Private city east of Bay Area
could be a game-changer
By Steven Greenhut | September 9, 2023
In one of the most-fascinating real-estate stories in American history, a secretive group of buyers purchased 30,000 acres of mostly swampland in central Florida in the 1960s. Hemmed in by urbanization at his Disneyland resort in Anaheim, Calif., Walt Disney sought out a larger area that he could control – and began eyeing vacant land around Orlando, Florida.
“Walt knew that an announcement that his company would be building a resort in Central Florida would have caused land-costs to skyrocket as speculators and smaller developers would have swooped in to make a killing,” according to reporter Mathew Thompson. The locals couldn’t figure out what was going on as news of the purchases surfaced.
The acquisitions led to Disney World and its expansion with Epcot Center. It’s now overwhelmingly viewed as a success story, as tourists flock to area resorts. A 2019 study found that Disney-fueled tourism in the area accounts for more than $75 billion annually, creates 463,000 jobs and provides $5.8 billion in tax revenue. Despite the company’s recent battles with the Florida governor, few people can imagine the region without Disney.
A new project in Northern California is raising parallels. Beginning in 2017, a secretive group of buyers has acquired 50,000 acres of ranch land in southeastern Solano County east of the Bay Area. Local officials for years have been trying to identify the purchasers and learn about the intended project. Property owners in the 78 square-mile area have been vexed by purchases by a company called Flannery Associates, even though it’s turned some ranch owners into millionaires.
The proposal now is out in the open. The company is backed by big names in San Francisco area venture capital. In its recent report, The New York Times referred to a note from Michael Moritz seeking investors. The project “dreams of transforming tens of thousands of acres into a bustling metropolis that, according to the pitch, could generate thousands of jobs and be as walkable as Paris or the West Village in New York.
The backers envision an “urban blank slate where everything from design to construction methods and new forms of governance could be rethought.” The company’s California Forever website acknowledges it has been “quiet,” but says it’s ready for a conversation about its plan “to build a new community that attracts new employers, creates good paying local jobs, builds homes in walkable neighborhoods, leads in environment stewardship, and fuels a growing tax base.”
The project has generated the expected pushback from local officials. “Economic blight is everywhere. So why do you need to spend upwards of a billion dollars to create a brand new city when you have all these other things that can be achieved throughout the Bay Area?” said Princess Washington, mayor pro tempore of Suisun City, outside of sprawling Fairfield.
That question is easy to answer. California cities have struggled to build the housing units needed to meet housing demand. California officials have been butting heads with local governments that resist their affordable-housing mandates. For decades, cities have made it difficult to build new housing. State rules have limited growth within existing urban boundaries. In 2015, the Legislative Analyst’s Office found that California is building 110,000 too-few houses a year, which is the key reason median home prices statewide have reached $830,000. The problem is most pronounced in the Bay Area.
Furthermore, cities are doing a terrible job handling their most basic public services. The state is nowhere near getting its homelessness crisis under control. Crime rates are increasing and urban disorder is rampant. There’s no end in sight to any of these problems, so why not just start anew by building a high-quality city from scratch? It seems like an “urban blank slate” is an overdue idea.
The Free Cities Center has reported on efforts in other countries to avoid dysfunctional government by building private or privatized cities. It’s unclear how this new city might be managed, but new private ideas are desperately needed. Of course, supporters would still need to deal with California’s miasma of growth-restricting regulations (e.g., California Environmental Quality Act, or CEQA). They also need to pass a voter initiative that would allow the rezoning of agricultural land for urban uses.
Yet this strikes me as an encouraging idea, even if there’s a long road ahead. Critics, such as U.S. Rep. Mike Thompson, who represents part of the area, blasted the secrecy of the land buys. But he surely knows that had the group announced its intentions early on that it would have become economically infeasible. The reason the company and Walt Disney bought land quietly is that once it became well known, land prices would have soared accordingly. (The company even sued some local landowners for allegedly trying to fix prices).
Others have blasted the new Solano city because it is the brainchild of the super-wealthy. Yet only very wealthy people could create a project this extensive. It obviously won’t be a mecca for the rich given that it proposes tens of thousands of new homes in an area far from the coast. That’s simply a kneejerk reaction from those who think that any proposal from wealthy investors has to be a bad one.
The project will test California politicians’ newfound commitment to increasing housing supply and to their own stated New Urbanist goals (walkable cities, sustainability) Although the state has passed some noteworthy laws, such as Senate Bills 9 and 10, that reduce regulatory hurdles for developing housing in urban locations, it has resisted the reduction of regulations for projects in exurban areas.
The state can’t fix its affordability crisis solely with high-density projects in urban infill locations, given that construction in those areas is costlier than building on green-field sites. And housing markets are regional. The state needs more housing overall across metropolitan regions and decentralized planning to meet demand – and not just an increase in condos and duplexes in the urban core.
This project ticks those New Urbanist boxes. It promises solar farms, a high-density downtown, walkable communities and surrounding open space and parks. It promises to respect the owners of local ranches, who could continue to operate them as usual. A new private city wouldn’t have the eminent-domain powers that often are abused by governments when they promote redevelopment.
I know the targeted area well. It encompasses lovely rural expanses separating the San Francisco metropolis from the Central Valley and picturesque Delta estuary. The biggest hurdle may be winning public approval, given that current residents of any area tend to resist new projects that bring more people and traffic. Can California still dream big and live up to the spirit of Walt Disney? Or are we condemned to a future of false limits? Time will answer those questions.
Steven Greenhut is the director of the Pacific Research Institute’s Free Cities Center. Write to him at [email protected].