Plan Bay Area: Telling People What to Do

Plan Bay Area: Telling People What to Do
August 28, 2013

Wendell Cox

Wendell Cox is a senior fellow of The Heartland Institute; a consultant to public and private... (read full bio)

The San Francisco area’s recently adopted Plan Bay Area may  set a new standard for urban planning excess. Plan Bay Area, which covers  nearly all of the San Francisco, San Jose, Santa Rosa, Vallejo and Napa metropolitan  areas, was recently adopted by the Metropolitan Transportation Commission (MTC)  and the Association of Bay Area Governments (ABAG). This article summarizes the  difficulties with Plan Bay Area, which are described more fully in my policy  report prepared for the Pacific  Research Institute (Evaluation  of Plan Bay Area).

Plan Bay Area would produce only modest greenhouse gas  emissions reductions, while imposing substantial economic costs and intruding  in an unprecedented manner into the lives of residents. The Plan would require  more than three quarters of new residences and one third of net additional  employment to be located in confined "priority development areas." These  measures have been referred to as “pack  and stack” by critics. The net effect would be to virtually ban development  on the urban fringe, where the organic expansion of cities has occurred since  the beginning of time.

Irrational Planning

Violating perhaps the most fundamental requirement of a  rational plan, Plan Bay Area begins with a situation that no longer exists.  Further, it is based on exaggeration, systematic disregard of official federal  government projections and overly optimistic planning assumptions.

Exaggerated Population Projection: The Plan assumes that the  Bay Area will grow 55 percent more rapidly between 2010 and 2040 than official  California state Department of Finance population projections indicate. These state-produced  estimates have tended themselves to be on the high side (Figure 1). The  planners scurried about to resolve these differences, but there is no  indication that the state will be revising its projections. Plan Bay Area’s  population projection would require growth in the Bay Area to increase by more  than one-half from the 2000-2010 annual rate. The exaggeration of population  growth has its uses: it leads to a higher greenhouse gas emissions projection  for 2040, providing a rationale for stronger policy interventions.

Ignoring Current Greenhouse Gas Emissions Projections: The Plan  also ignores the new, more favorable DOE fuel economy projections (Figure 2).  These projections were issued in December, well before the publication of the  draft plan in April and the adoption of the final plan in July. Indeed, if the  new DOE projections had been published the day before, Plan Bay Area should  have been placed on hold and revised. In short, Plan Bay Area was out of date  when adopted.

Overly Optimistic Planning Assumptions: The Plan assumes that  travel by light vehicle (automobiles, sport utility vehicles and pickups) would  be reduced by substantial increases in transit ridership. Plan Bay Area  presumes that expanding transit service 27 percent over the next 30 years will  lead to a near doubling of transit ridership. This is stupefying, since over  the last 30 years, transit ridership remained virtually the same, while service  was expanded nearly   twice as much as would be planned from 2010 to 2040.

The plan also assumes that residents forced into the  priority development areas will use transit and walking much more, materially  reducing their use of light vehicles. This research behind this assumption is skewed  toward transit oriented developments located on rail lines with good access to  downtown. But nearly nine out of 10 employees in the Bay Area work outside the downtowns of San Francisco  and Oakland downtowns, and that number is increasing (according to Plan Bay  Area).

Given recent history, it seems wishful thinking to believe that  small transit service expansions and downtown oriented transit development can  do much to attract drivers from cars. The modest gains greenhouse gas emissions  reductions projected in Plan Bay Area are likely exaggerations.

Plan Bay Area’s “pack and stack” densification is likely to  produce even less than the modest substitution of transit and walking for  driving (see The  Transit-Density Disconnect). Traffic congestion, in this already highly  congested area, is likely to be worsened, which could nullify part or all of  the greenhouse gas emission reductions expected from reduced vehicle use.

Correcting Plan Bay  Area Forecasts

Plan Bay Area would only modestly reduce light vehicle  travel and greenhouse gas emissions. This is illustrated in Figure 3, which  shows that the “pack and stack” strategies that would force most new residents  and jobs into priority development areas, Plan Bay Area would reduce greenhouse  gas emissions by 2 percent (“Plan Bay Area” line compared to the “Trend” or  “doing nothing” line).

By contrast, correcting the Plan Bay Area 2040 population estimates  to reflect the state population projections would reduce greenhouse gas  emissions more than eight times as much (17 percent), without the “pack and stack” strategies. A further correction of  the Plan Bay Area 2040 estimates to reflect the latest DOE fuel economy  projections, would reduce greenhouse gas emissions 22 percent, 11 times as much  as the “pack and stack” strategies.

