Berkeley’s Attack on Housing
beyondchron.org
beyondchron.org
Students don't vote in city elections for the most part.
The city council represents the homeowners and long time residents. The homeowners want their property values to go up, so most of them oppose more housing. The long time residents inexplicably hate students and "what the students do to this city" despite the fact that the University was there before every single person who live there now.
So the city council does everything it can to keep those property values high, since the students are a captive audience and will rent no matter what, and for the most part don't care what the cost is because their upper middle class parents and/or the federal government is picking up the bill until they graduate.
I personally do my small part by keeping the rent on our place below market, as close to our actual costs as possible. The appreciation on the property value is nice, but the steady income is really what Berkeley property is good for. In 19 years I've had three months of vacancy, and two of those were because I was renovating and one was because my tenants left in a odd month.
"as close to our actual costs as possible."
"but the steady income is really what Berkeley property is good for"
Wouldn't 'as close to costs as possible' be exactly what it costs to maintain the property (insurance, maintenance / upgradtes, rates, etc) thereby eating all the steady income.
Yes. We basically break even, including the cost of the mortgage. The idea is to own the property outright in 30 years, and then slowly ramping up the profits but still staying below market rate. Or simply sell the property.
But the point is it's a long term investment and savings account, that doesn't depend on the value to go up. If I wanted to be more rational I would add in a small return on capital as a cost, which would still have me be below market, just less so.
How short sighted, without the school the whole Silicon Valley thing might have happened somewhere else and property values wouldn't be nearly as high.
I don't think we should punish them through housing policy though :-).
The people who would've ended up in new housing don't just disappear into the ether; they end up living in some further out suburb, where they contribute to encroaching on nature, and where they have longer, more energy-intensive commutes.
To be an environmentalist and a NIMBY is a contradiction in terms. The bay area, unfortunately, is chock full of hypocrites of this sort.
Cough San Francisco Sierra Club Cough
https://www.forbes.com/sites/scottbeyer/2017/05/31/san-franc...
They're fighting to preserve a.... car garage. http://thebaycitybeacon.com/32740/282282/a/the-sierra-club-f...
Here's a quote: In many metro areas, household emissions in the suburbs are roughly double those of city households.
http://www.oaklandmagazine.com/June-2017/Dealing-with-the-Sp...
Apart from the anti-housing issues that you outlined, the city loses out on new property tax revenue that would be levied at the current market rate.
Staying in office is always the #1 goal.
They seem to think gentrification / "YIMBYism" is "good" because it "invests in" or "cleans up" the neighborhood, not realizing that all the poorer people they "cleaned up" don't disappear -- they too end up living in some further out area, with all the same problems that causes.
Edit: This isn't an anti-construction argument. This is a pro-appropriate-construction argument. Not just any new building works towards a solution. Not just any units actually help the supply side of this problem.
Like many in this debate, you seem to think that preventing housing construction prevents population change. But it only preserves the size of the population, not the composition
There is more than enough demand already to unseat every long-time renter by outbidding them at lease renewal time, and this is happening. No developer intervention required.
It doesn't preserve size, either. Existing units can be occupied more densely, units not intended (or legally permitted) for residential use can be occupied, and population can grow that isn't housed.
Not at all. That's a claim you've invented entirely on your own, not something I said.
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My claim is that YIMBYism is often an attempt to replicate the housing problems seen in places like Berkley, not an attempt to fix them. YIMBYism is often an attempt to inflate property just like NIMBYism is.
If 1,000 people are slowly dying of thirst in the desert, and PepsiCo offers to build a Pepsi distribution plant in your desert, some people will say "no" and some will say "yes", and neither will be addressing the water shortage problem because Pepsi isn't water.
That's essentially how housing works today. No one builds housing for residents, which is the problem. If you oppose the construction of buildings that are not housing for residents (like say, luxury condos), you get slandered with a "NIMBY" label, despite being pro-housing, because the construction makes the existing problem worse (the act of constructing that luxury condo will inflate all nearby property values too, displacing more people than the new building itself will hold)
Sure, it's possible to build too many luxury condos and depress prices in that market segment, while not building enough of something else, but we certainly don't have that problem now.
They need a way to stay housed as nonresidents move in.
If you can choose a swanky new building in Berkeley, then you don't need to commandeer housing that someone is already living in.
The real progressive solution here would be to use taxation for the government to build its own more affordable housing, housing that is mixed-income, mixed-use, etc. But, that can easily happen in parallel with private development.
Other countries like Singapore and Austria manage to have government-built/run housing that works fine. I don't think there's anything fundamentally stopping the US from doing it competently, the high-level design was just really bad before. You don't want to concentrate only very low income people (aka the people with the most social problems and the least social/political capital) in big towers in the middle of nowhere, that's a recipe for disaster.
If there are problems with cash transfer programs --- for instance, that only certain homes end up eligible due to paperwork requirements, or under-market payments --- it seems much easier to fix those than to turn the government itself into a landlord for millions of people. Tenant/landlord relations are themselves a kind of marketplace, and central planning handles those poorly.
