Boom town or bust? Developers postpone new-city plan

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It sounded like a possible libertarian paradise: Get some investors and build your own city on acres of empty ranch land. Billionaire tech lords have been trying to do just that in Solano County, Calif., which lies between San Francisco and Sacramento. They qualified their California Forever initiative for a majority vote of county voters this Nov. 5.

But on July 22, California Forever surprisingly announced it was postponing the land-use change initiative to 2026. After discussions with the county, reported ABC 10 News of Sacramento, the group will first apply for general-plan and zoning amendments and an agreement with the county. Their initiative would have rezoned 17,500 and amended previous county growth limits.

The developers apparently ran into bad polling and a negative report from Solano County questioning funding sources for related infrastructure. Taking more time and getting the bureaucratic papers and all the infrastructure funding and governance details in order will address some of the arguments the NIMBYs (Not In My Back Yarders) have been flinging at the initiative.

California Forever’s East Solano Plan website boasts it would bring a bonanza of 20,000 new homes “affordable for working families,” $200 million invested in revitalizing local downtowns, 15,000 jobs paying more than $88,000 a year, student scholarships, business grants to locals and six to 10 neighborhood primary care clinics run by North Bay Health. There could be homes for 400,000 people after the full build-out in two decades.

Those are standard promises that developers make to win over public approval. The real excitement came from California Forever’s desire to build a new walkable city from the ground up – including possible experiments in municipal governance.

I long made fun of such planned communities, especially Irvine in Orange County, the Beige City. But now I live in Irvine and love it, especially all the parks. California Forever sounds like a wonderful idea. Investors include a constellation of billionaires from nearby San Francisco and Silicon Valley.

“I love this proposal,” Stephen Walters told me; he’s chief economist at the Maryland Public Policy Institute, emeritus professor of economics at Loyola University Maryland and the author of “Boom Towns: Restoring the Urban American Dream.” “Given the laws of supply and demand, there are only two ways to make housing more affordable: increase supply, or reduce demand (for example, by making it unpleasant to live somewhere – leading to flight).  Everyone should agree the former is the only good option.”

The main problem: NIMBYism. Walters said, “Call me a cynic, but I suspect a lot of the NIMBYs’ anti-supply arguments (environment, congestion, open space) are a disguise for self-interest: they worry that more supply and more, affordable housing might reduce their property values.” Sadly, some YIMBYs (Yes In My Back Yarders) opposed the proposal because it would promote development outside of the existing urban footprint and promote “sprawl.”

Politico’s headline on the development enthused, “The scrappy resistance looking to block Big Tech’s urbanist utopia: Residents of Solano County have lots of reasons to dislike California Forever’s plans. Can they come together on a campaign to defeat it?” It quoted Aiden Mayhood, from the main opposition coalition known as Solano Together. “They have the money, they have the political connections on a broader level. But the strategy they have is a massive mistake,” she said. “They’re treating this as a statewide issue, but it’s not – it’s a local issue.”

Wrong. The California housing crisis preeminently is a statewide crisis. And despite the Golden State losing population in recent years, the Bay Area – just west of the California Forever site – is spearheading the global Artificial Intelligence revolution. Not just tech geniuses, but regular people working in the industry are going to need more housing as far out as Solano County.

California Forever was spearheaded by Jan Sramek, a former Goldman Sachs trader. He used what some called a “cloak of secrecy” to buy the land parcels. “This was brilliant and socially responsible, instead of getting the government to use eminent domain to crush the opposition and ‘take’ it, as was done in the famous Kelo case,” Walters added. In 2004’s Kelo v. City of New London, the U.S. Supreme Court allowed governments to use eminent domain to “take” private property, not for a government use such as a road, but to benefit other private parties.

California Forever reminded Walters of Tudor City in Manhattan, “which transformed a slum into a model community, still revered almost a century later.” A more recent example is Columbia, Md. Money magazine ranked the Baltimore suburb No. 5 on its 2020 Best Places to Live list, and wrote, “Built in the 1960s, Columbia is a master planned community made up of 10 villages.”

Walters said, “It was pasture land bought by the Rouse Company and developed in an attractive, ‘full service’ community. The entrepreneur sought to include all sorts of amenities beyond the walls of its homes, condos and apartments, with bike lanes, access to commerce and parks, etc.”

The main problem with this needed new California development? It’s in California – NIMBY paradise. It’s going to be a hard sell with voters in 2026. “Losing would be tragic for the property owners and would-be home buyers and workers,” said Adrian Moore, vice president at the Los Angeles-based Reason Foundation. It won’t ruin Solano County’s farming economy. “The planned development is one city in a large county and would occupy 3% of the land,” he said. “The plan is reasonable in scale and scope.”

On the positive side, “State laws have changed a lot in recent years to be more permissive and even encouraging of building more housing.” Should it be built, California Forever won’t be a utopian libertarian community. It’ll still be stuck with all the Nanny State regulations state and local governments force on everybody. Alas, voluntarist Elysiums will remain the stuff of such libertarian fiction as “Atlas Shrugged” and “The Moon Is a Harsh Mistress.”

John Seiler is on the Editorial Board of the Southern California News Group and blogs at: johnseiler.substack.com.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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