The Metropolitan Transportation Commission has been planning a coup.
Not the putsch kind of coup, where armed insurgents overthrow a duly constituted government, but an insidious takeover led by an ad hoc public-private coalition, authorized by new laws, and justified by artful rhetoric—above all, a reiterated declaration of emergency. The goal is not to overthrow the ruling order, i.e., the capitalist growth machine, but to secure and aggrandize it at the expense of the most vulnerable.
The MTC cabal, otherwise known as The Committee to House the Bay Area or CASA, would have us believe that the region’s housing crisis necessitates:
- creating a public-private agency that would standardize zoning across the region
- imposing as much as a billion dollars of new taxes on the Bay Area
- rolling back environmental review
- lowering housing affordability standards
- re-zoning “high opportunity” single-family neighborhoods for higher-density market-rate housing development, regardless of transit accessibility
- accepting the assumption that building market-rate housing lowers the price of all housing
- enhancing private developers’ profit margins
- ensuring continuous, explosive job growth while ignoring services and infrastructure to support that growth
These fatuous propositions inform the “CASA Compact: A 15-Year Emergency Policy Package to Confront the Housing Crisis in the San Francisco Bay Area,” a 31-page manifesto and plan of action finalized on December 12. Now MTC/CASA is lobbying the state Legislature to pass laws, including SB 50, State Senator Scott Wiener’s do-over of his failed SB 827, that implement the Compact’s recommendations.
For the sake of democratic governance, fiscal sanity, environmental protection, and housing justice, MTC/CASA needs to be stopped.
Laying the groundwork: MTC’s hostile takeover of ABAG
The CASA power grab is predicated on a prior usurpation: MTC’s 2016 hostile takeover of our region’s land use planning agency, the Association of Bay Area Governments.
As MTC’s name indicates, the agency’s official mission is transportation. Every region in California has a Metropolitan Planning Organization that channels federal transportation dollars to the area. The Bay Area’s MPO is MTC. Created in 1970 by the California Legislature, MTC administers more than $2 billion a year, including more than $600 million in bridge tolls, for the operation, maintenance, and expansion of the Bay Area’s surface transportation network. It is rich, powerful, and feared.
MTC is also a profligate, rogue agency. In 2010, MTC lost more than $120 million worth of bridge tolls in credit swaps gone bad. It had a major hand in the Bay Bridge debacle. Its new headquarters in San Francisco ran $90 million over budget; the agency’s use of bridge tolls to buy the building prompted then-State Senator, now-Congressman, Mark DeSaulnier to get the state Legislature to unanimously pass a law forbidding MTC to use bridge tolls for real-estate speculation. MTC is facing two lawsuits over the constitutionality of placing Regional Measure 3 on last June’s ballot as a fee, not a tax; the passage of RM3 increased bridge tolls by three dollars, starting with a $1 raise on January 1.
The grim state of the region’s surface transportation attests to MTC’s failure to carry out its basic mission. Congestion is so bad, Bay Area News Group reporter Gary Richards recently wrote, that in 2019, local transit agencies will seek state legislation to authorize a once “unthinkable” practice: allowing buses and possibly carpools to drive on the shoulder of freeways and bridges during the heaviest commute times. According to Richards, MTC “is a strong proponent” of the change.
Like every other major region in California, the Bay Area also has a land use planning agency called the Council of Governments (COG). The Bay Area’s COG is the Association of Bay Area Governments. Unlike MTC, a state agency, ABAG is a voluntary organization, created in 1961 by the cities and counties of the Bay Area. Whereas MTC is dominated by the three biggest cities in the region, every city in the Bay Area has a representative in the ABAG General Assembly.
In every other region in California, the MPO is subordinate to the COG. The Bay Area has been an exception. Until 2016, MTC and ABAG uneasily co-existed as semi-independent bodies. ABAG, the poor relation, was financially dependent on MTC. With the passage of SB 375, the Sustainable Communities and Climate Protection Act of 2008, the two agencies were forced to collaborate on Plan Bay Area.
The preparation of the initial Plan Bay Area, which was approved by MTC and ABAG in July 2013, engendered conflicts over policy and finances. Those tensions moved MTC to execute a hostile takeover of ABAG in 2016. That offensive entailed a year-long fight that culminated in the so-called merger of the two agencies under the aegis of MTC’s administration. ABAG retains its board, but its staff now reports to MTC Executive Director Steve Heminger.
