Sacramento’s easy answer to our housing crisis, Senate Bill 50, has been delayed until early 2020. While this is good news for those who respect local control, don’t expect housing activists to give up.
Left-wing opposition to SB 50 focused on a perceived lack of affordable housing requirements. Even prominent supporters of the measure — such as the Los Angeles Times’ editorial board — argued for explicit affordable housing requirements near transit.
Proponents of affordable housing often fail to inform us of significant infrastructure needs. On top of that, they deny that affordable housing mandates result in unaffordable housing for everyone else.
Let’s start with infrastructure. A larger population requires more roads, increased public transportation capacity, more teachers and schools, increased water and sewage connections and more emergency services personnel. It also requires more grocery stores, restaurants, coffee shops and entertainment options. The list can go on. All of these require zoning allocations and/or more public dollars.
BART and Caltrain are already overcrowded. The next iteration of SB 50 will likely include expanded affordable housing requirements. This would force Bay Area cities to add thousands of new units along already overcrowded transit lines. We have yet to see a workable proposal that modernizes our aging systems and also massively increases capacity. Major upgrades will also increase the cost of using an already expensive transit system.
Additionally, few are willing to admit that “inclusionary housing ordinances” result in increased prices for all but the lucky few who win a housing lottery. Requiring developers to rent 10% to 20% of new units at below-market rates causes a proportional pricing increase for the market-rate units. Everyone ends up paying more, including those in the low-income units as those prices rise with the rest of the market eventually. This is to say nothing of the onerous development regulations that lead to public reviews taking years, which further reduce the incentive for development.
Others bring up an “imbalance” between job and housing projections at the local level. For example, Burlingame plans on adding nearly 3,000 new units by 2040 — representing a population increase of over 20 percent. The city also projects job growth of nearly 10,000 workers in that same time period. This appears unbalanced at first glance.
However, not everyone lives where they work, especially on the Peninsula where cities are small in terms of land area. Also, projections over a 20-year period are based on today’s trends and therefore are not worth much. Claiming that balanced projections for 20 years in the future will solve our problems is policy analysis by way of grade school math.
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The only real solution would be to kick out current residents, bulldoze everything and build skyscrapers around the entire Bay Area. That will never and should never happen. No one has an realistic plan for addressing high housing costs because it is a symptom of a deeper problem.
The low-income housing threshold for a family of four in San Mateo County is a whopping $117,400. Compare that to New York City’s $83,450 or the national average of around $50,000. We should address the root problems that make the cost of living so incredibly high. Let’s revisit the high tax rates on just about everything and the crushing regulations that prevent small businesses from succeeding because they can’t afford regulatory compliance teams. A few thousand affordable housing units in a region with more than seven million people will not change much.
Perhaps we should consider that there is an upper limit to the Bay Area’s population given the limitations of our current infrastructure. We do not need to accommodate every individual or company that wants to be here.
The market is already addressing affordability for us. California has experienced negative migration for two years in a row. Employers and residents continue to leave for states with lower costs of living. The spread of the tech industry beyond the Bay Area is a positive development, as extreme economic concentration is corrosive. Just don’t tell that to the politicians in Sacramento who want to continue the tax bonanza from high-paying technology jobs.
Now that SB 50 is tabled, let’s refocus on improving life for the people who already live here. We should improve our strained infrastructure and reinvigorate the small business climate so all socioeconomic levels have an opportunity to prosper.
Unfortunately, Bay Area cities should consider funding litigation reserves for whenever Sacramento decides to overstep its authority. According to state Sen. Scott Wiener, D-San Francisco, “This fight is far from over.”
Nick Humann is a resident of Burlingame and a financial analyst for a satellite internet venture building the world’s largest satellite constellation.
(18) comments
Any discussion of housing affordability should probably start with the fact that San Mateo County is building the lowest number of new housing units this decade than we have in any decade since the 1930’s. We stopped building housing and, surprise, it got a lot more expensive. What is odd is the push from “affordability advocates” to oppose building the same amount of housing as we did in the 80’s.
Caltrain is right now discussing how to go from 60,000 riders a day to 250,000. BART is spending $3 billion on new trains. We are widening 101. We are spending $200 million on grade separation in Hillsdale. We just passed $40 million a year for bike/ped/road improvements.
What other infrastructure investments are you looking for??
I'm pretty sure I remember you saying that San Mateo County had one of the most dense populations in the country. Correct me if I'm wrong but doesn't that say something? Are you the guy who wants to put 10 gallons of water in a 5 gallon bucket?
Sure it's denser than most but it's still half as dense as San Francisco.
There are still plenty of surface parking lots that could have housing above them. We could also make it legal to replace single family homes with fourplexes.
It's just kind of unrealistic to live in an area that is home to Apple, Oracle, VISA, the country's 6th busiest airport, and numerous other Fortune 500 companies and expect it to stop building housing.
The densest city in San Mateo County, Daly City, is the 82nd densest city in America, at 13,195 people per square mile, according to the 2010 Census (https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=bkmk).
