September 16, 2015 - From the September, 2015 issue

Point/Counterpoint | Jennifer Hernandez: SB 743 Risks More CEQA Abuse

The transition from using Level of Service to Vehicle Miles Traveled when measuring traffic-related impacts under CEQA, as a result of SB 743, has been embraced by some and decried by others. Jennifer Hernandez, a partner at Holland & Knight, argues in this TPR interview that implementation of SB 743 should be delayed. She believes that the VMT guideline created by the Governor’s Office of Planning and Research will only worsen CEQA abuse and leave infill builders mired in litigation. This piece is a companion to TPR’s conversation with Amanda Eaken.

Jennifer Hernandez

“OPR’s proposal expanded CEQA by adding an amorphous new VMT mandate while also maintaining traffic congestion surrogates...that still require LOS studies.”—Jennifer Hernandez

Jennifer, as a long-time veteran of CEQA reform, what are your views on current efforts to delay implementation of SB 743, which the governor signed last year? What’s at issue?

Jennifer Hernandez: SB 743 was crafted around creating quite substantial relief from CEQA for the Kings arena—preventing the court from stopping the project or vacating project approvals unless a high bar was met, like public health problems. SB 743 was what I call a “buddy bill,” when folks with political connections get CEQA exemptions. 

Part of the cost of the buddy bill was limited relief, but in some ways important relief, provided for infill development that met certain qualifying criteria. Two of the three pieces of relief are straightforward and universally supported: SB 743 said that parking and aesthetics are not CEQA impacts for purposes of qualifying infill projects in qualifying locations. That’s good, because we have had lots of NIMBY-directed or other non-environmentally-directed lawsuits against infill, where people are actually worried about parking and the “character” of their community—i.e. an influx of apartments or apartment-dwellers. 

The third part of that bill was quite different. Authorization was provided to the Office of Planning and Research to come up with a different metric than Level of Service for measuring traffic-related impacts. 

The bill was circular. It said that OPR may or may not select a metric different from Level of Service, but regardless, you still have to look at the related congestion impacts of air quality (because idled cars waiting multiple cycles at the light are going to spew more stuff), as well as public safety (because if you have traffic congestion, you can end up with more conflicts between pedestrians, bikes, and vehicles), and interference with emergency-response vehicles.

Then OPR, with Amanda’s support, proposed a new guideline: Vehicle Miles Traveled, first for infill projects. 

This is new. We’ve looked at VMT for air quality purposes, but never for traffic purposes. We don’t have good tools for measuring VMT. In fact, there’s lots of disagreement about how to do it. OPR got a whole bunch of comments, including ones from traffic engineers, who said things like: “In San Diego alone we’ve got three different models for estimating VMT. They’re internally inconsistent. Which do you want us to use and why?” 

OPR also said that a project would be significant from a VMT perspective if it’s above a “regional average”—which no one knows how to calculate: what’s the “region,” are there different “averages” for different product types or locations within a region, who sets the “average” and how, etc.

To clarify, was the intention of this addition to SB 743 to come up with new guidelines for determining the significance of transportation impacts on projects within transportation priority areas? 

Yes. I call that “designated projects in designated locations”—not all projects and not all locations. The point was to acknowledge that we are purposefully developing infill neighborhoods that are not “car-friendly”—and allow for traffic congestion, rather than automatically categorizing congestion as an impact requiring “all feasible mitigation” under CEQA.

Again, the objective was to come up with more flexible traffic standards to facilitate infill projects, active transportation, and reduction of greenhouse gas emissions, correct?

OPR was directed to come up with a transportation metric to achieve those objectives. But SB 743 was about reducing, not increasing, CEQA costs and risks for infill projects. OPR’s proposal expanded CEQA by adding an amorphous new VMT mandate while also maintaining traffic congestion surrogates (air quality, public safety, and related impacts) that still require LOS studies. CEQA also still requires an evaluation of consistency with local land-use and congestion plans that use the LOS metric, which was another issue OPR’s proposal did not address.

In the last issue of The Planning Report, Pasadena Planning Director Vince Bertoni was interviewed. He noted that the City of Pasadena has already switched its local transportation documents to incorporate VMT rather than LOS. How does adoption of this metric at the local level figure into the current SB 743 debate?

That’s an interesting point. In fact, Pasadena’s not even close to alone in moving away from LOS. Cities can do that, and have done it. The problem was created when the state said that you must do it by the end of this year—initially for infill projects—in relation to a regional-average analytical methodology that no one has figured out, with “mitigation” approaches that no one has figured out either.

That puts a new, untested requirement into CEQA with criteria that are anything but clear, and imposes them first on the kinds of development that we actually want the most, from a climate, urban renewal, social justice, and environmental-quality perspective.

You’ve now stated that VMT is almost impossible to apply when incorporated into CEQA, but that cities are already using it. Can you clarify your point?

It’s applying a statewide standard through the CEQA litigation prism that’s the problem. When a city adopts a non-LOS General Plan standard, it has the opportunity to define its significance threshold under the new metric. The city could define the threshold as “anything less than 14 miles” or “30 percent of people commuting to and from work by means other than private auto.” Those are examples of workable local solutions that can be implemented at the planning level.

