On September 30, 2008, the rules governing regional planning changed dramatically when Governor Schwarzenegger signed Senate Bill No. 375 ("SB 375") into law. SB 375 attempts to control greenhouse gas ("GHG") emissions by curbing urban sprawl. However, the extent of the actual substantive changes SB 375 will trigger is difficult to quantify. Nevertheless, SB 375 cannot be ignored. Make no mistake; it would be an error to fail to become involved early on in its implementation. It is essential to carefully consider its provisions now and how they will affect you or your business.

SB 375 was put together by the diverse interests of the California Building Industry Association, League of California Cities, environmental groups, and affordable housing advocates. It creates a complex set of requirements that may represent the first step towards creating an overarching strategy for pursuit of regional transportation-oriented development and AB 32 goals for GHG emissions reduction. The implementation of SB 375 over the next few years will tell the tale.

Whatever the ultimate outcome, interested parties throughout California, from regional transportation agencies to local governmental agencies to land developers and industries alike, will need to navigate this new legal landscape together.

What Does SB 375 Say?

The bill requires all Metropolitan Planning Organizations ("MPOs") to update their Regional Transportation Plans ("RTPs") so that resulting development patterns and supporting transportation networks can reduce GHG emissions by the amounts soon to be set by the California Air Resources Board ("CARB"). The language of SB 375 articulates changes to the landscape of regional planning through a multi-pronged approach. The key elements of that approach include:

1. Regional GHG Targets

The bill requires CARB to create a Regional Targets Advisory Committee by January 31, 2009 to recommend facts to consider and methodologies to use for setting the regional GHG targets. The committee must be comprised of representatives of the MPOs, affected air districts, the League of California Cities, the California State Association of Counties, local transportation agencies, and members of the public. The Regional Targets Advisory Committee must submit its report to CARB with its recommendation by September 30, 2009. In turn, CARB reviews the report and must provide targets for each region by June 30, 2010.

2. A Sustainable Community Strategy

MPOs must incorporate a Sustainable Community Strategy ("SCS") as a new linchpin element of their RTPs. The SCS is effectively a blueprint-like set of planning assumptions that shape the land use component of the RTP. Its goal is to promote development density near urban cores and transit centers. At a minimum, the SCS must: (a) identify the general location of uses, residential densities, and building intensities within the region; (b) identify a transportation network to serve the transportation needs of the region; (c) identify areas within the region sufficient to house all the population of the region over the life of the RTP; (d) include a discussion of how the development pattern and transportation network can work together to reduce greenhouse gas emissions; and (e) set forth a forecasted development pattern for the region, which, when integrated with the transportation network and other transportation measures and policies, will reduce the GHG emissions from automobiles and light trucks to achieve, if there is a feasible way to do so, the reduction targets set by CARB. Determining what is "feasible" will likely be a much-debated (and potentially litigated) subject, especially considering that SB 375 uses the definition of "feasible" found in CEQA. CARB must approve the final SCS before it is enforceable.

If, however, CARB does not approve the SCS, the MPO can revise and resubmit it. Alternatively, if it is clear that federal planning requirements preclude meeting the GHG emissions targets or if the public will not accept the proposed framework of the SCS, the MPO must adopt an Alternative Planning Strategy ("APS"). The APS would theoretically show how the GHG emissions targets could be achieved through alternative development patterns or additional transportation measures. The APS would not be adopted as part of the RTP and would not be considered an applicable land use plan under CEQA. In contrast, because the SCS is the land use plan for the RTP, inconsistency between a project and the SCS could form the basis of a significant environmental impact under CEQA.

Prior to adoption of the SCS, the MPO must conduct at least two informational meetings in each county within the region for members of the board of supervisors and city councils. Each MPO must also adopt a Public Participation Plan for development of the SCS that includes: outreach efforts to encourage active participation of a broad range of stakeholder groups; consultation with congestion management agencies, transportation agencies, and transportation commissions; workshops for the public; circulation of a draft SCS for at least 55 days; and at least three public hearings on the draft SCS.

