Author: saveurvoice

Note from Our Neighborhood Voices: This Letter to the Editor was submitted by supporter and Los Altos resident Pat Marriott, and published on SFChronicle.com.

Regarding “Did one of California’s biggest new housing reforms go too far?” (Open Forum, SFChronicle.com, Nov. 20): Gov. Gavin Newsom signed over 50 housing bills this year, but that’s just the tip of the iceberg. For the mind-boggling five-year total, see Alfred Twu’s excellent summaries at https://tinyurl.com/atwuhousingbills

Our representatives compete to pass the most housing laws without any analysis to gauge their effectiveness. Chris Elmendorf’s Open Forum points out the unintended consequences.

It’s the Winchester Mystery House school of planning and it’s not working. In March, Ben Metcalf, managing director of the Terner Center for Housing Innovation at UC Berkeley, told state legislators, “We’re coming up short” on meeting the state’s goal to build millions of new homes in the next decade.

We need a cohesive housing plan based on reality: The cost of building one affordable unit is $500,000 to $1 million; even with incentives, market-rate developers provide very few of them; public housing can only be built with public money, yet Newsom vetoed many bills for funding low-income housing.

Until we attack the housing problem with logic instead of political grandstanding, we’ll get gentrification, 50-story towers near the beach and the poor will still be left homeless. 

Pat Marriott, Los Altos

Amid a crisis in affordable housing, the century-old ideas of Henry George have gained a new currency.

By Conor Dougherty

When Mayor Mike Duggan talks about his accomplishments in Detroit, the list is both impressive and sad. He had the streetlights turned back on, and reopened closed parks. In the decade since he took office, the city has demolished some 25,000 blighted homes whose rusty debris and incubation of crime drag down neighborhoods.

The progress would be even greater, the mayor argues, if the city hadn’t been smothered by speculation. In the years after the Great Recession, tens of thousands of Detroit properties were bought by absentee landlords and faceless LLCs. The owners are so negligent and hard to find that the city mows their lawns without asking.

Mr. Duggan gets angry discussing the subject. In speeches and community meetings, he paints a stark, moralized contrast between the businesses that invest in jobs and the sit-and-wait landowners whose paydays rely on others’ efforts.

“Blight is rewarded, building is punished,” he said in a recent speech, repeating it over and over for emphasis.

The refrain is a windup for Mr. Duggan’s scheme to fix the blight: a new tax plan that would raise rates on land and lower them on occupied structures. Slap the empty parcels with higher taxes, the argument goes, and their owners will be forced to develop them into something useful. In the meantime, homeowners who actually live in the city will be rewarded with lower bills.

“The phrase we use is ‘Land should eat,’” Mr. Duggan, 65, said in a recent interview at his office.

Seemingly without knowing it, Mr. Duggan, a Democrat in his third term, was espousing what generations of policy minds consider one of the best ideas nobody will listen to: the land-value tax.

The notion that land is an undertaxed resource — and that this distorts markets in destructive ways — unites libertarians and socialists, has brought business owners together with labor groups and is lauded by economists as a “perfect tax.” And yet despite all that agreement, there are just a handful of examples of this policy in action, and none in America that match the Detroit proposal in scale.

This is at least in part because the land-value tax has historically been associated with Georgism, an ideology whose adherents are regarded as the tinfoil-hat-wearers of economics. Strict Georgists don’t just believe land-value taxes are a good idea; they believe that if America were to throw out all taxes, then replace them with a single land-value tax, it would end poverty and recessions for good.

The fundamentalist version of Georgism, like the fundamentalist version of anything, is plainly unrealistic. But the broader Georgist framework is full of insights about urban economies and how to improve them.

Over the past year, Daryl Fairweather, chief economist at the real-estate brokerage Redfin and one of the most widely quoted voices on the housing market, has become one of the land-value tax’s most outspoken advocates. She trumpets the policy on podcasts, headlines panels with names like “the tax policy that can fix housing” and tweets memes of President Biden in front a whiteboard with the words “land-value tax” on it.

In an interview, Ms. Fairweather said she did not consider herself a Georgist, single tax and all that, but said land-value taxes were so smart that one of her favorite parts of arguing for them was they allowed her to “always be right.” They encourage housing development instead of discouraging it, she noted. They don’t discourage work or investment, like taxes on income and capital gains. They’re also hard to dodge, since land is hard to move.

“It’s like there’s this tool in our toolbox that could help solve a lot of our problems, and we refuse to pick it up,” Ms. Fairweather said in an interview. “If more people understood how useful this was, they would advocate it.”

Strong feelings about land taxes are something the American public used to have. Georgism gets its name from Henry George, who in the 1890s turned a book, “Progress and Poverty,” into a populist movement. George’s argument was that since land derives most of its worth from its location and the surrounding community, that community, and not the owner, should realize most of the benefits when values rise. His fix might sound wonky — tax the value of land but not improvements atop it — but it made him a celebrity in the 1890s.

There used to be Georgist newspapers. There are still Georgist foundations, Georgist conferences and Georgist schools. If you’ve ever played Monopoly, you have been unwittingly George-pilled: A Henry George fan invented the board game, in hopes of spreading his teachings.

Over the past few decades, as Georgism has faded from a mass movement to a relic, the ideology has been carried on by clubs and nonprofits whose dwindling membership was mostly composed of old men.

But amid a continuing crisis in affordable housing, a generation of young professionals has burrowed into housing policy, and gotten interested in the YIMBY movement, for Yes in My Backyard, that advocates for denser neighborhoods and zoning changes. As YIMBYs have grown from a curiosity to a legislative force, a subset of them and others who are angry about the cost of living have discovered Georgism. Suddenly there are organizations like Young Georgists of America, modern-day pamphlets like the Henry George podcast and the Progress and Poverty Substack, and an agreement that the shoshinsha emoji (which looks like a shield) is how Georgists will identify themselves online.

Young and old, Georgists come across as both radical and refreshingly pragmatic. They are interested in a specific problem: the cost of land and housing. But they embed that within a worldview that seeks to balance morality with commercial growth and rejects off-the-shelf -isms (capitalism, socialism, libertarianism) as unsatisfying or incomplete. Most are progressive liberals, while some lean libertarian. Their desire for an alternative makes them sound rational in some cases (land-value taxation is a good idea) and bizarre in others (we should get rid of every other tax).

Mayor Duggan knew none of this. When I asked him if he’d heard of Henry George at the beginning of our interview, his answer was “nope.” He was surprised to learn that he had become something of a Georgist hero, and that his plan was being cheered as a step toward restoring Georgism to the American conscience.

“This isn’t any deep philosophical movement,” Mr. Duggan said. “I’m trying to cut taxes.”

‘You Are Welcome Hither’

Driving along woodsy back roads in a Model A Ford, Mike Curtis, an 81-year-old retired arborist, seemed to be winding through a portal to the Georgist past. A third-generation member of the movement, Mr. Curtis used to work at the Henry George School in Philadelphia and lives in the Village of Arden, in Delaware, a sort of Henry George colony founded in 1900. (The motto is “You Are Welcome Hither.”)

The drive was the final leg in a morning-to-afternoon tour that included a stop by the Henry George Memorial Green and a walk through the outdoor theater where village founders staged Shakespeare plays. (“They figured if you could be comfortable onstage and project your voice to a crowd, what better way to prep yourself to talk about Henry George?” a guide informed me.) We ended at Mr. Curtis’s house, where the décor has a theme: There are single-tax posters, a Henry George light switch, Henry George quotes, Henry George mugs and a shelf of home videos with titles like “Law of Rent,” “3 Land Value Tax Movies” and “Taxes-Taxes-Taxes.”

Born in 1839 in Philadelphia, George — a self-made man without a formal degree in economics — started his swashbuckling career when he left home as a teenager to work on a ship headed to India. He acquired a pet monkey at port and returned home with scenes of poverty seared into his brain. (“One feature, which is peculiar to Calcutta, was the number of dead bodies floating down in all stages of decomposition,” he wrote in a journal.) What he saw in India helped inspire his theories on growth, but it wasn’t until George sailed to California — where, after brief run of gold prospecting, he settled in San Francisco and became a journalist — that these ideas found their full expression.

The central question of George’s writing was why rich cities seemed to create poverty instead of ameliorating it. In “Progress and Poverty,” published in 1879, George blamed rising land values and laid out the single-tax proposal as a cure-all.

Henry George did not invent land-value taxation, but he unquestionably was the idea’s greatest popularizer. With mix of wit and fury, and a whole bunch of exclamation points, his writing portrayed speculators as societal leeches grifting the city, profiting by doing nothing at all: “You may sit down and smoke your pipe,” he wrote in “Progress and Poverty.” “You may go up in a balloon, or down a hole in the ground; and without doing one stroke of work, without adding one iota to the wealth of the community, in 10 years you will be rich!”

By the end of the 19th century, George’s books had sold an estimated five million copies. George returned East and used the single-tax platform to run for New York City mayor, twice. He placed second in his first campaign in 1886, then ran again in 1897 but died four days before the election.

The great trick of Georgism is that it manages to sound capitalist (just one tax!) and socialist (speculation is bad!) all at once. “Progress and Poverty” found a natural audience in an emergent class of artisans, which included printers, journalists and lawyers, who were the 19th century’s version of knowledge workers, said Christopher W. England, a lecturer at Towson University in Maryland and the author of “Land & Liberty,” a new book on the Georgist movement. But the movement also had wealthy adherents, like Joseph Fels, a millionaire soap manufacturer who had an obvious interest in lower taxes and was a generous funder of Georgist causes, including the Village of Arden.

