What If We Free San Francisco?

Someone recently alerted me to a 2017 article in Forbes in which my friend Scott Beyer, who considers himself a market urbanist, asks, “How would San Francisco develop under an open market?” His incorrect answer is that it would be even denser than today.

He bases that on the fact that in parts of the Bay Area where housing prices are highest, population growth is low. The latter, he says, is due to NIMBYism preventing construction of new housing. Get rid of NIMBYism (by getting rid of zoning), and new housing would spring up denser than ever before.

Beyers is correct that NIMBYism is a real problem. But it is not the main reason why Bay Area housing is expensive. As Bay Area developer Nicolas Arenson pointed out in a presentation to the Metropolitan Transportation Commission in May, 2015, high-density housing costs more to build per square foot than low-density housing — up to 650 percent more depending on the density. Land also costs more in areas that are already developed. As if that’s not enough, Arenson adds that dense housing “sells at a discount” to single-family homes. Continue reading

BART: The Bay Area Transit Disaster

Ridership on the $1.2 billion Bay Area Rapid Transit line to San Francisco Airport — which was never very high in the first place — has declined by 10 percent since 2013, which translates to a $4 million annual loss in fare revenues. Ridership on the $500 million BART-funded cable car to the Oakland Airport, which was also well below expectations, declined by 6 percent in the past two years, equal to about $620,000 in lost revenues.

BART blames ride hailing services for the loss in business, claiming that no one could have predicted the rise in such services when the agency planned these lines. Ride hailing is very predictable now (hindsight being 20:20), yet BART is still planning new lines, including an extension to Livermore, a second transbay crossing, and of course the line to downtown San Jose.

To pay for these new lines, as well as reconstruction of existing lines, BART asked voters to approve $3.5 billion in new funding in 2016 — and spent two years and an unknown amount of tax dollars promoting the ballot measure (without actually mentioning the measure) with the slogan “it’s time to rebuild.” It also failed to report these expenditures in a campaign filing statement, for which it was fined a whopping $7,500 by the state Fair Political Practices Commission. As one voter noted, “that’s not a fine; that’s a fantastic investment.” Continue reading

BART Can’t Solve Bay Area Housing Crisis

Last weekend, California Governor Jerry Brown signed Assembly Bill 2923, which gives BART the authority to ignore local zoning rules and build high-density housing on its own land in the Bay Area. This bill faced fierce opposition from mayors and city councils in Contra Costa County, but was supported by affordable housing advocates.

Ignoring the debate over density at the moment, what makes anyone think that BART, which can’t even effectively run a transit system, can suddenly become an expert housing developer? BART estimates that, with passage of this bill, it will be able to build 20,000 units of housing, about a third of which will be “affordable” (which in the Bay Area can mean affordable to people who earn $115,000 a year or less). While the region could use 20,000 housing units, there is no reason to think that BART can build them affordably or that high-density housing can even be affordable.

BART is well known for the cost overruns, maintenance problems, and crime problems on its transit system. It will be interesting to see how it applies these skills to housing. It’s hard to imagine the results will be very desirable. Continue reading

California Bill Threatens Neighborhoods

Speaking of the San Francisco Bay Area, as the Antiplanner was doing yesterday, the California legislature may be on the verge of passing a bill that will make that crowded region even more congested. Assembly Bill 2923 would allow, even require, that the Bay Area Rapid Transit Authority to overrule local zoning and impose high-density housing on neighborhoods within a half-mile of BART stations.

Not surprisingly, many cities including Fremont, Hayward, Lafayette, and Pleasant Hill oppose this preemption of their local authority. More surprising is opposition from the California chapter of the American Planning Association. While the APA supports minimum-density zoning, it doesn’t believe that transit agencies should be allowed to preempt local cities. Apparently, more APA members work for cities than for BART.

The bill’s advocates argue that high-density housing will be more affordable, a myth the Antiplanner has addressed before. Mid-rise construction costs 50 percent more and high-rise costs 68 percent more per square foot than low-rise housing. Land in areas with urban growth boundaries can be hundreds of times more expensive per acre than areas without boundaries, so densities would have to be that many times greater to get land costs per unit of housing down to reasonable levels. Continue reading

Affordable Is Not the Same as Affordability

Too much housing news is based on the failure to distinguish between affordable housing and housing affordability. Affordable housing is government-subsidized housing for low-income people. Housing affordability is the general level of housing prices relative to the general level of household or family incomes, often measured by dividing median home prices by median family incomes.

