The news that Apple had pledged to give $2.5 billion to address housing needs in the San Francisco-Silicon Valley region and California in general – on top of $1 billion each previously promised by Google and Facebook – led to praise from politicians as well as from civic groups and housing nonprofits. Gov. Gavin Newsom called the announcement “proof that Apple is serious about solving this issue.”

But news analysis pieces prompted by the announcement were downbeat on the likelihood that it would bring any significant relief to a housing market that is so expensive that nearly half of Bay Area residents say they want to move – much less “solve” the crisis.

Leslye Corsiglia, executive director of the San Jose-based housing advocacy group SV@Home, told the San Francisco Chronicle, “It’s really great to get all this land and money, but in order to get units under construction and moving forward, we need to get project approvals. That does require policy and advocacy work to get the votes to move forward.”

Getting projects approved can take many years

The difficulty of getting projects approved in the Bay Area and Silicon Valley was cited in virtually all coverage of Apple’s pronouncement. Some cited the fate of the Vallco mall in Cupertino, less than a mile from where Apple opened its $3.6 billion headquarters in 2017.

Developer Sand Hill Property Co. acquired the mostly vacant 58-acre mall in 2014. But despite the region’s housing shortage, Sand Hill faced bitter opposition from the Cupertino City Council and local activists to its plans to build 2,400 residential units (half considered affordable), 400,000 square feet of retail space and 1.8 million square feet of office space on the site.

The $4 billion project was rejected first by local planners and then by voters in 2016. In early 2018, after state officials listed Cupertino as one of the hundreds of cities in California that had not built enough housing, Cupertino Mayor Darcy Paul defiantly said his city would not be pressured to respond to a housing crisis that he suggested was exaggerated.

City officials finally gave approval to the project a year ago after an analysis concluded that under Senate Bill 35 – the measure by Sen. Scott Wiener, D-San Francisco, that bars cities from rejecting certain projects that are properly zoned and include affordable housing – they had no choice. But because of further foot-dragging and legal threats, demolition of the main mall building was delayed until Oct. 2018 – four years after Signal Hall bought the property.

‘Affordable’ housing costs $700,000 in Bay Area

The second reason that Apple’s pledge was downplayed has to do with the extreme cost of building even what’s considered affordable housing in the Bay Area. While the average cost for a subsidized housing unit in California is about $420,000, housing officials say the cost is about $700,000 in the Bay Area and Silicon Valley.

If all $4.5 billion pledged by Apple, Google and Facebook were spent on such housing, that would add about 6,300 homes. Housing advocates say at least 54,000 such units are needed in the region – and far more if there is going to be enough supply to actually bring down rents that average more than $2,500 for small studio units.

Apple plans to provide a $1 billion line of credit for affordable housing projects. It also will set up a $1 billion fund to help first-time home buyers with down payments.

“We know the course we are on is unsustainable, and Apple is committed to being part of the solution,” Apple CEO Tim Cook said in a statement.

Nonetheless, the view that Apple was addressing a problem its explosive growth helped create was common – especially among progressives who see tech giants as a malign force. Sen. Bernie Sanders, the Vermont independent who is running for the Democratic presidential nomination said Apple’s announcement  “is an effort to distract from the fact that it has helped create California’s housing crisis.”

For the third straight year, the state Legislature has approved major legislation meant to accelerate housing construction in California to help stabilize or reduce the cost of shelter. But will the latest – Senate Bill 330, the Housing Crisis Act of 2019 – fare any better than past legislation in improving the housing picture in the Golden State?

The bill’s sponsor, Sen. Nancy Skinner, D-Berkeley, is optimistic, saying in a news release that its enactment would help create the housing California “desperately needs.” Her bill is meant to force local governments to speed up the processing of building permits and limit fees on housing. It also forbids cities and counties from reducing how many homes can be built. SB330 easily won final legislative approval last week.

But there was similar optimism about past measures. Most notably, Gov. Gavin Newsom has used new powers to aggressively target local governments which don’t build enough housing, especially units with rents or mortgages within reach of families with average incomes or less.

