Governance by regional bureaucrats destroys government as envisioned by our Founding Fathers.  The Nine-County Coalition seeks to offer solutions to challenges affecting the San Francisco Bay Area that do not weaken existing governmental jurisdictions.  Cities, counties, and states are government jurisdictions.  Regional agencies are not.  Voters have control over officials serving in government jurisdictions, but no control over those administering agencies. We thank you for visiting the NCC website.

Plan Bay Area 2040 and the Coming Seas of Taxes

With Plan Bay Area 2040 on the loose, a projected California budget deficit of $1.6 billion, Washington talking about funding cuts, and an aversion to spending reductions afflicting state and county leaders, we should all expect a tsunami of tax proposals. 

Taxes per se are a necessary inconvenience acknowledged by our founding fathers in the U.S. Constitution (Article I, Section 8).  However, what taxes are used for is the issue we at the Nine-County Coalition constantly pick on!  If taxes were limited to “pay the debts and provide for the common defense and general welfare” of any jurisdiction – federal, state, county, or city - there would be no need for this and other websites concerned about the perils of economic or land-use central planning.  Most of us would willingly pay for the solvency of our jurisdiction, protection of our private property, and basic government services such as the maintenance of courts. 

The Nine-County Coalition and others have expressed concern about Plan Bay Area 2040 and the plan’s clearly enunciated goals of focusing on largely government-funded transit-oriented development, forced allocation of housing including subsidized housing in all existing neighborhoods, and taxpayer funding to accomplish these objectives.  The last objective is the key to all others, and that objective is still at present in voters’ hands. 

However, taxes come in so many forms that they easily sneak up on payers.  A good website on this subject is California Tax Foundation (CalTax). The website’s Tax Watch provides a summary of the major taxes and fees introduced by California’s legislature.  Among the reports currently featured are California Tax Facts, an overview of the state’s tax structure; and Piecing Together California’s Parcel Taxes, which discusses the sheer volume and assortment of taxes on pieces of land.

One of the many interesting subjects discussed in California Tax Facts is Proposition 26, a state initiative constitutional amendment approved by voters in 2010.  Proposition 26 defines a tax as any source of revenue that does NOT fall into the following specific categories:

*  Benefit or Privilege:  Example is a zoning fee.
*  Government Service or Product:  Example is a vehicle registration fee.
*  Reasonable Regulation:  Example is an inspection fee.
*  Use of Government Property:  Example is an event space rental fee
*  Fine, Penalty, or Monetary Charge:  Example is a parking ticket.
*  Property Development:  Example is a developer fee.
*  Property Related:  Example is a street lighting assessment.

Proposition 26 says that whatever does not fall in any of the categories above is a tax.  Unlike implementation of a fee, implementation of a tax is limited by restrictions imposed by Proposition 13 (1978) and Proposition 218 (1996).
 
Keeping up with so much information just to protect our property, our pocketbooks, and our liberties seems unreasonable.  But eternal vigilance has always been the going price.

The Case of the Vanishing Middle Class

In this present crisis:  government is the solution or the problem?

“While all four household income groups, as defined by income categories, are expected to grow, it is the lowest and highest groups we expect to see relatively more households by 2040.  The 'hollowing out' of the middle is projected to continue over the next 25 years.”

“Household growth will be strongest in the highest income category, reflecting the expected strength of growth in high wage sectors combined with non-wage income (interest, dividends, capital gains, transfers). Household growth will also be high in the lowest wage category, reflecting occupational shifts, wage stagnation, as well as the retirement of seniors without pension assets. Slowest growth will be in the lower middle category, highlighting concerns about advancement opportunities for lower wage workers."

These rather obvious lamentations that the Bay Area middle class is vanishing are from Plan Bay Area 2040 Regional Forecast – Jobs, Population and Housing.

Planners ascribe this unfortunate situation to occupational shifts, wage stagnation, and retirement of seniors without pension assets.  However, are these reasons for the vanishing middle class or the results of deeper events?  Plan Bay Area 2040 believes the former, but let’s look into the latter.

Organic vs. Planned Cities

The Foundation for Economic Education (FEE) website published an interesting article in August 2014, Smart Growth?  U Cities vs Galaxy Cities.

"San Francisco, Seattle, and Portland are generally considered progressive cities. Well in advance of other cities, they implemented 'smart growth' policies. Now, there is a lot to recommend about these cities, but if you’re not rich, you’ll probably just want to visit."

"To understand how wealth disparities worsen in cities like these, we have to look at clusters of policies that go under the name 'smart growth.' They aren’t the only policies that create U cities, but these three areas drive the U city pattern…:  strict zoning regulations and building codes, rent control and low-income housing subsidies, rail investments preferred over roads."

Why are these three factors main culprits in U cities? 

"The wealthier folks snap up the dwellings in limited supply. Middle-class folks look for housing outside the city, if they can stay in the area at all. The poor, however, stay. They are subsidized to do so."

And, voila, the middle class vanishes.

"Now what about inverted-U cities? We could call these 'fried-egg' cities, but that’s not terribly sexy. I prefer 'galaxy cities' for obvious reasons. The idea behind galaxy cities is that, all things equal, you’ll not only get a fat bell of a middle class on the graph, but you’ll also get a galactic distribution of housing options if you look from above. Some call this sprawl, because more affordable housing extends outward from a denser core, phasing out at the periphery after the suburbs and exurbs."

"Galaxy cities are participatory cities. That is to say, their people participate far more in their evolution than do town planners. They are emergent cities."

