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Saturday, February 23, 2019

KQED Forum on CASA - Analysis I

Analysis of KQED on CASA
Part I: Rachael Myrow

This is an analysis of radio station KQED Forum's conversation on CASA on February 2019.  CASA is MTC's broad collection of suggestions for housing in the 9-county San Francisco Bay area.  More here: https://mtc.ca.gov/our-work/plans-projects/casa-committee-house-bay-area

Host Rachael Myrow, talked with Susan Kirsch of Livable California, Michael Corruvabias of TMG Partners, (a housing development company), and Guy Marzorati reporter for KQED.

Link to this post is: https://meetingthetwain.blogspot.com/2019/02/kqed-forum-on-casa-analysis-i.html
Part II is found here: https://meetingthetwain.blogspot.com/2019/02/kqed-forum-casa-analysis-ii.html

The transcript can be found here:
https://meetingthetwain.blogspot.com/2019/02/kqed-forum-casa-susan-kirsch-of.html

Introduction

Initially, Rachael Myrow describes the situation in general.  She covers the conventional wisdom "talking points" leading to issues.


Rachael Myrow: "Construction cranes everywhere..." 

This is a version of '...the Bay Area's tremendous growth'.  But look at census data and you'll say "what growth?"  There's been some, sure, but as always the question is "compared to what?"  As seen in the chart below, of the US's 50 most populous census metro areas San Jose and San Francisco metro area's growth is below average (click chart to enlarge).

US Census Data 2000, 2010 and Census ACS 2017
Not only are the Bay Area metro areas not growing much in percentage terms - they aren't growing much in sheer numbers either.  In fact a number of metro areas grew more than the combined growth of San Francisco and San Jose metro areas - see graph below (click on image to enlarge):
The Austin Metropolitan Area alone added more people than both the SF and San Jose metro areas combined!
More on population growth here:https://meetingthetwain.blogspot.com/2018/10/on-move-1.html

Implied in all this "tremendous growth" idea is that high population growth leads to high housing costs.  Is that true?  Actually, no.  There seems to be no correlation between high growth and house prices.  See graph below.

The high growth cities actually have lower prices than the two Bay Area metro areas!  In fact the greater the numerical population expansion the lower the house price!  This is a random coincidence here, but it certainly puts the lie to the idea that high housing costs come from high growth.


Rachael Myrow: "LA style traffic everywhere."

This is really the issue - not housing.  There is (relative to income) lots of affordable housing and lots of high paying jobs.  The big frustration is getting from the affordable housing to the good jobs.

In the US people arrange their lives so that on average their commute is about 30 minutes - varying widely from day to day within an urban area.  Averages hide a lot.  They are lowered by the large number of people that work off-hours.  E.g., the night shift at a hospital doesn't experience congestion going to work.  We see below what an average really means.  It means people experience difficult commutes - some days and times it is worse than others.  It is the "worse" that makes people start looking for a job in another state.

More detail on commute times here:
https://meetingthetwain.blogspot.com/2018/07/commute-times.html

Congestion is another issue.  Unless they start tearing down housing in Contra Costa County, people will still be commuting along the few roads the area's geography allow.  This is the cause of local freeway congestion.  
LA Freeways - 8 to 10 lanes in each direction
"You can't build your way out of it".
More and wider freeways would help one aspect of congestion but there is nothing that can be done about congestion on local streets.  These have become rush-hour nightmares because they are the few streets that connect freeways with residential areas.

These are not only "last mile" connections but also "overflow lanes" because the freeways are too clogged.  GPS directions plotting the "shortest time" routes between cities often avoid freeways entirely and direct traffic through all the little side streets.  No one likes this - not the drivers and definitely not the residents of what used to be quiet residential neighborhoods.
Sign in Fremont CA telling drivers "Don't Trust Your Apps"
because of "No Left Turn" during evening commute hours
Hollenbeck in Sunnyvale, or Grant Road in Mountain View, or so many others that were designed as quiet little streets to connect neighborhoods - they can not be widened.  They are the bottleneck to increased density.

The head of the Sunnyvale Public Safety union is on record as saying that there is already a serious problem getting emergency vehicles through traffic during certain times:


"Traffic congestion on our roads is so bad that our fire crews are not able to hit the 4-minute and 8-minute travel time response goals during commute hours."
At the 1:08 mark on:
https://www.youtube.com/watch?v=PgSOSguJcMU&feature=youtu.be
On the city council that is all I hear about from residents - traffic on El Camino and local streets.  It can take as much as 30 minutes of stop-and-go (mostly stop) - watching traffic lights cycle through red and green repeatedly - to travel the last 2 miles home once you leave the freeway.  That this might happen only one or two days day a week doesn't diminish the effect on people's perception of the quality of their life.

One obvious solution would be for companies to expand closer to housing.  Why is that never mentioned?


Rachael Myrow: "Millions struggling to pay the rent, let alone buy a home in the San Francisco Bay Area."
High housing costs, not traffic, is the issue at hand.  Partly, these costs are high because not just the SF Bay Area, but the entire US is in the middle of a housing bubble.  Housing price increases throughout the US have far exceeded increases in income as the next graph (from the Federal Reserve) shows.
Incomes (red line) have risen steadily but...
Housing prices (blue line) have risen much faster.  A bubble like 2008.
Graph from WSJ's "Daily Shot" column of 25, Apr, 2018
Ultimately this is not sustainable.  Prices cannot long exceed the average person's ability to pay them.  It takes a while but people will move to where they can afford housing - whether it is Contra Costa County or Charlotte, NC.  When the bubble bursts is anyone's guess but it appears there was some softening in real estate starting in late 2018.  More here: https://wolfstreet.com/2019/02/21/the-us-housing-market-begins-to-feel-the-pain/

Not just a housing bubble but a stock market bubble as well.  Several valuation methods put 2018 as more excessive than 1929 and almost as irrational as the 2000 "dot-com" bubble.  See graph below:
As of February 2019.
From: https://www.advisorperspectives.com/dshort/updates/2019/02/05/market-remains-overvalued
A lot of companies are using this stock bubble by giving out stock options in lieu of cash.  People are using those increasingly valuable options to buy housing - squeezing out those that can't compete.  When those options become worthless in a large market correction a lot of the money available to bid up prices will disappear.

But the SF Bay area is actually not the worst area in terms of housing "affordability".  The prices are much higher here than in other cities in the US but so are salaries.  When we correct for that we see several major metro areas where housing takes more out of a paycheck.  See graph below (click on image to enlarge):

From: https://howmuch.net/articles/hours-work-afford-home
The most un-affordable place is NYC, followed closely by Los Angeles.  The housing costs are higher in the San Francisco Bay but so are the salaries.  The following graph from data on the same HowMuch.net site of the above visualization shows the top cities in hours to work to pay the mortgage:



Rachael Myrow: "It's a crisis, no doubt..."

The way this word "crisis" is used in "housing crisis" is odd.  "Crisis' means the same in English that it does in the original Greek - "turning point".  We use it that way most of the time with "if... then..." phrases. "If the fever doesn't break then we must operate."  "If negotiations fail then there will be a strike."  In regard to housing, "if...what(?) then...what(?)"??

Perhaps it is "if we don't build a lot then housing will be unaffordable?" (Just a guess).  If that is the "crisis" then let's look at affordability.

"Housing affordability" in California has been varying in a range for decades.  Affordability has been both better and worse in California over the last 34 years as seen in the following graph.  At the moment affordability is towards the lower bound.  It was worse in the early 1990's and in 2002-2008.  See following graph (click image to enlarge):
CA housing "affordability" has been mimicking national affordability.
Looked at by County we see that over the last 27 years back to 1991 affordability has not been very high in any of LA, SF, or Santa Clara County (Silicon Valley).  We are currently at neither the lowest  nor the highest levels of affordability.

Data from California Association of Realtors
https://www.car.org/marketdata/data/haitraditional
A bigger question...

