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The Deplorable Politics Behind Article 34

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HUD's Fair Housing Door Exhibit in Honor of 50 years of Fair Housing

This spring, we briefly explained the injustices of California’s Article 34. In this piece, we explore its dark history of bigotry and exclusion.

California needs more housing. By standard estimates, it needs about 3 million more homes to ease this shortage, which has stunted the economic fortunes of an entire generation. This November, Proposition 1 aims to raise $4 billion in bonds to provide subsidized housing for the neediest, but it won’t be enough. Nor can California cities cover the gap on their own—tragically, the state’s Constitution hamstrings our ability to provide public housing at the necessary scale. How did this happen?

The short answer is racism, with a unique mid-century Bay Area flavor of classism and McCarthyism.

Article 34 of the California Constitution states that no city, town or county may develop, construct or acquire low-rent housing without electoral approval of a majority of voters. Today, the public sector provides low-rent housing through a convoluted spread of funding sources and market incentives, including Low Income Housing Tax Credits (LIHTC), to circumvent this requirement. By requiring a local popular vote to approve any instance of genuine, municipal social housing, California’s constitution calcifies its widening economic inequality.

The City of Emeryville recently invoked Article 34 in June 2018 with the passage of Measure C, a $50 million bond measure that will fund the construction of 500 new homes. Such a feat is nigh on impossible in more segregated, wealthy parts of the state—take Palo Alto, for example, where voters overturned a zoning ordinance to prevent a 60-unit apartment building for low-income seniors from being built.

Not surprisingly, the historical genesis of Article 34 is inextricably linked to Cold War-era racism and classism that spread like a wildfire in a rapidly industrializing California.

While a majority of the Supreme Court could not detect unlawful racial or class animus in Article 34 (see part I), the history of the people that designed, passed and enforced it reveals no shortage of prejudice against African-Americans and all people of color. Historic records show that the intensity and power of this political coalition against public housing reached its apex at a time that African-Americans gained widespread access to public housing programs and private housing markets for the first time, due in no small part to a booming post-war economy.

We focus our study on Oakland, the heart of the Bay Area’s postwar industrial growth. The city had grown in leaps and bounds since 1906, when the earthquake pushed many of San Francisco’s middle-class families to eastern shores. Oakland grew more blue collar but stayed racially homogenous – as much as 95% white in 1940. But the siting of naval docks and war industry manufacturing in Oakland and its East Bay environs drew workers at a pace that exceeded what the private housing market or charitable institutions could provide.

The Great Depression hamstrung the private construction industry, and World War II brought about massive supply and labor shortages. For all intents and purposes, new private home-building was on pause from 1929 to 1945.  With the end of wartime rationing, property owners, realtors, and builders anticipated that they could rise to meet the demand of the returning GIs. These soldiers, sailors and marines, armed with government-backed mortgages, would be ready to buy or rent homes. But they didn’t anticipate that the industrial workforce of the war machine would keep booming, drawing migrants from all over, including African-Americans from the South. An exhaustive account of this period can be found in “The Second Gold Rush: Oakland and the East Bay in World War II.”

To grow and diversify its workforce, Oakland would need a rapid infusion of public housing—and civil rights and labor groups, the offshoots of the “New Deal” coalition, demanded that it be desegregated. Local interest groups  would be forced to choose between their racism and their economic interests, and their resistance to these conditions ultimately drove the campaign for Article 34.

How “Improvement Clubs” Worsened Segregation

Contrary to its public image today, Oakland was dominated largely by white, conservative business interests for nearly a century. That lasted until 1947, when a social democratic coalition won a majority of the seats on Oakland City Council in the “Oakland Revolution.” This social democratic bloc made low-cost housing one of its key priorities.

As soon as the City Council began planning for public housing, neighborhood resentment grew—in part from incumbent homeowners, but later by real estate interests that astroturfed their grassroots operations. These organizing groups were so-called “improvement clubs.”

“Improvement clubs” were neighborhood associations that sprung up in the early 20th century dedicated to social and spatial order. They were early advocates for explicitly segregationist zoning codes. After the U.S. Supreme Court found such schemes unconstitutional in Buchanan vs Warley, East Bay improvement clubs adopted the non-explicitly racial zoning pioneered in Berkeley’s Elmwood District.  

