PUTTING THE PIECES TOGETHER

$ Urban Land Institute

A Report from the ULI California Smart Growth Initiative’s Statewide Coordinating Committee

PUTTING THE PIECES TOGETHER

State Actions to Encourage Smart Growth Practices in California

ABOUT ULI–THE URBAN LAND INSTITUTEULI–the Urban Land Institute is a nonprofit education and research insti-tute that is supported by its members. Its mission is to provide leadershipin the use of land in order to enhance the total environment.

ULI sponsors education programs and forums to encourage an open,international exchange of ideas and sharing of experiences; initiatesresearch that anticipates emerging land use trends and issues and propos-es creative solutions based on that research; provides advisory services;and publishes a wide variety of materials to disseminate information onland use and development. Established in 1936, the Institute today hasmore than 17,000 members and associates from some 60 countries repre-senting the entire spectrum of the land use and development disciplines.

Richard M. RosanPresident

ULI PROJECT STAFF

ii ULI California Smart Growth Initiative

Rachelle L. LevittSenior Vice President,

Policy and PracticePublisher

Marta V. GoldsmithVice President, Land Use Policy

David O’Neill(formerly) Director, Land Use

Policy and Community Outreach

Gary BingerDirector, ULI California SmartGrowth Initiative

Deborah L. MyersonSenior Associate, Land Use Policy

Nancy H. StewartDirector, Book Program

Libby HowlandManuscript Editor

Betsy VanBuskirkArt Director

Meg BatdorffGraphic Designer

Diann Stanley-AustinDirector, Publishing Operations

Cover: Digital composite—puzzle image ©Getty Images; map image ©Map Resources.

Recommended bibliographic listing:ULI–the Urban Land Institute. Putting the Pieces Together: State Actions to Encourage SmartGrowth Practices in CaliforniaWashington, D.C.: ULI–the Urban Land Institute, 2002.

ULI Catalog Number: 672International Standard Book Number: 0-87420-911-0

©2002 by ULI–the Urban Land Institute1025 Thomas Jefferson Street, N.W.Suite 500 WestWashington, D.C. 20007-5201

Printed in the United States of America. All rights reserved. No part of this book may bereproduced in any form or by any means, electronic or mechanical, including photocopyingand recording, or by any information storage and retrieval system without written permis-sion of the publisher.

ACKNOWLEDGMENTSThe Urban Land Institute is grateful to the James Irvine Foundation, theBank of America, and the ULI Foundation for their key support for theULI California Smart Growth Initiative. ULI expresses its appreciation toCandace Skarlatos, senior vice president and director for environmentalinitiatives at the Bank of America, and Diana M. Williams, associate pro-gram officer in the Sustainable Community Program at the James IrvineFoundation, for their ongoing support and encouragement.

ULI also gratefully acknowledges the contributions to the ULI CaliforniaSmart Growth Initiative of the following participants in the ULI advisoryservices panel held in March 2001 in Coronado, California. (Their delib-erations resulted in a report, State Incentives and Regulatory Reforms to Promote Smart Growth in California, which is available at www.smartgrowthcalifornia.uli.org.)

Byron Koste (chair)DirectorUniversity of Colorado Real Estate CenterBoulder, Colorado

Elizabeth B. DavidsonDirectorMontgomery County (Maryland) Department of

Housing and Community AffairsRockville, Maryland

Robert T. DunphySenior Resident FellowULI–the Urban Land InstituteWashington, D.C.

James F. Durrett IIIExecutive DirectorULI Atlanta District CouncilAtlanta, Georgia

Natalie GochnourState Planning Coordinator and Deputy DirectorGovernor’s Office of Planning and BudgetSalt Lake City, Utah

Shane HopeManaging DirectorWashington State Growth Management ProgramSeattle, Washington

Douglas PorterPresidentGrowth Management InstituteChevy Chase, Maryland

PUTTING THE PIECES TOGETHER iii

Donald Priest(formerly) PresidentDominion Land Development CorporationRichmond, Virginia

Patricia E. SalkinDirectorGovernment Law Center of the Albany Law SchoolAlbany, New York

During the course of its deliberations, the Statewide CoordinatingCommittee called on the following experts for information and advice:

James CorlessCalifornia DirectorSurface Transportation Policy ProjectSan Francisco, California

John LandisChairDepartment of City and Regional Planning, University of California

at BerkeleyBerkeley, California

Stephen LevyDirector and Senior EconomistCenter for the Continuing Study of the California EconomyPalo Alto, California

Richard LyonSenior Legislative AdvocateCalifornia Building Industry AssociationSacramento, California

James MusbachManaging PrincipalEconomic and Planning SystemsBerkeley, California

Marianne O’MalleyPrincipal Fiscal and Policy Analyst and Legislative AnalystState of CaliforniaSacramento, California

Paul SedwaySedway and AssociatesSan Francisco, California

Fred SilvaSenior Adviser, Governmental RelationsPublic Policy Institute of CaliforniaSan Francisco, California

Al SokolowPublic Policy SpecialistUniversity of California Cooperative ExtensionDavis, California

iv ULI California Smart Growth Initiative

Tom SteinbachExecutive DirectorGreenbelt AllianceSan Francisco, California

Terrell WattPlanning ConsultantTerrell Watt and AssociatesSan Francisco, California

Tom WorthingtonPrincipalImpact Sciences Inc. Research AssociatesAgoura Hills, California

A number of university students assisted the deliberations of the State-wide Coordinating Committee by researching issues and developing supportive materials, including Kevin Aaron and Rachel Hiatt from theDepartment of City and Regional Planning at the University of Californiaat Berkeley; and Colette Alpen, Noel Bouche, Will Gibson, and ThomasMiller from the Urban Studies Program at San Francisco State University.

PUTTING THE PIECES TOGETHER v

CONTENTS

Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

The ULI California Smart Growth Initiative . . . . . . . . . . . . . . . . . . . . . . . . . 2

Growth Challenges in California . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Eight Principles of Smart Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

The Statewide Coordinating Committee’s Recommendations . . . . . . . . 10

Economic Incentive Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Regulatory Reform Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Next Steps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

vi ULI California Smart Growth Initiative

FOREWORD A growing consensus exists among leaders in California—from the busi-ness, environmental, academic, government, social equity, labor, andother arenas—that new development patterns are needed in order toaccommodate projected growth while preserving people’s quality of life.Development must be encouraged to locate in existing urbanized areas.New development in nonurbanized areas must be more compact, of amixed-use character, and served by public transit. Jobs and housing mustmove closer together. Open space and important natural features andenvironmental systems must be preserved. And in order to begin to dealwith regional issues and solve regional problems—such as traffic, envi-ronmental quality, and the economy—planning and infrastructureinvestments must be coordinated across jurisdictional boundaries.

Many barriers stand in the way of achieving these objectives. There arefiscal disincentives to interjurisdictional coordination. No state frame-work is in place to facilitate smart growth planning and development.Growth-induced problems are being compounded by insufficient fund-ing for transportation and other infrastructure. And various regulatoryobstacles and liability issues discourage smart development practices. Webelieve, however, that it is possible to remove many of these barriers bytaking a comprehensive approach, crafting intelligent incentives andreforms, and providing bold and decisive leadership at the state level.

