Saturday, August 26, 2017

Where "Smart Growth" development falls short. Hint: The market doesn't like it.

Warning if you live with 1/2 mile of Highway 101 in Marin County

At the MTC-ABAG special forum for Community Housing Crisis, held in Oakland, CA,  a woman testifies that she has been forced from her home several times due to redevelopment pressures under Plan Bay Area.  "You are throwing us under the bus"

Friday, August 25, 2017

Can we intentionally improve the world? Planners vs. Hayekians

Can we intentionally improve the world? Planners vs. Hayekians

(This post is part of a series of Open Questions, in which I describe important questions about which thoughtful people disagree)
The Planner looks at the world and says, “What are the most important problems that need fixing?” and then comes up with a plan for how they might make a dent in some of those problems.
Effective Altruists are Planners. So are lots of other groups that don’t necessarily identify with Effective Altruism’s utilitarian principles, such as the environmentalist or animal rights movements.
You could argue that the value of Planning is just common sense — surely, we should expect better outcomes if thoughtful people actually try to help the world than if they don’t try? But Planners can also bolster their case by pointing to examples of governments, companies, or charitable foundations intentionally creating a lot of social good.
For example, governments and global charities have funded vaccination campaigns that have wiped out major diseases from entire countries (e.g., polio). And the Rockefeller Foundation funded a program to improve wheat production in Mexico; while working on that project, biologist Norman Borlaug developed a new strain of wheat that saved over a billion people from starvation worldwide.
But there’s another type of person who also cares about helping the world, and is wary of the Planner approach. They argue:
  1. It’s very hard to predict in advance how a plan will affect the world.
  2. Most plans to improve the world have failed, some catastrophically (see: Marxism).
  3. Most improvements to the world were not the result of planning, but rather the result of some mixture of serendipity and people pursuing their own ends.
  4. If we all limited ourselves to projects whose social value can be justified, then we’ll be stuck exploring a narrow slice of project-space, and will be missing out on some of the highest-value projects simply because they didn’t seem valuable from within our current, limited worldview.
  5. Therefore, the optimal approach to improving the world is for each of us to pursue projects we find interesting or exciting. In the process, we should keep an eye out for ways those projects might yield opportunities to produce a lot of social value — but we shouldn’t aim directly at value-creation.
This camp is sometimes called “Hayekian,” because their view of value-creation is similar to Friedrich Hayek’s: any individual firm has limited foresight, so the way we increase innovation is to increase the number of firms. The more different things we try, the greater chance of us hitting upon a few big wins. In other words, given our limited ability to “exploit” known strategies for creating social value, we should focus on boosting exploration instead of exploitation.
The lines between Planners and Hayekians start to blur in some interesting grey-area cases, such as Bell Laboratories, which produced some of the 20th century’s most valuable innovations (lasers, transistors, information theory, etc.). On the one hand, Bell Labs was funded by AT&T with the explicit goal of producing valuable innovations, which makes it seem like a point for the Planners. But on the other hand, one thing that made Bell Labs distinctive was how much free rein its researchers were given to explore projects that were interesting to them, without having to produce short-term results or justify their work in terms of a bottom line. Point for the Hayekians?
Relevant open questions:
How efficient is the market for creating social value? (coming soon)
Relevant reading:
  • Beware Systemic Change, by Scott Alexander (see especially the hypothetical dialogue between Bob and Alice, though Scott has apparently changed his mind since he wrote this post)
  • The Republic of Science, by Michael Polanyi, is a Hayekian argument applied to scientific innovation
  • The Idea Factory, by Jon Gertner, explores the unique culture of Bell Labs
  • Theory of Change, a post by Aaron Swartz on the value of planning

Housing Affordability & the Myth of Supply-Side Densification

Learning from Vancouver: Housing Affordability & the Myth of Supply-Side Densification

Vancouver has experienced significant escalation in the cost of housing over the last decade. Continuing our investigation of the housing affordability crisis, TPR reached out to Patrick Condon, Chair of the Urban Design program at the University of British Columbia and a thought leader on sustainable urban design and livable cities. Offering a different perspective from housing advocates who simply promote greater housing supply as an affordability solution, Condon advocates instead a targeted increase of middle-market housing supply and strong value-capture practices.

Patrick Condon

"It became increasingly obvious that adding supply in this way was not reducing, but actually increasing, the cost of housing. Adding supply at the high end had the nefarious consequence of increasing the apparent investment value of real estate throughout the entire city. It not only created supply that was unaffordable to the people who live here, but also had the perverse effect of raising the cost of all housing throughout the city." - Patrick Condon

Professor, Vancouver’s housing challenges were the focus of your remarks at the Asia Society’s recent Pacific Cities Sustainability Initiative summit. Please share your analysis with TPR’s readers.

Patrick Condon: Our experience in Vancouver is that additional supply of housing does not necessarily lead to improved access to housing for people in the city. In Vancouver—as well as San Francisco, London, New York, and probably Los Angeles, in the not-so-distant future—housing has become a commodity rather than a home. And as a commodity, it gets bid up by global pressures. Global capital flows are stimulating an inordinate rise in the price of all real estate.

