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This article is brought to you courtesy of the paying subscribers to California Planning & Development Report. You can subscribe to CP&DR by clicking here. You can sign up for CP&DR’s free weekly newsletter here. Prior to Implementing Alternative Plan, Palo Alto Beset with SB 79 Applications The City of Palo Alto, which has historically favored slow growth, adopted an alternative plan pursuant to Senate Bill 79 that went into effect two weeks after the law’s July 1 effective date. In that window, at least seven projects that would otherwise have been disallowed were proposed and appear likely to be permitted. They include both market-rate and affordable units, including four housing projects by nonprofit developer Minority Television Project; some projects use state Density Bonus Law to go up to seven stories. Applications for some SB 79 projects have been accompanied by letters from developers’ attorneys threatening the city with lawsuits if it attempted to reject projects on technicalities. According to a preemptive letter from law firm Holland & Knight, the city can reject SB 79 applications only for “significant, unavoidable, and quantifiable impact[s] on ‘objective, identified written public health or safety standards, policies, or conditions.However, the Legislature has affirmed its expectation that these types of conditions ‘arise infrequently.’” Palo Alto’s alternative plan went into effect July 16, limiting the size of projects to roughly 50% of what SB 79 would allow. (See related CP&DR coverage.) California Forever Loses $3.2 Billion Shipyard Contract California Forever, the plan to build a new city on roughly 70,000 acres of farmland in Solano County, California, has lost its bid to recruit an industrial tenant for their planned waterfront shipyard on the Sacramento River on the southern end of its land holdings. The area has long been zoned for “maritime industrial uses.” Saronic Technologies, an Austin-based defense startup that builds autonomous watercraft, has selected the Port of Brownsville in Texas over Solano County for its planned $3.2 billion Port Alpha shipyard. California Forever had signed a 40-year union labor agreement covering its 70,000-acre project and backed legislation to speed up environmental review for the shipyard, which could still advance as a budget trailer bill this summer. Texas, meanwhile, approved a $211 million tax-abatement package in June to draw Saronic to Brownsville, where the new shipyard will sit about 20 miles from SpaceX's Starbase facility. Joshua Arce of the California Alliance of Jobs told the San Francisco Chronicle the move will send roughly 10,000 permanent jobs and thousands of union construction positions to Texas instead, faulting state leaders for failing to act quickly enough. CEQA Reform Ballot Measure Gains Strong Voter Support A recent poll from the Public Policy Institute of California shows that Proposition 45, a measure to overhaul CEQA, has drawn support from voters with 73% of likely voters in support, 24% opposed and 4% undecided. The measure would impose a 365-day limit on environmental reviews for projects like housing, transit, reservoirs and renewable energy facilities, and require courts to rule on related lawsuits within 270 days. It is the biggest change to CEQA since it was signed into law in 1970. Renters, younger voters and lower-income households say the reform would cut red tape and lower housing, energy and water costs, while opponents including the Sierra Club, Defenders of Wildlife and Jane Fonda, argue it would weaken environmental protections and enable projects like data centers with minimal public input. Weakening of Federal Endangered Species Act Could Endanger 300 Species in California The Trump administration finalized a rule Friday that narrows the definition of "harm" under the Endangered Species Act, eliminating protections against habitat destruction from logging, mining and oil drilling as long as animals aren't directly killed or injured. Interior Secretary Doug Burgum defended the change, saying the previous definition "interfered with private property rights" and had been abused by federal agencies to obstruct land use; officials said the move follows a 2024 Supreme Court decision limiting federal agencies' authority to interpret environmental statutes. California, the nation's most biodiverse state, is expected to be hit especially hard with roughly 300 of the law's approximately 2,300 protected species found here including condors, sea otters, desert tortoises and gray wolves. The Endangered Species Act has been credited with saving species such as the California condor, bald eagle, southern sea otter and El Segundo blue butterfly from near-extinction, recoveries advocates say resulted directly from habitat protections the new rule removes. (See related CP&DR coverage.) CP&DR Coverage: New San Francisco Planning Director Brings Private-Sector Perspective Shortly after the election of San Francisco Mayor Daniel Lurie, he nominated Sarah Dennis Phillips to succeed Rich Hillis as planning director. Dennis Phillip was both a conventional choice and an offbeat. Offbeat, because she was coming from over a decade in the private sector, working for mega-developer Tishman Speyer. Conventional because she had previously spent a similar amount of time in San Francisco city government, in planning and community development. Her appointment complemented Lurie's dedication to development and increasing the city's housing supply. A year later, Dennis Phillip has presided over the implementation of the city's "Family Zoning Plan" and is attempting to reform the department amid renewed public enthusiasm--or at least tolerance--for new housing. She spoke with CP&DR's Josh Stephens. Quick Hits & Updates A new economic analysis estimates that Los Angeles's Measure ULA, commonly known as the "Mansion Tax," generates significant unintended fiscal costs by suppressing property transactions, which in turn slows growth in property tax assessments. The study notes that in California and more than half of U.S. states, assessed property values only rise toward market value at the point of sale, so any drop in transaction frequency caused by the transfer tax directly reduces the growth of property tax revenue over time. Environmental groups Earthworks and Comité Cívico del Valle argued before a California appeals court in San Diego on Thursday that Imperial County failed to adequately review the environmental and cultural impacts of Controlled Thermal Resources' Hell's Kitchen lithium project. The project would extract lithium from geothermal brine and require 6,500 acre-feet of fresh water annually. Governor Newsom signed Assembly Bill 179, a new housing affordability law aiming to reduce the per-unit cost of affordable housing by $60,000 to $70,000, remove red tape and boost housing construction. The law features a major reduction in impact fees, or one-time charges local governments impose on developers to support municipal services including schools, public parks and sewage for residents in new affordable housing units. Gov. Newsom characterized the current fee structure as "comical" and prohibitive toward the construction of affordable units. The Riverside City Council adopted a new planning framework aimed at transforming the area around a downtown Metrolink station into a mixed-use hub with housing, jobs and transit access. The item updates preparation of a Transit Oriented Development Action Plan and adopts a resolution required under Regional Early Action Planning 2.0 grant guidelines. It does not approve construction, rezone land or commit city funding, but officials say it lays groundwork for future investment. The Prebys Foundation and Downtown San Diego Partnership are planning to formally ask the city to create a joint powers authority (JPA) with the San Diego Community College District and San Diego Unified School District to redevelop the Civic Center, San Diego's four-block municipal compound plus two adjacent blocks. Modeled after the Bay Area's Transbay Joint Powers Authority, the JPA would have broad legal powers though the city would still need to separately transfer the Civic Center land before the entity could exercise land-use authority. Bay Area transit ridership patterns have shifted significantly by income over the past decade. In 2014 both the poorest and richest workers rode transit at higher rates than middle-income workers; wealthier riders often lived near transit corridors in cities like San Francisco and Palo Alto and commuted to downtown offices. By 2019, as gentrification pushed lower-income residents out of transit-rich neighborhoods, wealthier commuters increasingly turned to BART and Caltrain. That trend reversed again by 2024, as remote and hybrid work drew affluent workers, leaving