Beyond Sprawl: New Patterns of Growth to Fit the New California

Bank of America

See also: photographs of sprawl development

Sponsor's Note:

This report suggests new ideas about how California can continue to grow while still fostering the economic vitality and quality of life that makes it such a vibrant place to live and work. It is sponsored by a diverse coalition-the California Resources Agency, a government conservation agency; Bank of America, California's largest bank; Greenbelt Alliance, the Bay Area's citizen conservation and planning organization; and the Low Income Housing Fund, a nonprofit organization dedicated to low-income housing.

 The fact that such a diverse group has reached consensus on the ideas in this report reflects how important the issue of growth is to all Californians. We hope this report will make a meaningful contribution to the public dialogue about the quality and direction of California's growth in the 21st century.

EXECUTIVE SUMMARY

California is at a unique and unprecedented point in its history-a point at which we face profound questions about our future growth that will determine the state's economic vitality and quality of life for the next generation and beyond.

One of the most fundamental questions we face is whether California can afford to support the pattern of urban and suburban development, often referred to as "sprawl," that has characterized its growth since World War II.

There is no question that this pattern of growth has helped fuel California's unparalleled economic and population boom, and that it has enabled millions of Californians to realize the enduring dream of home ownership. But as we approach the 21st century, it is clear that sprawl has created enormous costs that California can no longer afford. Ironically, unchecked sprawl has shifted from an engine of California's growth to a force that now threatens to inhibit growth and degrade the quality of our life.

This report, sponsored by a diverse coalition of organizations, is meant to serve as a call for California to move beyond sprawl and rethink the way we will grow in the future. This is not a new idea, but it is one that has never been more critical or urgent.

Despite dramatic changes in California over the last decade, traditional development patterns have accelerated. Urban job centers have decentralized to the suburbs. New housing tracts have moved even deeper into agricultural and environmentally sensitive areas. Private auto use continues to rise.

This acceleration of sprawl has surfaced enormous social, environmental and economic costs, which until now have been hidden, ignored, or quietly borne by society. The burden of these costs is becoming very clear. Businesses suffer from higher costs, a loss in worker productivity, and underutilized investments in older communities.

California's business climate becomes less attractive than surrounding states. Suburban residents pay a heavy price in taxation and automobile expenses, while residents of older cities and suburbs lose access to jobs, social stability, and political power. Agriculture and ecosystems also suffer.

There is a fundamental dynamic to growth, whether it be the growth of a community or a corporation, that evolves from expansion to maturity. The early stages of growth are often exuberant and unchecked-that has certainly been the case in post-World War II California. But unchecked growth cannot be sustained forever. At some point this initial surge must mature into more managed, strategic growth. This is the point where we now stand in California.

We can no longer afford the luxury of sprawl. Our demographics are shifting in dramatic ways. Our economy is restructuring. Our environment is under increasing stress. We cannot shape California's future successfully unless we move beyond sprawl.

This is not a call for limiting growth, but a call for California to be smarter about how it grows-to invent ways we can create compact and efficient growth patterns that are responsive to the needs of people at all income levels, and also help maintain California's quality of life and economic competitiveness.

It is a tall order-one that calls for us to rise above our occasional isolation as individuals and interest groups, and address these profound challenges as a community. All of us-government agencies, businesses, community organizations and citizens-play a role. Our actions should be guided by the following goals:

• To provide more certainty in determining where new development should and should not occur.
• To make more efficient use of land that has already been developed, including a strong focus on job creation and housing in established urban areas.
• To establish a legal and procedural framework that will create the desired certainty and send the right economic signals to investors.
• To build a broad-based constituency to combat sprawl that includes environmentalists, community organizations, businesses, farmers, government leaders and others.

INTRODUCTION

California is at the crossroads of change.

Our economy is emerging from its worst downturn in 60 years-a downturn that has required nearly all of the state's major industries to retool for greater competitiveness in a global marketplace. Our demographic profile is changing dramatically. New racial and immigration patterns are rapidly producing a truly multicultural society, creating a variety of related social and economic issues. At the same time, California has emerged as one of the most urbanized states in the union, as our metropolitan areas continue to grow in population and scale.

In the face of this change, California remains shackled to costly patterns of suburban sprawl. Even as our economy and our society are being reinvented daily, we continue to abandon people and investments in older communities as development leap-frogs out to fringe areas to accommodate another generation of low-density living. And we continue to create communities that rely almost exclusively on automobiles for transportation. In short, the "new" California-with 32 million people and counting- is using land and other resources in much the same fashion as the "old" California, with only 10 million people.