Until recently, in functioning real-estate markets, the average family wage in a region was closely aligned with the average cost of housing—whether that housing was high- or low-density. That was more or less the case in Vancouver until the mid-1990s.

Now, the price of housing is four to six times more expensive than it should be. The price per square foot of a residence, compared to the purchasing capabilities of people living in the area, is completely out of whack.

In the 1980s and ‘90s, Vancouver became famous for adding density in our Downtown, which was unusual for North American cities. At first, these new high-density projects were available to people with middle-class incomes. Families moved back downtown; adequate open spaces, daycare facilities, and schools were provided, as was some supported housing. This was rightly celebrated.

But that was then, and this is now. Now, the only buildings that get built are high-rises aimed only at the very highest ends of the market. (They’re all of a type; even their finish characteristics are similar.) This is also the case in New York and London, where nothing is getting built except apartments that are selling for $2,000-$4,000 per square foot.

The conversation in California often revolves around the narrative that building more housing will solve the state’s affordability crisis, and that the main obstacle to this solution is NIMBYism. How do you frame the urban housing affordability issue?

I look at it very differently. I can tell you where the cities at the beginning of this process are going to end up, because we had the same arguments in Vancouver as prices began to rise.

Faith in “supply and demand” was very strong, and the argument was made by almost everyone that the answer to the problem of affordable housing was more supply. The city administration oversaw many approvals for new housing units based on the assumption that any supply is good supply. Their presumption was that there would be some kind of trickle-down—that, even if the new supply was aimed at the high end of the market, benefits would accrue to the lower end of the market by freeing up housing units. After many years of pursuing this strategy, it turned out that this was not the case.

It became increasingly obvious that adding supply in this way was not reducing, but actually increasing, the cost of housing. Adding supply at the high end had the nefarious consequence of increasing the apparent investment value of real estate throughout the entire city. It not only created supply that was unaffordable to the people who live here, but also had the perverse effect of raising the cost of all housing throughout the city.

Today, the city administration has made a 180-degree reversal – at least in their rhetoric. The mayor has said that it is no longer adequate to assume that adding supply is going to solve the housing affordability crisis; instead, the administration is trying to find ways to manage the market in order to supply housing for the middle of the market.

Going forward, our mayor says the approach will be to enthusiastically support only supply that is aimed at the people who live in Vancouver and make average incomes—specifically, housing that can be afforded with 30-35 percent of the average income of workers in the city.

What form of dense residential development do you suggest is more compatible with neighborhoods in Vancouver, and arguably Los Angeles?

I very much support the city’s new strategy of refurbishing neighborhoods’ existing housing stock to support more dwelling units-as long as that does not reduce the number of rental units there in the process. Rather than building one luxury high-rise downtown, change design ordinances such that single-family lots can be reconditioned to fit three or four individually purchasable strata units and/or rental units, by putting in another structure on a part of the lot presently occupied by backyard.

That is an intelligent strategy because it recognizes that the thing of value is not so much the building as it is the land. Under present circumstances, Vancouver residents can’t compete for a parcel that’s valued at $1.5-$2.5 million. That only attracts people at the very high end of the market, and often, after purchase, the original structure is torn down for a much more luxurious structure. But if that $2 million parcel is turned into four dwelling units, then the land requirement of each of those units is only half a million. And after rehabilitating and adding onto the structure, the individual units can be purchased for $400,000-$800,000—which is much more in line with what people can afford to pay.

In my opinion, the city is still not going far enough because it allows only three units per lot. That still won’t put those units within reach of those with average city incomes. But it’s a step in the right direction.

The notion of vibrant, mid-density housing development is sometimes termed “the missing middle.” What does that term suggest?

I think the concept of “the missing middle” has led people here to think that they have to do land assembly, which is politically difficult and comes with the consequence of distorting the fabric of the neighborhood. The strategy I advance is better termed “hiving”. It takes advantage of existing parcelization and structures to achieve “missing middle” or townhouse-level densities without reconfiguring entire neighborhoods.

How has taxation in metropolitan Vancouver worked to reinforce or undermine your efforts?

Pretty much everything that’s built up here is done by zoning variance rather than by right, and we have mandatory fees called Community Amenity Contributions that are negotiated in the context of variances. What the city gets as a consequence of variances is a number of millions of dollars to use for amenity packages: parks, recreation centers, libraries, and other things that give residents some of the benefits that accrue from a development.

These packages can be quite substantial; in Vancouver, they’re supposed to capture 80 percent of the value of the land lift subsequent to a zoning change. To take an extreme example, say there’s a parcel or set of parcels that was zoned for single-family, and then a variance is approved to allow a 20-story tower on it. Naturally, the value of that land has enormously increased as a consequence of that zoning change, and the city has will try to recapture 80 percent of the value of that land lift to use for amenities. That has been the major form of development taxation here for decades.

When people visit Vancouver, they are surprised by the number of parks we have and by the lavish expenditures on public amenities that are very visible in our Downtown. They were all paid for by these fees, not by ordinary tax levies. So this system worked out quite well in the past—until we got to the point where the only thing we were building was luxury housing.

