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Every single word in your development code counts. Take, for example, the extended controversy in the City of Santa Cruz over 1930 Ocean Street Extension, a project that would build eight fourplexes on hilly terrain near the San Lorenzo River. The project’s been in litigation for years – in part because of the potential impact of a nearby crematorium – but the latest battle basically comes down to this: Do the city’s Planned Development Permit rules require the developer to go through a process to modify slope regulations for the project or do they exempt the developer from that process? A Superior Court judge said one thing and now an appellate court has said the opposite. The project is proposed on a 2.74-acre property that has slopes of up to 30 percent. The developer originally proposed 10 fourplexes but the City Council reduced the project to eight fourplexes. The city’s Planned Development Permit process is intended, according to the Fourth District Court of Appeal, “to allow creative and innovative design to meet the public interests more readily than through application of the conventional zoning regulations, which are more cumbersome. The PDP process permits up to 10 “variations” from the city’s regular zoning, including variations from building standards, street standards, and lot coverages. But variation number 9 allows variation from “slope modifications, pursuant to procedures set forth in Chapter 24.08, Part 9 (Slope Regulations Modifications)”. Santa Cruz’s typical slope regulations require no structures within 20 feet of a 30-percent slope. Hence the confusion. Does the municipal code allow variation from slope modifications that are otherwise pursuant to the Chapter 24.08, Part 9, as the city contends? Or does it allow variation only within the context of the procedures set forth in Chapter 24.08, Part 9, as neighbors contend? Santa Cruz County Superior Court Judge Paul Burdick admitted the language was confusing, but eventually he sided with the neighbors against the city’s argument. Part of the confusion appeared to be the wording of the development code, but part of the confusion also appeared to be whether any new parcels were being created as part of the project. At the final court hearing, he finally said: “So long as there is no building sited within 20 feet of a 30 percent slope, there is no violation of the zoning ordinance. And that’s the intent of my ruling.” But the Fourth District disagreed, reversing Burdick and ruling in favor of the city. “Had the City intended PDP applicants to comply with the slope modification requirements, it would have achieved that result simply by omitting slope modifications as an area of variation available through the PDP process,” wrote Acting Presiding Judge Richard Huffman for a unanimous three-judge panel. The court also ruled that, though a tentative map was approved to permit possible future condo sales of the 32 units, no new “lot” was created in the process. The appellate court also rejected a wide variety of claims under the California Environmental Quality Act. The Case Ocean Street Extension Neighborhood Association v. City of Santa Cruz, No. D079064 (filed December 16, 2021, published January 13, 2022). The Lawyers For Ocean Street Extension Neighborhood Association: Babak Naficy, babaknaficy@sbcglobal.net For City of Santa Cruz: Anthony P. Condotti, Atchison, Barisone & Condotti, tcondotti@abc-law.com For Richard Moe (developer): Christopher L. Stiles, Remy Moose Manley, cstiles@rmmenvirolaw.com

Anticipating the release of a new statewide housing plan early this year, Gov. Gavin Newsom has promised in his proposed budget to redouble efforts to identify land for new housing and further streamline housing regulations in an effort to accelerate housing production.

California planners know that these days they live in a world of “objective standards”. The old world of vague and hard-to-define standards – often defined as “guidelines” – is melting away quickly – partly because of new state laws, but also because vague standards often mean judges believe they have to use their own judgment to interpret the standards. The case of “Trackside,” a proposed 27-unit mixed-use project near the Amtrak station in Davis, is an excellent example. (All of Davis’s documents about the Trackside project can be found here .) Trackside is located on the eastern edge of downtown Davis, adjacent to a single-family neighborhood known as Old East Davis. The project has gotten tangled up in a fight over what an appropriate “transition” project for this area should look like. Using one interpretation, the city approved the project. Using another, the Old East Davis Neighborhood Association sued – and got a Yolo County judge to agree with them, largely interpreting the vague standards himself. “The features relied upon by the City to justify the Project, like the step-backed design, do not really address the larger issue of the mass and scale of the project,” Superior Court Judge Samuel McAdam wrote in his ruling in the case. But now McAdam has gotten slapped down by the Third District Court of Appeal, which concluded that the judge had no business substituting his judgment for the city’s. “[I[t is not the court’s role to reweigh the factors unless no reasonable person could reach the same conclusion based on the evidence,” wrote Presiding Justice Harry Hull for a unanimous three-judge panel. “And we see nothing in the planning documents that compels the conclusion that the City’s reliance on the cited factors was inherently unreasonable.” Hull added: “Indeed, if the planning documents were intended to prevent the construction of a mixed use building outside the downtown core that is taller than mixed-use buildings inside the core, the documents could have said so. And where the planning documents do provide quantitative standards (e.g. “Accommodate new buildings with floor area up to three times site area”), there is no indication Trackside runs afoul of them.” The neighborhood activists who opposed the project appear to have gotten the message . In a statement after the ruling , they said: “Neighborhoods must understand, based on the appeals court ruling, that they need to look closely at the specific language in land use plans as they are modified in the coming years. Neighborhoods should require very precise, quantifiable and mandatory provisions in the upcoming plans and implementing codes.” The Trackside litigation got caught up in a debate over which planning documents governed the site and how to interpret the imprecise design guidelines contained in those documents. The project includes a 48,000-square-foot four-story building with about 10,000 square feet of commercial space on the ground floor and 27 housing units above. It is identified as an “opportunity site” by the City of Davis, where density as high as 40 units per acre is encouraged. The project is four stories high on the west side, adjacent to the railroad tracks and nearer to downtown, and two to three stories on the east side, adjacent to the Old East David single-family neighborhood. A 30-foot alley – twice the normal width –separates Trackside from Old East Davis.

