Foster City – Housing and Economics – Time for Change

Before I delve into the subject of housing and economics in Foster City, I want to again take a moment to tell you all what an honor it was to have served as your mayor last year.  Thank you for the opportunity to serve, I hope I served you well.

This past year most of us heard loudly and clearly that the people of Foster City are concerned about the impact of continued housing development in the city. Some residents have suggested that we adopt an ordinance providing a temporary moratorium on housing development.  Of course, the problem with that solution is that if we can pass an ordinance establishing a moratorium, we can just as quickly pass an ordinance revoking the moratorium.  Thus, a more long term and practical solution is what we really need.

Three years ago, before we even began to see these impacts, Council Member Perez and I, along with the CEO of the Foster City Chamber of Commerce and a group of City staff and City residents, became members of a City Council task force, the purpose of which was to study how to change the economic model under which our City operates and to come up with an economic development plan.  The reason for this effort is that we are a young city and as such have relied primarily on housing growth as our economic engine. In fact about 80% of the general fund revenue for Foster City comes from property tax!  However, as we came closer to being fully built out, it became clear to me, and others, that continued reliance on housing growth was simply not sustainable. Thus, we needed to find other ways to grow our revenue, including finding ways to make our existing assets more valuable.

As a group we, as members of the task force, worked together for two years and last February we bought our strategic plan to the City Council for adoption.  On February 10, 2014, the City Council unanimously approved the plan.  Unfortunately, just one month later the funding was pulled and the plan basically remains on hold.

I urge each and every one of you to read the plan.  You can find it on our website – www.fostercity.org.  From the home page hover over the button that reads “Projects & Initiative” and then click on the link that reads “Sustainable Foster City.” From that page there is a menu on the left and you can see the plan and download it by clicking on “Sustainable Foster City Plan.”   The plan is not very long and it is not very technical, but you will see in that plan that there is only one mention of housing and that is affordable housing (a subject I will cover separately later this year).  The rest of the plan is an outline of how to start to change the economic engine of Foster City so that it has greater balance and no longer relies so much on housing growth.

Today I feel even more strongly than I felt three years ago, and even last year when we presented the plan, that we are already suffering the impacts from an economic model too focused in one area, and that failure to change will only increase those impacts.  It’s like an investment portfolio that has only one asset type. Impacts become more powerful and risk increases over time. Thus, in my opinion it continues to be imperative that we change the economic model and move forward with the plan.

Some say that we are in good shape and do not need to change.  I am sure that the leaders in Detroit felt much the same way when the auto industry appeared to be thriving.  Unless we can learn from other’s mistakes we are bound to repeat them.

The solution is not to impose a temporary moratorium that can be undone as quickly as it is done, but to change the economic model through investment and diversification.  Again, please read the plan and please let each of us on the Council know that you support it and that you want us to move it forward.

I think we are already seeing the impacts of the delays in implementing the plan.  We need to move forward while at the economy is strong.  We need to be leaders, we need to innovate and we need to work hard until we succeed.  Our other choice is to do nothing and hope that we do not end up the way Detroit ended up.  I, for one, am not willing to take that chance.

Since I only write a Council Corner once every five weeks, I have set up a blog at charliefc.com where I will cover, on about a weekly basis, some of details of the plan and other issues that I feel are important to Foster City.  I hope you will follow the blog and add your comments. No City funds are being used to pay for the blog.

Those are my thoughts.  You can always share your ideas with me by email at cbronitsky@fostercity.org or call me at (650) 286-3504.

14 thoughts on “Foster City – Housing and Economics – Time for Change

  1. Gerard Aarons

    Dear Mr. Bronitsky,
    Regarding FC Islander article Council Corner (Dec. 10, 2014) “Foster City – Housing and Economics – Time for a Change”. Wile I do not disagree with the elements of the Strategic Plan presented by the Task Force, I believe it’s quite a stretch to use Detroit as a cautionary tale in relation to the long-term economic stability, development, and viable future of Foster City. Foster City is more like one of the many affluent communities that are adjacent to the City of Detroit. In my opinion, the demographics of Foster City are more in line with residents of one of New York City’s affluent boroughs instead, based on opportunity, cultural diversity, education, income, and its proximity to San Francisco and Silicon Valley. I would prefer to have our elected leaders work toward maintaining Foster City’s grace, beauty, and charm… and preventing the Manhattan-ization of Foster City.

    Reply
    1. cbronitsky12 Post author

      I agree that we need to maintain the City’s grace, beauty and charm, which I think is the point behind changing the economic model away from housing growth as the primary source of funds. I also agree that we are not Detroit, but we are also not a borough of New York City with populations in the millions and large amounts of land and public transportation infrastructure. My point in talking about Detroit is that we need to plan today if we want grace, beauty and charm tomorrow and we need to plan in ways different from the past reliance on housing. I do not think the draft plan is perfect, but it is a place to start. Thanks for the comment.

      Reply
  2. Bob Cushman

    Charlie: It is an honor to be the first to post a comment at your blog. I have read the economic plan “Sustainable Foster City Plan” that you mention. It is very generally stated so it is hard for me to vision how it might unfold.

