SB 50: Defining Sensitive Communities
Matt R. Richardson, Twitter: @MRRichardsonRE
The housing crisis has taken center stage in California. The data shows a significant population struggling to find and keep housing. “More than 25 percent of renters are severely cost burdened, paying 50 percent or more of their income in rent.” KPBS. Construction of new homes continues to fall short of demand — short approximately 100,000 new homes every year. LA Times.
The California Legislature is beginning to take the crisis seriously. In early 2018, Senator Scott Wiener (D-San Francisco) introduced Senate Bill 827. Though effectively dead on arrival, the proposed bill adopted the radical strategy of forced upzoning — increasing density along all forms of major transit. Fearing unmitigated acceleration of gentrification at the expense of low-income communities, SB 827 faced significant opposition even from housing advocates.
Though many critics remain, Senator Wiener is trying again with Senate Bill 50, also known as the “More Homes Act.” And Senator Wiener has learned his lesson. The bill now includes both a five-year delay on upzoning for “sensitive communities” and the option to pass a community plan during the five-year period. If the community plan sufficiently encourages density and multifamily development, the plan can dictate where zoning changes occurs. Effectively giving sensitive communities the ability to plan their own expansion and temper the possibilities of accelerated gentrification.
Now, for the important question, what makes a sensitive community?
Well, there are two definitions in the bill.
Definition One
The first definition has two parts. The community must have a poverty rate over 30 percent AND over a certain rate of “residential racial segregation.” Figure 1 and Figure 2 show the areas meeting both criteria in light yellow.
The California Tax Credit Allocation Committee has a GIS tool to view these areas throughout the state.
Figure 1. California Tax Credit Allocation Committee and the Hass Institute.
A 30 percent poverty rate is high. Research by Wayne State University Professor George C. Galster shows:
“[I]ndependent impacts of neighborhood poverty rates in encouraging negative outcomes for individuals like crime, school leaving, and duration of poverty spells appear to be nil unless the neighborhood exceeds about 20 percent poverty, whereupon the externality effects grow rapidly until the neighborhood reaches approximately 40 percent poverty.”
Given this data, why not start the threshold at 20 percent? The answer is not entirely clear. In fact, the Urban Displacement Project has already done a study using a 20 percent poverty rate. See their findings here.
The most likely reason for 30 percent is simply administrative convenience. The state government already uses a 30 percent poverty rate for defining “opportunity zones” designated for tax-incentive investments by the Tax Cuts and Jobs Act of 2017.
Now, for the second part of the definition, how does the bill measure “residential racial segregation?” It is actually pretty simple. The rate of segregation is a comparison between the average racial composition of the county and the composition of the neighborhood by census tract. Methodology.
As an example, if your neighborhood is a perfect reflection of the racial makeup of San Francisco county, your neighborhood’s residential-racial-segregation number would be 1 (as in 1:1). As the neighborhood becomes more racially homogeneous, the larger the number becomes. Senate Bill 50 sets the rate for sensitive communities at 1.25.
Why use this specific measure of segregation? Again, it is the rate already used by the government for tax incentives related to the Tax Cuts and Jobs Act of 2017.
Figure 2. California Tax Credit Allocation Committee and the Hass Institute.
Definition Two
But the Bay Area is special. Senator Weiner added a second method for defining sensitive communities that only applies to the nine counties of the San Francisco Bay Area.
The second method comes from data compiled by Metropolitan Transportation Commission (“MTC”) and the San Francisco Bay Conservation and Development Commission. Figure 3 and Figure 4 show the areas designated as sensitive communities in red.
The MTC maps are made by overlaying three factors: Displacement Risk Area; High Opportunity Areas; and Transit Access Areas.
Figure 3. MTC and the San Francisco Bay Conservation and Development Commission.
How does the second definition relate to the first? The MTC red areas are by default sensitive communities under SB 50, even though many of the areas do not have both 30 percent poverty rate and a sufficient residential-racial-segregation rate. But in the Bay Area, sensitive communities are not one or the other, both definitions will be used.
Clearly, the MTC maps designate significantly more areas as sensitive. And using both definitions, the Bay Area will likely have a larger percentage of sensitive communities than other areas of the state. Why the expansion?
One reason may be the San Francisco Bay Area has already initiated an area-wide planning organization, CASA, The Committee to House the Bay Area. SB 50 requires regulators to consult with “community-based organizations in each metropolitan planning region” before designating sensitive communities. CASA is such an organization for the Bay Area, and the organization requested the provided MTC maps be made.
Figure 4. MTC and the San Francisco Bay Conservation and Development Commission.
Takeaways
With the technical definitions and methodology out of the way, what are the takeaways?
One, sensitive communities are low-income, minority communities. By including racial segregation as a metric, the definition is tailored to include areas with minority-majority populations. As these communities are often the most effected by and most susceptible to gentrification, this policy choice seems perfectly understandable.
Two, sensitive communities are carved out of larger neighborhoods. Is it practical to expect small, highly-impoverished communities to be able to independently release a community plan to rewrite their zoning laws? This system is especially concerning because the planning process could open the door for other, non-community, interests to intervene. To implement Senate Bill 50 effectively; the local community, non-profit organizations, and a regional planning authority like CASA will need to coordinate the creation of plans that works for the people in each specific community.
Three, if Senate Bill 50 is not implemented correctly, the five-year grace period becomes a temporary moratorium on foreseeable upzoning. Slightly delaying the inevitable upzoning and possibly accelerating gentrification after the five-year period.
However, the bill is not the law. Changes and improvements can still be made. Plans can be made for effective implementation. California needs more housing. SB 50 will provide more housing and, hopefully, a say for people in the most sensitive communities.
