A very nice present from Mountain View Rotary Club

I gave a presentation on Tuesday to the Mountain View Rotary Club about the Land Conservation Initiative, and extremely important ballot item supported by Committee for Green Foothills. At the end of my presentation, the Rotary Club thanked me by giving a donation in my honor to the "Polio Plus" program that sponsors vaccination in Asia and Africa. The broader vaccination program is expected to eliminate this terrible disease entirely, in just a few years.

This was a great, and totally unexpected, gift.

-Brian

Interesting news items

A few items of interest to CGF members and friends:

A local television report on the Measure A campaign.

House prices increased 1.6% in Santa Clara County last year, which is a decrease when inflation is considered. San Jose's fiscal analysis for Coyote Valley depends on prices increasing 3% above inflation consistently, and a shortfall at the beginning can significantly increase projected "temporary" deficits.

Direct-to-consumers sale of meat by ranchers is a new idea gaining ground. None of the ranches mentioned are in Santa Clara County, but there's no reason why our County shouldn't be involved.

An article describes increasing interest in incorporating San Martin to stop inappropriate development between Gilroy and Morgan Hill. This seems like a good idea in a lot of ways, although we have to watch for pitfalls too.

-Brian

Comments on LAFCo Agricultural Mitigation Policy

The Santa Clara County LAFCo is developing a policy on requiring preserving farmlands somewhere in Santa Clara County to mitigate for the loss of farmlands when cities expand. It's a good start, and CGF provided the comments below.

-Brian

(We provided similar comments to San Jose for its policies, here.)

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September 18, 2006

Ms. Neelima Palacherla
Santa Clara County LAFCo
70 West Hedding St, 11^th Floor, East Wing
San Jose, CA 95110

Re: LAFCo Agricultural Mitigation Policy

Dear Ms. Palacherla;

The Committee for Green Foothills submits the following comments regarding the proposed LAFCo Agricultural Mitigation Policy:

· CEQA and good policy require the highest feasible level of agriculture preservation be achieved when annexation results in the loss of farmland. CEQA requires the imposition of feasible mitigation measures that substantially lessen adverse impacts. Public Resources Code sections 21081(a)(1); 21081(a)(3). While preserving farmland does partially mitigate for the loss, a 1:1 ratio clearly does not eliminate the significant impact, as the net effect is a 50% loss of farmland. Accordingly, LAFCo staff should review policies at other LAFCos and at the least, it should adopt the highest ratio of preserved-to-lost farmland currently in use.

· Even if LAFCo determines that preserving an amount of land equal to the amount of lost farmland is adequate, a 1:1 ratio is inadequate because it assumes the program will work perfectly. In the real world, mitigations are not perfect, programs and easements are often not followed or violated, or simply become infeasible. Wetland restoration mitigations frequently use 2:1 or 3:1 ratios or higher to account for the possibility of failure. A 20% addition to the preservation ratio (a 1.2:1 ratio) would provide some assurance that an equal amount of land will be preserved, and should form the lowest preservation ratio considered by LAFCo.

· LAFCo must retain as a feature of the ag mitigation policy that it has the legal ability to enforce the ag mitigation requirements. Staff’s proposal for conditional approval of an annexation, with mitigation preceding issuance of a Certificate of Completion, satisfies this requirement. Any alternative proposal that modifies this in a way that removes LAFCo enforcement ability will turn this whole process into a sham exercise. It is incumbent upon anyone proposing an alternative to show how staff can feasibly enforce mitigation requirements.

· Extending the conditional approval period to longer than two years may be an appropriate method to merge LAFCo enforcement ability with timelines that landowners may need to arrange mitigation. An expedited renewal process may also help resolve problems where landowners may not be able to meet deadlines. Tracking these projects over time will require additional LAFCo resources however, and fees should be imposed for purposes of cost recovery.

· Complaints that the staff proposal conflicts with long-term planning for city expansion are invalid. In the first place, annexations that provide space for land that the cities will not use for decades are already disallowed. Cities remain free to develop expansion plans that project decades in the future – however, any annexation proposal might have to be a subsidiary component of the city’s plan, and could only be considered when it is timely. This is the current policy, and the ag mitigation proposal is not a change in kind. If Coyote Valley landowners, as a hypothetical example, complained they could not arrange to buy easements when development of their property would not occur for decades, then they would simply be admitting that annexation of their properties should not be allowed at all. As a practical matter, annexation could occur with staff’s ag policy, with component parts being proposed for conditional approval, and a certificate received upon completion of the mitigation for each part. Extending the conditional approval period and expediting renewal of the period should address any remaining concerns.