A more recent strategy is to put a 15 percent tax on all foreign purchases, whether new or old structures, in all parts of the city. That has taken some of the sting out of the dramatic increase in the value of single-family homes, which is the kind of housing that has been most attractive to international investors. It has also mitigated the “penthouse market,” a piece of the high-rise market—the most expensive luxury apartments—that was also very attractive to the investment class.

One thing the city has not yet done, which I have advocated, is to increase and rationalize taxes (i.e., make transparent rather than negotiated) on all development. We have the ability to do that through the Development Cost Levy (DCL), which the city can set at any price, and which can be used to support affordable housing. We could use the DCL as a means of gaining enough funds to build, on the back of market-rate projects, public housing that the city would own and run. A transparent DCL at a higher level would get us out of this game of one-off negotiations for goodies that we experience using the CAC tax.

This strategy is a variation of the “Vienna Model”, so called because this is what Vienna has done for decades. The trick is that they tend to tax market development at such a high level—at least high in North American terms—that two things happen: 1) They get an enormous amount of money for public housing, and 2) it decreases the value of the land under the project.

A strategy of taxation that reduces the cost of land does not necessarily increase the cost of housing at the point of purchase. The Vienna model shows that if the city levies a tax of, say, $100 per buildable square foot against a parcel where you could sell a unit for $1,000 per square foot, that will not make the housing more expensive, for the most part. Rather, it will deflate the value of the land under the project.

It has political consequences, of course, but the goal of this model is to devalue land throughout the city—because in reality, we don’t have a high-cost housing problem. We have a high-cost buildable land problem. It’s not housing that costs all this money; it’s land.

Over the last five years, you’ve worked on a number of long-range plans for cities in the Vancouver region. Share the importance of such city visions for addressing the challenges that cities like Vancouver, San Francisco, London, New York, and even Los Angeles face.

In the hopes of inspiring the city of Vancouver to do something forward-looking, beyond the usual five- or 10-year horizons, my colleagues and I at the University of British Columbia took it upon ourselves to do a 2050 vision for the city. But I must say that the city has not enthusiastically embraced what we’ve done.

In the city of North Vancouver, I worked on a 100-year plan that has successfully informed the official community plan. It takes as its objective ensuring affordable housing for the expected tripling of the population in the city over the next 50 and 100 years. Additionally, by the time that planning period is over, the city should be operating with essentially zero greenhouse-gas emissions.

I’ve also had a relationship with the city of Surrey for about 25 years, beginning with a project called the East Clayton Sustainable Neighborhood that was started in the 1990s and is now completed. Recently, I’ve worked with them in the context of their community plan to make the city more sustainable between now and 2060. These projects tend to involve gentle infill densities and adapting existing neighborhoods to new types of communities, particularly immigrant communities.

For example: One piece of the puzzle in Surrey was that the immigrant families repopulating these 1950s single-family neighborhoods were often extended families where cousins, uncles, grandmothers, and grandchildren lived in the same building. The strategy we came up with was to reimagine existing structures on cul-de-sac lots for three to five families, and to allow quasi-industrial uses, such as small welding shops, to occur on the site as well.

Surrey is a very interesting community to work with. It was built in the 1950s to ’70s—a period when everything was auto-oriented—and is successfully adapting its community structure to be more compatible with walking, biking, and transit, as well as a whole different set of family types than it was originally built for.

Where does “sustainability” fit—if at all—into these planning, land use, and housing concepts for Vancouver and adjoining cities?

The city of Vancouver has an ambition to be the greenest city in the world by 2020, and they have a series of benchmarks to assess whether they are successful. They have ambitious benchmarks on urban forestry, recycling, reusing construction materials, and most importantly, getting people out of their cars to walk or bike or use transit. The most notable and controversial strategy is, of course, the addition of bike lanes throughout the city.

This ambition of Vancouver’s is not uncommon throughout our region. Surrey has a sustainability plan called the Sustainability Charterthat has equally ambitious benchmarks, especially around reducing the use of resources and decreasing individuals’ production of greenhouse gases. The cities of North Vancouver and Richmond have something similar. In comparison to other places in North America, the Vancouver region has high degree of success in meeting these green goals.

But Vancouver has also had a very dramatic wake-up call, which is this: It does us no good to be the greenest city on the planet if no one can afford to live here. There has to be coordination between strategies to provide affordable housing and strategies to create a sustainable city.

This coordination brings the citizen—the person—back to the forefront of policy. People need homes, and, secondarily, those homes need to be efficient. People need to get around, and we want them to do so in an efficient and zero-emission way. But the most crucial thing is that people have to actually be able to afford to live in our city.

Are you bullish about the ability of our urban metropolises to address the housing crunch that cities like Vancouver, San Francisco, London, and Los Angeles now face?
No, I’m not bullish. I think it’s a very difficult problem, because underlying it is a structural change in the way global capitalism is working.

What we have now is not just a problem of affordable housing. It’s the fact that the middle class no longer has enough money to buy a house. Co-incidental with the unreasonable increase in the cost of housing is the reduced capacity of the middle class to earn a substantial living.

A living that, in the past, was not such a challenge, is now quite a challenge. For example, in 1992, a baggage handler at Seattle-Tacoma Airport was paid $22 an hour. In 2017, the rate for that same work is $18. This trend is happening in many industries. An often unremarked aspect of the unaffordable housing problem is the fact that people are getting paid much less compared to what they were paid decades ago for similar work.

