As CalWatchdog

Senate Bill 35 by Sen. Scott Weiner, D-San Francisco, requires cities that have not met their affordable housing requirements to approve projects that are properly zoned, pay union-scale wages to builders and have at least 10 percent of units in “affordable” ranges.

After months of objections from Cupertino elected officials and activists, in June, the city signed off on developer Sand Hill Property Company’s plan to convert the largely empty 58-acre Vallco Mall site to a huge multi-use project with 2,400 residential units, 400,000 square feet of retail space and 1.8 million square feet of office space

Given that 98 percent of cities have been found to have an inadequate supply of affordable housing, according to a state evaluation, the Cupertino precedent seemed potentially huge.

Two months later, new developments related to SB35 appear to point in the opposite direction.

Last week, Berkeley officials rejected a plan to use the law to fast-track approval of 260 apartments and 27,500 square feet of commercial space at 1900 4th Street just east of the Berkeley Marina despite evidence presented by developer Blake Griggs Properties that it was properly zoned and otherwise met SB35’s edicts.

City tactics in fighting project have familiar ring

The tactics that Berkeley is prepared to use mirrored the ways that construction projects have been fought in California for decades: raising a variety of legal objections that could cost developers millions of dollars because of delays, even if they have little or no validity or applicability.

Berkeley planning chief Timothy Burroughs said the project could not proceed because:

• It would have been built on land designated as a historical landmark because of a Native American burial ground. As a city with its own charter government, it is given deference in protecting its history.
•  It would have considerable low-income housing but not enough housing for those with very low incomes.
•  It would have increased traffic in the area in ways not allowed by city laws.

The objections were of the sort that Weiner sought to bypass with SB35. This is why the developer warned of a lawsuit earlier in the summer after the city put up roadblocks to approval.

But in a surprising move reported last week by the San Jose Mercury-News, West Berkeley Investors – part of the group backing developer Blake Griggs Properties – has backed out of the project without explanation. The assumption of many is that it saw the hassles as outweighing the chances for success.

The Mercury-News also reported that a spokesman for Berkeley City Hall said officials would welcome it if developers chose to reactivate a previous application that had far fewer residential units – 135 – and slightly more commercial space – 33,000 square feet.

In his Sept. 4 letter rejecting the latest version of the project, the city planning chief emphasized the historical significance of the Native American burial ground. Why that significance would lose weight in planning decisions if a smaller project were being considered was not explained.

But Burroughs pushed back against the idea his city was hostile to adding housing stock. He said 910 housing units have been built since 2014, 525 are now being constructed and 1,070 are cleared and in the pipeline.

Passed in 1970, CEQA requires state and local agencies to assess the environmental impact of projects and, if possible, mitigate these impacts. While some argue it merely protects the environment, CEQA has attracted critics from both sides of the political spectrum. It’s blamed for contributing to the state’s insufficient housing stock and some argue it has resulted in frivolous red tape and litigation that bogs down and deters development.

According to the study, however, CEQA doesn’t come into play unless approval of the development is at the discretion of the local government.  “As of right” development – projects that need only to meet zoning and planning regulations – do not generally trigger the CEQA process.

In the five cities studied – Oakland, Palo Alto, Redwood City, San Francisco and San Jose – only 23 of 287 projects required a full environmental impact report.

The crux of the problem is that all the cities studied required discretionary review for residential projects. Some of the cities maintained minor exemptions, such as for single family homes, while San Francisco had no exemptions. Combined with the inefficiencies resulting from the byzantine review processes of these cities, developers face significant hurdles when embarking on projects.

“A single project might need to obtain Design Review approval and a Minor Variance from the Director of the Planning Department and a rezoning from the City Council. This requires navigating multiple levels of local government where only one approval process would be sufficient to pull the project within the scope of local discretion.”

The result is that more land use/planning approvals were issued than the number of projects. Additionally, parceling up the land would lead to even more review processes.