· Mitigation stacking should be at least discouraged; some kinds of mitigation stacking should never be allowed and it could be appropriate to prohibit stacking entirely. Illusory mitigation, such as would occur by selling Transferable Development Rights on land already covered by conservation easements, should be prohibited. Similarly, stacking any subsequent mitigation easement on land already protected by an easement that achieves much the same goal is illusory and should be prohibited. Stacking easements for biological purposes and for agricultural preservation on the same property could result in conflicting mandates and should be discouraged or prohibited.

· All mitigation funding, including maintenance and enforcement, is the responsibility of the annexation applicants (cities and landowners). Applicants cannot pay less than their full share on the basis that they expect to apply for funding from agencies such as open space authorities. Agency funding to augment the ag mitigation project is a separate discretionary decision that does not reduce the obligations of those converting farmland to other uses.

· While LAFCo does not have authority over County actions that convert farmland to other uses without changing jurisdictional boundaries, it should encourage the County to adopt ag mitigation programs similar to the LAFCo proposal.

· There should be some maximum time limit between collection of in-lieu fees by a conservation entity and land acquisition, at least in cases where in-lieu fees are large enough to finance acquisition in short order.

· Land acquisition must occur within Santa Clara County.

· Acquisition programs should prefer, including giving a price preference, purchasing easements on farms not already physically developed in ways that constrain future types of farming. Permanent greenhouse structures (ones with paved floors) and mushroom-growing buildings are examples of problematic development if they are the dominant use on parcels being considered. Easements that prohibit hardscaping the property over a certain percentage level would be appropriate.

· The buffer concept needs further development. We suggest that buffers may also be farmed in some circumstances, but in ways that minimize potential conflicts with neighbors – maximizing production and profits would not be the first priority. Organic farming, growing hay, and limited working hours would be examples of buffer management that could be appropriate. Because the buffer could not emphasize agriculture and might have to switch to other uses entirely, it should not count as part of the land preserved for agriculture.

· Efforts to exclude lands from designation as “prime agriculture” should be opposed. Staff proposed policies #5 and #8 should not be weakened by efforts to use loopholes such as capping wells and claiming the lack of water means the land is not prime, or removing “prime” designation by landowners simply leaving land fallow for several years.

Staff’s LAFCo policies represent a strong step forward to protecting our County’s heritage. The shame is that this was not done in previous decades. The sprawl now found in the north County could have been a “Silicon Archipelago” of high tech development and housing surrounded by farmland. At least, we can avoid repeating mistaken sprawl in our remaining prime agricultural lands.

Please contact us if you have any questions.

Sincerely,

Brian A. Schmidt
Legislative Advocate, Santa Clara County

Two Good Decisions!

We have had two very encouraging decisions in the courts this week. First, San Mateo Superior Court Judge Beth Labson Freeman upheld LAFCo and County Elections on their conduct of the protest process for the MROSD (Mid-Peninsula Regional Open Space District) coastal expansion. And today, the California Supreme Court rejected Big Creek Lumber's petition for a rehearing on their decision to uphold the Santa Cruz and San Mateo County ordinances on timber harvesting.

We all (and especially CGF Board Member April Vargas) can take a great deal of satisfaction in our role with the LAFCo protest process. Without our involvement, the opponents could very well have prevailed.

We have Karen McEwan Johnson and her team at the Orrick law firm to thank for their Amicus brief on behalf of CGF and other environmental groups in that significant decision, which upheld the proposition that although the State has authority over how timber harvesting is conducted, counties may regulate where it can be allowed.

-Lennie

County enacts viewshed protection in a win for the Measure A Campaign

Yesterday, Santa Clara County enacted improved viewshed protection for hillside development (Agenda Item 66) in the County, limiting the aesthetic impact from new development and giving people incentives to construct smaller, less intrusive homes.

CGF asked for even stronger protections which were not granted, but developers' efforts to weaken the protections also were rejected. Overall, I would describe this both as a significant improvement and a first victory for the Measure A campaign, the Land Conservation Initiative.

