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Home Featured Assault on local control equals deregulation of housing

Assault on local control equals deregulation of housing

Democrats in Sacramento guarantee that real-estate interests will trump affordability

Wiener, Chiu, Brown and Ting: Four Democrats who support deregulating housing

“Democrats have a comprehensive agenda to invest in America’s cities, grounded on the premise that local leaders are best equipped to create a better future for their residents…” 

Democratic Party Platform, July 2016

Well, not so much here in California.

Between July and September, California Democrats, led by Gov. Jerry Brown and empowered by a two-thirds majority in both houses of the Legislature, have passed legislation that guts effective local control over climate change and housing development issues, arguably the two most pressing issues facing  the people of California.  

The first was the July extension of California’s “cap and trade” program that gutted the power of regional air quality districts to fine and regulate local major polluters. Jack Broadbent, executive director of the Bay Area Air Quality Management District, which was reportedly just about to impose new emission controls on oil refineries in Richmond, called Browns bill “legislation that attempts to strip away our authority, muddle jurisdictional lines and propose flawed control strategies.”

Wiener, Chiu, Brown and Ting: Four Democrats who support deregulating housing


AB 398 not only preempted regional bodies like BAAQMD from imposing local controls but also limited the amount of  the cap and trade “allowance” polluters must pay. An odd position for our governor, who endlessly promotes himself as a self declared “world leader” on the environment yet finds it impossible to tax oil extraction at the wellhead (California is the only toil producing state NOT to have such a tax) and allows state-regulated fracking. The bill narrowly passed against strong environmental and regulators opposition. Our local state delegation —Sen. Scott Wiener, and Assemblymembers David Chiu and Phil Ting —  voted unanimously with the governor.

Then, earlier this month the Assembly approved Wiener’s SB 35 , which deregulates market-rate housing development in California by requiring mandatory approval of all housing proposals if the regional housing needs targets for that county are not BUILT in a given year. 

Note the emphasis: SB35 allows the state to approve all housing developments in a locality if the annual allocation for that housing is NOT BUILT.  Since local governments have absolutely no control over when a developer actually goes forward and builds a project, but only control over approving a development, requiring the development to be built to return to local control is simply an inside-the-Beltway gift to developers.  

That Wiener knew full well the difference between approving a project and building an approved project is clear by the fact that as soon as the building trade unions were given their prevailing wage concession on development projects and removed their opposition,  Wiener amended the bill to switch  the requirement from local approvals  to the project having to be built.

Requiring the project to be built, something local government and the now mystically powerful Nimbys have no real control over, before local control can be exercised shows that the real object of SB35 was to de-regulate housing development. When added to last year’s Sacramento legislation, which allowed massive density bonuses with minimal affordability  requirements, the deregulation agenda of  corporate real estate interests in California took a giant step forward, eagerly assisted by California Democrats  Again, San Francisco’s entire Sacramento delegation — self styled “progressive Democrats” all — voted for both measures.

The progressive fig leaf

The fig leaf that allowed our three Sacramento Democrats, who voted as Trumpian de-regulators, to call themselves “progressive” was the passage of SB2 and SB3 on the last day of the Legislative session.  These two measures are touted as critically needed “affordable housing funding.” The insider line was that Brown would not support them unless he got his SB35.

Yet, even a  superficial analysis shows these two measures, at best, will apply an band aide to a growing cancer and provide far less affordable housing than we need. 

SB3 is pitifully underfunded $4 billion bond for “affordable housing.” And it offers less affordable housing than it appears. Off the top, some $450 million is dedicated to local infrastructure costs to meet density increases allowed by new state laws, which require a minimum amount of the new, more dense, development to be affordable.  Approximately $1.5 billion goes for homeownership assistance, again with minimal affordable requirements  Not a dime is earmarked for housing currently homeless Californians. Only $1.5 billion of the bond can be called truly affordable housing development assistance for low-income  renter households.  

