Halloween may be over, but the climate frights this week continue. Here are the scary highlights:
- Electric vehicle incentives in trouble: the Republican tax plan would eliminate the $7500 tax credit for EV purchases, which would likely torpedo sales for all but the luxury EVs in the short term. States might be able to dig deep to make up some of the difference, and the tax credit is set to phase out anyway for automakers over certain sales amounts, but nonetheless this would be a big blow to demand.
- Infill tax credits at risk: the Republican tax plan also targets federal programs that help revitalize infill neighborhoods. It would eliminate key programs like New Markets Tax Credits (NMTC), Historic Preservation Tax Credits (HTC), and the Community Development Block Grant (CDBG) program. As Smart Growth America and their infill group Locus writes in a newsletter today, “community development projects almost invariably rely on federal programs like these to fill a critical financing gap, often making the difference between a go and a no-go decision for a project penciling out.”
- Tesla Model 3 stuck in production “hell”: Tesla’s third-quarter earnings call brought bad news about the Model 3, the $35,000 mass-market EV that is struggling to meet its production targets. The company’s goal of producing 5,000 units a week by the end of 2017 has slid to the first quarter of 2018. The normally upbeat Elon Musk was apparently in a bad mood, per E&E News [paywalled]:
The Model 3 is stuck in production “hell” per Elon Musk
The call’s tone was a swing to the dark side for Musk, who on quarterly earnings calls often minimizes problems and instead trumpets the company’s successes, or announces or at least hints at some bold new initiative.
- Earth passes a carbon milestone: scientists report that the rate of carbon dioxide being released into the atmosphere accelerated at an unprecedented pace last year, reaching levels not seen in 800,000 years. Per E&E news [paywalled]:
Current levels of CO2 correspond to the Pliocene period from 3 million to 5 million years ago, when the climate was 3.5 to 5.5 degrees Fahrenheit warmer, the report found. At that time, the ice sheets of Greenland and West Antarctica were melted. Sea levels were 30-60 feet higher than they are now.
I’d say this is not a good time to invest in ocean-front property. Happy Frightful Friday!
The tide is turning against people who claim to be environmentalists but oppose urban development. Grist ran a nice profile on the burgeoning YIMBY (yes in my backyard) movement of people frustrated with high housing costs and the environmental impacts of pushing new development further out over open space.
The piece features State Senator Scott Wiener, who has taken up the legislative mantle for these YIMBY efforts and authored SB 35, one of the first state laws to start limiting local discretion over infill projects:
Environmentalists are usually thought of as folks who are trying to stop something: a destructive dam, an oil export terminal, a risky pipeline. But when it comes to housing, new-school environmentalists — like Wiener — understand that it’s necessary to support things, too. To meet California’s ambitious goals to cut pollution and greenhouse gas emissions, regulators say the state must build dense, walkable neighborhoods that allow people to ditch their cars.
The article includes a wonderfully succinct quote about why promoting infill is pro-environment, and why fighting infill is an anti-environmental act:
If you slow down development in cities, houses will sprawl out over farmland, and people will wind up making longer commutes. “You can’t legitimately call yourself an environmentalist,” Wiener says, “unless you support dense housing in walkable neighborhoods with public transportation.”
In many ways, this fight is generational and class-based, as older homeowners fight to preserve their artificially inflated and low-taxed real estate investments by choking off new supply. But as more people find themselves in the “have-nots” camp, homeowner groups will lose more battles to these YIMBYs.
The wildfires that devastated Northern California this month claimed over 40 lives and nearly 9000 structures. But as businesses reopen and people return to their neighborhoods, what is being done to ensure future resilience in our fire-prone communities?
Should we rebuild in the same way, or allow more walkable, compact development? What role does water management play in the rebuilding effort? And how can you prevent fire damage to your home and property?
Join me tonight on City Visions as I discuss these issues with:
- Dr. Newsha Ajami, director of Urban Water Policy with Stanford University’s Water in the West and NSF-ReNUWIt initiatives
- Jack Cohen, retired Research Physical Fire Scientist with the U.S. Forest Service
- James Lee Witt, former director of the Federal Emergency Management Agency (FEMA) in the Clinton administration and newly named interim executive director of Rebuild NorthBay
You can tune in on KALW 91.7 FM in the San Francisco Bay Area at 7pm or stream live on the web. Hope you can join the conversation with your questions and comments!
