Controversial Bay Area Housing Plan Heads to State Legislature

An ambitious plan to tackle the Bay Area's housing crisis is making its way to the state Capitol, where lawmakers could advance a wide-ranging set of compromises drafted by a coalition of often divergent local interests.

Seeking a nine-county solution to a seemingly intractable problem, a broad coalition of developers, tenant advocates, elected officials, business leaders and labor interests created a 10-point plan to address regional housing affordability.

But making the proposal — known as the CASA Compact —a reality will require the approval and deft maneuvering of state lawmakers, who are already hearing opposition to various components of the agreement.

A rising tide?

Supporters of CASA (which looks like an acronym but actually doesn't stand for anything other than the Spanish word for "house") argue that the plan is the rising tide that will lift all ships, and that collective action will allow stakeholders with less political clout (read: tenants) to achieve meaningful policy gains.

"I think we need to have a regional approach," said Assemblyman David Chiu, D-San Francisco, the chair of the Assembly Committee on Housing and Community Development. "We are an economic region, we are a social and a cultural region, and we are a region with the most intense manifestation of the housing crisis."

The CASA Compact includes proposals aimed at both spurring new housing construction and protecting existing tenants.

Developers would be able to tap into streamlined approvals and tax incentives for more housing projects, and minimum zoning standards would be established around transit stops to increase density.

Under the plan, vulnerable tenants would be aided by a supply of emergency cash and legal assistance, as well as the establishment of a regionwide rent cap and protections against certain kinds of evictions.

Some of the plan's less controversial proposals push for greater transparency around impact fees charged to developers and encourage the use of surplus public properties for affordable housing.

To raise money for the proposals, the compact suggests the creation of a new Bay Area housing agency, led by elected officials but also including developers and tenant activists, which would levy regional taxes and distribute funds.

Members of the Committee to House the Bay Area, which created the plan, suggest a variety of tax options, including a fee on developers, a tax on businesses, a regionwide sales tax or parcel tax increase, and regional revenue sharing. The goal, they say, is to place a regional tax measure on the November 2020 ballot.

No shortage of critics

Critics of the plan question the very idea of a regional approach to the Bay Area's formidable housing crisis and argue that key constituencies were excluded from the process of drafting the proposals.

Susan Kirsch, founder of the group Livable California, which advocates for local control in planning, said the compact was created "without input from those communities that value and cherish the character and quality of life in their small communities."

"The fact that the majority of the cities were excluded, that’s unfair," Kirsch added. "It’s a stacked deck."

The CASA compact received the endorsement of two regional planning agencies, the Metropolitan Transit Commission (MTC) and the Association of Bay Area Governments (ABAG). Both votes, though nonbinding, were preceded by hours of fierce public debate.

At both hearings, representatives from the region's smaller cities voiced concern over forfeiting any housing decisions to a regional entity. And speakers from Peninsula towns hinted at the political perils of ceding local control. In Mountain View, Palo Alto and Los Altos, mayors and council members were defeated in November by challengers advocating slower growth.

"I am in the growing wave of voter pushback against state mandates to remove local control," Los Altos City Councilwoman Anita Enander told the MTC. "I defeated our mayor on a platform of listening to residents and keeping land-use decisions in the hands of local officials."

Delicate juggling act

A key tenet of the compact is that all proposals advance in unison at the state Capitol.

"Our premise is, if you put them together, they have a better chance of passing," said Michael Covarrubias, head of TMG Partners, a local developer, who co-chaired the CASA committee.

But that commitment to policy unity is merely aspirational. There's nothing stopping only certain pieces of the agreement from moving forward.

Figuring out the appropriate protections for renters could be particularly difficult on the heels of the defeat of Proposition 10 in November, a measure that sought to expand rent control statewide.

Tenant groups and the California Apartment Association, which represents landlords, both participated in the CASA process, but have distanced themselves from the final proposal.

"Unless the rent control and just-cause eviction elements are removed in their entirety, CAA cannot endorse the proposed CASA Compact and will oppose any related legislation aimed at implementing the rent control and just cause eviction elements," wrote Joshua Howard, senior vice president of CAA, in a December letter to the MTC.

The agreement also proposes a regionwide rent cap that would be equal to the Consumer Price Index plus 5 percent. For a tenant paying $1,500 per month, the maximum allowable increase in monthly rent would be roughly $140.

Additionally, a regionwide just-cause eviction policy would require landlords to cite specific causes for eviction, and provide relocation assistance for tenants evicted through no fault of their own.

Some tenant groups have argued that these protections are too weak to help Bay Area renters.

Paola Laverde, chair of the Berkeley Rent Stabilization Board, said the plan was a great starting point, but called the rent cap a "laughable increase."

"As written, these policies will not protect the most vulnerable that need protection," she said.

Nod from Newsom

There are some indications, though, that the plan could get a warmer reception among key leaders in Sacramento. During his budget press conference last week, Gov. Gavin Newsom praised the general idea of the plan, although he offered few specifics about what the next steps would be.

"I love the regional approach. The issues of homelessness and housing have to be looked at from a regional perspective," he said. "That’s exactly the spirit of what they’re trying to advance. I haven’t looked into the details of any legislative package, but it’s certainly the spirit I’m embracing."

The chairs of the Legislature's two housing committees, Chiu and state Sen. Scott Wiener, D-San Francisco, are both eager to advance the plan.

"CASA would have been unthinkable five or ten years ago," Wiener said. "These recommendations are bold, aggressive and necessary, and the fact that we’ve achieved such broad regional buy-in shows how quickly the politics of housing has shifted."

A handful of the compact recommendations have already been introduced in the Legislature. Others proposals are expected to be hashed out and unveiled after the Legislature's Bay Area caucus holds its retreat next week.

Lawmakers will also have to figure out what form the recommended regional housing entity will take, or whether the new responsibilities (and the power of the purse) can be folded into an existing regional body like ABAG.