Honorable Mayor and Members of the City Council. Submitted by: Dan Marks, Director, Planning and Development

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1 Office of the City Manager To: From: Honorable Mayor and Members of the City Council Phil Kamlarz, City Manager Submitted by: Dan Marks, Director, Planning and Development Subject: EXECUTIVE SUMMARY Senate Bill 375 became law in 2008 and established a requirement for the metropolitan regions in California to adopt a Sustainable Communities Strategy (SCS) for how the region would accommodate growth in a manner consistent with meeting State targets for the reduction of greenhouse gases. In the Bay Area, this process is being led jointly by the Association of Bay Area Governments (ABAG) and the Metropolitan Transportation Commission (MTC). The purpose of this report is to provide the City Council with an overview of the SCS process and to describe how its implementation is likely to affect the City of Berkeley and the Bay Area as a whole, and how Berkeley and other cities can contribute to the process. Staff provided an initial description of the SB 375 process in January, AB 32 was passed by the Legislature in 2006 and established a target for the State to reduce GHG emissions to 1990 levels by The Governor s Executive Order S3-05 established the goal of 80 reduction in GHG below 1990 levels by SB 375 focuses on reducing GHG emissions from cars and light trucks consistent with AB 32. SB 375 also establishes a process for harmonizing various state mandated programs with that goal, including Regional Housing Needs Assessments (RHNA) and Regional Transportation Plans (RTP). In September, 2010 the California Air Resources Board (CARB) established the Bay Area target for GHG reductions from cars and light trucks at 7 percent per capita reduction by 2020, and 15 percent per capita reduction by This GHG reduction from cars and light trucks essentially translates into a need to significantly reduce vehicle miles traveled (vmt). In order to reduce VMT, the fundamental land use strategy is to encourage more people to live near and use transit, and to develop more complete communities where people can rely less on automobiles to address daily needs. The range of strategies that promote more livable communities near transit is often referred to as smart growth. In addition to land use related strategies, other GHG reductions are expected to be achieved through technology (e.g., increased miles per gallon), improvements in fuel that reduce GHG emissions, increased use of renewable sources for energy generation, and a variety of other methods. In December 2008, CARB adopted the Climate Change Scoping Plan which contains the main strategies California will use to achieve the AB 32 targets Milvia Street, Berkeley, CA Tel: (510) TDD: (510) Fax: (510) manager@ci.berkeley.ca.us Website:

2 Existing State Housing Element law requires that each city show how it will meet its identified share of regional housing need. SB 375 mandates that each region show how it will accommodate all of the housing need generated by the region. In the past, Bay Area Regional Housing Needs Assessments (RHNA) have assumed that a significant share of future housing needs would be met in surrounding counties outside the Bay Area. Under SB 375, the region will have to show how it can accommodate all of its expected need a significant increase in the increment of growth that will need to be accommodated for the next RHNA allocation. RHNA allocations must be consistent with the SCS. In the past, regional transportation planning has used land use as an input to determining regional transportation needs. In other words, the system was designed to accommodate projected growth. Under SB 375, the Regional Transportation Plan and its allocation of billions of dollars must be consistent with and support implementation of the SCS, a particularly land use strategy. In other words, the goal of the RTP under SB 375 is not only to meet the transportation needs generated by growth, but to help guide and encourage certain types of growth consistent with the SCS. Responsibility for creating the SCS has been assigned to each of the Metropolitan Planning Organizations (MPO) in California. In the Bay Area, this job is shared between ABAG and MTC who have formed a partnership called One Bay Area ( to spearhead the process. At the County level, the process is expected to be led by the County Congestion Management Agencies (CMA) in Alameda County that will be the Alameda County Transportation Commission (ACTC). The SCS does not alter the authority of jurisdictions over local land use and development decisions, but the RHNA allocations and the distribution of regional transportation funds will clearly have an impact on local jurisdiction planning and land use decisions ABAG/MTC have formed several committees to provide input to the SCS. In addition to ABAG s and MTC s standing committees (Executive, Policy, etc.), they have created a Regional Advisory Working Group (RAWG) that includes key stakeholders, local government representatives, other local agencies, and others. I was selected by Alameda County Planning Directors to represent them on the RAWG. The process is summarized in an attached flow chart provided by One Bay Area. Key elements in the process include the following: Adoption of regional GHG Reduction targets by CARB (Complete September, 2010) Establish relevant regional targets in addition to those mandated by law to use as comparative cost/benefit measures against which various land use/transportation scenarios can be tested (underway) Establish a baseline scenario. This is a standard business as usual projection for the region. Page 2

