Refusing to second-guess a decision made by a public agency based on substantial evidence, the First District Court of Appeal has upheld a Sonoma County urban water management plan. The case resembled a great deal of land use and California Environmental Quality Act (CEQA) cases in which a plan or project opponent asks the court to scrutinize agency decision-makers by reweighing the evidence, and/or to expansively interpret the duties imposed by a particular statute. In  Sonoma County Water Coalition v. Sonoma County Water Agency , a unanimous three-judge panel of the First District, Division Five, declined to take either approach. The case involved the urban water management plan (UWMP) adopted by the Sonoma County Water Agency (SCWA). The agency is a water wholesaler whose service area covers portions of Sonoma and Marin counties and includes a population of approximately 600,000. Under state law, water providers must prepare or update an UWMP every five years and address the supply of water over the following 20 years. The agency adopted the plan in 2006, and was sued by 14 environmental and agricultural organizations led the Sonoma County Water Coalition. The opponents sued on five general grounds: (1) lack of coordination with required agencies, (2) lack of the required detail within the plan, (3) failure to consider certain environmental factors, (4) failure to address the effect of recycled water on the future water supply and (5) failure to provide reasonable specificity with respect to water demand measures identified to address potential future water shortfalls. Sonoma County Superior Court Judge Gary Nadler ruled favorably for the UWMP opponents. SCWA appealed, and the First District court reversed the lower court, in large part by concluding that Judge Nadler had failed to apply the required level of deference to the agency's decision. A number of the opponents' challenges were constructed around the "possibility" argument. That is, the legal challenge was formulated by assaulting the decision on the possibility that one or more assumptions may not come to bear. For example, the challenged water management plan made certain key assumptions about future approval by the State Water Resources Control Board of additional diversions from the Russian River. The environmental and agricultural groups successfully argued to the trial court that, because this approval was not assured, the possibility existed that the future diversions might be denied. This type argument is frequently raised in land use or CEQA challenges because the contested project involves other agencies with independent regulatory control that influences future project implementation. Here, the appellate court determined that the trial court erred in setting aside SCWA's decision, because there was substantial evidence in the record to support the agency's decision with respect to the future diversion and other future regulatory issues controlled by other agencies. In other words, an agency may rely upon a reasonable set of assumptions if the assumptions are supported by substantial evidence. The appellate court also rejected as a matter of statutory interpretation that the law required the adopting agency to develop the UWMP predicated on a "bare possibility." In recognizing the deference owed to the adopting agency, the appellate court noted that the issue was not whether another planning assumption was more reasonable, but whether there was substantial evidence to support the assumption adopted by SCWA. While the appellate decision does not explain the scope of the administrative record, from a practitioner's perspective it is clear that SCWA did its homework by providing supporting evidence for its key assumptions. Another example of the possibility claim was the opponents' argument that there existed the potential for future groundwater contamination as a result of potential wastewater discharges by the City of Santa Rosa. This possibility was raised after the City of Santa Rosa circulated a request for CEQA scoping for a proposed wastewater project in the Russian River watershed. According to UWMP opponents, this wastewater discharge proposal rendered the UWMP invalid because it failed to account for the risk that wastewater discharges could contaminate the drinking water supply. The appellate court noted that the record before SCWA did not support the conclusion that this risk existed. No specific discharge project had been defined and the project was speculative. Perhaps more importantly, the record contained evidence supporting SCWA's conclusion that its water treatment and natural filtration systems would reasonably assure adequate water quality. "Although others might well assess the significance of the risk presented by DCP differently, it was again error for the court to substitute its judgment for that of the agency," Justice Terence Bruiniers wrote for the appellate court. With respect to the coordination claim, the environmental and agricultural groups argued that SCWA was required to coordinate not only with all agencies that shared the same supply, but also with all agencies whose regulatory authority potentially impacted future supplies, such as the Army Corps of Engineers and Federal Energy Regulatory Commission. The appellate court concluded that none of the agencies identified by the opponents meet the statutory criteria of agencies "in the area" that shared the same water source or otherwise qualified as water management agencies. The fact that these other agencies' regulatory authority might impact future water supply did not bring them within the scope of the statute for purposes of coordination, the court ruled. The appellate court applied an abuse of discretion standard in reviewing the agency's decision not to coordinate with these other agencies. This decision restates and highlights the role of substantial evidence in guiding a court as it reviews challenged agency actions. The court refused to sit in place of agency decision-makers, but, instead, reviewed challenged decisions while recognizing the expertise of the decision-makers and applying the statute as drafted. Although this case involved an urban water management plan, the decision should act as important guidance in the CEQA and land use context as well. The Case: Sonoma County Water Coalition v. Sonoma County Water Agency , No. 124556, 2010 DJDAR 15743. Filed October 8, 2010. The Lawyers: For Sonoma County Water Coalition: Stephan C. Volker, (510) 496-0600. For Sonoma County Water Agency: Stephen L. Kostka, Bingham McCutchen, (415) 393-2000.

So, yet again Wendell Cox � a leader of the anti-anti-sprawl crowd -- has trotted out an impressive-looking quantitative report that purports to prove that certain metropolitan regions have high home prices because of "more restrictive land use regulation". In his New Geography piece  last week , which linked to a report on his web site , Cox seemed to attribute virtually all the variation in home price around the country to land use regulations � just as he has done in the past. But � as usual � Cox's analysis is based on the assumption that sprawl is the natural state of affairs and any deviation from sprawl must therefore be caused by regulation. He does extensive quantitative analysis to prove that all difference in home price  is due to regulation. But it's not too surprising that he reaches that conclusion, considering that his analysis assumes that any difference must be due to regulation. And even Cox himself apparently recognizes that he can't quite make an airtight connection. As he said in the New Geography piece: "Nearly all of this difference is in costs other than site preparation and construction, which indicates rising land and regulation costs." Note the language: Indicates, not proves. And that's not the only defect in his methodology. There are lots more assumptions piled on top of assumptions � some contradictory -- that make the numbers come out the way he wants them to. To summarize Cox's latest analysis, he compared home prices in 11 metropolitan areas. Home prices in six metropolitan areas that he categorizes as having "less restrictive land use regulation" (Atlanta, Dallas, Houston, Indianapolis, Raleigh-Durham, and St. Louis) are lower than home prices in five metros he characterizes as having "more restrictive land use regulation" (Minneapolis-St. Paul, Portland, San Diego, Seattle, and Washington, D.C.