This is Part A of the second installment of the “Facebook money and California housing” series, which delves into the Chan Zuckerberg Initiative’s multi-million-dollar funding of the pro-growth shadow government that’s reshaping California housing policy. The first installment focused on the cabal’s push for Senator Nancy Skinner’s SB 330. This second installment tracks Chan Zuckerberg’s efforts on behalf of Assembly member David Chiu’s AB 1487.
AB 1487, a complex regional housing bill, is driven by tech and development interests with no concern for out-of-control office growth.
The Chan Zuckerberg Initiative (“CZI”) website states that on an unspecified date—I’m guessing February 2017— the foundation gave a group called Enterprise Community Partners $500,000 “to support Enterprise’s efforts to plan and implement a resourced and impactful regional housing enterprise that will help build capacity for a regional body to sustainably support affordable housing for the long term.”
Fast forward to 2019: Enterprise is one of two sponsors of AB 1487, the San Francisco Bay Area Housing Finance Act. The other sponsor, the Non-Profit Housing Association of Northern California, is also a CZI grantee.
Authored by San Francisco Assembly member Chiu, AB 1487 would create the Bay Area Housing Finance Authority. The bill embodies recommendations of the Committee to House the Bay Area, or CASA, the ad hoc pro-growth lobby convened by the Metropolitan Transportation Commission.
AB 1487 zipped through the Assembly and then a June 19 hearing before the Senate Housing Committee, which is chaired by Scott Wiener. Its next stop was the Senate Governance and Finance Committee, which, on July 10 considered a draft version dated July 3.
Citing an “annual funding shortfall of $2.5 billion” in the Bay Area’s “efforts to address the [region’s] affordable housing crisis,” the July 3 draft authorized the new authority to
— Raise and allocate revenue through bonds; special taxes, including a parcel tax, a gross receipts tax; an employer head tax; and a commercial linkage fee;
— Allocate funds to various cities, counties and other public agencies and affordable housing projects within its jurisdiction to finance affordable housing development;
— Preserve and enhance existing affordable housing;
— Fund tenant protection programs, including legal aid, and emergency rental and relocation assistance for lower income households;
— Fund homeless shelters;
— Acquire land for affordable housing construction;
— Fund infrastructure needs associated with increased housing production;
— Establish affordable housing benchmarks; and
— Determine the region’s housing needs
Senate Governance and Finance Committee Chair McGuire opened the July 10 hearing by announcing that most of the July 3 text would be gutted, and a “shell of the bill” would be moved to the Senate Appropriations Committee. Neither specified nor discussed at the meeting, the details of this evisceration had been negotiated behind closed doors. The stripped measure was posted on the Legislature’s website on July 11 (details below). On July 12, the Legislature went into its month-long summer recess.
McGuire said that the plan is for state legislators to spend the next month negotiating a consensus with the Metropolitan Transportation Commission and the Association of Bay Area Governments that results in an amended bill that the Appropriations Committee can approve in “30 to 40 days.”
On July 29, Appropriations Committee Staff Director Mark McKenzie told me that AB 1487 is now set for a hearing on August 19. “If they bring us the amendments by August 13, we could hear the amended version on 8/19. If not, we would hear the bill in its current form.”
At the July 10 hearing, Enterprise Community Partners staffer Geeta Rao, speaking in support of the measure, brandished an ECP report that she had co-authored, “The Elephant in the Region: Charting a Path for Bay Area Metro to Lead a Bold Regional Housing Agenda.” That document and Enterprise’s other efforts in behalf of a regional housing entity make explicit what every version of AB 1487 has left implicit: The pro-growth regime sees the bill as an opportunity to
— Decimate Bay Area cities’ authority over land use;
— Penalize cities for failing to do what cities don’t do anyway —build housing;
— Aggrandize the moneyed rogue Metropolitan Transportation Commission;
— Facilitate the private appropriation and exploitation of the region’s public land;
— Put the region’s most vulnerable tenants at greater risk of displacement;
— Succor the private housing industrial complex; and
— Promote an improvident pro-growth agenda.
I think some form of AB 1487 is going to be approved by the Legislature. The question is how much of the autocratic, build-baby-build agenda the CASA lobby can persuade lawmakers to include in the measure by September 13, the last day for each house to approve legislation.
