Op-Ed: Transit Decoy For Gentrification

Proposed California Bill SB 827 Will Displace Tenants & Line Developers' Pockets

Joseph Smooke, Dyan Ruiz | 03/28/2018

There’s a newly proposed State bill, SB 827, that encourages gentrification in low-income communities throughout California and gives value to landowners and developers with no public benefit in return. It will cause huge social upheaval-- segregation and disinvestment from public transit-- while money flows into the pockets of wealthy people and businesses.

California Senate Bill SB 827 introduced by Senator Scott Wiener (D-San Francisco) allows developers to build residential buildings that are taller and contain more units than currently allowed by local zoning laws. These buildings need to be within half a mile from a major transit hub or a quarter mile from a high traffic corridor. If a developer requests this bonus, SB 827 forces the city to approve the development. The height and number of units would be mandated by this new state law, no longer by local zoning. It’s being framed by Wiener as an environmentally sound way to encourage development, but it does exactly the opposite.

What are the Main Problems with SB 827?

Displacement: The bill provides no real protections or new housing for low income people who actually use public transit. So when the communities targeted by SB 827 become gentrified out or their residents evicted, there will be massive displacement.  
Erosion of public transit: SB 827 will result in wealthy people moving into the new buildings. But those people do not use public transit-- rich people primarily use private transportation. With gentrification, less people are going to use and fund public transportation, so this public infrastructure will become eroded. 
Free value to landowners and developers: The government will confer wealth to landowners and developers through the added development potential of their land. Their land would be worth more because they can build more on it.  
More profit to developers, with no public benefit: Developers and landowners also would get more profit in this deregulated environment because they would automatically get the additional height and number of units, resulting in more money coming in for them, not us.

How does SB 827 cause displacement?

SB 827 incentivizes existing buildings to be demolished because those aren’t as profitable as the new, bigger building will be. For example in San Francisco, virtually the entire City is eligible to be demolished under SB 827. There’s no prohibition of demolitions in San Francisco, so nearly every renter’s home can be demolished without their say if the building owner decides he or she wants to make more money off that property. Even the San Francisco Planning Department Report on SB 827 acknowledges, it’s open season.

Although there’s a right to return and relocation payments required under SB 827 for the tenants who would be displaced, there’s no enforcement, and no funding provided by the bill. And there’s no requirement for landlords to provide notices to tenants in languages other than English, so immigrant communities will be disproportionately impacted.

In the real world, landlords will likely tell tenants that they’re going to tear down the building and develop something new, so they want the tenant out. As we know with current Ellis Act evictions, tenants get scared because they have no ability to fight these evictions, so they often leave. They won’t be able to fight these “Wiener evictions” either. It’s stressful to wait, and it’s stressful not knowing when you’ll be permanently settled again. Despite SB 827’s promise to pay for temporary housing, it’s still difficult to find something in San Francisco. And, what if the new units don’t get built in the 42 months that temporary assistance if available? These are all questions tenants will have to evaluate.

If the tenant does opt to wait and move back in, who’s going to make sure the landlord reaches back out to the former tenant so they know it’s time to move back in? There’s no enforcement provision with this bill, and there’s no funding to support local enforcement either. If this bill passes, these “Wiener evictions” will cause increasing segregation by lower income residents being forced out of cities, or entire metropolitan areas, they can no longer afford.

What’s more, new buildings are not subject to rent control. And this bill does not require any increase in affordable units. The new buildings’ market rate prices will create a new comparable value for the surrounding buildings causing property values and rents to skyrocket everywhere in the area. If there is an existing rent controlled building, it could be torn down and replaced by a new structure with no rent stabilization at all. This story of gentrification is already familiar to many in once neglected communities of working class people and people of color, and has already played out in transit-rich areas like the Mission and South of Market in San Francisco and the Echo Park neighborhood in Los Angeles.

Doesn’t SB 827 provide an environmental benefit? No! Rich people don’t use transit.

Senator Wiener is justifying SB 827 with an environmental argument-- maximize new residential development around public transportation hubs. But this is a resource that future residents of this high priced housing will likely never use. That’s right, the wealthy don’t use public transit.

