California Climate Solutions achieving environmental goals + creating business opportunities

Removing the Roadblocks

How to Make Sustainable Development Happen Now

Sustainable development is described by many different names such as “infill.” Its main features are compact, walkable developments that include housing located within walking or biking distance of services and jobs. The major benefit of this form of development is the ensuing reduction in vehicle miles travelled (VMT), which translates to reduced greenhouse gas emissions from the transportation sector. State and federal leaders must support local governments in their efforts to encourage infill development with financial assistance and regulatory reform.

Reducing greenhouse gas emissions from transportation and land use is essential to fighting climate change. In California, the transportation sector represents the single largest source of GHG emissions in the state at roughly 40 percent, compared to 33 percent nationwide.

Sustainable development will be necessary to reduce emissions from transportation.  Even with the state’s GHG regulations and improvement to the carbon content of fuel, projected VMT increases will outweigh the policies’ combined impact on GHG emissions.

Sustainable development patterns reduce VMT. Citizens who live in sustainable communities drive less and generate fewer GHG emissions on average. The average urban American resident in 2005 had a smaller carbon footprint than the average non-urban American.

Policy Needs

Policy Solutions

Building Necessary Infrastructure.

Re-Direct Infrastructure Funds to Sustainable Development.

Regional Entities

Distribute infrastructure funds and housing allocations to support sustainable development and not auto-oriented projects.

Under the state Regional Housing Needs Assessment and the Regional Transportation Plan process, regional entities can influence where local governments plan for transportation and housing.

State Government

Target infrastructure and facilities funds, through grants, contracts, and budgeting, to support sustainable development instead of low-density projects and require that relevant projects receiving state funds are built sustainably.

The governor could issue an executive order mandating that agencies consider sustainability as a requirement for awarding grants and contracts for real estate projects. By prioritizing infrastructure spending in areas that are ripe for sustainable development, state officials will enable transit-adjacent areas to support more sustainable projects and attract more residents to live in them.

Federal Government

Target infrastructure and facilities spending, through grants, contracts, and budgeting, to support sustainable development and require relevant nongovernmental projects receiving federal funds to be sustainable.

Funds for transportation, schools, federal buildings, and community infrastructure projects should be directed away from low-density, auto-oriented projects and toward supporting sustainable communities. The president should also issue an executive order requiring agencies to make sustainable development a requirement for real estate projects applying for government contracts or grant awards.

Industry Leaders

Lobby decision-makers to redirect education, transit and utility funds to neighborhoods that can support sustainable development.

The real estate development community will need to advocate for these political changes. Sustainable developers can take the lead by organizing politically. No such organization currently exists to speak for these sustainable developers. Advocacy groups like the Building Industry Association are dominated by mainstream developers whose interests sometimes diverge from the more specialized interests of sustainable developers.

Industry Leaders

Conduct a public education and outreach campaign to inform voters about the benefits to them of sustainable development and the need for infrastructure support like transit and utility upgrades.

Industry leaders can partner with nongovernmental organizations on this campaign.

Providing Certainty in the Regulatory Process.

Plan for Sustainable Communities in Advance.

Local Governments

Plan for, promote, and require sustainable development through the general plan process.


General plans allow local governments to: 1) consider the “big picture” of transportation and land use in their jurisdiction and to plan for walkable communities near transit nodes; 2) decide which suite of measures will most efficiently reduce GHG emissions, consistent with community needs and priorities; and 3) provide streamlined CEQA review for individual projects.

Local Governments

Support and promote local sustainable development projects to the community and educate the community about their substantial benefits.

Without this local leadership, sustainable projects are less likely to survive NIMBY complaints and receive approval from local governments. Local leaders must also work to educate citizens groups and neighbors about the benefits of sustainable development to their communities. These benefits often include increased housing options for seniors and young families in the community as well as improved property values for existing homes.

Regional Entities

Ensure that local governments honor their housing and transportation commitments to support sustainable development.

Oversight from Metropolitan Planning Organizations (MPO), through their control of transportation funds and housing allocations, may prevent local governments from opting out of their housing and transportation commitments.

Federal & State Government

Encourage a regional approach to transportation and land use planning.

