Growth, Sprawl, and the Contradictions of Capitalism: San Diego Suburbs and the Speculative Frenzy, 1970-1991

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Growth, Sprawl, and the Contradictions of Capitalism:

San Diego Suburbs and the Speculative Frenzy, 1970-1991


San Diego has become the most beautiful place where nobody can afford to live because speculative growth drives housing prices regardless of the level of supply or demand. How this happened in San Diego County is fairly clear. Marx explained that ground rents (and thereby land prices) increase when capital and labor are invested in the most valuable land and when investment is intensive, with vast amounts of labor and capital focused on the high yield properties to the virtual exclusion of less productive or less valuable lands. In fact, speculative growth between 1960 and 1980 conformed to what Marx identified as the ideal case for speculative growth in land prices. The speculative growth of housing inspired environmental, tax revolt, and no-growth movements, but the demand for affordable housing was short lived and of limited impact. Nevertheless, there is no reason why land in San Diego must be overpriced, except for the desire to profit from speculation in land use futures.

Richard Hogan

Purdue University

March 2010

Keywords: ground rents, speculation, San Diego suburbs

Growth, Sprawl, and the Contradictions of Capitalism:

San Diego Suburbs and the Speculative Frenzy, 1970-1991
San Diego has become the most beautiful place where nobody can afford to live. There are no jobs other than real estate speculation that will provide adequate salaries to purchase or rent adequate housing in San Diego. Why? Because land speculation combined with tourism has become the industrial base for economic growth. Although speculators dominated the local political economy even in the good old days of the military industrial complex, the postmodern political economy, beginning with Mayor Pete Wilson's growth control policies (in 1972) and culminating in Governor Pete Wilson's state habitat protection plan (in 1992) has elevated land speculation to a fine art, indeed a science, whereby capital accumulation no longer requires the production of goods and services. Thus housing futures become the object of speculation in master plan development, where prices increase even when overbuilding has doubled the vacancy rate and even when environmental and growth control movements, economic and political crises reduce population and housing growth to almost zero. In other words, speculative growth drives housing prices regardless of the level of supply or demand.

How this happened in San Diego County is fairly clear, based on Marx's theory of ground rents. Specifically, Marx explained that ground rent (and thereby land prices) increase when capital and labor are invested in the most valuable land and when investment is intensive, with vast amounts of labor and capital focused on the high yield properties to the virtual exclusion of less productive or less valuable lands.

Here we will rely on a simplified social geography as the context for applying Marx's theory to suburban sprawl in San Diego County between 1960 and 1991. Simply stated, between 1960 and 1990 (and to a large extent still) blacks lived the Southeast corner of the San Diego Central city (and near the marine base in Oceanside). Latinos lived in the South Suburbs, between the Central City and Tijuana, and in the eastern, rural region. Rich people lived on the coast, north of the Central City. Suburban affluence was situated near the estate of Ed Fletcher, in the East Suburbs, especially in the Mount Helix region of La Mesa and El Cajon. Native American Indians lived in the South East wilderness area.

Given this somewhat crude social geography, we can appreciate how speculative growth between 1960 and 1980 conformed to what Marx identified as the ideal case for speculative growth in land prices. In shopping center and freeway development between 1960 and 1991 there was a Northern bias, a Coastal bias (particularly in La Jolla, West of Interstate 5 and State 52, which forms the base of what is now called the "golden triangle" with the eastern perimeter defined by Interstate 805, between U.C.S.D., the Scripps Institute of Oceanography, and the surfing beaches north of Pacific Beach). Even in the interior region there was a focus on the relatively valuable land in La Mesa, and El Cajon, including Fletcher Hills, located between Mount Helix, Grossmont College, and San Diego State University, while the peripheral regions of Santee and Lakeside boomed as suburban housing tracts but remained isolated in the freeway and shopping center development. More central to the Seventies boom was San Marcos (in North County), where the medical industrial complex and the new California State University campus created a second city of sorts, adjacent to the luxury golf and tennis resorts of Carlsbad, with its high-priced estate lots featuring ocean views.

As we shall see, the speculative growth of housing, to the point of overbuilding in the high priced regions, inspired environmental, tax revolt, and no-growth movements, particularly in the North County Suburbs, which were experiencing the most rapid and most ruinous growth. Nevertheless, as we shall see in more detail, the demand for affordable housing was short lived and of limited impact. Ultimately, in the aftermath of the rebellions the new policy of smart growth exacerbated the problem by increasing the scale of speculation in land-use futures and the capital intensive nature of development while simultaneously increasing the local government's dependence on the developer (or the private sector investor).