For example, the Rockridge Improvement Club categorized buildings and uses that tended to undermine their vision of social order and worked to ban them by city ordinance. Mixed-use structures, commercial uses and apartment buildings were all found to be detrimental to the overall health of the Rockridge community by the Rockridge Improvement Club. Special scrutiny was applied to laundries, typically owned and operated by Chinese immigrants and Chinese-Americans. The Club went so far as to advocate for and secure demolition of buildings in violation of their new ordinances.

For the time being, state and federal law seemed to be heading in the opposite direction. In 1937 Congress passed the Wagner-Steagall Act, which provided subsidies for local housing agencies to improve housing conditions for low-income people through the construction of public housing. Subsequently, the Housing Act of 1949 banned explicit racial segregation in public housing, which left cities scrambling to find ways to separate communities of color from white neighborhoods. The act also required one-for-one demolition “blighted” properties.  A year prior, progressive groups placed a landmark public housing measure, Proposition 14, on the ballot. It would have created a state housing agency equipped with a $100 million revolving loan fund to assist in the construction of low-cost homes. Oakland’s new City Council, meanwhile, sought to implement these policies to build 3,000 units of public housing.

The looming promise of a widespread public housing blitz across Oakland spurred segregationist Improvement Clubs into action. The coalition behind Article 34 was born.

The real estate industry, unable to stop the passage of the Housing Act of 1949 at the federal level, sought to slow and stop its implementation at the state and local level. In California, these interests were spearheaded by Fritz Burns, a Los Angeles suburban tract developer. With the help of an expensive San Francisco ad agency, the Committee for Home Protection capitalized on Red Scare hysteria to deliver a crushing defeat to Proposition 14.

With the passage of the Housing Act of 1949, local public housing authorities and city councils throughout the state would be the new political arena. Burns enlisted realtors and landlords to start the Committee for Home Protection to counteract this perceived threat to their bottom line. In Oakland, he selected Piedmont landlord attorney Adrian Thiel to head the local chapter.

Local chapters of the Committee for Home Protection became loci of opposition to public housing in California.  But the Oakland chapter was one of the most vocal, organized and powerful in the state. Thiel recruited realtors, landlords, and homeowners to form the membership of the Oakland Committee for Home Protection. Thiel already had a steady source of organized homeowners to bring into his coalition: improvement clubs. In particular, he tapped into reactionary tendencies in middle-class neighborhoods that were undergoing more change thanks to postwar population growth.

These neighborhoods were closer to factories, had lower property values and less political capital to resist the siting of public housing. Affluent North Oakland and foothill neighborhoods were never seriously considered for siting public housing.

West Oakland’s Counter-Revolution

The West Oakland Improvement Club proved to be the most fertile source of recruits for Thiel. West Oakland was traditionally a working-class, immigrant neighborhood focused around the railroad, port and factories.  Prior to the war, many of the workers lived in modest, Victorian single-family homes. As white and Black defense workers from the South moved to Oakland, many Victorians were divided up as boarding houses. In vacant lots, temporary cabins, Quonset Huts and tents were set up to give workers the most basic shelter. All this had the effect of driving down property values for the striving or retired workers that owned Victorians. The West Oakland Improvement Club was a key voice in working to reverse these trends, which necessarily came at the expense of migrant defense workers.

After the war, the West Oakland Improvement Club advocated for the demolition, on health and safety grounds, of the temporary shelters many workers inhabited. They assured officials that the now largely-black residents would be able to find housing elsewhere.

The West Oakland Improvement Club leadership included Howard Rilea, a conservative railroad mechanic and homeowner, and his wife Louise Rilea. The couple previously led opposition to the Campbell Village public housing project in the neighborhood. The Rileas protested that their section of West Oakland was not blighted, and that public housing would decimate their property values. But in their neighborhood and elsewhere, Oakland city planners found the aftereffects of post-war overcrowding, and sought to counteract the surge of unsafe shanty-towns with bona fide safe, affordable public housing.

In response to the Housing Act of 1949, the Oakland City Council asked chief planner James Marr to survey the city for signs of blight. In the late spring, Marr issued a draft report finding blight in many of Oakland’s flatland neighborhoods. Many residents lived in overcrowded units in structures in poor condition. Marr concluded that there was also a clear and substantial need for safe and well-made affordable housing for Oakland’s workers. His report recommended that local housing authority construct 3000 public housing units.