Mr. Curtis’s family members, while not numbered among Arden’s founders, were fixtures of the movement: His grandfather worked on Henry George’s 1897 mayoral campaign and was there when George died. He met Mr. Curtis’s grandmother at a Georgist event, and they married on George’s birthday.

“So when you say ‘cult,’ it was kind of like that,” Mr. Curtis said.

Today, Arden is one of three neighboring villages (Arden, Ardentown, Ardencroft) that try to live by George’s teachings, through a structure in which each town’s land is held in a trust, and lots are leased to residents. They pay a tax on the value of their plot, but nothing on improvements.

Georgism started to fade in the 1920s as the automobile pushed down land values by stretching the limits of urban development. In the next decades, homeownership exploded into the apex symbol of a thriving middle class. The phrase “land-value tax” has come to sound suspiciously like “higher property tax,” making the politics even more difficult.

Mr. Curtis has spent the better part of his life proselytizing about land taxes but lamented that even in his hometown, Arden, most people are somewhere between ignorant and indifferent to Henry George. Most of his work now occurs in a home office with five printers. That’s where he runs the Henry George Academy’s incarcerated student program. Mr. Curtis mails lessons based on “Progress and Poverty” to inmates in state and federal prisons, grades the papers they send back and then mails a certificate upon completion.

“When I’m gone, at least somebody will have known the thesis of Henry George,” he said. “I wasn’t just talking to myself.”

Land Is a Big Deal

When modern Georgists describe their descent into the wormhole, the journey sounds like a healthier, nerdier version of the route to QAnon. “I think one day I just typed ‘Why do the suburbs suck?’ into Google,” said Nia Johnson, a 29-year-old consultant focused on start-ups and consumer technology.

The Googling led to a TED Talk on suburban design, she said, which led to urbanism Twitter, and to following various YIMBY accounts. She started tweeting about zoning policy, and then one day a social media follower said she sounded like a Georgist, which led to another Google search.

“And I was like, ‘Oh, my God, yes,’” Ms. Johnson said. “Once you learn about it and understand it, you see how every almost everything about our economy and our society that is crappy can be attributed in some way to poor land use.”

Ms. Johnson, like many of the new Georgists, fits a certain archetype: She’s young and loves cities, but she wishes they were less expensive to live in.

For her, Georgism isn’t a full platform — Ms. Johnson, like Ms. Fairweather of Redfin and most of their cohort, doesn’t believe in a single tax, for instance. Instead, it represents her aspiration for something different: better housing policy, and the idea that social welfare and market capitalism don’t have to be in opposition.

Like a lot of the new Georgists I spoke to, Ms. Johnson discovered Georgist ideas during the pandemic, which seems to have been an ideal vector for the ideology’s spread: There was an audience of professionals with high rent, stuck inside, watching home prices soar, with the time to go deep on a 19th-century thinker. In 2020, Astral Codex Ten, the futurism blog widely read in Silicon Valley circles, published a series of guest blog posts on Georgism that were so popular they were compiled into a book, “Land Is a Big Deal.”

From Delaware to California, every Georgist I talked to was closely following Detroit. Mr. Duggan’s proposal, while a long way from full-blown Georgism, represents something the movement hasn’t had much of: the hope of a real-world victory and a chance to show how land-value taxes can solve an actual problem — in this case, blight.

Detroit, for all its problems, is more hopeful today than it has been in decades. Will it ever again be the Detroit of the 1950s? Probably not. But to someone walking around downtown, past new cranes, new restaurants and a new Gucci store, it’s clear that the nadir of the Great Recession is comfortably in the past.

The problem is that in the years after the downturn, investors bought large swaths of the city and have mostly just sat on it.

From 2011 to 2015, about 100,000 properties — more than a quarter of the Detroit lots — were auctioned in tax foreclosures, according to Regrid, a Detroit-based provider of parcel data nationally. They weigh on the city’s progress and produce a stream of sad stories, like the one about a grandmother who was evicted from her home and moved to a van across the street, but continued to mow the lawn because she cared about the neighborhood.

Mr. Duggan refers to vacant properties as “lottery tickets.” They can be bought for little and held for little — some lots have taxes as low as $30 per year — but have a huge potential payoff, usually because someone else wants to invest. (Speculators recently made money after the city bought out vacant lots to help revive an auto plant that would bring jobs to the area.)

Problems like this are what helped spur interest in a new tax scheme. An early advocate for Detroit’s plan was Nick Allen, now a 32-year-old graduate student in urban planning at the Massachusetts Institute of Technology who worked for a city economic development agency from 2017 to 2019. Mr. Allen said his main project at the agency was finding new ways to stimulate growth that didn’t rely on grants and tax breaks. After reading “Progress and Poverty” years earlier, he’d become obsessed with the problem of speculation, and suggested a land-value tax. (Mr. Allen said he had never mentioned Henry George to the mayor because “the idea survives on its own without having to go back to 1879.”)

So instead of citing a dusty text, Mr. Duggan’s speeches on the land-value tax feature the politically salient image of homeowners with lovely gardens who pay more in property taxes than the vacant apartment building next door. A tax break for residents — paid for by nameless investors who are “taking advantage of the city” — would seem like a political layup.

But he needs state approval to do it, and lawmakers have been skeptical. This year, Michigan legislators debated a bill that would allow the mayor’s plan to go forward, but the measure was tabled until next year. Even if the bill passes, Detroit voters would then have to approve it. It’s a lot of ifs.

However it goes, the question for Georgists is whether Detroit is a particular city with a particular problem or the opening salvo in a larger conversation.

Most of the new Georgists I spoke to were concentrated in and around high-cost cities whose housing problems stem from a lack of supply — that is, basically, the opposite of Detroit.

When Mayor Duggan says “land tax,” he means encouraging growth on empty parcels and a tax cut for homeowners. When Mark Mollineaux, a 38-year-old engineer in Silicon Valley, says “land tax,” he is pointing to $3 million bungalows in Palo Alto and his wish that they could be replaced with denser housing or at least had higher taxes. In other words, in a depressed city, homeowners are victims; in rich ones, they’re the enemy.

“These homeowners have a land value of millions and they’re hoarding it,” Mr. Mollineaux, who hosts the Henry George Program, a radio show and podcast, said in an interview.

“I advocate razing Silicon Valley, socializing the land and building massive condos that are owned by the public and allocated equitably,” he added. “But even a tweak would be nice.”

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Why should cities and counties guarantee profits for builders and push the costs of growth onto the local taxpayers?

This article was originally published in 48 Hills.

By Zelda Bronstein

Yimbyism famously blames the housing affordability crisis on onerous local land use regulations—above all, zoning for single-family homes.

To be clear, I’m using “Yimbyism” as shorthand for the supply-side dogma embraced by card-carrying Yimbys as well as the Biden Administration, California and numerous other states, market-friendly think tanks, most academics, the planning profession, and virtually the entire media.

Citing the “laws” of supply and demand, Yimby doctrine holds that permitting taller and denser residential buildings—upzoning—will result in lower prices. Hence the slogan “End Apartment Bans.” The assumption is that, absent zoning restrictions, developers will build, build, build, and housing prices will fall.

California is the epicenter of Yimbyism in the US. In recent years, it’s passed more than 200 housing laws—the most of any state. Yet when the Legislative staff surveyed 65 major housing laws enacted between 2016 and 2022, they counted only 26 that mandated upzoning. Seven other statutes reduced barriers to housing access. Even more notably, 39 of the new laws:

· “Streamlined” public planning processes—that is, eliminated local discretion over land use decisions, thereby exempting housing from the California Environmental Quality Act (CEQA);

·  Bulked up the state’s existing Housing Element and Regional Housing Needs Assessment laws;

· Increased state oversight of local land use decisions by tightening the Housing Accountability Act;

· And/or (some of the laws did more than one thing) made surplus public land available for housing.

Upzoning’s secondary status was even more pronounced in the “housing package” of 56 bills that Governor Newsom signed on October 11, where it was mandated by just seven of the newest laws. That’s not counting Wicks’ I-love-noise-and-UC bill, AB 1307, signed into law by the governor on September 7.

Moreover, the numbers are misleading, because some laws have far greater impact than others. The upzoning fetishists can point to the expanded Density Bonus Law and the Builders’ Remedy provision of the Housing Accountability Act.

But those legal bulldozers are outnumbered by other kinds of major housing statutes. A few of many examples: AB 101, Newsom’s 2019-2020 budget bill, authorized multiple “state oversight and increased [local] accountability” mandates. AB 72, authored by Miguel Santiago in 2017, significantly empowered the Department of Housing and Community Development and the state Attorney General vis-à-vis local jurisdictions. AB 2584, authored by Tom Daly in 2016, authorized “housing organizations” such as Yimby Law to sue under the Housing Accountability Act. A 2023 bill, AB 1485, authored by Matt Haney and Scott Wiener and co-sponsored by the attorney general and the Housing Action Coalition, gave the AG the right to intervene without court permission in any suit brought to enforce specified housing laws. Wiener’s SB 35, also passed in 2017, and just expanded into the coastal zone by SB 423, drastically curbed local governments’ land use discretion. Phil Ting’s SB 1633, another bill just signed into law by Newsom, effectively makes CEQA action the preserve of the rich.

What developers really want

The subordination of upzoning in recent California housing laws reflects a truth that the supply side crowd seldom acknowledges: Private developers’ top priority isn’t building as many taller, denser homes as possible. It’s getting an anticipated return on their investments.

Cyrus Sanandaji, a partner in Presidio Bay Ventures, told San Francisco Chronicle reporter J.K. Dineen that the banks and union pension funds that finance housing “typically won’t invest unless they think they can get a 20 percent return.”

