Blogging Bayport Alameda

August 2, 2017

“At least say it out loud”

Filed under: Alameda — Lauren Do @ 6:02 am

Last Tuesday there was a piece on Forum about the Bay Area economy, housing, and transportation.  Specifically that the economy is growing and adding jobs, but that without adding more housing and more robust public transportation infrastructure (not just more freeways mind you) the economy may not stay on its current trajectory.

Despite individual jurisdictions thinking that the magic bullet for their localities is just adding jobs, jobs, jobs, without housing supply economic development will just stall out.  So says this economist from from Beacon Economics and the president of the Economic Institute at the Bay Area Council.

Here are a few excerpts from the discussion:

This answer from Chris Thornberg is based on a caller essentially saying that people should just move somewhere else if they can’t afford to live in California:

Let’s give the caller some credit, he’s just acknowledging something that a lot of Californians feel.  They don’t mind growth, they just don’t want it here.  From my perspective if you’re going to have that opinion: own it.  Don’t pretend you care about issues such as high housing costs when the policies you’re putting into place to prevent growth are the ones creating those particular conditions.

If we want to create a California that’s only for the richest and wealthiest that becomes a playground for the well-heeled, well that’s fine.  That’s a credible policy goal.  I don’t want to live in that California and I’m guessing Micah doesn’t want to either.  But at least say it out loud.

This comment from Micah Weinberg is in response to a question about making it easier to build accessory dwelling units because people need someplace for their families to live:

One of the things that I implore people in the Bay Area to do is to expand their circle of empathy.  It’s good that people have empathy for the members of their own family but I want them to have empathy for the service workers in the Bay Area.  To have empathy for the people that aren’t in their families.  I want them to have empathy for the people who want to come to the Bay Area to access the economic opportunity that is here.

This comment from Micah Weinberg is in response to someone saying that there’s enough market rate housing in San Francisco, but the problem isn’t better:

It’s not true that we have plenty of market rate housing.  It’s also not true that we have enough affordable housing.  But the big problem comes when we set up market rate housing against affordable housing.  When we try to tax housing, so market rate housing, in order to produce housing, which is to say affordable housing.  And that ends up setting up a zero sum dynamic which perpetuates the under building we’ve seen which is the leading cause of poverty in this state.  Under building, the lack of supply of housing in coastal California, is the leading cause of poverty in the state.  So I think that it’s great to have sources of funding for affordable housing, I get more nervous when those sources for affordable housing actually decrease the amount of market rate housing because for every market rate unit that you don’t produce somebody who needs a house is going to be displacing somebody from a house that they’re currently in.  That’s not even economics that’s just physics.

And finally this comment from Chris Thornberg which is a response to a question about revitalization without gentrification:

If you’re worried about workforce housing, again you need to look at overall supply because if there’s more and more supply coming on-line very quickly then that high end part of the market becomes over-saturated and developers start moving their sights to lower and lower end housing.  And again going back to the idea of workforce housing another issue in the Bay Area is begin is because of the lack of overall housing supply you keep a lot of middle class families in older housing stock which is typically available to lower end families within a market that has a natural expansion of the housing supply.  I hate to sound like an economist but this really boils down to supply, supply, supply. That’s the answer to all these questions.

Really good Forum show, worth a listen.  It’s about an hour-ish.

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34 Comments »

  1. Supply, Supply, Supply (housing) or Stagnation, Stagnation, Stagnation (economic and cultural).

    Comment by William Smith — August 2, 2017 @ 9:07 am

  2. Good post. The local slow (but really no) growthers need to be honest that they are looking to shift public policy for their own benefit at the expense of younger people and those who don’t already own homes. Advocating for lots of affordable housing is just an intellectual fig leaf. The ACT presents itself as progressive (and some of its more naïve members seem actually to believe that it is). It isn’t by any reasonable definition of the word. They should be loud and proud about wanting a gerontocracy.

    Comment by BC — August 2, 2017 @ 10:21 am

    • ACT (Alameda Community Task Force) advocacy for more dedicated affordable housing funding is more than just a fig leaf. The demand and supply for housing in the inner Bay Area are now so far out of balance that building market rate housing alone, or even with the inclusion of a small percentage of units set aside as affordable units, could worsen the affordability crisis.

