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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. San Francisco to Adopt SB 79 Local Alternative San Francisco is moving forward with a local alternative to California’s new transit-oriented housing law, Senate Bill 79, which takes effect July 1. The state law requires taller and denser housing within a half-mile of transit stops, but San Francisco’s Board of Supervisors unanimously approved a modified plan backed by Mayor Daniel Lurie that exempts large parts of the city. Officials estimate about 80% of parcels in the city fall within SB 79 transit zones, but argue San Francisco already has high housing capacity due to earlier zoning reforms. Pro-housing groups such as SF YIMBY and GrowSF say the exemptions for “low-resource” neighborhoods where officials say residents face higher risks of displacement could limit thousands of potential homes in transit-rich areas as the city struggles to meet a state requirement to permit 86,000 new homes by 2031. (See related CP&DR coverage.) Los Angeles to Consider Package of Streamlining Reforms Los Angeles Mayor Karen Bass is advancing a package of reforms aimed at speeding up housing construction and making it easier to open businesses in Los Angeles. The initiative focuses on reducing delays, simplifying permits, and modernizing city approval systems to address the city’s severe housing shortage. Speaking at the Department of Water and Power, Bass said Los Angeles needs “structural change” in how housing and business projects are approved. The reforms include launching the city’s first standard pre-approved home plan program with an online portal for single-family homes. The city will direct LADWP to reduce delays in power connections and create a project tracking system for developers and applicants. Developers have criticized the department for delaying projects. The reforms include implementation of AI tools to connect city departments into one digital permitting system so reviews can happen simultaneously instead of sequentially. State Proposes VMT "Mitigation Credits" as In-Lieu Fees The California Governor’s Office of Land Use and Climate Innovation released draft rules for a new statewide program that would let developers pay into a fund to offset transportation impact from new projects under the California Environmental Quality Act (CEQA). The program would allow developers to buy vehicle miles traveled "mitigation credits" instead of relying only on project-specific traffic reduction measures. The money would help fund affordable housing projects in transit-friendly and infill areas, based on the idea that residents in these locations drive less than average. Affordable housing projects funded through the program would be required to remain affordable for at least 55 years. Credit prices would vary widely by region, ranging from about $1,515 per daily vehicle mile reduced in parts of Madera County to $6,682 in the Santa Barbara region, with most areas falling between $2,000 and $4,000. (See related CP&DR coverage.) LAO Report Assails High Speed Rail Business Plan A new report from the Legislative Analyst’s Office criticizes the California High-Speed Rail Authority for lacking transparency in its latest business plan. The report says the agency failed to clearly disclose assumptions about relocating stations in Merced and Bakersfield, which could significantly affect costs and planning. The 171-mile Merced-to-Bakersfield segment boasts a potential cost of $34.76 billion, and is predicated on changing the Merced and Bakersfield stations without specifying how. The HSRA board has delayed a vote on the 2026 business plan on grounds that it may violate state law due to a lack of required details on costs, timelines, and how the full San Francisco–Los Angeles system will be completed. The board, which is facing widespread criticism, will consider the plan on May 20th and procure the finalized version by June 1. CP&DR Coverage: Cities Consider Warehouse Restrictions Amid Concerns About Tariffs As the global economy has wobbled in the face of tariffs imposed by the Trump administration, the California logistics industry has followed suit. The promise of jobs and economic development has pushed jurisdictions to embrace warehouses by the millions of square feet -- totaling over 1.17 billion square feet of warehouse space in Southern California alone and sprawling further into desert territories. Meanwhile, local opponents remain vigilant, citing concerns of environmental damage and job insecurity that may follow such expansion. The tension between expansion and restriction plays out against the backdrop of 2024’s AB 98 (and a 2025 cleanup bill, SB 415), requiring jurisdictions to impose buffer zones between warehouses and sensitive uses, create truck routes, use solar power, and adopt a host of other measures designed to