
The Fight to Save a Silicon Valley Trailer Park - Bud
http://www.wsj.com/articles/the-fight-to-save-a-silicon-valley-trailer-park-1439566484
======
stvswn
To oppose housing subsidies is to always be considered heartless, siding with
the rich, etc. But you cannot create prosperity by destroying wealth. The
broken windows fallacy applies here.

It's easy to see the cost of allowing the property value to rise to market
rates: people will have to find new homes. I'm not blind to the fact that this
would be a terrible upheaval in their lives. The places where they might
afford to live might be much worse than their current situation.

But -- there are costs to subsidizing their rent (and it is a subsidy -- if
the law prevents market pricing, someone is paying for it). These costs are
hard to estimate, but they are the cost of rising property prices elsewhere
due to artificially low supplies, the cost to property owners who cannot
realize the full potential of their assets, and the costs to the construction
industry which cannot improve the land.

There is also the cost, maybe most importantly, of all of the money that is
artificially tied up in the rent being paid by others that cannot be spent
elsewhere. That infusion of spending would mean a lot of new wealth for
workers in the service industry, for example.

Destroying wealth so that a lucky group of (perfectly decent) people can live
cheaply in one of the most expensive ZIP codes in the nation may sound
compassionate, but there is a cost, and there are unlucky people who suffer.
Those people aren't all rich. It's impossible to measure the marginal gain in
wages and new jobs created if the real estate prices in the Bay Area were
deregulated and allowed to float to the market rates. But the gains would be
real, and real people would benefit, and there are real people throughout the
rest of the Bay Area who do not get to live in Palo Alto and who are really
suffering.

~~~
resu_nimda
_but they are the cost of rising property prices elsewhere due to artificially
low supplies,_

Is this an actual problem? Isn't this a desired effect, balancing out the
prices, so that the subsidized area doesn't become a prohibitively expensive
anomaly?

 _the cost to property owners who cannot realize the full potential of their
assets,_

I imagine the property owners in question are doing just fine (just being in
the class "property owners" means they are better off than most in the area),
again I don't think this is an actual problem.

I appreciate your comment, but it seems to be a lot of handwaving about a
vague "destruction of wealth." What number and what type of people would
benefit from deregulation/removing subsidies? Would it really be the people
that are suffering and struggling? I'm not seeing it.

~~~
stvswn
Yes, undersupply and high prices are a problem. Only 9% of the housing stock
in SF is available for rent at market rates. I know it is the desired effect
of subsidies to reduce prices for a worthy class of people, but my point is
that it doesn't do a good job, and it doesn't have the desired effect, and
that there are unseen costs.

Frederic Bastiat wrote about this in 1850. It is a foundational concept of the
Austrian school of economics. Reasonable people dispute classically liberal
economics, but its been thoroughly studied. I'm not hand-waving. Yes, the
concept of measuring the wealth that was destroyed seems "vague," that was
precisely his point. If you're interested:
[https://en.wikisource.org/wiki/Essays_on_Political_Economy/T...](https://en.wikisource.org/wiki/Essays_on_Political_Economy/That_Which_Is_Seen,_and_That_Which_Is_Not_Seen)

~~~
resu_nimda
_but my point is that it doesn 't do a good job, and it doesn't have the
desired effect, and that there are unseen costs._

You haven't really demonstrated that it's worse than the alternative, let
alone how or why. Of course there are unseen costs; there always are, with
matters of public policy affecting so many people. I could say the same exact
thing about the inverse situation of an unregulated free market - "there are
unseen costs that are hard to measure." Is that a strong argument against it?

edit: In other words, how do you conclude that the costs that you describe
outweigh the costs of people being pushed out of their homes, the cultural
effects, etc? Ultimately it ends up as a subjective value judgment, there are
too many factors and human emotions at play to be objective. I don't really
believe in trickle-down economics or the magic ability of the free market to
correct all social ills, I believe in directly helping those that need it
most.

~~~
thwarted
_I don 't really believe in trickle-down economics or the magic ability of the
free market to correct all social ills, I believe in directly helping those
that need it most._

In some cases, "those who need it most" only need it because of the economic
environment created by regulation. In many cases, "directly helping" may solve
the short-term, immediate concerns of those housing/economically
disadvantaged, but doesn't actually serve to fix the problem that's making
things the way they are to begin with.

