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

by CP&DR Staff on January 25, 2024 Report

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

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

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

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

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

by CP&DR Staff on December, 21 2023

San Diego Approves Suite of Housing Incentives The San Diego City Council adopted a wide-ranging set of measures aimed at tackling the city's housing crisis with a 7-1 vote following a heated three-hour public hearing. Included in the package is a controversial developer incentive that critics fear could exacerbate segregation by limiting low-income residents' access to affluent areas. Council members remain optimistic about the incentive's benefits, having made amendments to address concerns. The package emphasizes various incentives, such as building single-room-occupancy hotels, converting commercial sites to housing and accommodating housing for college students. Additionally, it introduces protective measures for displaced low-income residents and aims to stimulate home construction to meet mandated goals. Some community leaders criticize elements of the plan, specifically the allowance for developers to build low-income and market-rate housing at different locations under the Complete Communities program, which was previously required to be on the same site. Initial plans to enact SB 10 density provisions were eliminated from the plan in the face of stakeholder opposition. The city has faced challenges in meeting housing targets, with concerns raised about potential repercussions, including segregation and unknown consequences. (See related CP&DR coverage .) State Releases Environmental Report for Delta Water Tunnel The Department of Water Resources released the final environmental impact report for a long-discussed 45-mile water tunnel beneath the Sacramento-San Joaquin River Delta. Championed by Gov. Gavin Newsom, the Delta Conveyance Project aims to modernize California's water system by transferring water from the Sacramento River to southern areas via large pumps, an initiative Newsom deems vital to combat climate change-induced droughts and enhance water infrastructure resilience. However, critics, including environmentalists, question the $16 billion project's impact on the delta's delicate ecosystem and endangered fish species, advocating for alternative water management solutions such as recycling and stormwater capture. Initially envisioned as a two-tunnel project under former Governor Jerry Brown, Newsom now supports a single-tunnel version of the initiative, with estimated construction costs at $16 billion. Proponents highlight the tunnel's potential to capture substantial water during heavy storms, though opponents express concerns about the detrimental effects on native fish populations. Despite differing viewpoints, some water districts and business groups support the project as essential in navigating California's changing climate, emphasizing its role in securing water supplies during challenging conditions. State Certifies San Francisco Housing Element; City Avoids Penalties The Department of Housing and Community Development certified San Francisco's housing streamlining legislation, preventing potential penalties like the loss of affordable housing funding and local control over development approvals. The California Department of Housing and Community Development confirmed the city's ordinance aligns with state law and emphasized the need for San Francisco to fulfill outstanding required actions. Following missed deadlines, the city finally passed the legislation, originally proposed by Mayor London Breed, after introducing amendments safeguarding rent-controlled units, historic buildings and single-family homes predating 1923. This move is part of the state's objective to push San Francisco to build 82,000 units over eight years, with 46,000 designated as affordable for low- and moderate-income families, streamlining processes and reducing Planning Commission hearings for many projects. The amended reform package passed by a 9-2 vote. Lake Tahoe Development Plan Faces Lawsuit A group of residents in the Lake Tahoe basin are suing to contest recent development plan changes in court, aiming to impede alterations that seek to promote affordable housing, hospitality and dining on the lake's West Shore. The legal action, lodged in Placer County Superior Court, intents to safeguard Lake Tahoe, according to the coalition filing the suit. Late in October, Placer