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I logged into the New York Times the other day, doing my best to dodge the Great Bleach-Injection Debate of 2020, and was shocked and delighted to happen upon an article about an exquisite Los Angeles neighborhood that I somehow had never heard of.  Called "Belvedere Heights," it includes a perfect little main street with an unbroken row of independent stores, mixed use, low-rise buildings, and rich architectural details. There are bay windows, streetlamps, and balconies—and fire escapes! Display windows snuggle up against the sidewalk, and each building has only a single storefront, each with its own distinctive facade. Judging by the design, its heyday must have been in the 1920s, give or take a decade. (There are no street trees, though. Curious.) It seemed like it would be a cool place for me to check out, next time I’m able to check out someplace other than Walgreens. Alas, the New York Times section I was reading wasn’t the national section or the real estate section. It was the arts section. Belvedere Heights isn’t near downtown Los Angeles. It isn’t antique, and most definitely is not mixed use. It’s at Melody Ranch studio, in the Santa Clarita Valley community of Newhall. It was built in the past few months. And it’s used for one thing: it’s a set for a television show.  Nobody lives here. "Penny Dreadful: City of Angels" is a new supernatural noir crime drama on Showtime, following up a 2016 rendition set in Victorian London. Noir being our endemic genre, a vintage Los Angeles location was a must. Detectives and demons alike will have a field day in their version of 1938. In one block alone, they’ll have plenty of places for mischief to play out: "empty nightclub, a shuttered cinema, a vacant rooming house." The show features undead antagonists like a shape-shifting succubus, but its themes also cover real monsters, such as the development of the Los Angeles freeway system and the violence it inflicted on minority communities.  (If the story sounds familiar, it’s because you’ve seen a version of it in "Who Framed Roger Rabbit?". "Penny Dreadful" replaces toons with actual people.) The supernatural elements provide "a fun way, a really entertaining way to tell the story of the building of a freeway," said the show’s co-producer Michael Aguilar. Fair point. In a show about ghouls, vampires, and murders, its commentary on Los Angeles’s built environment is, perhaps, the element that should give us the biggest fright of all.  New York Times reporter Alexis Soloski notes that the establishments along "Penny Dreadful’s” street are "relics of a past that never quite existed." But that’s not true at all. Neighborhoods like it absolutely could have existed, most likely somewhere in what is now downtown Los Angeles’s Financial District, which is the poster child for the notorious federal urban renewal programs of the 1960s. Old photos (such as this and these ) are shocking: the neighborhood of Bunker Hill once included low-rise mixed use Victorian and post-Victorian buildings (including some that were probably dilapidated and probably home to not the savoriest of characters). Then came HUD-funded bulldozers , and up went the high-rises, concrete plazas, and parking lots. Or, as the show suggests, maybe it was just covered up by the 110 Freeway.  The material destruction was one thing. We can’t un-demolish the past. The regulatory carnage is another matter.  Take a look at the photos ( here and here ) of Belvedere Heights and consider everything that, with too few exceptions, state and local regulations forbid today (or, if not forbidden, are rendered prohibitively expensive, in part by regulations):  Storefronts hugging the sidewalk. Gotta have setbacks .  Sidewalks with curbs. Gotta have those parkways .  Seismic codes’ Public Enemy No. 1.  Second stories. What’s going on up there? A building should do only one thing!  Third stories. Hold my sherry. I think I’m going to faint... Bars (you can’t see them in the photo, but it’s noir, so you know they’re there). Liquor licenses are literally harder to get than marijuana licenses. Attached buildings. Gotta make space for parking — and curb cuts.  A two-lane, two-way street. Most commercial zoning correlates intensity of use with traffic capacity, ensuring that the busiest retail environments will be the least pedestrian-friendly. Timely infill development. Not with bureaucratic delay and CEQA suits.  Architectural details. California has notoriously high construction costs, due in part to some contracting regulations.  Low-cost housing. Development of new affordable housing costs up to $1 million per unit.  Narrow lots. Not illegal, but often financially infeasible, partly because regulations elevate the cost of development and, therefore, developments have to be large to pencil out. "Assembly" is the name of that game.  Independent businesses. When you add up all the regulations above, it’s pretty hard for mom and pop to hang a shingle anywhere. (Never mind. Shingles aren’t allowed either. Want a billboard ? That’s no problem.)  I have to give mad props, no pun intended, to "Penny Dreadful’s” art directors. They have, with paint and plywood, created an object lesson in what is wrong with modern-day urbanism.  