Search This Blog

Thursday, February 13, 2020

Measure B - Putting It All Together

Sunnyvale's Measure B (2020)


No on B!
March 3rd

Summary of Arguments against Measure B
(it's all about that Mayor thing!)

Below are the slides I presented at the League of Women Voters (LWV) forum on Measure B on February 13th, 2020.  The professionally made video of that forum is available here:
https://www.youtube.com/watch?v=uIHQD0glOxo

I will post an annotated guide to that video later.

I have added some other images and explanatory comments to the slides I presented.

On or Before March 3, 2020
Vote "NO" to oppose an at-large Mayor and big money politics
Vote "NO" - the road to 7 districts for more diverse maximum
local representation to "our needs", not the politicians


Summary:

If Measure B passes, Sunnyvale will get 6 districts plus a directly elected mayor.

If Measure B fails, Sunnyvale will end up with seven districts.

The path to seven districts is:
  1. Measure B fails, 
  2. The Asian Law Caucus (ALC) sues, 
  3. Judge hears the case promptly, 
  4. Early to late May, 2020, Judge gives Sunnyvale seven districts.
  5. November, 2020 district elections take place
There is no question we will be moving to districts whether measure B passes or fails on March 3rd, 2020.

The big issue is whether there should be a mayor elected "at-large".

Given the power any mayor has, and the cost of running a city-wide election campaign, an at-large directly-elected mayor will be the one financially backed by the wealthy out-of-town developers - they want a mayor favorable to development, particularly office development.

Link to this post (for sharing):
https://meetingthetwain.blogspot.com/2020/02/measure-b-putting-it-all-together.html

Discussion:

For an intro to the basics of the California Voting Rights Act go to:


Keeping it Simple!



One Way Street

First thing to realize about an "at-large" mayor is that it is a "one way street".

Once a directly elected mayor is part of the city charter, it will be virtually impossible to go back to council-selected mayor.  What mayor will want to give up power?  There will be no shortage of mayor wanna-be's eager to give the mayor ever more power so they can have it when they get to be mayor.


Can a Directly-Elected Mayor Get More Resources for Sunnyvale?

Can a mayor get more money or other resources for the city from regional bodies if directly elected?

In 2011 then-mayor Melinda Hamilton wrote an op-ed pointing out that Sunnyvale got a lot more money than other cities that did have a directly elected (at-large) mayor .

"Melinda Hamilton: Directly electing Sunnyvale’s mayor will only benefit politicians"
https://www.mercurynews.com/2011/10/11/melinda-hamilton-directly-electing-sunnyvales-mayor-will-only-benefit-politicians/

From the above article:

------------
"Sunnyvale received $10.7 million in American Reinvestment and Recovery Act funding — three times what Santa Clara ($3 million) received, five times what Gilroy and Milpitas ($2.3 million each) received and seventeen times what Morgan Hill ($619,000) received. All of this without the directly elected mayor that those four cities have."
------------

I would add that asserting an at-large mayor will get more money for Sunnyvale assumes an unbelievable lack of professionalism on the part of those allocating funds.  Would VTA give Sunnyvale better bus service if it had a directly elected mayor?  The idea is laughable.


Changes Introduced by Measure B?


The major changes are:
  1. Extend the mayor's term from 2 years to 4 years.
  2. Removing a mayor now requires only a single vote by a simple majority of the council.  If Measure B passes, the mayor can only be removed by a recall petition.  This requires a large number of signatures gathered in a limited time - very difficult to do.
  3. Term limits are increased from 2 terms (8 years) with a 1 term break before running again, to 3 terms (12 years) with a one-term break.  (But no one can be council or mayor for more than 2 terms in a 16 year period.)
  4. The mayor will no longer be limited by the city council.  Currently the mayor knows if they try to go too far with their powers they can be easily removed.  Without that check, a lot of the powers the mayor has can be abused.
  5. Big question!  Why did the city council majority not vote to just go to 7 districts now with deal with the at-large mayor issue after the CVRA is satisfied?



Enough Time to Go to Districts if B Fails?


Some are concerned that there won't be enough time to get district elections by November, 2020.  But we have the City of Santa Clara CVRA legal case in 2018 to learn from.  They had a judge impose districts within 6 weeks after their ballot measure failed (in the first week in June 2018).  We can model a timeline based on that as seen below:


So assuming the ballot measure fails March 3rd, we should have new maps for districts by early May - plenty of time for people to know what district they are in if they want to run for office.



