SB 50: How Wall Street Speculators Plan on Destroying Single-Family Homes

Anyone who lives in or visits Los Angeles can see we have a humanitarian crisis on our hands. More than 60,000 people are without homes, and the numbers grow every month. The allegedly booming economy has trickled up to the rich; meanwhile many working people experience the ravages of downward mobility. Priced out of increasingly expensive apartments, more and more folks live out of their car. And when that gets towed or broken into or stolen . . . then what?

Clearly, we have a housing shortage.

But how big of a shortage and what kind of shortage is crucial. Luxury condos? We got plenty. Affordable “low-income” apartments? Not so much.

The State of California’s internal housing numbers, confirmed by the non-partisan Embarcadero Institute, show that California needs about 1.3 million housing units by 2025 to meet expected demand. But the national and local media blithely peddle a different story. California, they say, requires 3.5 million units, almost triple the actual need. Where did this bloated figure come from? It was conjured by a “management consultant” employed by McKinsey, a firm that’s become fabulously wealthy teaching corporations and the politicians who do their bidding how to become even more fabulously wealthy, usually by “cutting costs,” i.e., firing employees. Keep in mind, the McKinsey report used New York, not California, as the model for California’s needs. If such nonsense seems credible to you, then the (privately commissioned) report is working its magic.

Why is this distinction important? Using the wildly inflated figure instead of the real figure allows state legislators working at the behest of their real estate developer patrons to push through flawed bills based on panic, not reason.

The latest and most dangerous of these panic bills making their way through Sacramento is SB 50.

Championed by a San Francisco-based, Wall Street-funded state Senator, Scott Wiener, SB 50 is not only flawed, it’s existentially dangerous, threatening the future of single-family homes in most major cities. Indeed, SB 50 calls for the banning of single-family zoning in California. Some sensitive coastal zones and all severe fire hazard areas would be spared, but if the legislation is passed, our frightened state would allow all other cities to approve and build luxury apartments on what are currently residential streets.

Wiener  — a Democrat, by the way, for anyone under the misapprehension that one party is on “your” side and the other isn’t — says developers will thrive from SB 50’s profit incentives, creating a housing boom that will trickle down to those in need. Does anyone (except the rich and those who aspire to lick their boots) still fall for this “trickle down” theory? It’s been propounded since the Reagan presidency; we have four decades of data for guidance. The San Francisco Board of Supervisors, who’ve carefully observed the luxury housing boom in the Bay Area fail to seep into lower economic strata, strongly disagrees. They oppose SB 50. So does Los Angeles.

In practice, SB 50 would seize local planning powers from cities and local communities and courteously gift-wrap them for luxury housing developers. The bill provides no compensation whatsoever for the disruption and destruction of low-income neighborhoods, communities of color, and single-family neighborhoods, including historic ones, like our own Sunset Square. Instead, SB 50 lavishly rewards those who construct housing for the wealthy. A tiny percentage of units are supposed to be set aside as “affordable.” But the main point is not to build affordable apartments; it’s to build what ever the market thinks it can get away with. The bill is beyond “flawed.” It’s a “solution” that any reasonable person can see will make the housing crisis worse.

According to Livable California, a citizens’ group lobbying against SB 50, these are some of the bill’s scariest lowlights:

1) Neighborhood Multi-Family Areas. Single-family zoning would be banned. Developers could buy out your neighbor or entire blocks, erecting lucrative 4-unit market-rate buildings. If a single-family area is dubbed “transit rich” or “jobs-rich,” then multi-story buildings are allowed.

2) Transit-Rich Areas. Developers could override city zoning near rail stops and frequent bus stops to erect 4-story to 8-story towers — with few affordable units. To boost developer profits while claiming “sustainability,” SB 50 requires no parking in apartment complexes near rail.

3) Jobs-Rich Areas. Developers can override zoning in jobs-rich/good schools areas that have no transit service, allowing expensive 4-story to 8-story towers with very few affordable units.

4) Carve-out Counties. Cities in less urban, mostly upscale counties — including Marin, Santa Cruz and Santa Barbara — would not be forced to allow 4- to 8-story towers near transit. Instead they’d be required to allow apartments one story higher than their existing zoning.

5) 10-Unit Exemption. Projects that contain fewer than 11 units get all of SB 50’s profit benefits yet require NO affordable units. UCLA Professor Michal Storper’s stand against SB 50 focuses on this element, in which the State would openly reward 10-unit luxury-only buildings.

6) Density Bonus Powers. San Francisco planners identified the profit points SB 50 will reward to developers who include a few affordable units in luxury buildings. In practice, developers would control up to six areas of city and community planning, including, but not limited to:

Setbacks – Developer can SLASH THE BREATHING ROOM cities require for trees, green belts, side yards.
Floor area ratio – Developer can OVERRIDE CITY SIZE restrictions, adding 47% to 297% to building sizes.
Parking – Developer can erect big apartment complexes with NO PARKING, OVERRIDING city rules.
Standards: Developer can OVERRIDE CITY STANDARDS (design/sustainability/safety) that aren’t state law.
Onsite open-space – Developers can OVERRIDE courtyards and balconies required by cities.
Historic – Developers can OVERRIDE protection of homes not on the CA Registry of Historic Resources.

7) Sensitive Communities. This list of still-unidentified communities, deemed to have a high percent of working-class, minority, or poor residents, would be granted 5 years to find a way to upzone their areas to let SB 50 take effect. They would essentially plan for their own demise.

Prof. Michael Storper of UCLA and London School of Economics calls SB 50 a politicized experiment in “Shock Zoning Therapy” based on no proofs, a bill that will clearly drive up land costs, and will likely fuel rampant gentrification and further displacement. Around here, we think it’s a disastrous way to fuel an ongoing disaster.

This might be a good time to find out what your elected representatives think about SB 50. And, perhaps, to let them know your thoughts.