We need productive farms in California to provide local food, help the economy in one of the poorest regions in the country, and as a buffer against continued sprawl. So it’s both environmentally and politically significant that the president of the California Farm Bureau Federation, Paul Wenger, penned an op-ed in the San Francisco Chronicle complaining about labor shortages:
On my farm near Modesto, where I grow almonds and walnuts, I’ve had trouble hiring enough people to tend and harvest my crops. And I’m far from alone: Around California, farmers and ranchers report chronic problems in finding and hiring qualified and willing people to work in agriculture.
The California Farm Bureau Federation — a membership association representing farmers and ranchers — conducted an informal survey of our members. It showed more than half of responding farmers experienced employee shortages during the past year. The figure was higher among farmers who employ people on a seasonal basis — 69 percent of those farmers reported shortages.
Wenger goes on to describe how farmers have offered higher wages, benefits and more year-round jobs. But because farmers depend on an immigrant workforce, these businesses have been hit hard by the federal crackdown on immigration, now intensified under Trump, as well as increasing living standards and lower birthrates in Mexico.
Yet many in this industry, which is generally very Republican, backed Trump in the last election. And their preferred candidate’s policies and rhetoric now appear to be hurting their business:
We’ve been asked many times if the Trump administration’s immigration policies contribute to the shortages. We’re not exactly sure at this point. Our survey results found that a number of farmers reported their employees are increasingly concerned about immigration enforcement and may be more reluctant to move from job to job. Although we’re not aware of any significant increase in enforcement activity on California farms, the atmosphere has certainly changed.
Successful farms are important to California’s way of life and to guard against sprawl. If continued economic pressure on them motivates more to sell out to developers and stop growing our food, we’ll all be worse off for it.
And for more on low-carbon agriculture and policies to encourage it, check out our Berkeley/UCLA Law report Room to Grow:
This has been a tough year for the planet and our climate. With rising air and sea temperatures across the globe, we’re seeing more intense hurricanes and wildfires. But the flooding from Hurricane Harvey in Houston and the devastating fires in California’s wine country are made worse by our land use patterns.
As I wrote about during the Harvey floods, the Houston sprawl exacerbated the damage by paving over natural floodplains that could have absorbed some of the excess rainwater. And now in the Napa and Sonoma wine country, we’re seeing sprawl neighborhoods of single-family homes adjacent to fire-prone wilderness areas taking the brunt of the destruction.
Both types of disasters are going to become more common and intense in the coming years, as the planet warms even more. And that means we’re going to need to re-adjust our land development patterns with less sprawl and more infill.
In flood-prone areas, we’ll need more natural floodplains by concentrating development in the urban core and not allowing more sprawl. And in fire-prone areas, we’re going to need more defensible space between wildlands and sprawl, with more focused growth in our city centers that are protected somewhat from these fires by the urban ring.
How do we achieve these goals? Absent strong land use controls, such as urban growth boundaries and deregulation on local land use policies, we can achieve them through pricing. Examples include ending subsidized insurance for sprawl in flood- or fire-plains and levying higher fees on developments in these areas to cover the costs of the inevitable disasters.
Ultimately, more compact infill development and less sprawl will help make our cities and towns more resilient in the face of worsening climate change. It will take political will, perhaps motivated by these recent disasters, to get us there.
California legislators patted themselves on the back when they passed a housing package this sessions raising money for affordable housing. But these tough votes to hike real estate document fees (SB 2) and place a bond measure on the ballot (SB 3) will barely make a dent in subsidizing the state out of its extreme housing shortage.
Real estate developer John McNellis runs through the numbers on The Registry, which are pretty shocking in their paltriness, given the scale of the problem:
According to the Los Angeles Times, San Francisco’s 700-unit Hunters View low-income housing project cost $450 million or $643,000 a unit. While appallingly high, that number sounds about right. Thus, if SB2 actually raises $250 million a year, California could add another 388 low-income units annually. And the whole $4 billion from SB 3 would be gone after 6,220 new units. In a state which needs to add 100,000 new dwellings a year just to keep up with its population growth—and not allow the housing crisis to worsen—this is truly spitting in the ocean.
But it gets worse. As McNellis points out, lack of money is only part of the problem. Neighborhood opposition to new affordable projects — which also affects market-rate projects but with more intensity given antipathy to people who need subsidized homes — makes implementation of these projects more difficult:
The problem is you can’t spend affordable-housing money. Last year, the citizens of Los Angeles generously voted to increase their property taxes by $1.2 billion to build housing for the homeless. This year, the somewhat less compassionate Angelenos in Boyle Heights blocked a proposed 49-unit homeless shelter in their neighborhood, a political scenario that has been played out countless times in nearly every city in the state. Tie-dyed progressives, kind-hearted liberals, even Orange County conservatives are all in favor of low-income housing…in someone else’s neighborhood.
