|Ventura County Civic Alliance
Livable Communities Newsletter
|2015 4th Quarter, Number 36 |
Welcome to Our Fall 2015 Livable Communities Newsletter!
This edition completes our 9th year of quarterly publication, and the Ventura County Civic Alliance Livable Communities Committee is proud to continue bringing you discussion of important issues that impact the sustainability of Ventura County.
This quarter we have focused on discussions of SOAR initiated within the HOME 14th Annual Ventura Housing Conference. One key theme was the need for higher density if we are to absorb natural growth without going beyond the SOAR boundaries. Dao Doan and Sandy Smith report on conference conversations that dealt with the real issues being faced by attempts to develop within the SOAR boundaries. With discussions about the "haves and the have-nots" and NIMBYism that can turn Ventura County into the next Santa Barbara, there is much that needs to be done within the SOAR boundaries if we are to keep land outside of the boundary undeveloped.
The concept of no development outside of the SOAR boundary was also heavily debated during the conference. The issues range from what has been described as "an absurdly long horizon for any kind of land-use planning" by John Krist, CEO of the Farm Bureau of Ventura County, to the what Key Note Speaker Professor Gabriel described as the real benefit of SOAR: the delivery of quality of life benefits to those urban land owners within the boundaries at the expense of land owners outside of the boundaries. These points have compelled us to bring back an article by Edgar Terry written in August of 2014 that clearly articulates this part of the conference discussion. Our last article is a Bruce Stenslie EDC-VC blog posting that offers hope for future support to expand the agricultural base to keep farming viable.
As always, we ask for your feedback on what we are presenting. We would like to incorporate this feedback into further coverage of these topics.
14th ANNUAL HOUSING CONFERENCE REPORT
By Dao Doan
In recent months, the tragic predicament of refugees from Middle Eastern countries flooding across borders into European safe heavens dominated the international news media. Among the urgent needs to address their accommodation, authorities worry about where and how to shelter them, as hundreds of thousands still linger in tented camps for months, many going on into years.
On our continent, without the tragedy attached but still with a pressing concern, a couple of hundred people got together in Ventura County on October 7 for the 14th Housing Conference in Camarillo to discuss this very same topic. Housing needs in the County are definitely under strain, as the shortage grows cumulatively with every year we keep talking about it yet fail to fully address it.
One issue, two places a world apart. Indeed, housing needs seem to be a universal theme spanning the societies and cultures. It is a core necessity for people, next to food and water. It is truly a measure of modern society's health.
To view the topic in a broader global context and understand its economic impact on local housing issues, the conference attendees came together to hear Dr. Stuart A. Gabriel, the keynote speaker, share findings of his research. Dr. Gabriel is Director of the Ziman Center for Real Estate at UCLA and is Arden Realty Chair and Professor of Finance at UCLA Anderson School of Management. His research focuses on topics of real estate finance and economics, housing and mortgage markets, urban and regional economics, and macroeconomics.
From the information he presented, some sobering data:
- China, now the 2nd largest economy, is in a recession. Many speculate a potential bubble burst coming soon. The recent stock market crash took investors by surprise, although they should have been warned by some obvious symptoms. Indeed the overzealous push for massive developments in many regions has left entire ghost communities with not a living soul there. In the drive to show strong GDP growth to the central government, regional political leaders have promoted gigantic development projects faster than buyers can show up to absorb the products. The only benefit is that the local leaders can claim (false) GDP on the basis of the "ghost" value added to their bottom line. Nobody knows whether the likely downturn will be a soft or hard landing, government prop-ups notwithstanding. As a major trading partner with the U.S., a China hiccup can have deep reverberations here.
- Japan is in its second decade of slow growth. Its economic culture, where workers are traditionally guaranteed jobs for life, has been partially culpable. A low birth rate, late marriage, and an increased aging population exacerbate the problem. Japan is actually experiencing a deflation, where the cost of goods and services decreases, bringing down revenues with it. In fact its Debt/GDP ratio is higher than in Greece. However, the reason the country has been able to sustain that debt is because it is owed mostly internally (as compared to the US, whose debts may be owned by China for instance). It is still an economic super power, but there are significant internal dysfunctions it has not been able to fully address.
- It is now common knowledge that Europe is in trouble, with Greece teetering on bankruptcy; Italy struggling along very slow growth with demographic problem not unlike Japan; and Spain just a few steps behind Greece on the precipice. Germany is alone with any steam to pull these sinking economies, but Germans are less and less willing to put up their hard earned tax money to feed the engine.
