Vomiting anarchists, burrowing owls, and the San Francisco housing crisis
A conversation with Kim-Mai Cutler
In the United States, we want housing to fill so many contradictory needs. We want it to be affordable. But we also want it to be a good investment. We want to preserve neighborhood communities, but we also want to welcome new neighbors. Housing is a basic necessity, but, unlike other necessities like food and health care, we often celebrate when prices rise. Dense cities are good for communities, economic growth, and the environment, and yet the NIMBY (not-in-my-backyard) movement perseveres, even among green groups and within environmental hubs like the San Francisco Bay Area.
Kim-Mai Cutler guides us in and around these paradoxes on the Breakthrough Dialogues podcast. As a partner at Initialized Capital, contributor to TechCrunch, one of the leading voices in urban policy, and a Bay Area native, she’s delved deep into how we got into this mess in the first place; her 2014 piece on TechCrunch, “How Burrowing Owls Lead to Vomiting Anarchists,” is still one of the most comprehensive pieces telling the story of the San Francisco housing crisis.
The following are highlights from Kim-Mai Cutler's conversation with Alex Trembath on the Breakthrough Dialogues podcast. To listen to the episode, and for a full transcript, click here.
The Breakthrough Dialogues is hosted by Alex Trembath and produced by Tali Perelman and Alyssa Codamon.
You've spoken before about how, beyond merely the supply of housing, US policy turns housing into an asset class, into a wealth generator. Can you talk about that?
Sure. It's important to remember that these are some deep, deep, deep cultural norms that have existed in this country for centuries. The US is founded on the idea of being a property-owning democracy where farmers were in this prized and elevated political position, and during and after the Great Depression, our president at that time, Franklin Delano Roosevelt, was really grappling with ways to jumpstart the American economy. And he looked toward housing as a way to do that. The industrial revolution created the first class of commuters; rather than people living and working on the same piece of agricultural land, they were commuting from apartment buildings to work in factories. That severed that traditional relationship between land and personal, family, and household wealth.
And so, in his creation of a set of institutions like the FHA and Fannie Mae to jumpstart the US economy, FDR looked toward the technology of the car and the ability to build roads, and the ability to build houses that were far away from the urban core, and these kinds of public institutions like the FHA and Fannie Mae to uphold these homes as a form of wealth and household savings, so that he was tying together this notion of a home and a farmstead or homestead as well back together, just like they were in the pre-industrial era.
His idea was like, "Well, if you're just working a wage job in a factory, if you don't have some other kind of means of putting your savings somewhere so that you can take it out if there's ever an economic shock or an income shock or a house shock... It's the government's responsibility to help create that." So he created this whole back door system of financing that is government-supported to enable access to this type of wealth savings tool. And it's also important to underscore that the creation of these policies was not racially equitable: it was primarily white Americans that had access to these loans and to these financial tools and to purchase housing.
It becomes not just a form of wealth accumulation, but of passing down wealth from generation to generation, so it's a legacy problem too.
Right. And so, if you look at the basis of the modern racial wealth gap in the United States between white families and families of color, it would be predominantly in the form of home ownership and the savings represented by that home ownership that's passed down.
Housing can be affordable or it can be a way to pass wealth down to our children, but it can't really be both. So how should we think about housing in an ideal way? And is there an alternative asset class? Is there an alternative wealth incentive to property that could take its place?
I don't have the answer to that question. But I would say, there are other high-functioning economies in the world, like in Japan and Germany, that do not center housing at the core of wealth creation in the way that the United States, or Australia, or the United Kingdom do. Germany's a tenant majority society, so to say, it's only 40% home ownership, but they also have more robust programs around access to medical care, around higher education that is relatively affordable compared to the United States, to vocational training, to lots of other support programs that enable people over the long-term to have access to housing that's relatively affordable.
Alex: What makes California’s housing situation unique?
