Wednesday, June 28, 2006

Open Space Initiative and Letter to Mountain View

CGF sent out an Action Alert this week asking people to check out the website for the Open Space Initiative and to encourage Mountain View City Council to endorse the Initiative. Unfortunately, the City didn't make a decision this week after all, but we hope they'll endorse it in the near future.

Below is a short letter we sent in support of endorsement.


June 26, 2006

Mountain View City Council

Re: Item 4.17 on City Council Agenda - support for Land Conservation Initiative Resolution

Dear Members of the Mountain View City Council;

The Committee for Green Foothills and the other major conservation organizations in Santa Clara County have worked for over three years to improve the Santa Clara County General Plan through the Land Conservation Initiative, coming to a vote this November. We urge the City Council to endorse the Initiative as something that will improve the quality of life for all County residents, including Mountain View residents.

The Initiative will only affect unincorporated County land designated as Ranchlands, Hillsides, and Large-scale Agriculture. It will not affect city jurisdiction or the County lands bordering the north and east of Mountain View. Generally, it will limit rural subdivisions to levels similar to other Bay Area Counties, like Alameda and San Mateo Counties. It will keep development off ridgelines, protect our streams from inappropriate development, and preserve threatened wildlife. It does not apply to cities or to more developed rural areas. The Initiative preserves the areas in Santa Clara County that still retain the strongest rural character.

Just as Mountain View would participate in amending the County General Plan on other occasions, the City has every right and obligation to ensure that the quality of life in the County remains protected. Fighting sprawl outside City limits will also have important effects on air quality, water quality, and views experienced from within Mountain View.

Again, we urge you to support the Initiative, and we would be happy to answer any questions about it.


Brian A. Schmidt
Legislative Advocate, Santa Clara County

Thursday, June 15, 2006

CGF is suing Stanford over reneging on its environmental promises

Well, this has been in the works ever since last December, when Stanford and Santa Clara County took an action we described as "Disappointing, bad policy, and illegal." Instead of a promised trail to make up for Stanford's environmental impacts, the university pushed an expanded sidewalk in a different county that causes environmental impacts instead of making up for them. We've sued to stop that from happening.

Our press release is here.

Palo Alto Weekly's coverage is here.

The Mercury News coverage is here.

We'll be sure to keep you updated.


Wednesday, June 14, 2006

11,000-acre ranch protected along south Santa Clara County

(Below is a guest posting by CGF Summer Intern Annie Ryan.)

On June 14th, Los Gatos-based Gabilan Ranch owners announced the sale of development rights to the Nature Conservancy for the "stunning" 11,190-acre ranch, located just south of the Santa Clara-San Benito boundary. In one of the largest land preservation arrangements ever to be completed in Northern California history, the deal ensures that the ranch will never be subject to any kind of development, even if the current owners decide to sell.

While just outside of CGF’s area of work in Santa Clara County, the ranch will contribute to maintaining a wildlife corridor shared by the County that extends from the Coast to the Central Valley. In addition, the selling of development rights has become increasingly popular among western ranchers afraid of losing their land to urban sprawl. Once the possibility of future development on a ranch is diminished, property taxes drop dramatically, making it more feasible for the land to stay family owned.

Click here to learn more about the land’s value and history.

-Annie Ryan

Monday, June 12, 2006

Master Comment letter on Coyote Valley Fiscal Analysis

CGF sent the additional letter below, following up on many previous comments on the Coyote Valley fiscal analysis. We sure hope that it gets a thoughtful response by the city.

June 6, 2006

Coyote Valley Specific Plan Task Force

Re: Master Comment Letter on Draft Fiscal Analysis for Coyote Valley

Dear Members of the CVSP Task Force:

Per the request by City staff for comments, the Committee for Green Foothills submits the following response that collect our previous concerns together, along with additional comments on the Draft Fiscal Analysis for Coyote Valley. We note that at the Technical Advisory Committee, staff and consultants appeared to support the CGF’s suggestion that a Final Report include any revisions made over time and include a Comments and Responses Section similar to that done in a Final EIR. We hope this will still happen.