In SF, there's a lot of rhetoric around "market rate housing" and "affordable
housing". Presenting it as a dichotomy as such ignores that there are things
that could be done to make market rate housing the same price as affordable
housing. There wouldn't be talk of "affordable" housing as a distinct thing if
"market rate" wasn't so out of whack because of the complex economic and
political incentives and setup in California, the Bay Area, and SF.

Another thing that I see frequently glossed over is that "market rate" isn't a
single thing. It has different values based the actual quality of the property
in question. I'd love to move into a better place at the same rent I'm paying
now, because really, my current place is way overpriced considering the
quality and I can afford to continue to pay the rate I'm paying. But it's not
worth it for me to move because so many places are equal or less quality and
equal or more in price. There are no better places coming on the market at
this price point. If the economic and political climate was such that the
market was able to provide an equal or greater quality place for equal or
greater price, that would free up a lesser quality place (because I could move
there) and reduce its price to a market rate based on its quality that someone
with lesser means could then afford. The availability of residences is a
significant contributor to the market rate for residences in SF, so much so
that it dwarfs all other possible influences on the market rate.

That being said, I do believe that the market needs to be able to provide a
wide range of quality — just building high end housing isn't going to be as
fast or as solid of a fix as building housing for many different kinds of
economic classes. This is part of the problem around mandates to build
"affordable housing" or "subsidized housing" (usually as a percentage of total
building): these are, by definition, below market rate, but someone is paying
for the difference between "affordable" and "market". That spread needs to be
reduced, rather than subsidized.

~~~
resu_nimda
_In many cases, "directly helping" may solve the short-term, immediate
concerns of those housing/economically disadvantaged, but doesn't actually
serve to fix the problem that's making things the way they are to begin with._

Agreed. In this case, the problem is that a lot of people with money want to
live in SF now and there just aren't enough places to put them. I do agree
with the consensus that the NIMBYs need to accept that and allow construction
of more units, at all price points.

 _that would free up a lesser quality place (because I could move there) and
reduce its price to a market rate based on its quality that someone with
lesser means could then afford._

Maybe, but that is basically a trickle-down assumption. It's also possible
that there is a near-inexhaustible supply of rich people who would buy a
second or third or fourth home, or foreigners looking for pied-a-terres, and
then this expensive low-density new construction has left everyone else
exactly where they were, except market rates may have actually increased.

The reason I lean towards subsidized housing is because (yes, in the short
term), it directly helps the people that are struggling, rather than relying
on the playing out of complex economic theories that coincidentally give
justification for rich people to not actually care about poor people ("just
let us do our thing, and eventually it will work out for everyone else...we
promise").

~~~
thwarted
_that is basically a trickle-down assumption_

Invoking Reaganomics is a red-herring. It's used as a response to the
kinds/quality of buildings built in the short term (or currently are being
built) as if that's the only kind that need to or will be built (however, it
_is_ the only kind that is and will be built without policy change and getting
rid of NIMBYism). That's not the case. As I said, there needs to be a glut of
all kinds of buildings being built. There is no reason to build anything other
than high end currently, because availability is limited.

 _The reason I lean towards subsidized housing is because (yes, in the short
term), it directly helps the people that are struggling, rather than relying
on the playing out of complex economic theories_

This is not an either or proposition, however it is often presented as one
(and you just did with the use of "rather"). It is possible to subsidize those
who need it in the short term _and_ open up the market for a wider range of
building with effects to occur in the medium and long term. Both should be
done. Once the market forces take effect, the subsidizes won't be as
necessary. Or alternatively, if you're completely right that the market won't
fix any of this, the subsidizes will already be in effect and useful and they
can continue and we'll have a larger set of housing stock.

Supply and demand is not a "complex" economic theory, and presenting it as
complex is disingenous. What we have now, with perverse incentives, taking
everything to the voters with propositions at election time, NIMBYism,
subsidizies, uninutitive zoning, is what is complex and leads to unintended
consequences. Make no mistake: we are where we are now specifically because of
decisions made over the last twenty years (although, one can argue that where
we are now is exactly where NIMBYs want us to be).

