Tag: California

How California Became a Blue-State Role Model

California, once disdained as zany, insubstantial and politically unreliable, has now become a favorite of the blue state crew. From culture and technology to politics, the Golden State is getting all sorts of kudos from an establishment media traditionally critical of our state.

For example, the New York Times recently ran two pieces, one political and the other cultural, that praised this state for its innovation and cool – even in the midst of a horrendous drought.

And to be sure, it’s nice to be a pet – at least I hope that’s what our dog Roxie feels. But we may want to understand why those who traditionally lambasted California now grant us their favors. Although some praise is deserved – both the economy and the cultural scene in California have improved somewhat – much of this shift reflects changes in the political and media culture itself.

How a writer looks at California can be increasingly predicted by the writer’s political orientation. For liberals, the nasty California that produced both Richard Nixon and Ronald Reagan has been supplanted by a cooler, greener and more socially progressive state. If you are on the Right, California is beloved for reasons of nostalgia; for the Left, California is where the future once again is being shaped. Those of us more in the middle are simply unsure of what to think.

Read the whole thing at the Orange County Register.

Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. He is also executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is also author of The City: A Global History and The Next Hundred Million: America in 2050. He lives in Los Angeles, CA.

Photo courtesy of the National Archives.

May 11, 2015
A Fix for California Water Policy

Critics of California’s current water policy advocate more infrastructure spending on things like dams, canals, and desalination plants. Many would also curtail water releases for the benefit of fish and other wildlife.

Certainly, infrastructure spending would be better than wasting money on the governor’s high-speed-train fantasy. However, California cannot spend enough money on water infrastructure to prevent water shortages. And, solving California’s water shortage does not require an end to “dumping water” to save fish.

California has a history of droughts lasting as long as 200 years. You can dam every canyon in California and line the coast with desalination plants, and you won’t solve the water shortage in a 200-year drought, or even a ten-year drought. Under the current allocation and pricing system, California will simply consume every new drop of water produced. We will have a water shortage all the same.

Consider Westborough and Hillsborough, in the South San Francisco area. Hillsborough consumes more than four times the water per person as Westborough, just six miles away. Increasing the supply of water in California will simply allow Westborough to be more like its neighbor. The problem is how to constrain demand in places like Hillsborough.

California policy makers prefer to use authoritarian conservation policies and police-state enforcement tactics to allocate water and control demand. These polices do not end water shortages. They perpetuate the shortage, and they add to the burdens imposed by energy and growth policies which are already driving businesses and people out of the state.

Eliminating California’s water shortages in the presence of recurring droughts will require that the state resort to something truly radical — a free market in water. This will require that ownership of water be clearly defined, that resale be allowed, and that we adopt a market-clearing price.

We know what this looks like. Water markets equipped Australia to endure the 1995-2009 Millennium Drought. This was the worst Australian drought since European settlement. Total water stored declined to just 27 percent of capacity. Yet water trading allowed Australian cities to avoid the most severe water restrictions. It protected agricultural businesses, and it ensured that the country’s endangered habitats and species received adequate water.

Remarkably, in an end-of-drought survey, over 90 percent of Australian farmers reported that water markets were important to their businesses’ survival. There are many lessons for California here. A key one is that the tension between water users is completely the creation of policy. There is no need for the tensions between the agricultural industry and California’s cities, between growers and endangered fish, between Hillsborough and Westborough, between neighbors. Water markets can balance competing uses in a way that benefits all.

To work, markets need something to trade. The basis for trade in a functioning water market is exclusive access to a share of water from a specific body. Australian water laws provide this. California’s water laws do not.

In California, water rights are often tied to land ownership. The right to surface- or ground-water is conferred by owning the land and often can only be transferred by selling the land. If a land owner wants to use the water, he needs only to put a straw in the ground or the stream. The landowner is entitled to “reasonable and beneficial” use of the water, but that right only extends to the borders of the property. He can use all the water he can pump, but he has to use it on his land. There are legal barriers preventing the sale of water.

This creates a “use it or lose it” system of water allocation, with lots of absurdities. We have growers using sprinklers to irrigate low-value crops like alfalfa in our deserts, while neighbors shame each other for watering their lawns and cities establish water police to enforce arbitrary rationing goals. We have huge aquifer overdrafts, with massive damage to the environment and to highways and canals.

California water users are drawing from a common pool. Since they cannot do anything with their water except use it or lose it, an individual’s incentive is to use as much water as possible, before it’s gone and his neighbor gets it. During a drought, it’s literally a race to the bottom of the well. A functioning water market would provide each user with a specific allocation. Then, as the supply of water diminishes during a drought, remaining allocations would become more valuable, increasing the economic return to conservation.

Prices in a functioning water market would behave just like those in any number of other healthy markets. Consider gasoline or coffee beans. Over the past year, the price of gasoline in California declined by 30 percent, reflecting new supplies and slower demand growth in some markets. In 2014, coffee bean prices increased by 72 percent, in fewer than four months, reflecting a severe drought in Brazil. Australia’s water behaves the same. During the Millennium Drought, water’s price increased by 20 times, from a low of $25 AUD per acre foot to $500 AUD. Naturally, when the rains returned, the price fell.

California water prices are much more stable over time, but they vary a lot by geography. California municipalities see prices that vary by about 12 times. For example, Ventura pays pumping charges of just $120 per acre foot, while San Diego is purchasing desalinated water for $2,200 per acre foot. Price discrepancies like this defy economic laws. There is certainly nothing resembling a scarcity price for water.

When you pay your personal water bill, the price that you pay does not signal that we are facing a critical water shortage. Water prices have increased incrementally, but not nearly enough to convey our dire situation. The gas lines of the 70s reminds us of what a world without scarcity pricing looks like. Remember how quickly shortages disappeared when price controls were abandoned?

California does not need another speech by the Governor. It doesn’t need another legislative proposition promising additional water supply 20 years or more later (think Proposition 1). It doesn’t need more dams or canals. Remarkably, it doesn’t even need more rain, although more rain would be nice.

What California needs is a process to define who owns the water and how much is available. A comprehensive rewrite of California’s water laws is the best way to achieve this, but this is probably politically impossible, especially since that rewrite would require Sacramento to cede control of water allocation to the markets. Alternatively, California has a court-mediated alternative in place. The process, adjudication, is far from perfect, but it can work.

Twenty-three of California’s more than 400 groundwater basins have already undergone adjudication. While not models of efficient water use, adjudicated basins are a big improvement over non-adjudicated basins. Unfortunately, the current legal infrastructure requires a minimum of 10 years for the adjudication process to work. This is obviously too slow to help with our immediate problem. Sacramento legislators have promised to implement policies to expedite adjudication, but we are still waiting for them to deliver. This should be California’s single highest legislative priority.