-Baltimore). Not too surprising on the face of it, but let's unpack Cox's methodology, most of which is contained in a separate document . First, he asserts that more restrictive regulation raises home prices and disrupts normal market functioning in a variety of ways. There's obviously a lot of truth in that. Second, he identifies six specific regulatory approaches that, he claims, are characteristic of "more restrictive land use regulation policies with potential to increase land costs and house prices". These are: 1. Urban containment (urban growth boundaries, urban service districts, restrictions on physically developable land, infill quotas.) 2. Large-lot zoning in urban fringe & rural areas. 3. Geographical growth steering 4. Housing building moratoria or limits 5. High development fees & exactions 6. Mandatory regional or county planning. Where did he get this list? Well, in some cases he got them from the 2000 HUD report The Cost of Sprawl. In other cases he references himself, a la Mike Davis. But he doesn't differentiate among these policies; he simply asserts that they all fall into the category of restrictive regulation. Never mind, for example, that he lumps together UGBs (which encourage higher density) and large-lot zoning (which encourage lower density). He also asserts that no matter what the policies are called � for example, smart growth or growth management -- they are basically all the same. Next he categorizes the 11 metros based on the presence or absence of these six criteria. In the case of the five "more restrictive" metros, he finds the presence between two and four of the criteria. He's on target in many cases � clearly, Portland has a UGB. But he gives them equal weight, even though his discussion of the six admits that not all of them have the same effect. And, amusingly, he finds that none of these criteria are present in any of the six "less restrictive" metros. Apparently there's large-lot zoning in Minneapolis but not in Atlanta or Raleigh or St. Louis? He gives no indication as to how he decided this. Once he comes up with these categories, he then goes through an exhaustive � and, frankly, mostly well-executed � quantitative analysis about home construction cost, accounting for variation in construction costs in each metropolitan area. But then he assumes that construction cost is typically 80% of the advertised home price, meaning 20% is attributable to land cost and regulation. He says he has data to prove this but doesn't provide references; he simply assumes that 20% is what land and regulation cost should be in a less restrictively regulated market. And then he simply assumes that if the difference between home price and construction cost is more than 20%, then  all the difference must be due to regulation. For example, if construction cost is $80,000, the sales price of the house should be $100,000. Under Cox's methodology, if the cost of the house is more than $100,000, anything over that price is either due to excess regulation or due to high land cost that is caused by excess regulation. In his 11 metros, he compares the "expected finished land and regulation cost" with the actual difference between construction cost and home price. This is, miraculously, zero in his six "less restrictive" metros, and it's a lot more in the other metros � ranging from $28,000 per unit in Minneapolis to $221,000 in San Diego. To give a more detailed comparison, Cox calculates that construction cost of the average home in Atlanta and Washington-Baltimore is about the same -- $128,000. Based on his 80/20 rule, this means the average home price in each metro should be about $160,000 (with $32,000 for land and regulatory cost). The average home price in metro Atlanta is $161,000 � right on target. But the average home price in metro Washington/Baltimore is $235,000. That's $75,000 more than he thinks it should be � so obviously all of the increase MUST be due to regulation! The list of other things that could account for this difference is long indeed, but Cox doesn't even give lip service to any of them. To begin with, there's demand � and, in particular, the psychology of any given real estate market. Real estate booms and busts are common, as we saw have learned once again here in California in the last few years. Then there's the income of the people buying the houses; that's a factor because, in practical terms, home prices depend not only on how much houses cost to build but also on how much you can afford to pay. The more you can afford to pay, the higher the prices will be. (Median incomes in Washington-Baltimore are about 10% higher than median incomes in Atlanta And where's developer profit, which will rise in a boom market and drop in a bust market? Cox's formula doesn't seem to acknowledge profit at all. Poor guys. I could go on, but you get the idea. I respect the anti-anti-sprawl researchers � Cox, Randall O'Toole, Sam Staley � and I try to stay on good terms with them. But what drives me crazy about this stuff is that the self-fulfilling assumptions undermine the valid points and make it difficult to reach consensus about what's going on. There's no question, for example, that UGBs do increase home prices at least a little and also create a "bounce" effect, as my colleague Rolf Pendall and I have acknowledged in a piece of research Cox cites as part of his source material. But UGBs do not, by any means, account for all home price variation. Instead of acknowledging the complexity of the situation, however, Cox lumps all public policy into the same category of intrusive regulation and then ascribes all variation in home price to that regulation. (O'Toole does the same thing all the time.) I'm no academic snob, but I can't believe this would pass any serious peer-review muster. Unfortunately, Cox's stuff is the Fox News � or MSNBC, if you prefer � of land use research. One point of view always wins out. The possibility that another point of view may have merit is simply never entertained. Instead of moving toward greater understanding about land use policy and how to use it, we are pushed deeper into our own separate world views � and further away from a useful policy debate. -- Bill Fulton Bill Fulton's new book on economic development, Romancing The Smokestack , is available here .

The passage of Proposition 26 – which requires two-thirds voter approval for certain local fees – won't stop the gears of land use planning and development approvals from churning. However, it does turn traditional thinking on its head – a fee is a tax unless proven otherwise – and it's certain to lead to some litigation that might affect planning and development on the margins in California. At least that was the conclusion Wednesday of League of California Cities lobbyist Bill Higgins, who spoke at the California Chapter, American Planning Association, conference at La Costa Resort in Carlsbad. Philosophically, Proposition 26 represents a huge change in the way California views fees and taxes. There's now a new definition of taxes: "Any  levy,  charge  or  exaction  of  any  kind" imposed by the government, unless the fee falls within an exemption under the law. But the practical effect on planning may not be great. Although television commercials made it seem as though all fees will be affected, in fact Proposition 26 has a very narrow target: Sinclair Paint Co. v. Board of Equalization , a 1997 court ruling that upheld regulatory fees on manufacturers of lead paint to pay for programs to assist children subject to lead poisoning. The intent of Proposition 26 is to outlaw fees imposed generally on an industry to pay for the mitigation of problems created by that industry's products, without tying the fees to specific impacts. In a nutshell, Proposition 26 takes the "special benefit" language from assessments and applies them to fees. "Proposition 26 requires proportionality accounting on an individual user basis," Higgins said. In that sense, it's not unlike current rules on development impact fees and other obligations imposed on developers. In fact, development impact fees are exempt from Proposition 26. So are administrative costs associated with running the government – but not, apparently, advanced planning and regulatory rulemaking, which would have to be paid for out of tax funds. To that last point, Higgins said a broader question is whether other, more general fees imposed on developers – for example, a General Plan fee used to stockpile funds to update the General Plan – might get caught in Proposition 26's web. More broadly, a variety of other fees that local governments rely on – though not in the planning and development arena – might be affected. For example, according to prominent municipal lawyer Michael  G.  Colantuono , franchise fees could be at risk. And municipal gas and electric rate increases – which were exempt from Proposition 218 – will now be subject to a two-thirds vote, even though rate increases for private utilities are not. Fees and rates covered by Proposition 218 are exempt from Proposition 26.