lower-income workers making up a larger share of transit riders relative to the overall workforce. The Los Angeles City Council approved Fourth & Central, a $2 billion mixed-use development that will replace cold storage facilities, parking lots and warehouses on Skid Row near Little Tokyo and the Arts District. The project, first proposed in 2021, calls for 10 buildings including a 30-story residential tower with 572 condominiums and 949 apartments, including at least 262 affordable units. Real estate firms Jamison and Kennedy Wilson will attempt a $200 million conversion of the L.A. World Trade Center into Sky Castle, a 512-unit affordable housing complex as part of a broader campaign to build 4,000 affordable apartments across Los Angeles. The office will be Jamison's 15th office-to-housing conversion, with work set to begin in August and completion expected by early 2028. Rents are expected to start at $937 for one-bedroom units, with two- and three-bedroom units renting for $1,100 and $1,300 respectively, and the complex will include amenities like a fitness center, co-working space and rooftop tennis or pickleball courts. Eligible tenants must earn between 30% and 80% of the area median income. San Diego City Council, acting as the Housing Authority of the City of San Diego, approved the creation of an $8.5 million Affordable Housing Preservation Fund to slow the loss of affordable rental housing and keep rents low for individuals, families and seniors. The fund is intended to help preserve "naturally occurring affordable housing" by combining its resources with other funding sources and establishing long-term affordability requirements for those units; specific proposals for using the fund will come before the council or Housing Authority in the future. A Contra Costa County Grand Jury issued a report on the City of Martinez's deteriorating waterfront and marina, which spans 67.3 acres along the Carquinez Strait and has fallen into disrepair since being built in the 1960s. The city currently lacks funding to repair the crumbling seawall and docks, dredge the marina, or build a higher seawall to address projected sea level rise, and cannot continue subsidizing the marina without harming core services. The Sierra Club and three other environmental nonprofits filed a petition Wednesday in San Bernardino County Superior Court seeking to invalidate Barstow's approval of the Barstow International Gateway, a $4 billion, 4,500-acre BNSF Railway facility that would become the nation's largest rail yard. The groups argue the city's environmental review was inadequate, citing projections that the project will emit over 550 tons of nitrogen oxide and 134,471 metric tons of carbon dioxide equivalent annually while burning more than 18 million gallons of diesel a year, and that it failed to properly assess impacts on species including the Mojave desert tortoise and western burrowing owl. El Segundo City Council declined to move forward with a plan to ask voters to make the city a charter city, after two of four council members present at the July 7 meeting voiced opposition, falling short of the three votes needed to place the measure on the November ballot. The proposal was aimed at giving the city more control over land zoning amid state housing mandates.

This article is brought to you courtesy of the paying subscribers to California Planning & Development Report. You can subscribe to CP&DR by clicking here. You can sign up for CP&DR’s free weekly newsletter here. Shortly after the election of San Francisco Mayor Daniel Lurie, he nominated Sarah Dennis Phillips to succeed Rich Hillis as planning director. Dennis Phillips was both a conventional choice and an offbeat. Offbeat, because she was coming from over a decade in the private sector, working for mega-developer Tishman Speyer. Conventional because she had previously spent a similar amount of time in San Francisco city government, in planning and community development. Her appointment complemented Lurie's dedication to development and increasing the city's housing supply. A year later, Dennis Phillips has presided over the implementation of the city's "Family Zoning Plan" and is attempting to reform the department amid renewed public enthusiasm--or at least tolerance--for new housing. She spoke with CP&DR's Josh Stephens. You've been on the job for about a year now. What are your overall impressions so far? I think there are two overriding impressions. One, how amazing and evolved the San Francisco planning staff is. I left planning in 2013, for other career opportunities. We've always had really qualified staff, but the way staff practice their jobs now, that staff has really risen to the moment. They understand the challenges facing us. They understand how time impacts housing in our public realm projects, and they understand what the city wants. They're not just here regulating, they're looking at how they get to yes, to build, to get to the exciting outcomes that San Franciscans want. As we understand the affordability crisis, they've really taken that to heart. They've seen that themselves, not just because their boss told them to and not just because they just got out of college. There are plenty of people who started the same year I started here in 2005 and are still here — over 20 years — and those same humans have evolved in a really strong way. I think it's emblematic in some ways of our city And then the other one is, I forgot how brutal the politics are here. That's real, and it's a bit daunting. What lessons do you draw from Tishman-Speyer and bring into your current job? It was an incredible opportunity. I don't think everyone who works in the development sector has the opportunity to work with a firm that prioritizes design almost as much as planners do — that's endemic with Tishman Speyer and that's fabulous. What I brought back here is an understanding of the myriad ways that a project can get impacted and go south. There is not just "oh, the rents aren't high enough" — there are a hundred different ways that a project can go sideways, some of which are in the city's control: capital priorities shifting, capital partners going south, different ways you structure a joint development agreement. So many pieces along the financing and the construction side of things have made me understand the vulnerability of development, which definitely shapes my attitudes here as we regulate it moving forward. Tell us about the mayor's agenda. Which aspects are you most excited about, which are proving to be the most challenging? I came in last July, almost a year ago, with the number-one priority being we need to get the Family Zoning Plan over the finish line before we hit the deadlines mandated by the state housing element law. I'm proud of what the team built — they built it long before I got here, it had been in development for about two years before I arrived. What we brought over the finish line was largely baked by the time I arrived, but the politics of getting it approved, and the outreach needed so that the public really understood what we were doing, was a big part of those final six months. The family zoning plan wasn't the priority — that is the vehicle. The priority is housing. We need more housing for all San Franciscans, and the family zoning plan is a big part of that. There are other initiatives happening that I'm really excited about, including an expanded housing trust fund that'll create $125 million annually out of the city's budget for permanently affordable housing, and adjusted inclusionary housing percentages that allow regular market rate housing to move forward at the same time that we're financing affordable housing through that trust fund. Another priority is downtown revitalization — not recovery. I think we are past downtown recovery, but we still can make our downtown a lot better. Not just filling vacancies, but creating an amazing public realm, making it a place that people come to 24 hours a day for entertainment, for art. The third priority, which came straight from the mayor, is improving our permitting process, improving our permitting technology, and creating permitting that is oriented towards customer service. How much of that feels in your grasp versus technically challenging, or needing buy-in from staff, the supervisors, or the public? Under this mayor, there's a big chunk of it that is within our grasp. One of the things we are working on now is unifying our planning department and our building department. The people who issue rules and the people who issue building permits and inspect projects are different departments — that is not great. There are a lot of bumps in the handoff along that process. By putting us together — and we are midway through merging them — by early 2027 we hope we will be one unified department working towards