This is Part C 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 delusory “missing-middle” fix
Local officials have raised questions about how AB 1487 deals with governance and revenue distribution. What they apparently haven’t questioned is the bill’s underlying assumption that a supply-side approach will make housing in the Bay Area more affordable.
Though AB 1487 is being marketed a vehicle of affordable housing, no version of the measure has defined affordability per se. The closest Chiu has come to including such a definition was in Section 64502, excised from the July 3 version on July 11, which referred to “lower income” and “low- or moderate-income households.”
“Lower income households,” said Section 64502, “has the same meaning as that term is defined in Section 50079.5 of the Health and Safety Code.” The referenced passage in California law sets “lower income” at “80 percent of area median income.”
The problem, as noted in the discussion of “Elephant,” is that in today’s gentrified Bay Area, median incomes are very high. To review: As of April 2019, the Area Median Income for a four-person household in the HUD Metro Area that encompasses San Francisco and Marin County is $123,150. Eighty percent AMI is $98,500—hardly what comes to mind, at least to my mind, when I think of “low income.”
The gentrification quotient is exacerbated by AB 1487’s accompanying designation of “low- or moderate income households”: “’Low- or moderate income households’ has the same meaning as ‘persons and families of low or moderate income,’ as defined in Section 50093 of the Health and Safety Code.” That section of the Code states: “’Persons and families of low or moderate income’ means persons and families whose income whose income does not exceed 120 percent of area median income, adjusted for family size by [HUD].”
In the HUD Metro Area that includes San Francisco, 120% AMI is currently $147,800 for a family of four. That may be statistically moderate in today’s Bay Area, but again, only because incomes have been bloated at the upper end by the influx of highly paid tech workers.
Moreover, Section 50093 goes on to say that if “upon determination that 120 percent of the median income in the particular geographic area is too low to qualify a substantial number of persons and families of low or moderate income who can afford rental or home purchase of housing…without subsidy,” it’s permissible “to use higher income limitations in designated geographic areas of the state.”
Now, keeping in mind the dollar distinctions between “lower-income” and “low- to moderate-income” households, look again at the allocation formulae in AB 1487’s July 3 draft. They authorized BAHFA to allocate a minimum of 60 percent of the authority’s revenues to “production of housing units affordable to lower income households” and a “minimum of 15 percent and a maximum of 20 percent for preservation of housing affordable to low-income or moderate-income households.”
If Chiu accepts the amendments recommended by the ABAG Ex. Board and the MTC board, the next version of AB 1487 will lower the allocation for production to 50 percent and lose the allocation caps. But nobody at either ABAG or MTC has publicly questioned the “lower-income” or “low- to moderate income” specifications. Presumably those specifications will reappear in the newly amended bill. If they do, and the bill is enacted into law, Bay Area taxpayers will be asked to fund the production of market-rate housing for households earning 80 percent AMI—for a four-person household in San Francisco, that means an income of up to $98,500—and the preservation of housing for households earning up to 120 percent AMI—for a four-person household in San Francisco, that means an income of up to $147,800.
That ask would accord with the recommendations in the CASA Compact, which offers some insight into the number and kind of housing units that the proposed allocations would generate. The Compact calls for producing 35,000 housing units a year—“14,000 of which are affordable to lower-income and 7,000 to moderate-income households.” It also calls for preserving 30,000 “affordable units—“28,000 of which are market-rate affordable units, and 4,000 are at-risk over the next five years”—and for preserving “300,000 lower-income households who are extremely rent-burdened (they spend more than 50 percent of their income on housing.”
We won’t know until August 19 at the earliest if the definitions of affordability are going to be restored. We do know that allocation percentages are going to be coming back, and that it looks as if the numbers in the July 3 draft will all be retained except the figure for production, which means that a minimum of 15 percent will be allocated for the preservation of housing affordable to low- or moderate income households and a minimum of 5 percent for tenant protection programs.
