Matching Growth and Infrastructure

ESP 171 Urban and Regional PlanningProfessor Susan Handy

5/12/16

Types of Strategies for Efficient Development within the Boundaries

Reactive ProactiveRegulation Incentive ActionShapeDevelopment if and when it happens

Encouragedevelop to happen

Make development happen

“Up-zoning” where you want more density(vs. “Down-zoning” where you don’t want it)

Development subsidiesTax creditsRegulatory streamlining

Redevelopment processTargeted public improvements

Recap: Redevelopment (specific form of Economic Development)

• Starting point: Blight– Finding of blight for specified redevelopment area

• Tool 1: Eminent domain– Used to assemble parcels for easy development

• Tool 2: Tax increment financing– Way for project to pay for itself – borrow up-front

against future increases in tax revenues

California redevelopment agencies abolished 2/1/12…

Can cities still do redevelopment without redevelopment agencies?

• Do cities still have the power to use tax-increment financing…?– Yes, for things like roads (but it isn’t easy)– But for redevelopment projects…?

• Even if they could, city would only get 15%

• Do cities still have the power to use eminent domain…?– Yes, definitely for things like roads– But for assembling parcels for development…?

• Even if they do, where do they get the funding?

Community Revitalization and Investment Authorities

• Authorized by legislature in 2015• CRIA can be created in locations where

– Predominantly low-income and 3 of:• Unemployment 3% above statewide average• Crime rate 5% higher than statewide median• Deteriorated or inadequate infrastructure• Deteriorated commercial or residential structures

– Former military base with deteriorated structures

• Can use tax-increment financing; 25% goes to affordable housing

“We call it Little Beirut,” Ms. Brooks said. “It looks like it was bombed.” The hole is a visual monument to the failed plans of two ambitious businessmen who vowed to revitalize this struggling region… They planned to finance it through a federal program that allows wealthy foreign citizens to invest $500,000 in projects in distressed areas in return for green cards, leading to permanent residency in the United States.

Fraud Charges Mar a Plan to Aid a Struggling Vermont RegionNew York Times 5.10.16

http://www.nytimes.com/2016/05/11/us/fraud-charges-mar-a-plan-to-aid-a-struggling-vermont-region.html?_r=0

Redevelopment agencies in California are dead!Broad concept of redevelopment is not!

What other tools are available?

Types of Strategies for Efficient Development within the Boundaries

Reactive ProactiveRegulation Incentive ActionShapeDevelopment if and when it happens

Encouragedevelop to happen

Make development happen

“Up-zoning” where you want more density(vs. “Down-zoning” where you don’t want it)

Development subsidiesTax creditsRegulatory streamlining

Redevelopment processTargeted public improvements

e.g. infrastructure investments

What do I mean by “infrastructure”?

John Oliver’s definition

Level of Government

Infrastructure/Services

Transportation

Federal $$$, policies $$$, policies

State Water systems Highways outside metro areas

Region Water systems Highways inside metro areas, transit, bike/pedfacilities

Local Sewer systems, garbage, police, schools, etc.

Local streets, bike/pedfacilities

Who’s responsible for what

Growth Infrastructure

Traditional question:How can cities ensure that growth does not overwhelm infrastructure?

What happens when a city doesn’t have adequate infrastructure? Roads

Water/Sewer

Stormwater

Growth Infrastructure

Newer question:How can cities use infrastructure to influence the rate and type of growth?

Traditional question:How can cities ensure that growth does not overwhelm infrastructure?

Responsive

Strategic

Local Tools for Matching Growth and Infrastructure

CAN be used for encouraging infill development!

BUT often have the opposite effect!

