Why California is a Terrible Model for Progressivism
With the highest poverty and homelessness rates in the U.S., the Golden State could be exactly the kind of embarrassment the progressive movement doesn’t need.
Robert Chapman Wood is professor of Strategic Management and Global Management at San José State University in Silicon Valley.
California progressivism is suddenly a driving force in Washington. With Kamala Harris as vice president, Xavier Becerra as secretary of Health and Human Services, and many others in top jobs, the Golden West is ascendant. And given California’s environmentalism, this should be good news for the Earth.
But if California represents progressivism, a big question needs to be asked: Will ordinary Americans really want the California kind of “progress?” Can Californians lead the nation without producing the perfect enemy for Donald Trump to run against in 2024?
California has produced great innovations not only in computers but in pollution regulation, solar energy, electric vehicles, and batteries.
But California also has the highest poverty and homelessness rates in the U.S. – probably in the developed world. If California could reduce poverty to the average rate for the U.S. as a whole, it would have almost 2 million fewer poor people.
Worse, oppressing people who don’t own property has been central to the creation of progressive political majorities in California. This may sound like a radical statement, but the facts are hard to deny. Policies made with the best intentions (mostly) – to protect the land and ensure development would be high in quality – have had one unfortunate impact. They have prevented housing construction. The unintended consequences of what California politicians call “California values” have meant ordinary people cannot get housing near jobs without paying absurd rents. Of California’s 6 million renter households, 1.7 million wind up paying more than half of their income for rent. It’s hard to think that this is the land that we want as symbol of environmentalism.
These thoughts come to mind as a new “Regional Strategy” is launched by SPUR, the privately funded regional planning association covering the San Francisco Bay area. (The letters SPUR originally stood for San Francisco Planning and Urban Renewal Assn. The home page describing the strategy is here: SPUR Regional Strategy: The Bay Area of 2070. It can be called either artistic or gimmicky, depending on your tastes.)
As the planners note, a lot is at stake. Even before the last seven years’ price increases, housing prices drove much California poverty and homelessness. But recently the median home price in the San Francisco Bay area has hit $1.06 million – three times the median for the US as a whole. Median rent for a small one-bedroom is $2,600 a month in San Francisco, even after declines caused by many Californians’ flight to lower-priced areas where they could work remotely during the pandemic.
Thanks to an Obama-era innovation, the U.S. Census Bureau produces a good measure of poverty by state. California’s poverty rate adjusted for cost of living and government benefits Is 17.2%. The national rate calculated this way is 12.5%. For comparison with two states that Californians frequently escape to, Texas’ rate is 13.7%; Arizona’s is 12%. (See https://www.census.gov/content/dam/Census/library/publications/2020/demo/p60-272.pdf .)
California has 27% of all the homeless in the U.S. (https://socialinnovation.usc.edu/wp-content/uploads/2020/02/Homelessness-in-CA-Fact-Sheet-v3.pdf ) And the politically progressive Bay area probably has the widest rich-poor gap in the state.
A Partly New Strategy
SPUR and government organizations like the ponderously titled “ABAG” (the Association of Bay Area Governments) see overcoming this as crucial. And SPUR’s approach is certainly progressive. Its “new civic vision” based on principles of environmental sustainability and equity has led to carefully done policy proposals for distributing new housing near mass transit and along commercial corridors, reducing driving and putting much subsidized housing in wealthy towns and neighborhoods. SPUR wants to learn from Denmark, Singapore, and other countries where government plays a big housing role. It calls for changing the “governance structure” of the state to prevent wealthy towns from blocking construction. It urges putting housing land in private or non-profit ownership. And it advocates “industrializing” housing production – building much of it modularly in factories to cut costs. In short, it proposes radical change to overcome a very bad situation.
This had better work. Pressure on the coastal California housing market is likely to get even more intense. Recently the value of Bay area companies like Apple, Google, Facebook, and Netflix has soared. The value of the listed companies based in Silicon Valley alone probably exceeds the combined value of all the firms in Europe put together.
This means investors expect firms in California’s Santa Clara and San Mateo counties to produce more profits in the coming decades than all of Europe. It means a continuing flow of educated people to the Bay area for highly paid jobs. So, housing demand is likely to expand even more.
Progressives’ Rise and the Problems that Came with It
But success is not guaranteed. Unfortunately, inadequate housing production is deeply entwined with progressive success in California, and progressives have rarely succeeded in getting Californians to make personal sacrifices to support comprehensive, inclusive solutions.