Behold Belvedere Heights's small storefronts and shared walls, nesting comfortably side-by-side-by-side. Compare them to the mega mixed-users, with five stories of wood on top of massive concrete podiums and underground garages, that take up entire city blocks and look like beached cruise ships. They technically engage the sidewalk with ground-floor retail (usually a City Target or a Ross Dress-for-Less), but they also tend to be hideous and oppressive. There’s not a commercial strip in California that couldn’t accommodate this type of development if it was allowed to (maybe minus the bricks). The only chief constraint is parking, in terms of number of spaces and curb cuts. Well, we can figure that out too. Maybe it’s a shared parking scheme. Maybe it’s alleyways. Maybe it’s diagonal curbside parking. Maybe it’s no parking at all.  In the real Santa Clarita, the closest thing to a main street is the Home Depot parking lot. If I had to choose between living in Belvedere Heights and the outer ’burbs, I think I’d try my luck with the succubi. This is what fiction is for, of course. Beyond its escapist frights, "Penny Dreadful" is an allegory for race relations and sociopathy. It’s showing us what we ought not do. But it’s also showing us something we ought to do — something we ought to build. But, like the proverbial debonair vampire, the true horrors do not lie on the surface. It’s easy enough to see a high-rise or to speed down a freeway and think that things are OK. But the accretion of laws, regulations, and social conventions have made it all but impossible to revive our better angels. Belvedere Heights reminds us that, to create great places, we first have to envision them. Of course, many people, including planners and developers, have been trying valiantly to undo the damage of postwar 20th century urbanism. They’ve made progress. But, to use an unavoidable metaphor, there is no silver bullet that will erase, revise, and repeal all the bad regulations all at once. My emotional reaction to Belvedere Heights tells me that we have to keep at it.  Like most things in a noir drama, Belvedere Heights will end up dead, dismantled, and recycled for lumber and props until the next period piece comes along. If only we could figure out a way to banish more of our demons and bring this urban fantasy to life.

Covid-19 Crisis Set to Cost Cities $6.7 Billion over Two Years  Even if stay-at-home orders are lifted by June 1, California cities will lose at least $6.7 billion over the next two years according to an estimate compiled by the League of California Cities. That number is likely to be far worse. Gov. Gavin Newsom and public health officials have signaled that bans on large gatherings and travel will likely extend well into summer. Already, cities are reporting budget shortfalls, prompting layoffs, furloughs and cuts to basic services. Of the $5.8 billion that went to California in the last federal aid package, most went to counties. Only Fresno, Los Angeles, Sacramento, San Diego, San Francisco and San Jose saw any relief money, and even they aren't allowed to use money for anything other than coronavirus-related expenses. The League of California Cities asked Newsom and the state legislature last week to help cities cover budget shortfalls. Newsom plans to unveil a new budget proposal next month. (See related CP&DR coverage .) Ballot Measures for Local Funding Slumped in March  According to a recent analysis of the March 3 election, over half of local measures on the ballot didn't pass muster among local voters, who, collectively, turned out in record numbers for a spring primary election. Among the 293 measures were 150 school bond measures including 122 school bond measures seeking a total of $17.4 billion. There were 89 city, county, and special district fiscal measures, of which 45 were add-on sales tax measures and 27 parcel taxes, substantially more than ever before in a spring primary election. The number of measures increased year-over-year from 89 in June 2016 to 111 in June 2018. Greater numbers did not translate into greater success, however. Only 96 passed, a departure from the much higher passage rates in years prior. School bonds in particular fared poorly. Over half of the measures weren't even close to passage. Forty-five passed, authorizing a total of $6.636 in school construction bonds out of the total $17.4 billion requested. (See prior CP&DR coverage .) Developer Sues Sacramento County over Climate Action Plan  In an unusual role reversal, a developer is filing suit against a county government for not being environmentally sensitive enough with a project. Tsakopoulos Investments is suing Sacramento County for approving Mather South without a climate action plan in the final EIR. In the suit, Tsakopoulos attorneys note that the county has never adopted climate change significance thresholds that could provide a point of reference in an EIR for a project like Mather South. As approved, Mather South would be an 848-acre project with up to 3,522 residential units, a 28-acre environmental education campus with 200 family units, a 21-acre research and development park and 21 acres of retail. As the developer for nearby Jackson Township, a 1,391-acre project that is currently undergoing its own EIR review, Tsakopoulos