Getting that return is fraught with risk. Most private developers work with borrowed money. Anything that delays the completion of a project or adds costs—Sanandaji cited San Francisco’s 6 percent transfer tax—increases their debt and decreases the ROI.

What developers seek, then, is certainty that the development process from application to certification of occupancy will move forward with minimum expense and delay. Most of California’s new housing legislation aims to maximize that certainty by derisking private developers’ investments.

To be sure, the state can’t guarantee that derisking will generate new housing. There are barriers to development beyond the control of any state or local government. Thanks to soaring interest rates and construction costs, 47,000 approved housing units are going unbuilt in San Francisco.

In San Jose, developers are using Builder’s Remedy to shrink their housing projects.  

The derisking state only seeks to “escort” financial capital—I borrow the phrase from British economist Daniela Gabor—as far as possible. That means minimizing local land use discretion as much as possible. At bottom, Yimbyism is a political project that seeks to restrict local action and centralize state power on behalf of financial and property capital.

HCD touts derisking to San Francisco

Derisking’s crucial role was underscored by the California Department of Housing and Community Development (HCD) in a letter the agency sent to the San Francisco Planning Commission on June 16. The letter urged the commission to support the  “Constraints Reduction Ordinance” that Mayor London Breed had released to the public the day before. HCD argued that provisions in the mayor’s proposal “would fully or partially satisfy some of the commitments…set forth as Actions” in the city’s HCD-approved Housing Element.

Only one of those “commitments,” Action 7.2.6, targets upzoning, and even that target is paired with a streamlining mandate: “Permit group housing broadly throughout the City and streamlining approvals for group housing projects.” Nine of the other Actions roll back public planning processes:

·  “Reduce discretionary processes and neighborhood notification requirements for certain code-compliant housing project (Action 8.4.17), including requests for Reasonable Accommodation (Action 6.3.10).”

·  “Remove Conditional Use Authorization (CU) requirements” for specified conditions in housing projects,” including “demolition of residential units meeting certain criteria” (Actions 8.4.8, 8.4.9, and 8.4.10).

·  “Remove Planning Commission hearings for program-compliant State Density Bonus projects (Action 8.5.2).”

· “Modify the requirements for the HOME-SF program and entitlement process (Action 7.2.9), including [e]liminating environmental criteria such as historic resource, shadow, and wind” and “[a]llowing the demolition of up to one unit for HOME-SF projects.”

The remaining Action cuts development impact fees:

· Increase financial feasibility for affordable housing projects (Actions 1.3.9 and 8.6.1), including [e]xpanding the Impact Fee exemption to a housing project with units affordable up to 120 percent of the Area Median Income” and “[a]llowing 100 percent affordable housing projects utilizing State Density Bonus Law to be eligible for Impact Fee waivers.”

“By implementing the above programs,” wrote HCD, “as well as other Planning Code changes put forward in the Ordinance, the City can increase certainty of approval for a wider range of housing projects, thus reducing the risk associated with building housing in San Francisco.” The agency added: “The City’s adopted housing element acknowledges that this risk translates to higher housing costs.” So it does, stating that “the cumulative effect of complex entitlement and post-entitlement permitting is making the process uncertain and even more expensive.”

What neither HCD nor San Francisco’s housing element say is that when the state derisks private investment, it shifts the risk and expense of housing development onto the local public. That maneuver takes ingenious forms, as illustrated by Breed’s Constraints Reduction Ordinance and Berkeley Mayor Jesse Arreguín’s Hard Hats Ordinance.

The affordable housing/tenant protection hustle: Breed’s Constraints Reduction Ordinance

Tim Redmond has followed the pushback against Breed’s proposed law (in chronological order: here, here, here, here, and here). My account draws largely on his coverage.

San Francisco’s mayor would have us believe that reducing, if not simply eliminating community, staff, and planning commission input into planning decisions and giving developers the right to demolish existing homes will generate more affordable housing and greater protection for tenants.

Those assurances have sparked massive protest. Every tenant group in the city, plus the dozens of community organizations who formed the Race and Equity in All Planning Coalition, have argued that by giving developers a free hand, Breed’s proposed law would place tenants in greater danger of eviction. And by encouraging more market-rate construction, the CRO would worsen the city’s affordable housing crisis.

The Tenants Union pointed out that the measure would allow the demolition of “sound, rent-controlled units,” with “no requirements that the new units actually become rental units.” Indeed, the ordinance has no affordability requirements for new housing of any sort.

And, Redmond observes, there are “no provisions in the law that would require the city to make sure that evictions are legal, not fake, and that tenants actually get the right to return.” Even if there were such provisions, they would be impossible to implement, given that San Francisco has no database of rent-controlled housing units.

The CRO lacks an enforcement mechanism that could prevent a scenario laid out by Sup. Dean Preston: a speculator buys rental property, uses the Ellis Act or the threat of the Ellis Act to evict the tenants, and uses Breed’s proposed law “to demolish the building and replace it with high-end housing or a monster home.”

The CRO takes its cues from San Francisco’s 2022 Housing Element and that document’s reiteration of the city’s latest Regional Housing Needs Allocation. According to its Executive Summary, the Housing Element is “San Francisco’s first housing plan that is centered on racial and social equity….The 2022 Update articulates [the city’s] commitment to…increasing housing affordability for low-income households and communities of color.” The Housing Element commits San Francisco to planning for 82,000 new homes by January 31, 2031, of which 46,000 are to be “affordable.”

The likelihood of all those units getting built is low. As Breed’s representative, Lisa Gluckstein, told the Legislature’s housing committees in February, the city’s “RHNA requires an average of 10,000 units per year, or roughly three times historical production.”

In another absurdity, like the Housing Element, the CRO defines affordable housing to include homes affordable to households earning up to 120 percent of the Area Median Income as defined by HUD. In San Francisco, 120 percent AMI for a four-person household is $172,900.

Both the CRO and the Housing Element propose the elimination of development impact fees for “affordable” housing. Development impact fees pay for transit, open space, child care, infrastructure and other services required for the residents of new housing. Either the public will have to make up the shortfall, or these services will not be funded.

In short, “Constraints Reductions Ordinance” is a misnomer. The proposal only reduces local constraints on private capital; it increases restrictions on local efforts to discipline capital.

Consistent with the CRO’s proposed rollback of government accountability to the public, at the Sept. 18 meeting nobody from the Mayor’s Office showed up. Redmond reported that the two supervisors who co-sponsored the measure, Matt Dorsey and Joel Engardio, were not there for the start of the hearing, sent no staff to the meeting, and “then left for another appointment.” Nor did Breed brief the supes beforehand on her proposal, thereby breaching the city’s customary protocol for the introduction of legislation that has broad community opposition.

Chafing against Breed’s highhandedness and alert to the CRO’s dodginess, the Board of Supes opted for a process that allowed its members to ask hard questions about the sweeping measure and to run changes to the San Francisco’s housing laws by the City Attorney in a timely manner. As of early November, four and a half months after its release, Breed’s ordinance had yet to be passed in any form.

The construction labor standards ploy: Berkeley Mayor Jesse Arreguín’s Hard Hats Ordinance

Breed’s CRO takes an in-your-face approach to derisking. By contrast, Arreguín’s Hard Hats Ordinance, adopted by the Berkeley City Council on May 2, 2023, charts a devious route. As part of a laudable plan to require union pay and benefits for large projects, the council stealthily moved to give big developers breaks on local fees and affordable housing requirements, meaning the local taxpayers will be subsidizing developers—all in the name of making projects more profitable.

Formally known as the Helping Achieve Responsible Development with Healthcare and Apprentice Training Standard Ordinance, the HHO requires developers of construction projects (not just housing) measuring 50,000 square feet or more to provide their construction workers with health care coverage and to contribute to the state-run California Apprenticeship Council—effectively a path to union membership.

In introducing the item at the council meeting, Arreguín said:

even in Berkeley,….a proud union town…workers are being exploited. We need to make sure that as we are building up our city and building up our region, that we are lifting up people as well, and that we’re not doing it on the backs of the people who are building our community.

His sentiments were echoed by every councilmember at the meeting (Susan Wengraf was absent).

Arreguín emphasized that the HHO’s intended beneficiaries aren’t workers per se, but “qualified local construction workers.” The idea is to “mak[e] sure that people in our community have entry-level workforce opportunities in the construction trades.”

Accordingly, many of the 20-odd tradespeople, some of them apprentices or former apprentices, others members of union locals, who applauded the measure at public comment noted that they were Berkeley or Bay Area residents or natives, and told how their training and union membership had changed their lives for the better.

The derisking provisions briefly appear in the recommendations that headed up the memo from the mayor that conveyed the HHO to the council:

2. Refer the City Manager and Planning Commission to:
a) Include an analysis of these new healthcare and apprenticeship requirements on private development as part of the Housing Feasibility Study currently underway and direct the City Manager expedite completion of this analysis;
b) Based on the findings of the feasibility study, recommend adjustments to impact fees if needed to offset the cost of these new requirements to maintain economic feasibility of projects;
c) Bring back to the City Council proposed changes to enabling legislation to enable fee reductions if needed;
d) Explore zoning modifications to allow for additional density as a way to offset the cost of these new labor standards if needed.

The passage is an exercise in obfuscation. Start with the mystifying reference to “the Housing Feasibility Study currently underway.” Exactly what does it mean for a housing project to be feasible? The memo provides no link to the study.

