☆ Khamis: Measure E compromise ignores past mistakes
Time has validated former CM Johnny Khamis' opposition to SJ's slow and wasteful Housing First ideology. After the most recent Council voted to continue draining city coffers with its Measure E compromise, Khamis examined why SJ is devoted to a discredited housing dogma in an exclusive conversation with Opp Now's Christopher Escher.
Opportunity Now: Let's start with the politics of it all. Mahan got something but not as much as he wanted for Quick-Build. He says the result was disappointing and that Council just kicked the can down the road to next year. Is that how you see it?
Johnny Khamis: We certainly have had budgets we argued about previously. And while, broadly speaking, Mahan got what he wanted from the overall budget and there's consensus there, he just didn't have the votes for the Measure E portion. When you don't have six votes, you need to do a lot more compromising. The pro-Housing First bloc in SJ has some powerful special interests supporting it, and they flexed their muscles.
ON: Back when you were on Council, we noticed that you were the lone voice opposing the massive expansion of the Housing Dept and its anti-market, anti-fiscal responsibility direction. The broad failure of Housing First in SJ, California and the nation at large has validated your position, although many cities in California like SJ still cling to Housing First. What gives?
JK: I've been arguing against this big centralized government housing direction for a long time. When I was on council, my thesis was that we'd be better off buying instead of building to address our homelessness and affordability crisis. It would have been cheaper and way faster. There are empty condos and office buildings all over SJ right now, and the city could buy them outright at 60% of the cost of building and 0% of the wait time.
They are not doing that. They have the money, but they choose to go for much slower and much more expensive processes.
ON: What's the argument against your Buy Not Build approach?
JK: What they said a decade ago—and what they say now—is that it would take housing off the market for people who could afford it.
ON: That makes no sense. It creates affordable housing right now, and funds the market for even more development—even if it's at the middle or high end. Our housing crisis is, at its core, a supply issue, and anything which promotes more total supply is a good thing, as even higher end housing can be repurposed to affordable, and over time older units become more affordable anyways.
JK: That analysis, of course, begs the question of: why is it so darn expensive to build gov't subsidized housing? The answer is: if you want to build affordable housing and use a single dollar of government money or subsidy, you have to carry tons of restrictions: those include project labor agreements, union labor requirements, pension requirements, all kinds of other requirements that drive up the cost by as much as 15%. This is why it doesn't, in the parlance of the industry, "pencil out." Other government requirements like CEQA—which I have fought to reform for many years—also slow it down and price it up.
ON: If I were to ask, "cui bono?" it sounds like—surprise—the answer is nonprofits and labor unions.
JK: Well, kind of. The truth is, one of the reasons nonprofits got into the housing business in the first place is that they were able to avoid all the labor regulations as well as property taxes, so they initially may have brought the cost down. But now that the nonprofits accept government subsidies, they have to comply with all the cost-raising factors. The labor regulations caught up with them, too.
ON: Housing First made its debut in the G.W. Bush administration. And has been burning through billions of taxpayer dollars in a failed effort ever since. In SJ, we keep building up a Housing Department and nonprofit ecosystem utterly dependent on it. Why is it so hard for the Council to pivot to a more businesslike approach?
JK: Like many city government issues, experience is a great teacher. A lot of our CMs are new, and they haven't had the experience of seeing how a lot of supposedly caring policies end up flopping. There's also a very cozy relationship between city staff and nonprofits, and they both have a lot to gain from an ever-expanding Housing First monopoly. That muddies the waters as well.
There is never a 100% perfect solution, but both sides need to be heard, and right now the Housing Industrial Complex tries to block out opposing perspectives. Most notably, they won't accept the fact that when it comes to homelessness, the core issue isn't *just* housing supply: it's addiction and mental health services.
For other local leadership thoughts on Measure E Reallocation, see here.
Read more local perspectives on SJ’s quick-build vs. PSH debate here, here, and here.
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Image by Greg Ramar