Areas where housing is affordable, such as Dallas or Raleigh, may still need some affordable housing for very poor people. But areas where housing is not affordable, such as Portland or San Francisco, will not solve their housing affordability problems by building more affordable housing. Despite this, politicians, reporters, and editors all promote more affordable housing to address housing affordability issues.

The San Jose Mercury News, for example, accuses Republicans of “sabotaging” the Bay Area’s affordable housing plans by cutting federal housing budgets. But the federal government didn’t impose urban-growth boundaries that have restricted development to 17 percent of the Bay Area, so why should federal taxpayers subsidize affordable housing that isn’t going to solve the region’s self-inflicted housing crisis? Continue reading

“Stability” Is Another Word for “Lack of Accountability”

A bill in the California legislature would give Caltrain, the commuter trains that connect San Jose with San Francisco, “permanent financial stability.” That’s good news if you think you will be riding Caltrains one thousand years from now, but it’s bad news for the taxpayers who will have to “permanently”–however long that is–pay for running empty trains.

Many transit agencies already have dedicated funds, by which they mean taxes that go straight into their coffers, but those that don’t whine and moan endlessly about how they would be much better off if only they had a dedicated fund. They even love to make fine distinctions: Atlanta’s MARTA complains that it has no dedicated funds from the state, but it does get a 1 percent sales tax, half of which has to be spent on capital improvements.

Transit advocates also like to point out that highways were built with a dedicated fund. Yet the gas taxes that go into that fund are highway user fees. In that sense, every transit agency has a dedicated fund because it gets to keep its user fees. Continue reading

Herding the Poor

TransForm, a smart-growth group in Oakland, has analyzed California’s household travel survey data and made what it thinks is a fascinating discovery: poor people drive less than rich people. Moreover, poor people especially drive less than rich people if they live in a high-density development served by frequent transit.


Click image to download the executive summary of TransForm’s report.

According to TransForm’s report, poor households who live in transit-oriented developments (TODs) drive only half as much as poor households who live away from TODs, while rich households who live in TODs drive about two-thirds as much as rich households who don’t live near TODs (see figure 1 on page 7).

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Making Housing Affordable

A Bay Area writer, Kim-Mai Cutler, writes what she supposes is the definitive analysis of why housing in San Francisco is so expensive. Unfortunately, she left a few things out.

She blames expensive San Francisco housing on Google’s refusal to build housing on its own campus in Mountain View–which Google says it can’t do because of the need to protect a rare owl. But Cutler defends the right of “anyone–rich or poor–the chance to transform or be transformed by” living in San Francisco. How can the City of 800,000 people achieve that when there are another 2.5 million people at its doorstep most of whom wish they could live in the Paris of the West?

Cutler’s solution is to build “affordable housing.” That means subsidized housing. If everyone in the nation has a right to live in San Francisco regardless of income, who is going to pay the subsidies? It also means high-density housing. Just how attractive and hospitable will San Francisco be after all of its single-family neighborhoods have been replaced by mid- or high-rises?

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BART Strike Today?

San Francisco BART employees were going to go on strike a couple of months ago, but Governor Brown invoked a “60-day cool-off period.” It seems unlikely that 60 more days of negotiations could resolve the issues–and they didn’t, as workers are expected to on strike today.

BART says that it needs $15 billion to rejuvenate its system over the next few years. To cover this cost, it wants workers to pay more into their pension and health care plans. Despite a proposed 12 percent pay raise over four years, the workers refused. Unions offered to go into binding arbitration, but BART management–probably fearing that arbitrators wouldn’t see BART’s maintenance problem as having anything to do with worker pay–refused.
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Even Bay Area commuters who used to love BART are beginning to understand the problems. First, BART employees, like most transit employees, have a cushy deal to begin with, and arbitrators would be reluctant to cut it back. More important, rail transit is just too damn expensive, and the costs never go away. Outside of places with Tokyo- or Hong Kong-like densities, nobody can really afford to run a passenger rail system, and those who try are going to find themselves in the same bind as BART is in today.

Carmaggedon? Not!

Many including CNN predicted that the BART strike would “paralyze San Francisco.” “Public transit in San Francisco came to a screeching halt Monday morning as Bay Area Rapid Transit unions went on strike,” says CNN.

Not exactly. First, BART accounts for less than a third of the region’s transit commuters. Buses account for more than half, and the buses didn’t go on strike.

Second, BART just doesn’t carry enough people to lead to paralysis even if all of them drove instead (and in fact many rode buses). As a state highway patrol officer noted, “If I didn’t know there was a BART strike, I wouldn’t have thought anything was different after looking at the traffic.”

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