The State of California is nearly two months into the 2008-09 fiscal year, and it faces at least a $15 billion gap between current spending levels and tax revenues. Yet there is no sense of urgency at the state Capitol. Earlier this month, I predicted that lawmakers would pass a budget by August 25 because that's the day the Democratic National Convention starts and every Democrat wants to be in Denver. Looks like I'm wrong again. Legislators continue to work on non-budget bills, and this week they have spent an extraordinary amount of time on ceremonies for termed-out members. But there has been surprisingly little budget negotiation. In an interview with the Sacramento Bee , Gov. Schwarzenegger lays part of the blame on term limits. He notes that this is the first year that Assembly Speaker Karen Bass (D-Los Angeles) and Senate Minority Leader Dave Cogdill (R-Modesto) have participated in leadership-level budget talks. "It's just one of those examples that chasing people out of the building after a certain amount of years, even though they're still capable of leading and doing a good job, like Burton, is a mistake," the governor told the Bee . What the governor didn't mention is that he has declined to participate in most of the legislative leadership's budget haggling. The "Big 5" this year has been the "Medium 4." Redevelopment update Earlier this week, the governor released a "proposed compromise" that includes a "temporary" $228 million diversion of tax increment from redevelopment agencies to schools. The governor's proposal is to shift the greater of 5% or $225 million from redevelopment to schools every year for three years. In a legislative update, California Redevelopment Association Executive Director John Shirey said he thinks this shift could become permanent . The idea of using property tax increment to ease the state's budget woes has been floating around the Capitol for weeks. The idea is not going away, rather, the size of the shift seems to be increasing. Five percent is real money for many redevelopment agencies, whose ability to repay bonds and proceed with projects could be jeopardized. If the shift of funds from redevelopment agencies is approved, it would render meaningless a bill passed this week (AB 2594-Mullin) that permits redevelopment agencies to use non-housing revenues to acquire foreclosed housing and to assist homeowners, developers and lenders in financial straights (see CP&DR , July 2008). The state's budget solution would ensure that redevelopment agencies do not have "extra" revenue lying around to spend on housing. – Paul Shigley

I've been listening to sports talk radio since "Sportsphone 68" with Scottie Sterling was on the Bay Area airwaves during the 1970s. I think the show was on for a couple hours on weekday evenings. These days, there are full-time sports radio stations, and some of them fill nearly all 24 hours with talk shows. These shows mostly amount to guys (and the rare brave gal) bloviating about which teams and players suck or rule. Although they have memorized the previous night's scores and stats, few participants – hosts included – have any real insight into why Team A beat Team B, or why Player X was unable to rush for a critical first down. Mostly, the folks on sports talk radio want to express their strong opinions. When the subject is big-time spectator sports, it doesn't matter that the opinions are based on very few actual facts because none of it really matters. It's only sports. Over the years, discussion about things that do matter — such as social policies that effect millions of people's everyday lives – has devolved to the level of sports talk radio. "Dialogue" amounts to a bunch of hot-headed people with strong opinions yelling over one another. You get name-calling, shouting, insults, threats – essentially all the things that your mother and second grade teacher warned you about. And this doesn't occur solely on AM talk radio and cable television. You can see vivid examples in the comments that many newspapers permit readers to post at the end of on-line stories. If you scroll down very far in these comments, you'll find dialogue that goes something like this: "You're an idiot." "No I'm not, you are." "Takes one to know one." "You must know them all." What once seemed like a populist idea – letting readers comment immediately about the news of the day – has become just another annoyance. However, at least a few newspapers are reconsidering their policy of letting readers self-post anonymous comments. The Sacramento Bee ombudsman recently questioned that paper's policy after commenters attacked a rape victim who testified before a legislative committee. This is my way of getting around to talking about CP&DR 's policy regarding comments on news stories and blog entries. We permit readers to post comments. You simply need to be registered and logged in to read or post comments. Although we don't receive a lot of comments, we strongly encourage them because the level of dialogue here is different. Our audience is sophisticated and the comments reflect this. Since we started allowing comments a little more than a year ago, we have removed exactly one submittal. It was a diatribe that was only tangentially related to the subject at hand. I'm sure no newspaper would have removed the comment, but our standards are higher. Am I being elitist? Probably. But I do know that I'm not the only person who values facts, well-researched analysis, reasoned argument and opinions that just might be different from my own. So, if you want to comment on any story you see on this website — including this very blog entry — sign up, log in, and have at it. We're happy to foster a discussion about land use policy, real estate development and related subjects. I have no doubt that our readers still remember what their second grade teachers taught them about civility. - Paul Shigley

