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HomeMy WebLinkAboutStaff Report 6486 City of Palo Alto (ID # 6486) City Council Staff Report Report Type: Informational Report Meeting Date: 1/25/2016 Summary Title: Plan Bay Area 2040 Update Title: Update on Plan Bay Area 2040 - 2016 Scenario Planning and Timeline From: City Manager Lead Department: Planning and Community Environment Recommendation This information item is to provide the City Council with an update on the planning effort being undertaken by the ABAG and MTC to update the regional plan known as Plan Bay Area. No action is required. Executive Summary As initiated by the Association of Bay Area Governments (ABAG) and the Metropolitan Transportation Commission (MTC) in 2013, Plan Bay Area 2040 is an integrated, long range transportation and housing/land use strategy that is intended to preserve the character of the ay ! rea’s communities while planning for the transportation needs of the region. ABAG is currently reaching out to member municipalities regarding the ongoing update to the plan, and will be conducting public workshops in the spring. This information item summaries those efforts and follow-up activities. (See the presentation included as Attachment A.) Background Plan Bay Area was created as a result of SB 375 (Steinberg), a 2008 law aimed at reducing greenhouse gas emissions from passenger vehicles by aligning land use and transportation investments on a regional basis. On March 22, 2013, the Association of Bay Area Governments (ABAG) and the Metropolitan Transportation Commission (MTC) released a draft of Plan Bay Area, and a Draft Environmental Impact Report (DEIR) for the document was released on April 2, 2013. On May 13, 2013, the City Council approved two letters (Attachments B and C) that reflected the ity of Palo !l to’s continued objections to the Plan Bay Area effort, particularly the singular and overstated population, housing and economic projections. These letters were drafted to allow the City to 1) be “on the record” of concern and opposition to some of these issues, in the event litigation or other challenges are subsequently raised, and 2) counter arguments by other stakeholders City of Palo Alto Page 1 who may argue for even increased allocations to cities like Palo Alto, such as the potential DEIR alternatives. A Final EIR was prepared and Plan Bay Area was adopted by ABAG and MTC in the summer of 2013. SB 375 requires the regional agencies to update Plan Bay Area on a regular schedule and the first update is now underway. This update is considered “minor” for a number of reasons, and will not involve development of new Regional Housing Needs Allocations (RHNAs) for local jurisdictions. City staff responded to requests for information over the last year, and will be scheduling a study session or an action item to receive the ity ouncil’s input in the spring. Discussion ABAG will be reaching out to member communities throughout 2016 to get their input on a number of aspects of Plan Bay Area. These include:  Assessment of Transportation Projects to be included in the Plan (early 2016)  Public workshops to developed alternative land use distributions and transportation strategies (April 2016)  Public workshops to discuss the use of performance measures (April 2016) The ity’s first opportunity to participate in these milestones will be the workshops for the land use and transportation strategies in April and City staff will schedule a City Council study session or action item to receive the ouncil’s input around the same time. ABAG Scenarios ABAG is currently developing three land use and transportation scenarios as part of the overall stragety under Plan Bay Area. The scenarios are expected to 1. Analyze and evaluate three planning scenarios designed to achieve Plan Bay Area 2040 goals 2. Inform the selection of a preferred scenario; and, 3. Be used in the Plan Bay Area Draft Environmental Impact Report (EIR) !cc ording to !!G, “Once refined, these scenario concept narratives will be released in early 2016, and then evaluated to understand the effects of different combinations of land use and transportation strategies on our shared goals and targets. A series of evening public workshops will be held in the spring of 2016 around the region. Public comments will be sought to inform the selection of a preferred scenario, which is slated to be approved by the ABAG Executive Board and MTC in June 2016.” Once staff has received the narratives and data, they will be presented back to Council for discussion in March 2016. Per previous responses on the DEIR in 2013, staff will continue to monitor any data that is generated by ABAG that does not match historical growth patterns, development capacity, and/or are inconsistent with other projections. City of Palo Alto Page 2 Timeline Staff expects to review the aforementioned scenarios, and accompanying data, in January of 2016. Once that review is complete, staff will return to the Council to