3 Establish a vision scenario. This is proposed by ABAG/MTC staff as a way to identify a vision of how the GHG targets might be met, assuming we did not face significant constraints in regards to financing and improving infrastructure, had significantly improved transit available, etc. The vision scenario is unconstrained. Evaluate the scenario in relation to targets Establish other scenarios and evaluate each of those in relation to targets Select an SCS (ABAG/MTC) Ensure that RHNA Allocations are consistent with the SCS Adopt a Regional Transportation Plan consistent with and supportive of implementation of the SCS BACKGROUND Senate Bill 375 became law in 2008 and calls for the development of a Sustainable Communities Strategy (SCS) in all metropolitan regions in California. Within the Bay Area, the law gives joint responsibility for the development and adoption of the SCS to the Metropolitan Transportation Commission (MTC) and the Association of Bay Area Governments (ABAG). These agencies will coordinate with the Bay Area Air Quality Management District (Air District) and the Bay Conservation and Development Commission (BCDC). The SCS integrates several existing planning processes and is required to accomplish the following objectives: 1. Provide a new 25-year land use strategy for the Bay Area that is realistic and identifies areas to accommodate all of the region s population, including all income groups; 2. Forecast a land use pattern, which when integrated with the transportation system, reduces greenhouse gas emissions from automobiles and light trucks and is measured against our regional target established by the California Air Resources Board (CARB). The SCS is a land use strategy that is an input to the Bay Area s 25-year Regional Transportation Plan (RTP). The RTP must support the achievement of the SCS. By federal law, the RTP must be internally consistent. Therefore, the over $200 billion dollars of transportation investment typically included in the RTP must align with and support the SCS land-use pattern. SB 375 also requires that each updated eight-year regional housing need allocation (RHNA) prepared by ABAG is consistent with the SCS. The SCS, RTP and RHNA will be adopted simultaneously in early It was clearly the intention of the legislature and is even more emphatically the intent of the regional agencies implementing SB 375 in the Bay Area that the Sustainable Communities Strategy be more than just a means of assigning housing need to places or achieving greenhouse gas targets. The goal is to guide the continued growth of the Bay Area in a manner that is environmentally and economically sustainable and equitable. The Three E s are explicitly fundamental to the development of the SCS in Page 3

4 the Bay Area. According to the draft description of the process supplied by ABAG/MTC to cities: By directly confronting the challenges associated with population growth, climate change, a new economic reality and an increasing public-health imperative, the SCS should help us achieve a Bay Area which is both more livable and more economically competitive on the world stage. A successful SCS will: Recognize and support compact walkable places where residents and workers have access to services and amenities to meet their day-to-day needs; Reduce long commutes and decrease reliance that increases energy independence and decreases the region s carbon consumption; Support complete communities which remain livable and affordable for all segments of the population, maintaining the Bay Area as an attractive place to reside, start or continue a business, and create jobs. Support a sustainable transportation system and reduce the need for expensive highway and transit expansions, freeing up resources for other more productive public investments; Provide increased accessibility and affordability to our most vulnerable populations; Conserve water and decrease our dependence on imported food stocks and their high transport costs. In recognition of the importance of goals beyond those established directly by SB 375, ABAG and MTC propose to adopt performance targets and indicators that will help inform decisions about land use patterns and transportation investments. These targets and indicators will apply to the SCS and the RTP. These targets and indicators are being developed by the Performance Targets and Indicators Ad Hoc Committee of the Regional Advisory Working Group that includes local planning and transportation staff, non-profit organizations, and business and developers organizations. The targets are scheduled for adoption early 2011 and the indicators will be adopted in spring I have included a draft of the targets in the attached material. The SCS will build upon existing efforts in Bay Area communities to encourage more focused and compact growth. In 2007, ABAG/MTC asked communities to identify Priority Development Areas (PDAs) where infill development could occur near transit. The PDAs are the foundation upon which ABAG/MTC expect to structure this first Sustainable Communities Strategy. PDAs are only three percent of the region s land area. However, local governments have indicated that based upon existing plans, resources, and incentives, the PDAs can collectively accommodate over fifty percent of the Bay Area s housing need through The City of Berkeley has identified 5 PDA s: Downtown, San Pablo Avenue, South Shattuck Avenue, Adeline Ave (near Ashby), University Avenue and Telegraph Avenue (south of Dwight). These areas are consistent with the policies of the General Plan and the Housing Element to encourage higher intensity use along our major transit corridors, and have a substantial supply of Page 4

