12-5-11 Response to SB375 Alternatives

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City of Palo Alto (ID # 2210)City Council Staff Report

Report Type: Action ItemsMeeting Date: 12/5/2011

December 05, 2011 Page 1 of 7

(ID # 2210)

Council Priority: Land Use and Transportation Planning

Summary T itle: Response to SB375 Alternatives

Title: Response to Alternative Scenarios for Sustainable Communities Strategy

(SB375), Designation of Planned Development Areas, and Update of Regional

Housing Needs Allocation Process (RHNA)

From: City Manager

Lead Department: Planning and Community Environment

RecommendationStaff recommends that the City Council provide direction regarding the Citys next steps to

respond to the SB375 Alternative Scenarios, including a) working with the SB375 Council

Committee and the Planning and Transportation Commission to review Priority Development

Area (PDA) designations for El Camino Real and for Downtown, and b) responding to the

Association of Bay Area Governments regarding allocating Regional Housing Needs Allocations

(RHNA) to the County for Stanford campus housing.

Executive SummaryStaff has provided multiple updates to the City Council regarding the status of the Sustainable

Communities Strategy (SCS) and the Regional Housing Needs Assessment (RHNA). On

September 12, 2011, staff briefed the Council regarding the release of Alternative Scenarios for

the SCS. The scenarios assume that employment in the Bay Area will increase by approximately

995,000 jobs from 2010-2040 and that an additional 770,000 new housing units will be needed

in the region within that timeframe. The Association of Bay Area Governments (ABAG) and the

Metropolitan Transportation Commission (MTC), who are jointly preparing the Plan Bay Area

effort, are currently evaluating three scenarios as to their potential impacts on greenhouse

gases (GHG) and other factors. Community meetings are being scheduled in each county for

January and cities are expected to comment on the alternatives by February 2012. A preferred

alternative is expected to be drafted and released in the spring of 2012 and the SustainableCommunities Strategy for the Bay Area is to be finalized by early 2013.

Staff has now met four times since August with Councilmembers Scharff, Schmid, Holman and

Burt and has developed an approach that includes: 1) recommending a third party peer review

of the State and regional population and employment projections; 2) reaching out to State

legislators to pursue this issue at the State and regional level, 3) identifying and coordinating

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with cities who share Palo Altos concerns; 4) directing staff to prepare summaries of key issues

for presentation to State legislators, other cities, and the regional agencies; and 5) extending

outreach to the community for better understanding of the implications of these scenarios.

Staff has also engaged limited consultant assistance to support coordination of these issues,

particularly relative to the demographic and economic analysis.

On November 21, 2011, the Council approved a letter commenting to MTC regarding the Citys

concerns and objections to the proposed One Bay Area Transportation Grant funding criteria.

Pending issues for consideration in the coming month include: a) whether the City should

designate the El Camino Real corridor and/or Downtown as additional priority development

areas (PDAs), allowing those areas to become eligible for future transportation grants, and b)

working with Santa Clara County, Stanford University and ABAG to assure that housing to be

constructed on the Stanford campus is allocated to the Countys housing target, rather than to

the Citys. Staff recommends proceeding forward on both of these issues.

Staff will continue to meet with the Council committee to stay abreast of issues of concern to

the City of Palo Alto and to develop strategy to seek support from other local officials and State

legislators to request independent peer review of the One Bay Area scenario demographic and

employment projections.

BackgroundOn March 14, 2011, staff updated the City Council regarding the status of the Sustainable

Communities Strategy (SCS) and the Regional Housing Needs Assessment (RHNA). On May 4,

2011, staff updated the Planning and Transportation Commission regarding the SCS and the

Initial Vision Scenario (IVS) proposed by the Association of Bay Area Governments (ABAG) and

the Metropolitan Transportation Commission (MTC). The Initial Vision Scenario (IVS) for the Bay

Area was intended to accommodate an additional 903,000 housing units and 1.2 million jobsfrom 2010 to 2035. The goal of the IVS, formulated by staff of ABAG and MTC, was to create

development patterns and a transportation network that would result in reductions of per

capita greenhouse gas (GHG) emissions by 7% by 2020 and 15% by 2035. The IVS would

anticipate a total of 12,000 new households and almost 5,000 new jobs being created in Palo

Alto over that time period.

On May 27, 2011, staff sent a letter to the regional agencies, following review and input from

the Planning and Transportation Commission, questioning the approach and outlining many

concerns of the City of Palo Alto, including the need to address job growth near transit to

achieve GHG emission reductions, as well as highly unrealistic housing assumptions, the lack ofconsideration of numerous constraints to growth, and the lack of supportive infrastructure,

particularly including transit, to accommodate such extensive levels of development.

On July 18, 2011, staff briefed the Council regarding the letter to the agencies and next steps,

including the upcoming release of alternative scenarios by ABAG and MTC. Council asked staff

to work with some Councilmembers over the Councils August recess and to then present an

approach to Council for proceeding to respond to this planning effort. The three alternative

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land use scenarios were released by ABAG and MTC on September 1st

(http://www.onebayarea.org/plan_bay_area/). Community meetings are being scheduled in

each county for January and cities are expected to comment on the alternatives by February

2012. A Community Meeting is scheduled for Santa Clara County at the County Government

Building at 70 W. Hedding on Wednesday, January 18, 2012, at 5:30 p.m.

The related Regional Housing Needs Assessment (RHNA) Methodology Committee, of which

Councilmember Scharff is a member, has met several times, and the Committees progress is

outlined below in the Discussion section.

More background information is provided in the September 12, 2011 Council staff report

(Attachment I). Attachment J provides a Glossary of Acronyms and Terms related to the

regional planning (SB 375) process.

Timeline

ABAG has modified its schedule for the SCS and RHNA several times. The current schedule

contemplates that the SCS Preferred Alternative will be available in March 2012 and the

Sustainable Communities Strategy for the Bay Area is to be finalized by early 2013. ABAG will

release its draft RHNA methodology in May 2012. ABAG will then conduct hearings in June

2012 followed by adoption of the RHNA methodology and draft allocations anticipated in July

2012, beginning a 60-day review and comment period.

Discussion

Alternative Land Use Scenarios

The Alternative Land Use Scenarios were released by ABAG and MTC on August 26, 2011,

clarified on September 1, and identify three (3) primary options:

Core Concentration Growth Scenario: Concentrates housing and job growth at selected

Planned Development Areas (PDAs) and Growth Opportunity Areas (GOAs) in the Inner

Bay Area along the regions core transit network.

Focused Growth Scenario: Recognizes the potential of Priority Development Areas

(PDAs) and Growth Opportunity Areas (GOAs) across the region with an emphasis on

housing and job growth along major transit corridors.

Outer Bay Area Growth Scenario: Addresses higher levels of growth in the Outer BayArea and is closer to previous development trends than the other two scenarios.

A summary of the scenarios and potential housing and employment projections are included in

the September 1st memo from the agencies (Attachment H) and online at:

http://www.onebayarea.org/plan_bay_area/. The objective of each of these scenarios is to

accommodate population growth of approximately 770,000 persons and almost 1 million new

jobs in the Bay Area by the year 2040. The tables at the back of the memo outline estimated

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increases for each jurisdiction in the Bay Area, including breaking down how much of the total

growth would be located in either PDAs (California Avenue area in Palo Alto) or GOAs (El

Camino Real corridor and/or Downtown in Palo Alto). There is no indication of where the

agencies expect the remainder of the growth to be located. In summary, the total growth in

housing and employment for the City from 2010-2040 breaks down as follows:

Core Focused Outer Bay

Concentration Growth Area

Households 12,250 12,250 6,110

Jobs 26,630 27,820 19,360

The Core Concentration and Focused Growth scenarios vary in that more of the projected

growth would occur in the PDAs and GOAs in the Core Concentration scenario. Staff will need

to obtain and analyze data based on traffic analysis zones (TAZs) to determine where the

remaining development would potentially be located.