      The Urban Displacement Project led by UC Berkeley’s Miriam Zuk and Karen Chapple is building a strong case that either inclusionary requirements must be raised significantly or separate funding must be found to build affordable housing. See for example their 2016 paper on the relationships between housing production, filtering (hand-me-down) housing, and displacement (http://www.urbandisplacement.org/sites/default/files/images/udp_research_brief_052316.pdf).

      Many studies sponsored by cities claim that raising the inclusionary requirements further will reduce, or even eliminate, the production of market rate housing. And with available financing for affordable housing so limited, the evidence is accumulating that a moratorium on the construction of market rate housing in hot urban markets would be the best course of action, not to solve the affordable housing crises, but to keep it from getting worse.

      A thought experiment illustrates the conundrum for promoters like me of affordable housing. Building 1 affordable unit and 99 market rate units will house one low income family. The retail jobs, clerical jobs, landscaping jobs, and restaurant jobs created to serve those living in the new market rate units will attract far more than one low wage worker and their families. Thus, the overall project with one affordable unit and 99 market rate units, despite increasing the total number of affordable units, actually worsens the affordability crisis by attracting more than one new low wage worker to the area.

      Any study justifying inclusionary housing percentages to require of new housing developments that is more than a two or three years old likely underestimates the inclusionary requirement needed to promote housing affordability. Thus many recently approved, and certainly future inclusionary developments in the inner Bay Area could be intensifying the shortage of affordable housing rather than relieving it. Lower State inclusionary housing requirements in the suburban and rural areas are more likely to suffice to relieve the housing crisis than those in high demand markets like Alameda.

      It is time for a serious review of Alameda’s inclusionary requirements. Encourage the Council to conduct a full (rather than the cursory review just completed by the Planning Board) review of Alameda’s requirements when they take up this issue, perhaps in September.

      Comment by William Smith — August 2, 2017 @ 11:14 am

      • The economists address your very first paragraph here:

        It’s not true that we have plenty of market rate housing. It’s also not true that we have enough affordable housing. But the big problem comes when we set up market rate housing against affordable housing. When we try to tax housing, so market rate housing, in order to produce housing, which is to say affordable housing. And that ends up setting up a zero sum dynamic which perpetuates the under building we’ve seen which is the leading cause of poverty in this state. Under building, the lack of supply of housing in coastal California, is the leading cause of poverty in the state. So I think that it’s great to have sources of funding for affordable housing, I get more nervous when those sources for affordable housing actually decrease the amount of market rate housing because for every market rate unit that you don’t produce somebody who needs a house is going to be displacing somebody from a house that they’re currently in. That’s not even economics that’s just physics.

        ACT is pitting affordable housing, or worse “workforce housing,” against market rate housing. The result is urging the City to not build at all which makes the problem exponentially worse for those that are least able to afford a battle waged by people with housing security.

        Comment by Lauren Do — August 2, 2017 @ 12:29 pm

        • Thank you Lauren for your comment on my overly broad first paragraph. Constructing more market-rate housing alone could worsen the housing crisis only in microregions, such as the Mission in SF or perhaps (no convincing evidence one way or the other yet) Alameda. From a regional point of view, build, build, build anything anywhere sooner is the quickest way out of the housing crisis. As Miriam Zuk and Karen Chapple have documented, however, that solution means that low wage workers will be displaced from the most desirable microregions. Many non-Alamedans agree that Alameda is a highly desirable microregion in the SF Bay Area.

          Comment by William Smith — August 2, 2017 @ 1:02 pm

        • Low-wage workers will be displaced even faster if it becomes a battle of who can afford to pay the most for a stagnant supply of housing units.

          Comment by Lauren Do — August 2, 2017 @ 1:17 pm

        • Filtering, as you describe, obviously take a long time. But, among many issues, your analysis ignores that those 99 families moving into those new market rate units leave 99 units of existing housing stock vacant for other households to move into or not be displaced from. This benefit is nearly instantaneous and the primary public benefit of new “luxury” (to embrace a term of the no new housing crowd) units.

