Stock photo.

As California deals with an ongoing housing problem, a 2013 law designed to curb greenhouse gas emissions coming into effect Wednesday could make development in small towns more difficult.

Senate Bill 743, passed during then-Gov. Jerry Brown’s tenure, changes one of the environmental impact assessments from traffic impacts to calculate the number of miles residents travel for work or play. What is called vehicle miles traveled (VMT) has the potential to affect small towns whose residents are often reliant on commutes to work by adding high development fees to new homes and commercial development.

“SB 743 is going to have harmful or negative impacts on Valley housing and economy,” said Christine Kai, deputy director of the Fresno Council of Governments.

The goal of SB 743 was to curb urban sprawl and encourage infill development. California’s Office of Planning and Research established a goal of reducing driving miles by 15%. The Fresno Council of Governments took on the task of working to identify tracts throughout the county based on how much driving goes from or through the area. Baseline averages are established for comparison and future projects that require environmental review would have to do VMT analysis. Projects that exceed reductions would have to find ways to mitigate driving whether by public transportation, bike lanes or walking paths.

“For a big metro area, 743 does what it is supposed to,” said Kai. “For smaller cities, they tend to travel a little longer.”

In Clovis — ranked No. 1 in the Central Valley and No. 10 in terms of population growth throughout the state, according to the California Department of Finance — growth has been at the “fringes” of the city, said Dave Merchen, city planner.

New communities have popped up in the south and north of town, but new job opportunities haven’t exactly followed geographically, said Andy Haussler, director of economic development for the City of Clovis.

Infill development in the city, like in other cities, is costly because most of the time property is already developed. Costs associated with demolition, new infrastructure and rebuilding make it difficult to repurpose. Part of SB 743 reduces governmental fees for infill development. But projects can still be costly.

“You put that together and it starts getting pretty expensive pretty fast,” said Haussler.

At the same time, the California Department of Housing and Community Development has been increasing housing targets for regions throughout California. While these targets are based on density and zoning, the State has been active about tracking housing production, said Kai. In 2019, Gov. Gavin Newsom’s administration sued the City of Huntington Beach for its inability to reach low-income housing goals. The City of Clovis was also put on notice by the Governor’s office for not issuing enough permits for low-income housing units.

Many regions received housing targets doubling or even tripling previous goals, said Kai. When housing targets come out early next year for Fresno County, she anticipates those numbers to be higher as well.

For new housing developments, this could increase housing costs.

The Office of Planning and Research recognized that for rural areas without mass transit, 15% reduction goals may be difficult. The City of Fresno adopted a 13% reduction and other smaller cities may be able to adopt reasonable thresholds, said Jerome Keene, senior planner at QK, Inc.

But the goal of SB 743 was to discourage cities from continued sprawl, said Keene. Fringe development would become tougher than infill-style development.

For developments in areas identified for high VMT, mitigation methods have to be implemented. But those methods aren’t always clear. One method may be paying into fund programs. Others will increase developmental impact fees.

“There isn’t a set of VMT impacts that couldn’t at least be mitigated on paper, the question is how expensive is it going to be,” said Merchen.

Regional VMT maps are scheduled to be released by the Council of Governments in the coming weeks, but developers feel that it will add more fees.

“With limited methods of public transportation around the Central San Joaquin Valley, we fear the only feasible mitigation measure may be increased fees, and that might not actually be feasible at all,” said Brandon De Young, executive vice president with De Young Properties.

“If early estimates of fee increases are to become a reality,” De Young went on to say, “it could cripple the local housing industry and raise housing prices in a market where affordability is already a major concern.”

Small communities throughout the Valley have seen the highest growth. Mendota, Kerman and Fowler rounded out the cities experiencing the highest growth in the Central Valley, but may not necessarily have the available jobs to sustain that growth. Residents commute to larger urban areas for jobs. In Sanger, ranked No. 7 in terms of population growth in the Central Valley, retail space is in high demand, where they are nearly out of space for new development, said Tom Navarro, community development director for the city.

A new annexation near Highway 180 and Academy Avenue will broaden out the city limit and allow for new retail growth. But because of the area’s penchant for tourism miles going toward Sequoia National Park, it could very well be labeled a “hot spot” for VMT, Navarro said.

Additionally, most of the growth for Sanger has been in single-family homes, which does not help VMT mitigation.

For higher density urban areas, housing projects could be exempted from governmental fees. But in lower density, smaller communities, those fees could be increased.

“SB 743 was designed to help expedite development in urban core areas, but that doesn’t extend to rural communities,” said Kai.

In response to what many governments as well as the Building Industry Association view as burdensome regulations around the assessment, which takes effect July 1, 15 governmental agencies, including the Fresno County Board of Supervisors, joined the Building Industry Association of Southern California in drafting letters to Gov. Gavin Newsom to delay or repeal SB 743.

Others are requesting less drastic measures.

“The state is not very clear in their guidance,” said Kai. “Those need to be reviewed before those guidelines are effective. We are asking the state to pause and ask stakeholders what needs to be done.”