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CP&DR Vol. 38 No. 8 August 2023

Financiers, Tech Leaders Purchase Land for "New City" in Northeast Bay Area Over the past five years, a company called Flannery Associates has been acquiring over $800 million of open and agricultural land near Fairfield in Solano County, with apparent ambitions to build a new city in the Bay Area hinterlands. The holdings total roughly 40,000 across 230 parcels. The company, which is registered as an agricultural company and has no apparent experience in real estate development, was founded by former Goldman Sachs trader Jan Sramek and has been funded by some of the wealthiest individuals in the tech industry, including Reid Hoffman (LinkedIn), Patrick and John Collison (Stripe), investor Michael Moritz, and the venture capital firm Andreessen Horowitz. Mortiz reportedly circulated investment memos describing the development of a new, walkable city with an innovative governance structure. The company has purchased land for as little as $5,000 per acre, but prices have risen to $20,000 per acre as available land has become more scarce. The purchases have raised national security concerns due to their proximity to Travis Air Force Base. A local mayor believes the company -- which has not previously stated their intentions behind the purchases -- could be planning to create a new city, as suggested by a poll reportedly sent to Solano County residents. This poll stated the potential city could include new homes, a solar energy farm, orchards, parks and open spaces. Federal entities like the U.S. Air Force's Foreign Investment Risk Review Office and the Committee on Foreign Investment are looking into the acquisitions. Orange County COG to Ask Supreme Court for Relief from Housing Goals The Orange County Council of Governments unanimously voted to ask the California Supreme Court to overturn the state's directive requiring cities and counties in Southern California to construct 1.34 million new homes by the end of the decade. This move comes after lower courts dismissed their former lawsuit alongside several Los Angeles County cities challenging the housing mandate's excessiveness. The Second District Court of Appeal upheld the original ruling, stating that legislative changes in 2004 shield the Regional Housing Needs Assessment process from legal intervention. Orange County leaders claim state housing and community development officials did not adhere to the law in determining the region's housing needs. The Attorney General's Office, representing HCD, emphasizes their commitment to aiding struggling California families in affording housing. The 1.34 million-unit mandate is applicable to all city and county jurisdictions within the Southern California Association of Governments region, encompassing LA, Orange, Riverside, San Bernardino, Ventura, and Imperial counties. The appeal filing deadline for the council of governments is September 5, with the California Supreme Court having the discretion to review the matter. (See related CP&DR coverage .) Supreme Court Throws Out Monterey County Ban on Oil Wells The state Supreme Court ruled, on a 7-0 decision, Monterey County's voter-approved ban on new oil and gas wells as invalid due to state laws promoting oil and gas production. Measure Z aimed to prohibit drilling new wells and wastewater injection in unincorporated areas of the county, but the court found it conflicting with existing state laws. While oil companies welcomed the decision, supporters of Measure Z expressed disappointment and emphasized the need for state law prioritizing public health and climate concerns over industry interests. The ruling avoided addressing the issue of restricting well locations. “By providing that certain oil production methods may never be used by anyone, anywhere, in the county, Measure Z nullifies — and therefore contradicts — (the state law's) mandate that the state ‘shall' supervise oil operation in a way that permits well operators to ‘utilize all methods and practices' the (state) supervisor has approved,” the ruling reads. San Diego Revamps Mission Bay Recreation and Restoration Plan The City of San Diego amended plans to turn parts of Mission Bay into marshland , including a 10 percent increased of land -- from 60 acres to 66 of the 505-acre redevelopment -- for golfing, tennis, sports and recreation. The new plan includes other additional offsite replacement recreation sites and a promise to minimize disruption to activities if fields are relocated. Many recreational institutions in the area disputed with environmental groups pushing for more wetlands and camping companies advocating for campgrounds. The plans initially began with the closure of a mobile home at Mission Bay, and have faced large community pushback. City officials stated they cannot promise any individual activity will be included in the plans. The city council will vote on a revised concept plan in the fall. CP&DR Coverage: CEQA & Solar As California enters a new world of renewable energy, local governments are struggling to make sure their plans and zoning ordinances are keeping up with changes in technology. A good example is the battle in North Livermore over the Aramis Solar project, a 347-acre solar farm in unincorporated Alameda County that would include 267,000 solar panels as well as on-site battery storage. The Alameda County Board of Supervisors approved the project back in 2020. But neighbors and local environmentalists, including the local chapter of the Audubon Society, have consistently opposed the project, calling it an industrial “power plant” and arguing that it would convert an agricultural area into an industrial area. Recently, an unpublished First District Court of Appeal ruling gave the county a complete victory on the Aramis project. Quick Hits & Updates A new report by SPUR studies San Jose's Al Fresco Initiative allowing local businesses to operate on sidewalks, street parking spaces and private parking lots, concluding that making the initiative permanent by making the program affordable, easy to implement and easy to scale up would enable the city to continue a program benefitting businesses and community members. The University of California Regents face a $4.5 million lawsuit from neighborhood groups linked to Berkeley's People's Park, alleging that they intentionally destroyed plants and property, hindering access and enjoyment of the park. The lawsuit, filed by three nonprofits, claims the destruction was a result of the university's order to clear the land for a housing development project, arguing the demolition damaged the park's features, including a wheelchair ramp to the "People's Stage," with the nonprofits seeking compensation for the lost vegetation and repairs, while emphasizing the importance of protecting the environment. (See related CP&DR coverage .) The Los Angeles City Council has approved the purchase of the Mayfair Hotel for $60 million to be used as part of the city's efforts to combat homelessness, despite concerns about safety, costs, and operational plans. The purchase, intended to provide interim housing and services, received mixed reactions, including concern over community engagement and the site's access to Skid Row residents, but was approved with a 12-2 vote. Oakland's lead negotiator for the A's Howard Terminal ballpark project left her position to join a real estate developer after the A's stopped payments in May while shifting their focus to exploring a new ballpark in Las Vegas. If the A's return to negotiations an assistant city administrator, will take over the role. The City and County of San Francisco has engaged San Francisco-based design firm Gensler on a "feasibility study" for a downtown soccer stadium that would replace the city's faltering Westfield mall. The city does not control the site, but Mayor London Breed hopes to "get a developer and others excited about making investments into the stadium as a way to diversify what happens in the downtown area." Several flagship stores have vacated the mall amid poor sales and lack of activity downtown. (See related CP&DR coverage .) Fairfield's Local Agency Formation Commission (LAFCO) approved the annexation of three county "islands" within city limits, while also approving a 5% cost-of-living increase for its employees and adding a project specialist position. The annexations involve several properties, an apartment complex and a local church as part of the ongoing effort to incorporate unincorporated properties within the Solano city. The Los