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New Guidelines for Analyzing Air Quality Impacts Could Thwart Bay Area Infill Development

Over the years, our society has developed the habit of confronting each newly perceived threat to health and welfare with legislation addressed to that issue alone, to be administered by a new bureaucratic agency with regulatory power focused on that issue without regard to other issues its action might implicate. When the demands of the water pollution control regulators or the air quality control regulators, for example, conflict with beneficial land use policies, we generally have no established process for balancing the competing interests.

Recently adopted regulations of the San Francisco Bay Area Air Quality Management District (BAAQMD) provide a perfect example of this phenomenon. Those regulations set up a sharp conflict with land use policies favoring urban infill and so-called “smart growth” by subjecting those projects to cumbersome, expensive and time-consuming process – likely to lead to the imposition of costly mitigation requirements. Those requirements, broadly imposed, may indeed produce cleaner air over time, but at a societal cost that the agency has no mandate to consider.

Confronted with this conflict during consideration of the regulations, BAAQMD proclaimed that “administrative convenience” provided no excuse for avoiding “clean air” responsibilities. It is difficult to characterize such a fatuous response in terms both appropriate and polite. The true question is whether or not the value of the new regulations at the margin justifies the added cost of delay, process and mitigation that will add significant burdens to projects perceived to be the best hope of future urban growth and urban redevelopment.

The newly adopted BAAQMD Guidelines include direction on how to evaluate, measure, and mitigate air quality impacts related to greenhouse gas emissions from land development construction and operational activities, and also set new significance thresholds for criteria air pollutants (reactive organic gas, nitrogen oxide and particulate matter), toxic air contaminants (diesel particulate matter), and odor emissions. Overall, the new BAAQMD Guidelines set a low bar for determining when a project’s emissions are significant and thus require more extensive environmental review and mitigation under the California Environmental Quality Act (CEQA).

Greenhouse Gas Thresholds

For greenhouse gases, BAAQMD adopted two quantitative thresholds based on the goal of AB 32, the Global Warming Solutions Act, to reduce state-wide greenhouse gas emissions to 1990 levels by 2020.  The first threshold establishes a “bright line” of 1,100 metric tons of carbon dioxide equivalent emission per year; projects with emissions greater than the threshold would have a significant impact and would be required to mitigate to the threshold level or reduce emissions by a percentage deemed feasible by the lead agency. To establish this “bright line” above which a project would have a significant impact, BAAQMD undertook an eight-step “gap” analysis to determine the difference between anticipated emission reductions associated with adopted state-wide regulations identified in the AB 32 Scoping Plan and the reduction needed to reach 1990 levels, and then attributed “an appropriate share” of emission reduction to new land use development projects within BAAQMD’s jurisdiction. The resulting threshold of 1,100 metric tons of carbon dioxide emissions per year would be exceeded by a typical single-family residential development of 60 units or a shopping center more than 19,000 square feet, a size that most neighborhood centers would exceed.

Recognizing that even highly efficient projects may not be able to meet the bright line threshold, BAAQMD also adopted an “efficiency” threshold to account for projects with higher mass emissions by measuring in metric tons per service population (the sum of the number of jobs and the number of residents the project could accommodate). BAAQMD derived the threshold by dividing California’s land use sector emission target of 295 million metric tons by the state’s service population. Only very efficient projects would meet the resulting threshold of 4.6 metric tons per service population per year, but as the scale of a project and its mass emission increase, it is more likely to be under this threshold than the bright line threshold.

BAAQMD also approved a qualitative threshold based on consistency with a “Qualified Greenhouse Gas Reduction Strategy” or similar program. A Qualified Greenhouse Gas Reduction Strategy must meet the criteria set forth in the recently adopted section 15183.5 of the CEQA Guidelines, which include requirements for quantifying existing and projected greenhouse gases; developing a level of cumulative greenhouse gas emissions that would not be considered significant; specifying measures and standards that would ensure achievement of this level; and monitoring to track progress. Since section 15183.5 was just adopted at the end of 2009, and development of a Qualified Greenhouse Gas Reduction Strategy will require public review and environmental analysis of its own, it will be some time before a project can actually rely on its consistency with such a plan to be below the threshold of significance.

