California is Anti-Development

This semester, I’ve been taking a course on land use and planning law with a focus on contemporary planning practice in California. As a longtime California resident who has been constantly seeking to understand why planning outcomes are often so disappointing here, I can attest that the content covered in the course has been quite illuminating.

Now I understand why California is FUBAR (for lack of a better term), and have realized a lot of it has to do with originally good intentions paving their way into our current hell. Specifically, intentions to protect the citizens of California from “big” governmental overreach have resulted in remarkably powerful local governments — cities and counties that operate like fiefdoms, competing for resources and making both local and regional development increasingly difficult.

The benefit of this system is that Californians tend to enjoy a high degree of control over the land use near where they live, via their locally elected officials. The downside is that Californians tend to like things just as they were when they first moved in to an area, resulting in fiery resistance to changes even if they’re meant to improve the living environment and especially if they’re designed to accommodate growth for new residents. (See: NIMBYism.) As my professor puts it, the planning and development process in California has become “extremely democratic, but also extremely inefficient” over time.

The developer permitting process in California typically involves enraged local residents

There are three major areas of planning law that illustrate this issue well.

Police Power & Zoning

The legal basis for all land use regulation from a local government (i.e. a city or county) lies in their “police power.” This is not just related to crime or cops, but rather is a general power granted by the California Constitution that enables them to do almost anything to protect the public health, safety, and welfare of their residents. This sounds reasonable at first, but such power has been historically applied in some highly questionable ways.

Most notably, the police power has been widely applied to justify slow-growth zoning ordinances — which is a major reason why more than half of all developable land in California is zoned for single-family housing only. You might wonder, “how is zoning related to the general welfare of residents?” Well, court precedents (e.g., see Ehrlich v. Culver City or Ewing v. Carmel-by-the-Sea) have established that the police power can be used to protect a city’s “aesthetics”, “character”, “stability”, and “soul” — in other words, if residents like their single-family neighborhood, their city can (and entrenched residents will force it to) use its police power to protect them from change indefinitely.

This plays out most visibly in battles between local cities and the state government of California. The governor and state legislature have always been eager to tackle the housing crisis by setting high targets for new unit construction, but cities often ignore or push back against these targets — decrying the encroachment upon their local authority and claiming that excessive development will hurt the “character” of their communities.

While this may seem great for those already settled comfortably into their aesthetically pleasing neighborhoods, this has ultimately led to a statewide housing crisis as there is an ever-shrinking amount of land where more housing can be built. The individualistic myopia of each local jurisdiction has resulted in skyrocketing housing prices and the ongoing displacement of families who can no longer afford to live in the state. How is that for protecting general welfare?

CEQA & Transparency

California is blessed with a magnificent natural environment, and the California Environmental Quality Act (CEQA) was passed in 1970 in an attempt to ensconce it in ironclad protection. CEQA is basically a “full disclosure law” that defines a detailed process of documentation and public review for any activity that would cause “direct or foreseeable physical change in the environment” — a scope that includes practically every kind of project a planner might be involved in.

Just a sample of the incredibly involved CEQA process

At the time of passage, CEQA made a lot of sense and was a huge win for environmentalists. In the decades since, however, it has been expanded in scope dramatically through court cases (see: Friends of Mammoth v. Board of Supervisors of Mono County) and has been repeatedly abused as a weapon against all types of development. At this point, projects that don’t get CEQA exemptions are often doomed due to the extreme costs of a full Environmental Impact Report (EIR) and/or the inevitable lawsuits filed by locals wishing to block them. (CEQA is enforced by citizens starting litigation under the Fair Argument standard of review, which can tie up projects for years.)

The goal of CEQA is in line with the principle of providing “reasonable notice” defined in the Brown Act or established in court cases like Horn v. County of Ventura. That is, Californians just want maximum possible transparency in projects of concern to the public. Who would argue against transparency? Well, when these kinds of demands for transparency are used to block affordable housing or stop opening of streets during a pandemic, one could argue that the regulations have ceased to be helpful.

Exactions

Building in California is expensive. In fact, San Francisco was the world’s most expensive place to build in 2019. The cost of land is a major factor (partially due to the way we zone it per above), but observers also point to the exorbitant exactions (fees) developers have to pay to local jurisdictions for permitting. There are recurring calls for cities to reduce the extent to which they use exactions, but these seem to fall on deaf ears. Why is this?

Well, it turns out that exactions have become a critical revenue source for cities ever since Proposition 13 passed in 1978. Yes, that Prop 13 – which took hundreds of millions of property tax dollars away from local governments, leaving them scrambling to find new ways to fund essential services and infrastructure. Developers were an easy target, since cities were able to use their police power to levy exactions broadly so long as they generally furthered the public welfare. Cities invented “in-lieu” fees to make developers pay for public goods like parks, and generally built on ideas like this to become exceptionally creative with what they could charge over the years.

While court cases Nollan and Dolan refined the rules and limited cities to charging exactions based on an “essential nexus” and “rough proportionality” to the expected impact of development, cities still have plenty of leeway to increase or decrease their fees as they see fit. Given that the fundamental budgetary issues in local jurisdictions aren’t going away anytime soon, we can only expect the pressure on developers to continue increasing over time.

Takeaways

Newcomers to California often wonder/complain about how slow things are built here, how limited the transit systems are, and how intractable the housing crisis seems. Likewise, I wondered how Californians could be suffering these problems for literally decades but still couldn’t get things built faster.

After learning about how local governments exercise their police power to limit growth, how CEQA litigation threatens projects before they even get off the ground, and how sky-high exactions make many developments infeasible, I think I’m finally starting to piece it together. California is fundamentally anti-development, and it’s largely by design (however unintentional).

For those with enough wealth or luck to settle into a home in California, they’re truly golden in the Golden State. But for everyone else, it’s hard to imagine an end to the dystopia.


Images and inspiration pulled from these textbooks:

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