Housing Crisis? Not so fast…

Here in California we are bombarded with news about our “housing crisis.” State politicians have used the housing crisis as justification for removing local control of zoning and handing carrots to developers. We are told that the Bay Area is the “epicenter” of the housing crisis.

Politicians and pundits who use this overblown language should review some of the reports available from state agencies and business sources. Those reports paint a far more nuanced picture.

The reports show:

1) San Francisco is not the epicenter of the affordable housing shortage. The opposite is true.

2) The state does not have a housing crisis. It does have a severe shortage of affordable housing for our lowest-income residents. This is due a combination of a physical housing shortage and simple poverty. There is not a shortage of market-rate housing.

3) 2018 population estimates show that population growth has slowed dramatically statewide, but the decline varies from county to county. Factors including fires, expensive housing, and the search at the urban boundaries for cheaper housing. Housing projections need to take these new figures into account.

4) Hundreds of thousands housing units have been proposed in California—more than enough to meet growth in housing demand statewide since 2010. While some projects are working their way through local government approval processes, most of them have been approved. For most of these projects, the construction phase is the bottleneck, not local government.

5) Growth is not an act of God. The jobs/housing ratio in the Bay Area is out of balance. The trend toward the “Manhattanization” of San Francisco has been fought sporadically for decades, and is now back on the agenda. There needs to be a serious, competent, open and democratic planning process for growth, both at the regional and state level.

This analysis is based on the following four widely available reports. However, the data has been combined to tease out some conclusions that are not well understood:

1) HCD report: California’s Housing Future: Challenges and Opportunities, Final Statewide Housing Assessment 2025. California Department of Housing and Community Development.

2) LAO report: The 2019-20 Budget: Considerations for the Governor’s Housing Plan. Legislative Analyst’s Office.

3) DOF report: E-5 Population and Housing Estimates for Cities, Counties, and the State, 2011-2019 with 2010 Census Benchmark. State of California Department of Finance, Demographics Research Unit.

4) CIRB report: New Development in California 2018. California Homebuilding Foundation, Construction Industry Research Board.

San Francisco is not the epicenter of the housing crisis

Under the standard definition, any household that spends more than 30 percent of its gross income on rent is considered rent-burdened. The chart below displays the percentage of low-income households that are rent-burdened in California. The chart is taken from the LAO report, but the graph has been truncated to save space. The original chart on page 7 of the report lists several more highly cost-burdened California counties.

Source: LAO report, p. 7.

Note that the least burdened county is San Francisco (which is both a city and a county). Low-income San Francisco residents on average have a rent burden that is lower than any other California county, and lower than the rest of the United States. This is probably due to a combination of low-income residents hunkered down in rent-controlled apartments, while highly paid techies are paying market rates.

According to the report, “The figure demonstrates that low-income households experience similar levels of rent burden across communities—suggesting that insufficient income creates housing affordability challenges even in low-cost communities that have a sufficient supply of housing. Because of this, construction of affordable housing has a key role in helping low-income households afford housing.”

The HCD report takes a slightly different approach, but the results are much the same. In the chart below, counties are ranked by the average percentage of income spent on housing and transportation. As in the LAO chart above, this version of the chart has been truncated to save space. Several more highly rent-burdened counties can be found in the original chart on page 34 of the HCD report.

Source: HCD report, p. 34.

The report shows that not only does San Francisco have a low rent burden, it also has a low transportation cost burden due to access to mass transit and jobs that are close to housing. Together these two charts show that despite the myths, San Francisco is not the epicenter of the state’s housing crisis.

California has a severe shortage of affordable housing

Statewide there is a shortage of 1.5 million housing units for very low- and extremely low-income residents. These income categories are defined based on household income with respect the local area median income (AMI). The county is usually the area used in the definition. Extremely low income is defined as less than 30 percent of AMI, while very low income is 30 to 50 percent of AMI.

An example will help make this clear. Let’s assume an AMI for a particular county is $100 thousand annually for a family of four. Then an extremely low income household makes $30 thousand annually or less, a very low income household makes $30 to $50 thousand annually, a low income household makes $50 to $80 thousand annually, a moderate income household makes $80 to $120 thousand annually, and an above moderate household makes more than $120 thousand annually.

A household at the upper boundary of the moderate income category must spend on rent at least 30 percent of annual income, or $3,000 per month, before it is considered rent-stressed. On the other hand, a household at the upper boundary of the extremely low income category must spend on rent more than $750 per month to be considered rent-stressed. In reality, the AMI for Alameda and Contra Costa counties is slightly higher than these figures. This is due in part to high tech salaries in the Bay Area. In at least nine tech companies, the median salary is more than $200 thousand annually.

The chart below compares incomes and housing availability statewide:

Source: HCD report, p. 30.

There is a lot going on in this graph, so it is useful to work through it carefully. On the left is the bar that shows renter households by comparison to AMI. On the right the bar displays rental units that are affordable for renters in the various income categories.

As the legend on the right shows, in every group except the above moderate group, some households must pay more for housing than they can afford. For example, note the upper boundaries of the light blue bars. For low-income groups and below, there is a shortage of 960 thousand units statewide—the difference between the top of the light blue bars on the left and right. For moderate income households (green bars) and below, there is still a smaller shortage of 61 thousand rental units statewide.

The gap of 1.5 million housing units is shown by the blue arrow. Note that for low, moderate and above-moderate income households, the bars on the right (light blue, green and yellow) are thicker on the right than on the left—within those groups, there is enough housing. If there was enough affordable housing for very low and extremely low income households, all income categories would have sufficient housing (these numbers are for the state as a whole and figures can vary by region).

Taking a broader view, this chart details the mismatch between renter incomes and rental housing supply. One solution is to expand the bottom of the right hand bar—increase the amount of affordable housing. An alternative would be to shrink the bottom of the left hand bar—increase incomes to push renters into higher income categories. As the LAO report stated, the real culprit here is poverty (see here, here and here). But in either case, California doesn’t need to subsidize more market-rate housing. It needs to concentrate on housing for its lowest-income residents.

California’s population growth has slowed dramatically

Housing estimates have to account for population growth. In recent years, this issue has grown more complicated. Population growth has slowed tremendously in the last few years and is falling well behind projections, but in very uneven ways.

Source: DOF E-5 Population and Housing Estimates.

The table above is derived from the population estimates of the California Department of Finance demographic unit. It shows the figures for the state, selected large counties and all nine Bay-Area counties. Population for the state and various counties is shown for the years 2010, 2018 and 2019 (in blue on the left). On the right (in green) we see the total percent change from 2010-19, the annual average for the nine-year period, and the annual percent change for 2018-19.

Let’s start with the far right hand column. Last year’s statewide population growth figure of 0.47 percent is the lowest figure ever recorded. The state population growth rate is about half what had been forecast in long-range estimates. Only two counties, Riverside and Sacramento, had population growth rates of greater than one percent. Also note that three counties with negative growth last year all suffered from devastating fires.

In addition to the three counties with fires, four counties had slower growth than the statewide average—Marin County and the three Silicon Valley counties of Santa Clara, San Francisco and San Mateo. In Silicon Valley, the lack of population growth is partly due to people leaving because they can no longer afford to live there.

Next, it is useful to compare the last two columns. In the state as a whole and in every county except one, last year’s growth rate is below the 9-year average. Population growth has slowed down. The only exception is Sacramento County. The region has become a popular destination for people exiting the Bay Area to look for cheaper housing. Estimates of future housing needs must be adjusted for these slower population growth trends.

Proposed housing is sufficient to meet statewide growth since 2010

A comparison of population growth data, along with proposed housing projects, tells another interesting and complex story. The table below is derived from the Dept. of Finance population figures combined with estimates from the Construction Industry Research Board (CIRM) report of housing projects in the pipeline.

When reviewing these numbers, it’s important to keep in mind two things. First 2010 is the base year for the DOF population reports. California’s housing shortage existed even then. Renter’s income began to lag behind rising rents at least a decade before 2010 (HCD report, p. 29, fig. 1.23). Second, the number of proposed housing projects exceeds population growth in some Silicon Valley counties. If built, this new housing would help restore the jobs/housing balance in those counties, reducing the need for commuting.

Sources: DOF E-5 Population and Housing Estimates and CIRB report.

In the left hand column are the number of persons in 2019 living in households. Note that these numbers are slightly lower than the previous population statistics because they exclude people living in dormitories, assisted living centers, prisons and other group settings. The figures in the green section show the number of housing units in 2019, and how many housing units we would need to keep up with population growth from 2010-19. In the state as a whole, and in every county in the table, there is a shortage—since 2010, housing growth has not kept up with population growth.