What is Enterprise Community Partners?
Operating largely out of the public limelight, Enterprise Community Partners, a 501(c)(3) non-profit headquartered in Columbia, Maryland, is a power player in the national affordable housing finance industry. From the ECP website:
We deliver the capital, develop the programs, and advocate for the policies needed to create and preserve well-designed homes that people can afford in inclusive and connected communities.
Besides ECP, the Enterprise “family” includes three subsidiaries that offer tax-exempt financing or develop housing, and two taxable “members” that provide asset management services or “multifamily and commercial real estate financing.”
The website says that since its founding in 1982, Enterprise has invested $43.6 billion in 585,000 “affordable and workforce homes.” The company “help[ed] write the legislation” that created the Low-Income Housing Tax Credit equity program, currently the major source of public funding for low-income housing in the US. Self-described as “one of the nation’s leading syndicators” of LIHTC equity for affordable housing development, Enterprise brokers tax credits between allocating agencies—in our state, the California Tax Credit Allocation Committee (CTCAC)—and private developers. Enterprise says it’s invested $13.6 billion in LIHTC equity.
With offices in San Francisco and Los Angeles, Enterprise is deeply involved in California affordable housing finance, affordable housing development, and housing policy. ECP sits on the California Fair Housing Task Force, the committee appointed by CTCAC and the California Department of Housing and Community Development to develop “opportunity maps” for the siting of LIHTC projects, an undertaking that also involves three other Chan Zuckerberg Initiative grantees, the Haas Institute and the Terner Center for Housing Innovation—both at UC Berkeley—and the California Housing Partnership Corporation.
The role of private nonprofits in building affordable housing in California – particularly in the Bay Area – is critical to any discussion. Since the Reagan Era, the federal government has completely defunded public housing, allowing existing housing stock to deteriorate and spending zero to allow cities to build new public-sector units. Neither the Clinton nor Obama Administrations did anything to change that.
While public-sector housing has been a great success in Western Europe, it’s been mostly a failure in the United States for a long list of reasons.
The community-based nonprofits that emerged out of the 1960s and 1970s have become the only affordable housing providers in cities like San Francisco. Those groups – including the Chinatown Community Development Center, TODCO, and others — have built some 30,000 units of well-managed, permanently affordable housing over the past few decades.
But the community-based nonprofits in SF are not all supporting Chiu’s bill.
In Northern California, Enterprise Community Partners is involved in some admirable projects: chairing the board of the San Francisco Housing Accelerator Fund, a public-private partnership that’s raised $70 million to produce and preserve affordable housing in the city; assisting the Sustainable Chinatown Initiative, a project of the Chinatown Community Development Center, San Francisco’s Planning Department and Department of the Environment that seeks to protect the neighborhood’s distinctive identity and culture, create more affordable and resource-efficient housing, and improve access to parks and other community services; and investing, via Enterprise Community Investment, a 501(c)4, in the recently opened Pauline Weaver Senior Apartments in Fremont.
And then there’s ECP’s Chan Zuckerberg-funded campaign for a Bay Area regional housing entity. One of the peculiarities of the CZI grants list is that the dates on which the awards are made do not appear. The list states only the grant period—for CZI’s $500,000 grant to Enterprise, 2018 to 2020. The dates matter, because they illuminate connections between CZI funding and its grantees’ concerted politicking.
My query to CZI about the date of the grant to ECP ran up against the limits of Chan Zuckerberg’s purported openness: the organization has refused to provide the date. But when it comes to public disclosure, Enterprise is worse. CZI responded initially to my queries with a half-hour interview and a subsequent, albeit cursory, exchange of emails; my overtures to ECP have simply gone unanswered.
I’m guessing that CZI made the Enterprise grant in February 2017, for three reasons. First, that’s when it reportedly made a slew of other housing grants. Second, that’s when it reportedly made its $443,500 grant to the Terner Center for Housing Innovation, another award that’s good for 2018 to 2020. Third, and most importantly, that timing jibes with the December 2017 publication of Enterprise’s report, “The Elephant in the Region.”
