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In recent months, Sacramento, Los Angeles and San Diego each passed their first Sustainable Communities Strategy (SCS) in response to Senate Bill 375, the 2008 state bill requiring each region in California to create a coordinated land use and transportation plan to reduce per capita greenhouse gas emissions from driving.

We in the Bay Area have the advantage of being the last among the big regions to pass an SCS. What can we learn from the other regions about the implementation of SB 375 and the prospects for better regional planning statewide?

Last month, SPUR explored this question in a panel discussion with four of the state’s leading advocates for effective strategies: Ken Kirkey from the Association of Bay Area Governments, Eliot Rose from the Center for Resource Efficient Communities, Amanda Eaken from the Natural Resources Defense Council and Stuart Cohen from TransForm. Given each area’s distinct circumstances and politics, it is difficult to generalize about their SCS process, but several broad lessons stood out.

The San Diego Association of Governments (SANDAG) was the first regional agency in California to adopt an SCS, and the results were watched closely by the state’s other metropolitan areas. SANDAG has the advantage of being a region that includes a single county, as opposed to SCAG’s six, SACOG’s six and the Bay Area’s nine. The SANDAG SCS passed in October 2011, and the region has looked likely to meet the Air Resources Board’s green house gas emission reduction targets early, thanks in part to the overall decrease in regional activity accompanying the economic recession. But the SANDAG SCS has received ambivalent reception, with many observers questioning whether the plan went far enough. As Eliot Rose wrote, “complying with SB 375 is a different thing than actually using the opportunities that the bill presents to produce substantive changes in the way our communities look and the way that we get around, and SANDAG’s RTP illustrates this gap.”

SANDAG has devoted a commendable investment to transit, a proportion comparable with Los Angeles at 47 percent, but the San Diego region is still directing substantial new development to areas where transit is likely to remain limited. According to Rose, only 53 percent of the region’s growth is slated to occur in Smart Growth Opportunity Areas, with the rest scattered in suburbs and unincorporated areas, even after the 2035 horizon when the region is unbound by general plan assumptions.

The SANDAG plan is currently held up in litigation, and its perceived shortcomings have prompted a wider conversation about whether more aggressive standards should be adopted in order to hold regional entities to their policy commitments.

In Southern California, the Southern California Association of Governments (SCAG) focused throughout its SCS process on overcoming the apprehension that measures to reduce greenhouse gas emissions are bad for the economy. Organizers gathered compelling data from expert studies demonstrating the market demand for transit, multifamily housing and walkable communities. Most promising were the voter surveys commissioned by SCAG which showed a population that embraces smart land use planning and wants to live in communities with many transportation options.

By mounting an extensive outreach campaign across the region, the largest and most heavily populated in the state, SCAG leaders were able to bring about a major shift in funding priorities. $246 billion, nearly half the plan’s total revenue will be spent on public transportation, including the ambitious 30/10 Plan to build 12 key transit expansion projects in Los Angeles in the next ten years. The plan quadrupled regional spending on bike and pedestrian infrastructure, but the final figure still represents just 1 percent of the SCS budget, falling far short of the 14 percent of funds voters said they would like to see spent on active transit.

The SCAG SCS was passed unanimously on April 4, and the broad support it was able to garner represents progress for the region. But voters are notably ready to see even more commitment to smart land use and public transportation investment.

Sacramento’s regional planning entity, the Sacramento Area Council of Governments (SACOG), passed its SCS just a few weeks ago on April 26. The plan focused on local rezoning around identified transit priority areas, defined as areas within a half-mile of high quality transit: a rail stop or a bus corridor that provides or will provide at least 15-minute frequency service during peak hours by the year 2035. But the Sacramento delta region lagged behind the other regions in their prioritization of transit, allocating only 32 percent of their overall budget, compared with SCAG’s and SANDAG’s 47 percent and MTC/ABAG’s projected 67 percent. Sacramento also plans to spend significantly more on highways than the other regions.

SACOG has earned praise, however, for allocating nearly 8 percent of its overall budget for improvements to bike and pedestrian infrastructure, far exceeding the other regions whose investments in active transportation remain a meager 1 percent. And Sacramento makes important steps in concentrating new growth within already built up areas, managing to grow by 39 percent, but increase its urbanized footprint by only 7 percent.

As the Bay Area's own SCS is finalized over the next year, our task is to continue to set a high bar—to keep shifting our investments towards more sustainable modes and high performing transport projects that are cost effective and support multiple regional goals such as reducing driving and expanding the economy. The other metropolitan regions are looking to ABAG and MTC’s Project Performance Assessment Process for improved economic, social and environmental goals with which to measure the merit of projects in the next SCS process.