Amid those bleak surroundings, the U.S. may appear like a beacon of economic dynamism to some, the only engine of global growth. However the question remains whether the other economies will bring us down, or we are going to bring them up? For comparison purposes, a ten-year US treasury yields 3% vs 0% in Japan. Capital has returned to the US again as investors bet on bonds and the real estate market. The recession has faded and unemployment significantly reduced (last week it was the lowest since almost 8 years ago, at around 5%, which is normally considered full employment by economists), although their shadows still hover over our heads.
With the market recovering, Federal Reserve Chair Janet Yellen considered raising the Fed fund rate above the current near-zero level. In the end she decided against it to avoid the market going into a double dip and allow the economy more time to recover. Inflation is still negligible, but normally such low level does not allow the Fed the ability to respond effectively to the market as it cannot go any lower. The Fed Fund Futures Market anticipates a 5% probability that the Fed will tighten its rate.
Compared to the rest of the country, all signs are California will grow in excess of the US, over 3% vs. about 2%. The state has shown good employment gains although its downturn was deeper. This is most visible in a rebounded housing market, where Coastal California remains the most unaffordable area in which to live. The downside is many commute from the interior where housing is more affordable to the coast for work and leisure, rendering an already bad-traffic region worse.
The housing profile also went through changes. With the senior population growing and more millennials coming of age, more than 50% of US households rent. Additionally, in LA County alone there is a shortage of about 500,000 units. Adding fuel to the fire, the homeless crisis creates a burden on society nobody knows how to best resolve.
In the face of more housing development pressure, and with SOAR coming up for a re-vote, what does this mean for SOAR and the rest of the community in terms of meeting its housing needs? Dr. Gabriel acknowledged that we all want to promote quality of life. The challenging question is how to best do it. Some believe it is by establishing urban growth boundaries like SOAR. However, boundaries benefit properties within (property value increases), but are detrimental to those outside (property value decreases).
Dr. Gabriel suggested that with SOAR looming, density may be a solution to balance the desire to preserve open space around an urban boundary with the need to meet demand for more housing. Some recent signs support that view. Millennials tend to gravitate to dense developments where services are more conveniently available. These dense development areas are "walking and bicycle friendly." They are more efficient yielding goods and services per unit of land. Yet in Ventura County popular belief tends to be against density.
That creates an awkward conundrum. Communities that choose to maintain their status quo have ended up creating an outwardly attractive shell to a rather dysfunctional internal structure. Such is the example of Santa Barbara, which has policies that indirectly limit growth to the degree it has become an exceptionally unaffordable place in which to live. A highly popular tourist destination, it is simply a coastal enclave of the "haves" while the "have-nots" from the outside commute in to provide services. The comparison is inevitable: Is Ventura going to be stagnant like Santa Barbara? That would seem to be a selfish conceptualization of quality of life where, for instance, the farm workers and the poor are not invited to share at the table of plenty.
Dr. Gabriel concluded that essentially sprawl as we know it is dead -- the lack of water and the State water and other infrastructure simply can't support it. Going forward, he said, it is not wise to plan single family development.
The density topic was discussed again at one of the panels, where Roy Prince raised the issue about why Oxnard does not allow higher density along the Boulevard. He promotes 4-5 stories there to create sufficient critical mass to generate more retail activity. However, many policies still in place, such as minimum parking requirements, height restriction, etc., essentially make it very hard to have such building scale.
The issue clearly will not be resolved in one conference. Many more years may pass before Ventura County sees a surge in density development. Meanwhile people will continue to wait for more housing to be affordable.
HOUSING IN MY BACKYARD
By Sandy Smith
This year I had the opportunity to serve as a moderator for one of three break-out sessions at the Annual Housing Opportunities Made Easier (HOME) housing conference. The title of this year's conference was "The Price of Paradise: Unintended Consequences," and true to its yearly mission, the conference focused on issues surrounding our County's ability to provide affordable housing to our workforce and residents. The closing panel concentrated their discussion on SOAR (Save Open-space and Agricultural Resources), and whether the adoption of the SOAR ordinances has had an impact on our ability to permit and approve housing, and/or has it served to fuel the high cost of housing in our region.