discuss findings and next steps. Resource Impact The ongoing update to the Plan Bay Area regional plan will not directly affect Palo Alto because it does not include development of a new Regional Housing Needs Allocation (RHNA), although it will inform !!G’s population and employment projections for the region, as well as prioritization of regional transportation investments. Attachments:  Attachment A: City Council Approved Letter on Comments on Final Draft Plan Bay Area dated May 13, 2013 (PDF)  Attachment B: City Council Approved Letter on Comments on the Plan Bay Area Draft EIR, dated May 13, 2013 (PDF)  Attachment C: Plan Bay Area Presentation by MTC and ABAG (PPTX) City of Palo Alto Page 3 ATTACHMENT A CityofPaloAlto Office of the Mayor and City Council May 13, 2013 Mr. Mark Luce, President Association of Bay Area Governments Joseph P. Bort Metro Center P.O, Box 2050 Oakland, CA 94607-4756 Re: City of Palo Alto Comments on Final Draft Plan Bay Area Dear Mr, Luce: The City of Palo Alto has reviewed the proposed Final Draft Plan Bay Area (Plan) and the associated Draft Environmental Impact Report (DEIR). The City has previously reviewed and commented on the Preferred Scenario tentatively adopted by the agencies in May of 2012, and on prior alternative scenarios. This letter provides the City of Palo Alto's (City) comments regarding the Plan, while a separate letter will be provided outlining comments on the DEIR. In summary, the City's concerns are as follows:  The regional forecasts of jobs and housing being considered as part of the Plan overstate future growth in the Bay Area and are inconsistent with the most recent Department of Finance projections. ABAG should recognize the distinct possibility that actual growth rates in the Bay Area over the next 30 years may be lower and should evaluate a range of growth potential and phase job and housing allocations and implementation accordingly.  Palo Alto's allocation of jobs and housing units under the Plan is excessive by reference to its historical growth trends and development capacity; these allocations should more accurately consider policy constraints, market feasibility, and the high infrastructure costs and local fiscal impacts of such intensive redevelopment.  The land use changes contemplated in the SCS Alternative Scenarios have a proportionately small contribution to achieving AB32/SB375 GHG reduction targets and there are very limited differences shown between the scenarios considered; the substantial effort and investment needed to effect these land use changes should be re- directed to more cost-effective regional and local GHG reduction measures. P.O. Box 10250 Palo Alto, CA 94303 650.329.2477 650.328.3631 fax Page 2 of 6  The City of Palo Alto has been a national leader in implementing policies and programs that reduce greenhouse gas (GHG) emissions and the effectiveness of these efforts should be considered as a part of the SCS and achieving regional GHG emission reduction targets. The following items elaborate on the summary points listed above. 1. The Regional Forecast of jobs and housing overstate future growth in the Bay Area and are inconsistent with the most recent Department of Finance forecasts. The regional forecast of jobs and housing for the region substantially overstates growth for the overall Plan period (through 2040), implying greater RHNA (Regional Housing Needs Assessment) housing allocations for cities through that period. Significantly, the overall regional allocation continues to ignore the updated demographic forecasts of the State’s Department of Finance (DOF). Whereas the Plan Bay Area estimates an increase of 2.1 million population from 2010-2040, DOF projects only a 1.3 million increase, approximately 40% less. This creates an unrealistic scenario for long-term planning, potentially creating unreasonable and unachievable housing mandates and infrastructure needs. Although the SCS process does allow for adjustment of long-term growth projections on a periodic basis, the City encourages ABAG to regain public confidence of its numbers by working with the Department of Finance to reduce the 2010-2040 projections to reflect the adaptations already made by the Department of Finance to the changing State of California demographics. Furthermore, current and future projections should be adjusted so they are more consistent with historical growth patterns and/or a range of projections should be adopted that reflect meaningful planning scenarios in response to market changes over time. The ity suggests that the agencies should adopt “low,” “high,” and “most likely” forecasts for planning. An analysis of the inadequacy of the current long-range projections, authored by Palo Alto Councilmember Greg Schmid, was submitted to ABAG during the Preferred Scenario evaluation process and is attached to this letter. A more recent analysis prepared by Councilmember Schmid, specifically focused on the Plan Bay Area Final Draft, is also attached. a. Jobs. Regarding