Even the governors ally, Oakland Mayor Libby Schaaf, publicly called for a $6 billion bond  to ” help make up for more than a decade of state disinvestment in affordable housing…[which] has shrunk by more than $6B” since 2006.

SB2, on the other hand, had real possibilities. When introduced in March  it called for a $75 fee on “each real estate document” and was estimated to produce $200 million to $300 million a year, with 70% going for shelters and affordable housing development, 20% for “workforce” ownership housing for households above 120% AMI, and 10% for farm-worker housing.

But what passed in September was far less appealing.  Some 55% of the first years funding was dedicated to local “streamlining” plans to increase density and “to eliminate the need” for new environmental planning with no minimum affordability  requirement, and to pay for the governors’ staff  to oversee this process. 

But most significantly, the measure was transformed into an implementation program for SB35. Instead of being placed in a fund with specified affordable housing goals as originally proposed the new formula for allocating the funds were to be based upon the governors’ staff determining that a local jurisdiction was in compliance with SB35! 

The trade off of giving up local control over housing development for state funding for  affordable housing was not much of a trade. What we got was state funding for instituting state mandated deregulation and a tiny one time bond program that equals just about one year’s funding the state got from tax-increment financing before Jerry Brown abolished it in 2008. 

Why the assault on local government?

As 48hills has reported, last November saw a significant series of victories at the local level for both affordable housing and rent control with more then $2 billion in local funding and the establishment or expansion of rent control in the Bay Area. The tactic of  passing local market controls and supporting  public funding for truly affordable housing, a model fashioned here in San Francisco, has been embraced by a growing number of voters seeking protection from displacement and economic and social diversity in their communities in the face of market induced  “economic cleansing” of neighborhood after neighborhood and community after community across the bay Area. 

The passage of SB35 and the amendments of SB2 and SB3 undermines the ability of local voters to craft solutions that meet local realities.  SB35 will actually drive market rate development into localities already suffering from over-development of high-end market-rate housing and steer development away from suburban  jurisdictions that need to allow more housing development by leaving the decision up to market rate developers and limiting local government from imposing necessary affordable housing requirements.

That it could have been different, that the state may have actually offered INCENTIVES to suburban counties for doing more housing development thus relieving pressure on “hot market” localities like San Francisco, Oakland and San Jose, can be seen in the sad failure of the state to adopt such polices in SB1, the ten year, $52 billion tax increase for transportation.

Last year in the debate before the state Senate Housing and Transportation Committee (yes, the state Senate sees the two so linked that the committee is supposed to deal with both issues together!)  on Gov. Browns ill fated “by-right” assault on local government, San Francisco community advocates for affordable housing urged the committee to link suburban housing development to state assistance for the road and freeway repairs so avidly sought by suburban county officials. The linkage would be clear and effective: no state funds for highway or freeway repair unless and until the affordable housing targets of these sub-urban counties were addressed. It is the failure of these counties to produce affordable housing that has placed such unprecedented demand on the affordable housing produced in urban areas such as Oakland, San Jose and San Francisco. 

Failing to link transportation funding to affordable housing development as SB1 did means “transit oriented development” will be mainly market rate housing often occupied by folks driving or taking private tech shuttles to Silicon Valley, not taking cross town public transit to work as asserted by the housing advocates for rich people (HARPS). The urban working class, like 90% of all other urban residents, simply cannot afford market rate TOD, dramatically reducing the policy’s  effectiveness.

SB35 will be equally ineffective for essentially the same reason: It fails to link affordability to housing development. By preempting local regulations requiring significant affordability, SB35 and state density bonuses will combine to assure that the rules of real estate will trump (!) local rules of affordability. And the first rule of real estate is “location, location, and location,” meaning that what will result from state deregulation will be an increased pace of high-end housing development in the already “hot” real estate markets like San Francisco.  

There will be little or no new affordable housing and more of One Oak type multimillion dollar condos with plenty of off-street parking for tech types to continue to drive to Silicon Valley, making public transit slower and slower as it has to compete with all the traffic driving south.