Thresholds for other air pollutants

The BAAQMD Guidelines also set lower thresholds of significance for other air pollutants that must be evaluated under CEQA (ozone, nitrogen oxide and particulate matter). The project-level thresholds for most pollutants have been reduced from 80 pounds per day under previous BAAQMD guidance to 54 pounds per day, and apply to construction emissions for the first time. The new stricter standards for analysis of toxic air contaminants (cancer-causing pollutants or TACs) require a finding of significant impact for projects within 1,000 feet of a source of diesel particulate matter that would result in an increased cancer risk greater than 10 in one million. In order to make this cancer risk determination, a Health Risk Assessment using an air dispersion model in accordance with guidance from BAAQMD and/or the California Air Pollution Control Officers Association (CAPCOA) must be prepared to identify the cancer risk.

Under these new standards, infill development located adjacent to freeways or major roadways would now require preparation of a health risk assessment and probably preparation of an environmental impact report. In urban areas like San Francisco that already exceed these risk thresholds, a project would be required to prepare an environmental impact report based on a pre-existing air quality risk. The new threshold thus penalizes urban infill development by requiring a project proponent to either mitigate for impacts it cannot control or effectively mitigate on a project-level, or force a lawsuit to challenge the “nexus” and “rough proportionality” issues implicit in this setting.

Perhaps in an attempt to soften the blow these new thresholds could have for infill development, BAAQMD has provided that projects consistent with a qualified “Community Risk Reduction Plan” would be considered to have less than significant impacts. And, in order to give local agencies time to prepare such a plan, the threshold for the significance of risks and hazards associated with toxic air contaminants will not apply to projects that introduce new receptors until January 1, 2011. However, this six month “reprieve” does not allow local agencies even a minor fraction of the time actually required to develop, review, and adopt a Community Risk Reduction Plan.

Implications for new development

Overall, the new standards for greenhouse gas emissions and stricter standards for other pollutants will inevitably increase the number of projects that have a “significant impact” and require mitigation measures or the preparation of environmental impact reports under CEQA. Further creating the potential for expense and delay, once an environmental impact report has been prepared for a project, it would be open to litigation to challenge its adequacy and the adequacy of mitigation measures. In addition, for projects that trigger the threshold, CEQA precludes options for streamlined review unless additional mitigation measures can be developed to reduce the impacts below the significance threshold.

Although local lead agencies are not legally required to use BAAQMD’s standards, they will carry great weight and may become a default standard since many local agencies will not have the time or expertise to develop substantial evidence to support an alternative standard.  By adopting these Guidelines, BAAQMD became the first air district in the state to adopt thresholds of significance for greenhouse gas emissions. The Guidelines are therefore likely to be influential in areas beyond the Bay Area, since other air quality districts that have not yet set their own thresholds will consider the BAAQMD Guidelines in establishing their own CEQA standards.

Throughout the BAAQMD Guideline approval process, local agencies and development interests expressed concern about the potential for the new thresholds to hinder high-density, mixed use, infill and transit oriented development; exactly the type of development intended to reduce greenhouse gas emissions. BAAQMD staff insists that it supports infill and transit-oriented residential development. Its actions have the opposite effect.  BAAQMD also countered that agencies could adopt a Greenhouse Gas Reduction Study or a Community Risk Reduction Plans as an alternative to analysis of individual project impacts. Those options likely will not be available for at least another year as agencies go through the lengthy process of developing those plans with public input and environmental review.

This disconnect between support for smart growth infill development and increasing requirements for analyzing greenhouse gas emissions in the urban core illustrates the dysfunction of the state’s project review and approval system, which relies on single-purpose entities working on a regional basis to set standards that have wide-reaching effect. For example, in contrast to the stringent new BAAQMD thresholds, the San Joaquin Valley Air Pollution Control District’s guidance for greenhouse gas analysis adopted in December, 2009 uses a performance based approach whereby projects implementing “best performance standards” set by the District would be determined to have less than significant impacts associated with greenhouse gas emissions. The best performance standards are relatively easy to achieve and include flexibility to allow projects various ways to comply. These very different approaches undermine California’s goal of reducing emissions to 1990 levels by reducing the incentives for developing in the urban core and making greenfield development a more economically feasible proposition.

Amy R. Higuera is an associate in law firm Buchalter Nemer’s Real Estate Practice Group. Her practice focuses on land use and environmental law. Howard N. Ellman is a shareholder in law firm Buchalter Nemer’s Real Estate Practice Group. His practice concentrates on real estate, land use and environmental regulation.

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