Budget Restores REAP 2.0 Funding
The budget deal agreed upon by Gov. Gavin Newsom and Legislative leaders restored virtually all funding for the second round of the Regional Early Action Planning grants (REAP 2.0) -- but the funds must be obligated by September. Meanwhile, affordable housing got whacked by over $1 billion. Newsom had proposed that $300 million of the grants -- designed to encourage more planning and construction of driving-efficient developments -- be withheld because of the budget deficit. But almost all of it was restored. The vast majority of the $500 million in funds will go to the state's Metropolitan Planning Organizations, while $30 million will be reserved for competitive grants. A summary of the budget deal can be found here. (Previous CP&DR coverage of the REAP 2.0 budget can be found here.)

Seaside Faces Lawsuits over General Plan 
The Center for Biological Diversity and LandWatch Monterey County filed a lawsuit against Seaside, alleging that the city's approved general plan update lacks sufficient consideration of environmental impacts, violating CEQA. The plan includes development on sensitive wildlife habitat at the former Fort Ord military base, potentially impacting endangered species like the California tiger salamander and California red-legged frog. Despite objections and evidence suggesting alternatives, the city proceeded with the plan, failing to adequately assess greenhouse gas emissions and environmental consequences associated with the proposed development through 2040. The lawsuit also alleges the city did not adequately analyze the greenhouse gas emissions associated with this development or study any alternatives as mandated by state law.

Report Quantifies Burden of Impact Fees Statewide
A new report by the California YIMBY Education Fund and UCLA Luskin School of Public Affairs illustrates the wide variety in housing impact fees across California. The report, titled The Impact of Fees: Rethinking Local Revenues for More Multifamily Housing, reveals that the average impact fees for both multifamily and single-family houses, $21,703 and $37,471, respectively, are triple those nationwide. It is not uncommon for total development fees – including impact fees, services fees, in-lieu fees, and others – to reach $150,000 per unit. Some of the stiffest fees are in Bay Area cities: Livermore, Fremont, and Palo Alto. The report contends that fees on new homes are designed to pay for infrastructure that is used by all residents; said Nolan Gray, research director for California YIMBY, “it’s essentially a form of wealth transfer from new residents of multi-family housing, who tend to be lower-income, to existing residents of single-family homes – who tend to be wealthier.” To reverse the trend and instead incentivize multifamily housing developments, the report presents a variety of recommendations including transparent fee calculations, capping fees per square foot, and alternative revenue sources like bonds.

Supreme Court Kicks Tax Measure off November Ballot
The California Supreme Court has blocked a ballot measure that aimed to require voter approval for tax increases, ruling it would constitute a revision of the state constitution rather than an amendment. The measure, called the Taxpayer Protection and Government Accountability Act and supported by over 1 million petition signers, would have required voter approval for all legislative tax increases, and it would have raised the threshold for approval of local tax increases from a simple majority to two-thirds. The court's decision was unanimous; the decision read, in part, that the measure “would substantially alter our basic plan of government” by limiting governments' taxation powers. The measure also sought to increase voting thresholds for local tax hikes and retroactively reverse tax increases since January 2022. Democratic leaders, including Governor Gavin Newsom, opposed the measure, arguing it would undermine government operations and progressive policies. Business groups supporting the measure criticized the court's decision as partisan, claiming it denies voters a voice in fiscal policy. Had it passed, the measure would have applied retroactively and nullified, among other local measure, Los Angeles's controversial Measure ULA, which imposes a surtax on real estate transactions of $5 million and above (see related CP&DR coverage).

Racetrack Closure Presents Redevelopment Opportunities in East Bay
Golden Gate Fields, a historic horse racing venue in Albany and Berkeley, is closing permanently, prompting local officials to consider its future use. Mayor Jesse Arreguin of Berkeley views this as a significant opportunity to reimagine the property, which spans 140 acres across both cities. The current plan dates back to 1986 and includes outdated uses like a composting facility, deemed unsuitable for such prime real estate today. Proposals for redevelopment include options like housing, commercial spaces and even a hospital, with both cities collaborating on a joint plan. However, challenges such as rezoning, regulatory approvals and ownership present significant hurdles to these ambitious redevelopment plans. (See related CP&DR coverage.)

Federal Government Seeks to Restore Wetlands Nationwide
In the continuing evolution of the Clean Water Act, and the related Waters of the United States ruling, the Biden administration set a goal to protect and restore 8 million acres of wetlands over the next six years to counter development pressures and recent regulatory setbacks. This initiative, called America the Beautiful Freshwater Challenge, aims to reverse the loss of wetlands, crucial for filtering pollutants and preventing floods, especially after the recent Sackett v. EPA S Supreme Court ruling weakened federal protections. Alongside wetlands, the administration plans to reconnect and safeguard 100,000 miles of rivers and streams nationwide by 2030, removing barriers like dams and stabilizing eroded banks. Several states, tribes, cities, NGOs and private companies have pledged to participate in the America the Beautiful Freshwater Challenge, committing to work towards freshwater restoration targets.