Statewide and Regional Projections

Staff has met with Councilmembers Scharff, Schmid, Holman and Burt four times now,

beginning in August, and the underlying assumptions for population and employment estimates

have been one of the primary topics of discussion. Councilmember Schmid has reviewed and

discussed demographic and economic information from several sources and has provided a

summary memo (Attachment B) that outlines some of the key discrepancies between the

projections and the reality represented by the 2010 Census and past trends. Additional

information is attached in the September 12th

staff report and in attached articles and a table

further outlining these issues (Attachments C-E).

Since these statewide and regional projections underlie the entire distribution of housing and

population for the Sustainable Communities Strategy planning, the Councilmembers and staff

expressed a strong desire to request that a peer review, perhaps by University of California or

Stanford demographic and econometric analysts, be conducted to verify or dispute the

estimates. Such a review, however, should be accomplished at the initiation of State and

regional officials, however, rather than by local agencies.

Coordination with State Legislators and Other Cities

The Councilmember committee and staff are coordinating efforts through the areas Statedelegation, members of the ABAG and MTC Boards, and cities (elected officials and staff) to

develop support for the Citys position that a peer review be initiated on a broader (regionwide

or state) level. The contacts are proceeding slowly, however, and ABAG has deferred several

meetings recently that might have provided better insight into how the assumptions were

prepared. At its last meeting, the Council committee assigned contact responsibilities for

following up, and will use the attached Summary of Key Issues document (Attachment A) as a

handout for those discussions. Staff expects to take a request to the Planning Directors of Santa

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Clara County cities in early January to support the City of Palo Altos efforts for an independent

study, and believes that the majority of staff members in those cities concur with the request.

Attachment A provides an initial summary of Sustainable Communities Strategy issues and

concerns, to be distributed to legislators, other cities, and the broader community. Some of the

highlighted concerns include:

Employment projections appear to be substantially overstated and do not recognize the

evolving economic model in the Bay Area, particularly in Silicon Valley;

Housing projections are driven by unrealistic employment projections and are

substantially higher than recent trends in natural increase and migration, as reflected in

the 2010 Census;

The basic goal of reducing greenhouse gas (GHG) emissions is not well served by

overstating projections, which then require even more extensive resources and more

dramatic land use and transportation changes than would be required with more

realistic estimates; and Alternatives to greenhouse gas (GHG) emissions reductions should be provided to allow

cities to propose ways they may otherwise accomplish similar reductions that would

exceed those proposed by the Alternative Land Use Scenarios.

One Bay Area Transportation Grant Proposal

On November 21, 2011, the City Council approved a letter to the MTC outlining the Citys

concerns and objections to the proposed One Bay Area Transportation Grant funding criteria.

Of greatest concern is the potential requirement that grant funding would be allocated only to

cities with certified housing elements, which vests considerable authority in the States

Department of Housing and Community Development (HCD) and will make housing compliance

even more problematic. The City suggested that housing element certification be one of 5 or 6

criteria, and that other criteria be more clearly defined. Another proposed provision of the

program would limit grant funding so that at least 70% of the grants would be focused only on

priority development areas (PDAs). The California Avenue area is the Citys only PDA, though

the El Camino Real corridor and the Downtown area are considered growth opportunity areas

and are targeted for considerable increases in development under the Alternative Scenarios.

Designation of Additional Priority Development Areas (PDAs)

ABAG staff has recently noted that identified Growth Opportunity Areas (GOAs), such as the El

Camino Real corridor and the Downtown area, may be designated by cities as Priority

Development Areas (PDA)s, as noted in Attachment F. These GOAs have generally been treatedsimilar to PDAs in assigning growth potential in the Alternative Scenarios. However, under the

proposed criteria for the One Bay Area Transportation Grants, most (70%) of the available

transportation funding would be targeted to PDAs, but not GOAs. Thus, to assure cities are able

to obtain transportation funding, ABAG has requested that staff from affected cities prepare

forms for such designations by December 16, 2011. City Council would then need to consider

and submit the required resolution not later than January 30, 2012. The disadvantage to the

designation is some uncertainty that ABAG may suggest further intensification of those areas in

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refining the scenarios. Staff believes, however, that it is worth the effort to at least evaluate the

potential for development in both areas, present that information to the SB375 Committee and

the Planning and Transportation Commission, and then come forth with a specific proposal to

the Committee and Council by mid or late January.

Regional Housing Needs Assessment (RHNA) Methodology Committee and Spheres of InfluenceThe RHNA Methodology Committee has met several times through September and has

determined that there should be a close link between the housing criteria and the Sustainable

Communities Strategy. The current methodology under review would require each city and

county to provide for 1/3 of the 2035 total in each of the three 8-year planning periods during

that timeframe. The RHNA Committee is not scheduled to meet again until February 2012,

while the Alternative SCS Scenarios are analyzed.

RHNA Sphere of Influence (Stanford Campus)

In the meantime, however, ABAG has indicated that housing allocations to a citys sphere of

influence (SOI) would be directed to the city rather than the unincorporated county

(Attachment G). This has been the policy in the past for most counties in the ABAG area, and is

proposed again, with the intent of encouraging cities to annex areas outside their city limits. In

the case of Palo Alto, however, most of the Citys SOI is the Stanford campus lands. In the most

recent RHNA allocations for the 2007-2014 housing element timeframe, the City argued to

ABAG that Stanfords campus housing should be considered in the Santa Clara County

allocation, since by agreement the City of Palo Alto cannot annex lands on the Stanford

campus. The County and Stanford concurred at the time and over 600 housing units were

deleted from the Citys allocation and redirected to the County. Staff expects to make a similar

request to vary the ABAG process for the coming RHNA cycle and, in fact, the County staff has

already acknowledged in a November 24th

letter to ABAG that such a transfer should occur

again. Unless Council directs otherwise, City staff will prepare a letter to ABAG making a similarrequest. The number of units assigned to the County will need to be determined by ABAG, but

staff expects at least several hundred housing units would be transferred.

Community Outreach

A Community Meeting is being sponsored by ABAG and MTC on Wednesday, December 18th

, at

5:30 p.m. at 70 W. Hedding Street in San Jose (County Government Center). Further community

outreach should also be requested of the regional agencies to assure that all affected

communities will have a common understanding of the implications of the analysis and

proposed Alternative Scenarios. Staff expects to provide this report and Attachment A to

neighborhood and school groups in December and January to raise the level of awarenessthroughout the community. Subsequent updates will also be provided to the Planning and

Transportation Commission (a November 30 update was deferred due to continued

postponement of ABAG meetings and deferral of a Council committee meeting).

Resource ImpactsReview of the Sustainable Community Strategy and Regional Housing Needs Assessment

process involves considerable time of the Director of Planning and Community (estimated 20-

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30 hours per month) and lesser time for other department staff. Staff has also retained a

consultant to review and coordinate the effort, particularly with Santa Clara County cities, to

address the demographic and economic assumptions of the Alternative Land Use Scenarios.

Staff estimates that the cost of such assistance will not exceed $25,000, as was authorized by

the Council at the September 12th

meeting. The funds were absorbed within the current budget

of the Department of Planning and Community Environment.

Next Steps1. Set up meetings with State legislators and interested cities to outline the need for

independent analysis of the projections and econometrics underlying the Alternative Land

Use Scenarios and to inform them of other critical issues.

2. Review with the SB375 Committee and the Planning and Transportation Commission

potential for designating the El Camino Real corridor and/or Downtown areas as Priority

Development Areas (PDAs), and then return to Council with a recommendation.

3. Prepare a letter to ABAG requesting that Stanford campus housing be allocated to Santa

Clara County as part of its RHNA requirements and not be included in the Citys allocation.

Staff will continue to participate in regional and countywide meetings and report back to PTC

and Council.