Absent meaningful reform, litigation will take on an increasingly important role. Significant Proposition 218 cases have already been decided in San Juan Capistrano and Ventura. The Ventura case is especially noteworthy. The City sued the local water purveyor over pumping charges which are greater than those of local farmers. Suing to lower the City’s already low water prices during a severe shortage shows impressive audacity. Fortunately, an appeals court ruled that the current rate system is legal. Ventura’s pumping charges are not going down anytime soon.

The San Juan Capistrano decision seems less helpful. There, an appeals court ruled that the City’s tiered rate system, which increases the cost of water as the number of units increases, is illegal under Proposition 218. We ask the question again, what will constrain the demand for water in places like Hillsborough? Or San Juan Capistrano? We are not qualified to object to the legal decision on its merits. But the cost of water for all users in San Juan Capistrano very likely ought to be higher than it is today. A free market in water would tell us just how much higher.

Finally, allowing a market price for water would contribute to increased supply during droughts. Businesses and business people are amazingly efficient at taking advantage of profit opportunities. Who knows where water would come from if the price were higher? Water districts would have economic incentives to explore supply alternatives such as rain catchment, waste water reuse and desalination. Residents would have incentives to explore household alternatives such as grey water irrigation systems. Maybe Mexico would put in desalination plants and sell it to us? Maybe some business would use tankers to import water? We don’t know how markets would provide the water, but they would. We see this with oil, coffee, and every other commodity. It’s time for California to move to a market price for water. It’s time to end the current nonsense.

Matthew Fienup teaches graduate econometrics and works for the Center for Economic Research and Forecasting at California Lutheran University, where he specializes in applied econometric analysis and the economics of land use. He is currently working on his PhD at the Bren School of Environmental Science and Management at the University of California Santa Barbara. He holds a Masters Degree in Economics from UCSB. Bill Watkins is a professor at California Lutheran University and runs the Center for Economic Research and Forecasting, which can be found atclucerf.org.

Photo by TCAtexas (Own work) [CC BY-SA 3.0], via Wikimedia Commons

May 5, 2015
Silicon Valley: Jelly in the Jam

My last post was about how Silicon Valley is evolving into an urban form that’s not quite leafy and open enough to be a suburb anymore, but not really vibrant and compact enough to be a proper city either. “Too thin to be jelly. Too thick to be jam.” The story got an unusually large number of visits. I received some well informed comments that touched on the reality that Silicon Valley is a big place and I shouldn’t generalize. Palo Alto is very different from Fremont and so on. It’s not all isolated corporate enclaves. Fair enough. So here’s a quick follow up that explores the jelly in the jam.

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This is the town of San Carlos twenty five miles south of San Francisco and an equal distance north of San Jose. We all have our biases. I’m partial to the kind of walkable Main Street small town that was common everywhere a century ago. I like a place with mom and pop shops and a mix of modest cottages and grand stately homes a few blocks in each direction. For me that’s the perfect balance of city and suburb. A Main Street provides a broad range of activities while accommodating pedestrians, cyclists, and cars without prejudice. These places can also be well served by public transit – not so much to get around town, but to efficiently connect people to other towns that are also walkable. If these small towns are then surrounded by working farms and a bit of nature all the better. Toss in a nearby city for access to culture and jobs and I’m in heaven. But such places are hard to come by in America these days. Fortunately, Silicon Valley has a string of such places along the historic rail line like little gems imbedded in the post WWII sprawl.

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San Carlos sits between two major freeways and right on El Camino Real and the CalTrain line that serves the entire peninsula. It’s possible to navigate most parts of San Carlos as a pedestrian, hop on a train or a bus, or drive to just about everything in the Bay Area. You have a lot of transportation choices that are equally good. What’s more important to me personally is that being a pedestrian or cyclist is actually pleasant in San Carlos. Transit within most of the town itself is entirely unnecessary. There are areas up in the hills with a lot of twisting cul-de-sacs that are more manageable in a car, but there’s at least a continuum of housing options including small apartment buildings next to shops downtown. People can select their own personal sweet spot.



There are relatively “affordable” $950,000 bungalows (this is the Bay Area) while the big fancy homes up on the hill with water views sell for $7,000,000. I understand these numbers seem ridiculous to people in other parts of the country, but San Carlos has immediate access to very well paid jobs so these prices are justified based on local incomes. If you have the money it’s a great place to raise a family with excellent public schools and a safe clean environment. It’s also a pretty fabulous retirement spot if you decide to age in place. And it isn’t terrible to be a young single person in San Carlos either. That little downtown and the train station make all the difference. You’ll find the same basic arrangements in similar older towns along the train line: Burlingame, San Mateo, Menlo Park, Mountain View, and so on.



Here’s another point that’s often overlooked by city planners obsessed with making everything pretty or attracting the right demographic to their town. Every town needs some ugly utilitarian stuff. Even in a place where schmaltzy tract homes sell for a million bucks people still need plumbers, electricians, and low grade warehouses. If a town zones or redevelops these areas out of existence they induce more people to get into their cars and trucks to commute to distant industrial parks in a region where freeway traffic already comes to a complete halt during most business hours. And these suburban warehouse districts are also excellent buffers from the ugliness and noise of freeways and rail lines. No one wants to live pressed up against a diesel train or freeway interchange full of tractor trailers. It’s often a mistake to see these light industrial areas as redevelopment opportunities for dense infill housing.

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Some of the comments I received from my last post mentioned recent projects that brought transit and density to some Silicon Valley suburbs. This is San Bruno, home to tech companies like YouTube. It has all the same advantages of San Carlos: immediate access to good jobs and nearby culture, the same freeways, El Camino Real, a BART rail station, similar single family housing stock, and so on. But the two towns are very different. I would love to live in San Carlos, but I could never live in San Bruno. Here’s why.



San Bruno was built after cars had come to dominate the landscape. There never was much of a town and everything built over the last sixty or seventy years has been organized around the freeways. A rail station in a shopping mall parking lot that’s cut off by massive twelve lane roads is just miserable for pedestrians and of little use to people in cars. There are plenty of people on foot in San Bruno, but they’re very poorly served in this environment.

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Density and transit all by themselves do nothing for a town if the public realm is completely car oriented. These new infill apartment buildings are perfectly respectable and I’m sure they’re very comfortable on the inside. But once you step outdoors you find yourself in the left over space between parking lots and highways. You can physically walk to the supermarket and the dentist and the train station so it checks off a lot of boxes on the “Smart Growth” list, but you feel like a social outcast as you schlep around the edge of speeding vehicles. The scale is out of whack with human needs because the needs of cars always come first. Adding apartments and giant parking garages to a suburban environment also adds that many more cars to the already congested roads. This kind of development bothers people who want a traditional suburb and it falls short for people who want a genuine urban experience. As I walked around this cluster of apartments I thought about how it could have been done better. What if the ground floors had shops in them? What if the sidewalks were wider? What if the roads were more narrow? What if the buildings were organized around outdoor public space instead of having the greenery sprinkled around the edges in useless landscaped berms and highway medians?

