Web Salon: Smart Growth

Dear Messrs. Silver, Bollman, Metcalf and McCue,

Given the wide range of possible topics that fall under the rubric of development, growth and planning, I’d like to begin by allowing you to set the terms of our discussion.

In your estimate and within your area of expertise, is California’s growth being managed effectively? Would you cite specific instances where progress has been made and/or where more attention — or greater effort — is needed?

Jose — The short answer is clearly no. The American system is designed to disperse power — and control of land use is one of the ultimate powers of government.

There are certainly some examples of progress. Riverside County’s Integrated Project is a model which other jurisdictions would do well to examine and adapt to their own needs. Organizations such as the Great Valley Center in Modesto are doing an excellent job of getting people to recognize common regional interests and plan for a desired future. There is certainly a much greater awareness statewide that many important issues - air quality, transportation, the proximity of housing to jobs — are issues that can only be solved at a regional level.

But, on the other side, the state lacks bodies which are empowered to act at the regional level. Groups such as the Southern California Association of Governments or the Association of Bay Area Governments can gather information and advise, but reaching consensus and implementation are in the hands of the cities and counties which make up those organizations. And, even with recognized regions, there can be a lack of coordination. In Riverside County, large housing projects have consistently been approved by the Board of Supervisors, and some cities, without reference to the local school boards, which are then left scrambling for sites.

I think the greatest effort needs to be made in educating the public. People are astounded when I present them with the population projections for Riverside and San Bernardino counties. They are horrified to think of the costs of providing schools, police officers, sewers and parks, much less the thought of sharing the freeways with these new residents. Yet, that growth is coming. If California residents act like King Canute, it will drown us.

The question is not whether California’s enormous growth is being effectively managed, but whether it is managed at all. An enormous quantity of California’s irreplaceable countryside is consumed for estate lots, yet grossly insufficient housing is produced. Underutilized land in cities goes to waste, while General Plans - the “land use constitutions” - of unincorporated areas are amended piecemeal, producing chaotic, “leapfrog” development.

Planning departments process applications, but do precious little planning. The only bastions of sanity are those parts of the state that have enacted growth boundaries which clearly demarcate where necessary growth will go for a 20 year period. This planning framework provides certainly for the environment, development, and infrastructure. It is a framework around which community-based visioning can occur. It also provides what is too often missing at the local government level — discipline.

I agree with Andy’s comment entirely, though I may be a bit more sanguine about how much “smart growth” thinking and acting is going on, particularly among local government officials and planners, developers and community activists.

It is becoming increasingly apparent that economic progress and a high standard quality of life demands different development results. There are an increasing number of planning processes that embrace smart growth. In addition to the Riverside Comprehensive Integrated Plan, the 2004 Regional Transportation Plan prepared by the Southern California Association of Governments as well as the Compass Growth Vision Project on which it is based in part, are guided by smart growth principles.

Other examples include the new San Diego Association of Governments’ Regional Comprehensive Plan, the Blueprint Growth Visioning Project in the six-county Sacramento region, the small-town planning ideas advanced by the Sierra Business Council, and many other regional projects. They have all envisioned a different way of developing with a different (and better) result. And an increasing number of actual development projects, whether residential, commercial or industrial, or following smart growth principles, such as locating mixed use development near transit stops or with robust rather than congested access to highway transportation corridors.

And increasingly, public infrastructure investments, such as light rail or express busways, follow these ideas. In Los Angeles, a group called New Schools Better Neighborhoods is working with the First Five Commission and schools in the LA Unified School District to locate, build and operate schools as centers of vital communities, including joint use of school facilities by the surrounding community (libraries, playgrounds, community meeting rooms, etc.).

But a plethora of good examples has not resulted in a fundamental change in the development process or its results because the “rules of the game” stand in the way. Localism, where cross-jurisdictional collaboration is needed, is one obstacle, as Andy has suggested. The distorting effects of Proposition 13, which has caused cities to chase sales tax by building retail centers when they should be building housing, is another. The failure to fully integrate transportation investments withland use priorities is another.

The list of obstacles to making smart growth a reality is long, but in general, and particularly with the election of Governor Schwarzenegger and the appointment of knowledgeable and visionary Cabinet members, I am hopeful that at long last the state government may play a leadership role in supporting communities and regions to produce an adequate supply of affordable housing, and protect our precious open space and farmland, and reform transportation policy to achieve greater mobility and less congestion. That’s the hope, at least, and I’ve seen signs that the Governor will truly lead on these issues.