As we can consider in conclusion, there is no reason why land in San Diego must be overpriced, except for the desire to profit from speculation in land use futures. If we wish to save paradise, we must banish the speculator, not just from the coastal and wetland regions but from sea to shining sea. To understand why, we must review Marx on ground rents and land prices. Marx offers an admittedly difficult and often less than inspiring analysis, but thanks to the valiant editorial efforts of Engels and the critical scholarship of Harvey (1973) this might provide the base for a simple explanation of why speculative growth increases land prices and how housing growth might be effected without inflationary prices.

Marx on Commodities and Ground Rents

The structural economic version of this argument is complex (see Harvey 1973), but it is rooted in Marx's assertion that land "is not the product of labor and therefore has no value" (1967 [1867-1894], volume III, p. 623). Theoretically, the purchase price of land is a function of the prevailing rent divided by the interest rate and multiplied by the length of the rental period (how many years it will sustain tenants). Different lands may rent at different prices because some are more productive than others (given soil fertility, access to water, or whatever). However, since land is a commodity, its price (including its rental price) is not determined by its productivity or "use value" but by the "laws" of supply and demand. Since landowners can keep land off the market until the demand exceeds the supply (and the price rises), the inflation of rent and property values can be totally independent of productivity. Thus Marx concludes, "Landed property is here a barrier which does not permit any new investment of capital in hitherto uncultivated or unrented land without levying a tax" [that is, without claiming a profit] (1967 [1867-1894], volume III, p. 762).

In fact, the purchase price of land tends to increase over time for a variety of reasons that are not directly related to use value. When interest rates decline or consumer savings increase, when banks (or governments) offer long-term, low interest, unsecured loans to first-time home buyers (or veterans) or when the supply of land declines relative to the demand of consumers, land prices increase. For this reason, land tends to increase in price over time and tends to become the object of speculation, particularly during times of economic crises and de-industrialization. Thus the market value of land increases without any accompanying increase in the use value of the land. This is, in fact, why farmers are hard pressed to buy farm land on credit or, in some cases, to pay the taxes on the land they own. The market price of the land (what speculators will pay per acre) far exceeds the market value of the crops that the land will yield, even if the farmer is extremely industrious (see Marx 1967 [1867-1894], vol. III, p. 812, on small scale agriculture).

There is, however, an alternative to speculative growth and inflated land prices. Marx explains that there are two types of differential rents. Type I is rooted in differences in productivity. The least productive (worthless) land provides the base for calculating the differential rent for more productive land. In this case, as Marx (1967 [1867-1894], vol. III) explains, "[S]urplus profit is transformed into ground rent when two equal quantities of capital and labor are employed on equal areas of land with unequal results." (p. 649). The difference in the value of the product between least productive and more productive land is the value of differential rent (type I). Usually, labor and capital are invested in more productive land, which increases rent per acre (since relatively more acres of rent-bearing land are being brought into production) and thereby increases land prices. If, however, capital and labor were invested in worthless (least productive) land—clearing swamps or renovating ghetto housing—then the value of the land would increase without a corresponding increase in rent. All else being equal, property prices would not increase in this case.

In fact, this sort of capital improvement might yield differential rent of a different variety. Type II, the second form of differential rent discussed by Marx, reflects differences based on capital investment and the appropriation of these improvements by the landowner (pp. 674-709). Here too, however, there is a way to avoid inflationary growth. If capital investment is extensive (as opposed to intensive) there is an increase in rent that corresponds to the increase in capital but there is not an increase in rent per acre. As Marx (1967 [1867-1894], vol. 3) explains,

This is a phenomenon peculiar to differential rent II, distinguishing it from differential rent I. If the additional investments of capital were made successively in space, side by side in new additional soil of corresponding quality, rather than successively in time in the same soil, the quantity of the rental would have increased, and, as previously shown, so would the average rent from the total cultivated area, but not the magnitude of the rent per acre. (p. 691).

