes in agriculture. Elected officials are urged to pursue innovative water management strategies in response to the ongoing water crisis. Berkeley mayoral candidate and Councilmember Rigel Robinson is resigning from office and ending his campaign due to "harassment, stalking, and threats." Robinson, the youngest council member ever elected in Berkeley, cited the toll on his well-being and family, mentioning burnout from perpetual stress and exhaustion. His resignation leaves his district without a representative until a special election later this year, and the mayoral race now features two council members, Sophie Hahn and Kate Harrison, along with Adena Ishii. A proposed housing development in San Jose's Alviso district, spanning 804 units on a 3.2-acre site, is being refashioned to include 100% affordable apartments, according to city documents. The project, initially planned for a 200-room hotel, was redirected due to the impact of the COVID-19 pandemic on the hotel industry, and the new proposal for 100% affordable housing is being pursued by a unit of Genesis Commercial Capital. The University of California is considering expanding its presence in San Francisco in response to Mayor London Breed's request for the university system to grow its footprint downtown. The UC Office of the President is exploring opportunities to advance research, public service, and education in the city, and UC Berkeley is also involved in the effort. The move comes as more than one-third of the space in San Francisco's office towers remains vacant due to remote work trends.

by CP&DR Staff on January 25, 2024 Report

California Forever Submits Text of Ballot Measure to Solano County California Forever, the development group funded by tech billionaires with plans to build a new city in Solano County, submitted a ballot initiative seeking an exemption from the county's Orderly Growth ordinance, which restricts development in the largely rural county. The plan includes the construction tens of thousands of "middle-class" homes, parks, bike lanes and a solar farm. The project, aimed at being walkable, integrated and eco-friendly, faces skepticism due to its secretive origins and the need for approval from Solano County voters. The proposed city, located north of Rio Vista, could eventually house 400,000 residents, with initial development targeting 50,000 residents by 2026. The ballot initiative promises legally binding guarantees on jobs, down payment assistance and funding for mixed-use projects. However, opposition comes from ranchers, environmentalists and locals concerned about its impact on agriculture, real estate prices and existing infrastructure. The initiative includes a number of commitments, such as funding highway improvements and increasing the buffer zone around Travis Air Force Base. If approved, the measure would appear on the November ballot. (See related CP&DR coverage .) Judges Allow Housing Lawsuit Against Huntington Beach to Proceed The state's lawsuit against Huntington Beach, California, accusing the city of violating state laws to address the housing crisis, is back on track after being temporarily halted in November. A three-judge panel at California's 4th Circuit Court of Appeal ruled that Huntington Beach's status as a charter city does not prevent the state from seeking an expedited hearing on its lawsuit. The lawsuit, led by Attorney General Rob Bonta and Governor Gavin Newsom, alleges that the city violated state law by rejecting a plan to provide enough housing for expected population growth. The decision allows the case to continue expedited proceedings, unless the city persuades the courts to halt the lawsuit for other reasons. The lawsuit targets Huntington Beach's refusal to comply with state laws addressing the housing crisis, and the city previously sought protection in federal court, claiming violations of its constitutional rights. (See related CP&DR coverage .) Cupertino Reaches Settlement with Housing Advocates over Noncompliant Housing Element Housing advocates, represented by YIMBY Law and the California Housing Defense Fund, reached a settlement with Cupertino after lawsuits were filed against it and several other Bay Area jurisdictions for missing the state deadline for housing elements. As part of the settlement, Cupertino will revise its housing plans in compliance with state law and abide by the "builder's remedy," allowing developers to push larger projects through an expedited approvals process. Cupertino must approve 4,588 new homes by 2031, with 1,880 designated for low-income households. The settlement aims to speed up the adoption of a compliant housing element, with Cupertino's Deputy City Manager expressing a commitment to responsible development. While some council members support the settlement for expediting the process, others criticize it, citing concerns about a bypass of environmental review laws and blaming the city's consultants for delays. San Diego Adopts Citywide Housing Reforms The San Diego City Council approved Mayor Todd Gloria's Housing Action Package (HAP) 2.0, part of the Homes for All of Us initiative, aimed at addressing the city's affordable housing challenges. The reforms include amendments to the Land Development Code to preserve existing affordable homes and encourage the construction of new ones, with a focus on protecting vulnerable community members such as those experiencing homelessness, people with disabilities and seniors. The package introduces incentives for various housing options, including single-room occupancy homes for the very-low-income level, affordable student homes near transit and accessible accessory dwelling units (ADUs) for seniors and people with disabilities. It also allows public agencies greater flexibility in developing homes on publicly owned land, addresses environmental justice concerns and promotes the preservation of affordable homes while preventing displacement. Additionally, the reforms implement flexible parking requirements, encourage developments in underused areas near transit and streamline regulations to build family homes in areas with good schools and job opportunities. The