So, in the galaxy city model you have people who feel free to search for opportunities, not feel stuck by zoning regulations.

Time for a Fresh Start?

Galaxy cities

Ah, but then won’t you have all these people driving their cars long distances to work, raising the level of greenhouse gases?  That is the scenario presented by Plan Bay Area.  Might we not create a different scenario, one in which cities that evolve organically avail themselves of ride sharing, driverless cars, hot lanes, private van services, and even incentives to bring jobs to them so folks end up working where they live?

U cities are by any standard not a good place to live.  Not for the rich who have difficulty finding good middle class care givers and educators for their children, and not for the poor who are lulled into staying in "poverty traps." It is time to review the real causes of U cities, and stop the unsuccessful treatment of the symptoms. 

Transit-Oriented Development: What Does It Take to Make It Work?

Developing a New Methodology for Analyzing Potential Displacement is 415 pages long; and cost a pretty penny, according to the Berkeley Institute of Urban and Regional Development.  This study on transit-oriented development (TOD), published in March 2017, was prepared for the California Air Resources Board and the California Environmental Protection Agency by U.C. Berkeley and U.C. Los Angeles.  In spite of its length, complexity, and cost, this study comes to the same conclusion about TOD as anyone could have done by simply looking at a map.  What is useful to the study's target audience, metro-planning agencies in Los Angeles and in the Bay Area, are the suggestions for greater bean counting that can provide these agencies with ammunition for doubling down on "mitigating strategies" for displacement:  land use control, transportation control, fiscal policies, and taxation.

TOD is one of the responses to California state mandates to reduce greenhouse gases (GHG) by reducing vehicle miles traveled (VMT).  TOD promotes population density in corridors ½ mile from rail transit.   For a quick view of TODs see the Nine-County Coalition’s article, Meet Your New Landlord: Bay Area Rapid Transit.  Our conclusion was the same as that of the ARB study:  TODs make housing expensive, folks who cannot afford to pay move away, and folks who can afford to pay move in.  Of course, there are token housing subsidies, which claim to do some good.

                     Map of Transit-Oriented Development in the San Francisco Bay Area.

                     Map of Transit-Oriented Development in the San Francisco Bay Area.

The study is divided into background, study and conclusions, and mitigating remedies.  We readily admit we did not go over the 415 pages with a fine-tooth comb (we are unpaid volunteers with day jobs), but managed to cull some highlights from each of the study’s sections that we hope are of interest.

Background (Abstract):

“This report examines the relationship between fixed-rail transit neighborhoods and displacement in Los Angeles and the San Francisco Bay Area... Overall, we find that TOD has a significant impact on the stability of the surrounding neighborhood, leading to increases in housing costs that change the composition of the area, including the loss of low-income households. We found mixed evidence as to whether gentrification and displacement in rail station areas would cause an increase in auto usage and vehicle miles traveled (VMT).”

The bottom line here is that the study could not really tell whether TOD succeeds in reducing VMT, but succeeds admirably in displacing lower-income residents.

Residential and Commercial Gentrification:

These bullet points on the report provide a very brief overview of study and conclusions.

"Neighborhood decline results from the interaction of demographic shifts, public policy, and
entrenched segregation, and is shaped by metropolitan context."

"Gentrification results from both flows of capital and people. The extent to which gentrification is linked to racial transition differs across neighborhood contexts."

"Commercial gentrification can also transform a neighborhood’s meaning, but research is mixed on whether it is positive or negative for existing residents and businesses."

"New fixed-rail transit, inasmuch as it has a positive effect on residential and commercial property values, may also affect neighborhood stability and composition."

The study discussed the many variables that can result in gentrification and subsequent displacement, such as quality of schools and parks, and includes proximity to rail transit as a significant factor.

Mitigating Policies:

As its title indicates, the point of this study was to look at methodologies for analyzing displacement given the status quo.  Nothing in the study suggests that the status quo itself could be (and perhaps should be) revisited and modified.  Therefore, the study simply reiterates that TOD contributes to displacement and summarizes current mitigating polities. 

Here is a chart from a streamlined presentation of the study by the Air Resources Board.  One side of the chart lists production strategies:  fiscal, taxing, land use controls, and assets and investments.  The other side lists preservation, tenant protection and support, asset building and local economic development.

Strategies to address displacement

The study also discusses "barriers at the state level [that] include changing voter thresholds for communities that want to raise their own funds.”  In some cases, the study indicates that strategies such as rent control and affordable housing bonus plans do not work as well as they should because they are not applied forcefully enough.

In summary, Transit-Oriented Development may or may not reduce greenhouse gases by reducing vehicle miles traveled when displacement is factored in, it contributes to the astronomical housing costs in California’s metro centers, and it promotes displacement of lower-income residents.  If TOD contributes to those negative effects, then so do Priority Development Areas and Priority Conservations Areas, which also concentrate population along transit corridors.

California's metro-areas are likely to see more inventory and control of land and transportation as a result of this study.  However, the study also provides evidence that TOD, and by extension other features of the current central planning, come with consequences.  What price mitigating strategies?  Time to scrap the current central planning itself? 

Plan Bay Area Has Not Fixed Anything Yet.