Relatively few opponents of the County viewshed proposal tried to kill it, but rather most of them only sought to weaken it. If we had not been bringing our Measure A, there's little doubt that the realtors and developers would have tried to kill viewshed protection entirely. Because they had to act "reasonably", our Measure A campaign defused a great deal of potential opposition to the County's action yesterday.

Our comment letter is reposted below.

-Brian
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August 25, 2006

Santa Clara County Board of Supervisors

Re: Agenda Item #66, Viewshed Protection

Dear Members of the Board of Supervisors

The Committee for Green Foothills continues its ongoing support for improvements to County viewshed protection, which include proposals suggested by County Supervisors for nearly two years. While interest in improving the viewshed protection extends even longer than two years, the Committee was involved in the recent catalyst for this effort, a proposal to place a 25,000 square-foot monster mansion on a hilltop ridgeline. We are very glad to see the effort to improve rules make so much progress.

The Committee generally supports County staff’s viewshed protection proposal. We support the proposal both on its own merit and as something that complements the more general protection we hope to achieve through the Land Conservation Initiative on the fall ballot. We note that Initiative opponents have stated they also support the viewshed process and proposal, and we hope they will not seek to remove the most important portions of the viewshed proposal.

Rather than remove vital parts of the proposal, the Committee seeks to see it strengthened. In particular, we suggest the following:

· House size levels for design review should be better adjusted to reflect the problems that monster mansions pose for viewshed protection. As proposed, a 4,900 square-foot structure would not get Tier 2 review and no incentive in the rules to reduce its size. The 12,500 square-foot limit for Tier 3 is similarly too high to create a significant disincentive. We suggest the transition from Tier 1 to Tier 2 occur at 4,000 square feet, and from Tier 2 to Tier 3 occur at 10,000 square feet.

We understand that staff based the Tier 2 transition on the current typical house of 5,000 square feet in the hillsides, but if the goal is to fix an existing problem, some incentive should be given for people to choose less massive housing. Similarly, the problem of a “monster mansion” arises at a much smaller level than 12,500 square feet, and the tiering system should address that problem through appropriate incentives, including transitioning to Tier 3 at 10,000 square feet.

· The alternative proposals for ridgeline development, General Plan Policies RGD31a through 33a, should be adopted. These proposals achieve what the Board of Supervisors want – get development off of ridgelines unless no other choice presents itself, while protecting private property rights. We strongly encourage the Board to adopt these proposals and direct staff to prepare the appropriate zoning ordinances.

In addition, the Committee recommends that the 18-24 month review period include considering improvements to the proposal that would protect the viewshed for County residents who are not located in the County valley floor. These people also have the right to quality views. In particular, the review should consider the following:

· Extending viewshed protection to areas heavily used by many County residents – Highway 280, Highway 152, Highway 17, and parts of selected County parks.

· Improving lighting control ordinances to decrease light pollution and improve access to night sky views, something the County could do in conjunction with city jurisdictions.

· Review air quality protections to reduce haze in the County.

We applaud the County’s efforts, and look forward to protecting viewsheds. Please contact us with any questions.

Sincerely,

Brian A. Schmidt
Legislative Advocate, Santa Clara County

Getting sponsorship for "Saving the Bay"

CGF wrote the following short message of support to the Santa Clara Valley Water District, urging them to sponsor the public television special, "Saving the Bay." This program will be a very useful method for public education.

-Brian
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Dear Santa Clara Valley Water District Board Members:

The Committee for Green Foothills urges the District to provide sponsorship support for the public television program, “Saving the Bay”. We believe this program will advance the District’s goals of environmental protection through education, and sponsorship will also give appropriate visibility to the District.

The Committee is also familiar with “Saving the Bay” producer Ron Blatman’s work on other projects, and we expect he will again do an exceptional job. We encourage the District to help bring this program to the viewing public.

Please contact us with any questions.

Sincerely,
Brian Schmidt
Santa Clara County Legislative Advocate
Committee for Green Foothills

San Jose Insider discussion of the Land Conservation Initiative

One of the San Jose Insider bloggers posted a great editorial supporting the Land Conservation Initiative, and a spirited discussion is in the comments section.

-Brian

Coyote Valley fiscal analysis already showing flaws

As we reported a while back, San Jose expects to make money off of Coyote Valley development only because it expects housing prices to increase exponentially faster than income, every year for sixty years. We think this reasoning is flawed, and the problems are already showing.

