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ABAG Projections - 2000ASSOCIATION OF BAY AREA GOVERNMENTS Representing City and County Governments of the San Francisco Bay Area ~,(,d~Q JN~NNt/ld A BAG 1~38dWb'~ ~0 Ally 66fit 8 0 d3S Date: September 3, 1999 ~~~~~~~~~ To: County, City, and Town Planning Directors From: Paul Fassinger, Research Director Re: Review of Preliminary Projections 2000 Population, Household, and Employment Forecasts As many of you know, ABAG updates its Projections series every two years. These forecasts are used by local planning departments, congestion management agencies, regional and state agencies, and by the private sector for investment decisions. Because this information is so widely used, we encourage your careful review and comments on the attached preliminary forecasts. Uncertainty is inherent in any projections process, and ours is no different. Varying opinions about potential growth will occur. We try to follow as closely as possible the constraints of local development policies for the short term. Over the long term (greater than ten years), our forecasts assume that economic conditions and population pressure can affect policy strategies of some local communities. Your review and comments on the forecasts are essential so that we can give you the best possible estimates of the future growth at the local level. The Projections cover the period 2000-2020 and incorporate all available Census demographic information in the 1990 base year and estimates for 1995. In addition, employment data are benchmarked using zip code and Census tract data from the Bureau of Census and the California Employment Development Department to provide you with the best estimate of current employment. Projections 2000 will mark the first time that we will have separate data for subregional study areas and for jurisdictional boundaries. The Local Review Period will end on October 8, 1999. Mailing Address: P.O. Box 2050 Oakland, California 94604-2050 (510) 464-7900 Fax: (510) 464-7970 info@abag.ca.gov Location: Joseph P. Bort MetroCenter 101 Eighth Street Oakland, California 94607-4756 We welcome your review and strongly encourage written comments. They should be addressed to: Paul Fassinger, Research Director Association of Bay Area Governments P.O. Box 2050 Oakland, CA 94604 Phone requests for assistance should be directed to the following individuals: Population and Household Forecasts (Alameda, Contra Costa, San Francisco, San Mateo, and Santa Clara Counties) Hing Wong (510) 464-7966 Population and Household Forecasts (Marin, Napa, Solaro, and Sonoma Counties) Employment Forecasts Brian Kirking (510) 464-7996 Paul Fassinger (510) 464-7928 After comments have been received and reviewed, the preliminary estimates will be revised and the Projections 2000 document issued. Each member government will receive a complimentary copy of the latest forecast. We look forward to hearing from you. Prelimilnary Economic and Demographic Projections Association of Bay Area Governments September 1999 Attached are the preliminary long-term economic and demographic projections for the cities of the San Francisco Bay Region. The Projections will be officially released in December in the document Projections 2000. The base year for the Projections is 1995, and the forecast extends in 5-year increments to 2020. 1990 figures are included to allow comparison with census time periods. Short-Term Forecast We follow local policies in the short term as closely as possible in allocating household growth needed to meet the economic growth. Therefore, in the short term (less than ten years), ABAG's forecasts reflect the aggregate of local development policies in the region. Long-Term Forecast In the long term, staff recognizes that policies change; the intensification of land use does occur; and the distribution of growth may shift. Therefore, forecasts of minimal housing needs (i.e., households) may exceed present local development policies. in this series of forecasts, we exceed local development potential based on current policies in some jurisdictions after the year 2005. Caveat for Small Area Projections Realistically, small area projections are more difficult to produce. Therefore, we recognize that these estimates of local growth could substantially change over time at the community level. REGIONAL HIGHLIGHTS: Economic Growth There are two significant changes between Projections 98 and Projections 2000. First, we have adjusted 1990 and 1995 employment to better reconcile census jobs identified in the 'journey to work tabulation' and data from the California State Employment Development Department and the Department of Commercials County Business Patterns. Second, the high rate of recent job growth has prompted us to generally increase our estimates of the year 2000 employment, even as job growth has began to ease in the last few months. While these are general trends, specific areas may vary. Overall, changes