Tag Archives: housing

Moms 4 Housing vs. Private Property

Moms 4 Housing

Sameerah Karim raises her fist with supporters after filing a claim to fight her eviction notice at Alameda County Superior Court. (Molly Solomon/KQED)

The Story, Once More

Hundreds of news articles have reported for the last couple of months the saga of four homeless moms and their children who moved last November into a vacant house owned by the investment firm Wedgewood Properties in Oakland, California.

Given that the estimated number of unsheltered people in the U.S. is nearly 200,000 (45% in California), one could assume that many take shelter unobtrusively in vacant property. However, quiet occupation was not the intent in this story.

The moms immediately received strategic and legal help from Alliance of Californians for Community Empowerment (ACCE), admiration from public officials, and support from cheering crowds outside the house. They founded the collective Moms 4 Housing, and in the name of one of the moms, Dominique Walker, defended an eviction notice in court.

Dominique Walker’s argument was that the court must grant right of possession to the women occupying the house with their children, because housing is a right, the house had been vacant for two years, and the alternative to occupying the house would be living in the streets. Walker requested the court’s permission to offer expert testimony on the right to hosing based on federal and international law.

Judge Patrick McKinney on January 10, ruled that Dominique Walker had no valid claim to possession of the house, and eviction could take place. He indicated that Walker’s argument of housing rights under federal and international law were “outside the scope of this proceeding.”

Alameda County Sheriffs then conducted a pre-dawn raid with full swat regalia and battering rams, while many supporters of Moms 4 Housing surrounded the house and the press took it all in. Two moms and two supporters were arrested and soon released. Dominique Walker was not in the house at the time of the raid, since she was attending an interview with Amy Goodman of Democracy Now.

Although Wedgewood Properties offered to pay for a few months of shelter for the moms they refused to negotiate the mom’s request to purchase the house through the Oakland Community Land Trust “for exactly what they paid for it.”

Rights Under Federal and International Law?

There are a number of U.S. federal statutes that prohibit discrimination in housing, provide home-buying assistance, and help with rent payments. None of these statutes mandate a roof over everyone’s head or indicate that housing is a human right.

There are numerous trans-national declarations of human rights. Most of these declarations were implemented by the United Nations, including one of the most notable, the 1948 Universal Declaration of Human Rights. In spite of its mane, the Declaration of Human Rights does not mandate a home for all who need one; instead it speaks of economic, social, and cultural conditions that should be respected. Perhaps most pertinent to the Moms 4 Housing case is the Declaration’s Article 17: ”Everyone has the right to own property alone as well as in association with others. No one shall be arbitrarily deprived of his property.”

The Legal Perspective

The U.S. Constitution is clear on matters of property: no one can be “deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public good without just compensation.” (Amendment 5, Section 1). The prohibition applies also to States: ” …nor shall any State deprive any person of life, liberty, without due process of law…” (Amendment 14, Section 1).

Judge Patrick McKinney’s decision in the Moms 4 Housing case should have been anticipated, given the case’s lack of a Constitutional basis, lack of U.S. statutes affording possession of other people’s property due to an occupier’s hardships, and the fact that international declarations (as opposed to international treaties) have no standing in U.S. courts.

Economic Realities and Progressive Solutions

The U.S. Constitution’s clarity in matters of private property has always been a stumbling block to those who favor a more communal ownership of property. They make a distinction between classical liberals (presumably outdated liberals) who defend unrestricted private property, and contemporary liberals who adjust the concept of private property to modern times. Corporate ownership of property, the function of wealth in political power, and rising economic inequalities are realities of modern time cited by contemporary liberals.

Contemporary ‘classical liberals’ (and related, ‘libertarians’) still defend the classical conception … However, most contemporary liberal authors accept private property as a fundamental right but supplement this acceptance of unrestricted private property rights with a set of social rights. This supplementation strategy also reflects the practice of many international human rights documents and national constitutions. Social rights (to housing, health care, etc.) are meant to counterbalance the harsh effects to vulnerable individuals resulting from only recognizing unrestricted private property rights.” Private Property and Political Power in a Liberal-Democratic Society, Dutch Research Council, 2016.