The first column in the blue area shows the size of the shortfall, and compared it to the number of housing units that are in the approval and construction pipeline. In some cases, there is more than enough housing in the pipeline to meet population growth, and in some cases it is the opposite. In Los Angeles and Sacramento counties far more housing has been planned than is needed to meet population growth since 2010. The East Bay counties of Contra Costa and Alameda are a little behind. Interestingly, the Silicon Valley counties of Santa Clara, San Mateo and San Francisco all have far more housing in the pipeline that they need to accommodate population growth.

Statewide, there are 801,300 housing units in the pipeline. Of that number, according to the CIRM report, 451,000 are either under construction or are awaiting developers to pull the permits and begin work. In other words, cities have done their jobs and have signed off on 451,000 new housing units statewide—more than enough to meet population growth since 2010. The bottleneck for those units is the construction industry, not local governments. The HCD report states California needs to build 180,000 housing units annually. The number of units the in construction backlog (downstream of local governments) is 2.5 years of needed housing production. In the business press, the problems with the construction industry are well known. For more on the construction industry, see these two articles in the San Francisco Business Times (here and here).

The need for democratic growth planning

Building more housing and increasing housing density in the Bay Area are often justified because they will reduce rents. But if adding density will reduce rents, why does Manhattan, the most densely populated place in the United States, still have high rents? That is the question that the Bay Area’s pro-grown advocates have yet to answer. The relationship between increasing urban population density and lower rents is not straightforward.

The housing crisis has been talked about almost exclusively in terms of supply. Sooner or later, anyone who has taken an economics course will began to wonder about the demand side of the housing market, or put another way, the job/housing balance. Growth is not an act of God. Do we accept growth at any cost? Do we want to turn the San Francisco into Manhattan and the rest of the Bay Area into Brooklyn, Bronx and Queens? Who gets to decide?

To help clarify these issues, the chart above demonstrates a stylized version of San Francisco’s office and housing markets. On the vertical axis are office units. On the horizontal axis are housing units. We define these such that one more office unit requires one more unit of housing for balance. Each office unit provides space for one more person to work, and each housing unit provides space for one more person to live. The thick grey line is the balanced-growth expansion path. Along this line rents will stay reasonable. The points on the upper right indicate places where there are more office units than housing units, and rents are high. To the lower left, there is a surplus of housing units, and rents are low.

Let’s start on the lower left, at point (0,0). Assume some time in the halcyon past San Francisco had job/housing balance. But with a sudden burst of commercial development, 4,000 office units were developed, but only 1,500 housing units. We find ourselves at point A. Rents have risen, low-income residents are being displaced, artists are moving away, etc.

From here there are two possible courses of action. The first would be to get back on the balanced growth path quickly. Commercial growth could be discouraged and held to 1,000 new office units. Meanwhile to preserve housing possibilities for current residents, 3,500 affordable units would be produced. Balanced growth and reasonable rents would be reestablished at point B with a new total of 5,000 office units and 5,000 housing units.

Another alternative would to add 3,500 more market rate units while adding 6,000 more office units. The end result would be 10,000 office units and 5,000 housing units. This is point C. Note that at point C there are double the number of office units with respect to point B. This is the road to Manhattan. Point C has moves us even further away from the balanced growth line than point A. Yet getting to point C requires building just as many housing units as getting to point B.

For developers, point C is advantageous. First, because of the influx of well-paid tech workers, new housing can be market rate. Second, with the job/housing ratio even more out of balance, rents will continue to rise, allowing developers and their allies to continue to decry NIMBYism, impact fees, high construction costs, etc. The reality is that as long as the tech boom continues, developers can maintain the housing “crisis” simply by expanding office construction faster than housing construction can keep up.

But balanced grow per se is not the complete answer. Even if we can stay on the balanced grow path, there remains a question—how much balanced growth do we want? In the short term even balanced growth puts stresses on the kind of infrastructure local governments provide. Think of it this way: When you buy a house, you don’t stop there. You have to turn your house into a home. You furnish it inside with carpets, furniture, beds, kitchenware and eating utensils.

When a developer builds a new neighborhood, all those houses have to be furnished on the outside to turn that collection of houses into a community—infrastructure like water and electricity, sewer systems, police and fire services, park, libraries and schools. Building communities is expensive and takes more time than building offices.

In the long run, too much growth, even balanced growth, leads to crowding. Californians don’t just live to work. They want to get outdoors and enjoy weekends and vacations. Many people already feel that the Bay Area is too crowded (here and here). In addition, even balanced growth can start bumping into environmental constraints—sea level rise, droughts, fire, earthquakes. None of these are made easier to mitigate by more growth and more population.

To focus exclusively on California’s “housing crisis” obscures as much as it illuminates. The issues are far broader, and require a more informed and democratic discussion of how much California should grow, and how it needs to change to adapt to its future. Those are the issues our legislators and all Californians should be discussing.

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A review of Albany campaign spending in the 2018 election

It’s time once again for me to post the amounts spent by candidates for Albany city council and school board positions. I typically do this after every election. This information is public record and can be found on the Albany city clerk’s website here.  The candidates are required to complete their post-election reporting by the end of January, and the city posts the information in February. The spending numbers below were taken from each candidate’s Form 460, page 3, line 11.

There were three candidates who ran for two city council positions, Preston Jordan, Peggy McQuaid and Rochelle Nason. McQuaid and Nason were both incumbents, and both won re-election. McQuaid and Nason both agreed to the voluntary campaign spending limit of $6,000. This limit does not include the $980 required by the state for the 250-word ballot statement. Jordan did not agree to adhere to the limit. Their vote tallies (high to low) and spending are listed below.

McQuaid $3,183  votes: 4,716

Nason $6,915.27  votes: 4,245

Jordan $35,379.60  votes: 4,009

For comparison, here are the spending amounts and vote totals for the three candidates who won election in 2016:

Nick Pilch $16,076.48 votes: 5,386

Pete Maass $7,185.47 votes: 5,328

Michael Barnes $1,990.69 votes: 3,589

My spending in 2016 was low because I created my own simple campaign literature in Photoshop and InDesign and I used my surplus yard signs from the 2012 election. In addition, my strategy was to spend as little as possible and still come in third, which is what I accomplished. That seems like the rational approach to me.

I will point out that the two big spenders in 2016 and 2018, Nick Pilch and Preston Jordan, are the co-founders of the advocacy organization Albany Strollers and Rollers. I think we set the voluntary campaign limit in the right place. Pilch and Jordan, who spent much more than $6,000, didn’t seem to get much bang for the buck from their additional spending.

Here are the amounts spent for the Albany Unified School District elections:

Sara Hinkley $4,635.38  votes: 4,922

Clementina Duron $(NA)  votes: 4,575

Brian Doss $(NA) votes: 3,092

Charlie Blanchard $(NA) votes: 2,940

Ross Stapleton-Gray $(NA) votes 2,438

All of the school board candidates except Hinkley spent less than $2,000, so they were not required to file a Form 460. The Albany Teacher’s Association filed a Form 460 to report its campaign expenditures on behalf of the following candidates:

Sara Hinkley $965.20

Clementina Duron $1,370.20

Brian Doss $1,370.20

 

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What the East Bay Times doesn’t understand about Albany

The East Bay Times wrote a poorly reasoned op-ed about Albany, disguised as an endorsement piece about the city council race. Fortunately it didn’t find its way into the Friday, Nov. 2, issue of the Albany Journal. I’ve printed the full text of the op-ed below, indented and in italics, annotated with my responses. For the sake of brevity, I’ll refer to the authors of this piece as EBT. Published version is here.

Albany needs to get a grip on its taxes and its financial planning.

Well, no. Actually, we already have a grip. Let me just start by saying that as a former state budget analyst (back in the 1980s), and a recently retired UC Berkeley science editor, I have high standards for writing. In my opinion, the authors of this op-ed substitute ideological arrogance for thoughtfulness and rigor. I’ll explain below as we go:

 On taxes, voters should elect research geologist Preston Jordan. He was a driving force behind the city’s sidewalk tax, approved by voters in 2016. But he also is firm that such add-on taxes should sunset, giving voters a periodic opportunity to decide whether they merit renewal.

No. This sounds like EBT just read Preston Jordan’s campaign literature are took it at face value. Jordan was not the driving force. The driving force was just about everyone in Albany who was sick of tripping over cracked sidewalks. Jordan was helpful in the end with technical details of how the tax should be applied to parcels of various sizes. And the group he help found, Strollers and Rollers, did fund and distribute campaign literature. While the council was grateful for the efforts of Jordan—and many other residents—some sort of solution for cracked sidewalks was to be passed one way or the other.

