[Cross-posted from the San Francisco Chronicle]

By Christopher Elmendorf

If anything defines the spirit of San Francisco, it’s the idea of doing things our own way. Immigrants, hippies, financiers, technologists, the LGBTQ community: Generation after generation, people with a vision for doing something differently and better, or simply for being different, have alighted here.

Doing things your own way can be great; our city has often been a haven for compassion and acceptance. But not always — and there’s nowhere we see that more profoundly than with land use.

San Francisco stands alone in making every permit for a land-use change subject to discretionary review. This means that anyone who doesn’t like a project can demand a hearing, and city officials may reject the project for any reason, regardless of applicable standards. And only San Francisco would be so bold as to post a self-study acknowledging its noncompliance with state permitting law — and then do nothing about it for the next two decades. And what other city would respond to a state mandate to plan for 10,000 new homes a year from 2023-2030 by submitting a plan for 5,000 homes a year by 2050?

The results indict the San Francisco way:

Our city has the second highest rents in the nation. Housing production has nearly ground to a halt. We have been so determined to “capture value” from new development — with impact fees, affordable housing requirements, costly building standards, labor mandates and more — that virtually all potential housing projects in the city have become economically infeasible to build. An investor who buys a dilapidated single-family home or warehouse in San Francisco can make a lot more money flipping it or selling it to Amazon than redeveloping the site for apartments. The city’s own studies point this out.

Thus, we have homeless encampments, innovative firms disembarking for cheaper markets, rents that only the fattest-salaried professionals can afford, gentrification of working-class neighborhoods, the displacement of the city’s African American population and an underclass of super-commuting service workers who make grueling daily drives from the Central Valley.

But this week marks a turning point.

On Monday, Gov. Gavin Newsom’s Department of Housing and Community Development released a devastating review of San Francisco’s draft “housing element” — a required 8-year plan through which cities show how they’ll accommodate their share of regionally needed housing. As a consequence, San Francisco will be subject to the state’s very first housing policy review, “aimed at identifying and removing barriers to approval and construction of new housing.”

What happens if San Francisco doesn’t get its act together?

For starters, the state will decertify the city’s housing element, which would cut off various streams of state funding, including for affordable housing. More dramatically, it would empower a “builder’s remedy” under state law that would allow developers of affordable and moderate-income housing to bypass city zoning codes. There are unresolved questions about how this will work in practice, but a San Francisco without an approved housing plan could be San Francisco in which new apartments are allowed to pop up helter-skelter throughout the city. Ultimately, courts could rewrite the city’s master plan for housing, exercising judicial authority conferred by a bill signed into law that City Attorney David Chiu authored when he served in the Legislature.

If city officials want to avoid this fate, a few things are now reasonably clear. First, San Francisco has just two years to come into compliance with state permitting law. This will require serious changes to standard operating procedures at the planning and building departments.

Second, any approved housing element will be an ongoing contract with the state, one with clear performance benchmarks and pre-specified consequences if the city comes up short.

Here’s an example: The city’s draft housing element tried to minimize the need for upzoning and regulatory reform by forecasting that the “pipeline” of already-proposed-but-not-fully-permitted-or-built projects will gush an unprecedented fountain of new homes — roughly doubling the city’s annual rate of housing production. This comes at a time when developers are abandoning projects left and right. Moreover, UC Berkeley data scientist David Broockman ran the numbers and found that San Francisco’s pipeline guesstimate vastly exceeds historical yields.

The state housing department’s review letter rightly asks what evidence supports the city’s magical projection. But more importantly, it told San Francisco to put a circuit breaker in its housing element, so that if the pipeline’s flow falls short of projections, the city will allow (for example) larger buildings to be developed citywide. A circuit breaker won’t work, however, if it merely triggers years of exhaustive environmental study followed by a vote on rezoning. San Francisco needs to decide now what the circuit breaker will do and allow it to operate on autopilot.

Third, the review letter hones in on the cumulative effect of San Francisco’s zoning, permitting, fees and all the other requirements the city heaps on new development. San Francisco won’t be able to get its housing element approved unless it realistically commits to making 80,000 new homes economically feasible to develop over the next eight years.

San Francisco can go its own way in deciding which regulatory requirements to roll back first. Should it be impact fees for public art or affordable housing mandates? But the bottom line must be a regulatory environment in which building new apartments and condos is more appealing than flipping existing single-family homes.

San Francisco will remain a special place. No one wants to change that. We will continue to be inventive, wacky, dreamy, different. But many more people will be able to share in it and call our city home. Thanks in advance, governor.

[Cross-posted from the San Francisco Chronicle]

By Christopher S. Elmendorf and Tim Duncheon

In October, outrage erupted when San Francisco’s Board of Supervisors voted down a proposal to build nearly 500 new homes — many affordable — on a downtown site at 469 Stevenson St. now being used for valet parking.

Of course, these same supervisors reject housing developments all the time. And yet this denial was especially brazen.

It came short on the heels of a major Court of Appeal decision upholding the state’s powerful Housing Accountability Act, which requires cities to approve housing projects if a reasonable person could deem the project compliant with applicable standards. Yet the supervisors who voted “no” didn’t even try to argue that the project was noncompliant.

Instead, they attempted to evade the HAA by using a different law, the California Environmental Quality Act.

Technically, the board voted to reverse the city planning commission’s certification of the project’s environmental impact report—a report that took over two years to complete and certify in the first place. Board members demanded additional environmental studies, even as they openly admitted that their objections to the project — too big, not enough affordable units, risk of gentrification — had nothing to do with the environment. Oakland and Sonoma have also used similar CEQA maneuvers to hold up housing projects, too, albeit to much less fanfare.

The immediate question this raises is whether cities will be allowed to keep using CEQA to launder denials of housing that state law protects. Can bad-faith cities keep getting away with demanding round after round of ever more elaborate environmental studies, until developers cry uncle and walk away?

But there’s also a deeper question. Why is a housing project that a city can’t legally deny — because it is protected by state law — required to undergo an exhaustive environmental study in the first place?

CEQA requires local governments to carefully consider environmental concerns whenever they make discretionary decisions. For example, it requires cities to do environmental studies when they change their zoning ordinances.

San Francisco’s city charter subjects all development projects to “discretionary review,” making them all potentially subject to CEQA, even if they conform to zoning. But that doesn’t mean every single project in San Francisco is put through the wringer of a multiyear environmental impact report. A report is required only if the development may have a “significant impact” on the environment.

But significant relative to what?

The developer of the Stevenson Street project had to complete an environmental impact report because San Francisco’s Planning Department concluded (after its own yearlong, 342-page study) that the building might have a significant local environmental impact in the form of shadows, wind, or (during construction) noise and air pollution, relative to leaving the site as a parking lot.

