Should Palo Alto really aspire to be more like a Chinese factory city? | A Pragmatist's Take | Douglas Moran | Palo Alto Online |

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By Douglas Moran

Should Palo Alto really aspire to be more like a Chinese factory city?

Uploaded: Jun 22, 2014

The concept of "community" is much diminished in "Smart Growth". The Comprehensive Plan Advisory Committee (CPAC) process in the 1990s was conducted under the banner of the "New Urbanism", a large component of which was "community-building"?that urban design should support a strong social fabric rather than impede it. In the transition from "New Urbanism" to "Smart Growth", this was discarded: Its Principles regard a community as a physical place (#5 "Foster Distinctive, Attractive Communities with a Strong Sense of Place").(foot#1)

"Smart Growth" advocates will say that they believe in the importance of the social fabric, and I believe that they truly believe that they do. But humans are proficient at holding contradictory beliefs even when that has been pointed out. When you raise concerns about community and quality-of-life, they get dismissed or overridden by statements of the form "Companies want to bring thousands of jobs here, and we need to provide housing for all those employees." For example, at the City's public outreach meeting entitled "Growth Management" (June 10, second of three meetings), the question of how much job-growth was appropriate/desirable was off-the-table. That number was presented as a given (handed down from ABAG), thereby effectively limiting residents to how they wanted their quality-of-life diminished ("We're going to amputate a limb. Should it be an arm or leg? Left or right?").

"Workforce Housing"
The notion that the City's development policy should be in service of employers' desires (and at the expense of residents) recently took a turn for the even-worse: It has been increasingly embedded in the terminology used. Recognize that terminology can dramatically shape how one thinks about an issue. In urban planning, the term "Workforce Housing" is increasingly replacing "Affordable Housing" and "Below-Market-Rate (BMR) Housing". The typical definition is in terms of the "Area Median Income" (AMI), where "area" is typically defined as the county, because that makes it simpler for the bureaucrats and politicians. But housing markets are rarely homogenous across a county, for example, the City of Santa Monica specifies households making 180% of the Area Median Income as needing help to afford housing. (foot#2)

For me, the term "Workforce Housing" creates a psychological separation: They are not members of the community, but servants (part of the infrastructure that supports the full-fledged members of the community). The terminology is only catching up with the attitude shift by the City and regional governments. For example, the Comprehensive Plan developed during the 1990s specified that Below-Market-Rate (BMR) units in housing developments should not be inferior to the Market-Rate units and should be intermixed with the other units in the complex (partly to avoid any stigma attaching to those residents). Because this reduces the profit potential for the Market-Rate units, developers understandably attempt to minimize compliance (Note: discussion of practicality of this policy is off-topic here). For example, at the 800 High Street complex, the developer wanted to have the BMR units in inferior locations and of lesser quality. However, the watershed moment came with Alma Village. Council approved having the BMR units be both substantially inferior and segregated. The BMR units were located above the commercial space along Alma and were effectively part of a sound-wall (traffic and train noise) for the Market-Rate single-family dwellings behind. Residents (including me) testified against this configuration. Affordable housing advocates, including Palo Alto Housing Corporation which was designated to manage the BMR units, testified in favor of this configuration.

One of the complaints about about the densification resulting from the rate of growth is that it is forcing more and more people into smaller and smaller "boxes". That "affordable" housing--the price people pay--is being achieved by sacrificing the value of what they get. I hadn't realized how far this had gone until I took the "City of Palo Alto Housing Questionnaire" this spring (closed, but results not yet available; Imperfect Copy of Questionnaire). Several aspects of this questionnaire were troubling, but what hit me hardest was that one of the options for
"14. Increasing a variety of housing types and costs can provide options for working families. Which alternative housing types should the City of Palo Alto support?"
"Micro-Apartments (Compact, one-room living units, generally with 150-300 square feet of space)"
Do they really regard this as an option for a family? (For visualization, 300 sq. ft. is less than most two-car garages) These micro-apartments are also mentioned as an option in the Staff Report on the update of the Housing Element of the Comprehensive Plan. (foot#2)

The explanation one hears for this trend is that the magnitude of job growth leaves few options, ignoring that the fundamental option of better managing job growth has been taken off the table.

