2017 was the beginning of a state effort in California to finally address the severe housing shortage here. 2018 promises to be even bigger, with more bills proposed that are finally starting to tackle some of the core causes of the shortage.
Friday at 12:30pm the San Francisco nonprofit SPUR (San Francisco Bay Area Planning and Urban Research Association) will host a free hour-long panel discussion on what to expect this year in statewide housing policy. We’ll cover SB 827, CEQA, affordable housing, tenant protection, and more.
Joining me on the panel will be:
- Brian Hanlon / California YIMBY
- Catherine Bracy / TechEquity Collaborative
The location is:
SPUR Urban Center
654 Mission Street
San Francisco, CA 94105-4015
Unlike SPUR gatherings later in every month, there’s no charge for this first-of-the-month event. Hope to see you there!
Google made headlines recently for buying a huge property adjacent to the future downtown San Jose high speed rail station, per the San Francisco Chronicle:
Google has been in negotiations with San Jose since June for a planned “village” that would feature up to 6 million square feet of office, research and development, retail and amenity space near San Jose’s Diridon Station. The development could bring 15,000 to 20,000 jobs, Nanci Klein, San Jose’s assistant director of economic development, previously told The Chronicle.
To be sure, this property would be valuable for Google even without high speed rail, as it’s at the heart of San Jose’s light rail network. But high speed rail will only increase the value, as it would give Google employees high-speed train access to businesses to the south and through the San Joaquin Valley — and eventually Los Angeles.
So the question is: would a property owner like Google be willing to help finance high speed rail, which is badly in need of cash? It’s the old school way of funding trains: leverage the future increases in property values around the stations to finance the transportation.
Given the slow trickle of state dollars and nonexistent federal funds, high speed rail leaders will need to get creative about how to find money to keep construction going. A large company like Google could greatly help with the search.
Back in 2008, and then again in 2016, transit advocates in Los Angeles came together to get county residents to fork over $160 billion over 30 years in new sales taxes revenue for transportation investments. A sizeable chunk of that money goes to major transit capital projects, including new rail and bus rapid transit lines.
They successfully secured approval for these tax hikes with 2/3 voter support. But now transit ridership is plummeting in Los Angeles. It’s a nationwide phenomenon, but it’s particularly severe in L.A. While there a few ways to counter-act these trends, the most proven and sensible one is to boost transit-oriented development of all types.
Yet given recent public debate on SB 827, which would upzone residential areas within a few blocks of major transit stops, it’s clear that many of these advocates are not committed to the land use changes necessary to achieve this density. Despite SB 827’s promise to accomplish the very increase in residential density needed to support transit, they remain opposed.
So who are the culprits? Most prominently, Los Angeles mayor Eric Garcetti (who championed the 2016 measure) still refuses to support SB 827, despite the recent amendments to address his legitimate displacement concerns. Instead, he stated concern for the area’s single-family homeowners, professing a desire to “protect” these mostly affluent residents from mid-rise apartment buildings near major transit.
And it gets worse. Move LA, the organization that has probably done the most to launch these voter sales tax measures, actually came out against the bill in a joint letter with various community groups. This opposition comes after their executive director Denny Zane already helped sink a major transit-oriented project near an Expo Line station that would have added more than 400 hundred badly needed homes in the area, including 50 affordable units. His main concern at the time was too much car traffic.
Even Sierra Club California used the fear of these land use changes in SB 827 as a reason not to support the measure. Specifically, the organization wants to see a new rail transit line in Sacramento, even though the line will be a massive money-loser without more density around the stations.
Based on these transit advocates’ arguments, it seems clear that many are only focused on one thing: building new transit lines. They don’t seem to care how cost-effective they are, and in many cases they actively don’t want to see much new development around the stations — especially not market-rate housing, and especially not in “quiet” affluent areas that are benefiting financially from these publicly funded investments.
So despite SB 827 being one of the most important pro-transit measures put forth by the legislature in recent years, some key transit advocates seem unlikely to join a coalition in support.
It’s a disheartening — though clarifying — turn of events. What it means is that the help to save transit agencies from plummeting ridership may not come from advocates for expanding new lines. It will instead come from those who favor more density of homes near transit in general, which is apparently a distinct cause for many in the “transit advocacy” community.
Some opponents of SB 827 (Wiener) — to essentially upzone residential areas adjacent to major transit stops — simply reject the idea of any new housing in their neighborhoods. Others are generally hostile to new market-rate development. But besides those non-helpful objections, the one compelling knock on the SB 827 approach is that the new residential development it would unleash could displace low-income renters.
There’s a clear moral objection to that happening. With the housing shortage and jobs boom leading to high home prices and rents everywhere, low-income residents of rent-controlled units will basically have no place affordable to go if they’re displaced. The bill shouldn’t force some of the most economically insecure and impoverished among us out of their homes.