Angeles City Council voted 8-6 to halt a contentious hotel project in Benedict Canyon due to concerns about environmental impact and public safety, citing potential ethics violations, environmental threats and community opposition. The development group behind the Mall of America abandoned plans to buy a 47-acre site in Canoga Park in Los Angeles after almost five years in escrow. The parcel requires extensive environmental cleanup due to groundwater and soil contamination. (See related CP&DR coverage .) Department of General Services and the Department of Housing and Community Development have selected McCormack Baron Salazar to lead the team to transform three state office buildings in Sacramento into affordable housing. This move is in line with Governor Newsom's efforts to address California's housing crisis by repurposing state properties for affordable housing, potentially creating 400 new homes in the heart of downtown Sacramento with various affordability levels. The U.S. Department of Housing and Urban Development agreed to exempt Los Angeles-based housing providers from rules requiring applicants to provide identification and documentation of their homeless status and income before moving into their apartments. Now, applicants can move into apartments and acquire the necessary documents, particularly prescient for people moving from interim to permanent housing.

As most readers of CP&DR are aware, the California Environmental Quality Act plays a unique role in California planning and development. Depending on your point of view, it’s either the one thing standing in the way of destruction of your neighborhood or the one thing standing in the way of providing needed housing. As we recently reported , both sides of the CEQA debate often use CEQA litigation – either the supposed prevalence of it or the supposed rareness of it – to defend their point of view. But, whichever side of the issue you are on, CEQA continues to operate as the “big dog” of California planning, overshadowing almost everything else in sight (with, currently, the possible exception of the builder’s remedy). There is no question that CEQA invites creative challenges to development projects. The whole law is designed to encourage the creation of citizen groups that will sue and try to find something wrong with the environmental analysis – or the procedure used to conduct the environmental analysis. But lately, we’ve seen California’s appellate courts having to deal with more creativity than usual. Most of this creativity results in nothing more than a lengthy and expensive win for the local government approving the development, but it does highlight the state of play for CEQA right now. Three recent cases – two of which resulted in wins for the local government, one of which resulted in a loss – are unusually good examples of this creativity. The first, in case you didn’t notice it when we reported on it, was what is probably best described as “the Montecito biking trail case”. Here’s what happened: There’s a popular trail in pricey Montecito called Hot Springs Canyon, which has only about eight or 10 off-road parking spaces. During COVID, trail usage went through the roof and people started parking on adjacent streets and roads. Then, nearby residents – and this is an extremely expensive neighborhoods, with houses currently on the market for between $4 million and $25 million – put boulders, plants, and other obstructions out in the public street to prevent people from parking there – a violation of the Santa Barbara County’s encroachment law. But the hikers simply parked around the boulders and obstacles, blocking traffic. When the county tried to enforce the encroachment ordinance, the neighbors sued, saying that removal of the obstacles was really a prelude to an expansion of the parking area and therefore was part of a “project” under CEQA. The Court of Appeal disagreed, saying that the county was simply trying to reclaim parking that already existed. “Any claimed ‘failure’ to follow the California Environmental Quality Act is not a defense to the commission of a crime,” the court wrote. ( CP&DR ’s writeup of this case can be found here .) The reaction to our writeup of this case was virtually unprecedented. When Bay Area YIMBY Max Dubler called the case “bonkers,” on X (formerly Twitter), we got more web traffic than we’d had on any other story all year. Which I guess means all this CEQA creativity is good for us, even if the creative lawyers lose in appellate court. But that wasn’t the only creative case we’ve run across recently. Here’s another recent creative case: In San Diego, the city decided to try to underground utilities – something that most neighborhoods welcome. But because the underground utilities would have required above-ground transformer boxes, a resident of the affluent close-in neighborhood of Kensington sued. (The resident has sued the city several times over tree removal, which might have been part of the undergrounding project, and has also written a book about the neighborhood .) This case has now been to the Court of Appeal twice. The first time, the appellate court ruled in favor of the neighbor – saying that the city’s mitigated negative declaration was insufficient because the city had not analyzed consistency between the project and sent the case back down for the judge to resolve. Instead of redoing the environmental analysis, the city simply abandoned the project. You’d think that would be the end of it. But the neighbor continued the litigation, arguing that the city needed to do the additional environmental analysis anyway because the project might be re-started at some point in the future. At that point, the appellate court called a halt to the whole thing, saying that if the city re-starts the project in the future, additional CEQA analysis can be done at that time. ( CP&DR ’s writeup of that case can be found here .) But both those creative challenges failed. The challenge to the Marilyn succeeded. If you’ve been to downtown Palm Springs, you’ve probably seen the 26-foot-tall, 34,000-pound statue of Marilyn Monroe – recreating her famous scene from The Seven-Year Itch – which is located in the middle of Museum Way in front of the Palm Springs Art Museum. When the statue was placed on Museum Way in 2020, quite a few locals objected, calling it a sexist statue. The director of the Art Museum said : “You come out of the museum and the first thing you're going to see is a 26-foot-tall Marilyn Monroe with her entire backside and underwear exposed…We serve over 100,000 school-age children that come to our museum every single year. What message does that send to our young people, our visitors and community to present a statue that objectifies women, is sexually charged and disrespectful?” (Following a variety of controversies, that particular museum director left Palm Springs after two years.) However distasteful misogyny is, it’s not an environmental impact. So the Committee to Relocate Marilyn had to find something else to sue over, and they did. The city had declared the statue’s location on Museum Way as exempt from CEQA and also declared the statue’s positioning (and closure of the street) as “temporary” under the state Motor Vehicle Code. (When you stand in front of it, the statue sure looks permanent.) In this case, the appellate court said the CEQA problem was the exemption was tied to a temporary closure and subsequently the city permanently closed the street. The court revived the CEQA part of the case on those grounds. ( CP&DR ’s writeup of the Marilyn case can be found here .) What’s the common theme? In all of these cases, the plaintiffs were opposed to something for reasons other than the reasons they sued on. The Montecito residents didn’t want to comply with the law, so they sued based on CEQA grounds. The San Diego resident feared her trees would be removed, so she sued based on the city’s Climate Action Plan. The Palm Springs Marilyn opponents thought the statue sent the wrong message, but they sued over CEQA technicalities. You can complain all you want about these kinds of cases, but, as I say in my CEQA summing up in Guide to California Planning , CEQA is doing what it is designed to do: Engage communities (affluent ones, anyway) in a robust debate over the environmental effects of proposed projects – even if those supposed environmental effects are sometimes a stretch. If you don’t want CEQA to do that, you’ve got to change the law in a big way. And, for a variety of reasons, nobody in Sacramento is willing to take that on.