The cynic would also note that the Buena Vista Mobile Home Park is prime example of existing "workforce housing" and has been on the radar of the City and Affordable Housing advocates for over 15 years, and yet it is moving towards being closed with no/few good options for the current residents.

Practicalities of living close to work
For years, advocates said that Palo Alto needs to incentivize high-density for rental housing so that people can easily move when they change jobs. Typically, these advocates are unaware that a majority of housing units in Palo Alto are rentals. There are more apartment buildings than most people realize, and there are a lot of single-family houses that are rentals. Among cities in Santa Clara County, Palo Alto consistently rank at or near the top in percentage of rentals. Consequently, these advocates don't consider local experience with rentals, much less use it as guidance for their policy advocacy.

More strikingly, these advocates regard employees as isolated individuals, as if there are no spouses, children? I have asked "What if you and your spouse work in very different locations, how do both of you live close to work?" No credible answer. Similarly, what if your work moves, for example, from Palo Alto to Campbell, but your spouse continues in the same location? Then there are those inconvenient school-aged children. If your job moves during the school year, do you move your home to be close to the job and drive your children back and forth to their current school? The very purpose of dogma is to ignore these sort of practical, everyday details.

When I ask these advocates why they believe that additional housing would be occupied by people wanting to live very close to where they work, I don't get a satisfactory explanation. Many regard closeness to work as the predominant factor in choosing housing. When asked about Palo Alto schools as a factor, the usual answer is the belief is that that development's residents wouldn't have children (a claim that has been repeatedly refuted, but continues to be served up). I then ask about the premium that people pay to be within the PAUSD, and why it would be seemingly irrelevant to such people. (foot#3) No answer. I then point out that roughly 70-80% of employees living in Palo Alto work outside Palo Alto.(foot#4) Don't bother to ask how it makes sense to create 2-4 out-bound commutes to eliminate one in-bound commute--the answer will likely be some form of "This time will be different." If you ask "Why?", the typical answer from the advocates is that they hope that people will do what those advocates regard as "the right thing". The obvious follow-up question is "What if things continue in the same pattern?" There the responses cover a wide range, from some not having thought about the next step to some suggesting that unspecified government action would be appropriate.(foot#5)

Advocates of live-close-to-work can be largely silent when that is inconvenient to an influential employer or developer. For example, during the consideration of the Stanford Hospital Expansion, Stanford was opposed to providing housing nearby, and thus it became widely accepted that many of the new employees would be living in the East Bay and that the focus needed to be on how to mitigate those commutes (for example, buses).

Job mobility
The national average for people staying with an employer is less than 5 years. This is a flawed proxy for considering the practicality of encouraging employees to live close to work, but I don't know of a practical alternative. This statistic doesn't capture cases where your job within the company moved a substantial distance (I have had multiple friends who bought a house within easy walking distance of work, only to have their office shortly thereafter relocated to 15+ miles away). Neither does it deal with the cases where your employer has changed, but your new job is in essentially the same location (for example, same office park).

Remember that "Nobody is average." There are still many people who stay with the same employer for 20-30 years. And on the other end, there are also many whose jobs tend to be short-lived. Because that mix is likely different here, the national average provides only rough guidance.

The notion that your residence can easily follow your job implicitly puts negligible value on neighborhood and similar friendships. This is dangerous and unhealthy. For many of us in this area, too much of our lives already revolve around work. If/when you get fired, these relationships become tenuous, if not completely severed. In the absence of alternate support networks, the unemployed can slip into a variety of physical and mental health problems. Changing jobs can also decimate your support network.

"Company Town"
The analogy to a "Company Town (Wikipedia)" seems to have entered the local discussion as the result of an interesting article " Facebook's Company Town" (Wall Street Journal, 3 October 2013). Company towns can have some very real positives, such as bootstrapping a community that might not otherwise have happened. This is accompanied by some minor negatives that are usually acceptable tradeoffs. For example, well-intentioned paternalism that occasionally goes astray.

