Make Smart Growth a Smart Business Choice

San Luis Obispo Tribune, Jan. 7, 2010

San Luis Obispo County has embraced the principles of “smart growth,” writing into the county’s codes and plans the promotion of compact, infill, mixed-use development with a range of housing choices, access to transit and walkable neighborhoods.

As noted in a recent Tribune editorial, smart growth promotes the county’s goal of achieving an adequate supply of safe, decent and affordable housing for our residents (“County’s multi-family land needs better protection,” Dec. 20).

When proposed projects of any significance reach the county decision makers these days, few seem to be considered “smart” enough to receive approvals to move forward. The county has disapproved one recent development proposal in Templeton for not being dense enough and another (the San Miguel Ranch project) for being located adjacent to an existing town rather than an infill location within the town.

If the county truly wants to foster a smart growth pattern and accomplish its vision of appropriate housing for all, it is not enough to sit back as a passive planner and regulator of land use, disapproving projects that don’t match the planners’ vision. For smart growth to succeed, county government needs to embrace a new role as an active participant in the development process, understanding the economic realities of desired projects, selling the public on the vision and providing regulatory and financial assistance to make the right projects feasible to build.

In the more than 100 urban infill, affordable and other smart growth projects throughout the state that I have worked on, successful completion of those developments has always depended on close cooperation between private developers and public officials. In all cases, the municipalities evaluated the market demand for and feasibility of the project and provided assistance to help make the development happen.

If San Luis Obispo County sincerely desires to encourage smart growth patterns (and is not just seeking to discourage all development), it needs to take the following steps to become a partner with the development community.

Follow the Money

There is a market for higher-density housing, in the right locations and with the right designs and amenities. If smart growth plans are inconsistent with market demand, however, the project will not be financeable and will not be built. Likewise, smart projects will be built only when they are economically feasible. Infill projects often face higher costs than traditional projects, and the smart project envisioned by government planners may not “pencil out” without some sort of assistance.

Developers need to help the county understand what types of higher density housing are realistic to build, and the county needs to engage in the same kind of market and economic analysis used by builders. The county has a responsibility to use this information to develop realistic, market-oriented plans and strategies for encouraging smart growth projects. Educate the public

The message to existing residents should not emphasize higher density in and of itself. Smart growth is about design, not density. A beautifully designed project with amenities like coffee shops and dry cleaners, not located on productive farmland or pristine open space, and which is sited to make good use of bus and transit routes, can be appealing to the neighborhood. The county can help by showing the neighborhood the design of the envisioned project and emphasizing the public benefits.

Streamline the Process

Traditional development standards for road widths, parking ratios, building heights, setbacks, etc. are generally better suited to lower-density development than smart growth projects. Adoption of a planned development zone for ownership housing will provide a framework for the innovative design that is necessary to make smart growth work.

The county needs to actively guide and expedite smart growth projects through the development process to reduce costs, lower entitlement risks and make smart growth projects more attractive to builders. Adopting environmental impact reports for areas planned for future smart growth projects can be extremely useful to an infill developer in streamlining governmental review of the project and reducing processing time and costs.

Innovations such as providing parking in community parking facilities, allowing tandem parking and parking in carports and reducing parking requirements to reflect public transit ridership can also help smart projects to make financial sense.

Make Smart Development Feasible

As the smart growth concept has caught on, new sources of financial assistance have become available for infill projects. The state provides localities funds for transit-oriented development and infrastructure projects for infill development. Traditional sources of local government assistance such as Community Development Block Grant funds, as well as a variety of affordable housing funds, are frequently available for smart growth projects as well.

The county can help make smart housing projects appealing to buyers through obtaining and using these funds to offer first-time homebuyer loan programs and other homebuyer assistance to stimulate demand for the housing. The county can also help to make smart growth projects economically feasible through assistance to developers in the purchase of land, construction loans and grants, infrastructure financing and waiving and reducing development fees.

With an informed and active county, smart growth can be turned from a barrier to new development into a winning strategy for residents and the building community.

Jon E. Goetz is a real estate and land use attorney at the San Luis Obispo office of Kronick, Moskovitz, Tiedemann and Girard. His firm is involved in the Templeton project appeal and has also represented the developer of the San Miguel Ranch project on a limited aspect.