County supervisors sanctioned pivotal revisions to the overarching Tahoe development plan, influencing building guidelines across the basin from South Lake Tahoe's periphery to Kings Beach, overseen jointly by the Tahoe Regional Planning Agency. Despite county claims that the adjustments would bolster lodging, mixed-use redevelopment and workforce housing, skeptics among Tahoe residents fear exacerbation of existing problems like traffic, crowding and pollution. The lawsuit challenges the approval process under the California Environmental Quality Act, demanding a fresh environmental impact report considering the lake's infrastructure challenges. Terner Center Recommends Reforms to State's "Prohousing" Program UC Berkeley's Terner Center for Housing Innovation released new analysis of the state's Prohousing Designation Program (PDP) overseen by the California Department of Housing and Community Development (HCD), concluding the program can improve by consolidating "prohousing" criteria, enhancing transparency of the criteria and implementing data-driven analysis of policy reforms' impact on housing production. The PDP, started in 2021, assesses local areas' housing policies, considering zoning, timelines for housing construction, cost reduction strategies and potential extra points for equity and sustainability efforts. Jurisdictions achieving this prohousing designation gain advantages in applying for grants and access to special funding opportunities. The analysis recommends several methods to increase the effectiveness of the program, including simplifying criteria, reducing the complexity of the application process and solid metrics to study the impact of the PDP. The Turner Center suggests to adapt elements of California's PDP for the federal Pathways to Removing Obstacles to Housing (PRO Housing) program run by HUD, which emphasizes federal support for expanding housing availability. Moreover, the Turner Center adds linking additional funding sources, such as infrastructure or transportation funds, to the PDP could further encourage jurisdictions to actively address housing challenges in a meaningful way. (See related CP&DR coverage .) Los Angeles County Plans to Source 80% of Water Locally by 2040 Los Angeles County's newly adopted water plan aims to increase local water sourcing substantially over the next 20 years due to climate change impacts and escalating costs associated with external water supplies. This strategic plan outlines a shift towards sourcing 80% of water locally by 2045, focusing on stormwater capture, recycling and conservation to increase water supply by 580,000 acre-feet annually. The initiative underscores the need for water conservation and beneficial reuse, diverting stormwater away from coastal pollution. Started in 2019, the plan gained traction emphasizing collaboration among over 200 independent water agencies in the county to develop regional water strategies and shared goals. The plan's objectives encompass enhancing water supply reliability, groundwater collection, managing wildfire impacts and supporting failing water systems in low-income communities by offering resources for improvement. Environmental groups commend the county's commitment, lauding the plan's responsiveness to stakeholder concerns and its potential for leveraging state and federal funding opportunities while prioritizing equitable access to clean water for all residents. CP&DR Legal Coverage: U.S. Supreme Court May Forbid Exactions For half a century, planners in California and across the country have relied on a wide variety of “exactions” - impact fees, environmental “mitigations,” inclusionary housing ordinances, and other items developers are required to fork over in order to get an entitlement. But now the U.S. Supreme Court appears likely to box in entitling agencies on entitlements more strictly than ever before. The only question is how far the justices will go. This is coming to the fore because the Supreme Court decided to accept a little-noticed California appellate court ruling, Sheetz v. County of El Dorado , which was decided last year. The court upheld El Dorado County's imposition of a $23,000 fee on as part of the approval for an 1,800-square foot manufactured home. It's a foregone conclusion that the court will strike down the California rule about broad policy not being covered by Nollan/Dolan . At the very least, that will be a boon to the consulting industry that does nexus studies. But how far beyond that will they go? Quick Hits & Updates Shasta County filed a lawsuit against the California Energy Commission (CEC) regarding the Fountain Wind