Even when cities use the same regulatory tools, the outcomes can vary drastically. Both Oakland and San Francisco rely on Community Plan Exemptions to mitigate CEQA compliance obligations. Yet the process takes only 7 months in Oakland, as opposed to 23 months in San Francisco.

The authors concluded that “these five local governments are choosing to opt into CEQA through their choice to embed discretionary review into the entitlement process,” and “the problem (and potential costs) associated with environmental review do not appear to originate with state environmental regulation.”

The implications of the study are a bottom-up and local focus might do more to ameliorate the state’s affordable housing shortage than the more popular top-down, “reform CEQA” approach.

“This is much more than CEQA,” Eric Biber, one of the study’s authors, told the L.A. Times. “Really if you just went after CEQA, you’re not going to solve the problem.”

Under the newly passed resolution, no city department, agency or employee “shall use any city funds or resources to assist in the enforcement of federal drug laws related to cannabis.”

The action comes after Attorney General Jeff Sessions rescinded multiple Obama-era memos that had adopted a policy of non-interference with pot-friendly state laws, in what essentially allowed legalization efforts to take effect without federal interference.

“In light of threats by Attorney General Sessions regarding a misguided crackdown on our democratic decision to legalize recreational cannabis, we have become what may be the first city in the country to declare ourselves a sanctuary city for cannabis,” Berkeley Mayor Jesse Arreguin tweeted this week.

Sessions called the decision a “return to the rule of law.” And while he didn’t outright direct more prosecutions of marijuana crimes, the move outraged proponents of legalization.

“Increased federal enforcement of marijuana will have serious social and economic consequences,” the Berkeley resolution reads. “Uncertainty about potential enforcement and or enforcement itself may force established medical and adult-use cannabis-related businesses to close or move underground, which could impede the development of the newly regulated market and threaten public safety.”

While several states, including California, have legalized pot, it is still illegal under federal law.

“I believe we can balance public safety and resisting the Trump administration,” Mayor Arreguin reportedly said at Tuesday’s City Council meeting. “We’re keeping with the strong position Berkeley is a sanctuary for people in our community.”

However, the move is largely symbolic as there’s little the city could do to stop federal authorities from cracking down on commercial marijuana operations.

In 2016, under Proposition 64, California voted to legalize the drug and it went into effect at the start of this year. Under the new law, adults 21 and over can use marijuana for recreational use.

For the liberal enclave, it’s just the latest act of defiance, as the city has been outspoken in its opposition to the Trump agenda on issues like immigration and climate change.

And in an even more unorthodox move, the city is exploring creating its own crypto-currency in an attempt to establish more independence from Washington by holding an initial coin offering (ICO).

President Trump called out Berkeley specifically last February following violent protests over a planned speech by provocateur Milo Yiannopoulous.

“If U.C. Berkeley does not allow free speech and practices violence on innocent people with a different point of view – NO FEDERAL FUNDS?” Trump tweeted, highlighting the conflict between the White House and the city.

It’s just the latest piece of evidence on the state’s housing crisis, as residents confront a shrinking supply of homes and rising costs, leading many to wonder if they’d be better off elsewhere.

“When you then ask them where they would relocate, they’re often throwing up their hands,” poll director Mark DiCamillo said, according to the LA Weekly. “Millennials seem to be the most likely to say they’d consider leaving.”

The uneasiness about the market appears most dramatically in the Bay Area, where 65 percent of those polled said they’re facing an “extremely serious” housing affordability problem.

But even in Los Angeles and San Diego, 59 percent and 51 percent, respectively, have considered re-locating over housing affordability issues.

The IGS poll sampled 1,200 registered California voters from late August through early September.

In Los Angeles specifically, a recent analysis found that a person needs to earn over $109,000 per year to afford a two-bedroom apartment in the city, with the assumption that renters are spending 30 percent or less of their income on housing.

Across the entire state, the median rent for a one-bedroom apartment is $1,750 and a two-bedroom averages $2,110.

“These are very dramatic findings,” DiCamillo added, according to the Mercury News. “In every region of California, the rising cost of housing has crept into the consciousness of voters.”

