Los Angeles’ $466 Million Housing Plan Runs into California’s SB 1137 Paradox

Los Angeles has approved a record $466.6 million funding round to build and preserve affordable housing, even as California implements a state law premised on the proposition that residents need a 3,200-foot “Health Protection Zone” separating them from oil and natural gas production.

The contradiction is difficult to miss.

When the Legislature enacted SB 1137, it imposed a uniform 3,200-foot restriction on oil and gas operations near homes, schools, hospitals, and other so-called sensitive receptors. State regulators now characterize these areas as “Health Protection Zones,” with significant restrictions on permitting and operation of existing oil and gas facilities.

Yet California did not establish that 3,200-foot standard based upon epidemiological studies demonstrating that oil production conducted under California's regulatory regime causes adverse health effects among Californians living within that distance.

Instead, the Legislature created an arbitrary setback distance just five days before adjournment and justified it with research that did not establish any causational link between proximity to oil facilities and residents, not to mention most of the research was conducted outside California and under substantially different regulatory, geological, and operational conditions.

That distinction matters.

California oil producers operate under one of the nation's most extensive regulatory systems, including state and local air-quality requirements, well construction standards, groundwater protections, emissions controls, inspection requirements, and operational restrictions. Applying findings from oil and gas operations conducted elsewhere to California operations does not, by itself, establish that a compliant California well creates a measurable health hazard 500 feet away, 1,500 feet away or precisely 3,200 feet away. Nevertheless, California chose 3,200 feet and wrote it into law.

Now consider what Los Angeles is doing. The Los Angeles City Council has approved $466.6 million for affordable housing, the largest funding round in the history of the Los Angeles Housing Department. Roughly 70 percent is expected to come from Measure ULA revenues, with hundreds of millions of dollars directed toward multifamily affordable housing and other residential projects.

Here is where SB 1137 produces a remarkable policy contradiction.

Under the law, a new apartment building is a “sensitive receptor.” Put that apartment building near an existing oil operation and the residents become people whom California says must be protected from that operation.

But SB 1137 does not prohibit Los Angeles from putting the apartment building there in the first place.

The state believes that SB 1137 does not prevent local governments from approving housing development inside a Health Protection Zone. In other words, California can severely restrict an existing oil producer because people live nearby while simultaneously allowing government to approve new housing that brings additional people closer to the same oil operation.

That raises an important question that should be answered before Los Angeles begins spending nearly half a billion dollars: How many of the affordable housing projects receiving this $466.6 million are located within 3,200 feet of existing oil and gas wells or facilities?

Neither the funding announcement nor the reporting cited here answers that question. But given the extensive overlap between oil production and developed areas of Los Angeles, it is a question worth asking.

And it leads directly to another:

If some of these publicly funded housing projects are inside SB 1137 Health Protection Zones, why is government spending taxpayer dollars to place additional residents in areas that California has simultaneously designated for special health protection because of their proximity to oil production?

That is where the supposed health rationale becomes difficult to reconcile with the state's housing policy. If California has determined that living near oil production presents a health risk serious enough to justify a mandatory 3,200-foot protection zone, why would government finance additional housing within that same distance?

Conversely, if California believes those locations are appropriate for new housing, what does that say about the premise used to restrict the existing oil operation?

Los Angeles cannot logically have it both ways.

This issue becomes particularly important because Los Angeles' oil fields are not isolated rural developments. Many are legacy fields surrounded by an urban environment that grew around them over generations. Housing, businesses, roads, schools and oil production became intertwined as Los Angeles expanded.

SB 1137 allows that urban development to continue moving toward existing oil operations while placing significant regulatory consequences of that development on the oil producer.

Build another apartment building and California does not tell the developer that the location is too dangerous for residents.

Instead, those new homes can become additional sensitive receptors affecting an oil operation that was already there.

Before Los Angeles celebrates nearly half a billion dollars in new affordable housing funding, policymakers should identify where these projects will actually be built and determine how many fall within 3,200 feet of existing oil production.

The fundamental question remains remarkably simple:

If California believes living within 3,200 feet of oil production presents a sufficient health concern to justify SB 1137, why is California allowing taxpayer-supported housing to be built there?

And if it is appropriate to build new housing there, California owes oil producers and the public an explanation for why the same 3,200 feet is treated so differently when an operator seeks to maintain or continue producing from an existing well.