Many California urban centers have vacant and underutilized land surrounded by sprawling suburbs. Sprawl is costly in terms of infrastructure and public service costs, congestion and loss of open space. Attempts to encourage revitalization of older, developed urban areas as an alternative to sprawl are thwarted in part by the state's environmental review process. The environmental review process should be streamlined to encourage new development on vacant, underused land in developed urban areas.

Infill development is the strategy that is employed in older, developed urban areas that have pockets of vacant or underused land. An infill area is an urbanized area within a city boundary or within a designated unincorporated area that is substantially surrounded by existing urban uses. [1] Mixed-use development incorporates several different land uses, such as residential, retail, employment and entertainment, within a reasonable walking distance of each other. [2] Infill and mixed-use development encourages more compact development and greater efficiency in use of land, public services and infrastructure. [3] Infill and mixed-use development offers many benefits: it can reduce sprawl, revitalize downtowns and older neighborhoods, make it easier to walk or take transit to get around, improve the jobs-housing balance and provide residents with a greater variety of housing options.

Despite strong residential and office markets in many U.S. cities in recent years, relatively little infill development has taken place nationwide. [4] Although Section 21159.24 of the California Public Resources Code allows an exemption from the environmental review process for certain infill housing projects, it is too restrictive to encourage reuse of vacant and underused land in older, developed urban areas. It is not adequate because infill development often includes mixed-use and commercial components that are not allowed under the existing exemption. [5]

The California Environmental Quality Act (CEQA) sets forth the statutory requirements for the state's environmental review process. CEQA requires all public agencies to inform decisionmakers and the public of potential significant environmental impacts of proposed projects. [6] CEQA also applies to any private development that requires governmental approvals. The requirement applies to most infill housing and mixed-use development projects. [7]

According to John Landis, Chair of the Department of City and Regional Planning at the University of California at Berkeley, developers view CEQA as a barrier that adds time, cost and uncertainty to infill and mixed-use development projects. [8] This is because a developer must prepare a separate environmental review on each proposed infill and mixed use development project. The project-by-project environmental review creates uncertainties because there are too many opportunities for blocking projects for non-environmental considerations. The environmental review process opens projects to legal challenge. Not all of these challenges are related to environmental protection. CEQA is often used by neighborhood opposition groups (known in California as "Not in My Back Yard" or NIMBY protests) to block multi-family infill housing projects.

Mahal Plaza in Yuba City, California, for example, was built in 1990 to provide multi-family housing for farmworker families. This infill housing development was built on underused land with many attractive features, including proximity to agricultural jobs, shopping, schools and transit. This project was delayed for five years due to the environmental review process used by community residents who opposed the project. The project's non-profit developers worked to counter claims that the project would overcrowd schools, decrease property values, increase crime, increase traffic and overburden public services. The project did not cause any of these impacts and in fact, a market rate housing development has been constructed next to it. [9]

The basic planning tool for communities in California is the general plan. California's general plan law requires local governments, counties and cities, to adopt long-range plans, goals, objectives and policies that address development, conservation, housing and circulation. The general plan sets policy on how a community will grow, including where development will occur and what type of development will be encouraged. [10]

CEQA requires that an environmental impact report be prepared on the general plan. Despite the environmental studies done on the general plan, developers of subsequent projects must do further environmental studies to obtain approval for their projects. This is perceived by many in the development community to be redundant in older, developed urban areas where open space and habitat are already minimal. It also creates the uncertainty that discourages infill development.

