How tax systems, NIMBYs frustrate new Bay Area housing plans
The Los Angeles Times reports why city of Brisbane is rejecting developers' plans to build much-needed housing.
"Just beyond San Francisco’s city limits lies 640 acres of land that could help solve some of California’s biggest problems.
"A developer wants to build 4,400 new homes there — one of the largest projects recently proposed in one of the country’s most unaffordable regions. The development would overlook a railway that drops riders into the heart of San Francisco in 15 minutes, reducing the need for cars and cutting the greenhouse gas emissions that come from them.
"State and regional leaders have endorsed the project. But its fate rests with Brisbane, a city of 4,700 people that annexed the property 55 years ago. And no one, not even the developer, thinks Brisbane’s residents will approve all 4,400 homes.
“Unfortunately, we believe that their ceiling is going to be below that,” said Jonathan Scharfman, the general manager for the developer, Universal Paragon Corp.
""The project, Brisbane Baylands, reveals how few incentives local governments have to accept large developments — even as the state is pushing to lower housing costs and funnel growth toward existing cities and nearby mass transit to combat climate change. Brisbane residents are wary of a project that could triple the city’s population. Under California’s tax system, Brisbane also earns more money if it rejects the current plan in favor of potential alternatives with more hotel rooms and space for businesses — but no homes.
"The Bay Area’s dire need for housing makes the debate over the Baylands project “particularly painful,” said Ben Metcalf, director of the state Department of Housing and Community Development.
“It is frustrating that as a state and as a constellation of local jurisdictions we are constantly making decisions that aren’t the best for alleviating poverty, housing affordability, furthering our state’s economy or meeting our climate change goals,” Metcalf said.
"For their part, some Brisbane residents feel besieged by pressure from housing activists, business groups, state lawmakers, San Francisco politicians, newspaper editorials and others beyond the city’s boundaries. An old rail yard and garbage dump contaminated the land, and opponents contend they want to protect anyone who might decide to live there even after regulators approve a cleanup. More than that, Brisbane residents say, outsiders don’t understand how much the Baylands project would upend their community.
It might be easier for residents and elected officials to welcome growth if the city received more tax dollars for doing so. But the opposite is true.
Because of tax limits established in 1978 by Proposition 13, local governments generally receive more revenue from sales and hotel room taxes than property taxes. Proposition 13 limited property tax rates to 1% of a home’s taxable value and restricted how quickly that taxable value could increase after a purchase.
Last year, Brisbane hired a consultant who found that the city would net $1 million a year in tax revenue by approving the Baylands. But if the city instead approved a project with lots more commercial space, a larger hotel and no housing, Brisbane would gain $9 million annually — an amount equivalent to more than half the city’s current day-to-day operating budget...
“I’d like to think if just the fiscal incentives were reversed, if a city could make as much money off housing as they could retail, we’d be having a very different conversation in California,” Stivers said.
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