The next 3 largest cities in San Mateo County -- San Mateo, Redwood City, and South San Francisco -- are the 358th, 2,077th, and 537th densest cities in America, respectively. Note that none of this is counting the vast tracts of open space in the county, which we should protect.
If you exclude open space and only count the incorporated cities in the county, San Mateo County's population density is 5,283 people per square mile. That would be the 21st densest county in the country, and less than one-third the density of San Francisco. If you count the open space, San Mateo County is the 98th densest county in America.
However you slice the data, I don't see how anyone can argue that there isn't space to grow here, especially since we seem to have unlimited capacity to allow the tech companies to expand within our borders.
Another of a long string of solid arguments pointing out the shortfalls of SB 50. A good starting point for resolving the jobs - housing imbalance in this area will be to not make the situation worse; local governments should not be entitling any developments that increase the number of jobs in this area.
A sentence with the words "a long string of solid arguments" followed immediately by a sentence that says, "instead of building more housing, the obvious thing to do when it is very expensive and commutes are long, turn our backs on an economy 49 states would kill for."
I’ll let others tackle the misguided substance of this editorial (i.e., that the Bay Area is somehow full and there’s a way to solve our problems by acting as if it is). I’ll just address a number of the technical mistakes about how housing and transportation works so that others don’t repeat them:
1.) Assertion: “We have yet to see a workable proposal that modernizes our aging systems and also massively increases capacity. Major upgrades will also increase the cost of using an already expensive transit system.” Correction: Construction is already underway on Caltrain electrification, which is projected to be complete by 2022. Faster and more frequent trains means that system capacity will increase by 30% (https://calmod.org/). Caltrain is also considering their long-term plans through 2040 this summer, and the highest-growth proposal could accommodate tripling ridership (https://www.caltrain2040.org/). That’s basically like building another 101 in terms of commuter throughput.
2.) Assertion: “Requiring developers to rent 10% to 20% of new units at below-market rates causes a proportional pricing increase for the market-rate units. Everyone ends up paying more, including those in the low-income units as those prices rise with the rest of the market eventually.” Correction: This is not how an inclusionary zoning ordinance for affordable housing works. When cities enact such ordinances, they generally consider how much value is being created for the developer by allowing different densities of units. As more units are allowed on a parcel, the potential profit for the developer goes up. Putting inclusionary zoning in place simply recaptures some of this value for the public good -- since the public is creating the value through higher-intensity zoning -- and this allows local workers and other vulnerable groups (seniors, the disabled) to pay rent in proportion to their income. Inclusionary zoning does not mean that the market-rate tenants are subsidizing the below-market tenants on an ongoing basis. Indeed, even if they were, the market rate is the market rate, and a landlord can’t just charge more than the market will bear because their costs are high. Their unit would lay vacant if they tried.
3.) Assertion: “Others bring up an ‘imbalance’ between job and housing projections at the local level. … Claiming that balanced projections for 20 years in the future will solve our problems is policy analysis by way of grade school math.” Correction: No one is suggesting that cities merely try to balance theoretical jobs/housing projections two decades out. What we should be doing is looking at current job creation and current housing production and doing our best to keep them in balance. Indeed, the Home for All initiative by the county (https://homeforallsmc.org/) is one attempt to do just that, but cities individually should be doing more within their own borders. The consequences of not doing this -- higher rents, worse traffic, worse parking -- impact their residents directly and immediately.
"The market is already addressing affordability for us. California has experienced negative migration for two years in a row."
There are two huge problems with this statement. First, it is disgusting to suggest that people being displaced from California is a good outcome and a sign that the market is producing desirable outcomes.
Second, the housing market (and by extension, land use market) is extremely regulated. It is not the free market in any meaningful sense but rather onerous government overregulation that is creating the housing affordability and availability crisis. Specifically, government regulation in the form of single family home zoning (i.e., the government mandating that a property owner can only build a residence for a single family and do nothing else with their land) locks up vast swathes of land to a single, highly restricted use.
Cost of everything and anything is determined by competition.
If California politicians were truly concerned with the next generation being able to purchase a HOME and continue to live in California, they would eliminate the outside profiters. Yes anyone in the world can purchase residential properties in California. Easy fix, one needs to be a citizen of the UNITED STATES to purchase residential property, a Home in California. Try and buy property in China, no way. Yet profiters with unlimited government backed money from china bid against our youth. California property started its rise when China allowed its citizens to travel. Good for China bad for Home Grown Kids in California. Realestate profiters living in foreign lands are buying our children’s future.
The politicians are walking in circles, “ don’t use water” but build more housing. Affordable housing yet unlimited world competition for purchase. Plan and simple, our politicians our ether idiots or corrupt. Our concern for our children is called “racist” yet Rose PAK SF activists owned several illegally purchased affordable homes. Corruption shadowed by name calling. Citizenship should be the first qualifier not CASH and Corruption. Those homless on the streets are US citizens not foreign born real estate profiters. Family first, tuff but true.