          Comment by BMac — August 2, 2017 @ 3:21 pm

        • When 99 housing units become vacant, the people that move into them can either come from nearby or from the outer fringes of the Bay Area. If 99 locals move in, I agree that their move instantaneously removes pressure on the local housing market in their income range. If 99 people move in from the exurbs or out of the area, they create additional service jobs locally that require housing for additional workers – exacerbating the local housing shortage, especially for lower wage workers.

          From a gross regional standpoint it doesn’t matter who moves in – more housing helps. From a fine local standpoint, who moves in can either relieve or exacerbate the local housing shortage. The continuing UC Berkeley Urban Displacement project is only just beginning to document the relationship between the type of new housing built and displacement of existing residents. The only conclusive finding I recall from their study is that affordable funding that does not add to the cost of market rate housing is the most effective approach to relieving the housing shortage for low wage workers.

          For now the conclusion that such affordable housing is effective is primarily academic. The amount of funding that does not discourage market rate development suffices only for symbolic projects that make a small, but vital, contribution to the affordable housing stock.

          Comment by William Smith — August 2, 2017 @ 5:59 pm

  3. A moratorium on new housing would be an eviction notice to thousands of working class families. We need even the lower numbers of housing that we are currently building to provide competition in this already stagnant market. Our state is just ramping up and is planning major announcements this month on various laws that they hope will increase funding for affordable housing. We need a multi-pronged approach to solving this housing shortage. Instead of a moratorium the state should provide funding for emergency homeless housing and by right approval for such units to be built state wide. Alameda county has seen a 40% increase in homelessness over the last two years. This, paired with more market rate so that the people with money have something to buy instead of taking up existing housing could be a more fruitful approach to providing housing for the folks who urgently need it as we slowly ramp up to producing the large numbers of housing that we need that will decrease prices over time. Housing alone won’t solve this problem and we need our state to use every tool they can get, including incentives to move jobs to areas where there are few, and new increased mass transit opportunities. A building moratorium is counter-intuitive and will only make the problem worse for everyone.

    Comment by Angela — August 2, 2017 @ 12:21 pm

    • I agree with Angela that we need a multi-pronged approach that finds money for financing affordable housing without discouraging the construction of other types of housing. Once such funding is secured, any case for a moratorium on market-rate housing to keep from increasing the demand on Alameda’s limited supply of affordable housing evaporates. Let’s hope that the Legislature does come up with significant new funding sources soon.

      Comment by William Smith — August 2, 2017 @ 12:51 pm

      • Where is this “evidence” for a moratorium? The report you quoted stated nothing of the sort. It says:

        This does not mean that we should not continue and even accelerate building. However, to help stabilize existing communities we need to look beyond housing development alone to strategies that protect tenants and help them stay in their homes

        Meaning increase tenant protections, not a moratorium on building new housing.

        Comment by Lauren Do — August 2, 2017 @ 1:14 pm

        • Increased tenant protections help existing tenants. They do not provide housing for the new low wage workers needed to support high wage residents in new market rate housing.

          Comment by William Smith — August 2, 2017 @ 6:02 pm

        • You said in your first comment that there is increased evidence for a moratorium. Where is it?

          The study you cited doesn’t say it. Back up your statement.

          Comment by Lauren Do — August 3, 2017 @ 5:59 am

  4. I neither agree nor disagree that the number of low wage workers without housing in Alameda will increase faster if large numbers of market rate housing are built in Alameda without sufficient accompanying affordable housing. We simply lack the evidence and analysis to assess the outcome of building more housing here. We need a focused study of inclusionary housing requirements to address that question.

    There is no convincing evidence of a need for a moratorium, rather increasing evidence that building market rate housing in highly desirable microregions without sufficient affordable housing increases displacement. It is possible that if current trends continue, a moratorium on market rate housing could be demonstrated to be the best of the only feasible, and bad, solutions to address displacement in Alameda. Such a solution, though, would be detrimental to the overall housing balance in the region.

    If the demand for housing by upper income workers IN ALAMEDA is so strong that it fails to “filter” or “trickle” down to lower wage earners, constructing more market rate housing will INCREASE the number of low wage workers without access to housing in Alameda, even if a small number of additional housing units are built.

