Tag Archives: yimby

How housing activists and unions found common ground in California

Originally published at Vox on August 21, 2023.
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Over the last decade, whenever California lawmakers tried to pass new legislation aimed at boosting the state’s alarmingly low housing stock, they’d come face to face with a politically powerful barrier: organized labor.

It wasn’t that unions wanted no new housing in California, but their top priority was ensuring that any new units would be built with unionized workers, and that the nearly half a million members represented by the State Building and Construction Trades Council, or “the Trades,” as it’s locally known, would be well positioned to find good jobs in the future. Keenly aware of how sharply industry standards have declined in parts of the country with less union power, and still reeling from job losses during the last recession, the Trades have assertively fought bills they deemed threatening to their way of life.

In the Democratic and proudly pro-labor state, opposition from the Trades has often been sufficient to kill housing bills. Liberal lawmakers have been sympathetic to union arguments that the state’s housing crisis will not be solved by driving construction workers into poverty themselves. Sometimes unions would object to bills that failed to require certain wage standards, or bills that didn’t require enough union workers to do the jobs. And when they’ve objected, labor leaders have not been hesitant to flex their political muscle, running attack ads against bill sponsors and donating tens of millions of dollars to political campaigns.

Today, though, a major sea change is happening across California, with some unions now either actively supporting the major housing bills winding their way through the legislature, or otherwise signaling that they’ll no longer fight them. This shift in pro-construction, “Yes in My Backyard” (or YIMBY) politics has been dramatic, and one that hardly anyone foresaw just three years ago.

Getting to this point involved some unions being willing to break with the rest of organized labor, as they argued it was worth expanding the number of good-paying construction jobs even if lawmakers could not guarantee those would be union jobs per se. These dissident unions promoted an alternative vision for membership growth, and provided cover to California politicians who worried about being branded as anti-labor.

The stakes for workers, though, are high: The vast majority of California construction workers are not unionized, and toil away on sites with weaker protections, earn far less than their unionized counterparts, and fall too frequently victim to injury and wage theft. Though construction accounts for about 6 percent of California’s total workers, it makes up 16 percent of the state’s fatal workplace injuries.

A new coalition of pro-housing activists and labor unions has emerged in the Golden State, hoping to prove what is admittedly still an untested proposition: Can lawmakers accelerate housing production fast enough to meet the needs of their growing population without sacrificing standards for workers?

Early attempts at housing bills went, well, not smoothly

A number of issues have stymied housing development in California over decades: restrictive zoning codes that favor existing homeowners over potential new residents, lengthy lawsuit-laden approval processes, soaring costs for construction and land, and a shortage of available workers to build.

Starting in 2016, then-Democratic Gov. Jerry Brown pushed a plan aimed at tackling at least one element of this stalemate: He proposed accelerating the approval process for certain housing projects in California, so long as they included a portion of units dedicated to affordable housing. One reason housing production has been so slow is because individuals and organizations can challenge development in court, under the California Environmental Quality Act, or CEQA. Originally passed in the 1970s to ensure local construction considers possible effects related to issues like air quality, noise, and natural resources, CEQA court challenges have since become a top tool for NIMBYs (which stands for “not in my back yard”) to block or delay new housing, by dragging out projects in costly litigation.

Today, it’s typical for a proposed housing project to face at least three or four years in court battles, with added costs in the hundreds of thousands or even millions of dollars. Making this CEQA process both harder for opponents, and faster for developers, is referred to as “streamlining” in California policy circles.

But unions in 2016 objected to Gov. Brown’s proposed “streamlining” bill, arguing it would strip them of needed opportunity to negotiate higher wages for workers. Labor groups worried about accelerating the approval process for private-sector projects but not requiring developers to pay “prevailing wage” — which typically means the going union rate for labor costs in an area. Unions often use CEQA challenges to force developers’ hands on hiring union workers, though laws requiring the payment of “prevailing wage” historically have only been used for publicly financed projects, not the kind of private-sector development targeted by Gov. Brown.

The Trades mobilized hard against Brown’s legislative package, ran ads against his top housing official, and framed the whole effort as a giveaway to real estate tycoons. They successfully killed it.

The following year, to avoid a repeat of 2016, Democratic lawmakers introduced more modest streamlining bills, which notably included a huge shift in the state’s housing policies: Several proposed expanding requirements for prevailing wage from public works projects to also include some private-sector housing development. One of the bills — SB 35 — came from newly elected YIMBY state Sen. Scott Wiener, a Democrat from San Francisco.

