by Joel Bassett Quick for the Local Stewardship Project of HowMany.org

Morgan Hill, California is located in Santa Clara County just south of San Jose. The city was named after Hiram Morgan Hill, a man who ran a successful ranching operation in the area in the late 1800's.¹ Mr. Hill had his ranch subdivided and sold around the turn of the century thus creating the town that bore his name.² The town became incorporated in 1906. ³  Due to the incredible fertility of the soil in the Santa Clara valley, fruit growing was the principal business in the area for well over hundred years, and agriculture is still a means of making a good income in the valley.⁴

To the north of Morgan Hill the city of San Jose grew immensely from 1950 to the present.⁵ San Jose is currently the largest city in the San Francisco Bay Area both in population and square mileage. In 1950 the population of San Jose was less than 100,000 people and the city covered around 17 square miles.⁶  By 1970 San Jose had annexed land in every direction, large blocks of annexed area often loosely connected to the downtown area by thin strips of land, and the city had a population of over 450,000 people.⁷

The annexation of Coyote Valley is especially notable because it brought San Jose city limits south almost to the point of touching the city limits of Morgan Hill. San Jose has more or less surrounded several other cities in Santa Clara County over the past few decades including Cupertino and Santa Clara (see Figure 1).⁸  San Jose developed in a wildly sprawling pattern, annexing lands that developers wanted to build houses on, leaving the city looking like "an octopus".⁹  This pattern of annexation has left the city full of "holes" of undeveloped and un-annexed areas from development leapfrogging out into the hinterlands.¹⁰  San Jose currently (2006) has a population of over 950,000 people, ten times that of its 1950 population, and it covers an area of over 175 square miles making it ten times the size it was in 1950 as well.¹¹  San Jose is projected to continue growing in population well into the future. The city has focused on filling in undeveloped land between formerly annexed areas, but has also moved forward with the development of Coyote Valley about 15 miles south and east of the downtown.¹²

In 1909, three years after Morgan Hill was incorporated, the population was around 1,000 people.¹³ In 1950 it had around 1,600 residents.¹⁴ With the growth of San Jose in the second half of the twentieth century, and especially with the rise of Silicon Valley industries, Morgan Hill became a popular place to live. In 1973 the city had 7,000 residents, seven years later in 1980 it had around 18,000. Due to this rapid population growth its citizens adopted Measure E in 1977 creating a Residential Development Control System (RDCS) to slow growth to a pace that could be reasonably managed.¹⁵

Morgan Hill's RDCS sets a target population size for the city in the future and then works to grow up to exactly that size in the given number of years.¹⁶ The RDCS carries this out through regulation of the amount of homes permitted to be built in the city each year.¹⁷ These homes are approved based on a point system that gives preference to domiciles that meet specific goals for development.¹⁸ The RDCS has been an extraordinarily popular ordinance with the citizens of Morgan Hill. The voters approved Measure P in 1990 extending the RDCS to 2010, and approved Measure C in 2004 extending the RDCS to 2020. The population of Morgan Hill grew steadily to 32,092 people as of 2000.¹⁹

Morgan Hill has an annual growth rate of 0.9% and is projected by the California Department of Finance to have a population of 50,000 in the year 2030.²⁰ The city covers approximately 12 square miles and has a current estimated population of around 35,000.²¹ The city of Morgan Hill has a population ceiling of 38,800 people until 2010. The city has a currently approved a new population ceiling of 48,000 people for the year 2020.²²  The population ceiling is not to be increased until that time.²³ The "occupancy level per dwelling unit" approved under the RDCS is determined according to population and demographic projections by the California Department of Finance in accordance with the Housing Code. This in turn determines the types of units that are approved.²⁴ The RDCS employs a point system that allows the city to allow only the sorts of developments desired by the city. This criterion corresponds with the General Plan.²⁵