Sucking up to MTC
Authored by Heather Hood, Enterprise vice president and market leader for Northern California, and Geeta Rao, enterprise director, Connected Communities, Northern California Market, the 40-page ECP report identifies the region’s “elephant” as “the lack of a regional or city housing finance authority (HFA)” that could supplement the inadequate state and federal resources with “permanent regional and local sources of funding,” “activate public, surplus, and private land,” deploy “high-touch technical assistance to jurisdictions,” and “support mixed-income financing mechanisms and developments.”
Hood and Rao nominate Bay Metro as the ideal venue for the proposed authority. “Bay Metro” usually refers to the uneasy collaboration between two of the region’s planning agencies, the Metropolitan Transportation Commission and the Association of Bay Area Governments. Both are housed in MTC’s fancy new digs in San Francisco’s new financial district. In “Elephant,” however, Bay Metro effectively refers to MTC, the region’s transportation planning and funding agency.
The region, we’re told, needs “[a] long-term regional housing finance structure” with “the ability to leverage lower-cost capital…and invest in housing both as a financing source and as a subsidy,” using
a combination of low-cost, tax-exempt debt, gap funding contributions, and…property tax mitigation for very low- to moderate-income units that could result in thousands of new affordable units. Bay Metro is best situated to implement this housing finance model [,] given that it already has bonding authority and is engaged in sophisticated financial markets.
ABAG doesn’t have bonding authority. They’re talking about BATA, the Bay Area Toll Authority, which currently has $9.7 billion of outstanding debt. BATA has the same board as MTC, which administers the bridge tolls.
The MTC designation is explicit in “Elephant’s” accolades for the regional transportation agency. “We have already seen the positive impact on transportation that comes from MTC coordinating planning, funding, and capacity-building at a regional scale across 27 transit operators,” write Hood and Rao.“ To improve housing outcomes across the entire region, we need an entity with the authority and acumen to lead a similarly well-coordinated, impactful, and holistic housing process.”
Anyone who’s recently navigated the Bay Area’s jammed, decrepit roads or sparse public transit can only gape at this tribute to MTC’s “acumen” and “positive impact on transportation.” The absurdity of Enterprise’s homage becomes even more blatant, when you consider the agency’s loss of $120 million worth of bridge tolls on credit swaps gone bad, the $91 million of cost overruns on its new headquarters, and MTC’s deep involvement in the Bay Bridge debacle, whose $6.5 billion price tag was 2,500 percent over the original estimated cost.
But “Elephant” is, after all, among other things a solicitation for business—the business of affordable housing investment and development—by a party that has skin in the game and one, moreover, which has had a long and lucrative relationship with MTC. A PRA request asking to see documentation of funds MTC disbursed in behalf of CASA between March 6 and July 13, yielded an invoice from Enterprise Community Partners showing that since January 1, 1998, MTC has paid ECP $159,278,900.
“Given Enterprise’s particular expertise,” write Hood and Rao in “Elephant,” “we focus on actions that directly support housing preservation and production, but strongly encourage the new housing entity to include policy and capacity-building functions related to tenant protections as well.” [Emphasis in original] That coy advertisement echoes in “Elephant’s” repeated plugs for the regional housing entity to hire “development experts.”
The discounting of tenant protections and “capacity-building,” because those specialties fall outside “Enterprise’s particular expertise,” illustrates the report’s self-aggrandizing motives and Enterprise’s market-skewed priorities. Surely the $500,000 grant could have funded a tenant protection expert or two.
Hood and Rao aren’t just looking out for Enterprise; they’re fronting for private investment in the housing industry at large. They urge private involvement in the provision of affordable housing as a remedy for Bay Area cities’ alleged failure to do the job. Accordingly, a corollary of their marketized pitch is an indictment of local land use authority.
“Local jurisdictions alone cannot solve the housing challenges we face, and when they fail to provide solutions within their own boundaries, they export the crisis to other parts of the region….Some communities have stepped up, but most have failed to build their fair share of affordable homes.”
They attribute this failure to Prop. 13, the 2012 dissolution of redevelopment agencies and attendant loss of local funding for affordable housing development, localities’ “circuitous” and “unpredictable permitting” processes, and “[t]he ever-present challenge of all kinds of NIMBYism.”
