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SIGNATURE OR VETO - SB79 has narrowly passed the state legislature and is now waiting for the Governor’s signature or veto. This would be a good time to discuss the bill’s implications, including implications for the Governor; it also affords us another peek into the unique process of Sacramento sausage-making, as well as some ideas for cities should the Governor make the mistake of signing the bill.
SB79 is ostensibly a “housing” bill, with the express intent of creating more housing near transit hubs. The bill uses (TOD) Transit Oriented Development as its justification for eliminating community decision-making and imposing Sacramento’s one-size-fits-all diktats for cities throughout the state.
The actual efficacy of TOD was debunked years ago; nonetheless, density fetishists and market fundamentalists continue to push the myth of TOD, even as they admit that TOD in reality is DOD (Developer Oriented Development), which eliminates sensible urban planning, or, at best transforms urban planning into urban reacting.
FSD (Free Shit for Developers) isn’t the only motivation of SB79’s WIMBY (“Wall Street” in My Back-Yard) fans. SB79 is an attack on single-family neighborhoods by WIMBYs, many of whom undoubtedly grew up unhappy in suburbia and are acting out their collective trauma through the support of legislation that would, as it were, wreak “revenge” upon the unhappy surroundings of their childhoods.
SB79 is an attack on single-family neighborhoods, as it would allow for ministerial approval of multi-family units within single-family zones.
But even if a large number of repressed WIMBYs hate the single-family homes many of them grew up in, they are not even close to being in the majority. In fact, an overwhelming majority of Americans of all stripes prefer single-family homes, and it isn’t even close.
Since WIMBYs are such strong believers in the “law” of supply and demand, they would have to admit that SB79 will not promote affordability for the kind of housing overwhelmingly preferred by Americans. If anything, SB79 will reduce the supply of single-family homes. In other words, SB79 will increase the housing costs for the kind of housing Americans prefer.
Make no mistake about it: SB79 is a real estate bill, not a housing bill. Lest anyone thinks that SB79 has anything to do with affordable housing, how about this howler: there are absolutely zero affordability requirements for up to 10 units. “Affordable housing” is just a Trojan horse that Sacramento politicians are using to justify their assault on community-based decision-making and on the kind of housing preferred by a vast majority of Americans of all stripes. Some weak-beer, largely meaningless “affordability” provisions were tacked on to SB79 in an attempt to give the politicians voting “yea” some measure of cover, but Sacramento has consistently proven that they care more about developer profits and pre-empting local community planning as they continually constrain municipalities’ ability to impose their own affordability provisions while simultaneously lessening affordability provisions for density bonus and builders remedy projects, which allow developers to get a grab-bag of goodies, including added height and density, etc.
Sacramento’s housing real estate policies have been market fundamentalism by a thousand cuts, in the style of Lemuel Ricketts Boulware, who inspired the market fundamentalism at the heart of Ronald Reagan’s trickle-down economics. (For more on Boulwarean market fundamentalism, read Naomi Oreskes’s and Erik M. Conway’s excellent The Big Myth: How American Business Taught Us To Loath Government and Love the Free Market). Here the narrative is: build enough market-rate housing and affordability will trickle-down to the peons, just as cutting taxes for the 1% supposedly will benefit the peons as the conspicuous consumption trickles-down from the top to the bottom.
Because this is California, this hard-core market fundamentalism is often dressed up as “progressive” policy, which unites the self-styled “progressives” with openly right-wing and radical libertarian types such as the Frontier Institute, the Cato Institute and George Mason University.
Curiouser and curiouser is how the SB79 sausage got made. Senator Aisha Wahab stalwartly opposed the bill in the housing committee she chairs, correctly pointing out that it would do little to nothing to create affordability (not buying the phantom trickle-down benefits touted by the WIMBYs). She voted against the bill in committee.
Wahab turned out to be the deciding vote when the bill went to the final vote on the state senate floor. She claims that the meaningless affordability provisions inserted to give cover to the yea-voters had satisfied her concerns over the lack of housing affordability the bill would result in.
Did Senator Wahab really believe that the token affordability provisions were enough to overcome her spirited opposition to the bill?
Not bloody likely.
What we had here was an obvious case of Sacramento horse trading at its worst. It’s completely obvious that Senator Wahab traded her vote for the vote of Senator Scott Wiener, who authored SB79, on Wahab’s anti-Israel Gaza resolution.
That Scott Wiener would sell Israel down the river for a bad housing bill is not at all surprising, but a blood libel in exchange for developer profits seems like a particularly bad trade for most Californians on any day of the week…
Former labor leader State Senator Maria Elena Durazo also flipped her vote after some weak-beer concessions were made to organized labor. Perhaps Durazo and the union bosses were less concerned with their members ever being able to own a home. Perhaps Durazo and the union bosses forgot that many of their own members would like to own a house with a yard and that SB79 would make it increasingly difficult for them to be able to do so.
SB79, despite the misleading rhetoric, will also likely be bad for the environment. People and families who want a home with a yard, in as far as they don’t move out of state, will be forced to move to the periphery and exurbs to attain the kind of housing they prefer. In other words, SB79 would exacerbate a problem that already exists: for example, Beverly Hills public safety employees comfortably earn enough to live in apartments in town or in the vicinity, but almost all of them choose to live much further away to be able to own homes with yards and/or gardens. Heck, we even got pushback in our collective bargaining when the City wanted to insert a provision into the contract that employees have to live within 150 miles of City Hall.
