Summary and Recommendation
The Bay Area is projected to grow by about a million people in the coming twenty years (from 6.8 to 7.7 million), propelled by a remarkable economy. If the region persists in "planning as usual," many of the residents we can expect by 2020 will be located on the outer fringes of the region, or even beyond its traditional boundaries, and for mobility we will continue to rely primarily on the freeway and the auto. Staying on this path will maintain our dubious distinction of having the highest housing costs in the nation, will intensify traffic congestion, and will do nothing to moderate our high energy consumption.
The auto-dependent centrifugal sprawl that has prevailed for the last fifty years is an economic anachronism. This is due in part to our region's unique geographical pattern: where relatively close-in housing is found in other regions, we have a bay; where one central city exists elsewhere, we have several, and over a hundred smaller cities. Yet we do have one geographic advantage: unlike most other regions we have large but generally linear natural corridors formed by valleys traversing the region, conducive to fixed route transit.
We believe the region should address housing, transportation, and environmental needs by improving the quality and increasing the use of the transit system, achieving this in substantial part by building large amounts of dense housing within walking distance of major transit stops, while protecting older residential areas. In concept, we could thus generate up to a hundred transit-oriented centers (hereafter "Centers"), made up of multi-unit mixed-use buildings with associated services in carefully designed ensembles.
Of course, there is nothing new or unusual about this concept. In one form or another, planners, architects and urbanists have been saying these things for decades. We do believe it is useful for SPUR to make this recommendation now in order to highlight the issue and possible solutions at this time when we have new leadership on the San Francisco Board of Supervisors, a new head of MTC, and an energy crisis that is on everyone's mind.
This paper proposes legislation which the State of California would need to pass to provide the necessary incentives, powers and institutional structures for local Bay Area officials to create, manage and secure transit-oriented development.
The Problem: Expensive Housing, Congested Traffic and a Stressed Environment
As job and population growth continue, the Bay Area faces three serious and interconnected problems.
1) Housing shortages. Living space in the Bay Area is extremely scarce and expensive. Most recent residential construction has been at low densities on the geographically outer margins of the region, with poor correlation between the location of housing, services and and jobs.
2) Automobile congestion. After decades of an almost exclusive commitment to the personal car and the freeway (93% of trips), our roads are saturated and so congested that moving around the region is increasingly slow, costly, and unpleasant.
3) Environmental deterioration and high energy consumption. Throughout the Bay Area, the effort goes on to preserve open space, and to conserve or improve air and water quality. A new issue is also visible: prosperity and decades of sprawl have raised resource use to deeply habituated but extravagant and unsustainable levels.
Our land consumption is shaped largely by local zoning, enacted and enforced by over one hundred separate Bay Area localities. The demand side of our market for housing is created by a still rising number of new jobs (over the last decade about 40,000 per year, and reportedly as many as 100,000 in 1999). In theory, when a new job is created, a new place to live should be built which is reasonably accessible to it. However, most current local zoning favors the creation of jobs, but it is strongly biased against housing. Some Bay Area communities are reportedly creating only one new housing unit for each ten new jobs, dramatically worsening the jobs-housing imbalance. Some localities have enacted urban growth boundaries by initiative, coupled with resistance to internal increases in residential density. As a result, housing costs can be kept down mainly by using inexpensive land remote from jobs and services, necessitating heavy car use.
The Response: New Housing in a Network of Walkable, Mixed-use, Transit-oriented "Centers"
The solution to scarce housing is to build much more new housing within the region, both to absorb the present backlog of unsatisfied demand and to provide for future population growth. To prevent new population and housing from worsening our traffic miseries, we should plan future buildings with an eye towards cutting down on travel distances and increasing accessibility to public transit. This means selectively increasing housing density in a number of our Bay Area communities, particularly in infill locations near transit.
The core argument of this paper is that the Bay Area should purposefully steer most of its growth in the coming decades into denser, mixed-use pedestrian-oriented neighborhoods within walking distance of existing or to-be-developed rail, ferry, and express bus transit stations throughout the region, preferably in the region's core cities. The Bay Area should consider creating as many as one hundred "Centers" around transit nodes. Each Center should be designed to include both housing and employment sites, as well as complementary urban services, such as supermarkets, stores, restaurants, schools, cultural facilities, places of worship and attractive parks.
