Research Desk
Decentralizing Non-Retail Employment Out of the Urban Core
Beyond restrictive zoning, a central characteristic of urban planning across California is the centralization of economic growth in the central business districts of major urban cores. This is reflected at the state level in where economic policy has focused government investment in high income job growth at the heart of cities like Los Angeles, San Francisco, San Jose, Oakland, and San Diego, with the rest of their regional suburbs treated as commuter labor pools.
Bay Area Centrality Score for all urban amenities shows extreme concentration of key job and entertainment centers regionally within the downtown areas of San Francisco, Oakland, and San Jose, the three biggest urban centers (900k, 600k, 1M population) within the Bay Area
Given the dynamics of Proposition 13 - which keeps property taxes flat for residential and commercial property owners rather than adjusting as property valuations increase - this urban core centrism has had a few notable negative effects:
  1. 1.
    Local governments miss out of 10s of Billions of dollars in tax revenue as real estate valuations have skyrocketed at 8% annualized growth since the 1980’s (compared to the national average of ~4%)
  2. 2.
    Local governments become more dependent on sales tax as their major revenue source in lieu of fair value of property taxes. There is also minimal benefit from payroll taxes, since high wage sectors are concentrated in city centers of big cities. Suburban governments are increasingly vulnerable to the e-commerce takeover of the retail sector and have few options in the current state to diversify that risk
As the COVID-19 pandemic forces many local governments to reevaluate their planning policies for a dramatically different economic and political landscape— activists, tenants, and business advocates all across the political spectrum are calling for a drastic overhaul of current zoning policies. Despite certain long-standing misconceptions, the development of new zoning plans require neither a host of new ultra-dense skyscrapers blocking out familiar vistas, nor a chaotic rearrangement of natural neighborhood landscapes (Source 16). While residents of many Bay Area neighborhoods fear both of these outcomes and have used these fears to calcify zoning restrictions via NIMBY activism, a new generation of government officials have offered a more balanced approach.
While new zoning laws prioritize density and a new portfolio of affordable housing for both low-income and middle-income families, local planners are choosing to allot this density near strategic areas, such as near metro/light rail stations and major bus route terminals (Source 17). Focusing on building affordable housing units near transportation nodes not only enhances the sustainability of the city’s infrastructure, but it also decreases the economic burden of commuting for families who may not be able to afford a car (Source 18). The average Marin County resident spends an average of 32 minutes commuting everyday, though this average obscures the much more serious reality for the population of ‘super commuters,’ who spend more than 90 minutes every day commuting to and from work every day (Source 19, 21). As a way to address the challenges of residents’ commute patterns, transit-oriented development (TOD), has become the key framework for many local cities’ new zoning plans, and has helped to encourage the economic growth of cities by connecting readily-available labor forces with jobs in city cores (Source 20).
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