HAP 2.0 package is set to return to the City Council for a second reading in early January before reaching the mayor's desk for approval. CP&DR Coverage: Supreme Court May Updend Cities' Ability to Impose Exactions Based on oral argument last week in a case from El Dorado County, the U.S. Supreme Court seems ready to strike down California's Ehrlich/San Remo exception to the Nollan/Dolan rule on exactions - an exception that allows California cities and counties to impose exactions that do not have a “direct connection” to the project in question and that are not “roughly proportional” to the project's impact if they are part of a General Plan or broader legislative effort. The Nollan/Dolan doctrine states that development exactions - including impact fees - must have a “rational nexus” to the development project in question and also must be imposed in a manner that is “roughly proportional” to the impact of the new development on existing conditions. Exactions that do not meet this test are considered a taking of property under the Fifth Amendment to the U.S. Constitution. Quick Hits & Updates Average temperatures in Northern California, particularly across the Central Valley, have steadily increased over the last few decades, with winters becoming at least 2 degrees warmer. While the region is expected to experience a slight warming trend in the upcoming days, this warmer climate could potentially lead to more hazardous winter storms with sleet and freezing rain, affecting various aspects of daily life and agriculture in the area. The Hermosa Beach City Council approved a Land Value Recapture (LVR) program, which involves rezoning areas for mixed-use development, aiming to create market-rate and moderate to low-income homes and apartments. The program includes setting LVR fees of $76 per square foot on residential developments of four or fewer units and $104 per square foot on residential developments of five or more units, with exemptions for owners selling or leasing units at county-defined "moderate to very low income" prices. Attorney General Rob Bonta filed a civil lawsuit accusing Shangri-La Industries, a contractor with the state's Project Homekey homeless housing program, of illegally borrowing over $100 million against the projects, putting them at risk of foreclosure. Bonta demands the return of funds and asks the court to place seven properties in receivership, alleging that Shangri-La took out loans without state approval and failed to record required affordability restrictions, jeopardizing the projects' completion. Three master-planned communities in Southern California—Ontario Ranch, Great Park Neighborhoods, and Rancho Mission Viejo— rank among the nation's 50 fastest-selling communities, according to annual rankings by new-home tracker John Burns Research and Consulting. The trio collectively sold 2,187 homes in 2023, up 70% from 2022, with Ontario Ranch ranked fifth nationally, Great Park in Irvine at 19th, and Rancho Mission Viejo at 31st. The Hoopa Valley Tribe acquired 10,395 acres of land, including the headwaters of Pine Creek, through a $14.1 million purchase, marking the tribe's largest reacquisition of land since the establishment of the Hoopa Valley Indian Reservation in 1864. The tribe plans to restore the historic salmon run, rebuild the elk population and address environmental issues to enhance the well-being of its people on the ancestral territory. The governor's office launched the state's first interactive website, build.ca.gov , allowing residents to track the progress of thousands of publicly funded infrastructure projects across the state. The website provides details on projects ranging from clean energy to transportation and broadband, with an interactive map, a 110-page project list and spotlight stories offering background information on each project. San Francisco has regained compliance with state housing law, closing the window for builder's remedy applications from developers. The city passed the "constraints reduction ordinance" in December, meeting the state's standards and avoiding potential punishments for non-compliance. Senator Aisha Wahab withdrew Senate Bill 397, which aimed to merge the Bay Area's 27 transit agencies. The bill faced opposition from regional transit agencies but signaled ongoing discussions about consolidating some of the Bay Area's numerous transit agencies as they grapple with budget deficits and ridership challenges. A new report from UC Berkeley's Terner Center addresses the economic complexities of housing development, particularly in California, noting the impact of macroeconomic shifts like inflation and rising costs of materials and labor on construction expenses. According to the study, titled "Demystifying Development Math," policymakers and housing advocates often lack comprehension of the financial factors influencing developers' decisions. State Farm plans to raise its average homeowner insurance policies in California by 20% next year, a move attributed to increased costs and risks, amidst challenges in the state's insurance market. The rate hike follows a period of limited new policy acceptance, driven by rising construction expenses and escalating risks from catastrophic events like wildfires. Santa Barbara County is engaging the public to allocate space for 5,000 housing units by 2031 using the "Balancing Act" simulator, allowing users to select land parcels for housing while considering income requirements and county locations. Residents express diverse opinions on housing placement, emphasizing the importance of affordable homes and vacant properties for housing development.

In recent years, city councils across the Inland Empire--including Colton, Rialto and Riverside—have enacted moratoriums to freeze warehouse development. Others, like Jurupa Valley, have implemented other forms of control that stop short of moratoriums.

The frenzy of housing legislation adopted in recent years, designed to increase the zoned capacities of California, has had ironic consequences for many planning departments: a shortage of the very planners who are needed to implement those laws locally.