The depths of the covid pandemic inspired dire proclamations about the “death of cities,” and downtown areas were Exhibit A.

HCD to Award $2.8 Billion in Next 18 Months The California Department of Housing and Community Development released its 2023-2024 Notice of Funding Availability (NOFA) calendar. This calendar includes NOFA release dates, application deadlines, and anticipated award dates for various HCD funding programs. Over the next 18 months, HCD will provide more than $2.8 billion in funding for affordable housing and homelessness prevention, including $1 billion for multifamily housing, $124 million for affordable homeownership opportunities, $129 million for critical infrastructure support, $124 million for Tribal entities and $438 million for non-entitlement jurisdictions and disaster-impacted communities. These funds align with the state's goal of reducing homelessness and ensuring safe and affordable housing for all Californians, with funding announcements made through individual Notices of Funding Availability. Court Supports San Diego's 2020 Convention Center Ballot Measure An appellate court ruled in favor of San Diego's decision to approve a 2020 ballot measure for an expanded convention center via a simple majority vote. The court's decision overturns a previous ruling that questioned the city's authority to change the measure's outcome post-election. The court clarified that Measure C, a citizens' initiative seeking to raise taxes for the convention center project, only needed a simple majority for passage. However, the ruling did not conclusively determine whether Measure C truly qualified as a citizens' initiative, leaving that aspect for further consideration. The ruling has implications for the convention center project and funding for homeless services, as it introduces a delay of approximately 1 1/2 years. While proponents of the initiative see this as a positive step toward addressing homelessness and expanding the Convention Center, critics, including Alliance San Diego, view the ruling as a concerning precedent. Alliance San Diego, which challenged the city's authority to alter the election outcome, is considering further action, including seeking review by the state Supreme Court. State Plan Intends to Plug 5,000 Oil Wells California officials announced a plan to permanently seal over 5,000 orphaned oil wells, with the first phase allocated $80 million to plug 378 wells in the southern half of the state. Kern County, including the Arvin community and Morning Star neighborhood, will benefit from this effort. These orphaned wells, often neglected and abandoned, are known to release methane and other toxic compounds into the air, posing an environmental threat to nearby communities. Although advocates welcome this move, some criticize the delay in addressing the issue, emphasizing the need for permanent solutions given the recurring nature of leaks. Plugging wells will be costly for the state, with estimates exceeding $100,000 per well, and while some funds will be allocated to training displaced oil and gas workers, concerns remain about the adequacy of fees collected from producers to cover these expenses. The plan is part of a broader effort to address environmental and health concerns in disadvantaged communities, but some residents believe a higher proportion of funds should be directed towards these communities. Grand Jury Finds Williamson Act Underused in Contra Costa County A statewide tax relief act utilized in Contra Costa County to reduce development in open spaces has been essentially inactive for the last five years, according to analysis by the San Jose Mercury News. The largely suburban but formerly agricultural county relies on the Williamson Act to restrict land for agricultural or open space use. This law, passed in 1965, offers tax reductions from 20% to 70% to landowners who commit to keeping their land as open space or for agricultural use, discouraging premature conversion to urban areas. A civil grand jury report found delays in the approval process in Contra Costa County, causing overpayment of property taxes. The report recommends streamlining the process, similar to another county that approves agricultural contract applications in a few months. The DCD's response to these findings is pending, and Contra Costa County's history of development and the need to preserve open space underscores the importance of efficient land use policies. The county's response to these findings is pending, but the failure to process Williamson Act contracts could impact small farmers and contribute to further development in the region. CP&DR Coverage: CEQA Doesn't Allow You To Break The Law Santa Barbara County officials can enforce misdemeanor encroachment laws without conducting an analysis under the California Environmental Quality Act. An appellate overturned a Superior Court judge's ruling in a dispute between Santa Barbara County and Montecito residents who illegally placed rocks, plants, and other obstructions in the public right-of-way to discourage other people from parking near their houses while using a popular hiking trail. The residents had argued - successfully in Superior Court - that enforcing the encroachment law was really part of a larger “project” to be undertaken by Santa Barbara County that would result in more parking spaces in order to allow more hikers to use the trail. But the Second District Court of Appeal, Division Six, in Ventura disagreed. Whether or not enforcing the law was part of a larger project, Yegan wrote, the county acted properly in declaring the enforcement action as exempt from CEQA. Quick Hits & Updates Three California cities - Rohnert Park, Santa Cruz and South San Francisco - have been awarded the state's Prohousing Designation, making them eligible for funding incentives and additional resources for their efforts to reduce barriers to housing construction. This brings the total number of Prohousing communities in the state to 30 as part of Governor Newsom's initiative to address California's housing crisis and promote the development of more housing. A New York-based development firm is set to formally present their proposal for the redevelopment of the former Concord Naval Weapons Station, a 2,750-acre site, to city officials on August 26. The city expects to grant exclusive negotiating rights to Brookfield, as other contenders have fallen short, potentially leading to the project's collapse if the city does not select a project developer. (See related CP&DR coverage .) An analysis by Costar News found apartment construction across cities on the West Coast, including California, is slowing despite high demand due to rising interest rates and construction costs, particularly in cities like San Jose and Los Angeles. This trend is expected to exacerbate housing shortages and escalate prices, with experts predicting an oversupply in demand and delayed construction in the coming years. The City of El Centro filed a request for an injunction against the Imperial County Local Agency Formation Commission, alleging an improper California Environmental Quality Act process in a proposed healthcare district expansion project. The city aims to halt LAFCO's proceedings until the