The takeover signaled MTC’s intention to transform itself into a one-stop regional transportation and planning agency. Enter CASA.
Who is CASA?
A year and a half ago, Heminger secretly hand-picked 53 “stakeholders” to participate in CASA. The group is dominated by the real-estate industry, with representatives from some of the region’s largest market-rate and affordable housing developers (Related California, TMG Partners, MidPen Housing), as well as the California Apartment Association, the Building Industry Association, pro-growth affordable housing advocates (Nonprofit Housing Association of Northern California, SV@Home), think tank SPUR, and BART).
TMG Partners Chairman and CEO Michael Covarubbias is one of CASA’s three co-chairs. A second co-chair is SV@Home Executive Director Leslye Corsiglia, formerly a staffer at the state’s Department of Housing and Community Development and director of the San Jose Housing Department.
CASA’s paid consultants include Carol Galante, former CEO of Bridge Housing and current head of UC Berkeley’s Terner Center for Housing Innovation. The ferocity of Galante’s attacks on CEQA are rivaled only by those emanating from Holland & Knight attorney and CASA member Jennifer Hernandez. Terner also has a representative on CASA, Committee, Visiting Scholar Ophelia Basgal, listed on the roster by another of her UC Berkeley associations, the Center for Community Innovation. Basgal and Hernandez are joined on CASA by Janice Jensen, who represents another vocal CEQA opponent, Habitat for Humanity.
Big Tech (Google, Facebook), Big Philanthropy (Chan-Zuckerberg Initiative, San Francisco Foundation), and Big Pharma (Genentech) are also at the table. San Francisco Foundation CEO Fred Blackwell is the third CASA co-chair.
Other CASA members include local officials, half of whom represent the three largest of the region’s 101 cities; equity advocates (PICO California, Urban Habitat, Working Partnerships USA, Tenants Together, California Housing Partnership); building trades unions (Alameda County Building and Construction Trades Council and Nor Cal Carpenters Regional Council); and a healthcare workers union (SEIU-UHW).
The original CASA lineup included as one of its two putative environmentalists Jeremy Madsen, then-Executive Director of Greenbelt Alliance. Introducing himself at the CASA Steering Committee’s meeting on September 26, 2017, Madsen said, “I sometimes joke internally that “we’re the most pro-development environmental group you’re going to run across.” In January, Madsen left Greenbelt Alliance to became program director for The Energy Foundation; he subsequently resigned from CASA. His seat was taken by Greenbelt Alliance Deputy Director Matt Vander Sluis. Growth environmentalism’s other representative on CASA is Stuart Cohen, Executive Director of TransForm.
The full CASA roster appears at the end of this article.
CASA operates largely in secret…
CASA has two sub-groups: a 32-member Technical Committee, which has done most of the work, and an eighteen-member Steering Committee that has itself been steered by CASA’s three co-chairs and Heminger. From June 2017 to December 2018, the Technical Committee met publicly almost every month; the Steering Committee met publicly six times on an irregular basis.
Only three of the public meetings published written minutes, and only one of those three (the summary of the Technical Committee’s first meeting on June 28, 2017) documents the names of the speakers and summarizes what they said. The other two only name CASA members in attendance and people who spoke at public comment. Two meetings lack official video or audio documentation; three have only audio. And of course the secret meetings have no public documentation at all.
If the meetings were secret, how do we know that they took place?
Simple: At the public meetings, Technical Committee members repeatedly referred to them. They professedly met at night, on weekends, and on at least one holiday: On November 14, Covarrubius boasted to the Steering Committee, “We were here six hours on Veterans Day, about 30 people”—“here” being MTC headquarters.
The most spectacular instance of this covert activity came to light at the Steering Committee’s Dec. 12 meeting, when Oakland Mayor Libby Schaaf referred in passing to a trip that she and other, unspecified CASA participants had recently taken to New York City. That trip never appeared on any CASA agenda, nor was it ever mentioned at any of CASA’s public meetings before it took place. I’ve filed a Public Records Act query with MTC asking to see documentation of the costs associated with each member’s travel, room, and board as well as itineraries and agendas.
