
Governor Brown's housing proposal could mean sweeping Bay Area changes - apsec112
http://www.bizjournals.com/sanfrancisco/blog/real-estate/2016/05/brown-affordable-housing-development-approval-ceqa.html
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pjlegato
This would address an important element of high Bay Area housing costs: the
discretionary project veto by local authorities. This is the main reason why
only super-high end luxury stuff gets built in San Francisco.

In most parts of the US, there are certain local zoning laws. You apply to the
local government for review of your project. This is expensive, as you must
prepare detailed professional studies for the proposal.

If the project conforms to all of the zoning laws, it must receive a permit.
They can only deny you a permit if your project does not comply with some
specific zoning law.

In San Francisco and several other nearby cities, the local government can
arbitrarily withhold a permit even when a project conforms to all local zoning
laws in every respect, usually under the vague and arbitrary guise of "not
fitting in with the neighborhood's character."

Since applying for a permit is an expensive and time consuming process, most
developers simply don't bother to even try in San Francisco. They just go
elsewhere, where their project can't be arbitrarily vetoed by local
authorities despite conforming to all applicable zoning laws.

The main exception is luxury developments: since the profit margin on luxury
construction is so high, it's worth the extra cost and risk associated with
navigating San Francisco's permit process.

If this law passes, then municipalities will not wield the power of arbitrary
veto anymore. There will still be extensive zoning regulations, of course; the
difference is that development restrictions will have to be spelled out in the
law, in advance, rather than made up on an ad hoc, per-project basis by local
officials. This greatly reduces the risk involved in starting a development
project, and makes non-luxury developments much more likely to be profitable
and thus undertaken by developers.

~~~
jeffdavis
What would stop a municipality from making zoning laws that are impossible to
meet, and then just issuing waivers to those that play the political game well
enough?

~~~
floatrock
Hopefully the local interests who also know how to play the political game
well enough but recognize the "indications that businesses and residents are
fleeing the state in part because of high housing costs and the state's
Legislative Analyst Office blaming excessive restrictions on development for
the affordability crisis".

Profiting from pulling out the rug to newcomers only works if there are enough
newcomers still willing to pay the exorbitant rents for the artificially
suppressed supply. If enough people start saying "eh, the bay area is nice and
all but not worth it", the NIMBYism starts to get less profitable. Sort of a
pendulum-swinging-the-other-way dynamic-equilibrium type of thing.

~~~
superuser2
That is exactly what the electorate wants.

~~~
abakker
I've heard before that "everybody who moves to California wants to be the last
person who moves to California."

I think that applies here. Once you've got your spot, its best if it stays the
way it is.

~~~
seanmcdirmid
"Got mine, screw you" isn't limited to Californian real estate though. It is
unfortunately very broadly applied.

~~~
Grishnakh
It's not just "broadly applied", it's the American motto!

~~~
seanmcdirmid
Let's not kid ourselves: it isn't just the American motto...it is motto of
most people in the world.

~~~
Grishnakh
I don't know about that. Ignoring the rest of the world for a moment and
concentrating on industrialized nations, we seem to be the worst at providing
socialized services.

~~~
seanmcdirmid
I've been out of the states for 10 years now and have noticed the motto being
applied in states as altruistic as Switzerland, and it definitely rules in
here China, much more than in the US.

~~~
Grishnakh
China is a third-world country not comparable to western Europe. It's
industrializing rapidly, but no one would ever be so naïve to think it has
social services even approaching those in western nations.

~~~
seanmcdirmid
China is comparable, but further down the development chain. Social safety
nets and good governance tempers selfishness a bit, but can't eliminate it
(e.g. Switzerland). America has less of a net and equality than much of
Europe, which is why selfishness seems to be more apparent there than in
Europe.

~~~
Grishnakh
No, China isn't even remotely comparable. Just a few decades ago, it was a
mostly agrarian economy. They've had massive industrialization in a very short
time, but they don't the much longer-term culture of industrialization and
social programs and worker protections etc. that western nations have.

And how exactly is Switzerland "selfish"? They may not be part of the EU, but
they appear to have just as many social safety nets as any other western
European nation. This seems like a rather silly charge to me.

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hermannj314
It is a step in the right direction, but this is still just more of the same
policies that screw over the middle 40% of population. This still doesn't fix
the problem with housing. As someone who makes exactly the median income but
likes to save it, I am legally forbidden from living in "affordable housing".

If you are poor, here is your free house. If you make the median income, you
are forced to spend money exactly like everyone else. Lawmakers only care
about affordable housing for the poor, no one cares about providing modest
housing for the modest earner.

~~~
peteretep
Serious question: why do you believe you're entitled to affordable housing in
any arbitrary location?

~~~
hermannj314
I believe I'm entitled to the same benefits we give to the bottom 40% of the
population and I believe I'm entitled to think this based on my reading of the
equal protection clause of the constitution.

Creating housing where only the poor can live is not equal protection under
the law.

~~~
peteretep
Do you also believe you should get food stamps?

