Assistant Director's Message from Stephen Menendian

Stephen Menendian

Assistant Director and Director of Research

This piece was originally published in the 2017 Haas Institute newsletter.

Since 2012, I've had a front row seat to an unfolding crisis in my role as Director of Research. The Haas Institute was approached a few years ago by the California Department of Housing and Community Development to conduct research to assess housing needs in the state as part of a new 10-year statewide housing plan. We began by examining the previous statewide housing plan from 2000, focusing in particular on its projected demand for housing. We then compared it, all these years later, with the number of units actually produced. It came as a shock to discover that the production of units fell far short of projected demand. We also uncovered research showing that California was among the most housing-cost burdened states in the country, with especially harmful effects on low-income families, who were being pushed from their homes and neighborhoods.   



The Haas Institute was one of the few participants at the table back in 2014 who were raising serious concerns about the supply-side problems, as well as the risks of displacement and harm to communities. Since then, the Bay Area and many parts of California have witnessed double-digit increases in rents and home prices, and gentrification has greatly accelerated. Neighborhoods have been transformed as local businesses and places of worship have been pushed out, replaced by high-end establishments.  



There appears to have been a tipping point reached recently in the broader public awareness of the depth and scope of the crisis. There is now broad consensus that a crisis exists, and recognition across sectors that something has to happen. That’s the good news. The bad news is that the political will needed to actually address the housing problem is enormous and, more critically, there is no broad agreement about how best to approach, let alone solve, the crisis. 



Affordable housing advocates are justifiably skeptical of generic supply-side strategies that would take years if not decades to trickle down to an affordable level. So-called YIMBYs (Yes In My Backyard advocates), on the other hand, are also right that the depth and nature of the crisis cannot be solved by preservation of existing housing stock and building or expanding affordable housing alone. Middle-income displacement is part of what is causing the affordability crisis in traditionally lower income and working class neighborhoods. Young professionals are moving into these neighborhoods.  Middle income families are displaced into lower income communities, who are displacing existing residents further afield. 



Another dimension of this crisis is the shocking racial impacts. Richmond, California has lost half of its Black population between 1980 and 2010, and Oakland lost at least 50,000 during that same period. San Francisco lost more than half of its Black population between 1970 and 2010, which is now under 5 percent, and fell by an estimated 10 percent between 2010 and 2014 alone. 

Instead of following opportunity, however, this more recent movement is a migration from vibrant, prospering cities into struggling, low opportunity regions and neighborhoods. The historical resonances are clear. As Richard Rothstein, one of our senior fellows, brilliantly demonstrated in his recent book, The Color of Law, California’s communities systematically erected housing barriers to promote racial and economic segregation during and after the first Great Migration. After the passage of the Fair Housing Act, these measures took a decidedly different form, but with the same effect. Proposition 13, one of the key structural linchpins, plays a key, but complicated, role in housing and wealth inequality in the state. Proposition 13 was pushed and enacted as part of anti-tax movement that bridged Reagan’s governorship to his presidency. This referendum was enacted, in part, as a response to the desegregation mandates for California schools, and works to minimize effective tax rates in the wealthiest communities, exacerbating structural racism in the state. 

Fortunately, the new Statewide Housing draft plan, entitled “California's Housing Future: Challenges and Opportunities," released by the Department of Housing and Community Development earlier this year, reflects our research and analysis. The report is a big step in the right direction, especially by identifying land use policies as a major cause of housing inequality. 

But it will require much more than planning to make a difference in this crisis. For that reason, the Haas Institute is leading the way by articulating a vision and set of strategies that can galvanize broad support while conducting research on critical housing issues. Our California Partnerships Program is advancing an innovative research agenda and building partnerships with community that can generate support for real solutions in accordance with the scale of the problem.  

In addition to this work, we published two housing related research reports in recent months. The first, “Opportunity, Race, and Low Income Housing Tax Credit Projects,” released in March, analyzed the distribution of Low Income Housing Tax Credit (LIHTC) projects cited in the Bay Area. The LIHTC program is the largest federal investment in affordable housing. We are working with the state to determine how it can better serve low income families by siting LIHTC properties in neighborhoods of opportunity. 

More recently, we released “Unfair Shares: Racial Disparities and the Regional Housing Needs Allocation Process in the Bay Area,” a revealing portrait of a critically important state policy for allocating affordable housing regionally. 

Finally, we are planning a major national conference at UC Berkeley February 27–March 1 on the 50th Anniversary of the Kerner Commission, the National Advisory Commission for Civil Disorders. The Kerner Commission systematically examined the underlying forces that caused more than 150 spasms of urban rebellion in the summer of 1967. Each of these incidents were triggered by a police harassment or violence, just as was the case for the Black Lives Matter protests more recently. But the Commission, nearly 50 years ago, identified racial housing segregation as the key cause of the unrest. It is telling that rapid re-segregation is occurring today, at a time of widening inequality. We, at the Haas Institute, are at the forefront of identifying the most equitable solutions for moving forward.