Room to grow?

Builders challenge study saying Chico has enough land to develop

Kate Leyden, of Chico Builders Association, says builders face significant barriers to increasing the city’s housing stock, including environmental constraints, lack of infrastructure, land owners unwilling to sell and the cost of doing business.

Kate Leyden, of Chico Builders Association, says builders face significant barriers to increasing the city’s housing stock, including environmental constraints, lack of infrastructure, land owners unwilling to sell and the cost of doing business.

Photo by Ashiah Scharaga

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Along The Esplanade, Chicoans can find clear examples of mixed-use neighborhoods: offices, apartments, stores, eateries and single-family homes, large and small—all sharing the same tree-lined, tight-knit corridor.

“It’s a beautiful array of types that are adjacent to each other and mixed just perfectly,” according to Tom DiGiovanni, a developer and founder of New Urban Builders.

When it comes to housing density, planning is a “design exercise,” not a counting exercise, he continued. High density has become a taboo word—“a proxy for how oppressive it would be to the neighbors: too much traffic, too many people, [declining] property values.”

While the city’s 2030 General Plan doesn’t say to throw out the suburban single-family-style development, it prioritizes “a well-planned, quality built compact urban form,” with a variety of uses in the same area to create walkable, dynamic neighborhoods.

Last year, during the five-year review of the general plan, the Chico Builders Association—made up of tradespeople, developers, real estate agents, banks and mortgage companies—lobbied the city to take a deeper dive into land supply and demand amid the state’s housing crisis.

Enter the land absorption study, a $62,000 city-funded survey prepared by consultant BAE Urban Economics Inc. Its intent is to help the city understand the building market, including what needs to happen to reach general plan goals through 2035, including the city’s projected growth.

The study concluded that Chico has an adequate amount of land to meet the demand for housing, when factoring in development already in the pipeline (3,249 single-family homes and 2,013 multifamily units). This includes larger developments on the outskirts of the city, such as Stonegate and Oak Valley.

Special planning areas (places with significant growth potential that require more detailed land use planning) generally will not be needed through 2035, the study says—though a proposal for Doe Mill/Honey Run is anticipated, and Bell Muir is developing under county jurisdiction.

This conclusion, however, caught the members of the Chico Builders Association off-guard and, at face value, is misleading, association Executive Director Kate Leyden told the CN&R.

“Chico is unique because we’re small,” she said, adding that it doesn’t want to build out like Sacramento or other large cities, and “need[s] to have a variety.”

While vacant land may exist within city limits, it is not readily accessible, Leyden continued, and that is what the association, which focuses on middle-income first-time homebuyers, is most concerned about. Projects have to overcome significant environmental, financial and infrastructure-related hurdles—not to mention, not all vacant land is up for sale. The build-out anticipated for in the study, therefore, may not actually happen.

These barriers to developing land in Chico, Leyden said, are compounded by state building regulations and the rising costs of doing business, including the price of land.

“The only way to get affordable housing” is “production efficiency,” she added, and that’s achieved through economies of scale. In other words, when a developer builds more, the overall cost of the project goes down, which can lower the cost for buyers.

Leyden’s concerns were echoed during a recent City Council meeting by local builder Bill Webb, who added that developers have seen the study’s conclusions being used as “an anti-growth tool, and that’s concerning” to the association.

For local design consultant Mike Trolinder, land use planning boils down to one thing: The city is not being fiscally responsible by allowing development that contributes to urban sprawl—low-density subdivisions that cater to only one or two segments of the population (i.e., building cluster apartments and single-family homes).

“A lot of people are being left out,” Trolinder said. “Until we build homes for everyone, some people are going to be homeless.”

Development fees may pay for the installation of the public infrastructure, Trolinder continued, but what about the upkeep? “You have to get the density up in order to get the property taxes for [maintaining] the infrastructure,” he said. “Until politicians decide they want to be fiscally responsible and use a land-use pattern that pays for itself, we’ll never see the end of this. We’ll always be looking for more land.”

A mix of housing is not only more efficient for land use and extends land capacity, DiGiovanni added, but also provides for a range of households with different preferences and capabilities. Not every household can afford a single-family home. Some households want to be closer to commercial areas, like downtown.

Moving forward, the study suggests that the city look for opportunities to ensure there is adequate land for workforce housing development and remove disincentives. (On Oct. 16, the city reduced impact fees for smaller units.) People’s incomes have not been rising at the same rate as the costs of developing new housing, which has created a market that “appears dominated by the demands of the retirement community,” the study states.

The city has significant redevelopment potential at “opportunity sites” along key corridors of Chico, according to the study. Though these likely will be realized as student apartments near Chico State, “there is a significant demand for this use,” so it would be wise for the city to encourage more diversity among these projects, like retail-office community spots.

In DiGiovanni’s view, the study provides a sound analysis. “Some builders will be focused on infill and others will be focused on standard subdivisions,” he said. “But taken together, I think that will end up using the land supply … adequately.”