Some strenuous Googling revealed that the Housing Feasibility Study is an ongoing inquiry that’s been conducted for Berkeley since 2020 by the Street Level Advisors consultancy. The most recent component I could find online is an attachment to Item 21, “Citywide Affordable Housing Requirements,” on the council’s January 17, 2023 agenda. The staff report says that the city retained Street Level Advisors, “a firm that assists cities across the nation to develop programs and policies to facilitate equitable development,….to evaluate existing regulations and potential changes in order to comprehensively update the City’s affordable housing requirements. Dated February 2022, the firm’s report came in response to council referrals and new state laws. The HHO applies to all construction, not just affordable housing. But the analysis provides a good idea of the consultancy’s approach.

As shown by the following passage from the 2022 report, Street Level Advisors toes an orthodox supply-side line. And as in San Francisco, an absurd Regional Housing Needs Allocation is a driving force in the derisking strategy:

The Bay Area and the Berkeley community need more housing. Rapidly rising housing costs and growing displacement pressure are the result of a systemic shortage of housing. While building more housing alone would not be sufficient to address the current inequities, we overcome our housing challenges without building significantly more housing. The Regional Housing Needs Allocation (RHNA) requires Berkeley to permit nearly 9,000 new homes at all income levels during the period from 2023 to 2031. (p. 9)

In fact, the RHNA requires Berkeley to plan for, not permit, nearly 9,000 new homes at all income levels from 2023 to 2031. As journalist Michael Barnes has pointed out, that number is unattainable.

Street Level Advisors continues:

To meet this historic challenge, Berkeley’s affordable housing policies must balance two critical but competing goals:

1)  We must set affordable housing requirements high enough to produce meaningful levels of affordable housing, and

2)  We must ensure that they are not too high for developers to accommodate.

“Accommodate” is code for facilitating the profit margins that developers claim they need to obtain financing for their projects. In “Appendix A: Financial Feasibility Analysis,” Street Level Advisors does a “static pro forma analysis to estimate the return on investment that can be generated by typical residential developments in Berkeley.”

A 2016 report from the Terner Center, “The Effect of Local Government Policies on Housing Supply,” states that when contemplating zoning changes, most planning departments in the Bay Area “put together a static pro forma,” which “models the costs and returns to a single development on a plot of land in a single point of time. The pro forma provides the expected profit the developer might receive and the amount she can afford to pay for the land.” (p. 11)

Street Level Advisors goes on to explain its method of estimating a project’s financial feasibility as follows:

For the rental prototype, we used a common measure of return known as yield on cost (YOC) or a project’s net operating income divided by the total development cost. Based on a review of current market conditions in Berkeley and the East Bay, we occluded that projects earning a yield of at least 5.0% would be “feasible,” meaning that they would likely be able to secure investment….

For ownership projects, the Yield on Cost cannot be calculated, so we used a different measure of profitability: Profit as a percent of development cost, also called Return on Cost. Because of the lack of recent condo projects in Berkeley, we were unable to objectively determine the minimum necessary profit as a percent of cost for local ownership projects. As a point of reference, a common rule of thumb used in other studies considers project “feasible” when profit exceeds 10-15% of development cost.

The main body of the report considers how changes to Berkeley’s affordable housing requirements such as on-site unit income targets, condo conversion rules, and maximum unit size would satisfy the “critical but competing goals” of producing affordable housing and “accommodating” developer finances.

The feasibility analysis for the Hard Hats Ordinance is likely to take the same approach as the one in the Street Level Advisors’ 2022 report. The latter document was prepared with the assistance of another consultancy, Strategic Economics, with which Street Level frequently works. In July the city signed a contract with Strategic Economics to do the next component of Berkeley’s Affordable Housing Economic Feasibility Analysis, which will address among other things the HHO recommendations. The proposal that Strategic Economics submitted to the city said that it would be assisted by Street Level Advisors.

The contract with Strategic Advisors has a deadline of July 12, 2024. The only future date specified in Arreguín’s recommendations is the effective date of the HHO ordinance: January 1, 2024. The mayor left the “new requirements to maintain economic feasibility of projects” to be determined at an unspecified point in the future. In other words, as Planning Director Jordan Klein confirmed to me, the HHO could go into effect before the council has considered, much less approved, lower impact fees and greater densification, i.e., upzoning.

Arreguín’s rush job has to be viewed in the context of his current bid for office: He’s running to succeed termed-out Nancy Skinner in the District 9 State Senate seat. Shortly after the council approved the Hard Hats Ordinance, endorsements from the building trades unions began pouring into his campaign.

That his half-baked scheme was approved attests to the inanity of the Berkeley council, most fully voiced by District 8 (Elmwood and Claremont) Councilmember Mark Humbert. “In an ideal world,” said Humbert,

I would really like that this ordinance doesn’t go into effect until we’ve had adequate time to assess its costs and their feasibility on new construction….If the feasibility study shows there are other fees and requirements that have to give a bit, that we have to reduce, so we can continue building housing while also making sure that construction workers are justly compensated, then I’m a hundred percent in favor of that.”

But “without any actual data here, let alone example pro formas, I think we’re flying blind.” And then, without hesitation: “I will vote yes for this, and will vote yes for this enthusiastically.”

Councilmember Kesarwani demurs

As did all his colleagues but the member from District 1 (northwest Berkeley), Rashi Kesarwani. She peppered Arreguín and staff about the details of the HHO—a “line of questioning” that the San Francisco-based Housing Action Coalition, one of the most aggressive Yimby groups in the state, would attribute to issues raised by itself and its “friends” at the San Francisco consultancy Progress Public Affairs.

“I just got this ordinance on Friday at 5:10 pm,” Kesarwani said. Arreguín told her that it had been unanimously approved in September.

That’s untrue. What the council approved in September was the referral of a September 20, 2022 proposal from Arreguín and Councilmembers Ben Bartlett, Sophie Hahn, and Terry Taplin that directed the city manager and city attorney to draft a Hard Hats Ordinance. What the council and the public received on the afternoon of Friday, April 28, did include the drafted ordinance, as well as what turned out to be a first draft of the derisking recommendations.

However, the recommendations in the item that was before the council on May 2 had been amended by Arreguín under Berkeley’s Orwellian “good of the city” rule. Berkeley Municipal Charter Section 2.06.070 states that the council may consider a last-minute “supplemental/revision” to an already submitted agenda item, if, as the mayor wrote, “[t]he analysis [in the supplemental/revision]…demonstrate[s] how accepting [it] is for the ‘good of the City’ and outweighs the lack of time for citizen review or evaluation by the Council.”

The recommendations in the April 28 version of the HMO read: “Refer [to] the City Manager and Planning Commission if necessary…” Arreguín’s “good of the City” version deletes “if necessary.”

The May 28 version also specified the Downtown Mixed-Use District as the area where an increasing the number of taller buildings “at or above 180 feet in height” would be considered. The “good of the City” version eliminates that specification and qualified the upzoning prospect with the phrase “if needed.” In other words, the upzoning could apply anywhere in town.

At the May 2 meeting District 4 (Central Berkeley) Councilmember Kate Harrison said Arreguin had made the change at her behest. Pointing out that in 2010 Berkeley voters had approved upzoning in Downtown (Measure R), Harrison said “supports more density throughout the entire city,” especially in North Berkeley and on College and San Pablo Avenues.

At the May 2 meeting, the first order of business was for the council to accept the mayor’s just-revised material under the “good of the City” rule. It did so unanimously, without the slightest discussion of how the analysis in the revised material had made the requisite demonstration.

Kesarwani also asked how the 50,000 square-foot threshold had been arrived at. Arreguín said that “projects at this scale would be more likely to absorb the [prospective new] requirements” because there would be enough units onsite to amortize the costs. The intent, he added, was to capture not just the tallest buildings but 25- and 30-unit projects as wells. “Missing middle” projects would not be affected.

The councilmember’s most insistent questions concerned the lack of a financial analysis of the HHO’s effects. Had the city issued an RFP? What was the timeline? Would a contractor be “in the role by January 1, the effective date [of the ordinance] that we’re contemplating?”

To this last query, Assistant City Manager LaTanya Bellow replied: “We do not know.”

“When,” Kesarwani asked, “is the soonest date that the housing feasibility study could be completed and presented to the council?”

Housing, Health and Community Services Director Dr. Lisa Warhaus said that the city had received and was evaluating “two qualified proposals,” and that it hoped to bring the selected “vendor to the council before the recess.” As for the delivery of the analysis itself: Spring 2024 “would be pushing it.”

Kesarwani then said that, to her surprise, HCD had emailed the city about the Hard Hats Ordinance in December 2022 and February 2023, “even before it was before this council,” and that Planning Director Jordan Klein had responded to the agency’s queries in December. “It’s very hard to predict selectively what HCD will ignore or not ignore,” she said. Does staff have “any sense of how HCD is going to be looking at our implementation of our Housing Element and related programs in terms of determining our substantial progress toward meeting out [RHNA] unit count?”

In reply, Deputy Director of the Planning Department Alene Pearson said that HCD “wanted to make sure that we hadn’t adopted the [HHO] before the Housing Element had been certified” by the agency. If it had, the HE would have to have included an analysis of the new ordinance. In December Klein told HCD that the ordinance hadn’t been adopted. HCD certified the city’s Housing Element on February 28, 2023.

Yimby cadres attack the HHO

I was curious to see the email exchange between HCD and Klein. A Public Records Act request to Berkeley’s excellent City Clerk’s Office yielded the documents.

It turns out that HCD did more than inquire about the status of the Hard Hats Ordinance. In the initial, December email, HCD Housing Policy Specialist Jose Ayala said he was writing to the Berkeley council in response to “public comment regarding the attached ordinance and its potential effects on costs of housing development.”

