The Burlingame Voice

Rent Control: +5% Sends a Message

The Law of Unintended Consequences is often not understood in Sacramento.  In fact much of what emanates from the Legislature and the Gavinor appears to reinforce the Law of Totally Expected Consequences.  OK, I just made that last Law up, but that doesn't mean it's not accurate.  The LA Times describes the latest instance

“We are pleased to announce we have come to an agreement on a series of amendments to AB 1482 that would create strong renter protections,” said a statement from Newsom, Senate leader Toni Atkins (D-San Diego), Assembly Speaker Anthony Rendon (D-Lakewood) and bill author Assemblyman David Chiu (D-San Francisco). “The bill will protect millions of renters from rent-gouging and evictions and build on the Legislature’s work this year to address our broader housing crisis.”

Applying the KISS principle to analyzing AB 1482, one can only conclude that the bill guarantees 5% + inflation rent increases for a huge majority of renters every year for the foreseeable future.  Why would any landlord do anything else after being told that is the limit of what is acceptable (and legal)?  As someone who is neither landlord nor renter, but an interested observer this is a totally expected consequence--as will be the calls for more taxpayer dollars to go to state-subsidized, "affordable" housing.  Bet on it.

Scott Weiner Comes to Burlingame

Two weeks after state senator Scott Weiner’s visit to Burlingame I am still marveling at how smoothly he can speak out of both sides of his mouth in a single meeting.  Weiner was invited to the Lane Room by Thrive which is a consortium of non-profit organizations.  He was invited to discuss the problems non-profits are having retaining staff as the cost of housing rises.  Weiner’s Senate Bill 50, discussed here and here, appeared to be popular with some in the audience of about 60 people.

In an interview by Samaritan House CEO, Bart Charlow, Weiner comes off as a tall, skinny, somewhat geeky attorney with a heart of gold.  He’s a man on a valiant mission.  Yet I saw in him a streak of progressive fascism interested only in consolidating power in Sacramento by any means necessary.  After describing the “carnage” that is happening in California and is “hollowing out even the middle class”, he excoriated the “No Growth” people for “adopting progressive talking points” such as “we need to build only affordable housing”.  He believes that will never happen without market-rate housing to subsidize it, but others think differently.  To him, it is better to demolish the concept of R1 zoning in the six most populous counties in the state via SB50 thus hurting the middle class homeowners who rely on their single-family homes as their largest investment.  Weiner’s claim that “this is not about getting rid of single-family homes” rang hollow after he said “single-family homes are a ban on affordable housing”.

When asked about SB50 excluding less populous counties, particularly Marin County, Weiner spoke “bluntly” about needing to do that to get the bill through a Senate committee headed by a Marin senator.  So much for principles of “fairness” that one hears so much about from progressives.

When asked about the housing quotas cities have been given (known as the RHNA formula), Weiner complained about how the formula has been gamed by some cities and two-thirds of cities don’t meet their low-income targets.  It didn’t seem to occur to him that perhaps that state-imposed process should be fixed by the state Legislature.  Better to scrap the whole idea of city zoning and let anyone build anything anywhere.  Nice leadership.

Someone other than me asked Weiner where all the water will come from?  He responded that “we have a structural deficiency” on water infrastructure and then made the ridiculous claim that “building housing doesn’t drive population growth” or water consumption.  He really said that.  After the obligatory comments on low-flow toilets and water reuse (“we are way behind Australia and Israel”), one was left to wonder how he would keep the middle-class in California without consuming more water.  It must be nice to live in the fairyland of the state senate and not have to worry about fixing “structural deficiencies” before plunging ahead with massive growth laws.

When asked about the impact that AirBnB and VRBO have on permanent rental housing and whether something should be done to limit those businesses, Weiner magically turned into a private property rights advocate.  He didn’t even seem embarrassed by the switch.  He then proceeded to say that “cities have ample tools to ban or restrict” AirBnB, yet he’s quite comfortable completely overriding these same cities’ zoning ordinances.  I almost had to admire such blatant hypocrisy spilling out in a single meeting.

The most revealing comment of the 90-minute session was buried in one of Weiner’s asides about Area Median Income (AMI) ranges and which income range was most “deserving” of subsidies.  He noted that this was a problem until we tackle “the long-term project to realign our capitalist society and socialize housing”.  There you have it.

