8 ms·

This would address an important element of high Bay Area housing costs: the discretionary project veto by local authorities. This is the main reason why only su

This would address an important element of high Bay Area housing costs: the discretionary project veto by local authorities. This is the main reason why only super-high end luxury stuff gets built in San Francisco. In most parts of the US, there are certain local zoning laws. You apply to the local government for review of your project. This is expensive, as you must prepare detailed professional studies for the proposal. If the project conforms to all of the zoning laws, it must receive a permit. They can only deny you a permit if your project does not comply with some specific zoning law. In San Francisco and several other nearby cities, the local government can arbitrarily withhold a permit even when a project conforms to all local zoning laws in every respect, usually under the vague and arbitrary guise of "not fitting in with the neighborhood's character." Since applying for a permit is an expensive and time consuming process, most developers simply don't bother to even try in San Francisco. They just go elsewhere, where their project can't be arbitrarily vetoed by local authorities despite conforming to all applicable zoning laws. The main exception is luxury developments: since the profit margin on luxury construction is so high, it's worth the extra cost and risk associated with navigating San Francisco's permit process. If this law passes, then municipalities will not wield the power of arbitrary veto anymore. There will still be extensive zoning regulations, of course; the difference is that development restrictions will have to be spelled out in the law, in advance, rather than made up on an ad hoc, per-project basis by local officials. This greatly reduces the risk involved in starting a development project, and makes non-luxury developments much more likely to be profitable and thus undertaken by developers.