Port of San Francisco Identifies 23 Projects to Respond to Sea Level Rise The Port of San Francisco is considering raising the Ferry Building by several feet in one of its 23 plans for defending the Embarcadero from climate disasters, including earthquakes and sea level rise. Before that, however, the Port intends to retrofit existing wharves and secure sand that lays beneath the dike that protects the bay next to Oracle Park. The Port Commission will review the projects with the understanding that preparation measures for protecting the city with its 3.5-mile seawall between downtown and the bay are critical considering particular vulnerabilities to rapidly-increasing climate impacts. Officials hope the commission will fund the $26 million required for the project's initial designs, while the $650 million to $3 billion cost of the rest of construction would require state and federal funding. Strategic Growth Council Annual Report The California Strategic Growth Council published its Annual Report to the Legislature that considers the year's accomplishments and its basis for proposals in the Fiscal Year 2021-2022. The SGC highlighted its role in facilitating $2 million in state funding to ten Indigenous tribes for clean energy projects, its analysis of the success of the Transformative Climate Communities Program and the BOOST pilot program, its establishment of an investment framework for the TCC program and a State Metropolitan Planning Organization, its execution of goals within the Racial Equity Action Plan, and its sensitivity to the changes and burdens brought on by the pandemic. The SGC also detailed outlined its criteria for evaluating each program and celebrated its collaborative, community-based approach. Palmdale Establishes Major Enhanced Infrastructure Financing District In collaboration with Los Angeles County, Palmdale City Council approved The Enhanced Infrastructure Financing District (EIFD), a financing system that will encourage private infrastructure development in areas that the city believes will generate increased property tax revenues in the future. The EIFD would receive an estimated $606 million from Palmdale and L.A. County's property tax increment through bonds, grants, and other sources over a 50-year period. The mechanism could then allow for investment in services, such as sewer and water lines, that would encourage future development. Consulting firm Kosmont found that this initiative is the state's largest EIFD, and its net financial benefit over the next 50 years would total $433 million. League of Cities Adopts 2022 Agenda, Including Promotion of Local Control The League of California Cities Board of Directors adopted the organization’s 2022 Action Agenda that organizes city priorities across the state. Their plan includes securing funding to increase the supply and affordability of housing and reform state housing laws to retain local authority, attaining investments to strengthen and sustain critical infrastructure, increasing funding and resources to prevent homelessness and assist individuals experiencing homelessness, and strengthening disaster preparedness, resiliency, and recovery fro climate change impacts through improved collaboration and resources. With its agenda now set, Cal Cities has voiced its dedication to immediately advancing these objectives in the state capitol. Judge Halts Development of Resort in Lake County over Fire Danger Environmentalists are praising Lake County Judge J. David Markham's decision that developers failed to consider the dangers that residents might experience if a wildfire forced thousands to evacuate their $1 billion resort and housing project. The office of Attorney General Rob Bonta pursued the lawsuit against the developer's resort alongside the Center for Biological Diversity. The Guenoc Valley Resort was intended for construction in a wine region at severe risk to wildfires but included only one evacuation route: a two-lane route through a steep canyon, which was swallowed by a fire originating at the LNU Lightning Complex over a year ago. While officials celebrated the project for its potential to spur housing and job growth, they are also facing the threat of climate crises that threaten the lives of future and nearby existing residents. (See related CP&DR coverage .) CP&DR Coverage: Cities Adopt Urgency Ordinances in Response to SB 9 Cities across the state adopted urgency ordinances that, in various ways, place restrictions on potential SB 9 redevelopments.To SB 9’s supporters, the ordinances, especially if they become permanent, threaten to undermine the law’s potential to help ease the state’s housing crisis by providing “missing middle” housing, especially in upscale areas that currently offer few options for middle-income residents. The cities, however, charge that SB 9 is a blunt instrument and that they are well within their rights to regulate for aesthetics and safety so long as they do not make it impossible to build SB 9 units. Quick Hits & Updates A trial court rejected without leave plans to amend the Orange County Council of Governments' lawsuit that challenges the Department of Housing and Community Development's requirement for Southern California Association of Government jurisdictions to account for 1,341,827 homes by 2029. The descendants of Black families who were displaced from Santa Monica to make way for freeways and other urban renewal projects during the 1950s will be offered priority placement in the city's affordable apartment units. About 600 families were forced to move when the city approved construction of I-10 in addition to those displaced when the city replaced Belmar