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Yearly Archives: 2020
Second night of the George Floyd curfew in Berkeley, steps from People’s Park. Once built over with old shingled and clapboard houses like mine, after a long and troubled history, the space now holds a variety of tents. These tent people are quiet, unlike the angry crowds in Oakland five miles to the south. Police are not being sent to evict them from university property, possibly because the Berkeley campus is closed during the pandemic.
Tent camps, now sanctioned city locations, are the latest, if also the oldest, response to California’s housing emergency. Sadly, Project Roomkey, meant to house many thousands of vulnerable homeless in empty hotels, seems to be faltering with too little staffing and reluctant or unstable occupants. Colonies of new trailers intended for the unhoused also sit vacant. What seem to be working, still and again, are tent communities, evenly spaced, with services, on public land.
Large numbers of homeless in this prosperous land are hardly a new phenomenon. They have existed since the mid-nineteenth century, with a brief interlude of full employment during and after the Second World War. During the Great Depression in the 1930s homeless encampments were called Hoovervilles to spite the sitting president. What is relatively new is the migration of these encampments to city centers where they cannot be ignored. Their high visibility and persistence painfully signal, any way you look at it, a broken social contract.
I live on Hillegass Avenue, which begins (or ends) just south of People’s Park. The park rose some 50 years ago on a muddy, debris-strewn space where the University, using eminent domain, had levelled old housing and left it with a parking lot and a stalled plan for new dorms. In 1971, having just settled on Hillegass, we were soon breaking up asphalt in People’s Park to plant trees, and marching against Nixon’s mining of harbors in Cambodia. When not protesting the war, we joined Berkeley’s new architectural preservation group, too late to save the houses demolished on Block 1875, People’s Park. We had no problem reconciling our protests for and against the Establishment: we oozed righteousness on both counts. I ascended to president of the Berkeley neighborhoods’ coalition, my husband led the preservationists.
Many of the demolished homes in People’s Park had been re-purposed as rooming houses, and when our kids emigrated to points east, we rented rooms to students. All kinds of housing were scarce by the 1980s, no little thanks to the NIMBY concerns of neighborhood groups and preservationists like us. The median home price in Berkeley had bloated 300 percent in less than a decade. The twenty-five houses demolished for People’s Park would today, if not next week, be worth upwards of $50 million.
While we were passively amassing real estate, I was writing about local soup kitchens and shelters as well as local writers and bookstores. This led less to poetry readings and more to volunteer work with homeless support groups and a food recycling network . After the Berkeley Gazette expired, I wrote a novel about homelessness and a soup kitchen, folding in feuding academics and the gourmet revolution. …Soup of the Day. A [comic] sequel, Property Rites, involves competing native American and Mexican land claims on a campus not unlike, as they say, the Berkeley campus of the University of California.
The founding of the University of California does most often evoke eminent clergy shading their eyes as they gaze across the bay, quoting Bishop Berkeley: Westward the course of empire….
More recently, the University has been described as a group of entrepreneurs seeking a parking place. In 1868, jesting aside, the location of the new university campus vastly inflated the property values of four local investors. Francis Shattuck, William Hillegass, and their partners had divided a square mile of land just south of the projected campus, for which they had paid about $31 per acre. The loser in this deal was ultimately the holder of the Mexican land grant, Jose Domingo Peralta–if you don’t count the natives, those who survived, who didn’t share the western imperialist view of property rights.
Francis Shattuck’s eventual heir was philanthropist Weston Havens, born in 1903, whose family had lived around the corner from our Hillegass house. The maiden lady who sold us her own family home had grown up with him. When we moved in, he gifted us with sacks of fertilizer meant to sustain the viciously rampant Silver Moon rose over the driveway arbor. He had given it to her to soften the view of the four-story apartment building to the south of us. There’s more to tell here, and whether Weston Havens ever actually occupied a wing of our house is an unwritten story. But in 1940 he built a radically modernist house on Panoramic Hill where he lived until his death.
