Does Senate Bill 827 Even Make Sense?

By now most Bay Area residents know what California Senate Bill 827 is, and what its authors Scott Wiener and Nancy Skinner say they want to accomplish.  Most residents are also aware that there is opposition to the draconian nature of this bill.  

 The purported objective of SB 827 is to force all cities and counties in California to build lots of housing along all transit routes.  Theoretically, the increased supply would bring prices down; while proximity to bus and rail routes would encourage residents to ride transit, not drive their cars.  Do these objectives ring true in the context of today’s California housing “market.”  Does proximity to transit translate into increased transit ridership?  Does SB 827 even make any sense?

Would SB 827 bring housing prices down?

We all know that ample supply brings down prices.  That is a rule of a free market.  The California housing market is barely free, given the myriad of laws that require rent control, developer-financed subsidized housing, substantial tenant compensation in the event of eviction, payment of prevailing (union) wages in construction, and buyers/renters accustomed to astronomical prices. It would stand to reason that 1) landlords would have to charge high rents when they can to make up for what they forego under controls and compensations; and 2) developers would need to build a lot of high-priced housing in order to make up for high construction costs and mandated subsidies.  This scenario does not appear to be conducive to lower housing costs.

Would SB 827 get people to take public transit?

Proximity to transit could increase ridership, especially since those likely to move into the denser transit corridors that offer smaller units might be single and/or “child-free,” and those folks may not be as encumbered by day-care or school drop-offs as multi-kid families.

On the other side of the coin, SB 827 would fail in accomplishing its transit objectives if 1) most of the units built along transit routes are market rate and therefore affordable only to higher-income residents, and 2) higher-income residents don’t take the bus.  

What is the elasticity of SB 827?

The Kaden Tower

Beautiful views of the Bay in San Francisco, desirable exclusive neighborhoods in Marin, family-friendly single-family homes in Alameda, affordable house sharing in quiet residential neighborhoods, as well as an oversized cluster of labor-intensive companies in Silicon Valley are all magnets.  Thus, places like the San Francisco Bay Area are experiencing too many people chasing too few homes.  SB 827 in full bloom would most likely undermine the first four variables.  At what point do residents who want the views, the tranquility, and the small enclaves of affordable housing start leaving – or even arriving?

Pictured: The Longaberger headquarters in Newark, Ohio.  Such a building coming to your neighborhood transit corridor soon? 

Would SB 827 work with flexible transit schedules?

SB 827 ties mandated housing to transit corridors.  Not just fixed rail such as BART, but all transit, including neighborhood buses.  

Say, your neighborhood bus makes frequent trips to the mega store where so many of your neighbors work and shop.  Under SB 827, your neighborhood must allow any developer to build multi-story housing along that bus route.  Most of your new neighbors are the more affluent people who can afford to rent or purchase the new high-priced units, they certainly do not work at the store, and they prefer not to take the bus.  Then, the mega store closes, and the bus is re-routed to serve other transportation needs.  We know that the new buildings cannot move to the new bus routes.  Therefore, we need to ask whether SB 827 aims to just build anywhere by using whatever gimmick sounds good, or it expects to ossify transit routes for as long as the buildings along the route stand.

An even worse case scenario arises if a city council becomes concerned that their more affluent residents (who most likely do not take the bus and who most likely pay goodly amounts in property taxes) will not be pleased with tall dense buildings marring the character of the neighborhood. Their solution might be to simply remove the bus service, thereby leaving many less affluent people who take the bus to their work in the more affluent neighborhoods without transportation.

Quotes readers might find useful:

Not since the "Urban Renewal" projects of the 1960s (most appropriately characterized as "Negro removal" by James Baldwin) has something so radical and detrimental to the stability of urban communities of color in California been proposed. It will undoubtedly lead to the massive demolition of the limited affordable housing stock we still have in L.A. (rent-controlled apartments, like the two-story buildings that line King Blvd and Leimert Blvd, and almost all of Baldwin Village, which are increasingly being bought by Wall Street investors) to be replaced by 5-8 story market-rate housing, where the average rent will go for $3,500/month or more. The Crenshaw Subway Coalition  January 2018

Americans who are lower-income, black or Hispanic, immigrants or under 50 are especially likely to use public transportation on a regular basis, Pew Research Center data show.  Who Relies on Public Transit in the U.S.? April 2016

…if a bus route were shifted from one street to the next, or lines truncated or consolidated, it could significantly affect zoning. Furthermore, it could create pushback from jurisdictions or neighborhoods who oppose increased density to suspend already planned transit service enhancements or avoid planning for increased transit service altogether. San Francisco Planning Department March 2018

SB 827 is not a housing bill; it’s a real-estate bill. It is intended to monetize real estate. This bill is not about YIMBYs vs. NIMBYs; it’s about WIMBYS: Wall Street in My Backyard. The Planning Report, Triumph of the WIMBYs  March 2018

…in response to hostile questions, Senator Wiener said, “I do not advocate a state takeover of housing policy. I’m advocating looking at a balance, where the state sets basic standards that are enforceable, and local communities [have] control within those standards—just like public education.” Triumph of the WIMBYs

I suggest we all get to know the chief bus scheduler at Metro, because he or she will determine what gets built and where. Who’s the genius who thought that scheme up?  Triumph of the WIMBYs

SB 827 Flyer we hope you also find useful

SB 827 Flyer