Could Occupiers and Tea Partiers join to fight growth controls?

Jan. 3, 2013

By Wayne Lusvardi

Mixing metaphors, David Farber once said,  “Necessity is the mother of strange bedfellows.” That may be the case with flirting discussions between the Tea Party and the Occupy social movements in California.  There is a plausible emerging consensus between the two groups when it comes to the issue of growth management and the state’s foreclosure crisis.

No two groups could be further apart socially and politically. The the young occupiers mainly are based on California university campuses with no real property yet; the older tea partiers mainly are retired or about to be retired and are trying to protect their real estate and investment nest eggs.  The men in each group cannot seem to cross the communication gap; women Tea Partiers seem more willing to open up communications.  The dividing ground is private property: Occupiers don’t much like private property and Tea Partiers do.

Yet there may be common ground for collaboration in 2013.  In fact, there already have been unacknowledged occasions where both organizations were on the same side of the fence in 2012:

* For the most part, both Tea Partiers and Occupiers opposed Proposition 31 on the ballot in the past November election.  It would have usurped the republican form of democracy in California concerning tax-revenue sharing.  Universities, local public schools and even the California Coastal Commission saw in Prop. 31 the likelihood of funds being diverted away from them and environmental laws being relaxed.  Tea Partiers saw in Prop. 31 the state diluting “home rule” and diverting tax revenues from wealthy suburbs to broke cities and school districts. Arguably, without both organizations opposing Prop. 31 voters, might otherwise have approved it.

* In June 2012, Occupiers and Tea Partiers explored joining forces to oppose “Plan Bay Area,”  a regional plan for dense urban communities in mostly politically Blue coastal cities and counties.  Occupiers feared the creation of “priority development areas,” which sounds like re-starting redevelopment under a different name.  Some Tea Partiers were irrationally fearful about Plan Bay Area complying with United Nations Agenda 21 to establish global government.

Opening Discussions

A major concern of the Occupiers, who built a “Mr. Monopoly” float to follow the Rose Parade on New Year’s Day 2013 in Pasadena, is the ongoing California foreclosure crisis.  A subgroup of Occupy L.A., the Occupy Fights Foreclosures Subcommittee, wants to focus national attention on “illegal bank practices” that made homeowners victims of foreclosure.

Occupiers tend to misplace blame on big banks that mostly complied with the liberalized re-regulation — not deregulation — of mortgage finance laws from 2003 to 2010.  However, California Attorney General Kamela Harris already has been successful in shaking down big banks for an $18 billion “settlement” to combat California’s foreclosure crisis.  What the “Occupy Fights Foreclosures Subcommittee” can additionally accomplish beyond diverting attention away from the real cause is dubious.

On the other hand, in the South San Francisco Bay area there have been exploratory discussions between the two associations about opposing “smart growth,” such as Plan Bay Area.  Back in June 2012, Debbie Baccigalupi, the daughter of a Klamath Valley rancher, proposed joining forces with Occupiers to fight Plan Bay Area.  Even Danville realtor Heather Gass stepped up to oppose “coercive” regional planning.

It is unlikely that Occupiers can get Tea Partiers to join them in shaking down banks that hold the Tea Partiers’ savings and investments, but also hold mortgage portfolios.  And it is just as unlikely that the Tea Party could get Occupiers to oppose the proposed use of eminent domain in San Bernardino County to bring about mortgage forgiveness for homeowners who have “upside down” mortgages.

Fighting Growth Controls as Common Ground

But where interests could converge is over how slow growth and smart growth plans bring about California’s “roller coaster” real estate economy, resulting in ruinous foreclosures and upside down mortgages.

It is the toxic combination of slow-growth and smart-growth plans with low down payment mortgages that helped bring about abnormal booms and busts in California’s real estate market.

Growth management drives the politically unconnected out to the urban fringe, “edge cities,” and transitional farmland for new housing subdivisions. Thus, growth management results in stable property values in San Francisco, but boom and bust cycles in Fresno, Stockton and the Inland Empire.  San Francisco property values have recovered from the bursting of the Mortgage Bubble in 2007.  Stockton and San Bernardino experienced about 45 to 48 percent declines in homes values, something that has not been reversed.

Low interest rates and low down payments add fuel to this fire and cause home prices to rise beyond what incomes can support.  This creates a vicious cycle where homeowners need continual booms to offset their over-mortgaged housing that incomes cannot support.

California homeowners become addicted to voting for policies that promote housing booms to be able to sell their homes for an appreciated value.  And booms push property tax revenues under Proposition 13 up faster than money inflation.  Prop. 13 reformers never protest the windfalls from the bubble inflation of housing.

Housing bubbles are manufactured in California, not on Wall Street. One in every 173 homes in California was in foreclosure in 2009; only 1 in 1,000 in Texas.

Income inequality

Income equality — a major concern of Occupiers — is affected by growth controls. As the table below clearly shows, the Bay Area lost low and moderate-income households since 1989, but Houston gained in all income categories.  Unaffordable housing has pushed middle-income people out to the Central Valley cities with long work commutes.

Change in Number of Households by Income Class from 1989 to 2009

Quintile (5ths) in 1989	Quintile (5ths)in 2009	Houston(Private zoning)	San Francisco(growth controls)
>$60,000	>$100,000	219,970	156,477
$32,500 to $60,000	$60,000 to $100,000	45,986	245,948
$22,500 to $32,500	$40,000 to $60,000	122,329	12,425
$12,500 to $22,500	$20,000 to $40,000	184,840	30,474
<$12,500	<$22,500	90,680	7,828
		Included low & moderate income households	Pushed out low & middle income households to Central Valley
		1 in 1,000 homes foreclosed in 2009	1 in 173 homes foreclosed in 2009
Randal O’Toole, “American Nightmare: How Government Undermines the Dream of Homeownership,” p. 170.

Blaming big banks for foreclosures and Prop. 13 for state and school district budget deficits is just treating the symptoms and not the cause. Blaming banks also diverts attention away from the beneficiaries of growth control laws — wealthy property owners in Silicon Valley, Petaluma, and elsewhere who form a constituency for the Democratic Party.

If both groups were to find common ground in opposing growth management laws, they would have to give up demonizing for political gain and division.  And a crucial issue is whether the Occupy funding sources, including Democratic Party-backed ACORN, would allow such coordinated parallel efforts.  But stranger things have happened in California politics.