Attachments:

a: Attachment A: SB375 Issues Summary (PDF)

b: Attachment B: Demographic Forecasting in California (PDF)

c: Attachment C: SCS Projections v. Census Trends (PDF)

d: Attachment D: Silicon Valley Can No Longer Save California -- Or The U_S_

Newgeography_com (PDF)

e: Attachment E: Bureau of Labor Statistics Data 2010-2011 (PDF)

f: Attachment F: ABAG Applications for Planned Development Area Designation (PDF)

g: Attachment G: ABAG Memo re: Housing Allocations for Sphere of Influence (SOI)(PDF)

h: Attachment H: Alternative Scenarios (PDF)

i: Attachment I: September 12, 2011 City Council Staff Report (w/o Attachments) (PDF)

j: Attachment J: SB375 Glossary (PDF)

Prepared By: Curtis Williams, Director

Department Head: Curtis Williams, Director

City Manager Approval: ____________________________________

James Keene, City Manager

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City of Palo Alto

Sustainable Communities Strategy (SB 375)

Key Issues for Alternative Land Use Scenarios

November 28, 2011

The Sustainable Communities Strategy (SB 375) is based on the premise that greenhouse gas (GHG)emissions may be reduced significantly by land use patterns and transportation facilities and programs

to reduce vehicle-miles traveled. The potential for GHG reductions relates to the extent to which land

uses and transportation systems accommodate an unknown future of population increase, economic

growth, market forces, and transportation funding availability and pricing approaches. As such,realistic basic demographic and growth assumptions for such a strategy are imperative to derive the

appropriate strategies and to assure that cities and counties in the Bay Area region (and other regions)

plan accordingly. Similarly, all alternatives to provide for GHG reduction strategies must beconsidered to provide the appropriate mix of programs to cost-effectively meet regional and statewide

goals.

To ensure these issues are adequately addressed, the City of Palo Alto believes that further

independent analysis of many of the assumed demographic and economic projections and GHG

benefits must be provided at the State and regional level, and the following key questions must beanswered:

Demographic and Economic Projections

Are the assumptions for the demographic and economic projections realistic? Or are they overstated

and reflective of a different time period when the economy of the region was manufacturing-heavy

and migration to California and the Bay Area was rapid and substantial?

1. The States Department of Finance (DOF) is working with a forecast model that projected

a population growth of 9.9% for 2000-2010 for the Bay Area, whereas the Census showeda growth rate of 5.4% over that period. This represents a 45% overestimation of population

in the region. For the West Bay counties (San Francisco, San Mateo, and Santa Clara), the

DOF projected a 10.2% growth, while actual growth was 4.3%, thus an overestimate of

58%. A similar overestimate occurred for statewide population. See the attached memofrom Councilmember Schmid for further background.

2. Natural population increase (births deaths) was 3.1 million for the past decade, the singlelargest factor of growth in the state. This increase is expected to fall from about 260,000

annually today to about 90,000 in 2040, due to the gradually aging population and a long-

term decline in fertility rates that are now approaching a long-term replacement level.

3. Migration to the state has slowed substantially in the past decade and is not expected to

rise dramatically in the future, due to factors beyond just the state or national economy.

The primary contributor to in-migration in California is and will be from Mexico.However, the institutions studying migration (Dept. of Homeland Security, Pew Charitable

Trust Hispanic Center, and the Mexican Migration Project at Princeton) all agree that

immigration has slowed due to the economy and stricter immigration enforcement. Someof the studies, particularly from Princeton, also suggest that this is a long-term trend due to

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SB375 Key Issues for Alternative Land Use Scenarios

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declining fertility rates, higher educational levels, and a lesser wage disparity in Mexicothan in the U.S. than in prior years.

4. The proposed Alternative Land Use Scenarios anticipate an increase of 33,000 jobs

annually in the region, as compared to 10,000 jobs annually in the past two decades. The

attached table compares these growth rates through 2040 to past trends and a straight-lineprojection of the past 20 years. This is a dramatic increase as Silicon Valley and many

other technology centers continue to find ways to provide value with fewer jobs, not more(see attached article re: Silicon Valley Can No Longer Save California or the U.S.).

5. Projections for the Orange County Sustainable Communities Strategy (OC SCS) estimateincreased employment of 10.8% (175,000 jobs) over the 2008-2035 time period, similar to

the timeframe for the Plan Bay Area (2010-2040). The Alternative Scenarios for the Bay

Area, however, project a 30% increase in employment. The housing estimates for OrangeCounty are awaiting the RHNA allocations to the Southern California Association of

Governments (SCAG) and Orange County. Nevetheless, the preliminary estimates for

Orange County would result in housing growth of 13.5%, again considerably less than theapproximately 30% outlined in the Alternatives Scenario. An independent analysis ofprojects for the SCS process should evaluate all of the regional estimates to assure

consistency in the approach and that the sum of the parts is aligned with projections

statewide. Staff notes that the Orange County SCS will need to be integrated into theoverall SCAG SCS. A more detailed summary of the Orange County estimates is attached.

The City of Palo Alto suggests that experts at Stanford University, the University of California, and/orthe Public Policy Institute, among others, be consulted to provide independent auditing of the

projections offered to date by ABAG and MTC, as well as those in other regions statewide.

Attachments

Councilmember Schmid Demographics Memo, dated November 15, 2011

ABAG Growth Projections v. Census TrendsOrange County Key Summary

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SB375 Key Issues for Alternative Land Use Scenarios

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Greenhouse Gas (GHG) Emissions

Will greenhouse gas (GHG) emissions reductions be achievable under an unrealistically high

population and employment scenario, given the extent of infrastructure (and land use change)

necessary to support that growth? Are there viable alternatives to allow cities to propose means to

achieve reductions at the local level to supplement the assumed savings for the region?

1. The Sustainable Communities Strategy is expected to provide for about 9% of the GHGreductions to satisfy statewide AB32 climate change objectives. These objectives are to be

achieved by gaining a 15% per capita reduction in the Bay Area (actually yielding a slight

total increase in GHG emissions).

2. Overestimating population and employment would mandate a level of infrastructure

(particularly for transportation), new programs, and land use change that may not bewarranted and almost certainly wont be affordable.

3. Many cities have adopted or are considering climate change, land use, and transportationprograms to reduce GHG emissions. Examples of efforts that relate to SB375 objectivesinclude: compact development policies and plans, protected open space buffers, bicycle

and pedestrian programs and facilities to decrease vehicle ridership, and promotion of

electric vehicle infrastructure and programs. Could the SCS allow cities to provideprograms and facilities that may more effectively (less costly) achieve the needed GHG

reductions?

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California Demographic Forecasts: Why are the numbers over-

estimated?

Prepared by City of Palo Alto

November 15, 2011

Actual California Population growth

Over the last decade, the state of California added 3.4 million people, to reach a total of 37.3 million.

This was an increase of 10% over the decade. This growth rate follows the gradual slowing that started

after 1990, down dramatically from the very high rates of the post-World War II era. Note that the

Department of Finances (DOF) 2007 projections reflect a very high growth perspective. The DOF

numbers are currently used as the population forecasts for all state and local projectsthey are not

scheduled to be revised until 2013.

Table 1. Californias population growth over the last five decades

(average growth from census to census)

Census Dept of Finance Projections (2007)

1960s 29.2

1970s 18.5

1980s 25.7

1990s 13.8

2000s 10.0 14.8

2010s 12.82020s 11.6

2030s 10.2

Source: US Census Bureau actual Census numbers; California Department of Finance 2007 Projections.

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Recent State forecasts have been consistently over-estimated

Even after the sharp decline in growth during the 1990s, forecasters consistently tended to be overly

optimistic about population growth rates through the 2000s. In 2005, the Public Policy Institute of

California issued a report (California 2025: Taking on the Future) that included the population

projections of all the key demographic forecasters. The consensus forecast from this group was some40% higher than the actual outcome for the state:

Table 2. California Population Forecasts for 2010 made before 2005

(Percentage growth expected from 2000-2010)

California Dept of Finance 15.2

USC Population Dynamics 11.6

UC Berkeley (Lee, Miller) 13.9*

Public Policy Institute of CA 15.2*

CCSCE 17.2

UCLA Anderson Forecasting 16.6

Average of six 2005 forecasts 15.0

*=center point of band

Source: Public Policy Institute of California, California 2025: Taking on the Future, 2005, Page 29.