Two of the 3Ps—the preservation of existing affordable housing and the protection of tenant from displacement and eviction—are getting short shrift. The growth machine apologists who devised the CASA Compact contend that the lack of new high-end supply motivates wealthy individuals to buy housing in low-income neighborhoods, bidding up the price of real estate in those areas and forcing out current low-income tenants. The provision of new market-rate housing, they say, will alleviate gentrification and displacement pressures by offering so-called “missing middle” consumers an alternative. Best of all, in the process known as filtering, it can also offer households of modest means the possibility of moving into places vacated by those with greater wealth.
Unfortunately, this argument disregards the complex, fitful nature of building cycles in general—bringing new housing online is not like producing widgets—and the tech incursion’s inflationary effect on real estate values in the geography-constrained, built-out Bay Area in particular—as UCB geographer Richard Walker explains in Chapter Six of his book Pictures of a Gone City: Tech and the Dark Side of Prosperity in the San Francisco Bay Area). As for filtering: The Urban Displacement Project at UC Berkeley has found that it takes generations to work.
Watch to see if the amended AB 1487 on the Senate Appropriations August 19 agenda includes references to low income and low- or moderate income households, and how the bill divvies up the money.
Taxation without representation
There’s another aspect of AB 1487 that hasn’t gotten attention from the ABAG leadership—one that, I can confidently predict, won’t get any. In authorizing MTC and ABAG to levy Bay Area-wide revenue measures, AB 1487 would bestow (ABAG) or expand (MTC) taxing authority on officials who have no direct accountability to the prospective taxpayers.
The people who sit on the ABAG and MTC boards are popularly elected to serve county boards of supervisors or city councils, not the boards of regional agencies. They are appointed by their respective county’s Board of Supervisors or Mayors’ meeting; or in the case of San Francisco, a complex arrangement involving the Board of Supervisors and the Mayor. They do not run for their local offices on regional platforms, and their constituents don’t demand that they do so—for good reason: Most people living and working in the Bay Area have never heard of ABAG or MTC, much less know what the two agencies do. This ignorance reflects the mainstream media’s scant coverage of regional policymaking and politics (BART is the exception) and ABAG and MTC board members’ failure to inform their constituents about key regional issues and to seek their constituents’ views well before votes on those issues are taken at BayMetro.
AB 1487 indisputably qualifies as a key regional issue. If the bill becomes law, it will profoundly alter land use governance and funding in the Bay Area, not to mention the tax milieu in the region. At the ABAG Ex. Board meeting of July 18, 26 officials, who each sit on or represent someone who sits on one of eleven city councils (American Canyon, Berkeley, Campbell, Clayton, Hayward, Millbrae, Mountain View, Novato, Oakland, San Ramon, South San Francisco) or eight county boards of supervisors (Alameda, Contra Costa, Marin, Napa, Solano, San Francisco, Santa Clara, and Sonoma Counties)—Oakland and San Francisco each have more than one representative on the Board—voted on whether to support the measure with amendments. Yet to my knowledge, before July 18, AB 1487 had appeared on the agendas of only two of those nineteen bodies—the city councils of Berkeley and Oakland—and in both cases, on the consent agenda.
It’s not just the public at large that’s in the dark. Watch the ABAG Ex. Board’s July 18 discussion of AB 1487 (to access the video, Google “MTC Legistar”). It’s painfully clear that many, if not most, of the board members hadn’t read the bill, or, if they had, didn’t understand what was in it. Worse yet, many of them appeared to be unfamiliar with the powers of the agency they’re tasked with directing, with ABAG’s relationship to MTC, and with MTC’s powers.
Their incomprehension is partly a function of the secondary character of their service on the ABAG Ex. Board—one moreover for which none of them have personal staff. As mayors, councilmembers, and county supervisors, they have more than enough to do just keeping up with the business of their respective jurisdictions.
But their befuddlement also reflects their susceptibility to the manipulations of the clique on the board that’s calling the shots in concert with the MTC staff and the CASA lobby. So far, I’ve characterized ABAG’s relationship to MTC as antagonistic. That description doesn’t take into account the ways in which longtime leaders of both agencies have colluded to ABAG’s detriment.
