California Forever’s planned Bay Area city faces many regulatory hurdles. Can it succeed?
Image via California Forever
The CEO of the billionaire-backed company believes the plan for a new 400,000-person city near San Francisco can triumph, despite California’s restrictive environmental regulations and local pushback.
A billionaire-backed real estate development company is trying to build a new city of up to 400,000 residents in California, a state where it is notoriously difficult to build new housing.
California Forever is pushing ahead with plans to construct a walkable 16,000 acre city on roughly 70,000 acres of land that it owns in Solano County, located roughly 60 miles northeast of San Francisco.
If approved by local residents and able to pass through a number of regulatory hurdles, those behind the project say the city would be walkable, bikeable and transit-oriented, taking inspiration from other cities throughout the world. It could also help alleviate the state’s housing crisis, said Jan Sramek, CEO of California Forever.
The city’s economy would center around manufacturing, including a new shipbuilding hub that California Forever is proposing along the San Francisco Bay nearby, said Sramek, a former Goldman Sachs trader. And it would draw in tech companies.
Sramek believes California Forever will succeed because the state’s strict regulatory environment has caused housing prices to soar and prompted many people to flee the state.
“We had kind of a multi-faceted crisis of getting anything built in California,” said Sramek. “My bet was that attitudes towards growth in California would change.”
But even if the city did get approved for construction, planned cities such as this often take forever to work if they ever work at all, said Richard Green, director of the University of Southern California’s Lusk Center for Real Estate.
“Cities are organic. Cities are living, breathing things. They don’t just get cooked up in a lab and made,” said Green. “I don’t think you can just create a city out of whole cloth and make it work.”
California’s Challenging Environment
If built, California Forever’s new city will include different neighborhoods centered around shopping streets with grocery stores, restaurants, coffee shops and a pharmacy, as well as local schools that will be “the heart and social hub of the community,” said Sramek.
California Forever’s streets will form a grid system, but with superblocks similar to those in Barcelona — to create spaces for people to hangout with their neighbors and for kids to play, he said.
There will be greenways, where only walking and biking are allowed, protected bike lanes, and communal streets with low speed limits. And the city promises dedicated transit lanes in the middle of the street for buses, autonomous shuttles and potentially a tram, allowing them to move free of traffic.
But getting approval in California could be challenging. The state’s California Environmental Quality Act requires developers to take steps to reduce the environmental impacts of their projects but has since been used as a tool to stall or stop developments altogether. Local zoning and land-use laws have also prevented multifamily housing developments.
Building the city in this environment would likely be “a pretty steep uphill climb, said Jason Ward, an economist and co-director of the RAND Center on Housing and Homelessness, a California think tank.
Opponents of large planned developments are typically heard more than supporters, since they have the motivation to show up to every community meeting or local board vote, said Ward. Many people are also uniquely skeptical of housing developers, he said.
That’s made the cost of building in California extremely expensive and has led to a critical shortage of housing. The state needs to plan for more than 2.5 million homes over the next eight years to address the crisis, California’s Statewide Housing Plan found.
“California has a remarkable track record of turning ambitious plans into disappointing results in recent decades,” said Ward. “Without substantive support from state lawmakers that could limit the ability of specific critics to move the project forward, it seems like a challenging path forward.”
The Regulatory Path Forward
Public backlash and skepticism to the California Forever project began several years ago when a mysterious company, Flannery Associates LLC, secretly bought up land around the region.
But since spring 2024, conversations surrounding the project have started to evolve, Sramek said. People began embracing the idea and the benefits it could bring to the county, and are now asking how it should be completed versus whether it should be completed, he said.
California Forever tried to place a ballot measure before voters in November’s election that would have rezoned 17,500 acres of farm land to construct the city — but pulled the initiative due to a lack of support. Sramek said residents liked the idea but wanted a pause to continue figuring out the best way to build it.
Suisun City and Rio Vista, two cities located in the area, also agreed in April to collaborate on regional planning for the proposed city. The California Forever land could be annexed into one of those existing cities, a move that could take discretion over the project away from the county’s voters, Ward said.
But Sramek said he expects environmental lawsuits under CEQA “are likely to slow things down somewhat.”
The California state assembly is considering a bill that would limit the use of CEQA for urban infill housing, said Ward. But special legislation exempting the planned city from CEQA may be needed. That means, California Forever will require “substantial championing” at the state level to succeed, he said.
Building a New City
The new city could be attractive to many people given the “massive excess demand” for living in the Bay Area, said Ward.
A new “master-planned city in an area with incredibly high housing costs on what appears to be marginally productive farmland with reasonable water access and relatively low risk from wildfires and earthquakes,” he said, “seems overwhelmingly beneficial from a ‘what’s good for California’ perspective.”
But the very idea that a planned city such as this could actually succeed is in question.
Green, for example, characterized Brasilia, a planned city that became Brazil’s capital in 1960 as a “planning disaster.” The city has been criticized for its restrictive zoning plan, congestion, sprawl and poverty. Meanwhile, South Korea’s Sejong City, which was founded in 2007 to become the country’s administrative hub and reduce congestion in Seoul, has struggled to attract residents. “Nobody wants to live there,” said Green.
“This idea that wise people can somehow design a city that people want to live in, I think that history suggests that just doesn’t happen,” said Green.
Ward pointed to Irvine, California, and The Woodlands, Texas, as successful examples of master-planned communities in the 20th century. But Irvine underwent a major expansion in the early 1970s, just before a 1972 state Supreme Court ruling allowed CEQA to be used to delay or stall housing developments throughout the state.
California has since made it “illegal” to build cities with traditional neighborhoods, such as London, Zürich, Switzerland, and Manhattan, New York, Sramek alleges, citing CEQA challenges and restrictive local zoning and land-use regulations that are often used to prevent such developments from being built.
Under California Forever’s plan, most of the city would be zoned for mixed-use development. There’s also a downtown district on the southside of the city that’s next to a maker and manufacturing district, which includes a mix of entertainment, lofts and dining, said Sramek. Manufacturing and tech companies would set up shop within the industrial and technology zone on the western-side of the city.
“Lots of people in California and the rest of the country have lost their confidence that California can build big things,” he said. “I think a lot of both residents and elected officials are waking up to the reality and realizing that they don’t like it.”