The ultimate problem with Proposition 202 is that its costs far outweigh its benefits. As explained below, it will only control growth in an indirect way, and only in the long term, while imposing serious short-term costs and risks to the economy. For many years, Proposition 202 would create far more in the way of confusion than growth control. While these are significant changes, we think it unlikely that these measures would cause a complete freeze on new development. The much-discussed geographic growth boundaries would have an unclear effect on growth.
Some municipalities can easily draw boundaries to accommodate ten years' projected growth.
But Proposition 202 specifies that cities cannot set growth boundaries outside their current city limits. This means that most cities will simply designate their city limits as their growth boundaries. Because those boundaries may thereafter only move by vote of the people, it means future annexations would essentially require ballot approval. While counties are also supposed to draw growth boundaries, there is no current mechanism to project county growth. Proposition 202 throws innumerable obstacles in the path of development, such as the cost of consultants, lobbyists, litigation, and so forth.