has an interest in ensuring Mather South is sharing environmental impact costs. Tsakopouls is asking for a judge to issue a temporary restraining order to keep Mather South from moving forward AND set aside its approvals and EIR. Housing Advocates Identify Shortfall of 1.3 Million Affordable Homes  The California Housing Partnership has released a report that shows the depth of housing need across California. The report describes a rapid increase in rents that in combination with a dramatic decline in state and federal funding has led to a shortage of 1.3 million affordable homes. Despite the 2017 Housing Package, state funding remains well below 2012 levels; at the federal level, tax reform brought about a 13 percent dip in Low-Income Housing Tax Credit housing production and preservation. Median rent in California has increased 40 percent since 2000 while median renter household income has only increased by 8 percent, and 79 percent of extremely low-income households are paying more than half of their income on housing costs compared to just 0.4 percent of above moderate-income households. Meanwhile, California spends nearly four times more on homeowners than renters. Quick Hits & Updates San Francisco Mayor London Breed announced the appointment of Eric Shaw as Director of the Mayor's Office of Housing and Community Development. He replaces Acting Deputy Director of Housing Dam Adams, who had served since July 2019. Mostly recently, Shaw served as an advisor to the California Governor's Office of Emergency Services where he coordinated community planning and engagement activities associated with recovery from the 2018 Camp Fire. Prior to his work at Cal OES, Shaw was the Director of the Office of Planning for Washington, D.C. Following Oakland's "Slow Streets" announcement, San Francisco's MTA has announced its own slow streets program. Phase 1 announced 12 candidate streets up for consideration for the program, which allows for local vehicle access and maintains usual right-of-way laws. Friends of the Los Angeles River co-founder Lewis MacAdams died of complications related to Parkinson's disease. As the group's first president, MacAdams successfully lobbied the federal government for $1.6 billion to restore the LA river. Friends of the Los Angeles River has grown to 40,000 supporters, and a 7-foot-high monument of MacAdams' likeness overlooks the river's edge in a park that bears his name. The Los Angeles Department of City Planning released the framework for a new program that would simplify the approval process for sit-down restaurants seeking to serve alcoholic beverages. The proposed Restaurant Beverage Program would shorten the time for city approvals from months to a matter of weeks. The program would allow qualifying restaurants to receive over-the-counter approvals and pay approximately $4,000 for a permit to serve alcohol—significantly less than the permit’s current cost of $13,000. These measures are in line with Los Angeles’s broader efforts to help local and family-owned businesses prepare for the economic recovery ahead. Despite coronavirus concerns and nearly empty trains, Caltrain has no plans to back away from ambitious plans to electrify and double the size of its fleet by 2022. A proposed half-cent sales tax continues to wind its way through the approval process. If passed, the measure would generate $100 million in cash per year, which Caltrain would use to expand service from 92 trains a day to 168 trains a day by 2022. An analysis of climate planning documents from 23 California cities details competing policy agendas as cities have predominantly focused on mitigation strategies rather than an integrated mitigation and adaptation plan. The Mineta Transportation Institute findings suggest promising steps that both municipal and state governments can take to support integrated actions at the local level. Following years of dispute and gridlock, industry leaders, environmentalists, and community leaders came together to develop a new "transition zones” to both promote development and ward off gentrification the San Diego neighborhood of Barrio Logan . The plan involves identifying four land uses for the five-block transition zone: "maritime commercial," "community commercial," "neighborhood commercial" and residential. Faster Bay Area is on hold indefinitely amid uncertainties surrounding the coronavirus. An affirmative vote, which would have been cast this coming November, would have levied a once-cent sales tax to generate $100 billion over 40 years. Faster Bay Area will have to go to the sidelines until a future election yet to be determined, the three groups behind the initiative said in a letter. The West Hollywood Planning Commission voted to eliminate on-site parking requirements for 100 percent affordable housing developments. The vote is in line with new state law AB 1763, a directive that requires only .5 spaces per unit if the building is within a half mile of a major transit stop. San Onofre Nuclear Generating Station has begun an eight year decommissioning process after a radioactive leak caused the plant to cease production eight years ago. Environmental hazards will remain, however, until a suitable location for the plant's radioactive nuclear waste becomes available.