And displacement also potentially undermines one of the key purposes of the bill: to boost transit ridership. Low-income people are more likely to use transit than higher-income people. So replacing them with market-rate renters or owners could be a loss for the nearby transit system.
That said, I do believe the concern is overstated, as low-income neighborhoods are not likely to be a prime target of developers risking capital on expensive multi-family buildings and needing a high return to justify the expense.
But still, we knew anti-displacement measures in SB 827 were coming, and yesterday Sen. Wiener introduced them. They essentially boil down to two things:
1) Explicit recognition that SB 827 does not preempt local policies preventing demolition of rent-controlled units or displacement of those tenants or requiring affordable units to be built with market-rate ones. This recognition is probably not needed legally, but it’s a handy reminder to critics that SB 827 takes nothing away from locals on the issues of affordability and displacement.
2) Making it expensive to displace residents of rent-controlled units.
This second approach is where the amendments get interesting. Basically, if any SB 827 project displaces these residents, the developer must honor a “Right to Remain Guarantee.” As Sen. Wiener explains in a blog post:
[The guarantee] must, at minimum, provide all of the following, at the developer’s expense:
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All moving expenses for a tenants moving into, and out of, an interim unit in the area while the project is being built.
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Up to 42 months of rental assistance that covers the full rent of an available, comparable unit in the area.
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Right of first refusal for housing units in the new building, and offered with a new lease at the rent previously enjoyed by the tenant in their demolished unit.
So displacement could still happen, but only at significant expense and with displaced residents being “made whole” by the process. It’s essentially a quasi-market-based approach to discouraging displacement. It will incentivize developers to seek to redevelop properties that don’t have rent-controlled units on them to avoid these costs.
In addition, a separate amendment requires a local jurisdiction to adopt a demolition process for rent-controlled units if they don’t already have one, for any SB 827 project to occur.
It remains to be seen whether anti-displacement critics of the bill will be mollified by this approach. But I do think these changes make the bill stronger, without conceding too much of the market-rate development we still need for residents of all incomes in our state.
One of the interesting side benefits of SB 827 (Wiener), to allow mid-rise apartments to be built near major transit stops, is that it’s revealing exactly which interest groups have a stake in preserving the status quo of housing dysfunction and shortage.
Given the depth and breadth of the housing shortage, it’s not surprising that there are a lot of entrenched interests who benefit from this status quo. The obvious are the wealthy homeowners in coastal cities and their elected official allies.
But also in that corner are advocates for low-income renters in specific, transit-rich neighborhoods, either out of genuine concern over displacement but sometimes out of ideological hostility to market-rate housing, at least without being able to extract as much money out of it as possible for affordable units. They want to make market-rate development hard and expensive to build, so they can use that byzantine process as leverage to get a few additional affordable units built. But this is ultimately a self-defeating bid to boost affordable housing only for those few lucky enough to win the affordable housing lottery. Meanwhile, overall housing production lags, hurting low-income residents the most.
On the “pro” side are developers (who stand to profit from loosened zoning), the YIMBY groups (largely led by millennials frustrated at high housing costs), and a mix of pro-housing and climate advocates.
But in an interview with Vox.com, California YIMBY executive director Brian Hanlon pointed to another member of the pro-coalition: inland California representatives:
A lot of folks who represent more exurban areas, Inland Empire and parts of the Central Valley, they’re going to love this bill, even though it’s not going to allow more homebuilding in their areas. I spoke with one member in the legislature who just said, “I am sick and tired of these hypocritical, rich coastal liberals talking this good game on the environment, passing tax breaks for their rich constituents to buy Teslas, while not building any housing in their district. They’re displacing their middle-income people to my district, where they’re now driving an hour-and-a-half or two hours each way to get to work.”
You’re going to have some interesting alliances on this bill — folks like Ting, Skinner, and Wiener, who genuinely care about the environment and the housing crisis, along with members who represent outer districts.
Meanwhile, I still hold out hope that some of the low-income renter advocates will come around, once anti-displacement language is included in the bill. As Hanlon alludes to in the interview, the concerns particularly in Los Angeles around inadvertently weakening existing affordable housing policies are likely to be addressed through future amendments.
But in the meantime, SB 827 is finally lifting up the rock that keeps all of the dysfunction in California’s housing policy in place, with its attendant economic, environmental, and quality-of-life harm. The fight won’t be easy, but at least it’s finally getting started.
For those interested in the latest legislative updates and debates on housing and land use in California, I’ll be speaking this weekend at the Planning and Conservation League’s annual “Environmental Assembly” conference in Sacramento. I’ll be on an afternoon panel with:
- Kip Lipper, Chief Policy Adviser on Energy and Environment, Office of Senate President Pro Tem Kevin de León
- Winter King, Shute Mihaly & Weinberger, LLP
- Doug Carstens, Chatten-Brown & Carstens, LLP
We’ll discuss recent updates to the California Environmental Quality Act under SB 743, recent legislation like SB 35, as well as pending legislation like SB 827.