A federal judge's ruling blocking development of a controversial condominium project on the shore of Big Bear Lake has been thrown out by the Ninth U.S. Circuit Court of Appeals. The Ninth Circuit ruled that the district court had no jurisdiction to consider alleged Clean Water Act violations because environmental groups' notices to the developer regarding potential violations of the act were inadequate and federal agencies were already forcing corrective action. The Ninth Circuit further rejected alleged violations of the Endangered Species Act as both bogus and moot. The Ninth Circuit also threw out an award of $1.7 million in attorney fees to the environmental groups, a $1.3 million penalty, and a ruling that the developer was in contempt. The Ninth Circuit ruling marks a stunning reversal in a dispute that developer Irving Okovita had previously lost on a number of levels. The ruling also appeared to be a blow at Central District of California Judge Manuel Real, the 84-year-old appointee of President Johnson who has been under investigation by both the Ninth Circuit and a congressional committee in recent years. The Ninth Circuit has removed Real from at least eight cases, according to the American Bar Association Journal . Real's rulings in the Big Bear Lake controversy drew plenty of attention, but so has the entire affair. In 1989, Okovita and partners in the Marina Point development bought a 12.5-acre site on the north shore of Big Bear Lake in the very small town of Fawnskin. There was a recreational vehicle park, campground and marina on the site at the time. Okovita proposed building 133 condominiums and a 175-slip marina. Over the course of several years, the developer lined up all necessary local, state and federal approvals for the project. Construction was slow to proceed, however, and an Army Corps of Engineers permit for dredging in the marina expired in May 2002. The Corps allowed work to continue but in July 2003 issued a cease and desist order because a contractor was using the wrong equipment and stockpiling dredged material below the high water mark. By that time, the project had gained prominence among local environmentalists, who contended the site provided bald eagle habitat. The groups Center for Biological Diversity and Friends of Fawnskin sued in April 2004, arguing that the developer had violated the Clean Water Act and the Endangered Species Act. Okovita responded by suing members of Friends of Fawnskin and United State Fish and Wildlife Service employees under the Racketeer Influenced and Corrupt Organization Act (RICO). Okovita claimed his adversaries had illegally conspired to halt the development project and lower the property value so they could purchase the land. Judge Real quickly threw out the RICO lawsuit and later ordererd Okovita's attorneys (who were not involved in the case at hand) to pay $267,000 for filing a frivolous lawsuit (see CP&DR In Brief , August 2006 , September 2005 ). Meanwhile, the environmentalists' lawsuit moved to trial, and in June 2006 Real ruled that the Marina Point developers had violated the Clean Water Act and Endangered Species Act. Real permanently blocked any development on the site without court authorization, awarded attorney fees and imposed a statutory penalty. Last year, he found the developer in contempt and issued various orders based on that finding. None of those rulings held up at the Ninth Circuit. For a citizen to sue under the Clean Water Act, he first must provide a 60-day notice of intent to sue that describes the activity in question. " he notice is not just an annoying piece of paper intended as a stumbling block for people who want to sue," Ninth Circuit Judge Ferdinand Fernandez wrote in the opinion for the three-judge panel. "The purpose is to accomplish corrections where needed without the necessity of a citizen action." Over the course of five months beginning on June 30, 2003, the environmental groups filed four notices regarding dredging and the placement of fill material into the lake. But the Ninth Circuit determined that the notices were not detailed enough because they did not specify exactly how and when the developer violated the Clean Water Act (CWA). Plus, between the second and third notices, the Corps of Engineers issued a cease and desist order, and prior to the fourth notice the Corp authorized the developer to take corrective measures. Thus, the court determined, the environmental groups could not bring a Clean Water Act lawsuit. "" n light of the defects in the notices, and in light of the fact that the Corps and Marina Point did act to cease the activities that the center claimed were wrongful and even acted to effect ongoing repairs for any problems caused by past activities, the district court did not have jurisdiction to hear the CWA action," Fernandez wrote. "It should have dismissed the action at the outset." Regarding the alleged Endangered Species Act violations, the court found the lawsuit was moot because the Fish and Wildlife Service removed the bald eagle from the endangered species list last year. But even after declaring that part of the suit moot, when considering the award of attorneys fees, the court addressed the merits of the claim that the development would harass the raptors. The court concluded the project would not harm raptors. " aking all of the evidence together, there was no basis for a finding that there was some sort of causal connection between Marina Point's activities and any disruption of the behavioral patterns of the bald eagle," Fernandez wrote. Although the Ninth Circuit lifted the injunction against the development, it is unclear when construction might proceed because of the troubled housing market. The Case: Center for Biological Diversity v. Marina Point Development Co. , No. 07-56574, 08 C.D.O.S. 10204, 2008 DJDAR 12307. Filed August 6, 2008. The Lawyers: For CBD: Bernice Conn, Robins, Kaplan, Miller & Ciresi, (310) 552-0130. For Marina Point: Robert Crockett, Latham & Watkins, (213) 485-1234.