We cannot afford another generation of sprawl. As the Governor's Growth Management Council stated in a recent report: "What may have been possible with 10 or even 20 million people is simply not sustainable for a population of twice that much in the same space." Continued sprawl may seem inexpensive for a new homebuyer or a growing business on the suburban fringe, but the ultimate cost-to those homeowners, to the government, and to society at large-is potentially crippling. Allowing sprawl may be politically expedient in the short run, but in the long run it will make California economically uncompetitive and create social, environmental and political problems we may not be able to solve.

At a time when economic growth is slow and social tensions are high, it is easy to dismiss an issue like suburban sprawl as superfluous. Yet it lies at the heart of the very economic, social and environmental issues that we face today. Rapid population growth and economic change are occurring in a state increasingly characterized by a limited supply of developable land, environmental stress at the metropolitan fringe, and older communities in transition. With the onset of economic recovery, the next few years will give rise to land-use decisions of fundamental importance. They will help determine whether our state can succeed in re-establishing the economic and social vitality that have made it such a successful place to live and work for more than 140 years.

Suburban Sprawl and the "Old" California

In the decades after World War II, California emerged as an economic and political powerhouse, providing jobs, housing and prosperity for most of its rapidly growing population.

Underlying this success was a development pattern that emphasized expanding metropolitan areas, conversion of farmland and natural areas to residential use, and heavy use of the automobile. In the postwar era, this way of life worked for California. With a prosperous and land-rich state, most families were able to rise to the middle class and achieve the dream of home ownership. Government agencies and private businesses were able to provide the infrastructure of growth-new homes, roads, schools, water systems, sewage treatment facilities, and extensions of gas and electric distribution.

Within the last generation, however, this postwar formula for success has become overwhelmed by its own consequences. Since the 1970s, housing has become more expensive, roads have become more congested, the supply of developable land has dwindled, and, because of increasing costs, government agencies have not been able to keep up with the demand for public services.

Since the late 1970s, several efforts have been initiated to address the question of how to manage California's growth, but all have failed-some for lack of consensus, some for lack of engaged constituency, some simply because of bad timing.

The Challenge of the "New" California

In the 1990s, California is undergoing change of such scale and significance that it will literally redefine the state. To succeed, the new California must recognize and build upon the following changes in positive ways.

Population Growth

California's population continues to grow at a remarkably fast pace. Today's total of approximately 32 million people represents a doubling of the population since the mid-1960s, when California became the nation's most populous state.

During the boom years of the 1980s, California added more than 6 million new residents, a population larger than all but a few of the 49 other states. Even during the bust years of the early 1990s, the state's population grew at a rate of almost a half-million people per year-in effect, adding another Oakland or Fresno every year-even as we have suffered a net loss in the number of jobs.

This continuing surge in population puts pressure on both existing communities and on the remaining supply of undeveloped land, making it extremely difficult for traditional suburban patterns to accommodate more people.

Changing Demographics

While growing rapidly, California's population is also changing in significant ways. The demographic changes are well documented. Latinos-whose roots extend to Mexico, Central America, South America, and the Caribbean-are growing rapidly in number and may outnumber Anglos a generation from now. Californians of Asian ancestry now make up almost 10 percent of the population. African-Americans remain an important racial group, and the state's mosaic is rounded out by Native Americans, immigrants from South Asia and the Middle East, and others who bring great diversity to the state. California is truly one of the world's most multicultural societies.

Underneath the racial diversity lies another important change in the state's population patterns that will have a profound effect on California's attitudes toward growth over the next generation.
Traditionally, the popular perception has been that California's population grows because of migration from other parts of the United States. However popular, this perception is no longer true. Most new Californians now come from other countries, principally in Latin America and Asia.

The birth rate is also an increasing source of population growth. During the 1990s recession, "natural increase"-the net total of births over deaths-has accounted for almost 400,000 new people each year. Tomorrow's California will include-for the first time-a vast pool of people who are Californians from birth. They will want what Californians before them have wanted-education, jobs and housing. Most will expect the state to find a way to accommodate them. But their numbers are so huge that they probably cannot be sustained by traditional suburban development patterns.