Rent-seeking (in the economic sense). IIRC, any kind of direct cash transfer (or even subsidized loan) has been known to result in price increases for everyone. See, e.g., college tuitions. (Disclaimer: I haven't looked into the data myself and am relying on recall of things I've read in the past.)
Local YIMBY groups like East Bay Forward, YIMBY Action and SF BARF support the construction of both market rate and below market rate. They have on occasion opposed increases in the BMR requirements for new housing, but that was out of concern that the new requirements were so high that substantially less housing would be built and the absolute number of BMR numbers would in fact be lower. While not conclusive, some early indications suggest this concern was warranted [2].
[1] http://www.lao.ca.gov/Publications/Report/3345 [2] https://medium.com/@LocalPolitics/the-25-inclusionary-rate-i...
Similarly, we have little in common with immigrants from poor countries fleeing extreme poverty and dysfunctional violence. In the immigration analogy, we are more like the plutocrats buying access through investor visas. Even the most pro-immigration liberals don't think immigration should be for sale to the rich.
So why should cities be forced to remake themselves for our benefit?
The simple answer is, it's not for our benefit. The highly skilled, well educated, and well employed will happily take over every existing housing unit, no matter how poor its previous occupant. We might even prefer to live in beautiful, low-rise cities with only fellow elites for neighbors.
Increasing scale until there's enough for everyone is the alternative to just replacing existing residents in existing homes.
Those type of buildings are not very profitable to build now with modern building requirements like ADA. Once the economy goes south, the rent and quality of tenant will plunge.
Real estate is always boom-bust. Having a conservative outlook about building is pragmatic.
How do we fix this?
People used to move to cities for the opportunities. Now it's increasingly difficult to do so. For lots of reasons we need to make it possible for people to move to the cities and thrive.
Pretty much every scenario seems to be "optimized" to have techies paying 30-50% of their monthly income to housing. You can't really win, but you can attempt to maximize the real dollar amount you end up left over with with each month. Working remotely is "cheating the system" and is therefore largely disallowed, or "work from home" is allowed only to quell some degree of outrage. Literally the industry that invented video chat doesn't [want to] understand how to use it to work remotely.
That's exactly what would happen in a normal market.
If so, fuck that!
However, the long term fix I think should be that UC should stop annually increasing the number of students it accepts to UC Berkeley. I know this probably would never happen - but I don't see another solution. Why not benefit another aspiring area of California? Berkeley will not grow so where will the students go?
Similarly, if the Bay area has decided it doesn't want to grow upwards, then there should be more incentive to grow outwards. There should be a cap on the amount of office space growth in any given city unless housing grows equally... again I doubt this will happen. But I think it would be smart. People go where the money is, then comes the infrastructure, then comes other small businesses, etc.
That will both provide money for local schools and force the increase in efficient usage of land.
That's difficult in California: https://en.wikipedia.org/wiki/California_Proposition_13_(197...
It's almost funny how bad that law is for young people.
Boomers weren't the politically-dominant generation at the time Prop 13 was passed. I know people like to pretend all of history is divided between "Boomers" and "Millennials", but at the time of Prop 13, leading edge Boomers were in their late 20s and trailing edge Boomers were tweens. It's less accurate to say that Prop 13 was voted in by Boomers than to say Trump was elected by Millennials.
Prop 13 was voted in largely by the “Silent” and “Greatest” generations. Insofar as Prop 13 is unfair to young people, Boomers were the first young people that were on the recieving end of the unfairness.
I own a 2,000 square foot home with spacious city lot for 1/3 of that shed.
The Bay Area is cool if you bought a house in 1996. Now? You're crazy.
[1] https://www.dmv.ca.gov/portal/dmv/detail/dl/residency_requir...
Sometimes (near state lines in the US) not even /state/ level laws would provide adequate representational coverage.
A more accurate way of providing representation might be to identify areas of major expenditure. Employment, Education, Living, etc. Aside from residency should be either by some absolute threshold of transaction value or possibly by percentage of income. A significant economic interest in an area should be related to representation in that area (as you are being taxed for your activity there). Corridors that connect those areas should also apply (you do have to traverse them for your interests); transit and transit related laws should thus probably be at a major metro or higher level.
Edit: Also add public comment on zoning decisions that affect you even if you cannot vote.
Quite true. Also, they don't actually care all that much, because most of them have their housing subsidized by federal loans or their wealthy parents or both.
Yeah but that's been true for a long time. When I attended I had a friend who rented a piece of wood suspended above the laundry room of a frat house for $150/mo (while I paid $400/mo to share a one bedroom unit).
This happens across asset classes, but there are at least two significant distinctions:
* Purely financial assets: money, stocks, bonds, etc.
* Productive assets, most especially Maslovian assets: those which provide necessities of life.
Purely financial assets can absorb inflation without inherently creating dislocations in the productive economy. This isn't to say that they don't risk bubbles or other issues, only that there's no inherent need for a person to have, say, a specific quantity of stock or money (excepting ongoing expenses for the latter).
