C.R.I.B. – Car Reduction In-fill Bonus - a parked car "cap and trade" system

For multi-landowner, multi-tenant job centers

June 2007, last updated 6/7/08

A)      “Transportation Improvement Consortium" (TIC) will implement transportation improvements (new shuttle bus system, personal rapid transit system, paid parking scheme, other demand management scheme, etc) in a 1,200-acre, 20,000 employee office park.  The office park has about 100 landowners and 100 tenants. 

B)      A city “caps” cars in the office park at 17,000 cars.  Verifiable counts of cars are taken a few times per year.  There is a financial penalty to TIC for counts above 17,000 and remedies are prescribed.  Palo Alto has implemented something similar: “no new net peak hour trips.” This cap has appeal in “built-out” office parks (most of the 200 large office U.S. parks with 20,000+ jobs are built out). 

C)      In advance of the transportation improvements being implemented, the city agrees to the following.  For each verifiable car that is removed from the office park, the city grants 350 square feet of new development rights (often for multi-family residential) within the office park to TIC.  The rights are transferable and can be sold to landowners within the office park.  The rights allow for new in-fill development on any parcel within the office park, provided the landowner is willing.  Two city planning documents enable this scheme: A) A Specific Plan envisions the transportation improvements and new development.  B) A “development agreement” contractually commits a city to granting new rights in exchange for car reduction. 

D)     TIC creates the transit/TDM system.  Cars disappear.  TIC obtains new development rights.  TIC sells new development rights, paying for the up-front cost to implement the transportation improvements.  Because of the new development, the office park fills back up to the capped level of 17,000 cars. 

Development Agreements allow very open-ended bargaining (see the chapter on Development Agreement's in William Fulton's Guide to California Planning).  There is no precedent for granting new, transferable development rights for a plan area to a third party (non-landowner).  These new rights are somewhat similar to Transferable Development Rights (TDRs), that are used to preserve open space and agricultural lands by moving development to more appropriate parcels.  Hence, CRIB would represent a novel application of TDR-like rights, but the courts do give wide latitude to well written Development Agreements (DA).  These new development right do seem well within the bounds of what would be permissible. 

Precedent

• The 1991 Los Angeles Ventura-Cahuenga Boulevard Corridor Specific Plan (Ordinance No. 166,560, Effective February 16, 1991, http://clkrep.lacity.org/councilfiles/85-0926-S22_ORD_166560_01-04-1991.pdf , pages 34-35) measured and accumulated new peak hour auto trips as the basis for determining the amount of new development allowed. 14,000 new peak hour trips were allowed.  While the accumulation of new trips is below this threshold, new high-density development (floor-area-ratio greater than 1.25) is allowed.  When the cumulative threshold is reached, only lower density development is allowed.  There are also additional traffic-related “triggers” than restrict high-density development: A) If LOS at key intersections becomes impacted, and B) if trips generated by a new building per 1,000 sf are too high.  In essence, a “race” is created to build high-density new buildings until the traffic thresholds are reached. 
• The 2001 Los Angeles Ventura-Cahuenga Boulevard Corridor Specific Plan (Ordinance No. 174,052 Effective August 18, 2001, http://clkrep.lacity.org/councilfiles/00-0561_ORD_174052_08-18-2001.pdf , pages 27-28) grants a maximum accumulation of new development square footage (about 27MM sf per phase) for the plan area, creating a race to build new development until the maximum accumulation is reached. 
• Fulton’s 1999 Edition of Guide to California Planning, page 210, explains that a Los Angeles Sunset District Specific Plan called for 1.1 MM sf commercial along the strip over 20 years.  Most of this development was expected to be concentrated on 13 target sites with 10 story buildings (tall for the area).  The plan established a competition amount the target sites.  Not all 13 could be built out to their maximum potential.  The landowners who come forward first were allowed to build.  The remaining sites were developed with smaller buildings.    

Details 

• Within an office park, the landowners and employers (tenants) have little incentive to develop a new transit/TDM system for the office park.  Think of the Facilities Manager at a high tech company.  This person does not have a large budget to undertake projects in the public interest to reduce traffic.  If the Facilities Manager's company has extra money available, that company will invest the money in its core business.  Furthermore, transit investments for real-estate in-fill do not have the quick payback that high tech companies want.  So there is a mismatch of investment portfolio strategies that preclude landowners and employers from investing in new transit/TDM systems.  On the other hand, landowners and employers do want new development rights.  Hence, if TIC makes the investment in transit/TDM and earns new development rights, then landowners and employers will likely pay for those new rights.   

• “Car cap” is a political term.  In terms of the DA, the cap is simply a “measurement baseline,” used in calculation of new development rights.  We are using the “carrot” and not the stick. 

• In the DA negotiations, TIC will request that the city not grant new development rights for the plan area, other than via the DA.  Otherwise, the local market will be flooded with new development rights, reducing the value of those rights to TIC.  CRIB makes the most sense in a built-out area where new rights would not normally be forthcoming. 

• The City will demand strong measures be taken if car count grows to greater than 17,000.  In Stanford’s General Use Permit, higher-than-envisioned traffic counts trigger expensive intersection widenings: http://gup.stanford.edu/pdf/FINAL_GUP%202000.pdf 

• A Development Agreement is necessary to to “lock” in a city to providing new development rights for car reduction.  Otherwise, a new city council could be voted in, and could overturn this policy.

