2019 Housing Bills — California Democrats still refuse to take on the rich and powerful
“What matters today, the issue which blocks the horizon, is the need for a redistribution of wealth. Humanity will have to address this question, no matter how devastating the consequences may be.” — Frantz Fanon, Wretched of the Earth
There are bunch of new bills being proposed in the California Legislature to address the state’s housing crisis. People are excited, particularly those with neoliberal tendencies: the “wonks” and “urbanists” and “YIMBYs” that dominate Housing Twitter and the media. Among more tempered takes, the standard framing still seems to be that our politicians are responding with big ideas.
The reality is that even the most ambitious proposals here are half-measures, at best, that in no way match the scale of the problem or get to its root. Most fundamentally, there remains a stale unwillingness to confront the rich and powerful.
As always, the ideas being put forth do not come from the communities most impacted by the crisis, who are demanding programs like universal rent control (Prop 10 won in renter-heavy cities across the state), massive investments in alternatives to market housing, and public or community ownership of land.
The same class of people that have run California politics for the last 100+ years are still in charge, and when they want housing policies, they look to the (mostly white) professional class for ideas. So we’re left with a refusal to challenge the logic of free markets, and, above all, a refusal to redistribute the enormous amounts of wealth and land held by California’s richest people and corporations.
Fanon’s emphasis on the redistribution of wealth is spot on. Anyone who tells you that we can house everyone with dignity, without a massive redistribution of power and resources is either incredibly naive, or straight-up lying to you — like the people who claim we can adequately respond to climate change while leaving the super-rich and massive oil corporations untouched, and those who think we can provide healthcare to all without taking on the private insurance industry.
Take from the rich and give to the poor — until that’s what’s on the table, we shouldn’t get too excited. It’s politically unhelpful to shower praise on politicians for these lukewarm proposals.
We can admit that some of these bills are decent, but our primary response must be: “this is not enough,” and keep fighting for radical programs.
Below are some of the major bills people are talking about.
AB 11 and SB 5 — redevelopment
These would revive redevelopment agencies (RDAs). AB 11 would bring back RDAs essentially as they existed before 2011. SB 5 would allow for a maximum of $250 million per year to be funded through a similar financing scheme, 100% of which must be used for housing or transit-oriented development. People are excited about this because it would give us a continuous stream of money for affordable housing development that doesn’t currently exist.
But there are lots of reasons to be wary of these institutions. Most fundamentally, the funding mechanism behind RDAs, tax increment financing (TIF), is strictly tied to ever-increasing land values — which is bad, since higher land values mean higher rents. Basically, you take the total property taxes of some base year (say, 2018) for a given area, and then any increase in total property taxes over that base level goes to the RDA. So the money comes from diverting funds away from where property taxes would otherwise go: schools, infrastructure, other County and City services. It’s far from redistributive.
Plus, there’s lots of evidence that under the previous regime the funds dedicated to affordable housing were not spent well at all — only 11% was spent on actual construction. On the other hand, there’s no reason to believe this has to be the case.
Lastly, RDAs have a long history of subsidizing big-box retail development in suburbs (so cities can get sales tax revenues) and gentrifying corporate development in cities. The Community Redevelopment Agency (CRA) in Los Angeles is particularly infamous for this. Gilda Haas and Alan Heskin, writing in the 1980s, referred to the CRA as the “bulldozer, financier, and scapegoat” for “multinational business interests” in LA.
So we might get some additional money for affordable housing — but at what cost?
SB 50 — allowing more market-rate development around transit
This is the revised version of last year’s SB 827, the bill from YIMBY hero Scott Wiener that would force cities to allow for taller and denser development around mass transit. Supposedly this bill is better for tenants and low-income communities than the previous version. But we definitely shouldn’t forget how basically every single tenants union and anti-gentrification organization in the entire state forcefully opposed this last year, while it was supported by reactionaries like Chambers of Commerce and the California Apartment Association.
Upzoning in wealthy homeowner areas would be better than not, but ultimately, at best, this is a market-based, trickle-down measure that will mostly produce housing accessible only to the rich. Even Wiener himself admits that “the private market … will *never* produce housing affordable to our low-income residents.” So why did he oppose Prop C in San Francisco, which will tax the richest corporations in the city to provide hundreds of millions of dollars for homeless housing and services? (Wiener also didn’t support Prop 10.)
SB 50 is certainly not redistributive, and it’s telling that the biggest challenge to rich homeowners the YIMBYs can muster is to upzone — take that, NIMBYs, now your properties are even more valuable.
AB 10 — $500 million for low-income housing tax credits (LIHTCs)
This is another one people are excited about because it offers more money for “affordable housing.” The thing is, “affordable housing” often isn’t actually affordable for the people who live nearby, because the formula for who qualifies is not based on neighborhood-level numbers, but instead on area median incomes (AMI). So in LA you could make around $70,000 and qualify for “affordable housing” in a neighborhood where the median income is below $30,000. Plus these are often owned by multi-billion-dollar firms that relentlessly raise rents within the legal limits (see this situation in LA’s Chinatown).
Instead of subsidizing private developers, we should be investing in alternatives that put land in public or community ownership and give tenants power over their own housing. And this should be funded by taxing the rich.
Two genuinely good ballot measures
There are two proposals to put measures on the ballot in 2020 that are good! Each would need a ⅔ majority vote from both the Assembly and Senate to be placed on the ballot.
One would end a tax break that allows children who inherit homes to pay very low property taxes. This is, from what I can tell, the only redistributive proposal on the table.
The other would repeal Article 34 of California’s constitution, which is from the 1950s and makes it harder for cities to build low-income housing, requiring a public vote.
Some others
AB 22 would declare that every child has a right to safe and clean shelter; which sounds good but I’m not really sure what it can accomplish without any funding or details. SB 18 would create a legal fund for, among other things, tenants fighting displacement; again, good, but unclear how much funding it’ll get or how it would actually work. AB 53 would “ban the box” on rental housing; definitely good! AB 68 would make it easier for people to have small “accessory dwelling units” (ADUs) like in the back of their homes; good, but not great, unless you really believe minor tweaks to the free market can result in significant progress.
What’s NOT on the table:
- Taxing the 144 California billionaires on Forbes’ richest persons list.
- Repealing Costa-Hawkins.
- Repeal or reform of Prop 13 (which would allow us to tax much more heavily property owned by rich people and corporations).
- Measures to limit the impact of short-term rental services like AirBnB that take tens of thousands of units off the market.
- Regulations on Blackstone and the other Wall St. firms that own thousands of single-family rentals.
- Anything to deal with the hundreds of thousands of vacant units across the state.
- Investment in housing owned by the public or by communities.
Don’t believe what you see on Twitter or in the media — our politicians aren’t doing nearly enough.
