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TheHoTys
When did California politics lose its common sense?
In the wake of the postponement of a vote on SB 50, until January 2020, there has been a flurry of articles lamenting its fate. But, I’ve yet to read one in the mainstream media that says anything negative about the bill itself. Their focus is pretty much about placing blame and shame on those who opposed it.
In a recent article in the Los Angeles Times, The revenge of the suburbs: Why California’s effort to build more in single-family-home neighborhoods failed, reporter Liam Dillon concludes that the reason SB 50 failed was due to opposition from “suburban homeowners” (the new dog whistle to allege rich, white elitism). His title is eye-catching but is without substantive facts or understanding of the underlying issues and economics (it reads as if Liam may be an aspiring screenwriter).
Am I implying that everyone opposed to SB 50 has noble motives or reasonable arguments? No. Am I saying that there aren’t people who are elitists or are just categorically against all change? No. Am I saying that there isn’t selfishness or racism in the world? Of course not. You don’t have to look too far to find xenophobes, homophobes, phobo-phobes, or worse. But, to conflate all that with middle class, suburbanites is just laughable and sophomoric.
The LA Times article conveniently avoids mentioning that SB 50 was officially opposed by numerous inner-city, community groups and the state’s two largest cities, San Francisco and Los Angeles, who have more political clout than all the suburban towns combined. The city councils and planning departments of other large cities such as Oakland, Sacramento, San Jose, and San Diego, also did not endorse SB 50.[1] At the same time, it was also opposed by many small cities and counties, evidenced by the fact that the League of California Cities opposed it.
These are not minor considerations. In fact, the major support for SB 50 came from Senator Wiener’s political allies and his funders in tech, real estate, and trade unions, all of whom stood to benefit, directly.
That is why SB 50 failed. It didn’t solve the problem, the majority of those in local government knew it, and it probably would have made things worse. It’s really that simple.
Senator Wiener has lost sight of the goal that started this whole conversation decades ago: providing affordable housing for those most in need, not for those who believe that affordable housing in the most expensive locations, is somehow a constitutionally protected right – or even more selfishly that our top housing priority should be that the children of suburban parents are able to live in Marin County or San Francisco.
Similarly, Farhad Manjoo of the NY Times wrote an opinion piece, apparently based on nothing more than Twitter-ish, soundbite hyperbole, entitled, America’s Cities Are Unlivable. Blame Wealthy Liberals. He subtitled the piece, “The demise of a California housing measure shows how progressives abandon progressive values in their own backyards.” He describes the streets of San Francisco as “a plague of garbage and needles and feces, and every morning brings fresh horror stories from a “Black Mirror” hellscape.” (another aspiring screenwriter?).
In response, Susan Kirsch, founder of Livable California, and I penned the following letter to the editor of the NY Times:
Many California cities, low-income neighborhood groups, middle-class homeowners and renters, professional planners, the League of California Cities, and both the San Francisco and Los Angeles Boards of Supervisors opposed SB 50. Their conclusion: it was a blunt instrument, top-down measure that trampled on the powers of locally elected government and benefited real estate developers and institutional financial investors without solving California’s housing crisis. Worse, it likely creates an even greater vulnerability of displacement for low-income residents and those most in need of affordable housing.
Senator Scott Wiener and his YIMBY (yes in my backyard) supporters want to dismiss the general public’s reasonable concerns and are intent on labeling suburbanites NIMBYs, but the facts remain. SB 50 is a historic over-reach by state government to strip locally elected city and county government’s land use, zoning and planning powers, in violation of the California State Constitution, and hand those powers over to unelected, politically appointed state agencies.
My bet is our letter will never see the light of day. Crafting realistic public policy solutions is hard work and filled with a myriad of inconvenient details that can’t be wished away for political convenience.
The demise of the middle-class
According to current political fashion, traditional middle-class goals about raising a family in a suburban community are now considered something to be ashamed of. Doing one’s “fair share” now goes far beyond paying taxes, giving to local charities, volunteering at schools and for sports teams, being engaged in local community affairs, or your investment in pride of ownership. In fact, we now hear single-family homeownership itself being described as “institutional racism” and considered grounds for labeling homeowners as elitist, NIMBYs and worse. Why not try some obvious solutions before we stoop to that?
It's all "sticks and stones" as far as I'm concerned, but I find it disturbing because this tendency to attack a messenger with a differing point of view is coming from highly-educated and very well-funded individuals and organizations.
Social media seems to be the cesspool for the gestation of this, but mainstream media and local newspapers are no better at getting to the underlying issues and are arguably worse, because they have a substantial readership and by indolently parroting unsubstantiated assertions as fact, they give credence to false narratives about the need to end local control of land use, zoning, and planning. Or perhaps, they really don’t care to look too close, because the complexity of what’s really going on won’t make a neat, sensational story about good guys and bad guys.
