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Why Is There a Housing Crisis? | Opinion | East Bay Express
"The Bay Area's outrageous housing prices have led to howls of protest. Average rents have shot up by half during the last five years. Rents and house prices are the highest of any metropolitan area in the country and among the most unaffordable in the world. This is not just true of San Francisco but applies to the entire Bay region — now twelve counties and 8.5 million people, according to the US Census.

According to mainstream policy shops and planners, such as Gabriel Metcalf, president and CEO of the pro-urban growth organization SPUR, the housing crisis is caused by activists and neighborhood residents who oppose more market-rate housing development. Their solution is to allow developers to build more freely.

But while it's true that we need to expand the region's housing supply, building more housing cannot solve the problem as long as demand is out of control, as it is today. There is simply no way housing could have been built quickly enough to avoid the price spike of the current boom.

Three basic forces are driving the Bay Area's housing prices upward: growth, affluence, and inequality. Three other things make matters worse: finance, business cycles, and geography. All of these operate on the demand side of the equation, and demand is the key to the runaway housing market.

The prime mover of housing prices is economic growth. The Bay Area has been booming for the last five years, creating more than 500,000 new jobs on a base of 3 million. This is the global capital of tech, the world's most dynamic industry, and all those jobs have drawn in thousands of newcomers looking for housing. Moreover, tech delivers huge profits and pays high salaries and wages, as do other key sectors, like biomedical and finance. The Bay Area's per capita income has long been one of the highest in the country, and high incomes give people the wherewithal to pay top dollar for housing.

On top of this, income distribution is highly unequal, and wealth inequality is even worse, allowing the upper classes to put additional pressure on the market for good housing in favored locations. The Bay Area has one of the highest indexes of income inequality of any region, caused principally by the high salaries of the top 20 percent of earners. As for wealth, the Bay Area has more millionaires per capita than any other US metro and can claim 45 of the 400 richest people in the United States, second only to New York City.

Most people understand these essential drivers of the housing market, if not how extreme they are in the Bay region. But much more lies behind the runaway rents and sale prices of late. We need to think outside the box of simple supply and demand and look further at a trio of conditions shaping demand: credit and capital, boom and bust cycles, and the spatial preferences of the elite.

First, housing is a big-ticket item that normally requires a mortgage, and an excess of credit will exaggerate people's ability to purchase houses. California had the most overheated mortgage markets during the housing bubble of the 2000s, and our financial institutions have not been substantially reformed. Finance is subject to dramatic swings, and the pressure becomes unbearable at the peak of the cycle. Furthermore, footloose capital from around the world has once again been flooding into the Bay Area in search of high returns, whether as venture investments in hot start-ups, stock holdings in tech giants, or purchases of mortgage bonds. All the wealth in tech is not generated locally, nor is all housing demand.

Second, the housing market does not behave like eBay because supply is slow to adjust to demand. It takes a long time to build new units and most people stay in the same residence for years. Hence, only a small percentage of total housing stock comes on the market in any year — normally less than 5 percent — and markets suffer from intense bottlenecks. As expansive demand chases limited supply over the course of a business cycle, prices accelerate ahead of new building. Speculators and landlords intensify the pressure as they buy properties, evict tenants, and displace people in anticipation of even higher rents. The good news is that booms go bust, sooner or later. Construction will overshoot the market, as it always does, and then prices will fall by 10 to 20 percent, as usual.

Third, housing markets are badly distorted by the geography of privilege and power. If the nouveaux riches of the tech world want to live in San Francisco (even if they commute to Silicon Valley), they have the means to outbid working stiffs, families, artists, and the poor; the result, as we've seen, is a city that has become richer and whiter with remarkable speed. And that's just the tip of the iceberg: The greatest distortion to housing markets is the demand by the wealthy for exclusive, leafy, space-eating suburbs from Palo Alto to Orinda. These favored enclaves reduce overall housing supply by using low-density zoning to block the high-rises and apartments that provide moderate priced homes (not to mention low-income public housing).

So is there no recourse? Since the biggest sources of the housing crisis lie in the general conditions of contemporary capitalism — the tech boom, gross inequality, frothy finance, boom and bust cycles, and the power of the elites — local reforms can only do so much. Without a major political upheaval for financial control, higher taxes, equality, and more public spending, we are in for perennial housing crises. The housing market can never heal itself under existing conditions.

But some things can be done locally. Rent control with reasonable annual increases works quite well to dampen overheated markets. Eviction controls are critical, along with other restrictions on speculation. Demands for set-asides for low-income units are another proven strategy, along with development fees. Land trusts have worked well for open space protection in the Bay Area, and could work for housing, but will require major funding. And a real commitment of earmarking money for low-income housing by the federal government — on a scale to match the money going to highways — is a must.