Pricing up productive assets is another story -- two roles, wealth preservation, and productive use, are in conflict.
The problem is, from a rational perspective, it makes sense for the owners of such goods to seek value appreciation. This doesn't translate to an increase in real economic growth, but it does increase the owner's claims to such growth.
Through leverage, debt, and lending collateral, there are knock-on effects to other agents as well: a bank whose core asset (and lending reserve) is the market value of its real-estate portfolio benefits by increased valuation of that portfolio.
I'm not entirely sure what if any solutions might exist, though I'm partial to the concept of a land tax (or more generally: a held-asset tax), which increases ongoing carrying costs, and encourges more intensive utilisation of high-value property.
I'm also interested in what areas don't have this problem, and what policies or other conditions tend away from it.
For those arguing that the city could zone and facilitate building affordable non subsidized housing, where exactly would it be built?
There isn't an abundance of empty lots AFAIK and it seems enormous highrises would have to be built in large numbers to make any dent in having prices come down.
I would love more options but without even mildly specific suggestions articles like these seem to lack any pragmatism.
My personal bet is the proliferation of these cute backyard dwellings would actually make rents go higher because these would go for a premium over 50 year old crummy spots.
Why do they need to be relaxed if its already profitable to build one?
I wonder what about building such a unit requires too much red tape. Too bad they don't go into it in the article.
Huge swaths of south and southwest Berkeley (especially near the Emeryville and Oakland border) seem to be fallow, formerly industrial spaces when I drive through. Lots of opportunity for infill there.
Emeryville is a veritable utopia at first glance and has tax incentives for businesses out the wazoo.
I'm open to the idea that these areas could be developed, but most mission hipsters consider these areas ikealand at best.
I tend to think the valid critique of high prices in berkeley surrounds the existing popular areas.
Note that just because these areas are not as trendy as others, they are still very expensive.
"Arreguin recently joined a Council majority in rejecting a three-unit project at 1310 Haskell Street in South Berkeley that met applicable zoning laws. This was after a previous rejection caused the city to be sued. The city settled the suit and agreed to another hearing. Despite the city attorney warning the Council that they would again be sued if they did not grant approval, the Council voted it down again."
The second step would be increasing density on Shattuck (lots of single story buildings on or near) or increasing density over the single family homes/duplexes that are very close to downtown.
Or if those technical requirements that make cheap housing illegal aren't palatable, then just add in much more mixed frame construction. It's already fairly popular, I've seen a bunch of buildings under construction like this. It's basically 1-2 floors of steel or concrete frame for commercial use, along with 3-5 floors of residential wood framed units on top of that. Replace low-density commercial with that mid-density mixed-use, add in mid-rise townhouses, and you've got plenty of room to have five times as many folks in Berkeley.
Of course, the real problem is that housing is too regional for this to make a big difference. It's a huge cost to Berkeley, and what it does is relieve pressure in the greater metropolitan area as people shift their commutes to take advantage of this.
This is a vision to strive for instead of just preserving whatever state we're currently in.
[0] https://books.google.com/books/about/Ecocity_Berkeley.html?i...
http://www.housing.berkeley.edu/rates
I'm not sure if these are at/over capacity, but how do non students feel about these prices?
Typically these articles paint a picture of students rolling in as if they were forced into a 3000/mo condo.
Thus, the price of a quad room is even more, at ~$1,580/month, disregarding the inconvenience of the move-out. The single room with shared bathroom works out to ~$2,200/month. In-suite is more, at ~$2,400/month.
From what I've gathered, the additional fee is designed to incentivize developers to include at least 20% affordable housing units in new projects. If you're building less than 20% affordable housing, you pay a sliding-scale fee. That money goes to supporting staff in the city that monitor and enforce affordable housing regulations.
I can definitely see the opposing policy argument here: just remove incentives on developers and let the market figure it out. However, I don't think Item #53 is some kind of scheme to keep housing unaffordable on the part of home owners.
I wasn't able to find the de-zoning item in the agenda, if anyone knows which one it is I'd definitely give it a read. Full agenda here: http://www.ci.berkeley.ca.us/Clerk/City_Council/2017/06_June...
I almost have more respect for all the neo-fascists who are just openly racist and elitist. At least they're being honest about how they feel.
I haven't seen a good study on teasing apart cultural, class, and racial discrimination in terms of contribution to outcomes.
Class divisions due to race were cemented by slavery, jim crow, redlining, and the criminal justice system. Nimbyism parallels redlining in certain ways now that I think about it.
Example: they think Voter ID laws are racist because they think black people and other minorities can't find or get to a DMV or don't have internet [1]
They want artisanal-everything, Whole Foods and similar which is also a way to push out those that can't afford those things. I hear them talk about moving to these hipster places that are "up and coming". I know what they really mean. A gentrifying place where they can be surrounded by people just like them, with the same views, the same interests, similar occupations and similar social status.
[1] https://pjmedia.com/video/what-berkeley-liberals-think-of-vo...