Categories


Authors

Resisting the Bay Area's Modern-Day Feudalism

Resisting the Bay Area's Modern-Day Feudalism

Andrea Grimes

Art by Eli Miller

Art by Eli Miller

The doomsaying about the state of real estate in the San Francisco Bay Area began before my husband and I had even started begging the neighborhood liquor store for moving boxes. Among the responses to my Facebook announcement to our tight-knit community in Austin, Texas, that we were heading for the Bay, a faint schadenfreudic theme emerged: Boy howdy, you’re going to hate paying rent there!

I knew, of course, that everything would be more expensive in California, and that housing would be our top sticker-shocker (next to the price of cilantro, which my local natural grocer sells for an outrageous $1.50 per bunch). But the conversation that began with that Facebook post nine months ago hasn’t subsided; if anything, it’s grown broader and ever more maddening as we put down our new roots. A group hike up to the Sutro Tower over the July 4th holiday capped off a two-hour conversation about rent stabilization in San Francisco’s Bernal Heights. Brunch on Lake Merritt couldn’t commence without some anxious consideration of a new friend’s desire to move out of his suffocatingly small but rent-controlled local studio. At a cocktail party in North Oakland, a quick remark about whether we drove or took a Lyft turned into a treatise on the encroaching Berkeley crunchies and what the neighborhood had been like “before.”

“Before” is a time I inevitably hear about from everyone I meet here in the Bay. It means different things to different people, of course—but the general sense is that Before, everything was a little cheaper, a little cooler, and a lot less white.

But this pining for Before can sometimes obfuscate the difficulties of Now in the Bay. “Before” has become a conversational mechanism that allows for a lot of lamenting about gentrification, income inequality, and the failure of the free market to adequately provide a basic need—without talking seriously about solutions. But unless we start unpacking the present, Bay Area residents, and those in many urban environments across the country, have little hope these housing crises will be resolved in the future.

The New Property Barons

Nobody who thinks about land use and development in the Bay Area these days can talk about the subject without bringing up the devastating effects of the subprime mortgage crisis of the mid-to-late 2000s. The Bay’s biggest landlords built their businesses on the cheap foreclosure deals that emerged, taking advantage of investor-fueled cash flow and friendly commercial loans that made it impossible for prospective single-family homeowners to compete.

Long-time Bay Area real-estate watchers say the trend toward larger-scale ownership started decades ago, but what might have been a relatively incremental change got a massive boost amid the crisis. This phenomenon—exhaustively reported by the East Bay Express—turned underwater homeowners who managed to stay in the Bay into tenants. Much of the time, they became renters not of units owned by their neighbors, but of the many thousands of homes and apartments owned by “Wall Street” corporations. And these new tenants are disproportionately people of color.

“Without question, property—particularly housing—is being transferred to what I would really call an investor class,” said Rick Lewis, the executive director of the Bay Area Consortium of Community Land Trusts, a nonprofit group that works to acquire existing properties (via purchase or donation) and place them under a kind of collaborative management with resident-owners, allowing low- and middle-income folks to live affordably, long-term. When those resident-owners need to move, or pass away, a new family moves into the property, instead of it being sold for maximum profit. In a landscape consumed by profit-driven real-estate speculation, it’s a radical idea that, for Lewis, has been frustratingly slow to catch on.  

“People today are buying homes more as an investment than a roof over their head,” said Lewis. In the Bay Area’s skyrocketing real estate market, this is more than a long-term way for a family to create a valuable asset to be passed down. “People expect to buy something and flip it for an extra $100,000 a year from now,” said Lewis.

And for rental properties, these investor-owners want to recoup market rent, which often puts all but the highest-earning tenants out of the running to occupy the units. Tenants Together, a California lobby group for renters’ rights, produced a series of in-depth studies of what happens when Wall Street takes over Main Street residences, and the picture is bleak, according to associate director Aimee Inglis.

“The clearest trend we could find was that tenants renting from Wall Street landlords are paying higher than median rent in their area,” said Inglis. And they’re not getting much for their money: Wall Street landlords, according to Tenants Together, tend toward absenteeism and, at worst, issue eviction notices “casually” and with abandon.