[T]he concentration of capital upon a smaller area of land increases the amount of rent per acre, whereas under the same conditions, its dispersion over a larger area, all other conditions being equal, does not produce this effect. (p. 692).
In other words, more intensive investment increases ground rent, which explains why differential investment strategies can affect the price of land, as Marx illustrates in comparing two countries with similarly fertile land and the same amount of capital, in which the one that invests more intensively has higher land prices than the more extensively invested nation (p. 692). "The additional capital, then, is always the cause for the relatively high rent, although absolutely it may have decreased." (p. 709) "So long as additional capital is invested in the same land with surplus-productivity, even if the surplus-productivity is decreasing, the absolute rent per acre in grain and money increases." (p. 733). "The investment of additional capital yielding only the average profit, whose surplus-productivity therefore=0, does not alter in any way the amount of the existing surplus-profit, and consequently of rent." (p. 734).

The investment in land that yields less than average (negative) profit actually reduces rents (p. 734), but, as we shall see, capitalists seek to invest in profitable enterprises. This is, of course, why tract homes in San Diego are selling for one million dollars and why foreclosures are a growing problem. My inclination would be to use the northern and eastern suburbs to raise avocados (which grow there in abundance), but it is more profitable in the postmodern economy to accumulate capital without providing goods or services (Harvey 1989). In fact, speculation in land, in Southern California, matches speculation in oil in the international market, as an attractive investment for multinational corporations. In both cases, potentially productive land not yet approved for drilling or housing is kept out of production in order to claim exorbitant "monopoly" rents on a small segment of available land that is actually available for use. How this booming market rose and fell between 1960 and 1989, when the savings and loan companies crashed and the bankers stole the money, is worth considering in some detail. Then, in conclusion, we can return to the larger theoretical issues that should clarify the legacy of smart growth and the prospects for the future of "yuppie heaven," the new San Diego, emerging from its ashes as "the unconventional city." First, however, a little social geography will be helpful as context for the analysis of freeway and shopping center development, 1960-1980.

San Diego County: Paradise Lost?

San Diego County is a vast Mediterranean paradise that runs from Tijuana, Mexico, to Camp Pendleton, USMC (the Marine Corps base that protects San Diego from the cancerous growth of Orange County). In between are 70 miles of sandy beaches, with large bays in the south and lagoons in the north. As seen in Figure 1, most of the cities in San Diego County are close to the coast, extending 15-30 miles into the interior grasslands, where tumbleweeds and then scrub oak and Manzanita extend up to the wet side of the coastal range, where Cuyamaca Rancho State Park (about 50 miles east of downtown), Mount Palomar, and Laguna provide forest and even skiing at 7,000 feet (see Figure 2). In fact, for senior ditch day at Monte Vista High School (located between La Mesa and El Cajon, about 15 miles east of downtown San Diego) in 1969 half the senior class went to the beach while the other half went to play in the snow. Across the mountains is the Anza Borrego desert (about 90 miles east of downtown), which is no longer part of San Diego County. The desert, however, is the final piece of the Mediterranean paradise. If the beach is overcast (as is common in June),1 the wilderness area to the east is likely to be warm and sunny. If one can't find the sun there the mountains are sure to be above the cloud line. On the rare occasion when even the mountain town of Julian is cloudy and cool, the road to the desert is sure to lead to sunny skies and rising temperatures. If you like to play outside in 70 degree (F) weather, it is hard to find a place on earth more inviting than San Diego.

(figures 1 & 2 about here)
Although San Diego County is largely white, there is a black ghetto, Logan Heights, just south and east of downtown. There is also a modest black population in Oceanside, just below Camp Pendleton. As seen in Figure 3, the South Suburban and East Suburban areas, from South Bay (just south of Chula Vista) to Ramona (just east of Poway) were less than five percent black in 1990, and in North City, from Mission Beach to Del Mar, through North County East (Vista, San Marcos, and Escondido) and extending out into the Mountains in East County, the unincorporated area of the county, there were virtually no (<3%) blacks in 1990.
(figure 3 about here)

As seen in Figure 3, however, the South Suburbs (Chula Vista, Sweetwater, and South Bay) were largely (over 43%) Latino in 1990, and the central city, which was 15% black, was between 20% and 43% percent Latino. Most of the unincorporated, rural East County and all of the North County (above Del Mar) was 15 to 23% Latino. That leaves only the North City beaches, especially La Jolla (the western protuberance into the Pacific Ocean), and inland housing tracts, extending north and east toward Poway, that remained pristine white middle class suburban enclaves, during the population and housing booms between 1960 and 1990.2