Cost of Settling with the Asian Law Caucus?

If Measure B fails on March 3rd, we most likely will be sued.  In public city council session, the city attorney said that the average cost of settling ("stipulate" is the legal term) CVRA cases is about $125,000.  There are no penalty fees awarded by courts so any settlement costs are purely due to the time for attorneys.  If the settlement is quick and simple then legal costs will be lower.

Even if Measure B passes Sunnyvale will still need to pay the Asian Law Caucus $30,000 - the maximum the CVRA allows.  The city budgets over $1M in a contingency fund for lawsuits since the city gets sued regularly.

For comparison, it cost nearly $500,000 for the "outreach" to inform people about the transition to districts, and over $600,000 to the county Registrar of Voters (RoV) to put the measure on the ballot.  So, democracy costs money.

(Normally it costs under $28,000 for a ballot measure but Measure B is so long because of all the changes that the RoV charged a lot more.)

The new city hall being planned will cost $216,000,000 ($216 million).  The city budget is over $300M.

More on lawsuits and settlements on the CVRA in Wikipedia here:


What will a Judge Decide?


A judge is most likely to rule in favor of 7 districts should measure B fail.    Based on the case of City of Santa Clara, it is very, very doubtful that a judge would rule for an at-large mayor.  No guarantees, of course - after all, no one can guarantee the sun will rise tomorrow - but, that's the way to bet.

The relevant quote from the judge's decision is seen below:


This is covered in more detail in:
https://meetingthetwain.blogspot.com/2020/01/the-false-legal-narrative.html


Why Not an At-Large Mayor?

The problem with a directly elected mayor is that it costs so much to run a city-wide campaign that only the wealthy or (more likely) those backed by the wealthy have any chance of running a successful campaign.  The money input into city elections has grown tremendously in just the last few years.

More here:

Excerpted chart below (click image to enlarge):


We just had a ballot measure on at-large mayor in 2011!


Since the "Citizen's United" Supreme Court decision in 2010, contributions from wealthy individuals, corporations have exploded:


To run in a district is relatively easy.  Dropping flyers off at 50 houses takes about an hour or so.  Do that every day and in 3 months you've hit every house in your district.  Good exercise - do it with a friend and save on gym memberships.

Even if you feel you need to send out mailers, with only 9,000 voters in a district, that isn't too expensive for one mailer to every voter. 



Sunnyvale Ethnic Makeup?

It has been noted that there is no ethnic majority among Sunnyvale residents but that Asians are the largest group of residents.  (See chart below - click on image to enlarge)


While it is a true statement, that also includes a substantial number of non-citizens - who can't vote.  When you look at the "Citizens of Voting Age Population" (CVAP) the situation reverses.  (See chart below - click on image to enlarge)


However not every potential voter actually votes.  Looking at who actually votes, you find "non-hispanic white" voters (to use the US Census term) are the majority. (See chart below - click on image to enlarge)
Actual Voters 2016
23% Asian, 58% White, 13% Hispanic


Since 58% of those who actually voted in 2016 were "non-hispanic white" we can reasonably expect that if there were 6 districts and an at-large mayor, the mayor would likely be "white" along with 3-4 other council members for a total of 4 to 5 out of 7 councilmembers.

The Asian Law Caucus wants to increase the percentage of Council members who are Asian, and for these demographic reasons are unlikely to favor a directly elected mayor, since that mayor would most likely be "white"

The demographics of Sunnyvale and possible 7 districts are discussed at:
https://meetingthetwain.blogspot.com/2018/11/district-elections-cvra-5.html


Potential Ethics Issues of At-Large Elected Mayor


As the mayor gets more powerful, the potential for unethical behavior becomes greater.  By the early 1900s many mayors were essentially "bought" by powerful interests like the railroads.  This was the reason reformers in the early 1900's wanted to get away from elected mayors.  They adopted the "council city-manager" form of government with the mayor more like the "chairman of the board" than a powerful decision maker.

As an example of what can go wrong, this week it was revealed that San Francisco Mayor London Breed accepted several thousand dollars in gifts from an employee - whose $273,000 salary depends on Mayor Breed (the SF mayor's salary is $300,000/year).