Triangle with the Santa Monica Civic Auditorium. Wealthy and white Los Angeles residents have shorter commute times than the city's low-income residents and residents of color, according to Md. Rabiul Islam and Jean-Daniel M. Saphores in their research , "An L.A. Story: The Impact of Housing Costs on Commuting." The researchers analyze the relationship between housing costs and commutes and consider housing, transportation, public health, and climate implications. San Francisco's Embarcadero must be elevated as much as 7 feet to prepare for rising sea levels and protect the blocks behind the Embarcadero that hold some of the city's most valuable real estate. While there is not an exact timeline or analysis of how the changes would impact the waterfront attraction, the shoreline defense report is a precursor to a more detailed survey that will come out next month. A group of Central Valley farmers and desalination supporters are starting to collect signatures to propose a statewide ballot measure that would streamline the process for approving and funding big water projects, which could lead to a big showdown with environmental advocates over the state drought. The measure, "Water Infrastructure Funding Act of 2022," would require 2%, or $4 billion, of California's general fund to be used for projects that increase water supplies. The city and county San Francisco released an update to its Vision Zero Action Strategy intended to establish a citywide plan that makes crossing streets safer and promotes slower streets. The update brought together multiple government agencies with local advocacy and community groups and residents to more aggressively work to eliminate traffic deaths. The U.S. Supreme Court rejected an appeal by Bay Area developer John Sweeney, who was punished with a $3.6 million fine for polluting Suisun Bay to construct a duck-hunting club and kite-surfacing center on his 39-acre island, Point Buckler. Sweeney now must clean up the soil he deposited into the water. The Oakland City Council approved multiple ordinances that will allow RVs, mobile homes, manufactured homes, and tiny houses on residential properties in order to increasing housing options for the city's residents. The council eliminated a decades-old city law that required all residences to be built on a permanent foundation and placed its amendments under the protection of local rent control laws. A Bay Area school district is hoping to increase funding by finding a developer who will build over 1,100 apartment units on one of its campuses. The Jefferson Union High School District in Daly City is imagining a large multifamily housing project that would stand alongside retail, restaurants, parks, and trails on the 22-acre Serramonte Del Rey campus. A block of closed and unused retail shops near the 16th Street Mission BART Station is getting closer to being redeveloped into low-income housing after Mayor London Breed and Supervisor Hillary Ronen announced a plan for developer Crescent Heights to gift the 57,000-square-foot parcel to the city. If approved, the deal would produce housing for 330 low-income households on a site originally planned for market-rate housing that raised concerns over gentrification and displacement. The Wildlands Conservancy closed escrow on a 26,600-acre ranch in Northern California and will transform the space with a 10-bedroom lodge into an open space with mountains and valleys for the public. The family of investment giant Dean Witter sold the plot on the Eel River for $25 million to the conservation group that plans to welcome hiking, biking, kayaking, swimming, and camping on the site. The Mojave Trails National Monument may be designated as an International Dark Sky Sanctuary, which defines spaces that are remote, open to the public, and host a particularly good spot for viewing starry nights because they are very dark. Bakersfield is introducing an experimental program that will select 100 vulnerable, young residents to participate in a year-long study that examines how free access to public transit and electric scooters and bikes impacts their lives. The program reflects a nationwide interest in the concept of universal basic mobility, which would guarantee a minimum level of transportation accessibility. The Los Angeles City Council  approved the city's first two Jobs and Economic Development Zones: one on Lankershim Boulevard in North Hollywood and another on the Goodyear Tract in South Central. The JEDI Zone incentive program is intended to support small businesses by increasing access to capital, introducing loan program fees and interest reductions, and simplifying compliance and permitting processes. The Biden Administration is working on reversing a Trump-era decision that allowed Cadiz Inc. to pipe water across public desert land for sale. Though Cadiz claims the project will not damage nearby springs, their idea has faced severe opposition from Indigenous tribes, advocacy groups, and environmental organizations.

A major proposed wine resort in Lake County – located about 20 miles north of Napa Valley – has been shut down temporarily by what might be called a “reverse-reverse-CEQA case”.

Compared to, say, a wildfire or a landslide, the prospect of developing two- or four-unit dwellings in residential neighborhoods might not seem super-urgent. But, with the January 1 implementation of Senate Bill 9, the hotly contested bill that essentially allows lot-splitting or conversion of all single-family homes in the state into duplexes, cities across the state adopted urgency ordinances in December that, in various ways, place restrictions on potential SB 9 redevelopments.