~~~
tostitos1979
Given there exist software engineers at Google who sleep in their vans ...
maybe yes if the OP's employer doesn't have free food? At least in tech, we
don't have student loans. I've heard of Doctors leaving the Bay area because
they were fed up of housing + commute. Have you seen the prices in MV
downtown? Apartments seem to have doubled in prices. In my opinion, what
happened is low interest rates allowed some big hedge funds/property
management companies to buy all the properties in the prime spots ... they did
a bit of renovation, tagged the places as luxury apartments and here we are.
My last place, the apartment manager mentioned that some 2 bedroom apartment
had 4 roommates .. that's how people afford this crap.

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matt_wulfeck
> When Brown was mayor of Oakland, "every Oakland project I proposed was
> opposed at City Council by one group of neighbors or activists," he said
> last October.

If anyone wants to see evidence of this just sign up at nextdoor. There exist
a group of dedicated people in every neighborhood whose sole purpose it is to
stop any new development.

~~~
Asparagirl
THIS. OMG, the anti-development mob on Nextdoor is horrifying. I live in
southern Marin and you would not believe the hysterical and shameless level of
NIMBYism. People in my area use the platform to try to block new single family
residences from being built even on privately-owned parcels, and post to
Nextdoor urging everyone to come to the planning meetings to try to block the
permits. After all, the person who wanted to build the house was a developer
who lived in Sacramento, not a local person, and everybody freaked. Why, there
was even a possibility that he might build five or ten houses in that area
further down the line (the horror, the horror).

When I posted comments objecting to the attitude, one of the local anti-
development residents apparently ran a deep background check on me and posted
to Nextdoor that I surely must be opposed because my family must be real
estate developers and have some kind of vested interest. Actually, my
grandfather started a commercial real estate company on the other side of the
country, not residential real estate nor any kind of new development. But the
implication was clear: try to block NIMBYism and people will actually dox you
(albeit poorly), to the point they will seek out your deceased maternal
grandfather's name and business.

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mc32
Yes, guv Brown!

At last he frees us from the shackles local governments have had on reasonable
development. I do hope this passes. This, in my mind, would vindicate his
governorship, in my eyes. Glad pragmatism shows through from time to time.

Some day, some day, that we may repeal prop 13.

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hkarthik
Having recently moved to the Bay Area in the last year from Texas, I've been
observing the NIMBYs and I've determined that it's very nuanced issue.

I live in Dublin, CA, one of the far East Bay suburbs that is actually
constructing tons of highly dense, brand new housing. And I've closely
observed long time residents and neighbors debate and challenge the developers
putting in this housing.

There are the obviously impractical folks, complaining about the aesthetics of
highly dense townhomes/apartments and how they "ruin the hillside" with their
"cookie-cutter" looks. But this is a relatively small group making a fuss.
They're an easy target for the media.

But there are those with practical concerns. Increases in burglaries and auto
theft because thieves target newly constructed communities first due to easy
pickings [1]. Schools that become so overcrowded that kids are being taught in
mobiles because the schools can't build fast enough to accommodate the growth
[2]. Traffic that comes to a standstill because the two lane roads can't be
expanded fast enough and toll roads become the only rapidly deployable option
[3]. Mass Transit that becomes standing room only due to the influx of new
residents [4].

There are solutions to these problems (more police, more schools, more road
construction), but these services are often not financed by the housing
development authorities. Recent attempts to get the developers to shoulder
more of this cost is often the next fight these communities face. Some of
these things take a decade or more to resolve.

Given all of this, it's understandable why some just go the easiest route
possible and decide to block all new development. I'm not saying it's right,
but hopefully this gives you a bit more context. It's not just long time
residents fighting change for no reason.

* [1] [http://sanfrancisco.cbslocal.com/2016/04/07/dublin-residents...](http://sanfrancisco.cbslocal.com/2016/04/07/dublin-residents-patrolling-their-own-streets-after-burglaries-spike/)

* [2] [http://www.mercurynews.com/education/ci_28252721/dublin-grap...](http://www.mercurynews.com/education/ci_28252721/dublin-grapples-school-overcrowding)

* [3] [http://abc7news.com/traffic/new-i-580-express-lanes-now-open...](http://abc7news.com/traffic/new-i-580-express-lanes-now-open-in-east-bay/1207229/)

* [4] [http://www.ktvu.com/news/100269984-story](http://www.ktvu.com/news/100269984-story)

~~~
davmre
> Recent attempts to get the developers to shoulder more of this cost is often
> the next fight these communities face.