In 1996, the Democratic Party had majorities in both houses of  the Legislature. The party passed and Republican Governor Pete Wilson eagerly signed AB1890, which de-regulated the entire electricity market in California.  

By 2000, wholesale electricity prices increased by 800% and PG&E went bankrupt.  Later studies found that market manipulation, in part caused by AB1890, was mainly responsible.

When we revisit the impact of SB35 and the paltry affordable housing funding in SB2 and SB3 in four or five years it will be clear why we still will have a dramatic shortage of affordable housing in California: corporate solutions based on de-regulation produce profits, staggering profits,  for owners at the expense of everyone else. 


  1. “A foolish consistency is the hobgoblin of little minds, adored by little statesmen and philosophers and divines.”

  2. You impute things to Trumpians that give them way too much credit. Basically you’re just reciting conservative dogma and acting as if it has something to do with a base that has shown no consistency or integrity.

  3. Also regarding I've got mine. If zoning is changed, I won't have mine nor will anyone else in the future have what I have now. Everyone in my neighborhood won't have what they have now.

  4. Somebody's children are living here. Is the ability of your children a prediction, or what they are capable of now? Are they not doing well in school or do they have low-paying jobs?

    I have lived here for 75 years and most of my childhood friends, and all of my living relatives left the City. What they could afford was a factor in many cases. That's been true for at least 50 years.

  5. I've lived in Frisco for 17 years and am partial owner of a TIC. My children will never be able to live here because of NIMBYism. Viva el YIMBYismo! Vive la revolucion!

  6. I have got mine but that does not prevent others from having what I have. I would like to see more single-family homes built so more can have what I have. Or at least preserve those that remain so more families with school-age children can remain in the City.

    I hope you will find a suitable place to live that you can afford. It is a large country and there many nice places if you can't afford San Francisco.

  7. Yes, they can stop approving or slowing approval of residential developments. That's the status quo now. And it is the reason we have this acute housing shortage statewide. Viva el YIMBYismo! Viva la revolucion!

  8. I apologize for messing up the citation. It is §65913.4(a)(4)(B)(i) and (ii) that I intended to cite. Here’s a quote containing both (A) that Welch quoted and (B) that I cited:

    <blockquote>§65913.4. (a) A development proponent may submit an application for a development that is subject to the streamlined, ministerial approval process… if the development satisfies all of the following… (4) The development satisfies both of the following: (A) Is located in a locality that the number of units that have been issued <strong>building permits</strong> is less than the locality’s share of the regional housing needs, by income category, for that reporting period… (B) The development is subject to a requirement mandating a minimum percentage of below market rate housing based on one of the following: (i) The… production report reflects that there were fewer units of above moderate-income housing <strong>approved</strong> than were required for the regional housing needs assessment cycle…. (ii) The… production report reflects that there were fewer units of housing affordable to households making below 80 percent of the area median income that were issued <strong>building permits</strong> than were required for the regional housing needs assessment cycle for that reporting period, and the project seeking approval dedicates 50 percent of the total number of units to housing affordable to households making below 80 percent of the area median income…, (iii) The… production report reflects that there were fewer units of housing affordable to any income level described in clause (i) or (ii) that were issued building permits than were required for the regional housing needs assessment cycle for that reporting period, the project seeking approval may choose between utilizing clause (i) or (ii) (emphasis added)</blockquote>

    So by my reading of SB-35, a project that was mostly market-rate and above-moderate income can be streamlined in a locality that (A) has not issued enough <strong>building permits</strong> for above-moderate income households, AND (B)(i) has not issued enough <strong>approvals</strong> for above-moderate income households. If the locality has been meeting its RHNA above moderate target measured by approvals, then the project can’t be streamlined. On the other hand, a project that is at least 50% low income (and no, “low income” is not me being “creative.” 80% of AMI is the threshold for low income used by the RHNA, so I used “low income” as a shorthand for “making below 80 percent of the area median income”) can be streamlined if the locality has not been meeting its RHNA low income target measured by building permits.