EBT also misunderstands the sunset issue. Repairing sidewalks is the homeowner’s responsibility under state law. The Albany sidewalk tax was conceived of from the start as a one-time project that would run for several years to allow the city to repair all of its cracked sidewalks. Homeowners currently remain legally responsible for the sidewalks in front of their houses, and will continue to be responsible once the program ends. More here and here.

For financial planning, voters should re-elect Rochelle Nason, who is a strong advocate for implementation of long-range city budgeting. Three people are seeking two seats on the council in the Nov. 6 election. The choice is not easy. All three, including incumbent Peggy McQuaid, are smart, thoughtful candidates.

I agree about the smart, thoughtful candidates. However, one candidate stands out, and she is Peggy McQuaid, the only candidate EBT failed to endorse. I have been involved in public life in Albany since 2002, when I first served on Albany’s school board. EBT’s failure to endorse McQuaid is more a reflection of the newspaper’s poor judgement and lack of knowledge of the city than it is of McQuaid’s outstanding service and reputation in Albany. Her endorsements are stellar, from virtually all of Albany’s living former mayors to most of the current East Bay mayors. I wonder if EBT even bothered to read those endorsements. For my endorsements, go here.

The city is also asking voters to make the city sales tax permanent. As we’ve said previously, voters should reject Measure L. When combined with the state and county portions of the sales tax, Albany has one of the highest rates in the state. And the city is seeking approval for a $69 parcel tax for park and open space maintenance. Measure M would replace a temporary tax with one that is permanent, which is why voters should reject it.

This is misleading, and deliberately so. The urbanized coastal counties of California are vastly different than the rural and wilderness counties. The coastal counties generally have higher county tax rates. Albany has a high combined tax rate because Alameda County has a high tax rate. If Albany was in Plumas County, it would have a low tax rate. Comparing rural and urban counties is comparing apples to oranges.

 I’ve included the recent sales tax rates for California (source here). I’ve put the information into two spreadsheets. You can have the data sorted either by county or by tax rate, take your pick. The highest sales tax rates in California are actually in Los Angeles County—many cities have rates over 10 percent. If Measure L passes, Albany will continue to have a 9.75 percent sales tax rate, which is the same as our neighbor to the north, El Cerrito, and the same rate as four other Alameda Counties cities—Hayward, Newark, Union City and San Leandro. Albany’s tax rates are comparable with many of our neighboring cities.

Measure L is a good deal for Albany voters. For every $1,000 a resident pays in taxable purchases (not including food, which isn’t taxed), Measure L will cost only five dollars. Measure L can be revoked in the future if the either the city council or a citizen’s initiative place it on the ballot. We could have added a sunset provision to Measure L, but the city’s polling of Albany voters indicated that a sunset provision wasn’t important to them. Elections are expensive for cities, and unnecessary elections are a waste of time and money.

Albany also loves its parks and some of them could use a little TLC. With climate change bringing more extreme weather, taking care of our parks will require resources. Measure M, like other parcel taxes, will require a super-majority vote. I’m not sure we’ll clear that hurdle, but I’ll do my part by voting for Measure M, and I hope enough of my fellow citizens do, too. For more see this flyer.

 Albany property owners currently pay eight separate city parcel taxes totaling $449 for things such as libraries, sidewalks, road paving and street lighting. Plus, for every $100,000 of assessed value, homeowners pay $82 a year to help cover the cost of public employee pensions and city bond obligations. That’s $363 annually for the owner of an average single-family house.

May I please provide a dose of reality? The number of small parcel taxes on California property tax bills is due to Proposition 13’s stringent requirements for seeking additional tax revenues, which include super-majority votes and annual reports. This is not just the case in Albany, it’s true all over the state. I have written extensively in my city council blog about our property taxes, see here and here (once there, you will have to scroll down):

I just happened to get my new property tax bill in the mail today (although it was already available online). Here is a simple percentage breakdown of where my property tax dollars will go in FY2018-19:

58 percent: Alameda County

23 percent: Albany Unified School District

15 percent: City of Albany

4 percent: Other local agencies

It’s important to remember that not all of the city’s spending is discretionary. Like other East Bay cities, Albany is under consent decree with the Environmental Protection Agency to repair its aging sewer lines. We are legally required to spend this money. With respect to other local government agencies, the City of Albany simply isn’t creating a property tax burden.

Also note that the Albany Unified School District gets a much larger share of property tax revenues than the city. This is due to the state’s abysmal under-funding of K-12 education. In Albany we care about our schools, and are willing to help fund them ourselves.

 And when property owners sell their homes, the city charges an exorbitant transfer tax of $1,150 for every $100,000 of value, again one of the highest in the state.

Again, this is deliberately misleading. Charter cities, as distinguished from general law cities, have written charters that allow them to set their own transfer tax rates when property is sold. According to the information EBT cites (here), there are eight charter cities in Alameda County. Of the eight, two charge lower transfer taxes than Albany, while five charge higher rates.

That “exorbitant” tax rate is actually only 1.15 percent. I think Albany homeowners get what they pay for in the sense that good schools, well maintained parks and pleasant shopping districts keep property values high. I’m pretty sure the value added to Albany homes compensates for higher taxes.

 Meanwhile, city general fund expenditures are forecast to rise 41 percent from fiscal year 2015 to fiscal year 2020. It’s unclear where this ends because the city lacks a long-range budget.

It’s time for city leaders to stop trying to permanently lock residents into more taxes and better plan Albany’s financial future. Jordan and Nason provide the best hope for doing that.

Is there a citation for those forecasts? It’s hard to comment when I don’t know where the numbers come from or how credible they are. As for the rest of the paragraph, it’s more the same sloppy rhetoric. Albany’s current ballot measures do not try to “lock residents into more taxes.” Measures L and M are not new taxes, they are continuations of existing taxes. We are asking the voters to renew existing taxes. Isn’t that precisely what this op-ed piece has been suggesting?

All the current council members and city staff are keeping close watch on the potential problems with public pension funding. There won’t be any real differences between the candidates that get elected in this regard, since they will all be working together on the issue.

Unfortunately, this op-ed has been an exercise in ideology over informed debate. In that regard, it’s absolutely presidential. I do think what we have here is a bit of a culture war. I often ride my bike across the hills in Lamorinda and points further east, the cultural home of the East Bay Times. I was out there the other day and saw a political sign for someone named John Cox. “John Cox,” I said to myself, “I wonder who that is?”

Life over the hills is a bit like those German cars so many people drive there—monochromatic. Albany prides itself for being a little more colorful, although not as colorful as Berkeley (thank God). Think of our little town as the Denmark of the East Bay. Higher taxes, good public amenities, civic pride and a high quality of life. We like it this way.

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Please vote to keep Peggy McQuaid and Rochelle Nason on the city council

 

It’s time again for one of my intermittent blog posts. This one is on an important topic — the city council and why it’s in the interest of Albany to keep Peggy McQuaid and Rochelle Nason on the job. Peggy and Rochelle have proven to be dedicated, objective, thoughtful and hardworking. I don’t think the city council can afford to lose either of them.

Peggy is Albany’s #1 public citizen. A lifetime resident of our town, she has contributed more of herself to the city’s well-being than anyone that I know. She has contributed over the years through her participation in many of the city’s advisory boards and other civic organizations. Yet when she was elected, Peggy gave up her memberships in several of these organizations because she felt she need to be fair and objective, and because she needed to be free of all of potential conflicts of interest. Peggy has taken her responsibilities seriously and has been an excellent mayor. But don’t take my word for it. Her endorsements include almost off the living former mayors of Albany, and many of the local mayors from our surrounding communities.

It’s one thing to like and respect some one like Peggy, whom I’ve known for years and who I often agree with. It’s another thing to like and respect someone who you more often disagree with. But that summarizes my feelings about Rochelle Nason, who was not someone I knew when she joined the council, but who has earned my respect over the the last few years. I especially appreciate her legal background, which has particularly come in handy in our closed sessions, when we discuss legally complex issues that require confidentiality under state law. She possesses managerial expertise from having running large organizations. Rochelle also has an impressive list of endorsers.

As council members, we do not have power as an individuals. We only have power as a group. Good city council members tend to be self-effacing team players who, when given the chance to talk about their victories, will instead share the credit with many other people. They use the pronoun “we” more than “I.” Peggy and Rochelle both have this quality, and it’s one that is essential for the smooth functioning of a city council.These qualities do not stand opposed to providing leadership. Real leadership is not about grandstanding — it’s about getting stuff done.