housing and land use approvals together. The concept of a unified department has been talked about in San Francisco for a long time, but there hasn't been the leadership to pull it off, and the mayor has given myself and our director of the building department the authority to make that happen. A second example is our new technology permitting system. We are on a very old, disparate set of tech tools for permitting. this mayor has made it an imperative that we get on one unified system together. We started that system in March this year, we have about 10 permits up and running on it, and over the next two to three years we will fully migrate to a system that all permitting agencies in the city will be using together. You're obviously in the AI capital of the world. How has that affected the city itself in terms of rising rental rates and new influx of people? And how are you thinking about AI as a planning tool? It's a super interesting question. In terms of a business sector, AI has been the force driving our recovery. We're in a very good place from where we were in 2022, 2023, in large part due to not just the growth of AI firms and the leasing that they've done, but through the energy and ancillary support that's brought to other industries around San Francisco. At the same time, the fears that our entire country have around AI, particularly at a time of a tight and tightening job market, are even more acute here because it is so present at our front door. So there's some existential dread. We've regained our population losses, which is great. We are now seeing energy around developing new housing. We hadn't seen a lot of housing proposals in the city post-COVID, but that is starting to change because capital is following AI's impact on San Francisco, and they're starting to invest in housing projects to support the growing population. In our office, our staff are relatively nimble in figuring out ways AI can supplement their jobs. They've done some creative things in identifying and cataloging our historic resources, for example. As a city, we're a little creaky — like all bureaucracies. Executing AI in your work comes with union concerns, because people want to make sure it's supplementing their jobs, not replacing them. And we have privacy concerns, because we are stewards of public data and need to be careful about how we use it. The city is working on an emerging tech pool where we have prequalified technology partners, including AI partners, that we can develop smaller tools with — but it's a pilot and we haven't really started yet, so we'll see how that turns out. Let's get bigger and talk about the state. How do you feel about dealing with state laws? I probably can't parse out exactly which ones I like versus which ones are challenging because with so many in California, I sometimes still have to remind myself — wait, is that 2011 or 423, which one is it? By and large, I'm glad they exist and they are generally helpful. But they are most helpful when they push us towards an outcome while allowing us our own way of getting there. SB 79 describes what I was hoping for exactly — it said, “you are either going to have these types of heights and densities near your transit station, or you can show us your own way of getting there and we can tell you if we agree.” Our Family Zoning Plan basically qualified as our alternative plan under SB 79. It was one more tool we could use to explain to residents why it was important that we adopt the plan: “If we don't do it our own way, the state will do it for us.” There was some tension with some planning commissioners when you were appointed. How has that played out? That's been fine. I mentioned the politics here are kind of nasty — a knife fight in a phone booth, as our city attorney used to say. Our planning commissioners are lovely humans. Rich Hillis is my predecessor and he had a 4-3 vote on his appointment, and I joke that I was unanimous because those three recused themselves. We spoke pretty immediately after that outcome, particularly Catherine Moore, who's somebody I've worked with in a professional capacity for a long time and have a lot of respect for, and I think the respect goes both ways. Their challenge there was the process and not the person, and I'm comfortable with that. Process is, interestingly enough, one of the things we're trying to work through here in San Francisco — our planners are in favor of less process if it's the right outcome. And we've worked together swimmingly over the last nine months. San Francisco has had its share of contrverisal projects recently: the tower in the Outer Sunset; the Nordstrom's parking lot; and now the Safeway redevelopment in the Marina. What do those controversies mean to you? Are they a big deal or are they describing headlines but just part of the day-to-day for your office? Different meanings for each of them. The Nordstrom parking lot, dare I say, was a catalyst for much of the state laws that you asked me about. While it didn't turn state legislation on its head alone, the disapproval of that project and the grounds the appeal was upheld on, and just the utter shock that we could be that worried about growth on such a likely and positive development site, really helped catalyze a lot of the change at the state level that has been, as I've noted, generally helpful. The Outer Sunset tower has died. But even the noise around that one did bring to the fore a whole lot of housing supporters who were quiet before. It was just so loud that folks were like, wait, do I really care if there's a tower there? I know that's a crazy tower, but maybe I want more housing. Marina Safeway is challenging for us because we worked with the community in the Marina and the broader San Francisco community on the family zoning plan for what we felt was the right kind of density for that site. This project was filed just after that plan was adopted but before it became effective. We had been coming off a multi-year process, working with communities, telling them that yes, we need more housing, but we'll work with you on the shape and form of that housing. And then a project came in that was dramatically different. So that's a hard one. How do you characterize attitudes towards housing and development in the city today — what is the vibe? I think we are smack in the middle of an evolution. San Francisco has been for a very long time — certainly when I moved here in 2000 — a town with a lot of conflicted feelings about growth, even as it was an economic powerhouse through the first tech boom. “Manhattan” has always been a dirty word here in San Francisco. That's a long-standing attitude that is evolving. I don't think we're through the evolution — I think we're smack in the middle of it. The surveys around the family zoning plan showed that a strong majority, somewhere between 60 and 70 percent of residents, support that plan. And it was hard-fought — even though many people supported it, it was an incredibly tough approval process. So you can see that tension between high support but still those no-growth attitudes fighting against each other. The number of people who identify as pro-housing is incredibly large and well recognized. And attitudes towards growth are somewhat affected by what we saw post-COVID in our downtown — people realized they didn't want an empty downtown, and that if growth and more intensity is what it takes to get it back to activity, they can be in support of that. Where do you draw intellectual inspiration from — books, histories, people, mentors? I'm an economics geek. he overlay of the economy with the city is fascinating, not just because money has driven cities — through transfer of capital and growth — but because the other part of economics is humans and how humans want to see those things move. I'm a big fan of Edward Glaeser's books. I read The Economist weekly because it helps me understand what's going on throughout the world. I've had the benefit of some amazing mentors. Dean Macris, the planning director when I came here, who let me walk in as a very green planner and walk up to the podium and launch some exciting initiatives right from the get-go. John Rahaim, an incredibly thoughtful, design-focused planning director who I still consult with regularly. And Carl Shannon, who was my boss at Tishman Speyer, who showed me how you can be a capitalist with heart — Carl cared about affordability and design probably more than making money. And I would also say, given the brutality of land use politics, my inspiration for getting through challenging and thorny topics is running with my dog and playing my violin. I'm terrible at the violin — I only started a year ago — but there's nothing like being terrible at something when you've got a really hard job to get your head out of it. This interview has been edited and condensed.

