☆ Expert questions SV Biz Journal's dubious panegyric on MTC housing bond
Nicolas Poussin: The Empire of Flora, 1631 (depicting Narcissus and Echo). Image by Wikimedia Commons
The Metropolitan Planning Commission's proposed bond, which would dump $10–20 bn across the state for nebulous “affordable housing” purposes, has been criticized by finance and policy professionals for being vague and misguided. Silicon Valley Business Journal recently published effusive laudation of the bond, dubbing it a “vital lifeline”—but gov't finance consultant Tom Rubin begs to differ. His Opp Now exclusive breakdown below.
My basic problems with the Business Journal article include the following:
1. While this is still far from completely developed, there is very little in the way of actual commitments and deliverables. How are the voters—and taxpayers, and those that have housing needs—supposed to know, for example, what new housing units will be produced in which communities, and when?
2. MTC has done a terrible job in trying to maintain and improve the Bay Area transportation system, particularly in terms of mass transit—despite tens of billions of dollars in taxpayer expenditures, transit use has been sinking for years—and now it is going to take on housing?
3. This is being pushed as a “solution” to the problem of the high cost of housing; however, when you look closer, it appears that this a typical government arrangement with significant benefits for the construction trades that will get jobs at “prevailing wage” (which is significantly more expensive than the usual market rates paid for residential construction)—and financing for developers’ projects.
4. The high price of housing is being described as a “failure” of market economy; in fact, it is actually a sign that the market is working—as in, if it is too expensive to live in the Bay Area, then don’t live here. Go somewhere you can afford.
5. In terms of low-income housing, the simple truth is that it is impossible to make money as a developer and landlord of low-income housing—particularly if the objective is quality housing. One of the big changes in California is the abandonment of the traditional governmental investment in low-income housing during the economic downturn over a decade ago, particularly when then-Gov. Brown did away with both State financing of low-income housing and redevelopment agencies, in essence forcing the transfer of funds from local governments to Sacramento—and the Sacramento power brokers are blaming local governments for the problems of homelessness and high housing costs.
6. Taxing the successful to build housing for those that otherwise cannot afford to live in California will continue our long-running history of driving our those with assets and skills to places where they can live well—within their means. This bond proposal doesn’t reverse this trend; it actually accelerates it.
7. As far as homelessness, one thing we have most definitely learned is that “Housing First” is the absolute wrong thing to do for the vast majority of the homeless; the proven successful programs have taken a comprehensive, multi-disciplinary, long-term approach. This approach certainly includes transitional housing for those that need it. However, without basic health care; substance abuse, mental health, and other counseling; job training; and a secure place to live in the meantime; providing most of the homeless with a home and walking away will accomplish nothing while wasting taxpayers funds and the homeless’ chance to improve their lives.
8. Government fiats rarely succeed in changing human behavior, and failure leads to attempts to correct these failures, which rarely make things better and often make things worse, which can lead to Marx-Leninist planning and Stalinist implementation. The Legislature—and even the electorate—can vote to repeal the Law of Gravity, but that doesn’t mean that pigs will fly.
Related:
Perspective: Regional bond would be a big flop for housing affordability crisis
Joffe on MTC bond: Residents right to be confused, “skeptical”
On outmigration, living standards, and (yes) taxes: What's really at stake with ACA 1?
Follow Opportunity Now on Twitter @svopportunity
Opp Now enthusiastically welcomes smart, thoughtful, fair-minded, well-written comments from our readers. But be advised: we have zero interest in posting rants, ad hominems, poorly-argued screeds, transparently partisan yack, or the hateful name-calling often seen on other local websites. So if you've got a great idea that will add to the conversation, please send it in. If you're trolling or shilling for a candidate or initiative, forget it.