Capital Improvement Program

CIP Picking infrastructure projects, AND

Paying for infrastructure projectsExactions

Adequate Public Facilities standards

APF Restricting growth to capacity, OR

Mitigating if growth exceeds capacityTraffic Impact Analysis TIA

Tool 1: Capital Improvement Programs

• Public physical improvements scheduled for 5-6 years

• Facilities with long-term usefulness or permanence: sidewalks, sewers, etc.

http://public-works.cityofdavis.org/public-works-infrastructure

e.g. Davis CIP

http://public-works.cityofdavis.org/engineering/capital-improvement-plan - “CIP pages are all down while we ‘improve’ them”

Capital Improvement Programs

• Key issues:– Sources of funding– Prioritization of projects

CIP Issue 1: Funding Sources

• General revenues (sale taxes, property taxes)

• Service fees (e.g. on utility bills)

• Redevelopment funds – no more!• Grants (federal, state)

• Parcel taxes• Assessment districts• Exactions (for new devt)

Review: Prop 13

Tax bill = tax rate x assessed value of property

Fixed at 1% Can only increase at 2% per year as long as property is not sold

City gets 15% of total property tax revenues

Instead: Local governments use parcel taxes…

Property Tax versus Parcel Tax

Property Tax Parcel TaxPercentage of assessed value of property

Flat fee per parcel or fee based on square footage

Prop 13 limits…• Rate to 1% of

value• Assessed value

increase to 2% per year

• No limit on fee• Requires 2/3

vote

http://en.wikipedia.org/wiki/California_Proposition_13_(1978)

Parcel Taxes in DavisMeasure Date Amount Purpose

Measure C March 2012(until 2017)

$320 per parcel, $150 for multi-dwelling per year

Schools

Measure B June 2012(until 2018)

$49 per single-family home per year

Parkmaintenance

Measure E November 2012(until 2017)

$204 per parcel per year

Schools

56% of parcel tax measures in California approved 2003-2014

ISSUES?See http://ballotpedia.org/Parcel_tax_elections_in_California

Measure AA would implement a $12-a-year parcel tax, raising about half a billion dollars over 20 years. The money would go toward building up the bay’s defense against sea level rise by restoring marshes.

Measure AA Asks Bay Area Residents to Help Protect Against Sea Level RiseKQED, 5/9/16

http://ww2.kqed.org/science/2016/05/09/measure-aa-asks-bay-area-residents-to-help-protect-against-sea-level-rise/

Assessment Districts

• Property owners within district pay for benefits of infrastructure – fixed $ per lot– Used to back bonds: borrow now, pay later

• In California:– Mello-Roos Districts - 1982– Prop 218 - 1996

http://wildomarmagazine.wordpress.com/2011/05/page/2/

Mello-Roos Districts (1982)created by city/county and developer

• Community facilities district (CFD) levies additional taxes on land inside district

• Taxes tied to property (e.g. size of house), included with property tax bill

• Tax revenues used as backing for bonds to pay for new infrastructure

• Lasts no longer than 40 years…

Mace Ranch in Davis –$1.6 M per year

Common in Orange and Riverside County

Cannery CFD creates unequal taxation patchworkDavis Enterprise, 3/3/15

http://www.davisvanguard.org/2014/11/cannery-petitions-city-to-create-cfd-council-learns-of-history-of-cfds-in-davis/

From $904 to $3223 per house per year to pay for street improvements, sidewalks, street lights, public parks, etc.

http://www.davisenterprise.com/forum/opinion-columns/cannery-cfd-creates-unequal-taxation-patchwork/

Proposition 218 (1996)

• All local taxes of any kind, plus assessment districts, require approval of local voters

• Two-thirds vote needed for special purpose tax (e.g. utilities, transportation)– e.g. Parcel tax in Davis for parks maintenance,

others for schools• vs. 50% vote to increase sales tax – Davis’ Measure O!

Made redevelopment process and Mello-Roos more important!

New: Enhanced Infrastructure Financing Districts (EIFDs)

• Created by SB628 as of January 1, 2015.• Authorizes city or county to establish EIFD,

adopt infrastructure financing plan, issue bonds (55% approval of voters).

• Can use Tax Increment Financing! But revenues shared across agencies, all of whom must agree on financing plan.

Helps to make up for abolishment of redevelopment agencies!

FYI, many more kinds of districts…

Benefit Assessment Districts Maintenance Districts

Mello-Roos Community Facilities District Vehicle Parking Districts

1982 Act Benefit Assessment Districts Street Improvement Districts

Abatement Districts Community Services District

Business Improvement Districts Reclamation Districts

Geological Hazard Abatement Districts 1972 Act landscaping and Lighting Districts

Street Lighting Districts Community Rehabilitation Districts

Integrated Financing Districts County Services Areas

See http://www.californiataxdata.com/A_Free_Resources/fact_sheets.asp

Assessment District Issues

• Tax can’t be tied to property value because only property tax can be based on value –equity issues?