ABAG leadership in cahoots with MTC
MTC’s hostile administrative takeover of ABAG in 2016 was accomplished with the connivance of then-ABAG President Julie Pierce and four other Board members—Santa Clara County Supervisor Dave Cortese, Alameda County Supervisor Scott Haggerty, and Solano County Supervisor Jim Spering. 48 hills published a detailed account of their machinations at the pivotal November 2015 meeting of the ABAG Ex. Board.
At the time, all but Rabbitt also sat on the MTC board, where the ABAG president has a seat. All but Spering still sit on the ABAG Ex. Board; Spering still sits on MTC, to which he was appointed in 1987. Cortese and Haggerty still sit on the MTC board; Cortese has been on it since 2005; Haggerty has been on it since 2000 and now chairs it. Pierce got on in 2009. The current ABAG Ex. Board president, Sonoma County Supervisor David Rabbitt, was appointed in 2011; as ABAG President, he now sits on the MTC board as well. Rabbitt and Cortese sat on the CASA Steering Committee, as did then-MTC Chair, Sonoma County Supervisor Jake Mackenzie. Mackenzie, still on the MTC board, also sits on the ABAG Ex. Board.
Early this year, the ABAG Ex. Board coterie got its newest and youngest member: Arreguín, who was elected as ABAG Vice-President in January at his first meeting as a full board member. Not incidentally, the AB 1487 item on the Berkeley council’s June 11 consent agenda, of which Arreguín was the lead sponsor, included an approving nod to the CASA Compact.
The Board’s July 18 deliberation on AB 1487 shows that the old hands, aided by their new recruit, are still effectively fronting for MTC. Sometimes their interventions are subtle. At the July 18 ABAG Ex. Board meeting, Pierce described the recommendations emerging from the secret negotiations with Chiu as “something that respects the role that ABAG has traditionally had in the funding and planning for housing.” No, it infringes on that role by giving MTC unprecedented authority to directly fund housing.
At other times, the ABAG Board leadership openly defends MTC’s leverage. Novato Councilmember Pat Eklund and Millbrae Mayor David Lee both asked why AB 1487 couldn’t authorize ABAG instead of MTC to put revenue measures on a region wide ballot. Eklund mentioned AB 746, the bill that authorized the San Francisco Bay Restoration Authority to place revenue measures on the region wide ballot; ABAG appoints the SFBRA board. Why, she wondered, couldn’t we ask Chiu to have AB 1487 authorize ABAG to place a measure on the ballot? Lee, for his part, asked: “Shouldn’t ABAG be leading? MTC is the lead agency. Why a transportation agency and not ABAG?”
ABAG President Rabbitt swatted away both queries. “It [AB 746] was a state statute,” he told Eklund. But that was her point; so is AB 1487. Rabbitt told Lee, “MTC has had the history of dealing with millions of dollars through the toll authority [BATA] and ABAG has not.” True. And that history includes repeated disasters—the $110 million loss of bridge tolls in derivatives, the mess of the new Bay Bridge, and the $90 million cost overruns at the new MetroCenter.
And speaking of state legislation, after MTC used bridge tolls to buy the building on Beale Street, a property that had vastly more space than it needed for its own offices, then-State Senator, now-Congressman Mark DeSaulnier got the Legislature to unanimously approve his bill, SB 613, which forbade MTC to engage in further real estate acquisition and development and severely restricted BATA’s contribution of bridge tolls to MTC, which had been unlimited.
The squelching of dissent on the ABAG Ex. Board works only because the majority of the board members countenance it. Nobody objected to Rabbit’s dismissive moves. Indeed, San Francisco Planning Director John Rahaim, representing the City and County of San Francisco, took the same line as Rabbitt, stating that “MTC has the experience.”
The other representatives of the City and County of San Francisco, Supervisor Rafael Mandelman, and the alternate to San Francisco Mayor London Breed, Kanishka Karunatne Cheng, said nothing during the entire discussion of AB 1487. All three voted with the Board majority to approve the recommendations from staff, the two Legislation Committees, and the Ad Hoc Committee.