In short, Wiener wanted to streamline not only 100 percent affordable housing but some market-rate housing too. If he could promise unions well-paid jobs on both, he reasoned, then labor would hopefully relinquish its fight to preserve CEQA lawsuits as a negotiating tool.

To get it across the finish line, however, unions bargained one more request. For any housing project of 50 units or more that was not 100 percent affordable (meaning not entirely subsidized), developers would not only need to pay prevailing wage but also recruit a “skilled and trained” workforce to build. This “skilled and trained” language refers to workers who graduated from state-approved apprenticeship programs, which are mostly free for students, and are almost entirely union-run. Nearly every apprenticeship graduate later joins a construction union, so requiring workers to be “skilled and trained” is effectively requiring the hiring of more unionized workers.

The Trades still had general qualms about streamlining the housing approval process, and in particular about how eliminating CEQA lawsuits could more easily enable private-sector greed. Rudy Gonzalez, the secretary-treasurer of the San Francisco Building and Construction Trades Council, told Vox his members opposed past housing bills because they weren’t focused enough on dedicated affordable housing. “Who actually benefits from streamlining?” he asked. “I think developers benefit.”

But ultimately the “skilled and trained” language was enough for the unions to back SB 35 in 2017. Developers, meanwhile, didn’t love the idea of paying prevailing wage, but they agreed it was worth it if projects could move through the pipeline faster. SB 35 became law.

But it soon ran into another issue: a worker shortage.

The Trades acknowledges there’s a shortage of workers for California’s needed residential construction, and they know their existing unionized workforce is getting older. A union-backed study from 2019 stipulated that to meet the state’s affordable housing goals, California would need to recruit at least 200,000 new workers.

But the Trades insist things are not so dire yet that leaders need to abandon “skilled and trained” requirements, and they say more people will be incentivized to become “skilled and trained” only if lawmakers guarantee good union jobs waiting on the other end of an apprenticeship. About 70,500 people have graduated from these apprenticeships between 2010 and 2022, according to the California Department of Industrial Relations.

In the half-decade since SB 35 took effect, it’s become clear that the law has helped significantly increase affordable housing construction in California (a recent analysis found it streamlined over 18,000 new housing units between 2018 and 2021), but it’s been far less helpful in accelerating any market-rate construction. This has been partly due to a shortage of available “skilled and trained” workers developers need to hire.

How the Carpenters changed the story

Battles over whether additional California housing bills would require “skilled and trained” labor continued over the next several years, ultimately killing a slew of pro-housing bills in the legislature.

The California Conference of Carpenters — a labor organization representing about 80,000 unionized workers who install and repair wood structures — was more open to bills that included language only for prevailing wage. But leaders from both the Carpenters’ northern and southern councils dared not cross the powerful then-president of the Trades, who said unions would accept “skilled and trained” or nothing.

Change finally came in August 2021, when Jay Bradshaw, a longtime union organizer, successfully unseated a 20-year incumbent to take control of the Northern California Carpenters Regional Council, the Carpenters’ northern affiliate.

“While the labor story has ebbed and flowed and can get really complicated, it really can be simplified to say that one person made a gigantic difference in changing the conversation and that’s Jay Bradshaw,” said Todd David, who led the California YIMBY-aligned Housing Action Coalition between 2016 and 2022.

At the same time that Bradshaw ascended to power, the Carpenters’ Southwest Mountain States Regional Council — which represents workers in Southern California — elected its own new leader, Pete Rodriguez. Historically the two California Carpenters’ councils have not been closely aligned on policy, but Bradshaw and Rodriguez saw eye-to-eye not only on organizing new members, but also on making it easier to build housing — even if that meant stirring the pot with the rest of the Trades.

This first real test came in 2022. An Oakland Democratic Assemblymember, Buffy Wicks, worked closely with the Carpenters’ new leadership to hash out language the union could endorse. Wicks ultimately introduced AB 2011, a bill that would fast-track affordable housing development of old office buildings, strip malls, and parking lots in exchange for paying workers the prevailing wage. On larger projects (meaning at least 50 units) developers would have to provide health care and new tools to guard against wage theft. Larger projects would also require developers to see if “skilled and trained” workers were available, but if they weren’t, the project could proceed without them.

The Trades, along with the powerful and larger California Labor Federation, fought hard against Wicks’s AB 2011, arguing it had too many loopholes and would fail to protect workers in practice. AB 2011 had other opponents besides just organized labor, including some environmental groups and groups that advocate for local control.

But joining forces with the Carpenters on Wicks’s bill were two other dissenting unions: the 250,000-member strong California School Employees Association, which represents janitors, cafeteria workers, and other school support staff, and the influential SEIU, which represents more than 700,000 mostly low-wage service and health care workers across the state.