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As I made my way from one suburban train station to the next I discovered another infill project that actually made an effort to do many of the things on my list. Wide sidewalks? Check. Meaningful public space? Check. Shops on the ground floor? Check. At least a few narrow side streets? Check. Train station around the corner? Check. This place was significantly better. But… context is important.

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Here’s a Google Earth view of the area in which I colored the roads, surface parking lots, and multi-story parking garages blue. What would you call that building to pavement ratio? It looks like 60/40 to me in favor of pavement. The largest garage is owned by BART and is designed to collect suburban drivers and funnel them into the city by train for the last little stretch of the commute. This kind of train station is a highway patch to relieve traffic congestion in the city. It has nothing at all to do with “transit” or any kind of urbanism. It’s a clumsy and expensive prosthetic limb for cars and highways.



Here’s what it looks like on the ground. This well intentioned mixed use infill project is an island in the middle of the usual suburban sprawl. I’m quite certain that the people who live in the single family homes across the street drive to the Trader Joe’s market even though it’s only a block away. If I had to choose a spot to live this place is marginally better than San Bruno, but still an order of magnitude worse than San Carlos. And I should point out that San Carlos has a downtown of mostly one story buildings surrounded by much smaller apartment buildings than these and a majority of detached single family homes. “Density” has nothing to do with the success or failure of good urbanism.



Here’s the sad part. Even after what must have been an heroic effort on the part of everyone involved in getting this project built it still fails to cultivate enough foot or vehicular traffic to support small shops. The Trader Joe’s and the Starbucks are doing well enough, no doubt feeding off the morning and evening commuter flows from the BART station. And there is a small dry cleaner that’s managing to get by so far. But the rest of the storefronts are empty and have been so from the get go. Too thick to be jam. Too thin to be jelly. I keep wanting suburban retrofits to work, but they rarely do. The typical suburban chassis makes incremental urbanism a hit or miss affair. Mostly miss. The question is… what are the alternatives? Do we just let the cost of the existing single family homes rise until people and businesses pick up and move to Scottsdale or Orlando in search of economic relief? Do we let taxes rise on all the strip malls and gas stations until the necessary funds appear to repave all the twelve lane roads out in front of them? Or is mediocre the best we can expect from half assed infill projects that do the best they can under the circumstances?

John Sanphillippo lives in San Francisco and blogs about urbanism, adaptation, and resilience at granolashotgun.com. He’s a member of the Congress for New Urbanism, films videos for faircompanies.com, and is a regular contributor to Strongtowns.org. He earns his living by buying, renovating, and renting undervalued properties in places that have good long term prospects. He is a graduate of Rutgers University.

May 2, 2015
Building a New California

The Golden State has historically led the United States and the world in technology, quality of life, social innovation, entertainment, and public policy. But in recent decades its lead has ebbed. The reasons for this are various. But there is one area of decay whose story is a parable for California’s other plights—that area is infrastructure.

California’s infrastructure, like California, has had a golden past full of larger-than-life personalities and heroic deeds. But in recent decades the state has lost its innovative edge, resting on the laurels of its past successes without adequately preparing for any such bold endeavors in the future. California’s infrastructure imperative, then, is this: to accomplish bold, ambitious projects that promise a transformed and vibrant future for California, yet are still practical and sensible, and have proven viability.

Should California manage to get its act together and embark upon a course of infrastructure renewal, it will be taking one of several steps necessary to transform itself into an opportunity society again. Systemic reforms beyond infrastructure will be necessary to renew Californian society and lower the cost of living, raise the quality of life, and create opportunities for entrepreneurs and middle-class families. But infrastructure is a fantastic place to start.

Aside from basic infrastructure renewal like fixing up roads and bridges, expanding our water storage capacity, and reforming public policy and internet regulation to provide a world-class infostructure, there are three main physical infrastructure projects California should be focusing on to bring the state forward into the 21st Century. These are driverless car networks, a new nuclear energy grid, and an archipelago of desalination plants.

The current strategy for the future of California’s transportation system is wildly unrealistic. Passenger rail is simply too ineffective to justify building an expensive new High Speed Rail system that wouldn’t even be able to pay for itself. Commuter rail usage rates have been on the decline. A better way forward would be to embrace the power of computerization in the transport sector, and put our population on a path towards using self-driving cars.

The benefits of a driverless car network are numerous. They include greater safety, optimized traffic flow, reduced congestion, higher productivity, and cheaper, more effective travel for those unable to afford a car. The possibilities are endless. Already a test range at the University of Michigan is exploring what a driverless car system would look like. One could expect such a system to seriously reduce traffic congestion, improve transport speeds, conserve energy, nearly eliminate accidents, increase worker productivity, and generally revolutionize driving.

So how could California go about transitioning to a driverless car system? In the short run, there wouldn’t be much in the way of new construction to worry about. It’s mostly a question of technological investment and regulatory reform.

First, the state of California should partner with major universities and tech firms currently working on driverless car systems, and fund research and innovation projects geared towards enhancing the vehicles.

Once driverless cars are tested, California should work to lower the barriers to their deployment. This might include reforming insurance and licensing laws, to make it easier for people to purchase one. It would also help to offer incentives for middle-class individuals to purchase these new vehicles, too, such as tax deductions.

As with all public goods and services, government policy towards transportation ought to be designed with providing the widest array of convenient options for consumers, rather than forcing people into a single system or expecting them to use costly, uneconomical, heavily subsidized services. The call for a driverless car system is not to rid the roads of traditional vehicles. Nor is this a call to abandon rail or buses or cease investing in bike paths and walkways. This plan, rather, would seek to make one particularly middle-class-convenient option more available.

The next area California should focus on is its energy generation system, through a new nuclear generator fleet. Currently California generates energy with a combination of coal, oil, natural gas, and renewable power. Governor Brown has launched ambitious initiatives to have as much as 50% of the state’s electricity generated by renewables within a few decades (which doesn’t do anything to make energy cheaper for working and middle-class citizens and families, much less businesses.) Meanwhile the state’s use of fossil fuels for energy generation for backup continues to grow as unstable renewable energy sources go online.

We need an ambitious energy infrastructure plan if we are to both provide cheap, readily-available energy to the masses of California’s citizens (and thus provide them with a lower cost of living and higher quality of life) and to continue the state’s commitment to combatting climate change. Incidentally, there is a way to achieve both of these goals, while growing the state’s economy at the same time. California should open its fossil fuel fields to exploitation, levy a carbon tax on the profits, and use that revenue from the carbon tax to fund an ambitious nuclear program that could generate a majority of the state’s electricity within a few decades.