CP&DR Legal Coverage: Berkeley People's Park Case
The California Supreme Court has reminded everybody that the California Environmental Quality Act is just a law – one that can be changed by the legislature at any time. On Thursday, June 6, the court finally ruled in the long-awaited “People’s Park” case – the one where an appellate court ruled last year that noisy students can be a “significant impact” under CEQA, possibly triggering the need for an environmental impact report and mitigation. But the Supreme Court went the other way, overturning the lower court decision and clearing the way for construction of student residences in People’s Park. The final ruling, which was very different in tone, backed off of the displacement/homeless issue but concluded that noise from student parties in Berkeley is a significant environmental impact that UC must analyze in its environmental impact report.

Quick Hits & Updates

Air taxi company Archer Aviation unveiled plans for a network of flying taxis in the Bay Area. Their goals include hubs in South Bay, East Bay, Wine Country, and the Peninsula, aiming for 10-to-20-minute flights. Partnering with Kilroy Realty Corporation, Archer will use Oyster Point in South San Francisco as a central hub and is exploring a "sea portal" for water-based operations with electric VTOL aircraft and ferries.

The annexation of a contentious 606-acre property near Pittsburg into city limits was approved by Contra Costa LAFCO, making way for developer Discovery Builders to build 1,500 new homes around the Los Medanos Ridgeline. The project faced much opposition from environmental groups like Save Mount Diablo, which advocated for more adequate green buffers and environmental review processes.

Five years after California’s official apology to its Native American peoples for the state’s historical wrongdoings, Governor Newsom has initiated the return of 2,800 acres of ancestral lands to the Shasta Indian Nation in Siskiyou County, marking the largest land return in the state’s history.

A measure titled the Affordable Housing, Homelessness Solutions and Prevention Now has qualified for the November ballot in Los Angeles County. It seeks to replace the current Measure H sales tax with a permanent half-cent tax to enhance funding for homeless services and affordable housing, emphasizing prevention and accountability measures, despite concerns about its timeline and permanence from critics like the Los Angeles County Business Federation.

Residents in Riverside are opposing a proposed warehouse development near March Air Reserve Base, concerned about potential impacts like truck traffic and soil contamination from past military activities. Despite developer assurances of thorough testing and plans for mixed-use including a community park, the project has been indefinitely postponed by the March Joint Powers Authority following public outcry at a recent meeting.

State Sen. Dave Cortese withdrew his bill, SB 915, seeking to allow cities to regulate autonomous vehicles, citing concerns over amendments that diluted its provisions for local control. The Autonomous Vehicle Industry Association, representing companies like Waymo and Cruise, opposed the bill, arguing it would hinder safety and accessibility advancements for Californians. (See related CP&DR coverage.)

The U.S. Environmental Protection Agency has allocated $3 million in federal grants to five Southern California communities to rehabilitate polluted brownfield sites for safe development. Projects include assessing and cleaning up contaminated areas in Orange County, particularly focusing on culturally diverse neighborhoods with shortages of affordable housing and healthcare, aiming to transform idle land into thriving community assets while addressing pollution concerns.

Fashion Valley in San Diego will undergo a transformation as JCPenney is converted into 850 luxury residences, marking the first residential development within the mall. The project aims to integrate high-end housing with luxury boutiques, promising upscale amenities and finishes, but questions remain about affordability and potential traffic impacts.

Researchers at the Urban Institute created a “conversion disposition index” to identify cities most ripe for office-to-residential adaptive reuse. The index compares levels of office-space distress with housing demand. Ranked among 75 markets, San Mateo County (1), San Francisco (5), Oakland (8), and Los Angeles (11) all have great potential for office-to-housing conversions, according to the report.

The Santa Clara County Board of Supervisors have authorized the use of pre-approved plans for building accessory dwelling units in unincorporated areas, offering residents either a 800-square-foot or 1200-square-foot option. This initiative aims to expedite and alleviate housing shortages across the region while increasing property tax revenue to reduce a large budget deficit.

The Concord City Council rejected a developer’s proposal to build 183 mostly affordable apartments in the downtown area by using up to $90 million in state financing. They cited concerns over concentrating low-income housing in one area, but state housing regulators criticized the decision with claims that the city might be violating fair housing laws and ignoring the city's obligations to approve affordable housing.

A proposed Planned Parenthood clinic and new zoning laws are at odds in the Inland Empire where Fontana’s city council recently adopted an urgency ordinance banning “service based, non-entertainment uses” in the area where the clinic was due to open. According to the city council members, this was done in an effort to establish a downtown commercial entertainment district composed only of businesses that would help the area thrive.