When Was the Last Time We Built a New City?

In August 2023, California Forever, a corporation founded by Jan Sramek, announced plans to build a new city of up to 400,000 people in Solano County, forty miles northeast of San Francisco. Beginning in 2017, the company, funded by some of the deepest pockets in Silicon Valley, purchased 50,000 acres of land for an estimated $900 million. Most of the land is zoned for agricultural use and is subject to slow-growth laws. A proposed ballot initiative to change that will be voted on in November. If it passes, California Forever would be the largest and most ambitious new development built in the state for over 50 years.

Asterisk: I live in the Bay Area. I’m thinking of buying a house in the near future, but it costs a lot of money and this really stresses me out. In other words, I'm your ideal customer. So pitch me. Why do I want to live in California Forever?

Jan Sramek: You are, actually. That’s great. So imagine you had a place that looked like Noe Valley, or the Marina, or many of the beloved neighborhoods in the Bay. Now imagine we make it better by building superblocks, for example like they’ve done in Barcelona, where they have internal streets where cars can only go 10 miles an hour — so you can actually hang out on the streets with your friends, and your kids can walk to school on a road that’s safe.

Then imagine that it’s 25 minutes to Napa and two hours to Tahoe — much closer to those places than Palo Alto.

And then imagine that you can buy — hopefully you can buy — an apartment in the $400,000 range, or a nice house for $600,000. Those figures are a little bit up in the air, but it will definitely be more affordable. Then hopefully we do a good job on schools and culture and art.

And then imagine that because we are building lots of housing, if your friends want to move into the neighborhood, there’s units for them as well. You can actually get your friends to move into the same neighborhood, which is a real problem elsewhere, because even if you get lucky and you find the one house that you love somewhere in the Bay, it’s difficult for your friends to move within a couple of blocks. That will be entirely possible here.

A: This is going to be an expensive thing to start up. This has come up in a lot of discussions about this project. You’re not just promising houses. You’re promising a lot of infrastructure, schools, transit, amenities, parks.

What’s the plan for keeping those prices affordable while supplying all of those benefits?

J: One is that we paid less than you might pay otherwise for land. We have a big infrastructure cost but that’s not unusual for greenfield projects. In most greenfield projects, you pay less for land than you would inside a city, then pay infrastructure costs. And so that’s similar here.

The other part of it is that there are very significant economies of scale with a project like this. Yes, we do need to improve the highway and yes, we need to build a big park, but those are going to be shared by thousands, eventually tens of thousands and hundreds of thousands, of residents — hopefully. And so you can amortize those fixed costs over a large number of people.

A: But isn't there a bit of a chicken-and-egg problem? To build the infrastructure you need to get the residents and to get the residents you need to have the infrastructure to offer them.

J: There is. And that comes with having a big enough holding that you can kind of subsidize some of the earlier phases.

The way we think about it is: Take something like DoorDash. When they were starting out, they would lose money on every order. Eventually you build a network effect, you build scale, and it becomes cheaper. It might be that at the beginning we have to subsidize the grocery store and we have to subsidize a restaurant. But eventually you get enough people and the balance tips.

A: And those subsidies would be funded by your existing backers.

J: Exactly.

A: So the plan is to provide $500 million in community benefits for the town, with $400 million for housing, as well as sizeable benefits — I think around $200 million — for downtowns in neighboring communities like Fairfield and Vallejo. Is that all coming out of the same budget?

J: Yeah. All of that is coming from us gradually over the build-out. The important thing is that it happens proportionately as we build the community. And so we set these benefits, the $500 million in community benefits, which are basically grants, and then $200 million in commercial investments by us into the downtowns. That happens over the build-out from 0 to 50,000 residents.

So by the time that we've built out 5,000 residents, it’s 10% of that amount. It’s not all up front. It happens as we go along. Every year we’ll look at how many homes we’ve built, and then we pay that share of it.

A: Realistically, for those first 5,000 residents, what is the appeal? A $600,000 home in Noe Valley would be great! Anyone would go for that. But the first 5,000 residents aren’t going to experience Noe Valley. Is the hope that they just have to build with the expectation that it’ll grow?

