Letter to Editor: What Every California Resident Needs to Understand About the CASA Compact and the Proposed Housing Bills

South San Francisco, CA   March 12, 2019 by Danessa Techmanski

NOTE: Everything South City is sharing this information on this proposed SB50, which is again a failed attempt by Senator Scott Weiner to force an ill-conceived housing plan in our area. Sacramento cannot handle the responsibilities they currently have in front of them (failing highways, SF Bay Bridge, Oroville Dam, education, forest fire management, DMV, Veterans Affairs, among just a few).

CASA, The Committee To House The Bay Area, is a collaboration of the Metropolitan Transit Authority (MTC), and  Associated Bay Area Governments (ABAG) who determines our housing needs. With input from developers, politicians, housing groups, and other stakeholders CASA has been quietly lobbying Sacramento for 18 months to create legislation that supports a “Compact” to address California’s housing shortage by adding 35,000 new housing units per year over the next 15 years in the Bay Area, and 3.5M statewide over the next five years.
Much of that legislation is aimed at disabling normal democratic processes and limiting California voters’ rights to make land-use, economic, and environmental decisions. On inspection, CASA’s goal to save California from its housing woes looks more like a tremendous civic, economic, and social experiment based on much propaganda and unproven assumptions that will largely benefit developers and the real estate industry at the public’s expense.
Developers prefer to build profitable office and luxury housing which in large part caused our housing imbalance in the first place.  Yet the Compact cedes developers even more power over what they build by dismantling local checks and balances with a one-size-fits all housing prescription despite that each city has its own unique problems. By CASA’s reasoning, developers must now be “incentivized” and rewarded to build us out of a housing mess they largely created. In many ways this seems like a convenient opportunity to take advantage of a public crisis.
One long-term problem is that the Compact will cause more and more land to become rental property in the hands of a smaller and smaller minority.  Less housing will be available for public sale which has been a traditional means to wealth in this country. Indeed, proposed SB 384 will reward developers with density bonuses for building moderate and luxury units, yet nothing in the Compact requires developers to pass those financial gains back to the public in lower rents. In fact, there is no guarantee that the Compact will generate adequate housing for low and middle income residents at all.
The rational that control over land-use and development needs to be taken away from local governments in order to build more housing is ludicrous. Cities and residents don’t build housing, developers do, and they will always push for what brings them the greatest profits. Housing should be built to match local needs as precisely as possible to curtail rising prices and land scarcity. For some overcrowded cities, office should only be allowed to fund low-income housing and that should be up to local jurisdictions to decide for themselves.
Only four Bay Area cities took part in the creation of the CASA Compact: San Francisco, Oakland, San Jose, and Rohnert Park (Rohnert Park’s Council does not support the Compact and has since pulled their representative). The other 98% of cities were completely left out of the discussion. Though CASA’s members include elected officials, none of them were elected to act in that particular capacity. This means that they are not subject to the Brown Act despite that they will be collecting and spending public funds. That should be a big red flag.
The CASA Compact contains ten regional policy objectives shown in the box below:
CASA Compact Element#
Related Bill(s)    (Updated 3/10/ 2019)
1) Just Cause Eviction
AB 1481 (Bonta) spot bill*
2) Rent Cap
In discussion
3) Rent assistance and legal counsel
SB 18 (Skinner) statewide
4) Accessory Dwelling Units (ADUs)
AB 68 and AB 69 (Ting) statewide
5) Minimum Zoning Near Transit
SB 50 (Wiener) statewide
6) Good Government
AB 1483 and 1484 (Grayson) statewide
SB 330 (Skinner) statewide
7) Streamlining
AB1485 (Wicks) and AB 1706 (Quirk) spot bills
8) Public Lands
AB 1486 (Ting) statewide
9) Funding
In discussion
10) Regional Housing Enterprise
AB 1487 (Chiu)
*Spot bills denote bills that are placeholders
The Compact gets its teeth through Element 10 which creates a “Regional Housing Enterprise. ” That agency will take many democratic land-use, zoning, density, taxation and spending decisions away from individual cities. The Enterprise is backed and controlled by business and development stakeholders all of whom will profit exponentially by relaxed restrictions, density increases (and value) to properties, plus by-right building approval that bypasses design review, ministerial processes, environmental protections and public scrutiny.
