Marin Post !melk
Real Supply-Side Constraints
A key culprit in the housing shortfall is the herky-jerky property-market cycle at large. Neoclassical economics holds that supply and demand exist in a self-regulating, price-mediated equilibrium. But as UC Berkeley professor of geography emeritus Richard Walker explains in his new book, "Pictures of a Gone City," the supply of and demand for new buildings are usually out of sync. Unlike small consumer products such as cellphones, buildings—especially big ones—aren’t suited to quick-response manufacturing. It can take a long time to find sites—a challenge heightened in the Bay Area by hilly topography—arrange financial backing, and assemble contractors.
During a boom, builders tend to “overshoot,” leaving a glut of new construction—excess space to be filled when the next upswing begins. Walker emphasizes that “the time lag exists apart from any delays in obtaining permits or planning approval—which get far too much of the blame for slow supply response.” Even after getting official approval for their projects, developers may not pull a building permit. Or, having pulled a permit, they may not build at all and instead try to flip their entitlements for a profit.
Walker’s analysis doesn’t get traction among Yimbys, who blame pipeline delays in housing production on “exclusionary” zoning. In fact, all zoning excludes some kind of land use. The question is whether specific prohibitions are discriminatory. Zoning—specifically, bans on multi-unit housing that’s affordable to the least affluent—has often been used to keep poor people of color out of white residential enclaves and to box them into poor, segregated neighborhoods. Cities that categorically reject such housing can be legitimately charged with discrimination.
None of the cities sued by CaRLA have enacted such regulations. Nor, outside of a few individuals, have local critics of projects whom the Yimbys target as “Nimbys” sought such laws. Rather, they’ve asked for refinements to entitlements and zoning regulations that make proposed developments more compatible with their environs. That usually means asking for reduced scale and more parking. But a project that’s beyond redemption——for example, George Lucas’s bid to plop 224 units of affordable housing into a remote Marin County setting with scant infrastructure—elicits wholesale opposition.
That said, misguided public policy is a major factor in the affordable housing debacle. Private developers don’t build low-income housing because it doesn’t yield the returns that they and their investors demand. Hence, public funding is indispensable. It has also been desperately inadequate: Since the Nixon administration, the federal government has stinted on financial support for affordable housing.
In California, Proposition 13’s limitations on property taxes have encouraged municipalities to pursue commercial development and to snub housing, which has a greater need for new services, particularly schools. Finances aside, the state’s Costa-Hawkins Act forbids California cities from imposing rent control on single-family homes, condominiums, rental units built after 1995 or the date of an existing rent control ordinance, and newly vacated dwellings whose former tenants left voluntarily; and its Ellis Act authorizes landlords to evict residential tenants in order “to go out of business.” In the Bay Area, as in other popular locales, many cities have allowed Airbnb hosts to freely deplete rental housing stock. (San Francisco is an exception.)
Yimbys hate Prop. 13 because it deters cities from approving housing, and it privileges long-standing homeowners, whose property is taxed at significantly lower rates than those levied on more recent buyers. In July, YIMBY Action Executive Director Laura Clark told me that members of her organization have collected signatures to put an initiative to reform Prop. 13 on California’s 2020 ballot. The campaign is being run by Evolve California, a coalition of labor unions; civic groups, including the League of Women Voters; the California Democratic Party; and community and philanthropic organizations. The existing law calls for all property to be reassessed only when it changes hands. Since homes are sold much more often than commercial property, homeowners have shouldered the burden of the state property tax—just the opposite of what the law’s authors promised—and big property-owners have been let off the hook.
The ballot measure would split the tax roll by requiring large, nonresidential commercial property to be assessed annually, yielding an estimated $10 billion in new revenues. It would also close a loophole that has saved big real estate investors millions of dollars: If no single owner has more than a 50% stake, a property is not reassessed when its sold. The measure specifically allocates the expected new monies to schools and “communities” and none to housing in particular.
Clark called the “Evolve split roll...a powerful first step to reining in Prop. 13.” She added that Yimbys’ disagreements as to whether it will “further incentivize cities and towns to permit commercial [development] and not housing” and thereby “exacerbat[e] California’s jobs-housing imbalance” are more about strategy than philosophy.
Meanwhile, in November a measure to repeal the Costa-Hawkins Act, Prop. 10, will be on the California ballot. Last January, the Sacramento hearing on Assemblymember David Chiu’s bill to repeal Costa-Hawkins was packed with tenant activists from around the state. Just two Yimbys, representing East Bay for Everyone, spoke in support of the bill. Vehemently opposed by major real estate interests, including some endorsers of SB 827, AB 1506 died. A vigorous campaign led by Los Angeles–based Housing is a Human Right then put repeal on the ballot. Campaign director Damien Goodmon told me that to his knowledge no Yimbys had circulated the initiative petition.