Directly building more residences is not the only thing that can be done to
lessen this pressure either. There are huge swatches of the city that are
undesirable specifically because of lack of accessiblity and transportation.
Public works projects that directly benefit all economic classes need to be
considered, and perhaps forced through.

However, none of these things can be done overnight and if we were to start
_today_ on any of them we wouldn't see any significant movement for a few
years and the end result for perhaps a decade. That's part of the problem too:
there's a desire to see the effects immediately, but there is _literally
nothing_ that can have effect immediately. But doing what we're doing now,
restrictions on building, moritoriums for research (which is really just a
delaying tactic—I don't believe any "impact study" in California is a sincere
concern for whatever is being studied), isn't helping anyone and only serves
to push prices higher in the shorter term.

Solely subsidizing housing doesn't address the fact that the spread between
what lower income backets _can_ pay and what is available is going to keep
increasing, which is only going to serve to make subsidies more expensive over
time. And continuing to increasingly pay more for something when there are
other things to at least try to reduce the cost is a losing proposition.

~~~
resu_nimda
Good points, thanks.

------
rhino369
If the city was smart they'd cut a deal in which the whole site is replaced
with 40 story high rise apartment buildings. And the city can purchase one and
let these people live there with affordable rent.

~~~
x0054
You are of course assuming that these people are willing to live in a 40 story
high rise apartment. I am not saying they are entitled to live where they are
currently living, or making any other claim like that. But you are making an
assumption that just because someone enjoys living in a trailer house, they
must also be ok with living in an apartment. That may not be the case, at
lease that's not the case for me.

Also, I am not familiar with the area in question, but isn't it quite
susceptible to earthquakes? I am not saying don't build a multistory building,
but 40 stories?

~~~
rhino369
I'm sure they'd rather live in the trailer, but you can't always get what you
want. They are living on someone else's property.

I fully expect they'd rather live in a cheap apartment in Palo Alto over a
wherever the nearest empty lot large enough and cheap enough to host a trailer
park. I'd imagine that's pretty far away.

What will actually happen is that they will get evicted and 2 million dollar
mini-mcmansions will get built there instead.

~~~
x0x0
_very_ mini. With price per ft2 now nearly $1.4k, $2m is 1430 ft^2. That's not
tiny, but for a 3 bedroom it's far from a mansion.

[http://www.trulia.com/real_estate/Palo_Alto-
California/marke...](http://www.trulia.com/real_estate/Palo_Alto-
California/market-trends/)

------
jseliger
Seeing comments like this appear in the WSJ is disappointing:

 _Years ago, “anyone could live in Palo Alto,” says Saul Bracamontes, 30, Ms.
Escalante’s boyfriend and the produce leader at the local Whole Foods market.
“Now people are getting separated because some make less than others.”_

People aren't really "getting separated because some make less than others" in
this instance—they're "getting separated" because the entire Bay Area makes it
incredibly hard to increase housing supply:
[http://www.citylab.com/housing/2015/07/whats-the-matter-
with...](http://www.citylab.com/housing/2015/07/whats-the-matter-with-san-
francisco/399506/). The Bay Area has an entirely self-inflicted housing crisis
that primarily benefits existing owners. Matt Yglesias describes more in "The
Rent is Too Damn High" ([http://www.amazon.com/Rent-Too-Damn-High-Matters-
ebook/dp/B0...](http://www.amazon.com/Rent-Too-Damn-High-Matters-
ebook/dp/B0078XGJXO)).

Housing affordability is primarily a political / legal problem. It can be
solved relatively easily, if and when voters (and by extension politicians)
want it to be solved.

~~~
gozo
The problem is that housing demand is very elastic while housing supply isn't.
The solution is only easy if you ignore all the problems. It's not really
unexpected that people won't magically agree to things that will affect them
negatively. The far easier solution rather than increasing supply is to shift
demand to other areas.

~~~
kjksf
And what is your far easier fix (compared to building a few skyscrapers) for
shifting demand to other areas?

Call in army, put a gun to Larry Page's head and say "relocate to Ohio, or
else"?

There's a very simple reason all the programmers come here: because this is
where all the jobs are.