The recent unveiling of Plan Bay Area 2040 provides a nice reason to revisit one of the most comprehensive public comments on Plan Bay Area 2013, submitted to the Metropolitan Transportation Commission (MTC) by Thomas A. Rubin, a consultant with over four decades of experience in planning and transportation. Although Mr. Rubin’s comment letter dated May 16, 2013, is listed along with many others on a Plan Bay Area Archives list, links to these documents return a “Page Not Found” message.  However, Orinda Watch, thankfully, provides good links to excellent reports submitted to MTC testifying to the foibles inherent in Plan Bay Area, among those reports is Thomas Rubin’s.

In Comments on ABAG’s and MTC’s Draft Plan Bay Area and Environmental Impact Report Plan Bay Area Draft, Thomas Rubin presents massive amounts of figures and graphs to demonstrate that,

 “…the Plan’s and DEIR’s [Draft Environmental Impact Report] transit components will not only fail to achieve their stated objectives, but there is a very significant chance that they will be counter-productive.  The Plan’s transit components are simply a continuation of the Bay Area’s past emphasis on expensive fixed guideway [trains, monorails, streetcars] transit projects, an emphasis which has not increased transit ridership over the past thirty years.” 

“The housing elements of the Plan, by eliminating almost all of the small remaining potential for new Bay Area residents to achieve their ‘American Dream’ of a single family detached home in the nine Bay Area counties, and attempting to force them into high-density developments, will instead drive many of them to locate outside the Bay Area counties and commute – primarily by driving – to jobs in the Bay Area.”

“…the capital and operating costs of such undesirable, but expensive, housing will require large taxpayer subsidies, making the already extremely high cost of doing business, and living, in the Bay Area far higher still.”

Plan Bay Area 2013 was implemented without much heed to what many experts were saying.  Now four years later --  No more traffic jams? We all have nice affordable homes?  Folks have short easy commutes to their jobs?  No, not really.  Maybe it is time to revisit Tom Rubin’s suggested alternatives:

“…emphasizing those modes [of transportation] that can be implemented quickly and with relatively low capital cost, including improvement of motor bus and vanpool services…, plus expanded transit service on new high-capacity automated vehicle lanes.”

“Major fare reductions, particularly for those types of services utilized primarily by the transit-dependent and economically-challenged.”

…”carpooling…to both reduce vehicle miles traveled by increasing average passenger load and provide additional transportation opportunities for the transportation disadvantaged.” 

The May 2013 report was followed by others that questioned the Plan’s methodology, such as that used to determine the decrease in greenhouse gases needed for the Bay Area to abide by the mandates of Assembly Bill 32, Global Warming Solutions Act of 2006. For example, the Air Resources Board adjusted upward its green house gasses inventory method to conform to new Intergovernmental Panel on Climate Change protocols and other change factors, but it did not revise the 1990 GHG emissions figure.  The level of GHG in 1990 is the target called for by AB 32.  This from one of Mr. Rubin's articles in Reason magazine,

“Crucially, however, ARB has not revised the 1990 GHG emissions figure upwards to reflect the new methodology. The effect of this is to increase the amount of GHG emission reduction required to meet the statutory target.”

Looks like Bay Area residents are dealing with a moving target, adjusted at will that could demand increased levels of central planning in land use and transportation.  In the mind of the average central planner, that usually means a lot more of the same regardless of results.  Think more density along transit corridors, higher taxes to subsidize astronomical housing costs, no parking, and seemingly never enough money left to fix potholes.

California's Fly Over Counties - Neglected By Design

"We don’t have seats at the table,” laments Richard Chapman, president and CEO of the Kern Economic Development Corporation. “We are a flyover state within a state."

Fresno, Bakersfield, Ontario and San Bernardino are rapidly becoming the Bantustans — the impoverished areas designed for Africans under the racist South African regime — in California’s geographic apartheid. Poverty rates in the Central Valley and Inland Empire reach over a third of the population, well above the share in the Bay Area.

Kern County’s economy is largely based in agriculture and oil extraction, but water is scarce and oil is a commodity subject to market fluctuation and whims.  Manufacturing, once major employer of the county’s workforce, has dwindled.  The county has large unincorporated areas mixed in with incorporated areas, as well as federal and state-owned lands.  Challenges are many.  However, the stark disparity between employment and income levels of coastal communities and inland communities such as Kern County is exacerbated by state legislation and policy.  Orange County Register article, The Other California-A Fly Over State Within a State, is worth reading.

This disparity has worsened in recent years. Until the 2008 housing crash, the interior counties served, as the Kern EDC’s Chapman puts it, as “an incubator for mobility.” These areas were places that Californians of modest means, and companies no longer able to afford coastal prices, could get a second shot.

But state policies, notably those tied to Gov. Jerry Brown’s climate jihad, suggests Inland Empire economist John Husing, have placed California"at war” with blue-collar industries like homebuilding, energy, agriculture and manufacturing. These kinds of jobs are critical for regions where almost half the workforce has a high school education or less.

By curtailing new housing supply, California is systematically shutting off this aspirational migration. Chapman University forecaster James Doti notes that, in large part due to regulation, Inland Empire housing prices have jumped 80 percent since 2009 — almost twice the rate for Orange County. Doti links this rapid rise to helping slow the area’s once buoyant job growth in half over the past two years. Population growth has also slowed, particularly in comparison to a decade ago.

California central planning at its best!  Give mobility a bad name by calling it “displacement,” prevent organic housing growth by mountains of zoning, push up housing costs by limiting development to concentrated areas, tax most industry to death and reward a few.  Non-anointed counties struggle while California preaches environment and equity.