Element 9 empowers the Regional Housing Enterprise to levy 8 new taxes for $1.5B in funding per year. There are plans to lower the voting threshold for taxation from 2/3rds to 55%. Proposed taxes include increased property taxes, business head taxes (which will be passed on to residents through higher goods and service fees), a 1/4 cent sales tax increase, 5-year term general obligation bonds, and the right to take 20% of every city’s tax revenue which could leave some cities bankrupt and rob them of badly needed services, police, park funding, and emergency housing. There are also proposals to reform Prop 13.
Monies raised will be put into a common general housing fund with distribution decided upon by the Regional Agency. Individual cities will have no say where funds are spent (except for San Francisco, San Jose, and Oakland who have major representation on CASA’s board). It is paradoxical that cities will lose badly needed funding for low-income housing while at the same time being punished via CASA’s legislation for not meeting their quotas. Proposed SB-1568 will punish cities with insufficient progress by withholding transportation funds.
Dried up government programs for low-income housing and rising land and construction costs have cut into developers’ bottom line. The general public has now become the last bastion of desired profits.  How well have other avenues of financing been explored? New York uses pension funds to finance BMR housing. Why not a state housing lottery or vacancy taxes on investment properties that sit perpetually empty?
Elements 1 and 3 of the Compact cover eviction protections and legal counseling for tenants, but who pays for that? Element 2 provides rent caps–a whole debate unto itself. Element 4 allows the division of single family parcels into multi-home units and loosens restrictions on ADUs and tiny homes. In fact, CASA supporters assert that only 20% of any jurisdiction’s new housing should be for single-family homes (AB-725) because they are “selfish.” Polls show that up to 80% of millennials dream of living in quiet single-family homes like their parents. Will CASA create more transient communities where the only place for the young upwardly mobile to move is out?
Senator Scott Wiener’s SB 50 to support Element 5 illustrates the many problems and loose-ends with top-down housing regulation. It up-zones properties within 1/2 mile of rail to as high as 85 ft. (with a density bonus) and up to 45 ft. within a 1/4 mile of “high quality” bus stops  (buses running every 15-30 minutes). However, bus ridership has declined dramatically in many areas (down 23% in Santa Clara county since 2001) as has rail use despite massive improvements due to alternatives like Uber and Lyft. With autonomous vehicles on the horizon that will largely change transit patterns why plan around dying bus routes?
Wiener has made sure that cities without mass transit won’t escape SB-50 by adding an “equitable communities” clause. It will capture “job rich areas” (although “job rich” is not defined), that have a higher median income or that have higher performing public schools for up-zoning. It also allows single-family homes to be demolished for multiplexes or apartments. Essentially a developer can completely change the character of a neighborhood by-right and there’s nothing residents can do despite that they paid dearly for the opportunity to live there.
Although CASA is an offshoot of the MTC, the Compact has no transit plans to handle increased population density and actual commuting patterns seem grossly misunderstood.  Research shows that jobs and retail next to transit are much more likely to increase ridership than housing as 90% of vehicle miles occur during personal trips rather than commuting to work. Shouldn’t we support each city’s particular transit plans that are the most efficient and cost effective before randomly adding density within them? Why are there not discussions about ways to bring jobs to homes or suburban areas to keep people off the roads and give them greater choices in where they live?
Compact Element 6 removes “obstacles” to development such as fees for roads or sewers with those costs falling back onto taxpayers.  It also limits the number of public hearings on a development to a maximum of three to curtail council debate and silence public opposition. SB 330 will prevent residents, city councils, and counties from exercising referendums, initiatives, or any laws that could reduce housing density. That seems unconstitutional.
Element 7 reduces parking requirements by 50% or even altogether, which will cause overflow into surrounding neighborhoods and/or allow developers to charge for it. Think San Francisco. It saves developers money and gives them “free” buildable land. CASA claims more people will walk or bike to work, but in reality less than 8% of people even live and work in same city. Element 7 also dismantles the California Environmental Protection Act (CEQA) claiming that it creates delays and cuts into profits. All this at a time when climate change and the public health are in great jeopardy from pollution and global warming.
Element 8 requires cities to reform all underutilized public lands and zone them for housing. It includes surplus lands held by local and regional park districts statewide (AB 1486).