OPR proposed a one-size-fits-all state standard that all cities and counties were required to implement by the end of this year. We were faced with many different models used in different regions. No one knew what a “regional average” meant. 


The key point is that CEQA litigation disproportionately targets infill projects. About half of CEQA litigation targets projects with no private-party sponsor, but for the half that do have private sponsors, housing is by far the most challenged type of project. Of the housing projects challenged, infill, higher-density housing is by far the most commonly challenged. In fact, 80 percent of the challenged residential/commercial construction projects in our survey of all CEQA lawsuits filed over a three-year period statewide were infill projects.

OPR takes the single most litigious form of private sector project—which is also the most important to increasing density and transit utilization, as well as achieving climate goals and doing all kinds of other very good things for cities and residents—and it’s going to introduce a new CEQA impact to take effect at the end of this year? That undermines the state’s climate goals and increases CEQA litigation costs and risks for infill projects—exactly the wrong tool, at the wrong time, for the wrong type of project, in the wrong place.

Could you drill down into how the VMT proposal came about during the legislative process and OPR’s responsibility?

Two solutions were being discussed. The opening proposal was to simply include LOS in the same category as parking and aesthetics for CEQA reform, and say that infill projects don’t have to do parking, aesthetics, or LOS. That would have taken away the three most litigious issues used to challenge higher-density infill housing. 

Apparently, there are a whole lot of folks still attached to congestion as a metric. They didn’t like that statewide standard, either. It would have cleared the deck to allow a lot more infill housing to be built—and was certainly supported by the California Infill Builders Federation, where I’m on the board.

We’re in the first year of a two-year bill cycle. Since the initial solution was controversial, the lobbyists suggested that this be turned into a two-year bill to avoid imposing anything new on infill the end of this year. OPR wanted to move ahead with a new VMT/LOS proposal, and objected to the delay. Stakeholders who mistakenly believe that OPR’s last proposal got rid of LOS were also concerned about the delay. Delay was a legislative tactic that I didn’t follow, which was then replaced by yet another version of the bill in late August. This was drafted by OPR, and the bill in print now actually deletes the only two tangible benefits of SB 743 for infill projects by eliminating the statutory exemptions for parking and aesthetics! The administration’s version of AB 779 also puts vague new GHG reduction burdens into a congestion-management planning structure that continues to be bootstrapped into CEQA, again missing the mark on simplifying CEQA and reducing risk of litigation abuse.

Amanda suggests that infill developers of housing, environmental groups, and others are supportive of the immediate implementation of SB 743. How would you respond?

There’s a split. Some people believe that by moving to VMT, they won’t need to do LOS. That’s legally false. As Chris Calfee, OPR’s counsel, reports, LOS is still required under CEQA to deal with air-quality impacts, noise, and public safety—like access to hospitals, or accident risks of bicycle, ped, and auto congestion. 

If you ask every infill builder in the state, “Would you like to get out of LOS?” the answer is a unanimous, “Yes, please.” 

If you ask infill builders, “Would you like to do VMT?” the answer is, “What does it look like? How much is it going to cost? Am I going to get sued? If I get sued, will I win?” The answer to those questions are much more complicated. When you then also have to say, “By the way, you still need to do LOS for other reasons and the law is going to stay muddled for a decade about what your LOS mitigation obligations are,” then the infill builders tend to say, “When did CEQA reform include expanding CEQA?” 

More than 10 years ago now, we decided that we needed to include greenhouse gases under CEQA, which is totally legitimate. With two Supreme Court cases pending, we’re just now starting to possibly see the end of a greenhouse-gas litigation pathway. 

It takes 10 years to figure out how to do it right, as the court ultimately decides. Does anyone want to start a new 10-year litigation pathway on a fuzzy new CEQA metric with uncertain methodologies and mitigation for VMT?

Lastly, it appears that the mitigation measures incorporated into SB 743 go above and beyond those previously included under CEQA. Address the significance of these new mitigations requirements. 

When OPR put out its proposal to require infill developers, first and foremost, to do a VMT analysis of transportation impact for the first time, it said: “If you are above the ‘regional average,’ here are some mitigation suggestions: Build a different project. Maybe this should be a supermarket rather than an apartment structure. Build more affordable housing.” But should we build nothing until there’s enough money for affordable housing? How does that relate to the affordable-housing funding mandates now in place? 

OPR also said, “Create a better jobs/housing balance.” You can count jobs and housing units. But a jobs/housing match means building housing affordable to the people working nearby. But how close, actually? In the basement? In the first-floor retail? Three blocks away in a high-rise? Eighteen blocks away in a mall? 

Let’s think about the cost of higher-density housing. San Francisco just bought a gas station site on Van Ness for affordable housing where the land costs are coming in at $350,000 per door. All-in costs are expected to go past $800,000 for 700-900 square foot one- and two-bedroom units. How are we going to take an $800,000-900,000 unit and match it to a barista? 

These are not at all unacceptable or off-limits political questions. They’re deeply critical policy questions. But the City’s land-use plan for these infill areas presumably did its best to balance these needs. To ask those questions at a project level, for a project that already complies with the plan, invites endless new litigation opportunities around an already much-abused statute. We need housing to be more plentiful and more affordable—not more susceptible to costly delays from CEQA litigation abuse.


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