As the SF Chronicle wrote:

"It is simply improper for a mayor to accept something of value from a department head whose $273,000-a-year position is contingent, in part, on her approval of his performance."

https://www.sfchronicle.com/opinion/editorials/article/Editorial-Mayor-London-Breed-s-lapse-of-15058088.php

And in the Baltimore Sun:

"...prosecutors allege [former mayor Catherine] Pugh defrauded area businesses and nonprofit organizations with nearly $800,000 in sales of her “Healthy Holly” books to unlawfully enrich herself, promote her political career and illegally fund her campaign for mayor."
https://www.baltimoresun.com/politics/bs-md-pol-pugh-20191120-kzmc2v7cafetjladglhgnyusdy-story.html

And from the Boston area:


"Fall River Mayor Jasiel Correia, who is already under indictment for wire and tax fraud, was arrested Friday for allegedly conspiring to extort more than $600,000 in bribes from four marijuana vendors."  (Also employees ordered to 'kick-back' half their salary to the mayor, and lots of other fun stuff.)
https://www.wbur.org/news/2019/09/06/fall-river-mayor-jasiel-correia-arrested-for-allegedly-extorting-marijuana-vendors

If you want more examples, just search under "indicted mayors".


Effects of an At-Large Elected Mayor

As the leader and policy setter for Sunnyvale, businesses, (especially developers) will spend more and more to make sure their candidate for mayor backs further development.

We can see this in Santa Clara (which has a directly-elected at-large mayor).  They sold their golf course to build more office space and retail establishments - very little housing.  The 5.7 million square feet of office space will hold more than two times the number of employees of the Apple "Space Ship" Headquarters!  There is no way in heck Santa Clara can build enough housing for 28,000 employees and their families.  So the 28,000 future employees in Santa Clara will have to drive there making traffic a nightmare not only in Santa Clara but in neighboring North Sunnyvale as well.

http://www.keystonedg.com/projects/city-place/


Districts - Pluralities and Majorities

We can draw up districts pretty easily.  Whatever district map is used in the November, 2020 elections will need to include ethnic considerations.  (It will also need to be redrawn after the 2020 census).  Below is a map that was drawn by machine.  We can do about as well by hand, with better considerations of natural boundaries.  Click image to enlarge.
(From: https://meetingthetwain.blogspot.com/2018/11/district-elections-cvra-5.html )


The map above has the following ethnic make-up:





For now, this is...




Sunday, January 5, 2020

The Road to 7 Districts

The Legal Road to 7 Districts



Summary:

Possible and most likely sequence of events leading to district elections:

  • Sunnyvale Measure B fails on March 3rd, 2020.
  • The Asian Law Caucus (ALC) sues the city of Sunnyvale for violating the California Voting Rights Act (CVRA).
  • The Sunnyvale City Council "stipulates" (legalese for "give up") settling with the ALC for about $125,000 (based on similar situations with the CVRA).  
  • The joint agreement goes before a judge who has plenary powers - i.e., the judge can accept it, modify it, or ignore it entirely, at their discretion.
    • (The city council could decide to contest it as Santa Clara is doing.  However, the voters of Sunnyvale could then in November vote out those who vote to contest, voting in those who promise settle quickly and cheaply.  The council will be aware of this when they vote.)
  • The judge orders Sunnyvale to go to seven districts in time for the November, 2020 elections.
It is extraordinarily hard to see any way in which the judge could or would order a directly elected mayor to be installed in Sunnyvale.  This is based on what the Superior Court Judge already has written, namely:
---------------

      “The Court was initially concerned that having an at-large mayor would not provide remediation to the extent required under the CVRA, which can trump charter city rights.”
...
       "At trial, counsel for the City made an important point. He acknowledged the Court’s View that eliminating the at-large mayor would provide additional CVRA remediation."


------------

This means that even though Santa Clara already had a directly elected mayor in their charter, the judge could eliminate the at-large mayor to satisfy the CVRA.

In the end, the judge allowed the at-large mayor position to remain only because it was already in the city charter and the judge was imposing 6 districts.

But since Sunnyvale does NOT have an at-large mayor in its charter, for what reason could a judge add one, since it the atlarge provision violates the CVRA?  No reason whatever.