Because of their heights, these new buildings will be expensive to build, using costly materials such as concrete and steel. The luxury prices of these buildings will attract exactly the kinds of people who don’t use public transportation. They use private ride sharing services and tech shuttles and other sanitized forms of transportation.

Tech workers getting on their private shuttle

Look no further than San Francisco, which has one of the most heavily used public transportation systems in the US. Nearly every San Francisco resident can walk to a transit line that has a bus or train coming within 15 minutes during the day-- the kind that SB 827 references. Yet, San Francisco is also on the leading edge of new privatized systems of transportation, such as Uber, Lyft, Chariot, and tech shuttles to/from Silicon Valley, that chauffeur wealthier commuters in pristine, uncrowded, air conditioned bastions of luxury.

A previous People Power Media article, “Housing Near Transit for the Rich or Poor?” noted a 2010 study by Northeastern University studied the impacts of newly transit-rich neighborhoods. It concludes “the most predominant pattern (of neighborhood change) is one in which housing becomes more expensive, neighborhood residents become wealthier and vehicle ownership becomes more common.” The study continued to say “a new transit station can set in motion a cycle of unintended consequences in which core transit users– such as renters and low income households– are priced out in favor of higher-income, car owning residents who are less likely to use public transit for commuting.” This has been reiterated in many other studies such as a 2011 literature review and a 2014 analysis. More wealth in the neighborhood means more car-users, less public transit riders, and more commuters; this is the real environmental effect that SB 827 will have around transit hubs.

The people who will be displaced are the very people who actually use public systems of transportation, education, libraries, parks that will suffer further disinvestment when our urban diversity is replaced by upper class privilege and privatization.

How does it give value to landowners and developers without providing any value for the public?

Building housing close to transportation is already attractive to developers. They don’t need legislation to get them to build near transit. The presence of tech buses also increases property values. Even though rich people may not use a particular transit hub, they like to be near it. They like choice. They want that garage space for their car under their new condo, their free tech shuttle to and from work, and the choice to take CalTran, BART, Muni, Chariot or an UBER. It’s one of the reasons compact and transit-rich cities like New York and San Francisco are targeted so heavily by developers. Developers know that being near transit is more convenient, and when people spend less on transportation, they will spend more on housing.

With this bill, you hand out even more value to already valuable land. If passed, all a developer has to do is submit a letter to their local government demanding their increased “Wiener entitlements.” Wiener’s bill forces the local government to approve the request. So, with just a simple letter, a landowner can walk away with a huge windfall through the increased land value. That landowner can capitalize that windfall, even if nothing is built. There is no requirement to build on that more valuable land, so it can be sold at a higher price, commoditized on its potential alone.

How does SB 827 not even solve the root problem-- housing for additional workers?

Notice that Senator Wiener isn’t using his position as a California State legislator to work with his colleagues in Mountain View, Menlo Park and Cupertino. Cumulatively, just these three primarily suburban cities employ 50,000+ employees of Facebook, Google and Apple. Wouldn’t it make sense for a State Senator to work with his colleagues to make sure that there is housing and public transportation developed in those areas, so these workers can live near work rather than placing an increasing burden on urban areas like San Francisco which already has nearly 30,000 housing units in production? Unfortunately, this bill is instead a blatant attempt by wealthy people to re-colonize the inner cities and force people out. Instead of looking out for people and the environment, Senator Wiener is using this bill to ingratiate developers.

Real Solutions

Legislators need to:

Make sure that housing near transit is affordable;
Buy sites near transit to make sure they are used for 100% affordable housing;
Purchase existing apartment buildings to stabilize existing residents;
Increase amount of affordable housing required in new market rate developments; and
Make sure housing is built near employment centers like those in Menlo Park, Mountain View and Cupertino, so these tens of thousands of workers have short commutes and to alleviate displacement pressure on poor communities.
Value recapture like what has been done in Texas with Transportation Reinvestment Zones because even without the upscaling provided in a bill like SB 827, transportation improvements like the Van Ness BRT, Geary BRT, Central Subway provide an increase in property values.