- The document recommends that the Board of Supervisors direct the Administration to report back on an ordinance to create an Urban Agriculture Incentive Zone in Santa Clara County as authorized by state law. This would provide a property tax reduction to encourage urban farming on vacant land. - There are approximately 91 parcels in unincorporated San Jose that could be eligible for this designation. It is estimated the maximum potential property tax revenue loss to local governments over 5 years would be $762,000, though likely less since not all parcels would participate. - Supporters argue this would promote local food production, community benefits from urban farms, and help non-profits and landowners with associated costs.

1. County of Santa Clara
Board of Supervisors
Supervisorial District Four
Supervisor Ken Yeager
Boardof Supervisors: Mike Wasserman, Cindy Chavez, Dave Cortese, Ken Yeager, S. Joseph Simitian Page 1 of6
County Executive: Jeffrey V. Smith
DATE: February 10, 2015
TO: Board of Supervisors
FROM: Ken Yeager, Supervisor and Mike Wasserman, Supervisor
SUBJECT:Santa Clara County Urban Agriculture Incentive Zone
RECOMMENDED ACTION
Direct Administration to report backto the Finance and Government Operations Committee
on an ordinance creating an Urban Agriculture Incentive Zone in Santa Clara County, as
authorized by Assembly Bill 551. (Yeager and Wasserman)
REASONS FOR RECOMMENDATION
Santa Clara County has a rich agricultural history, earning it the moniker “The Valley of the
Heart’s Delight.” But agricultural land in Santa Clara County and the Bay Area at-large is at-
risk. Since 1984, the Bay Area has lost more than 15 percent of its farmland and Santa Clara
County has lost 45 percent.1
Meanwhile, urban agriculture sites operated by local nonprofit organizations such as
Veggielution, Garden To Table and Valley Verde are cropping up all over our County. These
organizations are providing numerous benefits to our community, including:
 Community gardens to County residents
 Nutrition and gardening classes for low-income families
 Community garden training, installation and maintenance services for homeowners
and schools
 Classes for families to operate their own home greenhouse micro-business
 “Do-it-yourself” kits to organizations and businesses to start vegetable gardens for
their employees
 Volunteer and internship opportunities for those looking to get more engaged in their
1 http://www.spur.org/sites/default/files/publications_pdfs/SPUR_Locally_Nourished.pdf. Page 12.

2. Boardof Supervisors: Mike Wasserman, Cindy Chavez, Dave Cortese, Ken Yeager, S. Joseph Simitian Page 2 of6
County Executive: Jeffrey V. Smith
AgendaDate: _______
community, including workdays for corporate employees
 Organized efforts to pick fruit from neighborhood trees that is then donated to needy
individuals through organizations or churches
 Weekly community-supported agriculture (CSA) boxes full of fruits and vegetables
 Harvesting and selling ingredients for sale to local restaurants
 Educational opportunities for youth such as:
o Field trips to a farm site
o Garden classes integrated with a school’s curriculum on nutrition and garden
maintenance
o After-school Garden Club for 5th and 6th graders
o Cooking classes on how to prepare healthy, seasonal and affordable meals
Combined, these benefits are providing our community with greater access to affordable food
that is fresher, healthier and grown locally.2 In short, these urban agriculture organizations
are enhancing our community.
While the soil of this region remains rich and the weather ripe for agriculture, decades of
urban development have left limited plots of available land in our Valley, for purchase or
lease, especially those in or near the 15 cities in our County.
As nonprofit organizations search for available land to start new community gardens and
urban farms, they also must contend with limited budgets to pay for renting or buying the
land. In most instances, purchasing property is costprohibitive.
However, some property owners are willing to lease vacant land that they envision for future
development to an urban agriculture organization for a nominal amount. Yet even when a
nonprofit garden or farm enters into a below market lease, the property taxes must still be
paid.3 Depending on how that landowner and the organization structure their agreement, the
property tax payment may fall on the shoulders of the landowner or the urban agriculture
organization.
Either way, both entities benefit from a reduced property tax payment.
If the urban agriculture organization bears the tax burden, the incentive is clear: a smaller
property tax payment would reduce its basic expenses, thus eliminating a potential barrier to
entry and encouraging it to develop new farms and gardens.
For landowners, the calculation is the same if they pay the property tax. Even if they do not,
real estate developers or other landowners often possess parcels they are not able to develop
in the near future. Since this Urban Agriculture Incentive Zone would only apply to vacant,
unimproved or blighted lands for a five-year term, landowners benefit by having activity on
their land in the short-term, as well as by receiving a positive responsefrom the community.
2 http://garden2table.org/projects and http://valleyverde.org/Impact.aspx and http://veggielution.org/whatwedo/
3 Nonprofit organizations that purchase or lease from a public agency do not pay property taxes.