I also asked the California First Amendment Coalition about the legality of CASA’s lack of written minutes. I was told that because CASA is not an official legislative or judicial body, it is not subject to the Brown Act and does not have to publish written minutes of its meetings.
At the CASA Technical Committee’s meeting of May 16, committee Co-chair Covarrubias approached me and said, “You’re a journalist?” I replied: “Yes. I have to come to these meetings, because there are no minutes.” Covarrubias: “We like it that way.”
…but is publicly financed
Technical Committee members—all volunteers—repeatedly congratulated each other on their diligence and dedication. And they did work very hard. But their labors were considerably eased by MTC’s largesse, which included a free, tony meeting space; free food; ample support from staff and paid consultants; grants for outreach to community-based organizations; a place on MTC’s website that featured a professionally produced video; a telephone poll “of all Bay Area residents;” and the trip to New York City.
The only information about the CASA funding that appeared on any CASA agenda was contained in a memo to the Technical Committee dated December 6, 2017 and posted on the committee’s December 13, 2017, agenda. Under the heading “DRAFT Community Outreach and Engagement Plan,” MTC Planning Director Ken Kirkey wrote:
In order to engage communities traditionally unrepresented in government decision making,….MTC will provide a $5,000 stipend each to four community-based organizations (CBOs) to host and conduct the first of two rounds of outreach meetings with disadvantaged communities” in spring 2018.
Kirkey added:
MTC will provide a second round of stipend to the same community-based organizations to conduct a second round of meetings with disadvantaged communities.
On April 23, I filed a California Public Records Act Request with MTC asking to see all documents related to funding the Committee to House the Bay Area. In response, on May 18, MTC provided with 55 pages of documents that included
- sole source contracts with Estolano LeSar Perez Advisors “for facilitation services for the Committee for Housing the Bay Area” totaling $450,000
- sole source contracts with the UC Regents totaling $133,400 for Terner Center Director Carol Galante and Urban Displacement Director Karen Chapple “for facilitation service for the Committee for Housing the Bay Area” that included “Just Cause Policy Research,” a “Protection Lens for Rent Gouging and Costa Hawkins Research,” an “Equitable Development by Neighborhood Conditions Framework” and “Production Pipeline Analysis.”
- a “Letter of Agreement for $19,922 between the San Francisco Foundation and MTC for the CASA Initiative” to “support research that will be conducted by the Urban Displacement Project” at UC Berkeley
- a letter from Heather Hood and Geeta Rao, Enterprise Community Partners to “Ken Kirkey and Team, Metropolitan Transportation Commission” setting forth the “Scope for Bay Metro to Support CASA with Research,” thanking MTC “for entrusting us to be a thought partner,” and estimating the total cost of the work to be $25,000, of which Enterprise “can contribute $25,000 of that time and materials in kind (paid by grants we have already secured).”
On December 12, I made additional PRA Requests, asking (again) to see all documents related to CASA’s funding, as well as all expenditures that passed through MTC to fund the recent trip to New York City, including allocation for CASA members’ travel, room, and board, and any agendas and itineraries.
On December 21, MTC informed me that, as per the California Public Records Act, because my request necessitated “consultation with another agency having substantial interest in the matter of the request or among two or more components of the agency having substantial subject matter interest therein,” additional time would be required to respond, and that it anticipated releasing a response by January 11, 2019.
The CASA Compact
While the political energies of many Bay Area residents were absorbed by the two elections of 2018, CASA drew up its Compact. Finalized in mid-December, the 31-page mainfesto/plan of action is organized around “Three Ps:”
- Increasing housing productionat all levels of affordability
- Preserving existing affordable housing
- Protecting vulnerable households from housing instability and displacement (p. 5)
The gist of the compact is contained in ten dense “elements,” each setting out a major policy proposal (a list of the elements appears at the end of this article).
The two most audacious Elements— Number 9, “Funding and Financing the CASA Compact,” and Number 10, “Regional Housing Enterprise”—deal with money and governance. One of CASA’s many foundational myths is the fiction that “everyone” is to blame for the Bay Area’s housing woes, and thus everyone should “share the pain” of remedying them. “[T]he beauty of this,” co-chair Covarrubias told the Technical Committee on September 18, is that it’s “a solution that doesn’t have a target, [but] that has everybody as a target.”
