A 1.5 hour talk I gave last week at the Adobe House in Mountain View about the history of land-use policies and how they clash with the hyper-growth of the technology industry.

1. T H E S A N F R A N C I S C O
B AY A R E A
A M O D E R N H O U S I N G C R I S I S

2. W H O A M I ?
H O W D I D I E N D U P H E R E ?

3. B O R N I N M O U N TA I N V I E W.
R A I S E D I N A 1 9 6 7 C U P E R T I N O R A N C H H O M E .

4. W H AT H A P P E N E D I N
1 9 6 7 ?

5. R E A G A N B E C O M E S G O V E R N O R

6. “ T U R N O N , T U N E I N , D R O P O U T. ”

7. D E T R O I T, N E WA R K R A C E R I O T S

8. P L A S T I C S .

9. T H I S G U Y M O V E S I N T O A H O U S E A
M I L E A WAY.

10. A H O B B Y I S T C L U B

11. G I V E S B I R T H T O T H E W O R L D ’ S M O S T
VA L U A B L E C O R P O R AT I O N

12. In fact, the technology industry has produced four
of the world’s six most valuable corporations by
market capitalization today.

13. A P P L E
Market capitalization:
$616 billion
Revenue per employee:
$2.1 million
Employees: 60,000
1/4th are in Cupertino

14. A L P H A B E T
( G O O G L E )
Market capitalization:
$521 billion
Revenue per employee:
$1.2 million
Employees: 61,800

15. M I C R O S O F T
Market capitalization:
$440.3 billion
Revenue per employee:
$784,0000
Employees:
112,000

16. FA C E B O O K
Market capitalization:
$321.2 billion
Revenue per employee:
$1.4 million
Employees:
12,691

17. B E Y O N D T H AT, M O R E C O M PA N I E S A R E
C O N C E N T R AT E D T H R O U G H O U T T H E R E G I O N

18. Venture capital and technology move very fast.
California land-use moves very slow.
Something’s gotta give. But what?

19. E V E N W I T H A L L
O F T H E S E
C H A N G E S … .

20. R E S E A R C H I N T O
C O M M E R C I A L
A P P L I C AT I O N S
T H E 1 9 6 0 S

21. S E M I -
C O N D U C T O R S
T H E 1 9 7 0 S

22. P E R S O N A L
C O M P U T I N G
T H E 1 9 8 0 S

23. T H E O R I G I N A L
D O T- C O M S
T H E 1 9 9 0 S

24. T H E B AY A R E A’ S B U I LT
E N V I R O N M E N T R E M A I N S L A R G E LY
T H E S A M E

25. 1950
• Bay Area median
household
income is $6,600.
• This Palo Alto
home costs
$9,400 with just
$300 down for
veterans.

26. $ 2 + M I L L I O N
T O D A Y ?

27. – S T E V E J O B S , A P P L E
“Eichler did a great thing. His houses were smart
and cheap and good. They brought clean design
and simple taste to lower-income people.”

28. S O M E T H I N G H A P P E N E D … .

29. P R I C E - T O - I N C O M E R AT I O S D I V E R G E

30. Historically, the region’s
economic growth has
generally been a good
thing.

31. B U T N O W, I T ’ S J U S T
G E T T I N G W E I R D ( A N D S A D ) .

32. B A R B E L L J O B M A R K E T

33. S E R V I C E W O R K E R S , P U B L I C
S E R VA N T S B E I N G L E F T O U T

34. "They have to get up at 3 or 4 a.m. in the morning to get
to the BART. They jump on the MUNI bus, they drop
their kids off at the school, then they jump on another
bus to get to work. They're spending $389 a month on
BART and MUNI and they're making $12 an hour. What
kind of life is that?”
— Roberto Hernandez, Mission activist

35. – PA L O A LT O O N L I N E , J A N . 2 7 , 2 0 1 6
“Tara Hunt, a third-grade teacher at Walter Hays
Elementary School who has taught in the district for 10
years, said she has a two-hour commute each way to and
from the house she rents in Santa Cruz. Her day starts at
4:45 a.m., and more than two-third of her paycheck goes
toward rent, she said. By the time the weekend rolls
around, she's too exhausted to head back to Palo Alto for
school events or activities.”

36. T R A N S I T T I M E I S O N E O F T H E S T R O N G E S T
FA C T O R S P R E D I C T I N G U P WA R D M O B I L I T Y

37. L I T E R A L LY M O R T G A G I N G T H E F U T U R E
W O R K F O R C E O F T H I S S TAT E .

38. L E T ’ S TA L K A B O U T
N O R T H E R N C A L I F O R N I A

39. S T R U C T U R A L
Q U A L I T I E S
• Nine counties and 101 city
governments for a regional
population of 7 million
people.
• Failed attempts at
annexation after the 1906
earthquake.
• Weak regional government
bodies in ABAG, MTC.