This is nuts.

After all, this was a proposal to put dense housing a block from a BART station, in a designated “priority development area” under the region’s climate plan. Few projects could be more environmentally friendly.

Also, critically, California law doesn’t allow the city to retain the site as a parking lot once a developer applies to build housing there.

There was no reason to require an environmental impact report for the Stevenson Street project unless it would have a significant larger impact than any other project of the size that state law authorizes and encourages developers to build on the site. If the impact of the 500-home building the developer proposed would be about the same as the impact of any other 500-home building on the site, then requiring the developer to prepare an environmental impact report was a colossal waste of time (two years and counting) and money. In the midst of a worsening housing crisis.

It doesn’t have to be like this.

Under the federal statute on which CEQA was modeled, environmental review is limited to effects that are proximately caused by a government agency’s discretionary decisions. Because California law prohibits San Francisco from downsizing the Stevenson Street project, the project’s size isn’t caused by the city’s permitting discretion. And so the Stevenson Street project wouldn’t require environmental analysis.

Or consider New York, where if a developer proposes a 10-story development on a site where the zoning currently allows a five-story building, the effect of the larger project is analyzed relative to a smaller one the zoning allows.

The bottom line is that there’s an urgent need for fresh thinking about how to fit CEQA and the HAA together in a sensible way. Ideally, California’s Legislature would do it, with clarifying amendments to one or both laws. But achieving meaningful CEQA reform through the Legislature has proven to be a Sisyphean task due to the powerful interest groups — first and foremost the building trades unions — that have mastered the art of using CEQA litigation to hold developers hostage until the unions secure a side-deal, thereby making housing harder to build — and more expensive when it is built.

Action on this issue will require a full-court press by other actors: the courts, the Attorney General, and most importantly Gov. Newsom, who is riding high after crushing the recall attempt.

The governor has tools at his disposal to get the job done. He oversees the Department of Housing and Community Development, which is tasked with enforcing the HAA and other state housing laws. He also appoints the directors of the Natural Resources Agency and the Office of Planning and Research, who in turn issue the official CEQA Guidelines, which spell out the nitty-gritty of environmental review.

The governor’s housing department has launched an investigation of the 469 Stevenson St. debacle. A few days before Thanksgiving, the department delivered a strongly worded letter to San Francisco. This letter suggested that bad faith demands for superfluous environmental studies may violate the HAA. This interpretation — which is plausible but not open-and-shut — would greatly curtail CEQA-laundered project denials. And it’s an interpretation that courts are more likely to accept now that the executive branch of state government endorses it.

The letter is great, but it’s just a start.

CEQA guidelines must be revisited, too. They don’t even mention the HAA. Worse, they arguably call for full environmental impact reports even when a city has limited discretion over a project.

Stevenson St. is a case in point.

This is no way to run the show in a world where, as the HAA puts it, the lack of abundant infill housing is “undermining [California’s] environmental and climate objectives” by causing “urban sprawl, excessive commuting, and air quality deterioration.”

The housing shortage gets worse with each passing month that is wasted on irrelevant environmental review.

One of Newsom’s first official acts after trouncing the recall was to sign a spate of new housing bills. Next in line for the governor’s signature should be an executive order directing a revision of the CEQA Guidelines in light of the HAA. There’s no time to waste.

Christopher S. Elmendorf is a professor of law at UC Davis. Tim Duncheon is a lawyer based in San Francisco. Portions of this commentary were published on the State and Local Government Law Blog.

[Cross-posted from the San Diego Union-Tribune]

By Christopher Elmendorf, Ricardo Flores and Jon Wizard

Last month, California’s Department of Housing and Community Development (HCD) notified San Diego that the city will be out of compliance with the state’s “housing element” law as of June 16 unless it commits to serious corrective actions before then. This is a make-or-break moment for San Diego and for the future of housing in the state.

Every eight years, California cities must adopt a state-approved plan, called a housing element, which shows how the city will accommodate its share of regionally needed housing. This law has been on the books for decades but was toothless until recently. Starting in 2017, the Legislature bulked up regional housing targets, added new sanctions, required cities to loosen zoning restrictions enough to achieve their share of the regional target, and insisted that housing plans undo historical patterns of segregation and exclusion.

What HCD decides in San Diego’s case will establish a landmark precedent for cities throughout the state — San Diego County is the first region to go through this process. It will also have immediate ramifications for San Diegans. Under state law, a city that lacks a compliant housing plan forfeits authority to deny or downsize affordable housing projects on the basis of the city’s zoning code and general plan. Thus, if San Diego falls out of compliance, it would have no choice but to approve large apartment and condo buildings even in neighborhoods zoned just for single-family homes.

Perhaps to shelter the city from this serious sanction, HCD has thus far treated San Diego with kid gloves. San Diego’s housing plan was due last September, but the plan the city adopted and sent to HCD had grave shortcomings. UCLA professor Paavo Monkkonen and his students found that 65 percent of the sites San Diego identified for low-income and multifamily housing are located in the poorest third of the city’s neighborhoods. San Diego has an unusually large percentage of its land area reserved exclusively for single-family homes, yet the city’s plan did not open any of these neighborhoods to multifamily housing. This flaunts the Legislature’s mandate to “affirmatively further fair housing.”

San Diego’s housing plan also presumed that every single parcel of land identified as having redevelopment potential will definitely be developed for new housing during the eight-year planning period. This parlor trick allowed the city to “show” that it can accommodate its share of regionally needed housing (108,000 new homes) without relaxing any land-use restrictions. Yet during any given eight-year period, many sites that have redevelopment potential will be tied up by long-term leases, held back by owners who don’t want to sell or stay unchanged for other reasons. San Diego’s “every parcel will be developed” assumption is like a university that needs a freshman class of 1,000 students deciding to admit only 1,000 applicants, even though the university knows (or could easily learn) from past experience that only about 1 in 3 admitted students will enroll. Just as the university would need to admit 3,000 applicants in order to enroll a class of 1,000, cities need to zone for several times their housing target in order to reach it. San Diego did not.

But instead of finding San Diego to be out of compliance last September, HCD deemed the city’s status quo plan “conditionally compliant” and gave the city six months to adopt amendments about fair housing and housing sites’ likelihood of development (the college admissions analogy). Disappointingly, the city has adopted no such amendments. Instead, in February, it quietly floated some inconsequential draft revisions that leave the status quo intact.

One of us leads a coalition of nonprofits that will soon launch a first-time home-buyer grant program for lower-income people of color. Our goal is to build modest for-sale homes — accessible to households earning no more than 80 percent of San Diego’s area median income — in high-wealth, low-crime neighborhoods. We’ve received several million dollars in charitable commitments, but the single greatest barrier we face is restrictive single-family zoning that makes it impossible to construct smaller, more affordable homes in most of the city.