Legal quotes above from page 7, (lines 19 ff)  of Yumori-Kaku vs. City of Santa Clara, 7/24/2018 AMENDED Statement of Decision. available here:


Detailed Analysis:

For those just tuning in, the March 2020 Measure B attempts to change Sunnyvale’s government to conform to the California Voting Rights Act (CVRA).  Currently, Sunnyvale has 7 council members with 4 year terms.  A mayor is chosen by the council from within the council for 2 years.  

The simplest change to satisfy the CVRA would be to have our 7 council members go to 7 single-member districts.  Instead of that very simple (but important!) transition, the March 3rd Measure B would add an at-large mayor in addition to 6 council members elected by single-member districts. 

The false narrative we are fighting is that when Measure B's “6 + 1” change is rejected by the voters a judge will impose "6+1" on Sunnyvale, anyway. 


The false narrative is that judges are inclined to go along with the desire of the majority of the city council. Since that could be “6 + 1” then (this false narrative continues) a judge would impose an at-large mayor plus districts.  BUT!  - this is not supported by what happened in 2018 in the City Santa Clara, not supported at all!

What you find when looking at the judgement from the Santa Clara County Superior Court in 2018 is that the CVRA takes precedence and that an at-large mayor (same as "citywide" or “directly elected”) is not aligned with the CVRA.

Here is what the Santa Clara County Superior Court wrote:
----------------------------------------------

        “The Court was initially concerned that having an at-large mayor would not provide remediation to the extent required under the CVRA, which can trump charter city rights.”
...
         "At trial, counsel for the City made an important point. He acknowledged the Court’s View that eliminating the at-large  mayor would provide additional CVRA remediation."

(From page 7 of Yumori-Kaku vs. City of Santa Clara, 7/24/2018 AMENDED Statement of Decision)  available at:

Santa Clara County Superior - Court Case Information Portal:
Search for record number 17CV319862 documents (some effort required)  

Also available (with one click) here 17CV319862_AMENDED Statement of Decision

----------------------------------------------

The statements above by the judge cannot be over-emphasized!

In the end, the judge permitted the City of Santa Clara to keep their at-large mayor only because they already had one.  The judge let them keep it rather than change their charter.  

And this is a crucial difference - Sunnyvale does NOT have a citywide directly elected mayor in its charter.  To put one in would require a vote of the people to change the charter with no guarantee it would pass, especially since at-large directly elected mayor has already failed several times in Sunnyvale.  

The court indicated that it could remove a directly elected mayor (though in the end it did not).  This is because having an at-large mayor would not provide remediation to the extent required under the CVRA.  The judge cannot put in a directly elected mayor if there isn’t already one in the charter.

The judge said the CVRA can trump charter city rights but to put in an at-large mayor where there isn't one is the exact opposite.  The CVRA could remove an at-large mayor as not providing remediation under the CVRA.  How could it possibly install an at-large mayor after ruling that the CVRA allows removal of an at-large mayor?  It makes no sense whatever.

If the court didn’t want to change the charter for Santa Clara, why would they do it for Sunnyvale when installing an at-large mayor is in direct opposition to the CVRA?  

In the case of Santa Clara there was a pre-existing charter provision for a directly elected mayor.  Without a charter provision for a directly elected mayor in Sunnyvale, it is hard to imagine why a judge would impose one.  For one thing, that would require a charter revision to pass in November, 2020 as Sunnyvale’s City Attorney explicitly stated in the council meeting of December 3, 2019.




The simplest action (by far) for the judge would be to order 7 districts for Sunnyvale resulting in minimal changes to the city charter.  

Some are concerned about there being sufficient time to implement the change to district elections.  In that regard please note that Santa Clara's ballot measure failed in June 2018 yet district elections, with new maps, occurred in November 2018! 

The judge might even rule that all of those 7 districts be up for election in November 2020 to completely satisfy the CVRA.  During public comments at Sunnyvale’s City Council meetings many people asked for exactly that - for all 7 seats to stand for election in November 2020.  We know from the court ruling (cited above) that the judge considered public comments in the ruling.

Finally, Sunnyvale city council seats will be up for election in November 2020.  Members of the city council running for re-election will need to consider how voters will view each candidate’s response to the failure of the ballot measure.  What will be the effect on their re-election prospects if they try to over-ride the will of the people who have voted against a citywide at-large mayor?  It is very possible that they may decide to bow to that will and just go with 7 districts.

This analysis should help Sunnyvale Voters feel more confident their NO on Measure B vote on the March 3rd ballot will make a difference.

