Open Letter to Bay Area Billionaires Concerned About Astronomical Housing Prices For Workers

“I watched a snail crawl along the edge of a straight razor. That’s my dream; that’s my nightmare. Crawling, slithering, along the edge of a straight razor. And surviving.” – Colonel Kurtz

Any student of Francis Ford Coppola’s Apocalypse Now will recognize this quote, one of the last of the soon-to-be-bludgeoned-to-death Colonel Kurtz.

There is some debate as to its meaning.  But in thinking about Localism and how to effectively address that phenomenon, there are some parallels in Col. Kurtz’s story.

For me, the razor represents the United States military power and its application in Vietnam.
The snail is the Viet Cong, who are able to maintain slow but certain movement and progress, without harm, directly over the deadly slicing power of the razor’s edge. Col. Kurtz recognizes the “genius” of his enemy in being able to accomplish this, and so admires the military tactics of the Viet Cong that he emulates them himself, with great success. That is his dream. He is operating in an effective manner, using the tools and tactics of the local environs, and rejecting the formal policies and operational playbook of those in charge in Washington.

His nightmare concerns his son, that his son will not understand everything that has happened under his vision and rule in Vietnam. 
But for this analogy, the “dream” part of his quote is the more relevant.

Meanwhile, 8,000 miles away and 50 years later, here in California, we have a similar dynamic at play.

The razor is Sacramento, with all its wealth and power, watching its position as an economic and political force diminish due to a stubborn housing crisis.
In April of 2021, California lost a seat in the House based on the results of a population census. In December of 2021, Elon Musk famously moved the Tesla headquarters from California to Texas, citing the cost of living as a key contributing factor.
I’ve personally seen co-workers move to Colorado and Texas because of the high housing costs here in California.

Who is the snail?

The snail is the Stewards of Existing Conditions.

Who, or what, are those?

Those are the millions of older Californians, homeowners whose tax bills are kept at bay by Prop 13.
They are the lucky beneficiaries of ever-increasing property values, with the powerful ability to effectively shut down new housing development in their local environments. (“We believe in increasing housing in this state, just not here.”)
They have the ability, as an electorate, to successfully vote in candidates who have a demonstrated record of (and commitment to) keeping the status quo.
They tend to be baby boomers. If you are a millennial trying to live in a given community, you’re in a catch-22: your pro-housing vote does not count, as you do not live there yet. None of this is new news.

If any housing advocate wants to make progress against the Stewards of Existing Conditions in California, they should study the methods of the snail very closely. And embrace conspiracy.

On August 18, 2016, the online tabloid Gawker announced it had ceased operations after 14 years. No longer a going concern, the company had declared bankruptcy a few months earlier. What happened?

In 2015, the site had a monthly visitor rate of over 22 million. The business was highly profitable. Its founder and leader, Nick Denton, was an astute and business-savvy media baron. Why the sudden demise?

Gawker was no saint. The company hawked salacious and life-destroying canards about the personal lives of celebrities, specifically promoting itself as “the source for daily Manhattan media news and gossip.” It delighted the many but infuriated the few who found themselves (or their friends) seized, branded, and held aloft under a blinding light for the world to see and ridicule. The hubris of this organization — which operated at the fringes of the cover granted it by the freedom of the press — was eventually its downfall.

In 2007, Gawker published a hit piece on Peter Thiel, outing him as gay. But it was one of the notes in the comment section beneath the article, written by Denton himself, that really provoked the ire of Mr. Thiel: “Peter Thiel is so gay.”

Mr. Thiel wanted to destroy Gawker, not just on his own behalf, but on behalf of friends and colleagues who had also been smeared by Denton and his crew of driven and pitiless writers. Thiel wanted to be recognized for being a savvy and successful investor, not known and defined by his sexual orientation.

