Fri, Aug

Bad Santa’s Coming to Town, with Special Gifts for His Friends

PLANNING WATCH--Yup, Santa may be coming to town in 2020, but not as a jolly old elf who knows who’s been nice.  No, it looks like 2020‘s Bad Santa will be State Senator Scott Wiener, and his presents aren’t for kids, but dollars for property owners through his third try at Senate Bill 50, his statewide upzoning bill. 

If the State legislature finally passes Scott Wiener’s SB 50, it will be payday for those who flip parcels and invest in apartment buildings.  This is because, according to Livable California, SB 50 supersedes local zoning laws and imposes the following and more over the entire State of California.  

  • As confirmed by LA City Planning, SB 50 would eliminate single-family zoning in neighborhoods within a quarter-mile of busy bus stops and a half-mile from rail and train stations. As the map below shows, in Los Angeles SB 50 would dramatically change most of the city south of the Hollywood Hills, as well as the San Fernando Valley’s transit corridors.

  • Developers could build 85 feet structures next to single-family homes if they apply for an SB 50 Density Bonus to stack an additional 30 feet onto their apartment projects.
  • SB 50 would also eliminate single-family zoning in neighborhoods that have above-median incomes, good public schools, or a high jobs-to-residents ratio.
  • Cities cannot reject house demolitions in SB 50-targeted areas because the bill prevents cities from challenging demolitions in areas that are job-rich, served by mass transit, or have good schools.
  • Under SB 50 developers can demolish homes that are not listed in the California Registry of Historic Resources. In Los Angeles, the city’s 37 Historical Preservation Overlay Ordinances and five Residential Floor Area Districts could, therefore, be nullified.

If California’s “blue” legislature passes SB 50 in 2020, what would then happen?  By imposing statewide increases in the height, size, and density (units per parcel) of residential property, many already observable trends would be accelerated – despite the beaming assurances of Senator Wiener, his real estate industry angels, and his posse of political supporters

Promised benefits that will not appear.  Because Scott Wiener, (Photo left.) his real estate benefactors, and his followers, such as YIMBY California, have sharpened their skills at camouflaging real estate speculation in fancy garments, I can assure you that their king wears no clothes.  Their efforts at housing, transit, anti-racist, and climate washing of their patrons’ upscale real estate investments will turn out to be a bust.  This is what will actually happen if SB 50 becomes law: 

  • The cost of housing will go up, not down. Prices will continue to rise, at least until there is another financial collapse.  Developers will certainly take advantage of more opportunities to build by-right housing in choice neighborhoods, but this new housing will be expensive.  When they demolish single-family houses to build apartment buildings, the new units will only be within reach of a small group of buyers and renters. These developers will never invest in low-cost houses and apartments because their business model is to maximize profits, not court bankruptcy.  Likewise, the imaginary low-cost apartments the Wienerettes promise supporters will also not magically appear, even when real estate investors overbuild expensive apartments, with their high but absorbable vacancy rates. 
  • Traffic congestion will get worse, not better, because upscale tenants depend on cars, not buses and rail, for mobility. Even when mass transit is close-by, few high-income tenants and employees will give up their cars.  As a result, transit ridership will continue to decline for years to come. 
  • Economic inequality will increase within and between majority and minority groups, not decrease, as existing property owners cash in on the fee-free gifts that Wiener’s law bestows upon them. Minority home ownership rates will stagnate, as wealth and income inequality increases and the supply of homes remains tight. 
  • The climate crisis will worsen, not improve. Green House Gas emissions will continue to rise for several reasons, worsening the climate crisis.  First, in-fill construction, which SB 50 rewards, nullifies the embedded carbon in existing buildings when they are demolished and replaced by auto-centric apartments.  Second, the residents of these new units will be upper-income, and therefore wedded to their cars and Ubers, not to buses and subways. 

In addition to increases in economic inequality and worsening housing, transportation, and climate crises, SB 50 will usher in other adverse trends, including the following: 

  • More out-migration. Lower income Californians will still respond to expensive housing by living with parents, squeezing roommates into crowded apartments, moving to distant towns where rents are lower but commutes are longer, and leaving California for cheaper housing markets
  • Decay of infrastructure and public services. SB 50 would allow increases in building intensity and population density without proportionate upgrades to already strapped public infrastructure and services.  As a result, neighborhoods with an SB 50-induced building boom will experience even more infrastructure failures than at present
  • More solicitations and demolitions. As the land underneath single-family homes quickly appreciates through Sacramento-imposed up-zoning, existing residents will be flooded with solicitations to sell their homes.  If they do, demolitions will proceed quickly, without posted permits and the required remediation of toxic asbestos and lead paint.  While the same sleazy contractors will remain players, their profits will soar when they switch from McMansions to apartments and condominiums.   

In his new book, Homewreckers, Aaron Glantz lists the corporate winners from the financial crisis that began in 2007.   These same companies, like Blackstone, will handsomely profit from SB 50, as these corporate landlords transform their business plans.  Instead of maximal extraction of rent from former homeowners, they will focus on flipping and in-fill development.  Like before, these companies would become the big financial winners through government-backed real estate schemes. 

What a friend they have in this bad Santa.


(Dick Platkin is a former Los Angeles city planner who reports on local planning issues for CityWatchLA.  He serves on the board of United Neighborhoods of Los Angeles (UN4LA) and welcomes comments and corrections at [email protected].  Selected previous columns are available at the CityWatchLA archives and the Plan-it Los Angeles blog.)