5 underutilized land. Although staff has not undertaken a 25 year projected residential capacity assessment, the analytical work undertaken for the 2009 Housing Element identified a capacity for growth that far exceeds the 7 year forecast that was required for the Housing Element. Over the past few years, PDAs have been supported by planning grants, capital funding and technical assistance grants from MTC. The current RTP allocates an average of $60 million a year to PDA incentive-related funding. Future RTPs, consistent with the SCS, will be structured to provide policies and funding that is supportive of PDAs and other opportunity areas for sustainable development in the region. In Berkeley, grants have been given for Downtown Plan implementation, the BART Plaza and, more recently, a Citywide parking management strategy, all of which were at least in part intended to be supportive of the PDA s. According to ABAG/MTC, development of the SCS is intended to be a partnership among regional agencies, local jurisdictions, Congestion Management Agencies (CMAs), transit agencies, and other regional stakeholders. A key element of the strategy is establishment of County-Corridors Working Groups. In Alameda County, this is expected to be the ACTA Technical Advisory Working Group, enhanced by the county Planning Directors. The existing group includes ACTA staff and representatives of other key agencies such as transit agencies and public health departments. In addition to the County-Corridor Working Groups, a Regional Advisory Working Group (RAWG), composed of local government representatives and key stakeholders provides technical oversight at the regional level (as noted above, I represent Alameda County Planning Directors on the RAWG). Process SCS Scenarios The final SCS will be the product of an iterative process that includes a sequence of growth and supportive transportation scenarios. Starting with an Initial Vision Scenario (February 2011), followed by more detailed SCS scenarios that refine the initial vision scenario (Spring and Fall 2011), and final draft (early 2012). For more information about the timeline, see SCS Schedule Attachment A. Initial Vision Scenario ABAG and MTC will release an Initial Vision Scenario in February 2011 that they expect to be based in large part on input from local jurisdictions through the county/corridor engagement process and information collected by December The Vision Scenario is intended to be unconstrained. In other words, it is intended to go beyond what many might consider realistic in relation to current market conditions, transit infrastructure, and existing policy. The vision scenario is expected to consider what might occur with a maximum transit-oriented infill strategy for the region. As noted above, the foundation of this strategy will be the PDA s, but will also consider other opportunities in the region for more sustainable development patterns, including major transit corridors that may not yet have been identified as PDA s, and other infill locations Page 5

6 in the region that could perhaps support higher intensity development if improved transit were available and policy permitted it. The Initial Vision Scenario will: Incorporate the 25-year regional housing need encompassed in the SCS; Provide a preliminary set of housing and employment growth numbers at regional, county, jurisdictional, and sub-jurisdictional levels; Be evaluated against the greenhouse gas reduction target as well as the additional performance targets adopted for the SCS. Detailed Scenarios By the early spring of 2011 the process will turn to an assessment of the feasibility of achieving the Initial Vision Scenario as work begins on Detailed Scenarios. The Detailed Scenarios will be different than the initial Vision Scenario in that they will take into account constraints that might limit development potential, and will identify the infrastructure and resources that can be identified and/or secured to support the scenario. MTC and ABAG expect to release a first round of Detailed Scenarios by July Local jurisdictions will provide input, which will then be analyzed for the release of the Preferred Scenario by the end of The County/Corridor Working Groups as well as the RAWG will facilitate local input into the scenarios through The analysis of the Detailed Scenarios and Preferred Scenario takes into account the Performance Targets and Indicators. Regional Housing Needs Allocation (RHNA) The Regional Housing Needs Allocation process is undertaken every 8 years and for the next round, the RHNA must be consistent with the SCS. The SCS is the first time that there will be a regional development strategy that combines land use, housing and transportation. The process to update RHNA will begin in early The county/corridor engagement process is expected to include discussions of RHNA, since both the SCS and RHNA require consideration of housing needs by income group. The distribution of housing needs will inform the Detailed SCS Scenarios. Regional agencies will take input from local jurisdictions for the adoption of the RHNA methodology by September The final housing numbers for the region will be issued by the State Department of Housing and Community Development (HCD) by September The Draft RHNA will be released by spring ABAG will adopt the Final RHNA by the end of summer Local governments will address the next round of RHNA in their next Housing Element update. Regional Transportation Plan The SCS brings an explicit link between the land use choices and the transportation investments. The regional agencies intend to work closely with the CMAs, transportation agencies and local jurisdictions to define financially constrained transportation priorities in their response to a call for transportation projects in early 2011 and a detailed project assessment that will be completed by July/August 2011; the Page 6