Is California’s growth being managed effectively? No way.

On the other hand, I want to agree with Nick’s optimism about change being in the works. There really are a lot of people at all levels of government and in all kinds of civic organizations who generally share the agenda of trying to re-shape, rather than stop, the growth coming into California.

Nick is much more involved with state level politics than I am. But from my perch at a non-profit civic organization, trying to promote good planning in the Bay Area, I am struck by a funny dichotomy: we are having strings of major victories on the projects we work on–higher tolls on the bridges, BART extensions opening, progressive General Plans being adopted, affordable housing getting built, bus rapid transit lines being funded, etc.–and yet what it adds up to is at the level of the region seems to be less than the sum of it’s parts.

It’s as though our efforts are dwarfed by the scale of the problem.

Sometimes I think the fault lies within the culture of non-profit organizations and their funders, who are both extremely focused on short-term horizons. It’s spring now, meaning it’s non-profit annual report season, and I have a little stack of reports on my desk telling me how all the non-profit organizations I’m involved with met their goals in the last year. If that’s true, their (our) goals are not nearly ambitious enough. And, in fact, it’s hard to be ambitious when the longest grant period a non-profit can obtain is for 3 years. This encourages a culture of short term goals.

It’s hard to say, for example, “the City of Oakland has the greatest potential for infill in the Bay Area, and we’re going to launch a project to revitalize Oakland, but it will take 10 years to do it.” What I’m getting at is that the civic organizations working to promote good planning in California are holding themselves accountable for “initiatives” — publications, conferences, and meetings–but not for actually changing the pattern of growth “on the ground.”

The same dynamic happens with elected officials, but even more so: they have to show results before their next election.

I think it’s hard to over-state how far-reaching and how radical the changes will have to be if we actually want the pattern of growth in California to be something other than sprawl and car-dependency. The whole anti-tax movement would need to be overthrown. As would the presumption of complete local government “autonomy” over matters relating to land use.

I’ll chime in later with some more hopeful thoughts. But that’s an opening statement.

There appears to be a common thread in your individual assessments of the state of growth planning in California (”not nearly enough.”)

Mr. Bollman points to the role that the state government could play in supporting local communities — granting them the authority to develop and execute sustainable and equitable growth strategies. Mr. McCue suggests that many critical growth problems “can only be solved at a regional level.” Meanwhile, Mr. Silver suggests that currently “[p]lanning departments process applications, but do precious little planning.”

Some of our viewers have written in to protest what they consider to be a lack of co-ordination between government agencies, an allegedly inflexible statewide “low-cost housing mandate,” and the vagaries of local governments.

I wonder if balancing these competing claims, along with the collective nature of resource management, requires a radical and fundamental shift in how we understand and carry out planning.

Much like the Department of Homeland Security is designed to help U.S. law enforcement to overcome inter-agency gaps and provide an integrated approach, is there, in your estimates, need for a similar top-down and holistic revision of California’s separate environmental protection, planning, transportation and development agencies?

While lack of coordination clearly contributes to lack of effective planning, I am not optimistic that this focus would serve as the key to managed growth. To be meaningful, this sort of integration would have to take place at the regional level, yet there is great resistance to shifting actual land use decisions to “regional government.”

Thus, I am left with the conclusion that the best option is providing a new framework within which local decision-making operates, that is, the collective setting of firm growth boundaries, on a 20-year cycle. As occurs today, housing need allocations, based on state projections, would be made at the regional level. But the new framework would foster infill, reduce costly infrastructure extension, allow for regulatory relief within designated growth areas, and facilitate long term agricultural and rural economies.

Having this predictable framework in place would certainly make it easier for interagency coordination to occur.

One of the great ironies about growth in California is that no one likes the way the state is developing today, but we are seemingly powerless to stop it.

But we know what a lot of the answers are, in terms of policy changes that would help to re-shape growth in California. Some of the ones that seem most important to me…

1. Give cities and counties a financial motivation to zone for housing instead of retail. The problem today is that the State gets more of the property tax, whereas cities get more of the sales tax. The solution is to switch these taxes, prospectively, for future development: allow cities to keep more of the property tax from new residential development, and in exchange send more of sales tax dollars from new retail development to the State.

