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California Climate Policies Chilling Housing Growth

State Supreme Court ruling will make California housing even pricier

The California Supreme Court's decision late last month to reject a nearly 6,000-page environmental report for a proposed development north of Los Angeles will not only delay or possibly kill a new suburban community. It will make it much more difficult for developers anywhere in California to build large-scale housing projects.

The Newhall Ranch project in the Santa Clarita Valley is similar to many communities throughout California. Proposed in the 1980s, the project was designed to be a new city with 58,000 residents on 12,000 acres. Back then, California's population was less than 30 million people. The population is now pushing 39 million and still growing – yet it looks like the days of master-planned communities are over.

"The report's finding that project's emissions would not be significant under that criterion is not supported by a reasoned explanation," the court ruled in a 5-2 decision. The state's highest court also rejected the project's "mitigation measures calling for capture and relocation of the stickleback, a fully protected (fish) species".

"The Supreme Court got the big picture on climate and sprawl development exactly right," said an attorney for the Center for Biological Diversity, in a statement. The center filed suit under the California Environmental Quality Act. The building industry has long warned that CEQA was slowing the construction of housing and infrastructure. Clearly, their warnings were correct, as this lawsuit targeted a project that opponents view as "sprawl."

The justices agreed with the "sprawl causes climate change" argument. "Finally, one should not assume a sizeable new housing development planned for a site relatively far from major urban centers, to be built largely on undeveloped land with habitat for several sensitive species, will have comparatively minor impacts either on greenhouse gas emissions or on fish and wildlife," wrote Justice Kathryn Werdegar for the majority.

If Californians aren't going to be housed in suburban-style neighborhoods, how will they live? The answer, many environmentalists say, is infill neighborhoods, smaller, high-density and apartment complexes shoehorned into existing urban areas, where residents can rely more on public transit rather than on automobiles.

One can debate the merits of either type of living. But in a recent column, former California Senate President Pro Tempore Don Perata, D-Oakland, pointed to research showing that CEQA lawsuits are used the most to target the kind of environmentally friendly projects the state wants to encourage, like transit, renewable energy and higher-density housing. Perata now heads a trade group that promotes infill housing.

Meanwhile, there's more chance the problem will get worse before it gets better. Last session, a measure (SB 32) to reduce the state's greenhouse-gas levels by 80 percent of 1990 levels by 2050 stalled after some members of the state's business community pointed out these long-term climate goals can be used under CEQA to halt currently proposed projects. The bill stalled, but is a two-year measure that may come back in January.

At the time, the California Building Industry Association produced a study showing the new measure could result in a 12-percent increase in the median-priced home and an annual reduction in the building of single-family homes by more than 10,000 units. That one measure alone, it argued, would price more than 680,000 Californians out of the housing market. Yet the Supreme Court's recent decision might have an even greater impact.

"The 'One Percenters' who live luxuriously along the coast will be little bothered by this decision," said Mike Genest, former state director of finance, and an author of the report. "They can afford the luxury of spending far more per square foot of housing... But, the middle class trying to make do in our increasingly bifurcated state will continue to suffer unnecessarily high housing costs because of out-of-control policies such as the court endorsed in its Newhall decision."

Another core problem with CEQA is that the climate targets aren't clear in statute. For instance, project opponents can challenge the climate-change standard a state agency uses (the so-called "threshold of significance") and whether the project meets that standard. Without clear guidelines in law, that leaves the courts to sort through all the details – and it means that developers have little predictability at the outset of a project.

Opponents can always make a fair argument that any proposed project warms the planet (or harms a stickleback or some other fish or species), so every project potentially can drag on through years of legal challenges. The obvious result: fewer housing projects of all sorts will be built, and those that are built will have additional costs. Many developers won't even bother proposing such projects. People opposed to growth might be happy with that outcome, but those cheering probably already own their piece of the California dream.

Photo Credit: ABC 6

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  • Fist of Etiquette||

    The Church of AGW is a powerful one, with tentacles reaching deeper into the halls of power than Hydra. (Look closely and you'll see devotees whispering "Hail Gaia" when greeting one another.) Central planners love urban centers. It concentrates their power base and their power. Sprawl dilutes it. Heck, left to their own devices out there in the suburbs and those fuckers might vote something other than Democrat.

  • Hank Phillips||

    Surely they wouldn't vote... (ghasp!)... libertarian?

  • JWW||

    Apparently California has decided that it want to just continually take a piss on the poor and middle class and tell them to enjoy the rain.