Project, alleging lack of CEC authority to approve it and demanding cessation of any related actions due to jurisdictional issues. The county, partnering with the Pit River Tribe, contends that the wind energy project poses risks to the environment, cultural resources and community well-being. Meanwhile, ConnectGen, the project developer, argues for the project's necessity in meeting California's carbon reduction goals and highlights its economic benefits, including local job creation and tax revenues. A proposed gondola linking downtown Los Angeles with Dodger Stadium, initially priced at $125 million in 2018, now projects a potential cost of up to $500 million according to an environmental impact report, facing regulatory hurdles and unresolved concerns about funding and future development. Despite the report's focus on the gondola as a transit project, community worries persist regarding potential construction, while specifics about financing sources and guarantees against taxpayer funds remain undisclosed. A recent report reveals that San Diego is falling significantly behind on its housing construction targets, needing to triple its efforts, particularly in constructing low and moderate-income housing units, concentrating more than half of new homes in just three neighborhoods, sparking debates on the effectiveness of current incentives, and prompting calls for additional measures and more effective strategies to meet the city's urgent housing needs. Despite improvements from the pandemic peak, over 1 million California renters are behind on rent, with almost 150,000 fearing eviction in the next two months, largely impacting economically vulnerable renters and low-income households, exacerbating the already expensive rental market across the state, particularly in areas like San Francisco and Los Angeles, leading to increased housing stress and eviction concerns, signaling a crisis in California's housing market. A redevelopment plan for Piers 30-32 and Seawall Lot 330 in San Francisco, which includes housing, retail and a bay swimming pool, faces a $125 million financing gap due to increased infrastructure costs and compliance modifications. Developers are negotiating with the Port, exploring tax districts, and using office space to cover necessary construction expenses amid challenges affecting other waterfront projects in San Francisco due to rising construction costs and market factors. The San Diego Trolley is the highest-ridership light-rail line in the US since the pandemic, with over 34 million trips in 2022, surpassing other major systems. While its ridership dipped during the pandemic, it retained a higher level compared to other systems due to factors like the Mid-Coast Trolley extension and efforts to maintain service levels. As transit ridership picks up nationwide, San Diego's Trolley continues to maintain its top-ranking position in 2023, although other cities are experiencing faster recovery rates. California ranks as the top state for transportation policies and spending priorities according to a new scorecard released by the Natural Resources Defense Council (NRDC). The report highlights California's leadership in sustainable transportation investments, emphasizing initiatives like vehicle charging stations, public transportation and bicycle infrastructure while addressing climate change and equity concerns. Caltrans omitted a significant industrial park from its environmental review connected to a freeway expansion in Fresno, despite prior knowledge of its existence. This omission has raised legal and ethical concerns regarding the project's impact on public health and environmental effects, casting doubt on Caltrans' decision-making process and transparency. Los Angeles city is set to spend around $40 million to rescue the failed Skid Row Housing Trust, expecting further expenses by mid-2024, stemming from the trust's financial collapse earlier this year. The city aims to stabilize the properties and transfer them to new nonprofit housing providers to prevent a humanitarian crisis, despite frustrations and financial challenges during the rescue efforts. The San Jose City Council unanimously adopted stronger protections for 13 mobile home parks, mandating developers to seek council approval and a general plan amendment for potential redevelopment, aiming to preserve affordable housing spaces. This decision reflects the council's commitment to maintain these communities amid concerns over their conversion into high-density housing, providing reassurance to residents, particularly seniors with lower incomes, who have fought to safeguard their neighborhoods.

