Berkeley: Housing Kettle at Full Boil

We were cruising Berkeley neighborhoods, putting price tags on houses. Marty Schiffenbauer pointed to a redwood bungalow of classic Berkeley design. Nice house, said Schiffenbauer, probably five fifty. We turned the corner and stared at a two-story stucco, circa 1900. Six, he said. Maybe seven.

We’ve all played this game. Trolling the streets of a neighborhood that has captured our attention, wondering about the price of admission. We make guesses, tossing off numbers so big they are foreign to the rest of our lives. They are numbers that have utility only in this strange game, and they leave a residue of uneasiness.

Schiffenbauer knows this game, albeit indirectly. He has lived in Berkeley for 20 years and watched his college town transform itself into a community of property-obsessed burghers. Professors and lawyers whose shingled houses now return them more wealth than their professions. Either you have property and now regard yourself as a member of the landed class, or you don’t. Either you can handle the numbers, or you can’t.

It is those who can’t that intrigue Schiffenbauer. That vast fraternity of escrow virgins now consigned, more or less permanently, to a lesser social class. Their lack of a strong equity position affects their friendships, their marriage potential, and no amount of other personal accomplishments can rescue them. They can either remain landless in Berkeley, living with their real estate anger, or emigrate to Arkansas.

This would be an old story in California, except that Schiffenbauer is not like most of us. A shaggy gnome of a man, an old radical whose type has become an endangered species outside of Berkeley, Schiffenbauer more or less founded the rent control movement here a decade ago. Along with Santa Monica, Berkeley now has one of the strictest rent control laws in the nation.

So when Schiffenbauer went running with a friend one morning, the two began talking about house prices and the disenfranchised. The situation was driving out the minorities and the old, just like the high rents back in the 1970s, Schiffenbauer said. He wondered if he should organize a new initiative to limit house prices.

Good idea, his friend said.

Then I’ll do it, Schiffenbauer said.

Within a few days he had designed an initiative that would restrict price increases of Berkeley houses to the national average. Last year the national average was 6%; the increase in Berkeley, 35%.

Now most likely you are thinking the same as everyone else when they first hear this idea. You think it’s illegal. No city would pass such a law, and if it did the courts would knock it down.

But consider two points: First, this proposal would be offered as an initiative, and in Berkeley the homeowners comprise only one-third of the voting population. Two-thirds are renters, most of them filled to some degree with real estate anger.

Second, no less than the dean of the Berkeley law school says a limitation on house prices just might pass muster in the courts. After all, such a law would have the goal of maintaining the ethnic and economic diversity in Berkeley’s population. That is the same goal espoused by the city’s rent control law, which was approved by the U.S. Supreme Court.

Mainly, the experts say, the courts would insist that price limitations not be so harsh as to deprive owners of a reasonable profit. Schiffenbauer thinks his plan would pass this test easily, since his law would put Berkeley on a par with other cities nationwide.

Maybe the courts would kick it out, maybe not. What’s more intriguing is the question of whether we are seeing the beginning of a long struggle over houses. When only 10% of the population can afford a house--as is now the case--is it reasonable to think the remaining 90% will tolerate that situation forever? What happens when those numbers go to 95%-5%, then 98%-2%?

Even now Berkeley is showing us what that struggle might be like. In his hometown, Schiffenbauer has become a pariah. Damning letters pour in every day to the local newspapers, and even Schiffenbauer’s old left-wing buddies in city politics--most of them now Berkeley homeowners--have denounced him in public.

The hate is worse than anything that happened during the old rent control days, Schiffenbauer says. He has started thinking of himself as the Salman Rushdie of Berkeley, ostracized because he has threatened something as precious as religion. Salvation through real estate.

And like religious struggles, this one promises its own special ugliness. When he went home the other day Schiffenbauer had two messages on his answering machine. “You are scum,” said one. “Schwein hund,” said the other.