Magazine News Volume 69, Issue 2

Bay Area Housing Crisis Sparks Legislative Proposals

In the United States, any household making at least $63,180 annually does better off than most American households.

In San Francisco, a household with at least two children making less than $117,400 is “low-income” for housing assistance purposes, according to the Department of Housing and Urban Development. A homeowner must earn at least $343,000 to affordably purchase a home, while homeowners must earn at least $198,000 in the Bay Area. Walnut Creek’s average house price, $1.1 million, is somewhat lower than San Francisco’s ($1.6 million), but higher than the regional average.

In response, state legislators enacted Assembly Bill 1482, which will, on January 1, 2020, cap rent increases at 5% each year plus inflation in apartment buildings, and some single-family housing units owned by corporations or real-estate investment trusts, over 15 years old. Rob Lapsley, President of the California Business Roundtable, a group representing some of California’s largest businesses, said that “AB 1482… strikes the right balance between providing better protections and certainty for renters while ensuring investment in new multifamily and single-family housing development.” Both Steve Glazer, Walnut Creek’s State Senator, and Rebecca Bauer-Kahan, Walnut Creek’s State Assemblywoman, voted for AB 1482. Rebecca Bauer-Kahan’s office stated that “rent gouging is a critical problem, and this compromise legislation will hopefully help keep families in their homes”.

However, AB 1482, which doesn’t restrict rents imposed on new tenants, failed to attract the support of some tenants’ groups. According to Deepa Varma, a San Francisco Tenants’ Union representative, AB 1482, “has a number of shortcomings and loopholes[,] such as the waiting period,” but “seems like a major step in the right direction, and a major victory for tenants.” Most rent increases are also lower than this maximum increase. Others criticized AB 1482 from an anti-rent control standpoint. The California Association of Realtors, in an August 30 statement, opposed AB 1482 because it “will not incentivize production of rental housing or help more people find an affordable place to live,” though pro-rent control groups such as the SFTU said “rent control keeps rents low for anyone who has it” and “keeps non[-]rent control unit prices lower than they would [otherwise be]… because landlord[s] then have competition on the bottom end,” citing studies in Boston after that Massachusetts banned rent control ordinances, including Boston’s, in the 1990s.

Tenants’ and labor groups also proposed Proposition 10, repealing a state law, the Costa-Hawkins Rental Housing Act, banning cities from restricting new tenants’ rents. The SFTU supported this initiative, stating that “Costa[-]Hawkins is the biggest barrier… to keep San Franciscans from being displaced, and the biggest barrier we have to keeping housing affordable.” Though California voters rejected Proposition 10 in November 2018, activists seek to place a similar measure on the 2020 ballot. Democratic presidential candidate Elizabeth Warren also proposed constructing 3.2 million affordable housing units and taking, “legal steps… to stop states from preempting local efforts to enact tenant protection laws,” similar to Proposition 10, according to a campaign press release. Bernie Sanders proposed, according to his website, constructing 7.4 million affordable housing units and enacting a “national cap on annual rent increases at no more than 3 percent or 1.5 times the Consumer Price Index (whichever is higher),” including on new tenants’ rents (known as vacancy control), which Varma called, “close to what we’d propose ourselves.” The SFTU also specifically favors, “strong rent control including vacancy control, a huge investment from the state in building affordable housing, union jobs (or at least [union-equivalent] wages) to do the building…other shifts to fight the income inequality that is driving so much displacement, and strong regulation of the finance and banking industry,” and for, “ strong [local] enforcement of these laws[:] rent boards to enforce rent restrictions, building inspectors to enforce habitability standards, and… a right to counsel so that tenants don’t lose out on their rights because they don’t have a lawyer.”

Yes In My Backyard (YIMBY) activists, however, focus on housing construction regardless of rent restrictions, believing greater housing construction will lower rates based off a supply-and-demand economic model. In this spirit, the California Legislature passed the Housing Crisis Act of 2019, prohibiting moratoriums on constructing new housing and municipal zoning reductions in density. Others proposed, but not enacted, SB 50, eliminating zoning restrictions near transit lines. The California Association of Realtors supports SB 50, as does YIMBY California, which boasted in a statement that SB 50, “will help end the housing crisis, protect existing renters from displacement, and reduce climate pollution,” while the SFTU opposed both these bills, claiming they would, “fuel increased speculative prices on land, undercut local affordable housing efforts, and [encourage gentrification].”

Rebecca Bauer-Kahan also opposes SB 50, “because [she] believe[s] that local cities and counties have the best perspective on what is appropriate zoning in their regions,” and that “a one size fits all solution is not the best way to encourage housing growth in our area – and is often simply not feasible,” according to a statement from her office. Both Steve Glazer and Rebecca Bauer-Kahan voted against the Housing Crisis Act, with Bauer-Kahan’s office stating that she, “absolutely believe[s] that we are in a housing crisis,” but that the Act, “did little to actually build homes, [and] only changes the bureaucratic processes that cities go through to zone and approve new housing.”