Client:  Arata Misuraca and Clement

Gruen Gruen + Associates (GG+A) conducted research in order to forecast the economic and social impact of a cumulative adoption of ordinances that would limit the number of building permits issued by smaller, fast-growing communities in the Bay Region. The study concluded that under the present region-wide and national institutional structure, housing production on a scale equal to the sum of units needed for new household formation plus units needed for replacement of existing, obsolete and low-quality units was necessary for household mobility. The study disclosed that, in all decades, a disproportionate share of new housing is supplied within cities that had a relatively low proportion of the region’s existing stock at the beginning of the period. The imposition of a limitation on the construction of new dwelling units in rapidly-growing cities such as Petaluma to an amount per decade not exceeding 60 percent of their 1970 stock would affect at least 25 percent of the construction that would otherwise take place between 1970 and 1980. The reduction in overall production of dwelling units in the price brackets that were found to be typical of those produced in growth centers similar to Petaluma would create pressure for increased housing prices and lower production throughout the region. Such pressures would not be substantially mitigated unless some of the basic institutional rules under which the housing production system operates were changed. In addition to tending to increase housing price, such ordinances would lower the overall quality of the housing stock and thereby inhibit the moves that people make to find shelter that better satisfies their needs. A limitation on building in established growth centers was also found to have long-run adverse impacts on the quality of their existing stock.

The results of the GG+A study were presented in the District Court of the United States for the Northern District of California in the case of the Construction Industry Association of Sonoma County v. the City of Petaluma. In a decision handed down on January 17, 1974, the court rules in favor of the plaintiff, declaring that Petaluma’s ordinance limiting building permits was unconstitutional. The decision was reversed by the Federal Appellate Court.