7 project assessment will be an essential part of the development of Detailed SCS Scenarios. The RTP will be analyzed through 2012 and released for review by the end of ABAG will approve the SCS by March MTC will adopt the final RTP and SCS by April CEQA Regional agencies will prepare one Environmental Impact Report (EIR) for both the SCS and the RTP. This EIR might assist local jurisdictions in streamlining the environmental review process for some projects consistent with the SCS. Regional agencies are investigating the scope and strategies for an EIR that could provide the most effective support for local governments. How Does the SCS Affect Berkeley? As with many new state mandated programs, the SCS has both potential risks and rewards for the City of Berkeley. On the reward side, clearly, promotion of a regional development strategy for the reduction of GHG is consistent with and supports the City s adopted Climate Action Plan. GHG does not respect jurisdictional boundaries, and the region (and the State) as a whole can have a much more significant impact through a coordinated approach than the City of Berkeley can have on its own. The City has already identified locations for development consistent with the overall approach to development articulated in the SCS process to encourage healthy, walkable neighborhoods near transit. Berkeley s CAP calls for a 30 percent reduction from local transportation sources, in part to be achieved through higher density mixed use development in the City s PDAs. City residents also stand to gain from a regional development strategy that focuses development in existing urbanized areas and discourages sprawl, thereby preserving nearby open space and productive agricultural land for the long term benefit and enjoyment of the Bay Area s residents. Finally, and most directly, billions of dollars in regional transportation funding must be targeted toward implementation of the SCS. Additional funding for transit improvements, for infrastructure and for quality of life improvement projects (such as the BART Plaza) is expected to flow toward the communities that are planning for and accepting the development that must be accommodated. On the risk side is the changes that will be required in Berkeley to accept its fair share of the region s growth over the 25 year forecast period for the SCS. The region is expected to grow by roughly two million people over the next 25 years. In order to accommodate that much growth in a compact, sustainable manner, the vast majority of that growth will have to fit into existing urbanized areas, and especially the inner-ring urban communities that are either near to or, as in Berkeley s case, are job centers in themselves. Staff has not undertaken an analysis of Berkeley s capacity to accommodate growth in its Downtown or along our major transit corridors over such a long period of time. However, as a job and transit-rich city, there will be especially strong pressure on Berkeley to accommodate additional housing near its jobs. While it is highly unlikely that Berkeley will see any significant change in the character of the Page 7

8 vast majority of its existing, established lower density residential neighborhoods, the character of the major transportation corridors, of areas near BART Stations, and of Downtown, will likely continue to change and intensify over the 25 year planning period. Once the SCS is adopted and the long term implications of the SCS become more clear, it will be incumbent on Berkeley and most other cities in the region to begin to undertake the planning necessary to identify areas for future growth, and also identify the investments needed in infrastructure, services, parks, recreational and community amenities so that they are attractive, high quality, livable neighborhoods. It is through this planning that this community can position itself for the funding that will hopefully be available to implement the SCS. As stated by ABAG/MTC: The SCS provides an opportunity for cities to advance local goals as part of a coordinated regional framework. By coordinating programs across multiple layers of government, the SCS should improve public sector efficiency and create more rational and coordinated regulation and public funding. The SCS connects local neighborhood concerns such as new housing, jobs, and traffic to regional objectives and resources. As such, it is a platform for cities and counties to discuss and address a wide spectrum of challenges, including high housing costs, poverty, job access, and public health, and identify local, regional, and state policies to address them. NEXT STEPS The overall process is outlined in the attached diagram. The immediate next steps include the following: Regional agencies expect to release an initial Vision Scenario in early February Staff will subsequently provide a report to the City Council describing the overall approach, regional context, and local implications for the City of Berkeley Staff will seek Council feedback and response to the initial Vision Scenario to be shared with regional agencies. This feedback is expected to serve as a basis for the development of Detailed SCS Scenarios through July CONTACT PERSON Dan Marks, Director of Planning and Development, Attachments: 1. Targets 2. Process Page 8

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