It is a moral and economic imperative that San Diego open up exclusionary neighborhoods and revise its zoning code to allow a lot more multifamily housing. It’s also the law. HCD and Gov. Gavin Newsom must stand tall and enforce it. If they don’t, cities across the state will infer that compliance with the state’s “strengthened” housing law just requires embellishing the status quo with cheap talk about good intentions.

[Cross-posted from the California Planning & Development Report]

By Christopher Elmendorf

Housing advocates YIMBY Law and YIMBY Action sued the state of California last week, arguing the Department of Housing and Community Development misjudged the housing need of the San Francisco Bay Area. The suit raises important questions at the intersection of transportation, climate, and housing policy.

The activists’ complaint has merit. But, the Legislature, not the courts, should resolve it.

Here’s what’s at stake. Every eight years, each city in California must adopt a housing element to accommodate their share of regional housing need, including the need for multifamily housing. Regional housing need determinations (RHNDs) are the state’s principal lever for making cities zone for dense, relatively affordable housing.

Senate Bill 828, enacted in 2018, substantially revised and improved the process by which HCD determines regional need. Previously, the state had relied almost exclusively on forecasted household growth. The obvious problem with this approach is that household-growth trends are the byproduct of land-use policy. Restrictive zoning impedes population growth. And as housing prices rise, young adults shack up with roommates or move back with their parents rather than forming new households. Using the forecasted number of households to judge the adequacy of a region’s land-use plans gets things exactly backwards.

SB 828 tells HCD to top off the baseline, household-forecast RHND with adjustments for cost-burdened and overcrowded households. These adjustments, along with an updated adjustment for vacancy rates, are supposed to better align the supply of housing in California with “healthy housing markets” in other regions of the nation.

Taking its new charge to heart, HCD delivered housing targets for the Bay Area and Southern California that are 2-3 times larger than what these regions had to plan for in previous cycles, from 187,990 units to 441,175 units in the Bay Area and from less than a half-million to over 1.3 million in Southern California.

So why are housing activists suing instead of celebrating? Because HCD appears to have overlooked an older adjustment factor, one which the Legislature added with a landmark climate change bill back in 2008: jobs-housing imbalance.

Escalating home prices have displaced much of the Bay Area’s working class to the Central Valley. As a result, the Bay Area now has the dubious distinction of being a national leader in “supercommuters”—people for whom a one-way trip from home to workplace takes more than 90 minutes. Although there is no settled methodology for adjusting a region’s housing target on account of such imbalances, I and colleagues have explored a couple of different approaches, which suggest that making the jobs-housing adjustment would probably increase the Bay Area’s RHND by roughly 25%.

YIMBY Law’s legal argument looks iron-tight at first glance. The statute says that HCD “shall make determinations in writing” on each of the adjustment factors, Gov’t Code 65584.01(b)(2). As best I can tell, no jobs-housing determination was ever made. An agency’s failure to make an assessment the law requires is normally reversible error.

But this is not a normal case.

There is a strong argument from the structure of the statute that the courts have no jurisdiction to review HCD’s regional need determinations. The RHND is the linchpin of a very complicated, multi-stage process that unfolds on a tight timeline prescribed by statute. The timeline does not accommodate a protracted legal battle – especially when, not incidentally, millions of Californians are under-housed.

Consider what must get done. “At least 26 months” before the housing elements of cities in a region come due, HCD “shall meet and consult” with the region’s council of governments “regarding the assumptions and methodology to be used to determine the region's housing needs.” After reviewing the council’s data and arguments, “the department shall make determinations in writing” regarding methodology. Next, HCD applies the methodology and cranks out the RHND, which shall achieve “a feasible balance between jobs and housing . . . .”

The council of governments then has 30 days to raise objections, and HCD is given 45 days to resolve objections. The statute says nothing about appeals by any other person or entity, or appeals to any authority other than HCD.

One way or another, the RHND must be finalized quickly, because “at least 18 months prior” to the due date for housing elements, the region’s council of governments must distribute a “draft allocation” of the RHND to cities and counties. (The localities’ shares of the RHND are called their “RHNAs.”) A rapid-fire sequence then unfolds: cities may appeal the draft allocation to the council of governments, the council holds public hearings on appeals, the council adopts a final allocation following additional hearings, and HCD reviews the final allocation for consistency with the RHND, revising it if necessary. Each step has tight timeframe for completion, usually 45 or 60 days.(Meanwhile, many cities in Southern California have appealed to the Southern California Association of Governments and are threatening to sue the state, because of allocations they consider too high.)

The timeframes must be tight because cities need to know their RHNA well in advance of the date their housing element comes due. Cities that lack sufficient capacity under current zoning to accommodate their RHNA must include a site-specific rezoning plan in their housing element. Using an HCD-issued spreadsheet, they must identify which parcels will be rezoned and the densities that will be allowed following rezoning.

The Housing Accountability Act requires cities to approve projects on such sites if the project’s density is “consistent with the density specified in the housing element,” even if the project is “inconsistent with both the jurisdiction’s zoning ordinance and general plan land use designation.”

Because a city’s housing element controls its development in this and other ways, a city may not adopt a housing element without completing environmental reviews required by the California Environmental Quality Act. This takes time. Yet if it takes too much time—such that the city fails to adopt a housing element on schedule—the city is likely to be found out of compliance. And a city without a compliant housing element apparently forfeits its authority to use its zoning code or general plan as the basis for denying any project with at least 20% low-income or 100% moderate-income units. Hence the need for speed.

The Legislature recognized the need for speed when it exempted regional housing need determinations and allocations from CEQA.

If every city or interest group dissatisfied with an RHND or RHNA could litigate the question in court, it’s doubtful that any city in the housing-constrained and disputatious regions of our state would be able to adopt a housing element on time. HCD and the courts would then face enormous pressure to ad lib waivers of the statutory deadlines—waivers which the statute does not authorize.

A decade ago, the Court of Appeal wrestled with these issues in a case brought by the City of Irvine. Irvine challenged not the RHND, but the very large share of the target that had been allocated to the city. The Court of Appeal concluded that Legislature must have intended to preclude judicial review of RHNAs, because the “the length and intricacy of the process created to determine a municipality's RHNA allocation” did not leave space for plodding, deliberative judicial proceedings.

