- Written by Marcy Berry
Because San Francisco has several significant Priority Development Areas, we at the Libertarian Party of San Francisco have been focusing on that component of Plan Bay Area. However, Priority Conservation Areas suffer from the same central planning micromanagement and resulting negative consequences as do the PDAs.
Therefore, we offer here a brief and clear Fact Sheet on PCAs.
- Written by Marcy Berry
Plan Bay Area seems to be caught between a rock and a hard place. Legislators envisioned the Plan as an ambitious regional transformation of population and transportation patterns. Environmentalists and affordable-housing activists hailed its establishment on July 2013. Today, cities find themselves facing consequences as they try to implement the Plan – and offering solutions that are sure to generate even more consequences. Unfortunately, such consequences have a way of reaching into everybody’s wallet.
- Written by Marcy Berry
“In the department of economy, an act, a habit, an institution, a law, gives birth not only to an effect, but to a series of effects. Of these effects, the first only is immediate; it manifests itself simultaneously with its cause - it is seen. The others unfold in succession - they are not seen: it is well for us, if they are foreseen.” 1
The above paragraph, written in 1850, is the introduction to Frederic Bastiat’s dissertation That Which is Seen and That Which is Unseen, a collection of ideas that seem good – the seen – but devolve into unintended consequences – the unseen. Idea number one is “The Broken Window,” a fable about a child who breaks a window in his father’s bakery shop. The baker’s neighbors tell him that his purchase of a new window will put money in the glazier’s hands, the glazier can buy new goods, and the whole neighborhood economy will profit. Bastiat reminds us that the unseen consequence is that the baker, who was planning to purchase a new suit, now does not have money to do so, and the tailor misses out on money with which to buy more goods.
Paul Krugman, Nobel Prize winner and New York Times columnist, would side with the baker’s neighbors. He wrote in his opinion piece of September 14, 2001, “Reckonings After the Horror,” “Ghastly as it may seem to say this, the terror attack -- like the original day of infamy, which brought an end to the Great Depression -- could even do some economic good…Now, all of a sudden, we need some new office buildings. As I've already indicated, the destruction isn't big compared with the economy, but rebuilding will generate at least some increase in business spending.”2 Break some windows, improve the economy. We will see if the rubble left behind by protesters in Baltimore this week will do wonders for the region’s economy.
Some in the press have blamed another broken window theory for the deaths of black men at the hands of police. The Economist article “What Broken Windows Policing Is” says, “In July 2014 an unarmed black man named Eric Garner died at the hands of a police officer after allegedly resisting arrest. Garner’s presumed crime was selling ‘loosies’, or untaxed cigarettes, on a street corner in Staten Island… Some say the problem is ‘broken windows’ policing, an approach to law enforcement based on the theory that cracking down on minor crimes helps to prevent major ones.” 3 Based on broken windows (plural) policing, New York instituted “stop and frisk,” under which mostly black and Hispanic men are stopped and searched without probable cause, creating a great deal of animosity and distrust between neighborhoods of color and police.
The article quoted above goes on to say: “The term ‘broken windows’ refers to an observation made in the early 1980s by [George] Kelling, a criminologist, and James Wilson, a social scientist, that when a building window is broken and left unrepaired, the rest of the windows will soon be broken too.”
- Written by Phil Berg
Written by guest poster Phil Berg
It's the money, stupid
There are two things involved in any transaction, the stuff and the money. It used to be that gas was five cents a gallon. Now it's three bucks. It's still the same old gas. So what has changed? The bucks have changed. The same goes for housing--more bucks chasing a fixed housing stock.
Let’s follow the money. But before I continue, I should say that almost everybody thinks that money is too complicated. It is much easier to make an emotional decision to just throw up your hands and blame greed. Blaming a broken market on greed is like blaming an airplane crash on gravity. Of course gravity is to blame, but the other reasons need to be investigated.
Following the money
One source of more money chasing housing is mortgages. The cash for mortgages largely comes from banks. Now, most people think that banks just recycle money from depositors. OK, this is right where most people stop listening and change the topic. But right here is the crux of the problem.
It is a little complicated. This is largely because we like to think that things work in a logical way. Honesty works in a logical. Fraud is more complicated. The machinery for creating more money for mortgages, or any other credit, is a fraud. That is a strong statement, but please just entertain the idea. Think about it for a while after you read this.
