The Battle of Rival Growth Caps Begins : Claims Fly as Measure Backed by Council and Builders Faces Citizens’ Initiative

As if they had fired a starter’s pistol, the members of the citizen’s advisory panel drawing up San Diego’s growth plan last week launched the long-awaited electoral competition that will determine the course of city growth into the next century.

Before voters choose one, or both, of the growth-limitation initiatives that they will see on the Nov. 8 ballot, the two plans face a six-month marathon of claims and counter-claims over which will produce economic ruin and which will save San Diego from being devoured by development.

Already qualified via the petition process is the Quality of Life Initiative, a citizen-sponsored plan that would impose a citywide building cap of increasing severity during the next four years and beyond.

The city-backed plan, which is still in broad outline form, currently calls for a less-restrictive cap lasting five years. The city plan might be altered by the San Diego City Council or the 28-person advisory panel before it is placed on the ballot in late July or early August.

Much at Stake

But with some saying that the city’s entire economy and future social fabric are at stake, the rhetorical footrace has already begun.

“We’re talking about jobs here. We’re not just talking about (housing) units,” said Robert Morris, executive vice-president of the Building Industry Assn., who predicts that the Quality of Life Initiative would eventually destroy the San Diego economy.

“If it passes, it’s a revolution in that it can take a long time to recover from it, if ever,” Morris said.

Tom Mullaney, co-chairman of Citizens for Limited Growth, which sponsored the Quality of Life Initiative, maintains that builders are already working to protect their profits by undercutting the initiative with such dire claims.

“California has at least 60 cities with growth controls in place. None of these cities has had massive unemployment or a breakdown in their economy. It’s scare tactics, pure and simple,” Mullaney said.

Forcing the city to cap growth was San Diego residents’ only choice because “it is obvious to citizens that rapid growth is causing and worsening many of the problems in the city now. But that is lost on the City Council. They think there’s some easy way out of this without upsetting the developers.”

Whoever is correct, a precedent already is being set. San Diego is apparently the largest U.S. city ever to consider a residential growth cap in the 16 years since the first one was passed in Livermore, Calif., said Douglas Porter, director of development policy research for the Urban Land Institute in Washington. Orange County voters will decide on a growth-control plan tied to auto traffic volume in unincorporated areas in June.

Court Final Decider?

The final decision ultimately may be made in court. Should the Quality of Life initiative receive more votes than its counterpart, “there will be property owners who have absolutely no alternative but to test it (in court),” said Paul Peterson, an attorney who represents a number of the city’s largest developers.

“That one, for sure, will be tested because it is so severe and because it has no provisions for variances and very, very limited provisions for exemptions,” Peterson said.

Courts, he said, have generally upheld residential caps if they are related to public health, safety and welfare.

But much will happen between today, when the City Council begins its first official look at the municipal growth plan, and the Nov. 8 election. Crucially important is the endorsement of Mayor Maureen O’Connor, who appointed the citizens advisory group but is making no promises about which plan she will back until both are finalized.

Support of the mayor would greatly strengthen the city-sponsored plan. “I think her endorsement will carry tremendous weight,” Peterson said.

But Linda Martin, co-chairwoman of Citizens for Limited Growth, believes that winning the election will be an easier task than her group’s successful signature-gathering effort to qualify the initiative for the ballot--even if the building industry fights the Quality of Life Initiative with its formidable financial might. Many who signed the petition wanted stricter limits than the organization was proposing, she said.

“If the public understands that ours is the only true limited-growth measure on the ballot, we can’t lose,” she said.

Building Industry Poll

A poll conducted in February for the Building Industry Assn. shows that only 5% of respondents believe that building should continue at a pace dictated by the market. Another 27% want growth virtually stopped and 67% favor controlled growth.

The sample plan to freeze housing that was used in the poll started at 15,000 units for the first year after passage and decreasing the number yearly; it drew 49% support and 42% opposition in the poll. A second proposal to limit home building to 4,000 per year received 25% support and 63% opposition.

Martin believes that a City Council elected with the help of generous campaign contributions from the development industry cannot write a plan more restrictive than the Quality of Life Initiative.

According to an analysis conducted by Mark Zerbe, chairman of the defunct local chapter of Common Cause, the four council members elected last November received an average of 41.9% of their contributions from individuals and groups tied to the development industry, excluding the money they supplied to their own campaigns.

The figures ranged from a low of $13,525 (23.7%) for Filner to $127,857 (66%) for Roberts.

With both measures currently calling for building caps, and even most development industry representatives on the advisory panel acknowledging that only a measure that includes a building cap can win, attention is focusing on whether building caps will be effective.

Will a Cap Work?

UC Berkeley consultants hired by the advisory panel concluded that they would not. Robert Freilich, the panel’s Kansas City-based consultant has said that they might, in conjunction with other growth constraints.

