Mary Owens: The way forward for Nevada County
September 10, 2017
Nevada County Economic Resource Council hosted a housing meeting the last Friday in August in order to explore ideas and options for solving the moderate housing and affordable housing problem in our county.
It was encouraging to see how many people took time out of their day to attend and give support to the process. The testimonies gave clarity to the already known problems and, more importantly, the less understood issues that are equally adding to the lack of housing starts.
Most folks are mildly aware of the long process of applications to build a new subdivision of homes. Start to finish it is common to take five to ten years or more to wind through all the applications, public hearings and financing before constructions begins.
In Nevada County many projects approved well over seven years ago are still not built, nor are any closer now than the day they were finally approved by the county or city.
So the big question is why?
With such a shortage, why are these homes not being constructed?
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Stories were relayed about the challenging environment for banks to lend, the lack of flat affordable land, and available amenities like sewer and water.
As challenging as they are, these challenges are more fixable at the local level than other issues that are looming loud and large at the state level. Developers and local officials presented examples of projects that had successfully passed all the aforementioned hurdles and still decided not to build.
The reasons were frustrating and not caused by local issues but instead by our state government. Our communities want to work together for a solution, but it is clear, the state has got to pass sane legislation to assist our local communities.
California passed legislation called the "California Environmental Quality Act" known as CEQA in 1970.
The design of the legislation was to create statewide policies of environmental protection. Its purpose was not to regulate land use, but to require state and local agencies to follow a set of rules regarding the analysis process and public disclosure of environmental impacts of proposed projects.
The bill also requires the oversite of the local government to require reasonable mitigations for the disclosed environmental issues caused by the project. CEQA made environmental protection the mandatory responsibility of all state and local public agencies.
I will not go into the details of what the environmental compliance developers have to deal with in order to get their projects approved.
Most have read about them in the press many times. They are difficult and comprehensive. What most do not realize is that CEQA laws are being abused in ways never intended.
Those who oppose a specific project (or sometimes all building) submit mountains of documents that may or may not be relevant, or organized, and demand the government and the developer to piece through thousands of pages just for the purpose of causing delay and costs.
The purpose is clear: do what they can to stop a project even if the environmental issues are addressed adequately.
The opposition uses the CEQA administrative process in a manner that was never intended: delay and destroy by administrative costs. Create confusion in the presentation so it can be challenged later in a lawsuit.
The current law allows the developer and the related governmental approving agency to be sued in court for a wide variety of reasons. This is only after the project has been approved and gone through a successful CEQA vetting with mitigations.
Our state allows someone to sue for both rational and non-rational reasons.
When the lawsuit's purpose is not to fairly apply the laws of CEQA, but solely to shut down a project, the local community loses in so many ways: loss of jobs and economic development, loss of reasonably priced housing, loss of students in local schools, loss of critically needed infrastructure, loss of local tax revenue and more.
The list goes on and on. Nevada County has clearly been impacted by lawsuits filed (or threatened to be filed) not for the purpose of demanding appropriate environmental mitigation, but instead solely with the intent of preventing building all together.
One clear example of the impacts of this misuse of CEQA directly impacted the availability of multiple units of affordable housing in Nevada County.
A developer was approved to build approximately 50 units of affordable housing. After the threats of lawsuits and years of negotiation, the project was scrapped and changed.
Instead, high-end housing was the replacement. The NIMBY (not in my back yard) won via a process never intended to stall or prevent the construction of affordable housing.
Our young people lost. Our schools lost. The local community lost.
Lawsuits can take years and years to settle. Even the threat of one is damaging. Ask a bank to lend you funds on a project that has a threat of being shut down because of a lawsuit. Ask a buyer to buy a home or build one in a project that is subject to a lawsuit.
The answer is "No."
These lawsuits have frequently been funded by people not living close to the project or even living in the community. CEQA is now being used by special interest groups to overwhelm and defeat the local desires of the community.
Last February, State Assembly Member Fong introduced Assembly Bill 1117.
His proposed legislation is an attempt to stop the misuse of CEQA and to give developers and the related local agencies a fair shake in the very political process of building.
He was spurred to write the bill because California needs a stunning number of new homes statewide to address its growing younger generation housing needs.
According to McKinsey Global Institute, the state needs to build 3.5 million homes by 2025 in order to have equivalent housing units per capital as compared to other states.
Just to keep pace with the current levels of housing shortages, the state needs to build 1,800,000 houses by 2025.
Developers are building an average of 80,000 new California homes a year. Nevada County is not alone. The entire state is suffering.
The state's current population is about 39 million living in approximately 13 million housing units. By 2050, the state is expecting to swell to 50 million people.
Assemblyman Fong's bill is one of hundreds that are currently being debated and scrutinized by the state's House and Senate. Assembly Bill 1117 seems to have the most favor so far, but is not expected to pass without further amendments.
To see the details of the bill go to: http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201720180AB1117.
The critical need is clear. Our state elected officials need to fix the problems caused by CEQA and other excessive regulations.
Please petition your elected official to get these problems solved now.
Mary Owens, CPA, MS, Principal, President of Investments, Branch Manager RJFS with Owens Estate and Wealth Strategies Group, located at 426 Sutton Way Suite 110 Grass Valley, CA 95945 | (530) 272-7500. Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Raymond James Financial Services Advisors, Inc. Owens Estate and Wealth Strategies Group is not a registered broker/dealer and is independent of Raymond James Financial Services. The information provided does not purport to be a complete description of the developments referred to in this material, it has been obtained from sources considered to be reliable but we do not guarantee that it is accurate or complete. Any opinions are those of Mary Owens and are not necessarily those of Raymond James.
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