California housing crisis

The Fight Over SB-827 Shows Why We Need a Massive National Plan for Housing — Again

The Williamsburg Houses (1938) still provides 1,630 homes for 3,121 New Yorkers. (nycarchitecture)

The Williamsburg Houses (1938) still provides 1,630 homes for 3,121 New Yorkers. (nycarchitecture)

This week in California, public hearings have begun on SB-827, the bill (which is a series of bills actually) proposed by State Senator Scott Weiner from San Francisco which calls for a radical realignment of housing policy away from single-family car-centric development to multi-family transit oriented development. It didn’t take long for it to get ugly. The battle lines for and against the bill have skewed the typical partisanship we’ve come to expect in American politics, pitting NIMBYists (homeowners, many of whom would otherwise lean progressive) against YIMBYists (a wider range of pro-market and even anti-market interests). It will absolutely get uglier.

That’s because the stakes couldn’t be higher. Along with California, the entire nation has been locked in an unprecedented affordable housing crisis and to solve it someone has to lose — big. Until that reality is faced, this crisis has no end in sight. 

The housing crisis won’t end until we stop calling it a housing crisis and start calling it what it is — a crisis of capitalism in housing. 80 years of housing policy that viewed it as a form of wealth creation has severely damaged our communities and our economy. It has racially stratified our society and left millions behind. It has ecsaserbated our climate’s instability. 

If we want to “fix” the housing crisis we need to fix capitalism. In the long run that means changing how we view — and finance, build, and use — housing. That obviously won’t happen over night. But we can start by looking at how we solved previous housing crises in the US. 

When has the market solved a previous housing crisis? Never. 

The scale and length of the current housing crisis is unique in American history, but housing shortages are not. What is also unique today is the lack of national policy initiatives to fight it. 

Many people (including many supporters of SB-827) will argue that we don’t need national policy. We justt need to unleash the free market to match supply with demand. That’s a nice idea, but we’ve tried that before.

New York City is the perfect example of what happens when you rely on the market. From 1890 to 1920 the city’s population grew from 2.5m to 5.6m due to a massive wave of immigration. The unregulated housing stock at the time was already overwhelmed and hellish (the tenement-dominated Lower East Side was the one of the densest areas on earth) but it couldn’t keep up with such a huge population increase. Even as the city physically expanded and private development sprung up further from lower Manhattan, adequate, affordable housing was hard to find the majority of the population.

There was minimal government intervention in housing at the time — this was pure market. It was before land use, occupancy, or even fire safety regulations let alone government sponsored housing. The city did however finance rapid transit, thereby indirectly subsidizing the construction of new housing on vast tracks of cheap green development in the boroughs— yet at no point was the private market willing or able to create enough affordable housing for the growing city. Expensive slums still persisted.

It should be noted that the federal government did build public housing during the tale end of this period in other parts of the US. During World War I, a massive influx of labor around war time production put a severe burden on port and industrial cities’ housing supply, causing inflation and price spikes. (A large part of this influx was the beginning of The Great Migration, which saw over 6 million African-American families move from the rural south to the urban north and west.)

The federal government built thousands of housing units for workers — although many of them were purposefully constructed as temporary to avoid angering local real estate interests who lobbied against the effort even during wartime. The market was and never will be interested in meeting demand.

How were previous crises solved? The federal government.

The housing crisis in NYC continued even in the boom years of the 1920s and came to head during the Great Depression. Millions of Americans lost their homes (whether they owned or rented) and were forced into dangerous tenements or shantytowns known as “Hoovervilles.” The market ceased to exist in any conventional sense.

Famously, President Roosevelt was able to enact the New Deal, which was a set of legislation that radically changed the relationship between the federal government and the economy. The two housing bills of 1934 and 1937 were, ultimately, a mixed blessing.

On the positive side, the scale of the Depression obliterated the ideological arguments against intervening in the housing crisis and spawned the first wave of public housing construction across the country. In conjunction with local governments, the federal government sponsored thousands of modern, clean housing complexes — in cities and in more rural parts of the country. Millions of Americans — the majority of which were middle or working class — received access to affordable housing never seen before.

On the negative side, the New Deal legislation racially segregated public housing and in fact displaced many communities of color to build public housing for white residents.

Even more damaging in the long the run, this was the beginning of massive subsidies for single-family housing. Originally conceived as a construction industry bail-out, the Federal Housing Administration would set the precedent of backing mortgages (for whites) that evolved into Fannie Mae and Freddie Mac.