(figure 4 about here)
As we shall see, these pristine white middle class suburbs were the focus of the first wave of suburban growth, between 1940 and 1970, before the speculative growth of housing in the Seventies.
Shopping Center and Freeway Development, 1960-1989

Beginning in the 1970s there was a hue and cry against uncontrolled or unplanned growth in San Diego County, particular along the coast, but growth was neither unplanned nor uncontrolled. Initially, federal, state, and local governments cooperated in providing the infrastructure, most notably the freeways, but also the public schools, parks, and utilities that allowed for suburban growth. The private sector provided the tract housing and the shopping centers that were the terminus for the freeways that were gradually reaching the northern and eastern suburbs. There were serious gaps in the provision of infrastructure and, particularly in the early years, a tendency to ignore the city planners. The biggest problem, however, was not population growth but speculative growth in housing units in the 1970s, during Pete Wilson's tenure (1972-1982) as Mayor of San Diego (Davis 2003, p. 83; Hogan 2003, pp. 45-48).

(table 1 about here)
As seen in Table 1, the dramatic population growth was in the Forties and Fifties, during and after World War II, when the defense industry and the military bases boosted population and housing growth to over 80% per decade. The modest city of less than 300,000 (in 1940) claimed over one million residents in 1960. As Davis (2003) explains, the military industrial complex of what came to be Convair and General Dynamics demanded housing for downtown (Pacific Highway) workers. Federal funds (the Lanham Defense Housing Act) inspired the "planning disaster" of 3,000 residential units in Linda Vista, just above the San Diego River floodplain, north of what would become the commercial center of Mission Valley. As Davis reports, "Ingenious prefabrication methods enabled builders to complete as many as forty homes per day, but community infrastructure was entirely neglected. One water pipe supplied Linda Vista and one jammed road took its inhabitants to work and brought them home. There were no sidewalks, grocery stores, or schools." (p. 62).

Thus poorly planned suburban housing developments were the rule rather than the exception, even back in the boom days (Davis 2003, p. 77). By the Sixties, however, the rate of population and housing growth declined dramatically, to 31% and 33% respectively, due in part to the rumors in 1961 of the "imminent bankruptcy or sale of General Dynamics's Convair Division, the city's leading employer" (Davis 2003, p. 77). Then, in the Seventies, modest population growth (37%) was overwhelmed by the speculative growth of housing units (60%), facilitated by the Wilson-Reagan economic growth policy, when Pete Wilson was mayor of San Diego (1972-1982) and Reagan was governor of California (1967-1975). The Eighties (Reagan's presidential years) marked a modest decline in population growth and a sharp decline in housing growth, as growth control and habitat conservation movements effectively stalled and in some cases cancelled plans for additional freeway and housing construction. Then, with the failure of the savings and loans in 1989 (as George H. W. Bush assumed the presidency) a severe economic depression (lasting until about 1996, when Clinton was re-elected) sharply curtailed population and housing growth in the Nineties (see Hogan 1997 and Hogan 2003 for more detail on the economic and political history).