The National Association of Realtors just released its national report on the housing market, and we can check San Jose's assumptions against what is actually happening. San Jose expected housing to increase 3% above inflation, so with inflation at 4%-5%, San Jose is counting on a 7%-8% increase in housing prices. The Excel spreadsheets at the Realtors' site show 0.4% increase for single family homes in the greater San Jose area, and 4% for condos in the San Francisco area.

San Jose's estimates are already off by 5% or more, according to these figures. More importantly, they demonstrate the flaw in San Jose's method of projecting unsustainable trends as something that will last forever.

-Brian

UPDATE, 8/17: Figures from a different source for all of Santa Clara County show a 7% rise, which just barely keeps up with San Jose's projections (although the decline in sales volume may indicate problems). There's a difference in geographic area and time period, but the range betweeen 0.4% and 7% is so large that I suspect something is wrong with at least one of these estimates.

Toxic explosion in East Palo Alto has uncertain effect on the Baylands

(Guest posting by CGF volunteer Annie Ryan.)

On June 5th of this year, a four-thousand gallon mixture of volatile and­­ semi-volatile organic compounds exploded inside a tanker truck at the East Palo Alto Romic toxic waste facilities, and subsequently escaped from the tanker into the air (the press release avoided the word “exploded” and said “reacted chemically” instead). A mist spread over the Bay Road complex, nearby homes, and the immediately adjacent Bayland marshes before coating the ground, leaving buildings, roads, and wetland plants covered in a residue of sticky black dots. Immediately following the spill, nearby residents were warned to stay inside their homes pending a further investigation into the cause and severity of the spill. Following the incident, the Environmental Protection Agency released a report outlining their initial findings regarding the nature of the spill, and what steps they were taking to ensure the safety of the nearby citizens and wildlife.

The report claims “the release of the VOCs had no effect on nearby neighborhoods or residents due to the fact that the chemicals dissipated so quickly into the air”, and that the sticky, black residue left on the road and plants “is not likely to be harmful unless one comes into direct contact with the material”. Any long term effect on the marshland was unknown at the time of the report, but biologists were expected to release results within the end of the week. (week of June 12th).

Nearly eight weeks later, the overall impact that the chemical spill had on surrounding East Palo Alto neighborhoods and marshlands is still largely a mystery. The EPA states that the tanker was carrying semi-volatile and volatile compounds, however according to Greg Baker of the National Oceanic and Atmospheric Administration there is still no definitive list of every compound in the tanker at the time of the spill. According to Baker, the biologists’ primary focus has been determining where the released spray passed over and if any damages to plant or animal life occurred. Back in June biologists explored the marshes looking for any signs of impact such as dead fish or birds, and used an imaging fly-over technique to get aerial views of the affected marshlands, and determine to what degree the area had been affected. Biologists could find no signs of environmental distress or a lack of photosynthetic activity. In August a second round of fly-over imaging will be used to see if any previously undetected impacts arise.

This incident is not the first time Romic has threatened the health and safety of residents and the marshland. In 1995 Romic mistakenly released cyanide into the Palo Alto Wastewater Treatment Plant, and in 2005 Romic paid the state of California $849,500 to settle 53 safety violations, accumulated over the last 7 years.

Romic’s presence has caught the attention of the East Palo Alto activist group Youth United for Community Action or YUCA. Over the last few years YUCA has worked to raise awareness of the harmful effect Romic has on the community. Roger Madrid, a co-member of the group believes that Romic has no place in his community, “they handle chemicals that are known to cause cancer and asthma” and “we want them to leave”.

It is troubling that while the EPA has released a statement assuring the community that the people, plants, and animals within the vicinity of the Romic spill were not harmed, it is still unknown what was in the tanker that spilled. Furthermore, EPA has not addressed the possibility of long term effects that the released chemicals could have on the community and wildlife. The Romic toxic facility has a controversial history, located in an economically disadvantaged, ethnic minority community while receiving, storing, and processing toxic waste generated elsewhere. The facility’s presence immediately next to the Baylands raises both environmental concerns and community economic development concerns for why the facility should occupy a prominent Bayfront property. These concerns are longstanding, and Committee for Green Foothills will continue to monitor the natural resource protection issues that result in this area.