Supreme Court to Consider Cities' Powers to Address Homelessness The United States Supreme Court will decide whether homeless individuals have a constitutional right to camp on public property when they have no alternative place to sleep. This comes in response to appeals from city officials in California and the Western U.S., challenging decisions by the 9th U.S. Circuit Court of Appeals in Martin v. Boise that deemed it cruel and unusual punishment for cities to deny homeless people a place to sleep. The 9th Circuit rulings have led to increased legal challenges for public officials dealing with homelessness in California and other Western states. Governor Newsom and city attorneys from various cities urged the Supreme Court to restore their authority over sidewalks and parks. They argue that the 9th Circuit rulings have worsened the homelessness crisis in the West Coast states. The Supreme Court will hear arguments in April and issue a ruling by the end of June. Transportation Ballot Measure Qualifies for San Diego County Ballot San Diego voters will consider a half-cent sales tax increase for transportation projects in the county, following the qualification of a citizens' initiative for the November ballot. Regional officials have sought infrastructure funding through a sales tax increase since 2016 when a similar measure was rejected by voters, falling short of the required two-thirds majority. Tax increases proposed through citizens' initiatives require only 50% approval, making it a strategic choice for transportation proponents. The initiative allocates funds with 50% for transit projects, 27% for highway improvements, 12% for transit operations and 7% for local road improvements, giving the San Diego Association of Governments' board control over the money. While facing challenges, including past scandals and controversies, supporters highlight potential benefits, job creation and the ability to subsidize transit fares for specific groups. Opponents, such as Coronado Mayor Richard Bailey, express concerns about the initiative circumventing state law and question spending priorities. Caltrans Seeks Proposals for Applying Artificial Intelligence to Transportation Planning The California Department of Transportation, in collaboration with other state agencies, has invited technology companies to propose generative AI tools by January 25 to address traffic issues and enhance road safety. The move reflects California's efforts to harness AI for government services amid concerns about potential risks associated with rapid technological advancements. Governor Gavin Newsom's executive order in September and a subsequent report emphasized the benefits and risks of using AI in state government. The state, equipped with valuable data from traffic sensors and cameras, seeks AI solutions to swiftly analyze diverse data forms and improve traffic flow. Generative AI is seen as a tool to brainstorm solutions faster than human workers, tackling reasons for traffic jams such as crashes, debris, events and recurring congestion issues. The technology could also help achieve zero road fatalities by 2050 by analyzing crash sites, lighting conditions and traffic patterns. Despite the expected changes in job roles, the state underscores that AI won't entirely replace human involvement, and the request for AI proposals involves evaluating solutions and potential contracts. Terner Center Analyzes New Economics of Homeownership in California California's housing market, previously more aligned with other states, has become notably pricier, hindering homeownership for its residents, with less than 45% owning homes in 2021 compared to almost 60% nationally. A UC Berkeley Terner Center for Housing Innovation report reveals that California's "age of prevalence" for homeownership hit 49 in 2021, significantly higher than the national average, marking a stark increase from 1980's 32 years old. Over time, California's housing price surge outpaced residents' wealth growth, rendering homes unaffordable for many; only 38% of 35 to 45-year-olds can afford a home in the state versus 56% nationally. This disparity has led to a significant decline in homeownership rates, especially among Black and Hispanic households, dropping from nearly 50% to 23% and 52% to 30%, respectively, between 1980 and 2021. Moreover, even among California homeowners, a small fraction, only 26% aged 60 to 75, have paid off their mortgage, partly attributed to zoning laws suppressing housing construction since the 1960s. CP&DR Coverage: Fulton: It's Time to Build Housing -- But Can We? California is gradually swallowing the zone changes and other requirements to meet the extremely challenging Regional Housing Needs Assessment targets in the sixth cycle of housing elements. The Department of Housing and Community Development reports that two-thirds of cities and counties in the state now have adopted housing elements. Appeals have been denied; lawsuits have been shot down. Local jurisdictions that are out of compliance are mostly accommodating the builder's remedy applications that have come their way. Despite some ongoing skirmishes, California's communities appear mostly ready to accommodate lots more housing. The question, according to CPD&R's Bill Fulton, now is whether the private market will build it. And if not, what does that mean for cities and counties around the state that have vastly expanded their housing capacity in their new housing elements? Quick Hits & Updates The governor's office released details of their Adaptation Planning Grant Program, part of the Integrated Climate Adaptation and Resiliency Program, for communities grappling with the increasing impacts of climate change, including extreme heat, flooding, wildfires, drought, extreme weather events and sea level rise. A lack of capacity, tools, guidance and resources hampers their ability to effectively plan for and respond to these climate impacts, hindering the development and implementation of resilience-building plans and the reduction of future risks. San Francisco Supervisor Dean Preston asked the Department of Housing and Community Development to investigate Mayor Breed's delay of an affordable housing project in Hayes Valley. The project site, Parcel K, is currently a temporary community space called Proxy and residents are divided over whether to keep it that way or proceed with affordable housing construction. The governor's office introduced a $21.7 million funding initiative in the first round of the Regional Resilience Grant, part of the Integrated Climate Adaptation and Resiliency Program. The grant will support 16 regional partnerships, bringing