I feel that we can mitigate the stress created by these structural changes in the global economy by taking a more aggressive posture toward providing housing for people who experience housing stress. The Vienna Model is a good example of that. But the fundamental problem is that there is a flow of money away from the middle class toward the investor class, and that is not a problem that purely housing-oriented strategies are going to solve.

Let’s close with an off-topic question: This issue of TPR covers the news that Los Angeles will host the 2024 or 2028 Summer Olympic Games. As a learning exercise for LA, share your perspective on how Vancouver successfully managed growth and public investment for the 2010 Winter Olympics.

I was quite skeptical about Vancouver hosting Olympics. I was suspicious of the premise that it would be good for the city, because we hear stories worldwide of capital investment in the Games that yields insubstantial returns, and legacy structures that end up derelict. But in the end, it was really good for us.

What made it good was that Vancouver, unlike many other places, was careful to calibrate its investment to things that would be useful after the Games and to take advantage of facilities that were already there. Existing stadiums and local universities, including UBC, were used as venues for activities. The city didn’t add all that much, and what was left behind was useful.

The planners on the Olympics committee collaborated with the planners and operators at our regional transportation agencies. They changed the configurations of some streets, created temporary bus-only lanes, added buses, and so forth—so that, for that four-week period, getting around wasn’t all that difficult.

The Winter Olympics became an occasion for people all over the world to see our city, and boy, was the atmosphere great. We’re a relatively small city, so the arrival of half a million people makes a huge difference. It was a party.

Los Angeles is also planning on using existing facilities, and it will have a very robust infrastructure, so I’m sure you can manage it.

Displacement and Real Estate Profits

55 Dolores Street, San Francisco - Erin Thompson, Compass Real Estate from Circle Visions on Vimeo.

Thursday, August 24, 2017

Senate Bill 35 passing within a week may start unbridled rapid growth in Marinwood

Senate Bill 35 passing within a week may start unbridled rapid growth

Big developments may be coming to Marinwood/Lucas Valley soon if SB 35 passes.

Wanted to alert folks to SF State Senator Wiener's Senate Bill 35 - the innocuously named "Housing Accountability and Affordability Act" - is likely to be enacted within a week. This has potentially radical consequences: - development in all qualifying cities and counties is now "streamlined"-all objections by residents, city council and planning commission are officially bypassed and effectively local control is over-ruled - this applies to all cities with over 2,500 residents AND... - cities that do not build enough affordable housing in each category of "affordable" incomes, few if any cities in our region achieve this. This moves the goalposts away from simply the city have a plan allowing enough units to be built to actually delivering permits allowing building to occur. 

Many cities in the Bay Area have raised objections to this Senate Bill which ostensibly seeks laudable goals of addressing the shortage of affordable housing statewide.
State Senator Mike McGuire nails it by saying: "“Completely taking out the public’s role in this approval process is a mistake,” said Sen. Mike McGuire, a Democrat who represents Marin in the Senate. “I do feel that if the public is never involved in the approval process, that pendulum has swung maybe too far in one direction.”" 

The bill has already passed the state assembly 17 - 5. It only needs to now pass the senate and is on the docket to do so this week, The implications are far reaching: - developers previously hesitant to build will now find all local considerations inhibiting development removed - to qualify new apartment blocks must have no more than one parking space per unit (creating parking over flow issues), it is presumed this will coerce or prevent new residents owning more than one car, which seems unrealistic. - affordable apartment units typically contribute about ~5% per unit to property taxes compared to a single family home owner; so when large numbers of affordable units are added this serves to put further upward pressure on local taxes and services (some of this I agree is acceptable, but SB35 may lead to excessive building and pressure) - only 10% or the minimum prevailing threshold of affordable units need be built (so most new units will be market rate). - units will most likely be taken by well paid SF and peninsular workers who will add to traffic congestion on 101. - building unions have secured wording requiring payment of union wages for buildings of over 75 units in larger cities. With this wording included they have applied pressure for this bill to pass.

Bottom line - where previously local oversight would limit or prevent developers building in flood planes, areas blocking views, causing traffic or parking issues, being built in polluted areas, being overly high or too many units you as a resident will not be able to go to anyone to raise concerns: the mayors, city councilors, supervisors, planning commission will all be powerless. 

You can read the bill text here: I post this on Nextdoor as few know about this Senate Bill and it's far reaching consequences.
What can you do?

Take these ACTION STEPS Re: SB 35

  1. Call Assembly Marc Levine's office and urge him to vote NO on SB35.  Phone: 916-319-2010 in Sacramento or in Marin at 415-479-4920; or email to:  Send a cc to Gov. Jerry Brown at
  2. State Senator Mike McGuire has taken a public stance opposed to SB35. Call to say thanks.  Phone: 916-651-4002 in Sacramento or Marin at 415-479-6612. Or email thanks to: with a cc to Gov. Brown.
  3. Call Governor Jerry Brown's office. Ask that he veto Senate Bill 35 if/when it comes to his desk. Phone: 916-445-2841.
  4. Post info about SB35 on NextDoor.
  5. Forward this post to friends around the state. Urge them to contact their state Senator to vote no on this affront to the public's right to know and determine their own future.