David Huerta, the president of California SEIU State Council, said after surveying members on issues they’re dealing with, it became clear SEIU needed to stand up more on housing. “Regardless of if you’re a janitor or a nurse or a health care worker or a home care worker, everyone overwhelmingly said the number one issue was housing affordability,” he told Vox. “We have members sleeping in their cars, who have big families sleeping in one-bedrooms, who are traveling hours and hours to get to work because they can’t afford to live near their jobs.”

Bradshaw, of the Carpenters, argued creating more high-paying jobs for all construction workers was more important than having guaranteed union jobs — and that unions could then aim to organize those workers. “For the elected officials we framed it as they do have a real choice,” Bradshaw told Vox.

In the end, California lawmakers didn’t really have to make a choice, and ended up passing Wicks’s bill, along with another similar bill that included the Trades’ preferred “skilled and trained” language. For now, developers basically can choose which law they want to follow if they want to convert strip malls to housing. (Yes, really.)

“AB 2011 was a huge victory, but they allowed the building trades to save face by passing both bills,” said David, the YIMBY activist.

Scott Wiener, author of the 2017 law that has successfully streamlined affordable housing projects but less successfully produced mixed-income and market-rate development, decided this year to run with the labor compromise language Wicks pushed in AB 2011. In a new bill — SB 423 — winding its way now through the legislature, Wiener is aiming to strip the “skilled and trained” requirement from his 2017 law, and add in the other labor protections from AB 2011, like for wage theft and health care.

The new president of the California Trades, Andrew Meredith, declared strong opposition to Wiener’s new bill when it was introduced in February, arguing it would hurt safety standards and housing affordability. The California Labor Federation backed the Trades up, too. “More profits for developers, less benefits for workers,” the labor federation’s leader said. “That makes zero sense from folks who claim to be pro-labor.”

In the winter and early spring, it looked increasingly like Wiener’s SB 423 would be one of the most contentious bills in the California legislature this year — a new proxy fight over who was more sufficiently for affordable housing and workers’ rights.

But in April a major twist happened: two more construction unions — the California Council of Laborers and the state Conference of Operating Engineers — broke with the Trades to publicly support Wiener’s housing bill. “We believe the balance that this legislation strikes will result in more available housing and ultimately lead to more affordable housing that could be utilized by our membership and those in need,” said the Operating Engineers in a public letter.

Corey Smith, the new head of the YIMBY-aligned Housing Action Coalition, told Vox he thinks the leadership from the Carpenters, and bringing in the other unions, “is perhaps the single most positive shift in California housing discourse, conversations, fights, and politics in the last 40 years.” It’s “such a big deal,” Smith continued, “because the single largest individual problem for homebuilding in California has been local discretion and CEQA and the Carpenters’ union basically said, ‘Hey, we’ll provide a political path to tackle this.’”

In June, two months after the Laborers and Operating Engineers joined the Carpenters in supporting SB 423, Meredith, the president of the California building trades, resigned from his post.

In another big political twist, the Trades have recently announced they are no longer opposing SB 423. They’re currently “neutral” on the legislation, and neutral on another bill to develop affordable housing on land owned by religious groups, which failed in 2020 and 2022 largely due to labor’s opposition.

“We’re still working with the bill author and we would love to be able to support,” the Trades’ new leader, Chris Hannan, told Vox. “We’re trying to get the labor standards right for workers.” Whether or not the Trades ends up supporting the housing bills, however, won’t really matter as much in Sacramento as the fact that they’re not actively fighting them anymore. Passage for both bills in September looks likely.

Two different visions for growing union membership

One important factor shaping the politics in California is that not all labor groups see rapid membership growth as inherently positive.

Laura Foote, executive director of YIMBY Action, recalls one of her earliest memories of advocating to expand California’s housing supply. “I was just starting to map out who would be pro-housing, and anyone who built housing seemed like a natural ally,” she told Vox. Foote met with a San Francisco planning commissioner who was also a member of the electrical trades.

“I had a one-on-one with him like, ‘Okay, all the construction industry trades are going to be on board? Let’s build a lot of housing!’ And he was very blunt that no we do not want to unleash production … For him, there was a problem that if we unleashed housing production and grew our labor force, then when there’s a downturn all of his guys would be banging down the door at the union hall when times are low and out of work.”

The concern of maintaining union strength in a downturn is a real one. More than 365,000 construction jobs were eliminated in California during the last recession, between 2006 and 2011. “The point for them is not higher wages, the point is steady union jobs,” Foote argued. (The commissioner did not return Vox’s request for comment.)