reduce pollution and lessen other impacts on residential neighbors. Quick Hits & Updates Environmental groups are asking a judge in Oakland to stop a major expansion of Oakland San Francisco Bay Airport, arguing the project was approved without adequate environmental and public health review. Three lawsuits claim the Port of Oakland violated state environmental law and is relying on outdated data to justify a large modernization plan that would add 16 new gates, a roughly 55% increase in capacity. Eureka City Council will consider approving $50 million in bond financing for two of the city’s largest affordable housing projects this week. One proposal would allocate $20 million for the eaRTH Center Apartments, a 46-unit affordable housing mixed-use building with a transit hub; the second would provide $30 million for the Green Phase Apartments, which is part of a larger redevelopment plan expected to replace 106 existing units with 256 new ones. A state judge has ruled that a Trump administration executive order does not override state environmental and regulatory laws in a dispute over oil pipeline operations off the Central Coast. The decision upholds a state order blocking Sable Offshore Corp. from restarting a pipeline system that closed in 2015 after a major spill until it complies with California permitting rules and other legal requirements. According to the 2026 State of the Air report, 82% of California residents live in counties affected by unhealthy air, as compared to 44% nationwide. Of the fifteen counties most impacted by smog last year, eight were in California. Los Angeles remains the most ozone-polluted metro area in the nation, and has ranked worst for ozone in 26 of the 27 years the ALA has conducted the study. Despite building over 677,000 new housing units statewide in the past six years, demand for housing has increased due to demographic change, according to the Public Policy Institute of California. As the number of people sharing a household has been falling over the past five years, more units are needed to house the same number of people. Despite new construction and higher incomes, the study estimates that 14% of homeowners and 28% of renters spend more than half of their income on housing. Brisbane, a city of fewer than 5,000 on the San Francisco Peninsula, is considering a major redevelopment that could nearly double its housing supply and significantly reshape its shoreline. The 684-acre plan proposes about 1,800 to 2,200 homes, up to 7 million square square feet of non-residential space, over 100 acres of new parks, and transit-oriented development near the Caltrain station on the edge of the San Francisco Bay. The 2026 Draft Specific Plan is scheduled to be released the week in May, with the Planning Commission review expected to begin in mid-June. A recent study by SmartAsset found that nine out of eleven American cities with the highest salaries needed to live comfortably are in California. The study used the cost of necessities such as housing, groceries, utilities, and transportation and discretionary costs and the 50/30/20 budgeting rule, assuming 50% of your post-tax income goes to needs, 30% to your wants, and 20% gets set aside for the future. The average cost of living in the top 10 most expensive cities hovers between $130,000 and $150,000 for single adults, and over $400,000 in some places for families. While New York had the highest individual salary needed to live comfortably, the rest of the top-5 consist of San Jose, Irvine, Anaheim, and Santa Ana. A January 2026 study argues against the common assumption that restrictive regulations limiting housing supply are to blame for lack of affordable housing. The study found that even major deregulation leading to large increases in market-rate construction would take decades to significantly improve affordability in high-cost U.S. cities. Instead, they argue that rising inequality and uneven demand growth across regions and income groups are the primary drivers of worsening affordability. The study concludes that relying on supply-side deregulation alone would deliver benefits too slowly and insufficiently for cost-burdened households. The Pasadena City Council unanimously adopted most elements of the “Reconnecting Pasadena” plan for redeveloping the 50-acre "710 Stub" site, a former freeway project area left undeveloped after the 2017 cancellation of the 4-mile extension connecting the 710 to the 210. Approved items include a goal of about 1,800 housing units along with transit and infrastructure changes in the unused patch. California’s Board of Forestry and Fire Protection has proposed new wildfire “Zone Zero” landscaping rules that establish a “Safety Zone” around homes in high fire-risk areas where flammable materials such as plants, mulch, and grass, would be prohibited.

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.