Writing in the San Francisco Examiner, Joe Fitzgerald Rodriguez reported that at a provisional YIMBY Action endorsement meeting in early August, the several dozen members present split on Prop. 10. Clark argued for “no endorsement,” warning that “‘mount[ing] a campaign one way or the other will be extremely divisive within the organization.’” She also feared that in the wake of repeal, a debate over new rent control laws could see San Francisco “‘descend into madness’”—as if the insanity of the city’s and state’s housing markets doesn’t warrant a hard fight for strong tenant protections. The members of YIMBY Action apparently heeded Clark’s advice: In late August, the organization took a “No Consensus” position on Prop. 10, meaning that support for or opposition to the measure each got less than 60% of members’ votes. At the same time, Brian Hanlon joined the Leadership Council of The Two Hundred, a statewide coalition that purports to be “working in behalf of low-income minorities who have been affected by California’s housing crisis and increasing wealth gap,” and that opposes Prop. 10.
Yimbys support publicly funded housing, preferably the mixed-income kind. That way, Clark told me, “we get more subsidized affordable units, cross-subsidized by market rate; we get way more total units; [and] we achieve a greater level of integration in this new housing.” YIMBY Action has called for San Francisco to build “permanently rent-controlled,” “city-owned social housing” comprising “mixed-income or middle income” homes on parking lots owned by the San Francisco Municipal Transportation Agency, with “predictable rent increases tied to inflation.” By contrast, the Council of Community Housing Organizations, San Francisco’s longtime coalition of affordable housing developers and advocates, argues that public land should be dedicated to affordable housing, and that 100% affordable is financially feasible.
YIMBY Action has endorsed a measure on San Francisco’s November ballot, Prop. C, that will fund homeless services by levying a tax of 0.5% on businesses’ gross taxable receipts over $50 million. Opposed by almost all of the Bay Area’s biggest tech companies, Prop. C will raise an estimated $300 million a year. Fifty percent will go toward the construction, rehabilitation, preservation, and operating subsidies of approximately 4,000 housing units affordable to low- and very low–income households; and 15% will go toward homelessness prevention, including eviction defense and rental assistance programs.
The endorsement has to be read in connection with Trauss’s supervisorial candidacy: The measure will be very popular with voters she needs to win.
Growth Machine Auxiliaries
Yimbys propagate the capitalist growth imperative. Using housing as a proxy for growth, they endow the limitless expansion of population with a seductive moral charge. “[E]veryone who lives in the Bay Area today,” writes Yimby pundit Kim-Mai Cutler, “needs to accept responsibility for making changes where they live so that everyone who wants to be here, can.” By this standard, current inhabitants who set limits to new housing are dodging their moral obligation to accommodate not only people fleeing oppression and brutality, but all would-be residents.
The fuller import of the Yimby behest for open-ended hospitality becomes clear when that injunction is read in tandem with the expansionary agenda of the region’s growth coalition: If the Bay Area is to remain competitive in the globalized economy, they claim, it must keep growing fast. Limit growth’s speed, and the region will become a West Coast Rust Belt.
In 2015, the Bay Area Council Economic Institute (BACEI) warned that sustaining the current breakneck pace of growth in the region requires residents to give up their “‘parochial’ attachments” to their “appealing[ly] diverse towns and neighborhoods.” “Manifest in local opposition to new development,” such fidelity “fosters an insular mindset” that “won’t accept ‘that change is normal’ and thus can’t ‘recognize the new opportunities that are emerging’ or ‘adapt to a new context.’”
We’ve seen this argument before in connection with the workplace: In the name of profit- enhancing efficiency, the enforcers of neoliberalism have busted unions, undermined worker solidarity, and shredded the social contract. The putative “normal” is arbitrary rule imposed from above, coded as “change,” while capitulation to that rule is hyped as the capacity to “adapt to a new context,” i.e., precarious employment.
Now the so-called flexibility visited on the workplace is being foisted on land-use governance, as growth machine operatives train their sights on neighborhood activists and local elected officials. Authority over development must be scaled up to the regional and state levels, so market-friendly officials can take steps to ensure that, in the words of BACEI board member Laura Tyson, who chaired Bill Clinton’s Council of Economic Advisors, the bases of the region’s “economic strength”—“the diversity of its innovative companies and its ability to attract the brightest from around the world”—are protected from democratic challenges at home as well as economic rivals abroad.
The credibility of this program rests on three suppositions: Change is always for the better, growth is the essential guarantor of the general welfare, and cosmopolitanism is inherently beneficent. The first two are undercut by the recent history of the Bay Area, where rapid growth has not only decimated the middle class and devastated the poor, but also degraded the environment: Since 2010, traffic on the region’s freeways has grown 80%, and hellish commutes are routine. The third premise is disproved by the self-interested ruthlessness of the new global elite. The tech giants tout the worldwide connectivity they’ve afforded humankind; meanwhile, in their quest for market domination, they’ve trampled working people, cornered markets, ravaged privacy, and harbored pernicious hackers.
Yimbys put a sympathetic face on the depredations of competitive cosmopolitanism by leveraging their generation’s economic disenfranchisement. That makes their alliance with the agents of disenfranchisement all the more dismaying. For now, they’re on a roll. In June, the Yimby-endorsed candidate for San Francisco mayor, London Breed, won, albeit by a 1% margin. As of this writing, CaRLA has initiated three new lawsuits. California State Senator Wiener says that next year he intends to bring back SB 827 with its market-based foundations intact. Meanwhile, other bills that supplant local controls over land use with state mandates are sailing through the California legislature.