The consensus forecast was some 50% above the actual numbers. The only forecaster who produced a

number below the actual 10% growth was the UC Berkeley group who stated that there was a 5%

chance that the growth rate would be lower than 7.1%. The 2005 PPIC Report stated that Recent trends

make population projections for California especially difficultFor these reasons, planners should

consider alternative population scenarios as useful alternatives for planners. (PPIC, 2005, pages 27-

28)

Even as late as the end of 2009, on the eve of the decennial census, estimates by the California Dept. of

Finance (the organization responsible for the numbers that are used for all state allocation formulas)remained strikingly high at 14.1% which was 1.5 million or 44.7% above the above the

contemporaneous and more accurate Census Bureaus Current Population Estimates.

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Critical Components of Change and the Future

The Census data provide a nice detailed perspective on the actual components of change during the

decade. While the 3.1 million people added through natural increase (births minus deaths) were the

largest single growth factor, the 2 million net gain from foreign immigration was important in

overcoming a net outflow of 1.6 million from native born emigration, primarily to other states.

Table 3. Components of Population Change in California, 2000-2010

(millions of people)

Births +5.45

Deaths -2.35

Net Domestic migration -1.63

Foreign immigration +2.58

Foreign emigration -0.59

Military, etc -0.07

TOTAL +3.38

Source: USC, Population Dynamics Research Group, What the Census would show, February 2011.

The challenge for projecting change in the future is the dramatic shifts in some of these base categories.

With the aging population, we know that, even with slight increases in longevity, the aging population in

California will raise the annual number of deaths in California from 271K in 2011 to 462K in 2039, while

the number of births will rise slightly from 532K in 2011 to 551 in 2039. The natural increase will fall

from some 260K today to 90K in 2040.

Thus, over time any increase in Californias population will increasingly rely on migration. Since net

domestic migration has averaged a net outflow of some 160K per year since the early 1990s, any growth

in population will be increasingly dependent on foreign migration. (Source: USC, Population DynamicsGroups, April 2011).

There is little reason to see a major shift in domestic migration with Californias high cost and high

unemployment rate. That leaves foreign migration as the critical component source of long-term

population growth. The most dynamic source for Californias growth has been immigration from Mexico,

both legal and illegal. All observers (The Dept of Homeland Security, the Pew Charitable Trust Hispanic

Center, and the Mexican Migration Project at Princeton) agree that net immigration from Mexico has

been down dramatically in recent years with the stricter enforcement of border crossing and the

prolonged recession in the US. Pew estimates that the illegal immigrant population in the US fell by

some 7% between 2007 and 2010. The important debate about the future is whether this is a businesscycle phenomenon or part of a longer term trend.

The group that has the best data source and takes the longer term look is the Mexican Migration Project

at Princeton. For decades they have been tracking migration patterns from Mexico and doing annual

surveys of thousands of families from migration centers in Mexico. They found that the percent of first

time immigrants from the Mexican communities of highest immigration fell from 1.2% of adults in 2000

to 0.6% in 2005 to zero in 2010. They identify that the changes are due to Mexican demographic and

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economic factors as much as from U.S. conditions. They identified five internal factors of change in

Mexico:

Fertility rates are falling dramatically from 6.8 births per women in 1970 to 2.8 in 1995 to 2 in

2010 (replacement level).

The number of young people entering the labor market has fallen from one million a year in the1990s to 700K today and demographic factors will bring that down to about 300K in 2030, not

enough to meet local job needs.

The rate of college attendance and college completion has doubled over the last decade, raising

the career path of an increasing share of young workers.

The wage disparity between Mexico and the U.S. is narrowing sharply with average wage gaps

falling from 10:1 in the 1960s to some 3.7:1 in the early 2000s.

The cost of migration has risen dramatically for illegal entrants, further narrowing the earnings

gap.

All of these factors point to the need, at the least, of looking at alternative scenarios of population

growth in California that are more sensitive to possible underlying changes in migration patterns.

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Sources of Demographic projections about California

US Bureau of the Census (responsible for the decennial census and does updated estimates each year of

state populationshas been much closer to actual numbers than the Cal Dept. of Finance)

California Department of Finance (responsible for state population estimates between the Census

yearsforecasts used as key source for state government planning). Statewide estimates for 2010

(made in 2009) were 41% higher than the 2010 Census numbers for the state, 83% over for the nine Bay

Area counties and 137% higher for the three West Bay counties.

Ronald Lee, UC Berkeley, Center for Economics and Demographics of Aging, Special Report: The

Growth & Aging of Californias Population, 2003 (an important report that identified the detailed

assumptions that went into the Department of Finances long-term projections).

Hans Johnson, Public Policy Institute of California, California 2025: Taking on the Future, Chapter 2Californias Population in 2025 (a report that gathered projections from eight academic and

government sources). Johnson concluded that population projections for California are especially

difficultIn addition to overweighting contemporary trends, forecasters are notoriously bad at

predicting fundamental demographic shifts... For these reasons, planners should consider alternative

population scenarios. Pages 27-28.

John Pitkin & Dowell Myers, USC Population Dynamics Research Group, The 2010 Census Benchmark

for Californias Growing and Changing Population, February 2011; Projections of the Population of

California by Nativity and Year of Entry to the U.S., April 2, 2011. (Pitkin and Myers had the lowest of

the forecasts in the 2005 studythough still overestimating growth by 16%. They are working with the

California Department of Finance on components for a new longer-term forecast; they are still assuming

a net immigration number of 160,000 holding steady in the future.)

Steve Levy, Center for the Continuing Study of the California Economy

UCLA Anderson Forecasting Project

Greg Schmid

October 2011

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5

4

3

2

01960 1970 1980 1990 2010 2035 2040

million

jobs

Department of FinanceHistorical Trends

3,071,300

3,271,300

4,266,000

4,734,300

Initia

lVisio

nScena

rio:+

48,800

jobs

pera

nnum

Scenar

io2:+3

3,200

jobsp

erannu

m

Job growth average

over last 20 years:+10,000jobs per annum

ABAG estimates that the region lost

200,000jobs over the last few years,

which is equivalent to the entire

job growth over the last 20 years

1,271,300

Job growth average

from 1960 to 1990:

+60,000jobs per annum

Job growth average

from 1960 to 2010:

+40,000jobs per annum

4,493,300

3,571,300

Continuingexisti

ngtrends:+10,00

0jobsperannum


17/87

October 17, 2011 Last Update: 10/15/2011

Blog Contact Contributors : About the Site News from Other Sites

Search

HOME ECONOMICS POLITICS URBAN ISSUES SMALL CITIES DEMOGRAPHICS SUBURBS CENSUS 2010 2011 BEST CITIES RANKING

SILICON VALLEY CAN NO LONGER SAVE CALIFORNIA -- OR THE U.S.

by Joel Kotkin 10/12/2011

Even before Steve Jobs crashed the

scene in late 1970s, Californias

technology industry had already

outpaced the entire world, creating

the greatest collection of information

companies anywhere. It was in this

fertile suburban soil that Apple

and so many other innovative

companies took root.

Now this soil is showing signs ofexhaustion, with Jobs death

symbolizing the end of the states

high-tech heroic age.

Steves passing really makes you think how much the Valley has changed, says Leslie Parks,

former head of economic development for the city of San Jose, Silicon Valleys largest city. The

Apple II was produced here and depended on what was unique here. In those days, we were the

technology food chain from conception to product. Now we only dominate the top of the chain.

Silicon Valleys job creation numbers are dismal. In 1999 the San Jose-Sunnyvale-Santa Clara area

had over 1 million jobs; by 2010 that number shrank by nearly 150,000. Although since 2007 and

early 2010 the number of information jobs has increased substantially up roughly 5000 to a

total of 46,000 the industrial sector, which still employs almost four times as many people as IT,

lost around 12,000. Overall the regions unemployment stands at 10%, well above the national

average of 9.1%.

This is partly because Apple, Intel and Hewlett-Packard have shifted their production which

offered jobs to many lower- and medium-skilled Californians to other states or overseas. With

its focus just at the highest end, the Valley no longer represents the economically diverse region of

the 1970s and 1980s. Indeed, it increasingly resembles Wall Street with a few highly skilled

employees and well-placed investors making out swimmingly.