Here's the factoid of the week at the California Chapter, American Planning Association, conference: Out of all the local sales tax declines since 2005, 40 percent are due to declining auto sales. That's right: Local sales tax revenue in California has dropped $600 million in the last five years. And of that amount, about $245 million came from declining auto sales. This according to economic analyst Stan Hoffman, who also reported that about 10% of all dealerships have gone out of business and somewhere between 500 and 1,000 acres of prime urban real estate have opened up as a result. Cities have depended on sales tax from auto sales for huge revenues in the last 20 years – but the auto industry is changing and it's hard to know how this is going to affect California cities in the long run. The bottom line, according to several panelists who spoke to this topic at the CCAPA event on Tuesday, is that cities will never get all this tax revenue back. They can possibly prop up auto sales by opening up auto malls and auto strips to used-car dealerships, but in the long run most of the land – especially along the old commercial strips – will turn over to other uses. The starkest tale told on Tuesday came from Whittier, which has had a strong group of auto dealers along Whittier Boulevard for generations. Here's what's changed since 2006: * 7 of the city's 9 dealers have closed. * Sales tax from auto sales has dropped from $1.8 million to $490,000 per year. * Sales tax from auto sales has dropped from 24% of the city's sales tax to 9%. Assistant City Manager Jeff Collier said Whittier has changed its Whittier Boulevard Specific Plan to permit used-car sales – at least temporarily – and is planning for intense commercial, housing, and mixed-use nodes along the boulevard. But he described a lot of problems, including fragmented ownership, contamination cleanup from service areas (one cleanup clost almost $1 million), and a lack of demand. Collier's takeaways: * Don't accept the first new use that comes along no matter what it is. * Understand the market so that you focus on development that's feasible, not aspirational. * Don't expect all the tax revenue to be replaced and look for other revenue options elsewhere. As the saga of declining auto sales and the impact on cities unfolds, a few wrinkles are becoming obvious. These include the following: * Commercial boulevards are struggling more than freeway-close auto centers. The Tuesday panel told the tale not only of Whittier Boulevard but also Colorado Boulevard in Pasadena, which has similarly struggled. * Microclimates matter. High-end dealerships in Pasadena have struggled – Maserati recently shut down – but as my blog from a couple of weeks ago indicated , luxury car sales along the boulevards on the Westside of L.A. are still really strong and dealerships are expanding. * Especially along the boulevards, there are a lot of familiar landowner problems. In some cases, longtime property owners have such low costs that they're not motivated to redevelopment. In other cases, the auto brands are still paying on the lease even though the dealership has left – good for the landowner, bad for the city. And in some cases, complicated landowner circumstances make it more difficult to make anything happen. (Eric Duyshart of Pasadena told the story of one dealership where adjacent parcels were owned by the dealer's two ex-wives!) -- Bill Fulton

Of all the ways that California is attempting to reduce its carbon footprint, perhaps none will have a more dramatic, or immediate, impact than that of solar power.   Up to 200 solar energy projects, are seeking, or have received, approval to be developed in California. Most notable of these are nine large-scale projects in the state's own Empty Quarter � the Mojave and Colorado  -- where state and federal officials are on the verge of inking approvals on more than 4,100 megawatts worth of solar thermal farms. Collectively, they represent nearly ten times the amount of solar capacity installed in 2009, and enough energy to power roughly 2 million homes.  One recently approved project, the Blythe Solar Power Project by the Millennium Solar, will eventually produce up to 1,000 megawatts a day, making it the largest solar power plant in the world. Companies like Millennium boast that jobs these projects will eventually create are good news for the state's nascent "green economy." And, perhaps more importantly, they are expected to provide heaps of clean energy that can help the state curb its greenhouse gas emissions and meet the goals of laws such as AB 32.  The 21st century equivalent of oil fields, these plants will not pierce deep into the Earth's surface. However, many environmentalists still approach them with suspicion.  "It is absolutely crucial that we get moved on to a renewable-based energy economy as soon as possible," said Chris Clarke, co-founder of Solar Done Right, a coalition of activists and experts concerned about the pace of industrial solar power development. "The problem is that�these giant remote utility-scale solar projects�are not spending our fairly limited economic and technological resources in a way that is going to sufficiently reduce our carbon burden on the planet." The projects' operational sizes range from a few hundred acres to more than 7,000 acres, and their total rights of way are more than 34,000 acres � roughly 53 square miles. These projects represent huge footprints that inevitably impact the local environment and its plant and animal species. But despite concerns, all nine projects appear to be moving towards approval by the end of the year. Six have already been licensed by the California Energy Commission, and three others are expected to face votes by the end of the year.  Clarke's group contends that companies like Millennium are building the desert mainly because they see profits in long-distance transmission. Clarke advocates local, small-scale solar generation like rooftop collectors.  This unusually fast pace of project review and approval was spurred by a grant program for renewable energy projects included in the American Recovery and Reinvestment Act of 2009 � a program with a deadline of December 31, 2010. Generous by any standards, the ARRA grants cover up to 30% of a project's cost, which is a major incentive for the private developers behind these multi-billion-dollar projects. The California Energy Commission estimates that the grants could total up to $2.8 billion if all of this year's applicants are approved and get built. But it's not just a sweet deal for developers that's pushing this sense of urgency. The State of California is also trying to meet its own set of deadlines. Public utilities in the state are, by the end of this year, supposed to derive at least 20% of their energy portfolios from renewable sources. Most are not expected to meet that requirement in part because of lack of generating capacity, but the state hopes that these solar projects will help utilities meet those targets relatively soon. To usher these projects along, the Department of the Interior and its Bureau of Land Management have teamed up with the state to create a fast-track program to process and approve large-scale renewable energy projects. They've targeted projects that were far enough along in their applications and reviews and have been plugging away over the past few months to ink approvals. "Collaboration with the state on that was a very big deal" said Erin Curtis of the Bureau of Land Management's media relations office in California.  The nine projects in the fast-track program are solar thermal projects, those that use vast arras of mirrors to concentrate sunlight to turn gas- or steam-driven turbines. Photovoltaic plants, which convert solar energy directly into electricity, were not included in the program as they only require county approval. However, three additional photovoltaic projects situated on federal land within California are also currently under review by the Bureau of Land Management. The fast-track program has greatly reduced the amount of time it takes to process these applications by performing state and federal environmental reviews at the same time, something Curtis said hardly ever happens. "We made a concerted effort to make sure these processes were in as much alignment with each other as possible," said Curtis. Through the fast-track program, reviews and approvals have been cut down to just 9-11 months. By comparison, the typical application and review period for a project like a natural gas plant is about 18 months. But those projects typically cover only about 30 to 50 acres, and are far less complex than solar plants, which can cover upwards of ten square miles. The greater size means more people are involved in reviewing and approving the project. It can also mean that the projects' impacts on the land can be significant. "The project sites are very large," said Karen Douglas, chair of the California Energy Commission. "The potential biological impact, the potential cultural resources impact, the potential water use impacts are significantly different than what you'd find in a natural gas power plant." And that can mean different in a worse way. Despite clearing CEQA and NEPA environmental impact reviews, some impacts remain too much for environmental groups. The Sierra Club, the California Native Plant Society, the Center for Biological Diversity and a number of other groups, including Clarke's Solar Done Right, have spoken out against some of the projects up for review or already approved. "Most of the technologies basically remove all the native vegetation and scrape the area completely clean. And in most cases, little to no wildlife can live in the same site as the project," said Barb Boyle, senior representative for clean energy solutions at the Sierra Club. Joining seven other environmental groups, the Sierra Club has been protesting one of the plants that was just approved by the California Energy Commission in September and then by the Bureau of Land Management in October. The Ivanpah Solar Electric Generating System would be a 370-megawatt facility situated on a 5.6-square-mile project site in the Mojave Desert near the border of Nevada, which is also a habitat and migration path for the desert tortoise.  