The median price of a single-family home rose around 7 percent year-over-year to $565,330 in California this past August – and in Santa Clara County, the heart of Silicon Valley, the median price jumped a shocking 17.9 percent year-over-year to $1,150,000. 

The state Legislature is taking notice, passing 15 bills this month relating to housing affordability, seeking to increase the pace at which housing construction takes place.

For example, Senate Bill 2 and Senate Bill 3 provide new funding for low-income housing, while SB35 attempts to streamline the approval process for construction in municipalities that fall behind Sacramento’s housing goals.

While California boasts some of the highest earners, it also has the nation’s highest poverty rate when housing costs are factored in, resulting in a heightened sense of urgency in a state that has some of the biggest regulatory hurdles for new home building.

Berkeley authorities bolstered security for the event, with a barrier being constructed around the perimeter of the area and attendees being required to walk through metal detectors as they entered Zellerbach Hall.

University of California spokesman Dan Mogulof said the university went through “extraordinary lengths” to ensure safety, spending nearly $600,000 on security.

Shapiro, citing the heavy police presence and physical barriers, joked that “Berkeley has actually achieved building a wall before Donald Trump did.”

The 33-year-old editor in chief of The Daily Wire delivered his usual blend of pro-free speech rhetoric and conservative policy, in the speech titled “Say No To Campus Thuggery.”

“America is watching because you guys are so stupid,” Shapiro said about the left-wing group Antifa. “You can all go to hell you pathetic, lying, stupid, jackasses.”

The much-anticipated speech drew national attention, as Berkeley has become a flashpoint in the debate over free speech on college campuses after seeing violent protests earlier this year over speakers like right-wing provocateur Milo Yiannopoulos and best-selling author Ann Coulter.

Those ordeals prompted serious questions about whether the liberal enclave, which historically embraced principles of free speech and expression, was now unwilling to host opposing viewpoints in a new political climate.

And while the night was largely peaceful, hundreds of demonstrators gathered outside the venue to protest Shapiro’s views and there were at least three arrests relating to the possession of banned weapons, local authorities said.

The Thursday night speech is just the start of a plethora of conservative voices coming to the Northern California campus, as Yiannopoulos and a student group have organized a “Free Speech Week” later this month. Beginning Sunday, September 24th, there will be a series of events, with speakers including Breitbart chief Steve Bannon, The Gateway Pundit’s Lucian Wintrich, and journalist Mike Cernovich.

“We’ve never seen a situation like this. It’s very unique. It’s a very different political dynamic where free speech … at Berkeley has become the occasion for the right and left to confront each other,” UC Chancellor Carol T. Christ said about the school’s role in a larger national debate.

Berkeley chancellor Nicholas Dirks said “the university had a ‘substantial and growing’ deficit that could threaten its long-term stability,” according to the New York Times, “and that it needed to reduce expenses and raise revenues to maintain its position as a premier public institution.”

Dirks indicated that a new committee would “develop proposals to address the $150 million deficit, or about 6 percent of Berkeley’s $2.4 billion budget, including looking at reducing staff, particularly in administration, and using online courses, real estate and branding to bring in new revenue,” the paper added.

A broader problem

The embarrassing revelations reverberated nationally amid an ongoing debate over the value of a college education in today’s cultural and economic situation. But in California, where Gov. Jerry Brown had entered into a protracted and at times acrimonious debate with UC president Janet Napolitano, news of Berkeley’s massive shortfall led observers to speculate whether the delicately negotiated agreement the two power players finally settled on would hold. Napolitano swiftly announced her support for Dirks’ plan, the Times reported, “while Mr. Brown declined to comment on it.”

Berkeley’s woes have come to epitomize the difficult situations colleges often find — or place — themselves in. “One of the campus’s primary sources of revenue — tuition and fees — has been frozen for undergraduate students for the last five years,” the Daily Californian noted, obliquely referencing the negotiated plan to keep UC tuition at current rates for in-state students through the 2017-2018 school year. “Meanwhile, inflation continues to inch upward, and costs beyond the university’s control have continued to rise, all in the context of an era of public disinvestment, according to campus sources.”