Kern County

Plan Bay Area 2040: Regionalism Marches On

On April 3, 2017, the Metropolitan Transportation Commission and the Association of Bay Area Governments released Plan Bay Area 2040.  This is an update of the regional plan implemented by MTC and ABAG in 2013.

The objectives are as they were in the original plan – a transportation and land use roadmap for the Bay Area’s future growth that implements the two mandates of 2008 Senate Bill 375.  The mandates are: 1) Climate protection by requiring the Bay Area to reduce CO2 emissions, and 2) Adequate housing by requiring the region to house 100 percent of its projected population growth by income level.

The methodology also remains basically the same as in 2013:  1) Most population and job growth concentrated in Priority Development Areas, and 2) Little or no growth outside PDAs or in Priority Conservation Areas.  Language continues to refer to the plan as “voluntary guidelines.”  As in PBA 2013, the 2040 plan makes no explicit mention of the increased outmigration of Bay Area residents, and how that will affect plan projections. 

What has changed from 2013 is emphasis on the different plan components, prompted by results of the plan’s Target Assessment.  Of its 13 targets, Plan Bay Area is moving towards meeting or exceeding five, is making progress toward achieving four, and is moving in the wrong direction in four.  Some of the misses are significant. Decrease in the share of lower-income residents’ income spent on transportation and housing is targeted at 10%, but is expected to increase by 13 percentage points.  Share of low- and moderate-income renter households at risk for displacement it targeted not to increase, but is expected to increase by 5 percentage points.  A Plan Performance chart in the Strategies and Performance section of Plan Bay Area 2040 is very helpful in summarizing plan successes and failures.

As expected from Plan Bay Area, its action plan to address the missed targets doubles down on the methodology used to try to reach those targets.  Also as expected, “voluntary guidelines” always have a way of nudging compulsory mandates.  A note of drastic urgency also helps hopes of targeted results:

“…there is no more time to wait. Failure to establish regional consensus and take concerted action will put the region’s historic economic, environmental and transportation accomplishments at risk. Unlike many other policy areas, housing policy is something local governments have significant control over.
The Bay Area must therefore pursue a multi-pronged strategy that emphasizes the construction of new homes for residents of all incomes, the protection of the region’s most vulnerable households, and the need to advocate for more financial resources to pursue local and regional solutions.”

“Given existing real estate market conditions, land use controls, and infrastructure needs, many PDAs may not be able to accommodate forecasted growth and may require additional policy interventions to increase their development potential.”

Besides the general calls to action, PBA 2040 also outlines specific proposals: 

Plan Bay Area subregions

* Mapping of the Bay Area cities into three “subregions,” 1) “Big 3 Cities” (San Jose, San Francisco and Oakland); 2) “Bayside” (cities directly adjacent to the San Francisco Bay, including Hayward, San Mateo, San Rafael and Richmond), 3) “Inland, Coastal and Delta” (cities just outside of Bayside, such as Walnut Creek, Dublin, Santa Rosa, Antioch, Brentwood and Fairfield).

* Concentration of household and employment growth in the Big 3 Cities and Bayside, projected to contain 72% of the Bay Area’s total household and 77% of total jobs.

* Increased “local” funding of projects, such as a multi-county fee or bond measure, as well as dedicated sales taxes, fares and tolls.

* Establishment of a regional Economic Development District to make the Bay Area more competitive for federal economic and work-force development funding under the U.S. Economic Development Administration programs.

* State legislation to incentivize housing production and increased housing policy capacities.

* Bringing together diverse interests to develop strategies for housing production and preservation; and recommendation of legislative, regulatory, financial and market-related measures needed to provide regional housing at all income levels.

By its own admission, Plan Bay Area is on its way to significantly miss four of its 13 targets and barely reach another four.  The plan fails to deeply assess the increase in outmigration of Bay Area residents, simply ascribing the trend to high housing costs.  Although the plan gives ample lip service to its pronouncements being only “voluntary guidelines,” it ably prods compulsory legislation.  Although the plan loudly assets its recommendations do not diminish “local control,” it forcefully promotes regional solutions to challenges, as if all Bay Area counties experienced the same preferences. 

Plan Bay Area has made noteworthy achievements in the two mandates of SB 375 – reducing per capital CO2 emissions from cars and light trucks by 15%, and housing 100% of the Bay Area region’s projected growth by income level. One could consider the mission accomplished.  However, obviously the peripheral goals of PBA are nowhere near achievement: so-called “equitable access” to housing, efficient cost-effective transportation systems, and traffic-jam free city streets.  No wonder.  Can anyone seriously assert that concentrating population in dense transit-rich corridors is not a prescription for excessive housing cost, questionable quality of life, and certain outmigration?  Can anyone seriously believe that taxpayers can spend their way out of plan-created unaffordable housing without unacceptable draconian mandates?  Perhaps further efforts in such a large-scale integrated strategy will only result in diminishing returns, as well as mountains of restrictive legislation. 

Maybe it is time to refocus, and re-direct taxpayer funding into development of first-rate transit and roadway systems that serve counties that want them and are willing to contribute funding.  Such systems would take folks where they want to go -- not where a plan dictates they need to go, maintain clean air, reduce traffic jams, and distribute population more evenly.

Land Use Planning Agencies - Give them an inch and they will take miles

Today’s land use planning bureaucracy manifests itself everywhere.  The Bay Area hosts two major players in the planning arena, the Metropolitan Transportation Commission and the Association of Bay Area Governments.  These two behemoths gave birth to Plan Bay Area, under whose meticulous and all-encompassing planning residents attempt to live a normal life.

