Local growth controls are not as important in creating California's high housing costs and slow production as market forces and state fiscal policies, according to a new report by the Public Policy Institute of California (PPIC). Authors Paul Lewis and Max Neiman further found that local ballot measures are even less of a factor in the housing shortage than policies adopted by city councils.
Lewis and Neiman surveyed almost 300 city planning officials across the state for the report that was released in late January, "Cities Under Pressure: Local Growth Controls and Residential Development Policy." Lewis and Neiman found that overt growth controls are rare. For example, only 14% of cities link new construction to concurrent capital improvements. And only 6% of cities cap annual building permits or restrict growth to already developed areas. Most growth-management policies that cities have adopted are understandable responses to conflicting pressures applied to city officials, according to the report.
The authors reported that two widely accepted local policies do help limit housing: low-density zoning and restrictive building codes.
On a broader scale, the system of funding local governments that emphasizes sales taxes and de-emphasizes property taxes is a disincentive for cities to approve new housing, according to the report. Inadequate infrastructure — especially roads — as well as rapid population growth and construction defect liability are also factors that constrain housing construction.
Lewis and Neiman detected major regional differences. In the Bay Area, cities have more growth-control policies, and residential growth decisions are often controversial. Southern California and Central Valley cities have fewer growth-control policies and see far fewer disputes over new home construction.
The report is available at the PPIC website, www.ppic.org
Outgoing Assembly Speaker Robert Hertzberg (D-Los Angeles) has promised to introduce legislation this year based on the recommendations of the Speaker's Commission on Regionalism, but said he does not yet know which recommendations he will move.
The commission, chaired by Nick Bollman of the California Center for Regional Leadership (CCRL), presented the recommendations to Hertzberg at CCRL's "Civic Entrepreneur Summit" in Berkeley in mid-January. Included in a large package of wide-ranging reforms were:
*The creation of a permanent state entity to assist poor regions.
*The creation of a Cabinet-level agency dedicated to work force investment (a proposal already in Gov. Gray Davis's budget this year).
*A constitutional amendment to prevent the state from further raiding local governments' property tax revenues.
*A system to encourage regional tax sharing by requiring local governments in each region to choose from a menu of tax distribution reforms.
*The integrating of school and university construction with local planning.
Hertzberg did indicate that fiscal reform lies at the heart of his regional agenda. "The only way to get to the core of this issue is to restructure the money," he said.
The commission's report is available at http://www.regionalism.org/pdf/finalreport.pdf
The City of Garden Grove in late January placed an emergency moratorium on new cyber cafes because of concerns over violent crime. The City Council approved a 45-day moratorium, which officials expect to extend, to give officials time to draft operating regulations for existing cyber cafes. Those measures could address hours of operation, age and number of employees, surveillance cameras, limits on school-age children, window tinting and security guards, said Community Development Director Matt Fertal.
"What we'll bring back in 30 days will be somewhere between what the police department wants and what the businesses want," Fertal predicted.
City planners also are trying to decide where cyber cafes fit into the current zoning ordinance. Prior to the moratorium, the city did not regulate the businesses at all. The city could classify cyber cafes as arcades, which are limited to a certain commercial zone and require a conditional use permit, Fertal said.
Cyber cafes rent computer time for about $2 an hour and have become quite popular. Garden Grove has about 18 such businesses, some of which are open as late as 4 a.m. Police and some neighboring business owners complain that cyber cafes attract gang members late at night. Since November, there has been a stabbing death and a separate assault on two teenagers outside of Garden Grove cyber cafes.
A few other cities in Orange County regulate cyber cafes, but business owners fear Garden Grove could set a tight new standard that other jurisdictions would emulate.
A long-range development plan and environmental impact report for the proposed University of California, Merced, campus received approval from the UC Board of Regents in January. University officials hope to break ground on the 10th UC campus in May and begin conducting classes in fall of 2004 (see CP&DR Public Development, April 2001, available online at the "Archives" on http://www.cp-dr.com).
However, some environmentalists are not satisfied with aspects of the long-range development plan, including the loss of vernal pool habitat and farmland. They suggested that a lawsuit is likely.
Also at their January meeting in Los Angeles, the regents approved the purchase of 7,030 acres of land about 2.5 miles northeast of Merced from the Virginia Smith Trust. The university agreed to protect 5,030 acres as vernal pool habitat for the endangered fairy shrimp, and set aside 750 acres for natural resource research. The campus will be built on the remaining 1,250 acres.
The regents also approved a 50/50 joint venture between UC and the Smith Trust to develop a new community on 1,240 acres just south of the planned campus.
The U.S. Army Corps of Engineers relaxed its wetlands regulations in January. The agency eliminated the mandate that a developer replace wetlands on a one-for-one basis. Instead, the Corps of Engineers will only require that overall development within a Corps of Engineers district result in no loss of wetlands within the district.
The Corps of Engineers also dropped a rule that limited the filling of seasonal streams to 300 lineal feet. Under the new regulation, builders may fill up to a half-acre (approximately 21,000 square feet) of any seasonal watercourse. The Corps of Engineers also relaxed some floodplain development rules. The Corps of Engineers did not change the requirement that any development affecting at least half an acre of wetlands receive an individual permit.
