Headlines keep coming. Development policies implemented over the last several decades are being rejected. They are blamed for over-the-top housing prices, not enough housing to meet demand, homelessness, families and jobs moving elsewhere, and loss of economic growth. A few headlines:

“The Urban Housing Crunch Costs the U.S. Economy about $1.6 Trillion a Year”

“Why California Can’t Build Affordable Housing”

“Planning rules are driving the housing crisis”

“CEQA lawsuits challenged nearly 48,000 homes in California in 2020, study finds”

California, in particular, has past development policies that have created difficult underlying conditions. To what extent will proposed replacement policies address current issues? Are there other policies and practices that should be looked at and can older policies be tailored to meet today’s challenges?

The whole array of planning and development practices are being questioned, particularly as seen through the outcomes they’ve produced or, in the case of housing, not produced. A front page Wall Street Journal article states the U.S. is running out of land for housing (September 27, 2022) and the Economist, looking at Britain, wonders why planning policies have stopped the needed growth and prosperity in that country. (“Britain Can’t Build”, September 3, 2022). The implication for the United States is clear.

Planning Policies Review

The following is a summary of many of these policies that continue as the basis for local community planning.

  • Urban Service Area (USA)—Premise: stop urban sprawl, only allow development adjacent to existing services and city limits, give higher priority to develop passed-over and underdeveloped land within cities prior to annexing more. Biggest consequence: sprawl controlled but communities didn’t change policies allowing easier development within the Urban Service Area, so the exact opposite happened. Cities passed policies making development even more difficult.
  • Level of Service (LOS) and Vehicle Miles Traveled (VMT)—Policies measuring traffic on current streets (Level 1 through 4 for LOS) or using the number of miles traveled (VMT). If a development makes traffic “worse,” requirements are implemented to minimize/reduce the traffic conditions (constructing wider streets, intersections, stop lights, etc.) or used to minimize/reject the development itself. Auto traffic became the “driver” for how much and what kind of development can be constructed.
  • Jobs Housing Balance (JHB)–A policy stating housing will only be built based upon the number of jobs created within that community. Usually the ratio is 1 to 1. This policy, adopted by any number of California cities, was in reaction to those cities feeling they were “bedroom communities” for other cities that had stronger job growth (particularly high tech) and were not gaining any of the financial/economic windfalls from that industry. This happened in Silicon Valley with San Jose taking the lead. San Jose felt neighboring cities benefitting from high job growth should do their “fair share” by requiring more housing. The outcome was not much more housing built in these other communities and stifled housing development in San Jose. “Fair share” has become a mantra of jobs versus housing.
  • Development Must Pay for Itself—A policy stating housing is a financial burden on the community because of its demand for city services. If a development is approved, it must pay for itself (i.e. generate enough tax and fees to cover all new or additional city services). Extensive formulas were developed to ensure enough was extracted from new development to cover perceived costs. In California, many policymakers still blame Proposition 13, passed in 1978, limiting property tax increases, as the reason for these policies. These greater upfront development fees and other assessments make development more expensive, resulting in building fewer low- and moderate-income housing.
  • California Environmental Quality Act (CEQA)—A 1970 law requiring public projects to review possible environmental consequences of a project and adopt measures to minimize or reduce those consequences. Expanded in 1972 as a result of a California Court decision stating all private development needing public agency permits or approval came under CEQA except those that were specifically exempt. The California legislature later expanded CEQA into what it is today. Used to examine and mitigate possible environmental impacts, it is also now used as a tool to stop, stall, or make development too expensive. A recent study found that 39 percent of all proposed housing projects in California have not been developed because of CEQA challenges.

Sometimes takes years to complete even the simplest project, a result of the above policies and general local community resistance toward development and, housing, in particular. Not enough housing is being constructed to meet demands of a growing population, and the housing built is cost prohibitive for many.

