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San Francisco Business Times

Plan Bay Area could spark housing development boom. Or not

mast_sfbiztimesBy Bianca Torres

With much-debated, frequently derided Plan Bay Area now approved, our region is officially on notice that it needs close to 200,000 new housing units over the next few decades. Next question: Who’s going to build it all?

Planning for new housing is great and all, but only time will tell if developers bite and actually build the housing the way the plan advises — high-density and near transit.

Plan Bay Area sets out growth and development guidelines to accommodate a 30 percent population increase, 2.1 million new residents, and 33 percent more or 1.1 million job increase in the Bay Area through 2040. The plan’s goals involve steering away from sprawl, building housing for all income levels and reducing greenhouse gas emissions.

“Theoretically, (Plan Bay Area) is a good idea,” said Paul Menzies, founder of Laconia Development, a multi-family developer. “The issue with the plan is that bureaucrats are imposing rules on the rest of us who are trying to be creative and trying to make money.”

Development is a business, he said, but one that involves input from the developer, the community and city officials, so the better the cooperation, the better the project and the better cities and regions become.

Plan Bay Area could be a boon for development, Menzies said, if the policies make it easier and less expensive to develop projects either by streamlining the entitlement process or providing some financing tools.

The plan’s main backers, the Metropolitan Transportation Commission and Association of Bay Area Governments, along with congestion management agencies have about $28 million to fund local planning efforts such as creating specific plans that guide development for a neighborhood or environmental impact reports. In some cases, cities establish plans and zoning to comply up front with California Environmental Quality Act regulations.

Many cities already have what are called Priority Development Areas, which are designated zones where local officials want to encourage development such as a transit village near a BART station.

Plan Bay Area also comes with $320 million worth of One Bay Area grants set aside to pay for infrastructure such as roads, street improvements and transit connections.

“It is a long term plan, so it’s not expected that the day after the plan passes, the change is going to happen,” said Ezra Rapport, executive director of ABAG. “No. 1, the goal is to establish that there’s political will to build housing within in those areas. No. 2, the idea that we can focus some resources to make it a lot easier to get a permit in those areas if we spend the extra effort in planning for CEQA.”

Beyond that, regional officials are looking at other ways to facilitate development, said Ken Kirkey, planning director for MTC. Methods include expanding the Bay Area Transit Oriented Affordable Fund, a $50 million loan program for new affordable projects, and down the road creating a mechanism for tax-increment financing such as borrowing against the future tax increases after a property is developed.

The plan has drawn much criticism from residents who fear that cities are being forced to allow for housing and population growth they don’t want or can’t accommodate and that regional authorities shouldn’t be able to mandate development at the local level.

The general comeback to that argument is that population growth is coming whether we like it or not, so it’s best to plan for that growth in a way that is fair, sustainable and efficient across the entire region.

Ultimately, the development community will play a huge role in meeting the swelling demand from population growth.

“There’s no question that Plan Bay Area will definitely provide new development opportunities within our existing cities and towns to create vibrant, walkable communities,” said Stephanie Reyes, senior program director for the Greenbelt Alliance, an advocacy group.

This article appeared in the San Francisco Business Times.

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