    By the way, i had to make a charitable assumption of Welch’s use of the word “built” vs “approved.” There are actually 3 counts that SB-35 requires: units approved, units issued a building permit, and units issued a certificate of occupancy. SB-35 used to measure the RHNA target based on the number of units that have completed construction, but Wiener changed all the triggers to units approved based on CCHO feedback (according to <a href="http://www.beyondchron.org/wp-content/uploads/2017/04/Senator-Wiener-4-15-17-letter.pdf">his letter to Peter Cohen and Fernando Martí</a>) and then later changed most of the references to units that have been issued a building permit. But (B)(i) still requires the locality to be under-approving before streamlining.

    <blockquote>The language in SB35 regarding local affordability requirements is so obscure that Assembly Member Phil Ting, working with the Council of Community Housing Organizations, drafted AB915 to clean up tits tangled language</blockquote>No, <a href="https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201720180AB915">AB-915</a&gt; sought to take the bonus out of the density bonus. It was not an amendment to SB-35 and did not clean up SB-35’s language.

    <blockquote>Most of the language in support of affordable housing in SB35 can be found in Section 65582.1 and consists of a listing of EXISITNG STATE LAW, ADDING NOTHING NEW.</blockquote>Streamlining of above moderate projects only applies when the locality has not been meeting its above moderate target, and for large projects, at least 10% of units must be set aside for low income households.

  9. Local control interferes with absentee investor predators. That's why it has to go. Period. Money rules and people don't. Except very very rich people — the one in ten thousand who own the controlling interest in America, including "California's" Wall Street puppet government.

  10. The average poor person in the US has more living space than the average middle-class person in Germany.

  11. Cities can't but the nation can. "He" refers to Trump. But the cities can stop approving new office buildings and slow down approval of new residential developments.

  12. Exists where rental housing prices were under control and housing had some semblance prior of affordability. Germany….there they have adequate land-use growth controls and restrict carefully the development of cities and impacts of sprawl….they have people trained in land use and urban planning and along with some other EU countries do well with the creation of essential housing l, here we have banks and real estate interests dictating policy… In bed with politicians

  13. No limit. You can't limit the population of cities, states, or countries. Show me the statutes on the books that say you can.

  14. Although I generally support CCHO, I'm glad Ting's bill didn't pass. I think Wiener is on the right track, we have to make it easier to build. Visiting Singapore and Japan was a big wake up call to me about the failures of our existing approaches to housing in San Francisco. I hope Welch, Cohen and Marti stay engaged, as the conscience for affordable subsidized housing, but I also hope they can engage in meaningful dialogs and compromises for pragmatic solutions with YIMBY, SFHAC, and others. We need housing for everyone, for every budget, and we should all work together to accomplish that goal

  15. Calvin sent me this reply:

    Yonathan Randolph claims I misrepresent the content of SB35 and was not "factually accurate" in my characterizations of it's content and its failure to actually require maximum affordability in new high density development to be approved by the state instead of local


    While agreeing that Wiener did switch the bill from

    requiring local government approval of projects to requiring the issuance of a building permit which no government can require

    of a developer putting the timing of removal of the state preemption totally into private hands, he says that is

    true "but only for development that are at least 50% low income".

    The actual language in the section cited by Randolph – not

    quoted by him- states that the building permit requirement shall be applied if the development :

    "(A) Is located

    in a locality that the department has determined that the number of units that have been issued

    building permits is less than the

    locality's share of the regional housing needs, by income category for that

    reporting period."

    In short, the bill requires that all "income categories"

    of the regional housing needs must have been issued building permits not only

    "50% low income" projects.

    It is Mr. Randolph who is not "factually accurate". And creative too, as the phrase "50% low income" never

    appears in the section cited .

    The language in SB35 regarding local affordability

    requirements is so obscure that Assembly Member Phil Ting, working with the Council

    of Community Housing Organizations, drafted AB915

    to clean up tits tangled language. It was a aimed solely at San Francisco and

    sought to insure that the 18%/20%

    inclusionary requirements in our local ordinance would stand after density bonus

    laws, incorporated by reference into SD35, which requires far less

    affordability than our ordinance, were approved.

