It’s 2018 and Senate Bill 827 is making waves in the super sexy hot tub party that is California housing policy. In case you’ve somehow had something better to do than obsessively scroll through YIMBY twitter, here’s the TL;DR.

SB827 would preempt municipal authority to upzone areas near high capacity transit and do a couple other fun things like limit minimum parking requirements. Some call it deregulation, I see it more as regulating local regulators ability to, well, regulate. There’s been a lot of good coverage to date, but one angle I haven’t seen explored is the bill’s potential to help finance mass transit.

Sasha Aicken’s best guess on the areas SB827 would upzone. Check out his site, transitrichhousing.org, for a statewide interactive map.

Transit that Pays for Itself

BART and other backbone Bay Area transit systems are in constant need of funding. Fares only go so far toward recouping operational costs and they don’t even begin to cover infrastructure. This leaves agencies like BART reliant on voter approved bond measures and federal grants. Given the difficulty of getting voter approval for bonds and that we’ve reached peak federal unreliability, the situation is suboptimal. There are, however, other couches in which to find loose change.

Transit creates value that manifests in land prices. Real estate adjacent to mass transit fetches a premium compared to parcels farther away. While we’re not in a political position to go full value capture finance, BART could (and actively wants to) convert its acres of on-site surface parking into high density mixed use development. If BART partnered with a developer on such a project, it could retain title to the land and set itself up as the owner of highly valuable residential and commercial space. In that scenario, the value that typically goes to private landowners would instead flow back into the transit system.

As it stands, the biggest blocker to following through on this strategy has been local control of land use. SB827, however, would upzone the hell out of BART land up and down the system. And while BART lands would still be subject to discretionary approval, SB35 (passed into law last year) now provides an end run around the local approval gauntlet for 97% of California’s cities.

There’s a lot to love about SB827, more than a few details to iron out, and a long road to travel before the bill becomes law. If this is the first you’re hearing of it, I highly recommend you read more. And if you’re already a fan, just consider this one more way in which it could help us build a better future.