If we can't say what makes this a "crisis", how will we know when it isn't a "crisis"?  Is affordability the benchmark?  If so, then does the fact it is well within a range going back to 1984 mean California has been in a crisis for 34 years?  If affordability is the benchmark, then has Fifth Ave. in NYC been in a "crisis" for over a hundred years?  Has the Champs Elysee' in Paris been in a "crisis" since Napoleon?


Rachael Myrow: "But if there's widespread agreement about the causes of the crisis, hello, Silicon Valley..."

Well here we are again.  What is the crisis?  What is this "widespread agreement" that Ms. Myrow is postulating?  And why highlight Silicon Valley when San Francisco has added more jobs overall than any other county and, as we saw in the above chart, is far less affordable than Santa Clara County (containing most of Silicon Valley)?
Of all counties, San Francisco added the most jobs by far.
c.f., https://meetingthetwain.blogspot.com/2018/03/sf-bay-area-1-live-work-commute.html
I seem to have contradicted every word she said.  This is not a reflection on her but on the "conventional wisdom" which she articulates so well.  While certainly "conventional" it is not very "wise" when compared to, you know, actual data.  

I do think Ms. Myrow was trying to be fair.  In later parts of the Forum, she asked reporter Guy Marzaroti if market forces wouldn't do the job as well as CASA.  She also asked Mr. Marzaroti if there were not some legitimate concerns of residents about traffic, etc. as opposed to the NIMBY-YIMBY narrative that Mr. Marzaroti was advancing.


Conclusion of Part I - Rachael Myrow

This concludes our analysis of Rachael Myrow's introductory comments. 

Like most journalists, Ms. Myrow covers a wide range of topics in a year and cannot reasonably be expected to be expert in all of them.  The phrase "a mile wide and an inch deep" comes to mind for most journalists.  I am not faulting Ms. Myrow for her statements.

For this part of the analysis we are at...



KQED Forum on CASA - Analysis II

Analysis of KQED on CASA

Part II

This is an analysis of radio station KQED Forum's conversation on CASA on February 2019.  Host Rachael Myrow, talked with Susan Kirsch of "Livable California", Michael Corruvabias of TMG Partners, (a housing development company), and Guy Marzorati, reporter for KQED.

Link to this post: https://meetingthetwain.blogspot.com/2019/02/kqed-forum-casa-analysis-ii.html

Part I of the analysis is here: https://meetingthetwain.blogspot.com/2019/02/kqed-forum-on-casa-analysis-i.html

The transcript can be found here:
https://meetingthetwain.blogspot.com/2019/02/kqed-forum-casa-susan-kirsch-of.html

Having stated the issue (see Part I), the KQED Forum host Rachael Myrow introduces the three other discussion participants or "guests".


Guy Marzorati

The first guest to speak in depth is Guy Marzorati who is KQED's California Politics and Government reporter.  


Guy Marzorati: "the Bay Area, we talk about it as a unified housing market, why don't we govern it in a unified way, when it comes to housing"

It sounds very reasonable to a transfer of planning from local governments to a regional organization.  But this is not what CASA is trying to do.  CASA doesn't transfer planning authority - it eliminates planning authority.  City planning is replaced with an extreme libertarian laissez faire permission to build pretty much any sort of housing anywhere within very, very loose and broad guidelines.  CASA is not a transfer of authority, it is an abdication of authority.

Currently, local governments make "land use policy" to decide where housing, retail, and commercial office space can be placed.  This is based on the traffic capacity of roads, access to schools, parks, transit, public appearance, shadows over housing - all the things that keep a city livable - a place people want to live.  Special situations go to a city council which looks at the particular conditions of that block and neighborhood to decide if a particular plan makes sense and is worth a change in pre-existing guidelines and plans.

CASA will eliminate this planning.  CASA as embodied in Senator Scott Wiener's SB50 (CA Senate Bill 50) essentially leaves every city at the mercy of whatever housing developers decide to build wherever they decide to build it, within some very vague limits - subject to change at any time by the legislature.

I need to point out that real estate & construction, rental, leasing, sales, etc. - is the largest sector of California's economy at about 19% (16% real estate + 3% construction).  For comparison, agriculture is 2%, retail trade is 6%.  See following pie chart. (click image to enlarge).

http://californiacentral.org/economy/
This prominence is also seen below in the list of contributors to Senator Scott Wiener's campaign for state senate.  Top contributors are construction unions and realtors.  Scott Wiener's  SB50 is the major component of legislation needed to make CASA a reality.
https://votesmart.org/candidate/campaign-finance/129655/scott-wiener#.XHFer6JKiUm

Guy Marzorati: "...the most high profile ...is this idea to mandate higher density near transit stops".

This is true as far as it goes - which isn't very far.

Senator Wiener's SB50 also allows 6-7 story buildings (including "density bonuses") anywhere in neighborhoods with "good" schools, or lots of jobs - however that might be defined now - or re-defined in the future.  It allows apartment-condo construction with no requirement for any off-street parking, external appearance, or zoning.  

Under SB-50 an apartment can be as ugly as sin, in the most inaccessible part of a city, tower over neighboring single family homes, block the sun from all the neighbors, apt. residents can completely fill the streets with parking - as long as it is in an area with lots of jobs, or good schools or a bus stop with 'frequent' service.

What defines an area as a 'good school', "job-rich", or 'transit-rich' neighborhood to qualify for this will be determined by bureaucrats in Sacramento - and changed at any time in the future without any public recourse. See the conceptualization images below:

Before
Calabazas Blvd. in Santa Clara - within 1/4 mile of a bus stop on El Camino with frequent service. 
Lots of jobs nearby, too.
 After
Perfectly legal under SB50 - no off street parking required.
This is known as TOD - "Transit Oriented Development"
because there is a bus stop within walking distance. 
(Depending on how far you want to walk.)



Guy Marzorati: "...the big overriding [idea] ... is ...housing governance. ... It's a creative body that can raise taxes and raise revenue to spend on housing in the Bay Area. That's really not clearly defined.  It'll be interesting to see how that shapes out in Sacramento."

Interesting, indeed.

Of the 101 cities in the SF Bay area, including all nine counties that touch the bay, only 3 cities were represented in designing CASA - San Francisco, Oakland, and San Jose.  By population, those three cities represent about 2.4M people out of the total nine county population of 7.35M.  I.e., only about one person in three in the nine bay area counties lives in those three large cities.  The representatives of the other two-thirds were left out.

The over-whelming number of participants in the formulation of CASA were businesses, apartment owners and builders - some of them non-profit builders - but all of them with a vested interest in building more housing if they want to keep their paycheck coming.  We can reasonably assume that they will dominate the "creative body", just as they dominated the CASA formulation and raise taxes at will.

You might think that they can't raise taxes because of Prop 13, but part of CASA is to take part of the increase in property taxes due to all new development (including property taxes not due to CASA-SB50) and put that towards further development.  So it won't be an increase in taxes, just an increase in what this yet-to-be-determined regional planning body gets from existing property tax rates through growth.  For now, they are asking for 20% of the property tax increase but once they get 20% they have established the principal.  Once that is part of the law then changing it from 20% to 30%, 50%, or 100% will be no problem at all.

The increased population and density will be creating more problems with school crowding, and traffic, public safety staff, and roads yet cities and counties will have less money to deal with these problems.  Increased tax revenue will be siphoned off - to create more construction, causing more problems with school crowding, ... etc., etc.

Cities with understaffed police and fire departments, over-crowded schools, and clogged roads are not nice places to live in.  Making California unpleasant to live in with city and county bankruptcies, etc., etc. is guaranteed to bring down California's housing prices.  Is that the intent?

People are already voting with their feet.  See U-Haul Index (as of January 2019) in chart below - San Francisco is 2 up from the bottom red bar (out-migration) - just above Philadelphia and just below Sacramento. (click image to enlarge):


Guy Marzorati: "... if you look at this on a population basis, San Francisco, San Jose, Oakland represent far more people in the Bay Area than the smaller cities, ... It's often the push and pull there, against the lawmakers representing Marin and smaller places in the North Bay.