The right combination of zoning changes and decreased parking requirements can make infill projects feasible in some of the state’s most urban settings. That is the conclusion of Solimar Research Group, which continues to investigate land use options for crowded urban areas. Recently, we explored how regulatory changes affect the financial feasibility of infill projects, and then applied our models to the land use surrounding a major rail extension in Los Angeles. The results should prove interesting to any agency that is approaching the issue of rapid growth with a strategy of high density, transit-oriented development. We sought to calculate the degree to which changes in parking and density policy, as well to zoning, will shrink the notoriously stubborn gap between planning ideal and development reality. Our comprehensive pro-forma analyses revealed that while parking policy affects feasibility more than density allowance, reliance on one or the other is politically unrealistic. A combined strategy is essential. On the other hand, key zone changes may prove a powerful, singular tool in getting infill development off the ground. We further explored how these proposed policy strategies would play out in the very real built environment of the planned Exposition Line extension of the Los Angeles Metro Rail system. Our parcel-by-parcel GIS analysis of infill opportunities surrounding proposed rail stations highlights the infill potential of underutilized industrial land along transit corridors. Grounded Analyses To ensure the “real-time” relevancy of our calculations, we consulted local developers to identify actual development models. Five infill prototypes were selected, and examples of each — from an 8-10 unit townhouse to a 100-200 unit mixed-use project — are currently under construction. We then applied an “as is” pro-forma feasibility model to each, one based on current zoning standards and the industry’s minimum expected 15% net margin. With our feasibility baselines established, we analyzed the fiscal impact of incremental increases or decreases in density and parking requirements. The selection of these two policies as regulatory variables was straightforward: one is a powerful determinant of gross revenue, the other a huge booster of project costs. We also calculated the impact on each prototype of building in either industrial or commercial zones. Combined Regulation Our pro-forma for development prototype 2A exemplifies the political near-impossibility of relying on a single regulation to promote infill in Los Angeles. Prototype 2A is a small, mixed-use project of 54 units, with a current feasibility gap of $1.2 million. A 50% density bonus reduces that gap to only $900,000; a 100% density bonus to only $700,000. While feasibility may arrive with 150% bonus, attendant density, height and FAR changes to the C-1 and C-M zones in which this project would be built are unlikely. Construction of prototype 2A also is unlikely without a change in parking requirements. We found that only a 50% decrease in the number of required parking spaces reduces the $1.2 million gap down to $400,000. That is still too much. But a synergy of more modest changes produces a viable alternative. Our study indicates that a 75% density bonus combined with a 25-50% parking reduction provide enough incentive for developers to pursue projects of this size. This outcome repeated itself in our calculations for prototype developments of various sizes. EXPO Application After calculating needed regulatory and zoning incentives, we took our prototypes to a built environment of high infill potential. The Exposition Line is scheduled for completion in 2010. It will serve an almost entirely developed area. We drew circular study zones around the planned La Brea, La Cienega, Crenshaw, Western and Vermont stations. Our GIS “screening” of parcels around the La Cienega stop reveals a repeated pattern of industrial under-use that, as our pro-formas indicate, should be targeted for infill. Nearly 25% of the half-mile area surrounding the station is zoned industrial/light manufacturing, much of that characterized by large parcels. In addition, many parcels are underutilized and ideal for infill redevelopment. Finally, we identified parcels along the La Cienega Boulevard commercial strip that could be assembled into spaces that would increase the feasibility of projects the scale of Prototype 2A. These projects become even more realistic with the regulatory changes identified above. Solimar’s complete fiscal and land-use analysis of infill potential along the Expo line is available at: http://www.solimar.org/pdfs/Expo_Final_3-30.pdf.

We are reviving the CP&DR podcast! Bill Fulton and Josh Stephens discuss the latest planning news, including the statewide battle over transfer taxes (including Los Angeles Measure ULA), the uneven implementation of Senate Bill 79, and the November ballot measure that could upend the California Environmental Quality Act.

