Bay Area city and county officials approved a massive plan last week that promises to turn the tide on gridlock traffic and high housing costs that have gone from bad to worse over the last decade. The long-range plan, known as Plan Bay Area 2040, provides the blueprint for how much housing would be needed -- and where it ought to be built -- to have sustainable growth across the Bay Area between now and 2040.
On a 41-2 vote, elected leaders serving on the executive board of the Association of Bay Area Governments (ABAG) and the Metropolitan Transportation Commission (MTC) approved the latest update to Plan Bay Area, which proposes a path where the region essentially builds its way out of the affordability crisis. The plan calls for 820,000 new homes -- accompanied by 1.3 million new jobs -- between 2010 and 2040, nearly half of which would be centrally located in the "Big 3" cities of San Francisco, Oakland and San Jose.
If all goes according to plan, MTC staff predict the planned growth would go a long way toward reducing traffic congestion and greenhouse gas emissions, and keep up with the housing demand that will come from expected job increases in the area.
The primary thrust of the plan is that the region needs to fix, or at least take the edge off, the growing housing crisis in the Bay Area. Data provided by ABAG shows that rental costs, adjusted for inflation, have nearly doubled in the Bay Area since the 1970s, and low-income families are spending more than half their paychecks on housing and transportation costs. An estimated 500,000 "lower-income" households are at risk of displacement in the Bay Area, a majority of whom live in Santa Clara, San Francisco and Alameda counties.
At the same time, commute times and traffic congestion are at the highest level on record for the Bay Area.
Whether or not Plan Bay Area's growth projections will be close to reality remains to be seen. Although the plan sets estimates for all 101 Bay Area cities and towns, MTC and ABAG have little say in whether any of the housing gets built. Local control remains in the hands of individual municipal governments, and there's a host of ways cities can choose to slow down or prevent growth from happening. The assumption is that local jurisdictions are going to put their best foot forward to follow the plan, and that a package of incentives, including money for planning and transportation projects, should be enough to encourage sustainable growth.
An average of about 27,300 housing units per year would be a significant U-turn for the nine-county region, which has seen decreases in overall housing production since the 1970s. More recent data from ABAG is hardly encouraging: Permits issued for new housing between 2007 and 2014 show the region is already off to a bad start, with the addition of only 123,098 homes during the seven-year period.
One of the hardest parts of the plan to digest is how these growth projections are created and whether they're a best-guess estimate or an ambitious goal -- a question that was answered more than once in the final meetings leading up to the vote on Plan Bay Area. ABAG President Julie Pierce, a member of the Clayton City Council, told her colleagues at the July 26 meeting that the growth targets are created by a complex "UrbanSim" calculation that determines what the developer market would build based on information like city zoning and general plans, traffic data, land values and development costs. In other words, the estimates give a realistic picture of what Bay Area growth would look like if market forces drove development between now and 2040.
Where will the housing go?
A staggering 77 percent of all the new housing growth is projected to be built on less than 5 percent of the Bay Area's land in so-called Priority Development Areas (PDAs), specific regions that local cities and counties elect for concentrated, higher-density growth. These PDAs tend to be located along transit lines and near job centers, and play a critical role in meeting the goals laid out in Plan Bay Area.
High-growth cities like Mountain View embraced the idea of PDAs, designating its East Whisman, North Bayshore, El Camino and the San Antonio Shopping Center areas as major locations for future growth. These plans translate into an estimated 82 percent increase in the city's housing stock -- from 31,957 to 58,300 homes -- between 2010 and 2040, putting Mountain View among the top 15 cities that will serve as "key locations for the Bay Area's future households and jobs." Pierce told the Voice in an email last week that cities volunteering for high growth are first in line for MTC funding to plan growth as well as discretionary transportation funding.
Mountain View's neighbor, the city of Palo Alto, went a different direction by designating only one area, in the California Avenue region, as a PDA, opting against volunteering its downtown or El Camino Real corridor as candidates for high growth through the regional plan. Palo Alto is one of only a few cities along the entire stretch of El Camino Real that opting against designating the thoroughfare as a PDA, leaving a small Midpeninsula gap on a near-unanimous plan to concentrate development in the area.
Palo Alto Mayor Greg Scharff, who serves on ABAG's executive board, told the Voice last month that the decision was made in order to retain complete control over the city's future development, and that electing to add more PDAs means the city could be pressured by the state to build more housing than its residents are comfortable with in the coming years.