  • MokFarin||

    Why do you think businesses are moving away in droves to places like Texas? Hiring people for 3x the cost of almost anywhere else in the country just doesn't make any sense. And it's not like "the poor" being paid less in Texas are being trampled: they just don't force you to put $250,000 of useless environmental modifications into every building you plan on putting up. Even if this was all California did (don't forget the CARB that screws construction companies on things like engine combustion efficiency and emissions control devices that don't actually control emissions, plus BIT inspections every 90 days) it would drive up the cost of everything because that means every new building is too expensive for the market, which means the food prices for a grocery store goes up, and so forth.

    The only reason California is rich is because of their agriculture - which is why the state turns such a blind eye to illegal immigrants. They all go to the valleys and live 25 to a home and get paid less than the state minimum wage without so much as a peep from those hypocrites in Sacramento.

  • Rhywun||

    Whycome you hate Texas stickleback fish?!

  • Sevo||

    Your CA residential property just took a nice bounce; artificial scarcity will do that.

  • Hank Phillips||

    Excellent! The states with their own income taxes took the hardest-hit in 1932, when Herb Hoover told the IRS to go ahead and let states inspect corporate federal tax returns. California was also the reddest state in the Bush prohibition plus asset forfeiture collapse of 2007-12. Once a bunch of legislators and corporate lawyers have their mansions nationalized, the lessons of the Soviet bloc may begin to sink in. Trust me!

  • McStinklebuns||

    Local implementation of a global strategy:

    https://www.youtube.com/watch?v=Cs3iYHOXEbE

  • dpbisme||

    I as 39 when I graduated from San Francisco State in 1998... Two weeks later I was out of that State with the plan never to live there again.

    I made 70 Grand a year there and could not afford a Garage to live in.

    I moved to Raleigh, got a job paying 60 Grand and bought a house, I paid it off in eight years.

    Truth is according to any relocation calculator I got a 20 Grand raise for moving.

    I like my low taxes, four seasons, and cheap gas,,, they can have that place.

  • dantheserene||

    Why does the California machine hate prosperity so much? Where do they think wealth comes from?

  • The Iconoclast||

    Taxpayers.

  • Win Bear||

    Many cities in California won't let you build "infill" or small homes or condos either. Apparently, everybody should have a 1500 sq ft condo in San Francisco within walking distance to public transportation. In addition, apparently, if you are below median income because you do something particularly worthwhile, like poetry, painting, or fighting for women's rights, those evil techies should subsidize you.

  • XM||

    "If Californians aren't going to be housed in suburban-style neighborhoods, how will they live? The answer, many environmentalists say, is infill neighborhoods, smaller, high-density and apartment complexes shoehorned into existing urban areas, where residents can rely more on public transit rather than on automobiles."

    So they basically want to convert CA housing to cramped South Korean style apartments..... even though they live in a land 30 times larger than Korea or Japan.

  • steveH099||

    Hyperbole much?

    California area = 163,707 sq mi
    Japan area = 145,882 sq mi
    South Korea area = 38,623 sq mi

  • KerryW||

    The "30 times" is hyperbole, but the basic point is valid. Japan has a lot more people (more than 3 times as many) than CA. You need to look at the numerator as well as the denominator (pop. in millions, area in millions of sq. mi.):

    CA: 39/.164 = 240/sq.mi.
    Japan: 127/.146 = 870/sq. mi.
    S.Korea: 50/.039 = 1280/sq.mi.

    By restricting where you can build housing to, say, a quarter of state's total area, CA is promoting a similar population density.

  • Del Varner||

    How will this housing be met? Not by infill housing, unless you shantytowns. Do you the the City of Los Angeles police of the Country of Los angeles sheriffs will run these people out? Not likely. The "optics" would be bad.

  • Mkelley||

    "The justices agreed with the "sprawl causes climate change" argument."

    Most of the left's agenda relies on the global warming scam for its justification. They will lie, cheat, or steal to force it on us.

  • boxty||

    "The answer, many environmentalists say, is infill neighborhoods, smaller, high-density and apartment complexes shoehorned into existing urban areas, where residents can rely more on public transit rather than on automobiles."

    As a San Diego resident, you should know that the environmentalists are lying. They've been blocking the One Paseo development for years, demanding that the plans for high-density, multi-use development be cut severely.

  • HasilAdkins||

    Meh, whatever the merits of a particular environmental measure it's a stretch to blame land bubbles on such measures. California has the dismal Prop 13 limitations to blame for high land prices, it's another vindication of laissez faire/Ricardian economics that where a natural monopoly is undertaxed supply will contract and prices will rise.
    Not to worry though, prices will be pulled down in the region by 2019 when the new Dot com/land bubble busts. And yes you can quote me on that.

  • roymathew||

    i heard this news, many builders move from california to another locations and build apartments, for example abu dhabi buiders create apartment for rent in abu dhabi also apartment for rent in bahrain ..amd many more places ...so govnment help california for needfull

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