Sacred cows

The crisis has turned out to be so bad that the campus’s athletic programs could wind up on the chopping block. “Even Cal Athletics, which many perceive to be the campus’s biggest revenue generator, will not escape budgetary review,” added the Daily Californian. “Intercollegiate Athletics has run a deficit in recent years, with even more strain put on its pocketbooks by debt obligation — about $18.1 million annually until 2032 — accumulated after upgrading Memorial Stadium.”

Campuses across the country have come under fire in recent years as critics have questioned the impact of lavish facilities, prized sports teams, and ballooning administrative staff on tuition costs. At the same time, state support for schools in states like California has decreased. “The amount of money the state gave the University of California, as measured per student, fell from $16,000 in 2007-08, before the recession, to $10,000 in 2011-12,” the Los Angeles Times reported. “Meanwhile, tuition more than doubled between 2002 and 2012, according to a 2014 analysis by the Public Policy Institute of California.”

In an effort to stave off another mutiny among alumni, Dirks “ruled out eliminating any teams,” according to the San Francisco Chronicle — “a subject of sensitivity in the past. When the university tried to cut the men’s baseball team in 2011, it prompted an uproar among alumni who eventually helped raise enough money to rescue it.”

Teams weren’t the only special groups taken off the chopping block. Although Dirks has insisted that “every aspect of Berkeley’s operations and organizational structure will be under consideration,” the Chronicle noted, he conceded in a recent news conference that “we’re not laying off faculty.”

In the red

To stay afloat, UC Berkeley has resorted to a supervised emergency bailout, with strings attached, from the UC system as a whole. The campus will “receive at least $200 million in loans and debt restructuring from University of California headquarters,” the Chronicle reported, “and will spend the next several months working with UC officials, faculty and the campus’ fundraising foundation to identify cuts and brainstorm ways to attract more cash.”

Plans have already been in the works sketching out exactly what that months-long process will entail. “Berkeley will scrutinize its entire workforce, redesign some academic programs, step up fundraising, expand online course offerings and take other steps to cut costs and increase revenue,” according to the Los Angeles Times.

For Sixties survivors like me, it’s always amusing when Berkeley does something like this. The city has been open to medical-marijuana dispensaries. But pot famously gives people the munchies. Then Berkeley taxes what they want to munch! (Or swallow, in the case of soda.) What would the late Jerry Garcia say?

In the 1960s, Berkeley was the center of the “free speech” and hippy movements. Motto: Turn on, tune in, drop out.

But yesterday’s hippies are today’s politically correct commissars, in Berkeley and almost every other campus in the United States, as well is in many state legislatures, including California’s. Motto: Tax it, regulate it, ban it.

But Berkeley is a medium-sized city of 112,580. It will be easy for its inmates to buy the contraband sugar-water in neighboring San Francisco, Oakland, Emeryville, Piedmont or El Cerrito.

Of course, then the unhappy hippies will try to go for a regional or state soda taxes.

Yet San Francisco’s Proposition E soda tax — a much higher 24 cents on a can — lost. Albeit the threshold of passage there was higher, two-thirds, and it got 55 percent.

But a statewide tax likely would fail, as would a tax in most areas, including giant Los Angeles. Maybe Santa Cruz or other Pyongyang-influenced university towns might ape Berkeley and pass a tax.

Soon we should see stories of merchants in Berkeley decrying lost soda sales, which also would lead to lost sales in other areas because of fewer customers going into their stores.

Taxes do have consequences.

On the heels of a recently approved $15 minimum wage in Seattle, advocates for dramatically increased hourly wages sensed an opportunity to select a fresh target. That’s where L.A. comes in. Organizations including the Los Angeles Workers Assembly and Peoples Power Assemblies have begun drafting a measure that would put a $15 wage on November’s city ballot.