CEQA process concerns are addressed, citing alleged failures in adhering to statutory and regulatory procedures. The Santa Clara County Local Agency Formation Commission partially approved Gilroy's request to annex 55 acres into its northern limits, with a suggestion for Gilroy officials to come back later with modifications for the rest of the acreage, considering concerns over vacant land and service provisions for the development, highlighting the city's need for housing units and the need to balance affordable and single-family homes in the growth plan. An Australian developer responsible for the only major high-rise project in San Francisco initiated during the pandemic will suspend construction on its Hayes Point development until new tenants or a capital partner are secured. The $1.2 billion project with 333 condos and 300,000 square feet of office and retail space, faces postponement until 2024. A new study from the Public Policy Institute of California found most state residents are greatly concerned about wildfires in their part of the state, with 44% of all adults call wildfires a "big problem" and 34% calling them "somewhat a problem." Most Californians only have some confidence in the government response to wildfires (53%). In a recent study on environmental policy, the PPIC found 68% of likely voters areee in favor of the state establishing a citizens' assembly on environmental issues. The Santa Clara County Local Agency Formation Commission partially approved Gilroy's request to annex 55 acres into its northern limits, with a suggestion for Gilroy officials to come back later with modifications for the rest of the acreage, considering concerns over vacant land and service provisions for the development, highlighting the city's need for housing units and the need to balance affordable and single-family homes in the growth plan. The Department of Housing and Community Development rejected Palo Alto's newly adopted housing plan, requiring the city to revise the document to meet the requirements of the State Housing Element Law, including demonstrating the feasibility of housing production on listed sites and addressing historic injustices such as past discriminatory practices. The rejection puts the city at risk of "builder's remedy" development applications, and the revisions are required within a year of the statutory deadline, which was January 31. The Hermosa Beach City Council unanimously voted to adopt its housing element, aiming to build 558 units by 2029, despite some residents' concerns about over-development and potential changes in zoning affecting height limits. The LA Metro and Caltrans 605 Corridor Improvement Project will not result in any residential displacement in the widening of freeways. Previously, earlier announcements indicated the project would impact over a thousand land parcels and demolish over 300 homes and apartments in Latino working-class neighborhoods. The new announcement confirmed the project will remain within existing Caltrans right-of-way, avoiding residential demolitions. The eastern San Diego county city of El Cajon's City Council voted 4-1 to cease funding for the East County Homeless Task Force over the task force's support of the Housing First model, prioritizing providing shelter before addressing other needs like mental health or substance abuse. The city council pointed to a number of complaints against the organization, including uneven distribution of hotel vouchers and a lack of focus on diverse approaches. The task force, now under a La Mesa-based organization, defended their work and stated they will continue it.

Santa Barbara County officials can enforce misdemeanor encroachment laws without conducting an analysis under the California Environmental Quality Act. “Any claimed ‘failure’ to follow the California Environmental Quality Act is not a defense to the commission of a crime,” wrote Second District Court of Appeal Justice Kenneth Yegan for a unanimous three-judge panel. That was the conclusion an appellate court came to, overturning a Superior Court judge’s ruling in a dispute between the county and Montecito residents who illegally placed rocks, plants, and other obstructions in the public right-of-way to discourage other people from parking near their houses while using a popular hiking trail. The residents had argued – successfully in Superior Court – that enforcing the encroachment law was really part of a larger “project” to be undertaken by Santa Barbara County that would result in more parking spaces in order to allow more hikers to use the trail. A Superior Court judge in Santa Barbara issued an injunction blocking the county from enforcing the law, saying the neighbors were likely to win on appeal and would suffer irreparable harm because their plants would be permanently damaged. But the Second District Court of Appeal, Division Six, in Ventura disagreed. Whether or not enforcing the law was part of a larger project, Yegan wrote, the county acted properly in declaring the enforcement action as exempt from CEQA. The county began the enforcement action against Montecito residents who live close to the popular Hot Springs Canyon hiking trail on East Mountain Drive after the number of hikers increased dramatically during the COVID pandemic. There are approximately 10 offstreet parking spaces for the trail but during COVID hundreds of hikers began using the trail. The barriers apparently did not discourage hikers from parking on the road but, rather, caused them to park their cars in a manner that blocked the road, reducing it from a two-lane road to a one-lane road. Neighboring residents sued, and in May 2022 Superior Court Judge Donna Geck issued a preliminary injunction against the county. Subsequently, however, the county sent letters to 11 homeowners demanding that they remove the obstructions. In June 2022, Superior Court Judge Thomas Anderle ruled that the county had violated the preliminary injunction and ordered that the letters be withdrawn. (Local news reports on the underlying situation can be found here and here . The county then appealed. The appellate ruling revolved around the question of whether the enforcement action was a separate “project” (and therefore exempt from CEQA) or whether it was part of a larger plan by the city to expand the overall amount of parking at Hot Springs Canyon in order to alleviate the parking problem. “Respondents and the trial court inferred that these notices were the first step of a ‘larger project,’ which involves encouraging many more hikers to use the Hot Springs trail by making it easier for them to park near the trailhead,” Yegan wrote. But he and his colleagues were not persuaded. “Removing the encroachments does not “increase” or add new parking; it restores access to parking spaces that have always existed,” he wrote for a unanimous three-judge panel. Yegan also said the lower-court judge had not balanced the potential harm to the neighbors of removing the barriers against the potential harm to hikes of leaving the barriers in place. Judge Anderle had argued that the homeowners would suffer real harm because “many of the longstanding encroachments consist of mature landscaping which, once removed, will likely be gone