Heavy Costs for Households  and Businesses

The Plan’s “pack and stack” strategies seem likely to  exacerbate the Bay Area’s already high cost of living. Currently, the San  Francisco and San Jose metropolitan areas have the worst housing affordability  among the nation's 52 metropolitan areas with more than 1 million residents.  San Jose's median house price relative to its median household income was 7.9  last year, according to the Demographia International Housing  Affordability Survey. San Francisco’s median multiple was 7.8. This  severely unaffordable housing results from recent decades of urban containment  or smart growth policies, which have severely restricted the land on which  development can occur. This drives up prices (other things being equal), consistent with economic  principle. This has been made worse by house and apartment impact fees imposed  on developers that are far above the national average.

By comparison, in major metropolitan areas that have not  implemented strong urban containment policies, the median multiple has  typically been 3.0 or less since World War II, including the Bay Area before  its adoption (Figure 4). The “pack and stack” strategies would largely limit  new development to small parts of the Bay Area, an even more draconian  prohibition than the long standing restrictions on urban fringe development. This  further rationing of land could be expected to drive land prices even higher,  making it even more difficult for households and businesses to live within  their means.

The problem is already acute. The new US Census Bureau  housing cost adjusted data shows California to have the highest poverty rate  among the states and the District of Columbia (metropolitan area data is not  available). An early 2000s Public Policy  Institute of California report showed Bay Area poverty to be nearly double  the official rate, adjusted for the cost of living. Ultra pricey San Francisco  had among the ten highest poverty rates – over twenty percent – of any urban  county in the country.

Unaffordable housing has also fueled an exodus to the San  Joaquin Valley (Central Valley). Now more than 15 percent of the workers in the  Stockton metropolitan area commute to the Bay Area, which led the Federal Office  of Management and Budget adding Stockton to the San Jose-San Francisco  combined metropolitan area (combined statistical area). In addition, the  greater traffic congestion is likely to lengthen work trip travel times. This  is likely to further increase emission while also burdening job creation and economic  growth (see Traffic  Congestion, Time and Money).

Ignoring the Economy  and Poverty

Plan Bay Area effectively ignores these costs (despite  rhetoric to the contrary), by failing to subject its strategies to a cost per  ton metric. According to the United Nation’s Intergovernment Panel on Climate  Change (IPCC), sufficient greenhouse gas emissions reductions can be achieved at  a cost between a range of $20 to $50 per ton. The previous regional plan  (through 2035) included such estimates. Only highway strategies achieved the  IPCC range. Transit and land use strategies cost from four to more than 100  times the top of the IPCC range. Even those estimates did not include the prohibitively  higher housing costs that result from urban containment policies. The cost  metric is crucial, because spending more than necessary to reduce greenhouse  gas emissions limits job creation and economic growth, which leads to reduced  household affluence and greater poverty. This is the very opposite of the economic objectives of  public policy. Virtually all political jurisdictions around the world seek  greater prosperity for their residents and less poverty. A legitimate regional  plan requires subjecting its strategies to economic metrics.

Opposition

There is opposition to Plan Bay Area. A citizen movement  worked for rejection and has now filed  suit claiming that the Plan violates the California Environmental Quality  Act. The suit also alleges that MTC and ABAG used a questionable interpretation  of state law and regulation to justify the irrational Plan outcomes.

Recorded Votes

Opponents were also successful in obtaining a rare recorded  vote at ABAG. The governing board (General Assembly) is composed of selected elected officials from cities  and counties who are not elected to their ABAG positions. ABAG adopts virtually  all of its actions by consensus, rather by recorded votes, as occurs in many of  the nation’s regional planning boards.

Consensus decision making seem especially odd in California, where  inability to obtain sufficient votes in the legislature for the state budget  required a constitutional amendment. Neither do city councils and county  commissions operate on a consensus basis on controversial issues.

There is no shortage of controversial issues, at ABAG or  other regional planning agencies. A good first reform would be for recorded  votes to be the rule, rather than the exception. Consensus decision  making may be appropriate for clubs, but it is not for representative bodies in  a democracy (Note).

Impeding the Quality  of Life

Plan Bay Area was outdated when approved and reflects a world  that no longer exists. Drafters have insisted on extravagantly expensive and  intrusive policies that produce only minimal greenhouse gas reductions, and at  great cost, using, among other things, unreasonably bloated population forecasts  to bolster their approach. Unless changed, the Plan will likely be more  successful in driving up housing prices, limiting options for families, and  further congesting traffic than meeting its stated goal of reducing   greenhouse gas emissions.

Wendell Cox

Wendell Cox is a senior fellow of The Heartland Institute; a consultant to public and private... (read full bio)