Capitol Alert

‘Yes in my backyard.’ Silicon Valley money fuels fight against state’s housing crisis

Brian Hanlon is a Bay Area guy who made his name “suing the suburbs.”

Too many cities and counties, he says, aren’t complying with state housing law that says it’s illegal to deny or scale back affordable housing projects that meet local zoning designations and other land-use rules.

Now he’s decided lawsuits aren’t enough.

With financial backing from Silicon Valley tech executives, Hanlon is starting a new political and housing advocacy venture in Sacramento called California YIMBY – or “Yes in My Back Yard,” a riff on the “not-in-my-backyard” phrase that characterizes neighborhood opposition to development projects.

It’s an emerging political movement demanding more housing construction across California, affordable or not. Pro-growth advocacy groups have formed groups from Santa Monica to San Francisco to Sacramento.

“We want more housing, and all types of housing. So we advocate for everything from transitional homeless shelters ... to tall, luxury condos and everything in between,” Hanlon said. “We are in a dire housing shortage and we’re not going to get ourselves out of that shortage if we nit-pick every project to death.”

As the state has added more than 2 million jobs since 2011, it has fallen far short of building the housing it needs to keep pace with the booming economy and rising population. On average, the state has seen an influx of 80,000 new homes per year over the past decade, when 180,000 are needed annually, according to state officials. To keep up with growing population, California needs an estimated 1.8 million new housing units by 2025, according to state projections.

Experts attribute the problem to lax state housing laws, an expensive and time-intensive approvals process for new construction, blowback at the local level that can lead elected officials to vote down projects and lack of state funding for affordable housing. Hanlon calls it a “sick joke.”

Angered by evictions in San Francisco’s Mission District a few years ago, he decided to get involved in the fight. He said he soon realized that some of the same people protesting evictions were also against new housing development in their neighborhood.

“That struck me as really counterproductive,” he said.

In 2015, he and his business partner, Sonja Trauss, formed a legal advocacy nonprofit and sued the East Bay city of Lafayette, an upscale suburb with a median household income of roughly $120,000 – more than twice the national average. The city wanted to build 44 single-family homes on 22 acres of prime Bay Area real estate, far less than the 315 moderate-income units originally proposed by developers.

Sensing likely defeat, they settled the lawsuit with the city in May.

“Victory at the appellate level, we thought, was unlikely because the law is simply too weak to be enforced,” Hanlon said.

He is now among the ranks of housing advocates in Sacramento pressuring lawmakers to strengthen the state’s approach to affordable housing development.

California has a complex set of state and local laws that require local government to plan current and future housing needs for all income levels. Yet these laws are rarely enforced, housing advocates and attorneys say.

“There has been a massive failure on the part of many local governments – not all – to adequately plan and zone for housing. Even though laws require it, there’s a lot of gaming of the system,” said Anya Lawler, a policy advocate and housing expert with the Western Center on Law and Poverty. “It’s pervasive in a lot of suburban communities who cling to their idea of tightly controlling community character. That’s code for ‘we don’t want any poor people.’

“Then when a developer actually does come in with a project, there can be NIMBY challenges. It’s a powerful force in a lot of communities.”

Intense neighborhood backlash often arises out of concern that low-income housing projects will lead to increased traffic and crime, demographic changes and declining property values.

The phenomenon is familiar to developers, housing advocates and land-use attorneys across the state. Elected officials, under pressure from neighborhood activists who voice strong opposition to new housing in their neighborhoods – particularly developments built for poor and working-class people – vote down projects seen as controversial.

Hanlon sees the problem as political.

“This absolutely happens because a politician’s first job is to be re-elected, or elected to a higher office. What they don’t want to do is anger an organized constituency in their district,” he said. “This is part of the reason we’re in this crisis – because for 40-plus years, we’ve been under-building homes throughout the Bay Area, and indeed throughout California.”

Jason Rhine, legislative representative for the League of California Cities, says the problem is more complicated. He pointed out that cities aren’t responsible for building new housing – just planning for it. Even when land is set aside for development, whether it gets built largely depends on economic and market conditions.

“Cities get criticized for not building enough, but what gets left out of the discussion is the lack of funding for affordable housing. And the market isn’t that great,” Rhine said. “State law tells us to plan for all four income categories, and 90 percent of cities have state-approved plans laid out in their housing elements. I’d say that’s pretty awesome.”

Adhi Nagraj, a director of real estate development for Bridge Housing, a nonprofit developer, said lack of state and federal financing has contributed to the housing shortage, but cities also put up roadblocks.

“Some cites have strong political will,” Nagraj said. “In others, the ability to secure entitlements and planning approvals is very challenging.”

Rents have soared across the state, home ownership is at its lowest rate since the 1940s and some believe lax enforcement of state housing laws has created economic and racial segregation of cities, especially in wealthier coastal areas.

“It’s criminal that ... Cupertino, in Silicon Valley, has a transit station surrounded by detached single-family homes and meanwhile they’re OK’ing the Apple spaceship that’ll bring thousands of new employees, yet building no new housing,” Hanlon said. “Where are they going to live? The answer is they’re going to displace people all throughout the Bay Area.

“This is part of the reason the state is in this crisis. We cannot let the actions of some rogue local governments, especially those with very high housing prices, get away with not committing new housing and causing this crisis everywhere else.”