J: I think, on most things, it’s going to be worse than Noe Valley in the beginning. But it’s going to be better on a couple of them.

Kids being able to walk to school right from the beginning is a really good example. In the first phase, we can’t start with 100 homes. It’s just not going to work at that scale. We need the minimum critical scale. We think of it this way: We need one shopping street to work. So for example an Italian restaurant, a Thai restaurant, an American restaurant, two coffee shops — one pretentious and one not. And then we need a grocery store and a bar. And of course a couple of schools.

Five thousand people can support that with some subsidies. That does mean that the choices are limited. But there are people who really care about some of those things in particular, like the fact that their kids can walk to school and play outside.

Do I think that the early market is going to be a bunch of people in their early 20s? Probably not. They would probably want more restaurants, more people, and so on.

But for people having small kids, I think that might be the right trade-off, and they might be the right market. To some extent, they’ll be taking the view that they’ll get in early and then the community is going to grow around them.

That’s one of the reasons why for us, the speed of the development is really important: People need to have the confidence that although there’s three restaurants right now, there’s five more coming next year, and more the year after, and so on.

A: And these initial residents would probably be commuting then to the Bay or maybe to Sacramento.

J: I don’t know that they would. We’ve had a lot of interest from employers since we announced this, and we’re hopeful we’ll have more news to share on this later in the year. We’re hopeful that there might be a couple of offices on day one, which would change the dynamic completely.

And then, to your point of who would move there: If we get a couple of offices, you work for one of those companies, you can have a two-minute walk to the office. That’s a pretty nice perk as well.

Another market, another group of people who might be early movers, are people who work at Travis Air Force Base. There are 15,000 people employed there right now. The housing options for Travis employees are not great, and we’ve heard from a lot of them that they would love to live there once it’s going.

A: You have staked the ability of this city to grow on being able to provide jobs not just for new residents, but for existing Solano County residents. To back up and contextualize this for readers, most of the land you’ve purchased is currently zoned for agriculture.The ballot initiative coming up in November would change the zoning to make it urban.

One of the guarantees in this initiative is supplying 15,000 jobs in Solano County during the build-out to 50,000 residents. That is, you’ve promised to do this to be allowed to build there at all. This seems really steep. One comparison that’s come up a lot in discussions of this project is Mountain House, an unincorporated community about 30 miles away. Mountain House has a population of 30,000 and so far it’s only generated about 1,500 jobs. Another that comes up is Walnut Creek. These bedroom communities are often very nice places to live, but they’re not employment centers.

You have a plan to do this differently. How can you attract commercial tenants in a way these other greenfield developments have not?

J: There’s a few components to it. Scale is really important. It’s really hard to attract an employer to Mountain House, where the full build-out is something like 50,000 residents.

We are approving up to 400,000 residents. The pitch to an employer is: If you take the risk on this as a place for a new manufacturing location or a new office, you won’t be limited to, say, 500 employees. If this works, you can grow here forever, and then your employees will be able to keep growing, and there will always be enough houses for them. You solve the problem of employee housing for the next 20 or 30 years. That’s really attractive.

This is a challenge for many companies in the Bay Area. Their employees can’t afford to buy a home here. They get frustrated and want to move home, back to Illinois or wherever it is. We can offer a place where the employees can become homeowners, they can have families, they can have a 10- or 20-minute commute as the city grows. And they can buy these homes at completely different price points than in the Bay, and still be close to headquarters. And moreover they can still get to San Francisco or Palo Alto or Menlo Park. That’s really powerful.

I mean, Mountain House was started in 1990, right? Employers on the peninsula or in San Francisco didn’t have a capacity issue in 1990, but they do now. And I think that if you look through the wave of what’s happened for the last few years, there was a frustration among employers in the Bay over lack of housing capacity back in 2016, 2017. Then COVID happens. Everyone is going to go remote a year later. But actually, that doesn’t work. People don’t like it. Then everyone was going to go to Phoenix and Austin and Miami — and then a year later that doesn’t work. Austin is only three hours away on a plane, but it’s not three hours away round trip. There’s Uber to the airport, TSA, your plane is delayed, airport, and Uber to get to the office.