At a dinner meeting, knowing Mr. Thiel’s animosity toward Gawker and Denton, a pitchman — the secretive “Mr. A” — made Mr. Thiel an offer: give him $15 million and three years, and he would take down Gawker. The offer was accepted, and the conspiracy was born. They explored every option. Destroy the business? Buy the business? Create a competitor? Destroy the reputations of Gawker’s writers? In the end, the strategy they pursued was a legal one.

In 2012, Hulk Hogan found himself in Gawker’s scalding embrace. In 2006, a sex tape depicting the depressed and unknowing Mr. Hogan and his friend’s wife was made (the secret video created by that same friend, a radio DJ known as Bubba the Love Sponge). Information wants to be free, so when Gawker found itself in possession of the footage in 2012, of course it published it. Specifically, a spicy two-minute excerpt from the 30-minute video, burned on a DVD. Hulk Hogan responded with a lawsuit. In Bollea vs. Gawker, the aging wrestler sued for invasion of privacy, intentional infliction of emotional distress, and infringement of personality rights. (Hulk Hogan was not his birthname — shocker! — but rather, Terry Eugene Bollea).

Gawker didn’t take the lawsuit seriously, but they should have. For out of nowhere, Hulk Hogan had mounted an extraordinarily expensive and well-supported legal case. (Who was funding this?) Moreover, the case was to be tried in Pinellas County, Florida, not liberal, elite Manhattan, where Gawker was based and where residents likely looked down on the WWF and held lofty ideals regarding the freedom of the press. Manhattan-based jurors believed and behaved quite differently from ones in Pinellas County, and that was something Gawker realized too late.

Bollea was seeking $100 million in damages — enough to bankrupt Gawker. “Mr. A” and his team had been looking for exactly this kind of case; by bankrolling Bollea’s legal defense, they might finally destroy Denton and his team. The funding was secret, and Bollea now had millions of dollars in anonymous legal support.

His legal team spared no expense. Fortuitously, they prepared by holding mock trials, examining which type of person — gender, age, income level, political views — would be most sympathetic to Bollea’s case. They found that middle-aged, overweight Pinellas County women were particularly disposed to rage toward perpetrators who non-consensually filmed and distributed images of nude bodies.

Thus informed, Bollea’s team stacked the jury with friendlies. And Hulk Hogan was a performer. He knew how to work a room — or jury box. The Gawker leadership and legal team were completely outmaneuvered.

In March of 2016, the jury found Gawker liable and awarded Hogan a total of $140 million. In June, it declared bankruptcy.

Peter Thiel is a chess player.  A favorite quote of his is “study the endgame,” a strategy that can be employed in the context of the housing crisis as well.”

As of 2021, the City of Sausalito is deficit spending. The ten-year CAGR from 2010–2021, even if not adjusting for inflation, is negative. Along with spending, they also have a revenue problem. They can’t afford an expensive housing lawsuit in the Superior Court of Southern Marin. And they have been sued before and settled in favor of a homeowner and developer.

There are many municipalities like Sausalito in California — wealthy, mostly white communities that oppose multi-unit housing. There are many in Marin County, and they are not difficult to identify. Look to median income, race, and the banning of gas-powered leaf-blowers (not because they are producing greenhouse gases, but because they are loud and noxious to the ears of the affluent citizenry). Look to towns that pride themselves on “neighborhood character and charm,” and you’ll likely find municipalities that have had no new multi-unit housing development in 20 years.

What should our “build, baby, build!” Bay Area billionaires be looking for?

Study local Planning Commission agendas in the aforementioned municipalities for design reviews of expansive multi-unit proposed projects. Pick the most ambitious projects, and approach the developer.. They need to understand that they can move through local design reviews and “community input” by embracing their legal rights. But that is a scary route to take, a place most developers don’t want to go. To develop a plan that is centered on suing the city they are trying to build in is an unusual strategy. They might need help and financial reassurance. And they should be thinking even bigger — more units, not fewer. That’s where our Col. Kurtzes come in. They can lead these developers to safe harbors.

