Upzoning: The Developers’ Long Con of Californians

by on December 13, 2021 · 33 comments

in San Diego

By Mat Wahlstrom

Tomorrow marks the 55th anniversary of one of the most important grand jury reports in California history, of which you may have never heard.

“Zoning Study Report & Recommendations“ was the result of an investigation into pay-for-play allegations against a developer and the Los Angeles city council and planning department to obtain favorable upzoning, or increasing density incompatible with existing purposes, despite concerns by every other agency as to the adverse affects.

You probably won’t be shocked to hear it was initiated by a complaint from citizens concerned about parks or that the rezoning at issue would have allowed construction of a sports arena in protected open space.

But you may be surprised to learn that it resulted in criminal prosecutions for bribery and conspiracy, significant reforms of the zoning approval process, and the preservation of that open space to this day.

At the final hearing in 1970, the judge sentenced the central councilmember to 1-to-14 years in prison as a deterrent to others, noting “that the power to rezone was the power to create great wealth and using that power wrongfully ‘is just as bad as stealing public money.’”

There’s a lot of wealth being wrongfully created in San Diego and California.

Second only to the federal government’s power to print money, upzoning creates wealth out of thin air. It takes existing property and, by allowing *possible* uses beyond or even contrary to its original purpose, increases its value.

It’s the equivalent of being able to write an extra ‘0’ on every bill already in your wallet and making others have to accept them.

Then as now, developers are using their pocket change, in the form of campaign contributions and ‘donations’ to nonprofit front groups, to influence politicians to upzone wherever and however they can. Except, as that judge noted, it is still an abuse of power that costs the public as a whole — and even more outrageous as it’s being done at every level of government.

From Senate Bills 9 and 10 to Complete Communities to Blueprint San Diego to ‘programmatic’ community plan updates, the developers are moving past specific project and spot upzoning to have their bought politicians direct government to blanket upzone entire regions and municipalities.

We’re told that everything that is being done is necessary because we are in a ‘housing crisis.’ Yet there are never any commensurate requirements for affordable housing or indeed any mitigation of or public benefit to offset this legalized looting of both the commons and real person property owners.

Like other hedge fund managers, the primary goal of developers is to make money. If developers can do it by not building any housing or only building certain kinds of housing, then that’s what they do. Which is why we have a glut of luxury, ‘market rate’ empty housing and only token amounts of new ‘affordable’ housing that only those making $70,000 a year can afford.

What’s different now from 1966 is that the courts cannot protect us from laws that have since been passed to preclude community actions which have been successful. Which is why developer shills discredit CEQA and other ordinances requiring adequate community review, such as by community planning groups, as these are literally the last line of defense against their depredations.

I would be doing no service to sugarcoat how bleak the situation is for everyone without a real estate portfolio.

Should the long con of upzoning succeed, San Diego and all of California will be reduced to neo-feudalism.

Existing homeowners should not feel safe, as all it takes is losing one neighbor to a developer who will build a mini-dorm next door right up to your property line before you and all your others are forced to sell out to get ahead or get left behind.

Renters cannot think this doesn’t concern them, as the paper increase of land value magically requires rents being raised to match that in addition to the rents in the new ‘market rate’ buildings around them.

And needless to say, the unhoused already know what it’s in store for everyone who can’t keep up.

What’s the answer?

Short term, we all need to be a lot more involved in decision-making on land use while we still can. Send comments and/or log on if you can to city council meetings as they’re noticed and/or mentioned here and elsewhere. This Thursday’s meeting of the Planning Commission on “Homes for All of Us” is critical, as SB 9 only allows until December 31 for municipalities to modify its implementation.

And we need to join with others already fighting this fight. (I’ll post links to some of these resources in the comments.)

