Chris Elmendorf Profile picture
Mar 27, 2022 24 tweets 13 min read Read on X
@sfplanning just released drafts of the keystone pieces of city's housing element: (1) analysis of site capacity (as zoned), (2) analysis of constraints.

tl,dr: big progress on conceptual level, huge problems in practice.

This 🧵 covers sites; stay tuned for constraints. 1/22
The big & welcome news is that SF, like LA, undertook to comply w/#AB1397 by modeling sites' probability of development during planning period & discounting sites' nominal zoned capacity by p(dev). 2/

The leadership of SF and LA on this issue, coupled with @California_HCD's rejection of nearly all housing elements from SoCal cities, is going put pressure on other cities to get on board the p(dev) train. 3/
This is *so* important, b/c for last 40 years, cities have gotten away with junk plans premised on patently false assumption that if a site could be developed during planning period, it would be developed. 4/
papers.ssrn.com/sol3/papers.cf…
Reality check: in Bay Area, a typical 5th cycle "housing element site" had less than a 1-in-10 chance of development during planning period.
A site zoned for 100 homes should have counted for 10 or fewer, but it was counted for 100. 5/

escholarship.org/uc/item/6786z5…
The false p(dev) = 1 assumption allowed nearly all cities in expensive places to avoid rezoning for additional capacity. /6

lewis.ucla.edu/research/a-rev…
But as LA and now SF have discovered, a city that's realistic about p(dev) will have to rezone. A lot.
Or at least it should... /7
SF hired an economics consultant to fit a p(dev) model to data from 2001-2018 and, as described, the model seems reasonable. So far, so good. /8
Consultant concluded that SF has p(dev)-adjusted capacity for ***less than 21,000 new homes, under current zoning, over the next 30 years.***

Whereas the city's state-assigned housing target exceeds 80,000 homes over just the next 8 years! /9
So, big rezoning? There ought to be! But SF purports to backfill most of deficit w/ handwavy, "trust us" assumptions about other sources of capacity, ultimately committing to rezone for only ~22,000 more units.

The money table is on p. 8. Let's break it down. /10
For starters, city posits that 50% of modeled capacity over next 30 years will materialize in next 8 years.

Rationale: state law is now better for development, so a model fit w/2001-18 data understates capacity under current law. Ok, that's directionally correct. /10
But even using that indulgent assumption, SF has "modeled" capacity for only about 10k homes, leaving massive shortfall (another 72k-84k units).

And this is where things get real wacky. /11
First, city posits that sites which "met criteria provided by mayor's office" for funding 100% affordable projects have p(dev) = 0.50!
City provides *zero* information about rate at which such sites have been developed in the past. /12
It takes real chutzpah to assert, w/o any evidence or even info about city's financial capacity to acquire these sites, that sites targeted for social housing have vastly higher p(dev) than other sites.

But this "saves" S.F. from rezoning for 8600 more units. /13
Now to the biggest skeletons: the "development pipeline."

City credits itself w/nearly 50,000 units from "housing ... projects that have been proposed or that have already received [planning] approvals but that have not received building permits." /14
What's the basis for these numbers? "[D]iscussion with city agencies working on the [pipeline] projects to assess units likely to be delivered over RHNA period."

That is, "trust us." /15
Notably absent: any analysis of what share of "pipeline" projects from last housing element got developed during the last planning period. (SF's last plan counted ~35,000 "filed or approved" units.) /16
Finally, after all the massaging of numbers, SF concludes that it ought to rezone for ~22,000 more homes, & that for fair-housing reasons, they should be located on west side of city.
Some housing advocates are rejoicing. /17
But: in connection w/ analysis of constraints (more on that later), SF hired consultant for pro-forma analysis of different types of housing projects in different areas...and the consultant concluded that *nothing pencils out on the west side*. /18
On basis of that study, @sfplanning says that w/ current permitting process, impacts fees, exactions, & construction costs, the *only* kind of project that's economically feasible is a 24+ story high-rise in city's highest-demand neighborhoods. /19
Yet SF "plans" to meet its ~22,000 unit shortfall (after hand-waving) by rezoning west-side corridors for 55'-85' projects that per city's own analysis would have *negative* rate of return.