-Annie Ryan

Counties' right to regulate logging

Several weeks ago, the California Supreme Court issued fairly broad protection to counties attempting to regulate logging in their jurisdiction. It had been unclear whether state law superceded the normal right of local agencies to regulate land use. With additional clarity, there may now be reason and ability for counties in our area to restrict harmful logging practices.

The Supreme Court decision is here.

NBC11 video on Los Gatos Creek logging proposal

NBC11 did a short news report on a thousand-acre logging proposal in the Los Gatos Creek watershed that deeply concerns CGF. The news report is here, and our writeup of the problem is here.

-Brian

Stanford Trails

Below is a Letter to the Editor we sent in to the Mercury News and Palo Alto Weekly about Stanford University's recent announcement they are halting work on the Page Mill/S1 Trail.

-- Holly Van Houten, Executive Director

--------------------------------------------
Dear Editor,

As the former director of the Bay Area Ridge Trail Council, it was my great pleasure to attend Wednesday’s night of the Midpeninsula Regional Open Space District where a trail connecting Los Trancos Open Space Preserve to Palo Alto’s Foothills Park was approved. Together with the trail opened last fall linking Foothills Park to the Pearson – Arastradero Park, this new connection will create a significant piece of a long sought after regional trail linking the San Francisco Bay Trail to the Bay Area Ridge Trail when it is built later this year.

By way of contrast, Wednesday’s paper carried Stanford University’s announcement of stopping work on the Page Mill/S1 Trail (“Campus halts work on trail”) due to a lawsuit filed by my new organization, the Committee for Green Foothills. This is an unfortunate and totally unnecessary action that denies the community access to a trail they have been owed for 5 years, ever since Stanford got approval to add 5 million square feet of new facilities.

Our lawsuit addresses only the northern trail known as the C1 trail, a project that was included at the last minute without considering alternative alignments, studying environmental impacts, or considering the public’s comment. Our lawsuit simply asks Santa Clara County and Stanford University to follow the environmental laws on this trail. We’re asking for them to exercise good governance.

Even better if Stanford would decide to be a good neighbor. The University has the opportunity to participate in creating a great regional trail system linking the popular dish trails up to the City’s Arastradero park, providing the needed link in the Bay-Ridge trail connection, but that isn’t the choice they’ve made. It is time to do the right thing, follow the law, and create real recreational trails that will benefit Stanford and its neighbors.

Sincerely,

Holly Van Houten

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.

-Brian
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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.

Sincerely,

Brian A. Schmidt
Legislative Advocate, Santa Clara County

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.

-Brian

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

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.

-Brian
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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 24^th and May 8^th 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.

Sincerely,
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:

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.

-Brian

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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:

http://www.greenfoothills.org/blog/2004/08/agricultural-preservation-versus.html

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.

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.


-Brian

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.

-Brian
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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.

Sincerely,
Brian A. Schmidt
Legislative Advocate, Santa Clara County

We are here

Click here, and click on the white box, and that's where Committee for Green Foothills is located.

Wikimapia is a new project allowing people to add notes and comments to a global map.

-Brian

Supporting Water District independence

We sent the following letter in support of separating some leftover connections between the Santa Clara Valley Water District and Santa Clara County government, changing them from semi-separate to separate agencies. Both agencies wanted the change, and it should make accountability clearer.

-Brian
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May 15, 2006

The Honorable Joe Coto

California State Assembly

State Capitol Room 2170

Sacramento, CA 95814

Subject: Notice of Support for AB 2435 (Coto): Santa Clara Valley Water District

Dear Assembly Member Coto:

The Committee for Green Foothills supports your AB 2435 to amend the Santa Clara Valley Water District’s (District) enabling act (Act). Our organization agrees with the Santa Clara County Board of Supervisors and the District Board of Directors that the existing arrangement no longer serves the interests of the County, the District, or more importantly the voters, residents and businesses of Santa Clara County. Your bill would specifically remove the County Board of Supervisors role in approving the District’s budget and appointing District Board Members.

AB 2435 will ultimately reduce costs to taxpayers and allow the voters to hold their elected officials directly accountable for decisions relating to water resources. Your bill will also make the District’s composition and budgetary process conform to that of other independent special districts throughout the state.

Our organization is very pleased that you have agreed to author this legislation, which was developed collaboratively by the County and the District. We are pleased to add our name to the list of supporters for this bill.