forever.” The county’s arguments for harm, he concluded, “relate more to its perceptions of the benefits of proceeding with the project, than they do to any legitimate harm which it or the public would suffer if the status quo were preserved.” Yegan shot that argument down forcefully. First, he said, the neighbors won’t suffer any real harm. “The plants and other objects they have installed in the public right of way can presumably be moved off public property and onto respondents’ private property. In any event, respondents have an obligation to obey the law, including the encroachment laws,” he wrote. And he said the current situation could cause real harm to the public. “The record includes substantial evidence that encroachments in the public right of way present both fire safety risks and public safety risks to motorists, pedestrians and cyclists,” he wrote. “Even without that evidence, the encroachment statutes and ordinances themselves represent a legislative determination that the public interest is served by prohibiting and authorizing the removal of unpermitted encroachments in the public right of way. The Case: Anderson v. County of Santa Barbara , No. B322465 (filed July 19, 2023; published August 16, 2023). The Lawyers: For Christopher Anderson and other neighbors: A. Barry Cappello, Cappello & Noël. abc@cappellonoel.com For Santa Barbara County: Lina Somait, Senior Deputy County Counsel, lsomait@countyofsb.org

Terner Center Estimates SB 35 Has Supported over 18,000 Housing Units A report from UC Berkeley's Terner Center for Housing Innovation studies the impact of Senate Bill 35 five years after its statewide approval. SB35, enacted in 2017, aimed to streamline housing development in California by simplifying the approval process for qualified multifamily infill projects, particularly in jurisdictions falling behind on housing production goals. The law, set to expire in 2026, has garnered favor among affordable housing developers, with 156 projects approved or pending between 2018 and 2021, totaling over 18,000 proposed housing units, primarily in the Bay Area and Los Angeles regions. Most of these projects are 100 percent affordable developments. The report suggests that the law has expedited the approval process for affordable housing, enhancing its attractiveness to developers. The report also highlights recommendations to improve SB 35's implementation, including the need for updated guidelines from the California Department of Housing and Community Development to clarify how SB 35 interacts with other land use laws, thereby making it more widely applicable to housing projects across the state. Autonomous Vehicles Win Major Regulatory Approval in S.F. The California Public Utilities Commission approved an expansion of driverless robotaxi services in San Francisco, allowing General Motors' Cruise and Alphabet's Waymo to operate without safety drivers and charge passengers fares for the service. This represents a significant step towards commercializing driverless technology and is part of the state's efforts to address the growing demand for autonomous transportation. The expansion has drawn both support and opposition, with some seeing it as a way to improve transportation access, particularly for vulnerable populations, while others express concerns about job displacement and the safety of autonomous vehicles. The approval covers a wide area of the city and represents a major milestone for the robotaxi industry. OPR to Allocate $50 Million for Regional Resilience Planning The Governor's Office of Planning and Research unveiled the initial funding round for the Regional Resilience Grant program, aimed at financing regional-scale projects to enhance climate change resilience. The 2021 Climate Budget has allocated $25 million for this grant, and the upcoming 2023-2024 budget proposes an additional $25 million, resulting in a total of $50 million across two funding rounds. The focus on regional projects responds to climate change risks that impact entire regions rather than individual jurisdictions. The grant is intended to foster long-term community-based partnerships that can continue leading climate resilience efforts in their regions for many years. The grant is part of the Integrated Climate Adaptation and Resilience Program (ICARP), distinct from other ICARP grants due to its regional emphasis, while the Adaptation Planning Grant targets individual local governments, community-based organizations, and tribes to address local hazards. The Regional Resilience Grant supports projects addressing various climate change risks, such as wildfires, rising sea levels, droughts, floods, and extreme heat events, with a focus on disadvantaged communities and California Native American tribes. HUD Invites Local Jurisdictions to Apply for $85 Million in Pro-Housing Planning Grants The U.S Department of Housing and Urban Development HUD unveiled an $85 million funding opportunity to tackle housing barriers and announced tools to enhance affordable housing development. This move aligns with the Biden administration's approach to reducing housing costs from the bottom up and the middle out. The PRO Housing competitive grants hope to empower communities to develop housing policy plans, address zoning and regulatory policies, and bolster affordable housing production. These grants, ranging from $1 million to $10 million, will target local governments, states, MPOs, and multi-jurisdictional entities. Furthermore, HUD is providing housing providers involved in the Rental Assistance Demonstration (RAD) with new tools for repairs, promoting energy-efficiency investments, and addressing climate resilience. This action aims to support the larger goal of making national housing more affordable, reflecting commitments from the Biden-Harris Administration. CP&DR Coverage: Cities Attempt "Self-Certification" of Housing Elements Developers are continuing to propose builder's remedy projects around the state, especially in Silicon Valley and in smaller affluent communities. But the pushback continues - especially over the question of whether cities can get out from under the builder's remedy by self-certifying their housing element, rather than waiting for approval from the Department of Housing and Community Development. Cities that have recently attempted versions of self-certification include, among others, Claremont, Beverly Hills, Menlo Park, and San Jose. Whether these approaches will hold up in court remains to be seen. Quick Hits & Updates Construction on a large tech campus in downtown San Jose has been paused by the development company due to weak market conditions in the Silicon Valley office sector, including rising office vacancy rates, sublease space being offered by tech companies and low demand for large office spaces. The first phase of the project, an office building totaling 390,000 square feet, was under construction, and the pause is set to occur after completing the garage and foundation by the end of 2023. A lawsuit filed by Ventura County, Ojai, Patagonia and other environmental groups hoping to stop the U.S. Forest Service from forest thinning old-growth pines on Pine Mountain hit a dead end as a federal judge dismissed the case with