CLU/CERF: Community Conversation on the Effects of SOAR

story arial, look sans-serif; font-size: 12pt;”>By Sheryl Hamlin

shop arial, sans-serif; font-size: 12pt;”>The Center for Economic Research and Forecasting (CERF) associated with California Lutheran University (CLU) School of Management hosted a “Community Conversation” about the Effects of the SOAR (Saving Open Space and Agricultural Resources) legislation. The event was held on September 9, 2016 in Oxnard with about 40 in attendance plus three panelists and a moderator.

panel

The panelists included: Matthew Fienup (far right), economist; John Krist, Ventura County Farm Bureau CEO; and Supervisor Steve Bennett, a SOAR founder.  The moderator (left) was Tim Gallagher, a development consultant per his website.  Supervisor Bennett and John Krist and in the middle of the above picture.

SOAR

Approved in 1995 in the city of Ventura by only 400 votes, SOAR is a series of voter initiatives that require a vote of the people before agricultural land or open space areas can be rezoned for development, according to the SOARVC website. It is up for renewal now across the county and in most cities. It has been upheld numerous times in court. Read its history here.

Land Use Policy in Ventura County

Matthew Fienup, a doctoral candidate in “Environmental Economics” presented a recent history of urban growth measures. He said that the period 1992-2002 was considered the Era of Ur ban Growth Restriction (UGR) where 48 communities modeled UGR legislation on the successful Portland model. Ventura County is unique in that decisions over land use are ballot driven and approved by the electorate. SOAR protects 600,000 acres of open space.

During 1992-1996, there was a 12.5% annual increase in crop land value and in 2000-2004 he calculated a 12.2% annual increase in crop land values. In 1984-1996, 391 acres per year were converted to high density; in 2000-2002, 2,287 acres per year were converted and in 2002-2008, 1,385 acres per year were converted to higher density uses. There was no correlation given about the state of the local economy during these periods and what contributed to the volatility.

Economic Theory

In the Fundamental Asset Equation, Fienup stated that option values associated with future development are capitalized into land values and that “development rights” can be up to 50% of land value.

Restrictions (uses) decrease land value, scarcity (amount of land) increases land value and amenities (preservation or open space) increase the value of land.

As the distance from the urban center increases, land values decrease, according to his graph. And, he said, 35 years of scholarship show that land values increase with the right to develop, containment policies affect location of development and urban containment increases home process.

The Oregon legislation of the 1970’s is a statewide growth initiative which requires municipalities to forecast twenty years in the future. He cited two other studies in land use: Turner et al 2014 studied land use and welfare and Lens and MonkKonen 2016, who studied segregation and land use.

Dynamics in Ventura County – not caused by SOAR, but . . .

Since SOAR, job composition has changed with high salaries declining 22% and the lowest paid jobs rising by 17%. Housing affordability continues to decline with only 26% who can afford a median priced home. County growth has been negligible at ½% with negative population growth for 13 years in Ventura County and 13 years of out migration from Ventura County. Home values are about 90% pre-recession levels of 2005-2007 but is a “function of scarcity”. 2013 jobs in Ventura County declined, so the challenge is how to provide upward mobility. SOAR was “innovative for its time”. 

Saying that Ventura county is unique with farmers, environmentalists, and workers all working collaboratively to address water shortages in Ventura County. He provided a copy of his editorial on such a partnership in meeting the SGMA (Strategic Groundwater Management Act) goals.

Panelists

The moderator asked Steve Bennett to describe SOAR history. Supervisor Bennett said that demand for Southern California coastal land is endless. The county’s Greenbelt system relied on elected officials to make zoning designations. These same officials often receive campaign donations from the recipients of the up-zoning. SOAR removed this from elected officials. The idea emanated from the Napa County Farm Bureau, which passed California Supreme Court review. In the 1990’s residents of Ventura County did not want Orange County sprawl. SOAR has worked. Supervisor Bennett contends that we will get land use decisions right more often by relying on voters rather than on elected officials who get campaign funds from developers and lobbyists. No one wants to pave Ventura County, he said, and make it a San Fernando Valley. Cities must use Smart Growth policies to decrease pressure to go outside the CURB (City Urban Restriction Boundary). There have been 11 SOAR votes with 6 approved by voters and 5 failing.