Six months after it came, the U.S. Supreme Court’s ruling in the Sheetz case is beginning to have an impact on land use planning in California. But – typical of Supreme Court rulings these days – Sheetz leaves a lot of question unanswered and practicing planners and land use lawyers are still wondering, or maybe hoping, that future court rulings will clarify things. Sheetz overturned California’s longstanding Ehrlich doctrine, which said that if exactions and impact fees are adopted as part of a legislative decision such as a General Plan update they don’t have to follow the “rough proportionality” rule of the so-called Nollan/Dolan legal doctrine. That doctrine, which emerged from the U.S. Supreme Court rulings in the Nollan and Dolan cases, says that exactions must be both reasonably related and roughly proportional to the impact of a development . But California had stubbornly held on to the Ehrlich doctrine, which constituted an exception to the rule. The Sheetz case – involving a traffic impact fee imposed on a homeowner in El Dorado County – struck down the Ehrlich doctrine. (CP&DR’s coverage of the Sheetz ruling can be found here.) Unfortunately, the court didn’t say what California jurisdictions should do instead, which led to a wide variety of interpretations. More than one planner has reported that, starting the day after Sheetz was issued in April, developers started calling up and saying they didn’t have to pay impact fees anymore. The big question is whether California’s method of calculating fees – essentially by using an average – conforms to the Sheetz ruling. As we explained last spring here, the typical exaction or impact fee regime spreads the cost of infrastructure and other impacts evenly across all development – essentially dividing the cost by the number of units (or the square footage) to arrive at a number. This is essentially what El Dorado County did in the Sheetz situation. But are averages okay? Or must cities and counties actually engage in what the Supreme Court has called an ‘individualized determination” for, say, every single home or building in the entire jurisdiction – a huge departure from the past practice of averaging? At the California Chapter, American Planning Association, conference in Riverside last month, several practitioners had some preliminary answers. But everybody agrees that more clarification from the U.S. Supreme Court – or other courts in California – would help a lot. “What we don’t know is whether … in 3-4 years we’ll get a new clarification ,” said Teifion Rice-Evans, a managing principal with EPS. The consensus was that there’s probably some middle ground between the current practice of averaging and the “individualized determination” the Supreme Court might have in mind. “The question is whether a permit condition imposed on a class of properties must be tailored with the same degree of specified as a permit condition that targets a particular development,” said Lufti Kharuf, an attorney with Best Best & Krieger. Referring to a concurring opinion by Justice Neil Gorsuch, Kharuf added: “Gorsuch suggested yes, but no other justice joined him.” Among the suggestions from the panel were:

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. Modesto to Expand Sphere of Influence by Over 12,000 Acres Modesto will move forward with the most aggressive growth option for its 2050 general plan, expanding the city’s sphere of influence by about 12,240 acres. City officials argue that growth is needed to increase revenue as Modesto’s general fund lags behind neighboring cities, $153.3 million in 2022 vs. $311 million in Bakersfield and $255.8 million in Stockton. Residents of Wood Colony and leaders in Salida fear the expansion could lead to annexation of historic agricultural land and parts of neighboring areas. Critics also question whether such large-scale growth is necessary given California’s slow population growth and demographic trends. The City Council approved the expansion on a 5-1 vote. State Park System to Establish Three New Parks in Central Valley California is aiming to establish three new state parks in the Central Valley in what would be the largest state expansion of the park system in decades. The three parks would include Feather River Park in Yuba County, San Joaquin River Parkway near Fresno, and Dust Bowl Camp in Bakersfield, bringing the total number of state parks to 283, the highest of any state. The initiative aims to provide recreation and preserve history in communities that have historically had limited access to parks. The expansion is part of the broader “State Parks Forward” initiative, which seeks to grow the state’s 1.6-million-acre system and add 30,000 acres by 2030. Officials say the effort supports the state’s goal of conserving 30% of its land and coastal waters by the end of the decade, and the plan will now move into a public engagement and approval process before final decisions are made. Los Angeles Mayor Proposes New Climate Action Plan The City of Los Angeles is considering a new Climate Action Plan outlining how Los Angeles will reduce emissions and adapt to climate change, including doubling local solar power by 2030, transitioning city buses away from fossil fuels, and cutting greenhouse gas emissions at major hubs like the Port of Los Angeles and Los Angeles International Airport. The plan sets goals for water use, addressing risks from extreme heat, and expanding green spaces and includes 14 objectives and over 50 actions, “designed to deliver concrete, measurable climate outcomes.” Key goals include reaching 100% renewable energy by 2035, fully electrifying city buses by 2028, and installing 120,000 EV chargers by 2030. The city also plans to boost sustainable aviation fuel use, ban new oil and gas drilling, and phase out existing extraction. Water initiatives include recycling projects and increasing local water reliance to 70% by 2035 while cutting per-person