Additional comments follow:

Consultant and staff response so far to CGF criticisms: the most important CGF criticism of the Draft Analysis finds the Draft’s assumption that housing costs can escalate 3% above inflation annually for 60 years, when household income increases much more slowly (less than 1% according to 1990s data), to be fatally flawed. The Draft concludes that a fiscal surplus will occur only because of this massive increase in property tax revenues, but that extent of increase will not happen. Instead, we believe it is not possible for housing costs to increase much in relation to household income, and that the Report should be revised accordingly.

The City’s consultants had two responses so far: first, the 3% figure is a conservative match for increases over the last 30 years, so it is appropriate to use the same figure for the next 60 years; and second, while an ever-smaller percentage of families could afford to purchase homes over time, that smaller percentage could still push the market price ever higher.

We consider these responses to be inadequate. First, the past rate of price increases is irrelevant when encountering a new factor – in this case, the cost of housing increasing to more than 33% of median household income. We believe the past trend is unsustainable, and an unsustainable trend cannot be maintained forever. The Draft Report contains no analysis of whether that past trend can be sustained; it just assumes the trend can last.

Regarding whether a smaller percentage of potential buyers can maintain the constant real rate of increase in housing prices, it would be useful to view the incomes of people potentially interested in buying residences in Coyote as a normal distribution/bell curve, where the largest numbers of people have mid level incomes, while smaller numbers have high incomes or low incomes. See Figure A, attached, for illustrative purposes (y-axis is the number of people/buyers, x-axis is their income level (the numbers on the x-axis are arbitrary here)). The vertical line intersecting the apex of the curve could help delineate the current potential market of buyers. San Jose staff have stated the average household spends 33% of income on housing, and banks are unlikely to give mortgages to people where payments would be much larger than that percentage. At current ratios of housing to income, then, potential buyers are the sum of the area under the bell curve and to the right of the vertical line.

The effect of increasing housing prices faster than income is to shift the vertical line further to the right, decreasing the number of potential buyers. And because the largest numbers of buyers in the bell curve are at the lowest income levels still to the right of the existing vertical line, moving that vertical line even slightly to the right will result in a disproportionately large reduction of buyers. Finally, the Draft Report implies a very large rightward shift in that vertical line to the right. All the above indicates a large decrease in the number of potential buyers given the Draft Report assumptions, but the Draft still concludes that prices will increase at the same rate as it did with a larger pool of buyers.

What the Committee for Green Foothills cannot do is quantify these numbers, but the City’s economic experts can. They should quantify how much the market will decrease given the relative changes in income and housing assumed in the Draft Report, and this would give a much better idea as to whether the housing prices can continue to climb at such an incremental rate.

Related housing price comments:

CVSP Task Force Member Craige Edgerton pointed out that Bay Area housing price increases don’t occur in a vacuum. When Craige moved to this area, housing cost twice as much as it did in Texas, and now it costs five times as much. This is another example of an unsustainable trend that the Draft Report may be assuming will continue for 60 years. City consultants should examine what is expected to happen in the national housing market – if that market is not also expected to increase at 3% above inflation, there should be an acknowledgement of that in an “Unrealistic Assumptions” disclaimer to the Final Report.

Craige also pointed out that even if the 3% figure is accurate, it could result in wrong projections if done at the height of a bull market. See Figure B, attached, as an example of how this could happen using an upward trending sine wave. The x-axis is time, and the y-axis is housing prices (absolute numbers on the axes are irrelevant for these purposes). The sine wave represents the up and down swings of the market, while the overall upward linear trend represents a gradual increase over time, which the City argues will average out to 3% or better. Craige’s point is that the 3% trend line could be drawn as tangent connecting the troughs of each curve, as a line bisecting the middle of all the curves, or as a tangent connecting the peaks of each curve. The most accurate starting point for extending the 3% trend line, in order to determine what future prices will be, would be from the middle. That does not appear to be what the Draft Report does, because the present position is much more likely to be at the peak, with an extended housing boom and what many are labeling a housing bubble in San Jose. To fix this, even if the City believes the 3% real rate is sustainable, it should begin its valuation with a partial correction (decrease in housing prices) factored in.