The Nimby rap
Only the Nimbyism factor is accompanied by specific examples: “a lawsuit brought against the City of Lafayette for denying what would have been a 315-unit moderate-income development in favor of a significantly lower density proposal aimed at higher-income households, and the City of Brisbane’s rejection of any housing units as part of its proposal to accept eight million square feet of new commercial and industrial development.” That’s the full extent of “Elephant”’s documentation of Bay Area Nimbyism, a term that the report doesn’t bother to define. Both examples are problematic.
The lawsuit against Lafayette, concerning a development on Deer Hill Road, was brought in 2016 by Yimby pioneer Sonja Trauss and the Bay Area Renters Federation, which subsequently morphed into the California Renters Legal Advocacy and Education Fund. The documents associated with the suit appear on CaRLA’s website in a list that concludes with the declaration: “We won!”
Really? The final ruling of the court, posted on the website, denied the Trauss/BARF petition, stating that “the Developer has maintained that the decision” to suspend the larger development and move forward with the smaller one was “voluntary.”
Presumably Hood and Rao view the lawsuit, regardless of its outcome, as evidence that local residents are routinely blocking new affordable housing in the Bay Area. If so, a few questions are in order. Should affordable housing be built anywhere it can get approved? In this case, the project was planned for a site with hourly bus service, right off Pleasant Hill Road, which is already packed at commute time. Wouldn’t this encourage sprawl and worsen congestion?
As for affordability: “moderate income” usually means household income at or above 80 percent the Area Median Income. For Contra Costa County in 2019, the HUD-designated income at 80 percent AMI for a four-person household is $134,050. Nothing moderate about that.
The Brisbane example is also dubious. “Elephant’s” claim that “the City of Brisbane” rejected “any housing units as part of its proposal to accept eight million square feet of new commercial and industrial development” references an editorial that appeared in the San Francisco Chronicle on September 25, 2016, under the headline “Brisbane shouldn’t hide from Bay Area reality.” Unnamed in the ECP report, the development was the Baylands project. What the Chronicle editors meant by “reality” was “a booming economy and surge in population” that have not been matched by a commensurate amount of new housing. The editors opined:
City leaders in the tiny town are ruling out condos and apartments in a mega-development smack in the center of the Bay Area’s costly real estate marketplace. The hamlet, population 4,282, favors up to 8.3 million square feet of shops and offices alongside the 101 freeway. What it doesn’t want is Part Two of the [developer’s] plan: some 4,434 residential units.
Sneering at “benign arguments about losing its small-town feel to a project that could [sic] double its population,” the Chronicle urged Brisbane show that “one Bay Area community isn’t afraid to accept its role in a wider region.”
In fact, as of September 25, 2016, Brisbane hadn’t rejected or approved anything. The residence-free alternative was one of four scenarios presented in the Baylands Environmental Impact Report. That scenario had been dubbed the “Community Proposed Plan” by the town’s planning director. Former Brisbane Mayor Ray Miller told me that residents protested that name, because their say in the plan’s formulation had been very limited, and in particular had excluded consideration of housing. And the Baylands property is not, as the Chronicle stated, merely “empty dirt where a dump and rail yard were the last notable activities.” It’s a Superfund site.
As with Lafayette, so, too, with Brisbane: It’s the principle of the thing that matters. What principle, then, justifies the argument that one town has to accommodate the out-of-control, unplanned commercial growth approved by other towns? It could only be the belief that Growth is God and thus needs to be appeased. That’s not reality; it’s a lethal delusion perpetrated by the capitalist growth machine. Like the Chronicle, Enterprise touts that fantasy. The report approvingly cites Plan Bay Area’s “bold vision for the San Francisco Bay Area to grow equitably and sustainably as our population increases from seven million to nine million by 2040.”
Cities don’t build; developers do
Contrary to “Elephant,” communities, i.e., cities, do not typically build homes, at least not any more (since the demise of most federal housing money). Private developers do—when they do. Cities approve housing—or don’t. A big reason they don’t in California is that Prop. 13 constrains property taxes, thus moving local officials to prefer commercial development—retail and offices—which needs less services than new housing.
Hood and Rao mark “the severe blow” that Prop. 13 “continues to deal…to most cities.” But they eschew the logical next step entailed by recognition of that blow: pushing for amendments to the law that would yield more revenue. It’s not that they’re averse to changing tax laws. On the contrary. But they want to lower taxes, not raise them, to subsidize the affordable housing industry.