usage. CP&DR Coverage: New Laws Lead to Flurry of High-Rise Proposals A recent confluence of new laws and economic conditions has resulted in high-rises being proposed, approved, and built in some unusual places. With the gradual resurgence of downtown areas after the pandemic, developers have looked to create towers in relatively low-rise areas -- as many as 24 in Beverly Hills, a half-dozen in Santa Monica, a 23-story tower near Pacific Beach in San Diego, a 22-story tower in San Francisco's Outer Sunset, and notably, a 25-story, 800-unit tower in SF's Marina District. With the overwhelming demand for new housing, some of these projects may come to fruition if they can survive the backlash. Quick Hits & Updates The Trump administration will pay $885 million to two energy companies, including Golden State Wind, to abandon offshore wind leases, such as a planned project off Morro Bay in California. In exchange, the company has committed to invest up to $765 million in a U.S. based liquefied natural gas facility. Officials say the agreements are part of a broader effort to move away from offshore wind, which the administration argues is heavily subsidized and unreliable. California is joining the International Union for Conservation of Nature (IUCN), the world’s largest environmental network, bringing together governments and organizations to advance solutions that protect ecosystems, wildlife, and communities. California is one of the first subnational governments to join the organization’s effort to expand tribal stewardship, scale nature-based solutions, build climate resilience, and protect marine ecosystems. Redwood City civic leaders have submitted thousands of signatures to qualify a November ballot measure that would impose stricter rent control and new landlord fees to fund a tenant protection program. The “Fair and Affordable Housing Ordinance”, which would apply to all buildings constructed before 1995, would cap annual rent increases at 5% or 60% of inflation, require relocation payments for certain evictions, and fund tenant protections through per-unit fees on landlords. The Campbell City Council has moved to close a loophole in California’s Starter Homes Revitalization Act that had allowed developers to replace occupied single-family homes with multifamily projects. The council voted to require that new single-family homes be built when existing homes are demolished, and now residents are considering legal action against 108 already-approved units. The law previously defined “vacant” as lots without usable structures but does not clearly say when the property must become vacant, a gray area that critics argue has allowed developers to buy and demolish existing homes to qualify for higher-density projects. A Los Angles couple has filed a federal lawsuit against the city, claiming the historic designation of Marilyn Monroe’s final residence is an unconstitutional taking of private property. Brinah Milstein and Roy Bank, who purchased the property for $8.35 million in 2023, argue the city reversed previously approved demolition permits under public pressure and later declared the home a historic-cultural monument, effectively preventing them from using or redeveloping it. They claim the decision violates the Fifth Amendment by turning their property into a public attraction without compensation. A proposed $700 million solar project in near Soda Mountain Solar in the Mojave Desert has received state approval after nearly two decades of delays and environmental opposition. The California Energy Commission voted unanimously to clear the 2,670-acre project, citing its role in helping California reach 100% clean electricity by 2045 and reduce greenhouse gas emissions. The project still requires approval from the federal Bureau of Land Management before construction can begin. A new report from Circulate finds California Density Bonus Law was used to approve over 140,000 affordable homes between 2021 and 2024, and it was used 10 times more than every other housing streamlining law combined in 2024. In the same year, Bonus Law was approved for use in 47% of all homes in multifamily projects and 78% of homes in completely affordable projects. Bonus Law contains incentives for builders who include permanently affordable homes in new projects, giving developers permission to build up to twice the number of units that zoning would allow if they provide enough affordable units. New campaign finance disclosures reveal that Cloverdale Councilmember Todd Lands, who is set to weigh in on the largest land-use action in the city’s history, received major contributions from individuals tied to powerful real estate interests. His position on the Sonoma County Airport Land Use Commission means he will be asked to weigh in on the Revised Esmeralda Specific Plan, planned to be built adjacent to the Cloverdale Municipal Airport. The development includes 605 housing units and 177 acres of open space along the Russian River. While no specific builders have been chosen yet, the plan would create the zoning and regulatory framework for major future development. Research from UCLA’s Institute of Transportation Studies analyzes California’s definition of transit stops, and how adjusting the definition of where the stops themselves begin and end could create more opportunity to take advantage of housing bonuses. Currently municipalities count only the precise area of the station, but researchers argue that considering the surrounding land could make over 1.3 million additional acres eligible for bonuses. No city or agency currently uses this broader definition, but state law doesn’t explicitly prohibit it.

The battle over a proposed eight-story apartment building behind the historic Santa Barbara Mission is continuing – most recently with a judge’s ruling that the developer did not make a clear enough case for a builder’s remedy solution in correspondence with the City of Santa Barbara.