Multifamily permits off 42% from 2018

Yet while this has produced headlines with the Newsom administration’s January lawsuit against Huntington Beach over its refusal to add more affordable units and with threats against other cities, it doesn’t appear to be boosting housing construction in any notable way.

State data shows residential building permits dropped by 12 percent in the first five months of 2019 compared with the same span in 2018. And the statistics were far grimmer for less expensive multifamily housing units, which plunged 42 percent.

Builders and housing experts who contributed to a recent Sacramento Bee print symposium on the news of declining residential construction were not optimistic. Two fundamental problems – one much noted, one less appreciated – are not going away, they said.

Tia Boatman Patterson, Newsom’s top housing adviser, said there continue to be bottlenecks at the local level in getting housing through bureaucratic hoops.

Sometimes there’s what appears to be defiance. The New York Times recently reported that California cities “with some of the state’s highest rents, including Atherton, La Canada Flintridge, Los Altos Hills and Rancho Palos Verdes, issued no multifamily construction permits from 2013 to 2017.”

Cash-strapped cities increasing fees

But some participants in the Bee project said the problem isn’t just getting local governments to live up to their obligations and to stop dragging their feet in granting permits and approvals. Many cities and counties are so fiscally stretched because of the rising costs of pensions and other expenses that they’re increasingly adopting new or higher fees on housing projects – even as developers beg for relief.

Rob Lapsley, president of the California Business Roundtable, even said these fees were on their way to being a bigger obstacle that the California Environmental Quality Act.

But there was also some pushback at the notion that NIMBYs were the biggest problem. Instead, some argued that it’s the fact that between the high cost of land and regulations that can add $200,000 to the cost of a single-family home, building housing in California is riskier and less appealing for developers than most other states. This decades-old problem may have been overshadowed by other housing issues of late, but it’s a consensus view of builders that has never gone away.

The executive director of the League of California Cities, Carolyn Coleman, noted in her contribution to the Bee that more than 450,000 homes had received final approval from local authorities but the vast majority weren’t being built.

The takeaway: Even when local bureaucratic obstacles are overcome, adding housing in California is a difficult proposition.

Newsom has not taken a position on SB330, but his signature is considered likely. It passed the Assembly 67-8 and the Senate 30-4.

Opponents of rent control and new restrictions on how landlords treat tenants succeeded in either weakening or blocking bills that needed to advance last week to have a chance of being enacted this legislative session.

Coming seven months after voters decisively rejected Proposition 10, a statewide rent control measure, the setbacks were a fresh reminder of the limited political clout of renters – even in a state where millions of residents’ complaints about the cost of housing are a constant of life.

Assembly Bill 1482, by Assemblyman David Chiu, D-San Francisco, was the focus of the most wrangling. Inspired by a similar law newly adopted in Oregon, the original bill would have limited annual rent increases to 5 percent plus the federally reported increase in California’s consumer price index. It had a 2030 sunset clause.

But after intense opposition by the California Association of Realtors and other business groups who said it would discourage housing construction in a state with a huge housing shortage, Chiu agreed to concessions that were so significant that most critics took a neutral stand on his bill, starting with Realtors.

It now limits rent increases to 7 percent plus consumer price index inflation and sunsets in 2023. It also doesn’t apply to housing projects built in the last 10 years or to landlords renting 10 or fewer units.

The bill doesn’t apply to housing units in areas where local rent-control laws are in place and puts no limit on how much rent can be increased after a tenant moves out.

But even with Chiu’s concessions, AB 1482 still only got the votes of 43 of 80 Assembly members. Chiu’s fellow Democrats made up the big majority of the 31 no votes. Even with reduced business opposition, the bill may not make it through the state Senate.