This is an opportunity to grow in a place where you can still get to the city or peninsula for a meeting in a day. It’s an hour to an hour and a half, so you wouldn’t want to commute every day. But doing that commute once or twice a week is great.

A: So it’s not losing option value. Like if you’re a programmer in the Bay and you buy a house in Solano County, you’re not closing off the possibility that someday you maybe want to work at a company in San Francisco or a company in the South Bay.

J: Yeah, absolutely. And many employees of Bay Area companies already live in Solano County. They live in Vallejo or Fairfield and they take the ferry or they commute into the city. And so for some of those employers, it’s a retention program where they don’t want to lose them, and they want them to be more productive by being closer.

A: Why greenfield development versus working in Vallejo or Fairfield? The mayor of Fairfield would be really excited about having a ton of development in their downtown — and probably quite open to some of the really exciting proposals for urban development that you have. And they already have infrastructure, schools, transit. Why not work in the existing towns in Solano county?

J: I became interested in solving housing problems before I started working on this project. I worked on infill for a year — repurposing parking lots in existing cities and so on. And the conclusion of that, at least to me, was that it’s not a solution. We're missing 2.5 million homes in California, while we’re building only 80,000 to 90,000 homes a year. That’s just about enough to keep the 2.5 million deficit the same given population growth and immigration. Even if the pace of infill increases by 50%, it will take 50 years to get back to where we need to be, which is too long.

Infill is going to be a major part of the solution, but we need another approach to complement it. I didn’t think that I had anything revolutionary to add in the infill world. But I thought this idea was the right idea. And it could be the right tool to complement infill approaches.

And then to go back to your question about why not infill in existing towns. If you talk to employers, or even large developers, about why they don’t come to places like downtown Fairfield, you will hear that there’s not enough critical mass. There’s not enough of a cluster there for them to make a bet on it. I think, ironically, the fastest way to see downtown Fairfield revitalized is for this project to happen and for that to bring the energy that you need in that area.

A: And you think that it’ll be easier to get critical mass for this new development than for existing cities in the region?

J: Yes. I think it’s true that in downtown Fairfield, for example, there are a few blocks that would be open for development. But that’s only a few blocks — it’s not walkable — and then you’ll bump up against existing neighborhoods that don’t want to change. And so you can’t, as an employer, take a 30- or 40-year view and say, "There’s going to be enough room to grow here." It’s just not the same.

The other part is the affordability challenge. We’ve always been interested in making a dent in that. It is empirically very, very difficult to build affordable housing in infill locations. Every project has a huge entitlement cost, legal costs, the land takes forever to buy, the construction is more expensive because you’re operating in an existing city. If you look at where first-time homebuyers and working-class families and new immigrants are buying homes in California, it’s largely in exurban locations. That’s where you can build affordable homes.

We’re trying to find the right balance of doing that, but making it more walkable and sustainable, instead of building traditional subdivisions.

A: I think that your plans for the development of California Forever, the city, are really smart and really well thought out. And as I’ve been reading them, a thought that has occurred to me is it’s not just infill versus greenfield. There’s so much energy in California on prioritizing zoning reform, on policy advocacy at the city and at the state level to make the process of infill cheaper.

I don’t see the debate as being between, for example, doing infill, which is incredibly expensive, or building new cities in Solano County or other places. It’s, should we be figuring out how to make infill in SF, in LA, in other major cities cheaper.

Of course, it’s not zero-sum. We can use all the units that we can get. But I’m curious what you think of your role in this landscape. Do you think that greenfield is more promising than advocacy, or do you just see it as your comparative advantage?

J: I think that we’ll need both. Back when I started looking at this in 2015, there were a lot of really smart people working on reform at the state level and in the YIMBY movement. I thought that there was limited value that I had to add in that space. Whereas nobody was working on walkable, sustainable greenfield development in the right locations. And I felt that needed to happen.

I think that they can be mutually reinforcing. If you look at our zoning code, it's basically everything that the urbanists have called for for 40 years.

A: Can you expand on that?

J: It’s been about simpler zoning codes that are not 2,000 pages long, genuinely mixed-use development, transit and dedicated bike lanes, no parking minimums, very limited design standards. For example, we have a minimum density in the plan. That’s completely unheard of. Nobody’s ever done that.