The COVID-19 crisis has shuttered council chambers and hearing rooms across the state. But the show goes on — electronically.

State Recommends Imperiled Joshua Tree for Federal Protection California's iconic Joshua tree is a step closer to permanent protected status after securing a recommendation from the California Department of Fish and Wildlife. Last year, the federal government denied protected status under federal law, partly because state and local programs already provide the trees some protection. Conservation groups are pushing for more protection: the hardy trees, belonging to the yucca family, thrive in the Mojave Desert's arid conditions, but climate models consistently project rising temperatures and increasingly erratic precipitation patterns that would push Joshua Trees and many other native California species into higher elevations. And the department's recommendation raises an inviting possibility: as the first species under consideration primarily on the grounds of climate change forecasts, Joshua Trees could set a precedent for other species that will be driven to higher elevations to avoid rising temperatures. It would also throw up another permitting roadblock for development projects that would remove western Joshua trees. In Housing Case, Court Upholds State Power over Charter Cities  The California Supreme Court declined to hear Anderson v. City of San Jose , bolstering the state’s authority to use the Surplus Land Act to compel charter cities to prioritize affordable housing on their surplus land. The appeals court decision, which overturned a Santa Clara County Superior Court ruling, referenced recent case law and legislation illustrating the scope of California’s housing crisis as grounds to demonstrate that the state’s interest in providing affordable housing with surplus government property is more substantial than identifiable municipal interests, therefore clearing the bar set for statewide preemption. The decision may bring clarity to similar cases. In 2017, for example, Huntington Beach prevailed in a lawsuit with arguments that closely track those made in Anderson v. City of San Jose, in which the city claimed its right as a charter city to flout state-mandated goals. That clarity and the fact the Surplus Land Act was expanded for local agencies in the fall through AB 1486 could be a bellwether for more affordable housing in the future. (See related CP&DR coverage .) Detailed Report Enumerates Effect of Sea Level Rise on Bay Area Infrastructure  An alarming 700-page report on sea level rise commissioned by a consortium of state and Bay Area agencies warns that "the Bay Area is at a tipping point, poised between a growing body of information... and the beginnings of irreversible impacts" from rising sea levels. The report is based on a rise of 48 inches, a level supported by a previous study in which that level could arrive as early as 2060. The findings highlight specific aspects of the approaching threat to how the region functions. The access points to four major bridges would be affected; runways at San Francisco and Oakland airports would be largely under water; nearly 31,000 jobs planned for north San Jose would need to be relocated; and 78 miles of protected bicycle trails would be off-limits. "All these different aspects of the region are interconnected," said Dana Brechwald, who oversaw the study's preparation. "The solutions aren't going to be one size fits all." Quick Hits & Updates  After weeks of sparring over how many hotel rooms the city should lease and who should move into them, San Francisco Mayor London Breed and the city's board of supervisors have agreed to lease more than 8,000 hotel rooms to house the city's homeless and frontline workers. The emergency ordinance, which received unanimous approval, requires fulfillment by April 26. Officials worry San Francisco's progress from strict shelter-in-place policies will unravel if COVID-19 takes hold in the city's homeless population. Given the extraordinary nature of the COVID-19 emergency, the Department of Housing and Community Development's Asset Management and Compliance Branch is providing guidance related to asset management and compliance functions for projects in HCD's portfolio. Landlords and property managers can find information regarding relief requests, reporting requirements, compliance monitoring and COVID-19 response best practices. The guidance will be in effect beginning April 16 and re-evaluated on a continual basis. HCD released an updated draft of Streamlined Ministerial Approval Process Guidelines. The draft incorporates new legislation from 2019 and technical clarifications to the initial document created under SB 35, which requires the availability of a simplified approval process for developments in localities that have not yet made sufficient progress towards their RHNA requirements. The public comment period ends May 18. Oakland Mayor Libby Schaaf announced the closure of 74 miles of city streets to nonessential car traffic. City officials hope to make it easier and safer for walkers, bikers, and runners to practice social distancing. Oakland has also opted to keep its nearly 6,000 acres of parks open. The U.S. Fish and Wildlife Service will withdraw a proposed rule that would have protected