Opinion: SB 827 will exacerbate California’s housing crisis
Printed in the Mercury News: https://www.mercurynews.com/2018/03/24/opinion-sb-827-will-exacerbate-california-housing-crisis/
By Tara Sreekrishnan
Decades too late, California is finally waking up to the fact that the state is too expensive for too many people. Legislation ostensibly aimed at alleviating California’s affordability crisis and housing shortage is barreling through the state legislature.
Many of these efforts propose that to fix our broken housing market, we must deregulate it further. A signature piece of legislation that is working its way through committee is Senate Bill 827. It is designed to strike at the heart of California cities’ zoning regulations in highly coveted transit-rich corridors by streamlining the permitting of 45 to 100-foot-tall high-rises.
On its face, the legislation’s housing-and-transit focus is good for working people and the environment. Most importantly, it promises desperately needed housing across the state.
But while building housing near transit is smart, we have to be careful not to intensify displacement, threaten our existing communities or discourage the building of new transit. More fundamentally, addressing the present crisis requires thinking beyond mere market solutions as the market has a tendency to prioritize housing that only the wealthiest can afford. We simply cannot expect the market to deliver us from this crisis.
Across the Bay Area, the vast majority of new housing is “market-rate,” which people can purchase for millions of dollars, or rent for $3,000-$5,000 per month. The City where I reside, Cupertino, features some of the highest rental and housing prices in Silicon Valley, with an average house in Cupertino now requiring a $500,000 down payment and a mortgage of over $10,000 a month. Even the highest paid professionals, making two or three times above median income, cannot afford to buy a home here. Teachers, firefighters, police officers, low-income families and young people do not stand a chance. Market-rate housing is the most profitable for developers, and there is little reason to believe that anything will change if the market-centric SB-827 succeeds in deregulating the building process in the most desirable plots of land across the state.
Revealingly, a recent study by housing economists at UC Berkeley concluded that there is little guarantee that market-rate housing becomes affordable as it ages. This calls into question the key premise upon which SB-827 operates. Further, they found that government-subsidized housing is twice as effective at stemming displacement than market-rate. We know that highly dense, market-rate buildings cause surrounding land prices to surge, leading to further displacement. Even Redfin’s chief economist is skeptical that SB-827 will create affordable housing. Others reasonably fear the bill lacks protections to prevent displacement or the demolition of existing housing, and could deter cities, such as Cupertino, from investing in the new transit infrastructure they so desperately need.
My immigrant family was fortunate to find a home in Cupertino decades ago. Tragically, precious few can do the same today. What we need now is for local leaders to lobby for a restoration of the billions in subsidized funding that the state and federal governments slashed, and also to fight for local measures that expand affordability and anti-displacement protections.
State ballot initiatives creating new affordable housing bonds are a critical step in the right direction. Cities should also take a more aggressive role in financing the construction of affordable housing for low and middle-income residents near existing transit, as well as invest in new carbon-free modes of transportation.
Community members, holding a range of opinions, have an important role in shaping these initiatives. Suspending democracy in order to solve a crisis is shortsighted, and the crisis will not be solved by state or local action alone; we need both to work together towards the goal of affordable housing for all.