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The housing debate in California has lost its way, while misguided class warfare continues
Like many political debates these days, discussions about housing policy have become buried in counterproductive ideological positions and misguided, sound-bite marketing. California has become the epicenter of this increasingly polarized nonsense. We now seem to be thoroughly incapable of actually focusing on the core problems or working to address them—how to provide housing for those most in need… low-income people.
We began to talk about a “housing crisis,” in earnest, following the financial crisis of 2008. The resultant Great Recession was brought on by a banking collapse caused by unscrupulous financing practices. But, what began as an effort to reform bank underwriting and reign in speculative securitization of home loans and residential assets (which the federal government has still utterly failed to do), things quickly devolved into a resident against resident blame-game and increasingly hostile name-calling at the bottom of the power pyramid, while those at the top of the financial world have been whistling all the way to the bank. All this, of course, plays right into the hands of those who were responsible for the Great Recession, in the first place.
Now add to that, chronic under-employment and for too many, unequal pay, racism, unequal treatment under the law, and unequal access to education, healthcare, and public services, and you have a recipe for a full-blown dysfunctional socioeconomic system.
At the same time, although there are many legitimate social justice issues that need to be addressed, those things have less to do with why the price of housing is increasingly out of reach for all Americans than is commonly argued.
The fundamental problem is summed up in these two photographs.
This is a photo of my first construction company, circa 1973, in Los
Angeles. I’m the guy in the middle, with the dorky disco haircut and the
Ray-Bans.
We were a multi-racial, multi-ethnic group. As the “boss,” I made about $15 per hour, which was 3 times more per hour than the lowest paid laborer ($5) and half again more than the lead carpenters ($10). Today, wage differences in most large American corporations, from top to bottom, are greater by magnitudes of hundreds. Still, back then, our wages were relatively high compared to our cost of living expenses.
Most of us were renters--Dave (fishing hat) owned a home--but we all had decent, affordable places to live. My apartment in old Hollywood was about $120 per month. My Blue Cross health insurance was $15 per month. Auto insurance was about $150 per year. Gas was $1.25 per gallon, a Big Mac was 55 cents, a pair of Levis was $11, and the cost of the average home in a California suburb was about $35,000.
This meant that at 40 hours/$600 per week or $2,400 a month in earnings, I was doing just fine. Below, is a photo of my work van / part-time RV / all-around transportation, which I paid $150 to buy, plus about $250 in repairs to make it road-worthy.
The income/expense comparison, relative to today, is shocking. Today, living expenses eat up the majority if not all of a working person’s wages, after taxes. This shows how serious our fundamental, systemic "un-affordability" problem is. To put a finer point on it, a large percentage of our population, today, is still not making $15/hour.
California's most powerful politicians love trickle-down economics
Since the early 1980s, when “trickle-down” economics was the public policy favored by government and business, alike, the wealth disparity in the US has grown dramatically worse. Compared to the skyrocketing costs of just about everything, the average working person is just not paid enough to live on, anymore, particularly in major metropolitan areas. Today, a typical family of four in a major American city, making $50,000 a year or less is a member of the new, middle-class poor. And any family of four below the official federal poverty level—about $26,500 per year—is in a full-blown crisis.
Yet, politicians in Sacramento, led like sheep by Senators Wiener and Atkins, are having none of it. Even as our affordability crisis continues to worsen, daily, in these pandemic times, they continue to double-down on the long-discredited mantra of trickle-down economics that has failed working people so miserably for the last 40 years.
Even as the flood of young tech workers and Millennials leaving the SF Bay Area to flee urban living for more congenial suburban and rural towns across the country has turned into a torrent and working remotely is becoming a permanent policy for many corporations, they continue to pound the table to promote their vision of high-density urbanization, insisting that their pie-in-the-sky job growth projections and apartment demand numbers are reliable.
Even as the explosive transformation of the auto industry is taking the investment world by storm—General Motors will soon become an all-electric car maker and most of the developed countries in the world are committed to outlawing the sale of gas-burning engines within less than 15 years—Sacramento politicians and their YIMBY supplicants continue to vilify the automobile, categorically, as if none of this is happening, and in the process are intentionally letting our highways and transportation infrastructure deteriorate beyond repair. They continue to use unscientific environmental tropes to perpetuate their falsehoods.
Let me give you just one example of the absurdity of California’s “anti-car” movement that is so unquestioningly embraced by politicians and YIMBY pundits.
Fact: The automobile is not the biggest generator of greenhouse gases in the US. That title goes to the built environment—our buildings—which account for over 40%. After that, there is agriculture/animal breeding, and then transportation. But although transportation does include automobiles, they are not the biggest polluters under that category, by far. Believe it or not, that honor goes to international shipping. The 20 largest ocean-going container ships in the world belch out as much particulate and acidic air pollutants as all the automobiles in the world, combined… and there are 60,000 container freighters on the high seas.