Tenant protection bill fails without getting committee vote

Yet it still fared much better than Assembly Bill 1481, by Assembly members Tim Grayson, D-Concord, and Rob Bonta, D-Alameda, which would have set up a “just cause” bureaucratic process that most landlords would have to follow to evict tenants for reasons other than failure to pay rent, property damage or repeated violations of rules. The process would have required landlords to provide a written reason for the eviction, then give renters an opportunity to correct problems that were cited.

“If landlords wanted to move into the property, intend to remodel it or were seeking eviction for other circumstances that were not tenants’ fault, property owners would in most cases have had to provide relocation assistance,” a Los Angeles Times analysis noted.

AB 1481 never even come up for a committee vote, reflecting a lack of enthusiasm for the bill by the Assembly’s Democratic leaders.

In a statement issued by Grayson, he praised the Assembly for passing the rent-control measure, but said “rent-gouging protections are not enough when tenants can still be evicted without cause or due process.”

AB 1482 did include one notable tenant protection. It says landlords of properties covered by the bill cannot seek evictions solely because they want to raise rent by more than the measure allows.

Meanwhile, an aide to Gov. Gavin Newsom said he was pleased by the measure’s passage. Newsom called for lawmakers to enact some form of rent control in a February speech and again in April.

2018 rental data suggest bill will have limited effect

But rental statistics for 2018 compiled by the RENTCafé website suggest AB 1482 won’t necessarily have a substantial effect on landlords. According to the state Department of Finance, California had a 3.7 percent increase in its consumer price index in 2018. (Federal figures for the Golden State were not available.) That means under Chiu’s bill, landlords probably could have raised rates by about 10.7 percent in homes covered by AB 1482.

But according to RENTCafé data, that’s much less than the average rent increase seen in the California cities with the highest percentage hikes in 2018 – Los Angeles (6.6 percent), Fresno (5.7 percent), Riverside (5.6 percent) and Long Beach (5.5 percent).

The need for less expensive housing in the Bay Area and Silicon Valley has been so plain for so long that many of those on the outside of California looking in wonder why local governments, developers and voters can’t get on the same page and get things done. A January story in the New York Times about the unexpected backlash to San Jose Unified’s attempts to prevent an exodus of teachers by offering subsidized housing reflected this sense of puzzlement.

But a story unfolding at the University of California’s Berkeley campus shows the complexity and difficulty of adding housing in urban areas of the Golden State. Housing development is seen by some communities and interest groups as a zero-sum game – if one side wins, then the other side or sides must have lost.

To address a lack of affordable housing that UC Berkeley says has made it difficult to attract and retain professors, Chancellor Carol Christ last year launched an aggressive push to replace a four-story campus parking building with 350 vehicle spaces with a $126 million complex that included 150 faculty apartments, 170 parking spots and a relatively small academic building.

But the plan to tear down the Upper Hearst parking building has faced steadily increasing criticism from faculty members. Their concern is that building the project would add to the heavy debt load borne by the university because of the $474 million cost of recent stadium renovations and the construction of a new student athletic center.

Yet coverage by the San Francisco Chronicle earlier this month of the Berkeley faculty Senate’s 174-69 vote asking Christ to suspend the project noted that the most pitched criticisms of the proposal came from engineering faculty members who stood to lose their access to convenient parking. Their criticism of the project continued even after Christ presented documents that she said showed the developer and property manager bore the financial risks if the project had cost overruns or other problems – not the university.

City says campus minimized enrollment growth

Meanwhile, a new front in this fight emerged in late April when the Berkeley City Council voted to sue UC Berkeley and the UC system over the apartment complex – even though city leaders praised Christ for seeking to add on-campus housing.

Council members cited planning documents previously filed with the city under which the university forecast it would have a student enrollment of 33,450 by 2020. Instead, as of January, enrollment already stood at about 41,000 – more than 25 percent higher than what UC officials had predicted.

Since under state law, the UC campus doesn’t pay local property taxes, city leaders say Berkeley taxpayers are the ones who are saddled with the cost of this fast growth.

This enrollment spurt has led to “increasing burdens on our streets, police and fire services,” Berkeley Mayor Jesse Arreguin said in a news release.