HCD encourages individuals and groups to inform the agency about potential violations of state housing law. A PRA request to HCD asking to see Ayala’s email and the referenced public comment revealed that the source of the comment was Paul Campos, senior vice president of governmental affairs and general counsel for the Building Industry Association of the Bay Area.

On November 11, 2022, Campos sent HCD Housing Policy Manager Paul McDougall an email with a link to the council’s September 22 referral asking staff to draft the HHO and the following comments:

Estimated cost increased [sic] for real world housing project in pipeline right now is an increase of 18-20% (would be higher, but some work was already going to be done by union labor); for this project that works out to an increased cost of approximately $19 million which would render the project infeasible.

Clearly would be a major constraint since would apply to every housing project of over 50,000 sq feet. It is NOT limited to public works projects; every housing project.

Campos wasn’t the only supply-sider who contacted HCD’s Paul McDougall about problems with the Hard Hats Ordinance. On February 16 Housing Action Coalition Executive Director Corey Smith cc’d McDougall on an email to the Berkeley council, a three-and-a-half page attack on the HHO. On February 17 McDougall emailed Planning Director Klein asking: “Any updates on the ordinance since December or is it still in its early formation?”

In 2021 HAC honored the entire Berkeley Council in the group’s annual Housing Action Heroes program “for paving the way to end exclusionary zoning and allow for multi-family homes to be built across the city.” Nancy Skinner presented the award.

HAC’s February email said nothing about Berkeley’s recent housing heroics. Instead, it warned that “[w]hile the aims of the HARD HATS Ordinance are laudable, housing production is suffering death by a thousand cuts. Each new mandate adds to costs, reduces feasibility, and results in lower production.”

To be precise, HAC was not commenting on the ordinance proper, which had yet to be released, but on the September 22 referral asking staff to draft the law. There, outlining “the City’s interests in taking action to redress the inadequate status quo condition of construction workforce development,” Arreguín, Bartlett, Hahn, and Taplin noted among other things the need to “[a]ddress inequality as residential developer profit margins continue to increase, while labor wages and benefits have remained stagnant.”

According to the State of California’s 2014 Affordable Housing Cost Study and Economic Census data specific to California’s construction industry, construction labor wages and benefits account for only 15% of total project costs. Meanwhile, since 1992 the industry’s basis for profitability has increased 50% more than either construction labor or materials. Despite this increase in profitability, there is still a disconnect between construction workers and apprenticeship and health insurance plans, resulting in a shrinking supply of labor. This has constrained the construction industry’s ability to expand in response to the rising construction needs of California and its many cities.

The September 2022 referral further stated:

California residential contractors offer fringe benefits at low rates to building trades workers. Only one third of construction workers are policyholders for employment-based health insurance, compared to over half of all other employed male civilian workers, according to data from the Annual Social and Economic Supplement of the U.S. Bureau of Labor Statistics’ Current Population Survey (CPS). California construction workers’ rate of coverage under any employer- or union-provided insurance ranks 35^th among the states, proximate in rank to Alabama, Colorado, Louisiana, Nevada, and Virginia.

HAC’s Smith did not address the Berkeley electeds’ foregoing claims. Instead, he questioned the effects of the apprenticeship fee and health care coverage for construction workers on the financial feasibility of new housing:

A proposal that solely increases costs will stifle housing and is inconsistent with the goals and objectives of [Berkeley’s] Housing Element. It also means that the benefits of the HARD HATS ordinance would not be achieved if it contributes to the financial infeasibility of new housing. If any ordinance is to pass that would increase the cost of construction without sufficient offsets, then we must acknowledge that we’re planning for rents to increase. Ultimately, this is simple math where revenues need to exceed expenses.

Citing Berkeley’s then-still-to-be-certified-by-HCD Housing Element, Smith wrote:

It [says] that construction costs for apartment buildings in the Bay Area are the highest in the state, that they have increased more dramatically than costs statewide, and that construction costs for affordable housing are higher than costs for mixed affordability and market rate projects “likely due to prevailing wage, local hire, and other requirements.” The HARD HATS Ordinance would add similar constraints on mixed affordability and market rate projects without providing any offsets or incentives.

Smith suggested ways that additional costs could be offset:

·      The City could lower overall fees on new construction. If we understand the associated increase in cost for the HARD HATS Ordinance, we could easily offset those costs in other areas.

·      Increased development capacity would mean more homes that could help offset the additional costs of the proposed HARD HATS Ordinance.

These are exactly the “offsets” that Arreguín included in the April 28 derisking Recommendations. In its May 5 newsletter, HAC claimed that its “joint advocacy” with Progress Public Affairs “in the 24 hours leading up to the bill’s adoption” had led to these “important concessions,” for which it thanked Arreguín. (HAC also took a dig at Arreguín: “We believe the mayor’s campaign for State Senate was the elephant in the room that prevented [the council from completing the financial feasibility the study before implementing the HHO], and [that] electoral politics can most certainly make for sloppy policy.”)

HAC further claimed that its lobbying had resulted in a third concession:

·      Giving City staff the latitude to push back implementation, which we believe will be necessary given the complexity, and meaningful because it will help move the timeline of implementation of this ordinance into alignment with the completion of the feasibility study.

In response to my query, Planning Director Klein said that he was not aware of any decision by the council that gave staff the latitude to push back the HHO’s implementation date.

It’s also notable that the derisking recommendations that the council did approve are not what HAC’s newsletter termed “the right path forward for Berkeley.” The “blueprint” for that route, wrote Smith, was laid out in state law:

Assembly Bill 2011 (2022, Asm. Wicks) has established the blueprint for pro-labor and pro-housing legislation. AB 2011 allows by-right approval [no public hearing] for projects over a certain size if they 1) pay prevailing wages, 2) provide healthcare and 3) provide apprenticeship opportunities.

Smith continued:

This same language is also in two pieces of pro-housing legislation recently introduced by Senator Wiener, Senate Bill 4 and Senate Bill 423. Allowing by-right approvals for projects that provide certain benefits to workers should be the status quo across the entire state. The Housing Action Coalition strongly believes that a similar ordinance is the right path forward for Berkeley and would welcome the opportunity to help pass a local ordinance.

To date, the Berkeley council has not afforded HAC such an opportunity.

During public comment at the May 2 meeting, Smith, like every other speaker, said he favored expanding health care for construction workers and investing in apprenticeship programs. But he also warned that from the developer standpoint, the HHO was now “all stick and no carrot.”

Another supply side critic of the HHO was Louis Mirante, the former California Yimby staffer who’s now vice president for public policy at the Bay Area Council, the lobby shop for the region’s biggest employers. The HHO’s provisions for workers are “really important for improving people’s lives,” Mirante told the council, “but projects that are not feasible at the end of the day are not helping anyone but developers in the Central Valley, where people are going to be driving from their new homes….Almost every developer that I’ve talked to says that post-ordinance, they’re planning to not do business in Berkeley, where previously they had been.”

A letter that Mirante, writing in behalf of BAC, sent the council on May 1 struck a tone at once more conciliatory and more threatening than the one taken by the Housing Action Coalition. “This,” Mirante stated, “is not a letter of opposition to the HARD HATs [sic]ordinance or its goals. But in a development environment of high and rising costs, any law that adds more costs, as this one will, should come with a commensurate reduction in costs elsewhere.”

He congratulated “the City of Berkeley and each of you in making truly remarkable progress on housing.” It was “impressive” that Berkeley was “one of the few cities in the Bay Area with an [HCD]-approved housing element.” The council also deserved congratulations for having increased its approvals of housing projects from 342 in 2018 to nearly 1,000 in 2022.

Then came BAC’s objections. “Requirements like the HARD HATs ordinance should offset their costs by reducing costs elsewhere either through an incentive-based structure or through reduced fees and exactions, through reduced affordable housing requirements, or through other measures.” Contrary to the claim that Arreguín would make the next evening, Mirante wrote that the 50,000 square-foot threshold for covered projects, amounting to about 25-units, included “smaller missing middle projects….Berkeley would likely end the production of these projects altogether by adopting this ordinance.” He urged the council to “consider a “higher threshold for these projects, or at the very least [to] study the impact of the ordinance” on their feasibility.

Strangely, for a letter that purportedly did not oppose the HHO, Mirante ended with a threat that invoked the RHNA goals and, implicitly, the prospect of HCD discipline:

This ordinance could represent a major challenge to the success of the [city’s] housing element and to the City’s in compliance with housing element law because it makes changes with major consequences to the housing element outside that process and without reducing costs. For that reason, this ordinance may not be lawful because it presents such potentially high new costs for a large portion of the projects that the City will need to meet its Regional Housing Needs Allocation goals. If the City’s policies fail to create an environment that encourages housing, it may lose access to the ability to deny certain project under its zoning code and several sources of infrastructure funding, and it could be subject to monthly financial penalties, all consequences for [sic] violating housing element law.

Also speaking at public comment was Amir Massih, the developer who heads 4Terra and is, he said, a 25-year Berkeley resident. “We’re getting other people’s money to build these projects,” Massih told the council, “and if people are going to take their money and put it into something that’s going to give them a higher return, there won’t be any of these projects built to create the jobs you wanted created.”

Massih was among eleven self-described “developers and property owners in the Bay Area” who sent the council a letter dated May 1 that expressed “urgent concerns” about the HHO. The other signers included Berkeleyans Denise Pinkston (TMG Partners) and Mark Rhoades (Rhoades Development Group).

Their criticism of the HHO diverged in a notable way from the objections raised by their fellow supply siders: they argued that upzoning would not pay for the added costs that the HHO would impose on their contractors. “Adding density itself drives up construction costs as buildings become more complex and code requirements more rigorous.”