Long term, the 1966 grand jury report at the start this article recommended several. The most relevant are:

  • That all persons representing themselves as “land consultants, expediters, zoning advisors, etc., be required to register as practitioners in that line of work and that certain minimal ethical standards be established for the conduct of their affairs.” Then as now this industry is totally unregulated, unlike real estate agents, leaving the door wide open for operators such as The Atlantis Group and Circulate San Diego. (Seriously, talent agents are more regulated.)
  • That anyone appointed or elected to a position with decision-making authority on zoning every six months “file a sworn affidavit…listing all real estate properties, their location, zone and use, in which he has any direct or beneficial interest and any part of which are within the city limits…or within five hundred feet outside its borders,” with special attention to shares of corporate ownerships. This should go beyond the required disclosures under the current Conflict of Interest Codes and Statements of Economic Interests by electeds and cover planning department officials who make Process 2 determinations.
  • That “discussion of zone changes by applicants, their representatives, and other directly interested parties with members of the City Planning Commission and members of the City Council be incorporated as part of the Brown Act.” This would put an end to the perfunctory statements on lobbyist forms about private meetings with city officials that currently pass for transparency.
  • That “both proponents and opponents” at any formal hearing considering modifying zoning “shall be placed under oath.” As it stands now, there’s no accountability for representations made in reference to decisions.
  • That applicants “shall, under penalty of perjury, file with the City Clerk a detailed list of any campaign contributions made or promised to any elected official who may vote on the application; said affidavit must be made at least five days before the hearing and must be part of the file.” (Wouldn’t take care of PAC contributions necessarily, but that just confirms the importance of overturning the Citizens United decision.)

As has been mentioned on this site many times before, past battles are too often forgotten and require learning about — and fighting — all over again. But we don’t have another fifty-five years to get it right.

{ 33 comments… read them below or add one }

Mat Wahlstrom December 13, 2021 at 10:59 am

Here’s the link to the agenda for the Thursday, 12/16, Planning Commission meeting on “Homes for All of Us” and SB9, https://bit.ly/3EQUqs8.

Also, here are links to resources I mentioned above:
48 Hills https://48hills.org/
Alliance of Californians for Community Empowerment
Alliance for Housing Justice https://www.allianceforhousingjustice.org/
Automating Banishment https://automatingbanishment.org/
Berkeleyside https://www.berkeleyside.org/
CityWatchLA https://citywatchla.com/
Embarcadero Institute https://embarcaderoinstitute.com/
Livable California https://www.livablecalifornia.org/
Neighbors for a Better San Diego
Save San Diego Neighborhoods
Shelterforce https://shelterforce.org/


Helen Rowe Allen December 13, 2021 at 12:45 pm

Homes For All Of Us: Say goodbye to every bit of charm and livability we San Diegans hold dear. We’re being squeezed and hoodwinked. We’re told that hyper-density and demo-buildout-buildup are the answers to all our problems. Everybody will have everything, and we’ll all live happily ever after – soothsaying for the masses, nonsense to be served up and swallowed.
2022 Get ready. Here comes San Diego chaos, congestion, broke infrastructure, and lots and lots of very, very angry San Diegans.


Mat Wahlstrom December 13, 2021 at 12:59 pm

No arguments from me. Should have also mentioned keeping a tally on all our elected officials’ votes on these measures to reference next election…


Lisa Mortensen December 14, 2021 at 6:16 am

Well-researched and well-written, Matt. Very powerful and a must read. I have passed on to others and suggested they do the same. ~ Lisa


Mat Wahlstrom December 14, 2021 at 8:16 am

Many thanks!


Don Wood December 14, 2021 at 3:36 pm

God bless Mat Wahlstrom. Please keep on explaining how the corrupt relationships between local politicians and real estate developers are undercutting today’s democracy and continue to destroy all the remaining beauty and traditions that make this a great place to live.


Mat Wahlstrom December 14, 2021 at 3:58 pm

Very much appreciate your encouragement.

Living here, I’m often reminded of this passage from Agatha Christie: “It is romantic, yes,” agreed Hercule Poirot. “It is peaceful. The sun shines. The sea is blue. But you forget, Miss Brewster, there is evil everywhere under the sun.”


Geoff Page December 14, 2021 at 8:34 pm

Great stuff, Mat, really well written, keep it up.


Mat Wahlstrom December 14, 2021 at 9:29 pm

Ditto. You guys are doing the daily lifting — I’m just posting biweekly.