On March 3rd, please Vote No on Measure B
Join and endorse the campaign and help fund our joint effort today.  

----------- Your Help Is Needed -----------

We don't like asking for financial support but the success of this campaign relies on YOU.  The ballots are scheduled to be mailed the beginning of February. In order to get our message out (mailers, flyers, Yard Signs etc.) before Sunnyvale starts voting we urgently need another $4,700 before 11:59 PM on Friday January 10th.  Please chip in whatever you can spare at: 

On March 3rd, please Vote No on Measure B
Join and endorse the campaign and help fund our joint effort today at the following link:  

Thank you for reading this and for your continued support. Please tell your friends and neighbors. 
------------------------
Vote NO on Measure B
March 3, 2020
(NO on 6+1) 

Oppose an at-large directly elected mayor in Sunnyvale
Demand 7 Single-Member Districts 
Click to DONATE

Thursday, December 5, 2019

The False Legal Narrative

Thanks for visiting - you are really looking for:


https://meetingthetwain.blogspot.com/2020/01/the-false-legal-narrative.html


Sorry for the confusion!



"Real" Reason Behind "At-Large" mayor

(This was the "No on Measure "X" Email of 11/28/2019")

Hi,
This is Sunnyvale City Council Member Michael Goldman (writing solely on my own behalf).  

What is the underlying theme of the city-wide directly elected (at-large) mayor part of the coming March 3rd ballot initiative?  For all the high-falutin’ talk about “governance” and “considering the city as a whole” it really comes down to the power of money in our local government.  

How much longer will the big money campaign contributions dominate our local politics?  Going to district elections will break the hold of out of town interests on our city. Locally elected council members will be more responsive to the concerns of their neighbors than to billionaire office developers. 

The key thing is the “directly elected” mayor.  It sounds nice – everyone can vote for the mayor – but the reality is that it costs so much now to run a city-wide campaign only those backed by billionaires really have a chance.

In the last council election over $100,000 was spent on each of the three winner’s campaigns (average $121,000), while the losers (some of whom came close) averaged about $17,000.  (See detail below) That huge money difference is why you see lots of glossy full color campaign fliers from some candidates and only one or two (if any) fliers from others.  Most without the big money backing cannot afford to get fliers out to every voter.  People vote for the candidates they hear from. 

If they don’t hear from you, they probably won’t vote for you.
(click on image to enlarge)


(For detailed financial discussion see website -- Campaign Buzz and FAQs)

During the nearly 3 years I have been in office I talk to a lot people in all the neighborhoods.  The number one complaint I hear is about traffic.  Not freeway traffic on 101 or 280 but local traffic.  The streets from the freeways to home, school and shopping have become ever more congested and dangerous.

This traffic has increased risk to pedestrians, bicyclists and our childrens' routes to school.

The traffic comes from overbuilding in areas with inadequate infrastructure. This overbuilding is enabled by politicians at all levels who owe their elections to big money contributions. 


The Supreme Court has ruled that money is “free speech”.  Billionaires have a lot more “free speech” than the rest of us so they can Roar while we can only whisper.

Sunnyvale is on track to go to district voting for city council members on November 3, 2020 with or without a directly elected mayor.  Going to 7 single-member districts with only about 9,000 voters in each district means the local candidate can easily reach all the voters in their district.  

While the big money can still pay for lots of fliers, the fact that the local neighborhood candidate can reach every voter is sufficient to even the scales.

Getting a directly-elected mayor is a one-way street.  If we allow that, we will never undo it.  A directly elected mayor will gain ever more power.  We will eventually become like San Francisco where the mayor can remove sitting elected officials, appoint their allies to empty elected offices or commissions, and veto ordinances.  We don't need the bitter San Francisco political wrangling between a money-backed mayor, and neighborhood-elected representatives.

If we reject the 6+1 Measure in March there will be several ways we can go to seven districts before November of 2020.


Thanks for reading.  I wish everyone a happy and restful Thanksgiving.

Sincerely,
Michael S. Goldman

Sunnyvale Council Member, writing solely on my own behalf
408-507-3128

Sunday, September 22, 2019

The "Myth" of a Housing Crisis

A Housing Crisis?

Crisis: "A crucial or decisive point or situation, especially a difficult or unstable situation involving an impending change".  Does that describe housing in California?