An alternative approach proposed by proponents of infill and mixed use development is to use a comprehensive version of the environmental impact report called a Master Environmental Impact Report (commonly known as Master EIR, referred herein as "Master Report"). [11] The Master Report for the general plan can be written along with the general plan to encourage infill and mixed use development as an environmentally superior alternative to sprawl. [12]

To encourage infill and mixed use development proposals, CEQA can be amended to give better incentives for using the Master Report approach to the general plan environmental studies. CEQA can be amended to replace the current exemption for infill housing with a broad statutory exemption for infill and mixed use development. A statutory exemption for infill and mixed-use development would allow developers to propose projects in urbanized areas that are already covered under a Master Report for the general or specific area plan. As long as the proposed project is consistent with the general plan policies and the Master Report, the proposed project would be able to move forward without further environmental studies. This statutory exemption can provide a powerful incentive to developers if it is coordinated with streamlined permitting processes and expedited approval for subsequent projects that are consistent with the general plan or specific area plan.

According to the National Association of Realtors, one of the most significant barriers to infill development is the lengthy environmental and permit reviews by multiple decisionmakers and staff reviewers. It adds uncertainty in the outcomes of the complex review and approval processes. This adds to the risk of a project, which may already be perceived as high risk when proposed for a location without a demonstrated market for infill development. The realtors suggest allowing minimal review for compliance with the general plan and Master Report. [13] This would increase incentives for private development on vacant, underused land, which would give California's communities better tools to direct growth. [14]

California is one of fifteen states that have an environmental impact assessment law modeled after the National Environmental Policy Act; however, no state has as rigorous an environmental review process as California's. [15] Three states, Maryland, New Jersey and Washington, have taken an alternative approach and have passed state laws that integrate environmental protection and general plan law. These states' laws guide comprehensive planning at the state and community level, emphasizing compact growth and infill development. Local land use plans must conform to the states' guidance that incorporates requirements for infill development at the local level. Maryland has a twenty-year history of state law, funding, incentives and guidance for infill development at the local level. Maryland enacted legislation in 1997 that sets forth the state's growth management vision and requires local comprehensive planning that supports infill development. Subsequent laws have been passed to provide funding and other incentives to support infill development. [16] In New Jersey, the state's smart growth program provides funding for communities to focus general plans on mixed use "centers [17]". Washington addresses infill development through a state growth management act. The city of Seattle has based its general plan on the state law and has set policy to favor infill development through its urban village strategy. [18]

Several communities in California have updated their general plans and Master Reports to promote infill and mixed use development. They have moved to a type of land use planning called "form-based codes". In contrast to traditional planning practice that separates land use types, the form-based codes designate neighborhoods, districts and corridors where a mixture of land uses and housing types are preferred and sets aside land for open space and public services. The form-based code general plans also consider how the specific areas in the community will be tied together by circulation patterns that allow for walking, driving and transit. [19] The form-based general plans and Master Reports provide direction to developers on what types of development will be approved without further environmental study or minimal further study and will receive expedited permitting processes. Some communities that are trying variations of the new comprehensive form-based general plan and Master Report process include Azusa, Petaluma, Sonoma, Cotati, Hercules, Nevada City, Salinas and King City. [20]

Recommendations
The Governor should work with the Legislature to introduce and amend the Public Resources Code to exempt from further environmental review, infill and mixed-use development projects that are consistent with local government General Plans and accompanying Master Report for older developed urban areas.

Further, Section 21159.24 of the Public Resources Code, which allows a narrow exemption for infill housing, should be repealed in favor of the new section.

The Governor should direct the appropriate state agencies to support local infill development through state policies, plans and investments.

State agencies should support the use of the Master Report and General Plan by local governments to streamline the environmental review process and approvals of infill and mixed use development projects.

The proposed exemption should lead to more infill and mixed-use development projects. Private developers in California will have more incentive to develop on vacant, underused land in existing urban areas because they will not face the uncertainty and costs of additional environmental review beyond the general plan Master Report. Property and sales tax revenues are estimated to increase with increased use of vacant land; however, this would be offset to some degree by the cost of infrastructure and public services to support the infill and mixed use development. The type of housing and mix of retail and commercial units will dictate the level of services the local government would need to provide. It can be projected that more compact development and reuse of vacant and underused land in California will balance growth patterns between older urban and new suburban areas, provide more housing choices and the possibility of living near jobs, and lessen strain on California's transit system.

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