It's the last week of the California Legislature's session, and we're still on the SB 375 watch. SB 375 is, of course, Sen. Darrell Steinberg's bill that would implement the AB 32 greenhouse gas emissions reduction bill by tying state transportation and infrastructure money to regional plans to create "sustainability communities." It has been years since California Planning & Development Report has covered a bill this much. Last year, the bill got almost all the way through the Legislature before Steinberg pulled it at the last minute. Ever since, it has been the focus of extensive negotiations among builders, local governments, and environmentalists. Last week, proponents announced a deal had been done – but this may have been wishful thinking . The reason for all this hullabaloo is that all the experts agree the state can't hit the greenhouse gas emissions reduction targets in AB 32 through technological fixes alone, and that 10-15% of the solution has to come from changing growth patterns in a way that reduces overall driving . This attention to land use has given smart growth advocates and environmentalists an opening in Sacramento, but it's not something that builders or local governments really want to hear. We assume SB 375 will pass in some form, setting off a frenzy of activity in California on how to implement the legislation. But it's worth noting that the whole AB 32 thing might be short-lived. No matter who is elected president in November, it's likely that a federal greenhouse gas reduction bill will pass that could override AB 32. Even if there is no new federal legislation, it's likely that the next administration – of whichever party – will likely give California more leeway on technological solutions. For example, the state has run into trouble with the Bush administration on tougher fuel economy standards. California asked the Environmental Protection Agency for a waiver permitting the state to impose tougher standards than the feds – the kind of action that the EPA has routinely granted in the past for tailpipe emissions. Surprisingly, the EPA pushed back, saying that greenhouse gas emissions, unlike other air pollution, creates a global problem rather than a local one and therefore California should not get the waiver. Schwarzenegger and Bush remain at loggerheads on that one, but even a McCain administration might back off. It's also worth noting that in the last 20 to 25 years, California has been very successful at being on the cutting-edge of technological fixes such as cleaner-running cars and energy conservation. On a per-capita basis, the state is among the most electricity-efficient places in the world, and builders are moving quickly toward green building practices. On smart growth, however, California has been behind the curve. And it may be that the state is such a crazy quilt of interests on growth that we'll stay behind the curve. If the state can't get its arms around the question of growth patterns, that will put more pressure on the technological improvements. – Bill Fulton

A housing bill that local governments love and affordable housing advocates hate has passed the state Legislature. Assembly Bill 2000 by Assemblyman Tony Mendoza (D-Norwalk) would permit a city or county in which newly constructed housing exceeds the jurisdiction's regional fair share to count the "excess" units during the next round of the regional housing needs allocation (RHNA). For example, if a city is told by its council of governments and the Department of Housing and Community Development to plan for 50 units of moderate-income housing during a planning period but builders provide 60 units, the city would have 10 units to count against its next allocation of moderate-income units. (A city could not produce extra moderate-income units and count them against future low- or very low-income allocations.) Local governments say the bill provides an incentive for cities and counties to approve needed housing. On the other hand, affordable housing advocates argue the bill marks a dangerous shift because it treats the RHNA numbers as a ceiling, rather than as a floor. Plus, the advocates say, RHNA numbers are forward-looking; the allocations don't consider housing shortages that have accumulated over the years. The City of Cerritos is sponsoring AB 2000. Through the development of several senior housing complexes, Cerritos exceeded its RHNA allocation of very low- and low-income units for the 1998-2005 planning period. Cerritos wants credit for this excess in the current RHNA cycle. The Senate narrowed the bill a bit by requiring deed restrictions for units in the lowest income levels and by permitting HCD to establish criteria for determining the appropriate income level when providing credit for excess units. Still, housing advocates and HCD remain sharply opposed. Somewhat surprisingly, the bill passed easily in both houses. The state Senate on Tuesday voted 28-3 for the bill, which now heads to the governor. (Procedurally, the Legislature is holding all bills for the time being because Gov. Schwarzenegger has vowed to veto any bill that reaches him before a budget is passed.) No matter when AB 2000 actually lands on the governor's desk, he may very well veto it. Not only is HCD opposed, but the building industry appears to have reservations as well. What of the "big" land use bill — SB 375 ? Housing advocates this week very reluctantly signed on, and the deal is holding for now. The bill is pending on the Assembly floor. – Paul Shigley

