Restored historic and old buildings, particularly in cities like San Francisco, contribute to the distinctive character that lure tourists and thereby creates jobs. Two relatively recent changes affect those buildings and the potential for their continued revitalization. First, changes to the Historic Tax Credit may alter the capital stack used to finance the rehabilitation of historic projects, as well as the overall return on investment for such projects. Second, changes to the Standards for the Treatment of Historic Properties with Guidelines for Preserving, Rehabilitating, Restoring and Reconstructing Historic Buildings may alter how historic resources are treated and the mitigation measures required under the California Environmental Quality Act.
On February 1, 2018, the California Department of Housing and Community Development (“HCD”) released its much anticipated determination regarding the local governments that are now subject to streamlined entitlements for housing development under Senate Bill 35. HCD’s methodology for this determination utilizes pro-rated Regional Housing Needs Allocation (“RHNA”) targets for the local governments that have not yet reached the statutory reporting period. (Additional information regarding HCD’s methodology can be found here: http://www.hcd.ca.gov/community-development/housing-element/docs/SB35_DeterminationMethodology013118.pdf) Overall, the HCD release underscores the scope and scale of the housing shortage in California, and the opportunity for housing developers to benefit from a ministerial approval process for qualified housing projects.
As we have done for the past nine years, the Retail Group of Cox, Castle & Nicholson LLP has, once again, taken on the daunting task of forecasting what to expect in the forthcoming year in four critical segments that affect the retail industry. In doing so, we analyzed the social, political and economic events of 2017, reviewed various economic data and projections and have come to certain opinions relating to the retail industry and where it is heading in 2018. Below is the product of our thinking, in the form of four articles of interest addressing such topics as capital markets, retailing, retail development and the impacts of residential development on retail:
- Capital for Retail in 2018 – Are We in for a Smooth Glide or a Nose Dive?, by Gary Glick
- Retail Looking Good for 2018, by Scott Grossfeld
- Retail Development – Riding the Tail Winds, byDaniel J. Villalpando
- Economic Indicators Are Positive, But Developments In Washington May Be Taxing On The Housing Market, by Jeremy M. Gruber
On December 22, 2017, the U.S. Department of the Interior’s Office of the Solicitor issued an opinion that resets its view of the Migratory Bird Treaty Act (the “Act”) and could give developers, renewable energy companies, and other industries regulatory relief and certainty for the inadvertent take of migratory birds. Continue reading →
On December 13, 2017, the Los Angeles City Council passed and Mayor Eric Garcetti signed a “linkage fee” ordinance that has been in the works for over two years and is projected to bring more than $100 million in annual revenue to the City. The ordinance was published on December 18, 2017.
On September 29th, Governor Brown signed a long-anticipated package of 15 housing-related bills, as summarized in our prior post, “California Legislature Passes Historic Housing Legislation in Effort to Tackle State’s Housing Crisis” (9/22/17). Collectively, these bills constitute the legislature’s farthest reaching action in years to address California’s ongoing housing crisis. Though the bills are expected to make only a small dent in California’s annual shortage of new housing stock, they are, at the very least, a resounding acknowledgment that the state’s housing crisis requires action at the highest level. This post highlights AB 1505, also known as the “Palmer Fix”.
On October 15, Governor Brown vetoed AB 890, a bill that would have limited the use of the voter initiative to effect certain land use actions. In his veto message, Governor Brown noted his concerns regarding a “piecemeal” approach to California Environmental Quality Act (CEQA) reform, stating instead his preference for a more “comprehensive approach” that balances the need for more housing and environmental analysis. Industry observers also had raised concerns regarding the constitutionality of the bill’s attempted limits on the initiative power.
On Friday, September 29th, Governor Brown signed a long-anticipated package of 15 housing-related bills, as summarized in our prior post, “California Legislature Passes Historic Housing Legislation in Effort to Tackle State’s Housing Crisis” (9/22/17). Collectively, these bills constitute the legislature’s farthest reaching action in years to address California’s ongoing housing crisis. Though the bills are expected to make only a small dent in California’s annual shortage of new housing stock, they are, at the very least, a resounding acknowledgment that the state’s housing crisis requires action at the highest level. This post highlights the core bills: SB 35 (which provides a streamlined entitlement process for qualifying projects), and SB 2 and SB 3 (both of which are intended to provide much-needed funding for affordable housing).
In an eleventh hour push at the tail end of the 2017 legislative session last week, California legislators passed a bundle of bills targeted at calming the state’s unprecedented housing crisis. Taken together, the bills address a wide swath of issues affecting housing production and affordability, including: funding for subsidized housing development, requirements for entitlement and permit streamlining, and tools for local and state agencies to enforce local planning obligations. This extensive legislative effort to reform California housing policy stands in stark contrast to the logjam that has vexed Sacramento lawmakers for years, if not decades. While the bills still require the signature of Governor Brown by mid-October, here is a first look at the pending changes to state housing law, including links to each of the bills. Continue reading →
An executive order signed by President Donald Trump in February may have major large impact on the way that wetlands are regulated at the federal level. The executive order rescinds a Clean Water Rule put in place during the Obama administration. To find out how this change could impact wetland regulation at both the federal level and in California, GlobeSt.com sat down with Scott Birkey, partner at Cox, Castle & Nicholson, for an exclusive interview.
