The Market Will Not Fix California’s Housing Crisis

The Market Will Not Fix California’s Housing Crisis

The real-estate market has long profited by segregating and exploiting low-income communities of color. Expanding its reach will not solve the housing crisis.

A response to Ben Ross.

Members of Causa Justa :: Just Cause and Homes for All march in San Francisco's Mission District, 2013 (Steve Rhodes / Flickr)

For all the criticism Benjamin Ross throws at anti-gentrification activists in his recent article—groups he brands, echoing real-estate-industry talking points, as the “anti-development left”—his analysis leaves unscathed a capitalist real-estate market that has long produced its profits by segregating and exploiting low-income communities of color. This refusal to engage left critiques and alternatives to market-driven housing policy and the particular legislation at hand, California’s Senate Bill 827, comes as the emerging “Yes In My Backyard” (YIMBY) movement, of which Ross is a partisan, seeks to blow new wind into the fraying sails of “creative class” redevelopment.

Radical anti-gentrification activists nationwide, under the banner of groups like Defend Boyle Heights, Inquilinxs Unidxs Por Justicia, and the national Homes For All campaign, understand that the interests of working-class residents are diametrically opposed to those of the speculators sending waves of investment capital into their neighborhoods. The former want simply to remain in their homes and retain some basic level of self-determination over their communities. The latter, whose profits depend on moving the color line to take full advantage of an influx of affluent, mostly white urban professionals, want the current residents gone.

It’s astonishing that Ross can write 1700 words on this topic and make a mere passing mention of rent control. Unlike the homeowners with whom Ross alleges they are allied, tenant and community groups’ opposition is not to new development in general, but to the rapidly expanding reach of globalized real-estate investment capital with no discernible interest in building housing for the working class. Such groups, both in California and across the United States, are fighting above all to advance policies of decommodification such as expanding rent control and building mass, publicly subsidized housing—not simply opposing individual developments, as Ross claims. Incidentally, in California, both rent control and public housing construction were severely curtailed by state laws supported by the very same real-estate lobbies that have now lined up to back SB 827.

Ross aims to convince readers that the “anti-development left” is a purely defensive movement, trapped in the narrow range between opposition to individual buildings and attempts to squeeze a bare minimum of “community benefits” from new construction. This conveniently ignores the radical, alternative visions of housing provision and community development that today’s grassroots housing movement offers.

T.R.U.S.T. South LA, for example, both actively develops de-commodified land for low-income residents and raises consciousness and community leadership via popular education programs. At Rolland Curtis Gardens, one of three developments now controlled by the organization, T.R.U.S.T. was able to pressure a billionaire owner to sell the land back to them to redevelop with community involvement, thanks to a protracted organizing campaign with the building’s tenants, thereby avoiding its planned conversion to USC student housing. In the Bay Area, groups like Causa Justa :: Just Cause, the Asian-Pacific Environmental Network, and the Housing Rights Committee center their tenant work across lines of environmental, economic, and immigration justice, fighting for the reclamation of a “right to the city” for black and brown communities displaced and dispossessed by Silicon Valley, luxury-housing proponents, and the “progressive” politicians they enable.

These groups have also gone out of their way to criticize SB 827. Yet Ross plays down their objections. While Ross might bemoan the horrors of racism, in dismissing left organizers of color as “junior partners” to a cabal of white homeowners, he sidelines the voices of its victims.

The major critique of SB 827 offered by the anti-gentrification left is that it will, by overriding local zoning regulations and allowing for taller and denser development near transit, accelerate displacement by making it easier and more profitable for investors to build what they want in poor neighborhoods predominantly occupied by people of color, thereby pushing up prices throughout these areas, with disastrous consequences for those who rent. Centrally located, low-income communities will be the primary targets for profit-seeking investors because these areas allow them to buy low and sell high once the built environment is remade to suit the tastes of wealthier, predominantly white incomers. In responding that “Trump Tower is not in the Bronx,” Ross misunderstands this “rent-gap” logic of gentrification identified by Neil Smith nearly forty years ago. Besides, even if significant development does occur in Beverly Hills, there’s plenty enough international capital flooding into California’s urban real estate to go around, meaning South L.A. could still be rapidly gentrified simultaneously. Trump Tower isn’t in the Bronx, but loads of yuppie apartments soon will be.