Meanwhile, our Colonial Box on Hillegass Avenue was continuing to amass unearned value as the Bay Area economy boomed. In the century after the Gold Rush, there was the pulsating prosperity of Silicon Valley and its garage geniuses. And the rich grew richer, billion by billion, and the poor poorer, year by year, decade after decade.
As Henry George, 19th-century political economist, journalist, and social reformer wrote in Progress and Poverty,
I mean that the tendency of what we call material progress is in nowise to improve the condition of the lowest class in the essentials of healthy, happy human life. Nay, more, that it is still further to depress the condition of the lowest class.… It is as though an immense wedge were being forced, not underneath society but through society. Those who are above the point of separation are elevated, but those who are below are crushed down.
George saw the root cause as the inevitable rise in wealth via unearned land value–such as the vast increase in the value of property adjacent to the new transnational railroad lines. Rents were already rising as fast as or faster than wages. He could have adduced another example in the shrewd purchase by Shattuck, Hillegass, and partners of a square mile of land next to the projected campus of what was soon to become the world’s preeminent public university.
George’s Progress and Poverty was the most important American economic treatise of the 19th century. But his prescription against income inequality, a single tax on land value, soon proved unworkable, since land’s value depends on its potential and its improvements. In 1880 he left the west coast to carry his ideas to New York City, where he became United Labor’s mayoral candidate. He finished well ahead of Republican Theodore Roosevelt, but lost narrowly to a Democratic candidate whose name I and others have forgotten.
Property tax in whatever form is still the most significant source of funding local government services, particularly education. The most important initiative on the 2020 ballot in California concerns Proposition 13, passed in 1978, drastically reducing all property taxes and devastating everything from school quality to street maintenance. The 2020 measure would tax commercial and industrial property valued over $2 million at its assessed value rather than its purchase price. It could bring billions of dollars to what is now our broken state economy.
After a world pandemic, after our racial conflagrations, our planetary climate crisis and national reckonings in housing, health care, and education, our stock market seems to be making the much-touted V recovery. This is all too likely to baffle financial and social reform efforts, not to mention the frantic struggle to rid ourselves of our current president. But the future may be full of surprises, and not necessarily locusts or earthquakes. ∞
Trouble at the Majestic
The year is 1919, the scene a decaying imperial spa in County Cork, Ireland. The owner of the Majestic Hotel is an Anglo-Irish aristocrat who cares more for his dogs and piglets than for the starved villagers who raid his potato patch by night. His beloved piglets are housed in the former squash court and fed yesterday’s pastries.
The Majestic Hotel figures in Trouble, a tragicomedy about the Irish rebellion against British rule–performed against a background of guerrilla attacks by the rebels and vicious reprisals by the British. The “Troubles” exploded again in 1970, the year that J.G.Farrell’s remarkable novel appeared.
A century after the partitioning of Ireland, amid the planetary chaos of the coronavirus pandemic, California’s vacant hotels suddenly figure in a social and economic crisis of survival.
California governor Gavin Newsom, confronting the vulnerable and potentially infectious mass of 150,000 homeless in the state, has engineered an ingenious deal. Hotels and motels, most notably Motel Six, have made available for lease some 15,000 hotel rooms for housing the most fragile homeless–the aged and those with underlying health conditions.
Newsom announced Project Roomkey at a press conference in front of a Motel Six in Campbell,California. Campbell is an unremarkable Santa Clara Valley town where I went to high school, when prune orchards were just giving way to housing tracts, highways, and the garage startups that transformed the farmland suburbs into Silicon Valley.
In the early days, Campbell, California had at least one street of “affordable housing,” inhabited by poor people, then generically called “Okies”. Gilman Avenue was a few blocks of small greyish bungalows, some with junked cars as lawn furniture. Betty the Moocher lived on Gilman. She was pallid and grimy with a plaintive, small-featured face. During lunch hour she would stand nearby, gazing silently at your sandwich. Sometimes we would give her something. It never occurred to me that she could actually have been hungry, though there were no free lunch programs then.
One of those Gilman bungalows is for sale right now as a “vintage” fixer-upper, for $1,220,000. Down half a million from its earlier listing. Most people cannot now afford any sort of home in California, but there are more free lunch programs. Just no housing.