Efforts like SB 375, which emphasizes regional planning and steers transportation funding to sustainable development, and recent proposals to allow regions to distribute sales tax revenue generated from local cities, represent steps in the right direction. The state and federal government should also offer financial support to Metropolitan Planning Organizations to assist them with the SB 375 planning process.

Industry Leaders

Mobilize to conduct a public education campaign about the benefits of sustainable development.

As sustainable developers organize politically, a major task for them will be to conduct robust campaigns to persuade neighborhood leaders, local environmental and other civic groups, and local, state and national leaders to eliminate barriers to sustainable development. In particular, outreach to communities in advance of the entitlement process may eliminate or minimize local opposition.

Reducing Economic Costs.

Shift Fees and Taxes Away from Sustainable Development.

State, Regional & Local Government Entities

Extend redevelopment powers to transit-adjacent areas to assist the purchase and financing of sustainable development projects without resorting to the use of eminent domain.

Expanding the use of redevelopment powers beyond areas of blight to include transit-oriented development zones would provide a critical mechanism for bringing sustainable development within walking distance of transit. Local governments could then use tax-increment financing (TIF), which taxes the increases in existing property values from redevelopment improvements, to fund the redevelopment of station areas.

State, Regional & Local Government Entities

Devise variable or differential impact fees that reduce or eliminate impact and other fees for sustainable projects and simultaneously raise them for sprawl developments.

Instead of forcing sustainable developers to cover infrastructure improvement costs, fees from sprawl projects should fund the necessary transportation/transit, processing costs, schools, parks, affordable housing, police and utilities. This rebalancing would force these projects to internalize the true costs of their projects to the region in the form of added greenhouse gas emissions and inefficient use of land and energy and water resources.

Local Governments & Regional Entities

Require appropriate mitigation under CEQA for the increased GHG emissions from permitted suburban or exurban developments.

Such mitigation should meet specific standards and be quantifiable, verifiable, additional and permanent. Requiring development that will generate higher VMT to pay more in mitigation fees will force these greenfield developments to internalize their costs, thereby making sustainable development more competitive in comparison.

Federal and State Governments

Create corporate and personal income tax incentives for sustainable development projects and their residents and tenants and increase taxes on developments that create sprawl.

Like higher impact fees, the tax increases provide a means of internalizing the present external costs of auto-oriented projects that the public absorbs through increased GHG emissions, traffic, loss of open space (including agricultural land), energy waste, inefficient use of land, and high VMT levels.

Federal Government

Eliminate the Federal National Mortgage Association (FNMA) requirement that a condominium project must have pre-sold 70 percent of its units in order for the developer to qualify for a federal loan guarantee.

As a result of this pre-sale requirement, many banks are unwilling to loan developers money to build these projects without a FNMA guarantee. The high pre-sale requirement hinders access to critical sources of capital for many sustainable projects and should be lowered or eliminated.

Industry Leaders

Invest in sustainable development and utilize the experience and expertise of sustainable developers.

As the market trends toward sustainable development, and as the oversupply of large-lot homes depresses prices, the current economic downturn and changes to land use planning may provide traditional developers with an opportunity to reinvent their approach to development.

Reforming Skewed Tax Incentives.

Restore Property Tax Incentives for Local Governments.

State Governments

Eliminate the sales and property tax incentives that lead to the “fiscalization of land use,” in which local governments look to land primarily as a vehicle for generating revenue.

The state could expand voluntary sharing of sales tax revenues across a region so that cities would not have to compete against each other to lure retailers, or the state could mandate regional sales tax sharing on a per capita basis. The state could also allocate 50 percent of state property tax revenue to municipal services.

Local Government and Regional Entities

Support efforts to reduce or eliminate the sales and property tax incentives that lead to the fiscalization of land use.

Local governments have historically opposed these efforts out of concern they would lose revenue or cede control to the state. To address this, they can look at sharing regional sales tax revenues among local governments.

Industry Leaders

Devise mixed-use projects that can bring revenue to local governments and are more likely to be economically sustainable in the long term as compared to large-scale retail.

Educate local officials about the long-term economic advantages of smaller scale, neighborhood serving retail.

"How do we realign incentives? Are we going to tell people, 'Don't build out past Manteca! Go to Berkeley and deal with the city council there and pay twenty percent more'? Infill is not for the faint of heart."

Jerry Brown, Former Attorney General