Another CASA conceit is that the compact is a “grand bargain” in whose formulation all parties have compromised for the sake of the common good. But some parties are expected to compromise a lot more than others, as indicated by the “Allocation formula” in Element 9, which divvies up the anticipated new revenues by percentages:
Allocation formula
- minimum 60 percent for “subsidized housing production”
- up to 10 percent for tenant protection services
- up to 10 percent for “local jurisdiction incentives (including funding for hiring more building inspectors”
- up to 20 percent for affordable housing
Note that production is designated for the lion’s share of the funding, and that only production comes with a funding floor. The other allocations all have an ambiguous (“up to”) ceiling; in other words, they could get less than the designated percentages.
Also ambiguous: the term “subsidized housing production.” Exactly what kind of housing is CASA proposing to subsidize? Is it market-rate? If not, why does “affordable housing” have a different allocation?
Answers to these questions may be gleaned from “Figure A: The CASA Compact Framework,” which shows “Numeric Targets” for each of the P’s. Under “Produce,” we read: “35,000 Housing Unit/Year, 14,000 of Which are Affordable to Lower-Income and 7,000 to Moderate Income Households” (p. 5).
In other words, 60 percent of the total funds for housing production would apparently go to—or to borrow the Compact language, subsidize—market-rate housing. And, as noted in detail below, thanks in large part to the Bay Area’s insane housing prices, what’s officially affordable is far beyond the means of many of the region’s residents.
The funds would be disbursed by the “Regional Housing Enterprise,” a new governmental agency described in Element 10 as an “independent,” public-private, regionwide entity that has authority to impose taxes; issue debt; buy, lease, and sell land; provide technical assistance to local governments; “collect data to monitor our progress;” and administer zoning standards for the region’s nine counties.
Heminger has referred to the Regional Housing Enterprise as a “housing assembly authority” (Technical Committee, October 17, 2018) and “a financing vehicle and data warehouse” (Steering Committee, December 3, 2018). At the Steering Committee’s meeting in October, he described CASA as “a public-private enterprise” and said that “it would make some sense to try to mimic that in the governance of this new institution.” Just so, Element 10 recommends that “[s]tate law should establish an independent board, with broad representation to [sic] MTC, ABAG, and key stakeholder groups that helped develop the CASA Compact.”
Some people, including me, complain that MTC and ABAG are undemocratic because their governing boards are not elected. More precisely, the officials sitting on those boards—mayors, councilmembers, county supervisors—are elected, but they’re not elected to oversee regional agencies. In terms of representative democracy, the Regional Housing Enterprise would be even far less accountable to the public: its board would include and very likely be dominated by individuals who haven’t been elected to anything at all.
At the Technical Committee meeting on December 3, Heminger responded to criticism made at public comment that the Regional Housing Enterprise would be unelected. “The fact is,” he asserted, “that there’s only one elected regional board in America—in Portland.”
The MTC chief then sought to further discount a regionally elected government by commending the “innovation” of having private parties on the RHE board. Apparently the novelty that distances government further from the public at large is welcome at MTC/CASA, while the kind that puts the two in greater proximity is not.
The compact says that “[t]he new enterprise will not have direct regulatory authority” (Preamble). But the two models referenced in the compact—the New York City Housing Development Corporation and the Twin Cities revenue-sharing program—both exercise regulatory authority. Neither program was ever discussed in detail at a public CASA meeting.
With the authority to “levy fees and seek voter approval to impose taxes for housing” (E10) and to “administer any new regional funds that might be approved for housing” (Preamble), the Regional Housing Enterprise would effectively be calling some big shots on land use in the Bay Area. And as envisioned, it would have a lot of money at its disposal.
Dodging Bay Area voters
The compact estimates the cost of the Regional Housing Enterprise at $2.5 billion a year for 15-20 years, with $1 billion coming from unspecified state and federal sources and the remaining $1.5 billion from new regional and “local self-help measures.”
A “menu” of potential new sources of revenue are laid out in Compact Element 9. CASA confusingly distinguishes “parcel taxes,” “taxes on local governments,” and taxes on “taxpayers.” In fact, “taxpayers” would be paying all three kinds of charges, as well as the interest on the general obligation bonds.