Most of Hanlon’s early funding is from Silicon Valley. So far, he’s got $500,000 in backing from tech executives, including Nat Friedman, a mobile app developer now at Microsoft, and Zack Rosen, CEO of the website management platform Pantheon.

The explosion of tech wealth, especially in Bay Area, for years has divided housing activists and others concerned about the skyrocketing cost of living that has led to mass evictions and rampant tenant displacement. Widespread angst over changes associated with the tech sector, in places like San Francisco, erupted a few years ago with the Google bus controversy.

Demonstrators protested the giant buses shuttling employees of tech giants like Google from San Francisco and Oakland to work in the South Bay. They decried the buses for clogging city streets and blocking public bus stops. They were also a symbol of gentrification and other changes many see being driven by the tech sector.

Hanlon said it’s time to change that outlook.

“They’re often targeted, and seen as the reason people are getting evicted,” Hanlon said. “Yeah, they’re mostly very highly compensated and they can afford California, but they’re pissed off, too. A lot of tech workers are saying ‘We want to be a part of the solution.’ 

State Sen. Scott Wiener, who previously served on the San Francisco Board of Supervisors, said even in bigger cities, neighborhood opposition can kill affordable housing projects or reduce the density.

“If you’re representing a neighborhood where everyone agrees there needs to be more housing, and you have neighbors intensely opposed, it puts elected officials in an untenable situation,” the Democrat said. “We’ve created this system that allows so many hearings and appeals and new hearings that it puts even well-intentioned elected officials in a bad position ... if you have well-organized people who are opposing housing, there’s a strong incentive to side with them, or water the project down.”

Pro-growth activists like Hanlon have been criticized for focusing too narrowly on simply increasing the supply of new units, including luxury condos. Housing experts say no amount of market-rate development will ease cost burdens felt by low-income renters, and without a stable source money for affordable housing, people already feeling the squeeze will continue getting pushed out of their housing.

“No additional supply is ever going to bring down the price to what they can afford,” said Brian Augusta, a Sacramento-based housing advocate. “Unless we have some kind of intervention by the state, housing is going to continue to be out of reach for low-income people who pay upwards of 50, 60, 70 percent of their income on rent.”

Hanlon is a forceful advocate for boosting the supply of both market-rate and affordable housing. He testified last week in support of proposed state bills he helped craft, including one from state Sen. Nancy Skinner, D-Berkeley, that would strengthen state housing law that requires local governments to set aside land and plan for low-income development.

“In many communities, residents who don’t want new housing tend to be louder than the ones who do,” Skinner said. “We want to help give them cover to build more housing and follow their own adopted zoning policies and housing elements.”

Local elected officials say they should be allowed to make decisions based on their own community’s conditions.

Palo Alto Councilwoman Lydia Kou expressed caution about increased traffic and other development worries.

“We have to think about this carefully. We have to consider more than just ‘let’s grow,’ ” she said. “In Palo Alto, we have a large area that is family oriented, and we have a lot of single-family homes. That’s what people have chosen to come to Palo Alto for. I see a lot of families moving here to get that yard and to get that house, and they pay a lot of money to do so.”

Sonoma County Supervisor Shirlee Zane has taken the opposite approach, championing the idea of “build, baby, build.”

“Elected officials need to challenge people and have courage to do the right thing,” Zane said. “We have entered a new paradigm with less state resources, more expensive land and longer approvals processes. We need political leaders who are willing to stand up and do the right thing, and that is about empathy – building enough housing for everyone in our community.”

Angela Hart: 916-326-5528, @ahartreports

California housing bills

The California Legislature this week is debating legislation aimed at addressing the state’s housing crisis. These are the key measures:

▪ Senate Bill 2 from Sen. Toni Atkins, D-San Diego, would impose a new $75 to $225 fee on real estate transactions and generate $250 million annually for affordable housing projects. “You can’t underestimate the impact of that kind of money,” she said.

▪ Senate Bill 3 from Sen. Jim Beall, D-San Jose, would authorize a $3 billion bond for affordable housing that would go before voters next year.

▪ Senate Bills 35 from Sen. Scott Wiener, D-San Francisco, and 540 from Sen. Richard Roth, D-Riverside, would streamline the approvals process for affordable housing development, eliminating duplicative reviews and reducing cost and time. “There are local elected officials who just oppose all new housing, but there are plenty of elected officials who want new housing,” Wiener said. “We need to support them and given them the tools to make that happen.”

▪ Senate Bills 166 and 167 from Sen. Nancy Skinner, D-Berkeley, would require land be set aside for affordable housing and strengthen state laws aimed at preventing local government from denying projects.

▪ Assembly Bills 72 from Miguel Santiago, D-Los Angeles, and 1397 from Assemblyman Evan Low, D-Campbell, would require jurisdictions to properly zone for affordable housing.

▪ Assembly Bills 2502 from Assemblyman Kevin Mullin, D-South San Francisco, and 1505 from Assemblyman Richard Bloom, D-Santa Monica, would allow local government to require a portion of new market-rate development be set aside as affordable.

▪ Assembly Bill 73 from Assemblyman David Chiu, D-San Francisco, would provide incentives for affordable and higher-density housing in city centers and near transit stations. “We have have a permanent source of funding for housing, and we have to hold cities accountable for building it,” Chiu said.

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