Mr. Marzaroti is wildly incorrect on population.  A bit surprising since he reports on the bay area's KQED radio and TV station.  This is in response to a comment from KQED Forum guest Susan Kirsch who lives in Marin County.  It is true that Marin County is sparsely populated with a total population of only 221,000.  However, Ms. Kirsch is not representing a Marin-based organization but "Livable California" and speaking about all nine counties that border the bay. 

To repeat, there are 7.35M people in the nine Bay Area counties and the three cities Mr. Marzorati mentioned include only about 2.4M - roughly one third of the population.  Mr. Marzorati appears to be trivializing the issue of democratic representation by inferring that only small towns in Marin County were left out.

The principal issue here is KQED's reporter Guy Marzorati's bias.  There is a theory that journalists should be unbiased in their reporting giving equal weight to all sides of an issue.  Another theory is that people, by their nature, cannot be unbiased so it is best that the reporter reveals their bias and gives enough information and sources for the reader to decide for themselves - fully aware of the bias of the reporter.

Mr. Mazorati fails as a journalist by both these theories.  

This matters.  Listeners expect something as easily verified as population to be accurate when stated by a reporter.  The casual listener will get from this exchange that most people were represented in the CASA discussion except for a few chablis-swilling hot-tubbers of Marin County.

It sounds like his population gaffe was something made up on the spot to counter Ms. Kirsch's comment on representation.  He is the first to even mention Marin County during "Forum" so it appears to be his own idiosyncratic view of democratic participation he is advancing: only big cities count - smaller towns are only in Marin.  He presumably knew where Susan Kirsch lives and tailored his reply around that.



Guy Marzorati: "... in Sacramento, it's much harder to get rent protections passed. So the idea is maybe, if they come in concert with some of these other streamlining proposals, maybe that's how to get it done."

Rent protections include rent control, and tenant's rights regarding evictions that some "tenant advocates" feel are very weak in the "CASA Compact".  The Costa Hawkins state law from the 1990's prohibits any city in California from enacting rent control except in certain limited cases.  A bill to repeal that law never made it out of committee in 2018.  A ballot measure in 2018 that would have allowed rent control of any form in any jurisdiction in California failed by roughly 60-40.

The MTC-CASA argument is that if there are to be any rent protections they can only come as part of a grand bargain between developers and tenant advocates.  This seems reasonable enough.  The concern of some is that the renter protections are so weak as to be effectively meaningless.  

Others are concerned that the tenant protections which are suggested could easily be ignored by the legislature which is under no compulsion whatever to keep together all the suggested aspects of the "CASA Compact".  The CASA backers, having obtained agreement from various tenant advocacy groups, could keep the names of those groups as having agreed to the package initially regardless of whatever emerges from the legislature .


Guy Marzorati: "... a bigger question of are people willing to accept this idea of regional government."

This is directed at Susan Kirsch of "Livable California" who is advocating for local control of zoning and development.  Ms. Kirsch replies in effect "Bay Area transportation is a mess and that is MTC's responsibility.  Why should we think they can succeed in housing when they are such spectacular failures in transportation?"

If Mr. Marzorati is looking for a "bigger question" that would be the big one for him to answer.

But the real issue is that the CASA Compact doesn't attempt to do any regional planning.  It is simply giving free reign to builders to do what they want within very loose guidelines and providing government money.  CASA is a Libertarian fantasy but supported by tax money and administered by an unelected bureaucracy - it would embarrass Ayn Rand.

Guy Marzorati: "... it's a pull really to take that voice away from local council members who are really subject to their constituents kind of as their job is."

Ignoring the fractured syntax, this summarizes what Mr. Marzorati and CASA are really all about.

Just before this statement Mr. Marzorati speaks well of the YIMBY movement and this statement is emblematic of that movement.  They don't like people having a voice in the environment they live in.  How does that fare in the polls?  In 2018 Sonja Trauss - founder of the YIMBY movement - ran for one of the supervisor positions in the City and County of San Francisco.  With the backing of the main SF newspaper, and lots of money she got 17% of the vote in a 3-way race.  Lots of YIMBY noise - not many votes.

This whole CASA-YIMBY-SB50 thing is a weird and incoherent mish-mash of Libertarian-ism and Stalinist central planning to be implemented by builders with public tax money.

End of analysis of Mr. Marzorati's discussion.


Michael Covarrubias

The other participant in the discussion was Michael Covarrubias, head of housing development corporation TMG.  They specialize in "infill" development.  His interest in having little or no restraint on his corporation's ability to build whatever they want, wherever they want - with government subsidies - is too transparent to merit much discussion so I will cite just one of his early comments:

Michael Covarrubias:  "...it's not a full democracy...this is intended to be a group that represents labor unions, transit folks, corporate users, non-profits, for-profits, all of the places we felt, including the protection side, needed representation."

The people and groups making money building stuff - but not the voters and residents who will be affected by it and pay for it.  This speaks for itself.

The only other comment I will make on his participation is that it is significant that MTC did not send a representative.  Instead Mr. Covarrubias - a private developer - spoke for them.  MTC really should just give up - fold their tents and go away.  They can't do anything about transportation so in desperation for something to justify their existence they turn to housing and go along with whatever some developer thinks he can get away with.

Nothing against Mr. Covarrubias.  I expect developers to try to develop any way they can.  I also expect foxes to eat chickens.  It would be nice if the hen house were not turned over to the foxes.

End of analysis of Mr. Covarrubias' statement



Susan Kirsch

Ms. Kirsch carried herself heroically in this uneven battle and all of us in "Livable California" are proud of her.  I am biased, of course, and will simply advise everyone to read her comments in the transcript linked to above and judge for themselves.


End of Part II

Friday, February 8, 2019

KQED Forum - CASA - Susan Kirsch of Liveable California

Transcript of KQED Forum on CASA
January 21, 2019

Background:

On January 21, 2019, Susan Kirsch of "Livable California" was interviewed on KQED by Rachel Myrow about "CASA".  Below is a transcription of the interview, very lightly edited for readability.

Link to this post for sharing: https://meetingthetwain.blogspot.com/2019/02/kqed-forum-casa-susan-kirsch-of.html

CASA is a set of proposals to the California legislature on housing.  It originated from the San Francisco "Metropolitan Transportation Commission" (MTC).  The "Association of Bay Area Governments" (ABAG) is essentially under MTC now and they also approved it.  (CASA means "house" in Spanish - it is not an acronym.) 

Link to Google Docs downloadable transcript here:
https://docs.google.com/document/d/1CAYxuXo8LJ5hcBmgxf99Yl5iUS5GgBaP9YSaD_o3lH8/edit?usp=sharing

Analyses here:
Part I
https://meetingthetwain.blogspot.com/2019/02/kqed-forum-on-casa-analysis-i.html
Part II
https://meetingthetwain.blogspot.com/2019/02/kqed-forum-casa-analysis-ii.html

The CASA proposals, if enacted into law by the California legislature, would remove a great deal of control from local municipalities and counties, designate publicly owned property for housing, and reallocate some growth in taxes that otherwise would go to cities, counties, and school districts.  The proposals would allow builders to construct housing with little or no regulation if certain very broad conditions were met.  It would not be a transfer of authority from local to state since state authorities would not exercise the same oversight that cities and counties currently do.  It is rather a removal of regulation.  The CASA goal is to further housing construction with the implicit hope that prices would then come down.

Invited guests (in alphabetical order) were:

Michael Covarrubias, chairman and CEO, TMG partners; co-chair of CASA
Susan Kirsch, founder, Livable California
Guy Marzorati, reporter, KQED's California Politics and Government Desk
Paola Laverde, chair, Berkeley Rent Stabilization Board

Livable California's website is here:  https://www.livablecalifornia.org/


Download (podcast) available at https://www.kqed.org/forum.
(Search for "Kirsch")
MTC's CASA website is here: https://mtc.ca.gov/our-work/plans-projects/casa-committee-house-bay-area


I. Introduction

Rachael Myrow - Click image to enlarge
https://www.kqed.org/author/rachael-myrow
Rachael Myrow: From KQED Public Radio in San Francisco, I'm Rachael Myrow. Any conversation about massively expanding housing in the Bay Area to address the crisis we're in, is going to be contentious. So now that the board of the Association of Bay Area Governments has voted to endorse a ten point plan, the arguments for it and against it can start. Something needs to be done about the housing crisis, but is this plan, or parts of it, the best way forward?