Economic Change

During the recession, California has undergone an unprecedented economic restructuring. The state has lost 400,000 manufacturing jobs since 1990, causing businesses and workers alike to rethink old assumptions about how to ensure prosperity.

Traditional foundations of the state's economy, such as aerospace and defense, have been drastically reduced and will probably never return, at least not in their previous form. Others-such as entertainment, technology, the garment industry and agriculture-remain just as important as ever. But they too have undergone tremendous change, becoming leaner and more efficient in response to global competition. And small businesses remain the largest source of new job creation. In the near future, the impact of the North American Free Trade Agreement will begin to be felt.

These economic changes are also putting pressure on the state's land-use patterns. The loss of manufacturing jobs is emptying out the state's long-established industrial areas, usually located in older communities. Downsizing and technological change in other industries is also rendering older buildings obsolete and creating a demand for new buildings-often in new suburbs-that are both inexpensive and flexible. The closure of many military bases is bringing a huge amount of land to the real estate market that will either extend sprawl or encourage new
development patterns, depending on how that land is used.

Spreading Urbanization

In response to both demographic and economic pressure, California has become the most urbanized state in the union. According to the 1990 Census, more than 80 percent of all Californians live in metropolitan areas of 1 million people or more, with 30 percent of the state's population living in Los Angeles County alone.

This large-scale urbanization means that California's people and businesses compete intensely with each other for space to live and work. The edges of metropolitan areas continue to grow to accommodate expansion of population and economic activity, while some neglected inner-city areas are left behind. These patterns increase the stress of daily life while, at the same time, put more pressure on land and environmental resources at the metropolitan fringe.

SPRAWL AND ITS CAUSES

All of these factors-a growing population, a changing economy, and increased urbanization-have been present in California for many years. But they have accelerated in the 1990s, while traditional suburban development patterns have continued. In a state with such powerful growth dynamics, the results are astonishing. The following trends are typical of the effects of sprawl over the last 10 to 20 years:

• Employment centers have decentralized dramatically. While jobs used to be concentrated in central cities, most are now created in the newer suburbs. For example, the complex of office centers around John Wayne Airport in Orange County-built on land that was, until a generation ago, cultivated for lima beans-recently surpassed downtown San Francisco as the second-largest employment center in the state.
• New housing tracts have pushed deeper into agricultural and environmentally sensitive areas. Job centers in suburban San Jose and the East Bay area have opened up Tracy, Manteca, Modesto, and other Central Valley towns as "bedroom suburbs," while job growth in the San Fernando Valley has stimulated housing construction 40 miles to the north in the Antelope Valley. This development has created metropolises virtually unmanageable in size.
• Dependence on the automobile has increased. According to the California Energy Commission, between 1970 and 1990 the state's population grew by 50 percent, but the total number of miles traveled by cars and trucks grew by 100 percent.
• Isolation of older communities, including central cities and "first wave" suburbs built in the 1940s and 1950s, has increased. Easy mobility for the middle class has caused them to abandon many older neighborhoods, disrupting social stability and increasing the economic disparity between older communities and newer suburbs. The decentralization of jobs has hit older neighborhoods especially hard, because new jobs are now virtually inaccessible to the poor and the working class. Also left behind are infrastructure investments, which are tremendously expensive to replicate in new suburbs.

• A perception that new suburbs are safer and more desirable than existing communities. Many people believe that suburbs provide them with good value-safe streets, neighborhood schools, a "small-town" atmosphere, close proximity to their local governments, and new (though not necessarily better) community infrastructure.
• A perception that suburbs are cheaper than urban alternatives. Owning a starter home in a distant new suburb is still within the financial reach of a typical family, despite the increased commuting costs. The family's financial equation, however, does not take into account the larger cost to society of far-flung suburbs-a cost the family will eventually share in paying.
• A belief that suburban communities will give businesses more flexibility to grow. Businesses welcome the tax incentives and freedom from heavy regulation that are often provided in newer suburban communities trying to develop a strong business base. Businesses also view suburban locations as safer-a view reflected in the cost of insurance-and they perceive they will have access to a better-educated work force.
• Technological changes that have decentralized employment away from traditional centers. This phenomenon permits dispersal of both jobs and houses across a huge area. The emergence of the "information superhighway" may accelerate this trend.
• Highway and automobile subsidies that have traditionally fueled suburban growth remain in place today. Since the 1950s, automobile use has been encouraged by government-financed road- building programs, and for the most part the "external costs" of automobile use (i.e., air pollution) have not been the direct financial responsibility of the individual motorist.
• Local land-use policies that inadvertently cause sprawl. In many older suburban communities, "slow-growth" attitudes restrict new development, pushing employment and housing growth to the metropolitan fringe. With a lack of regional planning, each community pursues its own self-interests, regardless of costs imposed on other communities.
• Fiscal incentives that encourage local governments to "cherry- pick" land uses based on tax considerations. Under Proposition 13's property-tax limitations, there is little fiscal incentive for many communities to accept affordable housing-and when such housing is built, developers must usually pay heavy development fees. Meanwhile, because communities must raise revenues to provide mandated services, auto dealers and retailers, both big sales-tax producers, receive subsidies to locate in communities.