For those new to SOAR, the SOAR ordinances prevent changes in three land use categories unless approved by a majority of voters: open space, agriculture, and rural land. With the exception of the City of Ventura where all land and properties zoned agriculture are reserved for farm production and require a vote of the residents to alter that use, the other seven cities with SOAR ordinances have adopted an "urban curb." The curb restricts development to areas within an adopted border around the City, and development outside that curb requires a public vote.
So why does housing cost so much in Ventura County? The reasons are well documented: the price of land, a lack of supply due to the recent recession, and the time it takes to permit and entitle housing projects, just to name a few. Because of SOAR, we also require the location of new housing projects within existing urban boundaries.
Unfortunately this in-fill strategy for development faces two additional challenges. First, we have an aging infrastructure that requires projects to absorb some of the upgrade/replacement costs, and secondly, any project proposed within an existing urban setting means that the proposed location is near somebody else. In short, any proposed project must overcome public and political barriers as part of the entitlement process.
Citizens have long sought to engage in decisions affecting their way of life. The "Not in My Backyard" (NIMBY) phenomenon may not be new, but its more recent expression has become a special challenge in the development process. When change is proposed in a neighborhood, existing residents may take a skeptical or even hostile approach to new developments. Developers, planners and municipal officials often find themselves in a defensive position, having to prove the benefits of a proposed new apartment, townhouse or supportive housing development.
What are the issues that NIMBY's usually assert when speaking out against projects in their neighborhoods?
- Increasing density in their neighborhood will cause too much traffic;
- Increasing density in their neighborhood will strain public services and infrastructure;
- Affordable housing and/or higher density housing spoils the character of the neighborhood; and,
- Affordable or high-density housing in the neighborhood will mean more crime.
While data proves that the typical concerns raised by residents about infill projects for their neighborhoods are unfounded, NIMBYism is alive and flourishing in Ventura County. How do we overcome our resistance to in-fill and more dense urban development given the realities of our existing land use policies, and how can we move from not in my backyard to yes in my backyard? How do our elected officials acquire the political will to make land use decisions that are in the best long term interests of their communities, given the public outcry against policies of increased density and infill?
My breakout panel discussed the issues of building housing within existing parameters, the "price we pay for paradise," and possible responses to NIMBYism. What can we do? First, communities can help build support for infill and redevelopment projects by making their objectives clear through various plans and policies as previously discussed; however, without continuing education and an open feedback loop, those policies can fall to the wayside with the next conflict. Local governments can encourage a positive dialogue with community groups by gathering influential members at key junctures throughout planning processes and development applications. It is important for local government outreach to address concerns related to infill and redevelopment while promoting the benefits to the neighborhood and the community as a whole.
The Ventura County Civic Alliance holds a set of core beliefs that guide its mission: regional stewardship, open dialogue, collaboration, evenhandedness, and community building and decision making by consensus. We have a history of bringing together residents and civic organizations to cooperatively explore options and find integrated solutions to complex economic, environmental, and social challenges of our region.
It is the one organization dedicated to insuring that the public voice is an integral component of any political discourse that concerns our future and the maintenance of our quality of life.
As such, the Alliance is in a unique position to play a central role in first exploring the issue of public resistance to infill and density, and later to consider and recommend potential regional methodologies and action items in response to that resistance. The Center for Public Dialogue, a working group within the Alliance, has initiated an internal discussion on how best to begin this process. If you are interested in participating, please contact the Alliance at civicalliance.org
A Farmer's Perspective
By Edgar Terry
"A well-understood concept in economics (envelope theorem) states that an outcome cannot be made better by the addition of constraints. Reducing their options does not help the owners of the land."
The above quote is from a study entitled Ventura County's Agricultural Future: Challenges and Opportunities, written by Bill Watkins, Chuck Maxey et.al. for the Hansen Trust in 2008. I think that it encapsulates in a single sentence why the Save Open-Space and Agricultural Resources (SOAR) initiative is not a benefit to agricultural landowners and growers.
In the mid to late 1990's when the SOAR Initiatives were being voted on throughout Ventura County, it was said that these initiatives would help growers have a more stable farming future in the county due to the fact that development would be constrained and, therefore, land values and rents would be more reflective of the underlying value of the crops being grown. Put simply, Speculative Value would be removed. On the surface this made sense to a majority of the voters in the county, that it would be a win-win for everyone. Growers would have land to farm and residents of the county would not see the urban sprawl that took over Los Angeles and Orange Counties.