City Hall was already working full speed ahead on a plan to house the growing industrial population, and they were ill-prepared for the resistance they encountered.

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The City Council, under pressure from Oakland Committee for Home Protection, criticized Marr’s findings. Many homeowners had no issue with Marr’s conclusion that the city needed low-cost housing.  They did not, however, want their neighborhood to be declared blighted, potentially acquired through eminent domain or have integrated subsidized housing constructed next door. Many circulated rumors that the mandate to improve unsafe and vacant homes was merely a ruse to raze their own houses.

Rilea took the report as tantamount to highway robbery: “[T]hey want to take our homes and build projects to regiment us like cattle,” he wrote of the plans. “My home may only be worth $1,800 to the government, but it is worth [one million] to me.” Local realtor Bruce Holman similarly decried what he saw as home equity seizure, writing: “Millions of dollars in property values have been destroyed by the publication of the Marr report.”

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In a tragic twist of irony, “slum clearance” did in fact gain political traction around the same time in San Francisco. After the passage of the California Community Redevelopment Act in 1945, the state set up public, for-profit Redevelopment Agencies to fund what was supposed to be an ambitious “urban renewal” plan—but it ended up displacing thousands of black and brown tenants in poor neighborhoods, mirroring the fears of West Oakland’s white homeowner groups. Far from an actual plan for public housing, San Francisco’s redevelopment program targeted large swaths of black neighborhoods identified for substandard living conditions, but with no legal provision to rehabilitate existing buildings, the City simply razed entire blocks in the Fillmore and Western Addition.

San Francisco’s majority-tenant black neighborhoods lacked the political capital to oppose this devastation, but Oakland’s homeowner-centered Improvement Clubs now had a concrete example of what they claimed to be fighting against. Facts didn’t matter: San Francisco’s Redevelopment Agency had no intention of bringing old buildings up to code, nor did they provide much-needed public housing in its place, but Oakland’s Planning Department sought exactly these goals.

In late August, Marr issued a final report, reducing the scope of blighted neighborhoods significantly.  The remaining areas of blight fixated on West Oakland and Deep East Oakland, along E. 14th Street (International Boulevard today). Marr described these areas as “squalid and unkempt” and “unsuitable for housing,” calling for the city to use federal and state resources to rehabilitate these neighborhoods.

Many homeowners were content with having steered the blight and prospect of integrated public housing away from their areas, but the potential condemnation of these neighborhoods still proved to be a useful recruiting tool for Oakland CHP. With less overall blighted space, the remaining blighted areas would require larger projects in smaller areas. That would require extensive eminent domain and demolition, thereby only reinforcing Rilea and his cohorts’ fears.

The Oakland City Council considered action on the Marr report at a mid-October hearing.  In the dissent, councilmember Fred N. Morcom roared, “There is no property I know of where we could build 3,000 units without putting people out of their homes and I’ll never vote for that.”

Marr had a predictable response: “We must look to a vertical rather than horizontal development of the city in the future,” he said. “There are only a few level lots left for residential building.” Amid jeering and boos, he also conceded: “Public housing is a controversial subject. It always has been and it always will be.”

So intense and raucous was the public attendance, the council was forced to cut the meeting short and reschedule the hearing from City Hall to the Kaiser Civic Auditorium on Lake Merritt. Perhaps by coincidence, a nearby car dealership, trying to drum up sales, set up spotlights—which in turn attracted even more curious Oaklanders to the hearing. Officials estimated that at least one thousand attended the hearing, and based on booing at chief planner Marr, most were opposed.

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Despite intense lobbying by Oakland CHP and homeowners, the City Council approved the blight designations and the construction of 3000 units of public housing by a vote of 5-4.

Oakland CHP in turn circulated signatures to place the approval on the ballot. Even with the requisite signatures, the City Clerk refused to place the item on the ballot, based on advice from the City Attorney that voters did not have the state constitutional authority to vote in a referendum on the issue. Oakland CHP threatened to sue.

Instead Oakland CHP  collected signatures over the 1949 holidays to recall the three of the five votes for public housing.  They quickly obtained the necessary signatures and set a February 28, 1950 recall election.