• TDM cannot generally be “grandfathered” on to existing development.  TDM is normally applied to new development that intensifies development and produces new traffic that must be mitigated.  However, for CRIB, the Development Agreement will be voluntarily entered into, so will not represent grandfathering of TDM. 

• We envision a lengthy public process to bring the Specific Plan and DA about.  A working group with landowners, long term lease holders, tenants, and city staff should be formed.  The working group would explore the concept and wrestle with details.  The DA would require a public meetings, so residents will need to be educated and their concerns dealt with.  I’ve found that some NIMBYs are less opposed to growth and more opposed to impacts, and are open to capping car counts. 

• There doesn’t seem to be a problem with 1995 California SB 475 that limited TDMs for Air Quality, as we are not quite implementing TDMs, as this a novel, “carrot-based” DA scheme, rather than an imposition of TDM to obtain project approval.  In addition the transit/TDM system provides reduced traffic and growth management, municipal objectives that are not limited by SB 475. 

• For an office park with 100 landowners, it is unlikely that all landowners would sign the Development Agreement (DA).  It is fair to assume 70 landowners would sign the initial DA.  Hence, some recalcitrant landowners would forego the opportunity to in-fill their parcels.  The DA should envision a streamlined process to amend the DA and add new landowners.  Note that the adding of new landowners via DA renegotiation would not be guaranteed, as a new City Council might not be amenable.  Hence, there is pressure for more landowners to sign on initially.  For a built-out office park, new development rights represent “all upside, no downside.”

• It might be helpful to develop a model Specific Plan and model DA.  This could be justified based on California's 2006 Climate Protection Law, AB32. Annual CO2 savings from implementation of this scheme across all 43 CA office parks is more than 1 million tons.
   

Frequently Asked Questions (thanks to folks including Adam Millard-Ball, Nelson Nygaard Associates)

1. There are legal problems with trip reduction schemes applied to existing developments.  There are specific prohibitions on trip reduction ordinances in the California legal code.

A: TDM trip reduction cannot generally be “grandfathered” on to existing development. TDM is normally applied to new development that intensifies development and produces new traffic that must be mitigated. However, for CRIB, the Development Agreement will be voluntarily entered into, so will not represent grandfathering of TDM.  In California, the 1995 Senate Bill SB 475 limited TDMs for purposes of improving Air Quality.  Our CRIB scheme will be brought about via a voluntarily-entered Development Agreement, rather than by imposition of TDMs.  This is a voluntary scheme, rather than a regulatory scheme.  In addition, since SB 475 passed, cities have regularly imposed TDMs for traffic mitigation and growth management (but not for air quality).  With the 2006 passage of Assembly Bill AB32 for climate protection, there may be interest in modifying SB 475 to allow imposition of TDMs for climate protection. 

2. Why is a Development Agreement used?

A: Development Agreement is necessary to to "lock" in a city to providing new development rights for car reduction. Otherwise, a new city council could be voted in, and could overturn this policy.  Real-estate developers require certainty before they will act.

3. Are you suggesting that it will be easy to bring about a Development Agreement for every US office park with 20,000 workers, and for smaller areas of office parking? 

A: No, it won't be easy.  For an office park with 100 landowners, the process will require the formation of a working group comprised of landowners, long term lease holders, tenants, and city staff.  The working group should explore the concept and wrestle with details.   We expect that national coordination of local policy development will arise, and there are a number of organizations that have a natural fit for this role.

We do not expect that 100% of landowners will sign each Development Agreement.  Rather, it may be reasonable to win over 80% of landowners in the first year, and then bring on more signatories over time as the CRIB scheme spreads and succeeds. 

A public process is required for a Development Agreement, so residents will need to be educated and will need to have their concerns addressed.   A good portion of residents are enthusiastic about capping car counts and capping traffic. 

And, Development Agreements cost money for expert legal advice and for the time of city staff.  There are some grant programs that may help fund pioneering CRIB development. 

4. Many City Councils and Planning Commissions have anti-infill tendencies

A: We've taken an empathetic approach to Planning Commissions and City Councils, anticipating their objections and having a good solution to those objections. The proposal does comprehend that you have to count cars and prove that car counts decrease. We're attempting to bring some more rigor / rationality to the city planning process.  With the passage of AB32 for climate protection, we do have a sea-change in policy formulation that we can exploit to bring about innovative local policies that were impossible in the past.  Cities are competing with each other to be the most green.  That helps this effort. 

5. Many office parks have grants for new development rights that have yet to be exercised. Employment ebbs and flows with the economy. Employers come and go, with different numbers of employees per 1,000 square feet. How do you accommodate complexities like these.

A: You count "cars per 100 employees" (you have to also take an employment census when you count cars), then you extrapolate to full employment. You end up rewarding changes in cars per 100 employees. But, this is a really complicated detail that should be avoided in this type of document, but must be handled in the Development Agreement. The main point is that there is a commonsense approach to specifying these details. No scheme will be perfect, but there's a way to arrive at a reasonable, rational, fair scheme.