the ABAG jobs forecast, a comparison with the last 20 years is noteworthy. Average job increases between 1990 and 2010 approximated 10,000 net new jobs annually. Excluding the three years that included the Great Recession where substantial jobs losses occurred (i.e. 2008-2010), the Bay Region added jobs at an average annual rate of 25,200 between 1990 and 2007. The ABAG jobs forecast used for the Plan assumes that the Region will add an average of over 33,000 jobs annually from 2010 to 2040, a 32% increase over the pre-recession trend line. The method used to arrive at the jobs forecast assumes a "shift- share" of a national jobs growth forecast that itself is subject to question. As a part of revisions to the regional jobs forecast, ABAG should consider a more fundamental economic assessment that identifies the key industries in the Bay Area that will drive job growth and also the distinct possibility that future jobs and housing may be closer to recent historical growth trends. Page 3 of 6 b. Housing. Regarding the ABAG housing forecast used for the Plan, an additional 660,000 households are shown added to the Bay Area between 2010 and 2040 - an annual average growth of 22,000 households. Until very recently, the Bay Area, like much of the United States, was mired in a weak housing market characterized by very limited new development, low pricing, slow sales of existing homes, tight credit, and an oversupply of homes resulting from a historically high number of foreclosed and distressed properties. These conditions are improving, but it may be several more years until the existing inventory is reduced and substantial improvement in the job market and related increases in household income occurs. In any event, the Bay Area will need to be in "catch-up" mode, meaning even higher additional households per year must be realized to meet the SCS forecast growth rates, once more normal housing market conditions emerge. Moreover, ABAG's regional housing forecast is based on a “shift-share” model of a national employment forecast prepared by the U.S. Department of Labor Statistics. The forecast also presumes that international in- migration (primarily of Asian and Hispanic peoples) would continue and comprise approximately 80 percent of all population growth nationwide, well in excess of migration trends documented by others. c. Housing Affordability. In addition to questions regarding job growth (the ultimate cause of housing demand) there are a number of other questions regarding ABAG's housing forecast including those related to affordability. A presentation made by Karen Chapple of UC Berkeley at the ABAG's January Regional Advisory Working Group (RAWG) suggested that given likely wages paid by the new jobs expected, over 70 percent of all new households formed in the 2010 to 2040 period will be "moderate" income or below. In many Bay Area locations, especially the inner Bay Area urbanized areas that are the focus of growth under the SCS Alternative Scenarios, such "affordable" housing units must be subsidized in one fashion or another, either as "inclusionary" units burdened upon the market rate units constructed or by public subsidies such as (now eliminated) redevelopment agency funding and federal tax credits. Given the loss of redevelopment powers and funding and recent court cases affecting inclusionary programs (Palmer, Patterson) there is no assurance that adequate housing subsidy funding will be available. Accordingly, given all of these concerns, the City strongly recommends that the jobs and housing forecasts for the Preferred Scenario be reduced to more accurately reflect the most recent Department of Finance projections and historical trends. Developing a more realistic jobs and housing forecast would reduce the implied need to intensify land uses, reduce projected GHG emissions by lowering energy consumption, congestion and single occupancy vehicle trips, and require less costly transit and highway infrastructure investments. The SCS effort is to be revisited and updated every four years, so that there would be future opportunities to re- evaluate whether a higher forecast is appropriate and adjustments would be needed. 2. Palo Alto's allocation of jobs and housing units under the proposed Plan is highly unrealistic and excessive relative to historical growth trends and development capacity. Page 4 of 6 Santa Clara County dominates all other Bay Area counties in the allocation of ABAG's regional forecast of jobs and housing, absorbing 33 percent of the regional job forecast and 36 percent of the regional housing forecast. Palo Alto is allocated 29,650 new jobs and 7,870 new households through 2040. These allocations have been made without regard to existing development capacity in Palo Alto (use of remaining vacant land and redevelopment of existing developed areas), the likely match between new household affordability and local housing prices, or a range of other potential local costs for achieving