Moving an existing city into that kind of a zoning code is extremely challenging. I think, in some sense, the best hope of that happening is by building a couple of neighborhoods that people love. After that happens, it’s going to be so much easier to go to existing cities and say, "Look, simple zoning code can work and it produces cheaper homes. We should do the same thing." So I think that it’s mutually reinforcing.

Another good example is we want better transit in the Bay Area. We need better transit in the whole Northern California megaregion from San Jose all the way to Sacramento. One way to think about this site is that it’s in the middle of nowhere. But if you think about that whole mega-region, it’s not in the middle of nowhere. It’s in the middle of everywhere.

A: It’s the same distance between SF and Solano as between Irvine and downtown LA.

J: Exactly. And so for many of the transportation improvements — like trains between Marin and Solano, or potentially improving the train between the capital corridor from San Jose to Sacramento, for example — adding a lot of people there makes the investment case better and more likely that that would actually get funded.

A: Switching gears a little bit, I’ve been listening to some of your initial interviews from back in September of last year, and you talk about wanting to go talk to people in Solano County and get their input. As you’ve been doing that over the past few months, I’m curious: What are the major ways your plans have changed as you’ve spoken to people in Solano? What have you changed your mind about?

J: One is that we realized that a major concern wasn’t just about protecting Travis, but it was actually about actively helping the base. When we started we knew that we needed to make sure that we wouldn’t infringe on the airspace. But what we realized is that the base deals with all kinds of challenges.

One is affordability of housing for base personnel. Spousal employment is a huge issue. Imagine you just got relocated from Texas, and now the closest job centers are an hour and a half away.

The second is resilience and infrastructure projects. It’s creating backup sources of power. The Department of Defense has a very aggressive renewable energy mandate, which they are not meeting right now. So there was more we could do for the base.

We were really pleasantly surprised by how close Rio Vista wanted to be to the development. We asked people, "Do you want us to put new developments next to you, or do you want us to put them all the way by Fairfield?" And almost universally, the answer was, "Don’t put it immediately next to us, but we want it pretty close, because a lot of us moved here, and we hoped that we would have more shops and a health care clinic and a couple of grocery stores, and that isn’t happening."

And so we’ve created this real estate parklands that we colloquially call the Friendship Park between the two. It’s about a half a mile away from Rio Vista. Rio Vista is an older community, partially because they have a retirement community there and partially because a lot of the young people have left due to the lack of jobs. The average age is 64. There’s no general practitioner clinic in Rio Vista. They have a van that gets there once every two weeks or something, and you get your GP visit inside a bus. I mean, it’s like being in an emerging country.

A: I’m curious how you feel now about the way you initially handled the land buyouts. People in Solano were confused by the initial secrecy, some are now involved in litigation, and others have lost trust in the project as a result of both. Are there things that you would do differently now, having seen how all that played out?

J: I don’t think that we would have done anything differently. We knew that the project would be feasible if we had the correct property. Anyone doing a project like this would first buy the land and then announce the intentions — not the other way around.

What’s been lost in the press is that out of the 600 people from whom we purchased land, we have excellent relationships with 99% of them. We’ve had people who’ve sold and used the money to buy better land if they wanted to keep farming. Others sold and started businesses, they paid off debt, they sent kids to college or bought houses for them.

In a small number of cases, we ended up in litigation. We’ve settled lawsuits with three out of the four groups, and we’ve been open to settling with the remaining one. And we’ve done a lot of education with voters in the county and said, "Hey, this is why we got into the lawsuit. This is how we treated people in settlements. Here is the evidence that we have for what we allege is illegal activity." And most people who’ve looked into it have said, "What you did was just a business decision."

A: Another set of questions I have is about some of the history and the inspiration for these developments. You’ve talked a lot in your planning materials and in interviews about how you’re inspired by the British New Town movement, by the Garden City movement, and especially by pre-1900 American cities. A common talking point you make is how all walkable cities in America today were built before 1900.