But Christ has been conciliatory to city officials, suggesting the university sees a path to addressing City Hall’s concerns about campus enrollment growth.

Yet the Berkeley chancellor isn’t deferring to the faculty Senate. She’s moved ahead with plans to tear down the Upper Hearst parking structure. The building could be closed next month, and construction work could begin this September, according to stories in the Daily Californian student newspaper. UC Berkeley officials hope the new complex can be finished by summer 2021.

The belief that California has a profound housing crisis took hold in the state’s media and political establishments in recent years after Census Bureau statistics showed the Golden State had the highest effective rate of poverty once cost of living was included.

The view was amplified by stories about four-hour commutes forced by housing costs and about shocking numbers of poor college students who struggled to pay for food.

That’s why the decision last week by state Senate Appropriations Chairman Anthony Portantino, D-La Cañada Flintridge, to kill Senate Bill 50 – the latest attempt to spur housing construction by limiting local control of approvals
– came as a surprise to many. That included the bill’s sponsor, Sen. Scott Wiener, D-San Francisco. His push to ease rules to allow four-to-five-story apartment buildings near public transit centers and to allow construction of such units in many zones previously reserved for single-family homes had won support from not just developers but construction labor unions, several large-city Democratic mayors and some activist groups. Many were skeptics of Wiener’s and Gov. Jerry Brown’s previous attempts to limit local control.

Stories about Portantino’s decision focused on the fact that leaders of cities in his district, starting with Pasadena, had been vociferous opponents of Senate Bill 50. Reports also focused on the formidable influence of environmental groups, which prefer strict zoning rules to give them more clout to block development.

These arguments are common. In August 2016, when Brown’s attempt to sharply streamline the approval process for housing projects died in the Legislature, Shamus Roller, executive director of Housing California, blasted “the political gamesmanship of powerful interests.”

Californians ‘must be convinced of benefits’ of adding housing

But another view is that then-state Legislative Analyst Mac Taylor knew what he was talking about in March 2017 when he issued a report on the failure of local governments to meet housing mandates that said major change was unlikely “unless Californians are convinced of the benefits of more home building.” Instead of seeing the failure of housing reforms as a result of special-interest machinations, Taylor argued that elected leaders who backed such measures hadn’t cultivated the public support necessary to enact major changes.

Taylor’s thesis was supported by a USC Dornsife/Los Angeles Times poll of Californians released in October that found little belief that the housing crisis was due to a lack of building. It was the sixth-most cited reason, falling far behind the top two: the lack of rent control in much of the state and inadequate “affordable housing” programs. Two-thirds of those surveyed supported local control of housing approvals even if cities or counties weren’t meeting state mandates for new housing construction.

Still, Wiener said he wasn’t daunted by Portantino’s decision. He said he would bring another housing reform measure to the state Senate in 2020. The former San Francisco supervisor, a Harvard law graduate, also said he thought Senate Bill 50 had a chance of being resurrected this summer, even though appropriation chairs of the Senate and Assembly have a long history of making their decisions stick.

“We’re either serious about solving this crisis, or we aren’t,” he told reporters in Sacramento last week. “At some point, we will need to make the hard political choices necessary for California to have a bright housing future.”

Fears that heavy housing costs could undercut Silicon Valley and the Bay Area’s economy have grown steadily in recent years as gains in wages have been outstripped by soaring rents and home prices.

Now a poll of 1,568 registered voters in the region done on behalf of the Silicon Valley Leadership Group and Bay Area News Group paints one of the starkest pictures yet of public dissatisfaction.

Those polled were nine times as likely to say life in the Bay Area and Silicon Valley had gotten worse over the past five years than to say it had gotten better. Forty-four percent of respondents said they wanted to move out of the region because of housing costs, bad traffic and declining quality of life; 6 percent intended to leave in the next year. African-Americans and Latinos were those most likely to want to move elsewhere.

But even 64 percent of homeowners – normally much more content than others in surveys on life satisfaction – said their lives had gotten worse.