Kim-Mai: California in particular is a state that was largely built out around cars and suburbs. We are a state that is the most populous in the United States, and we're on a major fault. Our elevation ascends pretty quickly from sea level up into the mountains surrounding both the LA Basin those surrounding the Bay Area. So once you build that out, the logical place to go from there is up, but in the 1970s, a lot of communities decided to downzone and to preserve their urban form in amber. And then they also fiscally preserved that through a set of tax changes at the state level that make it prohibitively hard for cities to finance basic infrastructure, like schools and roads and mass transit... Which also makes it difficult to create a community landscape that you would see in cities around the world that are more mature, like on the east coast, or in Europe.
And then also, if you think about the most recent set of fires... The fires from the last season destroyed like 20,000 homes. About 15% of California's housing stock is in the Wildland-Urban Interface. That means those homes at risk of burning. Do we assume that we're just going to have to live with fire and this is going to periodically happen, and more regularly happen, and more devastatingly happen? Or, do we need to rethink where we live in addition to how we build? And I think from a regional perspective, it underscores the idea that for the land that we do have that is flat, less prone to sea level rise, and less prone to fire risk, we need to be really thoughtfully thinking about how we can support more population growth there as opposed to sprawl out into areas where we're going to be putting people's lives at risk.
Can we blame the Bay Area housing crisis on tech jobs? There’s a steady stream of people moving into neighborhoods that were not wealthy neighborhoods before, putting pressure on housing prices and changing the nature of the economy – is that our biggest problem?
Regardless of the dynamics of job growth within the tech industry, in California every year, there are about 500,000 births, 200,000 deaths, and about 500,000 and 600,000 people moving in and out in either direction both domestically and internationally. Even if you just took the raw numbers, you're still looking at net population growth of maybe like 300,000 a year, and if you're assuming that you want to have two or three people per household, you're still going to need to build 180,000 housing units a year. California has been doing roughly 80,000 for the last 10 years or so.
We have to ask: what do you mean when you say, "Burrowing Owls Are Leading to Vomiting Anarchists”?
I was trying to tie what seemed like two disparate headlines together to tell a regional story about a very complex system. On the vomiting anarchists side, this is four years ago, there was a series of protests against tech buses. There was one in Oakland where a protester had mounted a Yahoo bus, and then vomited on it. People were upset that workers who are paid six-figure incomes are moving to a neighborhood in Oakland, which has this strange position of having some characteristics of being an industrial or post-industrial city, but also happens to be adjacent to the most expensive city in the country. It has these contrasting identities in a very complex racial and socioeconomic history.
At the same time, if you crossed the bay over in Mountain View, which is where Google is headquartered – they had zoned for something like 30,000 additional jobs and were building hardly any housing units. And one of the reasons that they weren't concerned about it was because they were worried about a dwindling population of the burrowing owl species. They had formed a feral cat task force to monitor cats attacking these owls. And this is one reason that they were not approving anywhere near the level of housing to match the number of jobs that they were approving, and it’s creating this spillover effect where all these extra Google workers, or Facebook workers, or Apple workers, or what have you, couldn't find any housing and housing stock down there. And so, they were commuting from San Francisco and then increasingly, Oakland, just to get to work.
What got you interested in housing and urbanism? Where has that taken you, and where are you going?
I grew up in the South Bay Area. The house that I grew up in, I believe, was built the same year that Steve Jobs graduated from high school. My neighborhood looks pretty much the same today as it did then, and Apple has gone from being something that grew out of the computer club to being the most valuable company in the world, with a five-billion dollar headquarters designed by Norman Foster and what have you. And the city looks the same! And having traveled to lots of other cities all over the United States and all across the world, I love beautiful walkable cities with lots of different amenities and resources and mixed use. And that just wasn't happening at all in Cupertino.
I was like, "What is going on?" This seems like a natural path that cities move along towards, and I was just always really curious why it wasn't happening there. And then when the protests started happening in San Francisco, it seemed like, "Wow! Why couldn't we just add more housing?" And then asking that question was just like opening Pandora's box and seeing, well, decades of loss, decades of rulings. There are decades of all of these different fights and struggles over the way in which we use land and the way in which we apportion who gets to live where and who gets to join what community. And so I researched that for like two months and then wrote that thing and it kind of blew up.
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