The Bay Area Alliance for Sustainable Communities is seeking the support of elected officials for the following legislative and regulatory changes aimed at supporting Smart Growth land use decision-making. Most broadly, these can be viewed as a combination of policies, incentives, and criteria, each of which addresses a fundamental aspect of planning in California that is in need of reform. The following concepts have achieved full agreement within the Bay Area Alliance’s Stakeholder Dialogue:

1. Stabilize local revenue through fiscal reform. Local governments that have greater control over their revenue are likely to make better land use decisions. Enable local governments to establish greater certainty over their revenue stream, and align that revenue with their responsibility to provide sufficient housing, community services, and public safety.

 

Strategy: Prospectively, return a greater share of property taxes to local jurisdictions, including exchanging sales tax for property tax with the assurance that jurisdictions will neither lose existing discretionary revenue nor restrict their ability to increase tax revenue in the future. Consider the same strategy with the same conditions for future new sources of revenue, such as the restoration of the Vehicle License Fee.

2. Reward sound land use planning. Local governments often aggressively compete for limited state infrastructure dollars. The State of California should support local Smart Growth planning and the projects that flow from those plans. The State’s adoption of higher standards for planning and building infrastructure can create new avenues for the public and private sectors to plan and build along Smart Growth principles.

Strategy A: Target a greater share of state competitive grants and other assistance for developing and implementing community plans and projects that respond to Smart Growth principles.

Example: Create priority eligibility for cities that adopt model Smart Growth policies in the award of state competitive grants for infrastructure, commercial and industrial development, or other economic development.

Strategy B: Target a greater share of Caltrans dollars for transportation projects that comply with local Smart Growth plans or respond to Smart Growth principles.

 

Example: The Metropolitan Transportation Commission’s Regional Transit Expansion Policy created financial and performance criteria by which transportation projects were evaluated for the 2002 Regional Transportation Plan. Among others, the criteria included "cost-effectiveness," "supportive land-use policies," and "system connectivity." The resulting matrix was used to "identify and prioritize projects," and informed MTC’s decision-making during the RTP process.

3. Create incentives that complement infill and refill development. Neighborhoods and local governments can develop compact infill housing if infrastructure dollars are more readily available for infrastructure improvements and community amenities.

Strategy: Reward local governments with infrastructure funds if they build higher-density housing close to transit.

Example: The Metropolitan Transportation Commission’s Housing Incentive Program is a regional example of exactly this concept. While it has faced complex challenges in tying financial rewards to bricks-and-mortar housing production, with additional funds the program could have a larger impact on the housing development pattern in the Bay Area. The Urban Land Institute’s proposed "Community Dividend" program is another example of this concept.

4. Lower the voter threshold for local tax and bond measures that finance balanced packages of Smart Growth infrastructure projects. Developing revenue streams that would jointly fund packages of Smart Growth infrastructure can be made easier by lowering the vote threshold required for their approval. Such packages would include designated amounts for infrastructure, transportation, housing, open space and recreation, all planned and built along strict Smart Growth principles.

Strategy: Two proposed bills, SCA 11 and ACA 14, as of 5/12/03, would lower the voter threshold below two-thirds for local bonds or special taxes for community infrastructure improvements. The reduced threshold would be available to local governments for taxes spent on a balanced package of investments in: (1) affordable housing, (2) community and neighborhood improvements, (3) open space and farmland, and (4) general infrastructure needs.

Example: Due to a voter initiative, now only 55% of voters need approve the issuance of general obligation bonds for school construction and modernization. Since the threshold for school construction was lowered, California has seen an increase in locally funded school construction. With a similar change in the financing of Smart Growth related infrastructure improvements, local governments can more readily create a financial mechanism to fund housing and related community amenities and services.

6. Study the results of streamlining the California Environmental Quality Act. The Bay Area Alliance wishes to see an overall increase in the amount of infill development, and state laws should enable, rather than hinder, that goal. Streamlining the California Environmental Quality Act (which can include expanding the categorical exemptions, exempting projects from certain parts of environmental review based on their location, mixture of uses, or density) is currently being debated as a way of catalyzing more infill development. The Bay Area Alliance encourages the State of California to study the results of past streamlining efforts in order to determine its impact on local infill development activity.

Example: A 2001 bill (AB 436 – Chan) exempted certain residential and mixed-use development projects in downtown Oakland from the CEQA requirements of examining project alternatives and studying cumulative and growth-inducing impacts. The projects had to be located in appropriate locations targeted for housing, meet minimum density requirements (40 units per acre), and be located within ½ mile of a transit station. The Bay Area Alliance supports studying the impact of this and other streamlining examples on development activity in the targeted areas.

7. Study the results of 2002 construction defect litigation reform. The Bay Area Alliance wishes to promote the production of higher-density, attached, for-sale housing – the type of housing that is most vulnerable to construction defect litigation. A reform bill passed in 2002 (SB 800 – Burton) defines "construction defect" and grants builders the right to repair a home when a construction defect is found before a lawsuit may be filed. The Bay Area Alliance supports a study of the effects of this reform as a step toward achieving our overall infill housing development goal.
8. Enact policy changes that will lead to an increase in housing production. The topic of how much growth the Bay Area should plan for is an ongoing matter of debate. However, the region is experiencing and will continue to experience a housing crisis unless policies are enacted that lead to an overall increase in housing production. The Bay Area Alliance encourages the State of California to host dialogues about policies that can accomplish this goal.
9. Establish greater flexibility in planning K-12 schools. The $13 billion school bond approved by voters in November 2002 included $100 million for flexibility in planning and developing joint facilities. The Bay Area Alliance supports greater flexibility in design – and in turn more efficient use of land in buildings – for schools in inner-ring and outer-ring communities.