The moderator asked John Krist about the status of agriculture in Ventura county. The Farm Bureau, he said, before his time, spent hundreds of thousands of dollars trying to defeat the original SOAR, and then litigated. Both lost.

Issues for agriculture: no rain; new competitive markets; pests in citrus and avocado; shifts in markets, such as the 34% reduction in strawberry acreage which is no longer competitive due to production costs; water challenges with sustainability plans in process; transition to more water intensive crops; SMGA could reduce water availability by 20 to 30% and we could see fallowed land due to less water; Fox at 55,000 acres under management could be down 20,000 acres fallowed; and growers face complexities and variables like retiring farmers with no succession plans. The Farm Bureau criticizes SOAR due to the 2050 time frame saying there is no automatic adjustment like Portland has in its legislation.

The Moderator then asked Supervisor Bennett what to say to owners whose land is fallowed. Is this fair?

Supervisor Bennett said “yes, it is fair”. Because, he says, if your land is fallowed for several years, you get an exemption which is written into the current SOAR. A three acre food process plant can be done without a vote, but a plan with hundreds of trucks goes to voters, as examples of uses for fallowed land.

John Krist replied with two key points: 1) there has been no physical impact of SOAR yet because the county has not paved all of the land inside the CURB and 2) SOAR has encouraged the conflating of “open space” with “agriculture land”, which are two different uses. He also said that the SOAR phrase “Save Ouragricultural resources” came as a surprise to the property owners who felt as owners they were being dictated by SOAR about THEIR land.

Matthew Fienup said that the term “hitting the wall” is really a slow process, but that we in Ventura County are in a slow motion collision with SOAR as affordability decreases and the county job base decreases.

There was a rapid panel discussion about SOAR’s effect on land values. Feinup said that SOAR has had an effect  greater than any other policy in the United States with Krist stating that agricultural land values have doubled in 15 years, although the economist said that land would be worth more without SOAR (not quoting a study). Supervisor Bennett said that with agricultural land at record levels and agricultural production at record values, SOAR is not Armageddon. With AirBNB and granny units encroaching on residential neighborhoods, Bennett said that Save Our Residential Resources is next, to which the economist concurred saying these movements are in process. John Krist reminded the panel that there are different models of agriculture: owners and tenants. Each has his own motivation.

The Moderator asked Matthew Fienup to elaborate on the Lens study. Fienup responded with a question: do wealthy sequester themselves or does the land-use policy (LUP) creation create economic segregation? Responding to his own question, he said that strict land-use leads to economic segregation.

Steve Bennett responded saying that the Harvard study cites Ventura County for increased economic mobility of low-income children. Communities solve problems. Urban Growth Boundaries, he said, make communities. Matthew Fienup responded that the Harvard study was in the 1980’s and 1990’s and is not current. He says economic mobility is declining for lower income levels in Ventura County according to a recent study. 

The moderator asked about affordable housing to which Supervisor Bennett said there is not enough energy. Bennett made the point about 1990’s downtown Ventura which was an eyesore. Post-SOAR, development moved down town as infill projects occurred. The CURB forced developers to work inside the boundary. He said that Santa Paula made a mistake by annexing East Area 1 without any plan for infill, so now it is difficult.

John Krist, who is on the board of House Farm Workers, said that it is more common for a project to be rejected because it has affordable housing. The ratio of approved versus allowed densities across housing is 50%, so we are not making use of the land and have squandered 20 years. He cited two initiatives in Sonoma where in 1991 the Ag/Open Space initiative was passed along with a ¼ % sales tax to fund purchases of land.

Matthew Fienup reiterated that SOAR was innovative in the 1990’s, but now can be augmented with conservation banking and trading, citing the New Jersey statewide system for tradeable development rights, wherein one party pays another party not to development or to development in some other place.