Hannan, the new president of the Trades, told Vox his members want to build more housing at all income levels and pointed to the Trades’ support for growing their apprenticeship programs as proof they also want to add to their ranks.

“I don’t believe that to be true,” he said, when asked about certain guilds not supporting membership growth. “People are entitled to draw their own conclusions and come up with their own opinions but the building trade unions that I represent want to grow opportunities for their members and new members. The Trades has been a wonderful career for me and I want that for more people.”

Still, it’s true that membership growth may present a more uncomplicated opportunity for the Carpenters compared to other construction unions, making it easier for them to back YIMBY bills. It could help that the Carpenters offers its members 401(k) plans in addition to traditional pensions, and is organized in ways that might make an influx of new members less threatening to incumbent leaders controlling smaller geographic turfs. Over the last few years, the Carpenters have embraced an aggressive organizing strategy, growing its membership by 8 percent between fiscal years 2019 and 2022, according to the union.

Will the pro-labor compromise actually work?

An outstanding question is whether these union-backed streamlining bills will generate enough new private-sector housing in California, and there are skeptics.

Making it harder to file CEQA lawsuits should certainly help, advocates say, but the constant debate in housing policy circles is whether a market-rate project “pencils out” — meaning whether the developers’ projected earnings outweigh their building costs. Prevailing wage and other labor benefits raises the cost of a project.

Jennifer Hernandez, an environmental and land-use lawyer who has studied how CEQA lawsuits get abused by housing opponents, told Vox she thinks whether SB 423 works as intended is “a real bet.”

She pointed to Los Angeles, where a 2016 ballot measure that required paying prevailing wage failed to produce as much mixed-income housing as some LA leaders hoped to see. “It’s been too expensive and there’s not enough workers,” Hernandez said.

Hernandez thinks SB 423 will work best in the most expensive markets where developers can afford to charge tenants higher rents to recoup their costs.

No one could say exactly how much more a project might cost if prevailing wage is required, and different estimates abound. Ben Metcalf, the managing director of the Terner Center for Housing Innovation at UC Berkeley, told Vox his organization believes it increases prices in the 10-20 percent range, but can vary a lot by region. Some estimates have it lower than that, and some others have it higher.

Some YIMBY advocates say the higher wages for workers will “pencil out” if state lawmakers move next year to tackle the high “impact” fees that cities often attach to new housing in exchange for development approval.

Brian Hanlon, the president of California YIMBY, said he’s optimistic about the prevailing wage requirement, but only if these fees and other costly regulations like inclusionary zoning requirements are later addressed. “SB 423 is an important law to get rid of a lot of these CEQA lawsuits, but we need to get the math to work right,” he said.

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Smith, of Housing Action Coalition, said it’s not clear yet how much will be saved by streamlining, but developers wouldn’t really care if they paid more for labor if they saved money elsewhere. The Carpenters and other unions have a vested interest in these projects penciling, too.

Ultimately policymakers and advocates of all persuasions recognize California is embarking on a major new chapter for housing politics — one where individuals will have less power to block housing production in court, and where the Trades have less power to block bills they don’t like in Sacramento.

“For years the way union politics worked in California is that each union would let the workers in that union lead on that policy, so you wouldn’t see the plumbers having a position on education, or SEIU getting in on housing,” said Foote, of YIMBY Action. “Now it’s like all bets are off.”

Democrats eye new legislation to rein in Wall Street landlords

Originally published in Vox on December 2, 2022.
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Institutional housing investors — largely, the commercial banks, private equity, and other financial entitles that flip homes or rent them out — have been the subject of conflicting media messages.

On the one hand, we’re told investors are buying up more housing than ever. In 2021, they bought nearly one in seven homes sold in the 40 largest US metropolitan areas, the most in at least two decades, according to Redfin data analyzed by the Washington Post. In the first quarter of 2022, investors comprised between one-quarter and one-third of home sales in Atlanta, Jacksonville, Charlotte, Phoenix, and Miami. The US House Financial Services Committee reported in June that corporate ownership of single-family rental homes has grown 3 percent annually since 2010, “with the third quarter of 2021 posting the fastest year over year increase in 16 years.”

These trends are worrying, researchers and advocates stress, because there’s evidence that corporate landlords, under pressure to deliver big profits to their shareholders, are more likely to evict their tenants, raise rents more aggressively, and shirk responsibility for basic maintenance and repairs. There’s also evidence that some investors have been targeting homes in Black neighborhoods at disproportionate rates, accelerating gentrification and putting homeownership for some families further out of reach.