together public entities, California Native American tribes, Community-Based Organizations and academic institutions to address climate-related challenges. The funding includes planning and implementation grants for projects tailored to the unique challenges of each region. A new study in Cities magazine explores how proximity to employment centers in the Los Angeles region affects commuting distance for low- and high-income workers. Findings reveal that increasing proximity to the nearest employment center reduces commuting distance, but the impact varies based on the attributes of the employment centers and the income groups of the commuters. The research contributes to the understanding of the location and characteristics of employment centers that influence commuting patterns, utilizing longitudinal data from 2002 to 2019. Nearly 1,000 acres of private land, known as the Thomas Creek project, has been transferred to the Mendocino National Forest, creating a vital wildlife corridor for the ecosystem. The Wilderness Land Trust purchased the property for just over $2 million, preventing potential residential development and protecting critical habitat for species like spotted owls, martens, mountain lions and the rare Anthony Peak lupine plant. Beverly Hills is appealing a Los Angeles County Superior Court judgment that would restrict its ability to approve new building permits until it meets California's housing requirements. The court ruled that the city failed its duty to plan for future housing needs and if the ruling takes effect, Beverly Hills would be temporarily unable to issue building permits for projects not adding to the overall housing stock until its Housing Element plan gains state approval. San Francisco supervisors Aaron Peskin and Connie Chan are considering a lawsuit against the state due to perceived unequal treatment in housing policies, particularly legislation championed by Senator Scott Wiener. Wiener contends that San Francisco requires extra assistance to address housing shortages, highlighting the city's lengthy permitting process as a major obstacle to new housing construction. A new federal bill introduced by Democrats aims to ban hedge funds from owning single-family homes in the US, requiring them to sell off such properties over a decade while imposing tax penalties. The legislation, if enacted, intends to increase availability for individual buyers and counter the trend of corporate-backed investment, which has surged housing prices and limited access for many Americans. A group of 18 California children, ages 8 to 17, has filed a new constitutional climate case against the US Environmental Protection Agency (EPA) in federal court, alleging the agency's allowance of planet-warming pollution from regulated sources has harmed children's health and welfare. The lawsuit, Genesis B. v. United States Environmental Protection Agency, follows a successful youth climate case in Montana and seeks to hold the EPA accountable for violating the US Constitution and misusing its authority. The plaintiffs contend that the EPA, over its five-decade history, has knowingly permitted significant planet-warming emissions, leading to detrimental impacts on children's lives, and are seeking a trial to address these issues. Amid California's pandemic-induced population decline, recent census data indicates a net loss of nearly 9,000 residents with advanced degrees between 2021 and 2022, marking a shift from previous years where this group tended to move into the state. Factors like high living costs and remote work opportunities contributing to relocation are affecting not only lower-income residents but also highly-educated individuals, impacting the state's population dynamics.

Now the hard part starts: Actually building the housing. California is gradually swallowing the zone changes and other requirements to meet the extremely challenging Regional Housing Needs Assessment targets in the sixth cycle of housing elements. The Department of Housing and Community Development reports that two-thirds of cities and counties in the state now have adopted housing elements. Appeals have been denied ; lawsuits have been shot down . Local jurisdictions that are out of compliance are mostly accommodating the builder’s remedy applications that have come their way. Yes, some reluctant cities are still fighting – Huntington Beach first among them and Beverly Hills is currently fighting a judge’s housing element ruling that shut down its permitting power. And San Francisco is struggling to make changes that will eliminate the possibility of its compliance being revoked. But mostly they are falling in line. Even Coronado has now made a deal with the state. So despite these ongoing skirmishes, California’s communities appear mostly ready to accommodate lots more housing. The question now is whether the private market will build it. And if not, what does that mean for cities and counties around the state that have vastly expanded their housing capacity in their new housing elements? Most cities in California’s big metropolitan regions don’t have to deal with housing elements again until the late 2020s. But already, HCD has issued target letters to rural jurisdictions that are on a five-year cycle beginning next year. There is no question that the housing market is changing – or, at least, the financial calculus of developers and lenders is changing. Yes, prices are still high and inventory is low. But high interest rates mean that it’s harder for developers to borrow money at a rate that makes their projects work financially. And already we are seeing developers back off in unexpected ways. One of the biggest headlines in the San Jose area over the last month was the decision by several builder’s remedy applicants to actually reduce their project size , even though the builder’s remedy virtually guarantees approval of a project of any size. Entitlements matter, but so do pro formas. Indeed, despite more than 100 new laws since 2017 designed to make entitlement easier, the needle has barely moved. In 2018, the year Gavin Newsom promised to build 2.5 million housing units in five years while running for governor, the state saw 114,000 new residential units built. In 2022, the year he ran for re-election after the passage of dozens of pro-housing laws, that figure had grown to only 120,000. As the accompanying chart shows, California has had housing production slowdowns in the past (early ‘80s, mid ‘90s and during the Great Recession), but never has a period of low production lasted so long. We haven’t seen a year with more than 120,000 new housing units produced since 2007.