"We want to be able to chart our own destiny," Scharff said. "If you choose to make something a PDA, you're saying 'Give us more development.'"
All carrots, no sticks
Now that the Bay Area has a road map for 820,000 homes by 2040, how much of it is actually going to get built? That's the big question facing ABAG and MTC, neither of which have the power to force cities and counties to adopt land use policies, zone for the growth or approve any development that would advance the goals of the newly approved Plan Bay Area.
Despite that challenging reality, public perception of the plan as a top-down, regional dictate that forces lower-density suburbs to accelerate construction and build up has been an ongoing challenge for the joint agency. The plan's FAQ web page is littered with language denying the loss of local control and demonstrating the elective nature of the job and housing estimates. Even at the July 26 meeting, MTC staff continued to stress that Plan Bay Area does not "usurp" local control, and that California government code states that nothing in the plan should be interpreted as "superseding the exercise of the land use authority of cities and counties within the region."
Plan Bay Area is a state-mandated plan under state law SB 375, which requires that the region adopt a "Sustainable Communities Strategy" that can demonstrate future growth and development will result in a reduction in per-capita greenhouse gas emissions. The housing and job growth in the updated Plan Bay Area is separate from the state's eight-year Regional Housing Need Allocation (RHNA) cycle, which requires cities to update so-called housing elements to zone for enough housing to keep up with population growth.
But depending on whom you ask, even the RHNA cycle hardly has any teeth. A 2017 report by the state's Housing and Community Development department points out that although the state can compel cities to zone for housing, there's no shortage of ways to keep it from being built. A lengthy and burdensome development review process, along with community opposition, can severely limit the type of housing that can be built and prevent projects from penciling out for prospective developers. The report specifically calls out Palo Alto residents for placing a measure on the ballot to overturn plans for a 60-unit low-income senior housing project.
Plan Bay Area's detachment from any mandatory land use policies wasn't enough to assuage concerns from Brisbane city officials, who showed up in full force at the July 26 meeting with frustrated demands to revoke the housing projections for the small city south of San Francisco. Plan Bay Area projects that a massive 684-acre baylands site located in Brisbane could accommodate 4,400 new homes, but city officials say it's hardly a done deal and simply one proposal by the developer who owns the property.
The projections may not affect the RHNA allocation of the city, but it does make a big difference if the higher housing number is included in the plan, said Brisbane council member Madison Davis. She said it's entirely possible Brisbane will be on the hook for 4,400 new homes in the next iteration of the RHNA process, and the city would be compelled to move forward with the development in order to tap into discretionary transportation funding.
"On the one hand, we're told that Plan Bay Area doesn't dictate local land use, yet on the other hand, it appears that the city could be financially punished for exercising our local land use in a way that displeases MTC," Davis said.
Brisbane's Mayor Pro Tem Clarke Conway called the growth expectations for the city "ludicrous," and demanded the joint agency's executive committee members delay a vote on Plan Bay Area and its environmental impact report until after the city's decision on the baylands project in late August.
"You need to stop listening to this executive planning director and do the right thing," he said, pointing at MTC staff members. "Table this 'til September, otherwise this guy, this staff and his counsel, are pulling you into the legal arena."
Scott Lane, a member of MTC's policy advisory council, said he fully embraces Plan Bay Area and understands the Bay Area is already be something close to 300,000 housing units behind on new demand, but said putting such a heavy burden on one city amounts to "utter insanity" that puts MTC at risk of a lawsuit.
"This is like telling a homeowner how to develop their property," he said. "I have been for years saying MTC and ABAG need to have more jurisdictional authority and power, (but) this is an abuse of power, there's no other way to say it. Every city needs to be the master of their own domain."
Palo Alto's Scharff said he believes the fears over Bay Area's growth projections are "misguided," and that the real threats to local control reside in Sacramento. The state legislature has proposed close to 130 different bills aimed at addressing the state's housing shortage, and some aim to limit the ability of local governments to slow down or block approval of housing developments. One such bill, SB 35 authored by State Sen. Scott Wiener (D-San Francisco), proposes a streamlined approval process -- or so-called "by-right" housing -- for projects that meet certain criteria within cities that are behind on meeting RHNA goals.