CASA’s bills are prefaced with bleeding heart pleas that they are the answer to lift up our homeless and downtrodden with housing for all. Many affordable housing organizations and young people are blindly running to support it with an almost cultish fervor. Yet other housing groups warn that the Compact may make affordable housing and inequality worse. So far most of the legislation increases housing production, and protections are weak for just-cause eviction, emergency rent caps, or sensitive low-income communities in danger of gentrification.
It is noteworthy that 60% of the Compact’s funding will go to market-rate housing for those making 100% to 150% of the median income which many people can’t afford. Only “up to” 20% of funding will be used for affordable housing despite that there is no definition of what “affordable” is. Ironically many residents will be paying taxes to subsidize housing in other cities for people who make more money than they do.
CASA’s most errant assumption is that the normal laws of housing supply and demand will work in places like the Bay Area. Studies show that increasing density where land is scarce and demand is high will likely raise prices, not lower them. Those price increases tend to be reflected in adjacent areas as well despite no development changes.
There is nothing in the Compact or its supporting legislation that prevents more over-production of office (and jobs). The city of Cupertino experienced this problem with CASA’s SB 35 debacle. The now referended project would create excessive office that would make Cupertino’s housing situation worse, add too much luxury housing, substandard below-market-rate housing (BMR), and even more crippling traffic for all who use the adjacent freeways.
Challengers to the efficacy and viability of the Compact are often countered with a barrage of name calling such as NIMBY, exclusionary, or selfish as if they have no empathy for the poor and homeless. There is almost a bullying tactic to deflect or deny any cracks in CASA’s objectives by turning the table and pinning a guilty label on the questioner to drown out or silence them. MTC, CASA and their followers have made homeowners the common enemy to take the focus off any facts that blow holes in their narrative.
Instead of blaming the housing crises on the middle class and the democratic process why aren’t there more discussions about income disparity, fair-living wages, or the taxation of large (mostly tech) corporations who make their fortunes while creating local housing shortages? Can we expect for-profit entities to protect the public’s well-being and quality of life better than our locally elected?
Many questions remain unanswered. Will massive housing production just trade one set of problems for another? Where will cities get the money for the services and infrastructure to support increased density when they are simultaneously losing 20% of their tax revenue? How will randomly added density impact school enrollment and funding? What about the rights of homeowners who will lose their privacy and end up in the shadows of 45 ft. tall buildings?
Finally, where does global warming fit into all of this? Much of the condemnation of urban sprawl is turning out to be incorrect. Tall urban cores don’t lend themselves well to greener building materials, local food sourcing, or more efficient and affordable solar technologies and power storage that are vital to cutting greenhouse gas emissions. Where are the plans for cisterns, water reclamation or desalinization to support added density in our dry state?
At present the CASA Compact looks like a developer’s dream come true, but it may leave the next generation with an even greater economic and environmental mess. Clearly there is much more work on this that needs to be done.
Danessa Techmanski is a native Californian and 30-year Cupertino resident. She is a founding supporter, writer, and advocate for two local sensible-growth groups: Better Cupertino and Livable California
Disclaimer: Contents herein are my opinion. I am not a politician, lawyer, representative or lobbyist. I have no expertise in government or legislative affairs. Any statements contained in this document are not intended as legal advice and  are for the purpose of disseminating my perspective on aspects of the political landscape as a concerned citizen volunteer only.
Rev. 3/11/19
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John B
John B
2 years ago

When cities are permitted businesses, your city council and Mayor forgot to increase the housing related to job growth. As a result, many people commute from Tracy, Lathrop, San Ramon etc daily to bay area clogging all the routes, butchering the environment, wasting valuable productivity time. You can’t hold the zoning laws formulated 50 years back to solve 21st century bay area or California housing issues. Artificially, limiting the house production resulted in sky rocket rents and forget about owning a house in bay area. Cities should be discussing how to say close or move your business some where or develop housing in relation to that. Solve the problem yourself or some one will solve it for you. That’s what SB50 rule is doing exactly to permit more housing production. Most of SFR owners would love to convert to fourplex in a snap, as they generate lot more income for them and puts a upward pressure on rents. I see SB50 is win-win situation for home owners and tenants.. a rare thing to happen..

Tony Verreos
Tony Verreos
2 years ago

Danessa – Very well done. Thanks!