Silicon Valley has become hyper-efficient; the region doesnt create jobs anymore, says Tamara

Carleton, a locally based fellow at the Foundation for Enterprise Development. In terms of

revenue per employee, Facebooks ratio is unprecedented. Even Apple hasnt grown significantly

this last decade, despite the successful launch of many products and services. While commendable,

greater efficiency doesnt put more jobs in the California economy.

This hyper-efficiency can be seen in the real state of the valleys industrial/flex space market. The

overall industrial vacancy rate remains 14%, two points higher than in 2009. Areas close toStanford, such as Palo Alto and Mountain View, have done well, but others on the periphery, such

as Gilroy, Milpitas and Fremont, and even parts of San Jose have vacancies reaching over 20%.

Californias other high-tech centers, with the possible exception of San Diego, are doing worse. The

state has been losing high-tech employment over the past decade, while such employment has

surged not only in China and Korea, but also in competitor states such as Texas, Virginia,

Washington and Utah.According to the annual Cyberstates study, California lost more high-tech

jobs about 18,000 last year than any other state.

Californias political leaders, particularly Democrats, still genuflect toward the Valleyfor economic

salvation and job growth. But social media has not proved a jobs-creating dynamo, and its clear

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that the highly subsidized, venture backed green economy has floundered miserably and faces a

less than rosy future.

You can feel pride, as an American and Californian, in the legacy of the likes of Steve Jobs but also

believe our future cannot be salvaged by high-tech alone. Many of the countrys greatest assets, for

example, are physical; in California these include the best climate for any advanced region in the

world, fertile soil, a prime location on the Pacific Rim and potentially huge fossil fuel energy

reserves, which give it enormous competitive advantages.

The green theocracy now in control of Sacramento, however, has little interest in these aspects ofCalifornia. It may prove difficult, if not impossible, to modernize the ports of Los Angeles and

Long Beach, prolific sources of good-paying white and blue collar jobs. These ports will soon face

increased competition for Asian trade from Gulf and south Atlantic locales eagerly waiting for the

2014 widening of the Panama Canal.

Administration officials such as Energy SecretarySteven Chu also slate the states agriculture for

demise by climate change. But just in case hes wrong, we should note that Californias agriculture

despite green attempts to cut off its water supply accounts for 40% of state exports. It

generates $12.7 billion annually in overseas sales and employs over 400,000 people directly and

many thousands more in marketing, processing and warehousing.

Similarly, California boasts some of the nations richest deposits of oil and gas, not only on its

sensitive and politically nettlesome coast but along the coastal plains and in the Central Valley.

The most recent estimates of the states reserves, according to the Energy Information Agency,

include nearly 3 billion cubic feet of natural gas and more than three billion barrels of oil, roughlythe same as Alaska and more than booming North Dakotas.

Geologists and wildcatters, usually ahead of the game, believe we have touched only a small part of

the states energy potential. Some discuss newoil shale discoveries, particularly in the Monterey

region, that could dwarf even the massive Bakken find in North Dakota. If you were in Texas,

quipped economist Bill Watkins to an audience in the hard-hit central California town of Santa

Maria, a predominately Latino town north of Santa Barbara, youd be rich.

A judicious and carefully planned expansion of these resources, particularly in the less populated

interior areas, could provide tens of thousands of high-paying jobs. It would also funnel

desperately needed revenue to the state. At the same time, such development could forestall much

higher energy costs, one of the things driving manufacturers in the state to move elsewhere.

California is unlikely to take advantage of its physical bounty; its leadership seems to lack

enthusiasm for any industrial expansion outside of the green economy. Industrial parks acrossthe state are emptying, more houses go into foreclosure and local governments wither on the vine.

Unless California begins to take its own economy seriously, it will continue to devolve from the

aspirational place that produced not only Steve Jobs but scores of entrepreneurs in everything

from movies and oil to agriculture and aerospace.

The Valley itself will likely do fine. Steve Jobs helped cement the position of Santa Clara Valley as

the epicenter of the high-tech world. But this accomplishment does relatively little for the rest of

California. What we will miss will not only be Steve Jobs creative contributions, but how clearly

his opportunistic, entrepreneurial spirit has ebbed away from the Golden State.

This piece originally appeared a t Forbes.com.

Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow

in urban futures at Chapman University, a nd an adjunct fellow of the Legatum Institute in

London. He is author ofThe City: A Global History. His newest book is The Next Hundred

Million: America in 2050, released in February, 2010.

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Data extracted on: November 14, 2011 (10:21:12 PM)

Local Area Unemployment Statistics

A to Z Index | FAQs | About BLS | Contact Us Subscribe to E-mail Updates

What's New | Release Calendar | Site Map

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Databases, Tables & Calculators by SubjectFONT SIZE:

Change Output

Options:From: 2001 To: 2011

include graphs

Series Id: LASST06000003

Seasonally Adjusted

Area: California

Area Type: Statewide

State/Region/Division: California

Home Subject Areas Databases & Tools Publications Economic Releases Beta

Attachmen


23/87

Download:

Y ea r P er io d l ab or f or ce e mp lo ym en t u ne mp lo ym en t u ne mp lo ym en t r at e

2 00 1 Jan 17064935 16259369 805566 4.7

2 00 1 Feb 17098323 16282609 815714 4.8

20 01 M ar 17112290 16282230 830060 4.9

2 00 1 A pr 17106936 16260518 846418 4.9

20 01 M ay 17091933 16225982 865951 5.1

2 00 1 Ju n 17079133 16188996 890137 5.2

2 00 1 Ju l 17079991 16159350 920641 5.4

2 00 1 A ug 17095502 16137458 958044 5.6

2 00 1 Sep 17123897 16124758 999139 5.8

2 00 1 Oct 17160184 16120839 1039345 6.1

2 00 1 N ov 17196995 16122667 1074328 6.2

2 00 1 D ec 17229217 16127240 1101977 6.4

2 00 2 Jan 17254267 16131779 1122488 6.5

2 00 2 Feb 17268275 16131808 1136467 6.6

20 02 M ar 17268276 16121777 1146499 6.6

2 00 2 A pr 17256523 16103201 1153322 6.7

20 02 M ay 17238799 16081190 1157609 6.7

2 00 2 Ju n 17223607 16065143 1158464 6.7

2 00 2 Ju l 17218410 16060411 1157999 6.7

2 00 2 A ug 17225377 16066519 1158858 6.7

2 00 2 Sep 17244071 16081116 1162955 6.7

2 00 2 Oct 17266542 16096536 1170006 6.8

2 00 2 N ov 17288100 16110834 1177266 6.8


24/87

2 00 2 D ec 17304130 16122076 1182054 6.8

2 00 3 Jan 17315792 16130492 1185300 6.8

2 00 3 Feb 17323528 16135644 1187884 6.9

20 03 M ar 17324032 16132504 1191528 6.9

2 00 3 A pr 17312041 16115720 1196321 6.9

20 03 M ay 17287722 16086034 1201688 7.0

2 00 3 Ju n 17260926 16055591 1205335 7.0

2 00 3 Ju l 17241998 16038009 1203989 7.0

2 00 3 A ug 17237301 16040636 1196665 6.92 00 3 Sep 17248865 16065345 1183520 6.9