That means the privately-owned, largely unregulated, ocean freight hauling business—that brings us all those cheap goods we buy at Target—pollutes about 8,000 times as much as automobiles. But Sacramento is so wound up in its politicized, myopic views that none of this is even mentioned. And, frankly, it should be because Los Angeles/Long Beach is the biggest seaport in the US and one of the biggest in the world outside of China.
But, Sacramento politicians don’t care about facts or poor people.
As a result, Sacramento’s single-minded obsession with usurping local zoning misses the affordability mark, by miles, and plays right into the hands of profit-hungry corporate interests that thrive on sowing divisiveness, in and between communities, and undermining locally elected governance so that power can be consolidated at the very top, behind closed doors. And let’s be honest, the only reason they are going after local zoning control is that they know that only a few California cities or counties—Los Angeles, San Francisco, San Diego, San Jose, and maybe Oakland—have the financial wherewithal to undertake a legal battle with the state government, and they’re all already urbanized.
The “housing” solutions being proposed in Sacramento, predominately focused on decimating local zoning laws, have nothing to do with the problems faced by everyday families trying to move up the economic ladder. While politicians jockey to score politically correct brownie points for photo ops, the overall lack of “affordability” of everything—healthcare, education, housing, insurance, taxes and fees, utilities, infrastructure costs, public services, etc.—and the inability for a growing majority of our population to earn a decent wage or have any chance to accumulate wealth is becoming so dire that if not corrected, immediately, threatens to tear apart our entire socioeconomic system.
This is not just idle speculation. The lack of adequate financial rewards for work and tax laws that favor financial capital over human capital and environmental capital is a flaw in our system that is no longer just an academic discussion about the haves and the have-nots, but is being recognized more and more by eminent economists and diehard capitalists, alike.
Unless we face the core inequities in our socioeconomic system and the environmental unsustainability of our measure of wealth, defined by human exploitation, rabid consumption, and environmental depletion—known as GDP—we will never be able to address our “housing crisis” or social equity goals. The elusive goal of affordability will always be just one step ahead of us.
In the interim, perhaps a boatload of big ugly buildings will get built (and probably be torn down in future decades like Pruitt Igoe) but nothing will change.
So now what?
Perhaps, the biggest thing staring us all in the face, aside from government's enduring ability to waste vast amounts of taxpayer's hard-earned money and its tendency to mismanage even the simplest of tasks, is the fact that the major driver of our wealth and asset inequality over the past 40 years has been changes in our tax law that started during the Reagan Administration and allow trillion-dollar corporations to off-shore their headquarters and pay little or no taxes on profits, and individuals making millions in income per year to pay a far smaller percentage of their earnings in taxes and fees (income tax, sales tax, property tax, utility fees, etc.) compared to working stiffs. It’s a rob Peter to pay Paul, kick the can down the road, Ponzi scheme that has made it appear that our economy has been growing stronger--and mostly made the very rich astronomically wealthier--while in truth, it has been built on humongous debt that will eventually come due.
In a recent article in the Guardian, on the issue of tax cuts for the wealthy and corporations--a favorite topic for trickle-down proponents--noted economist Robert Reich wrote,
“In a new study, David Hope of the London School of Economics and Julian Limberg of King’s College London lay waste to the theory. They reviewed data over the last half-century in advanced economies and found that tax cuts for the rich widened inequality without having any significant effect on jobs or growth. Nothing trickled down.”
Astoundingly, renowned economist John Kenneth Galbraith once promoted trickle-down economics (with a straight face) by saying that “If you feed the horse enough oats, some will pass through to the road for the sparrows.”
The only thing he got right about it was that most people would end up eating sh*t.
Whenever higher tax rates on the wealthy are mentioned, the cries of socialism and worse instantly arise. And many of these same extremely wealthy people nostalgically harken back to the 1950s and the time of “Greatest Generation,” after World War II, as some kind of Golden Age to be regained. But, few seem to want to remember that the period from the late-1940s through the early 1970s was arguably the greatest socialist experiment in American history, presided over initially by that great “socialist,” Republican President Dwight D. Eisenhower. It was a period when the marginal personal income tax rate on earnings over $1,000,000 per year reached 90%.
And, what did all those horrible taxes on the “rich” (in those days $1 million a year was very rich) help do? Nothing less than help build our national highway system, major ports and airports, the telephone backbone, the public school system, community colleges, parks, libraries, water and power, sewer systems, public transportation, and you name it—assets we’ve been “expending” without adequate repair, ever since.
In chastising the trickle-down theory, Reich suggested that the wealthiest individuals and corporations should pay more taxes and “invest in the public’s long-term well-being. The rich themselves would benefit from doing so, as would everyone else”- a statement I firmly agree with. However, the trick will be to implement equitable tax policy in a way that protects small businesses and creative, startup entrepreneurs and doesn't kill capitalism's dynamic goose that continues to lay so many golden eggs.
But, I would suggest that if a person, today, makes several million dollars or more a year and says that they can’t afford to pay a bit more in taxes and still live a happy life, no amount of money can fix that. They don’t need more money or lower taxes, they need a therapist. And corporations worth over $1 billion certainly need to pay a minimum tax to compensate society for all the public services and infrastructure our tax dollars provide them.