But now it’s 2024. What’s your plan to be the first people in 124 years to build a walkable American city? What can you actually learn from the past? What is useful today and what isn’t applicable? How do you make this model work in a very different society, with a very different economy, with very different technology and very different expectations for what urban living looks like?

J: I would probably divide that period into two periods.

So there was a period of a love affair with the car that lasted roughly from when the car was invented until the 1990s. It really wasn’t until the 1990s that people started turning around and saying, "You know, we like these walkable neighborhoods and we miss them." In the previous years, nobody was trying to build walkable neighborhoods because most people loved what we were building. So that’s what we built.

And then I think in the last 30 years, so much of the story is that we've created a regulatory, zoning, home building, transportation complex — kind of an industrial complex, if you want — where even if you wanted to build a walkable neighborhood, it was just too difficult. The transportation department said they couldn’t do it, or the fire chief said that the roads had to be wider. And then even if you go through many of these gates, eventually someone would say no and you couldn’t get the development built.

The reason why we believe we’ll be more successful than others is, I think, that we care more than most people. And also that it’s really hard to build walkable neighborhoods at small scale. That’s for two reasons. The first one is regulatory. If you need to change zoning, to fight against a multitude of agencies and stakeholders to override a process about, for example, how streets are designed, and you’re only building a few hundred homes, you just won’t have the money to do it. The economics of it doesn’t add up.

And then the second part is that walkable urbanism is really hard to build in small portions. Even if you’re building 500 homes and an incredible walking neighborhood at the edge of an existing city, you’re left with two walkable streets and nowhere else to walk to. It’s a problem that can only be solved at scale, both from a regulatory and economic perspective.

A: So then we’re back then to this issue of critical mass. It seems to me that a likely outcome is you getting, say, 50,000 people, but then development begins to falter. That’s common for new developments like this. What do you see as your biggest barriers to reaching that real critical mass that you need to have a truly urban development in this place?

J: The biggest challenge and the biggest opportunity is transportation because it’s not something that we can solve by ourselves. It’s a regional challenge faced by everyone. The fact that we don’t have a high-speed train from San Francisco to Sacramento is a policy failure. We should have one. So transportation is the biggest hurdle.

Apart from that, this is a complex coordination startup. There’s a lot of things that we need to do, and we need to do them right. We need to manage. We need to get the community to buy in. We need to get the regulators to buy in. We need to finance it correctly. We need good partnerships with employers and home builders and designers.

But this isn’t some kind of a breakthrough. We're not trying to invent a cure to some disease where we don’t know a cure exists. We know we can do all of those things. There’s just a lot of them, and they are complex.

I don’t think that it’s an accident that the largest successful new community in the country is in California, in Irvine. I think that it’s a market where there’s such a shortage of housing that if you build something that is well designed, in a reasonable location, then you will find an audience for that product.

A: But when I think about Irvine, I think about two things. One, they had a big anchor tenant in the form of UC Irvine from day one. Two, Irvine was built in the early ’70s during a period of increasing urbanization. People were moving to California. They were moving to cities in California.

And today — and this is a talking point you hit a lot — people are moving out of California, and particularly out of big California cities. Do you feel nervous going into this without an anchor tenant, and in a very different environment in terms of California urban population dynamics?

J: We would like this to be Irvine in that they did a few things right. They had a very long time approach. They became a real steward of that property. They had very high design standards for what they wanted to do.

But, I want to be clear, they wanted to build a very different kind of product. They built a first-class suburban experience. We don’t want to build that. I want to be very clear about that.

Now, in terms of an anchor tenant, they had UC Irvine, we have UC Davis 15 miles north. So I think it’s pretty conceivable that UC Davis residents, students, and staff will end up living in this new community.

But in addition, I’m pretty confident that we’ll have actual employers to announce even before the election in November. We’ll have anchor tenants as well.

And then on the last point, people are not leaving California because they don’t want to be here. People are leaving California because they can’t find a place where the trade-off between the cost of housing and what they get for it is acceptable.

If we build this, I don’t think we’re going to have a shortage of people who want to live there.

A: All of this presumes the ballot initiative in November goes well, that you get the zoning permission to build what you want to build. Do you have a backup plan for if the ballot initiative fails?