New housing will have to be built, as well. But developers are profit-seekers, so don't expect them to be innocent bearers of what people need. It is absolutely necessary to question developers and city planners over what is to be built, how high, how big, and where. A livable city demands good design, historic preservation, neighborhood protections, mixed use, and social diversity, among other things, and figuring out what those things are should be a collective, democratic and, yes, conflictual process of politics and public debate. Nonetheless, opposing all new building, greater density, and neighborhood change is not a viable policy, and we cannot cling to the idea that our town or neighborhood will remain the same in a dynamic urban system.

Conservative critics, of course, denounce all popular efforts to control runaway housing costs, displacement, speculation, and bad planning as unnatural violations of some "natural law" of perfect markets. No one should be fooled by such fantasies. The real "market distortions" propelling the housing crisis are inequality, speculation, financial bloat, tax havens, and more. The day when the runaway privileges of bankers, builders, speculators, wealthy suburbanites, and the rest are reined in — that's the day the housing crisis will be over.

Richard Walker."
housing  california  richardwalker  2016  speculation  inequality  growth  affluence  geography  economics  bayarea  power  privilege  capitalism  rent  rentcontrol  eviction 
april 2019 by robertogreco
San Francisco; or, How to Destroy a City | Public Books
"As New York City and Greater Washington, DC, prepared for the arrival of Amazon’s new secondary headquarters, Torontonians opened a section of their waterfront to Alphabet’s Sidewalk Labs, which plans to prototype a new neighborhood “from the internet up.” Fervent resistance arose in all three locations, particularly as citizens and even some elected officials discovered that many of the terms of these public-private partnerships were hashed out in closed-door deals, secreted by nondisclosure agreements. Critics raised questions about the generous tax incentives and other subsidies granted to these multibillion-dollar corporations, their plans for data privacy and digital governance, what kind of jobs they’d create and housing they’d provide, and how their arrival could impact local infrastructures, economies, and cultures. While such questioning led Amazon to cancel their plans for Long Island City in mid-February, other initiatives press forward. What does it mean when Silicon Valley—a geographic region that’s become shorthand for an integrated ideology and management style usually equated with libertarian techno-utopianism—serves as landlord, utility provider, urban developer, (unelected) city official, and employer, all rolled into one?1

We can look to Alphabet’s and Amazon’s home cities for clues. Both the San Francisco Bay Area and Seattle have been dramatically remade by their local tech powerhouses: Amazon and Microsoft in Seattle; and Google, Facebook, and Apple (along with countless other firms) around the Bay. As Jennifer Light, Louise Mozingo, Margaret O’Mara, and Fred Turner have demonstrated, technology companies have been reprogramming urban and suburban landscapes for decades.2 And “company towns” have long sprung up around mills, mines, and factories.3 But over the past few years, as development has boomed and income inequality has dramatically increased in the Bay Area, we’ve witnessed the arrival of several new books reflecting on the region’s transformation.

These titles, while focusing on the Bay, offer lessons to New York, DC, Toronto, and the countless other cities around the globe hoping to spur growth and economic development by hosting and ingesting tech—by fostering the growth of technology companies, boosting STEM education, and integrating new sensors and screens into their streetscapes and city halls. For years, other municipalities, fashioning themselves as “the Silicon Valley of [elsewhere],” have sought to reverse-engineer the Bay’s blueprint for success. As we’ll see, that blueprint, drafted to optimize the habits and habitats of a privileged few, commonly elides the material needs of marginalized populations and fragile ecosystems. It prioritizes efficiency and growth over the maintenance of community and the messiness of public life. Yet perhaps we can still redraw those plans, modeling cities that aren’t only made by powerbrokers, and that thrive when they prioritize the stewardship of civic resources over the relentless pursuit of innovation and growth."



"We must also recognize the ferment and diversity inherent in Bay Area urban historiography, even in the chronicles of its large-scale development projects. Isenberg reminds us that even within the institutions and companies responsible for redevelopment, which are often vilified for exacerbating urban ills, we find pockets of heterogeneity and progressivism. Isenberg seeks to supplement the dominant East Coast narratives, which tend to frame urban renewal as a battle between development and preservation.

In surveying a variety of Bay Area projects, from Ghirardelli Square to The Sea Ranch to the Transamerica Pyramid, Isenberg shifts our attention from star architects and planners to less prominent, but no less important, contributors in allied design fields: architectural illustration, model-making, publicity, journalism, property management, retail planning, the arts, and activism. “People who are elsewhere peripheral and invisible in the history of urban design are,” in her book, “networked through the center”; they play critical roles in shaping not only the urban landscape, but also the discourses and processes through which that landscape takes shape.