prejudice, preventing the group from refiling. They have 60 additional days to file an appeal. The project was approved under the Trump Administration to meet logging quotas. El Centro filed suit against the Imperial Local Agency Formation Commission over concerns of the environmental impacts related to the formation of a Valley-wide health care district. The lawsuit challenges one path of a project to build a single hospital district in Imperial County, claiming LAFCO did not comply with the California Environmental lQuality Act (CEEQA) requirements during their initial assessment. The Los Angeles Housing Department responded they will start an investigation following a report that residential hotels required by law to be reserved for low-cost housing advertise on travel websites and rent to tourists. The report found 21 hotels with over 800 units across Los Angeles turned housing units into hotel rooms, breaking a 2008 law requiring they remain residential unless the owner pays to replace units taken off the market or pay a city housing fund. Census data from the last two years shows fluctuation in population rates between large and small counties across the state, finding that some larger counties like Los Angeles, San Francisco and Santa Barbara are rebounding from population losses. Smaller counties' populations are more susceptible to local changes such as the construction of a prison or new housing. The census data still found that general state population continues to decline. The US Department of Housing and Urban development announced a $9.3 million grant to Mendocino County Indigenous Tribes to fund affordable housing activities. San Diego County built fewer homes last year than in 2021 despite a large political push for more housing in the area. The county saw 521 less homes built in 2022 than in 2021 even as the county cites housing as a significant focus. The San Diego Building Industry Administration believes the county must build approximately 21,000 homes a year to keep up with demand. The Santa Clara County Board of Supervisors voted to purchase land to build affordable housing for educators, hoping to reduce financial strains on local teachers. The Board of Supervisors agreed to swap a 1.5-acre county-owned parcel of land with Apple for a nearly-five-acre parcel.

Legal Briefs

In the original version of this story,  CP&DR mistakenly reported that Claremont's position was that housing element approval meant it did not have to process the Trumark application. We have corrected this information below and we regret the error.

California Population May Remain Flat for Decades to Come New projections from the California Department of Finance suggest the state's long-term population growth is slowing. The forecast predicts that by 2060, the state population will look the same as it does now with around 39.5 million people. Previously, an earlier population estimate project a population of 45 million people as of 2020 and almost 53 million a decade ago. The aging population of baby boomers and lower birth rates, as well as higher numbers of residents leaving the state due to high housing costs, attribute for the decline in population growth. The decline in population growth resulted in a lost seat for California in 2021 for the first time in the state's history. The forecast predicts deaths in the state by 2035 will surpass births and the total fertility rate will decline from 2.1 births per woman to 1.5. Sunnyvale Approves Plan for Mini-City of 20,000 Residential Units The Sunnyvale City Council unanimously approved a plan to transform the Moffett Park area into a large urban village. The redevelopment plan aims to convert the 1,156-acre office district into six distinct neighborhoods, featuring a mix of commercial and residential spaces, as well as community and public areas. The plan, which envisions an "an ecological innovation district," includes the development of 20,000 new residential units and an increase in approved office space from 22 million square feet to 30 million square. Around 15 percent of the residential units are planned to be affordable, with hopes to increase it to 20 percent. Additionally, there will be 500,000 square feet of retail space and 150,000 square feet of hospitality. The project is expected to address Sunnyvale's housing needs, as the city is required to build 12,000 new homes to meet state requirements by 2031. Planning Commission Rejects Major Housing Reforms in San Diego The San Diego Planning Commission unanimously rejected Mayor Todd Gloria's proposal to eliminate single-family zoning in much of the city. The commission approved the Housing Action Package 2.0 but excluded the controversial Senate Bill 10, which would have allowed the replacement of single-family homes with up to 10 units in a majority of the city. The rest of the housing package received approval and will proceed to the City Council for consideration. The decision reflects the ongoing debate between those supporting increased density and diverse housing options and opponents concerned about neighborhood character and potential negative impacts of greater housing density. (See related CP&DR coverage .) UC Davis Releases Database of Local General Plans The California General Plan Databases Mapping Tool, created by a team of students and professors out of UC Davis, is a new online tool to track statewide, local general plans for land-use. The goal is to be a free, easy-to-use integrated database for community members, policymakers, or experts to find general plans in one place. The creators hope the Mapping Tool is a method of education, and will help community members coordinate efforts to advocate for their best interests. The next step in the database rollout is workshops across California to teach people how to use the tool to visualize general plans across the state, with the ability to compare general plans from local government to local government. These state-mandated general plans influence land-use decisions and can cover a myriad of issues important to any community member including open space, housing, conservation, circulation, noise and safety. The database can search these plans by keyword, utilizing interactive maps and refined searches to make the tool as useable as possible. CP&DR Coverage: Cases May Decide Legality of "Self-Certification" of Housing Elements The battle over the builder's remedy and self-certification of housing elements expanded last week with two new lawsuits against the City of La Cañada Flintridge challenging the city's denial of a mixed-use project on Foothill Boulevard. The project's developer, Glendale-based Cedar Street Partners, came out with guns blazing. Cedar Street hired the aggressive law firm of Holland & Knight, which filed a lawsuit on July 21 which, with exhibits, amounted to 430 pages, with more than 10 causes of action. Four days later, the California Housing Defense Fund (formerly California Renters Legal Advocacy and Education Fund, or CaRLA), asking that the denial of the project be overturned. Cedar Street's lawsuit could be the test case for the biggest legal question that has emerged from the trend toward builder's remedy applications: Do cities need approval from the Department