Unless development pays for itself in terms of ongoing city services, city staff time to process applications, any additional offsite mitigations, and fees to other public districts (schools, special districts, utility districts, etc.), the development may not be considered. Other job creating development is being held up with long processing time and heavy fees. Major companies are leaving the more expensive states (like California) and setting up elsewhere.

New Trends

Abolish Zoning. Zoning is considered the culprit for reinforcing many of society’s inequities and difficulties. This is not a new indictment. In 1972 Robert Goodman (After the Planner) wrote about zoning’s inequities and called professional planners the enforcers of these inequities. In his 2022 book, Arbitrary Lines, M. Nolan Gray has a list of inequities and says the planning and zoning process is a crazy “array of confusing and pseudoscientific rules” that bring about egregious economic and social segregation.

Don’t like apartments? Ban them through zoning, Gray writes. Want to insure only certain economic outcomes from housing development? Make sure the zoning ordinance specifies large minimum lot sizes, building ratios, wide setbacks, or certain densities. Always assume a car and include minimum parking requirements. Gray and others advocate throwing out zoning completely. There is no reform. Let all cities become like Houston, Texas where there is no zoning. 

Abolish Parking Requirements. Get government out of the arbitrary parking business. Cities have a parking glut; that is, have way more parking available than is needed now or in the future. Further, what better way for policymakers to encourage affordable housing than dump these expensive requirements. It’s also good for the environment by forcing people to use other means of transportation. Let the market determine what/how much parking there should be, if any.

Force Cities to Change Development Regulations through State Legislation. Several new pieces of legislation in California are forcing local planning change. The State legislature feels compelled to force cities to build housing because of their inability to both recognize the housing issue and the unwillingness to change development practices. Cities have mainly responded by unhappily talking about their loss of local land use control and taking on additional financial  burdens.

New California State Legislation includes:

  • Senate Bill 8 (2021) extends the Housing Crisis Act of 2019 through 2030. The Housing Crisis Act was enacted to jumpstart more housing production by accelerating the approval process for housing projects, curtailing local governments’ ability to downzone, limiting fee increases on housing applications and implementing accountability provisions.
  • Senate Bill 9 (2021) overrides existing density limits in single-family zones. SB 9 supports increased supply of starter homes by encouraging building smaller houses on small lots.
  • Assembly Bill 1174 (2021) amends SB35’s ambiguities that have created loopholes for anti-growth community groups to delay or halt housing projects.
  • Assembly Bill 2011 (2022) provides for “streamlined, ministerial approvals” of certain mixed-income and affordable housing projects along commercial corridors in commercially zoned districts “by right.” No CEQA review is needed.
  • Senate Bill 6 (2022) allows residential use on commercially zoned property without requiring rezoning. To invoke the law, however, applicants must commit both to prevailing wages for workers and “skilled and trained workforce” requirements.

The Planning Policy of Nonexistence.

There is a clear trend in planning as it faces issues by declaring them nonexistent. Is parking considered an issue? Simply declare no more parking requirements for all uses. The market will decide what parking there should be or not. Is traffic a problem? It’s not a public issue any longer. Everyone should be taking public transportation. Zoning an issue? Get rid of it. That will solve the problem of economic segregation, economic inequity, homelessness, and any number of social ills.

Don’t think there should be any more single family housing? Declare the city has too many single-family homes that only the wealthy can afford anyway. Say only higher density housing will be built (if it can find its way through the maze of “the process”).

Is there a place for residential neighborhoods containing ownership options: single-family homes with ADUs, townhouses and condos, plus higher density apartments mixed with commercial along higher volume transportation routes?

In any number of surveys people have made it very clear they’d like that. But it’s not part of this new and trending planning world view. Those trends seem to take a position of avoiding, dumping, even demonizing such things as simple zoning, differentiating higher intensity uses from those that are not, or simplifying the entire development process. All communities do not want be like Houston, where even no zoning has its issues as pointed out by the Christian Science Monitor. (“Henry Gass: No zoning: Is Houston an affordable housing model or morass?”)