The theory of restricting the development of land in favor of farming over a 15 to 20 year horizon, possibly longer, assumes the fact that the advocates in favor of those restrictions know with all certainty that agricultural practices, market participants, crops, regulatory bodies, taxing authorities, city and county planners and other interest groups are going to have the exact same vision(s) of local agriculture as those who promoted the initiatives in the first place. Agriculture, like any other industry, responds to the demands of the marketplace. Those demands mean that growers must always be looking for a strategic advantage in order to sell to a consolidating set of retailers who in turn sell to consumers who are price sensitive when it comes their food dollar.
When ordinances are passed to keep farmland in farming it does not necessarily mean that farmland will actually be farmed. For example, the current drought is a case in point. Emergency Ordinance E was recently passed by the Fox Canyon Groundwater Management Agency. The purpose of the ordinance is to reduce the over-drafting of certain aquifers by agricultural, municipal and industrial users. At a recent Association of Water Agencies Symposium I made the statement that this is really treading on the farmers' property rights. In certain aquifer locations, along with SOAR, the interplay between the overlying rights of the agricultural land owner and the appropriative rights of the M&I user represent a dual challenge for farmers. The SOAR initiative reduces the agricultural landowners' options because it compels them to have their land remain in agriculture while the emergency ordinance challenges the same landowners' overlying right to the water. In other words, on one hand you are prohibiting agricultural landowners from selling the land for most any other use without a vote of the people, and on the other hand you are telling them that there is not enough water to fully farm the land. So, what choices are there to mitigate risk if there is not enough water to farm and there is also no option value to the land? Then what is the value of the farmland with a constrained set of options and how will that impact the access to capital to continue farming? What if the regulatory entities have a different, long-term vision of water conservation and that vision is not aligned with the community desire to keep land in agriculture? For the agricultural landowner these questions lead to an "endless loop" scenario: you must farm, but you can't farm.
You Have Only A Little Over A Page To Go To Finish...You Won't Be Sorry!! - Click Here.
COULD VENTURA COUNTY AG BENEFIT FROM FOOD PROCESSING?
EDC-VC blog: Posted on: August 7, 2015 by Bruce Stenslie
Ventura County is a national leader in food production. However, economic data generated through EDC-VC's recently completed Comprehensive Economic Development Strategy shows that the county's agriculture sector under-performs in such value-added components as food processing and distribution.
To explore whether the region could benefit from a more diversified food systems strategy, EDC-VC contracted with Applied Development Economics and the Hatamiya Group to study how such a strategy might help sustain the county's high-value agriculture sector.
The analysis will evaluate the feasibility and constraints of adding food hubs and more processing and distribution infrastructure, given the types and volumes of crops produced in the county.
One aspect of contemporary food systems that fuels EDC-VC's enthusiasm is the "farm to fork" movement. Consumers are increasingly interested in knowing where their food comes from.
With that in mind, EDC-VC is particularly eager to determine whether aggregating crop outputs from small growers might result in new market opportunities-locally and throughout the larger Los Angeles region.
Using a reasonable scenario for processing expansion, the analysis will calculate the potential for increased industry output, jobs and wages and long-term sustainability through a more diversified base.
The study is expected to be completed by November 2015. It is made possible through funding from the Morgan Family Foundation.
President/CEO of EDC-VC
Thanks to the Following Supporters of the 2015 Ventura County Civic Alliance State of the Region Report
Ventura County Community Foundation (VCCF) Fairburn Fund
Ventura County Community College District
Workforce Investment Board of Ventura County
California Lutheran University
California State University Channel Islands
County Commerce Bank
County of Ventura
Gene Haas Foundation
Procter & Gamble
Ventura County Deputy Sheriffs Association (VCDSA)
The Port of Hueneme
Ventura County Coastal Association of Realtors
Friends of the Santa Clara River
Kay Faulconer-Boger, Ed.D.
Maron Computer Services
Montecito Bank & Trust
United Staffing Associates
United Way of Ventura County
Brokaw Ranch Company
Cabrillo Economic Development Corp
Dyer Sheehan Group, Inc.
E.J. Harrison & Sons
Sherie & Joe Gibson
Ventura College Foundation
Ventura County Office of Education
Ventura County Transportation Commission
Special thanks go to Kerry Roscoe for detailed editing, photo, and format work required to bring these articles to you in the form that you see them!