The ULI California Smart Growth Initiative is an attempt by a broad crosssection of leaders in the state to seriously address California’s growthchallenges and find real, pragmatic, and effective solutions.

We feel that the work of the Statewide Coordinating Committee and ULIdistrict councils in California under the auspices of the ULI CaliforniaSmart Growth Initiative will make a positive contribution to the quality oflife of future generations of Californians.

Fritz GrupeCochairStatewide Coordinating Committee

Will RogersCochairStatewide Coordinating Committee

September 2002

PUTTING THE PIECES TOGETHER 1

The ULI California Smart Growth Initiative seeks to address growthchallenges in California by examining growth and developmenttrends, identifying barriers to smart growth, and making recom-

mendations for specific local, regional, and state actions that can advance a collaborative smart growth agenda. The project was launched inSeptember 2000 and is coordinated by ULI in collaboration with its fiveCalifornia district councils.

The project’s goals include the following:

� Encourage collaboration at the local, regional, and state levels amongkey stakeholders in the smart growth dialogue.

� Foster the active participation of the private development communityin local, regional, and statewide efforts to implement smart growthand sustainable development.

� Organize forums involving a diversity of community leaders whocould be expected to take the lead in developing and implementinglocal and regional smart growth strategies.

THE ULI CALIFORNIA SMART GROWTHINITIATIVE

To accommodate aprojected popula-tion of 57 millionby 2040—a 70 percent increase—California needsto concentratedevelopmentmore.

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2 ULI California Smart Growth Initiative


Committee CochairsGreenlaw “Fritz” GrupeChairman and CEOThe Grupe CompanyStockton, California

Will RogersPresidentThe Trust for Public LandSan Francisco, California

Committee MembersDavid A. AbelPresident and CEOABL Inc.Los Angeles, California

Angela Glover BlackwellPresidentPolicyLinkOakland, California

Nick BollmanPresidentCalifornia Center for

Regional LeadershipSan Francisco, California

Julie BornsteinDirectorCalifornia Housing and Community

Development DepartmentSacramento, California

Daryl J. CarterCochairmanCapri Capital LPIrvine, California

Gary CusumanoPresident and CEONewhall Land & Farming CompanyValencia, California

Elizabeth DeakinDirectorUniversity of California

Transportation CenterBerkeley, California

Tal Finney DirectorGovernor’s Office of Planning

and ResearchSacramento, California

Carol J. GalantePresidentBridge Housing CorporationSan Francisco, California

M. Arthur Gensler Jr.Chairman and CEOGenslerSan Francisco, California

John GioiaSupervisorContra Costa CountyEl Cerrito, California

Gail GoldbergPlanning DirectorCity of San DiegoSan Diego, California

Viola GonzalesExecutive DirectorLatino Issues ForumSan Francisco, California

Ralph E. GrossiPresidentAmerican Farmland TrustWashington, D.C.

(continued on following page)

Statewide Coordinating Committee of the ULI California Smart Growth Initiative

� Inform decision makers about the impediments and barriers to mak-ing smart growth work at the local, regional, and state levels; and sug-gest to them solutions.

The ULI California Smart Growth Initiative has been guided by a State-wide Coordinating Committee consisting of more than 30 respected lead-ers from the business, development, environmental, social justice, civic,and state and local government arenas committed to advancing a coordi-nated smart growth agenda. (See following list of committee members.)The diverse makeup of the committee—with each member holding astrong interest in seeing certain aspects of a comprehensive approachadvanced—resulted in recommendations that recognize the needs ofdiverse interests throughout the state.

The committee met formally in six full-day sessions between March 2001and June 2002 to identify key growth challenges facing the state, identifymajor barriers to smart growth policies and projects, and recommend aset of possible state actions to promote smart growth practices (as detailedin this report).

The ULI California Smart Growth Initiative has sponsored smart growthwork groups at the regional level, organized by ULI district councils inSan Francisco, San Diego, Orange County, and Los Angeles. These ses-sions have brought together leaders from the business and developmentcommunities; environmental, civic, and social justice communities; andthe public sector—leaders who are dedicated to advancing smart growthaction plans within their regions.


Carl GuardinoPresident and CEOSilicon Valley Manufacturing GroupSan Jose, California

William HauckPresidentCalifornia Business RoundtableSacramento, California

Thomas JonesExecutive DirectorCalifornia Futures NetworkSan Francisco, California

Bruce KaratzChairman and CEOKB HomeLos Angeles, California

James D. KlingbeilPresident and CEOAmerican Apartment CommunitiesSan Francisco, California

Mitchell B. MenzerPartnerO’Melveny & Myers LLPLos Angeles, California

Jerry MeralExecutive DirectorPlanning and Conservation LeagueSacramento, California

George S. NoltePresidentNolte Associates Inc.Sacramento, California

Bev PerryMayor Pro TemCity of BreaBrea, California

Stan RossSpecial ConsultantErnst & YoungLos Angeles, California

Lynn M. SedwayPresidentSedway Group,

a CB Richard Ellis CompanySan Francisco, California

Dan SilverCoordinatorEndangered Habitats LeagueWest Hollywood, California

Linda WongLAMNI/Development DirectorCommunity Development

Technology CenterLos Angeles, California

ULI District CouncilRepresentatives Richard M. GollisPrincipalThe Concord Group LLC Newport Beach, California

Mark R. KrollExecutive Vice PresidentSARES-REGIS Group of

Northern CaliforniaFoster City, California

Wayne RatkovichPresidentThe Ratkovich CompanyLos Angeles, California

Randall SaterManagerTeichert & Son Inc.Sacramento, California

Committee Member AlternatesCathy CreswellDeputy DirectorCalifornia Housing and Community

Development DepartmentSacramento, California

Larry GotliebVice President, Government and

Public AffairsKB HomeLos Angeles, California

Victor RubinResearch DirectorPolicyLinkOakland, California

Laura StuchinskyDirector, Transportation and Land UseSilicon Valley Manufacturing GroupSan Jose, California

Meeting FacilitatorHelen SpectorSpector and AssociatesOakland, California


California is projected to add 6 million new residents by 2010, 12million by 2020, and 24 million by 2040. And the state’s urbanizedareas are expanding outward rapidly. Distances between jobs and

housing are lengthening, meaning that Californians spend more timedriving and more money on transportation; housing production istrailing the demand for present and future housing; local infrastruc-ture is under increasing strain; and the state’s natural resources arebeing threatened.

To accommodate projected population growth without putting severestrain on the state’s resources and deteriorating the quality of life of itsresidents, California needs to concentrate development more. However,the state is moving in the opposite direction. Its most rapid growth(measured by the rate of population growth) is occurring in largelysuburban counties characterized by low-density development—such as Merced, Fresno, Sacramento, San Bernardino, and Riverside.