Who and what is driving up the cost of development, particularly housing? Planners and policy makers should look at themselves and the policies they practice.

Shane Phillips (The Affordable City – Strategies for Putting Housing Within Reach and Keeping it There) sees the importance of mixed use and vibrant residential neighborhoods. To bring this about he suggests upzoning many places at once, focusing upzones in accessible and high opportunity area (such as around heavily used transportation corridors), allowing housing in commercial zones and making development approvals “by right.” In other words, create objective rules for development approval, then stick with them. Minimize those layers of discretionary approvals.

What’s Needed

Change CEQA. If a proposed housing development is within an urban service area and the general plan and zoning designation allow that use CEQA compliance should be met because all those policies/ordinances have already been reviewed under CEQA. For housing, change CEQA to clarify that development within any general plan designation that includes housing, even mixed uses (i.e. commercial and housing), is not subject to CEQA. Redefine what “discretionary review” includes. Exclude housing approvals, subdivision map approvals for housing even within a mixed use development and any staff design reviews based upon written standards. With  California Assembly Bill 2011, this has been partially enacted, but it needs to be expanded.

By Right” Zoning. Instead of throwing zoning out the window, use it. Simplify its standards and zone land for generalized uses. A zoning code is considered “by right” if the approval process is streamlined so projects complying with zoning standards receive approval without a discretionary review.

Simplify the Rules. Zone areas for general uses such as residential, collapse the number of zoning designations, and minimized setbacks, land coverage ratios and conditional uses. Don’t use “planned development” as a catch all zoning and development designation. Some cities (San Jose, California, for example) insist that most housing development must be processed as a planned development, which entails writing specific development standards for that particular property and development. This process is slow, contentious and expensive. Instead, standards can be used to level the playing field where all (both public and private sectors) understand what is acceptable before walking into the planning department. Use zoning “by right,” coupled with performance standards, to bring about more certainty and faster approvals. It would also release planners to do planning instead of continuously regulating.

Change Attitudes. Too many city policymakers have attitudes toward development that should have been discarded long ago. The most difficult one is the idea that housing development does not pay for itself and what the community needs is retail sales and jobs, not housing. There have been too many studies in the past several years demonstrating housing is a net revenue generator. The statement that housing doesn’t pay for itself is simply not the case.

The latest study (June 2022) illustrating this was sponsored by the California’s HCD, Retail versus Housing? Rethinking the Fiscal Paradigm. The corollary to this attitude is: If housing is built it should be limited to the number of new jobs created. And in the background there is always the refrain that Proposition 13, the property tax limitation initiative from 1978, is the cause of all this, and the policymakers will never forget it. It’s been 42 years since Proposition 13. It should not be a driver of present day attitudes toward development and particularly housing. Development (and again, particularly housing) should be looked upon as a public good. It’s time to shake off these dated attitudes.

Historic Voices: There are voices from the past that should be heard again. In this rush to throw policies aside, where are references to Jane Jacobs and her thoughts on community, resident input and the continuity of neighborhoods? And all those who reacted against wholesale redevelopment that tore down and displace viable communities. Isn’t wholesale declaring policies/standards no longer needed (all zoning) or no longer applicable (all parking) the same thing, leading to upending communities and displacement? Wouldn’t these voices say a one size fits all approach hasn’t worked in the past and certainly won’t work now?

Don’t Ignore the Problem. Enacting public policy by declaring issues/problems no longer exist or no standards are needed will cause even greater difficulties. There is a framework available for the development process that is simplified, understandable and usable. And it will work with communities, neighborhoods, and residents. 

Scott Lefaver, AICP is an owner of Cabouchon Properties, L.L.C. Cabouchon owns and operates low-income and Section 8 apartment housing throughout the United States. He served for 12 years as a Planning Commissioner for the County of Santa Clara (Silicon Valley) and has taught land use planning at San Jose State University and Stanford University. He is an associate member of the Urban Land Institute.