Please contact us if you have any questions.

Sincerely,

Brian A. Schmidt

Legislative Advocate, Santa Clara County
cc: SCVWD Board of Directors, Fax: (408) 266-2897
Julie Maclay, Santa Clara Valley Water District, Fax: (916) 448-8499

Preserving farming near San Jose

At the May 15th Environmental Issues Forum for the 2006 San Jose Mayoral Candidates, an event cosponsored by CGF, candidate Michael Mulcahy suggested that some sort of preference should be given to locally-grown food. The Committee for Green Foothills suggested a similar idea last year, and showed how new development could be required to help provide that preference in order to mitigate the loss of farmland in our area.

We hope that Mr. Mulcahy, and everyone else concerned with local farms, continue to pursue these ideas.

-Brian

CGF Political Breakfasts

With the wonderful support of the Peninsula Community Foundation, the Committee for Green Foothills was able to put on two "Political Breakfasts" where community members could talk with two respected community leaders about environmental issues. Below is a brief write-up on the Breakfasts, and we intend to add more information to other parts of the CGF website.

-Brian
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Political Breakfast: “Ethnic Diversity and Environmental Opportunity”, Tuesday April 4^th, with featured speaker, Santa Clara County Supervisor Blanca Alvarado. Supervisor Alvarado talked about the importance of environmental issues to all communities, regardless of ethnicity. She referred to the statewide problem of the “fiscalization of land use” where governmental land use decisions do not further the interest of the represented communities. She discussed the proposed Santa Clara County General Plan Initiative to reduce sprawl and protect watersheds, modeled after a similar voter initiative in San Mateo County, and indicated she would likely endorse the Initiative. She discussed how Initiative supporters could get support from ethnically diverse communities by conducting outreach to churches, community centers, and non-English newspapers. She discussed how technically-challenging policy positions, such as CGF’s legal analysis showing inadequate legal compliance on restricting the increased paving-over of the County, could be tied to flooding issues with press releases and press conferences that would be read in ethnically-diverse communities. Supervisor Alvarado made recommendations for key people to contact in the Hispanic community

Following the meeting, environmental groups agreed to continue with outreach and set up a subsequent planning meeting in May.

Political Breakfast: “Water Rights and Water Wrongs: Lessons in water protection from an environmental perspective,” Tuesday, April 25^th, with featured speaker Santa Clara Valley Water District Board Member Rosemary Kamei. Board Member Kamei discussed the history of the Water District and how few people understood that the Peninsula and South Bay still derive an extensive amount of their water from local groundwater sources. She discussed how groundwater overdrafting has caused serious problems and how the Water District has attempted to address them. She emphasized the success water conservation has had in recent years, keeping water demand nearly flat even as population has substantially increased in the County. She pointed out the global problem of climate change could have local environmental effects by increasing flood potential from increased sea levels and inadequate levees along the Bay, as well as reducing water supply. She emphasized the need for greater participation by the public on environmental issues. She discussed the importance of protecting local open space in the context of the County General Plan Initiative, but has not yet decided whether to endorse it. Other elected officials in the audience, Larry Wilson of the Water District and Jim Foran of the Open Space Authority, added their comments.

Board Member Kamei challenged environmentalists to increase public participation in water protection, and suggested environmentalists turn each April into an “Environmental Awareness Month” that culminates in Earth Day. Many audience members participate actively in environmental organizations, and following up these suggestions will be an important next step. The legal issue of impervious surfaces paving over the County was also discussed as one that will be further pursued, especially as CGF first analyzed this issue through a Water District Grant, and has had further opportunities to publicize it at Political Breakfasts sponsored by a subsequent grant from Peninsula Community Foundation.

PCF was expressly mentioned and thanked for its sponsorship at both Political Breakfasts, and in supporting materials.

More about Coyote Valley fiscal problems

Last week, we gave San Jose a copy of the previous blog post on the problem of unrealistic fiscal assumptions used to make Coyote Valley fiscally responsible, together with the short letter below.