This may be the last time you can voice any concern to a mid rise apartment block going up in your neighborhood. 

Did anyone notice how we, the residents and taxpayers, are the last to know about this?

Citizens object to Plan for High Fees for public records.

Marin County: Furor kills plan to charge for public records

County Finance Director Roy Given. (Courtesy County of Marin)
County Finance Director Roy Given. (Courtesy County of Marin) 

A county proposal to start charging about $114 an hour to respond to public records requests was withdrawn Tuesday after the idea elicited a flurry of public protest.
County Finance Director Roy Given told the Board of Supervisors during its weekly meeting that it was never his intent to charge the general public for information requests under the California Public Records Act or the federal Freedom of Information Act.  See Article HERE
Stonewalling of public information by Marinwood CSD leaves us with little recourse
except a legal remedy. It is madness and likely in violation of the Brown Act to charge exorbitant fees.

How can citizens be informed and educated about their government if only the wealthy have access?

Wednesday, August 23, 2017

Malcolm X on liberals and conservatives

Should we build lots more housing in San Francisco? Three reasons people disagree

Should we build lots more housing in San Francisco? Three reasons people disagree

Some people, such as YIMBYs, advocate building lots more housing in San Francisco. Their basic argument is:
Housing in SF is the priciest in the country, with the average one bedroom apartment renting for over $3,000 per month (compared to the nationwide average of $1,200.)
The main reason rents are so high is because the supply of housing has been artificially restricted — new developments are constantly getting blocked by land use regulations and neighborhood associations. Meanwhile, demand to live in SF continues to rise. And since supply is not keeping pace, rents go up, as a growing number of would-be tenants outbid each other for the limited housing available.
Therefore, it’s important that we find a way to increase the rate at which we’re building new housing in SF, or it will be a city in which only the rich can afford to live.
I’ve been trying to understand why others are critical of this argument. I think there are three main areas of disagreement between what I’ll call the advocates and the critics, and I’ll briefly explain each in turn. (Note that I’m trying to present the strongest version of each argument, which may be different from the most common version.)
Disagreement #1: Would adding new housing have a noticeable effect on prices?
Critics are pessimistic about our ability to rein in housing prices in SF by increasing supply. Some simply reject or ignore the economic argument, and deny that there’s any reason to think supply would affect prices.
But the more thoughtful critics concede the advocates’ basic economic argument — that, all else equal, increasing housing supply should slow the growth of prices. Nevertheless, they’re pessimistic because they hold some combination of the following views:
Effect of supply on price is small. Critics argue that supply only has a small effect on prices, and that effect is swamped in the long run by the much larger effect of demand on prices. So even if SF adds a lot of additional housing, prices will still rise almost as quickly as they would have anyway, as long as demand to live here continues to soar. This view is mainly based on examples of other desirable cities, like New York or Singapore, which have built new housing at a faster rate than SF but nevertheless saw steep increases in price.[i]
Don’t trust studies. Advocates often cite quantitative analyses that try to estimate the effect of supply on prices. (For example, this one estimates that adding 5,000 new units each year would be enough to stabilize real prices.) But critics are more skeptical of such analyses, pointing out that they inevitably make major simplifying assumptions, and that it’s all too easy to set up an analysis to get the conclusion you want.
Effects are regional. Critics point out that the relationship between supply and prices is much weaker at the local level than the regional level. So it’s unclear whether we can reduce prices within SF itself by building more housing in SF. (I think many advocates don’t dispute this, actually — they just reply that reducing regional prices would be a great outcome.)
Induced demand. Critics worry that building new housing could actually backfire by creating new demand. If we build nice new buildings in SF, that will make the city overall a more attractive place to live, causing more outsiders to want to live here, and putting upward pressure on prices.[ii](Interestingly, advocates seem to be split on whether the “induced demand” scenario is incoherentor merely unlikely.[iii])
Disagreement #2: Does new housing help poor tenants?
Many critics argue that any new housing built in SF would be high-end, and therefore only benefit the upper middle class (e.g., programmers at Google and Facebook).
Advocates reply, “No, actually, high-end housing would also benefit poorer tenants.” They make two arguments:
Shifting demand. If wealthy tenants have an easier time finding high-end housing, they’ll be less likely to compete for mid-range housing. That will reduce demand for mid-range housing, thereby reducing its price… And so on, with the effects of increased supply at the top rippling down the spectrum of housing quality.
Filtering. Affordable homes today were once newly-built luxury homes, which then depreciated as they aged. So building expensive new housing now is how we end up with affordable housing in the future. And evidence suggests that the faster we build new housing, the faster existing housing depreciates.
Critics are not very enthused with the filtering argument, because it won’t happen in time to help today’s generation of poor renters. I’m not sure what they think of the “shifting demand” argument, though — it seems like that should affect lower-end housing prices much more quickly than depreciation would.
But critics also worry about new housing actively hurting poor tenants, not merely failing to help them. Their concern here is displacement: poor tenants being forced to leave their current apartments. This could happen directly, via eviction, if an old building is sold to a developer and the current tenants have to leave. Or it could happen indirectly, via gentrification — an influx of wealthy people moving into new housing increases the cost of living in the neighborhood as a whole, making it unaffordable for poor tenants.
Advocates respond by pointing to studies suggesting that adding new housing in a given neighborhood is good for poor tenants in that neighborhood, and actually reduces the number of people who get displaced.[iv] (Presumably because new housing reduces low-end housing prices enough to compensate for any cost-of-living increases and evictions.)
Critics don’t find those studies compelling. Partly that’s because the causal effects are so hard to disentangle, and the quality of the evidence is far from overwhelming.
But they also feel that even if new housing reduces low-end housing prices, that doesn’t easily make up for the harms done to the unlucky tenants who get evicted, and to the communities broken up by those evictions. (Some critics also argue that there’s no justification for building new housing in existing neighborhoods, where poor tenants will be displaced, when we could instead be building on greenfields outside of the city.)
So, to sum up: this branch of the disagreement is partly empirical, over how new housing affects low-end housing prices and the risk of displacement for poor tenants. And it’s partly about values — if we can make a neighborhood more affordable for poor tenants in the long run, but at the cost of evicting some of the pre-existing poor tenants, is that fair?
Disagreement #3: Are NIMBY objections legitimate?
The archetypal opponent of new housing is the NIMBY: a current homeowner, who benefits from development restrictions because they keep his property values high and the character of his neighborhood unchanged.
NIMBYs are being selfish, advocates argue. How can society ask poorer, younger renters to pay more for their apartments, just to protect the property values and aesthetic preferences of (statistically much richer) homeowners?
Critics disagree with the advocates here for several reasons:
Many homeowners are highly leveraged. Critics argue that the way NIMBYs are portrayed, as millionaires complaining about obstructions to their view, understates the potential harm to homeowners. For lots of homeowners, their houses are their main investment, and a highly leveraged one. If we could significantly reduce housing prices, that might be better for everyone overall, but it would deal a big blow to the main investment of a bunch of middle class people.
Neighborhood character is a public good. Critics acknowledge that NIMBYs benefit disproportionately from preserving “neighborhood character.” But they think that, nevertheless, neighborhood character might also be a public good worth preserving for others. Compare San Jose and San Francisco — don’t the ethnic enclaves of the latter make it a more beautiful city to visit?
Incumbents deserve extra consideration. Advocates tend to view the desires of current and would-be residents symmetrically, and say incumbents have no more “right” to live in SF than outsiders. But critics see an asymmetry — they assign value to community, and people’s attachment to place, in a way that advocates don’t. So they think it’s worse to displace an incumbent than to prevent a migrant from moving in (hence their greater concern with displacement, above), and they’re more willing to grant incumbents some right to steward their own communities.
(Thanks to Steve Randy Waldman, Noah Smith, Brian Hanlon, Kim-Mai Cutler, Jan Sramek, and others for helping me get a handle on this issue! Any mistakes are mine alone.)