The same goes for challenges to the regional determination of need (RHND). However, it’s not clear that City of Irvine will control YIMBY Law’s case. Generally speaking, judicial review is available by default in California unless the Legislature has “clearly” withdrawn it, and the housing statutes are silent on judicial review of the RHND. Moreover, the decision in City of Irvine seems to rest in part on the court’s belief that large RHNAs have no material consequences for cities, owing to provision of state law that allows cities to set less ambitious “quantified objectives.” That line of thinking, shaky at the time, has been totally undermined by developments in the years since. To give just one example, Senate Bill 35 (2017) tied a city’s obligation to permit certain projects ministerially to the city’s progress toward its RHNA, not some lesser quantified objective.

So what’s to be done? YIMBY Law’s suit necessitates a one-time legislative fix. While the jobs-housing adjustment is pretty inconsequential for most California regions (because the region encompasses the “commute sheds” of its major cities), this factor cannot be ignored for the Bay Area. Making the adjustment would also bring the Bay Area’s RHND close to parity with Southern California’s. (Whereas Southern California’s RHND for the upcoming cycle is more than three times larger than its last one, the Bay Area’s new target is only about 2.3 times as large, notwithstanding the Bay Area’s higher housing prices and rents.)

It would be simple enough for the Legislature to pass a bill raising the Bay Area’s RHND by 25% (the midpoint of my estimates of the jobs-housing adjustment), while ratifying HCD’s determination in all other respects. If it wished, the Legislature could also extend Bay Area cities’ deadline for submitting housing elements by a few months, though this seems unnecessary. And, to avoid any confusion, the legislature could provide that the 25% jobs-housing increment shall be distributed pro-rata to all cities and income categories. This is an easy rule to apply, and it respects the intraregional allocation chosen by the council of governments. Each Bay Area city’s target for each type of housing (very-low income, low-income, moderate-income, and above-moderate income) would increase by exactly the same percentage.

It is odd to think of the Legislature as a pseudo-appellate body sitting in judgment of a state agency or department. But given the process California has chosen for determining and allocating regional housing need, this is as it must be, at least for now.

A few years hence, we’ll be able to look back and see how the RHND -> RHNA -> housing element process played out during this cycle, and debate procedural and substantive reforms for the next cycle. Perhaps some will argue that expedited judicial review in a designated court should be part of the process. In the meantime, responsibility for supervising HCD’s determinations of housing need belongs to the Legislature, not the courts. 

For a fully footnoted version of this piece, please click here.

[Cross-posted from SPUR]

By Chris Elmendorf and Darien Shanske

COVID-19 has been catastrophic for public transit. Plunging fare and tax revenues are forcing drastic cuts. San Francisco’s transit agency could lay off more than one in five workers. Los Angeles is cutting service by 20%. Washington, DC is proposing to shutter 16% of its stations and eliminate weekend rail service. State governments can’t provide stopgap funding because they’re constitutionally constrained to balance budgets (though there is some room for creativity). Congress ought to step up, but Mitch McConnell stands in the way.

We think there’s a solution right under our feet: Make private drivers pay market rates to use the public’s roads. Traditionally, transit customers have had to fork over hefty fares, while private drivers go for free. The result is congestion, endless circling for parking spaces, Ubers and Lyfts blocking bike lanes and bus stops, and, at this precarious fiscal moment, a huge pot of potential revenue waiting to be claimed.

The place to start is residential parking. San Francisco has 275,000 curb parking spaces, only 10% of which are metered. Another 80,000 are in restricted residential parking zones. For a trivial annual fee, residents park without limit in their zone. Meanwhile, garage parking in the city costs on the order of $200 to $500 a month. Street parking isn’t worth as much as garage parking, and the value of a curb space would vary a lot from one neighborhood to the next. But even if the average curb space in the city were worth only $100 per month, the city could be earning $300 million a year from the street parking it now gives away. That’s almost double the transit agency’s forecasted deficit next year.

Cities less dense and affluent than San Francisco probably couldn't generate as much revenue this way. But with a little creativity, they could use the future value of street parking to close present budget gaps. For example, they could sell market-rate parking passes that would be valid for several years, or issue annual permits while converting the future revenue stream into marketable securities. Similarly, if a city is concerned about introducing a new charge during the pandemic, it could commit to imposing the charge next year or later — but start borrowing against the revenue stream now.

How would a city that decides to charge market rates for residential parking figure out the price? UCLA professor Donald Shoup recommends a uniform-price auction. The city would determine the number of parking spaces on a block or in a zone, and then invite bids for annual permits to park in that area. Permits would be allocated to the top bidders at the lowest price that any of them offered. For example, if a block has 20 spaces, the top 20 bidders would each win a space, and they’d pay the amount of the 20th highest bid.  
Another pricing strategy is to adapt the “variable rate” model that San Francisco and other cities are already using for metered parking in commercial districts. In these districts, the metered rate adjusts gradually in response to demand, ensuring that there’s usually an open space (but no excess of open spaces) on each block. Street parking in residential neighborhoods could operate on the same principle, albeit with parking allocated through residential permits rather than meters. The city would set the initial price for residential permits in each zone based on a “guestimate” of their value, and then gradually adjust the price upward or downward every few months until the number of subscribed permits is equal to the number of curb parking spaces in the zone. 
Charging market rates to use the curb lane would yield all sorts of other benefits, too. Some residents would decide the costs of private car ownership are no longer worth it. They’d sell their cars, decongesting crowded streets and reducing greenhouse gas emissions. Car-sharing, bike-sharing and ride-sharing companies could bid for curb space, expanding services throughout the city. Visionaries who foresee non-parking uses of the curb should be invited to join the bidding, too. More parklets and street-side eateries would enliven the city scene.

An objection to more expensive street parking is its potential to hurt people with low incomes. But programs to price the curb lane could be fine-tuned with discounts for low-income residents and small businesses. The revenue could also fund free transit passes for low-income households, since not all of them own cars.

Alternatively, the city could pursue an incremental pricing strategy that would allow everyone who now has a residential permit to continue parking as they always have. San Francisco recently piloted a “Paid + Permit” model for blocks adjoining commercial districts. Residents park for free while visitors pay market rates using meters or their phone. This pilot brought in more than half the revenue of fully metered commercial blocks nearby. Extending the Paid + Permit program to the 80,000 curb spaces now covered by the city’s residential parking program would generate a lot of revenue—and without a political fracas over charging residents for something they’re accustomed to getting for free (or, more precisely: accustomed to paying for with time and gas as they prowl for parking, rather than paying for with money).

But is it legal?

The main argument against market pricing of the curb lane is a legal one. States have constrained local fiscal authority in various ways, so there’s no uniform answer to the legality question. But in California, at least, the answer appears to be “Yes.”  
There is a common perception that the California Constitution, which strictly limits local taxes and fees, or the California Vehicle Code, which sets rules for public streets, allows cities to charge only “cost recovery” fees for residential parking. (A cost-recovery fee raises only enough revenue to cover the costs of administering a program.) We believe this perception is incorrect. 