AIDS Healthcare Foundation Sues to Block Los Angeles Housing Plan While the L.A. City Council wants to use the city's Housing Element to rezone and add nearly 500,000 homes by October 2029 (as mandated by the city's Regional Housing Needs Allocation), the AIDS Healthcare Foundation has filed suit to obstruct its plans, arguing that officials failed to adequately consider environmental impacts. The nonprofit noted in its lawsuit that it will intervene because upzoning for more density without establishing affordable housing requirements would spur displacement and gentrification. The city argues that its plan will provide renter relief by increasing supply, will generate 185,000 units of affordable housing, and adheres to state environmental law. To meet the proposal in its updated Housing Element, "The Plan to House L.A.," the city will need to approve about 57,000 units per year, a significant increase from the 16,700 units permitted annually since 2014. In 2017, AIDS Healthcare previously a defeated ballot measure to restrict development citywide and has filed several anti-development suits in the city. (See related CP&DR coverage .) Caltrans Releases Complete Streets Policy Caltrans announced its new policy for all new transportation projects it funds or oversees to include “complete street” features that provide safe and accessible options for people walking, biking and taking transit. This policy is intended to expand the availability of sustainable transportation options to help meet the state’s climate, health and equity goals, though some advocates remain skeptical considering the department's pro-highway history. As part of the new policy, Caltrans commits to removing administrative barriers and partnering with communities and local agencies to ensure more projects on state and local transportation systems improve the connectivity to pedestrian, bicycle, and transit facilities and accessibility to destinations. If not appropriate to the context or community of the project, projects must receive approval from Caltrans before complete streets features are excluded. State Challenges Anaheim's Plans for Angel Stadium The state Department of Housing and Community Development has issued a Notice of Violation of the Surplus Land Act to the City of Anaheim over its Angel Stadium land sale. While the city has been trying to convince the HCD that its project satisfies California affordable housing law requirements, the state found three violations related to a lack of prioritization of affordable housing developers. Anaheim argued that, in addition to the 466 affordable units promised at the moment, the final project has a goal of 777, and the city will work with Angels owner Arte Moreno's company to provide 518 affordable homes outside of the development. They claim that the state declined their proposal to pair affordable housing with the Angel Stadium project. (See related CP&DR coverage .) San Diego May Appeal Ruling Against Midway District Plans In its attempt to move forward with a redevelopment of the sports arena site, the City of San Diego is facing a court ruling that overturned a voter-approved ballot measure that would have relaxed building height restrictions in the Midway District. The city will respond with two approaches: an appeal from the city attorney office and an environmental impact report on tall buildings in the area. San Diego County Superior Court Judge Katherine Bacal ruled that the city failed to analyze the environmental impacts of Measure E, which would eliminate the 30-foot height limit, before putting it on the ballot. Since the appeal process may take over a year, the city hopes that conducting an analysis could be an easier path to putting the measure on the ballot again in 2022. Five firms remain in the running for developing the mixed-use site with thousands of new homes. CalEPA Updates CalEnviroScreen The California Environmental Protection Agency finalized the release of an updated version of CalEnviroScreen, a geospatial program first launched in 2013 and designed to identify communities that experience the highest levels of pollution burdens and risks. The tool helps officials make more equitable policy decisions and allows other organizations and individuals to more easily comprehend California's environmental injustice. Environmental justice grants, environmental law enforcement, site cleanups, and sustainable development are all due to the effectiveness of CalEnviroScreen. Also, the program's identification of "disadvantaged communities" allows the state to more easily decide who will receive California Climate Investments from the Greenhouse Gas Reduction Fund. The newest update analyzes data from 21 indicators of environmental, public health, and socioeconomic conditions in 8,000 census tracts. (See related CP&DR coverage .) Court Rejects Challenge to Controversial Lafayette Apartment Complex Contra Costa County Judge Barry Baskin rejected concerns from opponents of a 315-unit apartment complex that the development would not be environmentally dependable, allowing the project to move forward. Save Lafayette, the group challenging the complex, filed a lawsuit to stop construction of the Terraces of Lafayette after the city council approved the project amongst talk that the project would yield environmental challenges. The apartments are poised to include 63 affordable units across 14 buildings as well as a 2-story clubhouse, a leasing office, and 550 parking spaces on 22 acres. Judge Baskin found that the city's approval of the environmental impacts, including tree removal, is still acceptable, though Save Lafayette is arguing that environmental conditions have since changed. (See related CP&DR coverage .) Quick Hits & Updates Palo Alto is considering what may be the state's first SB 9 project that would build four homes on a single-family, one-acre Barron Park lot. The architect applied for approval just two days after the law took effect and plans to demolish the existing home and storage unit to construct a two-story home, an ADU, and two single-story homes. (See related CP&DR coverage.) To increase affordable housing supply, the San Jose City Council unanimously voted to scrap a policy that requires affordable housing projects located in urban villages or near major transit stops to plan for commercial space on the ground floor. While the policy was originally intended to propel economic growth, the