Supervisor Bennett said that SOAR led the way to add ¼ cent tax on the ballot, but VCTC also added a tax the same year. Both failed because they each required 2/3 vote.

Audience Questions

There were several questions about affordable housing and housing production in general. Supervisor Bennett said that both SOAR and the other measure have no affordable housing in the legislation. And, it was noted that the East Area 1 project removed the affordable housing, after the vote, and substituted an in lieu fee.  Note that this fee has been the subject of two Santa Paula council meetings recently.

attendees

Table Questions

During the break, each table was asked to delve into issues. Upon resumption of the meeting, the moderator asked each table to describe its findings.

Jurgen Gramckow, son of Werner Gramckow famed sod grower and survivor of the Battle of Stalingrad, made the following points about agriculture in Ventura County. SOAR presupposes agriculture values, but with $15.00 minimum wage, overtime pay, and foreign competition, crops that make agriculture viable are moving elsewhere, so locking land into agriculture without being able to sustain high value crops does not work. The farmer is facing unprecedented regulatory environment, pesticides and labor issues. Voters want to control growth and do not care about agriculture. Markets don’t reflect premiums for California grown products. Farmers see dark clouds. Solutions? High intensity agriculture, green houses, and high investment. Houwelings Greenhouses reportedly cost $1 million per acre. John Krist responded that this type of farming is no longer a family business.

Supervisor Parks spoke for her table saying that SOAR engages the public. She is proud of the Thousand Oaks council who recently rejected an apartment project with no senior housing.

Dawn Dyer spoke of multi-generational family farming. Inheritance tax chips away at the resulting farm. No solutions are on the horizon. “Support Uses” of agriculture land must have definitions in zoning codes. More honest dialogue needed about SOAR.

The next table said that 2056 is too far out to know market conditions, subtleties and nuances. 10 years ago did we know there would be drought and pests? The public wants to make quick decisions but does not want to become Orange County.

At the “growers table”, the spokesman said that creativity adds value and that 10 and 15 years was equivalent to the use of a sledgehammer in planning and removes creativity. Strawberries from Egypt came with hepatitis but were cheaper. The concept of tradeable development rights has promise. Row crops and citrus are a global market place now and economics always wins. Essentially saying that capital knows no boundaries.

David Ross of Moorpark said that they need more people in Moorpark. Empty stores abound. We need to educate voters on value of density. But, the developers must create attractive developments, which has been lacking.

John Krist responded saying that no amount of public outreach will convince voters to vote against personal choice. He is buoyed by the collaborative spirit in Ventura County. SGMA offers great opportunity for collaboration. They must move forward by identifying areas of mutual interest.

Closing Statements

Supervisor Bennett said that we must recognize commonalities. The old system with developers making political contributions does not work. The 2004 ¼ cent sales tax failed, but there will be another window of opportunity. Voters must be involved.

If this were easy, said Krist, we could resolve it. We must define the place we want to be.

Matthew Fienup, economist, reiterated that the water management efforts are encouraging, but we can’t hit the wall at 80 mph. Housing affordability at all levels is affecting business in California.

The moderator reminded the audience to save the date of November 10th for a post election Economic Forecast with Dan Walters of the Sacramento Bee and Bill Watkins, plus Matthew Fienup.

Photo Credits: Sheryl Hamlin

For more information about the author, visit sheryhamlin.com

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One Response to CLU/CERF: Community Conversation on the Effects of SOAR

  1. Sh September 16, 2016 at 6:29 am

    Economics of farming
    A new state law that addresses overtime pay for farmworkers has stirred anger and passion in the Central Valley. For employees who live paycheck to paycheck making $25,000 a year, the law is seen as a big boost. But for farmers, the expense is just the latest regulation handed down by the state. “The dying of California agriculture is not occurring simply because of a singular rule,” said Ryan Jacobsen, executive director of the Fresno County Farm Bureau. “It’s kind of like a death by a thousand cuts.” Los Angeles Times

    Reply

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