The results produced yet another warning from the Silicon Valley Leadership Group, which has cautioned for years that the region will struggle to attract workers for tech and blue-collar jobs alike unless housing costs stop spiraling upward. The group’s CEO, Carl Guardino, told the San Jose Mercury-News that “not working at our weaknesses will come at our own peril.”

School districts launch own projects

Most of the cities in the region haven’t come close to meeting state goals for either affordable or market-rate housing. Recent new state laws meant to spur more housing construction have yet to pay off.

Meanwhile, school districts in and near San Francisco and Silicon Valley are increasingly impatient with the status quo and open to new approaches. Three districts which struggle to keep teachers from leaving for cheaper communities are going into the housing business to ensure teachers have affordable rents.

In Mountain View, the city plans to meet its state affordable-housing mandates by working with Los Gatos-based developer FortBay to build a 144-unit subsidized apartment building for use by Whisman School District teachers and other employees.

The Whisman district’s board backed a $56 million agreement that commits the district to lease the building for at least 55 years. The project could be finished by the end of 2021, depending on the pace of city approvals and other factors. Long-term funding options include bonds or certificates of participation (bond-like measures that don’t require voter approval).

District Superintendent Ayinde Rudolph has also voiced the hope that substantial gifts from philanthropic groups could reduce the cost to Whisman.

In Daly City, the Jefferson Union High School District is using a $33 million voter-approved bond to build 116 apartments for teachers and other employers.

The Palo Alto Unified School District is evaluating how to fund a 120-unit project for its employees.

Legislation signed by Gov. Jerry Brown in 2016 allows the districts to give housing preferences to their employees. It also gives them access to state and federal low-income housing credits.

Can districts afford housing subsidies?

A recent UC Berkeley study of teacher housing issues in Berkeley Unified showed strong support from employees for a similar approach in their district. More than half reported difficulty paying rent.

But to date, no study has examined the long-term financial feasibility of having districts provide subsidized housing, as is contemplated by the three districts pursuing construction plans.

Employee compensation already consumes 85 percent or more of most school districts’ general fund budgets. With districts’ pension contribution rates more than doubling from 2014 to 2020 as part of the bailout of the California State Teachers’ Retirement System, dozens of districts are pleading poverty.

The state’s lawsuit – filed in Orange County Superior Court by Attorney General Xavier Becerra on Jan. 25 at Newsom’s behest – is the first to be filed under a 2017 law that allows the state to pursue legal action against local governments that don’t comply with their housing requirements.

The state wants to compel Huntington Beach to build 533 low-income housing units by Dec. 31, 2021, to meet its state quota. The city has only approved about 100 such units, according to the Southern California News Group.

City attorney sees H.B. singled out for its politics

Huntington Beach City Attorney Michael Gates maintains that as a charter city, his city should be able to set its own housing policies. He also hinted that there were political motives driving the actions of Democrats Newsom and Becerra. “It is noteworthy that Sacramento is suing only the city of Huntington Beach, while over 50 other cities in California have not yet met” their targets, he wrote in a statement. Huntington Beach has been a Republican redoubt for decades.

But state officials said they were motivated by Huntington Beach’s bad faith. Not only did the city refuse to provide a housing plan in compliance with state rules, in 2015, the City Council revised zoning rules to reduce by 2,400 the number of homes allowed in a neighborhood on the eastern edge of the city near Interstate 405.

While the state’s suit got far more attention, Huntington Beach’s suit – filed Jan. 17 in Orange County Superior Court – also involves high stakes. The city is targeting Senate Bill 35, the high-profile 2017 state law crafted by state Sen. Scott Wiener, D-San Francisco, that limits the ability of local governments to block housing projects that meet certain conditions, such as using union labor and including a portion of affordable units.

“It’s one thing to have more basic housing laws come out of Sacramento; it’s another to have Sacramento try to micromanage cities’ zoning and attempt to approve development projects in spite of the city,” Gates told the San Francisco Chronicle. “It’s really nothing more than the city trying to maintain its local control.”