There's a very simple reason all the companies come here: because this is
where all the potential employees are.

~~~
gozo
"compared to building a few skyscrapers"

You build a few skyscrapers on very valuable land and then what? The area gets
even more popular, congestion gets worse further decreasing the viable area in
terms of commuting, some of those people would want to start companies close
to where they live and now there's even more demand for that area.

No, it's not about relocating to Ohio. It's about doing what a lot of growing
cities have done with success. Promote other areas. Paris, New York, London
etc. all went through phases where one area was after another was gentrified.
Those are of course not cheap cities, but they are also much bigger. Locate
the central business district somewhere else. London built it's business
district in the former dock area, Paris business district is outside the city
etc. Increasing public/semi-public transportation. Good transport takes some
time, but that a multitude of companies already did this (just not in a very
helpful way in terms of housing) shows that fairly quick change is possible.

Most of this is just money problems. Promotion, incentives, transport, image.
You said it yourself, people go there for the opportunities, it doesn't matter
to them if those opportunities start to show up in a wider area.

~~~
ItsDeathball
_You build a few skyscrapers on very valuable land and then what? The area
gets even more popular, congestion gets worse further decreasing the viable
area in terms of commuting, some of those people would want to start companies
close to where they live and now there 's even more demand for that area._

For most cities around the world, throughout history, this has their
definition of _success_. Cities grow and change, and deal with the
complications of that growth, or they stagnate and decline as economic
development moves elsewhere.

Paris and London built new high-rise business districts in their suburbs to
protect their historic urban cores. This can help relieve demand pressure that
otherwise can't be satisfied in a city largely protected from development by
regulation. The application to the Bay Area, however, would be to protect San
Fransisco by building high rises in places considered less architecturally and
historically significant - like trailer parks in Palo Alto.

------
batbomb
In San Francisco this would be the equivalent of buying a few SROs, which the
city has banned.

I think sales like this (and SROs) should be permitted so long as only higher
density with enough units set aside to replace the displaced previous
residents on-premises. That would be a win-win, I think, but it would mean
that the residents would need to be displaced for some amount of time, which
is hard to do when you don't have any available units to absorb them.

This particular location is relatively well served by public transit. It's not
terribly close to caltrain (~1 mile) and it's right off of El Camino.

The alternative it seems is to let these residences languish and decompose
while people live in them. I suppose this isn't quite as big of a problem in a
trailer park as residents can attempt to get a new trailer, but I suspect
their land rental will go up so much that even that becomes impossible. I
think that sucks.

------
Animats
Belle Vista trailer park was one of the very few low-income areas from which
students could get into the Palo Alto school system. Palo Alto is very strict
about that - they even have an online form for reporting out-of-area
students.[2] For poor people, there's the crappy Ravenswood school district.
On the other hand, the trailer park is mostly retirees.

There are trailer parks all along the coastal area of the bay on the SF
peninsula, dating from when that area was used as trash dumps. Google HQ is
next to a former trash dump; Shoreline Park is a landfill, and in its early
days had methane fires. Because no one wanted to develop that property, it
came with a permanent tax exemption, which SGI exploited when they built
there. Menlo Park had a dump too; that's now a park. Palo Alto recently closed
the last section of their coastside dump and turning it into a park. (All the
local trash is being sent to a huge canyon east of San Jose.)

Here's the trailer park nearest to Google HQ: [1] That big square thing in the
background is the air intake for NASA's wind tunnel.