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This article is brought to you courtesy of the paying subscribers to California Planning & Development Report. You can subscribe to CP&DR by clicking here. You can sign up for CP&DR’s free weekly newsletter here. Developer Proposes Building Data Centers on Fairgrounds Statewide Global Stack LLC, a California infrastructure company, has proposed building data centers, multilevel parking garages, and helicopter landing pads on state land generally used as fairgrounds. The company has expressed a desire to utilize the substantial swaths of public land in partnership with private interests to generate revenue year round. Public records reveal discussions with eight fairgrounds so far: Cow Palace Arena & Event Center, San Mateo County Event Center, the Calistoga Fairgrounds, the Solano County Fairgrounds & Event Center, the Tulare County Fairgrounds, the Kings County Fairgrounds, the Antelope Valley Fair and Event Center in Lancaster (Los Angeles County), and the Southern California Fair in Perris (Riverside County). The plan envisions rolling the model out to as many as 70 of California's roughly 80 fairgrounds by 2030, offering site operators 100-year land leases in exchange for a stable revenue stream many fairgrounds sorely need. The proposal for Daly City’s Cow Palace, which is still in early discussions, includes an 8- to 10-megawatt data center, multilevel parking garage, and a helicopter landing pad for emergency response. Critics of the projects across communities cite concerns about noise, pollution, water and power demands. (See related CP&DR coverage.) SANDAG Says San Diego Skimped on SB 79 Upzoning The San Diego Association of Governments (SANDAG) determined last week that more than five times the four stops city officials had recognized are eligible for upzoning under Senate Bill 79, opening the city to allow even more new homes than the 367,000 that city officials predicted this spring. On July 1 SB 79 took effect, allowing buildings up to 85 feet tall in areas zoned for single-family housing near qualifying transit stops, with height and density allowances scaling down farther from the stop. It has been unclear which bus stops qualify until this dispute; city officials had counted only stops with bus lanes inaccessible to cars or bikes, while the YIMBY Democrats of San Diego County argued the law's criteria were broader and pushed for as many as 26 stops. Housing advocates estimate the change will push the city's required housing capacity increase from 367,000 units to roughly 467,000, though city planners say they're still calculating a revised figure. Elsewhere in the region, the Oceanside City Council has voted, 4-0, to defer implementation of SB 79 and will seek to “exempt and/or defer all sites that could potentially be exempted or deferred” and “reduce SB 79’s impact to the greatest extent possible.” The city is working on an Alternative Plan, but the deferral of full implementation could extend as late as 2032. The city has a transit center and several rail stations, bringing its full SB 79 capacity to over 50,000. (See related CP&DR coverage.) Environmental Group Sues CARB to Prevent Cuts to Greenhouse Gas Reduction Fund Communities for a Better Environment, an environmental justice nonprofit, is suing the California Air Resources Board over an update to the cap-and-invest program, alleging the agency skirted required environmental review under CEQA. The suit is the first major legal challenge to the program since lawmakers extended its expiration date from 2030 to 2045 last year. The suit addresses a manufacturing decarbonization incentive that lets polluters claim up to 118 million new emissions allowances in exchange for decarbonization investments, a move regulators say is meant to keep industry from leaving the state. The lawsuit contends CARB introduced the mechanism roughly six weeks before the vote without updating its environmental impact analysis, and posted the final assessment just two days before the hearing. It also alleges that the change threatens up to $2 billion annually that would otherwise be funneled into the Greenhouse Gas Reduction Fund, which finances housing, transit and clean-air programs, with the heaviest impact falling on low-income communities and communities of color. Lafayette May Upzone to Settle Dispute over Housing Development Lafayette, an East Bay city of about 25,000, has agreed to consider upzoning 130 acres of land as part of a June settlement with the Housing Action Coalition, possibly bringing an end to a notorious yearslong battle over the Terraces of Lafayette, a proposed office space and multifamily housing complex. Since 2011, the project has been downsized, rescinded by voter referendum in 2018, restored, approved by the city council in 2020, and challenged in a lawsuit by the group Save Lafayette that reached the California Supreme Court before the city prevailed in 2023. The development includes 63 below-market-rate units, though eligibility requires household income under 80% of Contra Costa County's area median of $135,750 for a family of four. Save Lafayette, led by resident Michael Griffiths, opposes the project on wildfire and traffic-pollution grounds and is considering further legal action. (See related CP&DR coverage.) State Offers $55 Million in Resilience Planning Grants Applications have opened for Round 2 of California's Community Resilience Centers (CRC) Program, which provides approximately $55 million in grants funded by the 2024 Climate Bond (Proposition 4). The program supports the planning, construction, and renovation of neighborhood resilience centers that provide shelter, cooling, emergency resources, and year-round community services to help communities prepare for climate-related disasters such as extreme heat and wildfires. Round 2 is open to lead applicants that are a public or local agency, nonprofit organization, special district, joint powers authority, Tribe, public utility, local publicly owned utility, or mutual water company, prioritizing communities most impacted by environmental, socioeconomic, and health inequality. Applications opened July 2, with grant applications due in September for review. CP&DR Coverage: Ugly Mayoral Race Highlights Importance of Civic Beauty At one point during his ill-fated campaign for mayor of Los Angeles, former reality TV star Spencer Pratt declared, “ we're going to have L.A. so beautiful. No more of these high-density, SB-79, prison-like structures.” He called out Art Deco in particular as the hallmark of a more attractive city. Pratt was angry and, arguably, loony. But, for a city beset by bad news, we can still take a cue from his optimistic vision. Conventional politicians rarely discuss aesthetics because they are likely afraid of the specters of gentrification or elitism, or they’re wonky enough to know how hard it is to regulate aesthetics. Or -- quite likely -- they simply have no taste and consider aesthetics to be frivolous. Except, writes CP&DR’s Josh Stephens, aesthetics matter. Not as much as poverty, homelessness, or housing--but they still matter a lot. Good plans warrant good design -- and vice-versa. Quick Hits & Updates Modesto will prepare an environmental study to measure the impact of a proposed development and population increase in compliance with their 2050 general plan. The City Council adopted a land use option that would add thousands of acres to the city and potentially grow its population from 220,000 to 324,000 over the next 24 years, bringing up to 38,500 new housing units and 57,300 jobs. While the plan will include mitigation policies to lessen environmental impacts, the city retains the option to approve overriding considerations for impacts deemed too significant to fully mitigate, citing economic or social benefits. San Francisco will introduce the Affordable Grocery Act in November, aimed at combating the city's food deserts and so-called "zombie stores", vacant grocery and pharmacy buildings that corporate chains keep empty to block competitors. The measure would pair tax credits and expedited permitting for businesses that reopen vacant storefronts as groceries or pharmacies with a new tax on corporations that deliberately leave such properties empty, though new stores after January 2027 and housing-conversion sites would be exempt. The San Diego County Board of Supervisors adopted a new inclusionary housing ordinance that requires most new residential developments in unincorporated areas with at least 10 units to reserve 5% of homes for very low-income households or comply through alternatives such as fees or land donations. Other local jurisdictions like Chula Vista and Carlsbad have long required affordable housing set-asides, and San Diego county has met only 28% of its state housing target so far. The county has invested more than $334 million in affordable housing since 2017, but officials noted that limited transit, wildfire risks, and slower homebuilding pose a challenge in unincorporated communities. The Los Angeles Homeless Services Authority has sued the Trump administration over withheld funds the agency says will put more than 11,000 at risk of losing housing and other services. LAHSA is seeking a temporary restraining order in order to stop the Housing and Urban Development Department from suspending the funds. The lawsuit comes three weeks after HUD suspended LAHSA over allegations of financial mismanagement, fraud and inadequate conflict-of-interest safeguards, to which the agency argues HUD has produced no formal investigative findings. The Governor’s Office of Land Use and Climate Innovation released a Notice of Funding Availability for Round 2 of California's Extreme Heat and Community Resilience Program, offering $27.5 million total in competitive infrastructure grants. Funding for the program is provided by the Climate Bond and Greenhouse Gas Reduction Fund to support projects that reduce the impacts of extreme heat and build community resilience. Funding is split into two tracks: Early Infrastructure Projects and Advanced Infrastructure Projects.