How did land use planning become so pervasive?  Bureaucracies are like ants.  You ignore one or two strolling in your kitchen counter or garden at your own peril. You will wake in the morning to find your cookies gone or your favorite rose bush bare. 

        Give them an inch, and they will take all your rose bushes.

        Give them an inch, and they will take all your rose bushes.

Until 1969, land use and circulation (transportation) were the only elements of local general plans required in California law.  Housing, along with other topics such as open space, was sometimes dealt with in optional general plan elements by ambitious cities and counties.(Paul Lewis, California’s Housing Element Law: The Issue of Local Noncompliance)

The first ant in the rose garden was then-Assemblyman Pete Wilson’s 1969 bill requiring that each city and county in California include a housing element in its planning.  In 1971, legislators passed a bill requiring local jurisdictions to follow the guidelines of the California Department of Housing and Community Development, and Jerry Brown, during his first tenure as California Governor strengthened the DHCD.  In 1977 the guidelines were extensively revised to include ample details and also to require a regional “fair-share housing plan,” under which jurisdictions within a certain region needed to absorb a fair share of projected population moving into the region.  In 1980, Assembly Bill 2853 enshrined the guidelines into statute, and put DHCD in charge of reviewing plans of local jurisdictions. 

Embellishments followed, including passage in 2006 of Assembly Bill 32, Global Warming Solutions Act, and passage in 2008 of Senate Bill 375, Sustainable Communities and Climate Protection Act.  These two optimistically-named bills added a new dimension, and new sets of mandates, to housing element plans.  Housing - as well as transportation, economic development, and population movement – became a centrally-planned bundled service.

[R]educing greenhouse gases is only one part of the equation for California. As we build our clean energy future, we must also ensure that our efforts to fight climate change continue to meet clean air standards and benefit community and ecosystem resilience. Achieving these intertwined goals requires a multi-pronged strategy that also delivers reductions in criteria and toxic pollution especially in disadvantaged communities that are disproportionately burdened by the impacts of pollution. In addition to regulatory measures, investment in communities through the Affordable Housing and Sustainable Communities Program, the Transformational Climate Communities Program, Low Carbon Transportation Program and the Transit and Intercity Rail Capital Program, result in reduced pollution, increased jobs and improved conditions in communities throughout California that are the most impacted.

The excerpt above is from the CA Air Resources Board 2017 Climate Change Scoping Plan Update.  In the old days, such mandated “intertwined goals” and “multi-pronged strategy” were called “central planning,” something considered bad form in a democracy.  Today, it thrives and grows.

California Senator Scott Wiener’s SB 35 is now being reviewed by the Senate Governance & Finance Committee.  His press release on the bill says,

The Regional Housing Needs Allocation (RHNA) is the state-mandated process that sets the number of housing units that must be included, at all affordability levels, in each local jurisdiction’s housing element. Under SB 35, if cities aren’t on track to meet those goals, then approval of projects will be streamlined if they meet a set of objective criteria, including affordability, density, zoning, historic, and environmental standards, and if they pay prevailing wage for construction labor.

Modest government policies such as Pete Wilson’s 1969 housing element guidelines usually turn into unstoppable and often draconian forces.  Then people fight or take flight.  Although California is not yet experiencing net outmigration, the state’s migration rate per 1,000 residents has decreased from 2.1 in 2012 to 0.9 in 2016.  Some who stay choose to fight by forming action groups such as Citizen Marin , Orinda Watch and the Nine-County Coalition.

Trump's 2018 Major Agency Budget Proposal: Cutting Up the Credit Cards

There is a White House 2018 agencies budget proposal on the table.  The Nine-County Coalition’s primary focus is on city, county, and state matters.  However, we also opine on federal issues that significantly influence local events.  Therefore, we list some points from the Major Agency Budget published by the Office of Management and Budget on March 16, along with our comments. 

Budget – Highlights:  “…the Budget eliminates and reduces hundreds of programs and focuses funding to redefine the proper role of the Federal Government.”

Comment:  Amendment X of the United States Constitution - “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”  What is not specifically enumerated is the responsibility of the States or the people.  Fiscal year 2016 federal budget $3.871 trillion; national debt $18 trillion; federal deficit $537 billion; 430 departments and agencies; 4,185,000 federal civilian and military employees.  Given these gargantuan figures, it would seem the federal government is tackling more than its enumerated duties.

Budget – Department of Agriculture:  “Reduces funding for lower priority activities in the National Forest System, such as major new Federal land acquisition; instead, the Budget focuses on maintaining existing forests and grasslands."   

Comment:  The Federal Government owns 46% of California land.  Most of us would not welcome building private homes on cattle grazing lands, given the economic contribution of ranchers to the state.  However, we need to choose between expensive transit-oriented development and reasonable reduction of protected areas.

Budget – Department of Commerce:  “Zeroes out over $250 million in targeted National Oceanic and Atmospheric Administration (NOAA) grants and programs supporting coastal and marine management, research, and education, including the Sea Grant, which primarily benefit industry and State and local stakeholders.”

Comment:  Although the 2016 Bay Area-wide Measure AA established a $12 parcel tax to help fund the Bay Area Restoration Authority, the Authority was certainly depending on federal grants. It is questionable whether there is a national interest in “restoring” the San Francisco Bay. The $12 parcel tax “benefits industry and State and local stakeholders,” especially the technology industry with its campuses bordering the South Bay.  The Budget will encourage NOAA to return to core functions such as surveying, charting, fisheries management, and providing forecasters with weather data.

