Negotiations are underway in Sacramento over housing. Here’s what’s up.
San Francisco Assemblymember David Chiu put $1.3 billion for affordable housing in the state budget. The Governor’s budget included zero housing funds. Chiu’s proposal would have, for one year, allocated about what the State used to spend annually on affordable housing through redevelopment, before Gov. Jerry Brown ended redevelopment.
Last year, Chiu got bipartisan support for a $300 million tax credit for affordable housing, which Brown also vetoed. Then Brown vetoed Chiu’s bill to resolve legal challenges to local inclusionary mandates to require a percentage of affordable housing in new development. Why?
When Brown removed the $1.3 billion for affordable housing from the budget, he said that land and construction are too expensive for public subsidies to address the housing crisis — that might be persuasive, except that literally no one argues that public subsidy ALONE could address the housing crisis. Moreover, a new analysis from UC Berkeley concludes that subsidized affordable housing has double the impact of market-rate development in reducing displacement. So maybe Brown is just wrong, and California needs both new construction and subsidies.
In Brown’s ascetic Jesuit ideology, the role of government is to assist the market. A market existing to maximize profit never meets the needs of poor people because poor people are not profitable. If rich people are rich enough — which they are here and now — middle-class people aren’t profitable either, and the market will fail them. That is why government should protect people from the market.
Brown would unleash the market to save us from ourselves by allowing construction “by right” — automatic approval without the irritating, unpredictable and slow democratic process. He supports Assembly Bill 2501 — coincidentally, along with the Association of Realtors, the champion of the underdog — to allow unchallengeable approval for projects compliant with existing zoning and density restrictions and include 20 percent affordable units, or 10 percent near transit. He believes that accelerating production will increase supply and bring prices down.
All goes into the “Big Three” negotiations over the budget between the governor, assembly speaker and senate president. So some affordable housing money may get restored to the final deal. The conventional wisdom is that the governor gets his way, because no one can threaten or offer him anything in a negotiation that he cares about.
Some advocates are trying to amend AB 2501 to make it more palatable. For example, making sure that by right can’t be used to demolish existing rent-controlled units, or that it would provide performance-based exemptions for cities that are already building, like San Francisco.
For all the tweets about San Francisco’s legendary and tortured approval process, denouncing activists for stubbornly refusing to allow developers to make millions, San Francisco and Oakland in fact do most of the housing construction in the Bay Area. San Francisco could never build enough housing to offset the addition of jobs without housing across all the suburbs.
If AB 2501 aimed at exclusionary suburbs that guard quaint subdivisions while adding jobs by the thousands, it would be fine. Instead, it encourages suburbs not to rezone to allow more housing, for fear that rezoning would be their last shot at local control. In San Francisco, AB2501 projects would probably have to comply with existing inclusionary policy, but it could drop a displacement bomb on Oakland, which has weaker inclusionary rules and displacement protections.
Since the end of redevelopment, negotiations over individual developments are the main way communities fund affordable housing. In San Francisco and Oakland, communities drive hard bargains, get some good deals and stuff gets built. If the governor funded affordable housing, it would ease the pressure on these negotiations. Instead, with AB 2501, he tips the scales toward developers and Realtors so they don’t have to negotiate with dumb community people who don’t even wear suits.
Expect a backlash, and maybe a proposition, from small white towns angry about a state power grab.
Nato Green, also known as @natogreen, and hosts a monthly movie-riffing show at the Alamo Drafthouse called Riffer’s Delight.