the required high density development. a. Jobs. The City presently contains approximately 89,370 jobs, according to ABAG. During the past decade (2000 to 2010), Palo Alto experienced a 14 percent decline in employment reflecting the combined effect of the "dot-com" bust and the Great Recession. While economic conditions are improving, there have been structural changes in technology industries that have driven growth in the Silicon Valley over the past 50 years that portend only modest growth. The proposed Plan, however, assumes that Palo Alto's job growth by 2040 will increase over the 2010 estimate by 33 percent. b. Housing. The housing projections in the Alternative Scenarios represent a 30 percent increase in housing units from 2010-2040, up to approximately 262 new units per year. The City has in the past 40 years (1970-2010) produced an average of 148 units per year. To increase that annual output by more than 50% in a relatively built-out city is again entirely unrealistic and using such an assumption as the basis for growth scenarios and transportation investments will likely result in failure of the planning effort. c. Constraints. The City of Palo Alto is highly built out, and the existing limited number of vacant sites and redevelopment opportunity sites severely limit how the households and jobs allocated to Palo Alto in the SCS Alternative Scenarios could be accommodated, The proposed Plan clearly does not appear to consider the many constraints to new development in Palo Alto, including limited school capacity and funding for infrastructure. Accordingly, the City requests that the allocations of jobs and housing units in Palo Alto should be lowered substantially to more accurately consider policy constraints, market feasibility, and infrastructure and local fiscal impacts of such intensive redevelopment. 3. The land use changes contemplated in the proposed Plan contribute a proportionately small contribution to achieving AB32/SB375 GHG reduction targets. The AB32/SB375 target for California is a reduction to 85 million equivalent metric tons per year by 2050, an 80 percent reduction from current levels. To return to 1990 levels of 427 million tons, an 80 million ton reduction of projected 2020 levels is required. Of this 80 million ton reduction, approximately 96 percent is proposed to be achieved from improved fuel standards, energy efficiency, industrial measures, and other methods needed to curb emissions from the construction, manufacturing, and agricultural sectors. Only four percent, however, or 3.2 million tons, would be achieved by altering land use patterns. Page 5 of 6 a. Regional Transportation Pricing and Policies: The MTC analysis of various transportation pricing and policy changes (e.g., telecommuting, electric vehicle strategies, parking pricing) may account for at least a 6.5% further reduction in GIG emissions, considerably more significant than the differences between the land use patterns in the Plan Alternatives in the EIR. b. Cost Effectiveness. Given the numerous challenges associated with fundamental changes in the way that Bay Area land use patterns would otherwise evolve, including wholesale changes to land use regulations, presuming changes in market characteristics and preferences of homebuyers, and the need for substantial public investments and subsidies, we question the feasibility and cost-effectiveness of the proposed Plan. Regarding cost-effectiveness, the comparable costs (mostly borne by local jurisdictions) of implementing the Plan or the various alternatives may be far higher than other alternatives for achieving comparable GHG emission reductions. Accordingly, the City of Palo Alto recommends that a performance-based approach, involving establishing GHG reduction targets for the local jurisdictions along with a menu of options for achieving these targets (including feasible and realistic alterations in land use policy) should become the basis of the proposed Plan Bay Area. 4. The City of Palo Alto has been a national leader in implementing policies and programs that reduce GHG emissions. Over the past decade, the City of Palo Alto has adopted a range of policies, programs and projects to reduce GHG emissions, focused upon improving energy efficiency, enhancing multimodal transportation alternatives to the single-occupant vehicle, and creating walkable, mixed-use districts. Implementing these policies, programs, and investments, the City has become a national leader in reducing GHG emissions. Examples of key City sustainability programs include an aggressive Climate Action Plan, the provision of clean energy to Palo Alto customers via the City owned and operated electric utility, various utility programs to reduce emissions, leadership in Green Building and sustainable design, affordable housing programs, higher density land uses near transit, and numerous “complete streets” oriented policies and projects. In particular, the City’s limate Protection Plan, adopted by the