TRENDSCalifornia’s basic growth and development trends are as follows:

� Population is steadily increasing. The majority of this growth stems notfrom in-migration but from natural increases.

� Urban areas are expanding rapidly. They are spilling over into undevel-oped areas.

� New development is primarily at low densities and largely automobile-dependent.

� Employment locations are becoming increasingly decentralized andseparated from residential areas.

PROBLEMSThese trends pose a number of potential problems for the state’s resi-dents, economy, and environment, including the following:

� severe housing shortages;

� housing markets that are unaffordable to more than two-thirds of thestate’s residents;

� a projected 100 percent increase in vehicle-miles traveled and a 200percent increase in traffic congestion over the next 20 years;

GROWTH CHALLENGESIN CALIFORNIA

� growing concentrations of poverty in urban areas and wealth in subur-ban areas, caused in part by the lengthening distances between afford-able housing and jobs;

� the loss (or fragmentation) of thousands of acres of farmland annuallyto residential and commercial development (note: the Central Valleyalone is projected to lose 1 million farm acres by 2040);

� a loss of open space;

� deteriorated air and water quality from pollution exacerbated bysprawl; and

� declining economic competitiveness attributable to high levels of traf-fic congestion, expensive housing, and other quality-of-life issues.

BARRIERS TO SMART GROWTHSmart growth offers a way out of the growth dilemma for California; it is a strategy that would enable the state to develop in ways that are moreequitable, efficient, and economically sound. However, numerous struc-tural, political, and fiscal barriers impede the spread of smart growthpractices. Key among these barriers are the following:

Fiscal zoning. California’s local government finance system encourageslocalities to seek land uses and development projects that will pay (orgenerate) more taxes than they will require in government services.Under this system, which has come to be known as “fiscal zoning,” salestax–generating commercial uses consistently win out over housing,resulting in a serious imbalance between commercial and residentialdevelopment.

Neighborhood opposition to new development. Nearby residents andbusinesses frequently pressure local officials to modify or deny proposeddevelopments out of concern about density, traffic, loss of open space, ordesign incompatibility. The benefits of well-designed developments in


Traffic (vehicle-miles traveled) in thestate is projected to double and congestion to grow even more overthe next 20 years.

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terms of community livability and economic viability and the preserva-tion of open space are not widely known or understood.

Fragmented decision making. On the local level, piecemeal localizedplanning decisions, the lack of a comprehensive planning framework,and the failure to take regional impacts into account make for bad overallgrowth policy. At the state level, many agencies affect patterns of devel-opment and community livability, but there are few or no requirementsthat these agencies coordinate their plans.

Insufficient funding for infrastructure. Many local governments willface significant infrastructure deficits in the coming decades. Insufficientfunding makes it difficult for communities to upgrade infrastructure tosupport infill development and thus can discourage infill activity indeveloped urban areas.

Limited funding for planning. Planning for smart growth and livability isnot included in the planning budgets of many localities with budgetarychallenges. The state generally does not provide funding to localities forthis activity.

CEQA redundancies. The California Environmental Quality Act (CEQA)requires localities to evaluate the potential impacts of proposed plansand projects. The evaluation and approval processes that have evolved tocarry out this task contain multiple redundancies that create uncertainty,delays, and additional costs in the development process.

Brownfield development issues. The uncertainty and delays that oftencomplicate the development of brownfield sites discourage developers,lenders, and insurers from investing in these sites. Multiple federal, state,and local regulations under the authority of separate agencies constitutea major obstacle, as does the threat of liability in perpetuity for develop-ers of brownfield sites for any environmental hazards arising from thesite, regardless of the cause of the hazard.

Construction-defect litigation. The proliferation of construction-defectlawsuits brought against builders and developers by homeowner associa-tions has become a serious disincentive to the development of compact,attached housing. This litigation—coupled with a lack of clear standardsfor the repair and remediation of defects—has driven insurance carriersout of the market, made it prohibitively expensive for builders to obtainconstruction-defect insurance, and limited the production of townhousesand condominiums, which have been one of the most viable housingoptions for first-time homebuyers in California.


Smart growth is about ensuring that growth is accommodated inways that are economically sound, environmentally responsible,and supportive of community livability. It is about growth that

enhances quality of life. Smart growth seeks to remedy many of the prob-lems associated with unsmart growth—increasing traffic congestion, lackof affordable housing, jobs/housing imbalance (lack of housing wherejobs are located and lack of jobs where housing is located), loss of farm-land, and loss of open space and natural resources.

The following eight principles of smart growth should serve as a frame-work for smart growth at the state, regional, and local levels. They act asthe foundation for the committee’s recommendations for state initiativesto promote smart growth.

1. Preserve and enhance California’s quality of life. Accommodategrowth in ways that use the state’s natural and financial resources effi-ciently, enhance its economic competitiveness, and provide local govern-ments more certain and adequate funding.

2. Create viable and livable communities. Ensure that existing commu-nities remain or become vital and healthy places that provide opportuni-ties for all residents to live, work, recreate, obtain a good education, andraise a family.

3. Invest in transportation linked to efficient land uses. Strengthen thelinks between transportation funding decisions and smart growth prac-tices. Support smart growth practices with efficient transportation plan-ning and investment strategies.

4. Enhance housing opportunities. Support policies to increase the sup-ply and affordability of housing to meet the needs of California families.

5. Preserve open space, natural resources, and the environment. Asmuch as possible, locate new development in or adjacent to existingcommunities, so as to protect air and water quality, conserve wildlifehabitat and natural land features and systems, and provide green spacefor recreation and other amenities.

6. Preserve farmland. To the extent possible, avoid the conversion ofCalifornia’s prime agricultural land to other uses.


EIGHT PRINCIPLES OF SMART GROWTH

7. Address growth issues regionally. Foster collaboration among state,regional, and local governments to solve problems that are regional—andnot local—in nature.

8. Seek solutions at the grass roots. Educate and engage the communi-ty because grass-roots, community-centered processes and proceduresare essential elements of smart growth.


Smart growth isabout ensuringthat growth iseconomicallysound, envi-ronmentally responsible, and supportive of community livability.

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D rafting a comprehensive, workable smart growth agenda forCalifornia is a challenging task. The state’s size and regional diver-sity, entrenched political interests, rapid population growth, and

complex and poorly coordinated statutory framework all work againstany one-size-fits-all solution. But this task is necessary as well. Smartgrowth needs programs at the state level that can effectively addressgrowth and development challenges while respecting the diversity andautonomy of California localities.

While changes at the local and regional levels need to occur too, theStatewide Coordinating Committee focused its attention on what can bedone at the state level. Its recommendations result from careful delibera-tions. Among the criteria that the committee aimed at in drafting its state-level recommendations are the following:


THE STATEWIDE COORDINATING COMMITTEE’SRECOMMENDATIONS

Smart growth promotes the growth oflivable communities that provide oppor-tunities for all residents to live, work,recreate, obtain a good education, andraise a family.

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� The smart growth initiatives should be compelling as well as politicallyand economically viable.

� The recommendations should address problems that are not alreadybeing successfully addressed.