Taxes on Property Owners: $200 million
- 1% tax on vacant homes, regionwide ($100 million)
- $48 per year region-wide parcel tax, regionwide ($100 million)
Taxes and fees on Developers: $400 million
- $5-$20 per sq. foot commercial linkage fee on new construction ($200 million)
- $10 per sq. foot flat commercial linkage fee on new construction ($200 million)
Taxes on Employers: $400 million
- 0.1%-0.75% regionwide gross receipts tax; small businesses and employers in a jurisdiction with an existing tax would be exempt ($200 million)
- $50-$120 per job regionwide variable head tax ($200 million)
Taxes on Local Governments: $300 million
- 25% “Redevelopment Revenue Set-Aside for affordable housing” ($200 million)
- 20% “Revenue Sharing Contribution from future property tax growth, regionwide” ($100 million)
Taxes on Taxpayers: $500 million
- 1/4 –cent sales tax, regionwide ($400 million)
- 5-year term general obligation bonds issued by Regional Housing Enterprise, renewed every five years ($100 million)
At the Technical Committee’s meeting in October, Heminger noted and then discounted objections to certain items on the revenue menu. Sales tax, he observed, “is regressive, but here in California, food and medicine are exempt….[I]f you’re spending it to fund a bunch of affordable housing, I would consider that progressive.” He also noted that
some of [the] measures in the developer-employer orbit could be considered fees, and, depending how the enabling legislation is passed in Sacramento, could be authorized without a vote of the people. I have no doubt that that would be litigated; we’re litigating RM3 right now for bridge tolls.
Heminger seemed unfazed by the prospect of new litigation, possibly because at the end of February, he’s leaving MTC. “Maybe,” he joked, “we’ll use our precedent to see what we can do on housing.” He also opined:
“I doubt that you could put five of these suckers on the same ballot and expect to pass any one of them. So one, we’re going to have to be selective; and two, some of these may not require voter approval, and that’s indeed helpful, if that’s true…”
Indeed, as Heminger wrote in a memo for MTC’s November 28-29 retreat at the Fairmont Sonoma Mission Inn, the compact advances “a suite of legislative reforms” whose authorization requires action in Sacramento. Well before MTC approved the compact, CASA members were negotiating behind the scenes with the Bay Area’s state legislators. The compact says that they will continue lobbying the Legislature “to implement” its “principles” (p. 5).
Missing from the compact is the “CASA Work Window” that was handed out at the Technical Committee’s September 2018 meeting. That document set out a five-year plan:
2018 CASA Development
2019 Legislative Package
2020 Election #1 Presidential
2021 PBA/RHNA Adoption
2022 Election # 2 Gubernatorial
On October 17, Heminger told the Technical Committee that the “infrastructure community” was discussing a regional “mega-measure” to pay for a second BART tube. “If [that proposal” is “live around 2020 election,” could his listeners entertain “some scenario where we might join forces and help each other?” Going in as “partners,” he mused, “might involve a better chance of success for both.” At the Steering Committee’s November meeting, he said getting such a measure on the 2020 ballot was an “imperative.”
Heminger and the CASA co-chairs have repeatedly stated that the 10 elements in the compact must go forward together. But on December 3, the first day of the Legislature’s new session, members of the Bay Area Caucus introduced bills—most notably Wiener’s SB 50—that incorporate CASA’s recommendations. Except for Skinner’ SB 18, which vaguely echoes Element 3, “Emergency Rent Assistance and Access to Legal Counsel,” none of the measures incorporate any of the compact’s proposals for either a regionwide just cause eviction policy (Element 1) or an emergency rent cap (Element 2); instead, they’re all aimed at weakening restrictions on growth. So much for a package deal.
AB 4 (Chiu): Redevelopment 2.0
AB 68 and AB 69 (Ting): further loosen regulations on in-law units
SB 4 (McGuire and Beall): Limit local land use policies that restrict housing and encourage new housing near transit and job centers
SB 5 (McGuire and Beall): Redevelopment 2.0
SB 6 (Beall): Streamline housing production and penalize local planning that restricts production
SB 13 (Wieckowski): further loosen regulations on in-law units
SB 18 (Skinner): legal assistance for tenants
SB 50 (Wiener): upzoning near transit and job center
Plus AB 2065 (Ting): surplus public lands (introduced in 2018 and still live)
CASA’s legislative initiative has a pay-to-play aspect: Estelano LeSar Perez Advisors, the consultantcy with the $450,000 contract with MTC noted above, is co-owned by Jennifer LeSar, the wife of California State Senate President Pro Tem Toni Atkins.