of Housing & Community Development for their housing element to be compliant, or can they “self-certify” that their housing element complies with state law? Quick Hits & Updates Hasan Ikhrata, the executive director of the San Diego Association of Governments, has submitted his resignation . He stated his relationship with the board was challenging, but he was proud of his work in transportation and regional planning like the per-mile fees on drivers and limiting car travel while improving public transit. Internal audits of the organization in recent years raised concerns about improper spending and poor policies at SANDAG. The US Department of Housing and Urban Development (HUD) is offering $85 million in competitive grant funding in the hopes of identifying and removing barriers to affordable housing production and preservation. The new Pathways to Removing Obstacles to Housing (PRO Housing) initiative aims to support communities in removing barriers to affordable housing by awarding local and state governments, metropolitan planning organizations, and multijurisdictional entities funds to establish housing policy plans and housing plans. The application deadline is October 30. The Antioch City Council voted 3-1 in favor of strengthening tenant protections with new rules against landlord retaliation and harassment, which includes barring landlords from retaliating against tenants exercising certain legal rights related to their rentals and addressing harmful landlord actions done in "bad faith" or for difficult-to-prove reasons. While some local landlords and real estate agents expressed concerns about the ordinance's impact on rental properties, tenant advocates applauded the measure, stating that new rules were necessary to protect tenants from harassment and ensure their rights are enforced. A 500-acre Petrified Forest located in Sonoma County, known for its prehistoric redwood trees, is up for sale for $12 million. The current owners hope to pass it on to a state agency or nonprofit for continued public operation. Los Angeles officials are working on a new master plan for the 2,000-acre Sepulveda Basin in the San Fernando Valley. The plan includes three alternatives, all three including expansion of multi-modal transportation infrastructure and adding new bridges, green streets, walking paths and an extension of the Los Angeles River Bike Path, in addition to new recreational facilities. The three alternatives propose various treatment of the Los Angeles River, ranging from more aggressive de-channelizing of the river to widening the river corridor without removing the concrete walls around the river and retaining all remaining golf courses. The Apartment Association of Greater Los Angeles (AAGLA) has filed a lawsuit against the city of Los Angeles over a pandemic-related rent hike freeze scheduled to end in early 2024, arguing the state of emergency has ended, and city officials have not reconsidered the freeze in light of recent inflation, making it a financial strain on rental housing providers. The ordinance, adopted in May 2020, applies to about 624,000 rent-stabilized units in L.A., preventing rent increases until February 1, 2024. The association seeks to overturn the freeze immediately and have it declared unconstitutional. This lawsuit follows another by AAGLA against Los Angeles county regarding Measure ULA, a tax on real estate properties over $5 million. A new study by regional planners suggests that a people mover plan to bring mass transit to the San Diego airport could reduce traffic congestion on surrounding roads up to 20%. The plan, estimated to cost between $1 billion and $2 billion, is considered more cost-effective and efficient than an extension of the San Diego Trolley. The project could qualify for Federal Transit Agency funding and a required 50% match from local sources. A U.S. District Court Judge sentenced a Los Angeles real estate developer to six years in prison for bribing elected officials and ordering a subordinate to falsify internal records of the transaction. The developer was found guilty last year for giving $500,000 in cash bribes to City Councilmember Jose Huizar in exchange for Huizar's approval of a 20-story residential tower downtown. A city working group in San Francisco sent a proposal to the Board of Supervisors to review a potential plan to explore public banking in the city. The proposal includes a plan to partner with private banks and utilize government funding for low-interest loans for community initiatives. California legislature previously authorized cities to explore public banking in 2019, with other other cities like Los Angeles looking into public banks.

AIDS Healthcare Pushing New Statewide Rent Control Measure A coalition of housing advocates led by Los Angeles-based AIDS Healthcare Foundation collected enough signatures to place an initiative to repeal a major restriction on rent control on the November 2024 statewide ballot. Called the Justice for Renter Initiative, the measure would allow more cities and counties across the state to cap rents on more types of homes. The Secretary of State's office verified over 617,000 signatures—substantially more than the 546,651 signatures required by its random sample count method to qualify the measure to go before voters in November 2024.Other supporters include the Coalition for Humane Immigrant Rights of Los Angeles, the California Nurses Association and the housing advocacy arm of the AIDS Healthcare Foundation. Cities like Los Angeles and San Francisco currently limit where geographically rent can be raised on a yearly basis. The state also has passed regulations on rent increase. The initiative would repeal the Costa-Hawking Rental Housing Act which prohibits rent control from being placed by cities and counties onto single-family homes and apartments built after 1995. The Costa-Hawkins Act also limits the right of the state to expand rent control. A similar measure, also sponsored by AIDS Healthcare, failed in 2020, 40% - 60%. (See related CP&DR coverage .) Lake Tahoe Area Organizations Release New Stewardship Plan Public and private organizations, managers, agencies and owners in Lake Tahoe announced a stewardship plan addressing the region's tourism-based economy and environmental challenges that have increased in the last three years since the pandemic. Some of the plan includes supporting redevelopment of tourism infrastructure and advancing recreation offerings while also emphasizing the development of vacation home rentals although very unpopular with residents. The proposal stressed that restrictions on development and redevelopment due to environmental concerns "erodes Tahoe's image" while putting a burden on developers. 