Peggy and Rochelle have another critical ability — the ability to stand back, set their personal feelings aside, and take a dispassionate view of the needs of the city. Too often in the past, city council seats have been treated as sinecures from which to launch favors for friends and to advocate for pet projects. Fortunately, on our current city council this tendency has been minimized. It will stay that way if Peggy and Rochelle are re-elected.

Peggy and Rochelle have both agreed to abide by Albany’s voluntary campaign spending cap of $6,000. That’s far more than I ever spent on a campaign to get elected in Albany, but sadly, far less than some other candidates have spent. In a town of Albany’s size, people power is what should count in running for office, not dollars.

In 2020, the three current male members of the city council, Peter Maass, Nick Pilch and myself, will all be termed-out (we’ll be ineligible to run again because of term limits). That means in two years, we’ll have a council with three brand new members. I’ll be much more comfortable leaving the council then if I know that our two current dedicated, long-serving female council members will be there to help smooth the transition.

Please vote for Peggy and Rochelle for city council.

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SB 827 dies in committee

Dear Albany residents,
 
As many of you may have read, SB 827 didn’t make it out of the April 18 hearing in the Senate Transportation and Housing Committee (T&H). I had a second-row seat, so I’ll give you my perspective below:
 
As I often have said around Albany City Hall, I’m at the stage in my life when I no longer get much satisfaction from saying, “See, I told you so.” But I have attached (here, as a pdf) my April 16 comments to the committee.
 
The day of the hearing, while I was wandering around, looking for the room, I stumbled upon Senator Ben Allen (D-Santa Monica), and waited for a break in the conversation to thank him for all his good work last year on the vaccination legislation (with Sen. Richard Pan, D-Sacramento). As it turns out, Allen was on T&H, and he made some of the best criticisms of SB 827.
 
After a few perfunctory bills that were heard while a quorum slowly assembled, Sen. Wiener stepped up the to the podium to present SB 827. The hearing room is designed with sloping floor, almost like a stadium, and an elevated, semi-circular dais, making it hard to see the faces of all the members when you are seated in front.
 
Wiener presented the bill, and it appeared to me he was the defensive from the start. When he described the strong points of the bill, he mentioned items that were not in the original bill, but were added as amendments in committee. That was probably a good thing. The original bill defined transit corridors so broadly that almost all of San Francisco, and much of urban coastal California, would have become zoning-free, like Houston.
 
The majority of the members of the committee (10-D, 3-R) damned the bill (and Wiener) with not faint, but fulsome praise. It was a little condescending. Everyone agreed that Wiener had identified a problem. But the reality is the original bill was sophomoric and the committee had to do a fair amount of Wiener’s homework for him.
 
Wiener, when he was on the SF city council, had a reputation for rapidly flinging stuff against the wall to see if anything stuck. His fellow committee members on T&H gently let him know that is not how things get done in Sacramento. In the future, they were looking forward to working with him in a more constructive manner.
 
And as for the tech-backed YIMBYs, I think the message to them was that the state legislature get requests from many powerful groups, and that they could take a number and get in line. As the nouveau riche kids on the block, they had an over-inflated opinion of themselves, perhaps due to some easier victories last session. But SB 827 was an overreach. They’ll learn.
 
The bill’s co-author, Berkeley’s Nancy Skinner, offered a rambling defense of the bill that, as a constituent, I thought was an embarrassment. In the end the bill got only four yes votes, two from the co-authors and two from Republican committee members. Six Democrats voted against, and two Democrats and one Republican were NVR (no votes recorded). I’m not sure how the NVR strategy works, but it’s annoying. More here.
 
I’m left puzzled by two things. The first is the media’s infatuation with Wiener and this bill, which I thought was obviously a PR stunt from the start. The NY media were especially guilty of this–an echo chamber of cluelessness. I’m reminded of Sol Steinberg’s famous 1976 New Yorker cover (attached here). More than once Wiener’s bill was presented as “bold.” Yet I don’t think anyone in this debate thinks of Houston, which has no zoning, as a bold model for San Francisco.
 
The second thing I find puzzling is that the co-authors pitched SB 827 as an environmental bill that will reduce California’s carbon footprint. I’m not sure if they were being disingenuous or if they don’t understand that the evidence for that is quite weak. But this is a topic for another day. Just keep in mind that homeless people have very low carbon footprints, yet no one argues homelessness is good for the environment. Housing is an end to itself, not a means to an end.
 
There were enough audience members who wanted to speak that they were only allowed to say whether they were in favor or opposed. I was one of the later. I’d guess those who were opposed outnumbered those in favor by about two-to-one.
 
The vote was taken, SB 827 died in committee, and the audience streamed out to the elevators, mostly happy and excited. In the end, the committee made the right decision.
 

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Please oppose Senate Bill 827

Dear Albany residents,

With this blog post I’m asking you take a stand on an important issue in Albany. Here is the contact information for our State Senator Nancy Skinner. I’m asking you to read the following, and if you agree with me, contact Sen. Skinner to let her know that a bill she co-authored, SB 827, is unnecessary and should be abandoned.

The bill is a clumsy attempt to micro-manage local government zoning decisions in a way that will not (at least in Albany) address the problem of housing shortages. And probably not anywhere else. But it will cause many other problems.

I see SB 827 as part of a growing trend to scapegoat elected local government officials and brand them as obstructionists. I strongly suspect that with the success of right-wing, pro-business groups in Washington, DC, and with the takeover of many state governments by the same interests, the focus of these groups is now turning to demonizing local governments, which are becoming the last bastions of community-based democratic control.

I have spent too many weeks writing a draft about a bill from last session, SB 649, which was also supported by Sen. Skinner (but opposed by our Assembly Member Tony Thurmond). This bill was a giveaway to Verizon and AT&T and other cell phone providers. The bill would have stripped local governments of the ability to regulate to location of mini-cell phone transmitters in neighborhoods.

Bills like this are the brainchild of ALEC, a right-wing organization that provides model conservative legislation at the state level. Fortunately, Governor Brown, who learned something about the value of local governance while the mayor of Oakland, vetoed SB 649. I’ll reexamine SB 649, and its relationship with net neutrality, in a later post.

Now my concern turns to SB 827, which remains threat to local governance generally and to Albany specifically. As an introduction, here is the op/ed piece I wrote on SB 827 for the East Bay Times. It appeared in the Albany Journal on Friday, March 16 (the editorial text is in italics):

Opinion: Albany has lessons for bill that will encourage ugly, thoughtless growth

https://www.eastbaytimes.com/2018/03/11/my-word-albany-has-lessons-for-bill-that-will-encourage-ugly-thoughtless-growth/

The year 2017 was when California’s Legislature began to take the state’s housing crisis seriously. A package of 15 bills, written by a variety of state senators and Assembly members, was signed by the governor.

To implement these bills, new administrative codes will have to be written, money will have to be allocated to state agencies and new staff will have to be hired and trained. Meanwhile, legislators are already crafting new housing bills.

In the middle of this flurry of activity, Senate Bill 827 has landed with a thud. It is such a troublesome piece of legislation that it has local government officials (like me) scratching our heads. The bill was sponsored by San Francisco’s state Sen. Scott Weiner and Assembly member Phil Ting, along with East Bay state Sen. Nancy Skinner. It is unclear who actually wrote the bill, but it was clearly someone who lacks experience.

The bill is based on the notion that zoning restrictions should be removed along public transit corridors, allowing apartment buildings up to 85 feet tall to be built by developers, with almost no review by planning departments. This will apply statewide. If a developer wants to build a drab big-box apartment building that fills an entire lot, local planners will have no control over how it looks, except for making recommendations on paint and trim.

The authors of SB 827 made some rookie mistakes. For example, the bill ties maximum building heights on transit corridors to curb-to-curb widths, which can vary as sidewalks are replaced, triggering zoning changes. A deeper problem is that the definition of a transit corridor hinges on bus schedules. A change in bus schedules can also trigger changes in zoning, making the transit agency a city’s de facto zoning agency.

Even worse, the bill’s definitions of transit corridors are so broad that with minor exceptions, the whole city of San Francisco becomes a zoning-free transit corridor. If SB 827 passes as written, most of Albany will be defined as a transit corridor, and our current zoning maps will become irrelevant. Large parts of our city would be upzoned to allow for bulky buildings of up to 85 feet tall — even in neighborhoods zoned for single-family homes.

The bill is also notable for what it leaves out. The bill makes no effort to encourage affordable housing. If anything, it will discourage developers from creating affordable apartments. Nor does the bill do anything to reform the state’s absurdly bureaucratic and abused CEQA review process

SB 827 is a mess — and an unnecessary one. Like other cities and counties in the state, Berkeley and San Francisco already have the authority to change their zoning laws. If the bill’s sponsors can’t create local political coalitions, elect their allies to city councils and have them vote to change zoning, why should the state get involved? Our senators’ effort to allow Sacramento to override local zoning authority is a sign of the weakness of their ideas, not their strength.