[i] Advocates and critics often interpret the same case studies differently. For example, in Tokyo it’s much easier to build new housing than it is in San Francisco, and Tokyo’s housing prices have risen much more slowly than San Francisco’s. Seems like a point in favor of the advocates’ case, right? However, the critics counter that Tokyo’s population growth has been declining, so they chalk up the city’s (relative) affordability to low demand rather than high supply.
[ii] There’s another version of this same argument in which all the wealthy people from outside SF moving into new housing here generate more demand for services, causing more lower-income workers to move into the city to provide those services, putting upward pressure on prices of lower-income housing.
[iii] Here’s an argument for why it’s unlikely, paraphrased from Noah Smith and Jeff Kaufman: “Imagine destroying a bunch of expensive apartment buildings in SF. Do you think demand for the remaining housing would fall, because the neighborhood would now be less attractive and current residents would move away? If that seems unlikely to you, then you should also think it unlikely that creating new luxury housing would cause demand to rise.” However, critics don’t buy this thought experiment. They object that there’s an asymmetry it doesn’t account for — that current residents of a city are willing to pay more to stay than outsiders are willing to pay to move there.
[iv] For example, CA’s Legislative Analyst’s Office found “displacement was more than twice as likely in low–income census tracts with little market–rate housing construction (bottom fifth of all tracts) than in low–income census tracts with high construction levels (top fifth of all tracts).” Also see this article by Richard Florida which summarizes some of the studies on new housing and displacement.
Editor's Note:  This is the single best analysis I have read about the Housing Debate raging in Northern California.  It is an absolute must read. Please share. Original article published HERE

Tuesday, August 22, 2017

Lawmaker’s proposal to extend ‘urban’ zoning in Marin

Dick Spotswood: Lawmaker’s proposal to extend ‘urban’ zoning in Marin


“No man’s life, liberty or property is safe while the Legislature is in session.” New York newspaper editor Gideon J. Tucker is as correct today as when he wrote the quip in 1866.

The latest example of legislative perfidy is Senate Bill 35 by Sen. Scott Wiener, D-San Francisco. Its negative impact on Marin, unless altered, is hard to exaggerate.