    The measure passed the Assembly but when it got to the Senate last month Wiener amended it to require that the Governor's office make a

    YEARLY determination that such local requirement

    " is broadly feasible" and "will not reduce the amount of total

    housing produced". That is, the Governor's office would determine, in its

    opinion, that a local law, in this case OUR local law ,would not reduce the

    amount of market rate housing in the project. It was tabled as other senators thought it would

    cost too much to make SUCH A FINDING EACH YEAR. Wiener succeeded in amending out of existence a clear requirement

    that AB35 not result in lowering our local affordability requirement.

    Most of the language in support of affordable housing in

    SB35 can be found in Section 65582.1 and consists of a listing of EXISITNG

    STATE LAW, ADDING NOTHING NEW. I suppose that one could argue that such a listing

    is a "linkage" to "low income deed restrictions" . Not even Weiner makes this argument . His point, made time and again, is that building more housing, especially

    "middle income" housing, will

    eventually produce more affordable housing. And that's what SB35 will do.

  16. Upper middle-class Black people are moving into gentrified neighborhoods, and to owner-occupied single-family neighborhoods. In most upscale family neighborhoods the percent of non-Hispanic Whites has declined. However, there are middle-class Blacks moving to the suburbs for more affordable single-family homes and Black homeowners, often retirees, who have sold out and left the City for bigger and better.

  17. Where did you get the 40% figure? I lived in the Haight in the 60's and was not aware of very many Black people. If they were owners they could not have been displaced. And if they were middle-class they could afford higher rents.

    Before the war, the Black upper-middle class and middle-class lived in NOPA. They moved out as lower class Blacks from the south moved into the Fillmore. Some moved to enclaves in Miraloma Park where there were not restrictive covenants and some to the Ingleside. And more moved after housing discrimination was made illegal to other upscale neighborhoods and other Bay Area cities.

  18. Illegal newcomers and products not more newcomers. But he does want to limit the number of newcomers. You ask how many is too many? How many would you permit? No limit?

  19. Actually, it is rather revolutionary.
    (Given that, for instance, the Nazi's viewed themselves as revolutionaries.)
    "Revolution" is not all its cracked up to be — often the results are much worse than what preceded it.

  20. Thanks for this.

    He says at the end: "I think getting people, residential people, the neighborhoods of this city more power is very revolutionary, I don't know anything more revolutionary than that, I really don't"

    A bunch of white people downzoning and gentrifying a neighborhood doesn't sound very revolutionary to me.

  21. The idea that the electricity market was totally deregulated is absurd on its face because retail electricity prices remained fixed, but Calvin isn't too concerned with actual facts here.

  22. Calvin's analogy to AB1890 makes no sense whatsoever.

    If this were like the electricity crisis, we would have some entity like PG&E buying market rate housing from developers, and selling it at a capped price to California consumers. This agency would also be required to maintain an uninterrupted supply of housing at the capped price, even if housing prices spiked due to manipulation on the supply side.

  23. > Note the emphasis: SB35 allows the state to approve all housing developments in a locality if the annual allocation for that housing is NOT BUILT. Since local governments have absolutely no control over when a developer actually goes forward and builds a project, but only control over approving a development, requiring the development to be built to return to local control is simply an inside-the-Beltway gift to developers.

    its a well known truth that The Market is a mysterious force we're unable to control. its true, the libertarians have been railing against government regulation of The Market all their lives without actually understanding that The Market is an all knowing, all powerful force that humans cannot possibly begin to manipulate with things like Dodd-Frank or, say, minimum wage laws.

  24. "PaxSF", Where can one find this information? I would really appreciate knowing your sources, and I'd figure many others would as well. Thx.

  25. Calvin please tell us about the 1970s, and about your diatribes against the "un-revolutionary" African-American community in the Haight, and how you sneered at their aspirations for middle class stability, and how you led the effort to downzone and restrict housing development in your neighborhood, and how that dramatically accelerated the pace of gentrification and African-American displacement in the Haight and Cole Valley. Funny how you're still there, Calvin, but they're all gone.