This hour, we'll talk to people on multiple sides about the proposal put forward by the Committee to House the Bay Area Compact, or CASA.

Construction cranes everywhere. L.A. style traffic everywhere. Millions struggling to pay the rent, let alone buy a home in the San Francisco Bay Area. It's a crisis, no doubt and the Committee to House the Bay Area, aka, CASA, has offered up a ten point plan, endorsed by the Metropolitan Transportation Commission [MTC] and the Association of Bay Area Governments [ABAG].

But if there's widespread agreement about the causes of the crisis - Hello, Silicon Valley! - there is widespread disagreement about what should be done, and whether this plan is the best way forward.

We'll hear from boosters and critics this morning and we'll hear from our own Guy Marzorati, KQED's California Politics and Government Desk.

And we have also in the studio, Susan Kirsch, founder of "Livable California", a coalition of elected and community leaders who oppose the CASA plan.

And last, but not least, Michael Covarrubius.  He is chairman and CEO of TMG partners, a San Francisco based development company.  He is also co-chair of CASA.


II. CASA Basics - Guy Marzorati

Guy Marzorati - Click image to enlarge
https://www.kqed.org/author/gmarzorati
Rachael Myrow: Guy, why don't we start with you.  Give us the basics.  This is a non-binding plan, right?  And it heads to Sacramento from here?

Guy Marzorati: Right, and it starts with this big idea that the Bay Area, we talk about it as a unified housing market, why don't we govern it in a unified way, when it comes to housing.  And so, this group, CASA, has put together, through a steering committee, ten different proposals, and you're right, many of them will need to go to the state capital and get approval there.

I think this is just the latest chapter in this kind of tug and pull about who should control housing decisions. Historically, it's been at the local level in California. The state has tried to wrest some control in recent years. And, this kind of throws a new element in there as well. Maybe the regional is kind of the sweet spot in the middle as a way to govern housing.

Rachael Myrow: Now, ten points, we're not going to get to all of them, at least at the top of this hour, but let me ask you to just talk about maybe a couple of the biggest, most controversial questions.

Guy Marzorati: Right, and there's a few that listeners might have already heard of that are already moving ahead in Sacramento. I think the most high profile of which is this idea to mandate higher density near transit stops.  This was a big debate last year, state senator Scott Wiener's bill, introduced that.  He's back at it again this year.  This is an element that's part of this CASA proposal.

Then there's also things that are more directed towards renters, whether it's direct assistance to renters and legal assistance, cash assistance, and even a region-wide rent cap. And, each individual of these proposals has been debated as to how strong it is, whether there's a balance here, between developer interests and tenant interests.

I think the big overriding one that's really still yet to be baked out, is this idea of the housing governance. What will this look like?  It's a creative body that can raise taxes and raise revenue to spend on housing in the Bay Area.  That's really not clearly defined. It'll be interesting to see how that shapes out in Sacramento.


III. CASA Makeup - Michael Covarrubius

Michael Covarrubias - Click image to enlarge
http://www.tmgpartners.com/team

Rachael Myrow: Michael, tell us a little bit about the makeup of CASA. I've read a lot of complaints online. People saying, why is there so much representation from developers like yourself. Why is that?

Michael Covarrubias: Well, if you look at the list of who are on the technical committees, who are on the steering committees, who the moderators are, it's not that way. I have the list in front of me, and it goes from large cities and small cities. It goes through corporations that are the subject of a lot of these attacks, in terms of their creating the problem. It goes from counties, representatives, legal folks, Habitat for Humanity, Hamilton Families, SPUR, I mean, it goes on and on and on.

There are thirty members of the technical committee, and twenty of the steering committee and it was intended to be a cross section of many, many, many interests. As we said, in some of the discussions, it's not a full democracy. We didn't take a vote of the nine million people in the Bay Area because, obviously, that was not feasible. (Note: the total population of the nine counties in the San Francisco Bay area is 7.35 million, not nine million. Ed.) But this is intended to be a group that represents labor unions, transit folks, corporate users, non-profits, for-profits, all of the places we felt, including the protection side, needed representation. So that was the intent.


IV. Critique by Susan Kirsch
Susan Kirsch
Rachael Myrow: Susan, do you agree with that assessment? Is this ... I think of the old phrase, don't let the perfect be the enemy of the good. Was this good enough?

Susan Kirsch: Well, many of us think, this was not good enough and I'm so glad you're doing this show, because there are so many people who care and just care so deeply about this topic. And some of the people who care the most are those elected city council members, the mayors and the members in the 98 cities that were excluded from this process.

Rachael Myrow: Well, okay. I'm going to throw back at you, right.  Like 98 cities, that sounds like chaos. Like, if you're going to have a committee that's going to come up with a regional plan, you’ve got to come up with a short list first of deciders.

Susan Kirsch: Yes, but the short list, to include the three biggest cities and what is often referred to as the representation from the smaller city was the representative Jake MacKenzie, who was appropriate to be representing Rohnert Park, a relatively small city [note: Rohnert Park population 40,971, mg], because he also sits on the MTC Board, he was on the CASA board, and he is on the ABAG Board. But when his own city council heard about this plan on January 8th, for the first time, they were outraged that as someone who might have brought word to them about what was happening, they were hearing about it for the first time.  

As other members of city councils have said and have given in public testimony, the fact that the majority of the cities were excluded - there was not a representative who was getting word back to the smaller, medium size cities. That's unfair, and it's a stacked deck for people. 

So, as much as there is caring, everybody wanting to work on solving this problem, to blame the cities and then not give them a seat at the table, seems highly unfair.  It's difficult to get to a product that will work, a plan that will work, without including the people who you're blaming for the problem.  That makes no sense.


V.  Marzorati & Covarrubias - Resident Input

Rachael Myrow: Guy, you've been watching ... Sorry, Michael, I'll get to you in just a moment ... you've been watching this as a reporter for some time now. Is it your sense that, as the committee was crafting, I understand they had to whittle down from, what was it, more than 50 different proposals that were on the table, were they in actual communication with other communities in the Bay Area?

Guy Marzorati: Well, that's been a huge criticism as this plan has gone before both the MTC and ABAG, that Susan brings up, smaller cities saying, hey, we were not made aware of this, we were not consulted throughout the process, and it gets to the representation of the groups that created this. 
There is a lot of diversity.  Professionally, I think Susan might say there wasn't enough diversity regionally, in terms of who made up these policies. 

That being said, if you look at this on a population basis, San Francisco, San Jose, Oakland represent far more people in the Bay Area than the smaller cities [those three cities represent 33% of the nine-county SF Bay area - see details below, mg], and so I think that's the push and pull that you're going to get at, even at the state legislature, it's often the more urban lawmakers, both the chairs of the housing committees in both the Senate and Assembly, represent San Francisco. It's often the push and pull there, against the lawmakers representing Marin and smaller places in the North Bay.  (Note:  Mr. Marzorati made a significant error about population above.  The total population of the nine counties of the SF Bay area is 7.35M. Total population of the three cities - San Francisco (900,000), San Jose (1,100,000), and Oakland (390,000) - is 2.39M.  Those three cities combined are 33% of the total San Francisco Bay area population. The smaller cities comprise nearly 5M people or 68% of the population – over twice the total population of the three major cities.  mg)

Rachael Myrow: Michael, do you want to talk about that? I live on the peninsula and it seems to me like it would have been a good idea to have cities like Palo Alto or Redwood City, especially at the table.