15 million people visit Lake Tahoe, and new homebuyers since the pandemic have created socioeconomic stress for the working-class residents and renters. The stewardship plan designates a council among over 32 action items, others including general goals like litter enforcement and micro transit solutions. The plan also emphasizes collaborating with the Indigenous Washoe Tribe on goals of protecting the surrounding forest and lake and utilizing tourism while in development processes. (See related CP&DR coverage .) Citing Traffic and Pollution, Fontana Rejects Warehouse Development Heeding complaints of worsening air quality and criticism from residents, the Fontana City Council rejected a proposal for three large warehouses near two high schools. The warehouses planned would have been 540,000 square feet and 69 loading docks, generating an expected 300 daily truck and 600 passenger vehicle trips. The developer behind the project proposed a 45-foot landscaped buffer between the warehouses and neighborhood and a $3.3 million contribution to a benefit fund for the community. The project would have required 29 acres of residential property rezoned directly adjacent to two local high schools. Council members voted, 3-2, against the rezoning. The decision is considered a win for activists and community members advocating for relief from warehouse expansion in the Inland Empire. California Cities Earn Mixed Scores in Walkability Report A new report from Smart Growth America ranks the nation's 35 largest metro areas by walkable urbanism. The report takes into consideration multi-family rental rates, for-sale home prices, and premiums in commercial rents. Four California cities, San Francisco (6), Los Angeles (8) fared well while Sacramento (24), and San Diego (28) ranked in the bottom half. The same four cities performed entirely differently on the Social Equity Index. Despite being ranked eighth in walkable urbanism, Los Angeles ranked 35th on the Social Equity Index (SEI), from a combination of low rankings on affordability, transit systems, and proximity to walkable areas. Sacramento was the highest performer of the California cities on the SEI rankings at 20, with San Francisco close behind at 22. The report also found that 6.8% of the US population and 19.1% of the total US real GDP is contained in 1.2% of the landmass of the top 35 U.S. metros. State Auditor Identifies Cities Financially at Risk For the fifth year in a row, the City of Compton has landed the number one spot on the state auditor's office list of the most financially at-risk cities. Other cities that made the list's top 20 include San Gabriel, which improved slightly from second to third place; Montebello, which regressed from seventh to fifth place; Torrance; Redondo Beach; West Covina; and Los Angeles. Compton, San Gabriel, and Montebello were classified as "high risk," meaning they are vulnerable to waste, fraud, and mismanagement. Meanwhile, Torrance's ranking improved, and the city is no longer in the high risk zone. The report considers the status of reserves, debt burden, liquidity, revenue trends, and more and found that many cities have been impacted by low reserves and high pension liabilities. CP&DR Coverage: New Los Angeles Rail Line Seeks to Support Black Community When Los Angeles Metro proposed and started planning a light rail line through the Crenshaw District and Leimert Park - historically the heart of the city's Black community - some of the opposition was fierce. More than just a new way to move people around the notoriously congested metropolis, the Crenshaw Line promised to become a test of the theory of “transit gentrification.” So far, community members say that the dire predictions have not materialized. The project is associated with Destination Crenshaw states that the central themes the project are to be “unapologetically Black” with a “commitment to our cultural and spatial permanence." Quick Hits & Updates Long Beach, Moreno Valley, Santa Rosa, Sonoma County, and the Town of Windsor have been designated as Prohousing communities. Through this designation, these jurisdictions are now eligible for funding incentives and additional resources through a state grant program designed to speed housing production. To date, a total of 27 California communities are now designated as Prohousing. A recently proposed builder's remedy project proposed in the Bay Area's Menlo Park includes 800 residential units, a 90,000-square foot hotel, 8,400 square feet of retail space and 280,000 square feet of office space. The development firm based out of Dallas, Texas plans to build four buildings -- one taller than the Statue of Liberty -- with at least 20% of affordable units for ministerial approval as Menlo Park does not have a state-approved housing plan in place. A U.S. District Court Judge sentenced a Los Angeles real estate developer to six years in prison for bribing elected officials and ordering a subordinate to falsify internal records of the transaction. The developer was found guilty last year for giving $500,000 in cash bribes to City Councilmember Jose Huizar in exchange for Huizar's approval of a 20-story residential tower downtown. Brightline West, the high-speed railway connecting Southern California to Las Vegas is a step closer to groundbreaking after the Federal Railroad Administration approved its environmental reviews and permitting processes of the rail stations in Hesperia and Rancho Cucamonga. (See related CP&DR coverage .) San Diego city officials are rolling back their proposal to expand where cannabis dispensaries can open in the city, nearly doubling the maximum number of dispensaries in many tourist and entertainment areas near transit. In a revised proposal following complaints and criticism, several neighborhoods have been taken off the plan and the new dispensaries can only open in three zones with 12 new dispensaries each. Senator Dianne Feinstein wrote a letter to the CEO and president of the company owning Golden Gate Fields, requesting clarity on the racetrack's closure. Sen. Feinstein sought answers on the plans for the land and stadium, as well as the decision making behind the closure. In an official statement by the company, they stated they will share transitional plans as well as revitalization plans for the Southern California Santa Anita Park. According to a report by the San Francisco Controller, both Oakland and Los Angeles have higher rates of homelessness than San Francisco in a study of a handful of similar cities across the country. The report indicates that political and grassroots efforts in San Francisco and millions of dollars spent on the crisis resulted in a 3% drop in homeless between 2019 and 2022, while Oakland saw a 24% increase in that timeframe. In an analysis of Census Bureau data from 2017 to 2021, California houses all seven of the nation's largest metropolitan areas with the lowest homeownership rates for young adults. Los Angeles and Orange County have the lowest rates of homeownership in the country for young adults aged 25-34. The study compared those areas to metropolitan areas like Baltimore-Columbia-Townson, Maryland, where 42.9% of the same population own their homes. Huukuiko, Inc., the nonprofit group of the Coast Miwok Tribal Council of Marin, closed a $3 million deal for 26 acres of homeland in Marin County returned to the tribe after a two-month fundraising effort including more than 85 individual and family foundations. Anonymous donors gave approximately $200,000 each.

The battle over the builder’s remedy and self-certification of housing elements expanded last week with two new lawsuits against the City of La Cañada Flintridge challenging the city’s denial of a mixed-use project on Foothill Boulevard.