Challenging the Yimbys and their allies is a formidable assignment. The growth machine is permanently mobilized—its cadres supported by vast financial resources, California law, and an asset even more potent than money: an ideological hegemony that transcends party divisions. The Spring 2018 issue of Evidence Matters, a HUD publication that purportedly “demonstrates [the agency’s] commitment to evidence-based policymaking,” identifies local regulatory barriers and Nimbyism as “the primary causes of restricted housing supply and rising housing costs.” The Obama White House took the same line, as does the Democrat-controlled California legislature.
If evidence really mattered, blaming local regulations for the lack of affordable housing would be a butt of ridicule. The specious indictment owes its cachet to the suppression of public debate about the true sources of the housing crisis and their concomitant remedies. In 2016, then–Palo Alto Mayor Pat Burt made a bold move for an elected official in the Bay Area: He declared, “[W]e have to do away this notion that Silicon Valley must capture every job available to it....We want metered job growth and metered housing growth.” He was pilloried in the national press.
Burt was right. The sky-high price of Bay Area housing is primarily driven by inordinate demand: People are drawn to the region by the tech boom’s promise of jobs. To moderate demand, approvals of new offices should be minimized; tied to a commensurate amount of housing, services, and infrastructure; and guided by a housing strategy that reconciles legitimate state and regional concerns with distinctive features of each locale. While seeking to accommodate projected growth, the Council of Community Housing Organizations has compiled a useful list of such features:
- existing density (urban, exurban, or suburban?)
- the current stage of the property business cycle
- the kind of land available for development
- land costs
- proximity to jobs and transportation
- demographics of race, class, and level of diversity
- the current risk and stage of gentrification of displacement
- the tenure and stability of existing residents (renters with or without rent control and eviction protections? small landlords or large corporate landlords and real estate trusts? foreclosure risk for homeowners?)
- history of exclusion, investment or disinvestment, good school and educational/economic opportunities
- the experience local residents have had (or not had) in deciding the policies that shape the future of their communities.
I’d add: a local jurisdiction’s financials, its vulnerability to sea level rise, the capacity of its schools, and the quality of its public transit.
What’s at issue is more than distributive justice. Wiener amended SB 827 to require higher percentages of inclusionary housing—housing affordable to people with low to moderate incomes. That didn’t satisfy the representatives of historically disadvantaged communities of color: they seek self-determination. Neither they nor the local governments, neighborhood activists, equity advocates, and environmentalists that also opposed SB 827 could stomach its assault on the local planning process.
The goal is equity and democratically accountable power and authority. That goal can be achieved only if the public realizes that the top-down, market-oriented, one-size-fits-all, growth-to-the-max paradigm is the source of, not the remedy for, the Bay Area’s housing debacle. Given the growth machine’s grip on public discourse, fostering that realization may be the toughest assignment of all.
Zelda Bronstein, a former chair of the Berkeley Planning Commission, writes about land use and transportation planning in the Bay Area and beyond.
SOURCES: Zelda Bronstein, “Inside the Yimby Conference,” 48 Hills, July 20, 2017 (48hills.org); Zelda Bronstein, “Scott Wiener’s War on Local Planning” 48 Hills, Feb. 1, 2018; Zelda Bronstein, “The Yimby Guide to Bullying,” Berkeley Daily Planet (berkeleydailyplanet.com), April 17, 2018; Zelda Bronstein, “When Affordable Housing Meets Free-Market Fantasy,” Dissent, Nov. 27, 2017 (dissentmagazine.org); Damien Goodmon, “SB 827 is a declaration of war on South LA,” Crenshaw Subway Coalition, May 1, 2018 (crenshawsubway.org); Dick Platkin: “Updated analysis of Senator Scott Wiener’s SB 827 real estate deregulation bill,” Plan-It Los Angeles, March 10, 2018 (plan-itlosangeles.blogspot.com); Tim Redmond, “Prop. C will define progressive politics in SF,” 48 Hills, Aug. 20, 2018; Joe Fitzgerald Rodriguez, “To endorse Prop. 10 or no? SF Yimby faces soul-defining choice,” San Francisco Examiner, Aug. 16, 2018 (sfexaminer.com); Bob Silvestri, “Mr. Wiener’s Whimsical World: The ‘Madman’ Theory of Zoning,” Marin Post, March 11, 2018 (marinpost.org); Jeff Stein, “In expensive cities, rents fall for the rich—but rise for the poor,” Washington Post, Aug. 6, 2018 (washingtonpost.com); Richard Walker, Pictures of a Gone City, PM Press, 2018; Calvin Welch, “Ed Lee’s development legacy and the end of ‘balanced growth’,” 48 Hills, Jan. 7, 2018; “Regulatory Issues and Affordable Housing,” Evidence Matters, Spring 2018 (www.huduser.gov); California YIMBY (cayimby.org); Yimby Action (yimbyaction.org).