• Based on idea that growth should pay for itself – but sometimes newcomers asked to pay more than fair share?

New: Greenhouse Gas Reduction Fund (GGRF)

• Funds projects that support the goals of AB32, i.e. that reduce GHG emissions – see programs

• SB 535 set requirement that 25% of funds must go to projects that benefit disadvantaged communities

• CalEnviroScreen tool to identify areas disproportionately burdened by multiple sources of pollution – see interactive map

Affordable Housing and Sustainable Communities (AHSC) Program

Sustainable Agricultural Lands Conservation (SALC) Program

CIP Issue 2: Project Prioritizing

vs.

All cities have a capital improvement program… but what kinds of projects do they choose to fund?

CIP Project Prioritizing

• Funding criteria based on goals of General Plan• Projects awarded points based on criteria• Projects with the most points get funded• Example: Give points to projects that support

growth management goals– Projects serve existing areas– Projects serve redevelopment areas

Transportation Element Goals

1. Travel Choices: Davis will provide a comprehensive, integrated, connected transportation system that allows users to choose between different modes of transportation.

2. Sustainability: The Davis transportation system will evolve to improve air quality, reduce carbon emissions, and improve public health by encouraging usage of clean, energy-efficient, active (i.e. human powered), and economically sustainable means of travel.

3. Complete Streets: Davis will provide a safe and convenient Complete Street network that meets the needs of all users, including children, families, older adults, and people with disabilities.

4. Bicycling: Davis will strengthen its status as a premier bicycling community in the nation by continuing to encourage bicycling as a healthy, affordable, and low-impact mode of transportation accessible to all users and abilities and by continuously improving the bicycling infrastructure.

Side note: Institutional and Professional Divisions

Planning department

planners

Public Works department

engineers

New twist 1: “Fix it First”

“…prioritizing investments in roads, schools, utilities, housing, and other infrastructure in a way that leverages and enhances existing assets before building new…”

– NGA Center for Best Practices

“there’s a multibillion-dollar maintenance backlog on California’s streets and roads” – Brian Kelly, Secretary of the California State Transportation Agency

http://www.sfchronicle.com/opinion/openforum/article/Road-funding-must-include-construction-and-6115448.php

Vallejo’s experiment with direct democracy – May 2013

New twist 2:“Participatory Budgeting”

Every resident age 16 and over given the chance to vote on how to spend $3.2 million in sales tax money

See article on course website

New Twist 3: “Complete Streets”

http://la.streetsblog.org/wp-content/uploads/2008/10_06/10_8_08_complete_streets.jpg

- See articles on website -

“Livable Streets in Carlsbad, Calif”

Local Tools for Matching Growth and Infrastructure

CAN be used for encouraging infill development!

BUT often have the opposite effect!

Capital Improvement Program

CIP Picking infrastructure projects, AND

Paying for infrastructure projectsExactions

Adequate Public Facilities standards

APF Restricting growth to capacity, OR

Mitigating if growth exceeds capacityTraffic Impact Analysis TIA

Tool 2: Exactions

• Growth should pay its own way!• Requirements for development approval.• Two forms:

– Physical: • Infrastructure• Dedication of land

– Financial: • “In-lieu” payments instead of infrastructure, land• Impact fees to pay for off-site services, mitigations

Exactions – Legal Requirements- see textbook -

• Based in police power: “public purpose”• Document and spend funds for that purpose• General Plan policy imposed on all developers:

– Reasonable relationship test

• Exactions imposed on single project or developer:– “Essential nexus” test: direct link between impact and

exaction– “Rough proportionality” criterion: impact and exaction

are the same scale

Nollan vs. CCC:Essential Nexus

Dolan vs. Tigard, OR:Rough Proportionality

http://www.beachandisland.net/modern-beach-houses/

Easement for path as mitigation for blocking views?

Dedication of land for bike path as mitigation for traffic?