40. C O M PA R E W I T H
N E W Y O R K C I T Y
• Functional grid layout up
and down Manhattan.
Decided when city was only
built to Houston St. in 1811.
• 1898 annexation solidified
five boroughs under a
single government.
• One government for 8.5
million people in a tri-state
region of 23.6 million.

41. W H Y I S A N N E X AT I O N A B I G D E A L ?
• Cities often make their own land-use decisions without
regard for other surrounding communities.
• Wealthy neighborhoods make decisions that protect
property values and impact lower-income
communities. There is almost no recourse for this.
• Cities compete against each other to attract
employers through tax incentives.

42. W H Y D I D W E N O T A N N E X ?
• Once streetcars and zoning came into existence, cities
now had tools to control their population and
community make-up and no longer felt the need to be
absorbed into a larger municipal body. (Fischel)

43. D I R E C T
D E M O C R A C Y
• The initiative, referendum and
recall were added under
Progressive Governor Hiram
Johnson at the turn of the century
to combat the power of the
railroads.
• Initiatives were not widely used
until after Proposition 13 in 1978.
Now, an entire industry of
signature gatherers.
• California constitution has been
amended 521 times in the last 100
years.

44. F R A G M E N TAT I O N M AT T E R S

45. When suburbs don’t build housing, the
pressure moves to:

46. T H E P E R I P H E RY, W H E R E I T C O N S U M E S
G R E E N F I E L D L A N D

47. T H E U R B A N C O R E , W H E R E I T D I S P L A C E S
L O W - I N C O M E C O M M U N I T I E S I N
H I S T O R I C A L LY R E D L I N E D N E I G H B O R H O O D S

48. R E G I O N A L O U T M I G R AT I O N T O T H E
S U N B E LT, PA C I F I C N O R T H W E S T

49. T H E S E PAT T E R N S F O L L O W O L D
I N E Q U I T I E S
Redlining
in the 1930s

50. 8 0 Y E A R S L AT E R , I T ’ S T H E S A M E M A P
—UC Berkeley Displacement Risk study

51. T H E R E G I O N I S T I E D
T O G E T H E R

52. PA L O A LT O
D O W N Z O N E S
• Birthplace of Silicon Valley
• Now Palantir has absorbed
commercial space across
23 buildings, crowding out
startups.
• 3:1 to jobs-to-housing
ratio.
• Voters kill Maybell senior
affordable housing project.

53. ‘“She said a woman came up to
her after a community meeting
where the same concerns had
been raised by a real estate
agent. “Her lips were quivering
and she was physically shaking
from how angry she was,”
Ananthasubramaniam told me.
“She was like, ‘You come back
to me 20 years from now once
you have sunk more than $1
million into an asset, like a
house, and you tell me that
you’re willing to take a risk like
this.”’
— T H E N E W R E P U B L I C ,
D E C . 1 3 , 2 0 1 5

54. U B E R I N T O
O A K L A N D
• 47% percent of Oakland’s
tenants are African American.
• Median tenant income is
$30,000.
• Affordable housing fees from
Uber real estate deal are $1
million.
• Costs ~$500,000 per to
construct a new housing unit

55. T R A N S I T F R A G M E N TAT I O N
• More than 20
transit agencies.
• None with more
than 45% market
share.
• MTA has 94%
market share in
NYC.
• MTA: 800+ miles
of track. BART:
107 miles.

56. T R A N S I T F R A G M E N TAT I O N

57. D I F F E R E N T D E C A D E S ,
D I F F E R E N T B U S E S
“Furthur,”1964
Google Shuttle,
2014

58. TA X AT I O N A N D
P U B L I C F U N D I N G
• Proposition 13, passed in
1978, caps property taxes.
After this, property taxes
can rise by no more than
2% per year.
• Super-majority vote
required for new taxes and
major bonds.

59. L O S S O F P R O P E R T Y TA X M A K E S O U R
S Y S T E M M O R E V O L AT I L E

60. P R O P E R T Y TA X E S A R E M O R E S TA B L E

61. “Each dollar decrease in property taxes appeared to
increase property values by seven dollars.”
— K E N N E T H R O S E N , U C B E R K E L E Y, “ T H E I M PA C T O F
P R O P O S I T I O N 1 3 O N H O U S E P R I C E S I N N O R T H E R N C A L I F O R N I A ”
L O W E R P R O P E R T Y TA X E S A L S O
J U S T G E T C A P I TA L I Z E D I N T O
H I G H E R P R I C E S .

62. I N E Q U I T I E S I N A S S E S S M E N T S
Housing purchased after 1999 is supporting
78 percent of Santa Clara County’s property tax
assessments.