� The actions recommended should be meaningful in terms of theimpact they would have if implemented.

� The set of recommended programs should address the needs of a broadcross section of stakeholders and be able to mobilize their interest.

The recommendations made, it should be noted, are not antigrowth.Growth is inevitable, and the aim of these recommendations is to assurethat growth is beneficial rather than harmful to California residents, com-munities, and the economy. Nor do the recommendations remove neces-sary safeguards against growth for communities, residents, and the envi-ronment. But they do seek to avoid many unintended negative conse-quences of such safeguards. Finally, these recommendations will not bur-den developers and businesses with unnecessary restrictions. On thecontrary, they will provide more certainty in the development processand a context of equitable, healthy growth that will help the state retaincompetitive advantages and benefit its economy.

Each of the committee’s recommendations addresses a different aspect of the growth and development challenges California faces, but each alsoaddresses multiple needs. Together they form a comprehensive packagethat could be effective in securing a more sustainable future for California.The committee’s recommendations are listed in the box below anddescribed in detail in the following two sections of this report.


Recommended State Actions for Smart GrowthThe Statewide Coordinating Committee of the ULI California Smart Growth Initiative recommends thatstate leaders consider implementing the following incentives and regulatory reforms to advance smartgrowth in California.

Economic Incentives� Create a program—the Community Dividend Program—to encourage and reward communities for

integrating smart growth practices into the planning and development processes.

� Program transportation funds to promote smart growth.

� Authorize tax-increment financing for transit-oriented development.

� Provide fiscal incentives for housing.

Regulatory Reforms� Revise regulations governing environmental review and local planning to encourage smart growth.

� Take steps to limit the impact of construction-defect litigation on the production of attached housing.

� Emphasize community building in school construction and remodeling programs.

� Eliminate barriers to the development of brownfields.

The committee recommends that state leaders consider implement-ing the following economic incentives, detailed below, to advancesmart growth in California:

� Community dividend program.

� Smart growth transportation funds.

� Tax-increment financing for transit-oriented development.

� Fiscal incentives for housing.

CREATE A COMMUNITY DIVIDEND PROGRAMThe proposed Community Dividend Program encourages and rewardslocal governments with a voluntary financial incentive—a dividend—forintegrating smart growth practices into their planning and developmentprocesses. The program has two parts: 1) grants and forgivable loans forplanning activities that help encourage smart growth, and 2) the award-ing of priority status for future infrastructure funds to localities that meetdefined smart growth criteria.

ECONOMIC INCENTIVERECOMMENDATIONS

The UptownDistrict neardowntown San Diego offers a mix of retail and recreationalamenities reminiscent ofa small town.

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The program’s goals include improved growth patterns throughout thestate, the provision of needed planning funds to localities, the more effi-cient use of state infrastructure funds, the provision of infrastructure thatsupports smart growth projects, and support for localities that accommo-date a share of the growth that is projected to occur in the state andgrowing regions.

PLANNING LOANS AND GRANTSThe state’s provision of grants and forgivable loans for up-front land useplanning and California Environmental Quality Act (CEQA) documenta-tion can encourage cities and counties to voluntarily seek to advancesmart growth objectives. Planning assistance would be offered to commu-nities for the development of integrated planning strategies incorporatingsmart growth objectives—for example, a diversity of housing choices, anexpansion of travel-mode choices, infill development, downtown revital-ization, transit-oriented development, a mix of land uses, open-spacepreservation, the protection of natural resources, and certainty in thedevelopment review process. Specific criteria for providing CommunityDividend Program planning assistance will need to be developed.

PRIORITY INFRASTRUCTURE FUNDINGThe state’s provision of priority infrastructure funding for cities and coun-ties that voluntarily implement smart growth strategies would encouragelocalities to practice smart growth. The Community Dividend Programwould involve the redesign of the state’s allocation systems for fundingtransportation and other infrastructure, economic development, openspace acquisition (including recreational land), and the preservation ofagricultural land and environmentally important land. Specific criteriafor providing Community Dividend Program planning assistance will needto be developed (see feature box on page 14 for some suggested criteria.)

IMPLEMENTATIONIn order to establish an effective Community Dividend Program, stateadministrative and legislative leaders need to take the following actions:

� Establish a pool of funds to support the planning assistance aspect ofthe program.

� Direct that the policies of all state agencies involved in funding infra-structure—including agencies that fund transportation improvements,sewer and water facilities, open-space acquisition and natural resourcepreservation, and economic development—incorporate criteria to sup-port the priority infrastructure funding aspect of the program.

� Link new funding initiatives for public facilities, including bond acts,to the objectives of this program.

The planning and infrastructure funds made available under this pro-gram could be particularly valuable in encouraging the integrated plan-ning that the Statewide Coordinating Committee calls for in its recom-mendation concerning the reform of environmental review and planninglaw regulations (see page 18).


PROGRAM TRANSPORTATION FUNDS TO PROMOTESMART GROWTHMetropolitan planning organizations and state transportation agenciesgenerally program a significant amount of state and federal transporta-tion funds each year. The California Department of Transportation(Caltrans) has recently directed some of its resources to local smartgrowth planning activities. It should carry that initiative further.

Caltrans can contribute to smart growth by undertaking the followingactions:

� Create a pool of funds to be made available to localities on a competi-tive basis for community planning and capital improvements that 1)promote mixed-use development near existing or future rail stations,2) concentrate growth along bus corridors, and 3) improve the regionaljobs/housing balance.


Any city or county opting to participatein the planning assistance or the priorityinfrastructure funding portion of theCommunity Dividend Program must sup-port specific smart growth practices andpolicies. Actual program eligibility criteriaand the process for determining eligibili-ty for priority funding should be estab-lished through a collaborative effortinvolving state and local governmentofficials.

Illustrative local actions that would betaken in order to receive incentive fund-ing under the Community DividendProgram are suggested here for consider-ation by advocates or legislators who areinterested in seeing this recommendationimplemented. The program’s action crite-ria should be refined and prioritized asthe program is developed.

Support for the Development ofThe Kinds of Housing Needed inThe CommunityIn support of the satisfaction of diversehousing demand, the locality:

� is planning to meet or exceed itsshare of projected regional housingneeds;

� encourages higher-density develop-ment in areas close to transit, employ-ment centers, and community facili-ties through location-specific densitybonuses (in addition to the state-man-dated bonuses) or similar mechanisms;

� gives priority to projects that includeaffordable or mixed-income housing;or

� does not require conditional use per-mits for proposed infill housing proj-ects that meet zoning requirements.

The Promotion of Travel ChoicesIn support of the expansion of travel-mode choices, the locality:

� establishes residential densities withinwalking distance of bus stations thatare supportive of local-bus service;

� adopts street design standards—suchas continuous sidewalks, on-streetparking, crosswalks, traffic calming,and landscaping—that give priority to

pedestrians and encourage walking,especially in residential and mixed-useareas; or

� relaxes level-of-service standards forstreets in walkable neighborhoodswith access to transit, and in neigh-borhoods targeted for infill develop-ment or redevelopment.