[1]
[https://www.google.com/maps/@37.4172537,-122.0736559,3a,75y,...](https://www.google.com/maps/@37.4172537,-122.0736559,3a,75y,92.09h,78.63t/data=!3m6!1e1!3m4!1sa1zmAwtbhaCA0JSARFpIcg!2e0!7i3328!8i1664)
[2] [http://www.pausd.org/registration/proof-residence-
requiremen...](http://www.pausd.org/registration/proof-residence-requirements)

~~~
ktothemc
Again, what's important to remember is that the Ravenswood School District and
East Palo Alto were created by racialized housing practices that confined
African Americans moving to Silicon Valley the 1940s through 1960s to a
subpar, excluded neighboring suburb across the highway. African Americans were
not allowed to own property in Palo Alto and other parts of the region because
of racialized restrictive covenants that existed until the 1968 Fair Housing
Law, and this set in place a permanent set of wealth and home valuation
differentials that persists to this day.

[http://techcrunch.com/2015/01/10/east-of-palo-altos-
eden/](http://techcrunch.com/2015/01/10/east-of-palo-altos-eden/)

------
x0054
Perhaps another way to look at this problem: Isn't it strange, and not very
efficient for such a large number of very prosperous companies to be located
all in one area. Apple, for instance, is building yet another campus in the
valley. Couldn't they build a facility some place else, spread the wealth a
little, so to speak. There are lot's of towns north of SF and south of
Monterey that could use the influx of capital.

I am not saying we should force companies to move headquarters, I am just
pointing out that Silicon Valley has huge, one might claim unreasonable,
concentration of wealth. This concentration of wealth really shifts
perceptions. For instance, 4 years ago or so I visited a friend in SF. We were
to meet in a restaurant. An Uber car pulled out and he got out. I asked him
about how it worked. His reply: "It's awesome, I order it on my phone, it
picked me up and dropped me off here (~3 miles away) for ONLY $40! Isn't that
awesome!" I am sorry, but for me at the time $40 was a lot of money, I would
have walked the damn 3 miles for that money.

My point is, sometimes I think the entire Silicon Vally is in the bubble of
affluence, and might be slightly delusional about what other people, outside
the bubble, might think is or is not reasonable. The solution isn't giving the
poor people free money, the solution might be to grow (geographically) and
spread the bubble around, making lot's of people better off by reducing
housing strain in the valley, and economically improving other communities
throughout CA or even the grater USA. Just an idea, I might be wrong.

~~~
kjksf
It is not strange at all.

The best companies are here because this is where the greatest number of good
programmers is.

Good programmers come here because this is where all the best companies are.

It's a virtual cycle for the industry but vicious cycle for housing,
especially when confronted with SV's housing politics (Seattle is also
experiencing a boom but is dealing better with it by building more tall
buildings).

This is almost a power law in play. It's not about SV having 2x more
programmers than elsewhere. It literally has hundreds (if not thousands) times
more than, say, the entire state of Ohio.

For that reason Apple can't just move to Ohio because they won't be able to
hire good programmers at scale.

Moving elsewhere might work for small companies that never intend to grow a
lot because you can find one or two good programmers that haven't yet moved to
SV but that won't move the needle.

And even small companies start here because this is where all the VC money is
to give you a start and this is where all the programmers are when you start
growing.

~~~
x0054
But I am not saying they should move to Ohio, they can move to Eureka,
California, or basically any place north of SF. Also any place south of
Monterey. Those areas are not dirt cheep, but they are inexpensive compared to
SV.

Let's say, for instance, Apple was to open a campus in Eureka, and offer some
of it's employees to relocate there and continue to get the same paycheck and
work on the same projects. Don't you think a lot of employees might take them
up on that offer. I am not saying everyone would, but people with families,
who wish to have a house and a back yard, and a dog, and a nice home life, and
wish to not have to pay 3/4 of their paycheck to the bank for the privilege,
would take Apple up on that offer.

Further more, if you think about it, it might be to Apple or Googles advantage
to actually open some remote, out of the way, campuses. This way they can
recruit developers who like the out of the way life style (yes there are some)
and those developers might be less inclined to jump ship. Maybe they can make
10% more at company X in SV, but they have a nice life, cheep housing, and no
traffic, why bother. It could be a good retention tool, and possibly a good
recruitment tool.

~~~
dragonwriter
> But I am not saying they should move to Ohio, they can move to Eureka,
> California, or basically any place north of SF. Also any place south of
> Monterey. Those areas are not dirt cheep, but they are inexpensive compared
> to SV.

Basically, any place outside of the Bay Area (within California, that's can be
North, South, or _East_ of the areas immediately surrounding the Bay.)