63. P R O P O S I T I O N 1 3 C A U S E S C I T I E S
T O FAV O R C O M M E R C I A L , O F F I C E
D E V E L O P M E N T.
R E S I D E N T I A L D O E S N ’ T P E N C I L .
— C I T Y O F S A N J O S E R E P O R T, A P R I L 1 0 , 2 0 1 5

64. C A L I F O R N I A N C I T I E S
R E S O R T T O F E E S

65. I N C R E A S E D P R I VAT E F U N D R A I S I N G F O R
P U B L I C K - 1 2 S C H O O L S

66. – “ C A L I F O R N I A C R A C K - U P, ” 2 0 1 0
J O E M AT H E W S A N D M A R K PA U L
“Next to the shrunken property tax bill on Prop.
13's trophy shelf sits a gold-plated public
pension.”

67. P U B L I C P E N S I O N U N F U N D E D AT
R E C O R D L E V E L S
$175.1 billion for 2014-15 budget
—Sacramento Bee, March 18, 2016

68. C A L I F O R N I A’ S U N U S U A L
L A N D - U S E R E G I M E

69. F R O M FA S T G R O W T H I N T H E 1 9 6 0 S
T O S L O W G R O W T H I N T H E 1 9 7 0 S

70. G R O W T H C O N T R O L S P R O L I F E R AT E I N
C A L I F O R N I A I N T H E 1 9 7 0 S

71. G R O W T H C O N T R O L S
• Outright limits on housing construction at the municipal
level. (Petaluma, 1972)
• CA Supreme Court says cities don’t have to compensate
property owners for downzoning.
• Single-family zoning adopted in many Bay Area cities in
the 1970s. Downzonings in SF in the 1970s and early 1980s.
• CEQA environmental impact reviews mandated for private
projects.

72. W H Y ?

73. Stagflation and high interest rates in 1970s, 80s
shift housing from being perceived as a
consumable good to an investable asset.
— “ Z O N I N G R U L E S ” , 2 0 1 5
D A R T M O U T H E C O N O M I S T
W I L L I A M F I S C H E L

74. The 1973 Oil Crisis and environmental movement
prompt a re-consideration of unmanaged growth.

75. After the Fair Housing Act passes a week after Martin Luther
King Jr.’s 1968 assassination, zoning arguably replaces
racial covenants as a coded strategy for controlling
the make-up of a community.
Fair Housing
Law passes

76. Minimum Lot Size: One acre.
Median Home Price: $4 million.
Example:
Los Altos Hills

77. Y B A R R A V S . L O S A LT O S H I L L S ( 1 9 7 3 )

78. As flatlands in both Northern and Southern
California get filled out, new development stalls

79. T H E N , T H E L A S T C Y C L E
SF adds 105K more employed residents from
2010-2015 five years, but just 8,290 more units.

80. I M M E N S E P R E S S U R E O N T H E T I N Y S L I C E
O F S F ’ S M A R K E T- R AT E H O U S I N G S T O C K

81. L O T S O F Q U E S T I O N S

82. W H AT A R E T H E C A U S E S ?
• Wealth inequality?
• Restrictive land-use policies?
• In-flows of external or overseas capital?
• Inadequate public funding for low-income housing?
Probably all of the above.

83. A N D W H E R E S H O U L D T H E F U N D I N G T O
S U P P O R T T H E R E G I O N C O M E F R O M ?
• Property and land taxes.
• Personal income tax.
• Capital gains tax.
• Corporate taxes.
• Fees.
• Bonds.

84. T H E PA R T W H E R E I G E T T O S U G G E S T
P O L I T I C A L LY I N F E A S I B L E I D E A S

85. R E G I O N A L
G O V E R N M E N T

86. R E G I O N A L F U N D F O R
A F F O R D A B L E H O U S I N G

87. R E G I O N A L TA X S H A R I N G

88. R E C O N S I D E R I N G S I N G L E - FA M I LY
Z O N I N G F O R A D U S , “ M I S S I N G
M I D D L E ” H O U S I N G A N D B E Y O N D

89. S I G N I F I C A N T I N V E S T M E N T S I N B A R T,
M U N I A N D R E G I O N A L T R A N S I T

90. S T R O N G E R T E N A N T R I G H T S
O N T H E P E N I N S U L A

91. A R E - C O N S I D E R AT I O N
O F P R O P O S I T I O N 1 3

92. S H O R T E R - T E R M I S S U E S

93. VA L L C O S H O P P I N G M A L L
Proposed: A $3 billion rooftop park.
Offices for 8,000 jobs. 800 housing units.

94. W H Y N O H O U S I N G ?

95. “Save our schools. Stop Condotino.”

97. I N S A N F R A N C I S C O
• Affordable Housing Bonus Program
• New inclusionary laws, which bring the standard from
12 or 20 percent, to a minimum of 25 percent. Needs
to be carefully implemented.
I N O A K L A N D
• New affordable housing fee structure.
• “Tech-quity.” (Yes, it’s cheesy. But people are really
working on it.)

98. E X T R A O R D I N A RY A C T S
O F P U B L I C W I L L

99. 1 8 1 1 G R I D O F
M A N H AT TA N

100. 1 8 9 8
A N N E X AT I O N O F
O F N E W Y O R K
C I T Y

101. R E D V I E N N A
A N D S O C I A L
H O U S I N G