One of the glimmers of consensus in California’s current State Budget debate is a shift of responsibility and funding for a lot of programs from the state to local governments. Coincidentally or not, cities and counties are also likely to inherit more power to make land use decisions in the near future.
Most immediately, local governments are being granted more discretion to set aside requirements for analysis and procedure mandated by the California Environmental Quality Act. This used to be the practice of state lawmakers, who passed numerous measures in the last several years to streamline or altogether neutralize the CEQA process for favored projects. In 2009, these included a dozen state highway projects and a new NFL stadium that were fast-tracked or entirely exempted by legislative fiat.
This year, legislation that would perforate or dilute CEQA has stalled in the Legislature. The Capitol’s fervor for bulldozing CEQA-related roadblocks has died down.
Picking up the baton, local government land use planners are already drafting plans to skirt the CEQA process. SB 375, the state’s milestone “smart growth” law, requires regional planning agencies to imagine scenarios that curb sprawl and encourage transit. And public works and real estate developments that comply with those scenarios become eligible for a “get out of CEQA free” card.
In April, the San Diego Association of Governments adopted the state’s first draft Sustainable Communities Strategy. And other metropolitan planning organizations are working on their own strategies. Led by local officeholders, these organizations are conducting visioning workshops and drawing plans that, once adopted, will enable routine circumventions of CEQA.
Essentially, SB 375 amounts to a policy bargain: the Legislature allows local governments to skip CEQA if local governments can come up with ways to realize smart growth. If San Diego’s much-applauded draft and if other organizations’ progress is any indication, local governments are holding up their end.
Local governments may also see their land use sovereignty grow in the area of infrastructure finance. The Legislature approved proposals Wednesday that would effectively shrink or altogether eliminate redevelopment. And lawmakers are already considering measures to equip a new financing mechanism to fill redevelopment’s shoes.
Senate Bill 214 strips the election requirements from Infrastructure Financing Districts (which currently need two-thirds voter approval to form and issue bonds) so that IFDs can take over the financing of public works when redevelopment is gone. But the bill also resets the trajectory of tax-increment financing because IFDs, which are currently virtually dormant, are exempt from the “blight finding” thresholds that have historically corralled redevelopment into very specific project types. Liberated from election requirements, and still free to ignore blight, IFDs would become a very flexible and accessible financing tool for cities and counties.
The tax increment in an SB 214 model would be smaller because IFDs do not divert revenue from school districts. But for what local governments would lose in tax-increment revenue, they would gain in the discretion to spend that revenue without having to identify blight or win public approval in an election.
Collating the SB 214 model and SB 375 plans in a hypothetical project, local officials could use tax-increment funds to expand an expressway and, so long as the expansion is consistent with the region’s Sustainable Communities Strategy, those local officials may be free from both the burden of analyzing traffic impacts under CEQA as well as the requirement to find blight.
Traffic impact analyses required by CEQA and blight findings required by redevelopment law have been pillars of red tape in the local land use field. Allowing cities and counties more opportunities to bypass them grows their sphere of autonomy to an unprecedented magnitude.
Other scenarios include tempering, rather than eliminating, redevelopment. The California Redevelopment Association has offered a compromise that helps shrink redevelopment to provide more funding to schools. The proposal would authorize a redevelopment agency to elect to give up some of its tax increment to schools in its project area in exchange for adding time to the project area’s lifetime (generally limited to 40 years). In one version that’s circulating, each additional percent of the tax increment would buy the agency an additional year to operate its project area.
This enables a trade of money for time on a localized, voluntary basis. Again, local redevelopment officials would inherit more discretion to allocate resources across competing priorities: Maximizing the tax increment for the short term or surrendering part of it for an overall larger amount that accrues over a longer term.
It is still difficult to predict the outcomes that will emerge from the kaleidoscopic scrum of competing legislation, or what solutions local planners will conceive in their groundbreaking work to implement SB 375 and streamline CEQA. But these days, the general thrust of California’s politics and policymaking is an openness to loosening the leash on local land use planners.
While cities and counties are getting punished fiscally by an economic recession and State Budget crisis, they are also freer and more equipped than ever before to innovate their way to success.