The Bay Area can expect population growth of about one million persons in the next 15-20 years, suggesting that the Centers ultimately would average around 10,000 people each, if most of the growth were to be accommodated in them. (Part of the present regional population of 6,800,000 already lives within walking distance of frequent transit.) Although it may not be possible to channel all of the Bay Area's future housing growth into Centers, it is recommended that initial planning efforts address a best case scenario, to allow for maximum success. No one will be deprived of the choice of living in the region's large existing stock of detached houses, since if all of the projected growth of a million people over the next 15 to 20 years were to live in Centers, about 85% of the region's housing would still be as now exists, predominantly suburban.
The Product: What a Center Would be Like
In the walking area within 2000 feet (a little less than four-tenths of a mile) around a regional transit station, a typical Center would have housing for 10,000 people, or about 5,000 living units. There would be work-site space for about the same number (arrived at by subtracting children and retired residents, but providing job locations for some inhabitants of the surrounding suburban areas), plus stores, services and various social facilities.
The circle formed by a radius of 2000 feet amounts to about 12 million square feet or 288 acres. About half the land would be covered with residential, retail, or job-site buildings. Streets would take up about 20 percent, but because of the heavy reliance on transit and the underground parking provided at the edges of the Center, the streets would have far less traffic than we are accustomed to, and that traffic would be slow-moving. Thirty percent of the landwould be left for plazas and open space, both ball fields and gardened parks, with greenery and landscaping, perhaps including uncovered historic streams. This proposal does envisage, on the built portion of such a focal center, a substantial level of distinctly urban mixed-use density, considerably higher, for example, than the densities associated with the "new urbanist" movement.
The Means: Existing and New Governmental Powers, Processes, Structures, and Cooperative Mechanisms
Achieving a more rational development pattern will require active and explicit cooperation between the public and private sectors. The basic finding from past experience in American cities is that neither the private sector by itself, nor single communities operating alone, can adequately achieve transit-oriented densification.
This suggests a multi-tiered decision making structure and process on the public side including: Development planning and approval powers rooted at the local government level using primarily existing planning tools including benefit assessment, or renewal districts around transit stations and activity centers;
A planning arm in each major transit agency;
A regional agency with policy, standard-setting and planning powers. It would have the authority to formulate a regional transit center plan, propose locations, priorities, and prototypical designs, and encourage development by incentives and other voluntary means;
This would provide a model akin to the Coastal Commission's local coastal program, whereby the Commission sets policies and standards, and local government prepares the plan for Commission approval. However, there are no sanctions for inaction, creating what is essentially a double-veto. But along the coastline, conservation and preservation are the goal, and development avoidance is considered regionally desirable. For the transit centers, on the other hand, development is to be encouraged. Hence, the regional entity should be prepared to offer incentives of sufficient magnitude to foster local action and perhaps ultimately to impose sanctions.
The jurisdictions in which Centers will be situated will be affected, and giving much thought to how to elicit their cooperation and support will be essential. New coordination likely will be necessary to direct station configuration, improve transit service levels, and assure Center development. Plans of external public works agencies and utilities must be reviewed. The new higher-than-local entity, whose character and location remain undefined, will have to deal with key questions: Where should major centers be located? Which ones should be pursued first? What should be the allowable range of density? What uses should be emphasized to provide a balanced set of non-competing centers? Thus, this entity should be able to review, comment on, and perhaps approve the Center plan. The powers needed for development of Centers include planning, regulation, acquisition, development and finance. The state places specific limits on the exercise of these powers by government; however some of these limits were conceived in an earlier day without anticipation of the current needs. Changes in legislation, discussed in the following section, are required to respond to these emerging needs.
The overall planning process must assure compatibility with preexisting development in locally-impacted areas. Local transit planning is also integral-transit accessibility, the amount and location of parking, and the availability of supplementary and para-transit services must be addressed. The planning process should anticipate future extension of transit lines to identify the appropriate role of Center development in a total regional transportation and development system, with an eye to increasing interconnectedness.