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Development Services Director City of Oceanside, CA

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. Voter Initiative to Curb Transfer Taxes Qualifies for November Ballot California’s secretary of state has certified a statewide ballot proposition for November that would sharply reduce local real estate transfer taxes and tighten rules on voter-approved tax increases. The debate is especially focused on Los Angeles’ Measure ULA “mansion tax,” which has raised more than $1 billion since 2023 for affordable housing programs. The proposition would cut transfer tax rates dramatically and, if passed, would be poised to override Measure ULA first. The measure, backed by the Howard Jarvis Taxpayers Association, would cap municipal transfer taxes at one-twentieth of 1% of a property sale and require some local tax measures to pass with a two-thirds majority instead of a simple majority. Measure ULA, for example, passed with 58%. (See related CP&DR coverage.) Lawsuit Filed to Avert Mining in Mojave National Preserve The National Parks Conservation Association filed a lawsuit against the National Park Service and the Interior Department for allowing mining in the Mojave National Preserve. The dispute centers on the Colosseum Mine, a former gold and silver mine that closed in the 1990s, now owned by Dateline Resources Ltd., which wants to resume operations and explore rare earth minerals. The suit claims that the mine threatens sensitive habitat in the Clark Mountains, including bighorn sheep and the second-highest density of rare plants in all California’s mountain ranges. In 2022, the Park Service had accused the company of unauthorized work that damaged land and destroyed plants, but later dropped those demands and allowed operations to continue under approvals by the Bureau of Land Management from 1985. The lawsuit claims that the Park Service acted illegally, failing to secure a plan of operations or the necessary permits and approvals for operation. Surprise Deal Could Halt Removal of Two Dams in Mendocino County A deal proposed by federal officials could scuttle the long-planned decommissioning and removal of two dams on the Eel River in Mendocino County. U.S. Agriculture Secretary Brooke Rollins suggested that a Southern California water district may be interested in purchasing and continuing operation of the Scott and Cape Horn dams, running counter to Pacific Gas and Electric Co.’s plan to remove the dams as part of the $350 million decommissioning of the century-old hydroelectric project. Environmental groups, tribes, and Gov. Gavin Newsom supported dam removal to restore salmon habitat and improve river health, while some Russian River basin communities oppose it due to concerns about losing imported water supplies. PG&E stated it has not received an offer and believes it is too late to transfer ownership as decommissioning is already underway. Federal Report Cites Shortage of 10 Million Homes Analysis in the White House Economic Report of the President estimates that the United States has a housing shortage of about 10 million homes, to make up for lost homes in the wake of the 2008 financial crisis, assuming “homebuilding and the growth of the single-family housing stock had continued at their historical pace instead of falling dramatically”. The report says this shortage has worsened affordability, with home prices rising 82% since 2000 while incomes increased only 12%, making ownership much harder for younger and first-time buyers. According to the report, reducing regulations via zoning fees, code requirements, and approval delays could help generate as many as 13.2 million additional homes. the Libertarian Cato Institute criticizes the report for disregarding tariffs' effects on construction costs, demonizing institutional investors, and mischaracterizing immigrants' demand for housing. CP&DR Coverage: Fulton on The Coming Battle Over Impact Fees There’s no question that an impact fee reckoning is coming in California – most likely from the courts and the legislature. A recent example in Menlo Park highlights the high fees associated with split lots under SB 9, reaching $127,000 in one case. Even though California courts have upheld fee systems under the Supreme Court Sheetz ruling so far, there will come a time when some court says the Nollan/Dolan test of 'reasonable relationship' to collect impact fees hasn’t been met, or the fees are being used incorrectly. But it’s not clear where that reckoning will leave California’s local governments, whether that may be falling back on higher property taxes or (very