Budget - Environmental Protection Agency:  "Eliminates funding for specific regional efforts such as the Great Lakes Restoration Initiative, the Chesapeake Bay, and other geographic programs...The Budget returns the responsibility for funding local environmental efforts and programs to State and local entities, allowing EPA to focus on its highest national priorities."

Comment:  The "specific regional efforts" would include continued funding for the Bay Restoration Authority.  Industry campuses that border the Bay would need to fend for themselves if they fear flooding.  Environmentalists would need to rely on private donations to save their favorite fish or seaweed.  Consumers would need to vote with their feet and refuse to do business with companies that harm the Bay.

Budget – Department of Housing and Urban Development:  "Eliminates funding for the Community Development Block Grant program"…"The Federal Government has spent over $150 billion on this block grant since its inception in 1974, but the program is not well-targeted to the poorest population and has not demonstrated results.  The Budget devolves community and economic development activities to the State and local level…"

Comment:  Cities and counties have come to depend of federal block grants, and these grants come with strings attached.  The NCC has discussed the drawbacks of the 2015 Executive Order “Affirmatively Funding Fair Housing.”  One of the requirements of receiving block grants is establishing the AFFH program in every neighborhood, and filling out reams of forms affirming that progress is being made in achieving neighborhoods wholly integrated by race and income.  AFFH and many other HUD programs are certainly far removed from HUD’s core mission of helping the poorest populations.  We note that AFFH was a Presidential Executive Order on which neighborhood residents of any race or income never voted on.

Budget – Department of the Interior:  “Eliminates unnecessary, lower priority, or duplicative programs, including…National Wildlife Refuge fund payments to local governments that are duplicative of other payment programs.” “Reduces funding for…new major acquisitions of Federal land.”

Comment:  The core responsibilities of the DOI are to protect and manage federally-owned land and waterways, provide information about natural resources, and meet national trust responsibilities to American Indians, Alaska Natives, and U.S.-affiliated island communities. Investing in maintenance of existing national parks, refuges and public lands is a good use of scarce resources.

Budget – Department of Transportation:  “Limits funding for the Federal Transit Administration’s Capital Investment Program (New Starts) to projects with existing full funding grant agreements only.  Future investments in new transit projects would be funded by the localities that use and benefit from these localized projects.” 

Comment:  Residents of Oklahoma and Kansas are helping to fund Bay Area’s BART and California’s High-Speed Rail.  Regarding the High-Speed Rail project, the Federal Railroad Administration is currently funding 69 HSR projects in 22 states totaling $8.6 billion; California’s share for initial planning, and construction of the initial Central Valley section is $2.6 billion or 30%.   

Loss of federal funding for many plans and projects, coupled with the financial strain placed upon Bay Area cities and counties intent on providing housing and a plethora of benefits for all, is not a pleasant prospect.  However, this might be a good time for voters to wrestle control back from profligate agencies, authorities, and irresponsible representatives, who seem to be doing everything in their power to either hoodwink voters or keep voters out of the decision-making process altogether. 

CalTrain.jpg

Caltrain Electrification

The Orange County Register of 02/17/17 reported that federal funding for Caltrain electrification was placed on hold in February, pending a new federal budget.  Caltrain spokesman Seamus Murphy called the delay a disappointment and added, “It really isn’t about the Caltrain project or any question about controversy surrounding our project. It’s about billions of dollars of projects that are already in the pipeline,” he said. “I think this is more a question about whether the administration is going to continue to invest in transit projects in the way that federal investment has occurred in the past.”  Probably not, since the proposed 2018 budget shifts responsibility for new capital investment to the localities that use and benefit from the investments.

Will Senate Bill 1 Fix California's Potholes?

The number of bills California legislators crank out each year is astounding.  One would think California residents were in need of guidance for every aspect of their lives.  Therefore, we at the Nine-County Coalition focus on bills that might carry the potential of fueling the kind of central planning exemplified by Plan Bay Area.  Most likely, such bills will include “housing” and/or “transportation” in their titles, and call for “sustainable communities,” “complete streets,” or other vocabulary of central planning.

Obviously, unless California chooses to administer its infrastructure exclusively with private funds – a heretical thought – provision for the collection and manner of collection of taxes to fund ports, state highways, roads, and streets is necessary.  However, residents might do well to keep an eye on what exactly their government representatives are enacting to accomplish funding objectives.

California Senate Bill 1, introduced by Senator Jim Beall and now pending in the Appropriations Committee, significantly revises California’s transportation funding system. Here are a few highlights that might be of interest. 

SB 1 Does the Following:

*  Creates the Road Maintenance and Rehabilitation Program, into whose funding account various funds would be deposited.

*  Requires the California Transportation Commission to adopt specified performance criteria.

*  Sets aside $200 million annually to be available to local jurisdictions that have passed or imposed transportation taxes orfees.

*  Allocates $80 million annually to the state Highway Account.

*  Allocates $2 million annually to the California State University for transportation research and education.

*  Removes the California Transportation Commission from the Transportation Agency, and established it an entity of state government required to perform an oversight role.

*  Creates the Office of the Transportation Inspector General as an entity of state government to ensure that all agencies spending state transportation funds operate efficiently. The Inspector General would be appointed by the Governor for a 6-year term subject to confirmation by the Senate.