At a City Council Study Session, Councilmember Forrest Williams and City consultants referred to the Draft Report as intended to be conservative. To assist this goal of making conservative assumptions, we suggest the following: Assume at the beginning of the project that housing prices will drop the same extent as the greater of the last two drops in housing prices, which we understand to have occurred in the early 1990s and 1980s. Further assume that prices will for the next few years increase no faster than the worse-performing of the two subsequent recoveries, and increases will stay low as long as the slowest recovery took. Finally, assume prices will then increase no faster than the rate of median household income increase for the projected duration of the project. The Committee assumed household income would increase 1% based on 1990s data, but that may be overoptimistic, and City consultants may have better long-term data. The Final Report could include the above as an Alternative Assumptions that could be use for fiscal projections for the various scenarios.

Other comments:

The underestimate of affordable housing resulted in an overestimate of revenue. Twenty percent of 26,660 housing units in Coyote (the last number we’ve heard) is 5,312, not 5,000. This means that in all scenarios, 312 units were inaccurately counted as market rate units generating substantial property tax revenues, instead of affordable units generating little or no tax revenue. This error should be corrected.

Initial sale prices of affordable for-sale housing cannot be increased at the 3% real rate between the present and whenever the housing is constructed. When this question was asked at a Task Force meeting, consultants misunderstood it as a question about control of resale prices. The real issue is what value and property tax revenues the Draft Report assigns to affordable for-sale housing constructed say, 20 years from now. If it takes current affordable housing prices, and projects those prices to increase at a 3% real rate for 20 years, then any pretense that these future homes will actually be affordable is thrown out the window. Instead, the housing prices should be calculate based on expected income levels at the time of construction.

As mentioned in our earlier comments and reiterated here, none of the five scenarios included the most environmental of the action scenarios that we have discussed in the last year – retain the current triggers, and add some form of phased 2:1 jobs:housing concurrence thereafter. This would keep the advantage the current triggers have of prioritizing in-City development first, while avoiding an “open floodgates” problem with current triggers – after 5,000 jobs arrive, housing development can far outpace jobs development. We recommend that this scenario be added to the Final Report.

Also as mentioned earlier, all the concurrency scenarios have a “cannibalism” problem that has not been addressed in the Draft Report or anywhere else. The 2:1 ratios create a potential incentive whereby Coyote developers will offer cut-rate prices to business to relocate there away from central San Jose, because those developers will then make large amounts of money off the 2:1 right to construct housing that was created when the jobs moved. San Jose needs to address this problem in multiple contexts, but it could start in the Draft Report by reducing tax revenues to reflect cannibalized business tax revenues stolen away from central San Jose.[1]

This letter incorporates and requests responses to previous oral and written comments from the Committee for Green Foothills, especially the April 24th and May 8th letters and attachments, and the Excel spreadsheet distributed at the last Technical Advisory Committee. If City staff have trouble locating these items, we can provide copies.

Finally, there is one idea that could fix ALL the criticisms we have of the Draft Report. Following up on an idea from the Sierra Club, the Final Report should explore making the Community Financial Districts a permanent means to make up the budgetary shortfalls from Coyote Valley, as opposed to a temporary means used only in the project’s initial years. If 20 years from now it turns out that Coyote is actually withdrawing more revenue than it brings in, the CFDs can rectify that situation with some kind of property assessment, maybe as a smoothed-average over several years to avoid dramatic assessment changes. Coyote Valley developers will presumably have no problem with this idea, as they are quite confident that after ten-plus years, Coyote will always deliver a fiscal surplus to the City. In that case, the CFD need never draw funds from Coyote Valley landowners. As it is, an uncertain level of risk remains that Coyote will not benefit the City. If Coyote Valley developers continue to assert that the risk is zero, then they should have no problem with it being transferred from the City to them.