Our little city of Albany has some lessons to share about this controversy. Back in the 1970s, Albany’s city council allowed the development of small, boxy, unattractive apartment buildings with inadequate parking. The neighbors began to complain about both how these structures looked and how street parking was being affected. In 1978, a group of Albany residents took matters into their own hands and passed a local voter initiative, Measure D. The measure required two off-street parking places for new residential development, and prevented zoning changes in residential neighborhoods.

Today, Albany’s residents are concerned about high rents and housing shortages, and the city is trying to do its part to help. Over the years, Measure D has turned out to be a big headache. In 2016 the Albany City Council proposed an amendment to Measure D that removed the parking restrictions. Its success gave a green light to our homeowners to develop “in-law” accessory dwelling units.

Albany’s city council and our residents both favor thoughtful growth that makes our city more lively, attractive and walkable. But there is another kind of growth. For lack of better term, let’s call it thoughtless growth. Albany experimented with thoughtless growth in the 1970s. The result was resentment, lack of trust and backlash. Decades later, we are still living with the political consequences. (The unattractive apartment buildings are still here, too.)

SB 827 will encourage ugly, thoughtless growth. State Sens. Wiener and Skinner would do themselves and their communities a favor by keeping in mind what happened right here in Albany in the 1970s. We don’t want to be forced to repeat the past.

Michael Barnes is a member of the Albany City Council. He is expressing his personal opinions and not speaking on behalf of the Albany City Council.

Here is another take on the original bill from the SF Examiner. Here is the take by the League of California Cities.

By the time my op-ed appeared in print, the original version of the bill had passed through its first committee hearing and had been amended. A good review of the changes can be found here as a big pdf. Scroll down to the second-to-last page for a one-page summary. Here is the League of California Cities’s letter to Sen. Wiener opposing the revised bill.

Basically, one of the rookie errors I mentioned, basing street width on curb-to-curb measurements, was changed to measurements based on property line boundaries. And in the revised bill some local planning elements will be allowed, including daylight planes and setbacks from the streets. In addition, the bill now specifies floor-area ratios. These changes will prevent buildings from becoming too bulky and occupying whole lots.

However, minimum building heights of up to 85 feet will are not changed. The bill still eliminates most of Albany’s current zoning. And the new version doesn’t allow for any subjective design review. As long as  buildings conform to some basic objective standards, they are allowed to be ugly. The suggestions of local planning and zoning commissions on how to make the building more attractive can be ignored.

Below is an image of how zoning in Albany would change under SB 827. You can click to enlarge the image. The blue circles show areas within a half-mile radius of  major transit stops, including both our local BART stations (North Berkeley and El Cerrito Plaza) and the intersection of two main bus routes where Solano and San Pablo Avenues meet. The green areas show the regions within a quarter mile of bus routes the run at 15-minute intervals or more often during peak times. Here and here are two sources of maps with the zoning overlays.

Most of Albany would be upzoned to allow buildings with a height of 85 feet in the green areas, and up to 55 feet in the blue areas. The two areas of Albany not affected would be the area NE of Memorial Park and the area near St. Mary’s High School.

To provide a sense of scale here is a photo of one of the taller apartment buildings in Albany, at about 40 feet tall. This is about half the height of new buildings that would be allowed in the green areas in the map above under SB 827.

SEVERAL OTHER PROBLEMS

There remain several other problems with the bill. First of all, it doesn’t make sense to base zoning on bus routes and bus stops. Buses move, buildings don’t. It makes more sense to take buses to the buildings than vice versa. Sen. Wiener has argued that bus routes in San Francisco should be considered fixed, but that is not what I heard from AC Transit planners at a recent meeting I attended in Richmond. They spoke at length about how bus routes often need to be adjusted. Under SB 827 when bus routes and bus stops are adjusted, zoning automatically follows, and that can create serious problems.

Alternatively, if we could just convince AC Transit not to run buses through Albany too often, that would instantly solve many of the problems that SB 827 would create. The bill’s transit-orientated zoning requirements apply only to bus routes that run at 15-minute intervals (or more often) during peak times. The bill unintentionally creates perverse incentives to slow down transit growth because of the zoning problems that would result.

Secondly, circles and squares don’t mix. Cities are laid out in grids. SB 827’s zoning rules around BART and bus stops are based on circles. That means curving zoning boundaries will cut city blocks into oddly shaped pieces. For buildings cut in half by these circular zoning boundaries, precise calculations with have to be used to determine which set of zoning rules apply. From a practical standpoint, this will be a big problem for planners—the zoning equivalent of trying to put square pegs in round holes.

Thirdly, this one-size-fits-all, cookie-cutter zoning doesn’t work given the variety of cities throughout the state. Albany exists on a different scale than Los Angeles. Albany packs 18,500 people into about one square mile of developed space. Our city’s population density (and ethnic composition) is remarkably similar to San Francisco’s, which packs 871,000 people into 47 square miles of developed space. The City of Los Angeles alone, not including its metropolitan area, holds 3.976 million people in 469 square miles at a density of 8,480 people per square mile. That Albany and Los Angeles should be subjected to the same top-down zoning rules doesn’t make sense.

CONSTRAINTS

Apart from all the problems above, there is a fatal flaw in SB 827—when it comes to building more housing, zoning is seldom the main problem. The important thing to remember is that cities don’t build housing, developers do. Here is a short list of constraints that get in the way:

1) Lack of property for sale.

2) Lack of interest among trustworthy developers.

3) Lack of capital.

4) Lack of a skilled workforce.

5) Burdensome regulations (including state-mandated ones like CEQA).

6) Zoning.

Unless all of these constraints are removed, new housing doesn’t happen. In a built-out city like Albany, 1) is the main problem. Further north, even before the fires in the Santa Rosa area, 3) and 4) were the problems. In other parts of the state, it’s other combinations.

Under existing law, cities are already required to zone for densities at levels necessary to meet their entire state-mandated Regional Housing Needs Allocation (RHNA). This does not mean cities have to build housing themselves, only that local zoning cannot be an impediment.

In other words, under current law, zoning is not allowed to be a binding constraint. If zoning isn’t a binding constraint, then what good does it to do to relax this constraint? Why is it rational to assume that relaxing zoning requirements statewide will lead to a building boom, if they are not the main problem in the first place?

The proponents of SB 827 fail to address this issue. The reality is that in different cities and in different regions, different sets of constraints are binding. There is no one-size-fits-all solution. That is why local control remains important.

Sen. Wiener might have to you believe that building new multi-family housing in San Francisco is bogged down in morass of zoning rules. But it’s not. Nor would gentrification be solved by turning San Francisco, one of our country’s most beautiful cities, into a zoning-free laughing stock like Houston, TX. Some portions of Houston are gentrifying quickly, while San Francisco is not.

There is a real problem with bills like SB 827 and the pie-in-the-sky talk coming from some gubernatorial candidates that propose simplistic solutions to complex problems—they create unrealistic expectations that will eventually fail to be met, leading to cynicism and backlash. A good rule of thumb is that solving problems in the public sector takes at least as long as it took to create the problems in the first place. California’s housing crisis has been gaining steam for years, and it may take a generation of hard work to turn it around.

We have our work cut out for us, and SB 827 isn’t the tool we need to get it done. I suspect Sen. Wiener is opportunistic and ambitious enough to realize this and not care, just as as long as he gets the media attention. Meanwhile, other thoughtful legislators, with more thoughtful approaches (here and here) get very little media attention.

That’s why I encourage you to write to Sen. Skinner to encourage her to drop this bill. Again, here is her contact information. And while you’re at it, please contact our Assembly Member Tony Thurmond here. Unlike Sen. Skinner, he voted the right way on SB 649 last session, so I’m hoping he can support our concerns once again.

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The Last Year in review

RETIREMENT IS HERE

Now that I am finally retired, it is time to get back to blogging. Since it’s been so long since I last posted, there are six items that I want to mention, more or less in chronological order (from old to new) and in order of brevity (from short to long):

1) Lions Club lawsuit

2) Rent review

3) New social services center

4) Campaign funding for 2016 council races

5) Our new property tax bills

6) Implementation of Albany’s Soda Tax

 

ALBANY LIONS CLUB LAWSUIT CONCERNING CROSS ON ALBANY HILL

The cross is an issue that the council has been dealing with for about three years now. Due to the lawsuit, the city staff and council members cannot comment on the issue, which is frustrating for both Albany residents and the council. I can tell you that the lawsuit is now in federal district court and there should be a resolution within months, not years. I can also share with you public information about the schedule. The latest information is that the initial case management conference is set for Dec. 14, 2017, before Judge William Alsup.