The environmental groups have challenged the developer, BrightSource Energy, to alter the project's location to reduce the impact on the tortoise, a threatened species. The U.S. Fish and Wildlife service estimated that there were about 32 desert tortoises on the entire site, but a recent removal and relocation effort by the company found 17 tortoises on one portion of the site, a number that indicates there are far more than 32 on the total project footprint.  In light of these recent findings, the California Energy Commission has been petitioned to reconsider its approval of the project, a hearing that was scheduled after press time. Several Native American leaders have also voiced concerns over historical sites and ceremonial grounds within the project's footprint. BrightSource Energy declined to comment.  But the environmental groups recognize the irony of stalling or even outright opposing such renewable energy projects. In fact, as Boyle said, they want these projects to be approved, just in a better way. "These are projects that have a very large impact and we are very concerned to see them put in the right kinds of places where they'll have the least impact on endangered species, and on issues like water quality, air quality and so forth," said Boyle. Douglas at the California Energy Commission contends that the environmental review process for these projects is very thorough, and bats off the suggestion that environmental concerns have been overlooked in the rush to get these projects approved. But she also recognizes that information about projects and their review processes could be better explained to the various constituencies and stakeholder groups that are concerned about these projects. The Commission and the California Department of Fish and Game have teamed up to create a Desert Renewable Energy Conservation Plan, a stakeholder-driven process to draft a long term plan for conservation and energy development in the Mojave and Colorado deserts. Douglas said this is one of the ways the state hopes to improve its process for planning renewable energy projects in the future. "The real value of that kind of planning exercise is it forces stakeholders and government agencies -- including both state and federal agencies, which is critical -- to work together to get on the same page for what renewable energy we expect to see and how we ensure that long term conservation is achieved," said Douglas. She hopes that these sorts of outreach efforts will help refine the state's planning process. And with the 2008 executive order that will require public utilities to derive a full third of their energy from renewable sources by 2020, the state's likely to have a lot more of these planning decisions to make over the next several years. Contacts: Barb Boyle, Senior Representative, Clean Energy Solutions, Sierra Club http://sierraclub.org,  916.557.1100 Chris Clarke, Co-Founder, Solar Done Right http://solardoneright.org/ Erin Curtis, Media Relations, California Office of the Bureau of Land Management http://www.blm.gov/ca/st/en.html, 916.978.4622 Karen Douglas, Chair, California Energy Commission http://www.energy.ca.gov/ 916.654.4989 BrightSource Energy http://www.brightsourceenergy.com/, 510.250.8162 --Nate Berg

Bill Fulton's new book, Romancing The Smokestack: How Cities and States Pursue Prosperity, is a collection of economic development columns from Governing magazine that covers the good, the bad, and the ugly about how economic development is practiced in the United States. It's a quick read -- but informative and entertaining -- on such topics as how Federal Express runs its middle-of-the-night operations in Memphis, the challenge of retaining manufacturing in America, the retail wars among cities in California, and whether cities need population growth in order to increase prosperity. To buy the book, just go here: https://www.createspace.com/3477293

It's been 20 years since California elected a governor with a strong interest in planning and development. And next week's gubernatorial election appears to present a pretty significant choice in the state's approach to these issues. Despite her occasional right-wing rhetoric, Meg Whitman is unlikely to bend in a radical direction. She may suspend AB 32 and focus on job creation, but she's likely to focus on green jobs. She's also likely to try to streamline the California Environmental Quality Act, though it's hard to know � with a Democratic legislature � how likely she is to succeed. Meanwhile, Jerry Brown appears to be � well, he's still the Jerry Brown of 30 years ago, but leavened by the experience of being mayor of a gritty comeback city for eight years. Brown will also focus on green jobs. It's reasonable to expect him to be more aggressive on smart growth issues. And, like Whitman, he'll probably go after CEQA � but in a more targeted fashion focusing on infill development. California's governors have always had a love-hate relationship with planning and development. On the one hand, all governors like cutting ribbons for both big infrastructure projects and big environmental restoration projects. And California has often been ahead of the curve on planning trends nationally. On the other hand, the state and its governors have been mostly resistant to coordinated state efforts to shape development around the state. Pete Wilson, Gray Davis, and Jerry Brown himself all tried to push a coordinated state agenda but most of these efforts have failed in the implementation. Will this trend change? Let's begin with Whitman. No matter what her campaign rhetoric has been � and she has bounced around from the right to the center all year � she is almost certainly a moderate Republican in the Schwarzenegger mold. Her political mentor is Mitt Romney. Whitman worked for Romney's investment firm, Bain & Co., for eight years in the 1980s and she has maintained close ties to him. Like Whitman, Romney ran for governor as a moderate Republican in a liberal Democratic state. In his one term as governor of Massachusetts, Romney established an impressive record on planning and development issues. Among other things, he consolidated all planning-related functions in one state agency and later brokered the regional greenhouse gas emissions compact for the Northeastern states. However, Romney backed away from these accomplishments when he ran for president in 2008. Whitman has showed a similar ideological flexibility, running to the right in the Republican primary and back toward the center in the general assembly. There's nothing in either her background or her campaign materials that suggest she has thought deeply about land use or growth policy. Most of her public statements on the topic have to do with CEQA � and even then her comments have focused on the role CEQA has played in slowing down industrial development, rather than its role in shaping communities. In a widely distributed op-ed piece written in 2009, she called CEQA " jumble of ambiguous rules that require environmental analysis of projects ranging from a nuclear power plant to bike lanes." She specifically stated she was "not advocating gutting CEQA," but focused on the need to streamline it. As an example of CEQA's shortcomings, she pointed to the case of Chevron's proposed expansion of its Richmond refinery. Environmentalists sued on CEQA grounds and a Contra Costa County judge concluded that Chevron's project description was unclear about whether the expanded refinery would be able to process cruder oil. In her op-ed, Whitman claimed the refinery expansion would have lowered emissions. "Despite winning local environmental clearance, die-hard opponents used CEQA's loose framework to get a judge to halt the project, throwing more than 1,000 people out of work," Whitman wrote. As far as I can tell, however, Whitman has never actually specified what kinds of CEQA reforms she would seek. But it is unlikely that Whitman will target CEQA reforms to infill development, as Brown might. Beyond that, she has called for a one-year moratorium on AB 32. But as I wrote in the last issue, it's unclera whether she could extend that to SB 375 and greenhouse gas emissions analysis in CEQA, both of which are protected by separate statutes. Unlike Whitman, Brown has a long record as governor, mayor of Oakland, and attorney general that suggests what direction he will go in. Brown will probably devise a more formal planning and development plan for the state to follow while implementing climate change laws aggressively and seeking to streamline CEQA for infill development. He's also likely to tie everything he can to his green jobs economic agenda. Back in the late 1970s, Brown produced California's first, and so far only, urban growth strategy. It seemed cutting-edge at the time, but said nothing that would surprise present-day smart-growthers: protect farmland and natural resources, focus on infill development, and when greenfield development does occur make sure that it's compact. Typical of the regulation-rich '70s, Brown aggressively pursued air and water quality regulation; it's worth noting that Mary Nichols, Schwarzenegger's Air Resources Board chair who's been pretty aggressive on AB 32 and SB 375, took her first turn at that job working for Jerry Brown. Twenty years later, Brown found himself mayor of a city desperately in need of new investment in old neighborhoods. Frustrated that CEQA permitted in-town residents to use environmental analysis to squawk about traffic, Brown pushed a bill through the legislature that streamlined CEQA review for infill projects � but just for Oakland. Later, as attorney general, Brown pushed the climate change agenda on local governments and their CEQA analysis with his lawsuit against San Bernardino County, saying that AB 32 required analysis of greenhouse gas emissions. The legal settlement required the County to examine GHGs in both its land use policies and its county operations and set the standard for incorporating climate change into general plans and CEQA analyses. Whitman is likely to push for general CEQA reform. But she's behind in the polls and would face a Democratic legislature influenced by environmentalists and by unions that sometimes use CEQA to block corporations they don't like. Brown, on the other hand, is likely to use CEQA and other tools at his disposal � such as AB 857, the never-implemented 2002 law that requires state agencies to follow smart growth principles � to encourage growth in infill areas and discourage growth in greenfield areas. Plus he's likely to select an ARB chair who pushes hard on SB 375 implementation. He's ahead in the polls and will have a Democratic legislature with him � so the Brown agenda is much more likely to move forward.