city will instead collaborate with nonprofits to encourage commercial use in buildings instead of requiring it and plans to extend this policy to all affordable housing projects. The Coastal Commission approved Laguna Beach's updated Downtown Specific Plan, which includes relaxed parking requirements and the implementation of permit-by-right for new businesses instead of conditional use permits to simplify the process of establishing commercial spaces in the city's village. The plan will not go into effect until the city council approves the commission's amendments. The state has approved a $30 million grant for the City of Sacramento to help construct The Railyards north of the city's downtown with developer LDK Ventures. The 240-acre site will include a Superior Courthouse, a Kaiser hospital, and a 345-unit housing development with 69 units for affordable housing and retail. Google announced a plan to construct several hundred homes atop the proposed site for a new San Jose BART station near the Diridon transit hub. Public records show that Google's project within its Downtown West Village would include 500 units and 18,000 square feet of retail and commercial space. Citrus Heights City Council unanimously approved a plan to transform the Sunrise Mall by reducing retail space by over 1 million square feet and constructing 2,220 residential units, 960,000 square feet of office space, and 480 hotel rooms. The Sunrise Tomorrow Specific Plan will be revitalized in phases, likely beginning with construction on surplus parking space. San Jose City Council is considering expanding on SB 9 to allow upzoning in historic districts. The policy finds support from city planners and the Planning Commission as an effort to increase the area's housing supply. The state Department of Housing and Community Development is reviewing Oakland City Council's delayed approval of a 222-unit residential project across from the West Oakland BART to decide if the city violated state laws. Their investigation comes a week after announcing their review of San Francisco Supervisors' denial of a 495-unit project. Long Beach will resubmit its plan to meet the state's RHNA requirements with an amendment that allows for more housing to be built on parcels designated as "high resource" areas. The change responds to state demands and should contribute to the requested construction of 26,502 units over the next 8 years. While Gov. Gavin Newsom has committed to ceasing the issuing of new fracking permits by 2024, the state is getting a head start by rejecting permits in areas deemed unfruitful. The state has denied 109 permits since July using references to the environmental and public health dangers of fracking. The latest proposal for the redevelopment of San Diego's Midway District into a new sports arena would include 4,000 new homes and 20 acres of park space. Developer Zephyr and affordable-housing company Chelsea Investment are spearheading the proposal that would reinvest in the 48-acre space surrounding the existing Pechanga Arena. The Clovis City Council voted to reduce its sphere of influence by 1,000 acres northeast in response to a developer's uncovering of a habitat of California tiger salamanders, a species that is either threatened or endangered throughout various parts of the state. Wilson Homes is urging the city to only adopt 155 acres into its sphere of influence, and Wilson Homes would develop 75 acres instead of the originally planned 350 acres.

CP&DR Vol. 36 No. 12 December 2021

Daniel Burnham is dead.

SANDAG Adopts $160 Billion Regional Transportation Plan The San Diego Association of Governments' Board of Directors voted to adopt its 2021 Regional Transportation Plan. It  will not include a controversial road mileage tax that would have charged drivers 4 cents for every mile driven. Part of the plan includes a Central Mobility Hub that would directly connect riders to San Diego International Airport and improvements to roads and rural highways. While SANDAG aims to not only expand public transit but make it free in the next decade, it's unclear how they will fund the $160 billion plan. Other potential sources of revenue include sales tax increases, ride-hailing fees, or a "managed lane" system that charges tolls on highways, but all of these sources have also come with significant controversy. Santa Cruz Approves First SB 35 Project The Santa Cruz City Council voted, 4-3, to confirm that a mixed-use project it previously denied does, in fact, meet the city's objective design standards. The council was, essentially, required to approve the project at 831 Water Street -- pending the design question -- because the project complies with Senate Bill 35. The Department of Housing and Community and Development released a memo verifying that the 140-unit, 50% affordable-unit project whose approval process was streamlined is consistent with state law and that the city's rejection of the project was illegal. It is the first such project in Santa Cruz to fall under SB 35. The new vote signals that city staff may file a formal letter to inform the project's developer that it may now begin the design phase. In two previous meetings, the city reviewed the project and on one occasion blocked the project from receiving SB 35 approval. The project also faced concerns that Novin Development was discriminating against low-income people by separating affordable and market-rate units into two towers. While SB 35 allows for this if the developer is hoping to receive grant funding, the law also allows local jurisdictions to set inclusionary ordinances, so affordable housing allocation in the building is still up for debate. (See related CP&DR coverage .) San Diego Formulates Resiliency Plan, Updates Climate Plan The City of San Diego released a multi-million dollar plan with 86 agenda items to prepare the city for climate disasters. The 536-page plan, titled Climate Resilient SD, introduces adaptation policies such as planting trees to resist the urban heat island effect in low-income neighborhoods. While the plan is expensive, officials argue that failing to introduce a strategy would be four to six times more costly. At the same time, the city plans to amplify its mitigation proposal by overhauling its 2015 climate plan and calling for net zero emissions by 2035. The change follows the discovery that the original greenhouse gas accounting system was flawed and reported untruthful