ity ouncil in December 2007, includes goals for the reduction of CO2 from a 2005 baseline level as a result of changes in City operations and from CO2 reduction efforts within the community. • GHG reductions for City operations have been reduced by 53% below 2005 levels, as compared to a goal of a 20% reduction in emissions by 2012. • GHG reductions for the City and the community have been reduced by 22% below 2005 levels, as compared to a goal of a 20% reduction by 2020. Page 6 of 6 Accordingly, the City of Palo Alto requests that ABAG consider the effectiveness of these local GHG emission reduction efforts, incorporate them as a part of the Plan and related regional GHG reduction targets, and provide "credits" to those jurisdictions that have demonstrated implementation of meaningful GHG reduction measures. Conclusion In conclusion, the City of Palo Alto suggests that the proposed Plan Bay Area for the Sustainability Communities Strategy should include:  A range of forecasted growth, outlining “low,” “high”, and “most likely” scenarios and transportation networks for each, to be updated every four years.  A focus on GHG emission reductions, with the flexibility for each city and county to provide for a reasonable minimum amount of housing plus options for other commitments to GHG emission reductions;  Realistic housing forecasts limited to each upcoming 8-year RHNA cycle, with review every four years to update projections; and  Longer range projections that are not allocated to cities and counties, but are used to provide context for regional transportation investments. Thank you again for the opportunity to comment on the Final Draft Plan Bay Area. If you have questions or need additional information, please contact Curtis Williams, the ity’s Director of Planning and Community Environment, at (650) 329-2321 or curtis.williams@cityofpaloalto.org. Sincerely, H. Gregory Scharff Mayor City of Palo Alto Attachments: Exhibit 1: November 15, 2011 Memorandum: “alifornia Demographic Forecasts: Why are the Numbers Overestimated”, prepared by ity of Palo !l to ouncilmember Greg Schmid Exhibit 2: May 6, 2013 Memorandum: “Demographic Forecasts for Plan ay !r ea: Why aren’t they More Helpful”, prepared by ity of Palo !lt o ouncilmember Greg Schmid cc: Adrienne J. Tissier, Chair, Metropolitan Transportation Commission Ezra Rapport, Association of Bay Area Governments Miriam Chion, Association of Bay Area Governments Ken Kirkey, Metropolitan Transportation Commission Palo Alto City Council ATTACHMENT B CityofPaloAlto Office of the Mayor and City Council May 13, 2013 Mr. Mark Luce, President Association of Bay Area Governments Joseph P. Bort Metro Center P.O, Box 2050 Oakland, CA 94607-4756 Re: City of Palo Alto Comments on Plan Bay Area Draft Environmental Impact Report Dear Mr. Luce: Thank you for providing an opportunity to review the Draft Environmental Impact Report (DEIR) for the Final Draft Plan Bay Area. The City of Palo Alto has reviewed the Draft and has several concerns about the basic assumptions, the inadequacy of the alternatives, and the lack of analysis of local impacts and associated mitigation measures. 1. The Key Assumptions include an overstated forecast of future population, jobs, and housing. One of the stated Key EIR Assumptions is that: “The total amount of growth projected for the ay !re a through 2040 is based on !!G’s Plan ay !re a Forecast of Jobs, Population and Housing0this amount of growth is assumed in the proposed Plan, which identifies a land use pattern to accommodate the projected growth/” The City of Palo Alto believes that the regional forecast of jobs and housing for the region substantially overstates growth for the overall Plan period (through 2040). Most significantly, the overall regional allocation continues to ignore the updated demographic forecasts of the State’s Department of Finance (DOF), with population estimates in excess of 40% more (ABAG: 2.1 million v. DOF: 1.3 million) than the 2012 DOF projections. This creates an unrealistic scenario for long-term planning, potentially creating unreasonable and unachievable housing mandates and infrastructure needs and overstating impacts, including greenhouse gas reduction. A range of projections should be evaluated that reflect meaningful planning scenarios in response to market changes over time. The City suggests that the agencies should adopt “low,” “high,” and “most likely” forecasts for planning and impact P.O. Box 10250 Palo Alto, CA 94303 650.329.2477 650.328.3631 fax Page 2 of 4 analysis. An analysis of the inadequacy of the current long-range projections, authored by Palo Alto Councilmember Greg Schmid, was submitted to ABAG during the Preferred Scenario evaluation process and is attached to this letter. A more recent analysis by Councilmember Schmid, specific to Plan Bay Area, is also attached. 