Affordable housing advocates would be smart to respond to this dynamic by fighting for more than just more money to subsidize these few expensive projects. Instead, they should be working to lower construction costs overall and reduce neighborhood opposition to new projects, from market rate to affordable ones.
Otherwise, the problem will continue to worsen. And the money we do spend will become increasingly less effective and wasted.
The story is fairly well known: Los Angeles used to have one of the biggest public transportation systems in the world, with the Red and Yellow trolley cars delivering people from their “streetcar subdivision” homes to the city center and beyond. But the automobile — and not an automaker conspiracy — proved more appealing to Angelenos than sitting on a crowded, tardy, and unreliable streetcar. And thus the system fell into disrepair, disuse, and extinction.
Curbed LA delves back into this history and helps dispel the myth that car companies undid the streetcars. In the piece, reporter Elijah Chiland asked me if anything could have been done to avoid abandoning the trolley streetcars in favor of the short-lived functionality of the automobile:
Elkind says the streetcar still could have been saved, but that “it would have taken some imagination and foresight on the part of the public to think, ‘what if we did subsidize this transit service? We might be able to address some of the problems that we have and make it a better service.'”
For whatever reason, that just didn’t happen. “The leadership wasn’t there and the foresight wasn’t there,” he says.
In the matter of the streetcar’s untimely demise, we Angelenos may have no one to blame but ourselves.
Chiland asked a good question. Certainly many European cities decided not to ditch their streetcars during the post-war era, and they are now better off for it (although most American cities did abandon theirs, from Washington DC to the Bay Area).
But during a brief moment in the history of the rise of the automobile, Downtown Los Angeles officials experimented with ditching the automobile during peak hours. In the 1920s, they issued a short-lived ban on parking during certain daytime hours. But the public (and downtown business leaders) rebelled, and the policy was scrapped. During that time though when car parking was banned, streetcars evidently regained their prominence downtown and avoided the sometimes 60-minute delays caused by car traffic halting the trains, which had undermined rail service and contributed to its unpopularity.
So local policies on critical automobile issues like parking, as well as support for auto-oriented infrastructure, ultimately sealed the streetcars fate.
It’s too bad, because now Los Angeles is trying to rebuild much of that streetcar system at a huge cost, while also trying to retrofit existing car-oriented neighborhoods into more compact, walkable development. It’s hard to undo what’s already been done, but a growing population and demand for new housing presents the region with an opportunity to correct some of these past mistakes.
The frenzy is over. The California legislature finished its session last week and sent its approved bills onto the governor. Casual observers note the big “victories” on housing:
- A supermajority vote to raise fees on real estate documents to fund affordable housing;
- Another supermajority vote to approve a bond measure to go before the voters to fund even more affordable housing;
- A win for SB 35, to streamline local approvals for new housing in cities and counties that aren’t providing enough of it also passed; and
- The “sleeper” AB 1568 (Bloom), which will improves infrastructure financing for infill projects under the acronym NIFTI (Neighborhood Infill Finance and Transit Improvements Act).
But as I wrote last week, SB 35 is the one that really gets to the heart of the problem of the housing shortage in California. The new revenue measures are drops in a seemingly bottomless bucket, as local governments consistently prevent new housing from getting built, particularly in job-rich infill areas. SB 35 instead starts to deregulate housing at the local level. California will need much more of that approach to solve this crisis.
Finally, on renewable energy, the state suffered a setback. SB 100, to increase the renewable mandate to 60% by 2030 and 100% by 2045, was kicked into next year, as was the plan to regionalize California’s grid to encourage more renewables across the west and lower electricity rates for all. But the stalling of these bills gives the legislature and climate advocates a good place to start on next year’s priorities.
Next up: we’ll see what the governor signs in the coming weeks.
California legislators are in the final week of the session, and there’s a scramble on bills related to housing and renewable energy. Here’s a rundown:
Housing
What was supposed to be the “Year of Housing” to address the state’s severe, decades-long undersupply of homes, is turning out to be pretty weak. There are basically three bills in play, out of the 150 or so to start the session:
- SB 2 (Atkins) would impose a $75-225 fee on individual California real estate transactions (which requires two-thirds vote);
- SB 3 (Beall) would authorize a $4 billion bond measure for California’s November 2018 general election ballot (which requires two-thirds vote and then approval by voters); and
- SB 35 Wiener) to force recalcitrant cities and counties to approve new infill housing projects without discretionary review.