    Calvin, why don't you tell us all about that? Because we love nothing better than listening to policy lectures from the man who has done more than anyone else to a cause gentrification and housing scarcity in San Francisco.

  26. Let’s see what Calvin Welch’s complaints are today against SB-35.

    <blockquote>Wiener amended the bill to switch the requirement from local approvals to the project having to be built</blockquote>Welch is right that <a href="https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201720180SB35">SB-35</a>’s threshold for streamlining changed between 4/4 and 5/26 from approvals to building permits, <em>but only for developments that are at least 50% low income</em>, not for majority market-rate projects! (Gov. Code §65913.4(b)(4)(i) and (iI).) So when Welch is complaining about “inside-the-Beltway gift to developers,” he’s actually complaining about a “gift" to typically nonprofit developers!

    <blockquote>SB35 will be equally ineffective for essentially the same reason: It fails to link affordability to housing development</blockquote>Everything in SB-35 <strong>does</strong> link development to low income deed restrictions. Welch may have some specific disagreement over the trigger thresholds, but it’s false to claim that SB-35 is all deregulation and no affordability.

    <blockquote>limiting local government from imposing necessary affordable housing requirements</blockquote>SB-35 imposes no such limit. In fact, SB-35 specifically respects greater requirements: “If the locality… requires that greater than 10 percent…, that zoning ordinance applies”

    When almost nothing that Welch says about a topic is factually accurate, it becomes harder to sympathize with his opinions.

  27. So Wiener, Chiu, Brown and Ting are "Trumpian de-regulators"? Calvin thinks that if he screams the word "Trump", his NIMBY battle cry will have some credo.

  28. Here goes Calvin "I'm- Marxist-and-I-live-in-a-$2.5-Million-Mansion" Welch going with the "local control" line again — just as Tim "My-House is-Worth-$1.5-Million" Redmond did as recently as yesterday.

    I guess this is their new angle, coming on the heels of their "supply-and-demand-doesn't-apply-to-housing", and "building-new-housing-displaces-people" arguments that failed miserably and were exposed for the lies that they are.

    Calvin and Tim and their whole cabal of the "Authoritarian-Left" remind me of The Old South, who also kept citing the supposedly-democratic primacy of "local control" in order to continuously thwart the rights of African-Americans and it took higher-level authority, i.e., the Federal Government to compel reform for the good of the Nation.

    Similarly, we need State-level authority to cut through this morass of feckless, self-serving and counterproductive localism to get housing built for the good of the entire State, not just some vocal "I’ve-got-mine-and-now-I want-to pull-up-the-ladder-for-everybody-else" homeowners and their ideologically-challenged handmaidens.

    If we don’t substantively reform the inherently extortive, time-consuming, abusive and expensive Discretionary Review and Appeals processes, then we’ll never be able to speed up the approval process for housing.

    SF’s chronic inability to reform its highly dysfunctional local processes is due to its Charter which essentially enshrines Discretionary Review. Accordingly, merely "streamlining" City bureaucracy (as Mayor Lee declared yesterday)— though welcome (but I’ll believe it when I see it) — isn’t going to cut it. For real reform, the City Charter would have to be revised, which, of course, is never going to happen.

    Every decade or so there is some lip service paid to this issue, but attempts at true reform end up going absolutely nowhere — is why this problem can only be solved at a higher level, i.e., via State-level legislation that can rise above the petty myopic fray and override the local laws of even Charter Cities like SF.

    Scott Wiener’s SB-35 is a good start in this regard — 6 months to review your average apartment building is plenty.

    In a healthy political culture (the exact opposite of Calvin's and Tim's Shangri La) the building of housing — like farming — should be a "normalized" activity and without all the absurd "storm und drang" that SF is so (dysfunctionally) accomplished at heaping upon it.

    It should be as "matter-of-fact", predictable and as boring as Canadian Banking.

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