If Berkeley is willing to eliminate its inclusionary and impact fee requirements to equal the added cost of the Hard Hats ordinance, housing production in Berkeley could continue. If not, the result will be evident and swift as deals in the pipeline go on hold, and new housing production moves out of Berkeley….We urge you to hold any ordinance adoption until you have adopted the cost offset regime to prevent deals in the pipeline being cancelled by funders, and to keep Berkeley as a place where new housing development remain viable.

The only councilmember who heeded this advice was Kesarawni. Declaring that “I always have to have the data before I can say, I respectfully abstain….I need the feasibility study first.”

I attribute her colleagues’ disregard of the Yimby warnings to collective smugness. The city is in the midst of a residential building boom. “We are very fortunate in Berkeley right now that we have so many construction cranes in the sky,” said Kesarwani. “We don’t see those cranes right now in San Francisco and Oakland, because of various reasons.” Neither she nor anyone else specified those reasons.

Let me suggest the biggest reason. Unlike San Francisco, Oakland, and indeed most places, Berkeley has a built-in, ever-expanding source of demand for housing: the local University of California campus. That demand has been encouraged and legally expedited by the Berkeley council for two decades—first by the Bates council’s 2005 “secret sellout” of the public over UC’s Long Range Development Plan, then by the Arreguín council’s 2021 repeat of that betrayal—despite the school’s uncompensated toll on Berkeley’s services, infrastructure, and finances. In February 2022, the council submitted an amicus brief in opposition to capping the campus’s enrollment. In March and again in September of this year the council submitted an amicus brief in support of UC in its fight against the CEQA lawsuit filed by Make UC a Good Neighbor over the population growth envisioned by the latest LRDP and in particular the construction of student housing in People’s Park. The council majority appears to be believe that developers will not pull out in the face of the university-generated, council-enabled demand for housing.

Why should Berkeley taxpayers underwrite private developers’ profits?

Arreguín and his colleagues were even more condescending to the Berkeley public. The developers got the promise of derisking “offsets;” the public got the prospect of greater impacts from citywide densification and of mitigating those impacts with higher taxes.

Unlike in San Francisco, in Berkeley the shift of risk to the public did not spark a massive protest. If the council had specified the forthcoming densification and lowered impact fees, perhaps the neighborhood associations would have turned out in force. In the event, of the 35 people who spoke at public comment on May 2, only three—Berkeley Daily Planet editor Becky O’Malley; Kelly Hammargren, whose indispensable Berkeley Activist’s Diary, posted on the Planet, follows the weekly antics in City Hall; and myself—objected to the burdens that the derisking recommendations would place on the local citizenry, and each spoke as an individual.

Hammargren offered the most substantial testimony. “I agree that the costs of construction shouldn’t be on the backs of the workers,” she said.

But you’re talking about reducing the fees for national and international investors. You said just last Thursday at the Budget Committee these new, taller buildings come with an increased cost for services, especially firefighters. So what about the increased cost to the taxpayers? Are we going to be bearing the brunt of the increased services? I believe this should be passed for the workers, but I’m very concerned about the discount for the developers.

The council ignored her questions.

10/23: HCD brings the derisking hammer down on San Francisco

It was shrewd of Arreguín to delay the release and approval of the Hard Hats Ordinance until after HCD had certified Berkeley’s housing element. Decertification can result in the loss of a city’s land use authority, triggering the draconian Builders Remedy.

Given that the ordinance had been in the works for years—on May 2, Arreguín mentioned two years of “extensive dialogue with our labor partners and also with developers,” the September 20, 2022 referral said work had begun in May 2019 and then been stalled by Covid—it’s hard to view the timing as coincidental. What remains to be seen is if HCD will crack down on Berkeley after the HHO takes effect on January 31 without the derisking provisions demanded by the Yimby militants.

In a sign that HCD has zero tolerance for what it regards as local insubordination on the derisking front, on October 25 the agency released a hard-line review of San Francisco’s “Housing Policy and Practice,” the agency’s first such assessment of any city’s laws. HCD’s June 16 letter had been a warning; the review delivered an ultimatum: Comply with our demands or invite our decertification of your housing element.

To support the review, HCD had commissioned a study from UC Berkeley researchers that asked:

·      Is the city fully implementing key state housing laws, such as the Housing Accountability Act, the Permit Streamlining Act Senate Bill 35 and State Density Bonus Law?

·      Is local implementation allowing these state laws to achieve their intended effect of promoting housing production and affordability?

·      What causes delay in the entitlement process and how do the city’s discretionary review process impact overall project timelines and the housing approvals pipeline?

Led by Moira O’Neill, the research team examined San Francisco’s entitlement data for 284 projects that had resulted in five or more housing units from 2014 to 2021. They cross-referenced written law, recordings from hearings, approval documents, and analyses from their entitlement data. They also drew on confidential interviews with dozens of participants representing affordable and market-rate developers, former and current city personnel and staff that work on housing development; land use attorneys; and housing advocates.

The UCB researchers’ conclusion: the data shows that San Francisco has not fully implemented state housing law intended to promote housing production and affordability. The summary of their findings, with its denunciation of subjectivity and uncertainty and of local discretion, public hearings and “neighborhood-level politics, encapsulates the derisking agenda:

San Francisco’s local rules embed subjectivity and uncertainty into review processes that state law says should be objective, time constrained, and, in some cases, certain. The city’s authority to apply discretionary review to any permit, and the ease with which project opponents can appeal planning approvals and permits (including post-entitlement permits) to the Board of Supervisors or Board of Appeals fosters planning practices that limit full implementation of the Permit Streamlining Act, Housing Accountability Act, Housing Crisis Act, and in some instances, SB 35 and State Density Bonus Law. (p. 9, emphasis added)

Is there a double standard at work here? The UCB researchers are fine with subjectivity and uncertainty insofar as those qualities operate to suppress democratic planning, i.e. “scrutiny from local political bodies” and “what neighborhood-level politics demand,” and to advantage private real estate investment:

Planning staff are concerned about whether planning review will survive scrutiny from local political bodies, not the courts. Planning staff anticipate local political bodies will ignore planning recommendations and extend review processes if that is what neighborhood-level politics demand. Planning practices reflect this assumption, and local policy reinforces it. Developers interpret this planning practice as requiring more than what the law “on paper” demands through negotiation outside of public hearings to satisfy neighborhood interests. Developers perceive all planning approvals as uncertain and risky, even if the proposed development conforms to all zoning and planning standards. Eight years of approvals data confirms these perceptions. (p. 9, emphasis added)

Presumably HCD and the UCB researchers would argue that the last line in the above paragraph refutes the charge of a double standard. The data show that it takes housing projects take longer to go from project application to construction in San Francisco than in any other city in the state.

But that metric constitutes what HCD Director Gustavo Velasquez calls an “egregious” barrier to housing production only if you assume that protecting private housing developers’ finances is more important than safeguarding democratic land use governance and environmental protection (HCD also fingers CEQA action as a major source of delay). So much for objectivity.

The same double standard informs the HCD review. There we read that “[p]lanners believe that project opponents abuse CEQA administrative appeals to block or delay other key project approvals” (p. 12), and that “[p]lanners report feeling fearful and overwhelmed while processing applications for housing developments, due to both the complexities of San Francisco’s local Planning Code and the threat of public scrutiny, which is amplified during public hearings.” (p. 13) HCD gives credence to anonymous planners’ beliefs and feelings. By contrast, it decries the “unpredictability and uncertainty” entailed by the city’s housing approval processes,” which it terms “notoriously complex and cumbersome.”

The HCD review lists eighteen “Required Actions” that, it says, would make San Francisco’s housing approval process predictable and certain, and designates a timeline for the city to accomplish each of the Actions. The Required Actions include approving within 30 days the “reforms” in Breed’s Constraints Reduction Ordinance and Housing for all Executive Directive “that will implement the various housing element programs identified in HCD’s June 16, 2023, Letter of Support and Technical Assistance.”

Then the hammer: “[F]ailure to implement the Required Actions will initiate HCD’s process to revoke housing element compliance and may result in additional enforcement action.” (p. 15) Such revocation could mean that the city would lose its local land use authority.

And, HCD, intimated, other cities should learn from San Francisco’s mistakes, or risk the same consequences:

While some of the barriers imposed on housing developments in San Francisco are unique, many of the findings and Required Actions in this Review can serve as lessons learned and best practices for other jurisdictions.

Behind the derisking campaign: the devaluation of publicly funded housing

The assault on local discretion rests on another rarely voiced Yimby assumption: only the private real estate industry can supply the housing that California needs.

That assumption, or something very like it, peeped out in HCD’s June 16 letter to the San Francisco Planning Commission. “State Housing Element Law,” wrote the agency, “acknowledges that, in order for the private market to adequately address the housing needs and demand of Californians, local governments must adopt plans and regulatory systems that provide opportunities for, and do not unduly constrain, housing development.” In support of this claim, HCD footnoted a reference to California Government Code, § 65580.

Here’s the relevant passage in that section:

65580. The Legislature finds and declares as follows:

….

(b) The early attainment of this goal requires the cooperative participation of government and the private sector in an effort to expand housing opportunities and accommodate the housing needs of Californians of all economic levels.

The section references the 2017 bill AB 1397, authored by Yimby fave Evan Low. The main thrust of AB 1397 was to introduce the notorious (if I may) “realistic capacity for development” criterion into Housing Element law.

Citing the above passage, in September I sent HCD the following query: “Does HCD think California law stipulates that the private market can adequately address the housing needs and demand of Californians?”