Michael Covarrubias: Yeah, this is a common conversation we've had and let me start with a fact and work backwards. The Association of Bay Area Governments is that representative group of the 109 cities. They voted last week, 21 to 9 to support this Compact. So, when we talk about the representation, we do believe that the groups were included by being members of ABAG. They all threw in their comments to their representative members and it came out 2-1 in favor of this Compact going forward.

So, factually speaking, we couldn't get to everybody. We did lots of outreach. The meetings were held every month on public meetings at the MTC facility. So, there is no way to satisfy everybody in terms of the connection with folks but when you reach back and say well, what actually happened at the end, MTC approved it 17-3, or something and then ABAG approved it, 21-9. So, we did the best we could. What is underneath all this is the issue of what's the right solution for the region and that's really where the heart of this discussion is.


VI.  Covarrubias - Regionalism

Rachael Myrow: So, let me ask you another question, Michael. You know, driving around, as a citizen of the San Francisco Bay Area, I see construction cranes everywhere, in the East Bay, in the South Bay, in San Francisco. Why do we need to take some ... why do we need ten legislative proposals? Why do we need a new agency? Isn't the market already trying to correct for the lack of housing development in recent decades?

Michael Covarrubias: No. If you look at the math, the number of jobs that have been created, and jobs has gone from the salvation of the Bay Area to the scourge of the Bay Area in ten years when we were pushing 10% unemployment and now we're down to three. The jobs we created weren't met with a housing supply that kept up, and you can do what we have done, talk to all the people that we think might be responsible for that. Our approach at CASA has been, everybody was responsible for that. Everybody took a little bit of blame and therefore, this attempt to fix it, is to look at everybody and say, everybody's got to chip in.

That was the premise of CASA. We said, if everybody sticks with their own silo and says, I'm sorry, my thing is sacrosanct, whether I'm a city, whether I'm a company, whether I'm a taxing agency, whatever it is, if we said, everybody just stays in their own bunker, we will keep doing what we've been doing. So this is an attempt to say we have to do it different, the region deals with transportation as a region, we don't build a freeway in Palo Alto, we build a freeway in the region. So, our approach is, housing needs to be looked at different. It is broken. Anybody who says it's not broken, isn't doing what you just described. They aren't driving the freeways and seeing that the rise of housing prices is unacceptable.


VII.  Kirsch - Resident Representation

Rachael Myrow: Susan, I want to let you jump in here. It does seem to me that nobody wants as much housing as we know needs to be constructed. Maybe there's an argument for having a regional approach that forces people to be more open to new development than they have proven to be, even in recent years.

Susan Kirsch: Well, that could be. I think we should have a lot of options on the table. But a part of the people offering those options should be the local cities, even though they might not have the population numbers, they have long histories of wrestling with the problem and they have tools that have worked pretty darn well, general plans, housing elements. What we come up against is the fact that corporations have not been doing their fair share. And if we really look at this as a part of the success of Silicon Valley, the success of so many jobs and being such an attractive place to come, that means that a part of the greater responsibility to solve this is on the shoulders of the corporations.

Rachael Myrow: And what do you mean when you say that? What would be their fair share, as you see it?

Susan Kirsch: Well, there are the people who are talking about fair share and how to get the right housing/jobs balance. For example, the mayor of Palo Alto was speaking at the event, the CASA hearing, the other night, coming forward with how they're going to meet their goals for having a job/housing balance by the fact that it's going to be a joint process of working together to get that.

But I want to something else to Michael's comment about everybody coming in with agreement on this, the CASA committee, MTC, and ABAG, and I just want to point out one of the kind of, like sleight-of-hands, in how they're using language and deceiving the public, I think, about the agreement.

So, for example, Steve Heminger, Executive Director for MTC, the leader of MTC, talks about the gradients of agreement, whereby they have gotten this agreement.  Any of us who ever did any evaluation things, we're used to five point scales, one is you're really in favor of something, five, you don't like it. But with this plan, along the way, they've used gradients of agreement to say if you vote one through four, you approve it, which has greatly clouded the disagreements and the decisions and the uncertainty that so many people still have about this plan.

Rachael Myrow: So, let me challenge you now. Name one point about the plan that you like, one point about the plan that you dislike.

Susan Kirsch: Well, I like that fact that everybody came together to work on it, excluding 97, 98 of the cities. I like that fact that it came together to do that and I like the fact that it was put together with the idea that those people in the room at that time would listen to each other and would look to hammer out agreements. So, that was ... were you asking me just what I liked about it?

Rachael Myrow: Well, I was thinking of a specific aspect of the plan, not so much the plan itself.

Susan Kirsch: Well, okay and I like the aspect of the plan that they are looking at tenant protections and looking at the vulnerable people who are at the greatest risk of being displaced or gentrification in their communities. I think that's really important.


VIII.  Marzorati - Renter Protection

Rachael Myrow: It's interesting that you mention that. Guy, I'm wondering if you can talk ... in a legislative environment, not too long ago we saw Costa-Hawkins, an attempt to roll it back rebuffed by state lawmakers. So, what is the political likelihood of new tenant protections being enacted?
[Note: Costas-Hawkins is a state law that severely limits rent control ordinances by local jurisdictions.  mg]

Guy Marzorati: And I'll add on top of that, just this past November, voters overwhelmingly rejected this push to expand rent control. [Note: referring to a 2018 statewide ballot initiative that would have repealed Costa-Hawkins state laws restricting rent control, ed.] So I think this is where you get at the crux of the agreement, of finding out what's politically possible. 

I know there's a lot of tenant advocates who are upset that the final CASA agreement, the regional rent cap idea was that, basically consumer price index plus 5% which, compared to other rent control laws that are already on the books, is not a really strict cap. 

That being said, when you look at the art of what's practically feasible in Sacramento, it's much harder to get rent protections passed. That's just a fact. Look at the past history in the state capital. 
So the idea is maybe, if they come in concert with some of these other streamlining proposals, maybe that's how to get it done.

I know, we talked about Steve Heminger. At the last meeting, he talked about this idea of CASA as, in a storm you want to be in a boat, rather than out on your own in the open water. I think that's the pitch they're giving to tenant advocates is look, you're not going to get a rent cap or rent protections on its own in Sacramento, but if paired with some of these other things that you make like less, maybe we all get it done together.


IX.  Kirsch - Regionalism & MTC

Guy Marzorati: But I think, ultimately, the big thing on any of these pushes that they're going to be fighting is this idea of regionalism. I don't know, Susan, if even theoretically, you think that there should be regional government for housing, but I think, even beyond the specific points of this plan, I think there's a bigger question of are people willing to accept this idea of regional government.

Susan Kirsch: So, just on the idea of regionalism. I think it would be so great if we could point to MTC as having been responsible for regional planning and feel greater confidence in what they've done in terms of regional planning to solve our transportation problems. 

But almost any direction you're traveling in the Bay Area, there's congestion and slow down and it's a mess and every year we're getting more and more taxes and fees for bridge tolls and all of that.  So, I would prefer that we would have confidence in MTC as a transportation planning agency before we would see them venturing into how they're going to now be setting regional housing policy for us.

Many of us are skeptical of their capacity to make that movement out of their lane of handling traffic into the lane of handling housing policy, and especially to do that without input from those communities that value and cherish the character and the quality of life in their small communities. The uniqueness of it, not wanting it to be homogenized to be the same as the big cities.


X.  Covarrubias - Regionalism & Approval

Rachael Myrow: I think it bears saying that this 15 year plan calls for producing 35,000 housing units a year in the Bay Area. So, that is what we're talking about here in many ways, the Manhattanization of large parts of the Bay Area.

Michael, one of the most controversial elements in this plan is setting up a new regional taxing authority. Can you explain that idea, that proposal?

Michael Covarrubias: Sure. I've been watching all the politicians on T.V. lately so I've learned to not answer the question that's asked. So if you give me a little leeway, I'd like to just go back and say that the point about the Costa Hawkins and the failure of rent caps is arguably the guts of these ten proposals. All of these issues have not succeeded, whether it's a current round of ADUs or just cause, they've all failed on their own. And our premise is, if you put them together, as Brian said, they have a better chance of passing.