Jan Neff-Sinclair December 15, 2021 at 6:21 pm

There is an effort underway to put an initiative on the ballot next year to wrest local land use control from the state and return it to local governments. It was started by Bill Brand, the mayor of Redondo Beach, along with two other local leaders. Signature gathering to put this initiative on the ballot has already begun. More information and materials and directions on how you can join this effort are available at https://ourneighborhoodvoices.com/. It may be our last hope to unburden California of the developer albatross currently around our necks.


Lisa Mortensen December 16, 2021 at 9:07 am

Thank you, Jan. I just signed up and will encourage others to do the same. That said, having a Mayor like Todd Gloria and a Council member like Steve Whitburn, who are doing back room deals without public input, our efforts locally will be hamstrung until the next election and hopefully we will get a new City Administration that listens and represents their constituency rather than for-profit developers.
But if voters throughout the state sign on, I believe San Diego will get on board. This is a good opportunity for us.


Trevor van Leeuwen January 11, 2022 at 10:56 pm

> Renters cannot think this doesn’t concern them, as the paper increase of land value magically requires rents being raised to match that in addition to the rents in the new ‘market rate’ buildings around them.

This is hilariously wrong. Simply see the SB 9 projects in Palo Alto. Unit value went down. Down is better.

Must be nice to be rich enough to own property.


Mat Wahlstrom January 12, 2022 at 9:00 am

Textbook YIMBY: refer to a situation somewhere else (without providing any context or link), misrepresent that situation to claim it refutes what’s being discussed, then close with an insult. And if anyone calls this out, barrage them with more bogus assertions and invite your fellow travelers to pile on, to claim a win when people cease to engage any further with relentless dishonesty and personal attacks.

As SB 9 only went into effect eleven days ago, there’s nothing that’s been built anywhere under it. And the news reports* about “SB 9 projects in Palo Alto” don’t mention “unit value” or anything about the cost of the final four units.

No matter how much new housing is built, none of it will be affordable unless it is required to be. The market has never and will never provide something less valuable than what it replaces.



Trevor van Leeuwen January 12, 2022 at 11:21 am

You think those 4 units will cost more each than the house they replace? **Really**? Be honest.
I agree we should build lots of affordable housing! Especially in and around Hillcrest. I await your suggestion on who should build this, since you are categorically against property developers.


Mat Wahlstrom January 12, 2022 at 11:55 am

Sigh. YIMBYs are nothing if not predictable.

A look at Redfin* for this project address once again proves their relentless dishonesty: 940 Matadero Ave last sold in 2001 for $712,500. Its current market value is $3,907,965. Even before any demo and new construction, that split four ways is $976,991 each. Yet somehow you think the resulting units will cost less than this? And your personal attacks are simply more proof of what I said.

When did you stop beating your wife, Paul, er, “Trevor”?

* https://www.redfin.com/CA/Palo-Alto/940-Matadero-Ave-94306/home/768043


Trevor van Leeuwen January 12, 2022 at 12:13 pm

Yes, I do think that the new units will cost less than 4 million each.


Geoff Page January 12, 2022 at 1:07 pm

He didn’t say $4 million each.


Trevor van Leeuwen January 13, 2022 at 11:31 am

I know he didn’t. You missed the point. Let’s say they’re 2.5 M each, being generous.

Old state: one family housed, at a cost of 4 million per family.

New state: four families housed, at a cost of 2.5 million per family.

The second state is clearly better than the first state.


Geoff Page January 13, 2022 at 12:15 pm

No, I’m afraid you are missing the point. The single family was housed for $712,500, the price they paid for the place in 2001. They sold the home for almost $4 million, it never cost them that much to live there. So, one family for $712,500 and now each family is $2.5 million, more than three times the cost of the original family, for only one residence.


Mat Wahlstrom January 13, 2022 at 12:23 pm

Thank you, Geoff. And this again goes back to how much of that over $3 million increase in valuation is due to upzoning, not improvements.


Vern January 12, 2022 at 12:31 pm

Seems there was a single family home at 4561 Niagara Ave that recently sold for something like $1.7M. The home was torn down and replaced with 4 units, one of which may have sold recently (11/21) for $2.6M.