easily) creating new special assessment districts. Quick Hits & Updates The Clovis Planning Commission unanimously approved the Mixed Income Zoning Ordinance (MIZO) in a 4–0 vote, requiring developers of housing projects with 11 or more units to reserve at least 5% for lower-income residents. The policy is part of a set of reforms tied to the city’s settlement of the 2024 Martinez v. City of Clovis lawsuit, in which a court found the city failed to meet affordable housing obligations under state law. A recently certified November ballot measure in San Francisco called the Affordable Housing Guarantee Act would require that revenue from Proposition I’s real estate transfer tax be dedicated entirely to affordable housing production, preservation, and tenant stabilization. Prop. I, passed in 2020, raised taxes on property sales above $10 million and has generated more than $400 million, with projections of about $100 million annually in coming years. The proposal for reinstatement comes with new provisions to encourage housing construction by lowering transfer taxes. Construction of a new U.S. border wall near Tecate has triggered backlash from Kumeyaay communities in both Mexico and the United States over damage to Kuchamaa Mountain, a site considered sacred and historically used for ceremonies and healing. Residents and tribal leaders say heavy machinery and controlled blasting on the U.S. side are harming a culturally and spiritually significant landscape. The Muwekma Ohlone Tribe in the San Francisco Bay Area has hired lobbyist Roger Stone, a longtime ally of Pres. Donald Trump, through his firm Drake Ventures. Last year petitioned the White House to take over management of the Presidio. Disclosure records show the tribe paid Stone’s firm at least $50,000 across late 2025 and early 2026, though the specific lobbying activities were not detailed. The filing shows no information on what the lobbying efforts consist of, but comes shortly after President Trump fired the Presidio Board of Trustees. SpaceX and the Coastal Commission have reached a settlement in a lawsuit over the commission’s attempt to regulate rocket launches from Vandenberg Space Force Base. The lawsuit, filed in 2024, followed the commission’s denial of a plan to significantly increase SpaceX launches due to environmental and community concerns. After Fresno Mayor Jerry Dyer reportedly pressured trustees to drop opposition to the Southeast Development Area (SEDA), the board of Fresno Unified School District is set to revisit the issue in May. Trustees previously tabled the resolution in a 4-3 vote after Dyer warned that opposition would damage city-district relations The district’s analysis found the buildout of the new area could trigger the closure of 11 schools and drain $200 million a year in funding. (See related CP&DR coverage.) The Department of Housing and Community Development has updated its guidelines to help communities understand and use the state’s Affordable Housing Preservation Laws. These laws are designed to protect existing affordable housing, especially as more than 47,000 subsidized rental units face expiring affordability restrictions over the next decade. The updated materials include a revised statewide guide and six new fact sheets tailored for tenants, tenant associations, public agencies, property owners, developers, and potential preservation buyers. Single women constitute a higher share of homeowners than men across the country, despite earning less than men and are more financially stretched, a survey by the National Association of Realtors found. About 51% of single women own homes compared to less than 50% of single men, and although single women earn less than men and are more financially stretched, they are less likely to have a mortgage. California saw one the fastest jumps in homeownership among single women in some of the most expensive housing markets nationwide like San Jose, San Francisco, and Los Angeles. A new report proposes major reforms to stabilize the state’s struggling home insurance market including options ranging from stronger regulation to creating a state-run wildfire insurance program. Major insurers like State Farm and Allstate have pulled back from the California market, especially in fire-prone regions. The report recommends giving the state more power to enforce coverage commitments and potentially revoke rate hike approvals if insurers fail to meet targets.

After a seven-year legal battle, the California Supreme Court has ruled that a developer can move forward to build three single-family houses in the San Luis Obispo County community of Los Osos.