In 1996 Morgan Hill adopted an Urban Growth Boundary (UGB) that falls within its sphere of influence as determined by the County Local Agency Formation Commission (LAFCO).²⁶  Santa Clara County created its LAFCO in 1963 to determine each city's sphere of influence (San Jose's sphere of influence is around 340 square miles).²⁷ According to Morgan Hill's General Plan, no city services such as sewage and water are to be extended beyond the city's UGB.²⁸ The UGB is not to be extended except in a particular direction and only by a vote of the city's citizens.²⁹ There is coordination with the Santa Clara County Plan in order to maintain open space and agricultural uses on all of the lands outside of the urban growth boundary.³⁰ The following quote is taken from the Morgan Hill General Plan 2001 as amended 2003; it outlines the city's attitude toward extension of services beyond its UGB.³¹

"The increased development burden on city services imposed by development outside the present city limits adversely affects the city's ability to provide services to developers within the present city limits."

Morgan Hill is a beautiful place, dotted with parks and surrounded by intentional open spaces. It is a fantastic little city with a ‘charming small-town atmosphere'.³² Several other cities around Santa Clara County are strapped with debt from bonds approved by voters to extend infrastructure to newly annexed areas.³³ All of the city's water comes from groundwater sources, and so water quality and quantity are serous concerns in regard to population growth.³⁴ The city has had a couple of its wells show unhealthy nitrate concentrations, careless development without proper water and sanitation services has the potential to exacerbate ground water quality problems.³⁵ The city uses a tiered system of rate charge for water services with county residents paying more than city residents.³⁶ The city itself has a Sustainable Budget Strategy to enable it to continue paying the county government for groundwater recharge services.³⁷

In parts of Morgan Hill there are properties that are considered blighted by the city government that are scheduled to be redeveloped according to the city's redevelopment plan.³⁸ Like most cities in America that are more than 30 years old, certain properties have become unused, abandoned, misused, or were simply built rapidly with cheap materials leading to deterioration after a certain amount of time and that time has come. Morgan Hill has an active plan to improve these areas.³⁹

With a looming national debate on whether or not cities can exercise eminent domain in order to return these blighted areas to healthy use, a population ceiling coupled with an urban growth boundary could be a good alternative in areas with projected population growth such as Santa Clara County. As the housing for the growing population nears build out within the UGB all of the properties in town will likely increase in value. As long as the city government has taken measures to assure that low-income and very low-income housing exists throughout the city, no ill effect will come from this. Morgan Hill provides low-income housing, as needed in accordance with state demographic and population growth predictions, while still maintaining the integrity of its population ceiling. The city gives attention to blighted areas and zoning amendments often made in favor of likable development.

With a RDCS like the one Morgan Hill has, the city is able to determine exactly what kind of developments it wants. The development pressures on the area from people wishing to take advantage of its small town character and commute to the nearby commercial centers of San Jose continue to provide development projects that willingly conform to the city's wishes. The RDCS also acts to protect residents from the high taxes that often accompany rapid growth through repeated bond issuances. The popularity of Morgan Hill's RDCS with its citizen base shows in its continued renewal for thirty years. The relatively new UGB is important in that it protects surrounding open space while simultaneously concentrating development in a defined area. It also gives the city another tool with which to encourage more concentrated growth instead of annexing areas further out. As stated, the UGB will act to encourage infill development of blighted areas, by centralizing all types of development.

Morgan Hill is faced with the future problem of congestion due to the development of Coyote Valley, just to the north of the city limits, by the city of San Jose. The Coyote Valley developments are scheduled to house and provide office space for around 70,000 people.⁴⁰ This development amounts to a new city larger than Morgan Hill ever intends to grow. If people decide to commute from bedroom communities to the south of Morgan Hill due to Morgan Hill's restrictions on development, then the city may well suffer from increased traffic congestion on highway 101, as it has stated will be the case.⁴¹ The projections for population growth in the city of San Jose are too large for the city itself to accommodate according to John Landis head of UC Berkeley's Planning Department.⁴² The Coyote Valley development has been endorsed by the Greenbelt Alliance because of the ‘smart growth' involved in its design.⁴³ The development includes a buffer of green space between Morgan Hill and Coyote Valley, but this may prove to be pointless if Santa Clara County allows development on the unincorporated areas between the two cities.⁴⁴

Hopefully San Jose will never engulf Morgan Hill outright, but with development continuing south it may eventually happen. Such engulfment is becoming a common occurrence in the United States. As the populations if San Jose and Santa Clara County continue to increase beyond 2030 so, presumably, will the population of Morgan Hill. The city of Morgan Hill determined its target population and declared a ceiling that cannot be surpassed and so must be met in an orderly fashion. A jump or rapid decline in the growth of the city is unlikely and has been guarded against with the RDCS.