RENT REVIEW

The city issued a request for proposals (RFP) to help the city formulate a rent review ordinance, but the response was disappointing. City staff have been in contact with organizations that could meet the requirements of the RFP, and it will be issued again with more efforts to notify potential applicants. There is a good review of Bay Area rent review efforts on page 1 here, written by Barry Miller, who coincidentally was the planning consultant for our general plan update.

NEW SOCIAL SERVICES CENTER

The Albany Community Resource Center opened its doors for the first time this past Friday, September 8, and will now be open every Wednesday and Friday from 10am-1pm.There was an open house on Friday, September 29, part of Albany Local Week. I attended the opening and was impressed by how much work the staff have put into creating the center, and by the generosity of the Albany United Methodist Church for providing the space. Information on the Community Resource Center can be found on the city website here.

CAMPAIGN FUNDING FOR 2016 CITY COUNCIL RACES

In California the campaign spending of council candidates is public information, and it is available on the city’s website here. Candidates must file the state’s Fair Political Practices Commission (FPPC) form 460 to report contributions and expenditures if they form a campaign committee or if they plan to receive or spend $2,000 or more.

In the November 2016 Albany city council race, three candidates filed form 460s. Here are the contribution and expenditure amounts for each (page 3, lines 5 and 11):

Nick Pilch: Contributions $19,958.00; Expenditures $16,076.48

Peter Maass: Contributions $7,185.47; Expenditures $7,185.47

Erik Giesen-Fields: Contributions $3,985.85; Expenditures $5,013.04

Note that some contributions came from the candidates themselves. For example, all but a few thousand dollars of Pilch’s expenditures were funded by him.

The remaining two candidates, Amber Whitson and me, filed FPPC form 470s because we didn’t anticipate receiving or spending $2,000 or more. We were not required to file documents detailing our contributions or expenses. I have no information about Whitson’s spending. However, I did keep close track of my own campaign finances, and here are the figures:

Michael Barnes: Contributions: $1,079.84; Expenditures $1,990.69

Basically, I recouped my costs for literature and postage. I did not recoup the cost of my official ballot statement, which for all candidates is $978. I find it annoying that the state charges candidates so much, since the expense discourages democratic participation. For my campaign, my strategy was simple–spend as little money as possible and still come in third in the vote count, which is what I accomplished.

In the fall of 2018, two council members, Peggy McQuaid and Rochelle Nason, will be up for re-election. In 2020, Pilch, Maass and I all well be termed out, so three new board members will be elected then. I am hoping Giesen-Fields runs again. He was a good candidate and I think he would be a good council member.

NEW PROPERTY TAX BILLS

Homeowners in Albany have just received their new property tax bills. I have written a previous post (you have to scroll down a bit) about how to read your property tax bill. I’ll put up my new bill and compare it last year’s (see below). You can click on the images to enlarge them, and click the back arrow to return to the text. Note that 2016-17 is tinted blue, while 2017-18 (the bill we just got in the mail) is tinted pink:

On the left hand side of your bill are the ad valorum taxes, which are based on a percentage of your assessed value (less $7K if you occupy the property as your home). My new bill is based on my adjusted assessed value of $591,506. Your bill will have different amounts, but the percentages will be the same. I’ll express these percentages as the taxable amount per $100K of assessed valve, just to make comparisons easier.

The AV (ad valorum) percentages changed very little from last fiscal year (July 1, 2016 to June 30, 2017)  with one exception. The tax rate for the Albany Unified School District rose, as expected, from $200 to $250 per $100K of AV (highlighted). So this year you will pay $50 per $100K AV more than last fiscal year to AUSD. Overall, however, the increase in the tax for all AV items rose only $41.60 per $100K AV. This means that the other smaller AV items tended to fall slightly.

Keep in mind that the annual increase in your AV property tax is the combination of two factors. The first is the change in the percentages discussed above. The second is the annual increase in your assessed value, which is capped at two percent under proposition 13. This year my assessed value rose the full two percent, and yours probably did, too. That means the AV proportion of my property tax bill rose 5.2 percent, for a total of $402, which is a combination of the  two-percent increase in AV (from the lower right section of your property tax bill), and the change in the AV percentages (from the left hand column of your bill). 

On the right hand side of your property tax bill are the “Fixed Charges and/or Special Assessments.” These are generally referred to as parcel taxes because they are same for each parcel and don’t vary with the assessed value (there are some minor exceptions). There are two new items here (highlighted). The first is the Albany sidewalk tax that was approved by Albany voters on the Nov. 2016 ballot. For me the tax amount is $38.64, but it will vary depending upon your lot size.

The second item is Measure AA, a measure that I consider regressive and regrettable. I blogged about it here. It’s basically a Robin-Hood-in-reverse scam that takes $12 annually from Bay Area property owners, rich and poor alike, many living miles from the Bay. It then funnels most of the money to Silicon Valley to beautify Bay views for some of the wealthiest high-tech corporations in America.

All the other items remain the same. Some are adjusted for inflation, some are not. Overall, the amount of parcel taxes that I pay rose by almost exactly $90, and that figure should be about the same for all Albany homeowners. As I predicted in my previous post, I now am paying more than $10K annually in property taxes for my 1,100 sq. ft. Albany bungalow. Other folks in town are paying far more than that.

ALBANY’S SODA TAX FIZZLES

Albany’s soda tax, passed by the voters in Nov. 2016, is now in place.The tax revenues are beginning to stream in. It’s still a little early to get a sense of how much money the tax will bring in annually over the next several years.

I was the only council member not to support the tax (here and here). I thought it was another one of those feel-good measures that lacked a solid policy foundation and was based on wishful thinking. My recent casual survey of soda prices in Albany confirms this. I encourage you to take your own surveys as you shop for food to see what you discover.

One goal of the soda tax was to raise prices of sugar-sweetened beverages (SSBs) like sodas and canned teas. Excluded from the tax were juices (although they often “naturally” contain more sugar than soda) and sweetened dairy products like chocolate milk (our state’s powerful diary lobby made sure those items weren’t taxed). The idea is that the tax would be applied to SSBs at the wholesale level, and retailers would would then faithfully pass along the cost increase by raising only the price of SSBs.

But here in Albany, that’s not what happened. I checked prices at Safeway, Target, Bevmo, Sprouts, CVS and Seven-Eleven. Sugar-sweetened sodas and diet sodas have the same price. Then I cruised down the length of Solano Ave., stopping to check soda prices at restaurants that are popular with teenagers. Sugar-sweetened sodas and diet sodas have the same price.

One exception was the new Safeway Market at the top of Solano in Berkeley, where the old Andronicos was located. That Safeway store did have special stickers to distinguish between the two types of soda. For example, a 12-pack of regular Coke was $1.44 more expensive than a 12-pack of Diet Coke. (A 12-pack contains 144 oz. of soda, so with the SSB tax of one cent per ounce, the tax totals $1.44.) However, Safeway often has club-member or two-for-one discounts, and those sale prices are the same for regular and diet sodas.

The Albany City Council never had the authority to tell retailers what prices they could charge. And today, it’s difficult to know which other goods have been marked up to cover the wholesale cost of the soda tax. But I think it’s fair to say that the council has effectively imposed a tax on food, which was not the intent of the soda tax.

During the next several weeks, the council will be discussing how to spend the soda tax revenue. It should be an interesting discussion, since the amount of revenue raised, unlike in our much more populous neighbor to the south, won’t be enough to start any major new programs. Because the SSB initiative was written to require a simple majority vote, and not a two-thirds supermajority, the SSB tax revenue cannot be earmarked and must be put in the city’s general fund. Perhaps the council can use it to enhance some existing programs.

ENOUGH FOR NOW

There are a few more items I’d like to cover, but this is enough for now. I’ll to blog again soon.

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Catching up after the election

Before I start, I just want to preface my comments with a few observations about the new Safeway on Solano Ave. Safeway purchased the old Andronico’s stores and converted them to Safeway Markets, upscale versions of their stores. I stopped by this weekend to take a look, and the store was packed. I’ve never seen the parking lot so full.

After years of squabbles over redesigning the Safeway in Albany, we did get a new upscale Safeway store after all–up the street in Berkeley. And that means Berkeley gets the enhanced tax revenue, not Albany. But Albany still gets the traffic. Another development opportunity has been lost for our city.