A few weeks later “HCD Media” sent this reply:

HCD’s letter was not intended to imply that the private market alone can adequately address the housing needs and demand of Californians. Rather, HCD’s Statewide Housing Plan provides an in-depth analysis about why there isn’t enough housing affordable to Californians, what the state has done, and the multi-pronged set of strategies and objectives that are needed going forward. These include a variety of strategies that 1) protect vulnerable populations and promote more inclusive communities through tenant protections, affordable housing preservation, thoughtful coordination, housing program design, and evaluation; strengthen land use policies to advance affordability, sustainability and equity; and administer public funds in affordable home development and rehabilitation, rental and home ownership assistance, and community development.

I looked at the latest (2022) Statewide Housing Plan. It does mention public funding, as indicated above. We also hear about HCD’s support for more money under the Low-Income Housing Tax Credit Program, which is a tax giveaway to private developers administered by the IRS.

What we don’t hear is a full-throated call for social housing—the current phrase for publicly funded housing—and for the Federal government to make such housing financially feasible, as only the Federal government can.

That silence belies Yimbyism’s primary allegiance to the private development industry. As shown by the scandal of 47,000 permitted but unbuilt homes in San Francisco, that industry’s requirement for profitability means that it cannot adequately address the housing needs of Californians. I wonder what it will take for the Yimby crusaders to acknowledge this reality.

This article originally appeared in the Orange County Register.

Top state officials took a legal blow in their ongoing lawsuit that accuses Huntington Beach of violating state housing laws, when a Superior Court judge halted their suit until a related federal case is decided.

A state Superior Court judge ruled Friday, Nov. 3, that the lawsuit file by the state Attorney General’s Office and California Department of Housing and Community Development must wait. The ruling is a win for city officials who hope to fight off state housing mandates to keep the “suburban character of the city.”

The state earlier this year sued Huntington Beach for refusing to adopt a housing element in compliance with state law. The city fired back by filing a lawsuit in federal court that argued because it is a charter city it’s not subject to state housing laws.

City Attorney Michael Gates called the judge’s decision “a huge loss” for the state and said the decision can’t be appealed.

“The state is stuck and can’t take any further action against the city for failure to adopt a housing element,” Gates said.

A spokesperson for the Attorney General’s Office said, “We are disappointed by the court’s ruling and considering all options to obtain the swift relief that state law requires.”

For decades, on a regular cycle, the state has required local communities plan for allocated amounts of housing at a variety of price points, including some amount of affordable, to meet needs of the future. More recently the legislature has given the process more teeth.

The state wants Huntington Beach to adopt zoning that would allow developers to build 13,368 new housing units over the next eight years. Huntington Beach officials have argued the city’s allocation is a disproportionate burden compared to other jurisdictions, such as Marin County.

The state filed a motion on June 22 to dismiss the city’s federal lawsuit, but a judge hasn’t ruled on it yet.

“I don’t see how the court is summarily going to be able to dismiss it,” Gates said. “We await the ruling, but I think the motion to dismiss is not going to be granted, at least not in whole.”

The state filed a motion on Oct. 30 asking the court to make a decision on whether the lawsuit would be dismissed or not. The state argued the court had 120 days to rule on the motion to dismiss.

Huntington Beach refused to join in on the request with the state for the judge to make a decision. State officials and attorneys for Huntington Beach differed in opinion on when the 120-day clock started for the judge to make a decision.

Deputy Attorney General Matthew Struhar said both sides needed to make the joint request, and state officials ended up filing without getting signatures from Huntington Beach attorneys.

The state also took issue with the city’s request to depose Gov. Gavin Newsom and other top state officials at City Hall.

By: Thomas Elias

This article was originally published in the Mercury News.

State’s unsheltered population, median home prices have kept rising despite requirements forced on cities

Rarely has California seen so concerted and unified a campaign by its elected officials as the drive for housing density conducted by Gov. Gavin Newsom and allied state legislators over the past five years.

ll along, as legislators passed law after law easing the path to development of high-rise apartments and condominiums, there have been three major goals: One is to ease a housing shortage, another is to drive down the price of housing and a third is to somehow ease the obdurate problem of homelessness.

In the eyes of state officials, these things are linked. By creating new housing and easing the existing shortage, real estate prices and rents were supposed to come down, thus relieving pressure on many folks having trouble paying their rent and allowing them to avoid eviction and homelessness.

Three new reports make clear this is not working, though. The more homeless people arrive in housing newly provided for them in many cities and counties, the higher the number of individuals living on the streets has risen.

The more folks who migrate out of California, presumably vacating their previous homes, the more homeless numbers rise. Also, the greater the housing supply, as is becoming apparent, the more using it will cost.

These improbable results are not only the result of folks like Anchorage, Alaska, Mayor Dave Bronson, who openly advocates sending his city’s homeless population to cities with warmer climates, such as Los Angeles and San Francisco, before the Alaskan winter hits in earnest.

Bronson is transparent about this, unlike officials in Texas and Florida who have used state money to send busload upon busload of recently arrived immigrants to California cities. However, the number of Californians who are now housed but unable to buy homes far exceeds the unhoused populace.

The latest official count showed California with about 170,000 homeless individuals on any given night, while the state’s Housing and Community Development (HCD) Department now estimates the housing shortage at 2.5 million units. Those government estimates of housing need have varied over the last five years between 1.8 and 3.5 million units, but fewer than 10% of any of those amounts have been built in any one year.

One reason may be that folks living in single-family residences have not seized upon the 2021 laws known as SB 9 and 10 to build either high-rise housing or dense apartment units on existing lots. Around the state, officials report only tepid results from those laws, which let high-rises be built on or near almost all “major transportation corridors” and give virtually automatic approval to construction of as many as six homes on almost all current single-family lots.

For cities that do not get new plans for dense housing approved by HCD bureaucrats, a 2017 law known as SB 35 (or the “builder’s remedy”) denies local governments and their constituents the right to protest almost any building plan that includes significant amounts of “affordable housing” that would be made available to buyers with incomes at 80% or below an area’s median level.

The UC Berkeley Terner Center for Housing Innovation reports this law has so far caused construction of 18,215 units, a drop in the bucket of what HCD claims is needed to satisfy demand. Meanwhile, median home prices did not abate their rise. In Los Angeles County, prices are now up 30% over the last five years, according to a Zillow survey, with a median price just shy of $1 million.

Several California cities have already crossed the million-dollar median mark (half the homes sold go for above and half sell for below that level), including San Jose, Santa Maria, Santa Cruz and San Francisco. The overall California median is America’s second highest, behind only Hawaii, fueled only in part by inflation. The Zillow average home value index for California was $743,361 at the end of June, about five times the level in West Virginia, the nation’s lowest at $155,773.

All of this demonstrates the need for far more conversions of vacant office, store and parking lot space to housing. An alternative would be to build far out into deserts and other ex-urban areas, a tactic that could contribute to climate change as it would force ever-longer commutes for those who still work in offices.

Note from ONV:

Our initiative is made up of tens of thousands of neighbors, local elected officials and community leaders who all know that we need to build more affordable housing – in fact our initiative exempts 100% affordable projects.

But where and how that new housing gets built matters – and we think those decisions should be up to local neighbors – not for-profit developers or Sacramento politicians.

If you agree, join us using the form below.

This article originally appeared in the OC Register.

By Tom Elias

Every poll shows most California adults favor the housing density laws that have emerged from the state Legislature with great regularity and fanfare over the last three years.

Despite those findings, often showing 60 percent or more in favor, the rebellion against those laws has a decent chance of success.

It’s a matter of what’s at stake and who will eventually vote on the potential landmark initiative to cancel out the new laws where they conflict with local land use ballot measures passed in many cities and counties.

Polling on housing density laws has usually been done in general terms, with brief explanations of the new measures not mentioning the instability and constant variation in need estimates from state government.

Those surveys often don’t distinguish likely voters from residents who aren’t even registered to vote. Nor do they note whose life savings are invested in their homes and who is now renting. They also do not mention the changes already wrought by the new housing laws in many once-bucolic neighborhoods.

But there’s a way to evaluate who might vote and how they’ll lean if the new initiative, which states simply that “local land use planning or zoning initiatives approved by voters shall not be nullified or superseded by state law,” makes the November 2024 ballot: Check out what their stake might be in its outcome.

This is where things begin to look optimistic for the measure. A new study from the UC Berkeley Institute of Governmental Studies reveals that the vast majority of California’s most regular voters have a large stake in matters of preserving neighborhood character and ambiance.

Only 39 percent of registered voters have voted in at least five of the last seven elections, thus making them almost certain to vote next fall in the presidential election of which this initiative seeks to be part.

Out of that 39 percent, seven of 10 are 50 or older and seven of 10 are also white. Fully 68 percent of this cohort own their homes and 55 percent are college graduates.

Taken together, these facts indicate a very large percentage of those certain to vote will feel they have a large stake in defeating this measure.

Yes, for some, laws like the 2021 SB 10, which allows as many as six dwelling units on virtually all lots that now hold just one home, represent a chance to sell out to a developer and get rich quickly, as their age and home ownership status often has provided them significant equity they can now cash out.

But for the many who plan to stay put the rest of their active lives, neighborhood stability will be a major interest. The currently proposed initiative is an effort to assure such stability, even if some call the status quo racist and exclusionary.

(The measure is now undergoing the state’s normal title and summary process in the office of state Attorney General Rob Bonta, a firm advocate of the laws this measure could cancel. Time will reveal the fairness of his work on this and whether it encounters a legal challenge.)

he Berkeley IGS study shows homeowners are more likely to vote in large numbers than any other single California grouping, regardless of race. Hundreds of thousands of Blacks and Mexican- and Asian-Americans own homes in California and want to preserve the character of places where they have invested.