On the other hand, housing owned by large corporate investors makes up a much smaller percentage of the nation’s overall housing stock than is often suggested by headlines. Institutional investors, referring to entities that purchase 100 or more properties, accounted for under 3 percent of home sales in 2021 and 2022, according to Freddie Mac. So-called “mom-and-pop” investors, who own fewer properties, are growing at faster rates, and according to the National Rental Home Council, only 1.16 percent of single-family rental homes were owned by rental companies. Americans for Financial Reform estimated that as of June 2022, private equity firms owned about 3.6 percent of apartments and 1.6 percent of rental homes.

Defenders of the sector point to research showing that most people moving into single-family rentals are poorer, younger, have worse credit, have larger families, and are more likely to be single parents than their home-owning counterparts. One study published last year estimated that 85 percent of single-family rental residents would not qualify for a mortgage. Taking away these rental options, advocates warn, would just take away more spacious living arrangements for younger families who can’t yet afford to own, or might not want to even if they could.

Others say the focus on Wall Street investors is largely a scapegoat to avoid wrestling with the real culprit of the housing crisis: the dearth of available units. Sam Khater, the chief economist of Freddie Mac, cited labor shortages, land use regulations, zoning restrictions, political opposition to new housing, lack of developers and lack of land as root causes of the housing shortage. And economic research published this summer found that remote work has also increased US aggregate home prices by 15.1 percent since late 2019.

Still, with damning press and congressional investigations into corporate housing abuses, political pressure has mounted on lawmakers to step in. In August, senators heard testimony from people like Laura Brunner, the president and CEO of the Port of Greater Cincinnati Development Authority. Brunner detailed how institutional investors have upended their local housing market, and dramatically hiked rents in the process. “We’ve been told by institutional investors that they only own about 1 percent of single-family homes; however … this could mean 50 percent of the houses on a single street,” she testified. “When the geographical impact is so concentrated, it has a game-changing effect on what it means to live in that neighborhood.”

In late October, three Democratic House members from California — Reps. Ro Khanna, Katie Porter, and Mark Takano — introduced a new bill, the Stop Wall Street Landlords Act, to address these growing concerns. Senators have also been getting involved, holding listening sessions with renters and housing policy experts. A spokesperson for Sen. Sherrod Brown told me that Brown is focused on “predatory investors and landlords — particularly deep-pocketed investors taking advantage of new technologies” that price out families from homes and leave tenants with unsafe living conditions. Brown is currently working on “legislative steps to protect families and address these predatory practices,” the spokesperson said.

Khanna said he doesn’t see his new bill as a comprehensive housing solution, and stresses that lawmakers need to stay focused on fighting barriers to new housing construction, increasing housing supply, and expanding down-payment assistance. “But we don’t need to be subsidizing institutional investors to go buy up housing in working-class neighborhoods and holding them for appreciation and turning them into Airbnbs,” he told me. “You could make an argument that it was necessary to subsidize Wall Street investors after the 2008 financial crisis when the market collapsed, but that certainly now has run its course.”

The Stop Wall Street Landlords Act, explained

The stated goal of the new House bill is to deter future institutional investments into single-family homes. It would try to do this in a few ways, including by barring corporate investors from claiming certain tax breaks like the mortgage interest deduction, and imposing a transfer tax on the sale value of new single-family home purchases.

The legislation also would bar the government-sponsored mortgage companies — Fannie Mae, Freddie Mac, and Ginnie Mae — from assisting certain large investors in financing, and would establish a new tax credit to help affordable housing developers build and rehab homes in low-income areas.

Groups representing institutional investors, unsurprisingly, have come out strongly against the bill. A spokesperson for the American Investment Council, which represents private equity companies, told Vox that “this politically motivated legislation completely misses the mark and won’t help address the real challenges in today’s housing market.”

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David Howard, executive director of the National Rental Home Council, told the Mercury News he believes the bill “will only reduce the availability of single-family rental housing while making it more expensive — ultimately hurting the very people for whom access to affordably priced rental housing is so essential.”

Kristin Siglin, vice president at the National Community Stabilization Trust, a nonprofit that transfers foreclosed and abandoned properties to local housing groups, praised the bill’s inclusion of the neighborhood homes tax credit, which was also included in the Build Back Better bill the House approved last year.