greenhouse gas reductions. Going forward, officials are drafting a more detailed version of their 288-page action plan, which includes policies such as the phasing out of natural gas use in homes and businesses and the reduction of transportation emissions. Housing Opponents Suffer Costly Defeat in Livermore Save Livermore Downtown will have to post a $500,000 bond to help offset financial damages that the nonprofit developer, Eden Housing, is facing due to the group's lawsuit to block a 130-unit affordable housing project. An Alameda County Judge and a state appeals court delivered the blow to the lawsuit, which argued that the plan is misaligned with Livermore's downtown standards, and the environmental review process's review of on-site contamination was inadequate. Despite the legal blow, an official ruling is not expected until February, and, in the meantime, Eden Housing may not be able to use the $68 million worth of state and federal tax credit funding until the ruling. The developer also expects to receive $14.4 million in Alameda County Measure A1 affordable housing money, but funding is contingent on starting construction by the end of 2022. Quick Hits & Updates The City of San Diego has entered into a 90-day negotiation period with 5 teams hoping to obtain a long-term lease to redevelop 48-acres around the Midway District's sports arena, leaving 2 behind. Discover Midway, Midway Village+, Midway Rising, HomeTownSD, and Neighborhood Next will all have an opportunity to rebuild or improve the sports arena and build housing, 25% of which must be affordable, on the site. A San Diego Superior Court Judge has blocked Measure E, a ballot measure that would have removed a 30-foot height restriction for new buildings in the Midway District that voters approved in 2020. While many residents support mixed-use development and a new sports arena in the area, the judge ruled in favor of the neighborhood group Save Our Access and required that the city carry out an environmental impact report before allowing residents to vote on the measure. A Los Angeles County legislator will introduce legislation that disallows freeway extensions in neighborhoods with high poverty rates and severe freeway pollution that has generated harmful health impacts across the state. Assemblywoman Cristina Garcia, who represents Bell Gardens, is urging other state officials to take action on the racial and health disparities related to freeway construction and use. The City of Sacramento will dedicate $5 million to fund programs intended to prevent or minimize the displacement of Oak Park residents as the UC Davis Aggie Square development, which has been accused of hastening gentrification, is underway. The money would fund affordable housing, local hiring programs, job training, and eviction protections for low- and middle-income people and people of color who may not receive many of the economic benefits the development is imagined to bring. (See related CP&DR coverage .) California Attorney General Rob Bonta announced a settlement with the City of Huntington Park to bring the city into compliance with SB 1000, a law requiring local governments to address environmental justice in their land use planning. Huntington Park faces some of the highest pollution levels in the state, and its residents are at increased risk of serious health burdens, but the city failed to meet any of SB 1000's requirements in its 2030 General Plan. To increase affordable housing supply, the San Jose City Council unanimously voted to scrap a requirement that affordable housing projects located in urban villages or near major transit stops include a ground floor dedicated solely to commercial purposes. While the policy was originally intended to encourage job and economic growth near public transit, the city will instead collaborate with nonprofits to encourage commercial use in buildings instead of requiring it and plans to extend this policy to all affordable housing projects. Climate change is 66% to 88% responsible for increased wildfire risk in the western United States, according to a team of California researchers. The researchers found that the severity of global warming's impact on atmospheric conditions has occurred much faster than expected, and their estimate is likely conservative. Labor and environmental groups filed a ballot initiative in San Diego County that would raise taxes to fund a $160 billion public transit expansion, including building a rail connection to the downtown airport and a new line between South County and Kearny Mesa. If passed, the plan would increase the regional sales tax by half a cent. Santa Clara County Supervisors have approved new development restrictions that prevent the construction of large-scale housing on an expansive area of unincorporated Coyote Valley. This move, intended to preserve the area for agricultural use, is the first time the county has limited development on land zoned for agriculture. The city of San Diego and the Padres will have to determine sale and development terms for a four-block, 5.25-acre East Village parking lot, named Tailgate Park, by January 31. The city extended the negotiation window by three months to allow for time to specify project requirements and community benefits that would result from the Padres' urban, office-anchored district, but the team is still working on a geotechnical analysis of the site's fault lines. Federal officials have found that BART's four-station extension in San Jose may cost $9.1 billion, which would constitute twice the original estimate for the total cost. While BART officials have not confirmed the increase, the Federal Transit Administration is contributing $2.3 billion in funds to the extension or a quarter of the final cost, whichever is less. The Chumash Heritage National Marine Sanctuary is getting closer to achieving federal protection as it moves onto the designation phase. The proposed sanctuary has been in the National Oceanic and Atmospheric Administration's nomination phase since 2015, and the NOAA will now discuss its potential boundaries and request public commentary on its scope. Fresno apartment rent prices set another new record last month, reaching $1,472 per month. While the pace of rent growth has mellowed dramatically from its July peak, it continues to exceed pre-pandemic trends, with rent averaging a year-over-year increase of $243 per month, which is nearly 20%.