2 00 3 Oct 17273399 16105384 1168015 6.8

2 00 3 N ov 17303871 16150178 1153693 6.7

2 00 3 D ec 17330901 16188538 1142363 6.6

2 00 4 Jan 17348252 16213823 1134429 6.5

2 00 4 Feb 17354669 16225582 1129087 6.5

20 04 M ar 17354156 16228394 1125762 6.5

2 00 4 A pr 17348588 16227454 1121134 6.5

20 04 M ay 17340789 16228312 1112477 6.4

2 00 4 Ju n 17336224 16237712 1098512 6.3

2 00 4 Ju l 17341618 16259878 1081740 6.2

2 00 4 A ug 17358575 16293254 1065321 6.1

2 00 4 Sep 17384216 16332639 1051577 6.0

2 00 4 Oct 17411726 16370818 1040908 6.0

2 00 4 N ov 17435099 16404295 1030804 5.9

2 00 4 D ec 17453567 16432990 1020577 5.8

2 00 5 Jan 17467741 16459050 1008691 5.8

2 00 5 Feb 17478629 16483881 994748 5.7

20 05 M ar 17486953 16507241 979712 5.6

2 00 5 A pr 17495465 16529698 965767 5.5

20 05 M ay 17506691 16552653 954038 5.4

2 00 5 Ju n 17522025 16576721 945304 5.4

2 00 5 Ju l 17543034 16602429 940605 5.4

2 00 5 A ug 17568333 16630031 938302 5.3

2 00 5 Sep 17594733 16658741 935992 5.3

2 00 5 Oct 17616387 16686389 929998 5.3

2 00 5 N ov 17630197 16710754 919443 5.22 00 5 D ec 17635330 16729894 905436 5.1

2 00 6 Jan 17607060 16719361 887699 5.0

2 00 6 Feb 17609316 16734299 875017 5.0

20 06 M ar 17614991 16746591 868400 4.9

2 00 6 A pr 17622567 16754007 868560 4.9

20 06 M ay 17630412 16758874 871538 4.9

2 00 6 Ju n 17639900 16767236 872664 4.9

2 00 6 Ju l 17656698 16787638 869060 4.9

2 00 6 A ug 17685904 16823086 862818 4.9

2 00 6 Sep 17727967 16869723 858244 4.8

2 00 6 Oct 17776543 16919664 856879 4.8

2 00 6 N ov 17822414 16962684 859730 4.8

2 00 6 D ec 17856306 16990145 866161 4.9

2 00 7 Jan 17874097 16999177 874920 4.9

2 00 7 Feb 17879382 16994294 885088 5.0

20 07 M ar 17875802 16979943 895859 5.0

2 00 7 A pr 17870836 16962380 908456 5.1

20 07 M ay 17869805 16945376 924429 5.2

2 00 7 Ju n 17877004 16934655 942349 5.3

2 00 7 Ju l 17895096 16934211 960885 5.4

2 00 7 A ug 17925032 16944839 980193 5.5

2 00 7 Sep 17963888 16965042 998846 5.6

2 00 7 Oct 18004960 16987589 1017371 5.7

2 00 7 N ov 18040287 17006407 1033880 5.7


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2 00 7 D ec 18067411 17018904 1048507 5.8

2 00 8 Jan 18087203 17023322 1063881 5.9

2 00 8 Feb 18103355 17019868 1083487 6.0

20 08 M ar 18119632 17007397 1112235 6.1

2 00 8 A pr 18138572 16985444 1153128 6.4

20 08 M ay 18160098 16954683 1205415 6.6

2 00 8 Ju n 18184134 16920841 1263293 6.9

2 00 8 Ju l 18207818 16887607 1320211 7.3

2 00 8 A ug 18229322 16855280 1374042 7.52 00 8 Sep 18249419 16818737 1430682 7.8

2 00 8 Oct 18268117 16769288 1498829 8.2

2 00 8 N ov 18282138 16701979 1580159 8.6

2 00 8 D ec 18289584 16617660 1671924 9.1

2 00 9 Jan 18289719 16524413 1765306 9.7

2 00 9 Feb 18285118 16432137 1852981 10.1

20 09 M ar 18276636 16347558 1929078 10.6

2 00 9 A pr 18264205 16272519 1991686 10.9

20 09 M ay 18246234 16201665 2044569 11.2

2 00 9 Ju n 18224228 16134515 2089713 11.5

2 00 9 Ju l 18198678 16071960 2126718 11.7

2 00 9 A ug 18171005 16016808 2154197 11.9

2 00 9 Sep 18146637 15973597 2173040 12.0

2 00 9 Oct 18131304 15943343 2187961 12.1

2 00 9 N ov 18131271 15927437 2203834 12.2

2 00 9 D ec 18148896 15925699 2223197 12.2

2 01 0 Jan 18177493 15937026 2240467 12.3

2 01 0 Feb 18204387 15953351 2251036 12.4

20 10 M ar 18217386 15962815 2254571 12.4

2 01 0 A pr 18213712 15960004 2253708 12.4

20 10 M ay 18196017 15945103 2250914 12.4

2 01 0 Ju n 18172933 15923431 2249502 12.4

2 01 0 Ju l 18153683 15901275 2252408 12.4

2 01 0 A ug 18145939 15887775 2258164 12.4

2 01 0 Sep 18145754 15882094 2263660 12.5

2 01 0 Oct 18147297 15880021 2267276 12.5

2 01 0 N ov 18147813 15877776 2270037 12.52 01 0 D ec 18150832 15878285 2272547 12.5

2 01 1 Jan 18150676 15904603 2246073 12.4

2 01 1 Feb 18116716 15916202 2200514 12.1

20 11 M ar 18078299 15902305 2175994 12.0

2 01 1 A pr 18080009 15938786 2141223 11.8

20 11 M ay 18063056 15947351 2115705 11.7

2 01 1 Ju n 18042724 15910004 2132720 11.8

2 01 1 Ju l 18014109 15847565 2166544 12.0

2 01 1 A ug 18005884 15830729 2175155 12.1

2 01 1 Sep 18067809(P) 15915991(P) 2151818(P) 11.9(P)

P : Preliminary.

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27/87

FOCUS Priority Development Area Application Materials

FOCUS applications for Priority Development Area designation are accepted on a rolling basis. Local governments in the nine county

San Francisco Bay Area are invited to apply for regional designation of an area within their community as a Priority Development

Area. These areas help inform regional and state agencies where incentives and assistance are needed to support local efforts that

encourage infill development near transit. Many local governments are already participating and have been eligible to apply for a

variety of capital funds and planning grants for the Priority Development Areas within their jurisdiction.

Applying to Become a PDA

Applications for Priority Development Area designation will be reviewed and evaluated, and areas that meet the designation criteria

will be recommended for regional adoption as designated Planned or Potential Priority Development Areas. In general, these

categories relate to readiness for funding: a Planned area would be eligible for capital infrastructure funds, planning grants, and

technical assistance while a Potential area would be eligible for planning grants and technical assistance, but not capital

infrastructure funds. Click here to learn more about the application review process.

Formalizing Growth Opportunity Areas as PDAs

Growth Opportunity Areas were submitted by local government staff for consideration in the Initial Vision Scenario. In 2012, a

Preferred Scenario will be identified and will serve as the basis for a draft Sustainable Communities Strategy (SCS). In addition,

regional agencies are proposing financial incentives for Priority Development Areas through the OneBayArea Grant program. To be

incorporated into the SCS and eligible for future funding, Growth Opportunity Areas will need to be formalized as Priority

Development Areas. See below for PDA application materials. Key upcoming dates for submitting a P DA application in time

for consideration in the SCS and OneBayArea grant program are as follows:

December 16, 2011: Jurisdictions submit completed PDA applications

January 2012: Staff review of applications received

January 30, 2012: Deadline for submitting local resolutions in support of PDA Application

February 1, 2012: Staff PDA recommendations presented to ABAG Regional Planning Committee with Planned/Potential status

March 15, 2012: Staff PDA recommendations presented to ABAG Executive Board for final adoption with Planned/Potential

status

This timeline, along with the addition of new Place Types and criteria for PDA designation, were approved by the ABAG Executive

Board at its September 2011 meeting. For more information, see the Application Guidelines for PDA Designation, below.

Changing the Status of an Existing PDA

A Potential PDA can move to Planned status once a plan has been completed for the area. Anything less than adoption by the City

Council or Board of Supervisors (accepting the plan, moving forward on implementation without adoption, etc.) is not sufficient to

meet this requirement. To complete the status change, applicants should submit a copy of the adopted plan and the adopting

resolution to the FOCUS Stafffor your jurisdiction. Applicants will also be asked to complete the PDA Assessment survey. Click here

for more details about the review process for revision requests.