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This article is brought to you courtesy of the paying subscribers to California Planning & Development Report. You can subscribe to CP&DR by clicking here. You can sign up for CP&DR’s free weekly newsletter here. American Canyon Annexation Spurs Lawsuit from Developer A Watson Ranch project developer has sued in Napa Superior Court to block a proposed 281-acre expansion of American Canyon's city boundary, arguing it violates a 2008 voter-approved measure barring urban limit line expansion without voter approval through 2030. The disputed annexation, sought by landowners the Hess and Laird families rather than the city, would add to a separate 86-acre expansion already approved on June 1. Although the larger expansion still needs approval from the Napa County LAFCO, the lawsuit seeks to address already approved county and city related tax-sharing and housing-allocation agreements. This dispute follows an earlier, ongoing lawsuit filed by Watson Ranch entities in October accusing the city of breaching development agreements, particularly over delays in extending Newell Drive as a relief route for Highway 29. Budget Trailer Bill Goes After Impact Fees The big budget news on housing was a trailer bill (AB 179) that created a new Cabinet-level housing agency as well as the Housing Development and Finance Committee, which is designed to consolidate consideration of affordable housing funding from different state programs. But the bill also contains a kicker involving impact fees: If a city or county is applying for funding for an affordable housing funding but doesn’t wait impact fees, then the state will reduce the funding by the amount of the fees. Gov. Gavin Newsom signed the trailer bill on June 30. State Releases Guidelines to Promote Transit-Oriented Development The Department of Housing and Community Development and the Governor’s Office of Land Use and Climate Innovation has released the 2026 Transit-Oriented Development Guidelines to implement the Transit-Oriented Development Implementation Program created by AB 130. The guidelines establish a framework for funding affordable housing and related infrastructure in transit-accessible locations while giving local agencies a new option to mitigate transportation impacts under the California Environmental Quality Act. Under the new program, CEQA lead agencies may contribute to the Transit-Oriented Development Implementation Fund, a statewide Vehicle Miles Traveled mitigation bank administered by HCD, instead of pursuing project-specific VMT mitigation measures. HCD will use those contributions to fund affordable housing projects in locations that promote lower driving rates and greater transit use. Fresno Streamlines Approvals for 20% Affordable Developments The Fresno City Council adopted a policy that will allow housing developments that set aside at least 20% of units for low-income renters to enjoy a streamlined approval process, even bypassing review by the Planning Commission and City Council in certain areas. The measure will keep the city in compliance with its state-mandated Housing Element, which outlines how the city will address a housing shortage. Mike Karbassi cast the lone dissenting vote, citing concerns that ministerial approval reduces opportunities for public input and appeals. Failing to adopt the policy, however, would have meant risking losing state funding eligibility or facing litigation from the California Attorney General. Downtown Los Angeles, San Jose Score Poorly on Survey of Global Downtowns A new 2026 survey found that downtown Los Angeles ranks among the least vibrant urban centers in the world, with only about 65% of residents describing it as vibrant compared with more than 80% in cities such as New York City, Chicago, Sydney, and Shanghai. In the same survey, San Francisco ranked seventh for vibrancy nationwide. The Gensler Research Institute City Pulse report highlighted several shared qualities between successful downtowns, including a mix of housing, jobs, shops, and entertainment, walkable streets, attractive public spaces, strong after-hours activity, good lighting, and a sense of personal safety. Researchers also found that thriving downtowns encourage visitors to stay and socialize rather than simply arrive for errands or events and leave. On three aesthetic measures--”beautful,” “memorable,” and “iconic”--downtown San Jose finished dead last among major U.S. cities. Downtown Los Angeles continues to struggle with post-pandemic office vacancies, business closures, and declining foot traffic, with nearly 40% of office space in the Financial District and 30% of retail space sitting vacant. Concerns about safety, along with parking costs and availability, have further discouraged visitors, even as crime is down 10% from last year. For Los Angeles, the report suggests that restoring a critical mass of residents, workers, and businesses will be essential to rebuilding the downtown’s vibrancy. CP&DR Coverage: Fulton on CEQA-Busting Ballot Measure The California Chamber of Commerce initiative revising the California Environmental Quality Act has qualified for the November. If it passes – which in my view is likely – it will fundamentally alter the CEQA process for certain types of projects, including apparently all housing projects. But even if it doesn’t pass, it’s the end of an era. It probably means that the importance of “significance” – and the judgment of lead agencies and their environmental scientists about what’s significant and what’s not – goes away. In fact the whole idea of impact analysis – the crux of both CEQA and NEPA – will go away. In that sense, CEQA as we know it will be dead. Quick Hits & Updates The Trump administration suspended federal funding for Los Angeles Homeless Services Authority, citing concerns about financial mismanagement. Federal funding accounts for about 7% of LAHSA’s budget and primarily supports permanent housing subsidies through HUD’s Continuum of Care program, which promotes community solutions to homelessness. The agency warned that losing federal support could jeopardize housing assistance for thousands of formerly homeless residents and increase the risk of people returning to homelessness. A feasibility study found that redevelopment of Alameda Point's 31-acre Main Street Neighborhood North could be financially viable if the city secures between $164 million and $240 million for infrastructure improvements. The estimated costs include about $176 million for backbone infrastructure and site improvements, plus $64 million for Main Street infrastructure, shoreline stabilization, and levee construction, although those costs could be reduced by up to $75 million through phased infrastructure work and grant funding. After talks of rolling back Los Angeles’ “mansion tax”, the Los Angeles City Council approved a $544.3 million spending plan funds, the largest single-year allocation since the measure took effect in April 2023. The plan is the largest single use of Measure ULA funds so far, calling for $381 million toward affordable housing programs and $163.3 million for homelessness prevention programs. A study Measure ULA finds that it creates a sizable hidden cost by suppressing property transactions. California reassesses property values only at the time of sale, so fewer transactions mean fewer reassessments slowing growth in the broader property tax base. The study, led by Daniel Green of Harvard Business School, estimates about 80 percent of Measure ULA