Oakland CHP campaigned heavily for the recall of the offending councilors. They were also well-funded, with billboards, newspaper ads, and sound cars—which denounced the trio as “socialistic.” In an interview with the San Francisco Chronicle in February, 1950, campaign treasurer John Hennessy argued that public housing was “being promoted by people who seek the downfall of a free America.” Packing residents into public housing meant only one thing to him: packing ballots for even more leftist politicians. This red-baiting campaign occurred in the midst of the second “Red Scare.”

Piedmont lawyer Adrian Thiel reemerged as a leader of the recall campaign, stoking opposition to public housing “as a matter of principle.” In interviews at the time, Thiel circulated the same misinformation about demolition and tax increases that had spurred animosity against the Marr report. “It is obvious that houses will have to be torn down to make room for these units,” he falsely declared. “You and I will have to pay the bill,” he argued, even though federal funding had already been secured for the proposal. “We will have to pay out of both pockets. Federal taxes from one and local taxes from the other.”

Labor unions tried to organize to protect the social democratic councilors, but started late and with a fraction of the resources of CHP. As the special election day came and went, two councilors retained their seats.  But a third, Scott Weakley, lost his after a recount found him behind by five votes, of 75,000 cast.

Weakley’s recall broke the public housing bloc on the council.  Plans for expanding upon the 3000 units were shelved. The Oakland Revolution was effectively over.

1950’s Proposition 10 

In the spring of 1950, the California Supreme Court, presented with a similar issue regarding voter referendum on subsidized housing arising in Humboldt County (organized by a local CHP chapter), affirmed the notion that the voters have no constitutional right for a referendum on approval of subsidized housing. Segregationists weren’t about to take that sitting down—instead, they resolved to rewrite the state constitution.

Energized by the victory in the Oakland recall, but wishing to overturn the California Supreme Court’s decision, Fritz Burns and the CHP collected signatures to overturn the court’s decision.  But CHP went for broke and wrote the ballot language to outright require a referendum by voters for the approval of low-income housing. They gathered signatures and qualified easily for the ballot.  

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For the fall campaign, CHP hired the same PR consultants that helped them defeat the California state public housing agency (Proposition 14) in 1948.  Harking on many of the themes pioneered in the Oakland recall campaigns, the ads focused on the “communistic” aspects of public housing and appealed to notions of self-determination among California’s new post-war suburban homeowners.

Proposition 10 narrowly passed in November 1950 and was entered into the California state constitution as Article 34.

Also in November 1950, the two surviving Oakland city councilors from the February recall lost their seats to conservatives.  A year later, the last of social democratic councilors was beaten by Howard Rilea, of the West Oakland Improvement Club and Oakland Committee for Home Protection. The new majority cancelled all but a fraction of the 3000 units. By 1966, only 500 of the 3000 units of public housing approved in 1949 were built.

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California faces eerily similar challenges today. In the midst of historic economic prosperity, wealth disparities have never been higher. The state’s housing shortage has never been greater, condemning younger generations to a life of debt, and bleeding the lower-income population as only higher-income populations choose to move in. Increasingly, the Bay Area’s booming technology sector chooses to relocate elsewhere in the country rather than grow locally, at the expense of rising rents.

Private construction is in less dire straits than it saw during the 1940s, but construction costs are rising, and construction labor has yet to recover from the 2008 recession. Simply put, the state’s housing shortage won’t be fixed with the private market or public sector alone—even if near-term regulatory reforms and funding measures are achieved.

Jessica Troustine, Professor of Political Science at UC Merced, analyzed local initiative elections and Fair Housing Act litigation across California to study the impact of local electorate discretion over development. She found, in part, that “white voters are more likely to support restricting development in initiative elections and that whiter cities have more stringent land use regimes.” Troustine found that majority-white cities in 1970 were able to remain majority-white, largely through local land-use control.

If White America can ever be forced to share its unjustly-hoarded wealth with Brown America—or for that matter, if Rich America ever integrates with Poor America—it must come at the expense of local veto power over public housing. We have seen California’s housing crisis bring deep political grudges and unlikely coalitions into sharp relief over the past few years, as the state legislature works to either curtail or reinforce these trends.

It is our hope that this research will embolden a new political coalition to finally repeal Article 34 of the California Constitution.

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