The largely supportive response from the press and from public officials that Moms 4 Housing received evidences that private property is no longer universally viewed as the unrestricted right of owners. However, Judge Patrick McKinney’s court order was based on the classical concept of property. According to the research paper mentioned above, such dichotomy could be remedied by implementing an “institutional translation” of “abstract proposals for a fair wealth distribution.” In other words change the nation’s Constitutional and statutory framework to reflect a concept of communal, rather than private, property.

Remedy Worse than the Disease

The Just Vote No Blog has pointed out in several articles that although the U.S. is overall still economically powerful and politically free, there are serious underlying challenges that need correction. Such challenges have the perverse effect of benefiting some and devastating others. Profligate government spending, an unsustainable national debt, cheap money, stocks valued at several times earnings are root challenges that will not be corrected by simply distributing property. Moms 4 Housing and their supporters are sadly on the wrong track.

Jerry Brown Blames the Feds for Wildfires Too

 

Four days ago, former California governor Jerry Brown testified before the U.S. House of Representatives Oversight Committee panel on the environment. Here is what he said,

California’s burning while the deniers make a joke out of the standards that protect us all. The blood is on your soul here and I hope you wake up.

His point was that climate change is the primary cause of California’s devastating wildfires, and the Trump administration is not interested in either the state’s plight or in California’s leadership in fighting climate change.

The governor’s specific reason for visiting Washington DC was to testify against the Administration’s plan to suspend the federal waiver that allows California to impose vehicle emission standards more stringent than those mandated by the federal government. The state views strict emission standards as essential in lowering CO2, the focus of California’s climate fight.

Let’s Review California’s Wildfire Scenario

Indeed, climate changes, and with change comes the need for adaptation. But the governor’s words when stacked up against some obvious facts sound more like prescribed rhetoric than a call for solutions. Here are some variables that are absent from the governor’s rhetoric.

* California wildfires have always been a fact of nature. Forest fires naturally take care of overgrowth and help seeds explode and propagate. However, while in the old days early inhabitants suffered smoky air and heat from the conflagrations today’s inhabitants are faced with tragic destruction of life and property.

* Recent poorly-managed population growth force people seeking room to build to locate in fire zones next to tinder-dry forests.

* An exploding number of homeless individuals and their campfires have spread out into fire-prone zones, just like their housed neighbors.

* Overzealous environmentalists have succeeded in stopping the culling of trees and trimming of underbrush.

* Nature-loving homeowners understandably enjoy forests, rendered deadly by droughts, right by their backyards.

* California’s perennial distaste for investor-owned utility companies such a PG&E and Southern California Edison preclude peaceful and efficient transition to renewable sources of energy.

Blood in Whose Soul?

Jerry Brown made headlines with his “blood is on your soul” accusation. But his climate change blame game sounds unconvincing when other factors affecting the destruction caused by California’s wildfires are ignored.

The former governor’s words brings to mind an image of another unraveling society of long time past, where someone fiddled as the city burned. Whose soul was tainted with blood then? And now?

More on the Subject

*  For a more scathing opinion of California fires, the Just Vote No Blog recommends

California is Becoming Unlivable, Atlantic, October 2019 issue

*  Picture: Note the dry dead branches in the center of this tree grove in a northern California residential community.

Trees 2

Cities, Hostage to the Drug-Homeless Complex

Drug injection needles on the street

Today’s guiding principles in the purported War on Homelessness are remarkably similar to those of the War on Poverty and the War on Drugs. Unsurprisingly, the result of all three responses to challenges is the same – homelessness, poverty and drug use flourished.

When a significant number of people stand to benefit from “fighting” a particular challenge, that challenge will grow. Think of the army of bureaucrats employed by the countless government agencies and government-enabled non-profits that make up these three Wars. They need their jobs to feed their families just like the rest of us.

So, they develop policies divorced from realities. The War on Poverty ignores the fact that people respond to free services by decreasing remunerative efforts that once enabled them to pay for those services. The War on Drugs ignores the insidiousness of the underground market. Today’s War on Homelessness, especially in populous progressive cities like San Francisco, ignores the principal reason for homelessness.

As the article posted on the Just Vote No Blog a few weeks ago, Homelessness: Is Housing the Problem? pointed out, most of today’s homelessness is a product of drug abuse, not a product of lack of affordable housing.

