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.
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.