You will not be alone in being dazed by what I am about to write. No less a famous liberal economist, John Kenneth Galbraith, said that, “The mind is repelled by the notion of how money creation works.”
So here goes
We will start with a car loan, so as not to be distracted by the complications of real estate.
- Written by Marcy Berry
In the old days people used to call it “Using OPM.” Today the same phenomenon is called a “Voter Revolt.” Or at least that is what Jon Golinger calls it in his Opinion piece in the S.F. Examiner of March 15. Golinger was the driving force behind the wildly successful “No Wall on the Waterfront” campaign, which resulted in the canning of the Washington 8 luxury complex in San Francisco’s waterfront. Equally successful was Golinger’s Proposition B, which requires voter approval of any structure over existing high limits to be built on Port of San Francisco property (the waterfront).
In his Opinion piece, Golinger quotes the findings of a citywide poll of 602 likely voters conducted in February 2015 for the housing group TODCO, Tenants and Owners Development Corporation, focusing on South of Market. The findings state that the voters polled would overwhelmingly support ballot measures that would accomplish the following:
* Dedicate City-owned land to be used only for subsidized housing.
* Zone City-owned land only for subsidized housing.
* Enact a temporary moratorium on new projects in the Mission District, until the City adopts a policy to protect against the displacement of small businesses and arts groups.
Golinger excoriates the City for approving “a glut of luxury condos to occupy our increasingly limited land instead of prioritizing the affordable [subsidized] housing we badly need.” No mention in the article that Proposition C approved in 2012 would require that developers fork over the equivalent of 12% of those luxury condos in affordable housing. And Proposition K approved in 2014 would make the pressure to bump up the 12% to 33% unavoidable.
We Libertarians are 100% in favor of voter revolts. However, this revolt is starting to shape up as tons of expensive bonds (City IOU’s) and tax increment financing (future gains in taxes to subsidize current improvements). The City does not “earn” any money, so any money it may have to pay principal and interest on bonds needs to come from the pockets of those who do.
- Written by Marcy Berry
Libertarians are forever sounding alarms about the consequences of legislative decisions. Besides challenges to individual self determination, property rights, and voters’ ability to hold accountable via the ballot box individuals who make decisions on our behalf, Plan Bay Area is predictably contributing to the housing crunch.
As we noted in our article Priority Development Areas and Your Neighborhood, Plan Bay Area was designed to confine population, housing, and commercial growth to transit corridors, ostensibly in order to reduce travel distances to and from work and shopping (not much mention of schools, places of worship, or getting together with friends living outside of PDA’s). Therefore, San Francisco is doing a lot of construction in the eastern corridors. The Plan Bay Area map seen here shows the principal transit corridors highlighted in red, pink, and purple.
Apparently, the fallout has already begun. As Joe Fitzgerald Rodriguez says in his article Why Not Look to Westside to Build Homes?, the adage “Go West!” does not apply past the Panhandle; past the Panhandle it is more like, “Fat Chance!"
And the eastside residents are crying “Not Fair!” So, our legislators are retooling. Supervisor Eric Mar says that growth can’t just be on the east side. Supervisor David Campos may propose a moratorium on market rate housing development in parts of the Mission; which means no development at all unless taxpayers come up with boatloads of money to build even more subsidized housing than is already planned.
We Libertarians would like to remind our readers that Supervisors Mar and Campos were enthusiastic supporters of Plan Bay Area – and therefore its Priority Development Areas. Perhaps look under the cushions for more taxpayer money to develop transit corridors in the western parts of The City ASAP?
We recommend Joe Fitzgerald Rodriguez’ article in the San Francisco Examiner of February 17, 2014: On Guard: Why Not Look To Westside to Build Homes?
- Written by Marcy Berry
San Francisco is unquestionably a progressive town. All elected officials are Democrats. Compassion means rent control, subsidized housing, minimum wage, City mandated workplace healthcare and paid leave, free MUNI for students and seniors, and 17% of workers unionized vs. 11% nationwide. As for voters, they seem to revel in approving bond initiatives for all manner of spending.
Therefore, it might come as a surprise that the City and neighboring counties have lots of liberty-leaning folks who believe in the benefits to all of small government, free markets, personal liberty, and personal responsibility.