Despite the WSJ article mentioning the potential dark side of company towns, I haven't heard this factor into current local discussion of the analogy. History demonstrates that company towns further tilt power in favor of employers in a manner that can be easily abused. The most infamous examples of this come from the coal-mining areas of Appalachia: Companies used their near-total control of isolated local economies to effectively create debt slavery (Wikipedia). (foot#6)(foot#7) Even when there is no apparent intent to be abusive, the situation creates problems. I grew up in the northern reaches of Appalachia (Southern Tier of New York State (Wikipedia)), and the area was studded with former company towns centered on factories. Well before I was born, the company in my town had transitioned out of owning most of the housing, but the impacts were still prominent parts of family histories that I heard from friends' grandparents (and even some parents). For example, when the employee was disabled or died (industrial accident, illness...), the family had to move out of company housing (after a modest interval). The family not only lost a parent, its income and its support network of friends and neighbors, but because they were unlikely to find housing near town, they now had diminished prospects for employment. It also impacted the children directly: Moving out of town also meant moving out of the corresponding school district. The rural areas around the town were predominantly served by one-room schoolhouses, so families would split up, "boarding" the younger children with relatives or friends in town.

While company towns are typically isolated communities, Pullman (Wikipedia) on the South Side of Chicago is a classic example of the abuses. While the conditions of here and now are very different from these historical examples, history has repeatedly proven to be immensely useful in fostering an appreciation for the potential complexities and questions, and in providing useful analogies. "The more things change, the more they stay the same."

Perks, Golden Handcuffs and plain Handcuffs
As companies offer more and more perks to their employees, they risk becoming virtual enclaves. If/when housing becomes associated with companies, they start taking on the character of physical enclaves.

A certain level of perks are harmless. For example, the company cafeteria benefits the company and employees both with efficiency (shorter lunch breaks) and building community within the company. However, when the company provides all meals, that dramatically reduces the employees' need to go grocery shopping which has traditionally been a major contact point for members of the community. And if many of the employees in an area are eating many of their meals at work, that hollows out the customer base for the grocery stores.

If the city has pursued high-density development on the basis that that housing density will support easily accessible retail, but the effective density--from the merchant's view--is far less (from being hollowed out), the merchant will need to target a larger geographic area in order to get the necessary number of customers, and this means that the assumptions about the accessibility of retail are no longer true.

Don't dismiss the potential problem of hollowing-out because the Bay Area is so big. The typical misconception is that it doesn't matter if there of pockets of such situations because residents can travel a bit further to get what they need. Urban design that presumes that people will use what is nearby also contains a component that discourages such travel (whether by public transit or car).

What start out as perks can turn into "golden handcuffs"--benefits with enough value that the employee is reluctant to lose them by leaving. And sometimes what is offered, and intended, as a perk can be a necessity for some employees. For example, company-provided childcare for employees for whom other childcare options cost more than the effective income from the job.

Don't jump and blame employers for such situations. Typically they are responding to deficiencies in the overall community, that is, they are trying to mitigate the impacts on their employees. The "Google buses" (and those of other employers) are a response to the deficiencies in public transit.

Planning for further development should acknowledge and accommodate what employers are already doing and what can be extrapolated from current practices.

For those interested in the complexity of this problem, the history of public education in the US provides many illustrations and useful analogies. (foot#8)
Note: that history is off-topic here (too large a digression), but relevant analogies are appropriate (they can shorten or simplify the point being made).

About those Chinese factory cities in the title
China is creating manufacturing jobs in cities well beyond the available housing and other infrastructure. Some companies create their own cities-within-a-city--their own versions of the "company town"--with workers housed in dormitories close to the factories, allowing them to be easily marshaled on short notice for additional shifts.

Other workers are forced into badly overcrowded housing because they don't have legal permission to live in the city because their jobs don't officially exist. I am not aware of what the motivation in China is to deliberately undercount jobs. However, in Palo Alto, it gives commercial developers excess profits by allowing them to avoid paying for the true impacts of their projects. For example, in computing a project's expected number of employees, the City still uses an average of 250 sq. ft. per employee when experience is that 100 sq. ft. is more realistic for many of the current projects. This change was highlighted in 2008 during Facebook's move to Stanford Research Park (that density was roughly 90 sq. ft. per employee).