The second point is, every meeting we've had for the last eighteen months, has sounded like Susan's comment where the small cities are pointing to the big corporations and it's their fault. And then, the unions were pointing at the small cities and everybody points at everybody 'cause that's what everybody does. Our attempt was to get away from that. So that's why this Compact works best, only if these items stick together.

The one to four gradient which was used at the steering committee level, number four said, I don't like some of this stuff in here, but I'll go along with it for the greater good.

Rachael Myrow: But Michael, I'm going to steer you back to my question now. There are a lot of people who are thinking that if we create a new agency, we just create a new body to point fingers at.

Michael Covarrubias: Sure, sure, sure. I agree. The new agency is, and I will say this somewhat tongue-in-cheek, was a little bit above our pay grade at CASA. We realized we needed an agency. We realized it brought up a lot of angst. We realized that a lot of people don't like the way certain of our agencies work now, all, probably, appropriate comments. So what we said was, somebody's got to run this.

So when we went to the state legislature, the area caucus, and say to them, you've got to figure this out.  We're not figuring it out, we didn't give a proposal here that says, ‘this is who it is, this is who's going to run it’.  We sort of gave some ideas and when you get to the tax issue, it will be the same.

We didn't solve it and say you've got to do income tax or sales tax; we said we’ve got to raise money. So a couple of the issues, I will say we kicked the can down the road, we suggested these have to be run by an agency, but that's not part of what we're doing.

Rachael Myrow: And there's no agency at the state level that might take this on?

Michael Covarrubias: Sure, you know, there's HCD, MTC could do it, there's a lot of people that could do it. We didn't make a recommendation on a specific agency.


XI.  Marzorati - Sacramento Politics

Rachael Myrow: Guy, tell us, do we have a sense of where Gavin Newsom comes down on any or all of this?

Guy Marzorati: He loves it.  He even mentioned in his budget press conference he brought up this CASA idea, unprovoked, he brought it up as an idea of something that he likes, a regional approach.  I asked him if he liked the specific proposals to move through, he said he hadn't looked through the specifics but he really likes the work that's being done. I think many of these proposals line up with what he's trying to achieve on a state level, whether it's through streamlining these really ambitious development goals, even something as simple as making a registry of public lands that could be converted into affordable housing is something he's already pushing on the state level.  That's in the CASA Compact.

So I think there's, in Sacramento they have real strong allies, for people who want a regional proposal.  I mentioned Scott Wiener who chairs the housing committee in the Senate.  David Chiu who chairs the housing committee in the Assembly and then Governor Newsom is definitely in support. So there's definitely people who have vested interest in this moving forward in some fashion in Sacramento. But again, I think the big question is this taxing authority, the power of the purse, who does that lie with, and what does it look like?

Rachael Myrow: And as we roll to a close on the first half hour here, can you tell us what's first, like what is the first thing that's going to be taken out?

Guy Marzorati: So there's two bills that have already been introduced that address specific things in here. I mentioned the bill around increasing density around transit. There's also a bill from Senator Nancy Skinner of Berkeley, that has the rental assistance, both emergency cash assistance and emergency legal assistance.  That's already been introduced in Sacramento.  I think in the coming weeks we'll probably see some of these other specific proposals get introduced as state bills.


XII.  Laverde, Covarrubias & Marzorati - Renter Protections

Paola Laverde - City of Berkeley Rent Stabilization
https://www.cityofberkeley.info/Rent_Stabilization_Board/Home/Meet/Contact_the_Board.aspx
Rachael Myrow: ...With us on the phone this half hour, Paola Laverde, chair of the Berkeley Rent Stabilization Board.  Paola, thank you for joining us today.

So, Paola, tell us what you make of this plan. There are ten points in it. Are you implacably opposed to all of them, to some of them?

Paola Laverde: Well, I'm really here to talk about the elements that are there to protect renters. I have to say, I'm cautiously optimistic on these. It is a great starting point because CASA is looking at preservation aspects and they want to provide just-cause eviction. They want to provide a rent cap, rent assistance, legal assistance. However, if we look at the details of the elements and look at the policies, they don't look like the expertise of people who have been working in the area of tenant protection for decades.

As it's written, these policies will not protect the most vulnerable that need protection. The element number 1 that talks about a just-cause eviction, that's great.  However, the element is looking at providing just-cause eviction only after 12 months of tenancy.  So, a tenant is vulnerable during the first 12 months of their tenancy. It offers no protection to tenants.  We need a meaningful rent cap policy to be adopted as well as the just-cause eviction.

When we look at element number two, which is a rent cap, it's offering 5% plus CPI. Last year, the CPI for the San Jose, Oakland and San Francisco region was 3.9%. So under CASA they're suggesting an 8.9% rent increases on already extremely high rents. I'm a state employee. I'm lucky if I get a 3% salary increase. I know tenants and many, many, salaried workers and just workers in small businesses do not get salary increases. So what this rent cap will do is not allow ... is a recipe for displacement of renters after a certain period of time.

So, if we're going to talk about protection of renters, we need these two joined together. We need just-cause eviction. Otherwise, landlords will be able to raise rents extremely high and then evict tenants for cause, for not paying rent. And we also need a rent cap but not just to include just-cause eviction because landlords will be able to raise the rents to evict renters under vacancy decontrol.

Rachael Myrow: Michael ... sorry, I'm just going to break in there Paola, because we're not going to have enough time to get through all of the points, but I do want to direct one of the things that you've, one of the points that you've raised to Michael.  Michael, surely these issues were brought up in conversation before this plan was released.

Michael Covarrubias: Oh my God, yes. And again, this is an attempt to try to get people who don't want to agree to rent caps at all. As I think Guy pointed out, it got beat soundly at the state level with Costa Hawkins.  We tried to come up with something that we had to get the Apartment Association, we had to get the Building Industry Association, we had to get all the folks who spend their daily lives doing the tenant protections, to agree to something that could get past a group that was not ever going to agree on anything.

So that's what every one of these components is, they are issues that have failed.  They haven't been agreed to but when you put them all together we got folks to agree. And yes, 8.9% sounds high. That's not a required increase. No one has to increase rents and in today's market, as you've probably read, rents have sort of peaked. So this doesn't mean you're just going to raise your rents 10% because you'll lose tenants. It means you can't go any more than 10%.

Rachael Myrow: I hear you, Paola, trying to get in there.

Paola Laverde: Yeah, but the element calls for banking rent increases. Yeah, so a landlord can't raise the rent this year, but next year can raise the rent in excess of the element, more than ten to fifteen percent. 

What is good about the CASA Compact though, I have to say, it is a starting point. It is a starting point.  And I'm very happy that CASA does look at the need for tenant protections. But these are a starting point.  These are laughable.  The rent cap is a laughable increase.  It is way higher than what the average rate of increases of already high rents are in the Bay Area.  About 3% is the rent increase, if you look at rent increases in cities that don't have rent control.

But this is a starting point that we can look at. But renters ... you know, today is Martin Luther King's day, we are celebrating his birthday. And we need to look at it through his lens.  He taught us that we need to view things through the lens of the heart and protect the weakest and the most vulnerable in our society.  And the way these protections are being put out, they're not protecting the most vulnerable.  We are going to get displacement.  We are going to get more gentrification.  We are going to get people being moved out because these tenant protections do not go far enough.

Rachael Myrow: I'm going to let Guy jump in here. Briefly, because we've got so many calls and comments.

Guy Marzorati: Right. I just want to put the rent increases in perspective for people. We're talking a lot about CPI.  I think if just you can think about it as if you're paying $1500 dollars for rent. Under a rent control in San Francisco the allowable increase would be about $40, this would mean it could be up to a $140.  But as Paola points out, it's a starting point.  We talked about that one year gap that's built in there saying that the just-cause provisions wouldn't kick in until after one year, that came up at the ABAG meeting and there were amendments put in, asking state lawmakers to, when this gets to Sacramento, to remove that one year period. So, this can all be worked out at the capital.