The Promotion of InfillDevelopmentIn support of infill development, thelocality:

� inventories its vacant and underusedurban land and prepares specificreuse strategies for various properties,which can include surplus or aban-

Illustrative Criteria for Smart Growth Dividends

The 14-acre UptownDistrict has beenredeveloped with an average housingdensity of 43 unitsper acre.

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� Provide financial and technical support to two recently establishedstate programs administered by the Department of Housing andCommunity Development, the Inter-Regional Partnership Grants forJobs-Housing Balance, and the Jobs-Housing Balance Incentive Grants.

� Integrate smart growth funding strategies into the allocation of federaland state funds for transportation planning and capital facilitiesthroughout California.

� Encourage regional organizations that allocate state transportation dol-lars to include smart growth considerations in their funding criteria.

Ideally, Caltrans could use criteria similar to those suggested for smartgrowth dividends (see box above) to prioritize its planning and capitalfacilities funding. It would be desirable to reprogram certain SurfaceTransportation Improvement Program (STIP) funds to emphasize smartgrowth plans and projects, but Caltrans would have to take care to notviolate existing funding commitments.


doned institutional facilities as well asunderperforming or abandoned com-mercial and industrial sites;

� determines priority areas for infillgrowth and initiates funding toupgrade infrastructure—water andsewer systems, lighting, and transit,for example—in priority infill areas;

� allows development rights purchasedfrom landowners in urban fringeareas that are targeted for open-space preservation to be used in infilllocations to develop at greater thanzoned densities (up to a locally pre-scribed maximum density);

� collaborates with agencies affected byinfill development or redevelopment,including transportation agencies,school districts, and various otherservice providers; or

� streamlines the permit process for thereuse of underused land.

The Encouragement of Activity inDowntown and around TransitFacilities In support of increased activity in down-town and around transit stations, thelocality:

� establishes minimum density require-ments for new residential and com-mercial development within walkingdistance (one-quarter mile) of com-muter-rail stations or bus-transit hubs;

� permits a mix of uses and the highestappropriate intensity of residential

and commercial use in downtownand transit-station areas; or

� adopts development regulations andestablishes funding programs thatencourage the location of communi-ty-serving facilities—such as child-carecenters, libraries and other civic build-ings, social services centers, seniorshousing, and medical facilities—indowntown and transit-accessibleareas.

The Encouragement of Mixed UsesIn support of a mix of uses within com-munities, the locality:

� plans for a complementary mix ofland uses, but not necessarily on everysite;

� permits residential uses in all zones(except industrial zones), convenienceretail uses within employment areas,and neighborhood-serving commer-cial uses in residential zones;

� relaxes parking requirements orencourages shared parking for resi-dential development above or adja-cent to office and retail uses; or

� programs school sites as centers ofcommunity activity, with a particularfocus on the joint use of facilities.

The Preservation of Open SpaceAnd Natural ResourcesIn support of the preservation of openspace and the protection of naturalresources, the locality:

� identifies agricultural land and natu-ral features—wetlands, wildlife habi-tat, waterways, and so forth—thatshould be protected, and encouragesthe protection of identified land andfeatures;

� provides parks and open space inbuilt-up and revitalizing communities;

� identifies priority sites for futureparks, and develops a financial strate-gy for acquiring and maintainingthese areas;

� establishes policies promoting theclustering of development on lesssensitive land and the avoidance ofdevelopment on more sensitive land;or

� provides dedicated funding for open-space acquisition and agriculturalland preservation.

The Provision of Certainty in theDevelopment Review ProcessIn support of providing more certainty inthe development review process, thelocality:

� provides a limited, more streamlinedenvironmental review process fordevelopment projects that conform tothe mitigation measures establishedin thorough front-end environmentalassessments and clearances; or

� establishes standards that assure thatmultifamily or mixed-use develop-ment located near transit will not beconstrained by parking requirements.

AUTHORIZE TAX-INCREMENT FINANCING FORTRANSIT-ORIENTED DEVELOPMENTUnder California redevelopment law, local redevelopment agencies areauthorized to use tax-increment financing (TIF) together with landassembly powers to achieve redevelopment objectives in areas deter-mined to be blighted. The state should authorize localities to use TIFpowers also in nonblighted areas near rail facilities and along major buscorridors to achieve transit-oriented development (TOD) objectives.

The result of successful TOD can be vibrant, mixed-use communities andpedestrian-friendly town centers with improved access to public spacesand mass transit; enhanced property values; and the prevention of blightin at-risk areas.

California should enact legislation allowing localities to use TIF aroundmajor bus stops or rail-transit stations that conform to specified criteria.TIF would be available for use within one-quarter mile of stops or sta-tions. The criteria for use of this tool would include minimum peak peri-od ridership on the transit route, as well as assurances that:

� the area is predominantly urban;

� critical county and other services dependent on property tax growthare protected;

� the hoped-for development would not reasonably be expected tooccur through private enterprise or government action, or both, with-out tax-increment financing assistance;

� density standards within TIF areas are sufficiently high, parkingrequirements are sufficiently reduced, and a mix of housing types ispermitted;

� a variety of nonresidential land uses, including transit-oriented retailand commercial development and civic uses such as daycare andlibraries, are allowed within the TIF area; and

� sufficient affordable housing is included.


A market-driven development strategy in Brea (30 miles east of downtown LosAngeles) has encouraged pedestrian and bicycle travel and retail/residentialmixed-use projects in this city of 35,500people.

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PROVIDE FISCAL INCENTIVES FOR HOUSINGThe reliance of local governments in California on sales taxes encouragesthem to approve proposed commercial development and discouragesthem from approving (or promoting) sufficient residential development.This incentive structure needs changing.

Fiscal incentives for local government approval of proposed affordablehousing and other housing projects conforming to smart growth prac-tices are needed. Even though the state currently faces fiscal limitations,incentives that would stimulate the production of needed housing war-rant careful consideration, because such housing would provide signifi-cant long-term benefits to the state’s economy. Certain incentives couldbe used in connection with a regional tax-sharing strategy. The stateshould consider the adoption of three (not mutually exclusive) possiblefiscal incentive strategies:

� Dedicate a portion of the growth in locally generated property or salestaxes to encourage the production of housing as well as transit-orienteddevelopment and to provide parks, open space, and other infrastructure.

� Dedicate a portion of the property tax increment from specific smartgrowth projects or types of projects to support local housing and othercommunity needs. For example, set aside a portion of the property taxgrowth from transit-oriented developments for use by local govern-ments in promoting housing and providing needed infrastructure inthe tax-increment district or nearby areas.

� Permit city/county voluntary agreements to provide for an exchangeof a portion of the city’s sales tax revenue for a portion of the county’sproperty tax. The city would collect a larger share (and the county asmaller share) of property taxes on new housing development leviedin the city and the county would levy a portion of the sales tax in thecity. In the first year, the transaction would be revenue neutral. Overtime, however, the city’s revenue base would come to depend more ontaxes on residential properties. Thus, this tax-exchange program wouldreduce the city’s motivation to approve an overabundance of commer-cial development and incen-tivize the production of housing.The optimum location for tax-exchange programs would becounties in which most urban-ization is taking place withincity boundaries and the coun-ties are not seeking urban devel-opment in unincorporatedareas.