PPIC Finds Significant Under-Production of Housing California's plans for increasing the housing supply does not make up for decades of undersupply with population growth, according to data from the 2020 Census and analysis from the Public Policy Institute of California. The Census Bureau's data shows that new housing has not matched population growth; the amount of people increased 3.2 times more than housing units over the past decade. Now, California is short of the near 3.5 million homes that Gov. Gavin Newsom believes will be essential by 2025. The Census also proved that coastal housing is the most expensive, but inland regions have experienced the largest percent change in housing values because residents are pushed or attracted to their lower costs. State Says Angel Stadium Redevelopment May Violate Surplus Land Act The Department of Housing and Community Development has issued a Notice of Violation of the Surplus Land Act to the City of Anaheim over its Angel Stadium land sale. While the city has been trying to convince the HCD that its project satisfies California affordable housing law requirements, the state found three violations related to a lack of prioritization of affordable housing developers. Anaheim argued that, in addition to the 466 affordable units promised at the moment, the final project has a goal of 777, and the city will work with Angels owner Arte Moreno's company to provide 518 affordable homes outside of the development. They claim that the state declined their proposal to pair affordable housing with the Angel Stadium project. (See related CP&DR coverage .) Poll: Voters Support Residential Upzoning Most Los Angeles County voters support SB 9 and SB 10, according to a poll from the Los Angeles Business Council Institute conducted alongside the Los Angeles Times that analyzes public response to the new state laws, which go into effect January 1. While multiple homeowner groups and other opponents argued that the bills would destroy single-family neighborhoods, the new poll suggests that many voters support changes to traditional single-family zoning. Countywide, 55% of voters are in favor of SB 9, and 68% of voters support SB 10. However, renters were much more likely to support the bills than homeowners, especially SB 9. Advocates of the laws hope that they will contribute to more affordable prices by encouraging construction in areas that have previously faced higher-density development restrictions. State Compels Santa Cruz to Accept SB 35 Project The Department of Housing and Community Development found that the City of Santa Cruz's rejection of a project that was proposed under SB 35 was illegal after the council noted that the layout reflects a form of segregation. The developer, Novin Development, of the 140-unit 831 Water Street project suggested to separate its two buildings into affordable and market-rate housing, claiming that creating this separation would make it easier to secure grants that would subsidize the development and maintain affordability. Under SB 35, which seeks to simplify the housing construction process, the project would have to be approved because it meets Santa Cruz's objective standards, even though the council voted 6-1 to turn down the project. San Francisco Allows Parklets but Implements Extensive Regulations Though San Francisco Supervisors approved policy to make outdoor parklets popularized due to the pandemic permanent, strict rules and regulations are driving many restaurants to completely cease their outdoor dining operations, according to an analysis by the San Francisco Chronicle. One estimate suggests that as many as 90% of parklets must be removed or severely changed to comply with the over 60-page city guidelines covered in the Shared Spaces policy program, or they may face severe charges. As restaurants receive violation notices, the city is not acting on fine punishments, according to spokesperson for Mayor London Breed's office Jeff Cretan. Meanwhile, worried restaurant owners are working through confusing violation notices and parklet requirements to support their businesses. CP&DR Commentary: On Housing, Political Labels No Longer Apply A few weeks ago, CP&DR covered what was, for many, a shocking rejection of a 495-unit housing development in the heart of San Francisco by the city's Board of Supervisors. It was shocking for any number of reasons. Pragmatically, it calls into question the city's ability to meet its state-mandated housing goals. Politically, it was a rare abandonment of aldermanic privilege. Perhaps most notably, it demonstrated that, ideologically, progressivism is now officially, unambiguously at odds with the provision of housing. The real progressive stories are in San Diego, San Jose, and Sacramento -- to name a few. Quick Hits & Updates The latest proposal for the redevelopment of San Diego's Midway District into a new sports arena would include 4,000 new homes and 20 acres of park space. Developer Zephyr and affordable-housing company Chelsea Investment are spearheading the proposal that would reinvest in the 48-acre space surrounding the existing Pechanga Arena. The Biden Administration is working on reversing a Trump-era decision that allowed Cadiz Inc. to pipe water across public desert land for sale. Though Cadiz claims the project will not damage nearby springs, their idea has faced severe opposition from Indigenous tribes, advocacy groups, and environmental organizations. San Jose City Council is considering expanding on SB 9, the "duplex law," to allow upzoning in historic districts. The policy finds support from city planners and the Planning Commission as an effort to increase the area's housing supply. The Department of Housing and Community Development is reviewing Oakland City Council's delayed approval of a 222-unit residential project across from the West Oakland BART to decide if the city violated state laws. Their investigation comes a week after announcing their review of San Francisco Supervisors' denial of a 495-unit project. The Santa Cruz City Council rescinded its previous rejection of a development located at 831 Water Street and will consider updates from the developer after facing litigation threats. The