For example, they think “underutilized, abandoned, and tax-defaulted land” should be placed in a regional land bank and made available for housing development. “[D]uring holding periods,” the “land coordinating entity” should have the authority to waive state and local taxes on its deposits. Hood and Rao also think the entity should “serve incomes beyond the typical range of 60% of AMI [Area Median Income, as defined by HUD] and below,” by subsidizing mixed income developments in which the higher market-rate rents “will support the lower-income units while also serving people in the middle who are currently without any assistance.” Critical to the success of such development, they say, is extending property tax reductions if not outright exemptions to housing for households earning between 81% and 120% AMI.”
California’s Revenue and Taxation Code currently “exempts non-profit-owned, deed-restricted housing serving households earning up to 80% AMI,” a provision that, the Enterprise staffers write, “in conjunction with subsidies and below-market loans, makes developing and operating affordable housing possible, since affordable rents [at this level] cannot cover both normal operating expenses and property taxes.” This same section of the code “also explains why so few developers build housing to serve households earning between 81 percent and 120 percent AMI, despite a tremendous need at this affordability level.” Hood and Rao suggest that before the Legislature amends the statewide tax code to expand the exemption beyond “’units serving lower income households’ to ‘units serving low- or moderate-income households,’” “it may make sense to explore a pilot for the Bay Area.”
Again, “Elephant” doesn’t tie Area Median Income, “lower- and “moderate-income” housing to dollar amounts, leaving these terms conveniently abstract. Here are the numbers: The current AMI for the HUD Area that includes San Francisco and Marin is $123,150; 80%, AMI is $98,500; 120% AMI is $148,800. In other words, Enterprise wants to subsidize housing—or more precisely, the builders of housing—for the wealthy. As noted, the report’s brief for such subsidies, when they’re folded into mixed-income developments, rests on the argument that without the supplemental market-rate rents, building housing for the neediest is not financially viable—that is, doesn’t yield the ROI required by private developers—particularly in the Bay Area.
Building for the neediest would be a lot more viable if we closed the giant loophole in Prop. 13 stipulating that property is only reassessed when it changes hands. That provision has shifted the state’s property tax burden onto owners of single-family homes, which are sold much more frequently than commercial parcels. No such proposal appears in “Elephant.” That’s because Enterprise wants to use public assets to lower the risk of private investment in housing.
To achieve that goal, “Elephant” also proposes to have the regional housing finance authority:
— sell low-interest (1-3 percent) tax-exempt bonds to fund “low cost-construction and permanent loans to housing developers”;
— supplement 4 percent Low Income Housing Tax Credits with low-interest loans and “deferred, ‘soft’ loans and grants” to housing developers;
— “take an equity position (deeply subordinated) in housing projects;
— write letters of credit;
— impose parcel taxes for affordable housing à la Seattle’s Housing Affordability and Livability (HALA); and
— make “surplus” or “underutilized” public lands available to the private housing industry via a land bank run by the regional housing entity.
Regional land banking as authoritarian capitalism
Summarily addressed in the EPC report, the land banking concept is fleshed out in a report referenced in “Elephants footnotes as a “forthcoming study on Public Lands by Bay Metro, to be released” (39). The study was published on September 11, 2018, under the nondescript title “Technical Memorandum.” Its declared subject—“MTC Workforce Housing Action Plan”—is only slightly more informative. A precise title would be “State-led and -enforced Privatization of Public Lands Action Plan.” The consultant authors had worked for two years with other consultants and a sixteen-person public-private Technical Advisory Team that included Hood and Rao.
As with “Elephant,” comprehending this “Action Plan” is an exercise in textual deconstruction. The title specifies “workforce” housing. The first sentence says that MTC hired the consultant team “to evaluate opportunities to develop publicly owned properties in the nine Bay Area Counties as affordable and workforce housing.” A few lines down, we read that the Action Plan addresses “the regional and state-wide need for housing generally and affordable housing in particular.” What are they really talking about? Is there a difference between workforce and affordable housing?
You bet there is. Footnote 2 hints at it:
For this study, “affordable housing” means units for households earning up to 60 percent of median income, as those typically are eligible for common subsidy programs such as Low-Income Housing Tax Credits (LIHTC) and Section 8 vouchers. “Workforce housing” means units for households with income below that required to secure quality market-rate housing, typically those in the 60 percent to 120 percent of AMI range, though in some communities with very high housing prices[,] “workforce housing” may include households up to 150 percent of AMI or greater. Use of one term or the other in this document does not necessarily preclude the application of actions to the other housing category.