What really matters in economic development today? How about highway access – and labor cost – and energy cost? Huh? What ever happened to the New Economy? You know, all those creative types sitting around coffee shops drinking lattes and typing on their laptops? (Which, by the way, is what I am doing right now.) The answer is that there's still plenty of "old economy" to go around in the United States. Manufacturing still accounts for more than 10 million jobs and more than 10% of the nation's gross domestic product. And no matter how caffeinated manufacturing executives need to be, they don't place a high priority on lattes. In researching my latest economic development column for Governing magazine , I ran across a survey of manufacturing executives conducted by Area Development magazine . And what manufacturing executives want more – far more – than anything else is: 1. Highway accessibility 2. Skilled labor 3. Low labor cost 4. Cheap and available energy 5. Available land 6. Low construction costs Since I'm blogging for a California land use publication, the obvious question that comes to mind is whether it's possible to provide any of these things in the Golden State. I'm going to surprise you. I'm going to say we have some of these things. We've actually got highway accessibility – though highways are often congested. We've got skilled labor, though not low labor costs. And because of California's remarkable energy efficiency, our energy costs are actually pretty low. Which brings us to the last two – available land and low construction costs. Construction costs are through the roof. And you'd think we don't have available land – especially in the coastal metros where most of the skilled labor is located. Think again. As CP&DR has written about repeatedly, there's a big movement among many of our larger, older cities to use heavy regulation to protect industrial land . In a way, industrial land is the new farmland. Factories are running more efficiently now, because they don't need the number of workers they used to. They are more high-tech. But they still need lots of land to operate – and the land they have historically used is under tremendous pressure to recycle to housing, retail, and office, largely because of its location. San Jose, Oakland, Los Angeles, and San Diego are all talking about using farmland preservation-style regulation to protect their industrial land for the future. L.A. in particular is in a knock-down-drag-out political fight over industrial lands . A lot of analytical horsepower is currently going into the question of whether to preserve this land through regulation and, if so, which parcels and uses should be priorities. I'd say the answers might lie partly in the priorities of manufacturing executives. If we've got skilled labor, highway access, cheap energy and available land – 4 of the Big 6 priorities – is that enough? Or is the cost of labor and construction just too high to make it worthwhile to preserve industrial land? I'll ponder this question as I sip my latte. – Bill Fulton

Climate change has a lot of people talking about "alternative" energy and water resources. Fine, say some people, let's built more dams for hydroelectric power and impound more surface water. But that's not what environmentalists have in mind at all. It's a conundrum, and it's one I deal with in a story on dam removal that appears in Planning magazine's special edition on water. (Sorry, the story is available only to American Planning Association members.) What I learned in reporting my story is that 273 dams have been removed in the United States since 1999. In general, these were small structures that were obsolete or unsafe. We recently reported in CP&DR on the removal of two of these dams from Alameda Creek near Fremont. But what to do about larger dams that generate a decent amount of electricity and provide water for farms and cities? The dams might be bad for the health of the river's ecosystem, but we need the carbon-free electricity and the water, right? This is a question that's bound to arise as California develops ways to reduce greenhouse gas emissions, and as the state wrestles with a water shortage that seems to grow more acute every week. I feel safe predicting that we won't build the Auburn Dam on the American River. It's a proposal that's too expensive ($3 billion? $6 billion?), too politically unpopular (the dam would flood a recreation that has more than 3 million visitors a year), and, well, too shaky (the dam would sit atop an earthquake fault). But proposals to create an "off stream" reservoir in western Colusa County and build a dam on the San Joaquin River above Friant Dam are very much alive. It's possible that climate change concerns could aid the cause of dam advocates, which demonstrates that climate change is far more than a simple environmental cause. – Paul Shigley

