It has now been two years since Arnold Schwarzenegger was elected governor of California under perhaps the most peculiar circumstances in American history. His political stock has been dropping rapidly for almost a year, culminating in his across-the-board loss in the November special election on which he had laid all his political chips. Having appropriated the pro-business agenda in 2005, the governor appears to be veering back toward the middle in hopes of getting re-elected in 2006.
This is the standard political line on Schwarzenegger these days. Is it also the line on planning and development? It’s hard to say. Although Schwarzenegger appointed some ardent environmentalists and Democrats to high positions at first, his approach to planning and development has been pretty much the same as his approach to everything else: Take the pro-business position and try to sell it as needed reform.
Within the Schwarzenegger administration, the planning and development issue has largely boiled down to housing. Business, Transportation, and Housing Secretary Sunne Wright McPeak is one of the strongest personalities in the Cabinet. For two years, McPeak has traveled the state promoting two basic ideas: first, requiring cities to provide a 20-year land supply for development; and second, a “take care of your own” housing requirement. Her basic message is that the state must plan for housing more aggressively and on a more long-term basis.
McPeak has failed over and over again to get housing – or any other planning issue – on Schwarzenegger’s short list. But she apparently sees an opportunity in Schwarzenegger’s special election miseries. Ever since it became apparent, earlier this fall, that the special election would go down in flames, McPeak’s office has been ramping things up – in particular, by having meetings of a wide-ranging Housing, Land Use, and CEQA Task Force every two weeks.
You would think McPeak’s strategy has a chance of working. After all, what else does Schwarzenegger have to run on? Every other pending pro-business issue was either resolved in 2004 or shot to pieces in 2005. But the average home price in the state is now ten times annual household income; a huge percentage of new mortgages are adjustable interest-only loans; and interest rates are going up. On the other hand, the housing market started cooling during August, and prices have now leveled off after tripling in seven years. So the problem as the public perceives it could easily flip from high housing prices and a shortage of supply to overleveraged homeowners.
Furthermore, Schwarzenegger’s director of the Department of Housing and Community Development, Lucetta Dunn, quit right before the election, after less than a year and a half on the job, and the administration appears to be in no hurry to replace her. McPeak is a powerhouse who essentially serves as her own housing director; nevertheless, purely in public relations terms, how can you short-list housing as an issue when you don’t even have somebody warming the chair at the Department of Housing and Community Development?
Then there’s the question of how the Democrats will play the planning issue this year, especially in the governor’s race. It has been 16 years and three governors since growth was an issue in a gubernatorial election. The leading Democratic contender, Treasurer Phil Angelides, is a rabid partisan with strong ties to the labor unions, but he’s also the darling of the national smart growth crowd, with a long record of rhetoric in favor of infill development, mixed-use growth, and New Urbanism. (Angelides was the developer of Laguna West in Elk Grove, one of the first New Urbanist suburbs in the state.) The other leading Democratic candidate, Controller Steve Westly, is less well-known on the topic. But Westly is a former local economic development official and he comes from Silicon Valley, where infill has been the order of the day, so you could make some assumptions about his disposition on planning.
One could imagine an interesting debate over housing and growth during the governor’s race this year. Schwarzenegger could be expected to take the pro-homebuilder position, adopting the McPeak argument that some infill is necessary, but some greenfield development is required as well. Angelides (or Westly) could be expected to take a hard-line smart growth position, arguing in favor of an aggressive infill strategy throughout the state.
Of course, if Schwarzenegger moves back to the middle in 2006, he will have to court environmentalists – perhaps his most logical Democratic constituency. That would mean he’d have to tone down the rhetoric on greenfield development. The Democratic candidate could get trapped between the pro-CEQA position of the environmentalist constituency and the pro-infill housing position of the urban Latino constituency. Add up all of this, and the housing issue might become moot.
A more likely scenario is that planning squirrels its way into the governor’s race by way of the infrastructure bond. It’s likely that some kind of infrastructure bond of $50 billion to $100 billion will receive bipartisan support in Sacramento and find its way onto the November ballot, meaning that both sides will be jockeying to spin it their way. Schwarzenegger will focus on the road-building benefits to suburban Republican constituencies, while the Democrat – especially if it’s Angelides – will undoubtedly use it rhetorically as a way to support a wide-ranging infill and smart growth agenda. In December, Angelides appeared to be staking a position on every side of an infrastructure bond.
Last year, I wrote a column stating that the stars could be aligning in Sacramento on certain types of planning and housing reform (see CP&DR Insight, January 2005). Schwarzenegger seemed to be positioning himself on the issue, and McPeak – a Democrat – was close to certain key Democratic legislators. The whole special election debacle made for a lost year in Sacramento, blowing all of those stars out of the sky. But between housing prices and traffic congestion, some aspect of planning is still on everybody’s mind during 2006. McPeak may not put housing on the governor’s short list, but planning may find its way into the gubernatorial debate one way or another.