State to Return Land to Paiute People in Owens Valley & Orange County California's Department of Fish and Wildlife plans to return the historic Mt. Whitney Fish Hatchery, including over 40 acres of land in Inyo County, to the Indigenous Paiute people, marking the state's first land return to a California tribe, aligning with Governor Newsom's support for addressing tribal issues through initiatives like the Tribal Based Nature Solutions Program. The Fort Independence Indian Community of Paiute Indians, the land's original inhabitants, plans to preserve the hatchery and the land's ecosystem while making it accessible to the public, underscoring water's deep cultural significance for the Paiute. In a separate case, the Acjachemen and Tongva tribes secured 6.2 acres at Bolsa Chica Mesa, reclaiming ancestral territory in Orange County. The acquisition aligns with the LandBack movement's broader goal of restoring and safeguarding territories seized by the United States. Transit Ridership Recovery Remains Mixed across California Public transit ridership across most major U.S. cities remains notably lower than pre-pandemic levels, as highlighted by American Public Transportation Association (APTA) data. In California, Oxnard and Fresno experienced the highest levels of return, with 93% and 91% of ridership, respectively, in August or September 20203 when compared with 2019 levels. San Diego, Los Angeles and San Jose follow in ridership rates. San Francisco struggles with 51% public transit ridership, but with a 43% increase on their Muni Metro light rail network. This decline in public transit usage affects cities' overall well-being and vitality, impacting environmental cleanliness, accessibility for car-free individuals and urban space utilization. Efforts to revive transit ridership involve various strategies, including fare reductions or free rides, investing in new routes and infrastructure and adjusting routes based on evolving travel patterns post-pandemic. (See related CP&DR coverage .) Reclaimed, Treated Water Could Contribute to California's Supply The California State Water Resources Control Board is poised to approve regulations enabling the conversion of sewage into drinkable water, a process known as "toilet to tap." This landmark decision, expected next week, will impact various communities, including Santa Clara County, Los Angeles and San Diego, potentially providing a constant water supply amidst escalating concerns over climate-induced droughts. The proposed rules will allow highly treated sewage, after advanced purification, to return to the main water supply, promising top-tier water quality. Despite anticipated benefits, complete implementation may take years, pending administrative approvals, with coastal communities set to gain the most due to their wastewater discharge patterns. Public acceptance remains a challenge, with about one-third of the population expressing reservations, although experts believe growing awareness of water scarcity could increase receptivity. Rigorous purification methods underpinning direct potable reuse are expected to mitigate concerns about unknown contaminants, aligning favorably with existing indirect potable reuse systems, reflecting a broader shift towards sustainable water management in response to worsening climate-linked water challenges. Legal Challenge to San Diego's Midway Rising Project Fails A San Diego judge dismissed the final legal opposition to Measure C, paving the path for the Midway Rising redevelopment project in the Sports Arena area. The measure, passed by voters in 2022, eliminated the 30-foot coastal height restriction for the Midway District, encompassing the 48.5-acre Midway-Pacific Highway Community Plan area. San Diego Mayor Todd Gloria expressed joy over the ruling. Critics argued that lifting the restriction would obstruct coastal panoramas and lead to traffic congestion. Advocates countered that the development blueprint would be advantageous for the entire region. The Midway Rising initiative is expected to introduce over 4,000 housing units, a sports arena, a park and a district for entertainment and cultural arts. CP&DR Legal Coverage: Beverly Hills Loses Big A Los Angeles judge has suspended the City of Beverly Hills' permitting authority because he found the city had not adopted a housing element compliant with state law. However, the Beverly Hills city attorney says the city has appealed the ruling and therefore it will not go into effect while on appeal. The stakes in Beverly Hills are high, as the city is currently dealing with 13 builder's remedy applications totalling almost 1,300 units - projects that are likely to move forward with little review if the city's housing element is deemed non-complaint by appellate courts. L.A. Superior Court Judge Curtis Kin ruled against the city back in September in a lawsuit brought by Californians For Homeownership, an arm of the California Association of Realtors. But on December 21, Kin suspended all of Beverly Hills' permitting power, with the exception of home expansions, until the city adopts a housing element he deems compliant with state law. Quick Hits & Updates Real estate groups are challenging San Francisco's Empty Homes Tax, approved in November 2022 to prompt apartment availability and fund affordable housing, arguing it infringes on property rights. The lawsuit against Proposition M was allowed to proceed after a judge rejected the city attorney's assertion that the challenge was premature, permitting a response deadline for the property owners' claims by January 12. The Bay Area faces significant housing cost challenges, with approximately one-third of households considered "cost-burdened," spending over 30% of their income on housing expenses, based on the American Community Survey. While the region's median income has risen, it doesn't necessarily benefit low-income individuals, leading to high rates of cost burden among Black and Hispanic households, with disparities exacerbated by rising housing costs. The San Diego Association of Governments (SANDAG) initially considered five routes to relocate train tracks off the eroding Del Mar bluffs, then narrowed them down to two, but faced objections from residents. Now, amidst community concerns and disagreements with the Del Mar City Council and fairgrounds, multiple new potential routes are being considered, complicating the decision-making process for the project aimed at addressing safety concerns due to bluff erosion, with construction possibly commencing in 2028 and concluding by 2035. Nonprofit organization Fix the City has initiated a lawsuit against Los Angeles city officials regarding a planned 33-bed homeless housing facility, citing violations of state and city law for not conducting an environmental study and bypassing a competitive bidding process. Despite the City Council's approval of the project to address homelessness in the area, Fix the City alleges legal infringements. San Francisco's population, which faced a steep decline during the pandemic, has started to rebound , growing by around 1,400 people in the year up to July 2022 