Doe Mill’s 160 single-family and multi-family homes on a 20-acre site in Chicoare being developed at approximatelytwice the density of new housing inother parts of the community. The proj-ect has received strong support fromneighbors.

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The committee recommends that state leaders consider implement-ing the following regulatory reforms, detailed below, to advancesmart growth in California:

� Revise environmental and planning regulations.

� Address construction-defect litigation.

� Emphasize community building in school construction.

� Eliminate barriers to brownfield development.

REVISE REGULATIONS GOVERNINGENVIRONMENTAL REVIEW AND LOCAL PLANNING Note: In the course of discussing regulatory reform related to the CaliforniaEnvironmental Quality Act (CEQA) and the role of such reform in effectiveland use planning—a complicated and controversial issue that leaders inthe state are seeking to address—the Statewide Coordinating Committeemade progress in formulating certain approaches. However, not all com-mittee members agree with all of the conclusions and recommendationsprovided here on this issue. They are provided to stimulate further discus-sion. The committee recognizes that a much more broadly based dialoguewill be necessary to develop final legislative proposals on the issue ofCEQA reform.

Two state laws guide development and conservation activities in California:the general plan law and the California Environmental Quality Act (CEQA).These laws are not strongly coordinated, nor are they effective in promot-ing smart growth. The state should seek to revise these two regulatory pro-grams to achieve three objectives: 1) improve the coordination betweenlocal land use planning and environmental regulations, 2) improve theability of local governments to preserve important wildlife habitats andother natural features, and 3) reduce barriers to smart growth erected bythese laws.

General plan law requires localities to adopt long-range plans, goals,objectives, and policies that address development and conservationissues, but fails to require them to specify the means for achieving thegoals and objectives or for implementing the policies. Also, general planlaw neither requires nor encourages localities to enact or pursue strate-gies consistent with smart growth.

CEQA requires localities to evaluate the potential environmental effectsof proposed plans and projects. Projects pass through multiple—and fre-


REGULATORY REFORMRECOMMENDATIONS

quently duplicative—stages of review that unnecessarily lengthen andcomplicate the approval process. Furthermore, CEQA is often adminis-tered by local agencies in a way that lowers planned densities and pushesdevelopment out to undeveloped areas.

Ideally, CEQA and the general plan law should be integrated planningtools that work together to protect environmental resources and openspace and promote smart development. In reality, the laws are imple-mented in ways that impede smart growth. These two regulatory programsshould be revised to focus on the accomplishment of three importantsmart growth goals: 1) infill development, 2) the management of urbandevelopment in undeveloped and developing areas, and 3) improvedopportunities for the kinds of residential development needed byCalifornia residents.

� For infill development proposals, institute a planning process that pro-vides for expedited environmental review under CEQA and greatercertainty in the approval process for qualifying projects.

� For development in unincorporated areas and expanding incorporat-ed areas, institute a smart growth planning process that protects openspace, identifies areas for future development, and encourages bal-anced, mixed-use developments.

� For enhancing opportunities for the kinds of residential developmentneeded by Californians, encourage local governments to prepare infillplans or inventories as part of the state’s Housing Element law.

To encourage these actions, the state should offer financial incentivesand support for planning and infrastructure like that described for theCommunity Dividend Program, and it should provide CEQA relief as well.

Developed on the site of a formerregional shopping center in the heart of downtown Pasadena, Paseo Coloradois a mixed-use urban village with morethan 500,000 square feet of retail devel-opment and 387 apartment homes.

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FOR INFILL DEVELOPMENTWhile CEQA offers important environmental safeguards, it also caninhibit infill development. The state should streamline environmentalreview for urban infill projects in order to promote infill development inurbanized areas (and thereby better protect the environment).

The first step in a streamlined review would be for a lead agency to pre-pare an infill-focused environmental impact report (EIR) for any qualifiedproject that will need an EIR. (Projects that do not receive a negativeenvironmental declaration or are not otherwise exempt from CEQA needEIRs.) To qualify for an infill-focused EIR, projects should meet specifiedcriteria to ensure that they are consistent with smart growth objectives(see feature box below for some illustrative criteria).

The infill-focused EIR would address environmental standards up-frontin the planning process and would certify that the project meets smartgrowth criteria. Thus, project alternatives, growth-inducing effects, andcumulative effects would not have to be addressed.

The infill-focused EIR would need to address the following issues: park-ing, traffic, community design, and open space. It could provide clearstandards and mitigation measures for these project elements.

The infill-focused EIR would be circulated for comments for a period ofnot more than 30 days, and be subject to limited judicial review (expedit-ed review and a limited standard of judicial review including judicial def-erence to the lead agency’s decision) and a 30-day statute of limitationsfor challenges.

FOR THE MANAGEMENT OF URBAN DEVELOPMENT INUNDEVELOPED AND DEVELOPING AREASThe state should seek to strike a balance between environmental conser-vation and protection on the one hand and development in designatedsmart growth areas on the other by encouraging more comprehensive

To qualify for streamlined environmentalreview, proposed infill developmentswould have to meet specified criteria toassure that they are consistent with smartgrowth objectives. The following criteriaare illustrative of what the state could useto determine the eligibility of a project.

� The project is located within anurbanized area—either within citylimits or within designated smartgrowth boundaries in an unincorpo-rated area—and is substantially sur-rounded by existing urban uses.

� The project is consistent with the localgeneral plan, and the EIR for theapplicable general plan was certifiedwithin ten years of the date of theproject application.

� The project is consistent with theapplicable zoning ordinance, andwith any applicable specific plan, localcoastal program regulations, andother applicable regulations.

� The project can be adequately servedby utilities.

� The project site has no value as habi-tat for endangered, rare, or threat-ened species.

� The project site poses no significanthealth hazards to future occupants.

� The project is within a specified dis-tance of a public transportation nodeor system.

� The project will improve the regionaljobs/housing balance.

� The project’s density is at least 20dwelling units per acre or is equiva-lent to at least 150 percent of the sur-rounding density, whichever is feasi-ble.

� The project incorporates adoptedlocal or regional mitigation require-ments—such as traffic or transit fees,water quality measures, and open-space fees.

� The locality has a certified housingelement and residential uses wereconsidered.

Illustrative Criteria for Infill-Focused EIRs


approaches to planning on the part of cities and counties, which wouldsupport smart growth practices by providing greater certainty in thedevelopment process. Initial implementation of a comprehensive plan-ning initiative could occur on a voluntary or pilot basis. The initiativecould involve—singly or in combination—1) new county/city planningefforts and 2) extension of the LAFCO (Local Agency Formation Commis-sion) process to address proposed expansions of urban development andthe establishment of new communities.