California’s antipathy toward fossil fuels has led it to impose onerous regulations that hurt growth and provide little environmental reward; the deposits of oil and gas off the coast and in the interior have been made even more accessible by the fracking revolution, and if it wanted to, California could become an energy giant. So California could open its fields for drilling, fighting off regulations and lawsuits by various anti-oil interest groups, and begin reaping huge revenues through the imposition of a light carbon tax.

This light carbon tax would go towards funding research in advanced nuclear energy, and towards a fund for establishing a fleet of a dozen or so advanced nuclear plants across the state. This would signify California’s continued commitment to reducing carbon emissions and adopting advanced energy.

These new nuclear reactors are not the hulking behemoths of Three Mile Island. Some new reactors have been designed to be as small as a car and power a small city. They are extremely safe. And, far more importantly, nuclear energy is the gift that keeps on giving. In civilizational terms, nuclear energy can power our society forever. And it provides far more bang for the buck than solar or wind, the current green fetish power sources.

Finally, California seriously needs to confront the water scarcity challenge that has perennially afflicted it throughout its history, and seek a permanent solution for providing cheap and plentiful water to the residents of this parched coastal strip. Desalination is the best way to secure that.

We are currently in the midst of what appears to be the worst drought California has faced in its entire history as a state, and this does not bode well for the future growth of California. Adequate water is one of those resources that every civilization has depended on. Although California is not literally “down to one year of water” as a recent LA Times article misleadingly claims, we are in a shortage that is economically catastrophic, environmentally devastating, and entirely unnecessary- for it is man-made. Better water policy in past years, allowing Californians to use more of their river water, could have staved it off, as could better storage infrastructure construction. But these projects and policies were never put in place to the degree necessary to stop this drought from happening.

Rationing and conservation may indeed be the short-term solution, but we need to look to a longer-term solution- and buying more water from other states doesn’t solve the problem.

Many arid coastal countries – including Australia, Israel, and some of the Persian Gulf states – use desalination plants to water their burgeoning populations, and it is something of a miracle that Southern California has gotten by without such systems. We have a long coastline on which we could build numerous desalination plants, powered by the aforementioned fleet of nuclear reactors. This system could more than satisfy the needs of California residents, farmers, and industries, while simultaneously reducing the pressure on our streams, rivers, and reservoirs. It would be incredibly capital-intensive and costly, and would perhaps lead to some unforeseen environmental consequences. But it is a better water policy than what we are doing now.

This infrastructure program would likely require budget, tax and regulatory reform, as well as the broad support of the majority of Californians. It would represent a reasonable response to the now excessive power of the environmental lobby.

But more than fiscal reform and public support, it would require a newfound political moxie in both the private sector and the public sector. We need a new generation of visionary William Mullhollands, Henry Huntingtons, and Pat Browns to pursue these and other reforms to turn our Golden State golden again.

Can it be done? With some political maneuvering and engineering ingenuity, sure. Will it be done? That’s a choice that our next generation of political leaders will have to make for themselves.

Luke Phillips is a student studying International Relations at the University of Southern California. He is an editorial intern for the magazine The American Interest and a research associate at the Center for Opportunity Urbanism.

May 1, 2015
Southern California Housing Figures to Get Tighter, Pricier

What kind of urban future is in the offing for Southern California? Well, if you look at both what planners want and current market trends, here’s the best forecast: congested, with higher prices and an ever more degraded quality of life. As the acerbic author of the “Dr. Housing Bubble” blog puts it, we are looking at becoming “los sardines” with a future marked by both relentless cramming and out-of-sight prices.

This can be seen in the recent surge of housing prices, particularly in the areas of the region dominated by single-family homes. You can get a house in San Francisco – a shack, really – for what it costs to buy a mansion outside Houston, or even a nice home in Irvine or Villa Park. Choice single-family locations like Irvine, Manhattan Beach and Santa Monica have also experienced soaring prices.

Market forces – overseas investment, a strong buyer preference for single-family homes and a limited number of well-performing school districts – are part of, but hardly all, the story. More important may be the increasingly heavy hand of California’s planning regime, which favors ever-denser development at the expense of single-family housing in the state’s interior.

Read the entire piece at The Orange County Register.

Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. He is also executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is also author of The City: A Global History and The Next Hundred Million: America in 2050. He lives in Los Angeles, CA.

Photo by Downtowngal (Own work) [CC BY-SA 3.0 or GFDL], via Wikimedia Commons

April 22, 2015
Big Box Urbanism

I’m ambivalent about big box stores. I occasionally shop at places like Walmart, Costco, and Target just like most people. I buy various packaged goods in bulk from these mega retailers to take advantage of a volume discount. I don’t moralize over these things. But when it comes to meat, dairy, and fresh produce I walk around the corner or down the street to my local mom and pop stores, farmers market, or Community Supported Agriculture plan. I’m fine with buying a pallet of inexpensive toilet paper that was manufactured on an industrial scale. Chicken? Not so much.

But I’m really interested in the giant retail buildings themselves. A large proportion of the North American landscape is dominated by big box stores and the associated land use pattern that we’ve all come to recognize. They’re so ubiquitous that we tend not to question how they came into being. This blog post will explore the retail development in the Antelope Valley in California, but I use this example because it’s typical rather than unique. Whether you live in Florida, Texas, or Nebraska the same dynamics are at work.

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The story begins with a rivalry between the two contiguous municipalities of Lancaster and Palmdale. If you were to drive through the Antelope Valley you would have no way of knowing when you had passed through one town and into the other. Not only are they composed of identical building types, but their borders are incredibly intertwined and gerrymandered after decades of annexation in an arms race to see who could grow the fastest. The big prize is always sales tax revenue from high volume retailers: car dealerships, big box stores, department stores, chain restaurants… Anything with a cash register will do. Like most towns the property tax revenue from residential development isn’t nearly enough to cover the costs of city services such as schools, road maintenance, and police and fire protection. Sales tax receipts are desperately needed to fill the gap. The construction and service jobs associated with new retail are also welcomed by city authorities. New growth is paramount at the economic development agencies.

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With this in mind the City of Lancaster prepared a site for a regional shopping mall in the late 1980’s. The land next to the freeway was set aside, it was properly zoned, expensive infrastructure was installed, a “business friendly” package of heavy subsidies and sweeteners was put in place, and an extensive lobbying campaign was launched. Basically, Lancaster hiked up its skirt, put on a Wonder Bra and a lot of rouge and hoped a big strong regional shopping mall would come calling.