An informative website, The City Journal, in its Autumn 2019 publication carried an article by Heather Mac Donald entitled, San Francisco, Hostage to the Homeless. The Just Vote No Blog recommends this article.  Although Ms. Mac Donald’s suggested solution could be interpreted to mean it’s a good thing for cities that act irresponsibly to spread their costs regionally, she reports in excellent details what the homeless interviewed on the streets are saying. They readily admit that “Everyone is on drugs here.”

An inadequate supply of affordable housing is not the first thing that comes to mind when conversing with San Francisco’s street denizens. Their behavioral problems—above all, addiction and mental illness—are too obvious.

Yet, as Ms. Mac Donald points out, the City continues to spend millions of taxpayers’ cash on condoning and normalizing drug use. San Francisco supplies thousands of free injection needles that are openly used in vast homeless encampments. Police are discouraged from interfering with drug sales visible to all passersby. Taxpayers are saddled with funding Poop Patrols the sole function of which is scooping human feces from sidewalks.

This scenario, although painfully entrenched in San Francisco, is supported in many other cities in the U.S. and abroad.  The enabling policies are advocated by the principle of “harm reduction,” a strategy largely funded by George Soro’s Open Society Foundations“Harm reduction” in this case applies to those addicted to drugs, not to the sober.

As long as “compassion” dictates everyone live under such conditions, and as long as speech and thought enforcers are at the ready with invectives as soon as anyone objects, the homeless, in the midst of their own misery, will continue to hold cities like San Francisco hostage.

Fear As a Tool For Control

Fear is a good tool with which to implement control. California did a great job successfully passing hundreds of mandates removing voter control of housing by utilizing concerns about climate change. The point here is not to engage in unwinnable arguments whether climate change is man-made or not, but to observe a transformation, some say not for the good, driven by constant talk of climate change.

California Political News and Views is an on-line publication popular among conservatives.  “Conservative” includes ideas such as protection of private property and displeasure with government supported or controlled housing.

An article in the Political News and Views issue of September 16, observes the connection between California’s continuous talk of climate change and draconian housing legislation. Of special note is the morphing of climate change into climate justice, which led to massive taxation of the state’s residents to support subsidized housing.

Here is a link to the article: The Ascent of Big Government in the Guise of Climate Change

California-Capitol-Money

 

Tech Villas-Not Your Old Company Towns

Scotia a company town
Pacific Lumber Mill company town of Scotia, CA, called “The Last Company Town.”

Nobody likes to pay almost half of one’s wages for housing, but that is what is happening to so many California residents. Reasons for the astronomical housing costs vary according to whom one asks. However, regardless of reason, the situation is now promoted as a “crisis,” and duly exploited as such.

Of concern to the Just Vote No Blog is that the housing crisis is at the heart of today’s central planning, which renders residents and voters increasingly powerless in land use and housing decisions.

A Brief Background

In The Curious Case of Housing Legislation, the Just Vote No Blog noted the history behind today’s network of housing bills. The state’s evolving efforts to remove land use and housing decisions from voters is one of the evident aspects of such history. Here are some reminders:

The seminal Assembly Bill 32, The Global Warming Solutions Act of 2006, started the ball rolling by mandating the reduction of the state’s greenhouse gas emissions to 1990 levels by 2020 and to 80 percent below 1990 levels by 2050.

Climate crisis soon morphed into a land use crisis that required dense job/housing development along narrow corridors throughout the Bay Area, ostensibly to cut down on greenhouse gas emissions produced by workers commuting from homes in the suburbs.

Predictable pushback from neighborhoods, cities and counties not wanting to lose their chosen quality of life encouraged increasingly stronger state mandates. SB 330 and AB 1487 are the latest high-profile bills bent on removing housing decisions from cities and counties.

SB 330, the Housing Crisis Act of 2019, introduced in February by Senator Nancy Skinner and approved by the legislature September 6, has the general objective to “prohibit a county or city, including the electorate exercising its local initiative or referendum power, in which specified conditions exist, determined by the Department of Housing and Community Development as provided, from enacting a development policy, standard, or condition, as defined…..”  Thus, the electorate is summarily dismissed.

