Supervisors establish urban agriculture incentive zone program

The San Diego County Board of Supervisors established an urban agriculture incentive zone program for the unincorporated county.

The supervisors’ 5-0 vote, Feb. 26, approved the first reading and introduction of the ordinance, while a 5-0 vote, March 11, approved the second reading and adoption.

“This is the right action to take,” Supervisor Greg Cox said.

In 1965 the state Legislature passed the Williamson Act which allows landowners to sign contracts agreeing to restrict their land to agricultural or other open space use, including recreational use or a combination of agricultural, open space and recreational use, in exchange for having the land assessed on its restricted use rather than its market value. The lower assessment reduces property tax liability for the landowner, and the Williamson Act included a provision providing partial reimbursement by the state to the counties for the lost property tax revenue.

In 2013 State Assemblyman Phil Ting, whose district includes the western part of San Francisco as well as some of San Francisco’s south suburbs, wrote Assembly Bill 551 to create urban agriculture incentive zones. The bill initially passed both the State Assembly and the state Senate without any votes against it, although when the Assembly approved the Senate version the vote was 69-6. Former Gov. Jerry Brown signed AB 551 into law in September 2013. Ting’s original legislation was a pilot program, and in 2017 he wrote a bill extending the urban agriculture incentive zone program until Jan. 1, 2029.

AB 551 authorizes cities and counties to enter into contracts with landowners to restrict the use of vacant, unimproved, or otherwise blighted land for small-scale production of agricultural crops and animal husbandry. The contract must be for at least five years, and the property must be at least one-tenth of an acre, which is approximately 4,020 square feet, but no more than 3 acres. The county assessor will value property under such a contract based on the average per-acre value of irrigated cropland in California, which was $13,800 per acre in 2019, and adjustments to that per-acre value can be made for easements, environmental constraints or other restrictions. The Urban Agriculture Incentive Zones Act defines “urban” as an area within the boundaries of an urbanized area including at least 250,000 people, so land in a small town within an urban metropolitan area is eligible.

No dwellings may be built on the property while it is under contract, although structures which support agriculture such as tool sheds, greenhouses, produce stands and instructional space are allowed. Both commercial and non-commercial agriculture are permitted on land with urban agriculture incentive zone contracts. A contract can include a prohibition on the use of pesticides or fertilizers although pesticides and fertilizers allowed by the U.S. Department of Agriculture’s National Organic Program would be permitted.

An urban agriculture incentive zone in an incorporated city must be approved by both the city council and the county board of supervisors, although either governing body can pass the first resolution of approval. A county board of supervisors has land use jurisdiction only in the county’s unincorporated area, but an urban agriculture incentive zone has property tax benefits so the county’s tax collection and disbursement activity creates county involvement for urban agriculture incentive zones in incorporated cities. An urban agriculture incentive zone in an unincorporated community requires only the approval of the county board of supervisors. The local government may charge landowners a fee for the reasonable costs to implement and administer the contract.

In November 2015, the board of supervisors voted 5-0 to direct the county’s chief administrative officer to create framework criteria for evaluating proposals to establish urban agriculture incentive zones both within unincorporated San Diego County and in other jurisdictions within the county and to determine the feasibility of establishing an urban agriculture incentive zone in the unincorporated county using the newly created framework criteria. Two incorporated cities provided requests to the board of supervisors, who approved an urban agriculture incentive zone for San Diego in October 2017 and for Chula Vista in May 2018.

A June 2016 memorandum by county staff outlined the feasibility, criteria, eligibility, administrative costs and potential property tax revenue loss to establish an urban agriculture incentive zone in unincorporated San Diego County. The analysis determined that approximately 3,500 properties totaling about 3,000 acres might meet the criteria and that if all eligible properties participated the county’s property tax loss would be $580,000.

In November 2018, the county supervisors directed the chief administrative officer to establish an urban agriculture incentive zone within the unincorporated county, to initiate the process through the preparation of a draft ordinance, to provide a detailed assessment of blighted properties which could be suitable for urban agriculture, to analyze an appropriate fee structure and complete any analysis required by the California Environmental Quality Act, to return back to the board within 15 months with a completed program to be reviewed and considered by the board of supervisors and to appropriate $135,000 of general fund balance to cover staff costs for the development of the program. The updated analysis indicated that 4,165 parcels totaling 3,618 acres in the unincorporated area might be eligible and that the annual property tax loss to all taxing agencies would be approximately $5.8 million if all eligible properties participated.

The supervisors’ most recent action placed a $250,000 annual cap on property tax loss, which would equate to approximately 180 parcels. That financial amount would result in annual property tax revenue loss of $41,280 for the county and $208,720 for other agencies which receive property tax revenue.

The application will begin with a form submitted to the county’s Department of Planning and Development Services, which will confirm the parcel’s eligibility. PDS will also confirm that the proposed uses are consistent with the county’s Zoning Ordinance and that the landowner has obtained all necessary permits including grading, clearing or building permits.

“This program does not change zoning or land use designation,” Michelle Fehrensen, program manager of PDS group, said.

The application will include a description and drawing of the proposed agricultural activities, major site features and utilities which demonstrate the full use of the site for agriculture. If the unincorporated property is within an incorporated city’s sphere of influence, the city's governing body must also approve the contract. A contract will be drafted, signed, presented to the PDS director for approval and recorded by the county clerk. The property value will be reassessed annually based on the average per-acre value of irrigated cropland in California.

The estimated cost to process an application and complete a contact is $1,264. The supervisors approved a fee waiver for up to 50 urban agriculture incentive zone applications, which would result in a revenue loss of $63,200. A general fund balance from a previous fiscal year will cover the costs of the applications.

Joe Naiman can be reached by email at [email protected].