Monday, May 28, 2018

Transit Induced Gentrification

Efforts to build housing around transit threaten to price out those most dependent on bus and rail

A San Diego Metropolitan Transit System trolley stops at the corner of Park Boulevard and Market Street in the East Village, where expensive apartment buildings and condominiums stand in stark contrast to the neighborhood's economically challenged residents. (Howard Lipin / San Diego Union-Tribune)
Joshua Emerson SmithContact Reporter

On his way to a doctor’s appointment, Steve Schneider sits at a bus stop in North Park on Tuesday afternoon surrounded by trendy coffee shops, tattoo parlors and mustachioed hipsters sipping craft beer.

The 68-year-old has lived in the neighborhood for 25 years, but in just the last four, he’s seen his rent jumped from $850 to $1,275. As an epileptic on a fixed income, he cannot drive and has recently started to fear he may have to move and lose access to transit.

“I get anxious about it, especially last year when my rent went up, and I thought ‘What am I going to do?’” he said. “That’s when I decided to get rid of my cell phone and go on the food stamps.”

Schneider’s situation could be part of an emerging new trend of bus and rail riders priced out of their communities by the very policies designed to boost transit ridership.

Lawmakers, academics and urban planners from Southern California to Sacramento have long called for building denser housing around transit stops. The idea is to design neighborhoods that encourage people to ditch their car commutes — simultaneously fighting climate change while trying to address the state’s historic housing crisis.

However, efforts to inspire construction along rail and bus lines, coupled with a severe shortage of housing, have brought opulent apartment buildings and condominiums into economically challenged neighborhoods. As young professionals flock to the new housing, moderate- to low-income tenants in urban areas from San Diego to Sacramento are now facing displacement.

Tenants’ rights groups, especially in Southern California, say the trend is already playing out in many communities with serious consequences.The greatest risk is the places that are already showing signs of gentrification. There’s already value in those neighborhoods and the private market has seen.— Miriam Zuk, director of the Urban Displacement Project at UC Berkeley

“You’re seeing families pushed further from transit,” said Laura Raymond, campaign director for Alliance for Community Transit in Los Angeles. “Around the urban core, we still have a lot of low-income families living next to transit-rich areas. They don’t have cars. When those areas are gentrifying, they’re moving out, and it becomes a lot more difficult to access their jobs.”

In the last five years, there were about 400 multifamily buildings completed or under construction within a half mile of a transit stop in the metropolitan areas of San Diego, Los Angeles, Sacramento and the Bay Area, according to data from real estate tracker CoStar.

While the median family income in those neighborhoods was on average less than $64,000 a year, the average cost of a two-bedroom apartment was more than $3,500 a month, according to a San Diego Union-Tribune analysis of Census and Costar data.

And about one in five of those projects are in areas where the median household income is less than $30,000, where the average rent on a two-bedroom apartment is still more than $3,300.

Concerns have become so pronounced, in fact, that academics have given the phenomenon a name: “transit-induced gentrification.”

“Being within a half mile of a rail station, we did see higher rates of gentrification in those neighborhoods,” said Miriam Zuk, director of the Urban Displacement Project at UC Berkeley, who has studied the phenomenon.

“The greatest risk is the places that are already showing signs of gentrification,” she added. “There’s already value in those neighborhoods and the private market has seen that.”

Zuk participated in a report prepared last year for the California Air Resources Board by UC Berkeley and UCLA that tracked demographic shifts around rail transportation in Los Angeles and the Bay Area.

The report found that “transit proximity 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.”

A San Diego Metropolitan Transit System bus travels along Market Street at 13th Street near the 13th and Market apartments in East Village, where rent for a two-bedroom apartment is more than 2,800 a month. (Howard Lipin / San Diego Union-Tribune)

Will building more housing solve the problem?

While the idea that rising housing costs are overhauling the face of many neighborhoods around the state and country, what to do about it, especially in transit-rich areas, has become a hot-button issue in California.

Experts agree that the state’s skyrocketing rents and home prices are largely the result of a massive housing deficit.

In the last decade, the state has added an average of roughly 80,000 new homes annually, far short of the roughly 180,000 needed every year to keep pace with growth, according to a recent report from the California Department of Housing and Community Development.

However, to actually lower the cost of housing, the state would need to add roughly 2.5 million new units by 2025, or roughly 357,000 a year, according to a recent analysis from the University of Southern California.