AB 1487, the San Francisco Bay Area Regional Housing Finance Act of 2019, introduced in February by Assembly Member David Chiu is currently active and in desk process.  This bill is a game changer.  Voters, no matter how disempowered by mandates such as SB 330, at present can still vote down tax proposals that finance mandates they do not like. AB 1487 makes that strategy more difficult. This bill establishes a new agency, the Bay Area Housing Finance Authority, run by bureaucrats removed from the wrath of voters, with the power to place tax proposals on region-wide ballots, and to determine pass/fail on an aggregate region-wide basis.

Progression Towards Powerful Public-Private Partnerships

The plethora of housing bills in the style of SB 330 and AB 1487 passed into law during the past few years calls for a good deal of cash, perhaps more than the creative financing that could be achieved by the Housing Finance Authority would be able to raise on its own. Thus, enter powerful private players interested in housing development for reasons of their own, willing to forge partnerships with public entities. As one would expect, tech companies like Google and Facebook are becoming major players.

Google, Facebook and other deep-pocketed tech companies are at present investing in housing, a dream come true for housing advocates. They are also encouraging the California legislature to pass legislation that will streamline housing production (more on this later), since investors do not like lengthy bickering over what or where housing is built.

Of course, private influence in public affairs is nothing new. Neither is privately-funded housing developed with government blessings — company towns like Hershey, Marktown, and Pullman are examples. However, today California is witnessing not just tech-towns developed for tech workers, but also the much broader endeavor of using tech money to fund housing for the general population.

Recommended Articles on Public-Private Partnerships

A San Francisco Bay Area publication, 48 Hills, has been deeply concerned about the waning power of voters in land use, housing and transportation decisions. A series of articles by researcher and journalist Zelda Bronstein, published in 48 Hills, explains in great detail how a private entity, the Chan Zuckerberg Initiative, is poised to affect housing policy. In the first two installments published May 29, 2019 and August 29, 2019 of the series (there might be more to come), Ms. Bronstein zeroes in on Senate Bill 330 and Assembly Bill 1487.

The articles are rich with information that Bay Area residents will find useful in understanding who is becoming in charge of their neighborhoods.

Continue reading Tech Villas-Not Your Old Company Towns

AB 1487 is Scheduled for Some Lipstick

Assembly Member David Chiu, author of AB 1487, and his colleagues in the California legislature have removed all hint of what the bill would specifically do if signed into law. Now, in essence, the bill simply says that a new agency is being created with power to raise, administer, and allocate funding as it sees fit for affordable housing in the San Francisco Bay area.

Not much of what was said of Assembly Bill 1487 when it was first introduced in February 2019 applies. “Stakeholders and local leaders” are at present meeting with legislators to re-construct the peripherals of the bill. Of course, the core feature remains: Establishment of the Bay Area Housing Financing Authority, an agency that will initially share staffing with the Bay Area’s Metropolitan Transportation Commission, and that will have power to raise tax money from all counties in the Bay Area.

BAHFA as MTC’s Other Self

The proposed new agency will serve as the Metropolitan Transportation Commission’s other self, with the additional coveted ability to raise funds.

MTC, the Bay Area’s version of a federally-mandated Metropolitan Planning Organization, has what one might call a checkered past. Its major feats are finalizing the construction of a span of the Bay Bridge damaged by the 1989 Loma Prieta earthquake after years of delays and billions in costs overruns, and implementing central planning via Plan Bay Area (approved in 2013 by MTC Commissioners, but never by voters). Today, MTC doles out considerable sums under its various centrally-planned transportation and housing projects, but it does not have power to raise fund. It will indirectly should AB 1487 pass.

So, now the prospects are excellent for MTC’s other self, the Bay Area Housing Financing Authority, routinely to raise taxes regionally in the fashion of Measure AA.  As the Just Vote No Blog noted in With AB 1487 There is No Opt Out, in 2015 Measure AA passed by the aggregate votes of all counties without possibility of any county opting out.

An Alternative to Putting Lipstick on AB 1487

AB 1487, last amended July 11, 2019, is currently an active bill in Floor process. A third reading in the Senate is scheduled for August 26, 2019.

Individuals and organizations concerned about BAHFA’s undue influence in the operation of their city or county should remember that the agency’s success in raising money depends entirely on the willingness of taxpayers to part with their hard-earned cash.