Denial of a conditional use permit renewal is a "project" requiring review under the California Environmental Quality Act, the Third District Court of Appeal has ruled. The court ruled for the owner of an airport in Sacramento County whose application for a conditional use permit (CUP) renewal was denied by the county Board of Supervisors without any environmental review. While the CEQA portion of the ruling is important for practitioners, the court also ruled that the State Aeronautics Act did not preclude the Board of Supervisors from closing the airport — a ruling that was a big victory for the county and local governments in general, and a potentially lethal blow to the airport. Operation of Sunset Skyranch Airport near Elk Grove has been the subject of extensive litigation since the early 1990s. Sacramento County first issued a two-year CUP for the airport in 1971, when the facility was little more than a dirt landing strip for a handful of crop dusters. Owner Daniel Lang never renewed the use permit, but he did dramatically improve and expand the facility. By the late 1980s, it was home to two paved runways, about 20 hangars, at least 60 airplanes, and an estimated 30,000 annual takeoffs and landings. In 1989, the county denied Lang a business license because he was out of compliance with the zoning ordinance, which required airports to have a CUP. In 1990, the county declined to issue a certificate of nonconforming use, resulting in an airport owner's lawsuit. In an unpublished 1993 decision, L ang v. Board of Zoning Appeals , No. C013642, the Third District ruled that the airport's expansion had ended its status as a conforming use and that Lang needed a CUP. Lang and Sunset Skyranch Pilots Association finally applied for a CUP in 1997, and in October 1999 the county approved a five-year CUP. A neighboring property owner sued over the negative declaration the county adopted for the CUP, but the Third District upheld the county's environmental review in Fat v. County of Sacramento , (2002) 97 Cal.App.4th 1270 (see CP&DR Legal Digest , June 2002 ). Days before the 1999 CUP was scheduled to expire, the pilots association applied for a renewal. The Planning Commission approved the renewal for two years with the understanding that no further extensions would be granted because urban development was encroaching on the airport. Representing area property owners, development consultants Taylor & Wiley appealed to the Board of Supervisors, which voted 4-1 to deny the CUP renewal. The board found continued use of the airport incompatible with new homes in the area and a proposed school, and determined other air facilities were available in the region. This time, Lang and the pilots association sued the county, arguing that the State Aeronautics Act (SAA) pre-empted the county's decision, and that the decision violated CEQA because the county conducted no environmental review before rejecting the application. Lang and the pilots also argued the county's decision was not supported by substantial evidence and that it was an unconstitutional taking of property. Sacramento County Superior Court Judge Jack Sapunor ruled for the county. A unanimous three-judge panel of the Third District Court of Appeal upheld all of the lower court's ruling except for the portion regarding CEQA. The county argued that no environmental review was required because CEQA Guidelines § 15270 states: "CEQA does not apply to projects which a public agency rejects or disapproves." But the court said the project here involved more than mere denial of an application. The project involved closure of an airport — something the county had vowed to enforce within 180 days, the court noted. The project had implications for the airport facilities and the pilots who use them. "We conclude the county's plan to enforce its zoning code, by ensuring the airport closure and transfer of pilots to other airports, are part of ‘the whole of the action' of the CUP denial, and the whole of the action has the potential for physical change in the environment," Justice Richard Sims wrote for the court. "Accordingly, the county's action constitutes a CEQA ‘project' requiring preparation of an initial study." Sims quickly pointed out that the court was not determining whether the project would have significant environmental effects or need a environmental impact report. "We merely hold the county has skipped an essential step," Sims wrote. The court rejected the arguments of the airport owner and pilots that the aeronautics act was contrary to and superceded the county's decision. They said the basis for the act was to protect the orderly expansion of airports and, therefore, required the county to permit continued operation of the facility. But the court said the SAA did not abridge the local police power. "The airport says we must look at the SAA as a whole," Sims wrote. "However, looking at the SAA as a whole, we do not see protection for airports against closure resulting from local land use zoning decisions." " he airport cites no specific SAA provision which is ‘contrary to' the county's denial," Sims added. " he SAA, as it stands, does not prevent the county from denying CUP renewal, even if it results in closure of the airport." In an unpublished portion of its opinion, the Third District rejected arguments that the county lacked substantial evidence for its decision, and the court ruled that the takings claim was not ripe for judicial review. The Case: Sunset Skyranch Pilots Associates v. County of Sacramento , No. C055224, 08 C.D.O.S. 8471, 2008 DJDAR 10193. Filed July 2, 2008. The Lawyers: For the pilots association: Lanny Winberry, (916) 386-4423. For the county: Krista Whitman, county counsel's office, (916) 874-5544. For real party in interest Taylor & Wiley, John Taylor, (916) 929-5545.