The final sentence suggests that MTC is playing a shell game.
To understand better what’s under each shell, consider the relevant Area Median Income dollar amounts. For a four-bedroom household in the San Francisco-Marin County HUD Fair Market Rent Area, the current AMI is 60 percent $73,400; 120 percent, $147,800; at 150 percent, $184,750. You get the picture: the report sugarcoats MTC’s solicitude for the wealthy as “housing that is affordable to the majority of households” in the Bay Area.
Next euphemism: “publicly owned properties.” (1) By page 2, it’s clear that what the authors really mean is public land near transit, as indicated by “Table 1: Public Land Suitable for Housing Near Transit” and the accompanying statement: “This Action Plan provides a set of recommendations to develop publicly owned properties near transit services in the Bay Area for affordable and workforce housing.” The chart lists “nearly 700 acres of developable parcels, estimated to have capacity for roughly 35,000 housing units,” as identified by “MTC and its consultants and advisors.”
The rationale for developing these properties as housing is threefold:
First: “The use of such transit-served land for housing is particularly promising, as the residents of such housing can make use of the region’s major transportation infrastructure investments.”
Second: “[T]he developers of such housing can capitalize on some funding opportunities that are specifically geared toward transit-served parcels.”
Third—and most telling:
[T]he use of public land presents key opportunities that are not typically available on private land, such as the ability to defer land acquisition costs until the project is entitled, the possibility of receiving a discounted land price to reflect the public benefit of the project, and the chance to leverage the public land contribution or discount as a ‘local match’ for competitive funding programs.
The validity of the second rationale depends on the viability of the first. Unfortunately, the first founders on reality. Yes, people who live near BART, bus and streetcar stops, “can make use of the region’s major transportation infrastructure investments,” but the unfortunate truth is that less and less of them are doing so. The problem isn’t limited to the Bay Area: despite massive public investments, transit use in California is generally declining. Though nobody in the Bay Area knows whether transit-oriented development (TOD) is working, dozens of TOD projects are underway in the region.
But of the three rationales, it’s the third—public land offers the private affordable housing industry unique opportunities for financial gain—that’s the most extensively articulated and the most concerning. To justify the exploitation of those opportunities, the “Memorandum” employs the same bait and switch rhetorical device that Hood and Rao used to acknowledge and then dismiss Prop. 13 as a major source of cities’ reluctance to approve housing: Nod toward an essential problem, and then advance a course of action that ignores, when it doesn’t worsen, the problem.
First, the nod—in this case, to the Bay Area’s population explosion, its built-out character, and public agencies’ “financial responsibilities”:
In the face of a growing regional population and a constrained supply of developable land, public agencies must be cautious about disposing of land they may need over the long term, if not the present or immediate future. Public agencies also have financial responsibilities to their constituents and taxpayers, and offering their land for less than market value and/or for developments that may not generate significant property faces can be difficult to justify from a fiscal standpoint.
Then the brush-off: “Nevertheless, many jurisdictions and agencies in the region have identified affordable housing as a key objective, and public land remains a unique asset to advance that objective.”
And finally, the aggravating plan of action: Take steps to ensure that cities surrender their land, an irreplaceable asset, to the private housing industry. To this end, the “Memorandum” makes six recommendations:
- Declare that housing trumps all. “Cities, school districts, transit agencies, and other public organizations” should “make clear to their entire staff and constituency that they are adopting a pro-housing position and that inevitable conflicts should be resolved as favorably for housing as possible.”
- Offer public land for less than its market-rate price. Public agencies should go beyond the Surplus Land Act’s requirement “that any California jurisdiction seeking to develop surplus land must first offer the property to developers of affordable housing” and “creat[e] policy-level flexibility to offer land for either fee simple sale or long-term ground lease, and…offer such land at prices below market-rate appraisal value to the extent that such discounts are required for affordable housing and can be recognized as a local match for other available subsidy programs.”
- Impose new taxes to subsidize private housing developers. To fund affordable housing “production and retention,” cities and counties should levy property and/or sales tax and use “tools such as Enhanced Infrastructure Financing Districts,” which partly replace “previous Redevelopment resources.”