Furthermore, the claims to progressivism by SB 827 supporters, which rest on the idea that they are reversing the history of exclusionary zoning by wealthy white homeowners, are belied by these supporters’ very own maps. Across California, but especially in Los Angeles, the richest and whitest neighborhoods are untouched by the bill’s upzoning, while low-income communities of color struggling against eviction and displacement are blanketed. The recent amendments simply do not address the threat of indirect displacement caused by rising rents, meaning this bill will lubricate the remaking of large swaths of urban land by global finance capital, both pushing communities of color out of existing housing and shutting out future low-income renters.

Although Ross describes these concerns over displacement as “eminently plausible,” he quickly moves on, uncritically accepting the market-urbanist claim that the way to actually stem rising rents is to deregulate housing construction and leave supply and demand to work their magic. Cities, however, rarely bear out the alluring simplicity of this theory. Berkeley economists Miriam Zuk and Karen Chapple have shown that the filtering process, by which new housing gradually trickles down and lowers rents at the bottom of the market, can take “generations.” There are also different spatial scales and sub-markets to consider. New developments could slightly bring down prices across an entire region, but raise rents in a given neighborhood, bringing more affluent tenants in and pushing the poor into the suburbs. Furthermore, falling rents at the top do not necessarily mean the same for the bottom, as the numbers from New York City make clear. These effects are all compounded by a modern real-estate market in which global investors increasingly see urban buildings as a commodity instead of shelter, and short-term rental services like Airbnb take thousands of would-be housing units off the market.

In short, the real-estate market is designed to produce profits, not shelter. One doesn’t have to be a “neo-Marxist” to recognize this basic tenet of capitalism, or to understand that fundamental human needs cannot be entrusted to the market. From the pre-zoning era of slums and tenements to mid-century redlining and “slum clearance” to modern “creative class” redevelopment, the continued immiseration of the working class by real-estate capital—landlords, developers, captive policymakers, and, yes, wealthy homeowners alike—make clear that this is not a mutually beneficial relationship of supply and demand. Indeed, the crowning irony of YIMBYism is that its “build, baby, build” cheerleaders count on the same interests responsible for instituting redlining and “white flight” in the first place to reverse their effects through a market unleashed by zoning deregulation. What they ignore is that real-estate capital has long profited off of segmentation and segregation without the help of zoning codes, and it now sees an opportunity to dispossess the redlined yet again as affluent whites flock back to urban centers.

Communities of color fighting gentrification understand this history all too well. Far from pushing a “defense of the residential status quo,” as Ross concludes, they fundamentally seek to restrict the power of the market, proposing alternative models for both new and existing housing.

One other omission bears noting. While Ross spends considerable energy lamenting the appropriation of anti-gentrification arguments by wealthy homeowners, he completely ignores the extensive and well-documented ties between the tech and real-estate industries and both the California YIMBYs and State Senator Scott Wiener, SB 827’s sponsor. Equally damning is the support for this bill by organizations like the California Apartment Association, a landlord lobby group; the Los Angeles Chamber of Commerce; the conservative Manhattan Institute; and other market boosters with a material interest in maintaining high rents and land valuations.

Though Ross and his YIMBY compatriots greenwash real-estate interests in Jane Jacobs-ian paeans to density and walkability, their fundamental animosity to the left is best summed up in the pithy, foreboding mantra of Robert Moses: “Those who can, build. Those who can’t, criticize.”

Jacob Woocher is an urban planning graduate student at UCLA and member of the Los Angeles Democratic Socialists of America’s Housing and Homelessness Committee. Shanti Singh is the Development & Communications Coordinator at Tenants Together and co-chair of the San Francisco Democratic Socialists of America’s Housing Committee.

Read Benjamin Ross’s original article, “A Tangle for the Anti-Development Left.”

Read Benjamin Ross’s reply.