DO - This is an example of why you are one of my favorite thinkers and essayists in our local housing discourse. This article moved me from free to a paid subsriber.
IMO, the unintentional and willful ignorance around housing math and lack of understanding about basic housing policy is our largest challenge to effective local housing policy. The hundreds of comments to Oaklandside's recent article on Oakland's current consideration of implementing an IZ policy are an example. I shuddered at the mountain of misinformation in those comments and kept it moving. It's hopeless.
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WHAT BOOK IS THIS FROM?
An excerpt from a book on the East Bay Area’s left-wing economic revolution in the 1970s explains how the socialists in Berkeley who introduced one of California’s first ordinances knew their 25% inclusionary requirements weren't feasible.
The requirement that low-to-moderate income housing be provided in any development was included to guarantee that new development would not be exclusively for wealthy residents. But proponents also understood that no private, speculative developer would either desire to provide lower priced housing, or be able to afford such inclusions without subsidies.
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A couple of quick comments and questions:
- Vienna talk is all the rage these days. Comment/question on Vienna - Austria has the 1% dedicated income tax to fund housing. This isn't a tax on wealth as you write above - this is a tax on income. Is there an income level below which Austrians don't pay this tax?
- Vienna has a lower population now than it did in 1880. In fact, Vienna's population declined 25% from its 1920'ish peak. Local govt was able to acquire vacant and abandoned land at cheap prices. That's not the case here and now. To implement Vienna style social housing, we have to fund not only construction and maintenance, but land acquisition in a built out Town. What's the math on that? Is there an appetite for another wave of eminent domain powered "urban renewal" in the flats? I thijhk its safe to say that our leafier neighborhoods won't be razed for Viennese style social housing apartment blocks
- Finally, as always, I challenge your notion that land ownership equals accessible wealth for lower income marginal homeowners. A friend's mom is a retired teacher with a house in East Oakland. Her pension doesn't cover her living expenses (healthcare is high - this ain't Vienna), and her kids had to borrow to cover her property tax that was due today 4/10. Increasing her property taxes not only directly increases her housing insecurity, but the ripple effects increase displacement & housing security in EO, if she has to sell her house and relocate to a lower cost region (i.e. Atlanta)
All of this is spot on as someone living in a 50/50 set aside luxury building with a lot of caveats and culture shocks. We should be subsdizing housing and small neighborhood service business sites as a government and that doesn't take away from a private market that wants to use skyscrapers as ATMs and toys.
Rent control was never a goal. It was always a strategy for justifying eviction restrictions so limiting that tenants would have all the rights of ownership without any of the obligations, essentially destroying private ownership. It worked in NY as generations of wealthy New Yorkers have replaced apartment ownership with ‘permanent’ tenancy at ridiculously low (subsidized) rents.
Berkeley’s Pamphlet from 1975 ‘Cities’ Wealth’ reveals the other goal is widespread public (Community) housing, made possible again by driving down the price of private rental housing (by over-regulating) so local government can buy (steal) property for public housing.
The underlying fallacy is that government can replace markets more cheaply by eliminating that bugaboo, ‘profit.’ The record shows the opposite: waste, inefficiency, poor maintenance, etc. The history shows only private competitive markets have a proven record of providing goods and services (such as housing) at efficient costs, and with incentives to maintain property (pride of ownership and future return.)
What about Vienna? A city with a unique history, culture, demographic collapse, wartime destruction, political structure, public-private tradition, etc. Mapping that onto Phoenix or Portland or SF makes little sense.
The only real solution to providing and maintaining affordable rents and home prices is a system of managed overbuilding. That provided affordability in past cycles, usually accidentally. It must be managed carefully to balance the needs of existing owners to protect the value of their investments against the needs of newcomers and new families to find affordable homes. It is a real political challenge but will always be fundamental to our housing system.
If you disagree and still cling to government housing, see Pruitt-Igoe. Government is historically terrible at building economically, maintaining, and operating housing or any form of building or construction (bridges, roads, parks, etc.). USSR?
I appreciate your perspective on these matters. I am curious if you have any thoughts about the Matt Yglesias-style YIMBY's refusal to engage in any discussion of genuine federal subsidies for affordable housing, social housing, public housing etc., as well as Yglesias himself's refusal to discuss rent regulations or tenant protections. You write well from both perspectives - creating more supply, but also not leaving behind the working poor - so I was curious. I literally cannot get Ygelsias to say anything about, for example, New York's network of rent stabilization which, in my view, is still pretty successful. (The trouble, really, is so many units left the program before 2019 and it's not universal.)
Yglesias and YIMBY's like him are very much against public housing. The argument, in essence, is that since private developers can build more cheaply than the government, the private sector should build. Which I get. But then why not argue for the feds to subsidize private development or create a new tax so you could fund projects where 50% or more of units are actually renting for less than $1800 a month?