Federal Government Contributes to Two California High Speed Rail Projects Two high speed rail projects in California received Federal Railroad Authority grants totaling over $6 billion. A grant of $3 billion secured by Brightline West, a private company, propels the high-speed rail project from the Inland Empire to Las Vegas, expected to be operational by 2028, coinciding with Los Angeles' Olympic Games. The $12 billion project will connect Rancho Cucamonga to Las Vegas in just over two hours, and featuring stops in Hesperia or Apple Valley. Utilizing a wide Interstate 15 median, the company behind the project already possesses federal permits, labor agreements and the required land for construction, set to commence in early 2023. While Brightline did not secure the full $3.7 billion it sought, the grant ensures the project's progress, intended to serve as both a luxury tourist train and a transportation link between Southern California and Las Vegas. The California High Speed Rail system received $3.1 billion to contribute to the Bakersfield-Merced segment currently under construction. The grant brings total funding to around $27 billion; the segment is expected to cost $33 billion. San Francisco Takes Action to Streamline Housing, Promote Small Businesses Ahead of an upcoming state housing deadline, San Francisco's Board of Supervisors adopted a number of reforms this week, including Mayor Breed's ordinance to streamline procedures for small businesses to establish themselves within the city and a housing reform package including protections for rent-controlled and historic buildings. The package includes safeguards for historic buildings and rent-controlled units following the city's failure to meet the initial deadline for residential development rule reforms mandated by the California Department of Housing and Community Development. The ordinance encompasses more than 100 updates to the planning code, primarily easing restrictions on new bars and restaurants in specific neighborhoods, offering flexibility in retail space usage, and expediting the launch process for certain businesses. Additional approved amendments to Mayor London Breed's reform package include safeguards for pre-1923 single-family homes, protection for rent-controlled units from demolition in favor of market-rate projects and the preservation of historic buildings, passing with an 8-3 vote. Breed also introduced an amendment preventing the demolition of rent-controlled units, initially allowing vacant rent-controlled units to be replaced for denser developments. Sacramento Makes Good on Promise to Upzone Having promised to upzone significant swaths of the city's residential neighborhoods, the Sacramento City Council formally adopted a housing reform plan that allows diverse housing units in single-family zones, hoping to address the city's housing crisis. Referred to as the "Missing Middle Housing Plan," it permits the construction of duplexes, triplexes and bungalows within neighborhoods, aiming to increase housing diversity while maintaining the area's character. Sacramento Mayor Steinberg emphasized the initiative's potential to accommodate multiple households on lots initially designated for single-family homes, offering a solution to the housing scarcity that has been under consideration since 2018. The plan seeks to rectify historical zoning practices that enforced discrimination, fostering economic diversity across neighborhoods and mitigating segregation persisting to this day. Expected to roll out in 2025, this plan eliminates restrictive zoning to enable more multifamily units while hoping to uphold the essence of local neighborhoods, aligning with the council's efforts to increase housing density. (See related CP&DR coverage .) Analysis Finds Massive Deposits of Lithium at Salton Sea The U.S. Department of Energy's analysis of the Salton Sea suggests it holds substantial lithium reserves, potentially yielding enough for over 375 million EV batteries. This domestic source aligns with the nation's goals of a net-zero emissions economy by 2050 and a 50% electric vehicle adoption by 2030. Despite these promising prospects, companies like Berkshire Hathaway and EnergySource are facing delays in launching commercial lithium production in the region, hindering immediate progress. Efforts to extract lithium from geothermal brines must adhere to responsible practices to mitigate environmental concerns such as water usage and seismic activity. Overall, the report underscores the importance of implementing proper monitoring and mitigation measures to minimize adverse impacts while leveraging renewable energy sources for sustainable lithium extraction. New Map Helps Track Affordable Housing Funding Statewide The California Housing Partnership released its Affordable Housing Map & Benefit Calculator as a tool to map the state's federal- and state-subsidized housing efforts, and those efforts' correlations to the quality of life for residents and surrounding communities. It also released a study on the 324,000 Naturally-Occurring Affordable Homes at Risk in the State. The map quantifies the social, economic and environmental benefits of affordable housing to local economies, individuals and families and taxpayers writ large. The California Housing Partnership established the tool to allow residents to learn where affordable housing is located, as well as the benefits of that housing for future or proposed affordable housing projects. The data on the "naturally-occurring" affordable homes at risk in the state studies the homes - due to location or other market factors - which offer rents naturally affordable to low-income residents. Statewide, these homes surpass the number of state-subsidized affordable homes by almost 400,000. Without oversight, data suggests these