The constitutional question

The California Constitution elaborately restricts local taxes and fees. But as amended by Proposition 26, it excludes from these limitations “a charge imposed for entrance to or use of local government property, or the purchase, rental, or lease of local government property.” Cal. Const. art. XIII C(1)(e)(4).

As the state supreme court recently explained, “the right to use public streets ... is a property interest [which a local government may] sell or lease … and spend the compensation it receives for whatever purposes it chooses.” Jacks v. City of Santa Barbara, 3 Cal. 5th 248, 254 (2017). Under Jacks, charging people to use public streets would count as a “tax” only if the charge did not bear a "reasonable relationship to the value of the property interest." So long as the city does not set the price for residential parking so high as to result in a large excess of unused curb space, the city’s fee-based parking program should pass muster.
Jacks interpreted “tax” as defined in Prop. 218, not as recently refined by Prop. 26. Nevertheless, the court discussed Prop. 26, and there’s not much reason to think the analysis would come out differently under Prop. 26 because, at least as to this aspect of the definition of tax, Prop. 26 appears to have codified the pre-existing common law analysis applied in Jacks. The court said as much in City of San Buenaventura v. United Water Conservation District, 3 Cal. 5th 1191, 1210 (2017). Two related Prop. 26 cases are now pending before the California Supreme Court. One goes beyond Jacks, holding that fees for use of public property are categorically not taxes, however exorbitant the fee. The other one extends Jacks to Prop. 26. Under either approach, market-rate fees for residential parking would be permissible (“not taxes”).  

The only constitutional issue we’re at all concerned about is the possibility that a residential parking fee would be characterized as an “incident of property ownership.” Under Prop. 218, fees imposed as an incident of property ownership are limited to cost recovery. However, this potential problem could easily be sidestepped by allowing people who don’t own or rent property in a zone to purchase curb-use permits. Even if the permits were restricted to owners and renters in the zone, it’s doubtful that Prop. 218 would be triggered, because the right to park in a zone is not a service provided “to any particular parcel.” See City of San Buenaventura, 3 Cal. 5th at 1207-1208 (holding that groundwater pumping fees are not “incidents of property ownership” because “the agency provides no service to any particular parcels”).  

That fees to park on public streets are not “taxes” under the California constitution has another implication of some practical importance: they can be adopted by any duly authorized governmental body, with no need for a popular vote. Solving the transit agency budget crunch need not wait until the next election.

The Vehicle Code question

As the Attorney General has explained, California’s Vehicle Code gives cities “broad power to restrict parking on public streets, and the … specific power to adopt preferential parking programs that exempt residents, merchants, and their guests from [the general restrictions].” CVC 22507(a). Notably, nothing in CVC 22507(a) says anything about fees that may be used to “restrict parking,” or about fees that may be charged to residents and merchants who benefit from a “preferential parking program.” 
The Vehicle Code does insist that if cities charge homeowners to park across their driveways, the fee be set at the cost-recovery level only (CVC 22507.2). But no such limitation is mentioned in the section of the Code about regular street-parking permits (CVC 22507). In fact, the distinction between 22507.2 (driveway permits) and 22507 (other permits) seems to anticipate Proposition 218’s limitation on fees “imposed … as an incident of property ownership.” The fee to park across one’s own private driveway is arguably incidental to property ownership, whereas a fee to park anywhere in a zone is much less likely to be characterized in that way.  

Section 22508 of the Vehicle Code authorizes metered zones with variable, demand-responsive hourly rates. Perhaps one could argue that by not mentioning demand-responsive rates in other sections of the Code, the legislature implied that cities may not charge market rates for monthly or annual permits on non-metered blocks. That argument’s a reach, but even if it were correct, cities could just meter their residential zones while issuing (market-rate) monthly or annual permits that entitle the permit-holder to park without feeding the meter. Nor is a meter at each space required. One meter can serve several physical blocks, supplemented by permits or pay-per-phone.
Here’s the bottom line: The question of what and whom to charge for using the curb lane is a political and policy question for California cities, not a legal matter. Yes, someone will probably sue if a city raises the price of parking—but they’re not likely to win. Making drastic cuts to the transit budget is a choice, not an inevitability. There is a better way.

[Cross-posted from Legal Planet]

By Chris Elmendorf

How recent legislative changes have given the state greater power to enable prohousing policies

This blog post is coauthored by Chris Elmendorf, Eric Biber, Paavo Monkkonen, and Moira O’Neill.

As California’s housing crisis swirls through the national news, attention has focused on statewide upzoning bills. Sen. Scott Wiener’s ballyhooed effort to allow 4-5 story buildings near transit was tabled until 2020, but earlier this fall the legislature effectively terminated single-family zoning, authorizing homeowners to add two “accessory” dwellings to their property.

Less widely appreciated is that the legislature has also empowered a state oversight body, the Department of Housing and Community Development (HCD), to make local governments rezone for much more housing while removing unnecessary constraints to development. It was not one big reform that put HCD in the driver’s seat. Rather, as we show in a new working paper (issue brief, full paper), the department’s newfound position is the byproduct of a number of individually modest reforms that work together to enable administrative interventions which would have been (legally speaking) unimaginable just a few years ago.

We argue, for example, that HCD can effectively double the amount of “zoned capacity” that local governments must provide, by requiring local governments to account for development probabilities in their housing plans. The department can also enact metrics and standards for whether the supply of housing within a local government’s territory is substantially constrained. Leveraging these standards, HCD could require poorly performing local governments to commit to speedy, ministerial permitting of projects that conform to the locality’s housing plan.

To put these ideas in context, let’s turn the clock back to 1980. In that year, California enacted an ambitious statutory framework to make local governments accommodate their “fair share” of “regional housing need.” But the law on the books was not enough to overcome entrenched local resistance. The Legislative Analyst estimates that between 1980 and 2010, developers produced only about half of the housing units that would have been needed to keep California housing prices from escalating faster than the national average. Similarly, during the most recent planning cycle, California’s local governments permitted, on average, only about half of what was determined to be their share of regional housing need.

Some of the blame for these failures rests with the misbegotten process by which California determines regional “need” and then allocates production targets among local governments. And some of the blame lies with the rickety state-law conveyer belt for converting housing targets into actual production.