Given the continuing pandemic lockdown, Project Roomkey hotel rooms would have been vacant anyway–a seemingly perfect solution, with FEMA ready to pay 75% of the costs. But two weeks ago only some 4,000 of the 15K available rooms were occupied. Tidy charts showed how many rooms had been leased for the project, how many were being prepared for occupancy, and the relatively few which were actually occupied.
It is not a simple process. The first challenge is the vetting of would-be occupants, by experienced social workers already overstretched by the Covid crisis. Applicants range from the responsible but roofless and medically fragile to lifelong addicts who may trash their rooms if not regularly supplied with their drugs. Medical records and background checks are needed. Staffing has to be arranged to provide food, housecleaning, medical help–and security.
Several counties have already signed onto Project Roomkey. But a number of southern California townships have rejected any use of their local hotels as homeless housing, either temporary or permanent. And anecdotal reports from some of the occupied lodgings are not good. Social distancing, along with housekeeping and private property, are unfamiliar concepts for many formerly homeless folks.
California has the fifth largest economy in the world, one of the highest costs of living in this country, and the largest number of homeless of any state. Some see this as flagrant evidence of a failed government–the inability to provide for the welfare of its least able citizens. Newsom, as governor, and earlier as mayor of San Francisco, took on homelessness as his central issue. There was the controversial Care Not Cash, which reduced cash support and increased shelter and social services. Now there is Project Roomkey.
Here in my present hometown of Berkeley, 40 homeless have moved into two Oakland hotels that are part of Project Roomkey. Each room is $186 per day, to be 75% reimbursed by FEMA. For whatever reason, Berkeley jokes aside, these are not Motel Six rooms like those claimed by other counties, which normally rent for $76 per night. Meanwhile the proposal for 16 stories of housing to be built at People’s Park brings out opponents pointing to its 50-year history as a political symbol and a refuge for the homeless.
Newsom and his allies would like to see Project Roomkey succeed and extend beyond the pandemic. This cannot happen without aligning funds from state, local, and federal sources. And so far, even money has not proven to be the answer. Homelessness was a serious problem in California long before COVID-19, and will doubtless increase afterwards, given the economic devastation of the work stoppage as well as earlier problems with local zoning and construction workers’ unions.
Bond issues for building affordable housing have been passed and then failed dismally to address the need. In California it costs $450K to construct one no-frills unit of subsidized low-cost housing. This is based on rising costs of labor and material and the expensive delays between securing funding and local approval of the project and the site. Given the cost of new construction, adapting ready-made housing seems a rational solution to the very immediate needs of California’s 150K homeless.
Some say that this apparent emergency will shrink back into perspective once our society returns to normal. Others point out that “normal” has included indifference not just to homeless encampments under our clogged freeways, but to the climate crisis, to enormous income inequality, to mass shootings, and to the continuing partitioning of our electorate that gave us Donald Trump. ∞
This story cut a path between impeachment fatigue and the coronavirus right into the California governor’s office and the international media. Four homeless mothers moved with their children into an abandoned house on Magnolia Street in Oakland, California. They cleaned it, connected the utilities, decorated for the holidays. Before long, of course, the owner, a southern California real estate corporation, threatened to evict them. Although public support was growing, a local court ruled against the mothers. County sheriff’s deputies in riot gear promptly staged a dawn raid on the house, complete with drones, tanks, robots, and AR-15’s. The sheriff declared himself well-satisfied with the timing and efficiency of the operation.
Meanwhile, sympathy for the mothers was feeding outrage against real estate speculators profiting at the expense of local tenants and the homeless. Some 6,000 vacant houses have been tallied in the city, while homeless encampments are everywhere–under freeway overpasses, on sidewalk strips, in public parks, at busy intersections.
