What Does AB 32 and SB 375 Mean For Development?

David Neault, President, DNA, Inc.

Many in the development community, whether private or public sector, have lots of questions and some even fears about what changes AB 32 and SB 375 will bring to the industry. Others scoff and dismiss the bills as toothless, having loopholes and only as strong as the agencies that are required to act on it. With all the attention these two bills are getting, I decided to do some research on the subject and share my findings. Here’s what I discovered about these two bills:

Global Warming Solutions Act of 2006 (AB 32) mandates that carbon emissions be reduced to 2000 levels by 2010, 1990 levels by 2020 and 80% lower than 1990 levels by 2050. California Air Resource Board (CARB) is the responsible agency and they are charged with developing and implementing a plan to reduce greenhouse gases (GHG) that is cost effective, real and quantifiable. There are timelines for CARB to achieve certain results through 2020. Recently, a Scoping Plan prepared by CARB was adopted that identifies a complete range of measures and means to make the required carbon reductions.

SB 375 crafted by Senator Darrell Steinberg is one of the measures that helps achieve the goals of AB 32. The law targets the largest producer of GHG; light trucks and cars. Transportation is responsible for 40% of the States GHG emissions with 30% coming from light trucks and cars. So this bill seeks to reduce vehicle miles traveled (VMT) by tying regional transportation plans with land use and housing. At the heart of this bill is the desire to curb sprawl, encourage infill development, require local governments to look at land use policies that are regionally based; in short, design community plans that take Californians out of their cars and improve our quality of life. On a fact sheet from the Governor’s office it is stated that, “SB 375 will be responsible for reshaping the face of California’s communities into more sustainable, walkable communities, with alternative transportation options and increase quality of life.”

As with AB 32, CARB is the agency responsible for implementing the goals of this bill. Their first task is to determine regional targets for GHG reductions in order to meet AB 32 levels in 2020. Each of the 18 Metropolitan Planning Organizations (MPO) will be given these targets by September 30, 2010. In January of this year 21 persons from various planning, governmental, environmental and development backgrounds were appointed positions on a Regional Targets Advisory Committee (RTAC). This high powered committee will work with CARB in determining what these GHG reductions targets will be in order to meet the September 30, 2010 deadline. Once these levels are delivered to the MPO’s they will work on creating a “Sustainable Community Strategy” to show how these targets will be reached. This plan will then need to be coordinated with the Regional Transportation Plan.

Another key component of this plan is that it connects Regional Housing Needs Assessment (RHNA) to the Regional Transportation Plan (RTP). Both the RTP and the RHNA need to be coordinated and together they will be updated every eight years. Additionally, the RHNA needs to comply with the Sustainable Community Strategy so local governments will work with the MPO’s to receive their fair share of the regional growth. The adherence to the plans by the counties and cities will ensure transportation funding from the State.

SB 375 rewards heavily those transportation oriented developments and higher density infill projects with CEQA exemptions and streamlining. Plans that are aimed at providing 50% residential use, minimum densities of 20/du, FAR for the commercial portions of the project at 0.75 and located with a half mile of transit are eligible for a full CEQA exemption. This encourages mixed use projects, low income housing and is biased towards providing housing in the areas that are already rich in transportation elements.

You can see that there are a lot of moving parts to the process. Many think that the bill has gaps and lack specificity requiring other bills and legislation to accomplish its intended goal. The bill gives some wiggle room for local governments to create alternative plans if they are not able to meet the Sustainable Community Strategy.

Finally, AB 32 and SB 375 represent a significant change in the way that we plan our communities. The push to reduce GHG emissions will force public and private sectors in the housing industry to work together creatively within the structure of the law. “If necessity is the mother of invention”, then the years ahead promise many inventive and innovative ways to look at development. If the goal is reduction of GHG and a cleaner environment, resulting in communities that are healthier, more walkable, less fossil fuel dependant and foster better socialization: than the efforts and change will have been well worth it.

What does this mean for the Development Community? We will be well advised to begin dialogues between private developers, consultants, Cities and Counties relative to taking a regional approach to land planning and development. Although we don’t know specifically what the Sustainable Community Strategies created for each of the Cities and Counties will be, we do know a lot about what kinds of regional and community design elements will reduce carbon output. By working collaboratively together we can share our ideas, experience and vision and begin devising strategies and processes that benefits all. This economic slowdown will come to an end…sooner than later I would hope; and it will be a tragic mistake if we have not prepared ourselves for this next step. If the land planning that we are presently engaged in does not proactively engage sustainable design elements we run the risk of producing plans that will be not be approvable. This is a waste of precious time and economic resources. We all know what happens when we wait for someone else to make decisions for us. Being collaborative in a proactive search of finding solutions to reducing our carbon footprint has the promise of a much more successful outcome. We as a company have dedicated ourselves to the research of creating sustainable communities. Please feel free to give us a call. We would be happy to review your current plans and offer suggestions on how to make changes that will fit the emerging sustainable development model.

Please call Peggy Newman at 951.296.3430, ext. 200 to set an appointment.