Point-Counterpoint: California Legislature’s State Growth Plan

Will the legislative package that in­cludes SB 929 spur economic recov­ery in California? 

Booher: Absolutely. SB 929 builds on two facts: 1) that the key to economic recovery is productivity, and 2) that the primary action the government can take to improve productivity is strategic investment in infrastructure. 

Beyond this, we now know the California economy is in the initial stages of a structural change.

Thoughtful observers agree on the necessary steps to place California in the best possible position to emerge from this transition even more prosperous. Recent studies by CCEEB, U.C. Berkeley’s Center for Real Estate and Urban Economics, the Center for Continuing Study of the California Economy, and Peter Uebberoth’s Council on California Competitiveness suggest wide-spread agree­ment on several of these steps: 

1. A program to invest thoughtfully and efficiently in infrastructure to accommodate planned growth. 

2. Specific Stale policies to provide a coherent frame­work to guide State, regional, and local growth decision making. 

3. A state strategy to deal with the dramatic changes occurring in California and the need to facilitate economic growth while enhancing the quality of life. 

4. The use of market principles to help meet environ­mental goals. 

5. A collaborative approach among government, business, labor, environmentalists, and civil rights groups to reduce the cost of living and working in California.

How well does the SB 929 package address these issues? 

1. SB 929 proposes a long term strategy for infrastruc­ture investment. These include: 

1. State and local capital improvement programs (CIP’s) to provide facilities to meet planned growth needs. 

2. A State infrastructure bank to provide matching funds for strategically important economic development. 

3. Simple majority voter approval for local infra­structure bonds included in the CIP’s. 

4. More efficient use of infrastructure funds.

2. SB 929 establishes a set of balanced policies guiding state, regional, and local growth decision-making to accommodate growth while protecting the environment. 

3. SB 929 requires the Governor to prepare a strategy providing direction and actions to meet the state’s devel­opment and conservation objectives, including economic investment and revitalization. 

4. The policies required by SB 929 include measures to promote market-based pricing mechanisms. 

5. The SB 929 program is based upon a collaborative approach as shown by the diverse group of two dozen business, environmental, labor, and civil rights groups supporting it, including: the Los Angeles 2000 Partnership, the Regional Institute of Southern California, the Ethnic Coalition, Sierra Club California, Natural Resources De­fense Council, the South Coast Air Quality Management District, the Bay Area Council, and the Western Center on Law and Poverty. 

Lyon: No! Quite the opposite. The emphasis on infrastructure investment and long-term planning is im­portant and we strongly support the financing mechanisms such as a State Infrastructure Bank and easing the local bond approval standard for public facilities construction. However, the sad fact is that the costly and poorly-defined development requirements contained in SB 929 will provide fertile new ground for those who harbor anti-business and anti-growth attitudes, allowing them to challenge projects and make the production of affordable housing nearly impossible to achieve. 

California’s economy is in a free fall with no bottom in sight. This is due in large part to the state’s self-inflicted hostile business and development climate. To use the vernacular, it is easier to swim through peanut butter than it is to successfully navigate the permitting and regulatory maze in California.

The Council on California Competitiveness chaired by Peter Ueberroth in its recently released report California’s Jobs and Future identified regulatory streamlining actions which would clean out the current blockages to commer­cial and residential development, ensure quality environmental protection, and speed economic recovery. Unfortu­nately many of those important recommendations are nowhere to be found in SB 929. 

For example, the Ueberroth report says that cities and counties should be required to prepare “Comprehensive Plans” and should be required to allow projects consistent with those plans to proceed. SB 929 on the other hand perpetuates the state planning law bias against develop­ment when, for example, it mandates that LAFCOs “shall not approve” a proposal unless it is consistent with the bill’s dozen new complex —  and not always consistent — goals and policies, its new and vaguely defined regional strategy, and its growth inhibiting land-use tiering system. SB 929 misses the opportunity to set the planning laws on a positive new course by requiring approval of proposals that meet these consistency requirements. 

Other important recommendations contained in the blue-ribbon report which are not found in SB 929 include reforming CEQA to provide for more comprehensive environmental analysis on an areawide basis rather than the current project-by-project approach and the creation of a stale-level Land Use Court to decide, among other things, project-level disputes and challenges to the sufficiency of the environmental review process. These critical changes are contained in Senate Bill 434 (Bergeson) which CBIA strongly endorses. 

The strongest economic investment/growth manage­ment/resource protection package which the Legislature could adopt would blend the financing reforms con­tained in SB 929 wilh the planning, environmental pro­tection and regulatory streamlining proposals of SB 434.

Can the proposed legislation prove effective without including structural reforms that address governance issues? 

Lyon: Absolutely. The question seems to imply that a restructuring of our current system of government (and the decision-making process) may be necessary to achieve a workable growth management program. 

