Smart Growth Zones

Smart Growth Zones: Rewarding Boldness and Innovation

In the Fall of 2001, The Transportation and Land Use Coalition convened leaders from regional and state organizations that focused on different aspects of Smart Growth. The goal was to choose one strategy that the Coalition could champion that would help move a true Smart Growth agenda forward in the Bay Area. There has always been a conundrum when it comes to Smart Growth strategies. Strategies that simply offer incentives don't engender the fundamental change in planning that is needed. For example, MTC's Transportation for Livable Communities is great for promoting individual Smart Growth projects, and creating incentives for local governments to embrace them. But these projects can be surrounded by sprawl, reducing their efficacy. On the other hand regional or state requirements for smarter land use are generally very weak, as they must go through a common denominator approach to get approval from state legislative bodies. For example, Maryland has much-touted Smart Growth funding strategies which funnel state investments into pre-designated growth zones. This has helped to direct growth, but to get such a sweeping provision approved quite a bit of land that could have been protected was allowed into the zones, and Sprawl conditions, such as housing at 2-3 units per acre were allowed within these zones. Finally, the problem of choosing just one strategy is obvious.

Moving toward Smart Growth will require big changes in local zoning, state and regional funding, and private development decisions. The best way to bring about these changes in a coordinated way is to create rewards and incentives for cities to follow Smart Growth criteria in their development plans. To do this, the Coalition proposes a new demonstration program, just for the 9-county Bay Area. We are calling this proposal "Smart Growth Zones", because they are similar in approach to the Empowerment Zones and Enterprise Zones currently funded by the federal government. This is a new concept and is still in draft form, so we need the advice of Coalition members to develop "Smart Growth Zones" into a workable policy initiative that can be implemented at the regional level!

A New Idea
The concept is simple - communities can volunteer to meet certain Smart Growth criteria, and in exchange they are given funding for creating a community enhancement plan. Development within these communities that meets certain standards would be eligible for funding reserved for Smart Growth Zones. Smart Growth Zones would provide seed funds - in the form of tax incentives, grants, loans, and technical assistance - to Bay Area cities and counties seeking to undertake the planning and environmental review needed to reshape their land use policies to encourage Smart Growth. The program would reward boldness and innovation. The qualifying standards for density, parking, height and other design factors would be high, in order to encourage local governments to enact real change in their development patterns. But instead of focusing on individual projects as do most voluntary programs, Smart Growth Zones would have a community-wide focus. Furthermore this concept can encompass multiple "strategies" at once, as there would be a minimum of 5-10 criterion to meet in order to qualify. Development of the criteria would have to be done through a transparent and inclusive process, with representation from environmental, social equity and business groups, as well as local and regional government.

The following are the type of criteria for designation of a Smart Growth Zone that TALC is considering:

1.	Encourages development on vacant and underutilized sites within currently developed areas.
2.	Increases residential and employment density by a specified amount and requires a mix of uses within the downtown and along major transit routes.
3.	Includes provisions to develop housing that accommodates a range of incomes, family sizes and ages, including low- and very-low income residents.
4.	Requires bicycle- and pedestrian-friendly neighborhoods, shopping areas and employment centers.
5.	Ensures new jobs benefit local residents through provisions such as first-source hiring, living wage requirements, and opportunities for apprenticeships and job-training.
6.	Involves and supports local community-based organizations in planning processes.

Once designated, local governments would be eligible to receive as much as $500,000 to conduct planning and environmental review. In addition to the planning grant, the regional agencies would be available to provide technical assistance to local governments as they undertake a Smart Growth Zone planning process. This investment in planning will pay off in investment by private and nonprofit developers in new or rehabilitated housing, commercial, retail, and light industrial development within the Zone. Any local government or partnership of local governments in the nine-county Bay Area would be eligible to apply for designation.

Although local governments must initiate and lead the Smart Growth Zone process, it is expected that planning and development will include a wide array of private and nonprofit developers, business representatives, community-based organizations, neighborhood associations, and the Bay Area's regional transportation, bay, air quality, and council of governments agencies.

Where Will the Money Come From?
As with all public policy, implementation is in the details and is all-important. But done properly these zones can have a major impact on livability. The steps below are just one scenario for how they can get started, and how more incentives and funding can be developed as more zones are adopted:

*	Smart Growth Zones could be defined and implemented now at the regional level, using existing funds already available through the regional agencies. For example, some amount of TLC (Transportation for Livable Communities) money could be designated for use only in Smart Growth Zones.
*	The state could also provide financial incentives without increasing the burden to taxpayers, by giving Smart Growth Zones higher priority for state housing, infrastructure and planning funds.
*	New local or regional funds that are developed could also contribute funding toward Smart Growth Zones. For example, if the bridge tolls are raised, a portion of the funding could be set aside for Smart Growth Zones, and county sales taxes for transportation could have an ongoing set-aside for Smart Growth Zones.
*	Once the concept has proven itself, the state could designate Smart Growth Zones as eligible for local voter-approved funding mechanisms such as tax increment financing and tax incentives.
*	Alternatively, each of the Bay Area's five regional agencies could provide $500,000 of discretionary funds, for a total of $2.5 million. These funds could be placed in a trust fund, a portion of which would be available immediately for the first round of planning. The remainder would be managed as a revolving loan fund. Smart Growth Zone planning grants would range from $200,000 - $500,000. The loan fund could be replenished by a fee structure that required local governments to pay 50% of the fees levied on new development within the Zone back to the loan fund, making new planning funds available to other local governments.

What Can I Do To Help?
The "Smart Growth Zones" concept is being promoted by the Transportation and Land Use Coalition (TALC). We need your help to develop this concept and get the word out!

We can provide you with samples and key points for any of the following:

¨ Place an article in your organization's newsletter.

¨ Ask your organization to endorse the Smart Growth Zone proposal.

¨ Join with TALC as we work to refine the proposal and have it adopted regionally.

¨ Send your comments and suggestions to TALC's Smart Growth Campaign at smartgrowth@transcoalition.org or contact the TALC office near you!

Update: 09/17/03