For instance, debates over public art in Ghirardelli Square—particularly Ruth Asawa’s mermaid sculpture, which featured breastfeeding lesbian mermaids—“provoked debates about gender, sexuality, and the role of urban open space in San Francisco.” Property manager Caree Rose, who worked alongside her husband, Stuart, coordinated with designers to master-plan the Square, acknowledging that retail, restaurants, and parking are also vital ingredients of successful public space. Publicist Marion Conrad and graphic designer Bobbie Stauffacher were key members of many San Francisco design teams, including that for The Sea Ranch community, in Sonoma County. Illustrators and model-makers, many of them women, created objects that mediated design concepts for clients and typically sat at the center of public debates.

These creative collaborators “had the capacity to swing urban design decisions, structure competition for land, and generally set in motion the fate of neighborhoods.” We see the rhetorical power of diverse visualization strategies reflected across these four books, too: Solnit’s offers dozens of photographs, by Susan Schwartzenberg—of renovations, construction sites, protests, dot-com workplaces, SRO hotels, artists’ studios—while Walker’s dense text is supplemented with charts, graphs, and clinical maps. McClelland’s book, with its relatively large typeface and extra-wide leading, makes space for his interviewees’ words to resonate, while Isenberg generously illustrates her pages with archival photos, plans, and design renderings, many reproduced in evocative technicolor.

By decentering the star designer and master planner, Isenberg reframes urban (re)development as a collaborative enterprise involving participants with diverse identities, skills, and values. And in elevating the work of “allied” practitioners, Isenberg also aims to shift the focus from design to land: public awareness of land ownership and commitment to responsible public land stewardship. She introduces us to several mid-century alternative publications—weekly newspapers, Black periodicals, activists’ manuals, and books that never made it to the best-seller list … or never even made it to press—that advocated for a focus on land ownership and politics. Yet the discursive power of Jacobs and Caro, which framed the debate in terms of urban development vs. preservation, pushed these other texts off the shelf—and, along with them, the “moral questions of land stewardship” they highlighted.

These alternative tales and supporting casts serve as reminders that the modern city need not succumb to Haussmannization or Moses-ification or, now, Googlization. Mid-century urban development wasn’t necessarily the monolithic, patriarchal, hegemonic force we imagined it to be—a realization that should steel us to expect more and better of our contemporary city-building projects. Today, New York, Washington, DC, and Toronto—and other cities around the world—are being reshaped not only by architects, planners, and municipal administrators, but also by technologists, programmers, data scientists, “user experience” experts and logistics engineers. These are urbanism’s new “allied” professions, and their work deals not only with land and buildings, but also, increasingly, with data and algorithms.

Some critics have argued that the real reason behind Amazon’s nationwide HQ2 search was to gather data from hundreds of cities—both quantitative and qualitative data that “could guide it in its expansion of the physical footprint, in the kinds of services it rolls out next, and in future negotiations and lobbying with states and municipalities.”5 This “trove of information” could ultimately be much more valuable than all those tax incentives and grants. If this is the future of urban development, our city officials and citizens must attend to the ownership and stewardship not only of their public land, but also of their public data. The mismanagement of either could—to paraphrase our four books’ titles—elongate the dark shadows cast by growing inequality, abet the siege of exploitation and displacement, “hollow out” our already homogenizing neighborhoods, and expedite the departure of an already “gone” city.

As Beat poet Lawrence Ferlinghetti muses in his “Pictures of the Gone World 11,” which inspired Walker’s title: “The world is a beautiful place / to be born into / if you don’t mind some people dying / all the time / or maybe only starving / some of the time / which isn’t half so bad / if it isn’t you.” This is precisely the sort of solipsism and stratification that tech-libertarianism and capitalist development promotes—and that responsible planning, design, and public stewardship must prevent."
cities  shannonmattern  2019  sanfrancisco  siliconvalley  nyc  washingtondc  seattle  amazon  google  apple  facebook  technology  inequality  governance  libertarianism  urban  urbanism  microsoft  jenniferlight  louisemozingo  margareto'mara  fredturner  efficiency  growth  marginalization  publicgood  civics  innovation  rebeccasolnit  gentrification  privatization  homogenization  susanschwartzenberg  carymcclelland  economics  policy  politics  richardwalker  bayarea  lisonisenberg  janejacobs  robertmoses  diversity  society  inclusivity  inclusion  exclusion  counterculture  cybercultue  culture  progressive  progressivism  wealth  corporatism  labor  alexkaufman  imperialism  colonization  californianideology  california  neoliberalism  privacy  technosolutionism  urbanization  socialjustice  environment  history  historiography  redevelopment  urbanplanning  design  activism  landscape  ruthasawa  gender  sexuality  openspace  publicspace  searanch  toronto  larenceferlinghetti  susanschartzenberg  bobbiestauffacher  careerose  stuartrose  ghirardellisqure  marionconrad  illustration  a 
march 2019 by robertogreco
Richard Walker: The Golden State Adrift. New Left Review 66, November-December 2010.
"Since the apotheosis of the state’s favourite son Ronald Reagan, California has been at the forefront of the neoliberal turn in global capitalism. The story of its woes will sound familiar to observers across Europe, North America and Japan, suffering from the neoliberal era’s trademark features: financial frenzy, degraded public services, stagnant wages and deepening class and race inequality. But given its previous vanguard status, the Golden State should not be seen as just one more case of a general malaise. Its dire situation provides not only a sad commentary on the economic and political morass into which liberal democracies have sunk; it is a cautionary tale for what may lie ahead for the rest of the global North."