-Brian

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May 8, 2006

Coyote Valley Specific Plan Task Force

Re: Draft Fiscal Analysis for Coyote Valley assumes housing prices will increase faster than income indefinitely

Dear Members of the CVSP Task Force:

The Committee for Green Foothills submitted comments last month on the Draft Fiscal Analysis for Coyote Valley. Please see the attachment that details the reason why a major expense – housing prices – cannot forever increase at a faster rate than the increase in income. The attachment shows that if annual housing expenses started at 33% of household income and increased at 3% annually, as assumed in the Draft, while San Jose household income increased at 1% annually, then after 11 years the housing expense would rise to 40.7% our household income. Clearly, any long-term assumption that housing prices will exceed income is not a conservative assumption as claimed by City staff, but rather the expression of “bubble” economics.

We further note that 1,000 housing units are designated as “affordable” for-sale units. A 3% appreciation rate of future new affordable units, even where deed restrictions govern resale prices, will quickly remove these newly-constructed units out of the “affordable” range. San Jose must adjust the fiscal analysis or acknowledge they will not meet the affordable housing targets.

Please contact us if you have any questions.

Sincerely,

Brian A. Schmidt

Legislative Advocate, Santa Clara County

The problem with extending a trend forever

The Draft Coyote Valley Fiscal Report has a problem with extending a trend line indefinitely. It says that housing prices will increase at a rate of 3% above inflation indefinitely, for 50-60 years. This results in a similar increase in property tax receipts, which is then used to claim that Coyote will result in a fiscal surplus for San Jose.

However, the report makes no prediction for increases in median household income. Fortunately, we found useful data here: income rose 10% over 10 years, or slightly less than 1% annually. You might see the problem already - if income increases more slowly than a major expense - housing - that expense can't keep increasing at the same level indefinitely.

I need to find someone more versed in Excel than I am, but I tried to calculate how it would turn out. Assume average housing costs of 33% of income, which is probably reasonable for San Jose. To simplify numbers, assume an average household income of $100,000, increasing 1% annually, and housing costs of $33,000, increasing 3% annually.

End of Year 1: housing costs $33,990, income is $101,000 and housing now is 33.65% of household income. Interesting. Let's do that for 10 more years:

(calculations show costs of housing if it increases 3% above inflation each year for ten years)

Year 1: 33 + (33 * .03) = 33.99
33.99 + (33.99 * .03) = 35.0097
35.0097 + (35.0097 * .03) = 36.059991
36.059991 + (36.059991 * .03) = 37.1417907
37.1417907 + (37.1417907 * .03) = 38.2560444
38.2560444 + (38.2560444 * .03) = 39.4037257
39.4037257 + (39.4037257 * .03) = 40.5858375
40.5858375 + (40.5858375 * .03) = 41.8034126
41.8034126 + (41.8034126 * .03) = 43.057515
43.057515 + (43.057515 * .03) = 44.3492405
Year 11: 44.3492405 + (44.3492405 * .03) = 45.6797177

At year 11, divide $45,679.7177 by $112,000 (should be very close to household income appreciating 1% annually), and you get housing costing 40.79% of income, up from 33% ten years earlier. And the fiscal report thinks this can continue for 60 years. I think it can't - I don't even know if it could continue for eleven years.

-Brian

To the person who left the anonymous tip yesterday

We'd be interested in more information on both matters, especially the second one. If you want us to use only some information and keep confidential the rest, we can do that.

-Brian

Everyone's writing about Coyote Valley

It seems to be on everyone's mind. Over at Sanjoseinside.com, "Single Gal" switches from discussing the dating scene in San Jose to lamenting how Coyote Valley backers are ready to turn San Jose into "Becoming Los Angeles".

At Loma Prieta Sierra Club, they've sent a letter about the fiscal report for Coyote Valley development that shows a significant deficit in the first 10 years. The letter says "Our primary concern is how fiscal mitigations will compete with environmental mitigations. The environmental impact of the proposed project is huge and the cost to mitigate is not insignificant." CGF shares this concern.

And not be outdone, we sent in our own letter on the fiscal issue, reproduced below.

-Brian
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April 24, 2006

Coyote Valley Specific Plan Task Force

Re: Comments on the Draft Fiscal Analysis for Coyote Valley

Dear Members of the CVSP Task Force:

The Committee for Green Foothills submits the comments below on the Draft Fiscal Analysis for Coyote Valley. While our comments focus on the specifics of the analysis, we must not forget the central issue involved in Coyote Valley – that it’s a developer proposal to convert crucial farmland to unneeded office space, while making our housing situation worse. The “alternative scenarios” that attempt to launch housing first while waiting for jobs later just defeat the central purpose of this project, while doing nothing about the ultimate problem of making the housing situation worse. Analyses of issues like finances cannot overcome this central problem, that developing Coyote Valley would be an unnecessary mistake.