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Unfortunately for Lancaster it was Palmdale that successfully wooed the mall developer with a $20,000,000 incentive package back in 1990. The customer traffic heading to and from the new mall spawned a dozen adjacent retail sites that sprouted big box stores and a penumbra of chain restaurants and strip malls. It was a city planner’s dream for almost eighteen years.

But then Palmdale was hammered by the economic crash of 2008. The mall lost its Gottschalk’s and Mervyn’s anchor stores. Palmdale’s economic development team felt it had no choice but to entice Macy’s and others to fill the void with multi million dollar tax deferments and business “incentives”. Remember, a big mall with no anchor stores rapidly fails as foot traffic declines. In fact, no developer can even secure bank financing to build or improve a retail complex unless they already have signed contracts with a couple of big stores. That’s why the largest stores in any mall pay the lowest proportional rent. The real cost of the mall is carried by the smaller shops and very often the tax payers. A Cinnabon pays a great deal more per square foot in rent than a big anchor like Macy’s. The Cinnabon is also far more productive and pays more tax and employs more people pound for pound. The anchors effectively take up a lot of space, negotiate with veiled threats, pay as little rent as possible, and virtually no tax. That’s standard business practice across the country.

The idea that a town can repeatedly offer tax abatements to the same property in the short term in order to create tax revenue and prosperity over the long haul is a bad economic model. In fact, having neighboring towns race to see who can repeatedly impoverish themselves the most in an attempt to grow rich on new business is also a bad plan. Both towns know private corporations actively game the system, yet they can’t seem to help themselves. They still wet their pants at the thought that the next town over might get the new Applebee’s or Jiffy Lube instead of them. It’s a form of institutional insanity.

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Since Lancaster couldn’t have the regional mall it needed to find a new use for the land it had set aside. There aren’t that many things that can fill that kind of space. Like the mall in Palmdale it needed to be something that would serve as a catalyst for growth all around it. And it had to be something that Palmdale didn’t already have. So Lancaster built what was intended to be a regional entertainment center with a baseball stadium, hotel, multiplex movie theater, and a premium outlet mall. “Build it and they will come.”

In 1995 the city of Lancaster spent $14,500,000 to build the baseball stadium in the hope that economic growth and development would spring up all around it. So a decade on what does the area look like?



Near the ball park is the Lancaster Marketplace – an outlet mall. I checked the official management website and the leasing agent lists half the stores as “available”. The spaces that are occupied include a dialysis clinic, a dentist, various nail solons, a recycling center, an evangelical church, and a few outlet stores that sell sneakers and jeans. This clearly isn’t the economic engine or tax base that the city had originally envisioned. It wasn’t simply the economic crash of 2008 that brought this place down. It was the institutional over supply of retail space across the entire region. No town needs the insane number of shops that were induced into being by overly optimistic developers and tax starved municipal authorities.

Here’s the movie theater with all the modern bells and whistles: 22 screens, IMAX, 3D, stadium seating, all digital, a sound system that can pull the gold fillings out of your teeth… you name it. It’s a massive stand alone building with an even bigger parking lot. In fact, the collection of reserved handicapped parking spots close to the front door is as large as many ordinary parking lots at lesser movie theaters. But here’s the problem.

This is the old 12 screen movie theater half a mile away. It’s now a “second run” theater catering to the discount matinee crowd because it can’t possibly compete on anything other than price with the new super deluxe theater down the road.

And here’s the old, old movie theater that used to play second run shows when the 12 screen opened up. It was eventually driven out of business. The building sat empty for a long while until someone attempted to operate a hairdressing school at the location. That business failed and now the place sits empty again. The new growth isn’t adding to the town’s economy. New bigger buildings simply replace old buildings that never get repurposed.



Across the street from the struggling outlet mall and old 12 screen movie theater is a Walmart. In fact, there are two Walmarts right next to each other. The older “small” Walmart was built in 1990. In 2006 Walmart decided it was time for a new larger super store and there was still plenty of land available in the same retail complex. Even as I stood on the far edge of the enormous parking lot with a special wide angle camera lens I still couldn’t get the two side-by-side buildings into view in a single frame. These buildings are massive.

deccabuilders.com

deccabuilders.com deccabuilders.com

I found photos of the old Walmart on the building contractor’s website. They were proud of the fact that this was the very first Walmart built in the state of California and they delivered the project on time and on budget.



Here’s what that same Walmart looks like today – just twenty five years later. In theory a new big box retailer would have opened up in the old Walmart building, but instead it has remained empty since 2006. There’s simply no market demand for these hulking ruins.

Across the street from the two Walmarts is another strip of big and medium sized retail buildings. When the regional shopping mall fell through the idea was that the new Super Walmart would draw enough traffic to the area to support additional shops. “With thousands of folks driving to Walmart everyday the new Circuit City will thrive!” The building pictured above was once a Circuit City. Past tense. Not only was there too much retail space built in the Antelope Valley, but many of these chain stores have gone out of business entirely due to competition from on-line retailers who deliver goods directly to customers via UPS and FedEx.



One of the popular urban planning strategies in vogue these days is to reuse dead retail buildings by converting them to “meds and eds”. Junior colleges and medical centers are of a suitable size that they can fill old big box stores and help reactivate the surrounding space. The above photos are of the newest medical center in Lancaster. It’s solar powered and hyper energy efficient. The native draught tolerant landscaping is irrigated with recycled gray water. High quality regionally appropriate public art is in abundance. And it’s almost exactly the same size as the old Walmart that’s been sitting empty for the last decade. But where is it?

If you were to search out the least developed patch of this already sprawling hopscotch part of Lancaster… that’s where. Why? I’m sure there were all sorts of reasons having to do with the medical people, the developers, the city planners, the banks… Maybe the medical center is expected to be the engine of economic development in this patch of the desert and they want loads of extra room so they can spread out in the future. Or maybe that’s where the really cheap land was near a freeway cloverleaf. Or perhaps the medical center was too prestigious to be located in a low rent shopping plaza. Who knows?

   Google

There was still a big chunk of the old mall site that couldn’t be filled with much of anything. Reluctantly the city rezoned it for single family residential subdivisions. Housing wouldn’t bring in tax revenue the way retail development would, but it was better than nothing. Growth was growth and Lancaster needed it badly. From Google Earth view you can see the cul-de-sacs carved into the desert. So far… no takers.



Here are a few views of that old regional shopping mall site: the back of the 22 screen movie theater, the back of the outlet mall, the back of the baseball stadium, and the back of the hotel. Notice the roads that were built to accommodate all the anticipated growth.

But they built it and they didn’t come.