Read SPUR’s recommendations for improving the Bay Area's draft SCS >>

For the last decade, businesses in San Francisco have been adamant that the city’s payroll tax is holding back job growth. First, companies must pay the tax when they reach $250,000 in payroll, which discourages new hiring. Second, they must pay it when employees exercise their stock options — a strong incentive for any company considering an IPO to leave the city. SPUR, along with much of the business community, has argued that we should restructure the city’s tax system to remove these disincentives to hiring. Following payroll tax exemptions in 2011 for stock compensation and for businesses locating in the Mid-Market neighborhood, the call for payroll tax reform has sounded again. The city is finally responding, but will this effort lead to real reform?

City Controller Ben Rosenfield and Chief Economist Ted Egan have for the last three months been hard at work designing a replacement for San Francisco’s payroll tax. That tax is currently 1.5 percent of total payroll for every company with at least $250,000 in payroll. This means most businesses pay nothing, because they're too small to qualify. The city has also had difficulty collecting from entities that don’t clearly have “payroll,” including some partnerships, sole proprietors and financial vehicles. As a result, only 7,500 of the city’s 80,000 registered businesses pay the tax. One of the goals of the reform effort is to reduce rates on growing companies by asking all companies to pay something.

San Francisco is the only city in California to levy a tax on payroll; most other cities have some form of gross receipts tax. For all of the complaints about the city’s payroll tax, though, at least it’s simple.

Rosenfield and Egan have developed alternatives and conducted dozens of industry workshops to explore their implications. All proposals at this stage are designed to be revenue neutral (meaning they would create the same amount of revenue as the current payroll tax), but they would broaden the base of payers. In other words, the city isn’t looking for more money, but it is trying to increase the percentage of businesses that contribute.

To make the San Francisco ballot in November, proposed measures must be submitted to the Board of Supervisors by the first week in June. As of this writing, the controller’s office is on schedule to send a final proposal to the mayor and board president by the first week in May. There are currently two distinct proposals: a new gross receipts tax and a revised payroll tax. Below we summarize the main features of each. (You can also download the latest presentation from the controller’s office.)

Option 1: Gross Receipts Tax

Gross receipts taxes are based on a company’s total earnings, as opposed to a percentage of a company’s payroll. Most major cities in California have a gross receipts tax, and no other cities have a payroll tax.

·      Uses industry-based rate schedules. Separates the business tax base into six groups, based on industry sectors. This structure mirrors that used in many other California cities but simplifies the structure with fewer schedules.

·      Sets progressive rates. Transitions tax rates to a structure in which rates increase as earnings increase. Companies pay a higher rate as they earn more. Conversely, companies pay a lower rate if they earn less.

·      Sets marginal rates. Creates tiers of rates that apply only to the range of gross receipts, rather than the entire amount of gross receipts, similar to personal income taxes. For example, a company in schedule 1 would pay 0.1 percent tax on gross receipts from $1 million to $2.5 million and 0.2 percent on all gross receipts from $2.5 million to $25 million.

·      Broadens the tax base. Increases the number of businesses paying the payroll tax to 33,500 from only 7,500 in 2010.

Option 2: Revised Payroll Tax

The revised payroll tax proposal retains the current business tax structure but lowers rates in all categories and significantly increases the cost of business licenses.

·      Increases business license fees. Retains payroll tax but increases business license fees at all levels. In the current system these fees range from $25 to $500 based on payroll. New rates would range from $150 to $10,000.

·      Lowers overall payroll tax rates. As a result of higher license fees and a greater number of payers, payroll tax rates would actually be reduced at all levels. Rates would progressively increase with payroll but top out at 1.2 percent for those with the biggest payrolls.

·      Uses progressive rates.Transitions the current 1.5 percent tax rate to a structure in which companies pay a higher rate as they earn more. Conversely, companies pay a lower rate if they earn less.

·      Creates special real estate license fees. New rates would be assigned by type of facility. Residential buildings of more than four units would pay per unit, commercial real estate would pay per square foot of space, and commercial parking with more than 100 spaces would pay a flat rate per facility.

·      Creates incentives for new businesses. Includes a one-year payroll tax holiday for all new businesses.

·      Encourages growing businesses. Multi-year stock option smoothing and a $100,000 annual deduction for all businesses could help businesses grow and thrive.

·     Broadens the tax base. Increases the number of businesses paying the payroll tax to 33,000 payers from 7,500.

All of this begs a very important question: What is the best way to transition a tax system that generates $400 million per year? Very carefully. The city is considering a multi-year transition that phases in the new structure in a way that ensures that the city doesn’t lose revenue — or collect too much. Details are not yet finalized, but it could look something like this:

Of course, there is always a third option: do nothing. It is still unclear whether a consensus will be achieved in support of a new structure.

