A five-county "Inter-Regional Partnership" between the Bay Area and the Central Valley is taking more tangible form. The Partnership will ask the Legislature this year for a pilot project to designate housing and job "incentive zones" — similar to enterprise zones — that would include a re-distribution of existing property tax revenue and streamlined environmental review to encourage better jobs-housing balance. The Partnership is also seeking $625,000 in state funding to integrate computer mapping throughout the five counties, thus permitting more accurate mapping of job centers and housing centers. "We have to coordinate our efforts better," said Contra Costa County Supervisor Mark DeSaulnier, one of the founders of the Inter-Regional Partnership. "We have to get local governments to understand the convergence of land-use issues." The proposed legislation, which will be carried by Democratic Assemblyman Tom Torlakson, a former Contra Costa County supervisor, will also formalize the Inter-Regional Partnership's legal status. Torlakson's bill will probably propose that the IRP be created as a joint entity of the three councils of governments in the affected area — the Association of Bay Area Governments and the San Joaquin and Stanislaus county COGs. The IRP would be created either as a joint-powers authority or through a memorandum of understanding among the three COGs. DeSaulnier said that formalizing the IRP does not represent creation of a new level of government. "You already have regional government," he said. "It's just a question of making it work." The Inter-Regional Partnership was formed two years ago by elected officials from five counties affected by an imbalance of jobs and housing — Santa Clara, Contra Costa, and Alameda in the Bay Area, and Stanislaus and San Joaquin in the Central Valley. These five counties are all part of a major cross-commuting pattern centered on the Altamont Pass, which separates eastern Alameda County from San Joaquin County. The IRP's forecasts predict that the three Bay Area counties will produce more than 800,000 jobs but only 300,000 houses in the next 20 years. [See Chart.] As a result, the number of commuters traversing Altamont Pass is expected to grow from 100,000 to 250,000 per day during this period, according to IRP planners. Staffed by the three COGs, the IRP up to now has served as a "watering hole" for jobs-housing balance issues in the two regions. (Though almost 69 local governments are located in the five counties, only 15 are officially part of the IRP, including all five county governments.) Participants say the likely creation of a formal entity reveals that officials from the five counties have built a certain level of trust. "We were sword-fighting and fist-fighting at first," said Don Bilbrey, mayor of Tracy, a fast-growing city in San Joaquin County. "But since then, there's been an evolution. We have identified regional problems and difficulties, so understanding and respect has grown." One measure of success: San Mateo County, which includes the northern end of job-rich Silicon Valley, recently sought to join the group. But IRP leaders asked the county to hold off, claiming that they wanted to maintain the IRP as a "pilot" program. In addition to the legislation, the IRP recently surveyed the 69 local jurisdictions in the five counties to determine how many are pursuing jobs-housing balance policies. Of the 30 jurisdictions that have responded so far, 23 were completing an inventory of vacant lands, 17 were studying higher densities, and 16 sought to attract employers that match the skills of the area's work force. Half of respondents had established urban growth boundaries. In most cases, Alameda and Contra Costa County communities appeared to be ahead of the other counties in adopting sophisticated planning and economic development instruments. The most interesting idea to emerge from the IRP is the concept of jobs and housing "incentive zones" that would receive tax and regulatory breaks in the same fashion as enterprise zones. The Partnership is asking the Legislature to pass a bill permitting the designation of 5 to 10 such zones of various sizes, scattered around the region. According to a draft prepared by IRP staff in February, the zones would be between 50 and 250 acres apiece, would contain significant vacant or underutilized land, and would provide either jobs or housing, depending on which is more needed in the area. The sites would be eligible for a slew of special incentives, including the following: o Delivery of all 100 percent of property tax revenues generated within the zone to the city or county containing the zone, rather than splitting revenues among all taxing entities. o Streamlined environmental review within the zone under the California Environmental Quality Act. o Priority for low-income housing tax credits, funds from the state infrastructure bank, and similar discretionary state funding sources, much like proposals made by State Treasurer Phil Angelides in his "Smart Investments" strategy. (See CP&DR October 1999.) o Brownfield-style loans for up-front planning and environmental evaluation of the sites. All these ideas have been kicking around Sacramento — mostly in other contexts, such as reform of the state-local fiscal system and the Angelides proposal. It is unlikely that all would pass. However, Torlakson, who is also chair of the Assembly Select Committee on Jobs-Housing Balance, said he is confident because of what he heard when the select committee took testimony around the state last year. "I think this will resonate across the state," says Torlakson. "I see similar problems all across the state." The state's IRP program would be considered a pilot program that would last for three years, with the IRP submitting a final report on the experiment to the Governor's Office of Planning and Research no later than 2004. Participants acknowledge that the Central Valley communities will be receptive to job creation in their communities, while the notion of adding more housing may meet resistance in the Bay Area. At the same time, however, it is not clear how quickly employers will consider moving from the Bay Area over the Altamont Pass into the San Joaquin Valley — especially the Silicon Valley computer companies. These companies have expanded rapidly in the Sacramento area, where an educated workforce and perceived high-quality lifestyle are draws. But they have been slow to move into the counties further south, even though many of their employees currently commute from those counties. For example, Carl Guardino, president of the Silicon Valley Manufacturers Group, said his organization is not focused on job creation in the Central Valley at present and has not been monitoring the IRP process closely. The organization, composed of Silicon Valley's biggest computer companies, is an aggressive lobbyist for more housing and better transportation within Santa Clara County and between Silicon Valley and the Central Valley. To the employers, he said, the most important element in location decisions is "access to a talented work force." Nevertheless, IRP leaders remain confident simple economics will drive Silicon Valley employers "over the hill" sooner or later. "The job generators understand how successfully they have been at developing jobs," Bilbrey said. "There is a demonstrated cost savings to these companies of up to 30%." Bilbrey's city, located at the base of Altamont Pass, is often depicted as a prime example of rampant residential growth in the Valley. After a lull in the early and mid 1990s, Tracy is now seeing construction of about 1,500 homes per year, he said. A citizen initiative, scheduled for the March ballot, would cut that number in half. Bilbrey and his City Council colleagues oppose the initiative. Contacts: Mark DeSaulnier, Contra Costa County supervisor, (925) 646-5763. Don Bilbrey, mayor, City of Tracy, (209) 831-4103. Carl Guardino, Silicon Valley Manufacturing Group, (408) 501-7864. Tom Torlakson, assemblyman, (916) 319-2011. Gary Binger, deputy executive director, ABAG, (510) 464-7902.