One of the components of Chinese industrial policy is that many of the workers are coming from rural areas. For the illegal workers and the ones in dormitories, the factory cities provide no facilities for their children, they get left behind in the villages to be raised by their grandparents.

We should pay attention to cautionary examples such as this to keep well away from the brink, or tipping-point, of things going badly wrong.

Related blog entries (past and planned)
1.(Introduction) Stupid Growth: So-called "Smart Growth" is a cancer on the community
2.The Law of Supply and XXXXXX, and other bad economics
3.Shills and Charlatans of Smart Growth

1.Public Transit Follies

---- Footnotes ----
1. In the "New Urbanism", "walkability" was first and foremost an opportunity for social interaction. Housing designed encouraged facing the street, both to make the sidewalks more "welcoming" to pedestrians and to increase interactions between people at home and passersby (reminiscent of the old front porch or stoop). "Smart Growth" abandoned this, treating walkability as a means of CO2 reduction.
Similarly, "neighborhood-serving retail" was seen as key locations for members of the community to encounter each other informally. In southern Palo Alto, it has long been the observation that we do so much of our shopping outside of Palo Alto that we only rarely encounter neighbors in stores, and those stores are typically in Mountain View. "Smart Growth" as it is practiced here rejects this: Any neighborhood-serving retail site large enough to foster such interactions becomes a prime target for conversion to high-density housing. Such housing development may contain a minor/trivial amount of retail so that advocates can claim that it is (technically) "mixed-use".
2. Staff report: Housing Element Update (6/2/2014): Attachment H: Workforce Housing
Mentions of this term is only starting to appear in local news articles. Example: "workforce housing": Palo Alto treads cautiously on housing policies: City Council moves ahead with Housing Element that includes no rezoning proposals (June 6, 2014):
3. The PAUSD premium on housing prices: I don't have the current figure. It is periodically computed and publicized by various people and groups within the real estate industry.
4. Out-bound commuters: There have been multiple analyses over the past 15 years that produced found that 19-30% of employed people living in Palo Alto work in Palo Alto. It is hard/impossible to get details on how this was computed because the person reporting the statistics is typically several degrees removed from the person who did the calculation. I speculate that the range is due to changes over time, variations in the data available, and some differences in how "employed" is defined. For example, home-based self-employed people present a data-analysis problem. Consider the consultant who works at a company under contract: Although his home address is his official workplace, he may actually be commuting to that company's workplace, just the same as that company's official employees. So how does one tabulate an uncertain commute to an unknown company?
5. "unspecified government action": Since the broader conversation involved financial inducements--incentives and penalties--my sense was that this was the sort of thing they would advocate if/when it got down to details.
6. The descriptions and accounts of these company towns tends to be highly partisan (both sides). Much of the public awareness came via folk songs, most famously "Sixteen Tons (Wikipedia)" which became a hit in 1955 (lyrics) with many different arrangements and performances by various artists (multiple available via YouTube).
7. Migrant labor camps have a similar political/economic dynamic, but because their residents are transient, they aren't regarded as "towns", and hence not "company towns", even though they have many of the characteristics of an official village or hamlet.
8. Thumbnail: In the pre-Civil War South, there was very poor public education because the oligarchy wouldn't support it--they provided private education for their sons (rarely daughters), often sending them off to England or the North. After Brown v. Board of Education (Wikipedia), the separate-and-highly-unequal school situation was maintained by a system of private schools (include religion-linked) that were supported by a de facto tax on the white population. During the mass immigrations, similar situations arose with the opposite solution. In response to the cities failing to provide adequate public education for the immigrants, the poor taxed themselves to create an alternative school system: Systems of religion-linked schools were created and subsidized by contributions from the congregations. The most famous of these were Catholic schools, because they were the most numerous (and had the best PR), but other religions had similar arrangements. A significant part of the current Charter School movement is the assessment of those parents that mainstream public schools are not adequately serving their children.

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