More details here:
What: Planning and Conservation League’s 2018 California Environmental Assembly
When: Saturday, February 24, 2018, registration and breakfast starts at 7:30 am
Where: McGeorge School 3200 5th Ave, Sacramento, CA 95817
The Sacramento Bee is running an op-ed today on line (and in print tomorrow) from me and infill builder Mott Smith in support of SB 827 (Wiener), to relax local zoning restrictions on housing near transit. The basic gist is that local control over land use has too often meant no new housing near prime transit areas, and it’s now time for the state to intervene directly.
As we summarize in the piece:
Change won’t come easy on hot-button land-use issues. But the status quo that so many groups defend drives the very problems we most need to solve – sprawl, environmental damage, transit disinvestment and gentrification.
We can only address these problems through bold action to boost California’s housing supply in the places we need it most. SB 827 is a long-overdue reform that will help the state rebuild its middle class, boost transit ridership and preserve the environment and quality of life that Californians cherish.
The bill will face some key tests in the coming weeks, particularly in the face of objections from advocates for low-income tenants. But the basic approach of SB 827 is right on and badly needed.
The Alameda Democratic Club is hosting a meeting tonight at 7pm with a panel on housing — specifically the challenges facing Alameda and the region from the statewide housing shortage. I’ll be one of the speakers on the panel, which features a wide range of viewpoints (including a member of the Alameda City Council):
- Marilyn Ezzy Ashcraft, Alameda City Council
- Victoria Fierce, East Bay for Everyone
- Paul Foreman, Alameda Citizens Task Force
- Catherine Pauling, Alameda Renters Coalition
- Jose Cerda-Zein, Realtor
Members of the public are welcome, and it will be held at the Alameda Hospital, Second Floor Room A. I’ll be sure to discuss SB 827 (Wiener) and other policies needed to address the housing shortage. Hope you can attend!
Los Angelist offers a nice and succinct video summary with narration of the Purple Line heavy rail extension down Wilshire Boulevard. As I wrote in the book Railtown, Wilshire Boulevard is the most densely populated corridor west of the Mississippi and should have been the first route to get rail transit in Los Angeles. So of course it’s only now under construction more than 30 years since Metro Rail began construction.
Here is the video for your viewing enjoyment, complete with a welcome shout-out to Railtown at the end (plus a rightful shaming of the Beverly Hills Union School District, which has wasted about $10 million so far on losing lawsuits against this line):
Lost riders on L.A. Metro alone, which serves L.A. County, accounted for fully 72 percent of lost transit patronage across the entire state. Those losses are even further concentrated: Remarkably, just a dozen bus and rail routes in L.A. County account for nearly 40 percent of all the vanished ridership in California.
Right now, the best explanation seems to be a staggering increase in cars on the road, owned and driven by the very people who used to ride buses, the report states. From 2000 to 2015, the population of the Southern California region grew by 2.3 million people, and the region added 2.1 million household vehicles—close to one new car for every person and a huge jump from the previous decade. In the same period, the proportion of immigrant households that own zero vehicles dropped 42 percent, and a whopping 66 percent among Mexican immigrant households specifically.
The ridership gap and vehicle usage seems to be particularly high among immigrant communities that previously were a backbone demographic for transit.
What are the solutions? One option is simply to make it more expensive to drive a car, through mileage-based fees, congestion pricing, and other taxes and fees. There’s merit to that approach, particularly if the funds generated help support transit in those corridors as an alternative.
But the other alternative is to stop forcing people to use cars as the most convenient travel option, and similarly stop subsidizing automobile infrastructure, particularly “free” mandated parking. And that all boils down to land use. People use cars to travel because their home is nowhere near convenient transit, they may have readily available free parking on-site and at their jobs (while paying for it via higher home prices and rents), and their jobs and other destinations are similarly not near transit.
So the most effective solution, as we’ve seen all over the world throughout the history of transit, is to encourage more homes and jobs near transit. It’s not really complicated: we need to build transit-oriented, walkable and bikeable neighborhoods within a convenient transit-ride of clustered job centers. Needless to say, this is exactly the goal of SB 827 (Wiener), which would lift local restrictions on growth near major transit stops.
Possibly the biggest beneficiaries in government from an SB 827 to approach to housing would be transit agencies. These agencies across the country have suffered this declining ridership over the past decade, hurting their revenues and undermining political support.
So far I haven’t heard California transit agencies clamoring to support SB 827, probably due to the complicated politics involved. But if they were honest, they would tell the public that SB 827 and similar approaches are what is truly needed to bring ridership back.
