Sprawl's Costs Hurting State, Report Finds : Growth: Bank of America, Wilson Administration join environmentalists in unusual alliance. Authors say the economy depends on smarter development.

By FRANK CLIFFORD

Jan. 31, 1995 12 AM PT

TIMES ENVIRONMENTAL WRITER

For years environmental groups have argued to little effect that suburban sprawl hurts California. Now the Wilson Administration and Bank of America are lending new weight to the argument, making the case that the state’s characteristic growth has been bad for the environment and the economy.

In a report to be released today, an unusual alliance that includes such beneficiaries of the post-World War II population boom as Bank of America concludes that future growth should avoid new sprawl to protect California from further harm.

“Sprawl compromises one of the most essential assets of California--the beauty and drama of its landscape,” the report states. “California businesses cannot compete globally when they are burdened with the costs of sprawl.”

The report blames the destruction of 95% of the state’s wetlands on suburban sprawl and contends that one-third of all air pollution is traceable to “car and truck emissions exacerbated by longer commutes” necessitated by the growing distances between home and work.

Yet the report’s authors insist theirs is not a call for limiting growth. Rather, they say, it is a call “for California to be smarter about how it grows--to invent ways we can create compact and efficient growth.”

Sprawl was affordable, the report says, as long as the supply of cheap land was abundant and government agencies and private businesses were able to meet the demand for affordable homes while paying for the roads, schools, water systems, sewage treatment plants and gas and electric lines that each new development required.

But within the past generation, the report maintains, “the postwar formula for success has become overwhelmed by its own consequences. Since the 1970s, housing has become more expensive, roads have become more congested, the supply of developable land has dwindled, and because of increasing costs, government agencies have not been able to keep up with the demand for public service.”

The report, titled “Beyond Sprawl,” was jointly prepared by Bank of America, the Wilson Administration’s Resources Agency, the San Francisco-based Greenbelt Alliance and the nonprofit Low Income Housing Fund.

The intent of the report is to promote state and local government policies that will discourage the pattern of leapfrog development that has distanced people from urban centers, while aggravating traffic congestion and air pollution.

“In the past, the argument against it (sprawl) has been couched purely in environmental terms,” Douglas Wheeler, the state’s secretary of resources, said Monday. “Unfortunately, that was not an argument which carried much weight. But by making the point that there are economic as well as environmental implications, and with business getting involved in the issue, there is a real opportunity for change.”

The report underscores the belief among some California businesses that to remain competitive economically, the state must look out for its quality of life.

“An attractive business climate cannot be sustained if the quality of life continues to decline and the cost of financing real estate development escalates,” the paper states. “By reducing the quality of life, sprawl has made California a less desirable location for business owners and potential employees.”

The appeal of California suburban living fades as new home buyers feel the weight of new taxes increasingly necessary to cover infrastructure costs, according to the report. “These additional taxes often have the effect of doubling a new homeowner’s property tax bill,” the report states.

The report echoes the case long made by urban planners that the increasing economic and social isolation of older city neighborhoods is linked to suburban sprawl, saying that it has taken away jobs, investment capital, political power and government services.

“People in central cities and older suburbs cannot become part of the broader economy if sprawl continues to encourage disinvestment, and the state can neither afford to ignore nor fully subsidize these neglected areas.”

But reversing a 50-year-old trend won’t be easy, experts say. Past legislative efforts to change the direction of development failed to overcome stiff opposition from real estate interests who recall the no-growth frenzy of the 1980s in established communities that did not want increased density.

“People in the industry know that it tends to be a lot easier to get projects approved on the outskirts where there is less public opposition than closer in where people are more likely to be hostile to new development,” said David Booher, a consultant to the Irvine Co., one of Southern California’s largest land developers.

Booher also pointed out that to lure developers back to the cities, current residents will have to be willing to share the costs of widening streets, enlarging schools and generally making room for more people.

“In the end, you have to be able to build a house that is affordable, and you can’t do that if you have to absorb all the infrastructure costs,” he said.

Meanwhile, one Bank of America official said, the bank that has financed development across the state has no intention of changing its lending policies.

“We will finance housing almost anywhere as long as there is a good market for the house,” said Richard Morrison, the bank’s director of environmental policy and one of the report’s authors. “We don’t make a distinction on where the development is.”