County/City Comprehensive Planning. Interested cities and countiescould draft 20-year comprehensive plans that would provide all stakehold-ers in the development process with more reliable information on regula-tory and investment trends. Counties should undertake such planningefforts in close collaboration with affected cities and property owners.

Such plans would designate areas in which growth will be fostered bypublic policies and public investment and areas in which the conserva-tion of appropriate open space, critical habitat, and prime agriculturallands will be fostered by public policies and investment. Alternatively,they would designate certain areas in which growth can occur and cer-tain other areas that will not be urbanized.

Such plans and their supporting EIRs should be reviewed and revised ona periodic basis—every five or ten years—to account for revised growthprojections and changing conditions.

Planners would use state and regional population and employment fore-casts to determine the amount of growth that should be planned for,while also taking into account how much of the forecasted growth can be practically and feasibly accommodated through infill development inurbanized areas based on best practices, maximum feasibility, and otherfactors (including how much infill development actually occurs in theplanning area in an average year).

Localities participating in long-term comprehensive planning would des-ignate smart growth areas in which development must meet defined cri-teria (for example, be of a minimum density, feature pedestrian-orienteddesign, contribute to the regional jobs/housing balance, provide transitaccessibility, provide parks and open space, and respond to certain miti-gation requirements). In determining the location of smart growth areas,planners should give consideration to the presence of prime agriculturalland or critical habitat and ascertain whether candidate areas are part ofa conservation plan approved by the state.

Long-range plans must be in full compliance with CEQA under currentrules. (That is, they must receive EIR certification.) Once a plan’s EIR iscertified, no CEQA litigation would be permitted for conforming devel-opment proposed within designated smart growth areas. This CEQAincentive will provide greater certainty in the development process andencourage private investment and development in fully planned smartgrowth areas.

Extension of LAFCO Process. Managing urban development in rural andnewly urbanizing areas could be accomplished also through extension ofthe Local Agency Formation Commission (LAFCO) process. Smart growth


Located 30 miles north of downtown Los Angeles in the Santa Clarita Valley,Valencia Town Center contains a widemix of uses, including office, hotel, resi-dential, retail, and entertainment. For the occupants of the development’s 560apartments and of another 5,000 attachedand detached residences nearby, thetown center’s many destinations are easily accessible by walking or bicycling.

The city of Sacramento’s RedevelopmentAgency provided a $1.2 million loan tothe developer of Metro Square to build45 single-family homes on a 2.2-acre infillsite in the Midtown neighborhood,which reduced project costs and keptsale prices at an affordable level.

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criteria—“factors of consideration” in LAFCO’s terminology—could bedeveloped and followed for all annexations. Furthermore, the LAFCOreview process could be applied to proposed major expansions of urbandevelopment and the proposed establishment of new communities inunincorporated areas. Factors of consideration could include smartgrowth standards and a determination—based on an infill-site inventory or infill development plan (see next section)—that the supply of feasibleinfill sites is inadequate to meet projected growth demands.

FOR HOUSING PRODUCTIONLocal governments should be encouraged to take an inventory of infillsites or prepare an infill plan as part of the state Housing Element law.And a CEQA exemption should be granted to qualifying infill projects incities and counties with an adopted infill plan that was developed in fullcompliance with CEQA.

A qualifying infill plan should cover the following bases:

� identify housing production goals for infill development;

� identify all potential infill sites (including vacant and underused prop-erty, reusable buildings, and brownfield parcels);


� suggest how barriers to infill development can be removed;

� provide incentives for infill development;

� specify minimum requirements for infill projects;

� report annually on the amount of infill development occurring;

� adjust annually the forecast for infill development; and

� establish strategies by which the locality can achieve its fair share ofhousing needed in the region.

TAKE STEPS TO LIMIT THE IMPACT OFCONSTRUCTION-DEFECT LITIGATION ON THE PRODUCTION OF ATTACHED HOUSING The production of attached housing—condominiums and townhouses—is the most economical means of providing more homeownership oppor-tunities for California residents and particularly for first-time homebuy-ers. But the production of attached housing in the state has fallen dra-matically in recent years, from 19,000 units in 1994 to 6,000 units in 2001.

The risk of construction-defect litigation is a major factor in this produc-tion drop-off. The high probability of being sued for construction defectshas made it difficult for builders to obtain construction-defect insurance,which is available only at extraordinary prices. Most insurers and buildershave been driven out of the attached-housing market. Many design pro-fessionals as well design only a limited number of attached houses if any,due to the risk of construction-defect litigation.

Regulatory reform that encourages the construction of higher-density,attached, for sale housing is needed to achieve the objectives of smartgrowth in any meaningful way. In the absence of appropriate reforms, thehomeownership rate in California will likely remain the second lowest inthe nation.

Redress should be available to homeowners when builder negligencecauses construction defects that could result in physical injury or proper-ty damage. However, the nature of construction defects varies widely andthe law provides no guidance for distinguishing minor cosmetic or aes-thetic defects from defects that threaten physical harm or major propertydamage. Furthermore, under the current system builders have no oppor-tunity to remedy defects prior to litigation, and homeowners receive littleassistance in evaluating the source and significance of defects and obtain-ing remedy short of a costly and lengthy legal process.

The state should devise a strategy for resolving construction-defect dis-putes that both protects the rights of homeowners and encouragesbuilders to produce well-designed, high-quality attached housing.Establishment of some of the following remedies and conditions could beincluded in this strategy:

� the right of the builder to inspect and repair defects prior to the filingof litigation;


� a contract between the builder and the original homebuyer (and anysubsequent homebuyers) providing full coverage of the cost to repairconstruction defects;

� a fair and rapid out-of-court dispute resolution system to resolve dis-agreements and provide for repairs deemed legitimate;

� independent third-party inspection and certification of construction-defect repairs;

� maintenance standards for homeowner associations (to reduce theincidence of building problems resulting from improper maintenanceor neglect);

� construction-defect definitions and standards developed specificallyfor affordable attached housing;

� limits on other tort remedies (punitive damages) in defect litigation,except in the most egregious cases;

� insurance products that protect all design professionals and contrac-tors associated with the project;

� a state insurance pool covering construction-defect risks; and

� the encouragement of higher standards of homebuilding.

The state legislature, the governor, and the attorney general should con-sider establishment of a commission or task force to bring togetherbuilders, insurers, trial attorneys, public officials, and other interestedparties for the purpose of finding ways of making construction-defect liti-gation less of an impediment to the production of attached housing.


The Crossings, an18-acre pedestrian-friendly neighbor-hood in MountainView (30 milessouth of SanFrancisco), wasdeveloped on thesite of a failedauto-orientedshopping center. It incorporatesretail uses and amix of housing—townhouses,apartments, andsingle-familyhouses—including15 percent afford-able units.

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School construction projects provide opportunities for neighborhood revitalization and for the inclusion of community-based educational and recreational facilities.

EMPHASIZE COMMUNITY BUILDING IN SCHOOLCONSTRUCTION AND REMODELINGSchool infrastructure needs statewide are estimated to require $40 billionof spending. The state is now spending significant amounts of school-bond funds for modernizing and building schools, and the state legisla-ture is considering a new $25 billion bond program for K–12 schools.