Both initiatives link a home building cap to required improvements in public facilities. But the similarity ends there. The city-sponsored initiative would allow 41,829 homes to be built between 1989 and 1994--the same number that the San Diego Assn. of Governments estimates would be built here under normal conditions.

Home building could be held below that limit if the city did not improve as yet unspecified factors such as the quality of sewer, air and water conditions.

“We’ve come to the conclusion that caps don’t work,” said District 2 Councilman Ron Roberts, chairman of the advisory group. “But it’s (our) thinking that caps in conjunction with something else can work.”

Citizens for Limited Growth came to that conclusion last Sept. 24, when the group announced its initiative. The organization’s plan would cap home building at 7,000 to 9,000 units in 1989, and decrease the allowed level to 4,000 to 6,000 units by 1991 and every year until 2010, unless the city meets five “quality of life standards” for five consecutive years.

Each year that the city meets a federal or state standard for a quality of life measure--air quality, sewer system, water system, solid waste disposal and traffic--the initiative would allow an extra 400 homes to be built.

Plan Called Too Strict

Developers maintain that the Quality of Life standards are far too strict or unattainable. They believe that the requirements will devastate the building industry, drive up home prices and rents, and eventually ruin the local economy.

Other critics call the plan simplistic, saying that it poses no solutions while offering nothing beyond a growth lid sure to appeal to voters.

According to Morris, the 50,000 to 55,000 people employed by the construction industry would be cut to 20,000 under the Quality of Life Initiative and because of a ripple effect, unemployment would rise in other labor markets.

Housing and rental prices could rise 50% within two years, Morris said. Builders and developers will be driven out of the county. Without the money they donate, arts and cultural institutions will suffer. Downtown redevelopment will grind to a halt.

Ultimately, when housing prices climb past an affordable point, jobs will dry up because employers will not be able to afford to pay their workers enough to live in San Diego, he said. Only then will population growth decline, although 35% of San Diego’s population growth--the children of the people who live here--will still have to accommodated, he added.

“This is elitism in its best example,” he said. “People who have theirs don’t want to think about what’s beyond. They’ve got themselves covered, they’ve got their needs covered and to hell with what’s going to happen in the years 2000 and beyond.”

Citizens for Limited Growth considers such doomsday predictions absurd. What members want is some decline in the city’s flourishing economy and corresponding slowdown in job growth, they say. Boosters like the Economic Development Corporation of San Diego County will have to become more selective about which companies and how many they bring here, Mullaney said.

“We ask the builders to recognize the difference between a slower rate of job creation and their prediction of job destruction,” Mullaney said.

Different Scenario

The consultants hired by the city advisory panel predict nothing like Morris’ scenario, Mullaney noted. If home building were capped at 4,500 units annually and economic growth continued to be strong, countywide housing prices would rise just 2.5% by 1995, the report shows. Even in rapidly growing areas like the Interstate 15 corridor, the worst possible price increase would be a one-year jump of about $7,000.

In addition, average rents would rise 1.2% and per capita income would fall by 2.1% in the same time period, according to the report by the Center for Real Estate and Urban Economics at UC Berkeley.

For direct experience with a growth cap, the city can look to its Interim Development Ordinance. When first-year statistics for the landmark ordinance are released in coming weeks, they will prove that the measure has met its goal of holding growth below 8,000 homes annually, predicted Michael Stepner, the city’s assistant planning director.

That would be significantly less than the 18,285 homes authorized in 1986. The total has risen steadily every year since at least 1983, when the city permitted the building of 9,085 homes.

That doesn’t mean that the IDO has won widespread support. “I think it’s an unmitigated disaster,” said Kim Kilkenny, legislative counsel for the Construction Industry Federation. “First of all, it has driven up the price of housing and of land by a large measure. We don’t know by how much. The jury’s still out.”

The UC Berkeley consultants estimate that the IDO may have increased home prices by $5,000 as early as last April, but added that “the effect may moderate or dissipate over time, depending on the actual level of building permitted.” Peter Navarro, a University of San Diego economist advising Citizens for Limited Growth, questions the accuracy of that estimate and the evidence on which it is founded.

Citizens for Limited Growth is also critical of the IDO, though Mullaney acknowledges that it did temporarily slow the city’s rate of development. But in addition to numerous exemptions approved at the time the IDO was enacted, the council has subsequently released three entire communities--Miramar Ranch North, Carmel Mountain Ranch and University City--which met the ordinance’s tests for having adequate public facilities, Mullaney notes.

Within 15 years, the three communities will contain more than 10,000 new homes, straining roads, sewers and water supplies, Mullaney said said.

The council “cannot seem to understand that regional facilities are now, and will be, a constraint to future growth,” he said. “That is the crux of the council’s failure to date.”

Stepner defends the IDO, saying that “you can’t stop everything until all the problems of the world are solved. You deal with the problems one area at a time, one neighborhood at a time.”