(figure 5 about here)
Paralleling the speculative growth in suburban housing was the growth of the San Diego freeway system between 1960 and 1980. Davis (2003) explains "successful land developers [relied upon] good intelligence on the location of future freeways and interstate highways" (p. 84). The freeways were, in this regard, the twentieth century equivalent of the railroads (Hogan 1990, pp. 39-42, 146-149, 168-174, 196-203). In fact, the pattern of suburban growth between 1960 and 1980 followed the network of freeways (the links) and shopping centers (the nodes) in the expanding transportation and commercial system that was the lifeline for otherwise isolated suburban housing tracts. As seen in Figure 5, the San Diego freeway system of 1960 comprised four fragments of state and interstate highways. The Cabrillo Freeway (which became State highway 163) was built in 1948. It was soon followed by State highway 80 (which became Interstate 8), State 94, and Interstate 5. Two large suburban shopping centers opened in 1960. College Grove (since renamed Market Place on the Grove) served the Eastern Suburbs. The Chula Vista Shopping Center served the Southern Suburbs, which remained isolated, without freeway access to downtown.
(figure 6 about here)
As seen in Figure 6, the eastern suburban freeways (8 and 94) were linked by 1970, and three new shopping centers served these area residents. Mission Valley and Fashion Valley were built, against the urging of the city planning department, in the floodplain of the San Diego River, in what was becoming the hotel and commercial center of the county, at the intersection of freeways 163 and 8 (see Davis 2003, pp. 73-77). Further east, in La Mesa, a new suburban mall, Grossmont Center, was located near the junction of freeways 94 and 8 (which were, in fact, connected via what would become State highway 125). The northern freeway system was also expanding, as Interstate 15 connected State 163 to the growing suburbs of Mira Mesa, Poway, and Rancho Bernardo. Interstate 5 connected San Diego with Orange County (and, ultimately, Los Angeles), but the southern section was only complete as far as National City. Chula Vista was still isolated, being closer to Tijuana than to downtown. State highway 78, proposed to link Oceanside with Escondido in North County, was still in pieces. Plaza Camino Real was open for business but without freeway access between Oceanside and Vista.
(figure 7 about here)
By 1980, as seen in Figure 7, most of the San Diego freeway system was completed. Interstate 5 ran from Mexico to Canada. Interstate 15 was completed past Escondido, which was then linked to Oceanside via State highway 78. There was also a North-South central freeway, Interstate 805, which provided eastern traffic with an alternative to I-5, providing access to I-15 suburbs, such as Poway, and to the beaches at La Jolla, via the new East-West freeway, State highway 52, which was projected , eventually, to connect with State highway 67, near Santee. There were, in addition, two new shopping centers. Serving the North City, University Towne Center opened in 1977 in what came to be known as the "Golden Triangle" formed by freeways 5, 805, and 52, just east of La Jolla. Serving the Eastern Suburbs, Parkway Plaza opened in 1972 at the intersection of freeways 8 and 67.
(figure 8 about here)
As late as 2001, there was still very little progress on the San Diego freeway system of 1980. As seen in Figure 8, the northern link to the East Suburbs, via State 78 to State 67 was abandoned. State 56 was still scheduled to connect I-5 and I-15 near the residential boomtown of Poway (but this is still in the planning stage in 2008). Further south, State 52 was completed past I-15 to State 125, but the East Suburb freeway system was still a set of fragments, since State 125, a critical piece of the South Suburb freeway system was still completed only between I-8 and State 94. Even today (2008), State 125 extends only from State 52 (near Santee) to State 54 (at the border of the unincorporated communities Sweetwater and Spring Valley). The proposed State 905 link to State 125 is still in the planning stage (in 2008).
(table 2 about here)
Clearly, the population and housing boom, which accompanied the developing freeway and shopping center system, was much greater in the North than in the South. As seen in Table 2, the North City population increased from 175,954 in 1960 to 596,995 in 1990, an increase of 421,041 or 239% The peak of population growth in this region was between 1960 and 1970, when population increased by 112,476, an increase of nearly 64%. In the next two decades population continued to grow but the rate of growth dropped dramatically, particularly between 1980 and 1990. Even then, however, the North City area was growing at more than twice the rate of the Central area. In fact, in 1990 the North City population exceeded that of the Central area.

The South Suburbs exhibit a similar pattern, but the scale of population increase was smaller. The rate of population growth in the East Suburbs was still smaller, and the pattern was slightly different. The peak of the population boom was in the seventies. This same pattern emerges in the outlying areas of North and East County, where the seventies boom is much more impressive. North County population growth is particularly dramatic, an increase of 472,325 or 320% between 1960 and 1990.

The general pattern is fairly clear. Between 1960 and 1990, San Diego County experienced classic suburbanization, a bi-polar pattern of development and redevelopment. In the 1960s the central city was deteriorating and the adjacent suburban areas in the north and south were expanding rapidly. In the seventies, the central city continued to deteriorate while the suburban boom extended into the eastern suburbs and, particularly, into the outlying areas of eastern and especially northern communities. In the eighties, growth in the affluent suburbs and outlying areas dropped markedly and the central city experienced a remarkable increase in population, as deteriorating inner-city neighborhoods were redeveloped.

When one examines population growth within subregional units, the pattern becomes clearer. The Central City subregion actually lost population (12%) between 1960 and 1970, but the Northern section of the City experienced incredible growth, particularly in the area of the University of California. "University City" housed 159 persons in 1960, but 14,630 residents were added by 1970 (an increase of 9,201%). A similar boom occurred in "North San Diego," where population increased from 290 to 7,714 (2,560%). Median housing values in these "boom towns" was $32,000 in 1970, compared $18,300 in the Central City and $22,200 in the county as a whole. All of this suggests a typical pattern of central city decline and growth of wealthy suburbs (Comprehensive Planning Organization of the San Diego Region 1970).