SB 35 is the most promising, although its prevailing wage requirement will make it essentially worthless in under-performing markets in the state. All three bills are being bundled, and Democrats in the Assembly are skittish about voting for the SB 3 real estate fee in particular. If SB 2 goes down, will legislative leaders peal off SB 3 and SB 35 for separate votes, which might be successful on their own? And if they do strip SB 2 from the package, will the other two bills lose support? Stay tuned.
Meanwhile, a sleeper bill on housing is AB 1568 (Bloom), which improves infrastructure finance districts for infill projects. Using the acronym NIFTI (Neighborhood Infill Finance and Transit Improvements Act), the bill would allow these districts to capture future increases in revenue from sources like sales and occupancy taxes to pay for infrastructure improvements up front. It’s up for a floor vote shortly.
But in the end, of the big housing bundle, only SB 35 shows real promise for lasting reform by removing authority from local governments on land use. The affordable housing money is otherwise badly needed, but it’s ultimately not going to solve much of the problem. And affordable housing suffers from increased costs due to the same local land use policies that thwart market-rate housing, such as high parking requirements and limits on density. So much of these dollars will be wasted without broader land use reform.
Renewable Energy
The big bill is SB 100 (de Leon) to boost the renewable mandate in the state to 60% (from 50%) by 2030, plus a new 100% target by 2045. The goals have broad support, but the details are now creating opposition from utilities. A defeat on this bill would be a big blow, as utilities (despite their opposition) need the stronger market signal and legal permission to procure more renewables now while the federal tax credit — set to sunset soon — is still in effect.
Meanwhile, AB 726 (Holden) to restart the process of integrating California’s grid with other western states is apparently stalling. Some environmental groups and labor unions are concerned with how it would get implemented. It’s too bad, because a regional grid is going to be necessary to meet California’s long-term climate and energy goals in an affordable manner. Plus, it could help solidify political support for renewables in the states that join us, by building up a domestic clean tech industry in each of those states. If it fails this year, climate advocates should prioritize it for next year.
So on both housing and energy, there’s a lot to follow in the Golden State this week. I’ll blog again on any successful bills once the dust settles.
UPDATE: The original employee numbers from the San Francisco Chronicle that I used to make the calculations below have since been significantly revised downward. As Geekwire reports, the numbers I cited were for Amazon company-wide, not just Seattle. In fact, Amazon employees 40,000 in Washington state, not the 340,000 I cited below. While this changes the single impact of Amazon’s move, my original post was perhaps conservative in underestimating the overall demographic impact, as Amazon’s move will attract other tech companies to the region, plus spouses. So the original point of the article stands, although the impact of Amazon’s move alone will not be as significant as I originally calculated.
Amazon.com just announced that its seeking a city for its second headquarters, outside of Seattle. Could an influx of Democratic-voting tech workers to a city in a red state be enough to turn that state blue? I ran through the list of reported city contenders and their respective state vote tallies below. My goal was to find out which city, if chosen, would have the greatest effect on the state’s (and therefore the nation’s) presidential politics.
The bottom line, as you’ll see below: Democrats should be rooting for Amazon to move to Tucson, Pittsburgh, or Detroit, which would flip those states from red to blue (or in the case of Pennsylvania and Michigan, back to blue).
But first: the criteria for Amazon and the potential job numbers. According to the Chicago Tribune:
Whichever city wins Amazon’s “HQ2” will host up to 50,000 workers with salaries that could reach $100,000 annually.
The company said it’s aiming for a metropolitan area of at least 1 million residents, opening up, theoretically, a few dozen cities in the U.S., from New York to Tucson, Ariz., and a handful more in Canada. It’s unclear whether Amazon would consider a bid from a Mexican city.
But the employment — and therefore the voter — numbers could be far bigger than that. As the SF Chronicle reports:
Amazon CEO Jeff Bezos said the company plans to make the second headquarters — dubbed HQ2 — “a full equal” to its Seattle home base [which employs more than 340,000 people].
And any new Amazon home would also bring additional tech workers from other companies that would locate nearby to do business with Amazon. In short, the headquarter decision could result in a major influx of educated tech workers who could greatly affect the state’s voting results, given that tech workers vote Democrat by potentially large margins (as Nate Silver documented in 2012). The key would be for Amazon to locate in a city that could grow just enough relative to the number of Republican-leaning rural residents.
