California Forever Postpones Ballot Measure, Will Conduct Two Years of Analysis and Outreach
California Forever, the parent company behind the East Solano Plan to build a new city of up to 400,000 residents on the northeastern edge of the Bay Area, reached an agreement with Solano County on a new process for advancing the plan. The company will not seek a zoning change via a previously scheduled November ballot initiative. Instead, the company will submit an application for a general plan and zoning amendment and will work with the county to complete an environmental impact report and development agreement, and then bring the full completed package forward for voters to consider. The process is expected to take about two years. The hasty ballot measure "politicized the entire project, made it difficult for us and our staff to work with them, and forced everyone in our community to take sides," wrote Solano County Supervisor Mitch Mashburn in a statement. "Delaying the vote gives everyone a chance to pause and work together, which is what is needed – not a fight between friends throughout the County on both sides of the issue." "This creates opportunities to incorporate additional community input, and then provide everyone with access to objective analysis," wrote Calfornia Forever CEO Jan Sramek. "We believe... we can build a shared vision that passes with a decisive majority and creates broad consensus." According to a poll commissioned by California Forever, 54% of county voters felt the plan was moving too quickly. (See related CP&DR coverage.)
Berkeley May Implement Citywide Upzoning for Small Multifamily Developments
This evening, the Berkeley City Council is scheduled to consider a motion that, if adopted, would permit one of the most dramatic upzonings in state history. The motion, introduced by former Councilmember Lori Droste in 2019, would permit the development of small multifamily buildings across large swaths of the city. Buildings could be as many as three stories high and include as many as 12 units. Opponents are concerned that new market-rate developments could alter the character of single-family neighborhoods and/or concentrate in low-income areas where historically disadvantaged residents might be displaced. (See related CP&DR coverage.)
State Updates Maps of Surplus Properties, with Eye Toward Housing Development
The Department of Housing and Community Development and Department of General Services released an updated map called the State Excess Sites – Affordable Housing Opportunities Map, aimed at assisting developers in locating state-owned land suitable for affordable housing projects. This update follows Executive Order N-06-19's mandate for HCD and DGS to prioritize surplus state properties for affordable housing to alleviate California's housing shortage. Using criteria established under AB 2233 and SB 561, over 44,000 state-owned parcels underwent rigorous evaluation based on feasibility and financing competitiveness, employing GIS technology and visual assessments by DGS and HCD staff during 2023-2024. The map provides a comprehensive view of potentially suitable sites declared surplus by state departments, offering developers tools to explore available lands and overlay datasets such as HCD/TCAC Opportunity Map and transit areas to facilitate funding applications and streamline development processes. Interested developers are encouraged to subscribe to HCD's Housing Planning and Policy email list for updates on submitting proposals, although no sites are currently open for allocation.
Terner Center: Construction Defect Law Suppresses Condo Development
UC Berkeley's Terner Center for Housing Innovation released a report on California's construction defect liability laws and their substantial disincentive on developers and contractors interested in building new condominiums. An estimated 3 percent of all multifamily homes built in California between 2011 and 2021 were for sale rather than rental. In 2022, homeowners occupied less than 10 percent of units in existing structures with more than 5 units. The also report found the number of new homes smaller than 1,400 square feet built in 2020 were less than 10% of all homes built statewide. The state's construction defect liability law extends the liability period extends for ten years after construction completion for condominiums, whereas it is only four years for rental housing, creating a longer and potentially more costly liability exposure for developers of condominiums, contributing to their reluctance to invest in such projects compared to rental housing developments. The Terner Center concludes that a thorough review of California's current approach to managing construction defect liability, aimed at reducing litigation, cutting costs and fostering consumer confidence, is essential for expanding homeownership opportunities across the state.
San Diego Seeks to Boost Fortunes of Business Districts
The San Diego City Council unanimously adopted a comprehensive set of 99 new policies aimed at enhancing business districts, promoting ambitious housing projects, and clarifying zoning regulations. These changes include easing rules for converting shopping malls into housing, simplifying the approval process for sidewalk cafes and facilitating the opening of substance use and mental health clinics for homeless populations. Additionally, the package seeks to streamline the establishment of urgent care clinics across neighborhoods and mandates improved accessibility for pedestrians, cyclists and mass transit users near new arenas and stadiums. These updates, pending Coastal Commission approval, are poised to have significant impacts citywide, particularly downtown, where incentives for development on underutilized sites and improvements to public spaces are among the proposed changes.
2023 Housing Progress Report Details Sixth Consecutive Year of Growth
The state’s 2023 Housing Element Annual Progress Report Update reports that in 2023, completed residential units increased by 13.1% to 112,076, marking the sixth consecutive year of growth since 2018. Multifamily housing remained robust with 308,577 units in the housing pipeline, surpassing the previous five-year average. ADU production reached record highs with 27,919 permits issued in 2023 as the share of affordable housing for lower-income Californians expanded significantly, comprising 19% of permitted units and 16% of completed units in 2023, up from 9% and 7% respectively in 2018. Further, development timelines also shortened across all phases, attributed to legislative initiatives like SB 423 and SB 330, underscoring ongoing efforts to accelerate affordable housing production and streamlined development.