naturally-occurring affordable homes will become extinct in the coming years. The study also found 120,000 affordable homes lost their status as naturally-occurring affordable homes in 2020 by pricing out of the rent cap. CP&DR Coverage: The Complex Economics of Density Among the 200-odd housing-related laws that the California has enacted since 2015, many - if not most -- were designed to increase density in one way or another. Some laws encourage housing units where now there are only big boxes and offices. Some encourage developers to build higher in exchange for housing lower-income residents. Others literally put new housing in people's backyards, by way of accessory dwelling units. Patrick Condon, a Vancouver-based planner and professor predicts, provocatively, these laws may simply lead to more expensive housing -- calling into question one of the fundamental orthdoxies of YIMBYism. And yet, writes CP&DR's Josh Stephens, most of Sacramento's incursion on their sacred right to self-determination, if every housing-constrained region and jurisdiction in the state has to upzone, then it might get an economy of scale, and it might meet aggregate demand. Quick Hits & Updates Silicon Valley backers behind the potential new city dubbed "California Forever" faced opposition from locals at a recent town hall. Solano County residents criticized the secretive land grab, opposing the investors' vision of a dense city. The California Forever project aims to create jobs and housing but faces criticism for potential habitat and cultural impacts, triggering legal disputes and concerns over community consultation. Separately, leaders from the Sierra Club and other groups held a rally opposing California Forever's plans for a new city in Solano County, citing concerns about agricultural land loss and the initiative's impact on farmland. (See related CP&DR coverage .) The City of Los Angeles has secured around $93.5 million for providing shade, focusing on building additional bus shelters and other shade installations, to combat extreme heat in areas like the San Fernando Valley. This funding aims to add thousands of bus shelters and shade structures over ten years, recognizing the dangers posed by high temperatures and the necessity for shaded spaces, particularly at bus stops, for public health and equity reasons. Oakland is implementing changes in its building permit process, aiming to automate 70% of permits by year-end, particularly for smaller residential or commercial projects, allowing immediate online application, payment and permit availability. While this shift may not directly impact larger developments, proponents anticipate it will alleviate staff workload, focusing attention on more critical reviews. The city aims to enhance the "customer experience" for permit applicants by streamlining processes, introducing new digital tools and appointing a citywide official to oversee the permit streamlining efforts. The development project called "The Rise" at the old Vallco Mall in Cupertino has undergone significant revisions, increasing the number of residences to 2,669 while reducing overall space and commercial square footage to adapt to changing market conditions. The aim is to create a new downtown area in Cupertino, fulfilling housing obligations and offering a dynamic retail environment, potentially commencing construction by late 2024 or 2025. (See related CP&DR coverage .) The Los Angeles City Council adopted a new law mandating police permits for short-term rental and hotel operators to address concerns over party houses and illicit behavior. Despite the council's unanimous vote, some members expressed worries about increased police workload. Critics questioned the necessity of the police permit, citing its potential impact on small businesses, while proponents highlighted it as a measure to tackle housing issues and ensure safety. Redco Development plans a three-building high rise project in Palo Alto, proposing 382 dwellings and commercial space on the current Mollie Stone's supermarket site. The development utilizes the contentious provision called "builder's remedy" to bypass local zoning restrictions, aiming for towers as tall as 17 stories--twice as tall as neighboring projects and at densities far beyond existing city limits. Backers in Oakland plan to launch a minor league baseball team called the Oakland Ballers to provide the city with its own professional baseball team amid the potential departure of the Athletics. The goal of the new team is to galvanize community ownership and fan engagement, inspired by the success of the Oakland Roots, while moving forward independently of the A's, potentially starting their inaugural season in 2024, potentially prior to the A's departure. (See related CP&DR coverage .) A group in San Mateo aims to designate the Baywood neighborhood as historic, potentially exempting it from the housing development law SB9, which allows up to four residential units on a single-family lot. Residents seek to preserve the Spanish Revival homes, while critics argue that historic designation could hamper housing density in walkable areas. The controversy intensified when a family's plan to replace a house was met with opposition, sparking discussions on race, housing rules and loopholes in California's housing laws like SB 9, the "duplex law." The California Supreme Court's decision not to review the Measure C ballot measure for San Diego's convention center expansion means ongoing delays as the case goes back to the San Diego County Superior Court to determine if it qualifies as a citizens' initiative. Measure C, which sought to increase the hotel tax for convention center funding, faces legal contention over its status as a citizen-led initiative, with continued legal battles expected. (See related CP&DR coverage .)