Our new white paper focuses on the conveyor belt. It theory, it works like this: (1) a local government, after receiving its housing target, revises the housing element of its general plan, showing that there exist developable or redevelopable parcels with “realistic” zoned capacity to accommodate the locality’s production target; (2) the draft housing element is submitted to the state housing department, HCD, for review and approval; (3) if  HCD disagrees with the housing element’s assessment of capacity, the department may require the local government to include “program actions” for rezoning and removal of other constraints; (4) the local government then enacts the housing element and implements the program actions; and finally (5) if the local government improperly denies a zoning-compliant project, the developer may sue under the state’s Housing Accountability Act (HAA) to get her project approved.

This conveyor belt was prone to all sorts of breakdowns. But in the last couple of years, the legislature has substantially reinforced it. Among other things, the legislature has amended the HAA to prevent local governments from denying or reducing the density of a proposed housing project if any reasonable person could deem the project to be consistent with the general plan (which includes the HCD-approved housing element), notwithstanding local zoning and development standards that are more restrictive. This effectively reverses the traditional norm of deference to local governments on questions about the consistency of local zoning with the general plan, and allows developers to end-run restrictive zoning if a local government fails to complete a rezoning promised in its housing element.

Yet the reinvigorated HAA won’t accomplish all that much unless housing elements are beefed up too. This is where HCD’s new authority comes into play. Historically, the department’s reach was tightly circumscribed. HCD could issue interpretive guidelines, but local governments were obligated only to consider them. HCD could find a housing element noncompliant, but if the local government then turned to the courts, the courts would likely approve it—deferring to the local government’s judgment at the expense of the department’s. HCD’s review of housing elements was also frustrated by a lack of systematic, reliable information about local permitting practices, zoned capacity, and more.

All of this is changing. The legislature has authorized HCD to issue “standards, forms and definitions” concerning the analytic side of the housing element, including the assessment of developable sites’ capacity, while tightening the standards for what qualifies as a developable site. The department’s new standard-setting charge extends to local governments’ obligation to report annually to HCD on housing development applications, approvals, and processes. The legislature has also authorized HCD to decertify housing elements midcycle for failures of implementation, and backstopped decertification with fiscal penalties and more. This allows for both more immediate response by HCD to recalcitrant local governments (rather than having to wait through the eight-year cycle until it’s time for a new housing element), and for more effective penalties (in the past, the stiffest penalty available against noncompliant local governments was a court order shutting down all development in the jurisdiction, a penalty that might not have stung for growth-averse cities). Finally, we argue that the legislature has tacitly ratified HCD’s preferred, functional gloss on whether a housing element complies with state law, abrogating the traditional judicial standard, which was highly deferential to local governments.

The import of any one of these reforms, considered in isolation from the rest, would be modest. But they work together to fundamentally transform the position of HCD. Ambiguities in the new substantive requirements of housing element law provide occasion for HCD to exercise its “standards, forms, and definitions” authority. HCD’s expanded authority over local governments’ reporting will allow the department to obtain information it needs to make good decertification decisions, and also to shape the analytical side of the housing element. The legislative ratification of HCD’s gloss on what is required for a housing element to comply with state law should result in judicial deference to HCD’s findings of noncompliance. And judicial deference to the department’s decertification decisions, coupled with newly serious penalties for remaining out of compliance, should make local governments much more willing to accede to the department’s demands.

This is not to say that all is well with California’s planning-for-housing framework. There’s certainly important work that the legislature still needs to do. But it’s equally important to ask whether HCD will have the necessary resources and leadership to take advantage of its new authority. The director’s position has been vacant since late summer, and it’s up to governor to choose the department’s next leader. When he was running for office, Governor Newsom boldly announced that he would more than triple California’s rate of housing production. The ball is in his court.

by Christopher S. Elmendorf, Richard Frank and Darien Shanske

[Cross-posted from the San Francisco Chronicle]

The recent defeat of Senate Bill 827, state Sen. Scott Wiener’s bill allowing 5-story buildings near transit hubs, was an enormous setback for California’s efforts to make housing more affordable while reducing greenhouse gas emissions.

Our state is now in a serious bind.

The only way to make California housing widely affordable is to build a lot more of it. We could do this with Texas-style suburban sprawl — Houston has boomed while remaining affordable — but that would sacrifice the environment. The alternative is to add residential density to existing neighborhoods, near job centers and mass transit.

California picked density over sprawl a decade ago, when it enacted SB375, a commendable law that requires local governments to plan for energy-efficient, transit-oriented development. Yet most city and county planners report that this planning mandate has had “little to no impact on actions by their city.”

The defeat of Wiener’s bill and the so far meager impact of SB375 speak to a deeper truth: California is not going to achieve large-scale, high-density development near transit unless it can change the local politics of housing.

In theory, the state might induce pro-housing political realignments with taxes and subsidies — for example, reallocating property tax revenue to cities that allow dense housing near transit and starving those that don’t. But the quick demise of SB827 suggests that serious penalties are not yet enactable, and subsidies would have to compete with many other General Fund priorities.

We think California can bolster pro-housing forces at the local level without bringing down the hammer or breaking the bank. Consider these alternatives:

1. Leverage “cap and trade” to make the climate consequences of density more transparent — and more tangible. The linchpin of California’s climate change regime is the state’s cap-and-trade program, which puts a statewide ceiling on greenhouse gas emissions from industrial sources and requires emitters to buy allowances for their releases. California could strengthen pro-housing forces in city politics by folding local governments into the cap-and-trade program.

The state would issue a formula estimating the per-dwelling climate impact of new developments, taking account of proximity to transit, size, materials and parking. When a local government permits new housing that’s more climate-efficient than the typical new unit statewide, it would be rewarded with credits to sell in the cap-and-trade market.

This would give pro-housing “YIMBY” activists a green cudgel to wield in local fights over development. Using the state’s formula, proponents could quantify the environmental benefits of each project near transit. Meanwhile, budget-minded city officials would have a fiscal incentive to upzone land near transit. The more transit-friendly development the city permits, the more allowances it would earn to sell in the greenhouse-gas market.

2. Reframe local debates with state reporting of “housing potential” along transit lines. Guardians of the status quo point out that San Francisco has increased its housing production in recent years. But the picture would look quite different if we compared current production to the city’s potential for transit-friendly housing, rather than to the city’s very modest output over the past few decades.

3. Let cities recapture the value they can create by upzoning and streamlined permitting. Opponents of Wiener’s bill called it a giveaway to developers. They had a point. Rezoning a lot from single-family use to five-story apartments increases its value tremendously. Why should the landowner keep all that profit? When local governments control rezoning, they can demand ancillary benefits such as affordable-housing units, infrastructure investments, and more. All this is standard fare — and not just for major rezonings, but for individual projects under the highly discretionary permitting rules that prevail at the local level today.