*  Requires that the Department of Transportation “update the Highway Design Manual to incorporate the “complete streets” design concept by January 1, 2018.

 *  Establishes until January 1, 2023, the Advance Mitigation Program and the Advance Mitigation Fund in the Department of Transportation, which will receive $30 million annually from the Road Maintenance and Rehabilitation Program. The bill would authorize the Department of Transportation to undertake specified mitigation measures in advance of construction of planned transportation improvements.

*  Authorizes the Department of Transportation where a regional conservation framework has been approved by the Department of Fish and Wildlife to, “Acquire, restore, manage, monitor, and preserve lands, waterways, aquatic resources, or fisheries, or fund the acquisition, restoration, management, monitoring, and preservation of lands, waterways, aquatic resources, or fisheries that would measurably advance a conservation objective in the regional conservation investment strategy if the department concludes that the action or actions could conserve or create environmental values that are appropriate to mitigate the anticipated potential impacts of planned transportation improvements.”

SB1 Creates the Following Funding Sources:

*  $0.12 per gallon increase on sale of gasoline, staggered over three years.

*  4% increase in the sales and use tax on diesel fuel, to be adjusted by the rate of the CA CPI.

*  $38 increase in annual vehicle registration fees, adjusted by the CPI.

*  A new $100 annual vehicle registration fee, adjusted by the CPI, applicable to zero-emission motor vehicles.

Some Good Some Bad

California’s per capita spending on transportation could use improvement, and SB 1 is very specific on what it creates, what it will do, and where money is coming from.

The discouraging part is that the bill indicates that “a funding program will help address a portion of the maintenance backlog on the state’s road system.”  How small a portion one might ask. 

The cautionary part is the establishment of funding for mitigation of possible environmental degradation in anticipation of transportation projects.  The question might come to mind how far in advance of the initiation of projects are mitigation efforts to be made!  How much of these now funded mitigation efforts will include land purchases and easements? 

Although the bill says that increased revenues will be directed to “the state’s highest transportation needs,” transportation needs these days include a lot more than reliable buses and pothole-free highways, as exemplified by BART going into the  “transit villages” business.  Therefore, it behooves residents to remain vigilant to prevent special interests from unduly influencing where the money goes.

Proposition 13: Rethinking Sacred Cows

Plan Bay Area Housing Affordability Funding Gap.   

Plan Bay Area Housing Affordability Funding Gap.   

California Legislators have been trying to remove taxation limits for decades, especially limits imposed by Proposition 13, the 1978 voter initiative that placed a cap of 1% on property taxes and 2/3 supermajority vote for passage.  However, California seems determined to live in a state of perpetual crisis, which legislators say requires lots of money to cure.  Today’s crisis is housing.

The surprisingly candid Bay Area Council in its report, Closing the Bay Area’s Housing Gap, of December 2016, advises jurisdictions to,

 

Rethink sacred cows. Consider revisiting Proposition 13, CEQA, and local control over land use as part of a grand bargain on housing.

Win hearts and minds for housing. We need storytelling, not just data.  Building conviction for housing among major voting blocs—e.g., environmentalists and organized labor—is critical. ‘Never let a good crisis go to waste’. The state could reframe the conversation by declaring a housing crisis and the electorate would be receptive to action due to skyrocketing rents and home prices.

In spite of legislators’ Herculean efforts, so far, their only significant success has been Proposition 39, which amended Article XIII of the California Constitution called for by Proposition 13, by lowering the required supermajority vote necessary for voters to approve local school bonds, from 2/3 of the votes cast, 55% of the votes cast.  Voter-approved school bonds under Proposition 39 are paid off by raising property taxes above the 1% property tax rate limit established by Proposition 13 in 1978.  Unfortunately, Proposition 39 and the ensuring ability of school districts to spend more did not improve the overall quality of California public schools, as evidenced by the 2016 Wallethub list by state that gave California schools a rank of 40 out of 51.   But, that is viewed as a minor aside.

Now, California Assembly Member Cecilia Aguiar-Curry (D-Winters) has introduced Assembly Constitutional Amendment No. 4 (ACA-4), Local Government Financing:  Affordable Housing and Public infrastructure, which is pending referral and may be heard in committee on March 21, 2017.  ACA-4 would amend California Constitution Article XIIIA.  

Highlights of ACA-4:

*  At present the California Constitution prohibits the ad valorem tax rate on real property from exceeding 1% of the cash value of the property, subject to specific exceptions.  ACA-4 would create an additional exception to the 1% limit that “would authorize a city, county, or city and county to levy ad valorem taxes to bonded indebtedness incurred to fund construction, reconstruction, or replacement of public infrastructure or affordable housing, if the proposition proposing that tax is approved by 55% of the voters of the city, county, or city and county.”

*  At present the California Constitution “conditions the imposition of a special tax by a local government upon the approval of 2/3 of the voters of the local government voting on that tax, and prohibits these entities from imposing an ad valorem tax on real property or a transaction or sales tax on the sale of real property.”  ACA-4 “would authorize a local government to impose, extend, or increase a special tax for the purpose of funding the construction, rehabilitation or replacement of public infrastructure or affordable housing, if the proposition that the tax is proposing is approved by 55% of voters.”

*  At present the California Constitution prohibits local government agencies from incurring any indebtedness exceeding in any year the income and revenue provided in that year, without the assent of 2/3 of voters, with the exception of indebtedness to provide funds for school districts.  ACA-4 would lower the voter-approval threshold to 55%; if the indebtedness is for general obligation bonds issued to fund the construction, reconstruction, rehabilitation or replacement of public infrastructure or affordable housing projects.