Mat Wahlstrom January 12, 2022 at 12:42 pm

Thanks, Vern. That’s exactly what I was saying — not an intentionally obtuse misrepresentation of what I said.


Geoff Page January 12, 2022 at 1:20 pm

That one may not be the best example, Vern. It looks like that very old house was sitting on four lots. The view from there is wonderful. You could say that whoever was sitting on all that unused land was perhaps being selfish, although I’m sure unintentionally. By removing the old home, it made it possible to build on those lots.

But, but, three of these look like narrow lots. There was a requirement years ago by the city that adjacent 25-foot lots, owned by the same person, had to be merged. The city’s lack of enforcement on this is, as usual, abysmal.


Vern January 12, 2022 at 1:37 pm

Geoff, you’re probably right. It seems the same thing is occurring one street over on Newport Ave (4551 +/-).
Agreed, the view is nice, but one thing possibly not considered is the ultimate completion of Terminal 1, the new flight paths and increased # of departures (one every 40 seconds at 1400′ – 2000′ ASL for @ 18 hours every day). $2.6M – a nice view but with 18 hours of relentless din and particulate. Might be a bit rough for some (or many).


Geoff Page January 12, 2022 at 11:30 am

Absolutely excellent reply, Mat! I loved that first paragraph.


Lisa Mortensen January 12, 2022 at 12:45 pm

Supply and demand mantra doesn’t apply here, Trevor. If you have for-profit developers, the dream of affordability will go down, but prices will continue to rise.
SB 9 & 10 are meal tickets for developers to build and donate heavily to their politicians in thanks. Mission Valley and Hillcrest are the perfect examples. All the units added, and affordability is at an all-time low.
What’s wrong with variety? Variety is the spice of life. Downtown should stay downtown and let the community planning groups decide the long-range planning goals of individual communities. We, as advocates for our communities have never said no growth but smart growth. We have truly affordable complexes in our community and their development was not opposed.
What we are saying is we want respectful architecture and not uncontrolled growth. Most importantly, why can’t we have a seat at the table? As longtime property owners, don’t we have a say? We pay taxes and the for-profit developers get the profits.


Mat Wahlstrom January 12, 2022 at 7:30 pm

Agreed. The issue isn’t supply and demand — it’s speculation. What can or can’t be done and the ratiocination of profits to be made from doing anything or nothing.

They’re not pro-housing for people, but for investments.


Trevor van Leeuwen January 13, 2022 at 11:23 am

Blackstone group’s subsidiary invitation homes have said one of the biggest risks to their portfolio is cities simply building more homes in SEC filings.

To stop RE speculators, we can listen to what they are literally saying their profit model is and prevent it.




Trevor van Leeuwen January 13, 2022 at 11:28 am

Supply and demand do apply: If we have 5 households, we need 5 homes.

California has the fewest homes per household of any state, and 49th per population. https://www.politifact.com/factchecks/2018/mar/21/gavin-newsom/true-california-ranks-49th-capita-housing-supply/

We can continue to sprawl into forests and chaparral with the wildfire risk associated, or we can build infill.


Lisa Mortensen January 13, 2022 at 5:26 am



Lisa Mortensen January 13, 2022 at 12:16 pm

I said ‘Absolutely!’ in response to Matt’s comments, not Trevor’s.

Trevor why is it either forests or infill that you are talking about? Why not re-imagine existing buildings? This would lead to vacant office buildings and hotels being converted to attached units at a fraction of new construction costs. If you truly want affordable units, this would be a strong program to that end.


sealintheselkirks January 13, 2022 at 12:47 pm

This fits quite well in this thread as it could be applied to San Diego politicians and land barons. Is making more money by making more people houseless worth the wealth they accrue? Of course it is…just as it is for the tobacco companies and oil companies and asbestos companies and Wall St and bankers and…my the list grows exponentially, doesn’t it?

Why Do We Let Psychopaths In Suits Get Away With Murder?
by Thom Hartmann



Mat Wahlstrom January 13, 2022 at 2:47 pm

As timely as it is relevant. Appreciate the share.


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