Siglin told me the coalition she leads to promote the tax credit was “really pleased” to see the measure included, and commended the Stop Wall Street Landlords Act for not only including sticks in the form of ending tax preferences for corporate investors, but also carrots, like the tax credit, to increase the supply of homes to sell to owner-occupants. Right now, large corporate investors are often the only entities available with the financing capabilities to make repairs on homes. The neighborhood homes tax credit, Siglin says, can help to fill this gap, and keep more properties out of Wall Street hands.

Khanna’s office said they worked with experts including the Urban Institute to develop their bill. The Urban Institute’s government affairs manager, Victoria Van de Vate, told me she hasn’t read the Stop Wall Street Landlords Act and said her think tank does not suggest bill language or take official positions on legislation. “A team of housing researchers and I met earlier [in November] with Rep. Khanna and his team to discuss policy alternatives to increase rates of black homeownership and the role of institutional investors in the housing market,” she said. “It was a good conversation, and we always welcome the opportunity to share our research, answer questions, and provide evidence-based recommendations about policy.”

Laurie Goodman, the founder of the Housing Finance Policy Center at the Urban Institute, told me separately that she sees Khanna’s legislation as a very “punitive bill” that would deter institutional investors from buying properties in a way that would be unhelpful. The single-family rental industry does a lot of good things, she added, “all of which are ignored by the critics.” Goodman was not familiar with the neighborhood homes tax credit but argued that institutional investors play an important role in financing repairs that prospective homeowners can’t afford.

Dan Immergluck, a professor of urban studies at Georgia State University who has researched the history of institutional investors on housing markets, told me that while he hasn’t had time to closely read the bill, he does not support allowing Fannie Mae and Freddie Mac to help finance large-scale single-family rental operations unless there were “serious strings” attached, like affordability requirements. Immergluck said he’s less convinced simply making it more expensive for single-family rental operators to do business through measures like excise taxes will be effective, “because in places where they already have market power, they could pass those costs onto tenants.”

Where the corporate housing sector is likely going

What about inflation and the much-discussed housing construction slowdown sparked by rising interest rates? Increased building costs have already led to a slowdown in investor homebuying — a decline of 30 percent in the third quarter of 2022, the Wall Street Journal recently reported. Redfin also just closed its own home-flipping business, following Opendoor Technologies, another online house flipper, which just posted record losses.

Khanna told me he thinks his bill would help stabilize some of the rising rents by decreasing demand from institutional investors, which still accounted for 17.5 percent of all home sales in the third quarter of 2022. Even if institutional investors only buy up a small percentage of total housing, their presence in the bidding wars can still lead to higher costs for all buyers. And even though investor sales growth has slowed, experts expect their share of purchases to rise again soon, as builders with unsold homes look to sell to rental landlords. Plus a widely expected recession could raise unemployment and make it even harder for traditional buyers to compete with corporate bidders.

While investment firms began purchasing foreclosed homes after the housing crash, investors more recently have been pouring billions of dollars into new build-to-rent communities in more than 25 states. The National Association of Home Builders reported 13,000 such homes were started in the first quarter of 2022, up 63 percent from a year before. In November the CEO of Tricon Residential, a Canadian real estate company, said on an earnings call Tricon has nearly $3 billion it plans to use to buy and build new homes.

The Stop Wall Street Landlords Act will not tackle the housing shortage, Khanna acknowledged, but maintained it’s a necessary part of the legislative puzzle. “We need to massively increase housing supply, we need to figure out creative programs for first-time homeowners, and we need my new bill, which will stop the financialization of housing.”

But Where Can We Shelter?

Originally published in The Nation on June 16, 2020.
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After the fifth debate of the 2020 Democratic presidential primaries, The Washington Post published one of its infamous fact-checks highlighting those moments when, in the paper’s estimation, someone got too loose with the truth. Among the 10 claims flagged by the Post was Vermont Senator Bernie Sanders’s remark that the United States has “500,000 people sleeping out on the street.” This statement was “exaggerated,” the Post admonished, because while it’s true that in 2018 the Department of Housing and Urban Development (HUD) estimated that there were 553,000 people experiencing homelessness in America, not all of them were technically on the streets; some 360,000 were in shelters or transitional housing.

Putting aside that many experts believe HUD grossly undercounts the homeless, the Post’s finger-wagging exemplified some of the peak absurdities of America’s housing crisis. The United States is the richest country in the world, but millions of its people struggle to afford housing or find it at all. Instead of ensuring that there are enough units in areas where people want to live, we’ve dawdled for decades and made excuses for why things can’t be different—or even claimed they really aren’t so bad.