Today in California, the assault on single-family homeownership, small business owners, the self-employed, and just about everything that has been traditionally defined as “middle class” continues unabated.
Wage increases are too slow to keep up if you’re in anything other than tech, law, big real estate development, or finance. Meanwhile, regressive taxation and fees continue to skyrocket (sales taxes, school bond fees, bridge tolls, business fees, parcel fees, utility fees, special district impact fees, etc.), with legislation in the works that will soon add dozens more. And let’s stop kidding ourselves. All taxes and fees assessed to housing or other property or businesses get passed on to renters and consumers. If it’s not passed on, then the condition of the housing deteriorates and the businesses close their doors. There’s no magic here. That’s how markets work.
The plain truth is that so-called housing “solutions” such as SB 50, AB 1487 and the CASA Compact are built on increasing control from the top and regressive tax and fee schemes that hurt the working poor and small businesses the most. In fact, MTC / Wiener’s entire vision is built on regressive taxation and fees paid by those most in need of affordable housing and most vulnerable to the legislation's negative impacts. And, our own Marin County Senator, Mike McGuire, has now become one of their head cheerleaders.
But, what if I were to tell you that the fundamental arguments against SB 50, or SB 827 that came before it, or whatever incarnation comes next, are not really about housing at all? What if I were to tell you that what the media and Senator Wiener would like to have us all believe is at best highly questionable and more likely beside the point? And that in the case of the CASA Compact, its rationale is pretty much made up out of whole cloth so that certain special interests can fatten their bottom lines or continue their rapid company growth and hiring, but lay off the costs and impacts on taxpayers.
Knee-jerk decision-making based on sound-bite false narratives
The SB 50 crowd keeps intentionally framing the argument as being for or against “housing,” rather than acknowledging (or even knowing?) that the basic arguments against SB 50 are not really about that. What’s at stake are the precedents that would be set by SB 50, which are actually separate from the issues surrounding housing or development.
It’s similar to the argument currently being fought in Washington D.C., regarding the subpoena powers of Congress. It’s essentially irrelevant if it’s a subpoena for testimony or a tax return or a stained blue dress. What’s at stake are the principles regarding the respective powers and roles of the legislative branch and the executive branch of our government, not whether Deutsche Bank did or didn’t make a stupid loan or investment (something they’ve been known to do for decades).
In California, the arguments in opposition to SB 50 and CASA are first and foremost about the respective powers and roles of locally elected city and county governments, and the state. It is those arguments that have to be addressed and settled before we can craft a housing bill that has any chance of producing a significant amount of affordable housing. In the ideologically-driven zeal of both reporters noted above and Senator Wiener and his cadre, awareness of this seems to have been lost, if it ever existed in the first place.
Under AB 1487, for example, MTC and its CASA Compact Committee of private, self-appointed and self-anointed corporate and special interests, and political insiders are attempting to create a regional government agency, disguised as a “special district,” that can unilaterally assess fees on residents and businesses, and propose new, regressive tax measures.
This is essentially a new, “mezzanine” form of government, manned in theory by a percentage of elected representatives, but in practice is so many steps removed from any local control or reasonable public oversight that for all intent and purposes, it’s a black box. Its opacity pretty much guarantees it becoming yet another trough from which special interests and political insiders can feast without taxpayer knowledge.
It is simply a reincarnation of the regional development authorities that were struck down and dissolved by the California Supreme Court in 2013, for being grossly corrupt and ineffective money pits. Its powers are destined to be abused because it ignores the shortcomings of human nature and provides no checks and balances.
Markets matter
It’s been recently reported that the SF Bay Area has the highest construction costs in the world. At the same time, the City of San Francisco now has more billionaires per capita than any other city in the world. On top of that, on average, San Francisco residents are now paid the highest salaries in the world. Could it be that all of this is somehow an impediment to building anything but luxury housing here? Don’t you think that anyone sincerely trying to understand housing in the San Francisco Bay Area would want to take these factors into consideration, before we start penalizing cities for not building housing -- which they don't actually do, anyway?
Housing prices cannot rise unless there are people who can afford them. Perhaps this sheds some light on the demand side. Are people being left behind? Absolutely. So, then which types of fixes have worked in the past and which have not?
This brings me back to an argument I’ve made before that cannot be emphasized enough. In an article entitled Affordable housing solutions: more government, less government, or smart government?, I wrote:
All real public wealth is the result of the efficient utilization of private manpower and capital (the tax base), which is measured as “productivity.” The efficient utilization of capital is absolutely critical to addressing any large scale, systemic challenge such as affordable housing. And, capital is always limited.