and by about 4,900 people in the subsequent year, reaching a total of roughly 848,000 residents. The recent increase in population reflects a shift, with more people moving into the city compared to those leaving, showing signs of recovery despite being smaller by approximately 22,000 people than mid-2020. A new state analysis highlights a projected $6 billion decline in California's gas tax revenue over the next decade, mainly due to electric car policies and climate programs reducing gasoline and diesel sales. This decrease in funds, approximately 31%, poses a significant challenge to state transportation funding, potentially impacting highway programs, road maintenance and public transit unless substantial new funding sources are identified. $70 million in federal funding has been allocated by the Bureau of Reclamation (BOR) for Salton Sea restoration, marking the first substantial federal funding for the Sea's stabilization and restoration. This funding aims to expand the Species Conservation Habitat Project, covering over 4,000 acres, mitigating dust emissions and rehabilitating the habitat at the southern edge of the Sea, crucial for environmental health and dust suppression. LA Metro plans to acquire around 80 properties, including businesses and residences, to build the initial phase of the East San Fernando Valley Light Rail Project. The project, estimated at $3.7 billion, will stretch 6.7 miles between Van Nuys and Pacoima, requiring acquisitions for construction, electrical facilities and track-laying. Metro is offering cash incentives, up to a 20% bonus above appraised property value and increased relocation payments to expedite acquisitions, aiming for completion by 2030 with 11 stations connecting diverse communities. A setback hit Rise Gold's efforts to reopen the Idaho-Maryland Mine in Grass Valley. Nevada County's Board of Supervisors denied the company's claim for vested rights to mine billions in gold, alleviating concerns among residents opposed to mining's return due to environmental impacts from the Gold Rush era. Rise Gold, facing an uphill battle to mine, is now pursuing a permit, a process requiring environmental scrutiny and board approval, although the Planning Commission has advised against it, highlighting the challenges ahead for the mining company. The Los Angeles City Council approved District NoHo, a massive 15-acre mixed-use development near North Hollywood's Metro station, encompassing 1,481 residential units alongside commercial and office spaces, with a quarter designated as rent-restricted. Despite approval, concerns persist regarding the project's allocation of affordable housing, sparking criticism and advocacy from community members for a more substantial focus on affordable units within the development.

Coastal Commission Imposes Large Fine on Homeowners in Aptos The Coastal Commission voted unanimously to fine the Rio Del Mar Beach Island Homeowners Association near Santa Cruz $4.7 million due to violations dating back to 1982. These infractions pertained to obstructed beach access and mismanagement of the Revetment, impacting coastal resources and views. The two fines include almost $2.8 million for access violations and nearly $2 million for non-access-related infractions, constituting nearly $4.8 million together. Though the penalty is the most severe in Santa Cruz County by the commission, some members believed it wasn't stringent enough, stating the penalties could have been even higher, constituting only 75% of the maximum for access violations and 25% for other violations. Despite no comment from the homeowners' representatives, community members celebrated it as a significant victory, especially for free public parking at Rio del Mar. The Coastal Commission's decision reflects a clash between private property rights and decades-old permit conditions, underscoring the commission's influence in ensuring public access along the state's coastline. Massive Wind Farm Slated for Port of Long Beach The Port of Long Beach unveiled plans for Pier Wind, a $4.7-billion project for assembling massive offshore wind turbines, marking a significant milestone this week as the environmental review period for the project begins. The proposal outlines a 400-acre terminal on new land made from dredged material, where turbines akin to the size of the Eiffel Tower would be assembled, floated to a storage area and later towed to sea. Included in the plans is a new wharf to facilitate vessel access and a transportation corridor for vehicle access to the complex, anticipated to transform the city's skyline with turbines reaching heights of up to 1,100 feet, potentially doubling the Long Beach International Gateway Bridge and rivaling the Wilshire Grand Center in Los Angeles. This project aims to assist California in achieving its goal of generating 25 gigawatts of offshore wind power by 2045 and aligns with the federal objective to cut offshore wind power costs by 70% by 2035, pending approvals from local, state and federal agencies in two phases over nine years, potentially completing the initial phase by 2031 and the entire complex by 2037. Delayed Environmental Review Complicates Major Bay Area Development The San Mateo County city of Brisbane missed a deadline to complete an environmental impact report for the Baylands project, intending to introduce 2,200 homes and 6.5 million square feet of commercial space. Although the California Department of Housing and Community Development approved Brisbane's housing plan, it heavily relied on the Baylands site for 90% of its housing production from 2023 to 2031. Advocates expressed concern over the missed deadline, emphasizing its significance in adhering to housing element goals and obtaining certification based on a solid plan and its execution. Brisbane's City Manager contested the characterization of the missed deadline, citing ongoing efforts to resolve complexities hindering the study's completion. However, concerns lingered about potential penalties, such as losing state funding and facing alternative projects bypassing local approvals, if deadlines continued to be missed, highlighting the challenges faced by small cities managing large-scale developments within limited resources. Environmental Groups File Suit to Block Sites Reservoir Environmental and conservation groups filed a lawsuit in Yolo County Superior Court opposing the Sites Reservoir project, alleging its detrimental impact on the Sacramento River ecosystem, fish and greenhouse gas emissions. The project, with an estimated cost of $4.4 billion, includes dams and tunnels and is praised by Governor Gavin Newsom's office for its potential to benefit millions of households and enhance Northern California's water capacity. Critics, such as Friends of the River and the Center for Biological Diversity, argue that the reservoir will divert crucial water from the Sacramento River system, endangering species like salmon and steelhead. Despite Newsom's efforts to expedite the project using Senate Bill 149, environmental groups question the adequacy of the environmental impact report under the California