3. Regional Housing and Transportation Planning

SB 375 requires that planning for transportation and housing occur together. To accomplish that goal, the bill extends the general plan housing element update period from five to eight years, thereby synchronizing those efforts with the eight-year Regional Housing Needs Allocation ("RHNA") periods. Procedurally, the MPOs will first allocate housing units among cities and counties using the RHNA. Those allocations must be consistent with the approved SCS. Second, and based on the RHNA, the local governments must submit a new housing element to the Department of Housing and Community Development. The housing element must contain a multitude of planning data points provided in Section 65583 of the California Government Code as amended by SB 375. Then, the local governments have 3 years to rezone parcels within the housing element boundaries to demonstrate consistency with the SCS.

If a local government fails to do so, the local government may not disapprove a housing development project, or impose other discretionary measures to make the project infeasible, if the project is otherwise consistent with the SCS. The local government may, however, disapprove the project if it makes findings based on substantial evidence that the project would adversely impact public health and safety.

4. Transportation Funding

SB 375 focuses public transportation funds on infrastructure improvements that are consistent with or facilitate the SCS. This may result in increasingly privately financed transportation infrastructure such as toll roads to fund those developments that are not considered consistent with the SCS. The financial element of the RTP will recommend that projects consistent with the SCS be financed with regional improvement funds.

5. Streamlined CEQA Review for Qualifying Projects

SB 375 fast tracks "transit-priority projects" that are consistent with general use designation, density, building intensity, and applicable policies specified in either the SCS or APS. It also provides CEQA exemptions and streamlining provisions for certain residential and mixed use projects that are consistent with the same. SB 375 provides detailed definitions regarding what characteristics these qualifying projects must include; and it outlines the streamlined CEQA procedures that apply to qualifying projects.

What Does SB 375 Not Say?

Specific language was inserted into the bill that expressly provides that "nothing" in the bill (the six "nothings") shall:

  1. Be interpreted to supersede the prerogatives of local agencies over land use planning; 
  2. Be interpreted to limit the California Air Resources Board's authority under any law; 
  3. Be interpreted to authorize the abrogation of vested rights; 
  4. Require a local agency's land use policies and regulations to be consistent with the regional plans that are created;
  5. Require a metropolitan planning organization to approve a strategy inconsistent with federal law; or 
  6. Relieve a public or private entity or any person from compliance from any other law.

Nor will the plans that are developed under the provisions of SB 375 regulate the use of land.

When Will SB 375 Be Implemented? 

  • January 31, 2009: CARB must create a Regional Targets Advisory Committee, which must recommend facts to consider and methodologies to use for divvying up the state targets and assigning each region a target for the automobile and light truck sectors for 2020 and 2035.
  • September 30, 2009: The Regional Targets Advisory Committee must submit a report to CARB with its recommendation regarding the regional targets.
  • June 30, 2010: CARB must provide each region its GHG emissions reduction targets for use in the region's next RTP update.
  • After June 30, 2010: Each MPO must prepare an SCS (and possibly an APS) as part of its next regular RTP update.

So, What Does SB 375 Really Do?

Ultimately, no one knows what SB 375 will do, other than create a series of planning milestones that must be met between now and 2010, and then into the future. These milestones may be what is needed to begin to pull the diverse landscape of regional planning together into a coherent policy for meeting California's housing and transportation needs into the future. Each agency and property owner will need to evaluate the legislation to determine how it affects them and how to address its dictates.

For land owners it could provide significant density incentives and CEQA streamlining benefits for certain transit-oriented projects. Land owners may also want to consider promoting an SCS that is favorable to their parcel. One way to do this is to join the advisory committees that will shape the development of each RTP. There are also incentives to develop housing with a minimum of 49% affordable units, since these projects are may qualify for an "anti-NIMBY" defense if a local government fails to permit a project that meets zoning requirements.

On the downside, auto-oriented development will be even more carefully scrutinized, as the ultimate goal for the SCS is to meet GHG emissions targets set by CARB. For agencies, it could provide access to funds for meeting their transportation goals. However, transportation funding may be more scarce for infrastructure outside the urban core.

Either way, SB 375 cannot be ignored. It is essential to become involved early on in its implementation and to carefully consider its provisions now and how they will affect you or your business.