The City of Chico's draft general plan opens with the darndest thing: a sustainability element. Every staff report to the City Council contains a section detailing the proposed action's potential impact on climate. The city has been a signatory to the U.S. Conference of Mayor's Climate Protection Agreement since 2006. With the assistance of Chico State students, the city has inventoried greenhouse gas emissions citywide, and the city has committed to cutting those emissions to 25 percent less than 2005 levels by 2020. Although such things closely divided the City Council at first, recent votes for climate protection have been 6-1. These were among the things I learned during the Great Valley Center's annual Sacramento Valley Forum at Sierra Nevada Brewery in Chico on October 27. Speaking on a panel about greenhouse gas reduction strategies, Mayor Ann Schwab was clearly proud of Chico's leadership role. The approximately 75 people at the forum applauded the city's efforts. After the forum, I drove north, deep into the most politically conservative corner of California. The "Yes on 23" signs, both formal and homemade, proliferated along highways and farm roads. So did the placards for Meg and Carly. As I drove, I wondered whether Chico's climate sensitivity could ever find a home in the cities and rural counties of what locals call "The North State." Yet, only one day earlier, the Tehama County Board of Supervisors had adopted an air pollution fee on new development. The indirect source fee will start at $172 for a new house, and double to $344 in 2012. To offset air pollution caused by new houses and commercial and industrial structures, the fee will fund projects such as road paving, bus shelters to make transit more appealing, bike lanes, and woodstove replacement. I recognize that adopting a small fee in order to reduce fine particulate matter emissions and ozone precursor gases is a long way from making sustainability your general plan cornerstone. Still, Tehama County is the sort of place where people drive a diesel pickup truck to their house on a gravel road, and spark the woodstove as soon as they get home. The Tehama County seat of Red Bluff is not Chico, a college town with extensive bike lanes and a 360-employee brewery that gets nearly all of its power from bio-gas fuel cells and the sun. Thus, the Board of Supervisors' 4-1 vote for an air pollution mitigation fee stands as a progressive move. Does it suggest the mayor of Red Bluff – or of Redding or Yreka – will soon be signing the Climate Protection Agreement? Probably not. But I can't deny that concern over climate change and related environmental issues will continue to sneak onto the agenda in unsuspecting places – no matter what happens in the November 2 election's aftermath. – Paul Shigley

The California Air Resources Board's long-awaited greenhouse gas emissions targets probably are not perfect, to say the least. But they may be the closest thing California has to a consensus these days. After two years' worth of recommendations, staff reports, committee meetings, research, computer modeling and input from literally all corners of the state, the ARB approved greenhouse gas emissions targets pursuant to SB 375 late last month. Many have called the target-setting process � resulting in goals of at least 7% per capita emissions reductions for the state's four biggest metropolitan planning organizations by 2020 � the most exhaustive, collaborative, and data-driven regional planning process in the history of the state, if not the country.  "I think that with these ambitious targets California absolutely may be on the verge of a paradigm shift where planning for sprawl that has dominated since the 1950s is on its way out," said Stuart Cohen, executive director of smart growth advocacy ground TransForm and member of the ARB's now-disbanded Regional Targets Advisory Committee. "These targets are ushering in a new focus on how we reduce not just GHGs � that's the leading indicator � but also a range of co-benefits." Whether the shift is definitive is another story. "SB 375 isn't like looking for the Holy Grail -- as if you go to enough meetings you may find it," said Riverside Mayor Ron Loveridge, president of the National League of Cities and ARB member. "But there is no Holy Grail there. This is a developmental process." The resulting targets direct the state's four largest MPOs to devise plans to reduce vehicle miles traveled (at least on a per-capita basis) and, in turn, limit their per-capita greenhouse gas emissions. The targets may turn out not to be prescriptions so much as benchmarks in the state's efforts to combat climate change and adopt more efficient land use patterns. "For the last two years...the best thing about SB 375 is that it has generated a never-before-heard regional dialogue on the future of California," said Rick Bishop, executive director of the Western Riverside Council of Governments . "(The discussions) have been fantastic, but they've been largely philosophical. I think (the targets) moves this one step closer to this being a real deal." By now participants in the target-setting process have nearly hypnotized themselves with "ambitious but achievable," That mantra that has been used countless times to describe ARB's goals. Nearly every speaker at the Sept. 23 ARB meeting insisted on ambitious but achievable targets, but for some critics the adopted goals lack the right balance.  "They erred significantly on the side of aggressive and not so much on the side of achievable," said Richard Lyon, vice president for governmental affairs at the California Building Industry Association. "Through the draft preliminary target ranges and the discussions we were having with the ARB and the four major MPOs we felt that targets in the rage of 4, 5, or even 6% were likely to be adopted and we felt that those were doable," said Lyon. "We were fine up to the time the staff-recommended final targets came out and were shocked to find that something significant happened between spoon and mouth." Lyon and other BIA officials have questioned the higher 2035 targets, saying that some of the regions themselves have projected that feasible 2035 targets could turn out to be as low as 3%. The targets that the board adopted are consistent with those recommended by ARB staff in June. For 2020, three MPOs will be shooting for 7% per capita reductions: the San Diego Association of Governments, the Sacramento Area Council of Governments, and the Bay Area's Metropolitan Transportation Commission; the Southern California Association of Governments has been assigned an 8% target. By 2035, the targets become more disparate, based in part on what each MPO said it could achieve according to its research and modeling. SANDAG and SCAG have been assigned targets of 13%, though SCAG's target is conditioned on further discussions between the agency and ARB. MTC and SACOG will be shooting for 15% and 16%, respectively.  Meanwhile, the eight MPOs of the San Joaquin Valley have been assigned "placeholder" targets of 5% in 2020 and 10% in 2035. The use of placeholders, which will be revisited in 2012, reflects unique, persistent challenges relating to air quality in the valley. The state's six remaining MPOs, which represent a small fraction of the state's population, are expected to make efforts to improve upon their own targets for those years but they are not directly addressed by the current goals that ARB has set out. The MPOs of Monterey Bay and Santa Barbara have already volunteered to model their goals after those of the big four.  "Every region has different models and different premises and variables built into them," said Mayor Ron Loveridge. "They're not always measuring the same thing from region to region." Lyon said the final numbers and that they had not been sufficiently explained by ARB or vetted by stakeholders. The most notable voice of dissent came from SCAG, whose Regional Council voted, 29-21, to recommend targets of 6% and 8% on the argument that the region simply would not be able to meet anything higher without incurring significant costs. Support for those lower targets was led by Simi Valley City Council Member Glen Becerra. Whether the region can achieve the ARB-approved targets or not does not necessarily depend on the Regional Council's perceptions. " I don't think that the 6% and 8% were very scientific," said SCAG Executive Director Hasan Ikharta, regarding the Regional Council's discussion. "They just wanted to have lower targets to make sure that we could achieve them at the end of the day. I tried to tell our board that the discussion shouldn't be about 6%, 8%, 13%�it should be about a positive policy message that we're going to do our best." "The differences of opinion capture the uncertainty about how this is going to work out," said Loveridge. "I thought it was important that we, particularly for 2035, have a very serious discussion between the CARB staff and the SCAG staff." Loveridge said he was not present for the Sept. 2 Regional Council vote. Opponents of the adopted targets also point to early studies by MTC staff that, they say, implied that higher targets were achievable only through measures such as taxes and fees that would result in $9 per gallon gasoline prices and the impelled migration of some 200,000 suburban-dwellers to the region's center cities. In a Sept. 22 editorial in the  San Jose Mercury News,  MTC Board Members Jim Spering and Bill Dodd called 15% targets "extreme" and a "gross overreach." These concerns have been echoed by representatives of the Building Industry Association, which has supported SB 375 from the onset but has expressed reservations about the targets.  