Yet project-by-project bargaining has major downsides. The uncertainties and delays, and the inefficient medium of exchange (in-kind benefits rather than money), contribute to the result we see all around us: an inadequate supply of new housing. Local officials surely understand this, but right now they have no way to profit from clear, nondiscretionary rules for development.

To encourage development on lands near transit, California should allow cities to share directly in the property value created by upzoning and permitting reforms. Cities could be authorized to impose “special assessments” for upzoning or permit-streamlining on lands within a half-mile of transit — recouping, say, 50 percent to 75 percent of the value added. The state law authorizing such value-recapture assessments would probably need to be approved by referendum vote. But once it is enacted, cities would have a fiscal incentive to supplant project-specific haggling with transparent, value-enhancing and development-enabling rules.

Our state’s housing-affordability crisis was decades in the making, and these solutions won’t work miracles overnight. But if state-mandated upzoning is off the table, and state-mandated planning is ineffectual, we had better start thinking about ways the state might intervene at the root, targeting the local politics of housing.

By Chris Elmendorf & Darien Shanske

[Cross-posted from Education Law Prof Blog]

Education is special in the eyes of the law. State constitutions rarely require the government to spend money on anything, let alone to spend it well. Yet virtually every state constitution provides for a system of free public schools, and many courts have treated state governments as having a legally enforceable duty of care with respect to education.

But what exactly does this duty of care entail? One might expect this question to be reasonably well settled, as public-interest lawyers have been litigating education rights cases since the early 1970s. It is not. Two competing visions of the duty of care are playing out today in cases across the country. One holds that the state’s primary responsibility is to provide an ample fiscal “pie” for local school districts. Funding arrangements must ensure that all districts can afford to pay for decent facilities and programs. This vision motivates many of the claims that were filed in response to school-funding cutbacks during the Great Recession. The other vision holds that the state’s primary duty is to allocate efficiently whatever funds it appropriates for education. Informed by conservative critiques of public-sector bloat and interest-group politics, this vision calls on courts to redirect wasteful spending and unfetter local school administrators, but without touching the “political” question of how much to spend. The better-allocation vision undergirds a recent and exhaustively detailed trial court ruling in Connecticut, as well as challenges to teacher-tenure and seniority rules now pending in Minnesota, New York, and New Jersey.

Conservative opponents of bigger-pie litigation have long argued that the empirical evidence of the effect of school spending on student outcomes is too shaky to warrant judicial intervention. Liberal critics of the new teacher-tenure lawsuits have started making precisely analogous arguments in better-allocation cases, with no apparent sense of irony. But no one has asked whether states themselves might bear constitutional responsibility for the lack of reliable information about likely effects of plaintiff-sought reforms.

In a forthcoming law review article, we pose and answer this question, developing a new, information-centric vision for education rights litigation. Under our account, the states’ primary responsibility today is to structure their educational systems so that researchers and policymakers can figure out which interventions or reforms would actually improve the constitutional performance of the school system. Courts uniformly agree that the constitutional function of public schools is to prepare children for a lifetime of productive participation in economic, political, and civic life. But researchers know very little about the effects of educational reforms on adult outcomes—and the states bear much of the blame for this.   

As our article explains, states exercise enormous control over the production of knowledge about education, especially about long-run effects. This control is wielded through the architecture of administrative data systems; through the rules for assigning students, programs, and funding to schools; through the manner in which educational reforms are implemented; and through the terms on which the state provides access to administrative data.

States already possess constitutionally urgent information about the outcomes that schoolchildren realize as adults. This information is scattered across tax, voting, health, welfare, and criminal justice agencies. But, for the most part, state record-keeping systems have not been designed to enable linkage of educational and other records—and record-linkage is necessary to understand the long-run impact of educational reforms. Some states have actually banned the use of critical administrative datasets for research purposes. Likewise, in rolling out educational reforms, states rarely consider whether the rollout will enable credible tests of the reform’s effects. (Typically this requires well-defined “treatment” and “control” groups, which are similar to one another on average.)

Judicial recognition of a state duty of care with respect to the production of knowledge about education wouldn’t turn children into lab rats. States would still have to protect student records from privacy-compromising disclosures, and state officials, not researchers, would continue to set priorities.

But states would no longer be free to ignore how their own decisions affect what can be learned about the long-run effects of the state’s educational policies and programs. At a minimum, states would have to issue and periodically update a plan that identifies barriers to learning about how the state’s educational objectives can be achieved, and that explains what the state intends to do about it. Arbitrary barriers, such as flat prohibitions on the linkage of educational and other administrative records, would be vulnerable to constitutional attack. And in “bigger pie” and “better allocation” litigation, courts would consider not only whether the plaintiffs’ evidence is strong enough to order statewide reforms, but also whether the difficulty of learning about the effects of spending levels or allocative constraints without the cooperation of the state warrants a test of the plaintiff-sought remedy, which would be implemented temporarily in a randomly selected subset of schools or school districts. 

Our informational gloss on the state’s duty of care with respect to education offers a way forward in the many states whose courts have, on separation-of-powers grounds, declined wade into the Stygian swamp of funding and allocative disputes. Courts can address barriers to the production of knowledge about education without touching large-scale questions about how much to spend on education and how to spend it. Whatever else the states may owe to disadvantaged children, at least the states must make it possible to learn whether their efforts to better educate those children are doing any good.

By Chris Elmendorf & Darien Shanske

[Cross-posted from Education Week]

The state should know lots about those students: their standardized-test scores, whether they voted, their criminal records, their income, etc. The state replies that it does not have this information collected in a manner that is accessible. And, to add insult to injury, the state explains that it would not release the information anyway because of privacy concerns.

You decide to proceed with pre-K in your district regardless, but, so that future researchers can learn something, you ask the state if you can assign pupils to the pre-K class through a random lottery given that there will not be enough spots for everyone. The state refuses. A local education researcher asks if you can work together to at least keep track of key administrative data for the children within and without the program. To do that, you need help from the state, but again the state refuses.

That scenario is neither fanciful nor uncommon. Despite some improvements, many states do not maintain the data in a usable manner that education researchers need, much less do they use program rollouts as a regular opportunity to conduct controlled experiments. On the one hand, this failure makes sense. Organizing and managing administrative data is not costless, especially if privacy concerns are properly taken into account. Furthermore, as a matter of practical politics, not much of a constituency exists for the collection of good data that will yield conclusions many years in the future-a time frame that for most politicians or administrators makes no sense.

At the same time, the failure to generate high-quality data is untenable. Education is by far the biggest expenditure made by state and local governments. The cost of collecting good data and making the information available is not even a rounding error compared with state and local education budgets. It would be one thing if educational researchers were doing well enough with the data they have, but the expert consensus is that they are not. And this is not because there is a lack of researchers or analytic methods. (Indeed, something of a revolution is going on in the social sciences when it comes to the use of administrative data. For example, a much-celebrated recent study by Raj Chetty and colleagues demonstrated that social mobility in the United States depends greatly on where a child grows up, based on careful analysis of years of tax-return data.)