jeffdavis 10y ago
What would stop a municipality from making zoning laws that are impossible to meet, and then just issuing waivers to those that play the political game well enough?
- SilasX 10y ago
  That sounds like how things already are, esp with the "neighborhood character" restriction.
- floatrock 10y ago
  Hopefully the local interests who also know how to play the political game well enough but recognize the "indications that businesses and residents are fleeing the state in part because of high housing costs and the state's Legislative Analyst Office blaming excessive restrictions on development for the affordability crisis". Profiting from pulling out the rug to newcomers only works if there are enough newcomers still willing to pay the exorbitant rents for the artificially suppressed supply. If enough people start saying "eh, the bay area is nice and all but not worth it", the NIMBYism starts to get less profitable. Sort of a pendulum-swinging-the-other-way dynamic-equilibrium type of thing.
  - superuser2 10y ago
    That is exactly what the electorate wants.
    - abakker 10y ago
      I've heard before that "everybody who moves to California wants to be the last person who moves to California." I think that applies here. Once you've got your spot, its best if it stays the way it is.
      - seanmcdirmid 10y ago
        "Got mine, screw you" isn't limited to Californian real estate though. It is unfortunately very broadly applied.
        Grishnakh 10y ago
        It's not just "broadly applied", it's the American motto!
        seanmcdirmid 10y ago
        Let's not kid ourselves: it isn't just the American motto...it is motto of most people in the world.
- tryitnow 10y ago
  My guess is that that would be a tougher law to pass. The real estate developers and construction trade unions would pretty much swear to block something that extreme. It could also wreak havoc with small-time landlords who want to improve their properties, so that's another interest group that would militantly oppose it.
  - pjlegato 10y ago
    This has already happened in SF. You need a permit to install a new garage door on your house, including a review of how well it fits the neighborhood character (in the subjective opinion of the reviewer). Yes, the real estate developers and construction unions have screamed, for decades. It passed anyway.
    - protomyth 10y ago
      "You need a permit to install a new garage door on your house" I can only imagine what would happen to a politician who would suggest this much less a group of politicians that would pass this in North Dakota. Why are they in office and who is supporting this type of legislation?
      - spamizbad 10y ago
        They are put in office by property owners that are big fans of these laws.
        sbov 10y ago
        That seems questionable. I haven't met a property owner that is a fan of permits.
        rm_-rf_slash 10y ago
        Harder to build -> harder to densify -> homeowners reap appreciation. If you don't need work done, this is a great way to sit back and let your property values skyrocket (as long as you can pay property taxes, but I hear that's kinda sorta not a problem in California).
- pjlegato 10y ago
  This is essentially what San Francisco does now: "fitting in with the neighborhood's character" is impossible to meet, unless you play the political game well enough.
- brudgers 10y ago
  Local real estate interests and the lack of political will. Sweeping zoning changes are hard work over many years. Those that widely devalue property? Few local politicians have the charisma to ride out multiple elections with that sort of agenda.
ethbro 10y ago
> The main exception is luxury developments: since the profit margin on luxury construction is so high, it's worth the extra cost and risk associated with navigating San Francisco's permit process. And by navigating arbitrary decisions, I assume we're talking about bribery at some level of the process?
brudgers 10y ago
Economics are the reason high end housing gets built. The fixed costs of development are similar regardless of affordability. Assuming uniform margins gross profits are higher at the high end as are internal rates of return [due to constant fixed costs]. Going further, there's more money to be made on larger loans and hence incentives for any developer financing purchases. Easier to sell on mortgages backed by higher quality assets. Affordable housing development is a specialty. It requires relationships with politicians willing to forgo maximizing the property tax base, specialized lenders, and a unique deal flow pipeline. E.g. think about the attractiveness of the 30 year affordability requirements in the legislation to the commercial market. Anyway, the effects of legislative changes will be felt ten to twenty years out...many of the shovel ready projects funded by the stimulus are still under construction.
- jessriedel 10y ago
  > Affordable housing development is a specialty. I don't necessarily dispute this, but your putative arguments could be applied to lots of industries, and seem inconsistent with the wide range of quality / price points for most products.
  - apsec112 10y ago
    In California newspeak, "affordable" housing means government-subsidized housing, while "luxury" housing means any housing built for profit (even if it's tiny studio apartments).
    - dragonwriter 10y ago
      > In California newspeak, "affordable" housing means government-subsidized housing, while "luxury" housing means any housing built for profit (even if it's tiny studio apartments). This is false. Direct subsidies are one of many means used in California to achieve targets for affordable housing, but affordable housing does not mean subsidized housing. That's particularly important in the context of this proposal, a key part of is proposing additional non-subsidy mechanisms to encourage affordable housing (by reducing the local-review barriers to new developments which include it, and reducing regulatory barriers to new units on existing lots.)
heydenberk 10y ago
Philadelphia allows any individual member of city council to veto any construction project for any reason[1]; it's called "councilmanic prerogative", and it is unsurprisingly linked to a number of corruption cases as well as some very murky cases of political retribution[2]. [1] https://www.seventy.org/publications/2012/01/04/councilmanic-prerogative https://www.seventy.org/publications/2012/01/04/councilmanic... [2] http://www.phillymag.com/citified/2016/05/09/kenyatta-johnson-ori-feibush-federal-trial/ http://www.phillymag.com/citified/2016/05/09/kenyatta-johnso...
tn13 10y ago
I think Municipalities should have the power of arbitrary veto. As a resident of Sunnyvale I do not want more housing projects to come in Sunnyvale, this helps me keep my property prices higher, have less traffic, less people and less crime. Also high income people tend to also improve the quality of public schools. I do not want state government to arbitrary force their views on our cities. Let the cities decide for themselves.

jeffdavis 10y ago

What would stop a municipality from making zoning laws that are impossible to meet, and then just issuing waivers to those that play the political game well enough?

