Executive Director's Column:
Some friendly advice for your planning portfolio

As a free service to you (please consider that you usually get what you pay for), the following 10 planning issues/options have been analyzed regarding their future viability and success. Recommendations on whether you, as an investor in California’s planning future, should “buy” or “sell” these issues/options are also provided, recognizing that you do so at your own risk. Large (e.g. global warming) and smaller options (e.g. cul-de-sacs) are explored for those with different investment abilities and interests.

1. Issue:  Going green

BUY as much as you can find.  While some might dismiss the green movement as trendy, don’t lose sight of the fact that California and the federal government have identified carbon dioxide as a major issue to be addressed.  Ensuing governmental rules and regulations aimed at curbing climate change will present numerous opportunities for private sector creativity and investment, which will spur the economy.  Corporate America has embraced the green movement, too.  There is plenty of green to be made in being green.

2. Issue:  SB 375 and the Sustainable Communities Strategy

The recommendation here is to BUY.  OK…so the State’s first attempt to legislatively link land use and transportation decisions is a bit confusing.  The idea is sound.  With limited transportation funding on the horizon for widening freeways and roads, planners need to take seriously the notion that accommodating the next 6 million people in Southern California should not be premised on what we did with the first 16 million.  Perhaps SB 375’s biggest accomplishment so far has been to increase regional dialogue regarding the future of Southern California.  Look for SB 375 to evolve into a more descriptive and understandable law, and look for jurisdictions to embrace its concepts. 

3. Issue: State water supply and water conveyance solutions

SELL.  Those of you who have held this stock since June, 1982 (when the Peripheral Canal vote was defeated by California voters) have since seen its value erode faster than the Sacramento and San Joaquin delta levees, and there isn’t much hope for short-term stabilization or improvement. On the positive side, Californians have done a laudable job to conserve, and California water agencies are leaders in water use efficiency. Over the past decade, local agencies statewide have invested roughly $400 million in programs to reduce water use. As a result of these efforts, California is saving more than 700,000 acre-feet of water per year, enough to meet the household needs of over 2 million people for a year.  Urban Southern California today uses about the same amount of water it used in the 1980s – even though its population has grown significantly. However, California’s water issues cannot be solved by conservation alone.  Even if the State had clear and supported strategies to fix the delta, provide for a water conveyance system to Southern California, and protect the environment, implementation could take years – perhaps decades.  The legislature has made water a priority issue this year, which is admirable.  But it’s unfortunate that nearly 30 years have passed since water was last prioritized at this level.

4. Issue:  The cul-de-sac

SELL.  Cul-de-sacs are a post-World War II phenomena, created to limit through traffic in residential areas, and have been a mainstay of residential development for decades.  Proponents find them desirable because they are believed to reduce car traffic on residential streets in a subdivision, thus reducing noise and, possibly, the potential for accidents. This is thought to decrease crime and increase desirability, since in most cases the people who drive the cul-de-sac either live there or are visiting those who do. 
Cul-de-sacs are criticized by others, seen as contributing to car transport for even short distances, since more direct connections are cut off by the dead-end geometry which requires long travel distances even to physically nearby locations. This increases fuel consumption and vehicle emissions.  Some U.S. cities, including Austin, Texas; Charlotte, North Carolina; and Portland, Oregon, have even placed bans on types of new cul-de-sac based suburbs.  Look for more cities to follow. Cul-de-sacs will stick around, but they seem to be so 80s.

5. Issue:  The Riverside / Orange County Tunnel

SELL.  The idea for a roadway through the Santa Ana Mountains has great creativity.  It lacks only two things: support and funding.  Look for it to have an always-secure place among the listing of Orange and Riverside county transportation relief options, but it’s looking like a NIML (not in my lifetime) candidate.

6.  Issue:  Transit oriented development (TOD)

BUY in small amounts only.  Shareholders in metropolitan areas might be wise to load up on TOD, but in Western Riverside County investors are cautioned to look for specific markets.  That’s largely because in this subregion, there still isn’t much transit to orient development around.  Existing and planned Metrolink stations in Corona, Riverside, March JPA, Perris and Hemet are good candidates, but those areas by themselves won’t create a strong TOD investment portfolio.  Bus Rapid Transit might eventually prove a worthy transit option for the WRCOG subregion, but the concept still needs additional traction.

7. Issue:  Mixed- use development

BUY.  Dramatic demographic changes indicate an emerging market for new housing choices.  Studies indicate that the majority of future households will be comprised of single parents, baby boomers, empty nesters and couples without children.  The Urban Land Institute reports that the traditional “two parent household with children is now less than a quarter of the population and getting proportionally smaller.”  Translation:  Look for mixed use and higher density developments to be more revered by the public in the future than reviled as residents seek to live in more vibrant communities that offer easy-to-reach amenities such as shopping, dining, and entertainment, as well as avoid the maintenance hassles of a single-family home and yard.  A WRCOG survey conducted in 2007 found that 50% of surveyed residents expressed interested in living in a mixed use, transit village in the next 10 years.

8. Issue:  Neighborhood electric vehicles (NEVs)

BUY.  NEVs can be a viable replacement of single-occupant vehicles for short- and medium-length trips.  Consider this fact: the Federal Highway Administration estimates that over 50% of all vehicle trips are between 1 and 10 miles in distance.  Significant emissions reductions – and greenhouse gas reductions – would occur if even a portion of these automobile trips were made by NEVs, which are directly emission-free.  WRCOG has received funding from the Southern California Association of Governments (SCAG) to prepare a pilot NEV plan for four contiguous cities in the subregion (Norco, Corona, Riverside and Moreno Valley).  The implementation of a NEV network in the subregion could be a low-cost solution for dramatically reducing vehicle emissions in Western Riverside County and increasing capacity of existing and planned arterials (thus reducing congestion).  They are also relatively inexpensive to own and operate and fun to drive, and significant capital investments are not needed to accommodate them on existing streets and roads.

9. Issue:  Goods movement

BUY.  Resolving Southern California’s goods movement issues might be comparable in scale to our water problems, but there seems to be more of a sense of urgency about this among regional and local players.  The almost-passage of SB 974 last year (which would have put a fee on goods moved from the Los Angeles and Long Beach Ports to be used for transportation and air quality improvements) indicates that some positive traction exists to develop and implement solutions.  The Ports are attempting to go green as they plan for the future, and area residents around the ports and along main corridors are mobilized.  Expect this issue to get big attention in the near future.

10. Stock Option:  High Speed Rail 

BUY. Those of you who dumped on high speed rail last year got some bad advice.  With an infusion of funding, high speed rail is back on track and is hot.  California voters approved Proposition 1A in November 2008, which allocates $9.95 billion to the California High Speed Rail Authority. Of that $9.95 billion, $9 billion will be used to construct the core segments of the rail line from San Francisco to the Los Angeles area. Furthermore, the California High Speed Rail Commission is angling to secure another $4.6 billion in federal stimulus money to support initial route planning and construction efforts. Meanwhile, local jurisdictions are positioning for high speed rail stops in or near their communities.  Suddenly, there’s a need for speed.