If education research is not to be left behind, states need to devote resources to collecting the data and making those data available to researchers. There are models for doing so. In some Nordic countries, each citizen is given an administrative-record number that is used throughout the government. When a researcher requests data, the government provides the data, but using a different set of numbers to protect privacy. That arrangement has enabled education research that would be difficult or impossible to carry out elsewhere, such as studying the effect of publicly provided day care on labor-market outcomes decades later&-just the question our hypothetical superintendent was hoping to answer.

"If education research is not to be left behind, states need to devote resources to collecting the data and making those data available to researchers."

The policy prescription is clear: States should aim to collect and disseminate first-rate educational data. A good place to start on this project is with the checklist provided by the nonprofit Data Quality Campaign, which emphasizes the record-keeping arrangements needed to track students over time and across administrative databases.

States should also organize themselves so that opportunities for controlled experiments are not squandered. In many cases, states already roll out programmatic changes in pieces; it would not cost much more to do so in a manner that enables credible inferences about the reform's effects.

What if a state refuses to take reasonable steps to assess the effectiveness of its biggest outlay? Can the states be forced into self-reflection? We think the answer is yes.

Virtually every state constitution provides for a system of free public schools. Most states have been sued under those provisions, with the plaintiffs claiming that states are not distributing funds equitably or just not spending an adequate amount. Plaintiffs have a mixed record in such suits, though it should be noted that many states changed their educational system because of the threat of such a lawsuit.

As a result, there are many states where the constitutional provision concerning education has been litigated and in which the courts have held that the state has a legally enforceable "duty of care" with respect to education. We argue in a forthcoming law review article that if this duty of care means anything, it must at least mean that states take reasonable efforts to enable the assessment of how their public education systems are performing. That is, leaving aside whether states must spend more money or spend more fairly, they must at least have some reasonable system in place to assess their compliance with the constitutional command to provide a decent public education.

Especially in states with courts that have proven willing to impose dramatic solutions, such as spending and other mandates, we think that even the threat of litigation should motivate state officials to provide education researchers the data they need. To be clear, our vision of states' duty of care with respect to education wouldn't turn children into lab rats. States would still have to protect student records from privacy-compromising disclosures, and state officials-not researchers-would continue to set priorities. But whatever else the states may owe to disadvantaged children in particular, at least the states must make it possible to learn whether their efforts to better educate those children are doing any good.

By Chris Elmendorf and Doug Spencer. Cross-posted from the Election Law Blog.

During oral argument last week in Shelby County v. Holder, the constitutional challenge to Section 5 of the Voting Rights Act, Chief Justice Roberts asked, “[I]s it the government’s submission that the citizens in the South are more racist than citizens in the North?” Solicitor General Verrilli responded, “It is not, and I do not know the answer to that . . . .”

This post offers a preliminary answer to the Chief Justice’s question, using recent data. Our initial results suggest that the coverage formula of Section 5 does a remarkably good job of differentiating states according to the racial attitudes of their nonblack citizens.

There are essentially three schools of thought about how best to measure racial prejudice using survey questions. Some researchers favor explicit measures of prejudice (“old-fashioned racism” or stereotyping), based on agreement with statements like “blacks are less intelligent than whites” and “blacks are lazy.” Others favor symbolic measures of prejudice or “racial resentment,” based on questions about affirmative action and whether blacks have gotten “more than they deserve.” Still others favor measures of implicit or subconscious bias. For the results reported here we use explicit stereotyping, as it remains disputed whether racial resentment measures capture prejudice as opposed to conservatism, and it is uncertain whether implicit bias predicts political behavior.

We created a binary measure of stereotyping that roughly captures whether a person is more prejudiced toward blacks than is typical of nonblack Americans. Our data source is the 2008 National Annenberg Election Survey (NAES), which asked non-black respondents to rate their own racial group and blacks in terms of intelligence, trustworthiness, and work effort, on a scale of 0-100. On average respondents ranked their own group about 15 points above blacks on each trait. We coded respondents as holding “prejudiced” views with respect to blacks on a particular trait if the difference between their rating of their own racial group and their rating of blacks exceeded the national mean difference for the trait. To create an overall measure of prejudice for each respondent, we summed the number of traits on which the respondent was more prejudiced than the national mean. Finally, we converted this sum into a binary variable, coding as “prejudiced overall” those respondents who exceeded the national mean with respect to at least two of the three traits.[1]

To be clear, a respondent whom we have coded as “not prejudiced overall” may well be quite prejudiced. But the Chief Justice’s question—whether “citizens in the South are more racist than citizens in the North”—is a question about relative prejudice, and this is what we are trying to capture.

We provide two estimates of the proportion of adult, nonblack residents in each state who are “prejudiced overall.” The first is based on simple disaggregation of the large NAES dataset (N=19,325). This method should work pretty well for the largest states but may yield unreliable estimates for smaller states, which contribute relatively few respondents to the NAES sample. For the second estimate we use multilevel regression with post-stratification (MRP), a recently developed statistical technique that has been shown to yield remarkably accurate estimates of state-level public opinion. We model prejudice as a function of individual-level covariates (sex, race, age, and education) and a set of state-level predictors (black population, percent of blacks in poverty, segregation, and income inequality).

Using either technique we find a strong positive correlation between Section 5 “covered status” and anti-black prejudice, but with MRP the correlation is truly stunning:

The MRP model suggests that the six fully covered states in the South are, by our measure, six of the seven most prejudiced in the nation. The two fully covered states that rank lower on the list, Arizona and Alaska, are presumably covered for reasons other than discrimination against blacks (anti-Latino discrimination in Arizona, and anti-Native discrimination in Alaska).

We wish to emphasize that these are preliminary results only. Though our findings are not entirely unexpected, other ways of aggregating the NAES prejudice questions, or of modeling responses, may yield different rankings of the states (to say nothing of other ways of measuring prejudice). We will present additional results at the Midwest Political Science Association conference in April.

Suffice it to say for now that the coverage formula seems defensible under the standard implicit in the Chief Justice’s questioning. Or, to borrow a metaphor from Judge Williams of the D.C. Circuit, Congress appears to have “hit the bull’s eye throwing a dart backwards over its shoulder.”

Elmendorf is Professor of Law at UC Davis. Spencer is a doctoral student in Jurisprudence and Social Policy at UC Berkeley. Elmendorf contributed to an amicus brief on behalf of the respondents in Shelby County v. Holder.