In February of 2018, the California Renters Legal and Advocacy Fund and the law firm of Zacks, Freedman, and Patterson successfully won a lawsuit against the City of San Mateo. The City had illegally denied the approval of a ten-unit housing development on the rationale that “the structures, site plan, and landscaping are not in scale and are not harmonious with the character of the neighborhood.” A subjective denial rationale right out of central casting.

The developer won, and did so because of a savvy law firm leveraging some recent laws out of Sacramento, most specifically the Housing Accountability Act (HAA). This act maintains that municipalities cannot reject new multi-unit housing on any rationales other than objective ones, like adverse effects on public safety. A “specific, adverse impact” needs to be cited.

That law firm is not cheap. I’ve heard estimates of about $1 million for the cost of this particular defense. But after a victory happens once or twice, these municipalities learn. It is expensive for them to mount a legal defense, and the courtroom is an environment where they do not have as much power as in City Council chambers.  This is right out of Mr. A’s playbook, leveraging the court system in your conspiracy.

What might this mean for a large, multi-unit proposed development in Sausalito? Or any other town like it in California that has not produced any new multi-unit housing in the last 20 or 30 years?

Study the endgame. Central to this strategy is to start with the end in mind: winning your case in Marin Superior Court. The theater of operations is in the judicial system; the Planning Commission and City Council are just a means to get there. This is legally called “exhausting all administrative remedies,” and the Writ of Mandamus is the foundational strategy to make it work. This judicial remedy takes the form of a court order issued to any government, demanding they do what is obliged under the law. And in the case of a City Council decision, that decision cannot be in conflict with California state law. This is where our friends in Sacramento are trying to offer the sponsors of proposed multi-unit projects some powerful tools.

Unlike with a normal lawsuit, there is no jury, no discovery, no depositions, no witnesses, no experts, and no evidence permitted except what is already in the administrative record. It takes about six months to get to trial. Such a trial, which consists of a lawyer on each side presenting to a Superior Court judge, typically takes about half a day. The judge then renders a decision within 60 days — in total, a process of up to eight months. That is a very workable timeline for a developer.

In 2015, George Lucas famously attempted to build affordable housing in Marin County but was defeated by the Stewards of Existing Conditions. Try again, Mr. Lucas; you can pull it off this time!

So where does that leave us?

What is needed are about a dozen Col. Kurtzes in California, embedded within these counties. Were you, Bay Area Billionaire, to provide $15 million, in three years, these Col. Kurtzes would deliver real results — like “Mr. A.” Place them in these affluent, all-white communities. Have them study upcoming multi-unit housing headed to design review. Get to know the local players, developers and land use attorneys, and the Neighborhood Defenders and other anti-development coalitions. Attend Planning Commission and City Council meetings. Focus on the large-scale projects — the more ambitious, the better.

Then educate those sponsors of proposed projects on their legal rights. How they should start with the end in mind — a successfully applied Writ — that gives them the green light to advance their projects. With the money a developer saves in costly continuances, plan changes, and quid pro quo payoffs to local municipalities, they might be able to make the financials work on creating a multi-unit complex with a higher proportion of deeded-affordable units (vs. market-rate) than they could if they had secured their approved design with the local administrative review processes (e.g., design review).

Sacramento is the state’s capital; they likely don’t know or understand the discrete tactics and people that define the composition of a localist offensive. They likely can’t see that each one of these exclusive, affluent communities resisting multi-unit housing operates just a little differently. All flavors of localism and anti-development are specific and different. The personalities and political ambitions of those in power are different. The municipal code is likely a bit different. But they are all bullying and frighting the developers into submission.

What is needed are embedded agents who can understand and operate in these municipalities and learn the tactics of the Neighborhood Defenders and local coalitions, and successfully advance building permits for large-scale, multi-unit housing by helping developers behind the scenes.

Like a snail advancing along the edge of a razor.