Further complicating the process are separate proposals from the Board of Supervisors, including a small business payroll tax exemption introduced by supervisors David Campos and Mark Farrell, and a persistent push to generate new revenues from Supervisor John Avalos and others.

Depending on which path the eventual tax reform proposal takes on its way to the ballot, there are a number of possible outcomes. The mayor could simply choose to put a payroll tax reform package on the ballot by his own signature, in which case the board would have no influence over the content. But what happens if a proposal is carried by the board? Will there be adjustments to specific rate categories? Integration of one or more proposals from the Board of Supervisors? Perhaps even a proposal that generates additional revenue? Of course the more layers of complexity, the lower the chance that the proposal will make it to the ballot.

SPUR has mixed feelings about these proposals. We do not want to drive away firms headquartered in San Francisco, which is a real risk of the gross receipts option. On the other hand, we believe the payroll tax is probably worse. Our hope is that the city can fine-tune the gross receipts option so that it succeeds in building the tax base while keeping San Francisco a viable location for many different kinds of firms.

The Stockton Street Enhancement Project, spearheaded by Chinatown Community Development Center (CCDC) and SPUR, brought Chinatown and SPUR stakeholders together to discuss ways to preserve the economic and cultural vitality of Stockton Street while offering opportunity areas for improvement through the next decade. The project, made possible by a grant from the National Endowment for the Arts, included a walking tour and two workshops designed to address issues with the highly trafficked corridor.

Stockton Street has evolved over the years to become an example of true urbanization, replete with a strong transit network, multigenerational families living in tightly knit spaces, hundreds of mom-and-pop stores and a bustling streetlife. It has a dense immigrant population and plays an important role as a regional hub for both Asian Americans and tourists from around the world. Its success lies in its strong history of grassroots organizing to protect Chinatown’s affordability, culture and urban form.

Buildings along the corridor are typically mixed-use — with retail on the ground floor and housing above — and between three and four stories in height. In addition to storefronts, there are also many social services and institutions (i.e. health, education, religious and family associations) that line the busy blocks of Stockton Street.

The residential base, small businesses and marketplace feel are assets that should be preserved and enhanced as the neighborhood experiences change from major public projects such as the new Central Subway. Connecting Chinatown to Union Square and SoMa before fusing with the existing T-Third line as it extends to Visitacion Valley and the Bayview, the Central Subway could prove to be an catalyst for change along the Stockton Street corridor, reshaping the street’s usage patterns and drastically changing its character. The community planning process framed by CCDC and SPUR sets the overarching vision of how to preserve and enhance the neighborhood amid these oncoming changes.

With an estimated 20,000 people living in Chinatown’s 30 square blocks, many of whom are crowded into 8-by-10-foot single room occupancy units, Chinatown is the city’s most densely inhabited neighborhood. The average median income of these residents is $18,000 per year, with more than a third of the population being seniors who live on fixed incomes. The neighborhood is made up of 88 percent renters, and only 10 percent of households own private vehicles. Future plans for Stockton Street must take into account the needs of the people who live in Chinatown by focusing on the creation of safe streets, affordable housing, open space, timely and efficient transit and access to social services and educational and religious institutions.

Stockton Street is also an important cultural and social hub for Asian Americans from many of San Francisco’s immigrant neighborhoods, including Visitacion Valley, SoMa, Outer Mission and Excelsior, who take the 30, 45 and 8X buses that pass through the corridor. Other Asian Americans enclaves in the Sunset, Richmond, East Bay and South Bay depend similarly on Muni and BART as their connection to Chinatown. Regardless of their location, San Francisco’s Chinatown serves as the confluence for the Bay Area’s Asian Americans, with a large proportion of them attending school, worshipping, visiting friends or shopping in the neighborhood.

Through a walking tour and two workshops, one held in Chinatown and one held at the SPUR Urban Center, Chinatown CDC and SPUR implemented a rigorous community engagement process to better understand the needs along Stockton Street. These public discussions brought together a diverse group of stakeholders — including monolingual residents living along the corridor, local merchants, property owners, architects and planners — to talk about potential opportunities for change. Bilingual and bicultural, the workshops were conducted to be participatory and engaging for all groups involved.

At the start of each workshop, SPUR and CCDC staff analyzed the current state of the Stockton Street corridor and shared case studies, both local and international, as possible models for its future, after whichparticipants divided into smaller groups to run through three different brainstorming exercises: 1) current strengths and challenges of Stockton Street, 2) priority areas to focus on for its future and 3) the connection of the future Chinatown Central Subway Station to Stockton Street.