Revisions to an Existing PDA

To revise an existing PDA, local governments should contact the FOCUS Stafffor their jurisdiction. Local staff will be asked to

submit an updated application (map, narrative, jobs and housing numbers, etc.) to provide accurate and up-to-date information

about the revised area.

If the revision is to a Potential PDA, then the applicant should submit an updated infrastructure budget. If the revision is to a

Planned PDA, then the applicant should submit an updated PDA Assessment Survey. A new resolution is not required.

Application Materials - Click on each item to download

Application Guidelines for Priority Development Area DesignationThe application guidelines include a program overview, eligibility for applicants and areas, designation criteria definitions,

application review process, timeline for priority development area designation, application form and submission instructions,

and contact information.

Application for Priority Development Area Designation

The application has six parts. Some information can be filled in directly in the Microsoft Word document, while some

information will need to be provided as a separate attachment.

Station Area Planning Manual for Part 1(e) of the Application

Use the Station Area Planning Manual as a guide to identify a Place Type that most closely aligns with the vision for the area

being submitted.

Attachment F


28/87

Infrastructure Budget for Part 6 of the Application

This Microsoft Excel spreadsheet is provided for applicants to enter information about the infrastructure improvements needed

and funding sources available to realize the vision for the priority area.

PDA Assessment Survey

This Microsoft Excel spreadsheet is provided for applicants to enter detailed information about the priority area. Applicants for

new PDAs will be asked to complete this spreadsheet ifFOCUS Staffdecides to recommend adoption as a Planned PDA after

review of the application. This should be also completed by applicants requesting changes to an existing Planned PDA or

moving from a Potential PDA to Planned status.

Sample Local Government Resolution

This sample local government resolution is provided as a template for requesting support from the applicant's council or board

of supervisors for participation in the FOCUS program through PDA designation.

Application Submission I nstructions

1. Fill out the Application in the Microsoft Word Document and compile the documents requested in the application form for each

area.

2. Submit an electronic version of the application form and associated documents requested in the application for each area to

[email protected].

3. Mail one hard copy of the application and attachments for each area to the following mailing address:

Association of Bay Area Governments

P.O. Box 2050

Oakland, CA 94604-2050

Attn: Jackie Reinhart

Physical address:

Association of Bay Area Governments

101 Eighth Street

Oakland, CA 94607-4756

Attn: Jackie Reinhart

Contact Information

For questions regarding the application, please contact Jackie Reinhart, ABAG Regional Planner

at [email protected] or 510-464-7994. However, prior to submitting an application, you are encouraged to contact the FOCUSStafffor your jurisdiction and discuss the goals for the proposed area.


29/87

From: Greg Scharff [[email protected]]Sent: Tuesday, November 22, 2011 12:10 PMTo: Williams, CurtisSubject: Fwd: [Housing Methodology Committee] Opportunity for input on RHNA Sphere of Influence (SOI) rulesPlease let me know what type of input we should give

Sent from my iPhone

Begin forwarded message:

From: Gillian Adams Date: November 22, 2011 11:44:00 AM PSTTo: Greg Scharff Subject:[Housing Methodology Committee] Opportunity for input on RHNA Sphere of Influence(SOI) rulesReply-To: Housing Methodology Committee

Reply ABOVE THIS LINE to add a comment to this message

Project: Housing Methodology CommitteeCompany: ABAG

Gillian Adams posted a new message:

Opportunity for input on RHNA Sphere of Influence (SOI) rules

The methodology for the Regional Housing Need Allocation (RHNA) must include rules for allocating

the housing need for a jurisdictions SOI if there is projected growth in the area, and most SOI areas

within the Bay Area are anticipated to experience growth.

For the 2014-2022 RHNA, staff is proposing to use the same approach regarding SOI that was includ

in the 2007-2014 RHNA, unless ABAG receives a resolution from a county and all the cities in that

county requesting a change. The deadline for requesting this change is December 31, 2011.

The proposed SOI rules are:

1. In Napa, San Mateo, Santa Clara, Solano, and Sonoma counties, the allocation of housing ne

generated by the unincorporated SOI was assigned to the cities.

2. In Alameda and Contra Costa counties, the allocation of housing need generated by the

unincorporated SOI was assigned to the county.

3. In Marin County, 50 percent of the allocation of housing need generated by the unincorporated

SOI was assigned to the city; and 50 percent was assigned to the county.

More details about RHNA, Spheres of Influence, and the process for requesting a change are includ

in the attached letter.

RHNA_SOI_112111.pdf

85 KB

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Sustainable Communities Strategy

ALTERNATIVE LAND USE SCENARIOSCore Concentration, Focused Growth, and Outer Bay Area Growth

REVISED: September 1, 2011

In July, ABAGs Executive Board and the Metropolitan Transportation Commission approved a

framework for Five Alternative Scenarios, which will be used to inform the development of thePreferred Scenario of the Sustainable Communities Strategy (SCS). Scenario 1 and 2 are based

on unconstrained growth, assume very strong employment growth, and unprecedented funding to

support housing affordability. Scenario 1, the Initial Vision Scenario was released in March

2011. Scenario 2, Core Concentration Unconstrained will be developed to provide a moreconcentrated development pattern along transit corridors. These two scenarios are essential to

identify the challenges and policies for an ideal sustainable development path.

This report presents the land use patterns for scenarios 3, 4, and 5 based on an assessment of

economic growth, financial feasibility, and reasonable planning strategies. They provide a range

of housing and employment distribution patterns across places and cities that support equitableand sustainable development. The three scenarios are as follows:

Core Concentration Growth Scenario: Concentrates housing and job growth at selectedPriority Development Areas in the Inner Bay Area along the regions core transit network.

Focused Growth Scenario: Recognizes the potential of Priority Development Areas andGrowth Opportunity Areas across the region with an emphasis on housing and job growthalong major transit corridors.

Outer Bay Area Growth Scenario: Addresses higher levels of growth in the Outer Bay Areaand is closer to previous development trends than the other two scenarios.

These three scenarios assume a strong economy supported by the appropriate affordable housing

production. They also assume targeted local and regional strategies and additional funding to

support sustainable and equitable growth. They are designed primarily around PriorityDevelopment Areas and Growth Opportunity Areas, as places for growth identified by local

jurisdictions. (PDAs will refer to both areas in this report) The level of PDA growth is defined

based on the Place Type established by the local jurisdiction (i.e., regional center, transitneighborhood, rural town), which provides a regional language to recognize the character, scale,density and expected growth for the wide range of places in the Bay Area. Beyond the PDAs,

household growth is distributed based on employment, transit access, household formation, and

housing production. Employment distribution is based upon the existing employment pattern,reversing the previous dispersal trends throughout the region.


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Regional dialogue on land use scenarios

The purpose of the land use alternative scenarios is to expand the regional dialogue on the type

of development, planning strategies, and investments to define the SCS. We are seeking inputfrom local jurisdictions, community organizations, business organizations, and general public on

the following themes:

Distribution of growth

Shifting from previous trends of dispersed growth, do these three land use scenariosprovide an appropriate spectrum for sustainable and equitable development trends? Is

growth concentrated at the appropriate places?Development of vital and healthy places

Are housing and jobs converging at the appropriate places? Can this convergencesupport greater access to jobs and housing, particularly for the low and moderate incomepopulations?

What elements of the scenarios would support the development of completecommunities?

Do the scenarios address the local expectations and necessary adjustments for regionalequity and sustainability?

Planning strategies and investments

How can local jurisdictions, community organizations, and business organizationsconverge into a coherent regional strategy?

What policies and investments should be prioritized to support the SCS?This report includes five sections and two appendices. The first section is a brief summary of the

input received from local jurisdictions and stakeholders on local development and equity. Thesecond section is an overview of regional employment and household growth between 2010 and

2040. The third section describes employment trends and distribution, including some details of

the recent regional employment analysis undertaken by ABAG and MTC to inform the land usepatterns. The fourth section provides an overview of the housing distribution, which relies on

the housing analysis presented in previous reports. The fifth section covers the next steps

towards the development of the Preferred Scenario. The appendices include, first, details on themethodology for growth distribution; and, second, tables of growth by PDA and local

jurisdiction. Scenarios maps are compiled in a separate packet.