Wiener's proposed legislation isn't a big shock, given his comments as an MTC member last year. During a review of Plan Bay Area in November, Wiener -- who was a San Francisco supervisor at the time -- said he was uneasy with the idea that the goal of 820,000 new homes wasn't going far enough to stop displacement and stem the affordability crisis. Indeed, Plan Bay Area conceded that lower-income families will likely be paying two-thirds of their income on housing and transportation by 2040. Weiner suggested a second set of numbers be produced that showed the break-even point for housing affordability.
Scharff, on the other hand, argued at the Nov. 17 meeting that MTC and ABAG ought to go in the opposite direction, and review what would happen to a broad set of performance metrics if the Bay Area failed to build the housing estimates in Plan Bay Area 2040. Scharff later told the Voice that the plan goes a long way towards preventing displacement and skyrocketing housing costs, and that a break-even point would hardly be realistic.
"Some things you just can't fix -- there's no lever you can pull to change that that's reasonable," he said. "I think you want to have a realistic plan about what's really going to happen as opposed to something that's aspirational."
After a lengthy back-and-forth among MTC and ABAG members about the fate of Brisbane's jobs and housing estimates, San Jose Mayor Sam Liccardo said he was disappointed by the dialogue that veered away from handling a very real housing crisis in the region. His original plan, he said, was to vote no on Plan Bay Area because it doesn't go "nearly far enough" to resolve the jobs-housing imbalance in the region, and that it lacks the teeth needed to force cities and jurisdictions to "bear the responsibility for housing that we are clearly not bearing as a region." And this is in spite of San Jose fighting to balance out its jobs-housing ratio by attracting more jobs in recent years -- not housing.
"I represent a city that has, among the major cities in the United States, the worst jobs-housing ratio," he said. "We're the only major city in the United States that actually has a smaller daytime population than nighttime population."
Liccardo added that the entire Bay Area needs to come together to fight an affordability crisis that makes traffic intolerable and could make it impossible for the next generation to live in the Bay Area because jobs are located in "jobs-rich communities" and all the housing is located elsewhere.
"As long as smaller jobs-rich towns are not willing to take their responsibility for housing, we will continue to perpetuate exactly what we have now," he said.
A big opportunity
Amid the multi-year process of updating Plan Bay Area, both MTC and ABAG began the slow process of combining forces as a joint agency, consolidating staff from both agencies and retaining a firm to make sure both agencies have "better and deeper relationships" and a "shared sense of purpose," according to a January merger update. Although the vague platitudes hardly go into detail on what it will mean to have a combined regional planning agency in the Bay Area, some housing advocates are already calling it a big win.
A June report released by the Nonprofit Housing Association (NPH) of Northern California called the merger a tremendous opportunity to use MTC's transportation planning and wealth of funding in conjunction with ABAG's "sophisticated housing expertise" in a way that finally addressed the dearth of housing being built in the Bay Area. Sustainable housing growth is inextricably linked with the region's transportation woes, and MTC has plenty of ways to pour some of its $1.9 billion annual budget into direct investments in housing, according to the report.
"We see this as an enormous opportunity," said Amie Fishman, executive director of NPH. "We see this as a critical chance to meld transportation and housing together to make sure we're investing in the infrastructure we need."
Among the suggestions in the report, NPH is advocating for MTC to pour its reserves into a regional "infill infrastructure bank," whereby MTC would help finance infill development for transit-oriented affordable housing -- particularly in situations where the project wouldn't otherwise pencil out for a developer to build. Despite MTC's purview as a transportation commission, establishing an infill infrastructure bank is within the agency's power and could start tomorrow, said Pedro Galvao, the regional planning and policy manager for NPH.
Back in 2012, MTC launched what's called the One Bay Area Grant program, which conditioned discretionary transportation funding on whether cities have an updated housing element in their general plan and make progress toward reaching housing goals. Even though Plan Bay Area has been approved, it's still not clear how much of MTC's $74 billion in discretionary transportation funding over the next 24 years will be tied to the One Bay Area program.
Since Plan Bay Area's complex calculation for job and housing growth was based on market forces, MTC's investment may need to be geared towards the kind of housing that won't get built in today's housing market -- particularly housing for low-, very low- and extremely-low income housing, Fishman said. A diverse housing stock is going to be necessary to preserve the character of the region, she said, as the Bay Area continues to see rapid growth.
"We know there's massive growth coming, and we need to stand tall with the values that our region stands for -- that we are an inclusive, welcoming community. That needs to be reflected in our land use and policy decisions."