Our comments include the following:

The analysis excludes considerations of costs to other agencies funded by San Jose taxpayers. For example, providing health care services to uninsured people in Coyote Valley will increase costs for Santa Clara County, and approximately half of the County taxpayers are San Jose residents. Costs to VTA and school districts have also been overlooked.

Keeping triggers while adding 2:1 concurrence was not analyzed. For the last year, environmentalists said that a carefully managed 2:1 match of jobs to housing would be appropriate AFTER the 5,000 jobs trigger was reached. This would keep the housing matched with jobs so people living in Coyote would be more likely to be working there, and establish an appropriate policy that the City should not develop farmland when it doesn’t have to. This would be the most environmental scenario short of not developing Coyote, but was never analyzed.

Negative fiscal effects from “cannibalizing” retail sales away from San Jose were omitted. The figure of 1.6 million square feet of retail needs to be justified relative to 15.7 million feet for office space. A large figure for retail creates suspicions that the figure was used to improve the fiscal picture for Coyote. This creates two risks: first, that sales will not reach the assumed level, and second, that some of the sales will result from retail businesses relocating from San Jose to Coyote, or from customers who would have otherwise purchased retail products in San Jose. The 25% net benefit stated in the report (Draft at 35) needs to be justified in light of these issues.

Negative fiscal effects from cannibalizing office space were omitted. Over the last year, Committee for Green Foothills has pointed out the risk that the concurrency scenarios would subsidize businesses to locate or relocate away from San Jose and into Coyote. Enough businesses locating at Coyote will mean that high-profit housing can happen. A Coyote Valley developer that owns both residential and office zoned land (or two developers working together) has an incentive to significantly undercharge the costs of office space in Coyote so they can profit off the resulting housing market. The fiscal effects would be to reduce tax revenue from elsewhere in San Jose, as well as many other negative economic impacts to the rest of San Jose. These effects need analysis and are more likely unless concurrency is carefully managed, so that large job-creation triggers in place to deter this strategy. Scenarios 1 and 4 are particularly risky.

Assumptions about property tax revenue are unrealistic. The analysis relies heavily on steadily increasing property tax revenue to achieve an eventual surplus, and it has three flaws: first, the 20-year trend line used to justify a post-inflation real growth of 3% annually is skewed by the significant housing bubble over the last 5-10 years. If one made a similar analysis of 20-year trends for the NASDAQ market from 1980-2000, the result would have no resemblance to the current market. Incorporating a bubble into your fiscal analysis is a mistake.

Second, no comparison is made between the 3% growth figure and median household income increases in San Jose. The Draft should obtain the figure for household income in San Jose – it would be surprising if the post-inflation figure kept up with 3%. We suggest the City ask any economist whether the percentage increase in the cost of housing can substantially exceed the percentage increase in household income for 60 years.

Third, no market correction analysis was conducted, to consider realistic worst-case scenarios if the housing bubble bursts. A fiscal analysis should be done to determine the revenue scenarios assuming a substantial drop in housing prices, a period of stagnation, and then a return to a steady rise.

Present value of the $1.2 million annual costs for lake maintenance should be calculated. This is a lot of money that could be spent elsewhere, and the lake area could be used primarily for athletic fields and secondarily as flood storage, eliminating the stated need for playing fields north of Tulare Hill. City staff had previously told us that the commercial amenity value of the lake would exceed its cost; this statement needs justification.

Details on housing can better define the extent that Coyote Valley will worsen our housing crisis. While not a criticism of the Draft, we note that Table 5 (Draft p. 21) breaks out the numbers for each housing type and persons per household. Rather than use the County average of 1.7 employed persons per household, this breakdown could be used to figure out how many employed people will reside in Coyote, contrast that to how many people will be induced to work there, and then determine what is the net increase in housing demand. We additionally note that the figure of 52,000 jobs in Table 4 seems like a significant underestimate compared to past estimates of non-industry leading jobs that will be generated as a result of construction in Coyote Valley.

These are just initial comments; we have had little time to review the document. We hope to send additional comments later.

Please contact us if you have any questions.

Sincerely,

Brian A. Schmidt

Legislative Advocate, Santa Clara County