Can charter cities defy state’s housing edicts?

Wiener blasted Huntington Beach in a statement given to his hometown paper. “Huntington Beach’s dismissive approach to housing – claiming there is no problem and that the state should just mind its own business – is Exhibit A for why we have a crisis in this state.”

When SB35 was discussed in 2017, there is no indication from a Nexis news search that Wiener or any lawmaker saw charter cities as being exempt from the bill’s requirements.

But lawyers for the League of California Cities have used language similar to that in Huntington Beach’s lawsuit to assert that there are limits to state power over charter cities. “The benefit of becoming a charter city is that charter cities have supreme authority over ‘municipal affairs,’” states the league’s legal primer on the topic. “In other words, a charter city’s law concerning a municipal affair will trump a state law governing the same topic.”

About one-quarter of California’s 478 cities have charter status. If Huntington Beach wins its challenge to SB35, general law cities that want to regain greater control over local planning could craft proposed charters and ask their voters to approve them under a process laid out in the state Constitution.

In January 2017, state lawmakers returned to the Capitol determined to make a difference on the state housing crisis. Dozens of bills were touted – including Senate Bill 35, by state Sen. Scott Weiner, D-San Francisco, which ended up as the most far-reaching law to reduce obstacles to housing construction in modern California history.

But even as momentum built for SB35 and other housing measures, the head of the respected, nonpartisan Legislative Analyst’s Office warned in a 12-page report issued in March 2017 that state lawmakers would never be able to reduce the housing shortage without much more support from the public.

“Unless Californians are convinced of the benefits of significantly more home building – targeted at meeting housing demand at every income level – no state intervention is likely to make significant progress on addressing the state’s housing challenges,” wrote Mac Taylor.

Now a USC Dornsife/Los Angeles Times survey offers the most definitive support yet for the legislative analyst’s conclusion that when it comes to building new housing, Californians aren’t very enthusiastic.

Few see lack of construction as big problem

The survey asked 1,180 Californians why they thought housing was so expensive in the Golden State. They were given a list of eight possible primary reasons.

The most popular reasons were lack of rent control (28 percent) and lack of affordable housing programs (24 percent).

In the middle tier of explanations were environmental regulations (17 percent), foreign home buyers (16 percent) and the influence of the tech industry (15 percent).

Bringing up the rear were a lack of homebuilding (13 percent), Wall Street buyers (10 percent) and restrictive zoning rules (9 percent).

The Times’ analysis of the poll noted how at odds the public’s view of housing is with the view of economists, policy analysts and housing experts.

There is “general agreement that a lack of supply is at the root the problem. Reports from the state Department of Housing and Community Development, the nonpartisan Legislative Analyst’s Office and a host of academics contend that California has a chronic shortage of home building that has failed to keep pace with the state’s population growth – especially during the recent economic expansion – which has forced prices up.”

But this wasn’t the only way Californians parted with conventional wisdom. The survey also included other questions that showed two-thirds of those surveyed backed local control over housing even if local governments weren’t meeting state-set goals for adding housing stock.

It is this local power over the approval process that empowers motivated NIMBYs in city after city. Taylor’s March 2017 study identified it as the single biggest reason behind the emergence of the housing crisis.

“For decades, many California communities – particularly coastal communities – have used this control to limit home building,” the legislative analyst wrote. “As a result, too little housing has been built to accommodate all those who wish to live here. This lack of home building has driven a rapid rise in housing costs.”

Tech industry certain to keep pushing for housing 

While the USC-Times poll could influence candidates in close elections to side with NIMBY views, it is unlikely to blunt new efforts by the Legislature to use legislation to bring down housing costs. The deep-pockets, influential Silicon Valley Leadership Group is one of many business organizations that sees the housing crisis as a threat to the state’s future prosperity because of its potential to hurt recruitment and retention of workers.