Frustrated by Marin Assemblyman Marc Levine’s successful effort to define most Marin communities as “suburban” instead of the preposterous state designation of “urban,” Wiener reached in classic bureaucratic fashion by changing definition

SB 35 uses an entirely different geographical term to define communities subject to fast-track, by-right rules fostering high-density housing.

Instead of applying the rules to “urban” communities, Wiener’s criteria is that if even a village is an “urban cluster,” then rules encouraging big-time development without pesky environmental review are applied.

Basically any community outside a county crossroad is an “urban cluster” for the purposes of SB 35 and state housing mandates.

The Census Bureau indicates “an Urban Cluster is a new statistical geographic term ... consisting of a central core and adjacent densely settled territory that together contains between 2,500 and 49,999 people. Typically, the overall population density is at least 1,000 people per square mile. Urban Clusters are based on Census block and block group density and do not coincide with official municipal boundaries.”

Under this definition most of Marin east of Olema and Bolinas is in “urban clusters.” Travel to that bustling “urban cluster” of Woodacre and the stupidity of using this obscure census term to define housing rules is apparent.

It wouldn’t be as bad if Wiener’s San Francisco wasn’t hypocritical when it comes to addressing the so-called “housing crisis.”

High-rise condos and apartments belong in job centers like San Francisco with comprehensive public transit networks.
To see a model city providing high-density housing, much transit and high quality of life, visit Vancouver, British Columbia.

If San Francisco was as committed to housing as it self-righteously claims, it would resemble the forest of high-rises that dominate western Canada’s metropolis. Then the Sunset District’s Taraval Street would be lined with 10-story apartment houses. The untouchable corners of Castro and Market served by four subway-light-rail lines and three bus routes would see 25-story housing towers on each of its five corners.

Even Telegraph Hill could follow another Pacific city that Wiener might emulate: Hong Kong, with high-rises running up the slopes of Victoria Peak.

If Sen. Wiener displays true political courage by suggesting Vancouver or Hong Kong-style development, his San Francisco constituents will see that he soon returns to the dreaded private sector.

North Bay legislators Levine, D-Greenbrae, and Sen. Mike McGuire, D-Healdsburg, should fight fire with fire. Submit an amendment to SB 35 mandating fast-tracking Vancouver-style high-rise residences as a matter of right in urban areas served by subways or three light-rail or bus routes.

That coincidentally defines Castro and Market and St. Francis Circle, next to posh St. Francis Wood, in the city’s fog belt. What’s good for Marin ought to be good for the city’s cherished people-scaled neighborhoods.

Note that SB 35 includes a requirement that for all housing built under its mandates: “The development proponent shall ensure that the prevailing wage requirement is included in all contracts for the performance of the work.”

“Prevailing wage” is legislative lingo for paying all covered workers union scale. Requiring affordable housing be erected exclusively by union workers will result in the units not being “affordable” without taxpayer subsidies.

Drop this political giveaway for state Democrats’ core labor constituency and much support for SB 35 evaporates.  See ARTICLE HERE

Legislation to Fast-Track More Housing Finds Opposition in Marin

Legislation to Fast-Track More Housing Finds Opposition in Marin

Marin County, with San Francisco in the distance, as seen from Mount Tamalpais. (Craig Miller/KQED)
By Guy Marzorati AUGUST 21, 2017

On high-profile bills this year to fix California’s roads and extend the state’s cap-and-trade system, Democrats in the state Legislature have mostly stuck together. And they’ve had some major legislative victories.

That unity will be tested with a proposal to streamline local housing development, one of the most controversial measures pushed by Gov. Jerry Brown and Democratic leaders in their attempt to address the state’s affordable housing crisis.

In the Senate, eight Democrats, mostly representing areas outside of California’s urban centers, declined to support Senate Bill 35. The bill passed with the help of six Republicans votes.

“That to me is positive,” said Sen. Scott Wiener (D-San Francisco), who is carrying SB 35. “We’re putting party aside and treating housing as the nonpartisan crisis that it is for both Democratic families and Republican families.”Sen. Scott Wiener (D-San Francisco), the author of Senate Bill 35. (Bert Johnson/KQED)

SB 35 seeks to remove local roadblocks to building new housing by shortening the review process in communities that have not met goals for developing new homes.

Wiener needs to look no further than just across the Golden Gate Bridge in Marin County to find opposition to the bill within his own party.

There, many Democrats see streamlining as a threat to the power that locals have over developments in their backyard.

“Completely taking out the public’s role in this approval process is a mistake,” said Sen. Mike McGuire, a Democrat who represents Marin in the Senate. “I do feel that if the public is never involved in the approval process, that pendulum has swung maybe too far in one direction.”

The streamlined approach outlined in SB 35 applies to California communities that have fallen short of the development goals outlined in the Regional Housing Needs Allocation (RHNA), multiyear targets compiled by regional government agencies.

Marin was dead last among Bay Area counties in permitting new housing during the last RHNA cycle, according to data from the Association of Bay Area Governments. Just 32 percent of the targeted 4,882 new homes were permitted.

Under the bill, if a housing development fits within existing zoning laws, cities won’t be allowed to put the project through the conditional-use process, in which individual developments can be required to undergo a separate hearing for approval.