Golden Gates, a new book on the housing crisis by New York Times reporter Conor Dougherty, dives straight into these problems, skillfully exploring everything from the yes in my backyard (YIMBY) movement, which promotes more housing development, to anti-gentrification activism, the normalization of homelessness, and the factors that have made it so prohibitively expensive to build anything new. It’s the latest addition to a slate of books on housing that have come out over the past few years, including Richard Rothstein’s The Color of Law, Matthew Desmond’s Evicted, Ben Austen’s High-Risers, Matthew L. Schuerman’s Newcomers, and P.E Moskowitz’s How to Kill a City. These books have explored various aspects of housing discrimination, especially the burdens borne by the nation’s poor and people of color, but Dougherty’s is among the first to look squarely at the politics of trying to respond to this disaster. By examining the inertia and ineffectiveness of political leaders who largely agree on what needs to be done, he makes a sobering case for how and why our politics have failed. While not so much a book of specific policy prescriptions, Golden Gates helps clarify why we have a housing crisis in the first place.

As suggested by the title, Golden Gates focuses on California, especially on San Francisco, where the housing troubles are particularly extreme. California has the distinction of having one of the highest housing costs in the nation and some of the highest-paying jobs. It also has, using HUD’s metric, more than 150,000 people experiencing homelessness—far more than any other state in the country. But California’s problems, Dougherty insists, are not anomalous: They are merely “an exaggerated example of the geographic inequalities” that we see in almost every American city as urban centers grapple with the increasing concentration of economic opportunity and the rising cost of living near it. As higher-paying industries like tech and consulting consolidate in and around a few dense areas and as lower-paying retail and health care jobs replace those in manufacturing, the competition to find housing near the good-paying jobs has grown more acute.

To tell this story of housing scarcity and political inaction, Dougherty focuses on a diverse set of people, including Jesshill Love, a longtime Bay Area landlord wrestling with how to raise rents, and Rafael Avendaño, the director of a youth center who tries to teach teenagers in Redwood City how to fight their evictions. We hear from housing developers like Dennis O’Brien and Rick Holliday about the byzantine barriers they face to build more homes and from state Senator Scott Wiener, who has struggled to get his housing reform bills approved. And we hear quite a bit from leaders in the YIMBY movement, like the teacher turned housing activist Sonja Trauss, who moved to the Bay Area in 2011. Since then, the Bay Area has created roughly eight new jobs for every new housing unit, far beyond the 1.5 jobs per new unit recommended by planners. Trauss and her fellow YIMBYs want more homes built, arguing that the shortage in metro areas with highly sought-after jobs has led to soaring rents and home prices and justified fears of displacement.

One of the most sobering aspects of Dougherty’s narrative comes from his historical findings. Many people are familiar with the current affordability crisis in San Francisco, which is often blamed on greedy tech CEOs and venture capitalists. But fewer are aware of its deeper roots. Digging through the archives, Dougherty shows just how long California leaders have been aware of the housing crisis that the state faced if it didn’t alter course. “Changing San Francisco Is Foreseen as a Haven for Wealthy and Childless,” read one New York Times headline in 1981. Two years earlier, an MIT urban planning professor blasted the Bay Area for its “arrogant” and “self-serving” land-use policies and traced how developers were routinely stymied by environmentalists and homeowners opposed to new people moving in. Delivering a 1981 commencement speech at UC Berkeley, the university’s top economics student warned that the Bay Area’s housing shortage would result in sharply rising prices and that homeowners were likely to keep fighting any efforts to address that.

The commencement speaker was right, yet too little was done in the years that followed. This lack of reform around land use was largely rooted in the failure of leaders to take on entrenched interests who profited from the status quo—from the investors, developers, and building trades to the homeowners who were fortunate enough to move to a desirable area first.

Today politicians are trying to tackle these structural problems more directly. Policy analysts say California needs to build 3.5 million homes to get serious about solving its housing crisis, and in 2017, California Governor Gavin Newsom committed to reaching this goal by 2025. But this is a tremendous task that would necessitate building roughly 500,000 units a year, when over the past decade, on average, fewer than 80,000 homes were built in the state annually. And there are, as Dougherty observes, considerable impediments that stand in the way, including soaring costs for construction and land. The cost of building a 100-unit affordable housing project in California had increased from $265,000 per unit in 2000 to almost $425,000 by 2016. And that’s an average. In cities like San Francisco, it can cost upward of $850,000 to build a single subsidized unit. When California’s legislature passed a $4 billion bond to build affordable housing in 2017, it was hailed as a serious step forward, one that would amount to a nearly $12 billion effort when paired with private money. But $12 billion divided by $425,000 equals just 28,235 units, or 0.8 percent of the 3.5 million goal. As Dougherty writes, “This sort of math could make a joke of any new funding effort.”