Again, this isn’t unique to the Antelope Valley. These same patterns of development play out all over the country. Some of you may dismiss this particular part of the world and assume your town is much better at managing its affairs. You may have more employers pumping money into your local economy. Or perhaps you live in a more sensible state with a pro business legislature, unlike the folks who run California. The truth is that California just did everything earlier and faster and on a grander scale than other places. Your turn is coming.

John Sanphillippo lives in San Francisco and blogs about urbanism, adaptation, and resilience at granolashotgun.com. He’s a member of the Congress for New Urbanism, films videos for faircompanies.com, and is a regular contributor to Strongtowns.org. He earns his living by buying, renovating, and renting undervalued properties in places that have good long term prospects. He is a graduate of Rutgers University.

March 31, 2015
California Dreamin’ or California Nightmare?

Our recent report on “California Social Priorities” — released by Chapman University’s Center for Demographics and Policy and the topic of the first meeting of the Houston based Center for Opportunity Urbanism — stirred up some controversy. A largely negative response came from Josh Stephens from the California Planning and Development Report.

As a lifelong Democrat, granddaughter/daughter/sister/aunt of union members working in the steel and construction trades, major contributor and multi-decade Board member of several California environmental advocacy organizations, top-ranked California environmental and land use lawyer and recipient of the California Lawyer of the Year award for environment and land use work, and Latina asthma-sufferer who grew up in Pittsburg, California amidst factories that belched pollution into our air and waters, I need to first take exception to the author’s apparent assumption that anyone publishing a thoughtful report with accurate data about California’s acute social needs (income inequality, middle-class job loss, educational non-attainment) is a “conservative” with a “hate on CEQA in much more vague ways.” (Indeed, none of the individuals cited by the author fit the derisive (in much of California) “conservative” label: Both David Friedman and Joel Kotkin worked at the Progressive Policy Institute, the think tank for the Democratic Leadership Council when Bill Clinton was at the helm.) Dismissing uncomfortable demographic facts with politicized name-calling seems more about deflecting, rather than engaging, in what I believe is an entirely appropriate – and necessary – debate about how to address California’s social equity challenges in tandem with California’s environmental policies.

I do agree with the author’s characterization that I am “an astute observer of, and enthusiastic participant in, the evolution of CEQA caselaw.” Defending CEQA litigation abuse, on behalf of our public and private sector clients, has been and continues to allow me – and a legion of other lawyers and consultants – to earn a generous income.

I am also delighted that the California Planning & Development Report reported on our demographic analysis at all, because I believe those of us dealing with land use planning uses are long past due for a frank conversation about how the web we have created – the “we” being pro-environment, pro-labor Democrats of a certain age – has without question improved air and water quality, and protected California’s most valuable natural areas, but has also without question managed to dramatically and adversely affect the upward mobility and economic health of many millions of Californians. I believe we are still young enough, still energetic enough, and still creative enough, to work together to improve social equity and economic opportunity – without sacrificing our hard-won environmental improvements.

I believe that part of the necessary solution, as acknowledged by scores of commenters and impartial observers including last week’s report from the Legislative Analyst’s Office explaining why California housing costs are so high, is modernizing CEQA. I have written extensively about CEQA. In an analysis of 15 years of reported appellate court EIR cases, for example, we learned that the vast majority of CEQA lawsuits challenged non-industrial “infill” projects, renewable energy projects, and transit projects – precisely the types of projects that improve public health and environmental quality, and combat climate change. This and related work – including widespread media reports of CEQA litigation abuse – calls into question whether CEQA is advancing, or obstructing, progress on today’s environmental challenges. I have too much personal experience as a lawyer with 30 years of experience with CEQA, and now as a researcher and CEQA reform advocate, to pretend that CEQA – and specifically CEQA’s litigation abuse – isn’t a major hurdle we need to discuss, and modernize.

The author also criticizes this demographic report as failing to recommend specific CEQA reforms, but neither CEQA generally nor CEQA reforms specifically were the primary subjects of this Report. As many of CPDR’s readers well know, I have and continue to advocate for sensible and moderate CEQA reforms, like better integrating this 1970 statute into California’s panoply of modern environmental, public health and planning laws, prohibiting secrecy in CEQA lawsuits that try to conceal abuse of this great statute for non-environmental purposes, and extending to all projects – not just politically favored, donor-rich Sacramento basketball arenas – the right to cure minor errors in CEQA studies with a corrected study (and where appropriate more mitigation) rather than derailing a project approval entirely because a judge decided to grade an EIR addressing more than 100 mandatory study topics with an “A-“ rather than an “A+”.

One final note: I am not an expert on Prop 13, nor do I understand why curtailing then-skyrocketing property taxes on the elderly and poor – those losing their homes when Prop 13 was enacted – contributes to today’s income inequality or middle-class job loss challenges. CEQA litigation abuse for non-environmental purposes, in contrast, has earned widespread recognition – by the Governor, by Bill Fulton’s (CPDR’s publisher) CPDR blog, and by every editorial page of every major newspaper in California, to name just a few – as a problem. Notwithstanding Mr. Fulton’s pessimistic assessment that special interests are too wedded to CEQA abuse to ever permit Legislative reform, I believe land planners and environmental advocates have a moral obligation to improve what we know (including CEQA) to address the terrible social inequality that has grown so pervasive in California.

March 27, 2015
California Should Make Regular People More of a Priority

California in 1970 was the American Dream writ large. Its economy was diversified, from aerospace and tech to agriculture, construction and manufacturing, and allowed for millions to achieve a level of prosperity and well-being rarely seen in the world.

Forty-five years later, California still is a land of dreams, but, increasingly, for a smaller group in the society. Silicon Valley, notes a recent Forbes article, is particularly productive in making billionaires’ lists and minting megafortunes faster than anywhere in the country. California’s billionaires, for the most part, epitomize American mythology – largely self-made, young and more than a little arrogant. Many older Californians, those who have held onto their houses, are mining gold of their own, as an ever-more environmentally stringent and density-mad planning regime turns even modest homes into million-dollar-plus properties.

What about California society as a whole? The Chapman University Center for Demographics and Policy released a report this month, by attorneys David Friedman and Jennifer Hernandez, on “California’s social priorities.” It painstakingly lays out our trajectory over the past 40 years. For the most part, it’s not a pretty picture and – to use the most overused word in the planning prayer book – far from sustainable from a societal point of view.

Read the full article at The Orange County Register.

Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. He is also executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is also author of The City: A Global History and The Next Hundred Million: America in 2050. He lives in Los Angeles, CA.

Photo by Thomas Pintaric (Own work) [GFDL or CC-BY-SA-3.0], via Wikimedia Commons

March 26, 2015
How the California Dream Became a Nightmare

Important attention has been drawn to the shameful condition of middle income housing affordability in California. The state that had earlier earned its own "California Dream" label now limits the dream of homeownership principally to people either fortunate enough to have purchased their homes years ago and to the more affluent. Many middle income residents may have to face the choice of renting permanently or moving away.