Earlier this week, the author of a bill that seeks to place regional planning, transportation funding, affordable housing and greenhouse gas reductions into a "smart growth" package conducted a press conference to announce that builders, local governments and environmentalists had reached agreement on the legislation. But the following day, the parties were back at the negotiating table and the legislation was not heard as scheduled in the Assembly Appropriations Committee. Senate Bill 375 did make it out of the Committee today (Friday), but it remains a work in progress. Affordable housing advocates — to whom bill author Darrell Steinberg (D-Sacramento) has close ties — are not on board. Plus, I have a difficult time believing that environmentalists and builders are going to be able to agree on precise language of California Environmental Quality Act streamlining for compliant projects, a provision that is the price for builder support of SB 375. Further, the bill would change the way the state allocates fair-share housing requirements among the regions, which is the sort of systemic change that is tough to pass in the Capitol. Senate Bill 375 is getting portrayed as the most significant land use legislation since state lawmakers passed the Coastal Act in 1976. The system under SB 375 would work like this: The California Air Resources Board, after consulting with local governments, would set regional greenhouse gas reduction targets. A regional transportation planning agency would then incorporate the target into the regional transportation plan. The transportation plan would contain a land use component (like the newly popular regional blueprints ) that would be called a "sustainable communities strategy." The Department of Housing and Community Development would have to consider each region's sustainable communities strategy when allocating regional fair share housing needs (known as the RHNA numbers). The regional planning agency would also apparently have to consider the strategy when allocating RHNA numbers to cities and counties within the region. The RHNA process and corresponding housing element updates would occur every eight years, rather than every five (although the current five-year mandate is often ignored). Development projects that implement the strategy would receive less environmental scrutiny than they would under CEQA as currently written. But projects that do not comply with the sustainable communities strategy would be on their own for infrastructure funding because the projects would not be covered by the regional transportation plan. The California Chapter, American Planning Association, has a more complete explansion of the bill on its website . Essentially, Steinberg is trying to force the development of compact, transit-oriented communities, and he's using transportation funding as both the carrot and stick. At a press conference on Wednesday, Steinberg rolled out support from the California Building Industry Association, The League of California Cities and the California League of Conservation Voters. The builders and the league had been SB 375 opponents. Both the Sacramento Bee and the San Diego Union-Tribune responded with stories suggesting SB 375 passage is near. Those news stories were only hours old when all the parties reconvened behind closed doors for further negotiations. Maybe the bill will pass before the Legislature wraps up its two-year session at month's end. And maybe the governor will sign it. But I wouldn't assume anything at this point. - Paul Shigley

Everything in the world here is under construction. So said my wife as we attempted to maneuver through downtown Portland recently. It seems that you can't walk more than a few blocks in the central part of Portland without encountering temporary construction fencing, cranes, pile drivers and hordes of steelworkers. Apparently, these people don't realize there's a real estate recession going on. Central Portland continues to thrive in ways that like-size California cities — namely, Sacramento, Fresno, Long Beach and Oakland — can only dream about. Mid- and high-rise mixed-use projects are going up all over downtown Portland and adjacent districts, often within site of condos or adaptive reuse projects that themselves are relatively new. Ten thousand housing units have been built in the 3,000-acre central Portland planning area since 1988, and another 7,000 units are either under construction or in the planning pipeline, according to a Central Portland Plan assessment released a few months ago. While new condos appear to be selling in the range of $400 to $500 per square foot, 59% of all central area housing units are available to households earning 60% of median income. Sacramento, Long Beach and Oakland count new central area housing units by the hundreds not the thousands. Fresno needs only the digits on a couple of hands. The housing slowdown that has stalled or killed dozens of central city housing projects in California appears to be having little impact on central Portland. In fact, prices are rising modestly in Portland's core area. Ridership on the regional MAX light rail system, which is concentrated in central Portland, has increased twice as fast as population, and about one-quarter of east-west commuters to the central area ride