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Redevelopment Reform Approved: Legislature Passes Biggest Changes Since 1993 Overhaul

Paul Shigley on
Oct 1, 2006

Changes to redevelopment law that are short of sweeping but still significant enough to stir the industry won legislative approval this year. The measures tighten blight requirements, ease challenges to redevelopment decisions and potentially limit use of eminent domain, but the bills do not go as far as originally proposed.

The redevelopment bills are probably the most significant land use bills passed by lawmakers during 2006, a year in which even modest housing, flood and environmental legislation failed. In fact, this was the quietest year for housing legislation in a while.

Of course, lawmakers did pass a series of measures placing $37 billion worth of infrastructure and housing bonds on the November ballot.

The redevelopment bills emerged from a series of legislative oversight hearings following the U.S. Supreme Court’s decision in Kelo v. City of New London, in which the court upheld use of eminent domain for economic development purposes. Because such an action could occur in California only under the guise of redevelopment, lawmakers focused on the Community Redevelopment Law and ultimately approved eight related bills.

Throughout the session, redevelopment advocates continued to argue that Kelo did not change existing law in California and therefore the legislative response was unwarranted, even if politically inevitable. “It’s amazing to me that a case of such little legal significance should create so much political reaction,” said Brent Hawkins, general counsel of the California Redevelopment Agency (CRA).

The cornerstone legislation is SB 1206, by Sen. Christine Kehoe (D-San Diego). According to a fact sheet from her office, the bill tightens the definition of “blight” by:
• Requiring blight descriptions to contain “specific, quantifiable evidence.”
• Requiring findings to be supported by “clearly articulated and documented evidence.”
• Repealing an exception to blight finding requirements for antiquated subdivisions with small and irregular parcels.
• Reinstating the ban on placing unblighted property into redevelopment project areas.
• Mandating that land use findings link to local general plans and zoning standards.
• Requiring local officials to document blight before merging redevelopment projects.

“Kehoe correctly recognized that blight is the gateway to eminent domain by redevelopment agencies,” Hawkins said.

The bill also increases state oversight by requiring local governments to send redevelopment plans and amendments in advance to the Department of Finance and the Department of Housing and Community Development for fiscal analysis and comment. The legislation also gives redevelopment opponents more time to challenge decisions via referendum or lawsuit, and eases the attorney general’s ability to intervene in those lawsuits.

Although she amended her bill by decreasing some proposed requirements, Kehoe made clear that she thought some cities are abusing redevelopment and that the state — which backfills school districts that lose revenue to redevelopment agencies — should play a greater role.

The California Redevelopment Association conceded that SB 1206 improved during negotiations. Still, in an analysis, the CRA stated, “Certain provisions changing and restricting the definition of blight and adding unnecessary, duplicative bureaucratic layers to the redevelopment process are objectionable to CRA.”

Another Kehoe bill, SB 53, and SB 1809 (Machado) require redevelopment agencies to be clear up front about the possible use of eminent domain, while SB 1210 (Torlakson) alters the eminent domain process for all public agencies, in part by making it more difficult for agencies to obtain possession prior to a court decision on compensation.

In contrast to the redevelopment reforms, a package of eight flood bills failed to escape the state Senate. Among the bills was AB 1899 by Assemblywoman Lois Wolk (D-Davis), which would have barred new development in areas lacking 100-year-flood protection and in areas that would not soon have 200-year protection. Other bills would have required cities and counties to share liability with the state for new levees (AB 1528 — Jones), and would have required cities and counties to consider flood protection when writing general plans (AB 802 – Wolk).

The failure of the flood bills was a “big loss,” said Planning and Conservation League Executive Director Gary Patton, because there is a need to prevent additional flood-prone development. Patton’s group and other environmentalists worked hard on AB 1899. In fact, said Patton, there was little opposition in the Legislature to AB 1899. Instead, the bill stalled when Senate President Pro Tem Don Perata (D-Oakland) held it up, saying that he did not want to rush a major policy change. More than a few people noted that Perata held up AB 1899 and other flood bills opposed by the California Building Industry Association (CBIA) only days after the group donated $500,000 to a campaign committee controlled by Perata.

“It was an effort by the building industry — on behalf of a few developers who are ready to get their entitlements in the next few years — to delay things,” Patton charged.

Perata denied there was any connection between stalling the legislation and campaign contributions, and CBIA Vice President Tim Coyle said Wolk’s legislation “was just a blunt, unabashed assault on housing.” The debate should be about public safety and infrastructure, not about growth, Coyle contended.

“This got started off on the wrong foot. It started out as a growth-control measure,” Coyle said. “If we don’t build one more home, there is still a risk of flooding in Sacramento and in Stockton.”

Coyle said the various factions have a lot more in common regarding flood safety than people realize. “The homebuilders are for getting to 200-year flood protection,” he said. But bills that attack new housing and nothing else are not helpful, he contended.

Wolk agreed that more needs to be done to protect people already living in harm’s way. But, she said, new subdivisions only compound the problem.