2. Alternatives are inadequate in that no alternatives consider demographic forecasts less than the overstated projections and no alternatives provide for alternative approaches to greenhouse gas (GHG) reduction. The alternatives proposed include the No Project Alternative, and three alternatives that result in either greater population, housing and jobs projections or a somewhat different distribution of the future development. Again, no alternatives are proposed that would evaluate lower and more realistic growth projections for the region. The California Environmental Quality Act (CEQA) requires evaluation of alternatives that would lessen environmental impacts, but none of those evaluated would have that effect. Another means of lessening impacts could include allowing flexibility or mandates for cities to take measures to reduce greenhouse gas (GHG) emissions through local energy conservation, building design or transportation measures. An alternative should be developed to provide for and evaluate local GHG reduction measures. The City suggested these type of “hybrid” alternatives in our July 11, 2012 response to the Notice of Preparation (attached). 3. The Alternatives proposed (other than the No Project Alternative) all would result in greater environmental impacts on the City of Palo Alto, in that the allocation of new housing and employment would increase above that proposed in the Final Draft Plan . The alternatives proposed include the No Project Alternative and three alternatives that result in either greater population, housing and jobs projections or a somewhat different distribution of the future development. Alternative 3 (Transit Priority Focus) would increase impacts on the City and similar cities near transit, even though those areas are often already heavily built out and congested already. Alternative 4 (Enhanced Network of Communities) would assume increased population and housing forecasts and would further exacerbate unrealistic demands and impacts on cities like Palo Alto. Alternative 5 (Environment, Equity and Jobs) is not only more impactful on Palo Alto, but is a highly infeasible option, relying on social engineering functions that will not be supported by the jobs and housing markets and will likely be counterproductive to the regional effort. 4. Lack of analysis of local impacts and potential for mitigation. The DEIR identifies many impacts at a regional level, and implies that there are significant unavoidable impacts in some impact categories, such as traffic congestion and land use character and compatibility. However, mitigation for many of these measures is assumed to be the responsibility of the “implementing agency,” assumed to be the local jurisdiction/ The ity questions the use of “Statements of Overriding onsiderations” by a regional agency when the Page 3 of 4 impacts are most heavily felt on local agencies. Mitigation should be offered by the regional and state agencies for many such impacts, and again alternatives should be considered with a lesser growth assumption to minimize those impacts on local agencies. Conclusion In conclusion, the City of Palo Alto suggests that the Draft EIR be modified to:  Include alternatives that assume lesser growth projections than proposed, at least midway between the Department of Finance projections and !!G’s -  Include an alternative that provides for flexibility for cities to reduce greenhouse gas (GHG) emissions at a local level, reducing the reliance on the land use-transportation connection;  Reject all proposed alternatives to the Plan as infeasible; and  Provide regional or state-funded mitigation for potential “significant unavoidable” impacts to local agencies. The ity also takes exception to the EIR’s characterization of alternatives 4 and 5 as “Enhanced Network of ommunities” and “Environment, Equity and Jobs/” These terms are clearly stylized to sound positive while they are actually alternatives developed by active interest groups, including the building industry (Alternative 4) and social/environmental advocacy groups (Alternative 5). The inclusion of these titles for the alternatives creates a highly biased appearance to the Alternatives analysis, if not the document as a whole. Thank you again for the opportunity to comment on the Draft EIR. If you have questions or need additional information, please contact urtis Williams, the ity’s Director of Planning and Community Environment, at (650) 329-2321 or curtis.williams@cityofpaloalto.org. Sincerely, H. Gregory Scharff Mayor City of Palo Alto Attachments: Exhibit 1. “Demographic Forecasting in alifornia,” prepared by Councilmember Greg Schmid; November 15, 2011 Exhibit 2. “Demographic Forecasts for Plan ay !re a. Why !re n’t They More Helpful?” prepared by Councilmember Greg Schmid, May 6, 2013 Exhibit 3: July 11, 2012 City of Palo Alto Response to Notice of Preparation Page 4 of 4 cc: Adrienne J. Tissier, Chair, Metropolitan Transportation Commission Ezra Rapport, Association of Bay Area Governments Miriam Chion, Association of Bay Area Governments Ken Kirkey, Metropolitan Transportation Commission Palo Alto City Council