"California’s government is in profound disarray. The proximate cause is the worst fiscal crisis in the United States, echoing at a distance that of New York in the 1970s. Behind the budgetary mess is a political deadlock in which the majority no longer rules, the legislature no longer legislates, and offices are up for sale. At a deeper level, the breakdown stems from the long domination of politics by the moneyed elite and an ageing white minority unwilling to provide for the needs of a dramatically reconstituted populace.

The Golden State is now in permanent fiscal crisis. It has the largest budget in the country after the federal government—about $100 billion per year at its 2006 peak—and the largest budget deficit of any state: $35 billion in 2009–10 and $20 billion for 2010–11. The state’s shortfall accounts for one-fifth of the total $100 billion deficit of all fifty states. These fiscal woes are not new. They stem in large measure from the woefully inadequate and inequitable tax system, in which property is minimally taxed—at 1 per cent of cash value—and corporations bear a light burden: at most 10 per cent. Until the late 1970s, California had one of the most progressive tax systems in the country, but since then there has been a steady rollback of taxation. In the 1970s, it was one of the top four states in taxation and spending relative to income, whereas it is now in the middle of the pack.

The lynchpin of the anti-tax offensive is Proposition 13, passed by state-wide referendum in 1978, which capped local property taxes and required a two-thirds majority in the state legislature for all subsequent tax increases—a daunting barrier if there is organized opposition. Proposition 13 was the brainchild of Howard Jarvis, a lobbyist for the Los Angeles Apartment Owners’ Association. Support for it came not so much from voters in revolt against Big Government as from discontent with rising housing costs and property-tax assessments. But it was to prove a bridgehead for American neoliberalism, which triumphed two years later with Reagan’s ascent to the presidency."



"The fiscal crisis overlays a profound failure of politics and government in California. The origins of the stalemate lie in the decline of the legislative branch, which has popularity ratings even lower than Schwarzenegger’s. Led by Assembly Speaker Jesse Unruh in the 1960s, California’s legislature was admired across the country for its professionalism. But by the 1980s, under Speaker Willie Brown, it had become largely a patronage system for the Democratic Party, which has controlled the state legislature continuously since 1959. Republicans went after Brown and the majority party by means of a ballot proposition imposing term limits on elected officials in 1990. Term limits neutered the legislature, taking away its collective knowledge, professional experience and most forceful voices, along with much of the staff vital to well-considered legislation. Sold as a way of limiting the influence of ‘special interests’, term limits have reinforced the grip of industry lobbyists over legislators."



"Efforts to jettison Proposition 13, such as that by the public-sector unions in 2004, have been stillborn because the Democratic Party leadership refuses to touch the ‘third rail’ of California politics. Most left-liberal commentators attribute this impasse to an anti-tax electorate and organized opposition from the right, but this does not square with the evidence. Electorally, the Democrats have easily dominated the state for the last four decades: both houses of the legislature, one or both us Senate seats, the majority of the House delegation, and the mayoralties of Los Angeles, San Jose, Oakland and San Francisco; and, from Clinton onwards, every Democrat presidential candidate has carried the state by at least 10 per cent.

Rather than electoral vulnerability, it is the Democrats’ fundamental identification with the agenda of Silicon Valley, Hollywood and financiers—and dependence on money from these sources—that explains their unwillingness to touch the existing system."