J: We’re pretty confident it’s going to pass. Just seeing the numbers from last year compared to seeing the reaction to the plan since we announced it a month ago. That really moved a lot of people out of the undecided or skeptical bucket.

But we do have a backup plan. We could build it more gradually. We have property inside the City of Rio Vista limits that’s zoned for residential already. In a recent general plan update, the city looked into annexing another 1,000 acres we own and zoning it as residential.

I don’t think it would be the optimal outcome. It would be harder, for example, to attract employers because we couldn’t offer that 40-year predictable road map for growth. But we could absolutely build it more incrementally.

A: I’m interested when you say a lot of people changed their minds from undecided to positive on the plan, what have been the biggest draws for people in Solano?

J: I think people were pretty skeptical in the beginning when we came out. And then despite their reservations, we said, hey, we’ll run the most intensive engagement process that you’ve ever seen. And I think they’ve seen that that was the case. We’ve met with thousands of people and many interest groups. We listened, we came back with new plans, and they’ve seen the input they gave go into those plans. People saw that we protected Travis. We created a buffer zone around it. They really cared about it. They didn’t expect it. Many people have told us, "If you are willing to put your money where your mouth is and actually guarantee the jobs, then I’m for it. But every developer promises jobs. Nobody ever brings them. If you guys are going to guarantee it, then I’ll be for it." And we guaranteed it. And so that made a difference.

A: What’s the plan? We keep circling this question about tenants, but there is a difference between doing your best and actually guaranteeing it. What makes you confident that you’ll be able to bring those jobs in?

J: The conversations that we’re having with employers. We’ve seen so much interest since we announced the project, particularly since we shared the plans.

We also know that so many of their employees want to live there. It’s an easy case to make to say, "Hey, why don’t you do a poll of how many residents you have in Solano County? How many employees do you have in Solano County? How many employees do you have who live in eastern Contra Costa County who would love to work there?" That helps.

A: I want to talk briefly about water. This is one of the thornier planning challenges that has come up in discussions of the project — there are real supply issues for a community on the scale you’re imagining. What’s the plan for that?

J: So we start by bringing the consumption down by design of reuse of stormwater, recharge of the aquifer, water-saving fixtures, landscaping. We will have about half of the average consumption in Rio Vista. We begin by bringing the need down.

Then we have a layered approach. The property we purchased does come with a substantial amount of groundwater and surface water rights from both the aquifer and the river. That’s likely enough for 50,000, maybe even 100,000 people. And then we're going to layer it by importing water from outside of the county.

My favorite example is: There's an almond orchard on the north side of Travis that was planted when almond prices were higher in 2016, in very marginal grounds that don’t produce many almonds. That orchard isn't popular for a variety of reasons. Number one, it attracts birds, which create hazards for Travis. Number two, it was built by ripping up a big portion of the Jepson Prairie, which is a very unique ecosystem.

People who care about the environment would love it turned back into pasture so that tiger salamanders and vernal pools can come back. Right now it uses about four acre-feet of water per acre. That’s about 10,000 acre-feet of water — the land is 2,500 acres. Our average consumption will be probably about a quarter of an acre per household. So it’s enough water for 40,000 households at two and a half people per household.

That’s enough water for 100,000 people just from that orchard. If we just rip it out and replace it with pasture, the rare species can come back. The vernal pools can come back. Travis is better off because they don’t have a hazard risk from birds. And we have lots of water for lots of new residents. And so I think that’s a really good example of the kind of win-win-win all around that can happen on that orchard.

I think that the story of the project overall is like that.

A: Is there anything else you really want people to understand about this project and your approach that you feel is being lost in the current conversation?

J: I think we need to get out of this zero-sum mentality that we’ve adopted, particularly in the build world. It’s not a zero-sum world. I think the Bay Area is a testament to the fact that it’s not a zero-sum world, and I think this project fits into that.

It’s a project that can make the environment better off. It can create economic opportunity for lots of people. It can help be a bridge for some of the transportation solutions in the Bay. It can take some of the pressure off other communities. It can bring investment in existing downtowns in Solano. There’s a positive-sum mentality and thinking that we’re trying to design into it through and through.