Activists’ experience in Seattle suggests that once a city votes in a mandatory wage boost, reversing the policy can be an extreme challenge. That even appears to be true during the time before increased wages are implemented. A business-led effort to repeal that city’s wage ordinance called Forward Seattle has run aground, failing to collect enough signatures to put a repeal plan before voters. That marks an end to organized opposition to the increase in wages, which takes effect gradually until topping out in 2017.

Hotel politics — and union gamesmanship?

Activists in L.A. had already singled out hotel workers for a planned hike in wages, almost doubling the rate to $15.37 an hour. Industry and business organizations reacted predictably. Lynn Mohrfeld, president and CEO of the California Hotel Association, observed that the scheme would only affect non-union hotels — stoking speculation that unions hoped businesses would encourage unionization to avoid the sudden leap in costs.

Mayor Eric Garcetti, who had been cagey about singling out hotels when his primary opponent Wendy Greuel called it a “living wage,” now supports the idea. Garcetti has said he would sign an ordinance bringing large hotels’ minimum wages to $15.37, but is only “reviewing” the current, broader proposal for a blanket $15 wage, according to a spokesman.

One reason activists looked to Los Angeles after Seattle is simple: California has already been successfully targeted for blanket minimum wage hikes. On July 1, Assembly Bill 10 went into effect, raising the state minimum wage to $9 an hour. On the first of the year in 2016, that figure will rise again to $10. Gov. Jerry Brown signed the bill last fall, giving activists a substantial amount of lead time in planning their next move.

L.A. isn’t the only city where minimum wage increases are on the march. Just this month, San Diego skipped over voters entirely and opted to raise wages through its City Council. Todd Gloria, the council president, initially wanted to put the matter on the ballot, but ended up deciding to impose it directly on a 6-3 partisan vote, with all Democratic members voting yes and all Republican members voting no. San Diego will hike the minimum wage to $9.75 on the first of the new year, to $10.50 at the start of 2016, and to $11.50 as 2017 rings in. Starting two years later, the minimum wage will rise along with inflation.

Powerful coalition builds in S.F.

Meanwhile, in San Francisco an overwhelming coalition of labor, interest and some business groups succeeded in placing on their city ballot a gradual wage increase to $15 by 2018. Although even San Francisco’s Chamber of Commerce has lent its symbolic approval to the measure, restaurateurs and hospitality industry leaders expect the hikes will hit them hard.

Finally, East Bay mayors have recently hatched a plan to coordinate their minimum wage increases. A wage proposal on Oakland’s upcoming ballot is poised to trigger a round of hikes that would end up reaching from Richmond to Berkeley to Emeryville and beyond.

Liberals, union leaders and labor activists were disappointed when Congress opposed a national minimum wage hike — a marquee initiative drummed up by high-ranking Democrats to shift attention away from Obamacare’s then-humiliating struggles. But the subsequent shift to state and local activism has demonstrated the effectiveness of politics practiced closer to the ground.

With momentum behind them, L.A. organizers have settled on an accelerated timetable for phasing in the hikes. Small businesses and nonprofits would get less than two years to prepare for the increase, while large businesses would be hit immediately.

In modern America, anything banned soon becomes mandatory.

So here’s a new routine for Cheech and Chong:

Knock on the door.

“Who is it?”

“It’s me. Dave, man. Let me in. I got the stuff.”

“Dave’s not here.”

Knocking.

“Hey, man. I think Social Services saw me. Let me in. I got the stuff and they want some of it for the poor.”

“Dave’s not here.”

“I know, man! I’m Dave. Let me in. Social Services is after me for some of the medical marijuana.”

“Dave’s not here.”

“Hey, I’m Dave. man. Dave. D-A-V-E! Now will you open up the door?”

“Dave’s not here.”

By Wayne Lusvardi

Question: Are working-class communities smarter than wealthier school districts by not putting increased school parcel taxes on local election ballots?