An even stronger sign of the majority’s acquiescence to MTC encroachment was its failure to challenge the secretiveness of the negotiations with Chiu—a failure complemented by Arreguín’s laudatory portrayal of the backdoor dealings in which he, as a member of the AB 1487 Ad Hoc Committee, had participated. Referencing the California law that guarantees the public access to the meetings of local government bodies, Berkeley’s mayor declared:
“This was an ad hoc committee. It was not a Brown Act committee. So therefore, the meetings did not need to be held in public. And that led to a much more open and productive conversation for us to have with our MTC counterparts and as well with Assembly member Chiu’s staff.”
Nobody at the meeting took issue with this self-congratulatory tribute to stealth public policymaking.
ABAG leaders boast that, unlike MTC, their agency represents all 101 cities and the nine counties of the Bay Area. That representation is a hollow affair. The only time all the ABAG delegates are convened is at the annual General Assembly, an event tightly staged by the ABAG president so as to have negligible political significance. As the deliberations over AB 1487 demonstrate, ABAG policies are set by the MTC staff and the ABAG Ex. Board, which is run by a well-oiled coterie closely tied to MTC.
California taxpayers to pay $25M for BAHFA “start-up” costs?
In another lapse, no one at the ABAG Ex. Board’s May 16 meeting objected to what is arguably the strongest expression of contempt for democratic governance to have come out of the public discussion about AB 1487 so far: “Ensure that no new responsibilities” for a regional housing entity “are assigned to ABAG or MTC without…“[a] guaranteed source of funding that is not dependent upon voter approval.”
Formulated by ABAG-MTC staff, this proposal was presented to the Joint MTC and ABAG Legislation Committees on May 10. The staff rationale for circumventing the electorate noted that the then-current version of AB 1487 requires that MTC staff the HABA but does not provide any start-up or sustaining funding with imposition of this new role. While the bill authorizes up to 3 percent of voter-approved funds to be reserved for administrative costs, this doesn’t address how the agency is to absorb what would be substantial near-term responsibilities before revenues are collected, or address what should occur if any or all contemplated voter-approved measures fail.
But whether the measures win or lose, the bill requires that either ABAG or MTC reimburse the counties for the cost of placing the measure on the ballot. The RM3 election cost MTC $3.2 million in direct charges from county election offices. Neither agency has funding available (or even eligible) to cover this cost if an election fails.
On May 10, The Joint Legislative Committee approved the recommendation to circumvent the electorate on the question of guaranteed “start-up or sustaining funding” for the new regional housing entity. On May 16, it was approved by the ABAG Ex. Board on a 31-7 vote.
The recommended amendment reappeared in semi-sanitized form on the Ex. Board’s July 18 agenda. Gone was the anti-voter approval language, along with the implication that the major problem was lack of funds at MTC and ABAG to cover the cost of a regional election. In their place: a recommendation to amend AB 1487 to “provide at least $25 million to ABAG for flexible housing planning work” in “FY 2019-20 Budget, presumably the state’s. A check appeared in the “Concern Addressed” [by Chiu] column. As noted above, on July 18, the ABAG board approved this amendment.
As also noted above, on July 18, the ABAG board approved a recommendation to amend AB 1487 so as to have MTC place revenue housing measures on a regional ballot. But staff has said that MTC doesn’t have the money to pay for an election. Presumably, then, ABAG would use some of the $25 million to pay the county voter registrars for the election. That would leave the bulk of the handout for—what? Surely not all of it would go for staffing. Presumably most would fund new housing production, including a substantial amount of new market-rate housing.
If this amendment appears in the version of AB 1487 that is enacted into law, it will give the lie to Chiu’s oft-repeated claim that the Bay Area Housing Finance Act is all about “self-help.” That was always hype: AB 1487’s major beneficiaries will be the private real estate industry; financiers such as Enterprise Community Partners; the tech industry; and the Bay Area’s three largest cities, which will be guaranteed funding by the bill (assuming that the voters approve as-yet unspecified revenue measures in November 2020).