THE COST OF SPRAWL

The cost and consequences of sprawl have been documented among academics and planning experts for more than two decades. In the early 1970s, planning consultants Lawrence Livingston and John Blayney produced a landmark study showing that in some cases, a California community would be better off financially if it used a combination of zoning and land acquisition instead of permitting development of low-density subdivisions. A few years later, the U.S. Council on Environmental Quality produced its landmark report, The Cost of Sprawl-the first comprehensive analysis of sprawl's true expense to society. As fiscal and cost-benefit analysis techniques have become more refined, the true cost of sprawl has become much more apparent.
Today, no one in California is unaffected by the cost of sprawl. Its consequences spread across all groups, regardless of geography, race, income, or political status.

Taxpayers

Sprawling suburbs may be cheaper in the short-term for individuals and families who buy houses in new communities, but their "hidden" costs may ultimately be passed on to taxpayers in a variety of ways.

• The cost of building and maintaining highways and other major infrastructure improvements to serve distant suburbs.
• The cost of dealing with social problems that fester in older neighborhoods when they are neglected or abandoned.
• The cost of solving environmental problems (wetlands, endangered species, air pollution, water pollution) caused by development of virgin land on the metropolitan fringe.

Taken together, it is clear that all these costs have contributed to California s dire fiscal situation during the 1990s, which has strained state and local government budgets to the breaking point.

Businesses

Many businesses benefit from suburban locations. But all businesses, both small and large, also bear many of the following costs.

• Adverse impacts on the state's business climate. By reducing the quality of life, sprawl has made California a less desirable location for business owners and potential employees. By increasing suburban resistance to further growth, sprawl has made it difficult for businesses to relocate and expand in California. Both these trends increase the attractiveness of neighboring states such as Arizona, Nevada, and Utah. For example, a major film studio recently decided to relocate its animation facility to Arizona, principally because of lower housing prices and less traffic congestion.
• Higher direct business costs and taxes to offset the side-effects of sprawl. This can include the cost of new business infrastructure or of mitigating transportation and environmental problems. For example, in many metropolitan areas, air-quality regulators have forced businesses to take the lead in fighting air pollution by initiating carpooling programs for their employees.
• A geographical mismatch between workers and jobs, leading to higher labor costs and a loss in worker productivity. Many workers must now commute long distances to their jobs, which takes a significant toll on their personal, family and professional life. Many other workers are removed from large portions of the job market simply because they cannot get to where the new jobs are.
• Abandoned investments in older communities, which become economically uncompetitive because of sprawl and its associated subsidies. This is especially true of the state's utility companies, whose investments in gas, electric and water infrastructure are literally rooted in established communities.

Residents of New Suburbs

There is no question that new suburban residents are, in many ways, the principal beneficiaries of suburban sprawl. They often live in new and affordable neighborhoods which they perceive as safe and prosperous. Yet many suburban residents are becoming increasingly aware that they pay a high price for these benefits in the following ways.

• The cost of automobiles. The average Californian spends one dollar out of every five on buying and maintaining their cars. As a consequence they have less to invest or spend on other items.
• Time lost commuting to work and other destinations. A huge number of Californians now spend an hour or more per day in their car, and the number continues to rise. A recent survey by the Walnut Creek-based Contra Costa Times showed that the commute times for residents of 10 cities in Alameda and Contra Costa counties had increased an average of 13 percent between 1980 and 1990.
• The cost of new suburban infrastructure. Suburbs are often perceived as "low-tax" locations, when, in fact, most new suburban homebuyers in California must pay additional taxes (usually Mello-Roos taxes) to cover the massive cost of new roads, schools, and other infrastructure required in new communities. These additional taxes often have the effect of doubling a new homeowner's property tax bill.

