Extra

This is Part 3 of “ABAG’s 9000,” a series about requiring Berkeley to add 9000 housing units to its housing "supply" over the next 8 years. “Supply” is ironic because it will be market rate housing, for which there is a glut, and thus “low demand.”

ABAG, the Association of Bay Area Governments, made this allocation at the behest of the California Department of Housing and Community Development (HCD), as a portion of its Regional Housing Needs Assessment (RHNA). The city of Berkeley pretends this is a real requirement, though ABAG is a non-statutory agency of state government that has no statutory powers to tell any charter city what to do. Yet according to a new ordinance, should Berkeley fail to meet its alleged obligation, HCD can take control of its housing permit operations, in a form of coup. The threat of such a coup smells like a racketeering operation. Why would the city of Berkeley act as if this was legitimate?

The specific statute in question is SB-35, enacted ostensibly to stop charter cities from refusing to allow housing development. Its title makes reference to affordable housing, but its text provides for no specific quantity of affordable units to be provided. Ironically, communities in Berkeley have been clamoring for affordable housing for years (housing for which the rent is at most 30% of a tenant’s income). Yet this ordinance will not succeed in providing such housing any more than Berkeley has on its own. Hence, the glut, producing housing that low income working class people (the majority) cannot afford. This ordinance, with its “proposed need” for housing, will do nothing to change the situation. What the state calls a "proposed need" is a self-defined need, arrived at without consultations with the cities, but given them as a responsibility. 

In part, the state created the crisis of affordable housing by prohibiting cities from regulating rents or combatting rent gouging (the Costa-Hawkins Act). It has fostered policies that benefit development corporations and real estate financialization -- industries interested only in earnings and capital gains – while ignoring the conditions of renters. “Fast tracking” development, the stated purpose of the act, will only make the problem worse. The city of Berkeley has been complicit in the problem by requiring only 20% affordable units in its Inclusionary Housing ordinance while allowing developers to buy their way out of including affordable units by paying a minimal mitigation fee. 

Thus, when proponents of SB-35 claim it will alleviate the housing shortage, they are referring to a shortage that doesn’t exist. It is simply a scam. Berkeley has plenty of empty apartments waiting for tenants. The crisis that does exist is an affordability crisis, one that has forced residents out of their communities (gentrification), searching for affordable housing elsewhere. 

On the democracy side of this situation, the majority of residents in a city like Berkeley are renters. City Council cannot represent them as such because of state law barring rent regulation. In a corporate dominated economy, affordability will typically imply subsidies to compensate corporate owners for the reduction in earnings. But subsidies also entail complex government contracts, and make a building harder to resell. 

Rather than address these problems directly, the state hides within the hubris of a “proposed need,” the ideological imposition of gentrified housing, and the hypocrisy of obstructing cities from democratically representing renters. Rather than participation in policy making, this situation transforms housing into an impoverishment machine grinding down residents. And representation takes the side of those who impoverish. All this comes together in the operations of SB-35. Its political character is to foster corporate economics through the imposition of state housing policy on cities. 

The Unconstitutionality of SB-35 

In California, the ability of a state ordinance to override or supersede charter city autonomy with respect to “municipal affairs” depends on three conditions. First, the state law must address a statewide concern, the pursuit of which requires city compliance in some form. Second, the ordinance written for that purpose must be a “general law” that is applied uniformly over the entire state. And finally, that ordinance must be constitutional, that is, not in conflict with any provision of the California Constitution. If those three conditions are met, then the ordinance and its political purpose can take priority over charter city autonomy concerning relevant city matters. 

With respect to the first condition, SB-35 will not resolve the state’s concerns for affordable housing because it has no greater access to forcing developers to build affordable housing units than the cities do. Developers will not build affordable housing because the returns are small or non-existent and the building is difficult to resell. In effect, the procedure chosen to satisfy the state’s self-defined "need" for affordable housing is misdirected. 