But to have California taxpayers give ABAG $25 million for the “start-up or sustaining” costs of a Bay Area housing finance agency, including the cost of a regional election, would take the mendacity to a new level. It also would also set up an intriguing precedent. Will other regions demand that the state fund their ballot measures and yet-to-be-created housing finance entities?
AB 1487’s path to Newsom’s desk is probably a lot shorter than it appears
To review: On July 10, Senator McGuire said negotiations over AB 1487 would continue over the next “30 to 40 days,” meaning during the Legislature’s summer recess, and longer if necessary. At the ABAG Ex. Board’s July 18 meeting, Pierce stated that there would be more amendments from Chiu’s office.
At the July 18 ABAG Ex. Board meeting, staff handed out a flow chart tracing the lengthy and convoluted itinerary the bill must navigate to reach the Governor’s desk and be signed into law.
As noted above, the bill is currently scheduled to be heard at the Senate Appropriations Committee on August 19. Between September 3 and September 13, the two houses meet only in floor session. September 13 is the last day for each house to pass legislation.
Unfortunately, the ABAG Ex. Board is not scheduled to meet again until the evening of September 19. Yet at the July 18 Board meeting, nobody suggested scheduling extra public meetings to see if the changes approved by the Board had approved had been incorporated into the bill or to vet new amendments. I suspect that most of the board members are unfamiliar with the Legislature’s calendar. Someone should have asked about the dates; predictably, nobody did. Which means that the ABAG Ex. Board has left most of its members (except those on the Ad Hoc Committee, which is presumably in on the backroom negotiations currently underway), the Bay Area cities it purports to represent, and the public at large out of the loop and in the dark and conceded all to the people in the backroom.
Meanwhile, AB 1487 appears to face a daunting route to passage. True, Senate Appropriations Committee Staff Director McKenzie told me that once the Committee has possession of a bill, the measure can be set for a hearing with at least a two-day public notice—four days if it’s the first committee of referral, but that is rare for Appropriations and in any case doesn’t apply to AB 1487. So theoretically the bill could be moved up to the committee’s August 12 agenda. Even so, the timing looks very tight.
But looks may be deceiving. On July 29, Steve Wertheim, who staffs the Assembly Housing and Community Development Committee, which Chiu chairs, replied to my request for clarification, stating that “the bill would not return to committees unless the committee chairs specifically ask for it to do so.” Scott Wiener chairs the Senate Housing Committee, so that’s two stops that AB 1487 will not have to make. My hunch is that McGuire, who chairs the Senate Governance and Finance Committee, and Assembly member Cecilia Aguiar-Curry, who chairs the Assembly Local Government Committee, will also wave it on.
My additional hunch: that the bill we see on August 19 will contain just enough language to authorize the formation of the Bay Area Housing Finance Authority and endow MTC and ABAG with the powers stipulated in the amendments that have been approved by the agencies’ respective boards, along with something about allocations that also reflects those amendments. Plus mystery changes that, according to Pierce, Chiu’s office is going to make.
At the July 10 hearing in Sacramento, Chiu said that a bare-bones measure will give local jurisdictions the opportunity to craft the details after AB 1487 becomes law. As Pierce put it on July 18, “this allows us to go forward for the next several months to form an outreach to the jurisdictions in the region.” It will provide “a basic framework, and then we will figure out how to implement that, and then get something on the ballot.” The exact “process will not be in the legislation….We write the rules.” By now it should be clear whom Pierce has in mind by “we.”
To get an idea of how unorthodox this arrangement is, glance at the text of SB 595, the 2017 law that authorized MTC to place Regional Measure 3 on the nine-county ballot in June 2018 and that Chiu cites as a precedent for AB 1487. Printing out at seventeen pages, SB 595 is stuffed with details. No way is Chiu going to get consensus on a similarly detailed version of AB 1487 in time to get it passed this year—or very possibly even next year. Better to go with a minimalist measure and rely on the MTC-ABAG power brokers to manipulate the outreach process in early 2020.