SilasX 10y ago
That sounds like how things already are, esp with the "neighborhood character" restriction.
floatrock 10y ago
Hopefully the local interests who also know how to play the political game well enough but recognize the "indications that businesses and residents are fleeing the state in part because of high housing costs and the state's Legislative Analyst Office blaming excessive restrictions on development for the affordability crisis". Profiting from pulling out the rug to newcomers only works if there are enough newcomers still willing to pay the exorbitant rents for the artificially suppressed supply. If enough people start saying "eh, the bay area is nice and all but not worth it", the NIMBYism starts to get less profitable. Sort of a pendulum-swinging-the-other-way dynamic-equilibrium type of thing.
- superuser2 10y ago
  That is exactly what the electorate wants.
  - abakker 10y ago
    I've heard before that "everybody who moves to California wants to be the last person who moves to California." I think that applies here. Once you've got your spot, its best if it stays the way it is.
    - seanmcdirmid 10y ago
      "Got mine, screw you" isn't limited to Californian real estate though. It is unfortunately very broadly applied.
      - Grishnakh 10y ago
        It's not just "broadly applied", it's the American motto!
        seanmcdirmid 10y ago
        Let's not kid ourselves: it isn't just the American motto...it is motto of most people in the world.
tryitnow 10y ago
My guess is that that would be a tougher law to pass. The real estate developers and construction trade unions would pretty much swear to block something that extreme. It could also wreak havoc with small-time landlords who want to improve their properties, so that's another interest group that would militantly oppose it.
- pjlegato 10y ago
  This has already happened in SF. You need a permit to install a new garage door on your house, including a review of how well it fits the neighborhood character (in the subjective opinion of the reviewer). Yes, the real estate developers and construction unions have screamed, for decades. It passed anyway.
  - protomyth 10y ago
    "You need a permit to install a new garage door on your house" I can only imagine what would happen to a politician who would suggest this much less a group of politicians that would pass this in North Dakota. Why are they in office and who is supporting this type of legislation?
    - spamizbad 10y ago
      They are put in office by property owners that are big fans of these laws.
      - sbov 10y ago
        That seems questionable. I haven't met a property owner that is a fan of permits.
        rm_-rf_slash 10y ago
        Harder to build -> harder to densify -> homeowners reap appreciation. If you don't need work done, this is a great way to sit back and let your property values skyrocket (as long as you can pay property taxes, but I hear that's kinda sorta not a problem in California).
pjlegato 10y ago
This is essentially what San Francisco does now: "fitting in with the neighborhood's character" is impossible to meet, unless you play the political game well enough.
brudgers 10y ago
Local real estate interests and the lack of political will. Sweeping zoning changes are hard work over many years. Those that widely devalue property? Few local politicians have the charisma to ride out multiple elections with that sort of agenda.

ethbro 10y ago

> The main exception is luxury developments: since the profit margin on luxury construction is so high, it's worth the extra cost and risk associated with navigating San Francisco's permit process. And by navigating arbitrary decisions, I assume we're talking about bribery at some level of the process?

brudgers 10y ago

Economics are the reason high end housing gets built. The fixed costs of development are similar regardless of affordability. Assuming uniform margins gross profits are higher at the high end as are internal rates of return [due to constant fixed costs]. Going further, there's more money to be made on larger loans and hence incentives for any developer financing purchases. Easier to sell on mortgages backed by higher quality assets. Affordable housing development is a specialty. It requires relationships with politicians willing to forgo maximizing the property tax base, specialized lenders, and a unique deal flow pipeline. E.g. think about the attractiveness of the 30 year affordability requirements in the legislation to the commercial market. Anyway, the effects of legislative changes will be felt ten to twenty years out...many of the shovel ready projects funded by the stimulus are still under construction.

jessriedel 10y ago
> Affordable housing development is a specialty. I don't necessarily dispute this, but your putative arguments could be applied to lots of industries, and seem inconsistent with the wide range of quality / price points for most products.
- apsec112 10y ago
  In California newspeak, "affordable" housing means government-subsidized housing, while "luxury" housing means any housing built for profit (even if it's tiny studio apartments).
  - dragonwriter 10y ago
    > In California newspeak, "affordable" housing means government-subsidized housing, while "luxury" housing means any housing built for profit (even if it's tiny studio apartments). This is false. Direct subsidies are one of many means used in California to achieve targets for affordable housing, but affordable housing does not mean subsidized housing. That's particularly important in the context of this proposal, a key part of is proposing additional non-subsidy mechanisms to encourage affordable housing (by reducing the local-review barriers to new developments which include it, and reducing regulatory barriers to new units on existing lots.)

heydenberk 10y ago

Philadelphia allows any individual member of city council to veto any construction project for any reason[1]; it's called "councilmanic prerogative", and it is unsurprisingly linked to a number of corruption cases as well as some very murky cases of political retribution[2]. [1] https://www.seventy.org/publications/2012/01/04/councilmanic-prerogative https://www.seventy.org/publications/2012/01/04/councilmanic... [2] http://www.phillymag.com/citified/2016/05/09/kenyatta-johnson-ori-feibush-federal-trial/ http://www.phillymag.com/citified/2016/05/09/kenyatta-johnso...

tn13 10y ago

I think Municipalities should have the power of arbitrary veto. As a resident of Sunnyvale I do not want more housing projects to come in Sunnyvale, this helps me keep my property prices higher, have less traffic, less people and less crime. Also high income people tend to also improve the quality of public schools. I do not want state government to arbitrary force their views on our cities. Let the cities decide for themselves.