For the second factor, SB-35 cannot operate as a general law because it imposes specific responsibilities on cities, failure in which leads to sanctions against the recalcitrant city. There is a non-uniformity built into that. 

Thirdly, insofar as SB-35 fails as a general law through that non-uniformity, it is precluded from overriding city autonomy. (Article XI, sect. 3) It has no legitimate power to require housing development from any city. 

Before showing why or how this is the case, let us review three court cases that decided that SB-35 was in fact constitutional. One of them involved Berkeley. The city attempted to prevent a local developer (Ruegg and Ellsworth) from utilizing SB-35 to gain building permits on Spenger’s parking lot, which is the site of an Ohlone shellmound, a sacred site for the Ohlone people. SB-35 exempts historic structures from the law’s consideration. Nevertheless, the owners of the parking lot sued the city for the right to fast-track its building permits. The court held that, because no structures were evident that referred back to its prior indigenous use, the city’s claim of exemption was disallowed. (1st dist. Apr. 20, 2021). The court thus ignored the fact that this parcel was already a federally recognized and landmarked site, siding instead with the state’s "concern" for affordable housing as of greater importance. From that clearly "settler" perspective, it belittled the Ohlone claim by suggesting that the historicity of that site could be landmarked anywhere. 

The other two cases were straight forward claims that state allocations of housing development to cities were barred by charter city autonomy. And in those cases, the court simply disagreed, also from a perspective of prioritizing the state’s proclaimed concerns. 

But in these three cases, the plaintiffs did not contest the idea that SB-35 was a ‘general law.” It would have to be one (a law implemented and applied uniformly) in order to override or supersede charter autonomy. In these incident cases, the real non-uniformity of statewide application was not examined. We shall detail it below. 

It is worth noting, however, that SB-35 also fails the test of democracy. Insofar as Berkeley is a charter city, its management of municipal affairs can be changed only by a vote of its electorate. Whatever changes to housing policy (its housing element) or its zoning standards may be required by state law (by means of its seizure of permitting operations), will require such a vote. Failure to provide that will be in violation of the state’s Constitution (Article XI, sect. 3). 

Somehow, SB-35 has been content (or has had the luxury) to assume that this detail of democracy, namely, the barring of imposition of procedures on the city by the state without a vote by the electorate, is ignorable (which corresponds to its equal ignoring with respect to Costa-Hawkins) The state is willing to shift its needs to cities so that it can hold the cities responsible for them, but with no responsibility for the democratic rights of the people of those cities. If those rights are ignorable in this case, then they are ignorable everywhere. It is for this reason that the state’s operations as outlined in the ordinance amounts to a coup. 

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SB-35’s procedure begins by instructing RHNA to allocate requirements to cities. RHNA uses ABAG to concoct allocations for Bay Area cities. As data about the future, those allocations have as much reality as a crystal ball reading. Nevertheless, Berkeley was instructed to build 9000 units over the next 8 years. For other cities, the allocations are different. 

What SB-35 also does is impose changes to the city’s housing element in light of the so-called (and unilaterally self-defined) state "need." And the idea of it being unilateral needs to be emphasized, since HCD did not canvas cities to find out what their "real" housing needs were. At no time have the “ABAG allocations” been made the subject of discussion or dialogue between city and state. Nor have the people had the opportunity to “instruct their representatives.” (Article I, Sect. 3). Had that been done, the ordinance would have actually made real provisions for affordable housing units. HCD nevertheless requires each city (and county) to file reports showing how it has advanced the state’s interests (interests about which no city has been given participation). If a city fails to advance the state’s needs sufficiently, the state can take the city to court, which can then order the state to take control of the city’s permitting process in order to streamline the granting of permits. 

Let it be said that the opportunities for corruption are enormous. The state gets to pick which developers it will use in which cities through control of the permitting process. In effect, you get a local version of a corporate state. 