Perhaps not surprisingly, nobody seems quicker to point out the need for a massive infusion of new workforce housing than the construction industry.

“You can demand transit-oriented development all day long, but it’s not going to house the people that need housing in those areas,” said Borre Winckel, president and CEO of the Building Industry Association of San Diego County. “I’ve never seen this much demand for the middle market. There’s no parallel in history. This is very scary, uncharted territory, and people are not taking this seriously.”

Coalitions of upwardly mobile professionals have formed in just the last year or so to demand lawmakers from city hall to Sacramento embrace policies to inspire new-home construction. These groups have embraced the notion that just dramatically increasing housing supply will bring down the price of homeownership as well as renting across all income levels.

Most notably the newly formed nonprofit California YIMBY — which stands for “yes in my backyard,” a play on the commonly used acronym NIMBY or “not in my backyard” — sponsored a bill in the state Legislature this year that would have bulldozed zoning requirements for density and parking up to a half mile from major transit stops all around the state.

Many academics supported the move enthusiastically.

“What’s really contributing to gentrification is the lack of new housing being built in general regardless of location,” said Ethan Elkind, director of the climate program at UC Berkeley School of Law. “If you don’t build new homes for these newcomers, they’re going to buy up existing homes and start gentrifying neighborhoods.”

However, a recent effort by state Sen. Scott Wiener, D-San Francisco, to loosen zoning regulations and encourage more construction around transit ran into opposition, from homeowners to local elected officials to even tenants’ rights organizations.

Affluent communities have routinely expressed concerns about new housing bringing increased traffic and undermining local aesthetics. More recently, lower-income renters have started demanding policies to prevent renters from being shunted aside in the rush to build housing for middle-class families.

After garnering national attention, Wiener saw his proposal, SB 827, to preempt local zoning rules around transit abruptly killed in its first committee hearing.

The death blow came, somewhat surprisingly, with opposition from rights groups for low-income tenants, such as Strategic Actions for a Just Economy, known as SAJE.

“My group really believe strongly in increased density along transit lines,” said Executive Director Cynthia Strathmann. “We just want to make sure that a big component of that is affordable.”

While Wiener and California YIMBY readily included a number of amendments at the behest of the fair-housing groups, it wasn’t enough to win their support. Backers of the bill are expected to renew their efforts and attempt to build a broader coalition next year.

Transit riders such Richard Krukowski aren’t holding their breath. The 51-year-old survives on disability payments and lives in a studio apartment in San Diego’s rapidly gentrifying East Village. He said he’s looking for a cheaper place to live on the bus line, but hasn’t had much luck.

“Clearly everybody’s concerned,” he said of all his friends in the area, “but pretty much everyone knows how it’s going to go. You’re not going to beat the developers and the big bucks.”

Can government policies ensure affordable housing for all?

Campaigns to bring down the cost of housing are threatening to pit the middle-class residents against the renters.

Right now, a developer who includes affordable housing in a project can get bonuses through the state and local government. Incentives include everything from faster permitting to being able to construct more units within a single building to relaxed parking requirements.

However, many advocates would like to see lawmakers take a more heavy-handed approach, requiring projects around transit stops to include a designated number of affordable units, using what are known as inclusionary zoning ordinances.

Such policies can be effective but they’re not without their consequences, said Casey Dawkins, a researcher with the National Center for Smart Growth at the University of Maryland.

“What tends to happen is you get affordable lower-income housing and you get more expensive unrestricted housing, and it’s harder to fill the middle and achieve moderate income affordability,” he said.

Some neighborhoods would like to see such zoning restrictions aimed at middle-income residents as well.

Under pressure from local residents, the city of San Diego has repeatedly stalled on plans to allow for greater density around planned transit stations that will serve the Mid-Coast Trolley extension, which is under construction from downtown to University City. Such proposals have routinely drawn huge crowds of angry homeowners from Bay Park, Linda Vista and Clairemont.

Recently, however, neighborhood residents have shifted from outright opposition to higher-density development to ensuring that whatever gets built is affordable for working-class people in the immediate area.

“What the community wants is workforce housing, and what the proposals are on the table from the land owners are luxury rentals with ocean views,” said James LaMattery, spokesperson for a group called Raise the Balloon, formed to oppose a city proposal to raise the building height limit in Bay Ho from 30 feet to 60 feet. “The city wants to rezone for more housing but they don’t want to guarantee the appropriate housing.”

