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How Nonprofits Misapply Value Capture To Parking
Follow-up to my previous article on the absurdity of nonprofit positions on parking by going into depth about the various degrees of the NPIC.
Last week the New York Times published a column on how the Democratic Party is failing to counter the authoritarian impulses of a Trump-inflected GOP. Harvard sociologist Theda Skocpol is quoted in the piece identifying Democrats’ reliance on non-profits and wealthy foundation funders to develop and communicate policy.
The advocacy groups and big funders and foundations around the Democratic Party — in an era of declining unions and mass membership groups — are pushing moralistic identity-based causes or specific policies that do not have majority appeal, understanding, or support, and using often weird insider language (like “Latinx”) or dumb slogans (“Defund the police”) to do it.
More importantly, Skocpol argues that the leaders and staff of these non-profits:
often claim to speak for Blacks, Hispanics, women etc. without actually speaking to or listening to the real-world concerns of the less privileged people in these categories. That is arrogant and politically stupid . . .
Skocpol is wrong to say that Democrats and elected officials embraced the demands of “defund the police” or the notion that it even came from the non-profit sector. I stated on Twitter in admittedly rude terms that Democrats aren’t saying “Defund” or “Latinx” either. But Skocpol is right in the bigger picture that some foundation-funded nonprofits have way too much influence on messaging and strategies from center-left Democrats, especially when it comes to championing the the interests of working class communities.
In California, this plays out regularly on land use, housing and transit policy. Some non-profits frequently take bizarre policy stances that run counter to progressive values, academic consensus and voter preferences. These non-profits sometimes end up opposing legislation to build more housing, make transit better and build safer streets. Positions that would ordinarily come from reactionaries but with ostensibly left reasoning. This broader non-profit eco-system, generally committed to status-quoism is nicknamed the Non-profit Industrial Complex (NPIC).
Not all advocacy non-profits within the policy making space are the same. Membership organizations — groups people join voluntarily, attend meetings, pay dues and govern themselves — are important. Not all membership organizations do good work or even support good policy. Oftentimes I’ve butted heads with membership organizations who are opposed to upzoning, rent control or less punitive law enforcement. But generally membership organizations are sincere and speak for their members’ self-interest. While many of these membership organizations are non-profits that raise money, the decision making rests with the members and not with the funders.
By contrast, foundation-funded non-profits are private organizations who rely on ongoing funding from foundations, big law firms and high net worth individuals to advance their social mission. Their funding could come from large corporations, banks, for-profit hospitals or networks of local elites. Foundations employ grant officers to scrutinize non-profit grant applicants for experience, capacity and alignment with the values and beliefs of the foundation. Non-profits that get funding from these foundations thus rely on keeping in the good graces of the foundations. Step out of line too much from your funders and you may have to lay off staff and scale back your mission. There’s nothing inherently wrong with foundation funded nonprofits but in policy making it’s important to understand where their blind spots and obtuseness derive from.
As Theda Skocpol discusses, the foundation-funded non-profit ecosystem creates an insular mono-culture of college-educated people. Many non-profits require bachelor or even graduate degrees to perform low-paid organizing and policy work. This ensures that the most people that can afford to apply and get these non-profit jobs are those affluent enough to carry little to zero college debt or come from within an insular academic culture. While the staff of many non-profits are smart people passionate about lifting up communities, the structure of the NPIC leaves little room for deviation or organizing outside of the mission or campaigns approved by the funders. The boards of directors are often composed of managers of other non-profits or legal advocacy groups doing various collaboration.
While these foundation funded non-profits can be flawed, at least they communicate and organize within the communities they serve. The next level of NPIC is legal nonprofits and lobbying groups that advocate “on behalf of” working-class people, consumers, Black people, Latinos and other marginalized people. This part of the NPIC is composed mostly of lawyers who review, comment upon and write legislation and regulations. Because they are funded by big law firms and liberal law groups, they are even further insulated from actual community opinion. This leads to rhetoric where NPIC heads will refer to entire communities as their clients as if all marginalized people voted for them.
Legal nonprofits and lobbying groups do good work. Largely because nobody else actually advances the interests of marginalized groups in higher level office. Western Center on Law and Poverty, for example, does outstanding advocacy around reducing child poverty and hunger. But in the realm of land use and transportation, these groups take extremely irrational positions, oftentimes at odds with academic consensus or the communities they claim to represent. These groups will oppose automated traffic enforcement on one hand and then oppose decreasing car-centrism on the other hand — which as I explained makes absolutely no sense. They’ll oppose upzoning near transit stations or exempting public transit projects from cumbersome procedures for inscrutable and hard-headed reasons. The nonprofit reaction to AB 1401, a 2021 bill from Assembly member Laura Friedman to eliminate parking minimums for development near transit, is a textbook example of this tendency among the NPIC.
It’s pretty simple: off-street parking requirements near transit make housing more expensive and reduce the likelihood residents will actually take the bus or train. When parking requirements are dropped, it drops rents and increases transit ridership. Nothing credibly disputes this. Why build a 1 billion dollar subway station in Los Angeles or San Jose if the city is going to cannibalize its ridership by making real estate developers build two parking spaces per apartment? We should be talking about parking maximums around transit, which actually prevents developers from building an unnecessary luxury amenity, but AB 1401 was a good first step.