*  For the purposes of this amendment, “affordable housing” is described as,

“Housing developments, or portions of housing developments, that provide workforce housing affordable to households earning up to 150 percent of countywide median income, and housing developments, or portions of housing developments, that provide housing affordable to lower, low, or very low income households, as those terms are defined in state law.”

*  For the purpose of this amendment, “public infrastructure” is described as:  water quality, sanitary sewer, treatment of wastewater, protection from sea level rise, open space and recreation facilities, improvements to transit and streets, and highways, flood control, broadband expansion in underserved areas, local hospital construction.

The Nine-County Coalition is not “anti-tax;” however, part of our mission is to encourage voters to be aware of legislation that will provide the funds for the implementation of central planning efforts which so many California residents oppose.  Awareness is especially recommended now that legislators have caught on to residents’ desire for “local control” of their cities and counties, and are introducing legislation that purports to support “local control,” while funds are directed toward further implementation of central planning. 

A report prepared by the Association of Bay Area Governments (ABAG), Affordable Housing Funding Gap Analysis, in April 2014, describes the funding shortfall of just one of the several elements of Plan Bay Area, subsidized housing. See the chart above illustrating the gap.

The Bay Area will need to produce 660,000 new housing units through 2040 to accommodate its projected population growth and future workforce. Over 371,000 or 56 percent of these housing units will need to be affordable to low and very low income Bay Area residents. Market rate development alone will not meet this demand; it must be complemented with affordable housing development. This requires subsidy.

Funding for Plan Bay Area’s projects would be greatly improved with passage of ACA-4.  However, as we have seen from the results of Proposition 39, more money does not necessarily translate into desired objectives.  Better outcomes might come from less grandiose central plans, specific city/county-centered proposals for basic services such as more frequent clean-fuel buses reaching even remote communities, and facilitation of local jobs that would not require residents to travel long distances.

Meet Your New Landlord: Bay Area Rapid Transit

TOD Fruitvale2.jpg

Bart is Going Into the Housing Business https://www.bart.gov/about/business/tod

Are you wondering about the disappearing parking spaces at BART stations?  Or how come all those look-alike “villages” are springing up along BART lines?  The answer is BART has been developing a housing plan since the late 1990’s, which has now come into full swing.  Why, you might ask would a transit system want to go into the housing business:  hope of steady revenue streams. 

BART owns roughly 250 acres within one-half mile of its existing and under-construction stations, most of which are in surface parking lots. In 2016, the BART Board adopted a new Transit-Oriented Development (TOD) policy establishing goals of supporting the implementation of Plan Bay Area and infill development near stations in partnership with cities, in order to increase ridership where the system has capacity to grow, reduce auto dependence, and lower regional greenhouse gas emissions.

To implement this policy, and to achieve the 2025 and 2040 TOD performance targets also adopted by the BART Board in December 2016, BART will be accelerating the pace at which TOD projects on BART property occur, and will be working with cities to expand tools and resources for TOD within the one-half mile station area. The Board aims to have a total of 7,000 housing units built on BART property by 2025.

TOD Basics

*  In addition to increased ridership, BART is also counting on revenue streams derived from lease agreements with developers, as well as from value capture-covenants.  Property closer to transit carries a higher value, so developers are willing to pay value fees to BART for the privilege of building on BART-owned land.

*  However, TOD projects are not intended to be self-supporting.  BART’s plan includes public financing and governance mechanisms, including joint powers authorities, assessment districts, improvement districts, and lease credits – all designed to capture a variety of taxpayer funds.
 
*  Current TOD projects include executed agreements at Fruitvale, MacArthur, Millbrae, Pleasant Hill, Richmond, San Leandro, South Hayward, Walnut Creek, and West Dublin/Pleasanton stations.  Future projects are envisioned at West Oakland, Balboa Park, El Cerrito Plaza, and Lake Merritt stations.

*  The District’s Affordable Housing Policy, adopted January 2016, calls for a minimum 20% developer-subsidized units, and aims for a District-wide target of 30 percent of all units to be affordable, with a priority to very low (<50% AMI), low (51-80% AMI) and/or transit-dependent populations.

The disease worsens with treatment

A rallying cry of the 1960’s was “Question Authority!” which remains an excellent suggestion.  We at the Nine-County Coalition would like to add another suggestion, question treatments designed to cure ills of the market:

Is the primary purpose of BART TODs to help lower regional greenhouse gas emissions, or to continue looking under the sofa cushions for money, rather than improve efficiency and cut costs?  Observation:  “Labor costs, including both wages and benefits, are the primary driver for BART’s operating uses, comprising about 72% of BART’s operating expense.”

Density near transit lines is mandated by Plan Bay Area.  Property near transportation commands higher prices.  As higher-priced development continues, and urban sprawl is discouraged, housing costs continue to rise. This merry-go-round is beneficial to established property owners who see their property values rise; but hardly facilitates local economic growth, when renters and new buyers need to spend a large chunk of their earnings on housing, leaving little to spend on local goods and service.

Luckily, the BART Board of Directors is elected by the votes of District residents. They can be disregarded on Election Day if investment in TODs do nothing but obliterate our parking spaces and provide overpriced housing; if it does not prevent BART from needing to raise fares significantly or come to voters hat in hand at every election; or if revenues go toward even higher labor costs and benefits.