sage-grouse populations in California and Nevada under the Endangered Species Act. The decision impacts roughly 3,000 birds and the birds' habitat, which 4.5 million acres of high-desert along the California-Nevada border. Redwood City is a step closer to ferry service after the Water Emergency Transportation Authority approved entering into a memorandum of understanding with the City and Port of Redwood City. The route is backed by the Bay Area Council as a means to decongest Highway 101, along with currently ongoing projects like building a carpool lane and electrifying Caltrain. Under a new measure being promoted by a Santa Ana coalition, apartment landlords would have to cap rent increases at 3 percent, applied retroactively since November 2017, and landlords would not be able to evict teachers or students during the school year to bring in another tenant or to sell the property. The law would establish a new rent control board to enforce the new measures. Pleasanton's proposed Costco development was hit by a second CEQA lawsuit from Pleasanton Citizens for Responsible Growth. This follows a previous lawsuit that set the project back for over a year of additional environmental analysis and public review as part of a settlement over a lawsuit in 2018. Businesses along the Port of San Diego tidelands are requesting the agency waive rents for 90-days--or face financial ruin, they say. The roughly 800 tenants are largely in the hospitality and retail sectors, including restaurants, hotels, harbor tours, sportfishing, and yacht clubs/marinas. The port is anticipating $30 million in lost revenue -- many rents are sales-based -- and faces the prospect of much more if it waives minimum rent requirements.

As sales and hotel bed tax revenues crater throughout California because of the COVID-19 shutdown, local governments and their planning departments are facing an almost-unprecedented budget shortfalls . Already, cities and counties throughout the state are taking an axe to their budgets – laying off hundreds of employees and in some cases taking an axe to their current (2019-2020) budgets and next year's (2020-2021) budgets as well.. And as the real estate development industry shuts down , the fees and charges on developers that keep planning departments going appear to be withering as well.

Volume 1, Episode 2 of the CP&DR podcast features Bill Fulton and Josh Stephens discussing the impending housing crash caused by the COVID19 economic shutdown, the fiscal pain that planning departments will feel as local revenues dry up, and a few court cases related to the California Environmental Quality Act.  Click here for access on Spotify, Apple Podcasts, and other platforms.  Related Articles Housing Development Likely To Crash Because of COVID Planning Departments Feel COVID-19's Fiscal Pain Ban On New Mailbu Vineyards Upheld High CEQA Baseline Upheld Solvang Reconsidered

In a split decision, an appellate court in Los Angeles has ruled that using the 98 th percentile for per-day air pollution, rather than the average per day, was an acceptable method in creating the baseline for an oil refinery project under the California Environmental Quality Act,

Judicial Council Curbs Evictions, Extends CEQA Suit Deadlines The rule-making arm of the California court system, the Judicial Council, issued new rules designed to halt evictions and foreclosures for court cases in California for the duration of Gov. Gavin Newsom’s emergency shelter-in-place orders. The rules suspend tenants’ obligation to quickly file a response to eviction cases, state that no default judgments for eviction will be issued against tenants during shelter-in-place, and suspend all orders to appear in court for eviction cases. Tenants can expect relief until 90 days after California’s state of emergency is lifted, unless altered by the Judicial Council, which is making every effort to minimize the court’s workload. The state legislature is expected to address issues such as terms for repayment plans for missed housing payments when it reconvenes next month. The council also adopted emergency regulations giving interested parties significantly more time to challenge project approvals under the California Environmental Quality Action . Normal requirements allow litigants 30 days to file after the approving agency files a Notice of Determination. Under the new rules, developers can be challenged up to 90 days after Gov. Newsom declares that the state of emergency is lifted. The change gives potential opponents more time to file suit, and it may delay development projects if developers choose not to break ground for fear of potential suits.  