Progressives’ ascendance in California was largely the result of the state’s anti-growth movement of the 1980s and 90s. Opposition to the fruits of growth back then was certainly appropriate. Housing development in the 20th Century meant enormous swaths of single-family homes on fairly large lots. Almost everyone had seen sprawl swallow up favorite landscapes. Democrats and many Republicans supported growth limitations, but Democrats were more forceful and consistent.
The upper middle class tends to be the swing vote in California. White working classes tend to support Republicans, ethnic minorities support Democrats. Much of the upper middle class had supported Ronald Reagan, but it flipped to support the Democrats with their promise of “smart (and limited) growth.” A Sierra Club spokesman argued the slow growth movement would “replace the market economy with the moral economy.”
Only a very incomplete moral economy appeared, however. Environmental protections increased enormously, and this meant environmentalist arguments could stop most projects that environmentalists opposed. But progress with mass transit was painfully slow. And no one really tried to reduce the growth of business. Meanwhile, few developments of denser, less resource-consuming housing were approved. Greater Seattle regularly produces four times as much housing as greater San Jose, where Silicon Valley is located, although the two were nearly the same size in the late 20th Century.
California set up a Regional Housing Needs Assessment (RHNA) that told each locality how many units it was supposed to encourage. But wealthy towns often opposed construction. There was no penalty. And California’s Proposition 13 limited property taxes to 1% of property value, so taxes on new residential construction would not cover the costs of services residents would need. This meant localities with non-property-owning blue-collar residents, where new housing could have been popular, felt they could not afford to permit much of it. Massachusetts, whose Prop. 2 ½ does essentially the same as Prop. 13, long ago set up a mechanism where the state will pay the difference if a town permits new housing and the taxes don’t cover the costs of the services it requires (https://www.mass.gov/service-details/smart-growth-smart-energy-toolkit-modules-chapter-40r-and-chapter-40s). California has nothing similar.
All these meant that as the number of upper middle-class jobs soared, the supply of homes dried up.
The Conundrum of California Development
SPUR and other progressives in California have lots of good ideas. It’s good to require wealthy towns to build more housing, including affordable housing. It’s great to work toward a big, egalitarian vision.
But California needs to learn from other states in the U.S. as well as from other countries’ ways of government-led housing construction. SPUR’s strategy still seems a long way from delivering actual plans that have a chance of helping the poor and the non-property-owning middle class and of bringing California’s poverty rate down to the levels of the rest of the developed world. Progressives argue that recent changes give teeth to RHNA and will force cities at all income levels to build more housing. But the explanations on state and regional web sites don’t give a convincing description that suggests something a good lawyer couldn’t get around.
It’s highly likely that rich communities won’t build as much as the RHNA quotas stipulate. If we don’t want poverty to get worse, towns like San Jose where many struggling renters live have to be helped to build more housing. Shouldn’t it be a reasonable goal to bring California’s poverty rate down at least to those of Texas (13.7%) or Alabama (13.1%)?
Every other state except perhaps Hawaii gets more housing built near its job centers than California. Most do it by allowing more relatively cheap-to-build “stick built” houses – homes and small apartment buildings framed with 2 x 4 lumber rather than concrete. Most regions simply allow such construction on more land than coastal California. It’s not that California doesn’t have the land or that appropriate transit can’t be provided for such homes. Santa Clara County, the heart of Silicon Valley, is only 25.6% urbanized. Compare that to most any county with substantial urban areas east of the Rockies. Middlesex County in Massachusetts, for example, where Thoreau wrote Walden and where some of the most verdant, exclusive, and environmentally conscious towns in the US can be found, is 72.9% urbanized.
At, say, 15 units per acre and 3 people per house – a density where not-too-expensive 2 x 4 construction is entirely feasible – it would take just 1.3% of the county (about 11,000 acres) to house half a million residents. Where homes can’t be built within walking or biking distance of existing transit, such densities can support good electric bus service. The point is that in addition to working to open wealthy towns and re-envision government housing development, there’s a need to enable the private sector to do what it does pretty well in the Seattle, Denver, and Boston areas.
So the challenge of housing people in coastal California remains. And too many are poor because they cannot afford the housing California has been willing to allow. If poor and middle-class people conclude on the basis of the California experience that progressivism does not offer them very much, the results for the earth could be quite disastrous.
Further evidence that good environmental policy does not guarantee genuine environmental justice. Thanks, Woody. Looking forward to having you contribute to EarthWatch whenever you like.