    You said in your 10 Dec Council Corner piece in the Islander that you are concerned about the impact of continued housing development in the City. I would appreciate your comment on what I perceive as the current state of affairs:

    It is inaccurate to describe Foster City as “built-out”. The City is “over- built”.
    Almost a year ago, the estimated number of residential units in the City was 12,765 . This is16% more than the 11,000 residential units that visionary Jack Foster called the “ultimate build-out” for Foster City.

    This over-built condition is straining the City infrastructure: We have traffic congestion and crowded schools. We lack water for additional people.

    What’s Coming:

    • There are 1,200 additional residential units now under construction or approved for construction. This will add another 10% to the current number of residential units in Foster City.

    The City has an average of 2.60 people per dwelling unit so, as a rule of thumb, the 1,200 new housing units will add approximately 3,120 people to the City population. (The City population was 32,168 as of 1/1/2014 )

    The City code requires 2.11 parking spaces for each additional residential unit. This can be used to estimate the number of additional cars that will be buzzing around Foster City when the additional 1,200 residential units are occupied. For example, 1,200 new housing units x 2.11 parking spaces required = 2,532 more cars.

    We have no similar ratio to show the number of additional school age children this building will add, but it is likely to be substantial

    • The City plans to approve even more residential units:

    Project Description Number of Units
    Projected:
    Harbor Cove 80
    Second units (Granny Units) 6
    Apartment Sites:
    Franciscan Apartments 104
    Sand Cove Apartments 300
    Shadow Cove Apartments 113
    Total 609

    We need a reasonable pause…a break in new housing unit approvals.
    Three votes from the City Council can accomplish this.

    Reply
    1. cbronitsky12 Post author

      Bob:

      Thank you for your comments. I do not intend to approve anything at this point other than movement forward on the economic development plan that moves us away from increased housing as the long term solution. I hope that you and everyone else concerned about this issue will support an economic plan that moves us away from housing growth as the primary financial engine for the City. Reliance on such past practices is not where we need to go.

      Reply
  3. Phyllis Moore

    Hi Charlie: Congratulations on starting this blog. It is a great idea. I am intrigued by your proposed change in direction that will rely less on adding new housing. I, too, am concerned about the problems that continued housing development is causing. The traffic congestion and over crowded schools will only get worse if we continue on our present course. But I am bothered by your statement that, “ if we can pass an ordinance establishing a moratorium, we can just as quickly pass an ordinance revoking the moratorium.” Actually, adopting an ordinance that would provide a temporary moratorium on housing development sounds like a good idea to me. It would at least give us a breather and it would temporarily stop adding school children to our already over-crowded schools. Would you be willing to introduce such an Ordinance, maybe just for discussion purposes among council members? Would you vote to pass it?
    Check out http://tinyurl.com/nomorehousing This is a petition opposing any additional high-density residential units until all previously approved construction projects are completed. Phyllis Moore

    Reply
    1. cbronitsky12 Post author

      Hi Phyllis – thank you for your comment. We do not need an ordinance to have breathing room, all we need are Council Members who are committed to changing our economic model. Right now, there is nothing in the pipeline that has not been addressed and the community has spoken loudly and clearly about the impact of housing growth. Thus, an ordinance adds nothing and can just as easily be removed, so it really serves no purpose. What I am hoping to see are more people like you that agree that we need a new model and talk to the members of the Council about their support for that.

      Reply
  4. Joe Giansante

    Hi Charlie:

    If I understand this correctly, the more fundamental problem is this:

    If one assumes that the share of property taxes received by Foster City is constant, and the city stops adding new housing at some point, then the tax revenues received by the city will increase at no more than the 2% per year that property taxes for current homeowners increases — plus an incremental amount to reflect the step-up in tax basis when existing homes are sold. So, including the sales of these existing homes, I’d venture a guesstimate that the annual increase in tax revenues would be on the order of perhaps 3% to 5% per year.

    If the annual Foster City operating budget inflation is higher than this 3%-5%, that at some point the situation becomes unsustainable, as we will eventually run out of space to build additional new homes. So at some point in the future, Foster City will have to limit its annual budget increases to this amount, which could make it difficult to attract and retain City employees, and maintain services at their current (inflation-adjusted) levels.

    We should understand this dynamic and what the financial and growth implications for the City will be, rather than simply adding new homes until the problems of overcrowding become more apparent — at which point we won’t be able to do much to remedy the situation. As has been noted by many observers, Foster City is becoming quite “crowded” already.

    Sooner or later the City will have to halt growth and adjust its budget to reflect this. It looks like the time to plan for this eventuality is now.

    Joe Giansante

    Reply
    1. cbronitsky12 Post author

      Hi Joe:

      Thanks for your email. You are 100% correct in your analysis of the economic reality – growth capped at 2% and inflation higher than that leaves us with no money eventually.