Analysis Ranks Inland Empire among Most Economically Fragile Regions Nationwide  Relative to other U.S. cities, the Inland Empire housing market is highly vulnerable to the economic fallout likely to result from the COVID-19 pandemic, according to an analysis. ATTOM Data Solutions, a property data provider, determined counties’ respective levels of risk based on the percentage of housing units in foreclosure or underwater in Q4, and the percentage of local wages required to pay for major homeownership expenses. With a $387,500 median selling price and 61 percent of income required to buy, Riverside County was graded with the third-lowest stability of the 50 U.S. counties with the largest populations. San Bernadino County ranked tenth least stable among the 50 counties. Its $335,000 median pushed it to No. 16 worst for affordability with 47.8 percent of pay needed to buy. Los Angeles County was ranked No. 25, but ninth-worst in affordability at 64.1 percent, while Orange County was five places higher than LA.at number 20, but second-worst for affordability at 80.3 percent of income. The lowest risk was in Harris County, Texas, with a $252,500 median and 31.1 percent affordability. Most at risk was Florida’s Broward County with a $252,500 median and affordability at 31.1 percent. (See related CP&DR coverage .)  San Diego Considers New Method for Allocating Housing To meet ambitious housing targets, San Diego leaders say they may take cues from Los Angeles and San Francisco for allocating housing throughout the city. The city council is considering a plan whereby, housing goals are allocated by neighborhood based on the neighborhood’s estimated capacity, proximity to mass transit, and other factors that make density more or less desirable. The hope is that measurable outcomes will bolster accountability and make it more likely that each of the city’s 52 neighborhoods will absorb its fair share of housing despite expected pushback from primarily single-family neighborhoods. Built-in accountability measures, such as twice-yearly reports from the mayor on how much housing is built in each neighborhood, are part of the proposal that has already been unanimously approved by the council’s Land Use and Housing Committee. Also driving momentum is a warm reception among key stakeholders: environmentalists, the local construction industry and the rental housing industry have all praised the proposal. Council staff are working with lawyers to craft the goals, which will return to the Land Use and Housing Committee before potentially going to the full council for approval. Quick Hits & Updates  A concrete proposal for Las Vegas-to-Los Angeles train service by Florida-based XpressWest has advanced in recent weeks. The firm has taken steps to secure funding under state and federal bond programs. The company told the Los Angeles Times the $4.8-billion project should have full funding for a 170-mile line along Interstate 15 and start construction later this year with trains running by 2023. (See prior CP&DR coverage .) Kaiser Permanente has canceled its $900 million headquarters project in Oakland, in what would have been Oakland's biggest commercial project and would have freed up substantial office space for smaller tenants to occupy. City officials said the move was not related to disruptions due to the coronavirus. A proposed events center in Stateline received unanimous support from the Tahoe Regional Planning Agency Governing Board. Petitioners say they have sufficient signatures to place the redevelopment area on the ballot. The California Department of Housing and Community Development has determined "The Plaza at Santa Monica" project is exempt from California's recently expanded Surplus Land Act. Santa Monica and the developer entered into a verbal exclusive negotiating agreement before Sept. 30 of last year. The finding comes one month after the city council halted negotiations over concerns it may violate the new law. A bold five-year plan to protect California's ocean ecosystem from climate change and prepare for sea-level rise was approved by the state’s Ocean Protection Council, setting the stage for sweeping coastal restoration, trash cleanup, research and rule-making involving several state agencies. The strategic plan is a blueprint for how stage agencies should collaborate to prepare for ocean warming, acidification, rising seas and plastic pollution. For cities scrambling to manage a crisis with fewer hands on deck and shrinking budgets, the League of Cities requested urgent relief in a letter addressed to Gov. Gavin Newsom. The letter requests a pause in statutory requirements and deadline extensions for HCD grant programs, annual progress reports, CEQA compliance, and development application review, among others. (See related CP&DR coverage .) Santa Monica-based Assemblymember Richard Bloom  introduced a bill that would open up commercial zones to developments where at least 20 percent of the units are affordable. Santa Monica would join several jurisdictions across the state that already allow residential development in commercial areas, an effort that brings people closer to transit, businesses, and jobs. The Dept. of Housing and Community Development released the Draft 2020 Analysis of Impediments to Fair Housing Choice , the results of efforts last fall to gather data from Californians on the barriers they face in accessing housing. In response to outreach, stakeholder interviews, a community needs survey, and extensive data gathering and analysis, the draft explores impediments to fair housing choice and issues affecting protected classes in California.

If all goes well in the worlds of virology and epidemiology, the coronavirus crisis will wane before long. Vaccines will be developed, microbes will be obliterated, and residents of California and the rest of the world will be able to once again walk carefree out their front doors.