You mention "competition" as if it's easy or even legal for homeowners to replace a single family home with four homes.
"The market is already addressing affordability for us. California has experienced negative migration for two years in a row."
Yet... our population continues & will continue to grow.
Source: ACS
Net Natural Increase: 196,471
+ Births: 477,145
- Deaths: 280,674
= 196,471
Net Migration: -38,271
International: +117,797
Domestic: -156,068
= -38,271
Population Change: +158,200
Total Population Change, including residual (an ACS Statistic figure): +157,696
learn about residuals here: http://www.census.gov/programs-surveys/popest/about/glossary.html
Learn More about the above data here: PEPTCOMP - Estimates of the Components of Resident Population Change: April 1, 2010 to July 1, 2018
Social Housing Advocates will not stop their takeover attempts on housing in our state. The thing that Nick said that I completely agree with is his suggestion that we consider an upper limit to the Bay Areas population. SB50 was contentious and unprecedented and like rent control measures, was solidly rejected this year. Good letter Nick, you bring up a lot of good points that should be considered in the long run when approving mass housing.
Sorry it's not clear how making it legal for homeowners to replace their single family home with a fourplex is a "takeover" or "social housing." Nothing is being taken over! By giving property owners more choices to do what they want with their land we'd actually be increasing individual liberty.
If you want to live in an area with slow growth and a population limit maybe try somewhere that has not had a red hot economy and booming tech companies - Apple, Oracle - around since the 1970's, there is plenty of land and open space in Manteca, Lancaster, Nevada etc.
Well written piece. Thank you.
The next, very overdue, major seismic event will have a significant impact on Bay Area employment and housing.
More and more truth bubbling to the surface - while YIMBYs continue to toil away, hoping to erode truth with 'emergencies' so we will act without proper thought. Great article on how Joe Public gets manipulated by these people and how they blame us for wanting to think it over. https://www.washingtonexaminer.com/opinion/localism-still-has-a-heartbeat-even-in-california
Last week the California State Senate passed a law requiring community colleges to keep their parking lots open for students who are sleeping in their cars, but sure, the status quo is doing just fine.
Can your kids afford to live on their own here? Could you afford to live here if you'd been born in 1990?
Finally, a commentary by Mr. Humann which outlines the problems with housing and gives sensible, accurate and necessary critique and solutions.
Yes, "affordable" (which is not really affordable) housing results in unaffordable housing for everyone else. Mr. Humann mentions below market rates cause proportional pricing increases for market-rate units.
His statements about "infrastructure" are right on. Many highways need near twice the available travel surfaces to accommodate reasonable flow of traffic now, not even planning for future increase. Perhaps add to freeways and bridges making them double-decker.
Build more bridges across the Bay. Not everyone wants to live on the Peninsula. Many want a single family home with some land and garage for family and animals. Perhaps a warmer climate. More bridges (and highways) will allow for that travel.
It has been said, we have a lack of transportation/highway crisis, not a housing crisis.
And yes, let's face that there is a limit to the Bay area's population given limits of infrastructure, schools, roads and land. These should all be planned for and addressed before adding any more SB50-type housing (which is a bonanza to developers). Perhaps after roads are built so that people can travel in and out of our area, we'll find that more housing may not be as necessary.
We have a transportation/highway problem, not a housing crisis.
Lots of good points. When Scott Wiener pushed SB 827 last year, it was reported that big corporate employers were behind it - seeking more housing, including luxury condos, for employees that they had imported and planned to import from outside of California. There was little talk of housing "affordable" to anyone else. The corporations formed a political group they named YIMBY (yes in my backyard). The corporations actually wanted and still want YOUR BACKYARD or at least your neighborhood. You don't own your neighborhood. It is FOR SALE in Sacramento. Scott Wiener's bill this year (SB 50) proposes to throw in some more "affordable" housing units for the same employees. A 25% discount on a $2 million condo in Mountain View or Los Altos would be a mere $1.5 million. Any 7-11 employees buying in? How about teachers? Cops? Nope. And if any developers choose to build apartments instead of condos, which might be rare, 25% off of $5,000 per month rent would not help any Uber drivers or dog-walkers or students - except insofar as new housing not goobled up by newcomers frees up existing housing for others - a tiny possible TRICKLE-DOWN benefit Instead of adding housing wherever corporation's fancy, government should limit where and on what terms corporations can take over large areas. Great to have profit-making businesses. But, as the piece notes, the corporations bring burdens and other needs beyond housing that must be assessed and addressed. The corporations and their representatives are just getting started. SB 50 and like bills will pass in Sacramento and be signed into law. At that point, city and county "leaders" can initiate and pursue referenda to suspend the laws pending a statewide vote. What real local leaders would be doing now is formulating and the circulating a state initiative constitutional amendment that would secure some local authority over land use that state politicians in Sacramento could not sell.
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