How Communities Can Benefit from Private Development in California

By Murtaza H. Baxamusa, Ph.D., AICP / San Diego UrbDeZine.

There is a building boom across California, but many communities have been historically left behind. Property tax increment has served as a planning and investment tool to provide public benefits such as affordable housing, good jobs and neighborhood amenities.

However, with the end of redevelopment, cash-poor cities across California are exploring innovative strategies to fund public benefits. One such strategy is to partner with developers for community benefits in exchange for planning and development rights.

The poster-child for the interaction between people and projects is South San Francisco, with the region having the most expensive rents in the nation, where a household needs to make $37 an hour wage to be able to afford a 2-bedroom apartment.

The city underwent a 2-year long planning process to develop the downtown area over 20 years within half-mile of the CalTrain station. They proposed several public plazas, 1,400 residential units and 800,000 square feet of commercial space with retail and services within walking distance. Residents were concerned about displacement, yet excited about the opportunities.

Community groups including labor, environmental, health, transportation, social justice, and housing organizations coalesced together to advocate on a common community benefits platform. As a result of their effort, the city council of South San Francisco adopted a specific plan earlier this year, which is one of the most innovative in the nation in creating a nexus between land-use and the socio-economic impacts of development. Here are examples of goals within the land-use element:

LU-1: Encourage the use of local workforce and local business sourcing for development in the plan area that generates quality construction and service jobs with career pathways, that provides job training opportunities for the local workforce, and that pays area standard wages for construction so that money in wages and materials used in the construction of these developments is invested in the local economy.

LU-7: Retain existing land use and density standards for residential neighborhoods outside of the Downtown core.

LU-8: Encourage a mix of housing types including ownership, rental, family, and senior housing, and also encourage provision of units accessible to persons with disabilities.

LU-9: Encourage the provision of affordable housing in the Specific Plan area, by working with non-profit housing developers to identify opportunity sites with high Low Income Housing Tax Credit (LIHTC) competitiveness, and through inclusionary or in-lieu fee provisions.

LU-10: Support regional and local efforts to examine displacement of affordable housing and lower-income households and consider programs to address identified housing needs.

The downtown South Francisco plan is just the foundational statement of principles, and implementation of community benefits is key to its success. One example of implementation is the adoption of an incentive zoning program with a menu of public benefits.

An increase of density or floor area ratio (FAR) is approved through a discretionary process in exchange for community benefits such as a local hire program, public art, local streetscape improvements, green building beyond statutory requirements, transit subsidies, and funding for public spaces, public facilities, community meeting rooms, or amenities like child-care.

Other cities in California where active community benefits movements are underway include:

• Redwood City: The city council last month approved a framework for community benefits that include a mix of housing, parks, citywide facilities and quality jobs.
• Berkeley: The city council has launched a discussion this month on significant community benefits that are required by developers who hope to construct taller buildings downtown.
• Menlo Park: The city council is studying public benefits that must be provided in exchange for development rights over the base level.
• San Diego: Next week, advocates are pushing for community benefits standards for publicly subsidized projects that include affordable housing, local construction careers and living wages.

Public accountability for public resources seems common sense, but is often under attack. This is because a community benefits approach threatens the dominant paradigm in many cities: that of value-free growth (i.e. any development is good).

However, a conditional acceptance of growth is not anti-growth, but an affirmation of value-added growth (i.e. any development ought to be good). It expresses astute stewardship of public resources by an educated public that recognizes the economic trade-offs between growth and stagnation, externalization and internalization of costs and benefits, and rent-seeking landlords.

Another way to ensure that new development benefits the community is by recapturing (rather than “taking”) the additional property value created by public agencies that grant land-use entitlements in the planning process.

Nico Calavita has written extensively about “public benefits zoning”, with several case studies from the East Bay Area in California. It is quite similar to the “cap-and-trade” in carbon emissions, in that development entitlements are capped to build a market pressure for the additional density to be sold for the fair market value of that entitlement. The public agency may ask for public benefits such as affordable housing or public spaces in return for the property value-enhancing entitlements.

The city of Santa Monica was one of the first in the nation to integrate community benefits into their land-use and circulation plan. Similar measures are being proposed elsewhere in the nation, such as Seattle and Detroit.

However, the emergence of a “movement” for community benefits in California depends on empowerment of communities of interest. No amount of technocratic streamlining nor abstract advance-modeling, can substitute for real-time deliberation of development proposals. Nor can the short-term alliances on a deal-by-deal basis constitute a sustainable coalition.

Plans that have build-out projected over a decade should ideally have continuous engagement built into the community benefits program, with sufficient discretion and enforceability over large-scale projects. Only then will “community benefits” be the authentic expression of a social movement rather than a marketing slogan for the next developer.

Murtaza H. Baxamusa, Ph.D., AICP is a certified planner, writer and thinker. He develops affordable housing for the San Diego Building Trades Family Housing Corporation, and teaches urban planning at the University of Southern California (USC). He has over 12 years’ experience in economic development and sustainable urban planning, and has previously worked for the USC Center for Economic Development as well as the Center on Policy Initiatives. He has doctoral and master’s degrees in Planning from USC, and a bachelor’s degree with honors from the Indian Institute of Technology, Kharagpur. He serves on several nonprofit boards, including Civic San Diego, the San Diego City-County Reinvestment Taskforce and the Middle Class Taxpayers Association. He received the Ruby Award for Outstanding Advocate from the San Diego Housing Federation in 2012, as well as the John Lyons Memorial Fellowship, an honor that was read into the Congressional Record of the 112th Congress. The City of San Diego proclaimed June 17, 2008 to be “Dr. Murtaza H. Baxamusa Day” in recognition of his contributions to the city. He is a home-owner in Bay Park, and lives with his wife and two daughters.

Originally posted at San Diego UrbDeZine. Re-posted with permission of the author.  The OB Rag has re-posted it from our online media partner, SDFP.