Those local proceedings can become an obstacle course in which planned developments are unveiled, dissected, jeered at and often stalled amid an avalanche of neighborhood opposition.

Marinwood resident Stephen Nestel, who authors the Save Marinwood blog, has spearheaded efforts that have held up new housing proposalsand even attempted to recall local officials for pro-development stances.

Nestel’s neighborhood of single-family homes is surrounded by natural beauty: green hillsides, a stream and a shaded park. He moved to the area a decade ago to enjoy the spoils of his surroundings.

“We paid for the open space. This is part of the lifestyle that we have purchased,” Nestel said. “We think that we have a right to maintain it.”

He says Senate Bill 35 is the latest attempt to tamp down neighborhood opposition and to move decision-making away from local politicians who he can reach at a weekly meeting.

“The reason that is so repugnant to me is that it really establishes a right of developers over the local communities’ right to discuss the problems that they’re going to face in adapting to whatever development comes here,” Nestel added.

Nestel and other opponents of the streamlining approach argue that the Bay Area’s job centers, namely San Francisco, should be the areas responsible for building new housing.Stephen Nestel, author of the Save Marinwood blog. (Guy Marzorati/KQED)

“If San Francisco had provided the housing when they gave tax credits for companies to be in San Francisco, then that spillover wouldn’t have been so bad,” said Marin’s Democratic Assemblyman, Marc Levine.

Levine says that Marin’s contribution to the state’s housing stock should reflect the county’s suburban nature. He pushed a budget trailer bill this session that keeps Marin’s “suburban” designation with regard to the density at which affordable housing is required to be built in the county.

“Marin should be designated as suburban, because that’s exactly what we are,” said Supervisor Judy Arnold.

The bill was criticized by a number of pro-development groups in the state who argue that all communities need to pull their weight if California is going to double the number of homes constructed each year. That’s the benchmark the state’s Legislative Analyst Office laid out for California to address its affordable housing crisis.

“While I understand that they want to preserve their small-town feel, you’re not in the middle of Nebraska. You’re part of the Bay Area,” said Laura Clark, executive director of YIMBY Action, a pro-housing advocacy group supporting SB 35.

Mary Murtagh has developed affordable housing in Marin for decades, as president and CEO of EAH Housing. She says the local furor against affordable housing developments has spread into other areas of California where EAH operates.

“Marin is no longer the only place where there is resistance to creating affordable housing,” she said. “The hearings are getting harder and harder.”

Murtagh proudly shows off an affordable housing community that EAH developed in bucolic Larkspur, a collection of one- and two-story buildings tucked into a hillside, with sweeping views of San Francisco Bay.

“Once we actually get something built and people see it, resistance falls away,” she adds. “Until then, there’s a huge element of fear, and it’s just very, very hard.”

Murtagh and local supporters of SB 35 hope that the streamlining proposal will actually serve as a shield for local lawmakers, against the groundswell of opposition that often accompanies individual projects.

If hearings on specific projects are bypassed, “It’s no longer your fault as an elected official,” Murtagh said. “It would take the political heat off of them for doing the right thing.”EAH Housing CEO Mary Murtagh, at the Drake’s Way development in Larkspur. (Guy Marzorati/KQED)

The streamlining proposal is one pillar of the housing solution pushed by the governor and Democratic leadership. SB 35, along with ideas to create new revenue for affordable housing, will likely be taken up before the Legislature’s interim recess in mid-September.

The new Anti-Fascist is so inspiring

Let's Build a Walmart in Marin !

How Walmart Improves the Lives of Everybody, Especially the Poor

I recently had the pleasure of visiting northwest Arkansas. If you have the chance, go—not only to experience the beauty of the Ozarks, but to see the world’s only Walmart convenience store. This store offers groceries, a gas station, and a counter for a local business, Bentonville Butcher & Deli. The difference between Walmart convenience stores and other convenience stores: Walmart prices (read: excitingly low). Those low prices mean that the more these stores spread, the more lives will improve.
I realize that there are ongoing arguments about whether Walmart improves or reduces people’s welfare. For instance, some argue that Walmart reduces the number of jobs in locations where they open, while others find that Walmart creates more jobs overall. Some believe that when Walmart enters a town, competitors are forced to lower worker income or close. Others claim that the benefits of lower prices may result in higher real wages, even in the retail sector. Some write that Walmart costs taxpayers huge sums as their employees receive federal support. Others insist that these programs are operating as intended: boosting employment among low income families who would otherwise be jobless.
While those issues are still debated, one thing is clear: When we have access to cheaper goods, our quality of life improves because we can buy more with the same amount of money. This is especially true for the poor who spend a higher percentage of income on household goods and food. For them, daily savings on these items are necessary for survival. Shopping at Walmart leaves them with more money, which they can use to feed their families, pay for additional tutoring for their children, or work less as they can afford more leisure time. In that way, few forces have improved the lives of Americans, particularly poor Americans, as much as Walmart.

Editor's Note Maybe we should lobby for Walmart in Marin to make the cost of living more affordable. Of course it will never happen but it will be fun to see the reaction of housing activists objecting to the one thing that can help the working poor.- low prices.