revenue is offset by lower future property-tax collections. The California Water Commission approved $268.9 million in conditional supplemental funding for the proposed Sites Reservoir Project in Colusa County, bringing the project's potential state funding through the Water Storage Investment Program to nearly $1.4 billion. The reservoir would provide 1.5 million acre-feet of water storage by capturing excess Sacramento River flows during wet years for use during droughts, while also supporting flood protection, wildlife refuges, recreation, and up to 200,000 acre-feet of emergency drought water supplies. Los Angeles County Metro's $400 million Vermont Avenue bus lane project can proceed without bike lanes for now, denying a preliminary injunction sought by Streetsblog LA editor Joe Linton who argued the proposal triggers Measure HLA, the 2024 law requiring street safety upgrades whenever the city repaves qualifying stretches of road. Palo Alto has adopted zoning changes aimed at revitalizing commercial districts by allowing a broader range of businesses that previously faced zoning barriers to occupy storefronts. The reforms streamline permitting, ease parking requirements, and expand allowable ground-floor uses as the city works to reduce downtown vacancies and adapt to shifts in retail demand. City officials say the changes are helping attract new businesses while preserving restrictions on traditional medical offices and other non-retail uses. San Diego, which has maintained a place in the top ten most expensive cities in the U.S., has fallen to 12th place with median one-bedroom rents dropping 2.2% annually to $2,200 a month. Analysts attribute the slide primarily to a surge in apartment construction, as San Diego County built more multifamily housing per capita than any other California metro and ranked second nationally as a share of total construction, after New York. Oakland home values are at their lowest in a decade according to data from Zillow. Oakland has seen the starkest home value drop among U.S. cities with at least 100,000 residents, tied with Cape Coral, Florida, which was dubbed the worst housing market in America last year. In March the typical home value in Oakland was about $716,000, reflecting a drop of more than $90,000, or 11.4%, after adjusting for inflation. Larger such as emptying downtowns, crime rates and a shift toward the suburbs combined with high mortgage rates have hurt demand for homes in both San Francisco and Oakland. The Urban Institute published a new interactive tool which allows users to explore where and how effectively states and urban areas have invested in transit-oriented development. The study found that better transit leads to higher ridership, and residents of places like New York City, San Francisco, and DC travel on transit more than seven times as frequently as people living in those other regions. It also found that housing near frequent transit sites encourages better ridership, with areas like Los Angeles and San Francisco performing best, each providing transit service within a half mile of at least 90 percent of homes. Humboldt County residents have launched a ballot initiative to ban large industrial warehouses from the county's Coastal Zone, a direct response to a proposed Amazon distribution center in McKinleyville. The measure would cap new warehouse facilities at 20,000 square feet, effectively blocking Amazon's roughly 40,000-square-foot proposal, while exempting marine-dependent industries like fishing and aquaculture. Organizers submitted the measure through Indivisible Trinidad and must collect 4,874 verified signatures from registered county voters before the Board of Supervisors can adopt it or place it on the November ballot.

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Huntington Beach Loses Anti-SLAPP Motion Against State

The original verson of this story incorrectly stated that the location in question is the site of the Bay Meadows racetrack. That was incorrect. Bay Meadows is in San Mateo.

This article is brought to you courtesy of the paying subscribers to California Planning & Development Report. You can subscribe to CP&DR by clicking here. You can sign up for CP&DR’s free weekly newsletter here. Ballot Measure to Curb Local Special Taxes Pulled; Los Angeles ‘Mansion Tax’ Remains Intact After talks of rolling back Los Angeles’ “mansion tax”, the Los Angeles City Council pulled a plan to reform the measure from the November ballot -- which would have exempted new multifamily projects from the tax -- approved a $544.3 million spending plan funds, the largest single-year allocation since the measure took effect in April 2023. Measure ULA has generated more than $1.24 billion in the last three years for affordable housing and homelessness prevention programs. But, critics say it has backfired and discouraged developers from building, effectively reducing availability of apartments and general property tax revenues. In part to neutralize Measure ULA--and reduce local taxes generally--the Howard Jarvis Taxpayers Association had qualified an initiative for the November ballot that would have capped transfer taxes at 0.11% and retroactively overturned special taxes that passed with less than two-thirds support, which Measure ULA's 58% approval in 2022 would not have met. After negotiation with lawmakers, the Jarvis Association agreed to pull the measure. In exchange, lawmakers agreed to place a constitutional amendment on the November ballot raising the voter threshold for future special taxes to two-thirds, while leaving existing taxes like Measure ULA intact. Some critics of Measure ULA have called the outcome the “worst possible scenario.” (See related CP&DR coverage.) Legislators to Place $11 Billion Housing Bond on November Ballot The Veterans and Affordable Housing Bond Act of 2026 will appear on the November ballot, pending formal approval by the legislature and the governor's signature. The $11.25 billion housing affordability measure includes $1.25 billion in self-supporting revenue bonds for the CalVet Home Loan Program and $10 billion in general obligation bonds for affordable housing construction, rehabilitation, and preservation. Only 17% of California households can currently afford a median-priced single-family home, and more than half of renters spend over 30% of their income on housing. The bond is projected to assist over 40,000 Californians with down payment assistance and affordable mortgage financing, while also funding the creation or preservation of affordable rental units and creating thousands of construction jobs. Targeted populations include veterans, seniors, farmworkers, college students, tribal communities, and people experiencing homelessness, and affordable units funded through the measure must remain affordable for at least 55 years. State officials estimate for every $1 invested by the state, an estimated $4 in federal tax credits, local funding, private financing, and resident rents will assist in financing and development. California Forever Seeks Expedited Approvals for Shipyard Project California Forever, the billionaire-backed venture seeking to build a new city on Solano County farmland, is pushing for legislation that would fast-track environmental reviews and ease regulatory hurdles for a planned shipbuilding facility and dense urban development. The legislative push is tied to efforts to land a lease with Saronic Technologies, an Austin-based defense contractor weighing a $3.2 billion autonomous vessel shipyard between