The possibility of residents becoming aware of how much control they will cede to a regional agency such as BAHFA and deciding to vote “No” on BAHFA funding proposals might give legislators some pause in moving forward with their plans. For those opposed to mandated central planning, aiming for such pause might be more effective than accepting BAHFA as fait accompli and merely attempting to negotiate damage control with legislators.

Putting lipstick on a piggy will not make it any pettier.

Addendum:  The Transformation of NeighborhoodsParkmerced - CopyParkmerced, a traditional privately owned residential community in the heart of San Francisco that houses over 3,000 residents, has developed Parkmerced Vision.  Under the plan, the garden homes surrounding green spaces will be demolished to make room for taller, denser buildings.  Some applaud the plan, others despise it. The transformation of neighborhoods is occurring for good or bad all over the state.  A regional housing agency such as the proposed Bay Area Housing Financing Administration is intended to accelerate the process by injecting public funds for subsidized housing.

 

Homelessness – Is Housing the Problem?

homelessness

When we see so many people with no other place to call home except a piece of sidewalk or a tent, we need to ask whether our leadership is choosing the appropriate solution to challenges at hand. In the case of homelessness in numbers such as we see in purportedly rich California cities, the answer is probably “no.”

When we routinely see drug injection needles discarded in sidewalks, parking lots, and our kids’ playground, we really need to think whether the current narrative of gentrification and housing shortage as the primary cause for homelessness makes sense.

We need to ask what role the drug industry, facilitated by political leaders, may play in such a scenario. The folks in question here are not the usual small-fry drug dealers, but the legitimate barons of an industry not shy about prices.  Injection needles and other drug paraphernalia cost serious money, so does the increasingly ubiquitous naloxone.

Naloxone maker Kaleo has an injection treatment called Evzio that has a list price of $4,100. The company plans to release a generic version of Evzio with a retail price of $178 for a two pack this year. A two-pack of Narcan, a naloxone nasal spray, has a retail price of about $125. Generic naloxone costs about $40 per dose.  FDA Clears the Way to Increase Access and Lower Cost of Life-saving Opioid Overdose Treatment Drug.  CNBC. January 28, 2019.

The increase has cost the federal Medicare and Medicaid health programs more than $142 million since 2014, according the Homeland Security permanent subcommittee on investigations.  Drug Company Raised Price of Lifesaving Opioid Overdose Antidote More than 600 Percent USA Today November 19, 2018.

The Just Vote No Blog recommends the article Homelessness: Housing is not the Problem, in the California Political News and Views of August 4, 2019, for more on this unfortunate homelessness situation. 

 

The Coming of Nemesis: Kopp vs. Wiener

Hubris is interesting, because you get people who are often very clever, very powerful, have achieved great things, and then something goes wrong – they just don’t know when to stop. Margaret MacMillan

On July 31, Quentin Kopp, a fearless fixture in California politics, announced that he intends to challenge incumbent Scott Wiener for the state Senate seat in District 11 representing San Francisco, Daly City, Colma, Broadmoor, and parts of South San Francisco. The 90-year old Kopp seems mad as heck and is not going to take it any more.

The last straw for Kopp of Wiener’s schemes was Senate Bill 281, hearing of which scheduled for May 6 was canceled at Wiener’s request. SB 281 was the most recent in a long line of attempts to transfer management and/or ownership of the iconic Cow Palace from the current board to a local county joint-powers authority.

The 78-year old exhibit hall sits on 68 acres of coveted land owned by the California Department of Food and Agriculture’s Division of Fairs and Expositions. Although its days of glory are over, when the Cow Palace hosted headliners like the Beatles, Rolling Stones, and Elvis Presley, the hall still has audiences that enjoy shows and fairs like the San Francisco Sport & Boat Show, Golden Gate Kennel Club Dog Show, Dickens Christmas Fair, and the Horse Show & Rodeo. The Crossroads of the West Gun Show will end after 2019 by decision of the Cow Palace Board.

Thanks to revenue from these exhibits, the Cow Palace receives very little funding from the California state budget.