- Deregulate local housing development. Cities and counties should reduce costs and risks of housing development by “establishing ministerial permitting or ‘by-right’ zoning for projects meeting objective standards defined by the local jurisdiction, providing program-level environmental clearance”—thereby avoiding the need for an Environmental Impact Report—“waiving or deferring certain impact fees, making public investments in requiring infrastructure or replacement parking,” “allowing affordable housing developers to acquire land at below-market prices” and “to defer the acquisition costs until a project has advanced on approvals and external funding efforts.”
- Raise densities and lower parking requirements. Cities and counties should “enhance project feasibility” by “increas[ing] the allowed densities on both public and private land,” “encourag[ing] form-based zoning, and “allowing affordable housing projects to provide fewer parking spaces per unit.”
- Condition transportation funding on housing production. This is the hammer and deserves to be fully cited: “MTC should use its leverage to strongly encourage jurisdictions to aggressively pursue housing development on surplus public lands. As a regional organization controlling significant funding for transportation and the responsibility to implement a sustainable development pattern for the Bay Area, MTC should direct discretionary funding to jurisdictions that have proven capable of producing housing, invest proactively in projects that face major infrastructure hurdles, fund technical studies and staff support for agencies seeking to develop their land, create flexible funding mechanisms to offer low-cost financing, and lobby for State laws that encourage the use of public lands for housing.”
MTC is already using its “leverage,” i.e., its control of millions of dollars of public monies, to pressure cities to approve new housing or forego funding. See its Housing Incentive Pool scheme, adopted in November 2018.
The “Technical Memorandum’s” concluding list of “Potential Actions for MTC” ends with an even more aggressive proposal: Adopt legislation that either adds affordable housing on public land to instances in which local land use “sovereignty” may be overridden by a state department, multi-jurisdictional regional entity or special district; or that retains land use authority in the current jurisdictions but limits their ability to reject proposals for housing development on public lands.
The Enterprise Community Partners’ report is more restrained about designs on local sovereignty. “Elephant” only cites the need for “greater enforcement mechanisms” and incentives—money, technical support—that a regional housing entity could use to remedy the current situation, in which “localities can get away with not building their fair share” of affordable housing “without consequences.”
Dispensing with such niceties, the “Memorandum” makes clear that the growth lobby wants to divest local jurisdictions of far more than their “underutilized” public lands. It also wants to usurp the land use authority of public agencies—not just cities but also special districts overseeing transit, water, and other services and infrastructure.
In another respect, however, “Elephant” shows less solicitude for public authority per se: Hood and Rao suggest that the regional housing finance entity could be overseen by a new department within Bay Metro or a “quasi-public” agency “similar to the Bay Area Toll Authority (BATA) and Resilient by Design (RBD),” also housed within Bay Metro. “
In the second approach, the quasi-public regional agency acts with the transparency and accountability of a public agency, but is empowered to play a strong role in administering additional housing resources, providing educational tools to local cities and other housing stakeholders, and intervening, when necessary, to advance affordable housing projects that may be facing financing, zoning, building code, or community hurdles.
“Elephant” says nothing about how to ensure that a quasi-public entity’s actions would be transparent and accountable. And the reference to BATA as quasi-public is disconcerting: the agency’s board is identical to MTC, a public agency, albeit one that favors stealth policymaking.
The elephant in the “Elephant”
Enterprise’s analysis of the Bay Area’s housing debacle has a major flaw: it omits the tech boom’s inflationary effect on residential real estate. The price of housing has been bid up, up, up by the tens of thousands of highly compensated tech employees who’ve streamed into the region. But what UC Geography Professor Emeritus Richard Walker has termed “insane demand” has no place in “Elephant,” where tech makes its sole appearance as a prospective partner of a regional housing finance authority. The report lauds the industry, calling on the “dynamic” sector to “bring its propensity for innovation and risk-taking to guide capital in ways that bring not only economic but social returns as well”—specifically, to help the new regional housing entity “in delivering affordable housing outcomes.” Given that the Chan Zuckerberg Initiative funded the report, the tech whitewash is perhaps only to be expected. It’s also another reason to discount “Elephant’s” analysis of and remedies for the Bay Area’s housing woes.