California and Texas, where officials recently approved a $211 million tax-abatement package for a competing site. California Forever has hired former Senate President Pro Tem Darrell Steinberg and former Senate Majority Leader Bob Hertzberg to pitch a package of concessions. The new legislation would cap CEQA challenges to 270 days and rely on a 2008 environmental impact report for the shipyard site, allowing Suisun City to annex California Forever's agricultural land if local governments fail to produce sufficient housing. (See related CP&DR coverage.) California Sues Feds to Maintain Vehicle Emissions Standards California Attorney General Rob Bonta filed a lawsuit challenging the Trump administration's attempt to roll back the state's vehicle emissions standards, calling the federal actions illegal and dangerous to public health. The Clean Air Act has allowed California to set stricter vehicle emissions standards than federal minimums since the 1970s through a waiver system that has been upheld by administrations of both parties for more than 50 years. The EPA has granted California more than 75 such waivers, and expressly reaffirmed the process under President George W. Bush in 2004 and 2008. Two weeks ago, however, Trump's EPA declared that each of those waivers is now a "rule" subject to congressional review, which the lawsuit argues has no legal basis. Among the specific standards are California's 2013 rules reducing emissions from new cars and light trucks, its 2008 greenhouse gas standards, and a 2024 waiver upholding the state's ban on most gas-powered lawn equipment. The lawsuit argues that overturning these protections would mean "more pollution, poorer air quality, more market uncertainty, and greater health risks" for communities already bearing a disproportionate emissions burden. The EPA declined to comment on the lawsuit. CP&DR Coverage: HCD Supports Midway Rising’s Proposal to Violate San Diego Coastal Height Limit In the wake of two court cases striking down voters’ decision to eliminate a coastal height limit in San Diego, developers of the city’s sports arena site have now taken the position that they can violate the height limit under the Density Bonus Law. And now the California Department of Housing and Community Development has issued a letter that would appear to validate that position. The Midway Rising project would include more than 4,000 new housing units as well as a new sports arena, hotels, and other amenities. The question San Diego posed to HCD was whether the Density Bonus Law, which deals with housing, could override the voter-approved 30-foot height limit even on the non-residential portions of the property, including the new sports arena. HCD responded in the affirmative. Quick Hits & Updates Humboldt County residents have launched a ballot initiative to ban large industrial warehouses from the county's Coastal Zone, a direct response to a proposed Amazon distribution center in McKinleyville. The measure would cap new warehouse facilities at 20,000 square feet, effectively blocking Amazon's roughly 40,000-square-foot proposal, while exempting marine-dependent industries like fishing and aquaculture. Organizers submitted the measure through Indivisible Trinidad and must collect 4,874 verified signatures from registered county voters before the Board of Supervisors can adopt it or place it on the November ballot. The Western Association of Wildlife & Fish Agencies released its Monarch Butterfly Conservation Plan, responding to a dramatic population collapse that has seen monarch numbers fall 86% since the 1980s and hit a record low in 2020. The updated plan spans nine western states, outlines population targets, incorporates new science, and proposes conservation actions aimed at stabilizing the population. The revision follows a December 2024 U.S. Fish and Wildlife Service proposal to list the monarch butterfly as threatened under the Endangered Species Act. The Los Angeles County Superior Court rejected United Water Conservation District’s challenge to protections for Southern California steelhead trout. Judge Tiana Murillo upheld the California Fish and Game Commission's listing decision to protect the trout, which has been pushed to the brink of extinction by urban development, water diversions, climate change, and dams like those operated by Ventura-based United Water Conservation District. East Bay lawmakers are moving to block the Trump administration's plan to fund a long-contested coal export terminal in West Oakland. The moves follow President Trump's June 4 announcement directing $75 million toward the Oakland Bulk and Oversized Terminal. The proposed terminal would be able to export up to 10 million short tons of coal annually, with trains passing through West Oakland, a neighborhood that already ranks among the highest in the state for asthma-related emergency room visits and hospitalizations due to industrial pollution. L.A. County Metro and the city of Los Angeles are planning improvements to the Vermont Avenue Bus Rapid Transit (BRT) after at least a decade of planning. Plans include removing some on-street parking and omitting areas for bike lanes. Advocacy group Streets For All has submitted a letter and is considering legal action, claiming that the project does not comply with Los Angeles’ Measure HLA and Mobility Plan. Oakland home values are at their lowest in a decade according to data from Zillow. Oakland has seen the starkest home value drop among U.S. cities with at least 100,000 residents, tied with Cape Coral, Florida, which was dubbed the worst housing market in America last year. In March the typical home value in Oakland was about $716,000, reflecting a drop of more than $90,000, or 11.4%, after adjusting for inflation. Larger such as emptying downtowns, crime rates and a shift toward the suburbs combined with high mortgage rates have hurt demand for homes in both San Francisco and Oakland. San Diego, which has maintained a place in the top ten most expensive cities in the U.S., has fallen to 12th place with median one-bedroom rents dropping 2.2% annually to $2,200 a month. Analysts attribute the slide primarily to a surge in apartment construction, as San Diego County built more multifamily housing per capita than any other California metro and ranked second nationally as a share of total construction, after New York. The Trump administration has suspended federal funding for the Los Angeles Homeless Services Authority, citing concerns about financial mismanagement. Federal funding accounts for about 7% of LAHSA’s budget and primarily supports permanent housing subsidies through HUD’s Continuum of Care program, which promotes community solutions to homelessness. The agency warned that losing federal support could jeopardize housing assistance for thousands of formerly homeless residents and increase the risk of people returning to homelessness. The EPA announced more than $15.3 million in Brownfields Multipurpose, Assessment and Cleanup (MAC) grants, with funds split across four categories. Grants are intended to accelerate redevelopment of long-contaminated properties, and include $7 million for environmental assessments, $6.38 million for cleanup activities, $2 million for multipurpose grants, and $500,000 in supplemental revolving loan fund support for the City of Fresno. The Brownfields Program has awarded more than $3 billion in total grant funding since 1995, leveraging over $45 billion in cleanup and redevelopment investment and supporting more than 228,900 jobs.