In an interview with San Francisco Chronicle’s Phil Matier, Quentin Kopp indicated that he felt SB 281 was a land grab to build more highrises in residential neighborhoods. Apparently, he is correct according the the text of SB 281:

This bill would authorize the authority to, among other things, enter into contracts or agreements for the development of the property for affordable and market-rate mixed-use housing and establish minimum local zoning standards, including, but not limited to, standards for height, density, parking, and floor area ratio, that apply to a project on the property that are different from those adopted by any other affected local jurisdiction.

Quentin Kopp is no lightweight in California politics. His resume is impressive:
San Francisco Supervisor 1971-1986, representing the West Portal neighborhood. State Senator 1987-1994, representing the southern part of San Francisco and the northern part of San Mateo County. San Mateo Superior Court Judge 1994 -2004. He retired after leaving his Court post.

After retirement from the Court, Kopp was appointed in 2006 to the California High Speed Rail Authority, a post he held until 2010. As Chair he was instrumental in the passage of Proposition 1A, which authorized a $9.95 billion bond to develop a high-speed rail system that would zip passengers from San Francisco to Los Angeles in less than three hours. The project received $2.5 billion from the Federal Railroad Administration. So far, construction can only be seen in California’s Central Valley, for an estimated cost to completion of $20 billion. Today Quentin Kopp rants against how the Rail Authority mishandled the bond money every chance he gets. The Federal Railroad Administration is angry too, and wants its money back.

In September 2016, the San Francisco Board of Supervisors appointed Quentin Kopp to the City’s Ethics Commission. He resigned from the post in March 2019, noting the uselessness of the Commission in denting its backlog or tackling important reforms in its job of enforcing governmental ethics laws.

Term limits might keep Quentin Kopp from serving once again in the California Senate. His argument is that since his previous service occurred before passage of legislation implementing term limits, the rule would not apply to him. And, as is Kopp’s stand-up-and-fight nature, he declared that he will sue if the Secretary of State decides he is not eligible.

Today’s Gen X and Millennial voters, accustomed to undistinguishable politicians forever uttering prescribed sound bites, might want to get acquainted with Quentin Kopp, who might soon turn out to be nemesis to Scott Wiener’s hubris.

His column in the neighborhood newspaper, the Westside Observer, appears monthly.

With AB 1487 There is No Opt Out

What is California Assembly Bill 1487?

Authored by Assembly Member David Chiu (D-San Francisco), this bill enacts the San Francisco Bay Area Regional Housing Finance Act, which authorizes the creation of a region-wide housing authority with powers to “raise, administer, and allocate funding for affordable housing in the San Francisco Bay area.”

Thus, the Bay Area Housing Finance Authority (BAHFA) would act as a permanent agency, the purpose of which would be to place on the ballot of all nine Bay Area counties concurrently identical ballot measures proposing fees, taxes and bonds to finance construction of affordable housing, preserve existing rent-controlled housing, and to provide tenant protections.  BAHFA would be one more regional agency operating under the wing, and sharing staff with, the Bay Area Metropolitan Transportation Commission.

CA Housing JuntaThe passage by the California legislature of numerous housing-related bills during the past four or so years made it possible for developers to receive ministerial stream-lined approval of housing developments throughout the state – regardless of city or county zoning rules.   (Pictured are Senator Scott Wiener, Assembly Member David Chiu, and Senator Nancy Skinner, the more prolific affordable housing advocates in the California State Legislature.)

Fees, taxes and bonds approved regionally by voters under AB 1487 would help finance development projects regionally – regardless of whether voters in each individual county voted to approve such measures or not.

Examples of the success of such region-wide measures enabled by state legislation are Measure AA (enabled by AB 746) approved regionally by voters June 2016, and Regional Measure 3 (enabled by SB 595) approved regionally by voters June 2018.

AB 1487 is currently housed in the Senate Appropriations Committee. As of today, no hearing date has been indicated. Perhaps legislators are having second thoughts about the viability of AB 1487? After all, the Appropriations Committee was the one that summarily placed Senate Bill 50 (the bill some have labeled WIMBY – Wall Street in My Back Yard) in hibernation.

Highlights of AB 1487

* The findings and declarations in Section 64501, i.e. why the bill’s author thinks his bill should be enacted, follow the by-now required mantra that there is a grand housing crisis due in essence to cities and counties failure to provide “enough” housing, and therefore, legislation needs to be enacted overriding local laws and regulations.