California’s local governments have already been struggling to move their planning processes online – a difficult trick given that many planning projects require approval of appointed or elected officials at in-person meetings. But now, cities and counties are about to face an even greater challenge – a financial meltdown that could decimate their ability to even keep their planners and other development specialists employed. With retail businesses closed and travel greatly restricted, it’s clear that, at a minimum, local governments will suffer steep losses in sales tax and hotel/bed tax revenue for the rest of this fiscal year and into the next. Cities, which are more dependent on sales and bed tax, are likely to suffer more severely than counties, which are more dependent on property tax. Making matters worse is the fact that Gov. Gavin Newsom has given all businesses that pay less than $1 million a year in taxes– an extra 90 days to pay second-quarter sales tax. No estimates yet exist – at least not publicly – about the severity of the drop but it’s likely to be at least equivalent to the 15-20% drop that the locals saw in the 2008-2010 recession. That recession – which was touched off by a meltdown in the mortgage market – saw virtually all cities reduce their planning and development departments. “With retail shut down, this probably will be a bigger hit for local government tax revenue than ‘08-’09,” said David Shulman, senior economist at the UCLA Ziman Center for Real Estate. “Local government is in real trouble right now, especially those that sold their soul for sales taxes.” After the 2008 recession, many cities, especially in the Central Valley, wound up with no staff planners at all for several years. For most local governments, it took a decade to return to pre-2008 levels of tax revenue. Some revenue will be coming from the state and federal governments – especially for big cities – but these funds are not likely to make up for the lost revenue. Although it’s early, indications are that local governments will move aggressively to try to get ahead of the curve on the fiscal crisis, in part because they don’t know how severe their drop in revenue will be. The City of Santa Barbara, expecting a 25% drop in revenue , laid off 400 employees at the end of March. According to the State Controller’s office, Santa Barbara receives almost half of its $100 million a year in tax revenue from sales and bed tax. Meanwhile, the City of San Diego – which had already ordered most employees to work from home – ordered non-essential workers to start taking paid leave as of April 6, though it was not clear whether the order constituted a furlough. The State Controller estimates that San Diego gets about 40% of its $1.3 billion in annual tax revenue from sales and hotel bed tax. And San Francisco is estimating a revenue drop of at least $1 billion . The Controller’s figures for FY 2017-18 – the most recent year for which figures are available – suggest that smaller tourist and resort towns and cities that have chased retail sales might be the hardest hit by the downtown. For example, Cerritos – famous for aggressively building up its auto mall – receives 65% of its tax revenue from retail sales. California Cities Most Dependent on Sales Tax

Newsom Names New HCD Chief, Other Housing Officials Governor Newsom announced three appointments that impact housing. The first is the new director of the Department of Housing and Community Development, Gustavo Velasquez. Velasquez is a Maryland native who has been senior director at the Urban Institute since 2017. Prior to that role, Velasquez was assistant secretary for the Office of Fair Housing and Equal Opportunity at the U.S. Department of Housing and Urban Development from 2013 to 2014. Zachary Olmstead, of Sacramento, will step up from his current position where he has served as deputy director since 2016 to chief deputy director of HCD. Before his HCD posts, Olmstead was homeless policy director at Housing California. Doug McCauley, also of Sacramento, will serve as commissioner of the Department of Real Estate. McCauley was executive officer at the California Architects Board before joining HCD, first as chief deputy director in 2018 and acting director of the Department since 2019. All three have masters degrees in Public Administration. Supreme Court Refusal Upholds Inclusionary Fees San Jose's high-profile case  California Building Industry Association v. City of San Jose  will not go before the Supreme Court, leaving the legality of developer fees instituted to spur affordable housing "a live issue when implemented as a condition on a permit approval," according to Pacific Legal Foundation the nonprofit firm representing the developers' case. The legal challenge arose after San Jose adopted an ordinance that requires developers of new residential housing of 20 units or more to sell 15 percent of the homes at below-market prices to low-income buyers, or pay a $122,000 in-lieu fee per unit. Pacific Legal, a conservative legal organization, filed a petition for the plaintiff claiming the city violated the Takings Clause, which "bar(s) Government from forcing some people alone to bear the public burdens, which, in all fairness and justice, should be borne by the public as whole." In June 2019, the California Supreme Court sided with the city of San Jose, citing the well-established scarcity of affordable housing that "might be described as epic proportions in many of the state's localities.” State Disburses over $400 Million in Homelessness Funding The Department of