MAX. Bicycles make up 10% of vehicles on the four primary bridges across the Willamette River. It's true that plenty of people drive in central Portland; however, especially in downtown, around the university and in the Pearl District, it sure seems like more people get around via light rail, the streetcar, bicycles and their feet. The four California cities I mention above have nothing like Portland's rail system, nor the huge numbers of people who commute and run errands on their bicycles. I've written before about how Portland far exceeds Sacramento as a city . Recent visits to both cities only confirmed my earlier observations. Downtown Portland throbs with life day and night, weekday and weekend. Public gathering spaces, streetcars and sidewalks are jammed all the time. The only California city that can match Portland's urban vibe is San Francisco. Compared with Portland, downtown San Jose and Los Angeles are nighttime and weekend ghost towns. In some ways, Portland is blessed with decisions made long ago. The central area has an extremely tight grid with many blocks only 200 feet long. The tight grid makes walking easy and inviting. Compare this with downtown L.A., where walking three blocks can take 10 minutes. A public university (Portland State) campus is integrated into downtown and the cultural district. Compare that to Sacramento, Long Beach and Fresno, cities where the CSU campus is isolated in a suburban area. In the early 1970s, retired painting contractor Walter Powell decided to open a downtown bookstore; it grew into the largest bookstore in the English-speaking world. Compare that with Tower, Sacramento's homegrown chain of music stores that no longer exists. One might argue that with these sorts of building blocks, Portland planners have had it easy. Plus, they had public support for urban growth boundaries that limited the sort of low-density sprawl that has funneled capital and energy away from downtowns in Sacramento and Fresno. Still, Portland has the reputation of being the city that planners built. That makes the Central Portland Plan update that commenced earlier this year intriguing. When the current Central Portland Plan was adopted in 1988, the city's goal was to bring 5,000 new housing units and 50,000 additional jobs to the core area, explained Stephen Iwata, project manager for the plan update. In 1995, the city updated those goals to 15,000 housing units and 75,000 jobs. The housing units have arrived. But the number of jobs in the central area has remained flat at about 122,000 for two decades, suggesting that Portland planners – gasp! – failed in one area. What went wrong? Iwata said bank consolidations have cost downtown several bank headquarters, and the dot-com bust of earlier this decade turned out the lights in numerous offices. Plus, the suburbs still have room for new Class A office space with abundant surface parking. Central Portland office development means going up or down, and that's expensive. In addition, the retail vacancy rate in the core area is surprisingly high at about 12%. Naturally, Portland wants to tackle the jobs issue with planning tools. For example, the city is behind a 6 1/2-mile extension of the light rail line that will connect downtown, Portland State, a new campus of the Oregon Health and Science University, the Oregon Museum of Science and Industry, and Portland Community College. The system extension will use a new bridge over the Willamette that provides for light rail, streetcars, bicycles and pedestrians — but not cars. The idea is to employ transit and mobility to capitalize on existing assets and create an education and tech corridor. It's the sort of bold idea you expect to see in Portland. Would any California city be so brave? – Paul Shigley

While the newspapers today are full of stories about Gov. Schwarzenegger's proposed "temporary" sales tax increase, the papers are not mentioning a proposed permanent shift of money away from local redevelopment agencies. The California Redevelopment Association is sounding the alarm about the proposed $200 million shift, which would apparently come in the form of increased, mandatory pass-through payments to school districts. According to the CRA, this would amount to a little more than 4% of gross tax increment that local redevelopment agencies receive every year. The proposal reportedly originated in the Legislative Analyst's Office. Compared with Schwarzenegger's plan to raise $5 billion annually with a sales tax increase, the redevelopment tax shift sounds like peanuts. But to redevelopment agencies that have issued debt based on certain revenue expectations (in other words, all redevelopment agencies), the governor's proposal is worrisome. Fearing that the state would tap local revenues to help solve the state budget crisis, the League of California Cities recently launched a new website that features video clips from several years ago in which the governor repeatedly promises to leave local revenues alone. However, the political difficulty inherent in the sales tax increase makes the redevelopment tax increment look like low-hanging fruit. For several years, we've seen lawmakers pass "get out of town" budgets. Everyone knows the budgets are hokey, but lawmakers just want to get back to their district or campaign or go on