1. INPUT ON SCS SCENARIOSThe development of the SCS Core, Focused, and Outer Bay Area Growth Scenarios are informedby a wealth of input we received on the Initial Vision Scenario (IVS) from local elected officials,

planning directors, and Congestion Management Agencies (CMAs) as well as from the Regional

Advisory Working Group, Equity Group, and stakeholders groups. County-level Basecamp siteshave been well noticed and public workshops were held throughout our nine-county region.

As indicated in previous reports, land use decisions are a local responsibility governed by localjurisdictions. The land use scenarios presented here are based upon local input and strong


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coordination among local and regional agencies. Regional agencies have incorporated localinput into three coherent land use development patterns.

Input on local developmentThe input received reflects the unique characteristics of the regions communities. Some

communities described the level of housing growth depicted in the IVS as too high, while otherjurisdictions responded that IVS housing growth levels would be appropriate if funding forredevelopment, public schools, transit and other community infrastructure were available. Still,

a number of common themes have emerged.

Addressing the Bay Area economic challenges: The Bay Areas first SustainableCommunities Strategy should advance a vibrant economy and strong growth for theregion. Employment growth should be aligned with existing and planned transit.

Employment totals are too high given past performance and the depth of the recession.

Sustainable and equitable housing production: Growth levels in the Initial VisionScenario are not feasible given current market constraints and funding availability. Infill

development challenges require capital investments and supportive policies. The SCS

should reward communities that advance sustainable growth at transit nodes. Transit service: Cuts in transit service will impede sustainable growth. Transit-served,

infill areas that have not been nominated by local communities as PDAs should take on

comparable levels of growth.

Coordination of regional efforts: Loss of redevelopment agencies will limit infilldevelopment. The SCS should provide CEQA benefits for projects in PDAs. Air District

and BCDC requirements should be aligned with the SCS.

Input on equityRegional agency staff has worked with the Regional Equity Working Group and MTCs PolicyAdvisory Council to develop inputs to the Alternative Scenarios that will increase access to

opportunities and an improved quality of life for residents from all income categories in

communities throughout the region. Social equity as well as economic growth and environmentalsustainability are promoted through the emphasis on encouraging growth in complete

communities served by transit. In addition, each of the alternative scenarios will also distribute

growth in a way that ensures each jurisdiction is planning to accommodate a minimum percent ofits expected household growth. Factors related to transit service, employment, and net low-

income commuters to a jurisdiction will also inform the alternative scenario housing

distributions.

2. REGIONAL EMPLOYMENT AND HOUSEHOLD GROWTH 2010 2040The recent national economic recession triggered a major employment decline. Recent data andresearch indicates that the nation is facing a slower recovery than expected over the next few

years, which will in turn impact the recovery of the Bay Area. Beyond this short term recovery,

the rates of employment growth for the Bay Area and California have become closer to or lowerthan the national rates since the 1980s. They were higher than the nation from the 1960s to the

1980s, but as the region and the state matured in its economic composition, growth rates became

closer to the national average.


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Due to lowered forecasts of national economic and job growth, along with dramatic decreases instate and national immigration levels (even prior to the recession), the Bay Area job forecast for

2040 would be revised downward by an estimated 100,000 jobs than the forecast employment

for the Initial Vision Scenario. The total jobs for 2040 would drop by another 200,000 jobs byswitching to a forecast where the Bay Area maintains its current share of national employment.

Even under those considerations, the SCS can reasonably assume a healthy economy for the BayArea by 2040. High expectations are based on the strength of our knowledge-based economy,

the development of new high technology sectors as well as the diverse economy to support these

leading sectors. In addition, the Bay Area has a highly qualified labor force when compared to

other regions and a high quality of life based on access to urban amenities, natural resources, anda Mediterranean climate. The region also provides businesses with a wealth of research and

development resources and a strong network of international exchange.

Given these resources, regional and economic experts working with ABAG and MTC suggest

the Bay Area could add almost a million jobs up to 4.26 million jobs by 2040. This is an average

of 33,000 per year over the next 30 years, which assumes a healthy and strong economy. This ismore than three times the 10,000 average annual job growth of the previous two decades. It is

close to the 40,000 average annual job growth of the last 50 years when the region experienced

the development of the high technology industry and the finance sector.

This employment growth will be supported by strong housing production of about 770,000 units

by 2040. This would represent an annual production of 27,000 units per year. The slow

recovery of job growth and housing prices are expected to limit housing production in the near-term. This period should be addressed independently from the housing production of the later

years. Assuming a suppressed housing production rate of 15,000 units from 2010-2015, thislevel of growth would increase to almost 30,000 units per year over the 2015-2040 timeframe. In

comparison, historical rates were 20,000 per year from 1990-2010 and 36,000 averaging 1970,

1975, 1980, and 1985 rates, periods of much greenfield housing production.

The expected growth of 770,000 housing units by 2040 in the scenarios under discussion is lower

than the equivalent one million units in Initial Vision Scenario. The former is the expectedhousing production while the latter reflects the housing need. The expected housing production

addresses lower 2010 household and population counts (Census 2010), lower employment

growth than previous forecasts, and reasonable assumptions on market trends, local and regional

policies, and infrastructure.

This level of housing reflects a reasonable job to household ratio for the Bay Area and would

consider a reasonable pace of recovery of the housing market. For these scenarios we areassuming a job to household ratio of 1.3 by 2040. This ratio is based on the regional average

over the past six decades and is also similar to the present-day ratio. It could be expected that

demographic shifts would lower this ratio over the next fifteen years as the baby boomergeneration retires, but that it would rise again in the later years of the planning horizon.


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Regional Growth: Households, Population, Employed Residents, Jobs, 2010 - 2040

Core, Focused, and Outer Bay Area Growth

Scenarios

Initial Vision

Scenario

2010 2040 Growth

2010-40

Growth

2010-40

Households 2,608,000 3,378,000 770,000 1,031,000

Population 7,151,000 9,236,000 2,085,000 2,432,000

Employed residents 3,153,000 3,974,000 821,000 1,338,000

Jobs 3,271,000 4,266,000 995,000 1,463,000

These scenario land development patterns will be supported by transportation scenarios that will

vary the level of funding for fix-it-first maintenance, transit capacity improvements, roadway

improvements, and bike/pedestrian funding.

3. REGIONAL EMPLOYMENT DISTRIBUTIONThe region is experiencing a transformation in its economic activities and in its populationcomposition, both of which have major land use implications. The very strong growth of

knowledge-based activities at the intersection with urban amenities brings new strength to

employment centers. These economic trends are parallel to some key emerging demographicchanges: young professionals preferences for vital urban places instead of office parks, an

increase in the ethnic diversity of the labor force and residents, and a major wave of retirement

and increase in the senior population. Providing that the region can develop and implement a

solid SCS, these changes provide an opportunity to strengthen the economic health, social equity,

and sustainability of the Bay Area.

SCS tasks to support a healthy economy include: Provide the appropriate transit, affordable housing, and urban amenities to support the

new wave of industries at urban locations and densified office parks.

Support a diverse economy through public investments that support strategic sectors,and the retention and expansion of affordable housing close to major employment

centers.

Regain the economic vitality of regional centers, which lost employment over the pastdecades. Support increased densities and a mix of uses at suburban office parks,which have been major employment growth areas.

Concentrate urban amenities and affordable housing in downtown areas and alongtransit corridors across the region. Maintain and increase the viability and productivity of industrial lands and

agricultural resource areas.

For the purpose of the SCS Alternative Scenarios we have revised the total employment growth

by 2040, the growth by industry, and the distribution by PDA and city. The rationale for this

healthy economic growth in relation to population and housing growth will be discussed in a


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separate memo. This report primarily focuses on growth by industry and distribution patternsbased on the employment analysis developed by ABAG and MTC in collaboration with Strategic

Economics.

Changes in the regional industrial composition

12-5-11 Response to SB375 Alternatives

Documents

Transcript of 12-5-11 Response to SB375 Alternatives