Housing and Community Development  announced awards totaling $427.9 million to help counties address mental illness and homelessness. The No Place Like Home program dedicates up to $2 billion in bond funds to build permanent housing with supportive services for Californians who live with severe mental illness and are experiencing homelessness, chronic homelessness, or are at-risk of chronic homelessness. The bonds will be repaid by funding from California's Mental Health Services Act. The awarded counties represent jurisdictions with five percent or more of the state's homeless population that have self-selected to be "Alternative Process Counties," which allows them to administer their own competitive distributions of No Place like Home funding within their respective jurisdictions. Los Angeles received the largest sum, with $310 million. San Diego and Santa Clara were awarded $40 million and 40.9 million, respectively. San Francisco was close behind with $36.5 million. The next round of competitive funding is scheduled to be announced this summer. Quick Hits & Updates UC Berkeley's Terner Center for Housing Innovation has hired Ben Metcalf as its new managing director. Metcalf, who has nearly 20 years of experience researching and implementing housing policy, including his most recent post as director of HCD, will lead the center's policy work around housing affordability. Previously he served as deputy assistant secretary at the U.S. Department of Housing and Urban Development. (See prior CP&DR coverage .) The National League of Cities and Bloomberg Philanthropies have teamed up to create a Location Action Tracker to collect and share actions taken by localities nationwide in response to the COVID-19 Pandemic. The wide-ranging database includes information on actions such as State of Emergency Declarations, closure announcements, and economic relief packages, among others. (See prior CP&DR coverage .) The Southern California Association of Governments' Connect SoCal plan, its project list and 20 supporting technical reports are now available for download on SCAG's website. SCAG, as Lead Agency, has prepared a Proposed Final PEIR for Connect SoCal, which is also available for review. Demographers say the United States could be facing its first ever yearly decline in population, based on the latest Census Data that shows declining birth rates and slowing immigration in combination with higher than usual death rates. "If this epidemic is as significant as some think, we could have deaths exceeding births in the nation as a whole, which has never happened in the history of this country," said Kenneth Johnson, a demographer at the University of New Hampshire, who analyzed the numbers. The California Department of Housing and Community Development released its 2018-2019 annual report that highlights the past year's accomplishments and shares progress and improvements. The report includes descriptions of HCD's programs, profiles of affordable housing developments made possible by HCD funding, and details on funding awarded to build and preserve affordable homes. After a meteoric rise in metros around the globe, Lime and Bird scooter- and bike-share companies have drastically reduced their scooter fleets. Santa Monica-based Bird began major layoffs Friday, cutting 30% of its workforce "due to the financial and operational impact" of the pandemic, according to an internal memo from Chief Executive Travis VanderZanden. Bird announced it is removing its fleet in six U.S. cities, including San Francisco and San Jose. (See prior CP&DR coverage .) The California Natural Resources Agency has announced $18.5 million for competitive green infrastructure grants for disadvantaged communities, funded by Proposition 68. Project component examples include: urban tree canopy expansion, park development, greening public schoolyards; and constructing non-motorized trails. Two grants have been awarded to date: Alamedia County has received $1.4 million, and Calaveras County was awarded $190,000. The  Santa Monica City Council passed an emergency ordinance that will allow all affordable housing and most market-rate housing to go through a rapid approval process. Planning Commission Chair Lambert stressed the importance of market rate housing's inclusion in the ordinance: "Neither the city nor the state has the money to build all the units required under RHNA.” A community group has filed a lawsuit against Anaheim for allegedly breaking state transparency laws, in hopes of overturning the city's land sale for the future site of Angel Stadium. A land sale proposal wasn't discussed in public before the vote, which violates the Ralph M. Brown Act, argues the open government attorney who represents the Task Force. The city's response from the City Attorney's office disputed all the allegations. San Francisco mayor London Breed wants the city to look into charging metered parking seven days a week and congestion pricing on crowded streets. The San Francisco County Transportation Agency is also looking into the possibility of charging a fee to drive downtown. It expects to have a proposal in 2021. A Laguna Beach community group has withdrawn a ballot initiative that would require majority voter approval for new developments, citing the spread of COVID-19. Laguna Residents First plans to submit a new letter of intent in six months to allow more time to gather signatures.

A ban on new vineyards in the Santa Monica Mountains – which touched off a fierce battle that has lasted several years – has been upheld by the Second District Court of Appeal.