3. Boardof Supervisors: Mike Wasserman, Cindy Chavez, Dave Cortese, Ken Yeager, S. Joseph Simitian Page 3 of6
County Executive: Jeffrey V. Smith
AgendaDate: _______
Thus, a reduced property tax payment for land set aside for urban agriculture provides a clear
benefit for both the urban agriculture organization and the landowner, including a financial
incentive.
In Supervisorial District Four, there are approximately seven parcels eligible for this
designation as an Urban Agriculture Incentive Zone, all in the Burbank neighborhood. In this
part of town, constituents could greatly benefit from increased access to green spaceand
locally grown food in an area that is calling out for revitalization and new community-
serving enterprise.
Moreover, property values for local home and business owners may rise as empty lots and
blighted properties are replaced by community gardens and urban farms.4 A study in New
York City found that within five years of a community garden opening in a lower-income
neighborhood, property values increased by as much as 9.4% on homes within 1,000 feet of
the garden.5
Encouraging new farms and gardens might also stimulate a more robustnonprofit community
in our County and thus lead to the creation of new jobs in urban agriculture organizations.
A food system that is more organic and locally based also contributes to our County’s
sustainability goals. By ensuring that less of our food is shipped into our Valley from long
distances, we can reduce our use of fossil fuels that damage the environment and the traffic
that clogs our streets and highways.
According to a report by Garden To Table commissioned by the Health Trust, there are
approximately 91 parcels in unincorporated San Jose that may be eligible for this change in
designation.6 Here is the breakdown of eligible parcels by Supervisorial District:
District 1 – 11 parcels
District 2 – 2 parcels
District 3 – 71 parcels
District 4 – 7 parcels
District 5 – 0 parcels
The County’s Finance Agency estimates that if every single one of these parcels applied for
status as an urban agriculture site, the estimated loss of property tax revenue for the entire 5-
year period would be $762,000. Broken down, the estimated loss of 1% property tax revenue
to the County over those five years would be $106,000, to K-12 schools and community
colleges it would be $505,000 and special districts it would be $151,000. Again, these
amounts are the very highest estimates possibleover five years and it is not anticipated that
all 91 potential parcels would apply for this designation. Thus, the resulting loss of tax
4 Heckert, M. and Mennis J. (2012), "The Economic Impact of Greening Urban Vacant Land: A Spatial Difference-in-differences
Analysis" Environment and Planning A, 44 (12): 3010 – 3027, http://www.envplan.com/abstract.cgi?id=a4595 or
http://phsonline.org/media/resources/Heckert_Mennis_2012.pdf.
5 Voicu, I. and Been, V. (2008), “The Effect of Community Gardens on Neighboring Property Values.” Real Estate Economics,
36: 241–283. doi: 10.1111/j.1540-6229.2008.00213.x, http://onlinelibrary.wiley.com/doi/10.1111/j.1540-6229.2008.00213.x/full
6 http://garden2table.org/ab551.

4. Boardof Supervisors: Mike Wasserman, Cindy Chavez, Dave Cortese, Ken Yeager, S. Joseph Simitian Page 4 of6
County Executive: Jeffrey V. Smith
AgendaDate: _______
revenue to the County and other governments would not be large.
While the decrease in property tax payments to the County is expected to be small in terms of
its overall budget, the value is significant to organizations looking for new urban agriculture
sites and to a Santa Clara County community in need of fresh, local and healthy food.
BACKGROUND
AB 551
On September 28, 2013, Governor Brown signed into law Assembly Bill No. 551, the Urban
Agriculture Incentive Zones Act.7 Similar to the Williamson Act, this bill authorizes cities
and/or counties and a landowner to enter into a contract to restrict the use of vacant,
unimproved or blighted lands for small-scale production of agricultural crops and animal
husbandry.
AB 551 stipulates a number of requirements on this contract, including:
1. A contract must be at least 5 years but must be entered into before January 1, 2019.
2. The property can only be between 0.10 acres and 3 acres in size.
3. The entire property must be dedicated toward commercial or noncommercial
agricultural use.
4. No dwellings are permitted on the property. However, structures that support
agricultural activity such as toolsheds, greenhouses, produce stands and instructional
spaceare in fact permitted.
5. Only allowing pesticides or fertilizers sanctioned by the U.S. Department of
Agriculture’s National Organic Program.
6. Landowners that break the five-year contract are obligated to pay back the tax benefit
they received.
7. An Urban Agriculture Incentive Zone cannot be established in any area that is
currently, or in the last three years has been, subject to a Williamson Act contract.
8. An Urban Agriculture Incentive Zone cannot be established within the spheres of
influence of a city unless both the city and county have consented to its establishment.
This last provision will probably require additional study and scrutiny by County Counsel to
determine the definition of the term “spheres of influence.” The Santa Clara County Local
Agency Formation Commission (LAFCO) has a specific definition of the term “sphere of
influence” that gives greater authority to the city.8 If AB 551’s definition of “spheres of
influence” does indeed refer to the term as defined by LAFCO, then Santa Clara County
would presumably need the consentof San Jose and other applicable cities in Santa Clara
County to proceed with forming a Santa Clara County Urban Agriculture Incentive Zone.
7 http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201320140AB551
8 http://www.santaclaralafco.org/images/pdf_files/policies&procedures1/Sphere%20of%20Influence%20(SOI)%20Policies.pdf
and http://www.santaclaralafco.org/about-lafco/faq

