This past spring, Governor Jerry Brown signed an Executive Order setting a goal to reduce carbon emissions 40% below 1990 levels by 2030.  The California Assembly will soon vote on putting this target into law as Senate Bill 32.  By emphasizing better land use patterns, carbon reductions of this magnitude are not just technically feasible, but would also save billions of dollars on infrastructure, fuel, and health costs while empowering economic growth and helping counter income inequality.  These are the conclusions of Moving California Forward, a new study on the potential for smart growth in California, conducted by Energy Innovation and Calthorpe Analytics.

Smart growth is important because California is expected to add six million residents by 2030.  This population influx could create more sprawling land use patterns, which would make achieving the 2030 emissions reduction goal more difficult.  But, handled correctly through smarter land use, California's population growth can be an important opportunity.

Smart Growth Will Create the Housing and Mobility Choices People Want

A smart growth approach would focus growth in more walkable neighborhoods within existing developed areas, supported through improved public transit options.  This and mixed-use development (combining housing, commercial, and other uses) reduces the distances people have to travel.  More people are able to accomplish more of their daily activities through easy, local access to shops, services, stores and other amenities, saving time and money.  Smart growth also makes providing quality public transit a cost-effective option.  It is difficult and costly to provide comprehensive public transit coverage when there is sprawl.

Smart growth means more transportation choices, less dependence on cars as the only way to get around, and less traffic for those that do choose to drive.  In other words, it will create a transportation system that works better for everyone.  These benefits matter for housing choices as well.  People increasingly want to live in walkable mixed-use neighborhoods with strong transit coverage.  An analysis by the Urban Land Institute forecasts that by 2035, demand for homes near transit stations will exceed supply in California by four million homes, while the supply of large conventional lot homes will exceed demand by two million homes.

By helping with affordable housing and achieving California's climate goals, smart growth can be a win-win opportunity.  It is a strategy for increasing affordable housing while leading to substantial carbon emission reductions.  New research by the Center for Neighborhood Technology found increasing affordable housing near transit would be a major driver of greenhouse gas emission reductions.

Smart growth will help to correct some of the housing market's supply-demand mismatch, but additional policy changes are needed to ensure escalating housing costs are kept under control.  State funding must be used more creatively to speed up approval of new housing supply in existing urban areas.  Land use is primarily a local question, but can be shaped through the power of the purse.  More specifically, beyond funding particular projects, state funding to localities could come with specific conditions, such as meeting specific quantitative targets for infill development that will increase the supply of housing within their jurisdictions, thus putting downward pressure on housing prices.  Stronger state funding to support local smart growth is needed, but strings should be attached to provide stronger incentives.

Smart Growth Can Save Governments and Consumers Billions in Avoided Costs

California is already suffering from too many cars on the road.  In the state's larger cities, some commuters spend more than 80 hours a year sitting in traffic due to congestion, among the highest levels around the country.  More sprawling land use patterns would worsen this problem, limiting economic growth.

California has a better choice.  Our study shows better land use through smart growth will not only create significant carbon emission reductions (a decrease of between 9-12 million metric tons of carbon dioxide equivalent in the year 2030 over previous estimates), it also produces huge co-benefits.  Between now and 2030, smart growth would reduce the health damages from air pollution by $3-$8 billion, and would save local governments between $12-$18 billion by redirecting government investment away from unwise, inefficient infrastructure and instead toward improvements within existing urban boundaries.   

Consumers will also benefit from smart growth beyond avoiding hours sitting in traffic by spending less on car-related expenses.  Transportation costs are the second largest component of household budgets, and we estimate by 2030, smart growth development could save households $600-2,000.  This dynamic is evident in the map below, showing average annual household transportation costs in southern California.  In walkable places well-served by transit, household transportation costs are roughly half as large compared to sprawling areas where there is more car dependency. 

Figure 1. Transportation costs are lower in walkable places that are well served by transit

Source: Map created using the Center for Neighborhood Technology's H+T Index, reflecting 2013 data.

Smart Growth is Emerging But Needs Stronger Policy Support

Fortunately, smart growth developments are already starting to emerge.  Los Angeles has taken impressive steps to build up a comprehensive transit system in a short time; the Antelope Valley Transit Authority recently won a $24.4 million grant funded by cap-and-trade auction revenue to purchase 29 electric buses; a compact, mixed-use development is close to breaking ground in the Fresno area; and the Bay Area recently scored a best-in-the-nation reduction in the number of people solo commuting in a car.  The state is making strong gains in transit and "active transportation modes"—walking and biking. The percentage of trips by such modes doubled as a share of total trips from 2000-2012. The state has set a strong target of further tripling their share by 2020. 

California should build on this momentum.  Moving California Forward recommends a handful of ways for how to do this.  California should pass SB 32 (which would implement an economy-wide carbon emissions target) and SB 350 (which would reduce dependence on oil use for transportation by half).  While ambitious, both the economy-wide carbon target and the petroleum reduction goal are achievable in part through smart growth.  To promote optimal land use patterns, the state should also set stronger targets for its land use law, SB 375, and continue the steady stream of state funding for these local actions, including frequent evaluation of the effectiveness of this spending and with an eye toward leveraging a stronger local impact.