At the Sept. 23 ARB meeting, however, MTC Executive Director Steve Heminger explicitly refuted Spering's and Dodd's claims, saying that the MTC board overwhelmingly supported ARB staff's recommended targets and that achieving the targets would require nothing resembling draconian measures. He insisted that recent modeling and the likely implementation of a wide range of land use and transportation demand management (TDM) techniques would make the 7% targets viable. Whatever the actual numbers, both sides are quick to point out that SB 375's GHG goals are just that: goals. The big four MPOs are now scheduled to move forward with their Sustainable Communities Strategies, which will lay out a planning blueprint that will be part of their Regional Transportation Plans and that will, it is hoped, guide member cities in their general plan updates. However, the 2035 SCAG targets are essentially placeholders and will revisited in the future, per SCAG's insistence. Until then, the setting of targets represents, to some, a pivotal moment, when the discussions over models, stakeholders, and economic impacts give way to actual planning. In fact, even if the finalized targets are, for now, only symbolic, they are a powerful symbol of California's abandonment of  the automobile-dominated suburbia that has been the  the state's dominant pattern of land use since the end of World War II. Even SB 375's critics acknowledge that the state's future lies in more compact development rather than in greenfield subdivisions. Whether this planning effort will pay dividends depends, in large part, on a host of economic factors, Bishop, whose organization is a SCAG subregion, said that communities in his area may be eager to grab SB 375's "low-hanging fruit," such as transportation demand management schemes to reduce VMTs via carpooling. "Those seem to be a little easier to grab on and not as controversial as the two more hyped-up strategies for SB 375 and that's transportation and land use," said Bishop. "The transportation and land use changes are going to come over time." Especially in a relatively sprawling sub-region like Riverside County, the big infrastructure- and development-heavy strategies that could create denser, less auto-dependent communities, will not happen with the strike of a gavel, Bishop said.  But now that the discussions about the targets have ended for the time being, the work begins in earnest on implementing SB 375. SANDAG is the first MPO scheduled to release its Sustainable Communities Strategy, which is due in July of next year, as the first regional plan of its kind. Contacts Rick Bishop, Executive Director, Western Riverside Council of Governments (951) 955-7985 Stuart Cohen, Executive Director, TransForm Hasan Ikhrata, Executive Director, SCAG (213) 236-1800 Richard Lyon, Vice President for Governmental Affairs, Building Industry Association of California (916) 443-7933 Ron Loveridge, Mayor, City of Riverside (951) 826-5551 --Josh Stephens

The entire California planning world now seems to revolve around combating climate change and reducing greenhouse gas emissions. But Proposition 23 – a long-term suspension of the state's climate-change law – is on the ballot this fall. The proposition is behind at the polls – but if it passes – will that be the end of SB 375, Sustainable Communities Strategies, greenhouse gas emissions analyses in environmental impact reports, and the whole industry that has been built up around climate change planning? And even if Prop 23 fails, Republican Meg Whitman could be elected governor. And though Whitman opposes Prop. 23, she has promised to suspend parts of AB 32 until the economy gets better. So could she kill SB 375 and the whole climate change planning effort if she wanted to? The answer appears to be no. And the fact that the answer is no represents an important lesson in how policies that emerge in response to a law quickly become embedded in the fabric of our governmental structure. AB 32 calls on California to reduce greenhouse gas emissions significantly – by 25% or so as soon as 2020. This target has triggered all kinds of other policies and actions on the part of the state, including the adoption of the low-carbon fuel standard, increased fuel efficiency standards, stronger building codes, a rethinking of how water is used, and all-but-mandatory requirements that local governments seem to minimize the increase in vehicle miles traveled associated with new development projects. Proposition 23 represents a de-facto repeal of AB 32, because it would suspend the law until unemployment in California dropped to 5.5% for one year. Even in good times unemployment doesn't usually drop that low, at least not for that long. But passage of Prop 23 – or institution of Whitman's executive decision to suspend critical parts of it – won't change the planning landscape much in California. The reason is that climate change planning efforts, while initiated in response to AB 32, are now embedded in not only SB 375 but also SB 97. SB 97 ordered the state to include climate change considerations in the analyses under the California Environmental Quality Act. SB 375, of course, is the law that requires regional planning agencies to draft sustainable communities strategies designed to meet GHG emissions reduction targets set by the state. Although SB 375 gets all the publicity, it is SB 97 that has most affected daily planning practice in California. One typical pattern under CEQA is that a new area of concern – or a new technique – is first identified by practitioners or lawyers, then memorialized permanently through a combination of legislative changes to CEQA and revisions to the CEQA Guidelines, which are done administratively by the Governor's Office of Planning & Research and the Natural Resources Agency. For example, this is how mitigated negative declarations became part of the fabric of CEQA. It's also how greenhouse gas emissions analysis became part of CEQA's fabric. After AB 32 was passed, Attorney General Jerry Brown – who will be the next governor if Meg Whitman loses – sued San Bernardino County, claiming that because of the threat of global warming, greenhouse gas emissions had to be analyzed in the County's General Plan Environmental Impact Report. In a legal settlement reached in August of 2007 < pdf =">pdf"> , the County agreed to incorporate GHG considerations into its General Plan. CEQA practitioners interpreted the settlement as meaning that GHG analyses had to be part of CEQA practice – which, of course, was Brown's whole point in suing San Bernardino County in the first place. Subsequently, the Legislature adopted SB 97, which essentially memorialized the need for GHG analysis in state law and ordered that the CEQA Guidelines be revised to set out requirements and procedures for GHG analysis. It is this law – not AB 32 – that forms the legal foundation for GHG analysis in the state and requires GHGs to be examined in every CEQA action. The point is that even though SB 97 was drafted as a way to implement AB 32, it's now a separate law and therefore not likely to be affected by the passage of Proposition 23. Of course, if 23 passes somebody will file a lawsuit claiming that SB 97 is no longer valid. But it's likely that such challenge would fail because of the nature of CEQA. There is no reason to prohibit lead agencies and their environmental scientists from concluding, on their own, that increased greenhouse gas emissions is a potentially significant environmental issue that must be considered under CEQA. Of course, Whitman – if she's elected – could try to change the CEQA guidelines to weaken the requirement to conduct GHG analysis. But it's