So for this exercise, I assumed that the Amazon move would eventually result in 300,000 tech workers moving in (less than Seattle’s current headquarter count and including potential workers from other tech companies). I also assumed their voting rate would be 80%-20% Democrat vs. Republican, which would roughly track the financial contributions from this sector, as a proxy for their voting habits.
That means the Amazon move could bring 240,000 new Democratic voters to the state, along with 60,000 new Republican voters. The net gain would be 180,00 new votes for the Democrats.
Could that be enough to turn a state from red to blue?
We should first note that in 2016, Trump beat Clinton by 306 to 232 electoral votes, leaving a gap of 74 electoral votes for Democrats to regain. No single state switch will reverse that gap. But a switch in one sizeable state could alter the presidential calculations going forward. Demography is destiny.
Here are the reported city candidates and the potential impact of an Amazon move on their state election results, based on the 2016 election (I left out the blue state candidate cities, because a move there would simply improve existing Democratic majorities):
FLIPPING TO BLUE
Tucson, Arizona
The state has 11 electoral college votes.
2016 presidential election results:
Trump 1.25M votes
Clinton 1.16M votes
Democrats therefore need approximately 90,000 more votes to flip the state.
Verdict: The 180,000 new votes from an Amazon move would be enough to flip the state to blue, leaving 90,000 extra Democratic votes.
Detroit, Michigan
The state has 16 electoral college votes
2016 presidential election results:
Trump 2.279M votes
Clinton 2.268M votes
Democrats therefore need approximately 11,000 more votes to flip the state
Verdict: The 180,000 new votes from an Amazon move would be more than enough to flip the state to blue, leaving a cushion of 169,000 extra Democratic votes.
Pittsburgh, Pennsylvania
The state has 20 electoral college votes.
2016 presidential election results:
Trump 2.970M votes
Clinton 2.926M votes
Democrats therefore need approximately 45,000 more votes to flip the state
Verdict: The 180,000 new votes from an Amazon move would be more than enough to flip the state to blue. It would leave a cushion of 135,000 extra Democratic votes.
CUTTING THE REPUBLICAN LEAD
Kansas City, Missouri
The state has 10 electoral college votes.
2016 presidential election results:
Trump 1.594M votes
Clinton 1.071M votes
Democrats therefore need approximately 520,000 more votes to flip the state.
Verdict: The 180,000 new votes from an Amazon move would not be enough to flip the state to blue. It would cut the Republican lead by about one-third though.
Nashville, Tennessee
The state has 11 electoral college votes at stake.
2016 presidential election results:
Trump 1.5M votes
Clinton 870K votes
Democrats therefore need approximately 650,000 more votes to flip the state
Verdict: The 180,000 new votes from an Amazon move would not be enough to flip the state, but it could cut the lead for Republicans by about a quarter.
Austin, Texas
The state has 38 electoral college votes.
2016 presidential election results:
Trump 4.685M votes
Clinton 3.878M votes
Democrats therefore need approximately 810,000 more votes to flip the state
Verdict: The 180,000 new votes from an Amazon move would not be enough to flip the state to blue. It would cut the lead by about one-fifth though.
Bonus Analysis: Boise, Idaho
Note: this city does not fit Amazon’s reported criteria for a move, but the city has the makings of a future tech hub, given the low-cost of living and proximity to a lot of outdoor recreation.
Idaho otherwise has 4 electoral college votes.
2016 presidential election results:
Trump 409K votes
Clinton 190K votes
Democrats therefore need approximately 220,000 more votes to flip the state.
Verdict: The 180,000 new votes from an Amazon move would not be enough, by just 40,000 extra votes, to flip the state to blue. But it would make a significant difference in Idaho politics.
Bottom line: if Amazon moved to Tucson, Pittsburgh, or Detroit, it could potentially flip those states to blue in 2020. A Boise move would come close to flipping the state, falling short by 40,000 votes. And a move to Kansas City, Nashville or Austin would chip away at Republican voter leads in those states by the following: one-third in Missouri, one-quarter in Tennessee, and one-fifth in Texas.
So for those who care about politics, Amazon’s move could have a significant effect on the 2020 election (not to mention House and Senate races, which would need to be covered in a different post).
Now that’s the kind of prime delivery that would make Democrats happy.