vacation – anything besides work on California's complicated system of raising and spending money. This year, I predict we'll see a "get to the convention" budget. The Democratic National Convention starts August 25, and no Democrat wants to miss this blowout. (The Republican National Convention is scheduled the following week.) Legislative update The governor on Monday signed a bill that specifically authorizes local governments to defer collection of development impact fees until as late as the close of escrow on the sale of new buildings. The bill, AB 2604 (Torrico), was the third and final piece of what the California Building Industry Association calls a "homebuilding stimulus package." Cities and counties typically impose impact fees, which pay for transportation improvements and various public facilities, when they issue building permits. That system has proven deadly to builders who are seeing many buyers cancel the purchase of new units built on speculation. The CBIA says deferral of impact fees until a housing unit is sold helps builders' cash flow and will boost speculative building. A handful of agencies have already begun deferring fees. The bill signed by the governor is not mandatory on local government, so one wonders how much it will get used. Local governments have their own cash flow issues, and they are still expected to provide the infrastructure to serve new homes. The other pieces of the CBIA package were SB 1185 (Lowenthal), which automatically extended the expiration date of subdivision maps by one year, and AJR 45 (Coto), a resolution that urged Congress to pass housing legislation. The governor signed SB 1185 last month. The Assembly passed AJR 45 about five weeks ago, and Congress has since approved a housing package that contains many of the provisions requested by the building industry. – Paul Shigley

There's a national debate going on nowadays about how the issue of cities, metropolitan areas, and growth is lacking from our national debate. Recently, for example, UCLA planning professor Randall Cran e argued that cities are the most important issue that the presidential candidates aren't talking about. But will the usual arguments about infrastructure and prosperity carry the day? Or do cities and metros need to play the climate change issue to be relevant in Washington again? Some policy wonks are still trying to put planning and development issues on the national agenda. Perhaps the best recent example came last week in Pittsburgh, when Bruce Katz, longtime head of the Brookings Institution Metropolitan Policy Program delivered his "MetroNation" pitch to the Alliance for Regional Stewards hip, the national association of regional civic groups such as Joint Venture Silicon Valley. Katz has been beating the "metro drum" for a decade, but his message is now finely honed – and one that planners and developers ought to pay attention to. His argument is that the United States is a "metropolitan nation" – the top 100 metros account for an enormous percentage of the population and economic activity – and future American prosperity depends on how well these metropolitan areas compete in the world economy.  (Brookings most recently came out with a report on "Mountain Megas" – the five big metropolitan areas in the Intermountain West.) Katz further argues that the four building blocks of metropolitan prosperity are innovation, infrastructure, human capital, and quality place – a kind of mash-up of land use planning and economic development. The most interesting part of Katz's argument is his call for a more forceful – or least clearer and more consistent – federal role in helping metropolitan areas pursue these four goals. Calling for a strong federal role – especially in economic development – has been out of fashion in Washington for at least two decades. But Katz's argument is that the federal government creates policies and spending strategies anyway, so the feds should be more conscious in using these efforts to support metros, whether it's in infrastructure or innovation. Katz claimed to be spending most of his time focused on Congress rather than the presidential candidates. He argues that the Democrats who control Congress will be very powerful no matter who's president. "Obama has begun to get a lot more specific / concrete," Katz said in Pittsburgh. "He's also picking up some of what Senator Clinton proposed in the primaries. McCain is still a work in progress. We know what he doesn't like, he doesn't like earmarks. We don't what he likes." Katz's prosperity-based argument might get only so far no matter how bad the economy gets. After all, even if the Democrats are in control, there's still considerable political resistance to a strong federal government. But I'm betting if there's one issue that makes Katz's agenda pop, it's climate change. Like most other policy wonks, Katz has begun to work climate change into his policy agenda. Sometimes it feels a little like an add-on to the four "building blocks" he talks about all the time. But it's probably the only overarching issue that the feds will be able to tackle without resistance during the next couple of years. And it's an issue that plays well on the metropolitan level, because emissions reduction and adaptation transcend local boundaries. -- Bill Fulton