Please contact us if you have any questions.

Brian A. Schmidt
Legislative Advocate, Santa Clara County

[1] A partial fix of the cannibalism problem would be to use large concurrency increments – say after each 5,000 new jobs, 2,500 residences can be built. This would substantially reduce the incentive to relocate jobs from Central San Jose, and could be used appropriately for the environmental scenario outlined above.

Figure A:

Figure B:

Friday, June 9, 2006

Coyote Valley Farmland Mitigation Comments

CGF has submitted many comments to San Jose about preserving nearby farmland. Below is one of our comments submitted in relation to Coyote Valley on June 1.


Dear Sal,

I hope the City of San Jose can accept these somewhat-belated comments on potential Agriculture Mitigation in Coyote Valley. The Committee for Green Foothills stands by the joint letter previously submitted by environmental groups on the subject, as well as all oral comments we have submitted to date.

We would like to add two more items for consideration. First, an appropriate, additional use of fees exacted from developers who convert farmland to other uses is to provide a price preference for local agricultural products. This would make up the damage done to local agriculture due to the decreased size of the local farming market, so it would be an appropriate mitigation, not an unfair exaction. More information is available here:

Second, Committee for Green Foothills suggests that an idea that might facilitate acceptance of farmland conservation easements in the Coyote Valley Greenbelt would be to make the easements transferable in the event of annexation of the Greenbelt by an adjoining city. This might get rid of the disincentive for Greenbelt landowners who believe annexation is possible, and therefore believe that accepting an easement on their land would them prevent them from having more intense development allowed under annexation. The easement could be transferred to another appropriate farm in Santa Clara County that is as close as possible to the Greenbelt. The landowner would have to pay to get another landowner to accept the transferred easement.

Details of this second idea would have to be worked out. It may not even be feasible at all, but it is at least worth investigating. We suggest the City consult with the group FROG during the process of developing its policy, given that FROG has spent the most effort working out a viable Greenbelt strategy of its own.

Please contact us if you have any questions.

Monday, June 5, 2006

Election Day tomorrow

Tomorrow (Tuesday) is Election Day, so people should remember to go out and vote!

Committee for Green Foothills is a non-partisan organization, and we don't endorse candidates. We do encourage people to examine the environmental issues in any particular race, however, and keep those in mind as part of the voting decision.

The San Jose mayoral race is particularly important - the five front-runners will be whittled down to two candidates (unless one candidate gets an absolute majority). It is no secret that environmentalists have had a difficult relationship with San Jose's current mayor, so any change is a new opportunity to establish a much better relationship.

I've had the privilege of talking at least briefly to all five mayoral candidates, and I can safely say that they all appear to be intelligent and hard-working people. Their environmental views can vary depending on the topic. I would encourage San Jose voters to look at those views - on Coyote Valley, the Open Space Initiative, on protecting green spaces, on "smart growth" generally, and on all the many other, important environmental issues, as part of making a well-informed vote.


Friday, June 2, 2006

Milpitas UGB - getting things straight

Santa Clara County LAFCo's map of the Urban Service Area for Milpitas doesn't match the restrictions that voters put in place in 1998. LAFCo met this week and postponed action to bring their map into conformance, but we hope it will happen soon. This will help clarify that sprawl is not allowed past a certain point. Our comment letter is below.


May 25, 2006

Santa Clara County LAFCo
70 West Hedding St, 11th Floor, East Wing
San Jose
, CA 95110

Re: LAFCo Meeting of May 31st, Agenda Item #5 – Milpitas Urban Service Area

Dear LAFCo Commissioners;

The Committee for Green Foothills supports the recommendation to finally make the Urban Service Area coterminous with the voter-approved Urban Growth Boundary. The eight years since the voter approval of Measure Z has been more than enough time to update the USA.

An indefinite delay at this point would only further circumvent the voters’ intent. Orderly planning and environmental protection, two major components of LAFCo’s mission, require the end of these delays.

Brian A. Schmidt
Legislative Advocate, Santa Clara County