Lusvardi worked for 20 years for the Metro Water District
of So. Cal. and lives in Pasadena. The views expressed are
his own. . Wayne receives e-mail at email@example.com
Pea Shell Game
Inclusionary housing laws...
[Wayne Lusvardi] 7/6/05
“Shell game. A form of the game thimblerig in which spectators
bet on the final location of an object hidden under one of three
walnut shells or cups that have been shuffled.” Encarta
has been defined as the art of promising something for nothing
and of concealing who really bears the burden of taxation.
This was demonstrated recently when Bill Bogaard, the mayor
of the City of Pasadena, California was quoted as praising
housing advocates for pushing for an amendment to the city’s
Inclusionary Housing Ordinance that would apply to small housing
projects of 5 to 9 units as well as many of the newer and pending
large-scale apartment and condominium projects in the city (“Following
Our Lead – Pasadena aims to strengthen affordable housing
rules,” Pasadena Weekly, June 23, 2005).
No politician wants to acknowledge that inclusionary housing
programs are pea shell games which claim to transfer property
from “greedy” developers to less materially advantaged
households, but in reality developers just pass such excise
taxes on to landowners in the form of price discounts when
The history of inclusionary housing programs in California
goes back into the 1980’s when the state legislature prohibited
exclusionary zoning and mandated that communities have to bear
their “fair share” of affordable housing. Federal
Appeals Court cases have upheld the Constitutionality of such
ordinances. The ability of such ordinances to withstand a legal
challenge is a word game intended to circumvent the takings
clause of the U.S. Constitution.
Pasadena’s inclusionary housing ordinance requires that
15% of new housing units be constructed for lower income households;
or that developers pay an in-lieu fee to the city’s affordable
housing fund which, in turn, can be used to purchase or create
more affordable housing. Pasadena has reportedly collected
$9,519,139 in in-lieu housing fees from developers and 341
units have been
dedicated for low-to-moderate income housing units. There are
2,278 new housing units being built in the city.
Housing advocates have recently pressured elected city officials
to produce more affordable housing units given that the fees
collected from developers will only produce 19 units given
the median price of a condo in the city is $500,000. Pasadena
Councilman Paul Little is quoted as saying that collecting
in-lieu fees has “given developers an incentive not to build affordable
housing.” In response, the City of Pasadena is reported
to be looking favorably at expanding its inclusionary housing
ordinance to smaller developments in order to produce more
affordable housing units.
Marvin Schachter, reportedly an affordable housing activist in
Pasadena, praised the proposed changes and wants the amendments
even stronger to keep up with the booming housing market. No
mention is made in the local newspapers that Schachter is a non-profit
housing developer who may benefit from such programs.
However, the reported housing data does not support the claims
of the affordable housing advocates. The dedicated affordable
housing units already built in Pasadena (341 units) reflects
95% of the 360 total potential affordable units and amounts to
15.8% of the total units. Thus, there would be no need to expand
the inclusionary housing program to smaller units as the housing
That the data doesn’t support their claims won’t
make much difference to such groups as ACORN (Association of
Community Organizations for Reform Now). ACORN typically masses
200 or more activists at city council meetings with TV news cameras
rolling to put pressure on elected officials to capitulate to
their demands. Many of these activists aren’t even from
Pasadena, so the affected small landowners are out-numbered by
non-voters who get all the media attention but don’t
have to pay a lick of taxes. But local politicians would rather
the risk of alienating a small minority of their own voting
constituency rather than the risk of negative media coverage.
technique is a highly effective tool of symbolic politics.
It is taxation with representation, but by mass media mob politics.
And the local newspaper media usually ignores the affected
landowners in such local political issues and plays up the
housing advocates as champions for the poor.
Like many cities in California, Pasadena has changed its General
Land Use Plan to “dump” all lower income housing
into the commercial core of the city so as to “exclude” affordable
housing from upscale single family neighborhoods. Thus, the city
has been dubbed with the nickname “Pasa-donuts” for
the hole of commercial development and low income housing at
its geographical core surrounded by a ring of single family
Pasadena has unjustly levied its inclusionary housing fees mainly
on landowners of downtown commercial and multi-family residential
zoned sites instead of spreading the tax evenly across all taxpayers.
Even a study commissioned by the city and conducted by Keyser-Marston
economic consultants reported that a 15% set aside of affordable
units in new apartment and condo projects would result in about
a 30% or more decrease in the value of the land on which such
projects are built. For example, on one small one-third acre
lot on which 20 apartment units could be built, the city's inclusionary
housing ordinance coupled with the city's new $20,000 per unit
parks fee could equate to a $1 million hit to its land value.
There is no housing affordability crisis in Pasadena if lack
of affordability is defined as some people being denied new
luxury apartments or condo units in its upscale “urban village.” As
a society we don’t say that people are being excluded
from buying expensive automobiles or other luxury goods, so
we say this with high-end market housing? It is also strange
that a city such as Pasadena would claim to have an affordable
housing crisis when the 2000 U.S. Census data indicates about
one-third of its residents are perhaps low income illegal migrants
who somehow have found affordable housing in the city. CRO
opinion piece first appeared at Chronwatch
copyright 2004 Wayne