The CASA coup rolls on
At the Senate Appropriations July 10 hearing, Novato Councilmember Pat Eklund was accorded the unusual privilege of addressing the committee at length. Seated at the table before the dais, Eklund called AB 1487 “fundamentally flawed,” partly because it would give the authority over Bay Area housing policy that has been ABAG’s office and hand it to MTC. But mainly she objected to how ABAG’s authority over housing had already been usurped by MTC via CASA, which, she alleged, the transportation agency had started and run without ABAG’s knowledge or involvement. (Three days later, Eklund was among the three ABAG Ex. Board members to vote against supporting AB 1487 if amended; the other two were Solano County Supervisor Monica Brown and South San Francisco Vice Mayor Rich Gabarino.)
Chiu did not respond to the charge that MTC bypassed ABAG via CASA. Instead, he declared that ABAG 1487 “is not a CASA bill,” and that “CASA does not exist anymore.”
Both claims are patently false. Indisputably, AB 1487 emerged out of CASA. That was the intent from the start. In December 2017, Enterprise’s “Elephant” envisioned a new regional housing entity as “a place for the key actions and continual deliberations emerging from CASA…to land and be implemented.” Element 9 of the CASA Compact calls for “$1.5 billion in new revenue from a broad range of sources, including property owners, developers, employers, local governments, and the taxpayers [sic], to fund implementation of the CASA Compact.” Element 10:
CASA recommends establishing a Regional Housing Enterprise (RHE)…to coordinate and lead implementation of the CASA Compact…. [T]he state should form the RHE through an act of legislation and give it authority to collect new revenue (through fees or taxes); disburse the revenue to programs and projects in the expenditure plans (consistent with the CASA Compact); purchase, lease and hold land; and provide direct assistance. The RHE will not have regulatory authority.
And CASA still exists—big time. There are no more formal public meetings at the BayMetro offices. The coalition assembled by former MTC Ex. Director Steve Heminger has turned its efforts to lobbying the Legislature in behalf of the policies in the CASA Compact.
The staff analysis for AB 1487’s July 10 hearing, for example, lists twenty-two supporters of the measure, of which fourteen—California Community Builders, Chan Zuckerberg Initiative, EAH Housing, Eden Housing, Enterprise Community Partners, Inc., Hamilton Families, Non-Profit Housing Association of Northern California, Pico California, Related California, San Francisco Mayor London Breed, Silicon Valley @ Home, SPUR, TMG Partners, and Working Partnerships USA—had a regular seat at CASA. (The Bay Area Council, also listed as a supporter, has withdrawn its endorsement over its opposition to the July 3 draft’s inclusion of commercial impact fees; watch to see if such fees are in the next draft.)
Other major housing bills conceived in CASA—for example, Ting’s AB 1486, Skinner’s SB 330, and Wiener’s SB 50, all of which would drastically affect statewide housing and land use—have also garnered a host of endorsements from CASA participants.
And that’s just the public face of CASA’s current efforts to sway the Legislature. In response to a Public Records Act request about MTC funding of CASA from January 17, 2019, to March 6, 2019, 48 hills received a document showing that during that period MTC disbursed $122,720 in public funds (a Federal Highway Administration/Transportation Development grant) for CASA: $56,589 for staff costs and $66,131, itemized as $21,131 to Civic Edge Consulting and $45,000 to Silicon Valley at Home. SV@Home Executive Director Leslye Corsiglia, formerly Housing Director for the city of San Jose and before that staff to the state’s Department of Housing and Community Development, co-chaired CASA and was on the secret trip to New York City last December.
Ever wonder what lobbyists exactly do? The breakdown of the MTC payments gives you an idea. Civic Edge was paid to lobby for CASA at nine public meetings in the Bay Area ($500 a pop): Peninsula League of Cities Division, Joint Meeting of Cities in San Leandro, Napa Valley Transportation Authority, City Managers Group of Contra Costa, Valley Transportation Authority, Solano City and County Coordinating Council, East Bay Leadership Council, Sonoma County City Managers Association, and the East Bay Economic Development Alliance. The balance of the $21,131 went for shared “typed notes within 3 days,” “organizing notes by theme, “Legislation Committee Summary Doc,” and “Other administration, as requested.”