Environmental Quality Act (CEQA). Concerns also arise regarding the limited statewide storage increase, heightened evaporation rates due to climate change, potential methane emissions and adverse effects on water quality and fish populations, leading to skepticism about the reservoir's effectiveness in addressing water scarcity. Environmental advocates view the Sites Reservoir as an expensive and inadequate solution, urging exploration of more cost-effective alternatives to manage California's water resources. Cost of Living Hurts Los Angeles's Global Competitiveness According to a new study by the Los Angeles Area Chamber of Commerce, California's economic competitiveness in the global and federal markets is losing traction. One of the main concerns in economic prosperity is the rate at which potential labor forces are leaving the state for places with lower costs of living. Focusing particularly on Southern California and analyzing the past, current and assumed future of the state's economic output, the study found the area generates only 40% of the state's economic output despite containing most of the state's population and jobs. The disparities between the industries in Southern and Northern California necessitates a different economic strategy for the state highlighting regional differences. The study also recommended partnerships between higher education and industry to meet the demand from local industries for workers, defining business attraction and retention strategies within regions, address high costs of living and ensuring housing matches the states in economic competition with California and support newer entrepreneurial infrastructure to remove barriers of entry. CP&DR Coverage: Bishop Downtown Plan Wins APA Award This year, the City of Bishop received the chapter's Comprehensive Plan (small jurisdictions) Award of Excellence for The Downtown Bishop Specific Plan & Mixed-Use Overlay — a plan designed to manage growth in and enhance the heart of one of California's most sought-after small towns. The decision to focus growth in the city's downtown wasn't just a progressive planning fantasy. It was, essentially, a necessity due to the city's geographic and environmental constraints. While Bishop may be a particularly scenic example of small-town planning, the principles at play in the downtown plan are applicable to small towns around the state and, indeed, around the country. “Downtown does tend to be the spiritual heart of the community,” said Chad Nabity, former chair of the American Planning Association's Small Town and Rural Planning Division. “Maintaining that and keeping that vibrant and alive helps maintain the essence of the community.” Quick Hits & Updates The California Public Utilities Commission voted to extend Diablo Canyon Power Plant's operation until 2030, contradicting the initial plan to close it in 2025. Despite concerns over the aging plant's safety and high costs exceeding $6 billion, the extension aims to bolster the state's energy grid reliability and serve as a transition toward renewable energy goals, emphasizing it won't operate beyond 2030. Critics fear rate hikes and safety risks due to the plant's proximity to fault lines, while proponents argue its necessity to meet the state's climate goals, providing about 9% of California's electricity and 17% of its zero-emission power. The Tahoe Regional Planning Agency recently approved policy changes to tackle the housing crisis in Lake Tahoe, focusing on adjusting zoning regulations to promote affordable and workforce housing while emphasizing water quality, transit proximity and smaller multi-family units. These modifications aim to incentivize housing projects near transit areas, provide deed-restricted units for lower-income residents and encourage stormwater management practices to protect water quality. The Oakland Athletics have agreed to pay $45 million for their share of the Coliseum property by May 14 as per their 2019 purchase agreement. The payment timeline requires $15 million in 2024, 2025 and 2026, triggered earlier due to the team's decision to relocate to Las Vegas, despite uncertainties surrounding their home for 2025-2027 seasons and the expiration of the Coliseum lease in 2024. Sacramento Mayor Darrell Steinberg recently stepped back from his proposal to raise the countywide sales tax for affordable housing and transportation projects, citing voter sentiments and the current fragile state of affairs. He plans to offer a ballot measure template for future use but won't pursue the tax increase in 2024, aiming to establish a consistent funding source for affordable housing while acknowledging the city's significant deficit in meeting demand for low-income housing units. San Francisco's former Hunters Point Naval Shipyard, a site intended for redevelopment, faced a setback as recent testing again discovered radioactive objects, including a deck marker and a pea-sized glass object, in areas previously cleared of contamination. The discoveries, reminiscent of a 2018 radium find, could hinder plans to transform the site into a housing neighborhood, leading to environmental concerns and potential delays. Amidst this, Greenaction plans to sue the Navy and EPA, alleging violations in cleanup standards and missed deadlines, while various legal battles and controversies persist regarding the shipyard's cleanup. Culver City and Sentinel Peak Resources have agreed to cease oil drilling and decommission all wells in the Culver City section of the Inglewood Oil Field by 2029, aiming to transition the area for residential, commercial and recreational purposes. This cessation of drilling marks a step in Los Angeles County's larger initiative to cease oil and gas extraction, potentially opening up significant real estate investment opportunities in the region. The City of Sacramento is contemplating a vacancy new tax targeting owners of over 3,600 undeveloped vacant lots, primarily in North Sacramento, aiming to incentivize development on dormant land. This proposed tax would penalize landowners who haven't initiated construction or secured building permits, potentially generating approximately $20 million annually if approved by city voters. Three executives, including Siavash Tahbazof, from a San Francisco design and engineering firm, face charges for allegedly bribing Department of Building Inspection workers. The charges stem from a wider federal corruption probe revealing a pattern of bribery and improper financial benefits in the city's building processes. Ridership at BART's Santa Clara County stations, opened in 2020, has severely fallen short of expectations, with current daily averages at less than 10% of initial estimates. The San Jose expansion continues to face cost overruns and construction delays. Local officials voted 6-5 against building a light rail station near a new public housing complex in the River District, citing cost concerns and potential service cutbacks elsewhere. Despite the decision, community representatives are advocating for improved transportation access, emphasizing the need for better transit options for residents.