Exactions – Key Court Cases- see textbook -

Example: Davis Code

Chapter 36 SUBDIVISIONS• 36.08.010 Dedication of streets,

alleys and other public rights-of-way or easements

• 36.08.040 Parkland dedication • 36.08.050 School site dedication • 36.08.070 Local transit facilities

$56,472 for parks in 2010-11

Grande school site

Example: Minimum Parking Requirements

Some cities: in-lieu fees to build public parking lots

Exactions - Issues

• Increase in housing costs!• Discouragement to growth…?• Newcomers paying to fix existing problems?

“For local governments… the clear message is to keep hiring nexus consultants and conducting more studies. For property owners, the clear message is to keep suing.”

- Fulton & Shigley

Local Tools for Matching Growth and Infrastructure

CAN be used for encouraging infill development!

BUT often have the opposite effect!

Capital Improvement Program

CIP Picking infrastructure projects, AND

Paying for infrastructure projectsExactions

Adequate Public Facilities standards

APF Restricting growth to capacity, OR

Mitigating if growth exceeds capacityTraffic Impact Analysis TIA

Tool 3: Adequate Public Facilities Standards

• New development must demonstrate that facilities and services will be available to serve project at the time it comes on-line.

• Local government sets standards then approves projects based on adequacy of public facilities

Goal: No reduction in service quality for existing residents

APF Standards – Variations- see Chapter 11 -

• Concurrency management – ex. Florida, Washington

• Growth-phasing systems– ex. Ramapo, NY system

Amount of growth = f (infrastructure capacity)

APF Standards - Issues

• What happens if a community does not have adequate public facilities to accommodate growth…?

Local Tools for Matching Growth and Infrastructure

CAN be used for encouraging infill development!

BUT often have the opposite effect!

Capital Improvement Program

CIP Picking infrastructure projects, AND

Paying for infrastructure projectsExactions

Adequate Public Facilities standards

APF Restricting growth to capacity, OR

Mitigating if growth exceeds capacityTraffic Impact Analysis TIA

Tool 4: Traffic Impact Studies

• Impact of proposed project on traffic levels in area

• Part of development review process, before project approval– California: part of CEQA– FL, WA: used to determine concurrency

Level of Service (LOS)

LOS = f (delay) = f (volume/capacity)

LOS

Average Intersection Delay

Average FreewaySpeed

A < 10 seconds >55 mph

B >10-20 seconds 50 mph

C >20-35 seconds 45 mph

D >35-55 seconds 40 mph

E >55-80 seconds 35 mph

F >80 seconds <20 mph

Traffic Impact Studies - Process

1. Existing LOS in area2. Projected LOS in area in future3. New trips generated by project4. Projected LOS in area in future with new

trips added 5. Mitigations, if needed

Existing LOS

New Trips Generated

LOS with Project

TIA Mitigations?

• LOS = f (volume/capacity)• What can you do to increase LOS?

TIA Issue

Trip generation rates based on data from suburban sites… what does this mean for TIAs for infill projects?

?

Recent UCD project to collect trip data at “smart growth” projects

See http://ultrans.its.ucdavis.edu/projects/smart-growth-trip-generation

Another TIA Issue

Are LOS and traffic congestion the main concerns from an environmental standpoint…?

?

SB743 Environmental Quality

http://www.opr.ca.gov/s_sb743.php

2013 bill instituted a shift from LOS to VMT (vehicle miles traveled) for traffic impact analysis for CEQA

Questions:- How to predict VMT for

proposed projects?- How much VMT is a

significant impact?

Increase over current situation, but relative to equal amount of development in different community…?

http://cityofdavis.org/city-hall/community-development-and-sustainability/development-projects/hotel-conference-facility-richards-boulevard

Local Tools for Matching Growth and Infrastructure

Capital Improvement Program

CIP Picking infrastructure projects, AND

Paying for infrastructure projectsExactions

Adequate Public Facilities standards

APF Restricting growth to capacity, OR

Mitigating if growth exceeds capacityTraffic Impact Analysis TIA

CAN be used for encouraging infill development if we use them in

the right way!

For Tuesday

• Keep reading!• Get started on White Paper! • Memo on topic due next Tuesday!