Sunday, January 10, 2021

Marin Voice: Housing rules allow corporate raiders to attack communities

 Marin Voice: Housing rules allow corporate raiders to attack communities

By Susan Kirsch, January 7, 2021

Scaffolding surrounds homes under construction at the Atherton Place development in Novato, Calif., on Tuesday, Oct. 27, 2020. (Alan Dep/Marin Independent Journal)

Most agree that meeting state housing needs shouldn’t take away local control. Yet this is the trend driven by corporate raiders with their sights on accumulating community housing wealth.

In the 1980s, a ruthless type of corporate greed emerged. Corporate raiders took advantage of lax regulations to target “undervalued” companies. Using hostile takeovers, corporate raiders acquired and broke up companies, stripped assets and drained capital reserves. While companies and communities suffered, the raiders walked away with profits. The abuses are documented in books like “Barbarians at the Gate: : The Fall of RJR Nabisco,” by Bryan Burrough and John Helyar.

During that time leading up to the financial crisis of 2008, predatory bankers were the raiders. They created a housing crisis by alluring first-time home-buyers with no-money-down loans and deceptively low initial interest rates. Inevitably, when balloon payments came due, banks initiated an avalanche of foreclosures that shattered thousands of American dreams.

Like the 1980s, individuals and communities suffered while the wealthy thrived. Author Aaron Glantz documents this shameful story in “Homewreckers: How a Gang of Wall Street Kingpins, Hedge Fund Magnates, Crooked Banks, and Vulture Capitalists Suckered Millions Out of Their Homes and Demolished the American Dream.”

The corporate-induced 2008 housing meltdown started a downward trend. California’s average ownership rate dropped from 60.7% in 2006 to 54.8% in 2019.

Today’s raiders are aided by California state legislators and “Yes, in my backyard” cheerleaders who back a national YIMBY bill. This time, corporate housing raiders, with buy-in from legislators, have targeted single-family homes, the airspace and land the homes sit on. These are the new “undervalued assets.”

A New York Times magazine article published March 4 describes a $60 billion housing grab by Wall Street whereby hundreds of thousands of single-family homes are now in the hands of giant companies who squeeze renters and wreck the dreams of home ownership.

The brazen housing raiders of today put the home-owning middle class, those who aspire to join it and communities at risk. The crisis we face is mistakenly called a housing crisis, but the real crisis is legislation that elevates developer/investor rights over the rights of constituents and community.

In California, not everyone agrees we have a housing crisis. Research by the Embarcadero Institute shows the state’s claim we need to produce 3.5 million housing units is wrong. They also show that the regional housing need allocation (RHNA) quotas assigned to each jurisdiction are inflated, prompting 60% of Orange County cities (21) to formally challenge the allotments.

Legislators’ failure to address fair wages and taxes, income disparity and wealth distribution has created the “affordability” crisis. The 64 housing bills passed in the past four years don’t address affordability, nor do they provide funding to build housing.

When legislators accelerate corporate raiders’ opportunities to buy homes and build density, the scales can tip from a middle-class society of homeowners to a disenfranchised society of renters and increased homelessness. Corporate landlords profit while communities struggle to provide safety, water, sewers and parks.

Legislators like Toni Atkins, Lorena Gonzales, Nancy Skinner and Scott Wiener elevate the rights of developers over community wellbeing. In December, Wiener introduced State Bill 10, which would allow cities to change the zoning of single-family neighborhoods to accommodate 10 units of housing on a single-family lot.

Wiener calls it “gentle density.”

There’s nothing gentle about it. The inflated RHNA numbers set cities up for failure, mandating hundreds of housing units in cities with nowhere to build and no money to subsidize building. If cities fail to meet the unrealistic RHNA numbers, a heavy-handed law passed in 2017 (SB 35) will kick in that dismisses community values and voices so developers’ projects “pencil out.”

Empowered communities provide housing. Misguided legislation that allows developers to set the housing rules adds another dark chapter of corporate raiders confiscating community wealth.

Locally elected city councils, homeowner and neighborhood associations, as well as community groups, are the bulwark that protect caring communities against unhealthy density.

In 2021, stand up to legislators who support corporate raiders and work to protect caring communities.

 Susan Kirsch, of Mill Valley, is a community organizer who was 2020 chair of the Nix-the-Nine Campaign. Email