DO - This is an example of why you are one of my favorite thinkers and essayists in our local housing discourse. This article moved me from free to a paid subsriber.
IMO, the unintentional and willful ignorance around housing math and lack of understanding about basic housing policy is our largest challenge to effective local housing policy. The hundreds of comments to Oaklandside's recent article on Oakland's current consideration of implementing an IZ policy are an example. I shuddered at the mountain of misinformation in those comments and kept it moving. It's hopeless.
=========================================
WHAT BOOK IS THIS FROM?
An excerpt from a book on the East Bay Area’s left-wing economic revolution in the 1970s explains how the socialists in Berkeley who introduced one of California’s first ordinances knew their 25% inclusionary requirements weren't feasible.
The requirement that low-to-moderate income housing be provided in any development was included to guarantee that new development would not be exclusively for wealthy residents. But proponents also understood that no private, speculative developer would either desire to provide lower priced housing, or be able to afford such inclusions without subsidies.
================================
A couple of quick comments and questions:
- Vienna talk is all the rage these days. Comment/question on Vienna - Austria has the 1% dedicated income tax to fund housing. This isn't a tax on wealth as you write above - this is a tax on income. Is there an income level below which Austrians don't pay this tax?
- Vienna has a lower population now than it did in 1880. In fact, Vienna's population declined 25% from its 1920'ish peak. Local govt was able to acquire vacant and abandoned land at cheap prices. That's not the case here and now. To implement Vienna style social housing, we have to fund not only construction and maintenance, but land acquisition in a built out Town. What's the math on that? Is there an appetite for another wave of eminent domain powered "urban renewal" in the flats? I thijhk its safe to say that our leafier neighborhoods won't be razed for Viennese style social housing apartment blocks
- Finally, as always, I challenge your notion that land ownership equals accessible wealth for lower income marginal homeowners. A friend's mom is a retired teacher with a house in East Oakland. Her pension doesn't cover her living expenses (healthcare is high - this ain't Vienna), and her kids had to borrow to cover her property tax that was due today 4/10. Increasing her property taxes not only directly increases her housing insecurity, but the ripple effects increase displacement & housing security in EO, if she has to sell her house and relocate to a lower cost region (i.e. Atlanta)
Keep doing the thinking!
All of this is spot on as someone living in a 50/50 set aside luxury building with a lot of caveats and culture shocks. We should be subsdizing housing and small neighborhood service business sites as a government and that doesn't take away from a private market that wants to use skyscrapers as ATMs and toys.
Very good points raised.
Rent control was never a goal. It was always a strategy for justifying eviction restrictions so limiting that tenants would have all the rights of ownership without any of the obligations, essentially destroying private ownership. It worked in NY as generations of wealthy New Yorkers have replaced apartment ownership with ‘permanent’ tenancy at ridiculously low (subsidized) rents.
Berkeley’s Pamphlet from 1975 ‘Cities’ Wealth’ reveals the other goal is widespread public (Community) housing, made possible again by driving down the price of private rental housing (by over-regulating) so local government can buy (steal) property for public housing.
The underlying fallacy is that government can replace markets more cheaply by eliminating that bugaboo, ‘profit.’ The record shows the opposite: waste, inefficiency, poor maintenance, etc. The history shows only private competitive markets have a proven record of providing goods and services (such as housing) at efficient costs, and with incentives to maintain property (pride of ownership and future return.)
What about Vienna? A city with a unique history, culture, demographic collapse, wartime destruction, political structure, public-private tradition, etc. Mapping that onto Phoenix or Portland or SF makes little sense.
The only real solution to providing and maintaining affordable rents and home prices is a system of managed overbuilding. That provided affordability in past cycles, usually accidentally. It must be managed carefully to balance the needs of existing owners to protect the value of their investments against the needs of newcomers and new families to find affordable homes. It is a real political challenge but will always be fundamental to our housing system.
If you disagree and still cling to government housing, see Pruitt-Igoe. Government is historically terrible at building economically, maintaining, and operating housing or any form of building or construction (bridges, roads, parks, etc.). USSR?
I appreciate your perspective on these matters. I am curious if you have any thoughts about the Matt Yglesias-style YIMBY's refusal to engage in any discussion of genuine federal subsidies for affordable housing, social housing, public housing etc., as well as Yglesias himself's refusal to discuss rent regulations or tenant protections. You write well from both perspectives - creating more supply, but also not leaving behind the working poor - so I was curious. I literally cannot get Ygelsias to say anything about, for example, New York's network of rent stabilization which, in my view, is still pretty successful. (The trouble, really, is so many units left the program before 2019 and it's not universal.)
Yglesias and YIMBY's like him are very much against public housing. The argument, in essence, is that since private developers can build more cheaply than the government, the private sector should build. Which I get. But then why not argue for the feds to subsidize private development or create a new tax so you could fund projects where 50% or more of units are actually renting for less than $1800 a month?