Participants quickly discovered that there is no single solution for Chinatown’s Stockton Street. On the contrary, there are many elements that work well, but have also proven to be challenges for functionality. For example, retail displays encroaching on to the sidewalk may initially seem innocuous and complementary to the street’s character, but when combined with open basement trapdoors, parking meters, unloading trucks and a multitude of newspaper stands these components quickly narrow the navigable sidewalk space.

Participants noted a similar dichotomy with the corridor’s transportation options. While the continuous flow of Muni buses provides near-seamless transit connections, their frequent stops also create traffic congestion. With pedestrians often forced into the street due to sidewalk obstructions, this congestion brings with it very real danger. Compounding this is the lack of open space along Stockton Street, with only Willie “Woo Woo” Wong Playground providing an oasis from the activity of the street.

In the second exercise the workshop groups identified many of the same priorities and solutions for the corridor. Short-term proposals included restricting loading and unloading during peak pedestrian hours, consolidating sidewalk stands and beautifying the street through painting, cleanup and improved lighting. Participants looked to similar streets around the world for ideas, taking inspiration from flexible parking options and sidewalk bulbouts, high-volume bus stops and pedestrian-scale full-spectrum lighting. Long-term ideas posed included eliminating a south-bound travel lane to free up transit and pedestrian flow, creating “flex delivery zones” dependent on the time of day and prioritizing travel lanes through traffic pattern analysis. Also proposed was the idea of “shoplets,” compact retail spaces that take over on-street parking in a similar manner to a parklet.

The final brainstorming exercise focused on the role of Stockton Street as the future terminus for the Central Subway. Participants immediately identified the opportunities in crafting the station as a hub of activity, art, business and culture while suggesting plaza space and rooftop decks as a respite from the street, along with improved signage and wayfinding for visitors. Finally, participants felt that the subway station’s construction could prove to be the impetus for the evolution of the Stockton Street corridor and the grand catalyst for lighting, transportation and façade improvements along its extent.

The feedback from the Chinatown workshop resulted in pragmatic ideas for positive and lasting change for the corridor, while the SPUR workshop, comprised mostly of working professionals, came up with more technical and creative thoughts on possible changes. SPUR and CCDC hope the City of San Francisco will prioritize these ideas in their plans as they pursue opportunities within the corridor.

Let’s say you’ve got a great jam recipe. Or perhaps you make some mean pickles.  Your friends keep telling you that you should quit your day job and follow your culinary passion. But unless you’ve got quite a bit of savings or other access to capital, following your friends’ advice is a pricey proposition.

That’s because in California, you can’t sell any food prepared in a home kitchen.  And access to a licensed commercial kitchen costs money — usually starting at around $30 per hour in the Bay Area. Add your ingredient and labor costs, and it becomes a decent investment to test your business idea.  

A proposed piece of state legislation, the California Homemade Food Act, would change all that. Called the “cottage food bill,” the legislation would allow Californians to sell certain items produced from their home kitchen. Similar to legislation already enacted in more than 30 other states, the bill comes with certain restrictions, including only allowing the sale of what the health department refers to as “non potentially hazardous” items, which basically means products that would not go bad sitting on a shelf for a few days.

On March 27, supporters of the law — including Christina Oatfield of the Sustainable Economies Law Center and Shakirah Simley, owner of Slow Jams — discussed the proposal alongside Richard Lee of the San Francisco Department of Public Health at an event co-sponsored by Kitchen Table Talks, 18 Reasons and SPUR. Lee raised a number of concerns that he and other public health officials statewide shared. The proposed legislation would give the health department much less authority to inspect home kitchens that sold goods to the public than what it has for inspecting licensed commercial kitchens. He expressed concerns about whether home producers would follow best practices regarding hand washing, sanitizing surfaces, pet contamination, vermin, appropriate labeling of allergens and distinguishing what is and is not potentially hazardous food. Oatfield responded by noting that that advocates were working with the health officials to add amendments to address some of their concerns.

She also discussed the issue of scale-appropriate regulation — the idea that the less risk an activity poses to society, the less regulation it requires (and vice-versa).  Since home kitchens produce much less volume and serve fewer customers than commercial kitchens, the thinking goes, they should not be subject to the same inspections. One of the aspects of the legislation currently under negotiation is whether a cap, based on sales volume, should be added to prevent a home kitchen from producing at the scale of a commercial kitchen.

The legislation is just beginning to make its way through the California Assembly. It is almost certain to be amended as food-producing entrepreneurs push for lower barriers to entry and public health regulators push to ensure food safety. But, if it does become law, Californians would be able to both sell what they grow from their home garden and what they cook in their home kitchen.

Read the California Homemade Food Act >>

Read more about the proposed legislation from the Center for Urban Education about Sustainable Agriculture >>