California's legislative season is over and with it the death of some very bad legislation like SB-50.  This was legislation that would have ruined local communities, driving more Californians out of the state in search of a livable place to make their home.

Link to this post: https://meetingthetwain.blogspot.com/2019/09/the-myth-of-housing-crisis.html

More on SB-50 (which might be up for consideration in 2020):
https://meetingthetwain.blogspot.com/2019/04/forum-on-sb-50.html


With these nightmare laws dead (for now), we can take a look and see that in fact things are as they have been for the last 50 years.  California's home ownership rate peaked during the housing bubble and then collapsed afterward.  It is now back to where it has been historically and is rising (see graph).  It remains consistently higher than NY State's, which is still declining.

Home Ownership Rate
(click image to enlarge)
CA (Blue): 53% in 1984, 60% in 2006, declined to 53% after the bubble burst.
NY's rate (Red) rose similarly but is even now declining
Home ownership rate rises with average age so, for example, Maine and West Virginia have 73% home ownership rates because there are few jobs there so young people migrate to growing economies like California.

In San Francisco, ground zero for the so-called "crisis", the percent of rent/mortgage "burdened" households has dropped significantly.  That fraction is below that of not only Boston, but also Brooklyn, NY, and even relatively cheap areas like Portland, Oregon.

Rent/Mortgage Burdened Households - 1
(click image to enlarge)
Kings County = Brooklyn Borough
Suffolk County, MA = Boston
Multnomah County = Portland, OR
What the heck, throw in Las Vegas, Chicago, and Orlando, FL for good measure (following chart).

Rent/Mortgage Burdened Households - 2
(click image to enlarge)
https://fred.stlouisfed.org/series/DP04ACS032003#0
Orange County, FL = Orlando
Clark County, NV = Las Vegas
Cook County, IL = Chicago
One can reasonably argue that San Francisco is too expensive for lower income people so they migrate to other communities.  Okay, but even the other communities with lower housing costs have lots of people for whom "the rent is too damn high".  This suggests it is really an income problem not a housing problem.  Let's raise people's incomes with better education and training - that might actually work better than building luxury apts/condos with inadequate parking.

The progress graphed above was slow but steady improvement.  It came without the help of state intervention.  Just the normal ebb and flow of economics with local control keeping development at a human scale, in tune with local communities.

So where did the idea of a housing crisis originate?  Whence Governor Newsom's "3.5 million homes by 2025" urgency?

McKinsey's Contribution to the "Myth"

That "3.5 million homes" comes straight from the McKinsey Global Institute's 2016 Report "A Tool Kit to Close California's Housing Gap: 3.5 Million Homes by 2025".  Central to that was a chart of housing units per person.  See chart below:


McKinsey - Housing Units per Capita
"Exhibit 3" in McKinsey Report, Page 3
More details at
https://meetingthetwain.blogspot.com/2019/06/mckinsey-housing-gap-part-1-a.html
McKinsey claimed that California being 49th in the above chart of "housing units per capita" was the cause of high housing prices in California - so their "solution" was to build more housing to fill this supposed "gap".

Except the bar chart makes no sense.  If being 49th caused California housing to be expensive then the 50th should be even more expensive. The 50th state is Utah.  And the 47th should be almost as expensive - the 47th is Texas.  Neither one is particularly expensive.  Might as well say it plainly - the graph is absurd.

More details here:
https://meetingthetwain.blogspot.com/2019/06/mckinsey-housing-gap-part-1-a.html

It gets worse.  McKinsey then went on to hold up NY state as a model for California to emulate.  But we've already seen that in terms of "housing cost-burdened population" and "home-ownership rate" both NY state and city are worse than California and San Francisco, respectively.

It gets worse.  Switch from McKinsey's "housing units per capita" to a more reasonable "housing units per household" and the difference mostly disappears.  All the states then are seen to have a surplus of housing, including California.  See chart below:

Housing Units per Capita

California has 1,100 housing units for every 1,000 households - a 10% surplus.
Adding 3.5 Million more housing units would result in 3.5 million empty housing units.
Original data for above comes from:
https://www.census.gov/quickfacts/fact/table/HI,NY,FL,TX,CA,US/HSG010218#HSG010217
The data and McKinsey's misuse of it is discussed more fully at:
https://meetingthetwain.blogspot.com/2019/06/mckinsey-housing-gap-part-1-a.html
The McKinsey report was probably the most widely cited and least read of all the promoters of the myth of a "housing crisis".  If anyone had read past the executive summary, they would have seen the above oddities.