unlikely she could get rid of it altogether. Then there's SB 375. The guts of the law lays out the process that the Air Resources Board must follow to create 2020 and 2035 targets for GHG emissions reduction and then the process that the regional planning agencies must follow in creating Sustainable Communities Strategies. But the law is so cleverly written that it can't be tied directly back to AB 32 -- an intentional effort, no doubt, by Tom Adams, the brilliant labor/environmental law who drafted most of the bill. SB 375 has only two references to AB 32, and both are in the preamble. Never does SB 375 say that it is implementing AB 32, even though it establishes processes that would not be necessary for any other purpose. And, at the same time, SB 32 wraps itself around two other legally required processes that regional planning agencies engage in – the Regional Transportation Plan required under federal transportation law and the Regional Housing Needs Allocation process required under state Housing Element law. Quite simply, SB 375 seeks to leverage the process of reducing greenhouse gas emissions to achieve other planning goals required by those other two processes. So there you have it. Proposition 23 or no Proposition 23, climate change planning is a permanent part of the California planning landscape. Meg Whitman can try to weaken this planning effort but it's unlikely that she can get rid of it – and, once in office, she may reveal herself to be a moderate Republican in the Schwarzenegger mold who sees political advantage to keeping environmental regulations strong. And as for Jerry Brown, he tipped his hand in the San Bernardino case: To him, climate change is the clearly cornerstone of California's planning in the 21st Century. --Bill Fulton

Urban Land Institute, it's time you and me had a serious chat about your awards criteria. As the foremost trade group of real estate developers, I find value in many of your publications and programs. And I find it understandable that you would laud large-scale development projects. Making projects is your businesses. But when you give a national award to a very questionable project like LA Live, the entertainment-and hotel complex that covers nearly 20 acres of downtown Los Angeles, it shows that your regard for urban quality comes second place to your round-eyed puppy love for big developers and big plans. LA Live is bad urbanism. This mega-project of retail, restaurants, night clubs and a 53-story hotel-cum-condo tower is a self-contained, inward-looking island. And that's in a major downtown area that has been seeking to promote public life for half a century. LA Live, as I have written before, is a tourist capturing machine. Located near the Los Angeles Convention Center and the Staples Center basketball arena, LA Live also adds a 7,000-seat Nokia Theater for live concerts. (There's a national chain of Nokia Theaters; think of buying naming rights for a national chain!). The developers, Anschutz Entertainment Group, already owns the sports arena. Anschutz is also the second-largest sellers of concert tickets in the nation, and a major promoter of concert tours by big name artists, who can play umpteen Nokia theaters in a row. AEG also manages many of the acts. Talk about vertical integration! But LA Live does not fit inside the existing city in a positive away. Instead, the enormous development literally imposes a wall between itself and busy Figueroa Boulevard. Ostensibly public, LA Live is in fact sequestered from public life. Although nothing like LA Live was planned for in the South Park Specific Plan, LA redevelopment officials were eager to get a convention center hotel, which became the centerpiece of the development. City officials used redevelopment bonds, to be paid off by the developer, to help assemble the enormous site for the $2.5 billion entertainment-anchored leviathan. For planning purposes, city officials simply went back and amended the general plan. What are plans for, if not to be amended whenever a billionaire unfurls the plans to the latest megaproject? Tourists to Los Angeles, finding themselves in unfamiliar territory, will naturally gather in the spectacular courtyard, with its laser lights shows, etc. They will have a drink in a club, maybe catch a show or a game, and turn around, go back to their hotel and text the missus or the boyfriend on what a swell place is Los Angeles. All this, without venturing outside the gilded cage of LA Live. In its statement accompanying the award, ULI mentions that LA Live brings development to a part of downtown that was underdeveloped. In fact, a half-dozen residential towers in the immediate neighborhood. In other words, LA Live does not represent urban pioneering. It's more like a blue whale that opens its jaws, waiting for all the krill (here meaning tourists and concert goers) to swim in. Yum! Phil Anschutz is a business genius who has yet to make a serious misstep. True to form, LA Live appears to be a big success, as I predicted it would be years ago. Business success is not contemptible, but it‘s not the only criterion for good urban design. A sense of public life, continuity with the surrounding city and increasing the level of pedestrian activity throughout the district are at least equally important. On those latter criteria, LA Live is a 1970s-style monster project in a 21 st  Century city. I think LA Live detracts from downtown, and deprives downtown of commercial activity and pedestrians-filled sidewalks.  Merchants and pedestrians both could have benefited from a similar development not conceived on the model of absolute control and privatism. But this enormous project seems to benefit itself only, while adding yet another bunker-like condition to downtown LA. In short, ladies and gentlemen of ULI, LA Live does not deserve an award. In fact, it stinks. --Morris Newman

Property taxes collected by redevelopment agencies provide the largest ongoing source of funding for low- and moderate-income housing development in California – about $1 billion annually. How agencies account for and spend that money may be about to change in light of a state Senate investigation and front-page newspaper stories. I would not be surprised to see 10 or even 20 pieces of legislation introduced in 2011 that concerns the 20% of tax increment revenue that redevelopment agencies must set aside for low/mod housing. I expect to see Democrats introduce legislation that somehow caps low/mod "overhead" expenses. Conversely, there could be Republican legislation that limits or closes down the housing set-aside, as some Republicans have in the past proposed taking money sitting in redevelopment agencies' low/mod housing funds to help balance the state budget. Bottom line: The redevelopment low/mod housing status quo is unlikely to remain. Under state redevelopment law, agencies must spend 20% of tax increment revenue on developing new low- and moderate-income housing, rehabilitating such units, acquiring long-term covenants that restrict occupancy to low- and moderate-income households, subsidizing rents and maintaining the existing supply of mobile homes. However, ensuring that agencies actually spend the low/mod money properly has been an ongoing battle for the state and affordable housing advocates, as some agencies have been eager to spend the set-aside on almost anything except actual housing. The state Department of Housing and Community Development, the state controller's office and the attorney general's office have varying levels of oversight. The controller's office and HCD collect annual reports from agencies, with HCD's reports focused on use of low/mod money. From 1998 through 2007, HCD conducted 42 audits of redevelopment agencies, forcing numerous agencies to change illegal or questionable spending practices. Budget cuts forced HCD to suspend the audits. Last year, the Senate Transportation and Housing Committee and the Senate Local Government Committee asked the new Senate Office of Oversight and Outcomes to examine redevelopment agencies' low/mod housing spending. After a full year of investigation and analysis, the oversight office released a 118-page report on September 30 that found a lack of oversight. The well-documented report is sure to rile up advocates of affordable housing, good government and limiting redevelopment activity. Although investigators compiled data on all 398 active redevelopment agencies, they focused on 12 agencies. Investigators looked at the spending and housing accomplishments over a 13-year period (from fiscal year 1995-96 through 2007-08) for nine agencies that reported the highest levels of low/mod expenditures for "planning and