SB50: The 'Drop Zone' in B'game

Yesterday's SF Chronicle piece "SF supervisors oppose Wiener's new housing-near-transit bill, but there's wiggle room" captures some of the many concerns about SB50.  We started the discussion here noting that another SF politician, David Chiu, decided it was good politics to point fingers at Burlingame.  One SF Supervisor, Vallie Brown, joined the "ruin other people's backyard" movement by saying “We need bold proposals, and not just here. We need to have the rest of the Bay Area and California get into gear around housing".  Talk about exceeding one's authority.  But most of the SF supervisors appear ready to vote for a resolution opposed to SB50.  Now if only our own San Mateo County supervisors had as much backbone.  But so far they haven't demonstrated it.  Today's Comicle editorial tries to paint even the SF supervisors as some sort of "reactionary" body--good luck with that laughable assertion:

In the long fight to keep California’s wealthy, homogeneous, exclusive suburbs just the way they are, Palo Alto and Beverly Hills have an ally they might not have expected: San Francisco.  The city’s Board of Supervisors — thanks to its purportedly progressive faction, no less — is poised to reiterate its reactionary resistance to legislation that would legalize higher-density residential development near mass transit amid a crushing housing shortage.

For many locals the threat is still abstract, so here is a map showing the affected sections of B'game should SB50 become law--I call it the SB50 Drop Zone

Lest you think it is bad enough that some hack politicians from the city who cannot even manage their own streets in a first-world fashion want to co-opt approval of development in more than half of B'game; the last part of SB50 says a city that is "employment rich" can't stop development anywhere in town.  Don't get too comfortable up in the hills.  Our City Council has taken a clear stance against SB50 and should be encouraged as they have been by two letters in today's Daily Journal here and here.  To buttress their good instincts, they should consider starting a legal reserve fund since this is likely to end up in court if it passes in Sacramento.  It might also be time to reconsider whether SamTrans should be allowed to operate on our section of El Camino Real.  That sounds crazy to say about a state highway, but it's not any crazier than Weiner, Chiu and Brown telling us we have to build five-story tall high-density housing everywhere in town.

Changes to Lyon-Hoag

We've been following the oncoming future of the Lyon-Hoag neighborhood for quite some time including here and here.  This might be the section of town undergoing the most change--at least until the up-zoning in the North end happens.  Regardless of how long the changes have been in the making, it's still a shock to many.  I needed a tow recently and the tow truck driver who has been doing that job for almost 30 years couldn't believe that Hower Auto had closed and that the Datsunville building had been sold and was likely closing.  At least Washington School is getting some new permanent classrooms as the population of kids is likely to jump once again with all of the development coming.

And don't expect the pressure to subside.  Beyond Facebook and the crazy CASA Compact is another wave of price pressure from the next wave of Bay Area IPOs.  The Wall Street Journal notes

Friday’s strong public-market debut of ride-hailing company Lyft Inc., now valued at roughly $30 billion, is expected to kick off a rush of massive IPOs that include competitor Uber and digital-imaging company Pinterest, supplying the Bay Area with possibly thousands of new millionaires.  What sets this IPO season apart from previous offerings is the sheer volume of workers expected to benefit from the bonanza and its impact on the Bay Area, already strained by a growing class divide fueled by the years-long tech boom.

One early Uber employee, who is currently living in a rental apartment with their spouse and sold about half of their shares during an internal sale, said they had been eyeing single-family homes in the city. But that even with a budget of $4 million to $5 million, they didn’t feel they could manage carrying costs and private school for their future children. They are now looking at homes in San Francisco’s suburbs farther south.

The eternal question is whether B'game and our neighboring towns will end up as an expanse of offices, housing and restaurants and nail salons with little in the way of small services like independent auto repair, mom and pop retail, entertainment venues or anything unique from any other suburbia?  Plenty of B'gamers fear the worst about that homogenization and the traffic with the most common question today being "If you decide to go, where would you go?" not generating a satisfactory answer very often.  Here's the Washington addition and the last view of Hower.

Mission Creep at Caltrain

Wikipedia defines "Mission creep" as "the gradual or incremental expansion of an intervention, project or mission, beyond its original scope, focus or goals, a ratchet effect spawned by initial success. Mission creep is usually considered undesirable due to the dangerous irreversible path, each success breeding evermore ambitious interventions, stopping only when a final, oftentimes catastrophic failure was precipitated."  In other words, stick to the purpose that you were set up to deliver on.  Caltrain is creeping towards mission creep as shown here from the Daily Journal piece

Caltrain officials want to build housing, retail and offices on the agency’s underused property, though plans for transit-oriented development will have to be balanced with the future needs of the railroad.  “I think we’ve got tremendous potential to develop this corridor land for not only housing, but commercial developments along the way,” said Board Member Ron Collins, the San Carlos vice mayor.

Apparently Collins wants to mess up the rest of the Peninsula the way they have messed up San Carlos.

