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Saturday, February 23, 2019

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:

Part I of the analysis is here:

The transcript can be found here:

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).
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.

Guy Marzorati: "...the most high profile 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:

Calabazas Blvd. in Santa Clara - within 1/4 mile of a bus stop on El Camino with frequent service. 
Lots of jobs nearby, too.
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:  "'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 (thich is what the "T" stands for in their name) 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