This is a cruel joke. Except it's no joke. /20
Here's the big picture: to meet its 82k unit target, San Francisco must *triple* its typical annual housing production.
Rezoning the west side for 22,000 economically infeasible homes won't cut it. /21
@California_HCD should nix this plan unless SF:
(1) backs up its "pipeline" & "mayor's office" projections w/ public data, &
2) commits to ministerial review + waiver of fees/exactions/standards that render projects economically infeasible until city reaches RHNA target.
/end

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More from @CSElmendorf

May 7
City of L.A. is swinging for the fences w/ demurrer to YIMBY lawsuit challenging adequacy of housing element rezoning.

I think city will lose at this stage, but its demurrer does illustrate a real problem w/ manner in which cities & HCD implement the Housing Element Law.
1/5 Image
L.A. argues that *none* of its housing element commitments is enforceable, owing to HE's prefatory description of programs/deadlines as aspirational.

(L.A. concedes it must rezone by statutory deadline, but insists it needn't do any specific rezoning actions listed in HE.)
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The nub of the problem is that *some* housing element programs must be real commitments, enforceable in court. See GC 65587(b) (enforcement by traditional mandamus) & GC 65589(d)(2) (burden of proof on city w.r.t. adequacy of rezoning & constraint removal programs).
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Read 5 tweets
May 7
This ⤵️ is an outstanding post from @mattyglesias on benefits of concentrated land ownership for urbanism and the renewal of downtowns.

My addenda follow below. 🧵/17
Matt's core point is that developers' incentive to invest in amenities like beautiful design, quality public space, and gathering places like coffee shops & bars is increasing in the share of the neighborhood that the developer owns.

/2 Image
The new Mission Rock development in S.F. is a great illustration. Exceptional parks, great architecture.

Why? Likely because the entire 28-acre site was controlled by a single developer. Value of parks & architecture gets internalized as higher office & apartment rents.

/3 Image
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Read 18 tweets
May 5
After reading @GaneshSitaraman & Chris Serkin's "Post-Neoliberal Housing Policy" alongside @ezraklein's interview of @ZephyrTeachout & @saikatc, I think I'm finally starting to understand the crux of the Left's vehement reaction to Abundance.

🧵/22 Image
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Each camp offers a diagnosis of the Democratic Party's predicament + a way out. I'd summarize it thus:

- Team Abundance: Improve blue-state governance. Attract new residents. Make voters elsewhere want their state (and nation!) to be more like California, New York, Illinois.

/2 Image
Do it by centralizing power in state executives; increasing technocratic capacity in execs & legislatures; and fomenting a culture of outcome-oriented, evidence-based problem solving.
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Read 23 tweets
Mar 27
Here's a follow-up 🧵w/ highlights from the rest of the Fast Track Housing Package.

- @MattHaneySF's AB 1294 requires all local govs to accept a single, uniform, state-issued application for housing development projects. An excellent pro-competition policy.

1/14
- @AsmLoriDWilson's AB 660 authorizes third-party review of building permit applications (by licensed engineer) if city flubs shot-clock deadlines. An important self-help remedy and alternative to litigation.

- @JoshHooverCA's AB 1308 similarly authorizes third-party...

/2
building inspections if city does not issue certificates of occupancy for completed work in a timely fashion.

- @BuffyWicks's AB 712 provides hugely important reinforcement for these and other state housing laws, by stipulating that if city was "advised in writing"...

/3
Read 15 tweets
Mar 23
Proposition: Abundance and the conservationist mode of environmentalism are (or should be) friends, not enemies.
🧵/15. Image
There's a widespread view that Abundance squares w/ environmentalism only insofar as climate supersedes conservation as the Big Issue for enviros.

Tradeoffs b/t conservation & green energy give rise to a "Greens' Dilemma."
/2 Image
Some people (e.g., @TedNordhaus) go further, asserting that environmental ideology is at war with Abundance. There's no space for compromise or synthesis.
/3


breakthroughjournal.org/p/environmenta…
Read 16 tweets
Mar 11
Even if CA enacts this amazing set of bills ⤵️, there are big challenges ahead.

I see six areas of concern on the horizon. 🧵/16.
Concern #1. Local political incentives.

Ditching public hearings on housing proposals ("ministerial approval") is good, but it doesn't give city council members any affirmative reason to facilitate -- or simply not obstruct -- development.

/2
What would improve their incentives?

- Replace single-member district elections w/ at-large or multi-member district elections. There's strong causal evidence that SMD elections depress housig production.

- Fix Prop. 13, or create new state -> local fiscal...

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Read 17 tweets

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