Paola Laverde: In that legislation, you know we need to look at it and be sure whatever legislation is being put out, that it does actually provide protections for the most vulnerable and we're going to be keeping an eye on that because tenants right now have no voice. And I also want to mention that Proposition 10 [Note: Prop 10 was the initiative to repeal Costa-Hawkins, mg] actually won in Alameda County and won in Berkeley and won in San Francisco. So, although it did ... and it won in seven other cities in Southern California. It was not a total disaster. And so, Prop 10 did win. So we have to take a look at where it won and not say ... it won in Berkeley and won in Alameda County.

Michael Covarrubias: It lost two to one, almost two to one in the state. That's all that counts.


XIII.  Kirsch - Big Tech Responsibility

Rachael Myrow: Well, okay, Michael, we're going to put that on pause right now. I do want to get to some listener comments and questions. 

 - Tess writes, “Blaming cities for not building housing is wrong. The three largest cities have thousands of housing units permitted but not built. Blame tech for bringing jobs, blame international finance for not funding, not cities.”

 - Katherine writes, “the tech companies aren't policy makers, they can only do what the cities will allow them to do.”

Rachael Myrow: Susan, this sounds like your bailiwick. What do we want to see tech companies do to counter balance the fact that they are bringing in so many new jobs.

Susan Kirsch: Well, I think the first thing to do is to bring them to the table with local communities, the way some of the big cities have begun to do. But when we look at the amount of profits, the record breaking profits that corporations have, it's impressive to any of us to see, like Microsoft in Seattle, making a loan of $500 million dollars. We need to get bigger numbers closer to that amount.  Mountain View did what? $10 million, which is also a really impressive number. But they need to be doing more of their fair share so that it's proportional. If we think of-

Rachael Myrow: We see Google expanding in downtown San Jose, housing is a part of that plan. Facebook has proposed a massive project in Menlo Park. Is this not what we're talking about?

Susan Kirsch: Well, we're talking about that, but what's often being overlooked is what the long term infrastructure costs are going to be for the cities as these companies come in with the thousands of people who are going to be having jobs in that city. 

And if we don't have the transportation, which is a part of where MTC has not done its job, to make sure we've got good transportation systems. Then we have cities still haven't if the population does live there. Schools for the population, the roadways, the parks, the water, the sewer systems, there are so many aspects to the infrastructure, which cities must be making sure that they're going to get funding to support those costs, to keep putting those on taxpayers is not going to be enough.


XIV.  Marzorati - SF Bay Population

Rachael Myrow: A listener writes, “rather than looking to pave over the Bay Area in order to accommodate endless numbers of newcomers, it is time to stabilize population growth. ... Read that as immigration reduction, in a domestic sense. ... and direct growth to other areas of the country. How can we best discourage population growth, and redirect it elsewhere?”

Rachael Myrow: Guy, is anybody in politics talking in those terms?

Guy Marzorati: No, I don't think, in population stabilization, I haven't heard those words. But I think that has been a criticism of this plan is that it didn't take into account the Bay Area job market and how that interacts with the housing market. This is really just focused on housing.

I will say though, there is growing political appetite in the region to tax businesses to address things like housing.  Wild success this past November on the ballot.  Prop C passed in San Francisco, a tax on big businesses.  There was Measure P in Mountain View, a head tax.  Those are all things that are kind of proposed in this CASA plan, that you could end up seeing.  So I think people are willing to ask big businesses to pay more.  So that could be an ingredient in the revenue, but I'm not sure that, when it comes to actually excluding businesses or pushing businesses out of the Bay Area, I'm not sure the business groups that are in this compromise would be okay with that.


XV.  Covarrubias - Densification

Rachael Myrow: Marie writes, “My small Marin town Fairfax, population 7,000, has been labeled by ABAG as suburban and is therefore subjected to certain housing addition requirements. I assert Fairfax is sub-rural, attached more to agricultural West Marin. Why must we suddenly sacrifice our small town lifestyle and aesthetics to instantly supply housing for the hundreds of thousands of corporate workers swarming into the Bay Area?”

Rachael Myrow: Michael, that sounds like a question for you.

Michael Covarrubias: Yeah, it's hard to have an argument against something that's that extreme. That's not what this is doing. And if you don't have some of these slides in front of you it's hard to visualize. But the tax proposal that we have, for example, addresses property owners, developers, employers, local governments, tax payers and philanthropic groups. We have made an effort in this Compact to say everybody needs to chip in and when somebody points to somebody else and says it's not my problem, it's theirs, that's when this falls apart.

So that's why the Compact, when you look at every item, you will see that everybody's saying we're prepared to do something.  And, if everybody does a little, and I agree that it's not the best rent cap that's ever been invented.  All the cities that have rent control we don't take that away.  All the cities that are building on transit, we don't take that away.  This Compact looks at places that aren't doing much, aren't doing their fair share and tries to get everybody to get towards the center.  So every argument about one piece of it that they don't like is exactly the problem and it's what we've said, there's something in here for everybody to hate.

Rachael Myrow: Well, so Michael, let me continue to press you on a phrase you just used, fair share. And Marie had, I don't want to say extreme, but, you know, Fairfax is out there, but there are communities where I imagine lots of homeowners, individual homeowners saying, ‘look I moved to fill-in-the-blank because I love my expansive one-story ranch house with its lawn and my close-knit community. I hear ideas about stacking and packing, you know, my community with multi-story condo complexes, and that doesn't sound like that Bay Area I want to live in anymore.’

Michael Covarrubias: Yeah, I hear that and we are cognizant of that and not every city is the same and one solution as we know, doesn't fit all. So these solutions are tended to be towards high density transit areas, where there's a train station or there's a BART station, high transit bus stations. It's not intended to solve the Cupertino Apple complex in Fairfax or Fairfield. It's not intended to make those kinds of fits. It's intended to make everything a little more dense if we can, near transit. It's intended to also throw in all the protection and preservation items. It's ... ADUs for example, is a huge part of this Compact. It's the one thing I think we can say, everybody loves ADUs.

Rachael Myrow: What's ADUs?

Michael Covarrubias: An Accessory Dwelling Unit. They used to be known as Granny flats.

Susan Kirsch: So, if I can jump in there, just to say, in today's Marin Independent Journal, there is the editorial about help ease the housing crisis and earn some money too. Which is about ADUs which is to the point, we may not need a CASA Compact and we may not need a new regional agency when we already have ABAG and that this article about the ADUs is what's already being done in so many communities.

Rachael Myrow: And yet, you do also hear headlines about communities resisting, or maybe we'll get to the ADU question in two or three or seven years.

Michael Covarrubias: ADU is a regional solution. That was not being done in cities. It's when the Bay Area council went to the state legislators and got the ability to build an ADU down to a building permit, that the ADU started. It took legislation to take a little bit of authority from the cities to say if it's here and it's this size then it works. And again, we're trying to address all the spectrum. We're trying to address the missing middle. Lest we forget the term, first responders, when we have the next event, it doesn't work very well, if we're living north of Antioch and they can't get here and the bridge is crowded. So we got to have people who can live affordably near the big cities, near the small cities, all of it. All of it needs fixing.


XVI.  "Gerald" - MTC vs. ABAG

Rachael Myrow: Now Michael, your point about ABAG leads into our next question from Gerald in Oakland.

Gerald: Yes, I just want to say, first of all, I absolutely agree that there's a regional housing problem and that there ought to be some regional coordination in cooperation with the little towns and cities.  It doesn't mean they get their way necessarily, but it means it needs to be done.  I was happy to hear Mr. Covarrubius say that the Compact had not decided which agency would actually take this over. 

MTC has failed to deal with transportation in the Bay Area for about at least 35 years to where things are way worse now than they used to be, not just because of highway backups, but also because the transit systems aren't functioning as well as they used to in the most cases.

So, therefore, ABAG is already there, it already has a housing element.  It never had enough power to really handle it as it should have and then two years ago that power was taken away from them, in large part, by MTC.  And now here is step two, now they want to take away, not only what was strong about ABAG before, they want to completely take it over.  You got 18 fallible human beings on that board, all appointed, none elected, dominated by a very powerful staff.  And that is not an organization that is equipped to take on this enormous new capability without some kind of major change.