Collins said he wants affordable housing to be part of the plans and Board Member Charles Stone, a Belmont councilman, agreed emphatically.  “I want this policy to prioritize affordability,” Stone said. “We’re a transit agency, we want to do projects certainly that don’t interfere with ridership and enhance ridership and we want to do projects that don’t hurt us financially and improve our finances if possible, but at the end of the day what I’m most concerned about is we play a part in the affordability crisis where we can.”

Voila, mission creep.  How about you just run the railroad and prep for electrification, increased schedules, improve service including "unmet demand", and work on the last mile problem that inhibits ridership.  Could you just do that?

SB50: Mi CASA no es tu CASA

Senate Bill 50 is the latest in a long line of bad ideas put forth by myopic politicians who cannot stand that some communities have different priorities than others.  That myopia is compounded by feelings of envy over perceived "inequality" and the self-righteous do-gooder, YIMBY mentality.  It's further compounded by politicians who have no qualms about reaching for Other People's Money (OPM).  Current case in point is Assemblyman David Chiu and his bill AB1487 that would create yet another regional agency to search for OPM to fund affordable housing.  As the SF Chronicle piece about the bill notes:

But the notion of a new agency and more taxes infuriates some city leaders who say the government is running roughshod over local control.  Residents often object to new development, saying it mars the look and feel of their communities.  The region is tightly interconnected, Chiu said, so a city council obstructing development in Burlingame puts pressure on Oakland and San Francisco. And, ultimately, the effects ripple, creating a severe economic split between homeowners and renters, and older and younger generations.

The finger-pointing at Burlingame might be because of Mayor Colson recent piece on local actions and the importance of local control which was much better thought out that anything Chiu has ever proposed.  You won't see the Burlingame reference in the on-line piece, but it was right there in the March 8 print edition.  Perhaps some editor thought better of stirring up this 'burb too much?  Here are some points from Donna Colson's Daily Journal piece:

Last month the Metropolitan Transit Commission and the Association of Bay Area Governments presented the CASA Compact, a 15-year policy package to confront the Bay Area housing shortage. The compact presents a 10-point plan for housing production, preservation and renters’ protections that was developed by a group of mainly non-elected, self-interested housing industry and policy advocates.

San Mateo County communities had no voice in the CASA Compact process. Not a single elected from San Mateo County was included on the leadership team, steering committee or technical committee which is frustrating as many small cities were already taking the initiative to craft viable housing solutions for their communities. Some cities are allowing teacher housing, others are embracing renters protections to limit gentrification, while some, like Burlingame, are updating their general plans to allow for up to 20 percent more growth near transit while protecting the character of existing single-family neighborhoods.

So where is all of this headed.  Going back to the Chronicle article:

It’s still unclear what will happen if cities refuse to build. Right now there is no real mechanism for the state to override local land-use authority. When Newsom proposed withholding transportation dollars from cities that don’t meet their housing targets, he ignited a political flame war.

It comes down to what the build-build-build politicians think they can get away with using OPM and political pressure.  Small minds like Chiu have no problem attributing their failure to manage growth to other communities, but cannot see that they are most of the problem.  Any one who thinks we can build our way out of costly housing without real restraints on commercial development doesn't understand economics or the intrinsic attractiveness of the Bay Area for businesses in our predominant industries of high-tech and biotech.  Build it and they will come, especially if the government is subsidizing the housing cost equation.  Here is the print version calling out B'game.

Developer Fees Coming

Ronald Reagan is famous for saying “Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”  This has been proven over and over again.  I was reminded of the quote when I read that B'game Planning Commission is recommending a "Developer Fee" for new residential development.  The DJ notes the amounts as

Under the proposal, rental developers seeking to build up to 50 units per acre would be required to pay $17 per square foot; those proposing up to 70 units per acre would be required to pay $20 per square foot; and those proposing more than 70 units per acre would be required to pay $30 per square foot. Condominium developers proposing 7 units or more would be required to pay $35 per square foot.

That last bit seems like a typo, but the point is adding some costs that could total $15 mil over the next five years for the 400-600 units that are in the "pipeline" may have the unintended consequence of slowing down development.  If it does, I'm all for it, but that ain't what the initial goal is.  What to do with $15 mil and where to do it is another political football.  While we ponder that eventuality, here is another Reagan quote: "The nine most terrifying words in the English language are “I’m from the government, and I’m here to help.”