The housing crisis in the San Francisco Bay area is regional in nature and too great to be addressed individually by the region’s 101 cities and 9 counties.

However, the current process is anything but regional; instead each city and county is each responsible for their own decisions around housing …

Regional funding is necessary to help address the housing crisis in the San Francisco Bay area by delivering resources and technical assistance at a regional scale …

* The version previous to amendments made to AB 1487 on July 10, listed in great detail the powers of the Bay Area Housing Finance Authority. The current version does not. In other words, the door is left wide open as to what the Authority would be empowered to do. Here is what is left of the list of powers, in Section 64514, including the bills applicability to any other agency that might replace the Metropolitan Transportation Commission.

The board may make and enforce rules and regulations necessary for governing the authority, the preservation of order, and the transaction of business.

In exercising the powers and duties conferred on the authority by this title, the board may act by resolution.

It is the intent of the Legislature that the powers granted to the authority and the executive board under this title shall be transferred to a future regional agency if an agency is established to replace the Metropolitan Transportation Commission and the Association of Bay Area Governments and integrate regional transportation and housing funding and policy decisions within the San Francisco Bay area under one governing board, subsequent to a robust public engagement process at the regional level.

* Because California legislators have labeled the current high-cost housing in the state a crisis – not state and regional land-use policies unbeneficial to the general public – they can enact legislation that overrides any and all local laws and regulations. For example, AB 1487 specifically indicates the bill is not subject to either the orderly reorganization of city and county governments, or the relative independence of charter cities.

The formation and jurisdictional boundaries of the authority are not subject to the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000 (Division 3 (commencing with Section 56000) of Title 5).

The Legislature finds and declares that providing a regional financing mechanism for affordable housing development and preservation in the San Francisco Bay area, as described in this section and Section 64501, is a matter of statewide concern and is not a municipal affair as that term is used in Section 5 of Article XI of the California Constitution. Therefore, this title applies to all cities within the San Francisco Bay area, including charter cities.

California’s Acme Co.

Acme CoRemember Willie E. Coyote? He tried so hard to defeat the Road Runner, but he consistently used products manufactured by the Acme Co. that failed to operate at all, exploded prematurely, or otherwise caused Willie Coyote the worst of harm. Some folks just don’t learn….

If after half a dozen or so years, say from the implementation of Plan Bay Area, and after numerous state mandates purportedly intended to make housing more affordable, California still sports the most unaffordable housing in the nation, then it would appear the state is facing a Willie E. Coyote vs. The Road Runner struggle.

The main characters in the struggle: On one side homeowners who worked hard to purchase a single-family home in a nice and quiet neighborhood, and wish to keep their neighborhood nice and quiet, as well as their home values astronomical. On the other side newcomers who want to live in those neighborhoods, whether the neighborhoods remain nice and quiet or not, and whether they can afford the market cost of those neighborhoods.

The supporting characters: Legislators at all levels of state government understand that clustering job-creating businesses as well as homes within narrow areas increases the value of both, which translates into higher state GDP and higher revenue from property taxes. Couple that with residents in the quiet nice neighborhoods that do not want job-creating businesses anywhere near them.

So, everybody in California seems to be a fan of the Acme Co. Will AB 1487 reach the finish line and thus change the entire character of city and county land-use planning? Will California residents realize AB 1487 offers no opt out for cities and counties?

The Ballot Box is the Ultimate Decider

AB 1487, as all affordable housing bills, will surely come with a price tag, because somebody has to pay for somebody to benefit.  In the case of AB 1487, the price tag will be in the billions,

The San Francisco Bay area faces an annual funding shortfall of two billion five hundred million dollars ($2,500,000,000) in its efforts to address the affordable housing crisis.  Section 64501 (e)

So far, legislators have not succeeded in doing away with voters’ rights to weigh in on tax proposals. Therefore, the expectedly huge amount of taxes needed to fund AB 1487 would have to be approved at the ballot box.

Since the bill does not offer residents an opt out, the ballot box will become the only venue available to those opposed to the bill to just say no.