Another of the state’s most politically potent forces – the California Teachers Association – also sees the housing issue as bad news for its members. But the CTA’s main policy prescription for now is Proposition 10 – the Nov. 6 ballot measure that would overturn a 1995 state law and let cities impose rent control. It has generally trailed in state polls, although with high numbers of undecided voters.

With the cost of housing driving California’s emergence as the state with the highest percentage of impoverished households, it’s easy to see the appeal of rent control to key Democratic constituencies – starting with poor and lower-middle-income families, often minorities, who struggle paycheck to paycheck.

This was why a diverse coalition was able to easily gather enough signatures to place Proposition 10 on the Nov. 6 ballot. It would repeal a sweeping 1995 state law – known by the shorthand of Costa-Hawkins – that grandfathered in some rent control laws but made significant new such laws difficult to impose.

The most notable provisions of the law were its ban on rent control for units built after 1995 and for all single-family homes and condominiums. It also forbids what’s known as “vacancy control,” which requires landlords to leave rents unchanged when a unit becomes empty.

The eagerness to undo Costa-Hawkins was plain in July at a meeting of the California Democratic Party in Oakland, where 95 percent of the party’s executive board voted to back the rent-control measure. That comes with a party commitment to send email and direct mail endorsements of the measure to as many as 2 million Democrats in the state, according to the San Francisco Chronicle.

Newsom splits with Democratic Party, opposes Prop. 10

But with less than a month to the election, this early momentum hasn’t translated into strong support. The most important Democrat on the fall ballot – Lt. Gov. Gavin Newsom, the heavy favorite to succeed Jerry Brown as governor – is against rent control. While most of what might be called the Bernie Sanders wing of California Democrats is all aboard the Proposition 10 bandwagon, a significant number of prominent and/or elected Democrats are in opposition. This includes Newsom’s primary rival, former Los Angeles Mayor Antonio Villaraigosa, and Assembly members Jim Cooper, Tom Daly, Adam Gray, Patrick O’Donnell and Bill Quirk.

A number of reasons appear to be driving Democratic opposition to a seemingly potent populist wedge issue. Newsom, who revels in his reputation as a policy wonk, has told newspaper editorial boards up and down the state that rent control actually would make the housing crisis worse.

In economic circles, the belief that rent control is counterproductive is the overwhelming consensus of Keynesians, supply siders and nearly all the factions across the ideological spectrum. In 1992, a poll of the American Economic Association showed 93 percent agreed with the statement that rent control “reduces the quality and quantity of housing.” A Stanford University study of rent control in San Francisco released last December reached similar conclusions.

Californians in communities with rent control don’t need to be told by economists that it doesn’t work well. As Ken Calhoon, an El Dorado County real estate broker, pointed out in a July commentary, “Rent control has been a long-time ordinance in the following cities: Berkeley, Beverly Hills, Campbell, East Palo Alto, Fremont, Hayward, Los Angeles, Los Gatos, Oakland, San Francisco, San Jose, Santa Monica, Thousand Oaks and West Hollywood. It’s not a coincidence that the two most expensive rental areas in our state, the Los Angeles and Bay Area regions, happen to have every city that has enacted rent control policies.”

Also helping the No on Proposition 10 campaign is an unusually broad collection of groups that includes not just the usual business interests but several construction unions and seniors groups and a long list of organizations with ethnic or racial affiliations, starting with the California NAACP.

A Public Policy Institute of California poll released two weeks ago showed Proposition 10 losing 48 percent to 36 percent, with 16 percent undecided. Among Democrats, it led narrowly, 46 percent to 43 percent.

Rent-control foes stake claim to populist label

In a state where even banged-up, aging two-bedroom apartments go for $2,000-plus a month in most urban areas, these results seem hard to fathom – especially  given that the Yes on Proposition 10 side is backed by such powerful, high-profile groups as the California Teachers Association, the California Nurses Association, several government unions and the AIDS Healthcare Foundation, led by Los Angeles political activist Michael Weinstein.