Although almost every public agency can acquire land, land use regulation remains a prerogative largely of local government or state-created agencies. Development plans for Centers would imply the need for suitable zoning changes. The most pertinent regulatory approach is use of "specific plans" and mixed use zoning. A specific plan avoids the constraining influences of conventional zoning, but its status in relation to existing zoning may be unclear, and should be clarified legislatively. "Mixed-use zoning" focuses on re-integrating compatible residential and commercial land uses and activities; under it, there can be provisions for development bonuses (of density or intensity) and shared parking. For densification and transit oriented joint development there is the possible need to impose minimum as well as maximum densities, which is an innovation requiring legislative approval. Area wide transferable development credit (TDC) systems are extremely useful compensation and might reassure nearby residents that greater density could be offset by greater permanent protection of existing single family and other development; most legal observers believe new legislative authority is required to make a TDC system usable in any non-voluntary manner, and cost implications must be analyzed.
The capacity for property acquisition, including by eminent domain, is vested in most agencies constructing and maintaining public works and facilities. New use of public lands or air rights over existing facilities is likely to be essential for the construction of Centers, but land and air right acquisition from existing owners may be difficult and politically unpalatable, particularly since some transit station areas in the urbanized part of the region are already built out. The ownership patterns around stations is fragmented in many cases, and some way must be found to assemble lands. This can be done by redevelopment condemnation, but perhaps some other means is preferable, in order to provide existing land owners with a stake in the final development. Station area densification, not merely blight should be approved by the Legislature as a valid purpose for redevelopment. The power of direct development by public agencies is virtually nonexistent except for affordable housing and public facilities. Moreover, there are recent additions to state law which now make redevelopment more burdensome and protracted. Public development corporations, chartered by the state, were popular decades ago in some states and cities, but have been ignored recently. These might be re-explored, since they could serve a useful purpose in Center development, complementing a primarily privately financed development program.
A final public power is that of finance (including taxation). If a public entity invests, for example, in station area densification, it must somehow recoup its investment. Value capture – the converse of inverse condemnation – may be considered when private parties make windfall economic gains due to public policy decisions by a city or county. Tax increment financing and benefit assessment districts have been widely used for this purpose, and there are also other alternative methods of "incentivizing" and financing these developments which should be explored and made usable by state legislation.
A revision of California law fostering Center development for the Bay Area, perhaps to be called the Transit Oriented Development Act, should include the following principles:
1. A statutory preface should unequivocally state California's desire to encourage the integration of housing construction with transit availability, and to advance large-scale Transit Oriented Centers (TOC) as solutions to the Bay Area's transit, housing and land use impasse.
2. The authorities, incentives and resources of the MTC, as well as BART, Caltrain, and other transit operators, should be mobilized and made fully usable to participate in and cooperate with local land development operations for TOC purposes.
3. A regional entity should be created, perhaps stand-alone, with representatives from MTC, etc. to advise and expedite Center planning. It would review and evaluate locally approved plans and might certify those which met its criteria to be eligible for State and Federal funding, or to be exempt from potentially applicable State or Federal sanctions, such as the withholding of other public funds. It would manage these and other "carrots" and "sticks" vigorously. It would maintain coordination with MTC and ABAG.
4. TOCs should be made an acknowledged public purpose for the exercise of certain redevelopment powers, with limited but strategic use of eminent domain. Similarly, legislative approval should be extended to public policy actions aimed at preventing the displacement of residents due to land use change, often called "gentrification." A showing of pre-existing blight would no longer be required as a precondition for using redevelopment powers near transit.
5. The law should provide that once an Environmental Impact Process has been performed for a planned Center, its findings should be considered to cover individual projects within the plan and within its buildout period, so that in the normal case, environmental review need not be repeated for individual structures.
6. External funding should be made available to localities for comprehensive plan revision, zoning changes, redevelopment study, specific plans, design work, land acquisition, and construction, including guarantees, for TOCs. Construction funds under existing housing and infrastructure programs should be steered to Center locations, including financial backing for various incentives, such as mortgage support, tax preferments and direct subsidies, perhaps targeted to special expense items, such as underground parking. Projects upgrading transit or adapting it to TOCs should be given access through the state transportation planning process to such funding sources as state appropriations, infrastructure bonds, sales tax revenue, gas taxes, bridge tolls, parking fees, etc.
Most people today know that in order to evolve into a more socially and environmentally sustainable society, we need to reshape our cities and towns into higher-density clusters. In this paper, we have tried to ask, what kinds of policies would be necessary to bring about such changes? The answers will be controversial, but the status quo is not working.