LOTS OF PROGRESS ON MANY ISSUES

I’m sorry to be behind on posting, I’m having trouble breaking free enough time get caught up. Quite a lot has been going on in our little city. In what follows, I do want to dive into one subject and spend a fair of time on it, but first let me provide some updates on a whole bunch of other issues that have come before the council. These items are listed in a rough chronological order from those that have already taken effect to those that are months away from being implemented:

1) The council passed a new anti-tobacco ordinance that tightens up rules for smoking in multi-unit housing (apartments and condos). The ordinance restricts smoking on balconies and other areas to prevent health problems from second-hand smoke. It encourages the transition to non-smoking housing units. Enforcement will be tricky–our police officers obviously don’t have the time to routinely patrol the halls of Albany’s apartments and condos, sniffing out violations. But the ordinance does empower apartment and condo managers (and residents) to insist on the right to smoke-free living, and to work with the police as necessary to enforce the new rules.

2)  The city will soon have part-time social services center, open two afternoons each week. The center will be located in the Methodist church at the corner of Marin and Stannage. The center will provide a range of social services, including services for the homeless. This is a pilot program. If successful, I’m hoping we can find the space to open a bigger center with longer hours.

3) The city continues to explore its legal options regarding the cross on Albany Hill, a public park.

4) In the next several weeks construction will begin on Phase I of Pierce Street Park.

5) The possibility of designating Albany an immigrant sanctuary city will be on the council agenda in the next several weeks.

6) The staff with present a rent-review ordinance for council’s discussion in the next few months.

7) The city’s soda tax will go into effect this summer, and we should have some sense of how much revenue it will generate by the end of the year. As a council member who opposed the soda tax, I have low expectations.

8) The Alameda County community choice aggregation plan (CCA), which allows the county to take over electricity billing from PG&E, will not be implemented for several more months.

9) Following the passage of California’s Proposition 64, which legalized recreational use of marijuana, the city will have to review its ordinances to make sure they conform to state policies. The city will be working with the League of California Cities in Sacramento on this topic in coming months.

THE ALBANY BULB TRANSITION TO THE PARK DISTRICT

I want to get back to an issue that the council considered in October, during election season. This is the issue of handing the Albany Bulb over to the East Bay Regional Park District (EBRPD). I’m not sure that it’s a great idea. I’m not sure it’s a terrible idea, either. As a council member I didn’t see and hear enough information to be able to come a reasonable conclusion.

I have very little personal interest in the Bulb. I don’t have a dog, and I prefer the ocean (Bolinas, Marin Headlands, Ocean Beach, Pacifica) to the Bay. But as a council member, I have an obligation to see that an important piece of public property is being dealt with in a manner that is consistent with the interests of Albany residents.

So like a surgical patient seeking a second opinion, or a car owner shopping around for a new mechanic, I thought some hard questions needed to be asked before the council approved the memorandum of understanding (MOU) with EBPRD.

First, some background details. The future of Bulb development (or lack of it) is governed by the Albany Bulb Transition Plan. This plan was the result of a thorough and democratic process, and it’s a good one. Some of the transition plan’s features–installing park benches and picnic tables–are inexpensive and could be done by the city.

More distant and more expensive parts of the plan, like laying down tons of rock to stabilize the Bulb Shoreline (much like has been done near Albany Beach) will require millions of dollars and a California Environmental Quality Act (CEQA) review, which by itself will require hundreds of thousands of dollars. I doubt the grant funding for the revetment (rock buttressing) will ever be found, but the CEQA review is more likely.

But my question is, why bother? Why not just keep doing what we doing now? The ownership of the Bulb will not be transferred to the park district because park doesn’t want the liability for any toxic leaks from the old commercial landfill. Nor will the park district pick up the tab for the patrolling of the Bulb by the Albany Police Department. Albany citizens will continue to pay for that. Under the MOU the park district will help the city pursue grants to fulfill the transition plan, and will help with the garbage collection.

As with most things in life, there are trade offs. The Albany residents that I talk with are generally happy with what has become of the Bulb, are glad that they can walk their dogs there, and that kids can ride their bikes there.

I don’t know any Albany residents who want the bulb to become an off-limits conservation area, as I think the local Audubon Society would prefer. Albany’s Memorial Park might be a better model, a place where dogs are allowed and people can roam around.

So why not keep the bulb as a city park, especially since Albany will continue to pay for policing and will continue to have the liability? That’s a big question that leads me to several other questions that are yet unanswered, at least at the council meeting:

1) If handing waterfront land over to the park district is such a good idea, why didn’t Berkeley do it? Cesar Chavez Park is a Berkeley city park.

2) What percentage of Bulb users are Albany residents?

3) What percentage of Albany residents are regular Bulb users?

4) What is the financial health of EBRPD, and will it ever be in the position to help pay for patrolling services provided by the Albany Police Department?

I am still perplexed that the council voted to approve the MOU without having answers to the questions above, and at the meeting, some knowledgeable Albany residents seconded my concerns.

As I’ve often joked, when it comes to the Bulb, I feel a bit like a traditional Indian father who is considering given up his daughter to an arranged marriage. In addition to his daughter basically becoming property of another family, he must provide a large dowry. On the other hand, he could allow his daughter to make her own choices.

I like to think if I was that father, I’d cancel the arranged marriage. And I’m having doubts about the wisdom of handing over control of the Bulb to the park district. The MOU requires the city to complete the CEQA review and do other expensive cleanup before the park district will “accept” the handover. Again, why bother?

Although I like the Bulb transition plan, someday the city might like to change its mind. There is lots of interest in artwork on the bulb, for example, and programming art activities there would be easier if it was a city park.

The MOU runs for five years. We’ll have to see how the transition evolves. I won’t be on the council by then, but I’m hoping the city will keep an open mind about maintaining the Bulb as a city park.

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I got re-elected, thanks!

First of all I want to say thank you to all of my supporters out there. Along with fellow incumbents Pete Maass and Nick Pilch, I was sworn in on Monday, Dec. 5 for another four-year term. Now back to work.

NEXT UP — PROPERTY TAXES

There are lots of policy issues to discuss, but first I want to talk about property taxes. The deadline for making the first installment payment was Dec. 10, and I’ve gotten questions about why property taxes for 2016-17 have risen about seven percent from last year. So here goes.

Our property tax information is public record, at least for addresses. To find out the property taxes for any address in Alameda County, go here. I used the county data available at that link, plus some of my own records, to reconstruct my property taxes for the last 10 years, and to estimate what they will be next year. I’m showing you my information because a real-world example helps explain what is going on. Most the information below will also apply to your taxes. When necessary, I’ll scale my taxes to amounts per $100K of assessed value to make comparisons easier. See the chart below (click to enlarge):

My property tax from FY2007-08 to FY2017-18. Final year is estimated.

I bought my house in 2000 for $461K. Since then its assessed value (not its market value) has risen to $587K, an average annual increase of of 1.52 percent. Under Prop. 13 the annual increase in assessed value is capped at two percent. During the past 16 years, my assessed value has risen by two percent in many years, but especially during the aftermath of the 2008 financial crisis, the annual increase was smaller than two percent, and in one year my assessed value actually declined.

We have just made our first property tax payment for fiscal year 2016-17, which for California’s government agencies runs from July 1, 2016 to June 30, 2017. I estimate that next year, FY2017-18, for the first time, I will be pay more than $10K annually in property taxes for my little Albany bungalow. In other words, our property taxes rose about seven percent this year, and will probably rise almost that much next year.

Below is a copy of my property tax statement, which shows my taxes divided into two categories, ad valorem taxes on the left, and fixed (parcel) taxes on the right (click to enlarge).

Prop_tax_img036Ad valorem is defined as “in proportion to value.” My assessed value is listed as $586,774 but I get homeowner exemption because I live in my own house, which knocks down my taxable assessed value to $579,774. That figure is the base for the ad valorem percentages on the left in my tax bill.

The largest item is the one-percent rate that the county charges, which is capped at that level under Prop. 13. That’s $1,000 per $100K of assessed value. Next comes the City of Albany ($93 per $100K), the Albany Unified School District ($200 per $100K, but rising to $250 next fiscal year), community colleges ($25.60 per $100K), BART ($8.00 per $100K), East Bay Regional Park District ($3.20 per $100K) and East Bay Municipal Utility District ($2.80 per $100K). Those percentages sum to 1.3326 percent. For my taxable assessed value, that’s $7,726.06 ($1,332.60 per $100K).

To the right on my property tax bill are the fixed or parcel taxes. These do not change based on your assessed value. They are a lump sum, although I’ve noticed that people living in the Pierce St. condos pay slightly less to the city. I don’t want to spend too much time on these fixed assessments because they are relatively small (they are the gray bars in the graph above), and they grew very little this year, less than $20.