• Loss of jobs and access to jobs. Residents of older neighborhoods no longer have convenient access to most jobs. This is especially difficult for poor and working-class citizens who must rely on public

transportation, because it is difficult to commute to most suburban jobs without a car.
• Economic segregation and loss of social stability. By luring middle-class residents from older neighborhoods, sprawl creates destructive economic segregation and robs those neighborhoods of the social stability that will keep them viable. The distribution of income becomes more skewed, and it becomes increasingly difficult for low-income people to escape poverty.
• Underutilized or abandoned investments. Businesses are not the only entities whose investments can become stranded when city neighborhoods decline. Individual homeowners and small shopowners can also see a stagnation or decline in property values. And this trend is not only visible in the inner city. Huge investments in older suburban shopping centers, for example, are now threatened because these centers are perceived as uncompetitive.
• Shifts in political power and government services. By removing the middle class of all races from older communities, sprawl makes it easier for that middle class to ignore the political and social problems left behind. Thus, revenues fall and it becomes more difficult for older neighborhoods-urban or suburban-to maintain government services, and the incentive for home ownership required to provide the foundation for prosperity.

Farmers

Agriculture remains one of California's leading industries. Yet sprawl continues to take a heavy toll on California agriculture in the following ways.

• A permanent loss of agricultural land. Between 1982 and 1987, the Central Valley- California's leading agricultural region-lost almost a half-million acres of productive farmland. Some of this land can be replaced by bringing new land into agricultural production, but often at a high economic and environmental cost. Also, many of California's micro-climates support unique agricultural products that cannot be replaced by land in other areas. Highly productive coastal agricultural lands lost to sprawl cannot be replaced at any cost.
• A loss in productivity due to pollution. Sprawl-induced ozone pollution alone can reduce crop yields by as much as 30 percent. According to the Agricultural Issues Center at UC Davis, pollution-induced costs to agriculture exceed $200 million per year.
• A decline in farm communities. As sprawl has eroded agricultural production, the effect on farm communities has been devastating. In some cases, rural communities have been transformed into bedroom suburbs, creating destructive commuting patterns while destroying agriculture infrastructure and productivity.
• Long-term uncertainty. Sprawl destabilizes agriculture by creating the temptation to "sell out." The prospect of eventual sale to a developer reduces incentives for farmers to make long-term capital investments. In many cases, farmers stay afloat financially only by borrowing against the speculative value of their farm for development- creating a self-fulfilling prophecy of sprawl. Another uncertainty for farmers arises from increased demand for water for urban uses driven by sprawl patterns.

The Environment

Traditional development patterns have taken a massive toll on all three basic elements of the natural environment: land, air, and water.

• Land: After 50 years of sprawl, California's metropolitan areas are enormous, reaching deep into natural ecosystems that were thriving even a generation ago. Some 95 percent of the state's wetlands have been destroyed over the last 200 years, and the few wetlands that remain are threatened. Also, California now has the highest number of candidate and listed endangered species of any state-partly because sprawl is affecting the state's unmatched diversity of biological systems. Sprawl makes it more difficult to resolve these land conservation issues by putting tremendous development pressure on the supply of remaining open land. Finally, sprawl compromises one of the most essential assets of California-the beauty and drama of its landscape. Far from being just a luxury, this value of open space is an important component in the state's ability to attract and hold workers and investors.
• Air: California has the worst air quality in the nation, and air pollution experts estimate that a third of all air pollution emissions are traceable to car and truck emissions exacerbated by longer commutes and higher auto use. The South Coast Air Quality Management District, which has the strictest air-pollution regulations in the country, estimates that air pollution in the four-county Los Angeles area costs $7.4 billion per year, or about $600 per resident. Dramatic gains in pollution technology are likely to be offset by further sprawl. According to air pollution expert J.V. Hall, "The benefits of pollution-reduction technology can easily be overwhelmed by our choices about where to live and work, about modes of travel, and about how many miles we drive."
• Water: Sprawl takes a serious toll on California's water supply. Forty of the state's 350 groundwater basins are seriously overdrafted, and water planners predict that by 2020 the state will face a water supply deficit of between 2 million and 8 million acre-feet. Though not the sole cause, fringe development does make the water issue more expensive and complicated to manage.

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