2. A related idea, which leaders in the Sacramento region are trying to implement, is called “tax-sharing.” It involves collecting sales tax dollars from new retail development and distributing them within the region according to population, instead of giving it all to the city that has the store. Today, if residents of one community drive to another community to shop, all the sales tax dollars stay where the shopping is done. Tax sharing for sales tax would reduce the incentive for communities to compete for big box retail, and basically allow every city to grow its tax base in proportion to the growth in the whole region.

3. The California Environmental Quality Act is back-firing, because it does not recognize the inherent environmental superiority of infill development over greenfield development. It should be reformed to streamline, if not exempt from review, development inside existing urbanized areas.

4. It might be time to amend State redevelopment law to allow redevelopment areas to be established not just where “blight” exists, but within 1/4 mile of major transit stations. This would allow (but not require) local government to be much more proactive in directing growth into some of the right places.

5. Caltrans continues to undercut our efforts to manage growth by spending too much money on sprawl-inducing infrastructure (highways) instead of sprawl-containing infrastructure (transit). We should be forcing new greenfield development to pay for the costs of highway extensions and highway widenings through development impact fees, and not subsidize sprawl with state tax dollars.

6. Finally, the role of Prop 13 (and the associated anti-tax measures) in reducing the attractiveness and livability of our urban areas cannot be over-stated. Until we start making it easier for citizens to levy taxes on themselves (say, enacting taxes via a majority vote instead of a 2/3 vote), it will be hard to make density livable. We will continue to live under what economist John Kenneth Galbraith called “private affluence, public squalor.” Reforming Prop 13 is part of the solution.

There are, of course, many other specific ideas that would help California manage its growth. I hope some of the other panelists can either disagree with these or add their own favorites.

I generally agree with Gabriel’s recommendations. To protect landscapes and natural resources, though, there would have to be accompanying reform of General Plan law. In other words, even if we increase infill, rural residential sprawl would continue.

Again, I agree with Dan, who has for so long articulated a passionate and sensible set of ideas for enabling sound development in the context of preserving open space, parks, and habitat. And I agree with him that, indeed, good planning on a regional or at least cross-jurisdictional basis is necessary but far from sufficient from achieving better results on the ground. And we need to move to bolder ideas because we will never get to the scale of smart growth outcomes necessary, and in a time frame that avoids the dumb growth that still occurs in too many communities.

Urban Growth Boundaries (UGBs) are one important tool for establishing certain ground rules, as long as they are established in ways that enable development of a sufficient supply of housing for all income groups. In the absence of strategies to meet this need, UGBs can result in increased land prices inside the UGB which makes housing unaffordable to working families and low-income households, or stimulate “leap-frog” development which further fractures our precious landscape. I believe that Dan shares the view that we need a comprehensive strategy that makes UGBs effective.

Among other things, we need major incentives (big enough to take the new development practices to scale), such as revised CEQA review processes to lower the cost and remove the “NIMBY” tool, where specific plans and common sense and good science tell us that the development will not impair environmental quality. We need a change in tax policy to make housing development financially attractive to local government.

We need public and private incentives for development in walking distance of transit stops, or in conjunction with robust road capacity (not congested highways) — one example is the “Location-Efficient Mortgage,” which discounts the interest rate for transit-oriented development, given that the reduced need for automobiles makes the borrower more attractive to the lender.

We need vastly more efficient review processes for the cleanup and reuse of so-called “brownfields” — land that has past contamination but that can be cleaned to reuse. We need to build schools in existing communities, thereby attracting housing to those neighborhoods and avoiding the abandonment of existing residents and their children.

We need permanent and dedicated sources of public and private financing to buy or place conservation easements on properties that should be protected from development. The list goes on, but most of all we need leadership, because for every impediment to better development and conservation there is an interest group or just inertia (”we’ve always done it this way”) standing in the way.

Political leaders need support to make the policy and program and fiscal changes that Dan and Gabriel and I have called for. As an eternal optimist, I believe that support is on the way, and that that leadership will emerge and succeed.

I’d like to pick up on something Nick mentioned, and that Dan touched on. That is, the need for cities to take a much more aggressive, and open-minded approach, to redevelopment.Clearly, one of the major reasons why badly-needed housing is being built on the fringes of thegreater Los Angeles area is that thousands of opportunities that are being missed to create housing in the already developed areas.