However, finally, an important organ of the state has now called attention to the housing affordability problem. The Legislative Analyst’s Office (LAO) has published "California’s High Housing Costs: Causes and Consequences," which provides a compelling overview of how California’s housing costs have risen to be by far the most unaffordable in the nation. It also sets out the serious consequences.

The LAO says that:

Today, an average California home costs $440,000, about two-and-a-half times the average national home price ($180,000). Also, California’s average monthly rent is about $1,240, 50 percent higher than the rest of the country ($840 per month).

LAO describes the evolution:

Beginning in about 1970, however, the gap between California’s home prices and those in the rest country started to widen. Between 1970 and 1980, California home prices went from 30 percent above U.S. levels to more than 80 percent higher. This trend has continued.

Much of the LAO focus is on California’s coastal counties, where:

….community resistance to housing, environmental policies, lack of fiscal incentives for local governments to approve housing, and limited land constrains new housing construction.

These causes result from conscious political decisions. While California’s coastal counties do not have the vast stretches of flat, appropriately developable land that existed 50 years ago, building is increasingly prohibited on that which remains (for example, Ventura County, northern Los Angeles county and the southern San Jose metropolitan area).

Demonstrating an understanding of economic basics not generally shared by California policymakers or the urban planning community, LAO squarely places the blame on the public policy limits to new housing construction:

This competition bids up home prices and rents.

In other words, where the supply of a demanded good is limited, prices can be expected to rise, other things being equal. LAO describes the impact of so-called "growth control" policies, which are also called "urban containment" or "smart growth:"

Many Coastal Communities Have Growth Controls. Over two-thirds of cities and counties in California’s coastal metros have adopted policies (known as growth controls) explicitly aimed at limiting housing growth. Many policies directly limit growth—for example, by capping the number of new homes that may be built in a given year or limiting building heights and densities. Other policies indirectly limit growth—for example, by requiring a supermajority of local boards to approve housing projects. Research has found that these policies have been effective at limiting growth and consequently increasing housing costs.

According to LAO, the problem is exacerbated by voter initiatives: "More often than not, voters in California’s coastal communities vote to limit housing development when given the option." It is hard to imagine a more sinister disincentive to aspiration, under which voters can deny equality of opportunity in housing to others by artificially driving up the price. Because new housing further from coast is also limited, options for a middle income living standard are also diminished.

These public policies have consequences.

Notable and widespread trade-offs include (1) spending a greater share of their income on housing, (2) postponing or foregoing homeownership, (3) living in more crowded housing, (4) commuting further to work each day, and (5) in some cases, choosing to work and live elsewhere

Each of these consequences is described below.

LAO Consequence #1: Spending a Greater Share of Income on Housing

LAO models the market situation from 1980 to 2010 to estimate the prices that would have prevailed if the regulatory environment had permitted building sufficient to satisfy customer demand at previous lower price levels. In both years, LAO estimates that the median priced house would have cost 80% more than in the rest of the nation (actual data in 1980, modeled data in 2010). This would have kept California house price increases at the national level. I think it would have been better to have modeled from 1970, before the huge house prices before 1980 described by Dartmouth economist William Fischel.

I have applied this LAO model estimate to the median multiple for California’s six major metropolitan areas (Los Angeles, San Francisco-Oakland, Riverside-San Bernardino, San Diego, Sacramento, and San Jose) to identify how much better middle income housing affordability would be without California’s excessive regulation. Using the LAO estimates the median multiple (median house price divided by median household income) in 2014 would have been at least 40% lower than the actual level in each of the metropolitan areas (Figure 1).

Many California households already have been priced out of the market. In the worst case, it is estimated that in the San Francisco metropolitan area, a median income White Non-Hispanic household will have nearly $60,000 annually left over after paying the mortgage on the median priced house. This is less than they would have if house prices had remained reasonable, but it’s enough to live on. The median income Asian household would do almost as well, with about $50,000 left over. The median income Hispanic household would have less than $20,000 left, which is considerably less than is likely to be needed for other essentials. The median income Black household would have less than $3,000 left over (Figure 2). If the price ratios of 1980 were controlling, that amount would rise by $16,000.

LAO also points out that the Golden State has the highest housing cost adjusted poverty rate in the nation. The latest data shows housing-adjusted poverty rate is far higher even than that in states with a reputation for grinding poverty. California’s housing adjusted poverty rate is more than 50% higher than that of Mississippi and approaches double that of West Virginia (Figure 3, LAO Figure 13)

LAO Consequence #2: Postponing or Forgoing Homeownership

LAO indicates that California ranks 48th in homeownership percentage, behind only New York and Nevada. LAO emphasizes the value of home ownership:

Homeownership helps households build wealth, requiring them to amass assets over time. Among homeowners, saving is automatic: every month, part of the mortgage payment reduces the total amount owed and thus becomes the homeowner’s equity. For renters, savings requires voluntarily foregoing near-term spending. Due to this and other economic factors, renter median net worth totaled $5,400 in 2013, a small fraction of the $195,400 median homeowner’s net worth.

Californians are buying their first houses later. LAO indicates that the average first home buyer in California is three years older than the national average.

LAO Consequence #3: Living in More Crowded Housing

The nation’s worst overcrowding is an unfortunate result of California’s housing policies.

LAO indicates that California’s overcrowding rate is well above that of the rest of the nation’s rate. Among Hispanics, which were expected to exceed the White-Non-Hispanic population in 2014, to become the state’s largest ethnic group, California overcrowding is more than 2.5 times the Hispanic rate elsewhere. Among households with children, overcrowding in California is four times the national households with children rate. Among renters, overcrowding in California is more than three times the national renter rate (Figure 4, LAO Figure 15).

This has important negative social consequences. According to LAO, research indicates that overcrowding retards well-being and educational achievement:

Individuals who live in crowded housing generally have worse educational and behavioral health outcomes than people that do not live in crowded housing. Among adults, crowding has been shown to increase stress and aggression, lead to social isolation, and weaken relationships between parents and their children. Crowding also has particularly notable effects on children. Researchers have found that children in crowded housing score lower on standardized math and reading exams. A lack of available and distraction-free studying space appears to affect educational achievement. Crowding may also result in sleep interruptions that affect mood and behavior. As a result, children in crowded housing also displayed more behavioral problems at school.

Overcrowding is particularly acute in the higher cost coastal metropolitan areas of Los Angeles, San Francisco, San Diego, and San Jose. There, overcrowding among households with children reaches 10%, and among Hispanic households, overcrowding reaches 18%. Among households with children the figure is slightly higher (Figure 5, LAO Figure 16). Overcrowded housing is generally worse, according to LAO, in areas with higher house prices.