Add to this the utterly whimsical numbers game played by the state’s Department of Housing and Community Development (HCD), in charge of enforcing the new laws, which amounts to a one-size-fits-all plan for increasing California’s housing density in current cities while leaving outlying ex-urban lands largely vacant.

Back in 2018, Gov. Newsom claimed the state needed to build 3.5 million new dwellings by 2030, or about 300,000 per year. Even during today’s housing boom, only a fraction of that much has been built each year since. Meanwhile, HCD has revised its estimated need, first to 1.8 million, and now to 2.5 million.

All of which might leave voters scratching their heads, especially those who already doubt the wisdom of greater density. Put it all together, and this measure definitely has a chance.

This article was originally published in the Mercury News.

By Susan Candell

California clearly has a housing affordability crisis. Unfortunately, the response from Sacramento politicians has only made the problem worse. Cities and resident groups are now pushing back, and a recent court filing by one of the country’s leading planning experts confirms their contention that state leaders have got it wrong.

The narrative widely circulated is that if we simply densify our cities, eliminate single-family zoning and remove the ability of our local councilmembers to review housing developments, the result will be more affordable housing. In a stunning legal filing, this narrative was upended by a top urban planner.

Professor Michael Storper, from UCLA’s Luskin School of Public Affairs, filed a legal declaration in support of the Southern California cities’ lawsuit against the state of California over the passage of SB9. SB9 is the law that eliminates single-family zoning and allows owners to split their lot and build as many as four to six units. The cities’ lawsuit claims that although SB9 was passed on the premise that it would lead to more affordable housing, it has no affordability requirements, so will not improve affordability.

Storper agrees based on his 2019 paper, and he is willing to testify under oath to prove that the currently popular narrative supporting the state’s policies is unabashedly untrue. He says the current narrative is “fundamentally flawed and lead(s) to simplistic and misguided policy recommendations” and actually harms residents and communities due to gentrification and displacement.

Gentrification results when new expensive housing is built and the current residents can no longer afford to live there, which occurs most often in communities of color. Over 100 laws have been passed recently that require denser cities and eliminate local planning, but affordability has only gotten worse with more unhoused residents.

Storper says that the states’ erroneous narrative “diverts attention away from the real need to address housing affordability for low- and moderate-income groups already residing in the prosperous metropolitan regions.” These state policies are an unqualified failure, and a respected world policy expert is willing to testify that this whole narrative is not only false but is leading to widespread gentrification and displacement.

To make matters worse, the state has weaponized the housing planning processes, adding steep fiscal penalties on cities, hiring lawyers to sue cities and removing local input for projects if production goals are not met. An old law called the “Builder’s Remedy” allows developers to build almost anything, anywhere, if a city does not have a certified Housing Element that satisfies state bureaucrats. Hundreds of Builder’s Remedy projects have been filed across the state, taking local elected officials and residents completely by surprise.

How do we fix the untenable position that our state has imposed on us? The only solution is to pass a constitutional amendment that would allow cities to override the state laws that are failing to solve our affordability and homelessness crisis — the Our Neighborhood Voices Initiative. The state should return their attention to working with the cities, as we have done successfully in our past. Sacramento’s one-size-fits-all policies don’t work — only strong local democracy and city leaders working with the residents can achieve our shared goals.

Thank you, Professor Storper, for your willingness to testify that the popular narrative of upzoning, densification and deregulation of California’s housing markets does not and will not work.

We must unite, fight for local democracy and solve the complex problem of housing affordability together.

Susan Candell is a member of the Lafayette City Council and a proponent for the Our Neighborhood Voices Initiative.

From the study:

Urban economics and branches of mainstream economics – what we call the ‘housing as opportunity’ school of thought – have been arguing that shortages of affordable housing in dense agglomerations represent a fundamental barrier to economic development. Housing shortages are considered to limit migration into thriving cities, curtailing their expansion potential, generating rising social and spatial inequalities and inhibiting national growth.

According to this dominant view, relaxing zoning and other planning regulations in the most prosperous cities is crucial to unleash the economic potential of cities and nations and to facilitate within-country migration. In this article, we contend that the bulk of the claims of the housing as opportunity approach are fundamentally flawed and lead to simplistic and misguided policy recommendations. We posit that there is no clear and uncontroversial evidence that housing regulation is a principal source of differences in home availability or prices across cities.

Blanket changes in zoning are unlikely to increase domestic migration or to improve affordability for lower-income households in prosperous areas. They would, however, increase gentrification within metropolitan areas and would not appreciably decrease income inequality. In contrast to the housing models, we argue that the basic motors of all these features of the economy are the current geography of employment, wages and skills.

Read the Full Study and Amicus Brief Below:

Note from Our Neighborhood Voices:

More and more Californians are waking up to the fact that “trickle down housing” has not made all housing more affordable like Sacramento politicians and for-profit developers tried to tell us it would. Now they are telling us that the “solution” to our affordable housing crisis is to destroy local democracy and turn all land use decisions over to developers.

If we want real, lasting solutions to our affordable housing woes, we need to put communities first – not developer profits.

This article originally appeared in Common Dreams

By Fran Quigley

Millions of people simply do not make enough money to consistently afford market-rate housing.

A few weeks ago, I drove through my hometown of Indianapolis to a court session which had nearly 200 eviction cases set on the docket. On the way, I passed multiple construction projects, several of them building apartments or other housing.

Contrary to popular belief, all that construction won’t help the hundreds of families I saw facing eviction. Nor will it be of any benefit to almost any of the 13 million other households currently behind on their rent or mortgage or the 600,000 people who are homeless in this country.

You wouldn’t know that from listening to the Biden administration, state governors, and think tanks, all of whom trumpet the virtues of building more housing. The New York Times diagnoses homelessness as a simple “supply-and-demand problem.”

The Atlantic writes that “The Obvious Answer to Homelessness” is, you guessed it, building more housing. Earlier this summer, when tenants brought their concerns about high rents to the National Multifamily Housing Council, the largest corporate landlord lobby in the country, they too were told that their struggles to afford rising rents could be solved if we just build additional housing.

How did such a powerful consensuscome together? As the saying goes, follow the money. Government subsidies and tax breaks for housing construction makes real estate developers fabulously wealthy. Banks, realtors, and corporate builders prosper from new construction, too. These industries’ fingerprints are all over the reams of reports and articles claiming that we must build our way out of the housing crisis. As Politico reported in November, “Lobbyists are scrambling to get help from Washington to goose the housing market.”

Maybe we should listen instead to the housing experts whose bank accounts don’t get a boost every time a crane goes up. Take Alex Schwartz and Kirk McClure. Schwartz, a professor at the New School, literally wrote the book on U.S. housing, Housing Policy in the United States, now in its fourth edition from Routledge Press. McClureis professor emeritus in urban planning at the University of Kansas. Like Schwartz, he is a widely-published, highly-decorated expert on housing markets.

In a recentBarron’s article, Schwartz and McClure decided to look past the housing-supply hype and crunch the numbers. Those numbers show that 21^st century housing construction has produced a surplus of 3.5 million units, including a surplus in virtually every metropolitan area. New York, for example, has a quarter-million more units than are needed to house its population.

Schwartz and McClure put it plainly: “Nationally, there is no shortage of housing, and adding to the surplus won’t resolve the nation’s affordability problems.”

Past the profit-focused cacophony insisting on building more housing, Schwartz’s and McClure’s warning is being repeated by others. Allan Mallach, a senior fellow at the Center for Community Progress and the National Housing Institute, concurred in large part with Schwartz and McClure in a Shelterforce article earlier this year. While Mallach does think building modestly-priced housing will help middle-income families, he rejected out of hand the notion that housing construction will solve the crisis experienced by the very low-income people who are homeless or housing insecure.

New construction’s impact is even more limited considering that the a great deal of new housing construction is luxury priced. The idea that production of higher-end housing expands the supply in a way that allows other housing to become affordable is known as “filtering.” But, among the several reasons this theory is unsupported by evidence is that it does not account for the millions of wealthy institutions and individuals keeping units vacant in lieu of renting them for lower prices. Empty condos in cities are sometimes known as “safe deposit boxes in the sky.” They are so plentiful that, in some U.S cities, there are more vacant units than there are homeless persons.

So, if a lack of supply is not the problem, what is causing our housing crisis? Schwartz, McClure, Mallach, and others offer the straightforward explanation that is also reported annually by the National Low-Income Housing Coalition’sOut of Reach reports, which is the same explanation our clients tell us time after time: Millions of people simply do not make enough money to consistently afford market-rate housing. We routinely represent people who fell behind on rent because it amounted to 80% and more of their entire incomes from low-wage work or disability checks. As the title of a 2019 Mallach article pointed out, “Rents Will Only Go So Low, No Matter How Much We Build.”

New construction won’t fix that problem. But other approaches will, including expanded and improved public housing and rent control. (The well-documented neglect of U.S. public housing maintenance and the enormous unmet demand for subsidized units make new public housing an exception to the rule that new construction won’t help those most in need.)

Schwartz, McClure, Mallach, and others call for universal housing vouchers, a fast, straightforward remedy for the shameful fact that 3 of every 4 eligible households are blocked from transformative housing subsidies simply because we don’t fund the program adequately. Universal vouchers, featured in President Joe Biden’s 2020 campaign platform, should be an interim step on the path to social housing freed of the for-profit market. And voucher expansion must be accompanied by laws prohibiting landlords from discriminating against voucher holders.

There may be great value in boosting housing construction, including creating good-paying jobs and providing more options for middle-income households. But let’s stop pretending that it will solve the affordability crisis faced by our clients and millions of other low-income Americans.