All of this additional commuting, as fewer working families can afford to purchase homes can only be awful for the environment, in other words the exact opposite of what the stated purpose of the bill is, never mind the ulterior Trojan-horse motive.
Newsom’s Dilemma
Governor Newsom is faced with an interesting choice. If he vetoes, the bill, as he has been urged by numerous mayors, including LA’s Mayor Bass, he will most certainly be skewered by the in-state WIMBYs, who will either try to label him as a NIMBY, “anti-housing” or both. That’s a risk he should be willing to take. None of the WIMBY supply-side policies pushed and implemented over the past decade – literally hundreds of housing bills – have had any meaningful impact on housing affordability in California. Noone believes the stock WIMBY response “That’s because we haven’t gone far enough” anymore.
If Newsom signs the bill, he will, of course, be lionized by in-state WIMBYs but he will also be dealing a significant blow to his thinly veiled presidential ambitions. Most Americans in the rest of the country do not look approvingly upon the corporate takeover of housing, and images of out-of-place towers as symbols of bad (or nonexistent) urban planning will undoubtedly heavily feature in ads alongside homeless encampments, accompanied by the pointed question to the rest of the nation: “Do you really want be more like California?” (And now you also know the origin of Newsom’s “care courts” and why he is frantically trying to clear homeless encampments throughout the state; they would look very bad during any presidential campaign).
In short, Newsom’s signing of SB79 can and should be used against him by Democratic competitors who aren’t willing to sell out the American Middle Class and the American Dream to corporate America, as well as those who truly care about the environment.
If Newsom wanted to expand his appeal beyond positioning himself as the “Trump Troller,” he would get the California legislature to pass long overdue anti-speculation housing bills, which would actually help create housing affordability as well as enable more Californians to become homeowners and allow more Californian families to establish intergenerational wealth through homeownership.
If Newsom really wanted to capitalize on helping Americans, then he would enact legislation which would stop private equity from profiteering off of housing, as well as provide more funding for organizations like LACAHSA to work on multi-pronged strategies to create real housing affordability, not just the nonexistent theoretical affordability of the WIMBYnomics. He would work on creating regional equity by promoting remote work opportunities, ensuring effective broadband networks throughout the state, and implementing policies that discourage the unsustainable metastasizing of “Superstar” Cities.
However, Newsom will likely sign SB79, and in so doing he will be hurting Californians’ prospects for homeownership and helping make other states more attractive. Yes, people can and do vote with their feet and they can and will move elsewhere if it means they can own their own home and have an opportunity to achieve the elusive American Dream.
A Prescription for Cities
Should Governor Newsom sign the bill, as is likely, there are a number of steps cities can take, starting with commissioning nexus studies. Running a city is not cheap and nexus studies can show the true costs of forced densification and having to service exponential numbers of residents. The State’s Constitution and prohibition against unfunded mandates allows cities to pass these costs onto developers, and this is exactly what cities can and should do, as I have argued here.
Beyond nexus fees, cities should consider holding developers and Sacramento to the stated intent of SB79, which is densifying around public transportation, which suggests that residents in TOD areas will not need cars.
Sacramento has, in most cases, banned parking minimums in proximity to public transportation. The argument is that parking isn’t necessary where there is public transportation and that parking requirements simply add to the cost of construction of housing, thereby making it more expensive.
What cities should consider for SB79 projects is the exact opposite: parking maximums. In fact, cities should ban all on-site parking for SB79 projects. That does not mean that residents of SB79 project should be allowed to clog the streets with parking either. Cities should make all on-street parking permit only and should ban residents in SB79 projects from being eligible for permit parking, Shoup-oup-i-doup.
The entire point of SB79 is to allow increased density with the justification of high-class public transportation. It isn’t to allow developers to charge higher rents by selling public transportation as an amenity. Parking maximums that preclude SB79 projects from on-site parking would ensure that the stated goals of SB79 would be met and that only those who truly need public transportation (rather than using it as an amenity) would reside in the dense apartments/condos that the law permits.
Although SB79 is bad policy and a bad law, the imposition of parking maximums (including outright bans) would also help mitigate the environmental damage caused by the additional and extended commutes of those forced further to the periphery and exurbs by the bill and would at least have the effect of allowing those who actually use public transportation to live near public transportation while also taking cars off streets and keeping rents lower than they would be if expensive parking were built.
Of course, state preemption of local decision-making and Developer Oriented Development, while great for the bottom lines of real estate investors, are generally bad for communities. Perhaps most importantly, SB79’s passage highlights the need for communities to rally around the Our Neighborhood Voices Initiative, which would amend the California constitution to ensure that residents actually have a say in what happens within their own communities, in line with the principles of subsidiarity.
In contrast to the “When They Go Low, We Go Lower” Prop 50, which is a Sacramento Sausage Factory special that puts politicians in the driver’s seat, the Our Neighborhood Voices Initiative would empower local communities by ensuring more decision-making closer to home, far from the unsavory sausage factory of the Sacramento politicians that brought us SB79.
(John Mirisch was elected to the Beverly Hills City Council in 2009 and has been mayor three times. He is currently serving as the city’s Vice Mayor. He also is a founding board member of the Los Angeles County Affordable Housing Solutions Agency (LACAHSA). John is a regular contributor to CityWatchLA.com.)