Had they gotten even a little further into the report they would have seen McKinsey's map of San Francisco's "underutilized residential" blocks.  The map includes Grace Cathedral, St. Mary's Cathedral, the Chinese Consulate, a hospital, and almost every landmark house of worship that survived the 1906 earthquake.

SF's Grace Cathedral
"Underutilized" Housing?
McKinsey mapped this as "underutilized" residential potential.  
"Underutilized" Housing Map
Red blocks are the most "underutilized"
(Click map to enlarge)

More details on McKinsey's "underutilized residential" map at:
https://meetingthetwain.blogspot.com/2019/06/mckinsey-sf-density-cathedrals.html

So okay, McKinsey's report is nonsense - but they couldn't create the "housing crisis" myth all on their own.  There were plenty of others with similarly bizarre ideas of economics.


The LAO's Contribution to the "Myth"

California's own LAO (Legislative Analyst Organization) came up with an analysis of housing prices.  They concluded that if an additional 100,000 units annually had been built over the last 35 years, housing costs would have been lower with 100,000 x 35 = 3.5 million more housing units.  That is where the 3.5 million number originally came from.
C.f., https://meetingthetwain.blogspot.com/2019/03/lao-on-housing.html

This "build more to make the price go down" sounds reasonable at first.   But look around you now (September, 2019) and you see builders avoiding the SF Bay Area because rents and prices are declining a little.  C.f., https://www.mercurynews.com/2019/03/20/why-wont-developers-build-housing-in-this-bay-area-city/

With no idea of how low rents and prices will go, banks won't loan money for construction.  No one wants to get stuck with buildings that sell/rent for less than the cost to build them.  We have seen this before - 100% up followed by 10% down, then 100% up, and again 11% down.  When housing costs go down, builders look elsewhere until rents rise again.  The following chart shows these cycles going back to 1985.

From:  http://meetingthetwain.blogspot.com/2018/01/housing-jan-2017.html
So the "build more" idea doesn't work - as soon as the price drops even a little, the building stops and then at the next boom, the prices rise even more.  The LAO is hypothesizing that builders will build even when it makes no economic sense.  The LAO's hypothesis is clearly false as reality keeps repeating.


HCD's Contribution to the "Myth"
HCD = CA Dept. of "Housing and Community Development"

Home Ownership:

California State's Department of Housing and Community Development (HCD) has made their own contribution to the "housing crisis" myth.  In a 2018 publication they showed home ownership in California as the lowest in 40 years.  HCD's graph is shown below:

Home Ownership Levels - US and CA
(click image to enlarge)
From: "California's Housing Future: Challenges and Opportunities Final Statewide Housing Assessment 2025"
http://www.hcd.ca.gov/policy-research/plans-reports/docs/SHA_Final_Combined.pdf
We saw earlier that California's home-ownership rate went up with the housing bubble and declined when the bubble burst - similarly to the rest of the US.  Yet for the graph above, HCD selected a small subset of available data to show only the decline.  This can be seen in the Federal Reserve Economic Data ("FRED") chart below:

CA Home Ownership Levels
HCD Data Selection
(click image to enlarge)
https://fred.stlouisfed.org/series/CAHOWN#0
Data for 1984 - 2018; Updated April 4, 2019
US Census data on home ownership goes way back to the early 1900's which HCD acknowledges when they write "...reaching the lowest rate since the 1940s" (op. cit., page 18).  Yet HCD decided to show only a 10-year period of declining ownership.  HCD's report was published in 2018 yet they stopped their data selection at 2015.  The HCD truncated data selection was cited early in California State Senator Scott Wiener's SB-50 (2019) as justification of the extreme measures in his bill.  Without the context of available data this serves to promote the myth of a "housing crisis".

Putting a Builder in Charge of HCD


It is hardly a surprise that California State's Department of Housing and Community Development added to the myth when for years the person in charge of it was a developer himself.  Naturally he will have his staff cherry-pick the data so he can argue against single family housing and for "by right development" - i.e., fewer home ownership opportunities, more rental apartments, and no restrictions by pesky local residents and their elected representatives.  For his arguments in full see:
https://www.sfchronicle.com/opinion/openforum/article/Open-Forum-Four-ways-to-fix-the-California-14436147.php


HCD's RHNA:

HCD also is in charge of California's "Regional Housing Needs Allocation" (RHNA) requirements.  These requirements have been widely misconstrued.  People think RHNA numbers are state requirements that cities must cause to be built a certain amount of housing.  That isn't what RHNA numbers are for.  RHNA numbers are a planning tool.  RHNA requires cities and counties to zone for housing.  Cities and counties have no way to build housing - that's up to builders and the market.