Update July 13, 2019

It now has surfaced that on July 9, two days before the scheduled hearing before the Senate Governance and Finance Committee, the sponsors of AB 1487 wrote a letter “To Whom it May Concern” saying they are “temporarily hitting the pause button…” on AB 1487 to allow for more time for feedback from the two main Bay Area bureaucracies deeply involved in land-use issues, the Metropolitan Transportation Commission and the Association of Bay Area Governments.  The Marin Post has a good article about the letter.

Good time for voters to use the “pause” to provide their own feedback.

Now a Credit Card Crisis?

U.S. Senator Bernie Sanders and Representative Alexandria Ocasio-Cortez plan to introduce legislation that would cap credit card interest rates at 15%. Proposals such as this sound great on paper – cap interest rates, and consumers will benefit. But is that all that would happen?

Consider the Following Track Record

* College Tuition

Rise in College Tuition 2If anything, increases in financial aid in recent years have enabled colleges and universities blithely to raise their tuitions, confident that Federal loan subsidies would help cushion the increase. In 1978, subsidies became available to a greatly expanded number of students. In 1980, college tuitions began rising year after year at a rate that exceeded inflation.” William Bennett, Secretary of Education, Our Greedy Colleges, The New York Times, February 18, 1987.

* Health Care

Rise in health care costThe U.S. “health care cost crisis” didn’t start until 1965. The government increased demand with the passage of Medicare and Medicaid while restricting the supply of doctors and hospitals. Health care prices responded at twice the rate of inflation. Mike Holly, How Government Regulations Made Healthcare So Expensive, Mises Wire, May 01, 2017

 

* Housing

Rise in California RentsRent controls protect tenants when rents rise faster than incomes. Because it makes owning rental properties less profitable, rent control discourages landlords from maintaining apartments and encourages them to convert apartments to condominiums, thus reducing housing supply. California’s current housing crisis has resulted in calls to expand rent controls, despite evidence that this practice may drive up rents in uncontrolled buildings.   Jenny Schuetz, Under US Housing Policies Homeowners Mostly Win, While Renters Mostly Lose, Brookings, July 10, 2018

* And Now Credit Cards

Like any other economic good or service, interest rates are subject to the laws of supply and demand. The supply of genuine savings and the demand for those savings embody the interest rate, and this is reflected by its price. When the price of a good or service is capped, this produces a disincentive for entrepreneurs and suppliers to engage in economic activity in the affected industry. This is simultaneously coupled with an artificially low price, which in turn increases demand. The result of a decreased supply and an increased demand is a shortage.  Logan Davies, Ocasio-Cortez’s Plan to Cap Interest Rates is a Horrible Idea, Eccentric Economics, Being Libertarian, June 9, 2019.

Caveats and Externalities

Seldom there is just one reason that explains a situation; although often there is a fundamental reason. Also, it is sometimes difficult to establish whether concurrent events are causal or incidental; but if the incidence of a type of concurrent event produces similar results, one would suspect a causal relationship. Thirdly, economics is a fungible discipline that can regard John Maynard Keynes as well as Milton Friedman with equal seriousness, although the economic theories of these two folks are diametrically opposed.

And fungibility of economic theory is good at both including widely – collective-leaning hypothesis are as acceptable in the economic arena as are market-leaning ones – and excluding imprudently. A couple of lines on a diagram cannot possibly take into account the countless characteristics in human behavior; therefore, those lines simply illustrate a scenario whereby “all other things being equal,” which hardly ever happens in real life.

Subsidy diagramFor example, the diagram at left is often used to illustrate the benefits of subsidies.  The higher “S” is pre-subsidy price, and the lower “S1” is post-subsidy.

A college administration’s greed response to government subsidies as described by Secretary William Bennett would be difficult to include in this diagram. Greed, that is, the capture of any marginal benefit, negates the assumption that all things remain equal. Thus, as subsidies grew, so did the number of college administrators, the variety of student services outside of basic instruction, and employee benefits such as pensions. It was not just demand that grew.

Are We Dealing With Microwave Mentality?

People use microwaves because they want their edibles now, not later. Microwave users want theirs now!

When politicians insists on, say, free college for all, universal health care, rent control, or a cap on credit card interest rates, they are catering to voters’ microwave mentality. In order to get elected or re-elected, politicians need to showcase immediate events that benefit constituents and ignore negative externalities that harm them.