Upzoning: The Developers’ Long Con of Californians

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.