Streamlining means granting permits “by-right” – by right of ownership of land and a plan. By-right development however must remain within a city’s minimal zoning standards. That implies that the state cannot alter the percentage of affordable units allowed by the city in its inclusionary statutes. In that sense, the ordinance restricts itself to no more affordability than the city had already been able to provide. This does not make SB-35 unconstitutional, but it does make it useless with respect to affordable housing. 

What does make the law unconstitutional, as we shall see, is the fact that it provides for punishment (called "sanctions" in the ordinance) in the event of failure to live up to a state’s demands. And what is also important with respect to constitutionality is the state’s reluctance to act democratically. To enforce SB-35 uniformly, which it must do to override a city charter, will not make up for the absence of democratic ethos. For Berkeley, in particular, affordability is a critical issue. It is responsible for displacement and a loss of diversity. Yet nothing in the state’s SB-35 comportment pays any attention to those issues. 

That failure stands in direct opposition to the Constitutional provision for citizen participation (Article XI, Sect. 3: A charter may be revised by majority vote of its electors). The state will deny the importance of this neglect of the people by saying that the law approaches all cities equitably, under comparable review and responsibility for allocations. But that is simply a change of subject. 

The issue of sanctions 

It is with the issue of sanctions that the claim of SB-35 to being a general law falls apart. The state decides which city to sanction not on the basis of city malfeasance or failure, but in terms of its own relation to an allocation it has itself imposed non-uniformly on the cities. 

Sanctions are punishments for failure to do something required. SB-35 sanctions are manifest through internal seizure of a city’s permitting process. In each case, they are instituted to rectify a failure specific to that city (viz. ABAG’s allocation). That resulting court process would then be different for each city because levied in terms of its specific allocation. Each instance of sanction constitutes a specific form of implementation of SB-35 for that specific city. They do not constitute a uniform mode of application of the ordinance because the court proceeding to which they are subjected is not external to the law’s implementation, but internal to it, while being non-uniform. For this reason, the specific form of sanction to be applied is not uniform either. In gaining control of a city’s permitting process, the state (HCD) obtains the ability to operate gratuitously and even arbitrarily (by ministerial enactment), within the strictures of the ordinance (the minimal conditions to which developers – but not the state – are held). 

If that is the case, then the law is not a general law. It will not be applied or implemented uniformly throughout the state, owing to the very method by which it relates to different cities through different allocations, and different demands with respect to each. In sum, the failure to be a general law emerges from inside the ordinance, internal to it, rather than external in the sense of a tort or criminal prohibition. 

We need to also ask, if SB-35 involves a court procedure, which court would it be? One would presume that it would have to be a civil court, since no criminal violations are mentioned in the law. But a civil court can only levy fines or property-oriented penalties. Yet in this case, sanctions mean a loss of liberty by the defendant, and an assumption of power by the state inside the city’s domain. Such procedures are not defined by civil statute; yet they are called for internally in the application of SB-35. 

In criminal law, a person who commits a violation can be deprived of their liberty. But that deprivation is a separate process, based on court hearings of evidence. Evidence is offered pursuant to law rather than to the court’s eligibility to try and punish (which would be the case for SB-35). For SB-35, the court actions to which a city’s failure to comply with allocations can lead, are located internally to itself as a law. 

In sum, when sanctioned, a city is deprived of its liberty, but the deprivation results not from objective law but from a violation engendered in the violating city by the ordinance itself. It is as if an anti-theft statute required a person to steal an object from someone in order to charge them with failure to return the object in order to remain innocent of theft. Or, as we see too often with the police, an officer can arbitrarily criminalize a person by giving them a command they will refuse out of self-respect, and then arrest them for disobedience. 

The disobedience by a city will be specific to that city because its failure will be with respect to the specifics of what SB-35 imposed on that city, and not with respect to its general enforcement. It is the difference between enforcement and imposition that marks the unconstitutionality of SB-35.