CP&DR Coverage: Housing Incentives Create Strange Bedfellows
Everything about housing development is antithetical to Costco's business model. Costco is in the business of building the same big-box store – with the same gigantic parking lot – pretty much anywhere. Urban infill housing is costly, complicated, and customized. But some people will do anything for an entitlement. That’s why Costco’s proposal to develop a roughly 800-unit apartment complex in South Los Angeles is a Trojan Horse that will also not-so-secretly facilitate the development of the chain's 17th Los Angeles County store. It will be built on the site of a shuttered medical center a few miles west of the USC campus, near a stop on L.A. Metro's Expo Line. Rather than wade through the tedious, costly, and uncertain process that would it need to gain approval for a traditional standalone store, Costco and its development partner Thrive Living taking advantage of AB 2011, which exempts multifamily housing projects on commercially zoned property from CEQA review, plus density bonuses provided by Los Angeles’s Transit Oriented Communities program.
Quick Hits & Updates
Advocates in San Francisco are proposing a ballot initiative aimed at imposing a new gross receipts tax on ride-hail companies like Uber and Lyft. On Friday, they delivered 17,000 signatures, surpassing the required 10,000 signatures with a significant margin. This measure, known as the ComMUNIty Transit Act, aims to generate $20-30 million annually to support the financially struggling San Francisco Municipal Transportation Agency (SFMTA), potentially mitigating upcoming service cuts amid a projected $130 million deficit for fiscal year 2025. The initiative, likely to appear on November's ballot, seeks to stabilize Muni service levels and fund programs for low-income and youth riders. (See related CP&DR coverage.)
A new Assembly Select Committee on Permitting Reform been formed to consider how to overhaul the state’s complex land use permitting processes, aiming to expedite approvals for housing and climate projects. The committee plans to continue hearings throughout 2024 and intends to publish a white paper early in 2025, outlining findings and proposing legislative reforms to address these challenges.
The Visalia City Council approved an 80-acre annexation in the Visalia Industrial Park to facilitate nearly 1 million square feet of construction by YS Industries despite potential litigation from a labor union. The project, located at Shirk Street and Riggin Avenue, moves forward with support from the city, which is preparing to defend its decision in upcoming legal proceedings initiated by the Laborers International Union of North America, Local Union 294.
Cupertino's mixed-use development at the former Vallco shopping mall site, known as The Rise, is moving forward following the city's resolution of a fee dispute with Vallco Property Owner LLC. Approved in 2018, the project includes 2,699 housing units, with 890 designated as affordable, along with retail space and office facilities totaling nearly 1.9 million square feet. The dispute, centered on impact fees and parkland dedication fees, was settled with an agreement requiring The Rise project to pay approximately $10.3 million in transportation impact fees and $32 million in other payments to the city over the project's lifespan. (See related CP&DR coverage.)
A Southern California environmental group, Save Our Forest Assn., has filed a federal lawsuit against the U.S. Forest Service for permitting BlueTriton Brands to extract water from the San Bernardino National Forest, claiming violations of federal laws. The group alleges that the water extraction has significantly harmed Strawberry Creek and demands the removal of infrastructure and cessation of operations, citing environmental damage and unlawful occupancy of public lands by the company.
The California Energy Commission has approved a comprehensive plan to develop a vast floating offshore wind industry off Humboldt Bay and Morro Bay, aiming to generate 25 gigawatts of electricity by 2045. The initiative, unprecedented in its scale and complexity, requires substantial public and private investment to address environmental concerns, upgrade infrastructure and create a specialized workforce.
Los Angeles Mayor Karen Bass has introduced stricter tenant protections and other guardrails to Executive Directive 1, her administration's affordable housing program, aiming to protect low-income residents and historic resources. ED 1 streamlines approvals for affordable housing, and the city is developing a version for market-rate housing. With the new rules, projects in historic districts and on sites that currently have rent-controlled buildings will no longer be streamlined. Critics view these changes as significantly scaling back a program that has spurred much-needed housing development, potentially hindering efforts to address the city's escalating housing crisis. (See related CP&DR coverage.)
Lynda and Stewart Resnick, California’s wealthiest farmers and owners of The Wonderful Company, plan to expand their distribution center in Shafter into a major international trading hub, converting 1,800 acres of almond groves into warehouse space. Their project will include a new highway and a $120 million rail terminal with promises of up to 50,000 jobs, yet there is much concern about the environmental impact of increased truck traffic and construction.
UC San Diego Chancellor Pradeep Khosla is seeking approval from UC Regents to spend $2 billion on a new village that could house up to 6,000 students, addressing a severe housing shortage driven by rapid enrollment growth. The project aims to alleviate the ongoing housing crisis and could begin construction in 2026, with the first 2,000 beds available by 2029.
San Diego County reinstated the use of CEQA Guidelines Section 15183 to streamline reviews of general plan-consistent projects, allowing them to bypass vehicle miles traveled (VMT) analysis and mitigation requirements despite changes in CEQA transportation analysis standards.