administration" and for three agencies chosen at random for comparison purposes. The findings are unsettling: • The Torrance Redevelopment Agency "reported no affordable housing accomplishments" for the 13-year period. Although the agency subsidized rent for up to 113 senior apartments, it did not build, rehabilitate or acquire an affordability covenant on a single unit despite expenditures of roughly $500,000 a year from the low/mod housing fund. • The Covina Redevelopment used its low/mod housing money "mostly to subsidize homeownership and the rent of senior citizens and victims of domestic violence, as well as to pay the salaries of code enforcement officers and make debt payments." In the final 12 years of the study period, the agency produced only eight new units, despite having $11.3 million in its housing fund in the 2007-08 fiscal year. • The Culver City Redevelopment Agency's low/mod housing fund grew from $3.2 million during the 1995-96 fiscal year to $22.1 million by 2007-08, but the agency built only four new units, rehabilitated 31 and acquired affordability covenants on 12 units – and virtually all of that activity was prior to 1999. During the 2007-08 fiscal year, the agency spent $2.16 million on planning and administration, including $1.5 million to employ workers in 15.2 positions in a neighborhood preservation program. • The Hercules Redevelopment Agency contracts out its affordable housing program to a private company founded by the city manager, who may or may not still own the company. The agency spends exactly $16,666 a month on unitemized "overhead" and paid $800 a month of low/mod funds to a Sacramento lobbyist. • An average of 76% of Monterey Park Redevelopment Agency low/mod expenditures were for planning and administration. During the last 11 years of the study period, the agency rehabilitated six units. • The Pismo Beach Redevelopment Agency existed for 23 years without completing any housing activity. The city deactivated the agency earlier this year. By comparison, the San Leandro Redevelopment Agency (one of those picked at random for scrutiny) spends substantial amounts on planning and administration (on average, 33% of annual expenditures), but the agency produced 155 new units and rehabilitated 153 during the study period. So far, no one has disputed the findings. Nancy Vogel, the oversight office consultant who prepared the report, told me, "It wasn't easy getting that information from the redevelopment agencies." California Redevelopment Agency Executive Director John Shirey interceded on Vogel's behalf when she got stonewalled by some agencies. When I spoke with him recently, Shirey declined to defend any agency that goes more than five years without producing actual housing units. But he was critical of the Senate report for its unrepresentative sample. "These are known agencies of concern. She might even have gotten some of the agency names from us," Shirey told me. He was also unhappy with the report's characterization of planning and administration costs as a percentage of annual expenses, rather than as a percentage of funds available. "There is some unfairness in the way it has been characterized for a long time," said Shirey, who noted that admin costs may appear artificially high for several years leading up to a development project completion. "Agencies for the most part do a good job with their housing programs and are reasonable with their planning and administration costs." All of the agencies singled out in the report are small to mid-sized entities. Christine Minnehan, a legislative director for the Western Center on Law and Poverty, said it might have helped to look at a large agency or two that does produce a substantial amount of affordable housing. Vogel conceded it might have been useful to compare and contrast 12 agencies with the highest planning and administrative expenses with the 12 agencies reporting the lowest spending on planning and administration. Still, she stands by the report. The report contains 13 recommendation, among them: Increase redevelopment agency transparency, bring back the HCD audits, improve annual agency audits performed by CPAs, and tighten the law on permissible expenditures. "In some ways, everyone is to blame," Vogel said. One obvious solution would be to place a cap on the percentage of money spent on planning and administration, something the federal Department of Housing and Urban Development does when it provides grants.Catherine Rodman, an attorney with San Diego-based Affordable Housing Advocates who has sued several jurisdictions over their use of low/mod funds, recommended a planning and administration spending limit of no more than 10%. "Because of Proposition 13, and because they don't want to build affordable housing, cities are using the housing money for staff. They consider it a slush fund," Rodman charged. However, the CRA has long opposed a cap as too inflexible, and there is concern that a planning and admin limit would simply lead to accounting trickery by recalcitrant agencies. Minnehan recommended reviving the HCD audits and improving HCD's online data collection system. Those moves would force bad actors to change their ways and educate people in agencies who are trying to do the right thing. Occasional intervention by the attorney general's office would get some attention, she added. However, Minnehan said, any reform or solution must ensure that large agencies with proven affordable housing track records – she singled out San Jose, Los Angeles and San Francisco – are not hindered. The Senate investigative report came out only days before two stories in the Los Angeles Times on the same topic. The Times concluded, "At least 120 municipalities spent a combined $700 million in housing funds from 2000 to 2008 without constructing a single new unit. … In case after, The Times found, cities spend substantial sums for little return" With the assistance of CRA and HCD, the newspaper put together an online database of redevelopment agency low/mod spending over an eight-year period. Some of the bad actors in the newspaper stories are the same ones identified in the Senate report – Monterey Park, Pismo Beach, Hercules. The Times also cited horror stories from cities as varied as Avalon, King City, Grand Terrace and Santa Ana.  Shirey called the Times stories unfair. He was particularly upset with the decision to lead off the stories with a corruption anecdote involving a Temple City redevelopment project gone wrong. "I don't think it's fair to tar redevelopment with the brush of crime and corruption, which she times reporters> times reporters> did in the lead example from Temple City," Shirey said. Although several other anecdotes in the Times stories are years old, the newspaper stories – combined with the Senate report – paint an unflattering picture. Still, it appears that the large majority of agencies are trying to comply with the law. The $700 million that the Times suggests was wasted would amount to only about 10% of the money that redevelopment agencies devoted to affordable housing during the eight-year period the Times examined. Many agencies in the database reported keeping planning and administration costs to 20% to 30% of expenditures, and reported producing, rehabilitating or subsidizing substantial numbers of units. I'm not excusing government waste and corruption. The state needs to do something to ensure all low/mod money is spent to provide actual housing – and not to provide chosen landowners with sweetheart deals or to pay the bills at City Hall. But any real reform will need a careful balance. Oftentimes, reports such as the one from the Senate oversight office and even from newspapers provide the impetus for legislative committee hearings. However, as one Capitol insider told me, hearings are best suited for fact finding and building momentum. The Senate report provides all the facts necessary, and momentum should be easy to generate, my source said. Shirey predicted we will see "12 or 15 pieces of legislation aimed at punishing the innocent. We're going to have an avalanche of legislation come January." Minnehan questioned whether significant reform can get through a Legislature packed with former city councilmembers who sat on redevelopment agency boards. In general, those lawmakers resist anything that increases agencies' affordable housing obligations, or that eases advocates' path to the courtroom, she said. One wild card to consider is the state budget, which is not truly balanced. When the next administration and Legislature go looking for money in 2011 , redevelopment funds could appear to be easy pickings in light of the recent investigations. – Paul Shigley