However, Wiener, Atkins, and other California politicians won’t talk about any of this because that would be biting the hand that feeds them—major development, tech, and banking interests. And no amount of facts or objective economic analysis will deter them from their personally lucrative “housing as class war” political aggrandizing.
Wiener and Atkins and their sycophants in the state legislature, who prominently include Marin’s Senator McGuire and Assemblyman Levine, remain determined to stick to ideological positions unsupported by scientific research or economic facts and build their power/donor base on fearmongering, class divisiveness, mutual distrust, and racist tropes to force their “urbanize everywhere” mantra on the entire state, while simultaneously handing private developers the power to sue any city that opposes them, into submission.
The Wiener/Atkins juggernaut, to attack middle-class suburbs and inner-city underprivileged neighborhoods and our environment with their plans for unsustainable growth, is intent on seeing that the least powerful are the ones who end up on the wrong end of that proverbial horse.
Meanwhile, the idea of promoting housing that is guaranteed to be affordable has been completely lost in the din.
The State Legislature's latest salvos against reason are Senate Bill 10 and SB 9, which once again attempt to override single-family zoning statewide and replace it with high-density housing, irrespective of local General Plans and other long-term socioeconomic planning rights—even when many of those plans are already pro-housing and pro-social equity.
Key to this effort is its carefully crafted messaging: a war of words and posturing based on the manipulation of meanings that would make Donald Trump, George Orwell, and Karl Rove blush. But their efforts bring up some fundamental questions we all need to discuss.
One is whether or not housing is a “human right” that people “deserve.”
Is housing a “right?”
What is or is not a “right” is and what someone does or does not “deserve” are extremely loaded questions and should be because the answers are ultimately going to have to be determined by law in our system of democratic governance. So, does everyone deserve to have affordable housing, as a right, and should we pass laws to ensure that? Or, should we focus more on leveling the playing field when it comes to access to education, healthcare, housing, jobs, and most importantly wealth accumulation and equitable tax law?
To date, as a society, we have decided, by law, that everyone should have equal access to housing and the right to be treated fairly and without prejudice based on race, religion, color, national origin, sex, familial status, and disability. But, we have not established that housing itself is a right. And our housing laws have never made determinations about what people deserve, except for benefits being income-based, perhaps because it is the province of our criminal justice system to make those kinds of judgments.
What a person does or does not “deserve” is a moral question. And who deserves what has ebbed and flowed many times throughout human history. Does this person “deserve” to be paid as much as they are? To what extent does a person “deserve” to be punished for a certain crime? Should outspoken women be sentenced to be burned at the stake as witches? Should the punishment for possessing marijuana be a prison sentence? The answers to these questions keep changing.
If you asked me, off-handed, do I think that everyone deserves to have affordable housing, my answer would probably be, “Some do, some don’t.” But, I think that framing the whole question in terms of who deserves what is the wrong way to look at it.
I think the correct way to look at the question is, ironically, through the lens of self-interest. It doesn’t take a genius economist or social scientist to understand that if a large percentage of our population is without access to education, healthcare, housing, jobs, and most importantly wealth accumulation and equitable tax law, it will quickly manifest itself in ways that will be very problematic for everyone.
A healthy, well-educated, well-paid, and securely housed populace creates a safer, happier, more productive, and prosperous society: one in which people will look out for each other and makes better public policy decisions.
In other words, it’s just a really good idea.
All things considered
Perhaps, what I find most repugnant and frankly inexcusable is that during the past year, while the death toll from this once in a century pandemic grew exponentially and families waited hours in food lines, and our front-line healthcare workers were being infected and dying in record numbers, and our hospitals were overwhelmed to the point that ICU patients were being kept in waiting rooms and in hallways, and while body bags stacked up in mortuaries, instead of focusing all their efforts on addressing any of this, to alleviate the suffering and misfortune, Wiener, Atkins, and their compatriots used this time as an opportunity to ramp up their war on California’s dwindling and financially besieged middle-class and under-served populations to hurriedly pass their single-minded agenda, while the general public has been distracted and out of touch due to business and school closings and lock downs.
Wiener and Atkins would be the first to condemn what Republicans have been trying to do for the years, in Washington DC, to ignore and disenfranchise anyone who disagrees with them. Yet, they happily do the same thing to promote their twisted agenda, when given the chance. The hypocrisy of the situation is just sickening.
For that reason alone, I urge everyone to call their elected officials and demand that all this nonsense stop and let’s get down to solving the core problems that are making our society inequitable.
Because the handwriting is on the wall.
It has been axiomatic throughout history that if those who "have" do not work to lift the "have-nots" up, the have-nots will eventually drag everything down with them.
After all, what have they got to lose?
We can do better. We must. It’s the only real solution.
Bob Silvestri is a Marin County resident and the founder and president of Community Venture Partners, a 501(c)(3) nonprofit community organization funded by individuals and nonprofit donors. Please consider DONATING TO CVP to enable us to continue to work on behalf of California residents.