council had previously denied the project because it felt that dividing the project into two halves — one for market-rate units and another for affordable housing — would contribute to the stigmatization of low-income people, but the developer is arguing that SB 35 would not allow the city to reject the development based on that argument. Long Beach will resubmit its plan to meet the state's RHNA requirements with an amendment that allows for more housing to be built on parcels designated as "high resource" areas. The change responds to state demands and should contribute to the requested construction of 26,502 units over the next 8 years. San Francisco Supervisors are considering a $64 million plan to protect renters that would help nonprofits buy small apartment buildings with high risk of resident displacement. The board is proposing to use funds from a $294 million pandemic reserve to help purchase at least 200 units, though one more supervisor will need to support the proposal to make it actionable. Google announced a plan to construct several hundred homes atop the proposed site for a new San Jose BART station near the Diridon transit hub. Public records show that Google's project within its Downtown West Village would include 500 units and 18,000 square feet of retail and commercial space. Boston Properties, the developer of San Jose's Platform 16 proposal, is "actively" considering restarting construction of a giant tech campus in 2022. The campus is located near the eventual Google transit village and the Diridon train station and will feature 16 terraces overlooking the banks of the Guadalupe River. If completed, the 1.1 million square-foot project would include 3 office buildings and a garage. The Housing Workshop, a housing policy firm, released a new report titled “CEQA: California’s Living Environmental Law: CEQA’s Role in Housing, Environmental Justice & Climate Change,” demonstrating that the 50-year-old law is a critical tool for advancing environmental justice and combating climate change. The report shows that the CEQA is not a significant barrier to the state’s housing production, contrary to critics' contentions. Extensive inequalities exist throughout the southwestern United States according to a study that explores the extent of thermal inequality. Researchers found that the difference reached as high as 6 to 7 degrees Fahrenheit in Palm Springs and the Inland Empire, and California urban regions proved to feature higher thermal inequality than other southwestern states, possibly due to extreme water use in wealthy neighborhoods. Oakland City Council will begin negotiations with the Black Cultural Zone Collaborative and its partners, Community Arts Stabilization Trust and Curtis Development, over a long-term lease of the city-owned Liberation Park in order to increase affordable housing availability and increase commercial and creative space. The 1.2-acre property is currently used as a community hub for shopping, free-meal distribution, outdoor movies, COVID-19 services, and more.

Cities tend to be land-rich but cash-poor. So it’s not surprising that – especially in California, where they don’t get much in the way of property taxes – cities are always on the hunt for creative ways to extract more cash from their valuable real estate. And over the past generation it’s been especially tempting for cities to use their real estate not only to generate income but also sales tax revenues, which have been the fool’s gold of municipal budgets ever since Proposition 13 passed more than 40 years ago. But the truth of the matter is that cities, for perfectly understandable reasons, are often lousy real estate investors. They’re highly political entities that are often incapable of making hard-nosed business decisions. They usually don’t have the real estate expertise required to make good decisions (and are often reluctant or too naive to hire that expertise). And they tend to get caught in a vise between trying to exploit long-term real estate assets on the one hand and trying to maximize sales-tax revenues on the other. Which brings us to the tale of Thousand Oaks and Rick Caruso. Thousand Oaks is a famously affluent and well-planned suburban community in Ventura County, just over the line from L.A. County west of the San Fernando Valley. Though the city’s planners have frequently sought to build more of a “downtown” along Thousand Oaks Boulevard, residents and some political leaders have resisted this transition strongly. They often use terms like “rustic” and “semi-rural” to describe the city, which has 127,000 residents and a median home price of around $1 million. Thousand Oaks, which did not impose a property tax in the pre-Prop. 13 era, is also highly dependent on sales tax revenues, the single biggest source of money for the city’s general fund. About 36% of the general fund revenue comes from sales tax, a far higher percentage than most California cities. (By comparison, neighboring Simi Valley, a city of about the same size with a similarly sized general fund, gets about 20% of its general fund from sales tax.) Rick Caruso is, of course, the legendary retail real estate developer who built The Grove in Los Angeles and Americana at Brand in Glendale among other shopping centers. (Caruso is also the beleaguered board chair of the beleaguered University of Southern California, but that’s another story.) Last month, Thousand Oaks City Council voted 3-2 to sell the dirt underlying Caruso’s The Lakes shopping center, which is located more or less next door to the Thousand Oaks Civic Arts Plaza, and allow Caruso to build a six-story apartment building on the site. The decision divided both the council and the city itself and, depending on how you look at it, represents a major step forward in urbanism in Thousand Oaks or the beginning of the end of the city’s rustic atmosphere. But the fact of the matter is that Thousand Oaks didn’t have much choice: The city’s past attempts to exploit its own real estate assets to generate sales tax revenue – combined with the original Caruso deal and rapidly changing retail sales patterns – had put the city in a hole that, basically, forced its hand on the apartment building.