This blog is brought to you courtesy of the paying subscribers to California Planning & Development Report. You can subscribe to CP&DR here. Since 1956, KB Home built over 600,000 homes in California, from San Diego the Bay Area and many places in between. That’s more homes than are in many states. KB and other mega-homebuilders made suburbanization happen and created one of the biggest building booms and population shifts in modern history. They specialized in what we would now call sprawl—vast truck developments of hundreds or thousands of largely identical homes that spread outward from cities like Los Angeles and San Diego, in the Bay Area, to create entire suburbs and entire lifestyles. KB Home, formerly Kaufman and Broad, has been based in Los Angeles since 1963. Last week, the company announced last week that after six decades, it is moving to Phoenix. Why? “To reduce costs and place its employees in a more affordable housing market,” according to the Los Angeles Times. Ponder that for a moment: At the same time that many California families can no longer afford homes in California, home builders can no longer afford California. The longtime KB Homes headquarters in Westwood Of all the corporate flights that have taken place recently—including poignantly, that of Occidental Petroleum, which was based literally two blocks from KB's building—this one hits hardest. I have a vaguely personal connection to KB Home. As I wrote a few years ago, I grew up a mile and a half from its headquarters. I passed by its building on a regular basis. I went to school with descendants and heirs of the founders. The company seemed just as unbeatable and affixed to the Los Angeles area as other corporate giants like MGM, Lockheed, and In-N-Out. KB will maintain a presence in the state. It still has projects underway. But, it’s hard not to say that the company has given up on California--with little reverence for the riches it earned here. However much KB has paid in dividends, the costs faced by its employees and company are probably enormous--certainly compared to those in Phoenix. And, the business model doesn't work in California anymore. We've become a stagnant state, and we are losing population. You don't need a Ph.D. in real estate economics to know that developing real estate business in a place that is shrinking is probably not the best move. There are still places where sprawl works, and KB is still making a go of it, at least for now. Think about places like the high desert—Hesperia and Lancaster. It’s the same model they’ve been using since the Eisenhower administration. We've been talking big game for at least 20 years about smart growth. And yet, smart growth has proliferated in only minute increments. We have a few high-rise districts, like LA's South Park and downtown San Diego. A few mixed-use apartment buildings, like those in Sacramento's Midtown or maybe Santa Ana. Those are fine. We still haven't built any new places. I can't think of a new city district, or a substantially expanded city that is more pleasant, more humane, or more livable than something built a hundred years ago. Given KB’s capital and know-how, KB could have turned to infill. It could have built places that resemble its own hometown. In fact, they tried. For a hot second, there was something called KB Urban, launched in 2005. Several other homebuilders tried the same. Unfortunately, they came along at the very moment that the Great Recession hit—which was, of course, a creation of companies like KB Home. It wasn’t a great time to get into infill, and KB Urban’s web page lists all of six multifamily developments. What's ironic about KB, of course, is that its founders were very urban. Particularly Eli Broad, who's known as one of the great benefactors of Los Angeles. He loved this city, and he loved making it better through museums, theaters, and all sorts of charitable donations. At the same time, he was building places—the exact opposite of the place that he lived in and that he nurtured. Now, Eli Broad is gone. And so is his company. (As an aside, I fear that his style of philanthropy, for all the wealth in Los Angeles and California, may be a thing of the past.) Infill developers need big banks and other financiers to be willing to fund some weird new thing that doesn't have a lot of parking or that has ground-floor retail. And that's really hard. But, if you're KB and you have access to capital, do you want to tie it up in projects that take years, that are uncertain, complicated, and do little but raise the wrath of politicians and city staff? The most successful developers in places like Los Angeles and San Francisco are those who have superhuman patience and put in tremendous effort—you might call it an old boys' club. But, really, anyone would grow old trying to get stuff done in Los Angeles. So, you go to Ontario, Hesperia, and, yes, Phoenix. So here we are now—a shrinking state, shrinking in part because of high housing prices caused by shortage, caused in part by the reluctance of companies like KB to build homes and communities, which has been caused largely by regulatory and political indifference and indeed resistance. I don’t want to disparage tract homes; they serve an important purpose, and they were of their time. But I will disparage California’s failure to produce communities pleasant and/or affordable enough to make California worthwhile. If ever there was a sign that California needs to change course, this is it. Or, maybe KB’s departure means that all the new laws passed in Sacramento -- which seem quaint compared to the vitriol and chaos surrounding the current race for governor -- are too late. Once there’s a new sheriff in Sacramento (and I sincerely hope it’s not an actual sheriff) and possibly one in Los Angeles, this state needs to make a new land use ethos its top priority. By “ethos,” I don’t just mean new laws and plans. I mean a collective, communal set of beliefs and goals. I don't have a stake or stock in KB. I'm not going to wish them well in Phoenix, but nor am I going to bid them good riddance. What I do know is that someday they may leave Phoenix, too. Probably not because of over-regulation or lack of demand. But, they may find that the sun that shines there is a lot hotter than the one that shines on Westwood. https://www.latimes.com/business/story/2026-04-14/l-a-s-trailblazing-home-builder-is-latest-to-leave-california

Every planner knows that it’s always tempting to replace strong, decisive language in a general plan with soft, squishy language: encourage, strive, explore. Call it the “shall versus should” debate. But, as a new court case from San Ramon suggests, “shoulds” have consequences.