The SV@Home payment was in two parts: $20,000 was designated for “Lobbyist” Holly Fraumeni De Jesus of Lighthouse Public Affairs to pursue legislative and administrative action on housing-related legislation, including drafting legislation, coordinating meetings and facilitating direct and indirect communications with key legislators and staff, and meeting with interest groups to attain support for the 10-element CASA Compact.
The balance, $45,257, was designated for SV@Home Deputy Director Michael Lane to draft legislation, work with Leg Counsel on bill wording, coordinate with other stakeholders, and manage the Sacramento lobbyist in an effort to meet legislative deadlines and introduce bills that implement the CASA Compact in its entirety. Fraumeni De Jesus and Lane were to undertake these efforts in January and February.
CASA is playing the long game. The “Overview of the CASA Compact” published by MTC in February 2019, a month after CASA’s formal meetings ended, includes a “CASA Work Windows” chart that spans 2018-2022.
2018 is dedicated to “CASA Development”; 2019 to “Legislative Package”; 2020 to “Election #1 Presidential”; 2021 to “PBA/RHNA” [Plan Bay Area/Regional Housing Needs Allocation]; and 2022 to “Election #2 Presidential.” Just because the regional land bank concept has (probably) been nixed in this year’s state legislation, don’t assume that it’s gone for good. That also holds for the other aggressive goals laid out in CASA Compact and MTC’s “Technical Memorandum.”
CASA exposes divisions in the Bay Area housing movement
Meanwhile, the “defeatist” notions that Tom Angotti warned against—accepting “the bedrock neoliberal philosophy that private power is not only a given but the only legitimate power,” and that “[g]overnment therefore must follow the lead of private capital”—have taken hold in the Bay Area, with a result similar to the one he described in New York City. Many of our region’s equity advocates have allied with “the liberal wing of the Democratic party” and the nonprofit housing developers who “stand to benefit from the largesse flowing from new public-private development.”
The Bay Area counterpart to what Angotti called New York City’s “largest coalition of housing groups,” the Association Neighborhood and Housing Developers, is the co-sponsor of AB 1487, the Non-Profit Housing Association of Northern California. NPH, which describes itself as “the collective voice of those who support, build, and finance affordable housing,” has also endorsed SB 50 and SB 330. Last year it backed the failed precursor to Wiener’s now-stalled SB 50, his SB 827. NPH Executive Director Amie Fishman sat on the CASA Technical Committee.
And in the Bay Area as in New York, the housing movement is split between allies of some nonprofit housing developers and the Democratic Party on the one hand and representatives of tenants and neighborhood preservation and community-based nonprofit housing developers on the other. The CASA process brought that division to the fore.
In January, representatives of two prominent community-based organizations declined to sign the Compact. Urban Habitat Ex. Director Ellen Wu, who sat on the CASA Steering Committee, and Tenants Together Power-Building Program Director Aimee Inglis, who served on the CASA Technical Committee, separately attributed their refusals to CASA’s failure to follow a “’tenant protection first approach.’” In Wu’s words, “stabilize gentrifying communities so existing residents can prosper in place” by enacting strong tenant protection policies before introducing any upzoning and streamlining of market-housing. Then work to preserve and produce deeply affordable housing. In addition, no up-zoning or streamlining should take place in communities at risk for displacement and gentrification.
Instead, Inglis wrote, the Compact offers “no guarantee that protections and new revenues for affordable housing are in place before [up] zoning and streamlining changes.” Both she and Wu also criticized the lack of meaningful, truly collaborative engagement with the Bay Area’s most vulnerable residents and the Compact’s flawed geographical analysis of at-risk communities.