These policy decisions have shaped the physical definition of America and the social and economic destiny of all Americans. It is no stretch to say that these polices set the country on a course that would inevitably lead to our current crisis. 

This time must be different. 

It’s fascinating and heartbreaking to think about what could have been different. Had the federal government intervened with public housing sooner, at the beginning of the 20th century, would it have demonstrated its value in different, smaller scale models that could have gained more political currency? Could the federal government have intervened by creating more mass transit and denser suburbs before the advent of the automobile? Could the it have avoided the racism that doomed a large segment of Americans and cities for generations?

Could we have avoided the tragedy of building our national and personal economic prosperity on homeownership? 

These questions are important to ask because we must learn from the past if we are to truly solve this housing crisis. The short answer for all of these are yes, if we valued the public good over private interests. If we valued democratic outcomes over market outcomes. If we valued shelter before wealth. If we stopped equating the market with virtue or even basic efficiency.

It starts by learning the lessons from the fight over SB-827. Homeowner interests can not come before the public interest. Local towns can not implicitly segregate themselves through down-zoning — at least near public transit (and extend that publicly-funded highways.) Special interests can not kill the democratic process.

Next, it means avoiding the failed lessons of relying on the market with minimal regulation from the early 20th century and avoiding the failed lessons of the New Deal focus on homeownership and slum clearance as national policy goals. We need more public housing in addition to more density. This is the only way to ensure that displacement doesn’t ruin another generation of low-income families chances of mobility. 

It means addressing the bigger problems inherent in our choice to make homeownership a priority because it drives wealth creation. There is nothing wrong with promoting homeownership, but doing so by warping the true cost of it is irresponsible. We learned that during the Great Recession and then quickly forgot it. We must finally address this at the national level. 

Finally, we must address the larger errors within capitalism that have warped what a home is. We can’t allow homes to be speculated on by private equity firms, international investors, or even flipping enthusiasts. Homes are for living in, not extracting profit from. 

We can’t allow homes to be the sole or majority source of a household’s wealth. It’s no wonder that homeowners freak out about potential risks to their home values — for too many Americans their perceived value is their only economic security. That is absurd and will likely trigger another major economic crisis in the years ahead. 

The only way to do all of this is for the federal government to intervene with the resolve of a national emergency. We must push for our elected officials to make the difficult decisions and political sacrifices to ensure that Americans can find affordable housing everywhere. The stakes are clear. The costs of inaction are clear. The way forward remains unclear.

Why Tenants Everywhere Should be Excited About the California Housing Proposal

The status quo must change, and maybe it is (mercurynews)

The status quo must change, and maybe it is (mercurynews)

Recently, Scott Weiner, a California state senator from San Francisco, proposed several truly radical housing bills. One would remove local land-use controls and establish density minimums around transit, one would create more worker-specific housing, and another would reshape how local data gets used to determine housing allocations. All three would basically do the opposite of what California has done over the last half century and represents a truly exciting reboot for housing policy with implications beyond the state.

Of course, radical change brings lots of resistance, especially from homeowners. Without being familiar with California politics, I can’t speak to the chances of these bills passing, but in a very important way, it doesn’t matter. At this stage in the affordable housing crisis, the fact that such a radical bill has entered the discussion in California should have tenants everywhere excited.

That’s because the most important part about these bill proposals is how radical they are. Housing advocates need to reject the housing policy status quo. Namely, we must evolve away from deferring to the market worship that frames every discussion (which needlessly creates economic and political winners and losers that harm the public interest) and instead embrace larger principles like housing as a right, which creates a shared vision that strengthens the public interest.

You do this by actually proposing huge, far-reaching visions for housing and outlining simple, clear goals that can achieve them. Senator Weiner has made an important contribution to this effort and, perhaps, has shown the way for more state leaders to follow. Here are three key ideas:

  1. Rolling back the power of homeowners

The first bill, SB-827, would supersede any local development restrictions about height and density close to public transportation centers. I’ll talk about the transit next, but the most important aspect of this bill is creating the precedent to override the power of local homeowners to block development in their cities or towns in the interest of creating more affordable housing.

I’ve written a ton about how policies favoring homeownership have been adisaster for the US. They were demonstrably based on racism; they created shocking economic and social inequalities; and they have caused lasting environmental damage that has also paralyzed our built environment.

All of these problems have manifested into the repressive, anti-democratic power that homeowners have to prevent development near them, which hurts all non-homeowners (and some less connected homeowners). Nowhere has this been worse than in California, where low-density single-family housing still dominates most of the state, especially in economically productive places like Silicon Valley.