There are only four parcel tax line items that are more than $100. Two are AUSD parcel taxes, and two are city sewer and storm drain taxes. Together they sum to $1,457.98, which is 68 percent of the total parcel tax amount of $2,144.34. So as a percentage of the total, the two AUSD parcel taxes comprise 41 percent ($876), while the two big sewer and storm drain taxes comprise 27 percent ($581.98).

In the chart below, I show how the ad valorem tax rates have changed during the last 10 years (click to enlarge).

Albany_ad_valorumThese quantities are ad valorem taxes per $100K of assessed value. Note that to keep the chart horizontal, I’ve truncated the county’s portion. The bars start at $900, not zero. The county’s portion is always $1,000 per $100K of assessed value. The AUSD portion is orange is this chart. It remains fairly constant for several years, drops to $144 per $100K on FY2015-16, climbs to $200 per $100K this fiscal year, and will climb again to $250 per $100K next fiscal year.

The City of Albany bars are gray. The city’s portion remained stable for many years, dropped very low in FY15 and FY16, and this year jumped back up, but not to the historical levels. This pattern is due to a CalPERS (California Public Employee’s Retirement System) pension payment holiday that lasted only for two years.

The school district is fond of pointing out that even with the dramatic increases in AUSD ad valorem tax rates, the total rate is still below the historical peak of 2010. That is true only for two reasons–first the Measures B and E tax rates don’t fully kick in until next year, FY18, when they will raise the total to $250 per $100K assessed value. Next fiscal year the combined AUSD and City of Albany taxes rates will be at a historical high, but because the BART rate (yellow) has declined, the total tax rate for FY18 will be slightly lower than the historical peak in 2010.

But this is misleading in another way. Between 2010 and today, our assessed values have risen. When the tax rates above are applied to today’s assessed values, it turns out our ad valorem taxes will be at a historical high next year. See the chart below for more (click to enlarge).

Albany_MB_AVIn the chart above, AUSD taxes are in blue, city taxes in orange. The chart above leaves out two taxes, the county ad valorem tax and the parcel taxes. Changes in parcel taxes added less than $20 between 2016 and 2017, while changes in the county ad valorem taxes added about $15 per $100K of assessed value. My total property tax bill rose $646.05 dollars between FY2015-16 and this year, FY2016-17. The table below breaks out the details for my tax bill and for $100K of assessed value in FY2015-16.

AV_table_2Of my property tax increase of $646.05, all but $17.06 was due to ad valorem tax increases. Of the ad valorem increases, 100 percent of it breaks down like this: 54 percent was due to AUSD, 52 percent was due to the county and city combined, and the remainder taken together declined about six percent.

We can expect similar increases next year. The AUSD ad valorem tax rate will rise another $50 per $100K assessed value. We will probably see more CalPERS-related increases from the city. The passage of the county’s Measure A-1 will add a little, as will BART’s Measure RR and the city’s new parcel tax for sidewalk repair. That’s why I’m expecting my property tax bill to be above $10K next fiscal year. 

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Why yes, I am running for re-election

I am running for re-election. Being on the council isn’t exactly fun, but it is important work, and I think I have something to contribute, so here goes:

For my older endorsements and my ballot statement, go here. For background about me, how to donate and get a yard sign, go here. For my latest endorsements, go here.

The League of Women Voter’s website is an amazing resource for general information about the Nov. elections, including information about me and many other candidates. The direct link to me is here, and the main link to the website is here. The league’s candidate forum for both Albany’s city council and school board is here.

Here are my voting recommendations for the city’s six ballot measures:

MEASURE N1 Modifying parking requirements. Vote YES.

MEASURE O1 Sugar-Sweetened Beverage General Tax. Vote NO.

MEASURE P1 Sidewalk Repair Special Parcel Tax. Vote YES.

MEASURE Q1 Various modernizing charter amendments. Vote YES.

MEASURE R1 Dissolve the city’s Civil Service Board. Vote YES

MEASURE S1 Remove term limits for the AUSD School Board. Vote NO.

I explain my objections to Measure S1 in my previous post here. I also am opposed to the soda tax (Measure O1), which I think is not a good fit for Albany. I have written about soda tax previously here. It’s right after the minimum wage and rent control discussion, so you have to scroll down.

The Solano Avenue Association circulated (without endorsing) a pro-soda tax poster (here) that I thought was so filled with errors that I asked, and was allowed to write, a rebuttal (without endorsement) here. I haven’t seen any No on O1 literature, but I’m sure it has its share of errors, too.

Now on the positive side of things, I strongly urge voters to support measures N1 and P1. These are both well-crafted measures designed specifically to deal with problems in Albany.

YES ON MEASURE N1

Measure N1 repeals Albany’s unrealistic parking standards that were put in place way back in 1978 by that year’s Measure D. Measure D was basically a poison-pill strategy that required developers of multi-family housing to build two off-street parking places for every housing unit built. Developers were reluctant (and still are) to swallow the poison pill of creating buildings with too many parking spaces and too few living units.

In an era of climate change and housing shortages, it is critical to build more places for people to live, not places for cars to park, especially along existing public transit corridors. Hence the effort to pass Measure N1, which will allow the Planning and Zoning Commission and the City Council to develop more reasonable parking standards. The Yes on Measure N1 Committee’s website is here.

I cannot give you a better argument in favor of N1 than that of long-time Albany resident and architect Howard McNenny, who was a strong supporter of Measure D back in 1978. Over the years, he has changed his mind. When I asked him why in an email, here is what Howard had to say:

Regarding Measure D, I do recall being a proponent (that was a long time ago, by the way).  As best I can recall, the argument had a lot to do with what was going on at the time:  Developers would buy property zoned as single-family, then somehow manage to get them re-zoned for multi-unit (spot zoning, it was called).  Then, they would develop the parcel such that the entire frontage would be open parking stalls — one space per unit.  Units would be arranged behind, and on a second level.   The result was not very attractive, to say the least.  Adding insult to injury, any additional spaces due to extra cars per unit, or guest parking, would be in front of neighboring property, depriving them of their own on-street parking.   Something needed to be done, and Measure D was the result.

At this point, I do not support the strict application of the Measure D rules for parking, which effectively increases the price of housing.  We now have very effective zoning, and the kind of thing that was going on in the 70’s and 80’s is not happening now.  Development along transit corridors should not be held to the same standards.  Same for senior housing.  I know we already have exceptions for development where “adequate” on-street parking exists, though these cases are probably rare in Albany.  Other neighboring cities have more relaxed standards, where the number of parking spaces is tied to the number of bedrooms.  We could consider something similar.

Many thanks to Howard for his extensive quote. And please remember to vote YES on Measure N1.

YES ON MEASURE P1

At first I was very skeptical of a parcel tax to repair sideways. Very few cities anywhere in the United States have taken this approach and we lacked the city policies to clarify some of the underlying legal issues.

However, due to coming together of the city staff, the council and members of the Albany Strollers and Rollers advocacy group, we collected the necessary information about costs (thanks to city staff), made sure we had reasonable policies on the books (thanks to council member Rochelle Nason for taking the lead) and worked out a fee structure that is reasonable and fair (thanks to Strollers and Rollers).

The result is Measure P1, a 10-year parcel tax that will help speed up sidewalk repairs in Albany. The city could probably repair the sidewalks without this measure, but it would take much longer.

The annual cost will run $15 for condo owners and $39 for typical single-family house, depending on lot size. The tax sunsets after a decade and includes a low-income exemption. Details of this measure and the other ballot measures can be found here.

If you would like to know what happens when a city neglects its sidewalks for too long, consider the case of Los Angeles, which may be facing a bill for as much as $1.5 billion to repair its sidewalks (here and here).

We need a two-thirds super-majority to pass this measure, and I know some Albany voters are already feeling taxed enough after seeing their new property tax bills, but there is no point in building new schools or developing walkable commercial districts if we can’t get there on foot due to dangerous sidewalks. 

Unlike Measure O1, the soda tax, which came to us from Berkeley and which I believe is a poor fit for Albany, our sidewalk tax is a well-crafted policy designed by Albany voters to fit the specific needs of our town. I encourage you to vote YES on Measure P1.

MY RECOMMENDATIONS FOR  COUNCIL AND SCHOOL BOARD

Finally, I am endorsing Albany’s current mayor, Pete Maass, and two candidates for school board, Jon Destin and Clementina Duron. Since Pete needs no introduction, please let me discuss my picks for school board.

Jon has one child at Marin Elementary, while Clementina has two grand children there. Both candidates are competent, thoughtful and independent. I think that’s exactly what our school board needs now. You can read about them and the other school board candidates on the LVW Voter’s Edge website here. More on Jon’s take on the issues here and here, and Clementina’s here.

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