LaMattery and others have suggested that developers who build workforce housing should get a break on inclusionary fees, which subsidized housing for the poor.

Therein lies the rub: In the decade or more it could take to erase California’s housing backlog, government policies aimed at controlling costs may result in winners and losers split along economic lines.

“Let’s be frank, there’s sometimes a blindness from the YIMBY crowd about the interests of the low-income tenant community and communities of color,” said Colin Parent, executive director of Circulate San Diego and member of a new local Democratic Party club YIMBY Democrats. “It just doesn’t occur to them that these displacement issues are big problems.”

In the meantime, efforts to enact rent controls are popping up around the state. For example, in National City — where 70 percent of the population are tenants — a signature drive is underway to cap annual rent increases at 5 percent in the city.

Statewide, tenants’ rights advocates have spearheaded a repeal of a decades-old law known as the Costa Hawkins Rental Housing Act, which prohibits cities from imposing rent control on single-family homes, condominiums, as well as any apartment buildings built after 1995.

Supporters are closing in on the 550,000 signatures they need to qualify a measure for the November ballot.

Landlords and developers strongly oppose lifting the restrictions, saying that rent control will only exacerbate the housing crisis. Experts and even progressive economists have agreed.

“It will absolutely interfere with new construction, and that’s the biggest fear we have,” said Debra Carlton, senior vice president of public affairs for the California Apartment Association. “If you can’t make that thing pencil it’s not going to happen in cities with strict rent control. It’s a great way to slow development.”

Carlton added that developers and even large corporate landlords aren’t making huge profits off the current situation.

“Despite what people might think the margins are very slim, because of the cost of land,” she said. “Even those high-end towers have staff costs, attorney costs, not to mention what it cost to buy and build it.”

Will affluent residents ever embrace public transit?

The overwhelming majority of transit riders are people of limited means.

In San Diego, for example, 84 percent of transit riders come from households that make less than $60,000 a year, according to data from the San Diego Association of Governments. And roughly 80 percent of riders are dependent on transit as their primary means of transportation.

A study in January from the UCLA Institute of Transportation Studies found that ridership of public transportation in Southern California had dipped as car ownership, especially among lower-income residents, increased.

After working her full-time job at a local coffee house in North Park, Wendy Islas drives with her husband to their home in Mexico, where they moved to save on rent. (Nelvin C. Cepeda / San Diego Union-Tribune)

Wendy Islas, for example, moved with her husband to Rosarito in January to avoid the rising cost of rent in her La Mesa neighborhood. For her it made more sense to trade a bus commute to the North Park job where she works for a more than hour-long drive by car.

“We’re trying to save money to buy a house, but if we kept living in San Diego it would be impossible,” said the 30-year-old San Diego native. “It’s tough right now because we have to wake up at the crack of dawn.”

An improving economy and cheap gas likely fueled the trend in falling transit ridership. But even as prices at the pump rise, some fear displacement of transit’s core patrons will continue to exacerbate challenges for systems around the state.

Even some of transit-oriented development’s biggest supporters have recognized the irony of the situation.

“The real story is those people that move into the high-density areas take Uber and Lyft not buses,” said architect-developer Jonathan Segal. “That’s the irony.”

Segal is no stranger to the changing dynamics of urban neighborhoods. He has built several critically lauded projects in North Park and Little Italy focused on invigorating street life.

He said that while newly arrived residents in these area may not be taking transit, he’s not giving up on his vision, which he believes still encourages people to drive less.

“Because it’s in a dense corridor, all the amenities come with that, like bars, coffee shops, the drycleaners,” Segal said. “So you don’t have to drive to Fashion Valley to see a movie.”

He might be right.

Findings from the Urban Displacement Project at UC Berkeley and UCLA have found no correlation between displacing transit riders and higher rates of overall driving in a region.

According to the report there is “little evidence that (vehicle miles traveled) would be affected by displacement unless it is accompanied by a loss of population near transit.”

The study found that lower-income residents drive less than more affluent households regardless of how close they are to transit, while higher-income residents tend to use their cars more infrequently the closer they are to a rail station.

Of course, that doesn’t mean that those residents are commuting to work using bus or rail systems.

Transit-rich San Francisco is the exception, with slightly more people biking, walking and taking transit to work than driving, according to Census data. But in San Diego County, for example, 85 percent of workers 16 years and older still drive to their job.

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