But this may be a case where money and superior strategy – not the views of economists or California’s history with rent control – are overcoming the populist inclination of voters. The No on Proposition 10 campaign, which has had at least a 2-1 advantage in fundraising so far, has been advertising for weeks. A Google search for Proposition 10 returns results that are topped with a paid No on 10 link. It goes to a page with the simple message that the measure is bad for veterans and seniors, doesn’t reduce rent and doesn’t provide funds for affordable housing. Some of these claims are solid and some are non sequiturs – why would rent control be expected to reduce rent?

But they make the case that this is not a simple attempt by moneyed interests to allow them to keep exploiting renters – instead making a seemingly populist case for No on 10.

Meanwhile, as an Oct. 5 story in the Ventura County Star noted, there may be high-profile supporters of Yes on 10, but only one is offering significant financial support. While the AIDS Healthcare Foundation has donated more than $10 million, “the only other major contributors to the campaign are the California Nurses Association and the AFSCME 3299 union, which contributed $50,000 and $60,000, respectively.”

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Silicon Valley is the epicenter of the state’s housing crisis, with even run-down older homes routinely selling for nearly $1 million and with apartment rent averaging over $3,400 in communities within a 10-mile radius of Mountain View. With some exceptions, local leaders generally say the right things about the urgent need to add more housing units.

But a new report about the region’s largest city, San Jose, shows the city has made little progress on its goal of adding 10,000 affordable housing units by 2022. According to a new report issued by city housing officials, 64 units were completed in the 2017-18 fiscal year. While 594 units are now being built and 270 are approved for construction, even if these units are counted, that means the city is on track to achieve less than 10 percent of its target by mid-2019.

Adding to this bad news is a recent San Jose Mercury-News report in which city officials expressed frustration on several fronts. Among the complaints:

• While Mayor Sam Liccardo has been consistent in pushing affordable housing, the head of the city’s housing department – Jacky Morales-Ferrand – sees an overall lack of focus at City Hall (pictured). One week, City Council members are touting rent-control ordinances, then they push the “tiny homes” concept, then it’s on to other issues.
• Morales-Ferrand also expressed disappointment that the state government has never provided cities with a new tool and new funding source to replace redevelopment, which Gov. Jerry Brown convinced the Legislature to gut in 2011.
• Councilman Johnny Khamis also has a complaint. He believes that the series of crime-reform initiatives touted by Brown and state lawmakers have complicated San Jose’s efforts to address housing and homeless issues. “I feel that the state just dumped a whole mess of people out of our prison system, and now we’re just having to deal with them,” he said.

Congress ‘0 for 115’ in approving helpful housing bills

Frustration with a lack of progress locally and in the state Legislature has led the influential, well-funded Silicon Valley Leadership Group to look for relief in a new place: Congress. While CEO Carl Guardino said the Silicon Valley and Bay Area congressional delegation had been helpful on major regional issues such as electrifying CalTrain and expanding the Bay Area Rapid Transit (BART) system to San Jose, he told the Mercury-News that there had been little help on housing from Washington.

Housing experts say ultimately, local and state land-use policies, fees, taxes and regulations are most crucial in whether new units can be built. But federal agencies regulate mortgages, enforce fair-housing laws and have provided billions of dollars over the years to develop housing projects and to subsidize low-income housing.

According to the Apartment List group, in its current session, which began in January 2017, Congress is “roughly batting 0 for 115” in approving housing legislation introduced by federal lawmakers. Rep. Barbara Lee, D-Oakland, has by herself introduced 11 bills that focus on creating affordable housing. In a March speech, Rep. Ro Khanna, D-Santa Clara, said, “I don’t want to live in the Silicon Valley that only has Facebook or Google engineers able to live here.”

But the Trump administration and the Republicans who control the House and Senate have shown little enthusiasm not only for bold new plans but for continuing policies that have led to 3 million affordable homes being built since the late 1980s. The Affordable Housing Credit Improvement Act, which would provide developers of low-income housing with a substantial tax credit, has languished in House and Senate committees since it was introduced in March 2017.