Demise of SB 827 But More to Come in SB 828

California Senate Bill 828 will be heard by the Transportation and Housing Committee on Tuesday, April 24, 2018.

For a quick summary of the bill and concerns over it, see article Now There is SB 828.  A good reason why we need to pay special attention to this proposal is here:

Demise of SB 827

The alliance of otherwise disparate groups in the “local control” movement enjoyed a major triumph on April 17, when Senate Bill 827, introduced by California Senator Scott Wiener in January 2018, suffered a compassionate but swift demise before the Senate Transportation and Housing Committee.  While bemoaning the state’s astronomical housing costs and thanking Senator Wiener for his aggressive proposal, committee members killed the bill with a 6-4 vote (3 members did not vote on this bill).

The lineup up of members of the public speaking for and against SB 827 at the April 17 hearing might be categorized as developers, real estate professionals, and big business in the YES corner vs. neighborhoods, lower-income housing advocates, and representatives of elected city officials in the NO corner.  

Senator Wiener, as well as his pro-development supporters, vowed to continue their fight for high density along transit corridors.

The Crisis That Will Not Go Away

Issues have a tendency to enjoy their five minutes of fame then fade from public consciousness.  However, California’s housing crisis seems to be here to stay.  Not only has this issue been long lasting, it has also been intense. Redevelopment, which aimed to tear down certain neighborhoods and build lots of new stuff was implemented in the 1950s.  The strategy suffered a crippling blow with its razing of San Francisco’s Fillmore District, and died an ignominious death upon discovery that the millions intended for low-income housing instead financed high-end golf courses and other amenities.  Although California’s Redevelopment Agencies officially died in 2011, redevelopment goes on, apparently eternally, as fixes to the equally seemingly eternal housing crisis.  

Observe the major concerns over legislation such as SB 827 expressed by housing advocates:  displacement and gentrification.  Ask any old timer that remembers what happened in the 1950s and 60s to The Fillmore:  displacement and gentrification.  It is one thing for neighborhoods to evolve organically via gradual market forces. It is another thing for central planning to force change through fervent mandates in order to achieve whatever policy is in vogue at the time.  

A Pretty Good Formula

Money and climate change

The San Francisco Bay Area has been especially adroit in manipulating housing policy through Plan Bay Area, but similar policies prevail throughout California.  Ask 100 people what are Plan Bay Area’s objectives, and there will probably be 100 different responses, including clean air, conservation, stopping climate change, globalism, power over we the people, abdication of power by elected officials, or a combination of all of the above.  Included in such responses should be the tendency of government entities to benefit the more powerful, pay some bills, and show economic growth.

“Follow the Money” is a frequently stated aphorism. There is money fighting climate change, for instance, but a lot more money to pass around in economic growth. 

If legislators can combine fighting climate change with promoting economic growth, they have a pretty good formula.

The Formula: Density!

Companies participating in national or global marketplaces benefit from being able to locate near existing pools of workers with relevant skills who they can hire. Workers benefit from being able to live in places where multiple employers need to compete for their labor…The deeper labor markets provided by density allow people to find jobs they are better at and that make them happier, while people being in proximity to one another allows them to be more innovative and productive.  There’s No Good Alternative to Building More Homes in Expensive Cities, by Matthew Yglesias, Vox 4/20/18

*  Walkable neighborhoods, parks and open spaces can generate economic benefits to local governments, home owners and businesses through increasing property values and related property tax revenues.

*  Open spaces such as parks and recreation areas can have a positive effect on nearby residential property values, and can lead to proportionately higher property tax revenues for local governments.

*  Compact, walkable developments can provide economic benefits to real estate developers through higher home sale prices, enhanced marketability and faster sales or leases than conventional development. 

**From Economic Benefits of Open Space, Recreation Facilities and Walkable Community Design, by Lilly Shoup and Reid Ewing, March 2010, abstract reproduced in American Trails.

We point to legislation as well as Plan Bay Area's strategies of building dense Priority Development Areas while enforcing vast Conservation Areas.  We also point to a massive budget (something for everybody), ever-increasing public pension unfunded liabilities, widespread homelessness and other public assistance challenges that necessitate considerable economic growth that can generate high taxes, fees, and other venues for California's public funding.  Sounds like density might be a formula for increasing rather than decreasing housing costs.

Density, Growth, and the Housing Crisis

If density is viewed as a significant engine of the economic growth necessary to support California’s spending, then draconian legislation that forces all cities and counties to build in severely restricted areas seems likely to continue unabated.  

Thus, we have seen numerous bills mandating counties to build their “fair share" of housing, a war on cars and parking spaces, Conservation Areas that prevent outward growth, taller buildings unwelcome in single-family neighborhoods, and super-tall construction in unstable land fill areas (exemplified by San Francisco’s sinking and leaning Millennium Tower).  

And there is more to come.  On April 24, 2018, the Senate Transportation and Housing Committee will hear SB 828, also introduced on January by Senator Scott Wiener.  

By expanding the duties of local governments relating to the housing element program and the final regional housing need plan, this bill would impose a state-mandated local program.

The opposition to SB 828 has not been as forceful as opposition to SB 827, an understandable situation since residents fighting against gentrification or for control of their neighborhoods have day jobs and few deep pockets to sustain such prolonged fights.  However, the outcry over SB 827 might have placed legislators on notice that residents have the last word come election time.  Also, alliances formed to oppose SB 827 hopefully will continue, to show opposition to SB 828 and similar mandates sure to come.