Liberty-leaning The Independent Institute thrives in nearby Oakland. This non-partisan non-profit organization sponsors in-depth studies of economic and social issues. Its website describes “The mission of The Independent Institute is to boldly advance peaceful, prosperous, and free societies grounded in a commitment to human worth and dignity.” http://www.independent.org/
Mountain View based Libertarian Futurist Society honors pro-freedom fiction writers with the annual Prometheus Award. From their website: “Do you love liberty and Science Fiction? Do you dream of a free future? Are you a fan of writers like Ayn Rand, Robert Heinlein, Poul Anderson, Vernor Vinge, James Hogan, Neal Stephenson, and Ken MacLeod? If so, then join the Libertarian Futurist Society!” Now, that can only be described as cool! http://lfs.org/aboutus.shtml
Libertarian (Big and small “L”) radio also thrives in the Bay Area. We recommend that you check out the websites of Bob Zadeck http://www.bobzadek.com/ and Freedomain Radio hosted by Stefan Molyneux https://freedomainradio.com/
There are several libertarian Meetup Groups, including ours which is sponsored by Starchild, our Outreach Director:
Free Exchange http://www.meetup.com/Free-Exchange/
Freedomain Radio http://www.meetup.com/Freedomain-Radio-Bay-Area/
Golden Gate Liberty Revolution http://www.meetup.com/RonPaulSF/
Libertarian Party of Alameda County Meetup http://www.meetup.com/libertarian-438/
Libertarian Party of San Francisco Meetup http://www.meetup.com/the-LPSF/
San Francisco Bitcoin Social http://www.meetup.com/San-Francisco-Bitcoin-Social/
So, if you think that the progressive approach to personal liberty and personal responsibility is not entirely to your liking, connect with people that feel as you do – check out the websites above.
- Written by Sonja Trauss
Guest contributor: Sonja Trauss
I don’t want subsidized, supervised affordable housing.
With a salary of $30,000 per year, I am low-income. Shouldn’t I be calling for more Below Market Rate (BMR) units to be built so that I can live in San Francisco? Don’t I appreciate the efforts of affordable housing advocates? They are working tirelessly to hold up and delay the creation of market rate units while negotiating for a higher percentage of units to be set aside as BMR rentals or condos.
Why aren’t I thankful? Don’t I want a Below Market Rate unit?
No, I want a Market Rate unit. I want the market to provide a unit I can afford.
Imagine the world that affordable housing advocates are trying to build for me: in their visionary utopia, in order to rent an apartment I would have to get my income certified. Next, I would go on a waiting list or enter a lottery. I would either wait years on the list for a unit or endure many rounds of lotteries before winning a unit. Once in a BMR rental unit, I would be discouraged from letting my income increase. If I were to progress in my career, or have some other financial success, I would have to move.
Maybe I could buy a BMR condo. That takes care of the possibility of being forced out if my income increases, but owning a BMR condo is false ownership. I don’t have the two main advantages of true ownership: I cannot pass the property onto my heirs, and I cannot take advantage of the full appreciation of the property. The resale price of a BMR unit is determined by the Area Median Income at the time of the resale. Unlike a true owner, increases in property values in my neighborhood do nothing for my overall wealth.
I want to rent on the open market. If I can buy, I want to buy and truly own. I want to consume housing the way I consume all other products: Buy used, old or out of fashion, buy scratched and dented, buy odd lots, split the cost with friends. Of course I’m not going to move into a new building. If you’re trying to save money on a car, do you buy this year’s model? No.
Every new affordable unit means another renter living under income supervision and perverse incentives. It means another “owner” robbed of the appreciation of his asset, and his children alienated from their inheritance.
There is a place for subsidized housing: people who are unable to work due to advanced age or disability should be entitled to a housing benefit along with their social security benefits. If you’re working, the market should be big enough to supply you with housing. If the supply is sufficient, and the lowest wage workers are still priced out, then the area minimum wage is too low.
In my utopia there would be zero working-age, able-bodied, sound of mind people in supervisory subsidized housing, zero hamstrung owners, ZERO WAIT LISTS. Zero supply constraints!
How do we get market rate housing for all markets? Step One: End the shortage. If we need 100,000 units, we have a lot of work ahead of us. If you’re involved in opposing a new housing project, stop, just stop.
Our need for housing at all price levels far outstrips our supply at any level. Are you preoccupied with whether the new units “match” the rest of the neighborhood? Matching is for your belt and your shoes. Housing supply is a serious problem. If you’re sentimental about the past, swallow your tears.
Sonja Trauss is the founder of SF Bay Area Renter’s Federation.Her views are her own and not an official position of SFBARF.