Why would the people building the housing be responsible for these costs? If
new people are moving to a community and consuming services, can't they pay
for those services through taxes like everyone else?

~~~
kabulykos
The cost to deploy most services does not increase linearly with the tax base.
Usually it's capital expenditure.

Maybe (but not necessarily!) the number of police can grow linearly with the
growth in taxable property. But police cars and police stations must be
acquired from scratch. Same with sanitation workers vs an expanded water
treatment plant, bus drivers and buses.

Some of those costs can maybe be amortized via debt issue (bonds), but the
cost of servicing those would still be borne by the community overall and not
necessarily the newcomers' taxes alone.

When a new development is proposed, it's the developer who's there in the
moment, hoping to make business and a profit. The prospective-and-still-
hypothetical newcomers are not yet there to make a case that housing be built
for them. So it's not insane that the developer be put in a position to
minimize negative effects of new building.

This isn't a perfect system, and it's certainly one that can be abused by
nimbys as everyone now knows. In particular things get unintuitive for
(usually older) folks who are house-rich but cash-poor ... accommodations
might leave them with a house worth more, even as a fixed income prevents them
from absorbing, say, increased taxes. But, since Proposition 13 passed in
1978, California has been pretty clearly biased towards disproportionately
helping out those sorts of people though. Can't say we weren't warned.

~~~
davmre
> Some of those costs can maybe be amortized via debt issue (bonds), but the
> cost of servicing those would still be borne by the community overall and
> not necessarily the newcomers' taxes alone.

This seems like another way of saying money is fungible. Suppose there is
School A used by current residents and School B we propose to build for new
residents. The annualized cost (labor+amortized capital) of a School is
$X/year, which registers as a tax burden on current residents. Building School
B doubles the total tax burden, but in response to a doubling in population,
so per-person taxes are unchanged. (assuming that new residents pay taxes at
or above the average rate, which is certainly true in the Bay Area).

It's meaningless in this case to distinguish who is paying for which schools -
you could say "newcomers are paying the entire cost for School B" since the
marginal revenue increase equals the marginal cost, or you could say that the
costs of servicing both schools are "borne by the community overall". But in
the latter case, in order to claim that current residents are contributing to
new infrastructure, you have to acknowledge the reciprocal contribution of new
residents to _existing_ infrastructure: increased tax revenue helps to pay off
the bonds that built the _current_ schools, and that will eventually be sold
to renovate and rebuild them. Either way it balances out.

~~~
makomk
The annualized cost of a school isn't fixed though. Firstly, the capital cost
of the older schools may well have been paid off. Secondly, the cost of
building one is going to be pushed up by the fact they're competing with
expensive premium housing for land, builders, etc. Thirdly, they're also going
to be competing with existing schools for teachers and it's not like teachers
from outside the area are going to be able to afford to move there unless
they're paid an awful lot.

~~~
davmre
> Firstly, the capital cost of the older schools may well have been paid off.

In the long term nothing is "paid off"; you have to keep up a regular schedule
of renovations and renewal projects, or things fall apart. Which is what's
currently happening to a bunch of US infrastructure. :-(

As for cost differences, property tax revenue scales with rising land values,
so land costs should be a wash (ignoring prop 13 insanity, which from other
replies seems like it might be the real issue here). And expensive housing /
high cost of living for new teachers is caused by high _demand_ for housing
without a corresponding increase in supply. So existing schools would already
face that problem, but increasing supply by developing new housing should help
to mitigate it.

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readams
I would rate the probability that this actually passes as somewhat less likely
than an asteroid wiping out all life on Earth in the next year. That said, it
sounds like a major step in the right direction toward actually addressing the
root of the housing crisis.

~~~
tryitnow
I have no evidence one way or another on whether this will pass, so I'm
curious as to what you're basing your assessment on.

The local NIMBYs have virtually no power at the state level, so I don't see
how they could block this.

Whereas real estate developers, construction companies, and construction trade
unions do have lobbyists in Sacramento.

~~~
aetherson
I'm not sure that real estate developers are super-excited to build projects
with 20% on-site affordable units, though maybe! I think it's clear that their
preferred model would be to allow them to off-site their affordable housing
requirements, but maybe this is a compromise they could live with.

~~~
rhino369
20% affordable is standard in many places, especially since affordable isn't
really that affordable.

~~~
aetherson
Note the difference between "affordable" and "on-site affordable."

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Shivetya
Interesting but Sec 3 (c) does have an out with regards to planned existing
zoning or general plan, then of course design reviews are another ninety days.

I am quite sure that if the groups have been so successful they will simply be
able to delay the process regardless. There will certainly be cities who will
sue the state to throw the law out.

Finally, never discount political retribution towards developers who do go
this route. While protected in developments that follow this proposed law all
their other developments directly and indirectly related will face more
scrutiny

Still got to celebrate a Governor whose solution doesn't involve taking away
property rights but attempts to allow those with them to use them as they
want.

~~~
xenadu02
This will have some effect in San Francisco (some neighborhood development
plans and zoning regs are so low density all projects require approval). But a
lot of projects (like "the monster in the mission" to replace an old Burger
King and empty warehouse with housing) would not be able to be blocked under
this law. They follow the existing development plan so they require no
exceptions.

Even out here in Sunset, all the land is zoned 40ft or 60ft. If you include a
basement, thats 4-6 stories when most structures are 2. If you weren't subject
to massive delays and reviews, it would certainly be profitable to tear down
some of these single-family homes and build 4-6 story apartment buildings.

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rat87
Note: Gov. Jerry Brown(CA) not Gov. Kate Brown(OR)

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dmode
This will be awesome if it happens. I don't have much hope though.