Given the limited nature of water that the city has, and the fact that it has to budget for it with less local money in the future, the population may be limited by natural resource constraints indefinitely as has occurred elsewhere.⁴⁵ As is the case in much of Southern California, as residential development increases water costs may make agricultural land uses prohibitively expensive. Supporting them through tiered water bill systems may work for a while, but eventually the regional population will likely see this as a direct farming subsidy. Whether or not the people of California will decide at some point between subsidizing farming and allowing further development is yet to be seen.

Some California counties have come out on the side of agricultural interests and have refused to allow large subdivisions on unincorporated areas. This city-county coordination makes sure that cities absorb the bulk of the development and consequently channel into areas they feel it should occur. This only works if cities are limited in their powers of annexation, something certain counties in California have set as a policy.

Santa Clara is not one of these counties, although countywide zoning does now and has existed for over half a century Santa Clara has rarely used it to limit development. Historically Santa Clara has taken some measures to zone certain areas as strictly agricultural, but largely the county has let many developers, and cities that support them, do what they wished to do. The fault for this lies mostly with county administration during the span of 1950 to 1970, when something could have been done to preserve the agricultural base of this fertile valley, nothing was—in fact a certain county administrator at the time admitted to refusing to do anything that was anti-development.⁴⁶

The state of California has taken some measures to protect agricultural lands form annexation by cities, but these lands are still threatened by the continued population growth projected for the state to 65 million people by 2050, or around three-quarters of a million more people per year. No one at the state level is even mentioning doing anything to curb this population growth, regardless of the fact that housing prices are outrageously expensive across the state.

Even cities like San Jose that have annexed almost 200 square miles into their jurisdiction are more likely to try to annex more land than spend time carefully revitalizing their interior properties or approaching build out. This is not to say that such city governments are necessarily irresponsible. San Jose actually has had a few decades of quite responsible development almost as a reaction to its being labeled as the prototype badly sprawling city in the early seventies. It is simply that people who work in a concentrated city center tend to want to live beyond its bounds in quaint places such as Morgan Hill. Sprawl is a natural phenomenon, as is overwhelming small cities within 100 miles of a larger city with housing developments. These places in turn have to continuously fight against population growth in order to retain their character. With its current RDCS and UGB, Morgan Hill may some day be a quaint small city oasis in the midst of a larger urban landscape.

Addendum

Mechanisms of Growth Control

The Ballot Measures passed by Morgan Hill were passed originally in a time of crisis. In seven years the population of the small city of 7,000 people grew by another 11,000 (1973-1980). Thus when the RDCS was first created it was a time of crisis. This is important because there is often a small window of time within which anyone can do anything about such rapid growth before much of the damage is done. It is also important to note the major political motivator in this case which was that Morgan Hill, if it had grown wildly, would likely have been surrounded by San Jose or forced to annex many more miles than it has. The residents of the city would also likely be paying outrageous taxes.

The urban growth boundary (UGB) placed around the city of Morgan Hill was adopted in 1996 through a decision by the city council. The area within the UGB is “the area likely to be urbanized" in the next 20 years.⁴⁷ The city also has an urban service boundary that it uses as a short-term gauge of where development is to take place.⁴⁸ The city is currently in the process of drawing up an urban limit line, a stronger measure designed to determine how far the city will ever grow, and what of the city will remain rural in perpetuity.⁴⁹ There has been some local debate over whether this decision will cause a rush in development in the open area, and open up rural lands that are currently protected under the UGB.l The measure would be stronger and would allow the city to reach a final population size at build-out at some point in the future.⁵⁰

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