in the early years have "ratcheted up" the forecast. Population Population growth forecasts are also seeing some changes in future years. The 1990 and 1995 numbers are generally unchanged. Two of the factors controlling population growth, birth and deaths are relatively unchanged from our previous forecast but assumed migration has increased in the short term. This is because employment is one of the most important factors atvacting migrants to a region. While a return to more historical growth rates is expected after about 2005, changes in the early years again "ratchet up" our forecast. Identification of Subregional Swdy Areas The asterisks geographically identify each community in the attached forecast as follows: * City * * City Sphere of Influence * * * Urban Service Area * * * * Other Subregional Swdy Area In most cases, the subregional study areas correspond to the Local Agency Formation Commissions' adopted spheres of influence as of 1999. in some cases urban service areas have not been adopted, city boundaries are usually used to define the Swdy area. Other subregional Swdy areas represent proposed city LAFCO spheres; the city and part of its LAFCO sphere (e.g., Daly City includes that part of the city which is within Brisbane's sphere); city planning area; unincorporated urban places outside city spheres; or unincorporated rural areas with significant concentrations of populations, households or jobs. The "remainder" areas in seven counties (all except San Francisco and Sonoma) correspond to the remaining unincorporated territory outside all other subregional Swdy areas. ABAG PROJECTIONS 2000: Q. 8L A. FACT SHEET 1. WHAT IS THE BASIS OF ABAG's PROJECTIONS? Projections are ABAG's biennial forecast of future population, household and employment growth, at 5-year increments based on modeling, which allows for the interaction of regional supply and demand factors. Supply Side Information Information on vacant or underused land and local development policies serves as a primary supply side input to Projections. This information is collected from local jurisdictions. Limited resources do not allow an update of local development potential for every city with every Projections series. We try to identify areas undergoing the highest rates of change, relying on local jurisdictions to provide us with data on vacant and redevelopment land supply as well as policy changes and growth and infrastructure constraints. The amount and location of vacant developable land serves as both asupply-side constraint (limiting where development can be assigned) and also as an "attractor" of the aggregate demand (attracting development location to that zone). This statement is especially true in the near term (1995-2000 and 2000-2005). However, we do not let the model overcome supply-side constraints in many instances, and especially in the long term. - Demand Side Information ABAG's forecasu also involve a set of assumptions about the Bay Area and national economies, the labor force, demographic changes, transportation, etc. These factors drive the demand side of the projections process. Assumptions for each indicator are developed based on a review of available federal, state, and private information resources. Following is a list of major indicators: National Economic Indicators • annual growth rate of GNP by industry sector • commercial interest rate Regional Economic indicators growth rates in exports by industry sector mortgage interest rate price of energy output per worker by industry sector consumer spending by industry sector real growth in capital spending by industry sector commercial interest rate Regional Demographic Indicators • growth in labor force participation • fertility rates • changes in household size These assumptions drive the projected region wide growth. Countywide forecasts are prepared using a model that considers historical growth trends and relationships between employment sectors. However, the regional and countywide forecasts are not simply a historical extrapolation of trends. Once the country growth forecasts are obtained, the county total is `allocated' to jurisdictions based • on a model that takes into account the availability of vacant and underused land and attractiveness factors (e.g., proximity to transportation, and the existing level of development activity in the zone). "Raw" model outputs are then compared to historical trend data as a subjective check of reasonableness. 2. WHAT ARE THE PROJECTIONS INTENDED TO REPRESENT? The forecasts are intended to represent expected growth for the region to the year 2020. They do NOT represent ahigh-end forecast. Projections 2000 shows stronger regional growth in the early years, and slower growth in the later part of the forecast period. subregional projections should not be interpreted as either a floor or a ceiling on growth. The best predictive capacity of the Projections is for the region as a whole, followed by the county-level projections. Sub-county and small area projections are subject to considerable uncertainty, particularly in area undergoing rapid or unanticipated changes. 