    On a regional level, I agree with your assertion that a moratorium on building housing anywhere will prolong the housing crisis. How do we best balance regional versus local housing interests – and if low income workers continue to be driven toward the fringes of the Bay Area, is that really a sustainable solution to providing low wage services in Alameda? These are tough questions that, if answered in advance, may help us avoid nasty future surprises and create a more sustainable Alameda and Bay Area. .

    Comment by William Smith — August 2, 2017 @ 1:56 pm

    • “It is possible that if current trends continue, a moratorium on market rate housing could be demonstrated to be the best of the only feasible, and bad, solutions to address displacement in Alameda.” If that is true, which I rather doubt, it would only work with rent control, otherwise just apply Econ 1 to think about the prince-impacts. You cool with rent control?

      My objection to ACT, Roloff, et al. is that their answer is always let’s stop and see, which is more about stopping than seeing. The economics at the regional level is clear. I’m not sure any decent economist would claim to understand the microregional effects, never mind the unpredictable side-effects of micro-tinkering.

      Comment by BC — August 2, 2017 @ 2:12 pm

      • Yes. I am cool with rent control when government policies, not the market, constrain the available supply of rental units. Then rent control can, in a very imperfect way, provide relief from a government sponsored monopoly, which is our current housing market.

        My position differs substantially from ACT. My position is full speed ahead with building in Alameda unless a comprehensive housing study demonstrates that our development policies are increasing the number of low wage jobs faster than the corresponding housing supply. Then, and only then, do we stop and consider how to change our policies, taking into account pending changes in nearby city, regional and state policies. A moratorium would be beneficial, and defensible, only if supported by unambiguous evidence that then current housing policies were exacerbating, rather than alleviating, inequities in housing.

        My position is also that we update the inclusionary housing study soon to establish a sound basis for our inclusionary housing targets, rather than bury our heads in the sand and hope that our actions are appropriate for addressing an unprecedented shortage of affordable housing in the modern area.

        Comment by William Smith — August 2, 2017 @ 2:46 pm

    • If the demand for housing by upper income workers IN ALAMEDA is so strong that it fails to “filter” or “trickle” down to lower wage earners, constructing more market rate housing will INCREASE the number of low wage workers without access to housing in Alameda, even if a small number of additional housing units are built.

      Or you can do what all cities want to do which is to admit there is a regional problem but do nothing locally to actually assist current community members to retain their housing because whatever happens at a micro level won’t be enough to solve the regional issue. Alameda needs more housing. Period. Building housing for people who exist in Alameda is a local housing interest. As Malia Vella said, housing is a public benefit. An Alameda public benefit.

      Comment by Lauren Do — August 2, 2017 @ 2:22 pm

  5. Alameda doesn’t need more housing. We have a geographical situation (sea locked) that places us outside the regional problem.

    Comment by jack — August 2, 2017 @ 6:30 pm

    • If Alameda does not need more housing, would you also agree that Alameda does not need more jobs, especially high paying jobs?

      Comment by William Smith — August 2, 2017 @ 6:44 pm

    • Thank you Jack. The pattern so far since the base closed is that the developers come in, pay off the politicians, and opinion poo-bahs and make their money and leave. Sometimes they are slowed down, but rarely stopped. Citizens with their eyes wide open see more traffic and more development every day in Alameda especially at the West End. Ask people on Bay Farm around the Harbor Bay Ferry how they feel about buying permits to park in front of their own house due to parking overload. We are rapidly changing whether we like it or not, so let’s stop with the argument about “doing our part.” Alameda is an island with finite resources and limited access. That means limited and measured growth- i.e. Slow.

      Comment by Nowyouknow — August 2, 2017 @ 7:47 pm

      • And that is fine. You’re refreshingly honest. You’re owning not giving a crap about others than existing homeowners (of which I’m one; thanks for your concern). You’re not claiming to be making the world any better. Selfishness is fashionable the US these days. You’re in good company.

        Comment by BC — August 2, 2017 @ 8:23 pm

  6. Well, Bill, mission accomplished, you’ve empowered the NIMBYs. What a side to be on.

    Comment by Angela — August 2, 2017 @ 8:02 pm

    • The purpose is not to empower the NIMBYs. The purpose is to empower clear thinking so that citizens who are desperate for housing don’t develop unrealistic hopes and lose faith in the system when false hopes are dashed.