      What I am trying to do is to change the economic engine from housing growth. We spent the my first four years on the Council cutting everything we could without changing the quality of life we have. Now we need to look at and change the other side of the equation.

      Reply
      1. Joe Giansante

        Charlie — what options, other than increased residential housing — have been considered? And what has been the response of other Council Members? Also, what has been the average annual City budget increase rate over the past 5-10 years?

        This situation is just one more reason why I may, at some point, implement my “Plan B” — which is to leave California for a more tax-hospitable state, and that also has a more middle-of-the-road political perspective among its citizens (which was the situation when I came here 32 years ago). The recent population migration statistics demonstrate that this change has already begun — which also coincides with the aging of the Baby Boomer demographic segment, who are also taking their money with them to their new retirement locale. Nevada is looking pretty attractive at this point, and has seen many transfers from California in recent years..

        All cities and states go through economic cycles of growth and decline. California has had a great run for 70 years now, and I highly doubt that the next 70 years will be as good. Sadly, I don’t think that the average Californian understands this — particularly those who have never lived anywhere else. They tend to think that the “good times” just automatically go on forever. They don’t.

        Reply
        1. cbronitsky12 Post author

          Hi Joe, we are looking at many other options and have moved forward in some areas already. We are looking at revitalizing our retail and have done a city-wide retail study in the hope of coming up with a long term plan. We have been working with local businesses to assist in business growth and looking for ways to help bring businesses into Foster City that compliment existing businesses. We had been and I hope will resume working with our shopping centers to drive more patrons to them with local and regional events. Much of where we would like to go is outlined in the Plan. The City’s website, fostercity.org, by clicking on the projects and initiatives tab you will see a link to our economic dashboard which will answer many of your questions about our costs and revenues. As to the position of other Council Members, I tend to get myself in trouble if I try to speak for them, so I recommend that you contact them and find out what they think. Their emails are on the City website, but its first initial lastname at fostercity.org. Finally, as to leaving, I hope you will not give up on us too soon. It may be cheaper to live in Nevada, but then you have to live in Nevada, not Foster City. Thanks, Charlie

          Reply
  5. Wayne Bayliff

    Hello Charlie, thanks for this opportunity to communicate regarding your sponsored new model for the development of Foster City.

    I agree in total with Bob Cushman’s comments and analysis, and that the city is already over-built.

    I also agree with Phyllis Moore’s sentiment that an “official” residential building moratorium is warranted until we see the actual impact of projects already approved.

    The “purpose” that a council statement or ordinance would achieve is an official recognition that the will of the constituents has been heard and will be honored. If it is “removed,” the people will know by whom and why, and can act accordingly.

    The first initiative according to the Sustainable Foster City Plan is sustainable development (presumably including residential) and redevelopment.. the topic of concern at hand, and in my opinion, a “too easy” fallback if the other parts of the plan fail.

    Advancing city infrastructure, retail, and city promotion are all laudable goals, and I think the council will get support for those initiatives – if the council and city management can come up with some creative ideas on how to make them happen. Successful retail development in particular directly impacts the creation of jobs and taxes, but has been elusive to Foster City in the past. I look forward to seeing how this issue will be addressed in the plan.

    I understand and support that you want to get beyond depending on residential development to finance our future, but controlling our already over-built situation is presently on every citizens mind.

    Reply
    1. cbronitsky12 Post author

      Hi Wayne:

      Thank you for your post. Actually, the first initiative is “Allowing the development of necessary and desired amenities to enhance a certain quality of life among City residents.” The only reference in the Plan to housing development is affordable housing which does not necessarily require housing growth.

      I have written a second blog post on what we can do with our existing housing and will write other posts on other sources of revenue but the fact remains that property taxes will not, in the long run, keep up with the inflationary cost of doing business. Thus, we need to start to change the economic engine now before we have to. The reason to start now is because there will be successes and there will be failures but we need to be able to have minor failures without having to go back to housing, housing, housing and we need successes and failures so that we can learn from them, reassess and turn failures into success. If we fail at changing the economic model, then we will have no choice but to build. In other words, we can have setbacks but we cannot have failure and we cannot know what will succeed and what will fail until we move the Plan forward.

      As to a moratorium, every possible project that could add housing to Foster City would have to come to the Council for a hearing. Based on the gatekeeper process that we put in last year, that requires a public hearing. Thus, if there is anyone voting for additional housing development from today forward, the public will already know all about it, without the need for a moratorium.

      Reply
  6. asaini

    Hello Mayor:
    How does one monitor the current state of the Sustainable Foster City plan? The quarterly implementation reports stop as of August-2013.
    Thank you,
    Amit

    Reply
    1. cbronitsky12 Post author

      Unfortunately the Sustainable Foster City Plan is in a bit of a flux in that although it was approved, its funding was not approved and so I am working to get it back on calendar and approved so that we can flush the plan out a bit, begin to implement some of the key initiatives and then monitor their success. If you think that the Plan puts us in the right direction, I urge you to contact the other Council Members and tell them how you feel. Their email addresses can be found at the City’s website, fostercity.org

      Charlie

      Reply

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