This is not the conclusion suggested in a new study released May 2013 by EdSource, a non-profit education research center in Oakland.  The study, “Raising Revenues Locally: Parcel Taxes in California School Districts 1983-2012,” suggests that lower-income school districts should catch up with the 12 percent of school districts that recently have passed local school parcel taxes.

Most of the school districts that have passed such taxes, however, have been in super-wealthy residential enclaves in Northern California.  A parcel tax, which is assessed on each individual parcel of property regardless of size, is placed on top of state funded school revenues and local property taxes.

But are school parcel taxes mostly a status symbol?  Or do they bring about better academic performance and higher property values in working class neighborhoods?

The EdSource study found that school parcel taxes actually pay for the provision of luxury public school services that are of no help to less advantaged areas, except perhaps but to provide more jobs to cultural elites and unions.

Local school districts in less wealthy areas want to bring in more outside state revenues, rather than imposing more taxes on already struggling families. Education policy leaders need to understand that, in working class families, many teenage children need to take jobs and don’t have time for the extracurricular activities funded by the parcel taxes.

Nor do many working-class parents have the time and an extra car to transport their children to sports, band practice or other activities.  Working-class students and their parents also are less likely to want more school counseling, high school course electives, diversity curriculum consultants, assistant coaches and librarians, and more arts and music classes.

But do low-income areas get more “bang for their education buck” if they raise their local taxes to provide more school funding?

A comparison of a wealthy and less wealthy school districts

Below is a table excerpted from the EdSource study that shows the top five school districts in relying on school parcel taxes in California. These five school districts generate from 24 to 31 percent of their revenues from local parcel taxes.

Note how the Berkeley Unified School District raises about $29 million from local parcel taxes, on top of already existing property taxes that also pay for schools. Parcel taxes make up 25 percent of Berkeley’s total school district revenues.

Parcel Tax as Share of Districts’ Revenues: Top Five School Districts, 2011-2012

Next is a table constructed by this author from a computer program supplied by the California Department of Education that provides an automatic comparison of school districts of similar size.  

The common factor here is the Berkeley Unified School District. It’s in the chart above, and in the chart below.

Here’s what to note below: BUSD provides about 31 percent higher revenues per student than the Milipitas and King Canyon Unified School Districts.  Most of Berkeley’s higher revenue comes from parcel taxes.

Comparable School Districts per California Dept. of Education

So, what does the Berkeley Unified School District get for about 30 percent greater public school revenues from parcel taxes? And for having lowest average class size: 18.1 students per class? Its achievement on Academic Performance Index test was no better than schools with a lot less money: all did not achieve at the mandated levels.

Comparison

On the second chart, compare BUSD’s with the less-wealthy Kings Canyon Unified School District. It has mostly minority students, lower average teachers’ salaries, a higher average class size and about 26 percent lower revenues per student than BUSD. But Kings Canyon got just as much educational “bang for their tax buck” as Berkeley; albeit they also did not achieve high enough on the API.

What Berkeley apparently did get, however, is enhanced property values as shown in the above table. Berkeley’s average property value of $749,400 was five times the $146,400 of Kings Canyon.

The above comparison of schools is representative of nearly all school districts in the state. The data was not cherry picked by this writer to slant the results.

In California, wealthier school districts often provide luxury educational services funded by school parcel taxes. Less wealthy public school districts would get no guarantee of greater academic performance by raising parcel taxes to fund mainly luxury educational services and jobs mostly for the benefit of cultural elites and unions.

The same trend would hold true for Gov. Jerry Brown’s proposed policy to shift a greater proportion of public school funding to more disadvantaged schools by reducing the budget allocation to suburban schools.

This only would lead to wealthier suburban schools passing even higher parcel taxes to back-fill the state school funding they lost.  But none of this cost shifting and tax shifting would have much, if any, benefit on educational outcomes. It might lower property values, and thus property taxes, in wealthier school districts, unless they backfilled the lost revenues with parcel taxes.

Returning to the question at the start of this article: Are less wealthy school districts smarter to not impose school parcel taxes on their communities?  Apparently so.