Addressing the Steering Committee on November 14, Heminger said that the region’s state legislators “are quite excited about this CASA thing you’ve all invented.”
This is the Part One of a series on CASA and Bay Area housing and development.
CASA Roster:
Co-Chairs and Convener
Fred Blackwell
Chief Executive Officer | The San Francisco Foundation
Leslye Corsiglia
Executive Director | Silicon Valley at Home
Michael Covarrubias
Chair and Chief Executive Officer | TMG Partners
Steve Heminger
Executive Director | Metropolitan Transportation Commission
CASA Steering Committee Members
Ariane Hogan
Associate Director | Genentech
Bob Alvarado
Executive Officer | Nor Cal Carpenters Regional Council
Dave Cortese
District 3 Supervisor | Santa Clara County
Dave Regan
President | SEIU
David Rabbitt
Second District | County of Sonoma County
Ellen Wu
Executive Director | Urban Habitat
Grace Crunican
General Manager | BART
Jake Mackenzie
Mayor | City of Rohnert Park
Julie Combs
City Council Member | City of Santa Rosa
Keith Carson
District 5 Supervisor | Alameda County
Kofi Bonner
Regional President, Northern California | FivePoint
Libby Schaaf
Mayor | City of Oakland
London Breed
Mayor | City and County of San Francisco
Matthew Franklin
President | MidPen Housing
Michael Matthews
Director of California Public Policy | Facebook
Rebecca Prozan
Chief of Public Policy and Government Affairs | Google
Sam Liccardo
Mayor | City of San Jose
Stuart Cohen
Founding Executive Director | TransForm
CASA Technical Committee Members
| Abby Thorne-Lyman TOD Program Manager | BART Adhi Nagraj Director | SPUR |
Aimee Inglis
Associate Director | Tenants Together
Amie Fishman
Executive Director | Non-Profit Housing Association
Andreas Cluver
Secretary-Treasurer | Building and Construction Trades Council of Alameda County
Bill Witte
Chair and CEO | Related California
Bob Glover
Executive Officer | BIA Bay Area
Caitlyn Fox
Policy | Chan Zuckerberg Initiative
Denise Pinkston
Housing Committee Co-chair | Bay Area Council
Derecka Mehrens
Executive Director | Working Partnership, USA
Doug Shoemaker
President | Mercy Housing
Jacky Morales Ferrand
Housing Department Director | City of San Jose
Janice Jensen
President and CEO | Habitat for Humanity
Jennifer Hernandez
Partner | Holland and Knight
Dr. Jennifer Martinez
Executive Director | Faith in Action Bay Area
Jonathan Fearn
Vice President of Development | Summerhill Housing Group
Joseph Villarreal
Executive Director | Contra Costa Housing Authority
Joshua Howard
Senior Vice President, Northern California | California Apartment Association
Linda Mandolini
President | Eden Housing
Lynn Hutchins
Attorney | Goldfarb Lipman LLP
Mark Kroll
Managing Director | Saris Regis Group
Mary Murtagh
President and CEO | EAH Housing
Matt Schwartz
President and CEO | California Housing Partnership
Matt Vander Sluis
Deputy Director | Greenbelt Alliance
Michele Byrd
Director, Housing & Community Development | City of Oakland
Ophelia Basgal
Visiting Scholar | Terner Center for Housing Innovation
Randy Tsuda
Community Development Director | City of Mountain View
Rich Gross
VP and Market Leader for Northern California Market | Enterprise Community Partners
Robert Apodaca
Principal, Zezen Advisors | California Community Builders
Scott Littlehale
Senior Research Analyst | Nor Cal Carpenters Reg. Council
Tomiquia Moss
Executive Director and CEO | Hamilton Families
CASA Compact Elements
#1 Just Cause Eviction Policy
#2 Emergency Rent Cap
#3 Emergency Rent Assistance and Access to Legal Counsel
#4 Remove Regulatory Barriers to ADUs
#5 Minimum Zoning Near Transit
#6 Good Government Reforms to Housing Approval Process
#7 Expedited Approvals and Financial Incentives for Select Housing
#8 Unlock Public Land for Affordable Housing
#9 Funding and Financing the CASA Compact
#10 Regional Housing Enterprise
