In the Rush to Redevelop, a California City Oversteps Property Rights

Seventeen years ago, I wrote a feature column for The Orange County Register discussing Santa Ana, California’s “Renaissance Plan,” which aimed to eliminate over 130 businesses to create a high-rise, transit-oriented district filled with condos and apartments. While I support urban development, I oppose plans that compromise property rights. At the time, I labeled it the ‘Forced Gentrification Plan,’ contending that it was an oversight to disregard established businesses and their communities in pursuit of urban renewal. This prompted public outcry, leading to intervention from state legislators and a compromise that allowed the existing businesses to continue operating under an “overlay zone” as developers introduced housing projects around them. This compromise benefited both the city’s population growth needs and the businesses, resulting in a fair outcome that exemplified a successful urban planning approach.

Fast-forward to today, and Santa Ana’s government is embracing new trends that reflect the state’s broader struggle with housing shortages, exacerbated by rapidly rising prices and legislative pressure on cities to meet housing goals. In 2017, Governor Jerry Brown signed Senate Bill 1000, promoting “environmental justice” by requiring cities to recognize and address pollution in disadvantaged neighborhoods. Although these new policies are ostensibly aimed at improving living conditions, they reflect a pattern similar to that of the earlier Renaissance Plan, threatening existing businesses under the guise of urban development. Recently, the City Council enacted a moratorium prohibiting the approval or expansion of industrial uses in the SD-84 Transit Zone, aiming to rezone the area without meaningful consultation with business owners.

The impacts of this moratorium extend beyond mere regulation; they jeopardize the livelihoods of those who have invested significantly in their properties and made longstanding contributions to the local economy. Business owners have reported that their permit requests are being denied, even when they have historically operated under local zoning laws, as the city adopts a rigid stance limiting their operational capacity. They fear devaluation of their properties, which could plummet by 25% to 75%, essentially reducing their land to the value of raw land rather than its developed state. This devaluation threatens their ability to sell their businesses when retirement or relocation becomes necessary, undermining years of hard work and investment.

One notable case involves Bob Adams, owner of Adams Iron Co., who has expressed deep concern over the city’s shifting position. He described the previous overlay zone as a promise from the city to allow industrial businesses to operate indefinitely. After nearly half a century of significant investment and job creation, he finds his company at risk of being forced out by the city’s new initiatives. His frustrations epitomize a larger issue: how community development can unintentionally jeopardize established businesses and disrupt local economies. This exemplifies a systemic betrayal of trust that many owners are now grappling with as they face uncertainty about their futures.

Throughout this situation, nearby residents have voiced their complaints about noise and nuisances associated with industrial operations. While these issues cannot be ignored, solutions should prioritize coexistence rather than forced closures. Many of the businesses under threat are well-kept and provide substantial employment and tax revenues. The city’s attempt to introduce new housing in tension with existing industries may ironically lead to what urban planners refer to as “urban encroachment,” much like complaints from individuals moving into areas formerly filled with agricultural activity without acknowledgment of the pre-existing businesses.

Finally, this situation serves as a poignant reminder that well-meaning policies labeled under “justice” can inadvertently lead to significant injustices, especially when local authorities wield new regulatory powers. The urbanist vision championed by today’s city planners must reconcile the need for housing with respect for existing businesses and their owners. As Santa Ana deliberates its future development plans, it is critical for city officials to engage meaningfully with stakeholders, ensuring that both the needs of residents and the rights of businesses are upheld, promoting a truly inclusive and sustainable urban environment.