The agency characterized the changes as "minor." Environmentalists were upset with the amendments, while builders offered mild praise.
Regional water quality control boards in Southern California have continued to adopt new standards regarding stormwater runoff (see CP&DR Environment Watch, August 2001, March 2000). In December, the Los Angeles regional board — which governs Los Angeles and Ventura counties — approved amended regulations. In January, the Santa Ana regional board approved regulations for northern Orange County. The San Diego board is expected to adopt new stormwater rules for southern Orange County this month.
The regulations are similar but not identical. All of them call for new development to have facilities that help slow down and treat stormwater, often through the use of small containment basins, grassy swales or mechanical filters. The idea is to reduce pollution and sediment levels in streams, rivers and coastal waters.
In general, builders and inland cities criticized the regulations as unnecessary and expensive, while environmentalists and coastal cities applauded the regulations. Both sides agreed that the Santa Ana board's regulations were the weakest.
The State Controllers' office has filed a lawsuit against the Town of Tiburon for failing to submit annual redevelopment agency reports. According to state officials, Tiburon did not file reports for the 1997-98 and 1998-99 fiscal years — and still had not as of January despite warnings from state officials. The lawsuit is believed to be the first filed against a city for failing to file the annual financial reports. The city could be fined up to $10,000 for each violation.
Is "smart growth" a labor issue? Yes, according to the AFL-CIO, which has adopted an "urban sprawl and smart growth" resolution. The measure directs union leaders "to actively engage in the emerging public and political debates surrounding urban sprawl and smart growth, asserting labor's rightful role in the national debate about the future of America's cities for the benefit of all working families."
Among those hurt by current trends, according to the AFL-CIO, are unionized grocery retailers that cannot compete with Wal-Mart, inner-city residents who have seen hospitals and public services close, downtown janitorial unions, and unionized public employees.
San Bernardino County and the City of Redlands reached an agreement on the development of the infamous "Donut Hole" in January. The county Board of Supervisors and the City Council both approved an agreement that allows development to proceed on the 1,100-acre island of unincorporated territory inside Redlands.
Under the agreement, the city will provide water and sewer services, through an intermediary county entity, to the property. The city and county will share sales tax revenue from the Donut Hole, with the county's share gradually shrinking to zero in 10 years.
The agreement appears to end years of acrimony over control of the land involving the city, the county and Majestic Realty, which wants to build a shopping mall on the Donut Hole's citrus groves (see CP&DR Deals, June 2001; Local Watch, November 1998; Legal Digest, November 1997, available online at the "Archives" on http://www.cp-dr.com). The battle even reached the state Legislature, which passed a law in 2000 that removed the Donut Hole from the city's sphere of influence.
Immediately after the city and county approved the agreement, some Redlands residents began talking about a ballot measure to block development on the site.
Western Placer County could become home to metropolitan Sacramento's first large Indian casino. A U.S. Interior Department official announced in early January that the agency would accept 58 acres west of Lincoln in the Sunset Industrial Area into trust for the United Auburn Indian Community — despite opposition from U.S. Rep. John Doolittle (R-Rocklin) and some local government officials.
With the federal government taking the property into trust, the Indians would be free to pursue their plans for a 200,000-squre-foot casino, restaurant and office complex — which is not subject to local government approval. Tribe representatives have talked with local officials for years about funding road improvements and emergency services to the area. Federal officials cited the tribe's outreach as one reason for approving the proposal.
Only days after affirming a Clinton-era plan for managing 11.5 million acres of national forest land in the Sierra Nevada, the Bush administration begin backing away from the plan.
In late December, U.S. Department of Agriculture Undersecretary for Natural Resources Mark Rey issued the final ruling in support of the Sierra Nevada Framework (see CP&DR In Brief, January 2002; Environment Watch, March 2001, available online in the "Archives" at http://www.cp-dr.com). But days later, Jack Blackwell, the newly appointed regional forester for California, announced an "action plan" to reconsider many controversial issues in the framework, which was eight years in the making. Blackwell's plan calls for reviewing limits on logging trees larger than 30 inches in diameter, standards for ski area and vacation home construction, and restrictions on grazing near streams.
Environmentalists quickly condemned the proposed action plan, while loggers, ranchers and ski resorts welcomed the announcement.
Los Angeles Mayor James Hahn in January pledged to create one of the biggest local housing programs in the county. Money for the proposed $100 million housing trust fund would come from federal grants, tobacco industry settlement payments, proceeds from the sale of city properties and property tax increment.
According to housing experts, the city needs to build about 4,000 reasonably priced units each year to meet demand.
Elk Grove became the third city in Sacramento County to provide financial support for the Rancho Cordova incorporation drive. In January, the Elk Grove City Council pledged $35,000 to help pay for an environmental impact report. Citrus Heights already gave $35,000 to the Rancho Cordova cityhood proponents, and Galt provided $5,000.
Incorporation of Rancho Cordova, a few miles east of Sacramento along Highways 50 and 16, could reach the ballot in November.