Voters across California have been more supportive of new funding packages for affordable housing over the past few years, but the quiet dread among advocates is that once the public realizes how little effect each influx of money has on the crisis, their appetite for new taxes might wane. “Behind each new affordable housing bond and the additional billions for homeless services was a public who thought they were being generous, when really the new taxes were nothing in comparison to a problem that was getting worse faster than cities could deploy the money,” Dougherty writes.

While the political leaders in Sacramento and on city councils continue to squabble, renters are doing what they can to organize, and Dougherty gives voice to their experiences too. In particular, we hear from teenager Stephanie Gutierrez, who studied every Tuesday night with other community members how to protest gentrification and eviction. One day, Gutierrez returned home to discover that her family’s rent would be jumping by 45 percent.

Gutierrez and the activists she worked with did their best to raise hell. “No hay peor lucha que la que no se hace,” another tenant insisted—there is no worse fight than the one that isn’t fought. But Dougherty doesn’t sugarcoat the hurdles that renters face. “Protests could make [housing] flips more expensive, but not nearly by enough,” he writes. Despite the occasional bad headlines, developers saw easy opportunities to make more money, and landlords were well within their legal rights to raise rents.

Dougherty also follows the YIMBY activists as they mobilize for new subsidized and market-rate housing. Their build-everything philosophy often pits them against anti-gentrification groups, which view new for-profit development as housing policy moving in the wrong direction. But activists like Trauss insist that more housing will help reduce prices for everyone by relieving pressure on strained markets. Dougherty is sympathetic to this argument, but he also notes some of the real limits faced by these mostly white, highly educated activists as they struggle to build a multiracial and cross-class movement.

Perhaps one reason Dougherty is more sympathetic to the YIMBY movement is that unlike many others, it has been more willing to confront the reality that you can’t stop people from moving to dense, crowded cities, no matter how much you wish they’d stay away. As Wiener, who is aligned with the YIMBYs, once vented, “There is a strain of self-described progressive politics in San Francisco that says: ‘Lock down the city’…. Don’t build more housing—just lock it down, and maybe if we dig a moat around the city and put crocodiles in it we can just stop people from coming.”

Despite finding some hope in local activism, Dougherty doesn’t end his book on a particularly optimistic note. The rising costs to build, the increasing polarization, and the failure to take on entrenched special interests, he suggests, could leave California in much the same place it has long been. And yet he writes that there is growing momentum on the legislative level, not just in California but across the country. Since 2017, rent-control bills and ballot initiatives have cropped up in roughly a dozen states, and in February 2019, Oregon became the first to pass rent control statewide. In June 2019, New York legislators beefed up rent control for nearly 1 million apartments in New York City, and California approved statewide rent control a few months later. Meanwhile, the Minneapolis City Council voted to end single-family zoning, a measure intended to boost the housing supply, and Oregon shortly followed suit. In the DC area, where planners say at least 320,000 new units are needed in the next decade to accommodate demand and population growth, lawmakers are considering measures to expand rent control and reduce barriers to construction.

Yet a crucial question in Golden Gates remains unanswered: What can governments do to help those who need housing now without enacting policies that could make the situation worse in the long term, whether by exacerbating displacement and segregation or by contributing to an even more severe shortage down the road?

Some new housing ideas have emerged recently on the left, such as building more housing that would be kept off the market for speculation and profit entirely. The homes guarantee movement, launched in September 2019, seeks to do for housing what Medicare for All would do for health care. While some homes guarantee advocates object to the idea of expanding Section 8 vouchers because they’d like to reduce reliance on the private rental market, others maintain that these policies are not necessarily in conflict with each other. In fact, Sanders campaigned on both a homes guarantee and making Section 8 vouchers available to all who are eligible. “Mixed solutions can feel like a cop-out,” Dougherty writes, “especially in polarized times. And yet, over and over, in city after city, it’s always where people end up and what seems most likely to work.”

He has a point. To move forward, movements will have to find ways to break out of their particular communities and build strength across class lines. In other cases, activists and political leaders might need, as was the case with Medicare for All, to find new language to address existing policy demands. One think tank in Seattle tested YIMBY messaging and found that the word “homes” worked better than “development” and the phrase “walkable and convenient” was more appealing than “density.” In Minneapolis a YIMBY group has opted for the warmer name Neighbors for More Neighbors. These are all worthwhile steps, but the politics won’t be solved by friendlier rhetoric alone. To build more housing, we’ll need to build more power.