School construction projects offer smart growth opportunities. Land useefficiency can be increased by programming multiple uses—museums,libraries and other community facilities, parks—for school properties.School facilities can serve as community anchors by providing a varietyof uses and functions extending beyond the hours they are typically usedfor educational purposes. School construction in developed urban areasprovides redevelopment opportunities and expanded educational andrecreational opportunities.

However, most school construction and modernization projects tend tobe planned without community collaboration and without considerationof joint-use opportunities. Also, current state rules favor large schools onlarge sites, which often makes it difficult for urban school districts tobuild new schools and diminishes opportunities for community buildingby isolating schools from neighborhoods, necessitating more auto usage,and increasing commute times for teachers and students. Furthermore,local school districts tend to view joint use as an unwanted complicationto the already challenging process of designing, funding, and construct-ing schools. In planning school projects, local school districts are notincentivized to consider community policies and goals and other com-munity-planning factors.

The state should work to assure that funds associated with state schoolbonds are awarded in ways that encourage sound community planning,

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the joint use of school facilities, and better and more efficient land use.School facilities should serve a variety of community needs; and schoolsshould act in partnership with a wide array of public, civic, and privateorganizations to accommodate community needs. Joint use is a key tomaking K–12 schools the centers of their neighborhoods. Joint-use devel-opment accommodating direct access to community uses—like libraries,gymnasiums, auditoriums, health clinics, athletic fields, and performingarts space—requires smarter designs for new and renovated schools.

To emphasize community building in school construction projects, thestate should 1) rank funding applications based on smart growth criteria,2) reduce barriers to smarter school design, and 3) directly fund theimplementation of model projects.

Using the State Infrastructure Bank scoring process as a model, the boardthat allocates state K–12 school funds should rank applications for schoolconstruction funds on a scale that gives a majority of points to suchsmart growth factors as the following:

� The project provides for the joint use of school facilities with nonprofitor public agencies.

� The design and location minimize automobile trips and commutetimes for students, teachers, and parents.

� The site is of the minimum size needed for meeting student spaceneeds. (The Department of Education currently accepts a number ofstrategies for minimizing site sizes, including multistory schools, thejoint use of facilities, the use of off-site facilities, structured parking,rooftop play areas, and shared fitness and athletic facilities.)

� The project involves the redevelopment of underused urban land orthe adaptive use of obsolete buildings.

� The project protects agricultural land and open space.

The state should reform its funding procedures, revise its school con-struction standards, and otherwise work to remove barriers to the jointuse of K–12 facilities and to the design and programming of neighbor-hood-serving schools. For example, the state should revise the minimumacreage requirements for school sites and the building and constructioncode requirements for school renovations.

Finally, the state should set aside a small portion of its school-bond fund-ing to plan and implement joint-use projects and model school designand construction projects that are based on smart growth principles ofcommunity planning.

ELIMINATE BARRIERS TO THE DEVELOPMENT OFBROWNFIELDSAbandoned, idled, underused, and often contaminated industrial andcommercial sites in urban, suburban, and rural areas offer significantopportunities to accommodate housing and jobs. In urbanized areas, thedevelopment of brownfields can strengthen the tax base. Development


on California brownfields is presently discouraged for a variety of rea-sons, including the state’s uniquely complicated regulatory structure.

Multiple federal, state, and local agencies exercise overlapping jurisdic-tion over brownfield cleanup and development in California. The appli-cable procedural and legal requirements of the different oversight agen-cies exhibit substantial differences. The state Department of ToxicSubstances operates a program modeled on the federal Superfund pro-gram that is targeted to assure cleanup of the most complicated andcontroversial properties. The regional water quality control boards haveestablished somewhat more flexible procedures for brownfield cleanup.The brownfield oversight requirements of local agencies—includinghealth departments, fire departments, and redevelopment agencies—arevaried and broad, contained sometimes in relatively informal memoran-dums of understanding and sometimes in detailed ordinances.

Each involved public agency establishes its own cleanup standards. De-pending on the standards that apply, cleanup schedules and costs canvary dramatically. The maze of laws and requirements that apply to mostbrownfield projects can be daunting; and compliance with these laws andrequirements still does not relieve the developer—and in some cases thelocal agency—from significant long-term liability. Moving through thecleanup process and gaining the required approvals is time-consuming.Often, developers must hire specialists simply to understand what isrequired.

To promote the cleanup and reuse of brownfields, the state should estab-lish a multifaceted and coordinated program that provides clear anddefinitive guidance on brownfields development. It would probably beadvisable to consolidate brownfields oversight under one roof by naminga single lead brownfields agency or coordinating agency. At a minimum,the state should provide an official guide to California’s brownfields regu-latory maze.

Also, state legislation should be aligned with the federal BrownfieldsRevitalization and Environmental Restoration Act (2002) to eliminateconflicting or redundant regulations and clarify liabilities and require-ments for the development of brownfields.


EmeryStationPlaza, a mixed-use developmentadjacent to theEmeryville AmtrakStation in the SanFrancisco Bay area,includes a multi-modal transit cen-ter, offices, retailuses, and housing.

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The ULI California Smart Growth Initiative’s Statewide CoordinatingCommittee’s recommendations aim to identify priority areas wherestate actions, including incentive programs and regulatory reforms,

could significantly contribute to smart growth. There is a growing con-sensus in California about the need for smart growth, and this bandwag-on offers an opportunity to effect real change, to make key changes inlongstanding growth patterns—and thus address the problems associat-ed with those growth patterns.

The implementation of these smart growth recommendations will helpto make California a place where—20 to 40 years in the future:

� activity-filled cities thrive;

� there is a workable balance of compact, efficient, transit-served com-munities and low-density, suburban developments;

� housing at all prices is in healthy supply;

� jobs, housing, and other uses are located near one another—and longcommutes are less necessary;

� green space is preserved and farmland protected; and

� underused urban land continues to be recycled for viable commercialand residential development.

Implementing the state initiativesfor smart growth recommended inthis report will not be easy. Theirsuccess depends on the support ofmultiple stakeholders, policy mak-ers, and committed leaders through-out the state. But the results will bewell worth the effort. The kinds ofincentives and regulations pro-posed here, if intelligently designedto promote smart growth, promise asatisfying quality of life and healthyeconomy for the next generation ofCalifornians.


NEXT STEPS

The smart growth movement inCalifornia opens up opportunities tomake key changes in longstandinggrowth patterns.

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For more than 65 years, ULI-the Urban LandInstitute has been widely recognized asAmerica’s preeminent voice for encouragingand fostering high standards of land useplanning and real estate development.Membership in the Urban Land Institute makesa personal statement of support and belief inthese principles.

ULI is a nonpartisan research and educationalinstitute directed by its members andsupported by dues.

Join ULI for access to objective informationand the experience of those active in everydiscipline of real estate development,investment, and regulation. Find your place in the world.

Call 800-321-5011 or visit www.uli.org and join today.

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PUTTING THE PIECES TOGETHER