"The victor, septuagenarian Democrat Jerry Brown, was governor of the state from 1975–83 and mayor of Oakland from 1999–2007; his most recent post was that of state Attorney General. Once a knight-errant of the liberal-left, it was his blunders in dealing with a budget surplus that paved the way for Proposition 13, and his harping on the theme of an ‘era of limits’ made him a rhetorical precursor to neoliberalism. In Oakland, his main contribution was to revivify the downtown area through massive condo development in the midst of the housing boom; he was also instrumental in pushing through charter schools. Brown’s low-key campaign kept its promises vague, but adhered to a broadly neoliberal agenda: pledging to cut public spending, trim the pensions of public employees, and put pressure on the unions to ‘compromise’. He has a fine nose for the political winds, but lacks any strong connection to a popular base."



"Yet whites have continued to dominate electoral politics, still making up two-thirds of the state’s regular voters. The majority of colour is vastly under-represented, because so many are non-citizens (60 per cent), underage (45 per cent) or not registered to vote. Turnout rates among California’s eligible Latinos are an abysmal 30 per cent, and the number of Latino representatives in city councils, the legislature and Congress remains far below what would be proportionate; Antonio Villaraigosa is the first Latino Mayor of Los Angeles since the 19th century. The fading white plurality continues to exert a disproportionate influence on the state. Markedly older, richer and more propertied, the white electorate has correspondingly conservative views: for many, immigrants are the problem, the Spanish language a threat, and law and order a rallying cry. Even the centrist white voter tends to view taxes as a burden, schools of little interest, and the collective future as someone else’s problem."



"The current economic and fiscal crises are just the latest symptoms of the slow decline of California’s postwar commonwealth. Here, as much as anywhere in the us, the golden age of American capitalism was built on a solid foundation of public investment and competent administration. Here, too, the steady advance of neoliberalism has undermined the public sector, and threatens to poison the wellsprings of entrepreneurial capitalism as well. This is especially apparent in the realm of education, from primary to university levels. The state’s once-great public-school system has been brought to its knees. Primary and secondary education (K–12: from kindergarten to twelfth grade) has fallen from the top of national rankings to the bottom by a range of measures, from test scores to dropout rates; the latter is currently at 25 per cent. There are many reasons for the slide, but the heart of the matter is penury—both of pupils and of the schools themselves, as economic inequalities and budget cuts bear down on California’s children."



"The upper middle class shield themselves by simply taking their children out of the public-school system and sending them to private institutions instead; previously rare, such withdrawals have now become commonplace—along with another alternative for the well-off, which is to move to prosperous, whiter suburbs where the tax base is richer. If public funds are insufficient, parents raise money amongst themselves for school endowments. In July of this year, a combination of civil-society groups launched a lawsuit over the injustice of school funding, hoping to produce a ‘son of Serrano’ ruling."



"California has been living off the accrued capital of the past. The New Deal and postwar eras left the state with an immense legacy of infrastructural investments. Schools and universities were a big part of this, along with the world’s most advanced freeway network, water-storage and transfer system, and park and wilderness complex. For the last thirty years, there has been too little tax revenue and too little investment. To keep things running, Sacramento has gone deeper and deeper into debt through a series of huge bond issues for prisons, parks and waterworks. By this sleight of hand, Californians have been fooled into thinking they could have both low taxes and high quality public infrastructure. The trick was repeated over and over, in a clear parallel to the nationwide accumulation of excessive mortgage debt. As a result, California now has the worst bond rating of any state."
richardwalker  california  via:javierarbona  2010  politics  policy  proposition13  inequality  education  schools  publicschools  highereducation  highered  government  termlimits  democrats  neoliberalism  liberalism  progressivism  elitism  nancypelosi  jerrybrown  ronaldreagan  race  demographics  history  1973  poverty  children  class  economics  society  technosolutionism  siliconvalley  finance  housingbubble  2008  greatrecession  taxes 
april 2017 by robertogreco
A Hidden Geography by Richard Walker
"The Golden Gate is inescapable. Draped in cloud, drenched in sun, swept clean by inexhaustible tides, the Gate and the bridge are always there, dutifully magnificent, stoically radiant. The Golden Gate anchors the San Francisco we carry around in our heads. City by the Bay. Gateway to the Pacific. City on the Hill. It fills the postcard, frames the visit, defines the experience. It captures the imagination of all who pass by.

But in and around the Golden Gate there is a great deal that does not readily come into focus. Beyond the magical realism of these photographs lies the geographic magic done by the hand of nature and humankind. The hidden geography of the Golden Gate can be seen in the rocky points and moldering piers cloaked in gray, in stipples of green and brown along the shore, in dots of brick and mortar tucked into the coastline. But it must also be called up from hidden places of collective memory, these clouds of history."
berkeley  california  climate  landscape  military  geography  sanfrancisco  richardwalker 
april 2010 by robertogreco

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