------
TheBiv
Non-paywalled
[https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&c...](https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0CB8QqQIwAGoVChMIpojssIOpxwIVSpmACh1z4gg_&url=http%3A%2F%2Fwww.wsj.com%2Farticles%2Fthe-
fight-to-save-a-silicon-valley-trailer-
park-1439566484&ei=shvOVabnCMqyggTzxKP4Aw&usg=AFQjCNEzIxupUlCIIKVyKfJQsDycL0l7tw&sig2=GMWS5VfFl-
dVWTJ9wyKC-g&bvm=bv.99804247,d.eXY)

~~~
stephengillie
Sorry but that link is also paywalled for me.

I'm starting to feel like we should crowdfund a WSJ subscription for HN, or
something similar. How much traffic does WSJ get directly from here?

~~~
Loughla
Is that a thing? Like a corporate subscription cost for aggregation and social
sites?

~~~
stephengillie
I don't think it is but I'm starting to wish it were. A large number of
articles on HN come from WSJ, NYT, Medium, and Bloomberg. 2 solutions come to
mind:

1\. Have a "site subscription" where links referred from your site are not
paywalled. And you would pay a subscription fee to be referrer-whitelisted on
the paywall; the subscription rate could be highly debated.

2\. Have a "multi-subscription package" where I pay one organization, and they
take my payment, slice it up, and distribute it to several dozen news
companies. The administrative fee for doing this would come into question.

I agree that writers, webhosts, and other employees of these news companies
should get paid; this isn't a product that's made for free. I don't really
want to have to track a handful of inexpensive subscriptions. And the
subscription path for NYT and WSJ is unclear - I haven't found the page where
I can simply buy a 1-year subscription; only the "12 weeks for $12" deal.

~~~
seanp2k2
Alternative suggestion: don't post links to sites with silly business models
which make their content annoying to access.

~~~
Loughla
You know, I hear this all the time. And honestly, this isn't meant to be
snarky, but I don't understand how wanting to be paid for your work is a silly
business model.

Or am I missing something?

------
michaelkeenan
It sounds like they're choosing between selling to the highest bidder, or
keeping it as a trailer park for the benefit of the residents. There's a third
option. If the land is more valuable as a vacant lot than as a trailer park, I
hope they consider selling it as a vacant lot and distributing a portion of
the difference to the residents as compensation for moving out. Using these
numbers as an example:

> his appraiser had valued the property in 2013 at $14.5 million with the
> mobile homes and at $29.2 million as a vacant lot.

He might sell for $29 million and distribute $8 million equally among the 400
tenants. That's $20,000 per person, which could be more-than-decent
compensation for having to move, and the seller still keeps a large portion of
the difference in value: 29 - 8 - 14.5 = $6.5 (million).

~~~
mikeash
Would $20,000 actually be decent compensation for having to move in this case?
They'd either have to start paying huge rents locally, or move pretty far
away. In the former case, the $20,000 won't last too long, and in the latter
case they're being uprooted from their community, they might have to find new
jobs. (Or be unable to!)

Certainly it would be a nice thing to do and would ease the blow. And I
wouldn't fault the owner for selling. But I don't know if distributing that
amount would really make it up to the tenants.

~~~
kjksf
When I lived in Seattle, I once was late paying my rent (by mistake I put the
check in the wrong box).

The landlord put a note on my door saying, I paraphrase, that I either pay or
get kicked out in a few days.

Do you think that before kicking me out they should have given me $20k to ease
the pain and suffering I would endure due to not having a place to live?

Are the rules for those people different?

~~~
mikeash
I'm not saying these people deserve anything here. That's a complex question
whose answer I don't know and which I haven't given nearly enough thought to.

I'm merely saying, _if_ you evict these people (which may be an entirely
reasonable and justified action) then $20,000 isn't necessarily going to go
very far in making it up to them.

As to whether they deserve more, or less, or anything, I don't know. You'll
probably want to take that up with the parent comment.

------
beachstartup
same thing happened in santa monica. spoiler alert: the trailer park is
getting replaced by a huge commercial development. there was a long court
battle and a settlement but it's basically going. can't stop progress!

[http://la.curbed.com/tags/village-trailer-
park](http://la.curbed.com/tags/village-trailer-park)

there's one in malibu as well, but malibu is basically anti-development so
that one will probably stay for a while. units also regularly are up for sale
so if you want ocean view property in malibu, it can be yours for only
slightly less than than $insane.

------
fernandotakai
wsj asks you to fully subscribe to read the full article (at least here) but
if you google the url and click on it from google, it will show the full
article.