      My mission is a long ways from being accomplished – we have much work to do to finance and build housing that will reduce the number of citizens who cannot find housing near where they work. Starting from a realistic base is essential for accomplishing that mission.

      Comment by William Smith — August 2, 2017 @ 8:13 pm

      • Nah, Angela’s right. You’ve empowered the Alameda NIMBYs, Bill.

        Comment by Lauren Do — August 3, 2017 @ 6:02 am

        • While back warmer JKW, as a guest lecturer told us that the Island will flood (no maybes about it) if we didn’t hurry up and build a perimeter wall. Isn’t it a bit disingenuous to be yakking about cramming more people onto this sinking ship when no wall is in the making?

          Comment by jack — August 3, 2017 @ 8:18 am

      • Will you make it clear to the ACT folks that rent control must accompany anything along the lines of the building moratorium for which they so hanker? Because, to give you the benefit of the doubt, you arguments are subtle, and subtlety isn’t something the good members of the ACT want to or are able to get. And anything that gives them an excuse to misinterpret an academic study (however preliminary the research or tentative the conclusions) will be misused by them to say stop it all, let’s study it more, which is code for, I want to be able to drive my Oldsmobile unimpeded along Park St in rush hour.

        Comment by BC — August 3, 2017 @ 10:29 am

        • Democracy works best when all parties acknowledge facts. Hiding facts undermines trust – helping parties express facts builds trust and can result in more inclusive and roust solutions. This fact based approach is vital to the advancement of science. Why not try it in politics?

          Au revor. Back on-line in late August.

          Comment by William Smith — August 3, 2017 @ 12:11 pm

        • Yes, I will make the case for rent control whether or not there is a moratorium. It will take decades to build enough housing to enable the supply to meet the demand. Until then rent control is needed to allow many service workers to live in Alameda.

          Although there are hints that a building moratorium might be appropriate, there is scant data to support it. What data I’ve seen is in papers associated with the UC Berkeley Urban Displacement Project. I plan to review closely and summarize that data over Labor Day weekend.

          Relevant local data is needed to update Alameda’s inclusionary housing targets. Urge the Council to return the inclusionary housing report to the planning board to resubmit it with a bona fide study of housing demand and supply in Alameda, not San Francisco.

          Comment by William Smith — August 3, 2017 @ 12:32 pm

    • It wouldn’t be the first time Bill has done that, and it won’t be the last. This is a fairly standard tactic on his part.

      Comment by Doug Biggs — August 3, 2017 @ 9:46 am

  7. Doug, I’ve noticed that too!

    Comment by Karen Bey — August 3, 2017 @ 2:11 pm

  8. The question is to what end?

    Comment by Angela — August 3, 2017 @ 2:56 pm

    • Deliberate obfuscation to create delay?

      Comment by BC — August 3, 2017 @ 4:06 pm

    • To stop housing. To understand Bill, you need to understand the Sierra Club that got him started on his advocacy. Back around 2004, the Sierra Club adopted an anti immigration policy. The club at that point(and to a great extent, still is) was made up of middle-upper class white males who took the attitude that preservation took precedence over everything. the club divided at that point, and more progressive members left. Surprisingly, A core group of SC members in the bay area, including Bill still stick with the more “pure” ideology of that earlier period. And I say all this having said it before directly to Bill.

      Comment by Doug Biggs — August 3, 2017 @ 4:13 pm

      • If that is indeed the case, I am disappointed because I believe new housing efforts, especially ones that can create more mobility in the market so that folks can move closer to where they can work and thus commute via car less frequently would actually be a part of the Sierra Club point of view. Their stance on housing in the East Bay has put me off financially supporting them.

        I would like to see us change how we do the math in deciding how and what we build. I think we start with the price point that we want to see per unit and find out what density would allow us to build the number of units necessary to make that cost pencil out. Right now, we start with these ridiculous “RHNA” numbers that only serve as caps. If we limit the number of homes at each site, then it’s logistically impossible to create that housing. That said, the densities at each location might not yield affordable housing, and that’s where we bring in the subsidies. When we prioritize building the quantities that we actually need instead of preserving the way of life for folks with stable housing, then we might be able to change the housing shortage. But this approach would likely terrify old school Alameda.

        Comment by Angela — August 3, 2017 @ 4:32 pm


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