by CP&DR Staff on December, 21 2023

If your city could give birth to something, what would it be? Would it be rock music? Free love? The tech economy? The United Nations? Or the Chalupa? I spoke a few weeks ago at the Housing Symposium of the Orange County Realtors Association in Newport Beach--an enviable city, and a stone's throw from Taco Bell's headquarters. My role was to explain how planning plays into the state's housing mess. At one point, I was discussing the legislature's scorched-earth policy towards housing-hesitant cities and assured the audience that, while exclusionary single-family zoning would no longer be tolerated in most places, "if some city in Orange County wants to become the next San Francisco, it can." Cue the guffaws. I clarified: if a city wants to become more dense -- at San Francisco levels or whatever -- Sacramento isn't going to stop them. My interviewer, speaking on behalf of the audience, nonetheless assured me, " no one wants to be San Francisco." Cool beans. Empirically, he may be right. It's possible that the ethos of Orange County is so dramatically opposed to that of San Francisco that emulation is unthinkable. Whether San Francisco embodies density, history, bridges, dirty hippies, progressivism, public transit, dysfunctional government, homelessness, or simply the right to ply the city sidewalks wearing nothing but a leather collar, Orange Countians may indeed want none of it.  Just for the sake of argument, let's say that some city in Orange County was inspired by my offhand vision. Maybe East Placentia, Garden Beach, or Mission Nuevo will lose its mind and decide to go all-in on Victorian rowhouses, zero-parking midrise apartment buildings, and duplexes as far as the eye can see. What does that give us? Fifteen square miles is about average for a city in Orange County. At San Francisco densities, that means 132,000 units for 270,000 people -- roughly three times as many units and four times as many people per square mile as the current countywide average. Our formerly staid suburb thus becomes the third-largest city and by far the densest city in the county. What might it get for that density? Possibly less than nothing. That sort of density at that scale hasn't been built in California--or anywhere in the United States--since the Coolidge administration. We could get 15 square miles of apartment buildings that look like Taco Bells. Or we could get some of the most inspired high-density architecture this side of the Roaring '20s. Who knows. In light of the state's housing crisis, and the manifest demand for housing anywhere within reach of a sea breeze. Folks who like their lawns and their privacy might shudder. But even the most hardcore fiscal conservatives behind the Orange Curtain may yet find something to like. Orange County's GDP in 2021 was a perfectly respectable $238 billion. It ranked ninth among counties nationwide. Guess who ranked 11th? San Francisco -- at less than one-third of OC's population. That's good for $200 billion total and $245,000 per capita, ranking second nationwide (to Manhattan). Not bad for a bunch of hippies. That's not to say that the city singlehandedly creates wealth. But it certainly attracts it. If wealth is your thing, you could do a lot worse than be San Francisco. Of course, not everyone in San Francisco is rich. And there's the rub. San Francisco's vistas, architecture, culture, cuisine, and economic fortitude have been overshadowed by reports of crime, homelessness, trash, vacancies, and the vaunted "doom loop." Sometimes, it seems like the only thing left intact in San Francisco is its political dysfunction. Many of these reports are exaggerated, of course, partly because it's easy, and even fun, to take jabs at whomever is on top. Hence, the chortles. But San Francisco's problems are partly of its own making. Many of them stem from its housing shortage, which is largely self-imposed. Had the market produced anywhere near the needed number of units, the city would have fewer people on the street, more residents to shop at stores and work in offices, and perhaps less of the intraurban tension that causes voters to favor tribalism over collaboration. A denser San Francisco would likely be not only wealthier but also far more livable for everyone. Even so, I get the concerns. San Francisco is already pretty darn dense. Meanwhile, though Orange County's density is fairly uniform; its 3,989 people per square mile does not rise to the level of what anyone would consider a major city. There's plenty of room for pretty much any housing type you could imagine. A denser Orange County -- or at least a portion of Orange County -- could reap all sorts of agglomeration benefits, as long as it had decent design, transportation infrastructure, and jobs (which is already has). The great irony is, if Orange County really wanted to distinguish itself from San Francisco, the best way to do so would be to build housing. The funny thing about the audience's dismissive attitude toward San Francisco is that real estate agents should, by professional necessity, be pro-housing and, therefore, be pro-density. And yet, they were skeptical of the very regulations that promote density. Case in point: The Regional Housing Needs Assessment process was referred to openly as "stupid"—despite the fact that it's designed to bring 123,000 new units to Orange County. Half of those are supposed to be market rate, which means 61,500 units that could potentially generate commissions. I would think that people who make money when, and only when, housing units change hands would salivate at the prospect of having all those new units to sell. I, for one, am going to keep my eye on East Placentia. When the upzoning happens, maybe I'll get my real estate license. And a Chalupa.