There is a lack of imagination. There is tremendous inertia about removing zoning and other regulations which make it difficult and/or financially impossible for private sector developersto jump into the market. There needs to be a benefit calculation for cities that includes costs avoided elsewhere (such as in transportation) rather than just in costs on the site. There must be a recognition that in some cases, land and buildings have negative value. There must be a willingness on the part of elected leaders to convey this information to the public.

In traditional cities, when population and land values rise, they build up. In the new-model megalopolis of Los Angeles, we have built out. We are reaching the physical limits of that growth, even if we don’t protect more open space as Dan would like. We have to make better use of the space we have. There are plenty of struggling shopping centers and outmoded industrial buildings that could be torn down and turned into condominiums or apartments nearer the regions jobs.

If I may summarize the last round of our discussion, it appears that the redevelopment of urban areas (infill) and the recycling of lightly contaminated or derelict areas (brownfields) are both important components of an alternative to present trends towards greater sprawl.

But, while a younger generation might be willing to trade away a front yard for a shorter commute to-and-fro work, I am not sure most Californians will readily embrace a new kind of suburbanism or urbanism after 60 years of operating under a different set of assumptions. In addition, fears of congestion or crowding make many neighbors, understandably, uneasy about their changing environment.

Given your emphasis on local decision making, the above cited approaches and the need for leadership, what will be the biggest cultural challenges ahead?

While there is a strong market for infill and higher density housing – note that less than one third of households are now two parents with children – achieving it is indeed difficult. Issues range from gentrification to NIMBYism. Clearly, strong fiscal incentives for local government are needed. There also must be community outreach, negotiation, and successful examples. Endangered Habitats League is part of a Housing Task Force in San Diego that supports infill. And I believe that our culture is already changing in this regard — look at the Starbucks everywhere.

From the environmental perspective, however, more infill and redevelopment in isolation will not do the trick. The monster eating California is actually the mini-mansion on the 2-acre estate lot, incrementally but on a vast scale converting California’s defining ranchlands and open space to rural residential sprawl. Only proper land use planning can halt this unsustainable pattern of development.

I’m not certain this is going to be as difficult as it seems. There undoubtedly will be resistance for exactly the reasons you cite. On the other hand, I think we need to recognize the power of market forces on this issue. Even here in the Inland Empire, with the image as the affordable housing market for Southern California, only about a third of the households can afford the average-priced new house. As prices rise, what people want in a house is going to be tempered more and more by what they can afford.

If we can find ways to make housing less expensive in already developed areas (or no more expensive but with a much shorter commute), then people will adjust. The issues of safety can be dealt with. In many ways denser developments are safer developments, because there are more eyes looking out the windows at the street. There is no magic bullet on these issues, but there can be much incremental change.

Consumer and public opinion surveys (such as the PPIC surveys conducted by Mark Baldassare) demonstrate that a majority of homebuyers still prefer the detached single family home. But they also show that the market is not producing as much attached housing and condos as the market wants. I know for a fact that major homebuilders in California are planning to increase substantially the proportion of such housing in their overall production portfolio, and decrease the proportion of detached single family homes.

Most expert analysts doubt that we can produce more than about half of the housing we need over the next twenty years through infill or refill development. That means the other half will have to be developed on what is now vacant land. Not all vacant land is environmentally, esthetically or economically (agricultural land) valuable. Put another way, we need to come to an agreement (at the regional and local plan level) on what vacant land should be developed and what should be protected (this is one of the principles of the Riverside Comprehensive Integrated Plan and similar efforts).

Then, to enable conservation, management and monitoring of the protected land, we need sources of funds that are large scale, permanent and dedicated to this purpose. Though there are many creative local financing sources available (mitigation fees, density bonuses, transportation funds, etc.) the very entrepreneurism associated with this approach fails to give the certainty required to assure that certain lands simply will not be developed (and others will). I believe that only the state of California is in a position to provide that permanent source, just as Maryland and other states have done before us.

The development patterns of the past 50 years emerged over time, in California and across the country, and were driven by major policy and funding decisions well known to us (federal highway funds, for example, enabling development of car-dependent suburbs). These major policy decisions both shaped and were shaped by homebuyer and renter interests and decisions. Therefore, I believe that a new set of concepts and major policy decisions can result (over time) in shaping different development patterns and consumer choices, to produce more livable and sustainable communities.

The question before our political leaders and our communities is whether we will commit to a new vision, follow through with bold policy decisions, monitor and measure our progress, and achieve a different and better development and conservation result. I believe (and hope) that we can and will do so. We must.