California Forever, Forever

Happy Tuesday and welcome to another edition of Rent Free.

Since I’m on vacation this week, I’m afraid readers will have to suffice with a slightly more abbreviated—but hopefully still valuable—newsletter looking at why it’s so hard to build a new city in California.

California Forever—Delayed or Doing Fine?

This past Monday, California Forever announced it would not ask Solano County voters to approve zoning changes it needs to proceed with its planned 17,500-acre, 400,000-person community this year, as it had initially planned.

Instead, the development company would work with the county government to approve the rezoning and complete a needed environmental review and development agreement before asking for voter approval in 2026.

“We believe that with this process, we can build a shared vision that passes with a decisive majority and creates broad consensus for the future,” said Jan Sramek, California Forever’s CEO.

Background

For those who have not been following this story closely, beginning a few years ago, investors behind California Forever have been buying up land in Solano County with an eye toward creating a new urbanist community where more flexible development rules would allow for the kinds of neighborhoods most California cities restrict—dense, walkable, mixed-use, etc.

Most master-planned communities are, well, master-planned—planners lay out exactly what will be built where and try to build it all at once.

The vision behind California Forever’s new community is a bit different.

Its East Solano Plan called for rezoning company-owned land to allow for a flexible range of densities and uses. Once rezoned, individual project sponsors could then come and build whatever was allowed by that zoning—new office space, new manufacturing facilities, new townhomes, etc. The idea is the planned community’s more flexible development rules and proximity to San Francisco and Sacramento would draw both jobs and residents.

It’s a nice vision. It’s also one that a lot of people have to say yes to before it can happen.

Getting to Yes

Solano County has an “orderly growth” ordinance blocking new greenfield development.

That means the company needs to get a bunch of zoning changes to make its land legally developable and get those changes approved by voters via a ballot initiative.

Changing county zoning, in turn, triggers the California Environmental Quality Act (CEQA)—which requires local officials to study the environmental impacts of changing land use regulations. These environmental studies can take years (or even decades) to complete.

Additionally, the company and the county need to sign a development agreement hashing out how infrastructure and other impacts will be paid for.

California Forever’s initial plan was to run a ballot initiative locking in the needed zoning changes this year and then work with the county to produce a CEQA-required environmental impact report and development agreement.

The New York Times reports that the company’s ballot initiative was plausibly headed for defeat later this year. Even local officials who weren’t totally opposed to a new city in the county said the company was moving too fast.

So instead of risk a failed ballot initiative, California Forever is now opting to ask the Solano County Board of Supervisors to approve needed zoning and general plan changes first, which will include producing a CEQA-required environmental impact report and a development agreement, and then go to voters with all that worked out in 2026.

Media write-ups of this change of plans describe California Forever’s new city as “on hold”—but that doesn’t strike me as quite right. The company is still proceeding with its project, it’s just changing the order in which it’s seeking various necessary government sign-offs.

YIMBY PEMDAS

Whether changing the order of operations of all these needed approvals improves the company’s chances of actually getting something built is an open question.

Getting an environmental impact report and development agreement hashed out before running its ballot initiative means the company can give voters a clearer idea of what they’re approving. More might say yes as a result.

Going through the Solano County Board of Supervisors first also would mean that a majority of supervisors would be supporting the project by the time it goes to voters. Plus, giving the county more input might also encourage county officials to sign off on an environmental impact report more quickly.

Solano Board of Supervisor Chair Mitch Mashburn, whose district includes the area where the new California Forever city would go, said as much in a joint statement with Sramek.

“Many Solano residents are excited about Mr. Sramek’s optimism about a California that builds again,” he said. “We cannot solve our jobs, housing, and energy challenges if every project takes a decade or more to break ground.”

“Delaying the vote gives everyone a chance to pause and work together, which is what is needed….It also creates an opportunity to take a fresh look at the plan and incorporate input from more stakeholders,” he continued.

But there are a lot of risks in doing a ballot initiative last too.

By running a ballot initiative first, California Forever was able to write the zoning changes it wanted for its new community. If that ballot initiative were successful, those zoning changes would be locked in.

In contrast, going to the county first to get its zoning changes approved gives county officials a lot more input over what those zoning changes will look like. It’s quite possible the county will try to shrink the project or impose other changes that will make the proposed new community less of the walkable, urbanist “city of yes” that its backers want it to be.

It also remains to be seen whether getting an environmental impact report done first will actually spend things along.

CEQA gives third parties ample opportunity to sue local governments who allegedly approve projects without performing a thorough enough environmental review, and those lawsuits can take years (or decades) to play out.

As such, CEQA suits have become NIMBYs’ weapon of choice for delaying projects. California Forever’s plans for a new city have been sufficiently controversial that someone will surely file a CEQA suit against them.

Expediting an environmental impact report for California Forever’s new city could well just expedite the time it takes for the whole project to end up in court facing years of environmental litigation.

No Easy Options

The fact is that California Forever’s quest for approval of its new community faces an uphill climb, regardless of how the company orders its asks for various permission slips.

Ironically enough, the company’s vision of creating a new community free from California’s typical tangle of red tape and regulation still requires working through a lot of that same red tape and regulation.

There’s no easy escape from the Golden State’s NIMBY morass, it seems. All the laws and processes—from zoning to CEQA to development referendums—intended to give people a say over how their community grows apply just as much to totally new communities too.

With its planned Solano County community, California Forever is trying to offer an optimistic vision of what a more pro-growth, urban California could be. At a minimum, it’s helping to highlight all the problems of an anti-growth California as is.

The post California Forever, Forever appeared first on Reason.com.

Source: https://reason.com/2024/07/30/california-forever-forever/