5. Boardof Supervisors: Mike Wasserman, Cindy Chavez, Dave Cortese, Ken Yeager, S. Joseph Simitian Page 5 of6
County Executive: Jeffrey V. Smith
AgendaDate: _______
There are other areas of AB 551 that may require additional research before defining Santa
Clara County’s Urban Agriculture Incentive Zone. With respect to what properties qualify as
urban agriculture, AB 551 defines “urban” as “an area within the boundaries of an urbanized
area, as that term is used by the United States Census Bureau, that includes at least 250,000
people.” For Santa Clara County, the 2010 Census indicates this Zone could include the area
between Palo Alto and Los Altos Hills in the Northwest to Milpitas in the Northeast, to
Saratoga and Los Gatos in the Southwest to South San Jose in the Southeast.9 However, it
might exclude Morgan Hill and Gilroy in South County. The State Board of Equalization
hints that there may be some ambiguity as to how the conceptof a 250,000 urban area applies
to AB 551.10
Implementation by Santa Clara County
Various Santa Clara County agencies may be involved in the approval and enforcement of
parcels used for urban agriculture under this ordinance.
 As it does with Williamson Act contracts, The Board of Supervisors (and in
incorporated areas, City Councils) would be required to approvethe change in
designation for each urban agriculture contract or for only those contracts resulting in a
certain amount or percentage of tax revenue loss a year.
 The Planning Department might determine if a particular applicant’s site is eligible and
process the necessary permits for this conversion.
 The Agriculture Division of the Department of Agriculture and Environmental
Management might visit the sites to ensure compliance with state and county
regulations before the contract is signed and thereafter.
 The fully executed urban agriculture incentive zone contracts must be recorded with
the County Recorder.
 The County Assessorwould assess annually the property by January 1 lien date at the
legislatively set rate based on the average per-acre value of irrigated cropland in
California, which was $12,100 for the 2015 lien date as determined by the U.S.
Department of Agriculture.11
For instance, the calculation of the assessed value for land that is 0.1 acre is $1,210, 1 acre is
$12,100, and 3 acres is $36,300.
Example: A one acre parcel is currently assessed at $500,000 and pays approximately $5,000
in property taxes. With this ordinance, the assessed value would drop to $12,100, with a tax
liability of $121, for a savings of $4,879.
There will indeed be County staff time required to process Urban Agriculture Incentive Zone
contracts, although it is not expected to take a great many hours. The County Assessor’s
9 http://www2.census.gov/geo/maps/dc10map/UAUC_RefMap/ua/ua79039_san_jose_ca/DC10UA79039.pdf
10 http://www.boe.ca.gov/legdiv/pdf/0551ab090313rmk.pdf. Page 5.
11 http://www.boe.ca.gov/proptaxes/pdf/lta14045.pdf

6. Boardof Supervisors: Mike Wasserman, Cindy Chavez, Dave Cortese, Ken Yeager, S. Joseph Simitian Page 6 of6
County Executive: Jeffrey V. Smith
AgendaDate: _______
office, which supported AB 551, has indicated that it can manage the increased workload
within its existing budget. In responding to this referral, we ask County staff to estimate how
many hours will be required of each department and offer a recommendation on whether or
not the County should charge a costrecovery fee to applicants. Currently, San Francisco is
not charging a fee and will be reevaluating a fee after the program’s first year.
San Francisco’s Urban Agriculture Incentive Zone further dictates that the site must be
periodically open to the public through agricultural education or outreach, distribution and/or
sales of agricultural products, orgeneral public open hours like a community garden.12
County staff may also wish to decide if applicants can apply at any time during the year, or if
it wishes to establish application cycles as San Francisco is currently doing.
12 http://www.sf-planning.org/Modules/ShowDocument.aspx?documentid=9312