As homelessness spreads globally, it overlaps with the migration crisis and gross income gaps, euphemized as inequality. Today’s Germany, with its generous welfare provisions, attracts not only masses of refugees, but investors looking to take advantage of both the housing shortage and government subsidies of skyrocketing rents. The German government spends about 4 billion euros on public housing projects and subsidies each year, and covers some 15 billion more in rent for social welfare recipients. One economist noted drily that the government program could be described as an “economic stimulus package” for property-owning landlords. In Berlin protesters have succeeded in extracting a five-year rent freeze from the government. Landlords and developers say they will simply move their operations to other German cities. Meanwhile, another economist estimated that given the current rate of construction, it would take another 185 years for Germany to provide housing for those in need.
The VIENNA Model
Just across the border in Austria, Vienna is often rated the most livable city in the world. 60% of the population live in social housing, mostly by preference. Large, well-designed housing estates are built and managed to attract and maintain tenants with a broad spectrum of income. The daughter of a former president was on a wait list for one of the most desirable projects.
When I was in Vienna as a student, three of us shared a large bedroom in the apartment of an impoverished baron and his family, just a block from the State Opera House. At the end of the Habsburg empire, not much had been left for the Austrian aristocracy. The staff of our institute included an overworked countess, and our landlord, the baron, could not have been happy to rent part of his home to a gaggle of American girls. Our room had high ceilings and tall, glass-windowed doors that rattled when the Frau came with our breakfast tray, laden with milchkaffee and precisely measured tiles of butter with just enough apricot jam for each of the fat kaiser rolls. After all, the Frau had managed to feed her family through the postwar shortages.
Much earlier, after the First World War, having exiled the troublesome emperor, the new Austrian republic did not sell off land to private bidders, but created a series of housing estates. Under the social democratic government, from 1919 to 1934, in so-called Red Vienna, the projects and their fittings were designed by world-famous artists and architects. And after the Second World War, the Austrian government resumed building and restoration. In today’s Vienna, residents live in some 420,000 apartments in assorted social housing projects owned and managed either by the government or by selected nonprofits.
In America, housing projects are often poorly-maintained and crime-ridden, a form of ghettoization that people want to escape. In Vienna the projects (Gemeindegebau) are where people want to live. But this network is expensive to build and maintain, and given the influx of asylum seekers needing housing, the city’s housing blueprint may be changing. While all profits from rents are ploughed back into new construction, the system relies on heavy taxation that Americans have historically resisted.
Wedgewood, Inc. was founded in 1985 in Redondo Beach, California. Its corporate headquarters inhabits some 50,000 square feet in this pleasant beach community. The company describes itself as “an integrated network of companies concentrating on real estate opportunities.”
Redondo Beach was until recently also the corporate home of Northrop Grumman, the second-largest defense contractor in the USA. Northrop’s highly diversified operations included in 2003 a $48 million contract to train the Iraqi army, and more recently, the design of the Global Hawk drone downed last year by Iran. The US has only three remaining of this $200 million aircraft, but replacement should be simple given the $718 billion budgeted for defense in 2020. This same budget apportions $44.1 billion for Housing, which is a fairly clear illustration of national priorities.
Northrop recently moved its headquarters to Washington D.C. to be near its main client. But Wedgewood, Inc.remains in Redondo Beach–as does a great deal of discretionary income. Real estate investments reap historically high profits. The current ROI (Return on Investment) for so-called fix and flip investments often exceed 100% of the original investment, although the current ROI (Return On Investment) clocks in at a relatively low 40%.
Wedgewood owns around 120 other Bay Area properties besides 2628 Magnolia Street. In the agreement negotiated by Oakland mayor Libby Schaaf and Governor Gavin Newsom’s office, Wedgewood agreed to sell the Magnolia Street house to the Oakland Community Land Trust–and to offer their other properties as well to the tenants before putting them on the open market. This “right of first refusal” has been a successful principle of tenant activism in other progressive cities. This is a serious victory for the local branch of housing activists in the Alliance for Community Empowerment, and a cautionary development for real estate speculators.
Wedgewood does not own the Oakland apartment complexes where residents have been withholding rent because of poor maintenance, and even organizing to buy the building. These tenants will welcome the breaking news that the Alameda County district attorney’s office has withdrawn all charges against the Moms4Housing collective and their supporters.