In a state with a political establishment that prides itself in watching out for low income citizens and ethnic minorities, the need to reform the responsible policies could not be clearer.

LAO Consequence #4: Commuting Farther to Work

LAO finds that California’s average work trip commuting times are only moderately above the national average. However, LAO suggests that the commute lengthening impact of higher house prices may be reduced by California’s widespread (I call it dispersed) development pattern, its freeway system and the "above-average share of commuters who drive to work. (Driving commutes are generally fast, and therefore metros with higher shares of driving commuters tend to have shorter commute times.)"

Nonetheless, according to LAO:

…our analysis suggests that California’s high housing costs cause workers to live further from where they work, likely because reasonably priced housing options are unavailable in locations nearer to where they work.

LAO Consequence #5: Choosing to Work and Live Elsewhere

LAO also indicates that California’s high housing prices are likely to have reduced its population (and economic) growth. LAO sites the strong net outmigration of California households to other states. LAO also finds in its national metropolitan area analysis that counties with higher growth rates tend to have better housing affordability than counties with lower growth rates.

There has also been strong net outmigration from the coastal counties to inland counties. This is most evident in the growth of the Riverside-San Bernardino metropolitan area (the Inland Empire) between 2000 and 2010. The Inland Empire captured more than two thirds of the population growth of the Los Angeles Combined Statistical Area (Los Angeles, Orange, Riverside, San Bernardino and Ventura counties). LAO notes the impact of the excess of demand in the coastal counties, again recognizing the nexus between overzealous regulation and the loss of housing affordability:

This competition bids up home prices and rents. Some people who find California’s coast unaffordable turn instead to California’s inland communities, causing prices there to rise as well.

LAO also refers to the difficulty that employers have in retaining and recruiting staff. LAO cited survey data from the Silicon Valley, which has for years been California’s economic "Golden Goose" in recent years:

In a 2014 survey of more than 200 business executives conducted by the Silicon Valley Leadership Group, 72 percent of them cited “housing costs for employees” as the most important challenge facing Silicon Valley businesses.

In addition, there has been a strong movement of California companies to other parts of the nation, where more liberal regulations foster a better business climate.

Restoring Housing Affordability

LAO indicates the importance of fundamental reform and calls for putting "all policy options on the table."

Major changes to local government land use authority, local finance, CEQA (California Environmental Quality Act), and other major polices would be necessary to address California’s high housing costs.

In addition:

The greatest need for additional housing is in California’s coastal urban areas. We therefore recommend the Legislature focus on what changes are necessary to promote additional housing construction in these areas.

Perhaps the only weakness of the report deals with densification, particularly in coastal counties. For example, LAO suggests that without the housing restrictions the city of San Francisco is population would be 1.7 million, rather than the approximately 800,000 who live there today. In fact that would be unprecedented beyond belief. No core city that had become fully developed and reached 500,000 people by 1950 has achieved growth of this magnitude. The greatest growth was less than 10%, in this category of 60 core cities (which includes the city of San Francisco). Even less likely would be public support for such huge population growth in the second densest major municipality in the nation.

While LAO does not indicate the additional population that its estimates would have placed in the core of Los Angeles, given the scale of the San Francisco increase, this could be a number of up to 3 million. This area, the broadest expanse of over 10,000 population per square mile density in the nation outside New York City is in the middle of the urban area with the nation’s worst traffic congestion, according to the Texas A&M Transportation Institute. It is doubtful that residents would have the "stomach" to expand roadway capacity to keep the traffic moving. Transit could not have made much difference. Even with its now extensive rail network that has opened since the early 1990s, driving alone accounted for 85% of the additional travel to work from 2000 to 2013 in the city of Los Angeles. Yet, the city of Los Angeles has the most extensive transit in the metropolitan area, including service by all rail lines.

In reality, core densification is likely to be modest. Keeping housing affordability from getting worse requires regulatory liberalization throughout California, including coastal and inland areas
The reality is that if California had permitted growth, it would naturally occurred mostly on the periphery. Even with the restrictions on building, the preference for suburban living (largely in detached housing) could not be repressed between 2000 and 2010. Less than 10% of the population growth in the Los Angeles and San Francisco Bay areas occurred in the cores.

The Challenge

Should the state of California begin to seriously discuss housing affordability, it will be important to ease restrictions throughout the state, not just in the coastal counties. There are serious barriers to placing the appropriate priority on improving the standard of living and minimizing poverty rates among California’s diverse population. Perhaps the biggest impediment is Senate Bill 375, which is being interpreted by the state and its regional planning agencies to require even more stringent land-use regulation.

In this environment, LAO rightly raises this concern:

If California continues on its current path, the state’s housing costs will remain high and likely will continue to grow faster than the nation’s. This, in turn, will place substantial burdens on Californians—requiring them to spend more on housing, take on more debt, commute further to work, and live in crowded conditions. Growing housing costs also will place a drag on the state’s economy.

It is to be hoped that California’s distorted policy priorities will be righted to restore the California Dream.

Photograph: Dense suburban development: Inland Empire (San Bernardino Freeway with Uplard toward the top and Ontario toward the bottom) – By author

Wendell Cox is an international public policy consultant and principal of Demographia in St. Louis. He is a native Los Angelino, having been born within two miles of City Hall. He was appointed to three terms on the Los Angeles County Transportation Commission by Mayor Tom Bradley. Full biography is here.

March 24, 2015
As Nonwhites Grow Their Majority in Southern California, How Can they Find More Success?

California teachers, politicians and media types like to extoll the benefits of ethnic diversity. Certainly, the state’s racial makeup has changed markedly since 1970, with the white non-Hispanic population now a minority. Some, like state Assemblyman Luis Alejo, D-Salinas, and some education activists now insist that multicultural studies be mandated for the public school curriculum. This is in addition to materials that, as most California parents with kids can tell you, already go out of their way to foster appreciation of different cultures and strongly focus on such issues as slavery, racism and discrimination.

Yet, if we look at how minorities are faring in the state, and particularly in the Southland, we need a greater sense of reality about how this new demography is working out. Students in Salinas might soon learn more about ethnic history, but it’s not likely to help rescue their schools, which are rated poorly – even in comparison with the state’s overall mediocre standards.

As California continues to become less white – largely because of both foreign immigration and outmigration of native-born – we have to understand that diversity alone does not assure a prosperous society; that takes greater attention to issues like education and broad-based economic growth than to the politically correct approach of ethnic pandering or curricula manipulations.

Read the entire piece at The Orange County Register.

Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. He is also executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is also author of The City: A Global History and The Next Hundred Million: America in 2050. He lives in Los Angeles, CA.

March 16, 2015