3. WHY DON'T ABAG's NUMBERS MATCH THOSE IN LOCAL PLANS? Local General Plans document the goals, policies and objectives of local jurisdictions; as such, they are often described as the constitution of the local planning process. Moreover, they contain a vision of a desirable future for the local area. But individual local plans are not a forecast of local development. They do not necessarily reflect economic conditions or the subregional ability as well as pressure to absorb new development. For example, local plans, taken together, often include a higher level of job-producing land uses than can be realistically absorbed at a subregional level. Also, the focus of the General Plan is on the local community or county. ABAG's responsibility is to look at the sum of all the local plans and policies, as well as local, regional, and national economic and demographic trends, and to develop a set of forecasts. A simple aggregation of local General plans would assist jurisdictions in assessing the actual likelihood of future development. It is worth noting however, that ABAG's projections can be used by local jurisdictions as an indication of what additional steps they may want to take to steer their community towards a future that is different from the projections, or fulfillment of the goals in their General Plan. 4. HOW AND WHEN DO CITIES AND COUNTIES PROVIDE INPUT INTO PROJECTIONS? Local jurisdictions have significant opportunities to provide input into Projections. The following are the key-points of local input: Local Policy Survey Data ABAG maintains a database of vacant and redevelopable land supply. It includes information on acreage, planned land use, density, phasing and infrastructure and environmental constraints. Data for each community is periodically summarized and circulated to the Planning Department for review and comment. Review of Correspondence Table Jurisdictions review and are asked to comment on the census tract correspondence table (see also No. 6). Review of Preliminary Projections Preliminary projections are distributed for review and comment to local planning departments along with explanatory information. Ail written comments, as well as staff responses are documented and are available for review. 5. WHY DOES ABAG TYPICALLY USE THE SPHERE OF INFLUENCE AS tTS PLANNING AREA? The incorporated limits for many cities are subject to relatively frequent change. The current Projections series extends out to the year 2020. Therefore, the projections must reflect the long- term boundaries of the jurisdiction. The sphere of influence (SOI), as established by the LAFCO, is defined as "the probable ultimate physical boundaries and service area of a local agency or district." As such, the SOI is often the most logical geographic area to use for future projections. In Projections 2000, we will also be providing an alternative description of the forecast based on current city boundaries. 6. WHAT IS THE "CORRESPONDENCE TABLE"? The correspondence table identifies how census tract level projections are assigned to tracts that straddle two or more planning areas. The table includes existing conditions (the 1995 value), and the future splits (the 2020 value). The correspondence table is regularly circulated for local review and comment. For intermediate five-year increments, ABAG interpolates between the current and end-year percentages, unless the local jurisdiction helps us to identify an alternate rate of change. 7. WHAT IMPLICTIONS ARE ASSOCIATED WITH THE PROJECTIONS? • State directive stipulates that the regional planning agencies' Projections can be used to identify needed levels of construction for sewage treatment plants, transportation facilities, and other capital facilities; • The Metropolitan Transportation Commission (MTC) and the countrywide congestion management agencies (CMAs) use ABAG's economic-demographic Projections in developing their travel demand forecasts (which in turn, are used to prioritize transportation improvements); • The Projections must serve as the basis for congestion management and air quality planning purposes; • The Projections are used for planning purposes by government and private entities needing a sense of future conditions; and • The Projections influence the housing needs determination (discussed below). S. WHAT IS THE RELATIONSHIP BETWEEN THE PROJECTIONS AND ABAG's HOUSING NEEDS DETERMINATIONS? Jurisdictions often ask how the Projections will affect their housing needs allocation. Under state mandate, ABAG has the responsibility to identify housing needs targets for use in preparing local housing elements. The housing needs determinations are separate and distinct from the Projections, however, the near-term household growth forecasts will be an important component in assigning the housing "growth" need.