This is fundamentally important but is being summarily ignored. Why? Perhaps, because our elected representatives in Sacramento don’t care and are only looking out for their own benefit, or they don’t really understand what it means, much less the implications of ignoring it?
As a case in point, I met with Senator Mike McGuire in March of this year, at his invitation, to discuss affordable housing. As a former and current affordable housing developer, for over an hour I tried to lay out relevant facts and arguments that needed to be considered. He was very earnest and tried to act attentive, and he was highly complementary, but it was apparent he knew little about real estate, affordable housing, financing, tax credits, the related history, or government programs. Bottom line, I felt like I was talking to a middle-schooler. He was ignorant of the facts at hand and in truth, seemed disinterested in knowing too many details. He didn't ask any questions.
I was not talking to a person capable of coming up with realistic, socially equitable, and economically and environmentally sustainable solutions that would result in significant affordable housing creation. Yet in spite of his handicap, according to news reports, "McGuire vows to push forward with” SB 50.
The business of selling solutions versus solving problems
The proponents of SB 50 and now AB 1487 appear willing to go to great lengths to create a narrative that fits their ends. A day after SB 50 was shelved, California YIMBY released results of a poll conducted by a Washington DC-based company they had hired, Lake Research Partners (LRP), which suggested that the bill was wildly popular among California voters.
According to LRP, 66 percent of California voters supported SB 50, whereas only 18 percent opposed it. First off, polling only 1,200 random people is not much of a sampling and we have no idea where they lived or what their personal situation was. Secondly, the polls questions were designed to get the responses sought.
For example, people were asked if they supported a bill that would “allow developers to build new apartments near transit and jobs if they also include affordable housing for moderate to low income workers?” Who wouldn’t endorse that? It fails to note that the affordable in lieu provisions are already the law and fails to explain the true density impacts. Or, they were asked about a bill that will “reduce car traffic and pollution by allowing more housing to be built near public transportation like trains and buses.” Sounds nice, doesn’t it? Too bad there’s no funding to improve our lousy public transit system. Or, how about to “allow communities to protect themselves against gentrification,” even though SB 50 does no such thing?
The way they “explained” SB 50 it sounded like a community protection act, not the developer giveaway it really was. So, of course, if you define SB 50 that way, everyone will say yes. But, that has nothing to do with what it would actually do in each community, urban or suburban – which is why the City of San Francisco opposed it.
I have some questions I'd like them to ask. How about...
If you worked really hard and saved till it hurt to afford to be able to move your family into a single-family home with a small yard, in a quiet neighborhood, and you fixed it up and did it within all the onerous restrictions on height and setbacks and parking and so on, and then someone comes along and builds a 4 story fourplex on the lot next door, and the tenants have 8 cars that ended up parked all over the street in front of your house (because unlike you, they have no parking requirements), and their windows look down into your once private backyard, would you vote for that?
Or...
If you have to commute to work in San Francisco from Hayward but drive to the BART parking lot near the station because you live a mile away and have to carry a lot of stuff to work. But, then BART cuts a deal with a developer to make extra cash to cover their unfunded pension liabilities, and they eliminate the parking lot to build an 8 story building, are you good with that?
Just wondering how those results might change.
If you say it often enough, it becomes the truth
It’s ironic that here in our one-party state, the very same people who probably (rightfully and understandably) loathe the Trump Administration’s complete disregard for democratic norms and principles and its attempts to rule by top-down edicts, seem to have no problem whatsoever, when those same tactics and lack of principles are employed to accomplish their own personal agenda and political policy goals.
How is it that the Wiener / YIMBY / Governor Newsom crowd cannot comprehend that the majority of those arguing against legislation like SB 50, AB 1487, and a slew of other bills in the works, are pushing back to preserve the powers vested in their own elected representatives, the powers SB 50 wanted to hand over to unelected, politically appointed agencies and self-appointed “stakeholder” cabals like CASA.
When President Trump calls his opponents slanderous things and gives them insulting nicknames, he's called a sociopath, a narcissist, and a man-child. But when progressives call people racists, NIMBYs, elitists or whatever, they claim they're noble and fighting for a just cause. Sorry, you can't have it both ways. Either you’re just "good people on both sides" or you're pretty much the same, right? And, I’m pretty sure I'm right about Trump being both those things.
Meanwhile, we continue to waste real opportunities to pass legislation that might actually have a positive impact on the development of affordable housing by tapping the power of private capital markets.
Wouldn’t it be better to stop the name-calling and advance programs that are based on economic realities rather than wishful thinking?
[1] Mayors of some of these cities supported SB50 but not with their city council’s or planning department’s support.
Bob Silvestri is a Mill Valley resident and the founder and president of Community Venture Partners, a 501(c)(3) nonprofit community organization funded only by individuals in Marin and the San Francisco Bay Area.