Amador City, CA  Population 186...
... and declining
Amador's RHNA numbers were for 2 housing units.  No one built them so..
Amador didn't "make their RHNA numbers"...
...and for that are subject to penalties under SB-35
There are over a dozen counties in California that have actually lost population in the last decade.  There is no reason for anyone to build there.  So, those counties didn't "make their RHNA numbers" - i.e., no one built the housing to fill the zoned areas.  Because they "didn't make their RHNA numbers" they are subject to penalties under SB-35.  Those who don't understand RHNA numbers think it is cities and counties standing in the way of housing, so the myth gains traction.


Homelessness - is that the Housing Crisis?


Stories of the homeless and the displaced are always in the news.  But these problems are worldwide.  A report from Yale shows the US with about 0.17% of the population being homeless.  This is about average among the OECD countries - between Austria and the Netherlands - and well below the rates in Canada and Germany.  See bar graph below:

Homeless %-age of Population
(click to enlarge)

"Trends in homelessness among OECD countries with available data are mixed. In recent years rates of homelessness are reported to have increased in Denmark, England, France, Ireland, Italy, the Netherlands and New Zealand, while decreasing in Finland and the United States."

More efforts and money should be put into housing the homeless - especially veterans and families with children -  but homelessness may never go away until humans find a cure for bad luck, addiction, mental illness, etc.

Causes of Homelessness
(click to enlarge)
Job loss + substance abuse + jail = 56% of causes
More housing and treatment centers would have been a worthy use for the $21 billion budget surplus California had this year.

California's 2018 $21 Billion Surplus
(click to enlarge)
http://www.capradio.org/articles/2019/01/16/about-that-giant-california-budget-surplus/
The 2019 California state budget includes "$1 billion for homelessness—to support local governments in developing an integrated approach to tackle their homelessness issues." out of a 2019-2020 revenue of $144 billion.  From page 71 of CA State budget:
  http://www.ebudget.ca.gov/FullBudgetSummary.pdf

California Renters and Owners

One measure of housing affordability is home ownership.  In the US, about 64% of adults own their own home - a number that has been pretty constant over the last 5 decades.  In states with older populations it tends to be higher and in states with younger populations (like California) it tends to be lower but there are exceptions.  New York State, for example, has the lowest rate of home ownership.

By that standard, California as a whole is affordable - i.e., most people own their own home.  In all but two of the 58 counties in California the majority own the home they live in.  The only exceptions are the counties of San Francisco and Los Angeles.  Those two counties also happen to be where the major California media outlets are. 

For example, in Alameda County, across the Bay from San Francisco, owner occupancy is 53%.  In Santa Clara County, it is 57%.  In San Diego County it is 53%.  In California as a whole, it is 55%. 

Looking at the following graph it is hard to determine any pattern.  Rural inexpensive Lassen County has about the same ownership rate as expensive suburban Contra Costa County, rural Colusa County about the same as very expensive Marin County.  See bar graph below (not all 58 counties are included for space reasons):  (click on graph to enlarge)

Some smaller counties have been omitted for space considerations. 
Data from US Census available here: add or subtract counties as desired
This data is available at:
https://www.census.gov/quickfacts/fact/table/santaclaracountycalifornia,alamedacountycalifornia,losangelescountycalifornia,sandiegocountycalifornia,sanfranciscocountycalifornia,CA/HSG010218
Counties may be added or subtracted using Census search bar in upper right of link above

The myth gains even more traction as young reporters find that their salary doesn't go as far as they had hoped.

Conclusion

So what will happen with housing in California?  The same thing that has been happening since the 1980's when it started getting expensive.  Housing costs will decline a little more, maybe go flat for a while, and then go back up as more startups grow, bringing in well-paid talent that can afford the housing.  Some people will leave for less expensive places, others will come for the high-tech job opportunities. People will complain - they always do.  For most people it will all turn out right.

For now, this is...