So, I would say if there's going to be regional coordination, maybe they should resurrect ABAG and make it strong enough to do a real role of coordination. Thank you.


XVII.  "Deborah" - Renter Protection

Rachael Myrow: Gerald, thank you so much. I'm just going to let those comments stand as we move now to Deborah, in Concord.

Deborah: I'm the director of a non-profit in Concord. We are one of a handful of community based organizations that were part of the CASA process during the community engagement sessions. I never actually thought I would go on-air to defend the Compact but with some of the comments that are coming out, I feel like I have to.

I think that this balance of tenant protections, preservations, funding and production is actually totally viable. Our community feels very strongly that tenant protections can be strengthened and that some of the other Compact items do have either a lot of detail in them or too little detail in them.

But I feel that we are avoiding the real issue that is looking at the whole region. Smaller cities have been avoiding real solutions. Suburban communities where the issues of jobs housing balance are not the same as our large urban areas and representing the most vulnerable community in Concord, tenant protections is a racial justice issue. Small towns and large towns have to look at the overall needs of the region. And the traffic pattern flows through small cities and large cities, even those that don't want to change the character of their town.

So we have to look at the Compact as a starting point, not an ending point. More work needs to be done, but I'll tell you we have to tie tenant protections to housing production. Without that, and without having those funding streams that are identified in the Compact, flowing across all the three Ps, Protections, Preservation, and Prevention, I think we're not going to have real progress.

Rachael Myrow: Michael, any follow-up on that?

Michael Covarrubias: Amen.


XVIII.  Kirsch - Democratic Process

Susan Kirsch: If I can just add, the P that's missing from those three Ps, I totally agree with those three Ps.  The missing P is Process.  And if we don't improve the process, we will never have an outcome that's going to be satisfactory to everybody and just to say, like the Tenants Together organization wrote their letter of opposition to the CASA Compact, recognizing that it was not meeting the needs for tenant protection.

Rachael Myrow: What would you recommend doing instead, Susan?

Susan Kirsch: Well, one of the ideas that was floated is that there should be a general assembly, ABAG people have recommended that there be a general assembly where their representatives, the people down into the councils would be able to come together and have their turn to look at this, but to get everybody at the table. 

To have the city council members, the corporations, unions, to replicate, maybe it's a part of ... replicating what CASA started and credit them for all of the work that they've learned about that. But to bring more people to the table to look at identifying what are the causes, a previous speaker I think was saying is the small towns who have had zoning regulations that have prevented this.

Susan Kirsch: But on the other side of that is that sign we see in fine stores that says if you break it, you buy it and that a part of the breaking of it, is that we have the imbalance creating by the corporations. So, to go back to look at how do they own the part of what they've broken, to fix it.


XIX.  Kirsch - Building Housing

Rachael Myrow: Now Susan, I'm going to have you respond now to this comment from "Sally", who writes, "I'm a small city sustainability officer and I know perfectly well how difficult politically it is to get housing built in small cities. Ms. Kirsch is misrepresenting small cities broad citizenry and just supporting the elites that don't want to have housing built in their upscale community."

Susan Kirsch: Well, I think in reference to the ADU and the approval and the encouragement for ADUs coming in, that that's one way to get more housing available and affordable housing for people.

Rachael Myrow:  But when I think of communities I'm familiar with, where you can't imagine any new major multi-unit housing being constructed. Many of them really are more elite communities that perhaps, understandably want to protect their way of life, their California dream and yet you don't see them stepping forward to participate in the process of inviting more people to the Bay Area.

Susan Kirsch: We definitely need to do more to do that. I think a part of where there's the division is between looking at housing and how many people can build housing and housing units and look at return on investment on their housing unit production.

That's the other side of what is looking at what does home mean to people and how do we look at the quality of home that has to do with community and neighborhood and the safety of schools, neighborhoods, friends and all that. And the current imbalance in the conversation is often into how do you get return on investment which means there would be a rent cap that is beyond what people are making as income.

So to get some more about the home quality into the safety quality into the equation and the discussion and that's where our local elected officials bring that into the conversation in a bigger way.



XX.  Marzorati - Age & Local Control

Rachael Myrow: Let's hit the phones again and Ryan in Oakland.

Ryan: I'm frustrated by this conversation in that I think one of the things we're leaving out is the generational aspect of this and the age of the people participating in the debate. When we say we want to sort of hold the Bay Area in stasis and not allow for growth and we put barriers like, oh there's not enough infrastructure.

You know, families have children and those children need to be housed here. There's an inherent level of growth that we need to accommodate and the reality is we have a lot of existing infrastructure and a lot of underutilized land. We've got malls that are dying that could have thousands of housing units. We've got transit systems that we can leverage and build on and it's really frustrating to see the conversation, terms like character and livability and the hoops that are put in front of housing development for dense, walk-able housing development that could actually improve our transportation situation.

It's very frustrating to hear that and to say MTC hasn't solved the transportation problem like they haven't solved it because we've grown out and people have to drive to get to their jobs. So to say that MTC led this process and thus this process is flawed, that's flawed logic in and of itself.

Rachael Myrow: Thank you so much, Ryan, for those comments.

Rachael Myrow: Guy, there is something to be said about the generational aspect of this. I think also of Proposition 13, there are a lot of older home owners who feel like they don't have the financial wherewithal to move, even if they wanted to.

Guy Marzorati: Yeah, there is definitely and when you see a lot of the energy at these meetings certainly by groups like YIMBY which is made up of a lot of younger activists who want to see, who have a different vision for what the Bay Area should be and it really revolves around walk-ability and transit around housing. And I would say, I think the real push and pull on this often comes down to local councils and local planning where a lot of these individual housing proposals either are approved or delayed or die.

And I think many of the younger generation and certainly in the YIMBY group want to see the entire process removed from that local level. To them, the status quo of how we approve housing is not working. And I'm sure for Susan, that might be terrifying to remove housing approvals and to take that historic power away from smaller towns where it's existed throughout California's history and I would say there's a political reality to this.

We look in the South Bay, a lot of suburban communities. Elected officials who were supportive of more development, got bounced this election, whether it was the Mayor of Mountain View, the council members in Los Altos as well.

So there's a real fear, I think, at the local level 'if I approve a certain project or if I seem to be too pro-development, I'm disappointing my constituents and I may no longer have this position'.  So I think it's a pull really to take that voice away from local council members who are really subject to their constituents kind of as their job is.


XXI.  Myrow & Marzorati Democracy

Rachael Myrow: Well, let me challenge you on one point, and this is not to say that local politicians actually do a particularly good job of holding developers feet to the fire. But when a developer is proposing a project, that's the moment to ask about traffic mitigation, about local park resources, about other things like that.  Do we see anything in this plan, going forward, to help protect the quality of life in these communities where the construction is going to happen?

Guy Marzorati: Well I think even in some of the streamlining proposals that you see in CASA, there is allowable for a certain amount of meetings that go beyond just a ministerial approval in a certain year.  Yeah, so I think that's kind of the crux of it, is whether you see those meetings and those processes as a real way to deliberate and come out with the best product in terms of housing, or whether you see those as things that are manipulated and used as road blocks. I think about CEQA and environmental review, that's a longstanding debate whether that's used in a just way or whether that's used in a way to stop housing.


Wrapping Up

Rachael Myrow: Guy Marzorati, thank you so much for joining us today, from KQED's California Politics and Government Desk.

I also want to thank our other guests, Michael Covarrubius, Chairman and CEO of TMG Partners and co-chair of CASA.

We heard earlier from Paola Laverde, chair of the Berkeley Rent Stabilization Board and of course, Susan Kirsch, founder of Livable California, a coalition of leaders who oppose the CASA plan.

Rachael Myrow: Keep the conversation going online, www.kqed.org/forum. You've been listening to Forum this hour. Thank you so much for joining us. I'm Rachael Myrow.


The End