“We continue to build in places that were under three feet of water or more twice in the last 20 years. We should just stop,” Wolk said. “There’s not enough public money in the world to fix a 19th Century levee system. And, besides, the public shouldn’t have to subsidize private speculation.”

The disaster wrought by Hurricane Katrina provided lawmakers with an opportunity to address flooding issues in the Central Valley, where an estimated 500,000 people live in areas lacking 100-year flood protection. The Assembly approved eight bills that sought to discourage new development in flood-prone areas, improve planning and increase public notification, but the Senate never voted on the legislation.

“The BIA was able to drive a wedge between the Legislature’s members, and the governor sat on the side and watched,” Wolk charged.

The failure of a flood bill package means the state lacks updated policies for spending the $4 billion contained in Proposition 1E, lamented both Wolk and Patton. The state could end up spending the money immediately without addressing the land use patterns that have helped cause the problem, Patton said.

Besides supporting the flood bills, environmentalists largely played defense against bills to overhaul the California Environmental Quality Act (CEQA), said Bill Allayaud, state legislative director for the Sierra Club. High on the hit list was SB 1800 (Ducheny), a multi-faceted bill backed by the Schwarzenegger administration and the CBIA aimed at easing housing development.

“They basically were trying to drive a truck through CEQA,” Allayaud charged. “You could have this broad, sweeping EIR, and then 15 years later somebody could propose a subdivision and say the review has already been done.”

The bill would have eliminated subsequent environmental review of projects that comply with a required “housing opportunity plan” that was the subject of an environmental impact report. But the CBIA’s Coyle said the CEQA provision was “a non-issue.”

“CEQA has become kind of the third rail in California. You can’t even utter the words without people overreacting,” Coyle said. Instead, the heart of SB 1800 was a provision requiring cities to identify land to meet the need for 20 years worth of new housing, and zone land for 10 years of housing.

“It’s a real simple idea that if we grow by a certain amount in these communities around the state, you’ve got to identify the land,” Coyle said.

The bill emerged from lengthy talks between the CBIA and the League of California Cities. Ultimately, though, the league’s board voted not to support the legislation.

The concept of a 20-year housing plan is not a bad idea, said Sande George, lobbyist for the California Chapter of the American Planning Association. But there were problems with SB 1800, especially the lack of funding to do the required planning and document updates, she said. “It was a huge change in planning law and would have cost an awful lot of money to implement,” George said of AB 1800.

Both the CBIA and SB 1800 author Sen. Denise Ducheny (D-San Diego) have indicated they will try again next year with a 20-year housing plan mandate.

Probably the most significant housing bill that did pass was AB 2511 (Jones). The bill includes a number of measures intended to strengthen anti-discrimination laws. It also requires local governments to decide within 90 days on a project if at least 49% of the units are affordable to very low- or low-income households, and limits conditions local governments may impose on housing developments. Additionally, the bill permits courts to sanction cities and counties for not filing annual general plan status reports — something that many cities and counties do not submit every year.

League of cities lobbyist Bill Higgins said the final provision is a “poison pill” for cities. “This comes on the tail end of a lot of changes in the housing element law mandating a lot of new requirements. It’s death by 1,000 cuts,” he said.

Although the league opposed AB 2511, Higgins conceded that bill language regarding permit streamlining is helpful because it actually defines an affordable housing project.

Housing advocates favored AB 2511, although their support tempered over the months while the author, Assemblyman Dave Jones (D-Sacramento), reduced the scope of what started out as a very broad bill.

Another bill that evolved greatly during the session was SB 1627 (Kehoe), regarding wireless telecommunications antennas. The bill started out as an industry-backed vehicle to eliminate virtually all local regulation of antennas. By the time lawmakers passed it, SB 1627 provided useful guidelines for regulation and for the application of CEQA, said Jonathan Kramer, a consultant to cities on antenna issues.

“The original bill was just awful in terms of what would have been its impact on local governments and their ability to plan,” Kramer said. As passed, though, the bill requires carriers to be up front about their intentions for wireless facilities; otherwise, they have to start the environmental review process anew. “This will actually bring some clarity and some new options to cities and to carriers as to long-term site planning,” Kramer said.

A bill that received a great deal of worldwide attention may ultimately be the most important land use bill of the year, according to Patton, of the Planning and Conservation League. The bill is AB 32 (Nunez) and it calls for California to reduce greenhouse gas emissions. Its approval by Gov. Schwarzenegger marked a sharp split within the Republican Party. The bill does not address land use directly, but curbing auto-dependent, low-density sprawl is an obvious way to limit emissions, Patton said.

“This pattern of development is the antithesis of what we need to reduce global warming emissions,” Patton said. “We think AB 32 will ultimately be a driver of better land use.”

Contacts:
Tim Coyle, California Building Industry Association, (916) 443-7933.
Assemblywoman Lois Wolk, (916) 319-2008.
Gary Patton, Planning and Conservation League, (916) 444-8726.
Bill Higgins, League of California Cities, (916) 658-8200.
Sande George, California Chapter of the American Planning Association, (916) 443-5301
John Kramer, Kramer Firm, Inc., (310) 473-9900.

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