B'game Rating: #38

The wizards at the San Francisco magazine have rated all 101 cities and towns in the Bay Area and we came out at number 38.  By combining scores for Education, Diversity, Health, Transit, Affordability, Public Safety, Culture and their own fudge factor "Editors' Rank", they arrive at Albany being the best place to live in the Bay Area.  Six years ago we were labelled as a sort of Utopia by the same magazine, so let's dig in a bit deeper.  Here are the scores

I get the good scores for Education and Transit.  Our public schools are quite good in spite of occasional issues with administrators at BIS and BHS and there are a lot of residents with bachelor's degrees or higher.  I also get how we land near the bottom in Affordability since we have always been an expensive place to live--it is more a result of the other criteria than an input on its own.  But how is B'game in the bottom half on Health?  They use physicians per capita, air quality scores and percentage of residents without health insurance.  With a major hospital in town and doctor's offices surrounding it, we must rate pretty high on the first one.  I hear at the meetings on the SFO runway noise that some residents also smell jet fuel fumes, but I doubt our air quality is below the median.

The real head-scratchers are Public Safety on the downside and Culture on the upside.  B'game has recently returned to "full strength" with 40 sworn officers and crime rates (aside from car break-ins mostly at Bayfront hotels) are pretty low.  Oakland ranked just ahead of us at 57!  And they do mean Oakland, California!!  There must be some spreadsheet error somewhere at the magazine.

I also cannot fathom how we got to number 15 in the whole Bay Area on Culture when the critieria are artistic venues per capita (we've got none other than the tiny art museum on the north end), the number of residents who list their occupation as "artist" (on Open Studio weekends we have a couple), and liquor licenses per capita.  I guess if one considers drinking with muzak playing "culture" we do OK.  While #38 isn't bad, I can't take much heart in the overall subjective nature of it all.  You won't catch many B'gamers moving to Colma (#18) or Pacifica (#22) or Belmont (#24).  I bet we just stay put.   
 

More Avenue Woes: Books Inc. Closing

You can't chat with any local B'gamer for very long before you hear two things:  "I'm going to miss Orchard Supply in Millbrae" and "I wish the Avenue would stay more local" or words to that effect like "it's just an outdoor mall" or "why can't we have more non-chain stores" or "how many hair and nail salons does this town need"?  Here is news from the DJ about the closing of another chapter in the Avenue's story

After almost two decades of enduring a changing industry and local marketplace, independent bookstore Books Inc. announced it will be shuttering its location on Burlingame Avenue.   Though the parent company continues to thrive despite the threat to retailers posed by the trend toward online sales, (President Michael) Tucker said the decision to close had more to do with the transition taking place in downtown Burlingame.  “It’s just the reality of what goes on, that a low-margin business like books cannot compete for occupancy with the big boys, the national brands,” said Tucker, nodding to the corporations such as Apple, Lululemon or Pottery Barn which also occupy nearby storefronts.

You can click through to read the full story including kind words about Karim Salma (the landlord) and more of the DBID president's thoughts

Juan Loredo, president of the downtown business improvement district, said the company’s decision to leave is similar to the other tough choices faced by other local retailers.  “The internet kind of paved the way for these smaller places and retail shops to leave because everyone is online shopping,” he said.

And this is welcome news also

Tucker took time to note though that the company plans to preserve its connection with local schools and organizations in Burlingame which the company has partnered with over the years.

Maybe this is an opening for some bookseller to find space in a less expensive part of B'game to make another run at it.  I still miss the Feldman's that was a block north of B'way before consolidating down to the Menlo Park main store.

 

Drive-in Reality on the Bayfront

I suppose it is appropriate that the old Burlingame Drive-in, home to many a night of virtual reality viewing through car windshields, would become the home of the Facebook Oculus virtual reality (VR) business unit.  The Daily Journal is following up on the SF Business Times' piece and television newscasts with a story today about the proposed lease

Mayor Michael Brownrigg expressed his enthusiasm over the social media titan’s announcement.  “No more ‘Boring-game,’” declared Brownrigg, who said the decision is further indication of the city’s viability as a hub of industry.

Under terms of the agreement approved by the commission, Facebook will be the sole occupant of the 767,000 square feet to be spread across two five-story buildings, one seven-story building, one eight-story building and a two-story amenities building.

Furthering that transformation will be other developments in the area east of Highway 101, where adjacent to that site, interest has been expressed in developing property owned by the State Lands Commission into a hotel. North of the proposed site, sports entertainment enterprise Topgolf is slated to move into the city’s driving range.

A proposal has also been filed to build the SFO Technology Center, slated to house more than 239,000 square feet of office space, about 11,000 square feet for a restaurant and more than 8,000 square feet of retail space at the former Hyatt Cinema site.

You should click through to read the fine print about traffic and the usual platitudes about "alternative modes of transportation".  Pardon me for not being quite so enthusiastic about a million plus new square feet of Bayfront development without a traffic plan already in place.  And exactly what are the alternatives?  The Broadway overpass is done and functional at the current load, but probably not much more.  Any Anza access is years away.  Facebook better try to put a pier in for ferry service!