AB 1401 had the support of a wide coalition of groups including Natural Resources Defense Council, Coalition for Clean Air, Habitat for Humanity, Streets for All, AC Transit, BART, California Interfaith Power & Light and non-profit builders like MidPen. And of course it did because the almost exclusive downsides to parking requirements are blatantly obvious. Unfortunately a coalition of non-profits led by the Western Center on Law and Poverty believes that parking minimums near transit should only be abolished if some benefit is recovered from the developer in return. This idea behind “planning value capture” is that when the government changes rules to the benefit of developers and landowners the public should recover some of the value gained.
Planning value capture makes sense in some circumstances like density bonuses but it doesn’t make sense when applied to parking. Developers, especially luxury and suburban sprawl developers, consider parking an amenity that increases rents and increases a unit’s desirability. So while parking requirements raise the cost of housing, as does any luxury finish or amenity, many luxury developers don’t perceive them as a burden to be disposed of.
Instead, the burden of parking requirements primarily fall on non-profit, low-income housing developers and builders of small apartments which tend to be cheaper. For low-income housing developers, parking requirements raise costs and make it harder to build. In many cases parking threatens to collapse the financing of an affordable housing project. Parking requirements are also used by cities to force low-income housing builders to scale back units or minimize family-sized apartments due to standard NIMBY nonsense.
The logic of value capture here — often plastered indiscriminately against housing production measures — is nonsensical. Effectively NPIC is saying: the law should require developers to worsen vehicle miles traveled, fail our climate targets, reduce the amount of housing built and tank publicly-funded local transit projects unless they make less money. We’re constantly told that developers want to maximize profit and yet we’re to believe that they want to make their homes less desirable in exchange for providing additional unprofitable housing units.
Western Center on Law and Poverty understands why parking requirements are bad; the leaders of the organization are well read on the research. The downsides of parking requirements were explained by parking reformers back in 2012 when then-Assembly member (now senator) Nancy Skinner pushed AB 904, which would have capped parking requirements near transit. Western Center argued back then that this would undermine the State Density Bonus Law and the ability of cities to bargain parking reductions for affordable housing and effectively killed the bill by leveraging a coalition of nonprofits to oppose it. Nearly ten years later, as Assembly member Friedman and a larger environmental coalition pushed for AB1401, Western Center is making the same tired, nonsensical arguments. Even as new studies have come out in recent years that unanimously rebut this planning value capture argument.
When San Diego made changes to its density bonus program in 2016 use of the program surged. But after parking minimums near transit were abolished in 2018, density bonus units increased by five-fold. This means developers were more likely to provide on-site low-income units after reduction of parking requirements, not less (as predicted by planning value capture theory). And non-profit low-income housing developers massively increased their production during this period.
Real life evidence does not suggest that parking requirements are being traded for affordable units. Based on the results of LA’s Transit-Oriented Communities density bonus program “only 20% of market-rate developers maximized the parking reduction — and none used only the parking reduction.” The developers were far more likely to trade height, density and setbacks for low-income units. And it turned out that 100% low-income and supportive housing developments were more likely to request reductions in parking requirements.
Finally, given what we have learned about the need to reduce auto emissions (EVs alone won’t do it, according to the California Air Resources Board), requiring parking as pretextual planning and praying that private developers will want to bargain it away is courting climate disaster. With these studies, it’s very clear that the theory of value capture as applied to parking is incorrect. That’s okay though because policy making is difficult but there’s an imperative to change and not be a stick in the mud about debunked theories.
Unfortunately, Western Center did not update their conclusion. Nor did they present evidence or a theory to demonstrate why these studies were flawed or any evidence that parking requirements had been negotiated by communities in exchange for affordable units. Instead they continued to oppose AB 1401 using the same argument because they’re stuck in an NPIC blind spot. They even went out and recruited more non-profits to oppose the bill along with the segregationist “local control” homeowner group Livable California.
Despite passing the Assembly Floor and getting approval from Senate policy committees, the bill was killed unilaterally by the Senate Appropriations Committee chair Anthony Portantino, who represents the affluent car-culture sprawling suburbs within the San Gabriel Valley and pretends to care about low rent housing. When asked on Twitter why he held the bill, Senator Portantino responded “[b]ecause it would provide a windfall for developers without the savings creating affordable housing.”
Portantino is a culturally conservative suburbanite that can’t fathom life beyond a gas guzzling SUV and a single-family house with a massive lawn. The problem is that handing Portantino these disingenuous arguments — which NPIC knows full well it’s doing despite pretending they’re being innocuously co-opted — makes them part of the problem. Because ultimately Western Center and suburbanite Portantino fought for the same thing: parking beside transit. Meanwhile they continue to propagate this idea to the Legislature about value capture conditioned on the removal of parking requirements.
So why does NPIC do things like this? The underlying problem here is this philosophical belief — pervasive among these heads of non-profits and their donors — that preventing developers from making money is more important than providing housing. Thus, removing parking minimums are not viewed as an attempt to get people out of automobiles; it’s viewed as a way to keep development expensive and theoretically less profitable. Although not actually — it merely makes rents higher. It ruins the credibility of these nonprofits if every motivation isn’t about the actual results of policy but how much obstruction in the process they can provide. Which isn’t good since we actually want these non-profits to meaningfully contribute which is increasingly diminishing with untenable positions.
Parking minimums is just one case of the preferences of insulated NPIC staffers making land use policy worse for home building, safer streets and climate action. But these types of warped and unresponsive stances that don’t adjust no matter how much contrary evidence comes before them proliferate across our politics at local, regional and national levels. The fight to get people on transit and make new housing more affordable via parking reform will eventually return to the California legislature and these ideologically adamant and illogical positions must cease.