Because we treat housing more like an asset than a consumable good, homeowners are incentivized to protect/promote the value of their property. This almost always means restricting what gets built around them out of fear that it would lower property values. And this almost always means passing highly-restrictive land-use policies that go far beyond their original intent of protecting people from pollution, noise, or other nuisances.

These policies typically favor ownership over renting, low-density over high-density, and restricted development rights over as-of-right development. Often they are presented as benign intentions towards preserving the character of the neighborhood, controlling traffic and road safety, or maintaining neighborhood control. But, at its core, they are about protecting or enhancing the wealth of a few incumbent property owners.

The end result is homeowners, through pliable or aligned local governments, are allowed to veto development (public or private) and to block other people from living in their communities. Especially in places like Silicon Valley, thiskills the economic and social mobility that has defined American opportunity in previous generations.

SB-829 will be the biggest political fight of the three bills because it attacks the largely-accepted concept that homeowners have the divine right to dictate development in their towns or cities. But overcoming this misguided and abused view is the first dragon that must be slain to change the housing debate in the US.

2. Combining housing policy with transportation policy

In addition to overriding local land-use control, SB-827 creates a proper incentive (indeed, a mandate) to build close to public transportation. Under the proposal, developers can build tall buildings, denser streetscapes, and fewer parking options as-of-right within 1/2 mile of transit stations or 1/3 mile of frequent bus routes. In fact, the proposal has mandatory minimums for heights and density in these zones.

This has an obvious virtuous cycle. Public transportation is designed to support high-density populations. The more you can build around it, the more people will use it, and the more an area will prosper (see NYC). This creates a more diverse housing stock which allows a more diverse group of people and businesses to cluster in more parts of the state. It’s estimated that the proposal could create an additional 3 million units in these zones across the state. That would almost single-handedly solve the affordable housing crisis in California.

As much as California is portrayed as a car-crazy, traffic-inundated dystopia, this bill rightfully recognizes that many major urban centers already have extensive transit systems or at least the foundation for them. However, ridership on the Metro, BART, and Caltrain, are all declining. This is because the lack of density near lines and stations severely limits these systems’ viability for many residents. If you have to drive to a transit station, you might as well just keep driving to your destination.

With this bill, more people could live closer to these already-functioning stations. Increased ridership and development would create more incentive to invest in and expand these systems across the state. The environmental and social benefits of reduced car dependency would have its own virtuous cycle.

The importance of thinking about housing policy and transportation policy together is the larger principle articulated in this bill and it should be central to all housing advocates’ arguments. Whether you are making a moral argument or an economic argument for housing, transportation should be central to it.

3. Helping every type of tenant and holding every type of town accountable

SB-827 is getting a lot of attention, but the other two bills both have far reaching implications for building more housing for more types of tenants. SB-829 allows farmers to use parts of their land to develop worker housing as-a-right. SB-828, changes the standards for how each city/town collects data required for affordable housing allotment. In both cases, this shows that a comprehensive housing vision can help all constituencies, especially under-represented tenants.

Agriculture makes up a huge part of the California economy. (It shouldn’t, but this isn’t the time/place for that argument, see Cadillac Desert). This requires a considerable amount of low-income, seasonal labor that falls on immigrant (and in some cases, illegal) working populations that deserve, safe, affordable housing too. Many rural communities resist worker-housing for the same NIBMYist reasons (and in some cases, racist reasons) that bigger cities resist density. Senator Weiner is showing a crucial, broad commitment to higher principles of affordable housing that aims to reach all tenants.

SB-828 goes a step even further by changing how housing goals are determined for each city and town through the Regional Housing Needs Assessment (RHNA). Currently, this system is easily gamed by many wealthier towns that get lower allotments while poorer, less connected cities or towns get a higher allotment. This allows some towns to escape development, while raising displacement pressure on others.

The bill would create a streamlined, consistent data collection and analysis process that would create more equity in development across the state. Development can’t just happen near transit centers and can’t just happen near easily-displaced populations. It must be spread across all communities, especially in wealthier ones.

I hope that these bills get serious consideration in Sacramento. There are many reasons to support them and many allies in the state to help do so. Even if they fall short right now (which is no sure thing) they have begun the bigger process of reframing the housing debate in the state that might be suffering the worst from the affordable housing crisis. The rest of us should take noticeand start forming similar plans in our own backyards.