According to Tenants Together, the three biggest “investor-landlords” in California, Blackstone/Invitation Homes, Waypoint Homes, and Colony American Homes, together owned nearly 10,000 homes in the state as of 2015. The residents of those thousands of homes who are able to make rent or evade eviction, said Inglis, “shoulder more of the burden of home ownership and none of the benefits,” with landlords expecting tenants to make their own repairs and pay for utilities, waste services, and “all these things that people usually get factored into renting in multi-family units.”

The result: There are a lot of people doing a lot of work—and generating a lot of profit—for a few wealthy landowners, exacerbating an already alarming trend toward income inequality in this country. A millennium ago, we called that feudalism. Today, it’s being packaged as an inevitability, a hip Millennial trend, or even a novel Silicon Valley solution. While it may seem like an issue only really felt by a handful of mainly coastal cities, in truth, several locations throughout the United States already have a higher percentage of renters than homeowners, and that trend is accelerating.

“Best Worst Practices”

I put the problem of this new urban feudalism to Max Grinnell, who tweets as @TheUrbanologist and teaches urban studies in Boston and Chicago. What happens, I wondered, when the people who make up the backbone of our cities—teachers, civil servants, waiters, bus drivers, and car mechanics—can’t afford to live in the places that can’t thrive without their skills? Over the howl of police cars echoing through his cell phone as he traveled across Chicago, Grinnell found himself “describing the water as we’re drowning.”

“The struggle is real,” he said. “Not everyone’s going to get to live where you want in a city, but shouldn’t you be able to live in that city if you’re a civil servant really improving the lives of young people?”

Grinnell lamented the lack of vision among the entities and institutions best poised to set up affordable, sustainable, and stable housing in fast-growing urban areas. Good ideas, Grinnell said, such as encouraging accessory dwelling units, don’t create enough space; meanwhile, development funds seeded by property taxes and other fees are ignored or misused by cities convinced that a mixed-use development that worked in one place—Palo Alto, maybe—could automatically work in, say, Saginaw, Michigan.

“There’s a lot of what I like to call best worst practices,” said Grinnell, with “creative class consultants,” policy wonks, and government officials “thinking that all these cities can play the same game,” instead of developing bespoke, long-term plans for metropolitan areas facing vastly different issues.

On the one hand, Grinnell says his students aren’t looking to decamp from Boston and Chicago to somewhere like Fresno—they want to move to Austin, he said, another swelling city with an entrenched and expanding gentrification problem. Making less-hip cities more appealing would take the pressure off of overloaded areas where long-time residents of color and low- and middle-income folks are being pushed out.

But as any civic-minded resident of a fading Rust Belt metropolis or smaller Southern city will tell you, it ain’t as easy as giving downtown a facelift, unveiling a tech incubator, and putting in bike lanes. “I don’t want to say we’re too late in some of these cities, but how can we think about reinvigorating Fresno or someplace like that?” Grinnell wondered. “Wouldn’t there be a better way to encourage people to resettle in some of these struggling cities?”

Grinnell’s students have “a sense of like, ‘Here’s this great, wonderful, progressive place, it’s already built for me,” that draws them to eschew settlement in the Fresnos of America. The alternative—deciding, Grinnell says, that “I’m gonna be the one who will work for more inclusive, progressive, less racist” geographies—doesn’t seem to hold much sway.

But he’s careful not to overload the blame on spoiled youngsters, because currently a big part of the problem is what he calls a “spatial mismatch” between where jobs are being created, and where people can afford to live. Compounding this issue for cities with “lame” national reputations, high-wage employers evaluating where to set up shop look specifically at quality-of-life factors and the education level of existing populations, which tend to favor—you guessed it—those progressive, pricey places everyone already wants to live in anyway.

Metropolitan areas are also failing to work together to address shared housing and livability issues. “It’s all cities for themselves, with the exception of basic things like water and maybe a regional park system,” claimed Grinnell. Because so much city planning is done in cycles —“election cycles and policy cycles,” he said—“long-range regional planning barely exists.” Instead of thinking about how a major affordable housing initiative two cities over might benefit a waterfront development, say, in a nearby township, cities are mainly concerned with immediate results and short-term wins.

Barring a sudden surge of interest in Indianapolis, migration to the Bay doesn’t appear to be slowing down. In the absence of effective institutional and governmental solutions to housing instability and the decline of property ownership, justice-minded developers, organizers, and tenants’ rights groups are thinking of new ways to work around a system that seems concerned primarily with piecemeal projects instead of fundamental social change.