Inglis’s assessment was even harsher. Contending that what came out of the CASA process “reads as a developer wish list with few meaningful tenant protections,” she deplored the “public subsidy of market-rate development through tax breaks and caps on existing fees”; the absence of “any process or principles for implementation,” including “an agreement not to pre-empt or undermine cities with existing rent control”; and the weakness of the proposed tenant protections: a rent cap that would limit annual increases to the Consumer Price Index plus 5% for fifteen years and a just-cause eviction policy that would “only cover tenants after their first year of tenancy and exempt owner move-ins from having to pay relocation assistance” to their evicted tenants. A fair and effective rent cap, Inglis wrote, would tie rent increases to the CPI alone.
These are minority voices among the Bay Area’s housing advocates. Compare Wu’s and Inglis’s statements with the January 2018 memo from “Bay Area Equity Advocates” urging the CASA Steering Committee to “(1) adopt measurable goals for protection, preservation and production (‘the 3 Ps’) that accurately reflect the scale of our housing crisis and (2) adopt overarching principles to guide CASA’s policy solutions.” This is the 6 Wins for Social Equity agenda, which, Wu said, informed her criticisms.
Like her broadside, the Bay Area Equity Advocates’ call to action focused on the plight of Bay Area residents who are “disproportionately” affected by the region’s “extreme housing affordability crisis”: “low-income families, people of color, LGBTQ+ people, seniors, and other populations,” adding that “the fight for the right to a dignified home is connected to the struggle for workers’ rights, immigrant justice, climate justice, equitable development, and transportation equity.” It recommended “actionable” “solutions that “advance racial equity,” “benefit and do not harm low-income communities,” “reflect the varying experiences of low-income residents,” and “engage disadvantaged communities and advance community priorities”—all consonant with the position taken by Wu and Inglis.
What’s missing from the Equity Advocates’ agenda is Wu’s and Inglis’s forthright demand to make protecting the most vulnerable people CASA’s first priority and the rejection of market-housing construction as a goal of equal importance. In fact, the January 2018 memo referenced “affordable homes” to “very low-, low-, and moderate-income housing” without tying those categories to actual incomes. Nor did it take any swipes at developers or allude favorably to rent control à la Inglis.
That’s not surprising. The 44 signatories of the January 2018 document included not only Inglis and Wu’s Urban Habitat colleague Mashael Majid but also representatives of the Non-Profit Housing Association of Northern California, Enterprise Community Partners, and three other organizations that would go on to support the July 3 version of AB 1487.
On July 15, a letter was sent to ABAG President Rabbitt and Vice President Arreguín offering to “work with Bay Area Metro and local jurisdictions to ensure that the RHNA process increases housing affordability and availability in all cities and counties throughout the region” by including “people and organizations representing low-income communities, renters, people of color, seniors and other people on fixed incomes, communities impacted by gentrification, affordable housing development, and fair housing experts.” The 14 signers, described in the body of the letter as “members of the 6 Wins for Social Equity Network and our allies,” include representatives of four organizations that have endorsed AB 1487: the Non-profit Housing Association of Northern California, Working Partnerships USA, Enterprise Community Partners, and one newcomer to 6 Wins: Silicon Valley at Home. Urban Habitat signed the letter; Tenants Together did not.
Go after CASA
Chiu’s dodgy disavowal of CASA before the Senate Governance and Finance Committee contained valuable political intelligence about his trustworthiness and, more importantly, about the growth machine’s attitude toward the Committee to House the Bay Area: Chiu thinks CASA is toxic. We may surmise that the growth lobby thinks so, too.
For those who seek a democratic alternative to autocratic shadow governance, Chiu’s gaffes revealed a tactical opening: Publicize, expose and, attack CASA. Going after CASA would be more efficient than the whack-a-mole approach of fighting bill-by-bill. Of course SB 330, AB 1487, and the other destructive measures conceived in the CASA Compact, including key aspects of SB 50, need to be vigorously opposed. But the finer points of the legislation are going to be lost on the general public. The public, however, is perfectly capable of grasping the dangers of a secretive cabal generously funded by Facebook money.
And in the best tradition of political jiu jitsu, make it clear that in the CASA Compact, the 3 Ps really stand for Profit, Profit, and Profit.