Four Warnings For Los Angeles On Measures S

The alternative title for this piece was: “Ballot Box Zoning: Where Needed Housing Goes to Die.”

Next month, Los Angeles will be voting on Measure S, a proposed 2-year policy that will effectively serve as a moratorium on new construction.  That is, Measure S will require a public vote on any new development that does not fit within existing zoning.  Most of the city’s major leaders, including Mayor Eric Garcetti, have come out against the measure, and the Los Angeles Times followed suit just a few days ago.

I’m not going to rehash arguments for or against the measure.  Instead, I’m going to offer several warnings based on the experience of Davis, CA, which passed its own Ballot Box Zoning Measure in 2000.   Measure J, our ballot box zoning measure, requires voter approval on any attempt to change the zoning designation of open space or agricultural land that sits on the community’s edges.  The law also explicitly names two particular parcels that must be voted on prior to approval.  So for the purposes of this piece, consider it a ballot box zoning law targeting sprawl.

Warning 1: These Measures Are Hard To Roll Back

Measure J passed in Davis with just 53.6% percent of the vote in a March primary when residents cast just 19,000 votes (in a city with at least 49,000 voting-age residents).  The law contained a renewal clause, and when it came up for renewal in 2010, support jumped to 76.7% percent.   This increased support may be an artifact of how the opposition attempted to stall the measure’s renewal.  Opponents of the renewal made a NIMBY argument the centerpiece of their case: they argued that slowing growth at the edge of town meant more infill pressure in the city’s core, threatening the character of neighborhoods.  As I’ll discuss in a future post, the argument is based on the fallacious assumption that those opposed to sprawl said “yes” to any infill.

In Davis, like much of the “left coast,” so called “progressives” fight against infill as much as sprawl and usually get what they want across the board. But I know Market Urbanist readers are already well versed in that. Unfortunately, many Davis residents now take it as a given that this direct-democracy in micro-zoning is an inherent right, with little thought to the ethical implications or power dynamics at play in ballot box zoning.  When the measure came up for re-vote its supporters’ final op-ed in the local paper began with, “Measure R protects your right to vote on new peripheral subdivisions,” (emphasis added).  It functions in Davis like Prop 13 functions in California: as an incredibly popular source of endless headache for functional urbanism.  Don’t let it happen to your community because people have short memories on these topics.  They will quickly come to believe it was always their inherent right to vote on the zoning of specific parcels.

Warning 2: Developments Usually Lose

Three developments went to the ballot box under Measure J, including one that voters had previously approved in 1995, yet all of them failed. In total, they would have added 2,725 new housing units to Davis since Measure J was implemented.  In that same period of time the UC Davis campus, adjacent to the city and its largest employer, grew from a population of 26,000 students to over 36,000.  Despite this growth, the city only added 1,764 other new housing units in the same time frame (according to the B25001 Census Table for Davis).

Table 1: Housing Not Approved Under Measure J

Now suppose the university somehow found the financing to put all the new students on campus (it didn’t and never will). The additional housing added to the city would not have provided enough beds for the new staff, faculty, and administrators at UC Davis, not to mention all the employees of businesses that support the university’s services or who serve the students.  The results should not surprise you: younger families have been bid out of Davis’ owner-occupied housing stock.  In Table 2 below, I’ve presented the share of Davis homeowners under the age of 35 against nearby communities since Measure J’s passage.

Table 2: Percent of Homeowners Under Age 35

Admittedly, other communities also experienced some decline in young homeowners.  Importantly, the one community in the region which saw sustained growth in young homeowners is also the community which expanded its stock the fastest: West Sacramento.  I intended to produce a similar table on the racial makeup of homeowners, but there are too few Black homeowners in Davis for the ACS to produce a stable estimate.

Warning 3: Developments Must Become More Expensive to Win

Of all three proposed projects, only Nishi Gateway came close to winning, garnering 48.7% of the vote in 2016.  How did Nishi come so close to passage?  A laundry list of community benefits certainly helped.  I have no problem with community benefits from development, but as you’ll see in Warning 4 folks who put so many demands on housing do not always think through the cost of saddling too many benefits on new housing.  First, I’ll quickly recap Nishi Gateway’s community benefits here:

• $23,000,000 in road infrastructure upgrades to upgrade one of the city’s worst highway interchanges (see below)
• $9 million in one time fees for the city
• $400,000 a year in funding for city schools

What $23,000,000 in ‘greedy developer’ money gets you: a functional interchange

The upgrading of the intersection would have displaced a local burger joint, known as Redrum Burgers, from its location.  The business’s owners put out a rancid attack against Nishi Gateway on Facebook just days before the vote.  The Developers responded by offering Redrum commercial space on its site with completely modern kitchens at the same rents they currently paid, another direct concession to the community.  A lot of students decried Nishi as “gentrification” because of all this.  The analogies between tens of thousands of low income people of color being priced out of the Bay Area to a burger joint in Davis getting a potential kitchen upgrade left me speechless.

But to recap: these benefits added $32,000,000 to the project’s costs, not including an extra $400,000 a year paid out afterward. That translates into higher costs for that housing and the people who live there.  Which leads me to warning 4:

Warning 4: The Sales Price or Rents of Any Proposed Housing Become Fodder for “No”

Opponents of Nishi circulated a “fact-sheet” claiming the site would have to charge $2,400 a month for a two bedroom apartment to break even.  They used this claim to argue the project wasn’t affordable and thus wouldn’t contribute to solving the city’s housing woes. Beside the fact that their numbers were bunk, they failed to appreciate or recognize the irony that some meaningful amount of the projects’ rents came from the need for the developer to pay down the above mentioned benefits.  Benefits designed to satiate NIMBY panic.

In official ballot arguments, several homeowners attacked the Wildhorse Ranch and Covell Village initiatives for simply providing market rate housing at all.  Yet these very same homeowners could turn around and sell their own homes at similar or higher values and nobody would bat an eye.  Additionally, these two projects included on-site inclusionary, subsidized housing to address the pressing local need for low income housing.  Indeed, 48% of the 1,884 units proposed for Covell Village would have contained price restrictions!* As far as I can tell, nobody asked these homeowners how they would contribute to the inclusionary housing funds when they sold their homes, or if they put price restrictions in their Wills so their children couldn’t sell their homes for too much of a profit.

The Big Takeaway

The point here is that any new development functions as a kind of referendum on the city and its issues.  And complicating the challenges further, new research argues renters can behave much like home owners and are sometimes likely to reject housing at the voting booth if it’s in their neighborhood, despite their own belief in the need for more housing generally.**  And in Davis, as it may very will soon be in Los Angeles, the going home prices in a community–which could be an argument for building more–are twisted to argue that all developers are inherently evil and their proposals should be voted down.  Luckily, Los Angeles Assemblyman Miguel Santiago has introduced a bill suggesting these laws should require that a 2/3rds “no” vote be the threshold to stop a project.  I’m no fan of arbitrary voting thresholds.  But I am no fan of ballot box micro-zoning either, and this bill could really help pour cold water on this movement to kill needed housing via ballot box zoning.

*I have been unable to verify at what income level those restrictions were to be set at, but I imagine they fell into the 80%-120% of AMI category: “moderate income” for the project to maintain feasibility.

**An earlier version of this piece misrepresented Hankinson’s findings.  They have been updated for clarity.  For those who do not have the time to read the full study, there is a good write up in Citylab