Collective Power

In the Bay Area, organizers are challenging the premise that land and home ownership, as most of us imagine it, is desirable in the first place. Particularly the kind of ownership many folks who got screwed in the mortgage crisis probably imagined as the American dream: a single-family home, grass lawn, picket fence. At Tenants Together, Aimee Inglis envisions a variety of alternatives.

“We believe as an organization that housing stability is important, but home ownership isn’t the only way to get there,” she said, suggesting a combination of collective ownership, robust tenant protections, and nonprofit management as potential solutions to the Bay’s cycle of rising rents and displacement.

In fact, the division of land can weaken communities and pit neighbors against each other—a tactic historically used by the American government to disempower and divide Native American groups. Inglis, who is part Osage, recalls the way American colonialists and bureaucrats broke up her tribe’s land, in what is now Oklahoma, in order to make it easier to wrest away from her people.

“Our tribe was sold, like many other tribes, that idea around allotment, that you shouldn’t collectively own your land and let’s split it up for you,” said Inglis. Without that mutual interest in preserving shared property, her tribe and others lost much of their bargaining ability. “There’s power in collective ownership,” she said.

Modern-day developers take that concept and flip it, recognizing how forceful they can become when they are able to consolidate separate purchases into one project with a little careful persuasion of local governments who are often not looking at the bigger picture when it comes to who’s building what, where, and to what extent. Take, for example, the ongoing sprawling development of the former shipyard at Hunter’s Point in San Francisco, one of the more affordable places to buy in the city, and yet still a price-out threat to neighboring areas. Without a simultaneously urgent and long-term plan to reduce speculation in the real estate market, the experts I talked to said the Bay Area’s housing stability problems will only grow worse, putting more and more renters at the mercy of bigger and bigger landlords.

“What seems to not work is leaving our housing question entirely up to the private market and fairly unregulated in terms of tenant protections,” said Inglis. The opportunity that the mortgage crisis gave to Wall Street investors could have turned out differently, she said, if cities and other public entities could have taken ownership of housing that investors scooped up in cash buys instead.

Taking the profit incentive out of housing and redefining it as a living incentive is at the core of the work done by the Bay Area Consortium of Community Land Trusts. It’s slow going, but nonprofits like Rick Lewis’ group are acquiring properties that are intended to be passed on to others in the community, not profited from. Limited-equity cooperatives and collaborative ownership, said Lewis, enables residents to “pass permanently affordable housing on to somebody else.”

Residents buy a little bit of ownership of a property, and when they move out, they might take a small share with them. “You don’t make a windfall profit,” said Lewis. For some people, that might dull the dazzle of the American dream of home ownership. But as Lewis noted, “You’ve benefited all those years [from a stable, affordable rent] and when you move out, you pass it on to someone of a lower income to appreciate and steward for as long as they want to live there.”

It’s not so different from the practice of being a good renter in general—keeping up the place, making sure your home can be a home for the next person who comes along. But the upkeep isn’t creating profits for a distant landlord-corporation— it’s creating livability for future neighbors who can know that the place they’ll move into is a place they can stay.

Focusing on the Future

One of the advantages of the never-ending riffing about what it’s like to pay rent in the Bay Area is that a five-hour hair salon appointment can breeze by, filled with a combination of nightmare landlord stories and fantasies about dream apartments with unthinkable luxuries like dishwashers and walk-in closets. That’s the conversational jag I found myself on with my hairdresser, a single mom raising an elementary-aged daughter on the Bay’s “urban island” of Alameda, where we both rent.

Alameda’s experiencing its own housing crisis and attendant battle between landlords and a feisty bunch of tenants who are demanding the outrageous prospect of requiring “just cause” evictions—preventing property owners from booting tenants out at random. Here, we’re so fired up about organizing for renters’ rights that the Alameda Renters Coalition even marched in our locally famous July 4th parade amid the motorcycle clubs, equine enthusiasts, and hometown baseball teams.

My hairdresser told me she’s given up on the prospect of ever buying in the Bay, but is dedicated to remaining in the place she’s called home for decades, creating a home where her kid can stay in the same school district without being uprooted every time rent goes up. She talks about Before, but she’s more concerned with the future.  

5 Houses That Were Also Visionary Artistic Masterpieces

5 Houses That Were Also Visionary Artistic Masterpieces

5 Things to Know This Weekend: July 14

5 Things to Know This Weekend: July 14