GlobeSt.com: How has the Trump administration affected wetland regulations on a federal level?
Scott Birkey: This story is still being written, but the new administration started setting the stage last February when Trump issued an Executive Order asking the two federal agencies that regulate wetlands on the federal level, the Army Corps of Engineers and the Environmental Protection Agency, to review and essentially rescind the Clean Water Rule established during the Obama administration. By many accounts, the Rule expands the scope of those agencies’ permitting jurisdiction over wet features, even those features that arguably wouldn’t be considered wetlands in any normal sense of the word. The real turning point in this saga is yet to come, but we have a pretty good idea of what it will look like. The Order includes a seemingly innocuous paragraph that could trigger sweeping changes in the way wetlands will be regulated at the federal level. It requires the agencies to interpret the phrase “navigable waters” consistent with the views of Justice Scalia, who relied on Webster’s dictionary to conclude “waters” are “relatively permanent, standing, or continuously flowing bodies of water.” Compared to the Clean Water Rule and all other prior iterations of the wetland regulations, this view reflects a significant restraint on the agencies’ wetlands permitting authority.
GlobeSt.com: How might this affect the Obama administration’s Clean Water Rule?
Birkey: The wheels are already in motion to jettison and replace the Obama-era Clean Water Rule with regulations that would significantly restrain the federal government’s scope of permitting authority over the fill of wetlands. What’s somewhat ironic is that the Clean Water Rule emerged to help clarify, at least ostensibly, the confusion created by a string of well-known wetland regulation cases decided by the Supreme Court. As a practical matter, I doubt that Scalia’s more commonsensical approach to defining “waters,”—which in turn establishes the sideboards for the agencies’ jurisdictional reach—will itself be that easy to implement, regulate, or enforce. We’re sure to see more litigation over this wordplay. This all may sound inane, but the fact is that tagging the phrases “navigable waters” or “waters of the United States” to wet features on a piece of property proposed for development can saddle that project with permitting hurdles that could result in significant time delays and costs.
GlobeSt.com: What does this mean for wetland regulations in California?
Birkey: I and others have written elsewhere that the guiding principle here is nature abhors a vacuum. What we’re likely to see is the state becoming more emboldened to fill regulatory gaps created by the new federal administration’s pullback from regulating wetlands. This is almost a certainty, given that the state has been working for over a decade on a set of wetland regulations that would specifically apply to those wetlands that are not classified as federal “waters of the United States” subject to permitting authority under the Clean Water Act. The State Water Resources Control Board issued a preliminary draft of the regulations in July 2017. The Board anticipates approving the regulations by winter 2017, which under normal circumstances is fairly aggressive in light of the controversy the regulations have generated, but because of the federal pullback from wetland regulations, that timeframe could be an almost certainty. Put simply, this federal pullback likely will result in a state pushback, where California acts more aggressively to ensure the wetlands left behind after Trump’s re-write of the wetland regulations will be regulated by the state.
GlobeSt.com: Can we expect another layer of regulatory oversight in the state?
Birkey: Absolutely, and that’s really the point of the state’s new wetland regulations. To be fair, the state previously has had the ability to regulate wetlands deemed “waters of the state.” But the state’s new wetland regulations will create a permitting mechanism almost identical to the federal permitting regime, mirroring the relatively onerous and time-consuming protocols currently used by the Corps to process wetland fill permits. So, for example, we can expect to see the state requiring applicants to justify their project is the “least environmentally damaging practicable alternative,” or “LEDPA,” an almost magical, albeit clunky, formulation that’s needed before a wetland fill application can be approved. The process to reach this determination requires significant documentation and environmental analysis, including a boundary delineation of the wetlands, an assessment of off-site and on-site alternatives to the proposed project, a review of the project’s other environmental impacts, and a description of compensatory mitigation to offset the project’s impacts. This level of processing and documentation is a sea change from what we’re used to seeing in the state. And so, from that perspective, the new regulations are effectively another layer of regulatory oversight in the state.
GlobeSt.com: How will this regulatory change affect developers with ongoing projects, and what do developers need to know?
Birkey: The draft regulations include a placeholder for their effective date, and so we don’t know yet when they’ll apply. For developers with projects proposing wetland fills after the effective date—get ready! You’ll see a new and heightened level of state agency scrutiny bringing with it increased compliance costs and time delays. Those of us familiar with the Corps’ permitting process know how onerous it can be to obtain a Section 404 permit—think wetland delineations, application forms, environmental review compliance, alternatives analyses, mitigation proposals. Imagine a nearly identical process at the state level. Another troublesome aspect is that it’s not yet clear how the new regulations will apply to projects that are also subject to the federal wetland permitting process. For some projects, there could be an inefficient duplication of agency efforts where, to give an extreme example, an applicant may be required to produce two alternatives analyses—one for the federal permitting effort and another for the state. This example and others I could give suggest we’re likely to see analysis inconsistencies and agency confusion as the new regulations roll out. Not helpful for a state still struggling to meet housing and other construction demands.