Government’s proper economic role lies in creating the climate for businesses to compete and thrive on their merits. We certainly do not need more government or more government agencies. The idea of consolidating certain existing regional agencies is not without merit and could very well produce positive effects. However, we do not need new forms of regional government.

Local governments must retain their land use powers and project approval authority. Land use and infra­structure funding decisions for individual projects should not be made in Sacramento or by some obscure regional body. These decisions, so fundamental to shaping the patterns and character of a community, must be made by locally elected officials. 

Booher: The SB 929 proposal starts the state down the road toward structural reforms of governance. But it recognizes that the process must be incremental. The first step is a requirement that existing regional agencies work together to integrate their existing regional plans into a coordinated regional strategy. Likewise, county­wide agencies are required to work together to integrate their activities into a coordinated economic development and growth management program. If these first steps do not prove to be effective, the supporters of SB 929 are prepared to advance stronger governance reforms. 

Is the land-use tiering system proposed in this package tantamount to a state plan and to the establishment of urban limit lines? 

Lyon: Yes on both counts. SB 929 requires the Gov­ernor to prepare a comprehensive State Conservation and Development Strategy. This strategy would have specific guidelines for state, regional, and local agencies as they go about determining which projects are worthy or unworthy of infrastructure invest­ment depending upon which rigid “tier” they fall into. 

It may, somewhat disingenuously, be argued that the tiers are for infra­structure investment priorities only, because they are a component part of the required Capital Improvement Plan and are not part of the “constitution” for growth and development. Irre­spective of the “spin” some may put on this issue or how it may be dressed up in disguise, a stated purpose of the tier system is to impose new planning criteria, including density standards and guidelines for “compact develop­ment” to achieve “phased growth.”

While those are conceptually laud­able ideas, they quickly become issues over which lawyers will rejoice and courts will be clogged with for years to come. The potential looms large for virtually every standard subdivision — probably the very type both you and I grew up in — to be challenged by anti-growthers on the basis that it isn’t “compact” or is out of “phase.”

Housing in the supply needed to accommodate our state’s growth (and at affordable prices) cannot be attained under such a restrictive system. Growth problems cannot be solved by drawing arbitrary lines on a map or by disguising them as land tiers. Market­-based approaches which give great weight to consumer preferences are the desirable means of establishing preferred growth patterns. 

Booher: The tiering system in SB 929 is not a land use tiering system. It is a system to guide public investment in infrastructure and natural resource preservation. 

The four tiers — urban revitaliza­tion areas, planned development areas, urban reserve areas, and resource conservation areas — are included in the local capital improvement pro­grams for the purpose of determining where limited infrastructure funds and conservation funds will be targeted. They do not dictate land use regula­tions. However, one would not expect local governments to finance develop­ment infrastructure where the general plan calls for open space. The tiers are guided by the general plan, not the other way around. 

Urban limit lines are boundaries around existing urban areas that de­fine limits for development. SB 929 does not prohibit this policy but nei­ther does it support such boundaries. The real issue is the form that future development patterns will take. Some builders want to continue the pattern of sprawl. The supporters of SB 929 believe we must move in the direction of more compact, mixed-use patterns. They believe sprawl is too environmentally and fiscally ineffi­cient to be sustained. 

Politically, does this proposal represent an opportunity for consensus among the state’s key interests on growth management issues? 

Booher: Not only does SB 929 represent an opportunity for consen­sus on growth management issues, it is the only opportunity for consensus. It is the only approach where the kind of support listed in the first answer is present. 

These groups are committed to collaborate further on appropriate regulatory reform measures. They are open to participation by others who agree to collaboration instead of tired rhetoric and ultimatums. No effective policy can enjoy support from everybody. But SB 929 is the kind of centrist approach that pre­sents the opportunity for broad-based collaboration on the critical issues relating to growth. The only alterna­tive to a collaborative approach is business-as-usual. I know of no one who thinks business-as-usual is ac­ceptable. Some elements of the building industry are unwilling to address environmental and social equity concerns. Consequently their preferred bill, SB 434, is opposed by interests with those concerns. 

Lyon: SB 929 may have frittered away the opportunity for consensus among key interests on growth man­agement by ignoring during the ne­gotiation process such important mainstream business and develop­ment groups as the California Chamber of Commerce, the Cali­fornia Manufacturers Association, the California Association of Real­tors, the California Business Prop­erties Association and the California Building Industry Association. 

Politically, the thin coalition of SB 929 supporters lacks the broad base of support necessary to achieve its goals. To achieve true consensus we must avoid “politicizing” the is­sue, and instead work with all the key interests, and work particularly closely with the Governor and his very capable Administration to de­velop a plan to make California a desirable and comfortable place to live and raise our children.