In South and East suburbs, unincorporated areas and small towns that had been considered outside of metropolitan commuting range experienced tremendous population growth as they were incorporated into the expanding urban area. The population of "Sweetwater," an unincorporated area east of Chula Vista, increased 152% (from 5,605 in 1960 to 14,105 in 1970). Santee population increased 90% (from 10,429 in 1960 to 19,793 in 1970). In North County, a similar pattern emerges. San Marcos population increased 87% (from 3,243 to 6,059), making it the fastest growing city in North County (Comprehensive Planning Organization of the San Diego Region 1970).

Although South and East Suburb and North County areas generally offered moderate-priced housing in 1970 (below or near the county median), the most rapidly growing subregions in those areas were, for the most part, offering higher priced housing. Median housing values were $26,800 in Sweetwater (compared to South Suburb median of 21,500) and $27,900 in San Marcos (compared to $22,700 in North County). Santee was the only rapidly growing subregion that offered moderate priced housing ($19,400). Otherwise, the growth was in areas where only the affluent could afford to buy (Comprehensive Planning Organization of the San Diego Region 1970).

Generally, between 1960 and 1970, San Diego City experienced urban blight and the growth of new suburban areas, particularly in the north. The southern and eastern suburbs continued to grow, particularly at the periphery of established suburban cities. The most dramatic growth, however, was in northern San Diego. Through the Seventies, this general pattern of central city deterioration and suburban growth continued, with the most spectacular growth in North and East County areas. As the prospects for further development in the more proximate areas declined, the outlying areas of North and East County experienced an incredible population (and building) boom between 1970 and 1980.

What is most remarkable, however, is the demographic transition of 1980-90. Population growth slowed in all the outlying regions of the city and increased dramatically in the central city during this period. In fact, the Central City subregion population increased 17.5 percent during this period. The outlying areas still grew at a faster rate than the central city, but the rate of growth declined across all areas except for the Central area and the Central City subregion in particular (SANDAG 1990 (June)). This was the direct result of growth control movements and lawsuits that imposed limits on new suburban development and imposed the burden of affordable housing on the Central City of San Diego (where the need was the greatest) and the wealthy suburbs, such as Carlsbad (were the building capacity was the greatest). As we shall see, however, the brave new world of smart growth did not mark an enduring commitment to affordable housing. In fact, both in San Diego and in Carlsbad, developers merely absorbed the cost of affordable housing as part of an increasingly capital intensive, large scale planning and development effort that further increased the price of housing (particularly in places like Carlsbad) and simultaneously increased local government's dependence on the private sector, which now provides not just housing but infrastructure, including schools, police and fire services, which once were considered public goods.

(figure 9 about here)
After the Boom

Briefly stated, the Eighties marked the transition from suburban freeway and shopping center development to inner-city redevelopment, as San Diego made the transition from "unconventional city" (rejected as the site of the 1972 Republican Party convention) to "yuppie heaven" (Davis 2003, pp. 97, 103; Miller 2003, p. 233; Mayhew 2003, p. 272). The postmodern or postindustrial economy turned from defense and defense contracting to land speculation and tourism. FIRE (finance, insurance, and real estate) was the major growth sector, and San Diego received a face lift, from the deteriorating downtown to the distant towns of Carlsbad, Escondido, and Julian. The result was something like Disneyland, but the downtown (Main Street) was a mix of suburban shopping mall—Horton Plaza, built on the site of the old war memorial, where sailors and prostitutes had gathered in the Seventies, and urban club life—the Gaslight District of yuppie bars and clubs, which was finally cleared of street people through draconian law enforcement efforts. Nearby (although not readily accessible on foot) was the new convention center on the harbor, bordered by the extended commercial promenade of Seaport Village. Old Town was revitalized as Margaritaville, and the bikers and strippers were pushed aside in Mission Beach, where Sea World provided the anchor for resorts on the Bay. Post Coastal Commission public access created a vast beachfront of public land, from Ocean Beach to La Jolla. Further north, Lego Land offered family fun, while Anderson's split pea soup offered family dining in the increasingly exclusive suburban paradise of Carlsbad, which now boasts a PGA ready golf course and a tennis facility that is already on the ATP tour. Further east, the Wild Animal Park is the postmodern alternative to the classical San Diego Zoo, downtown. At the Park the animals run free and the tourists are caged (on train or walking tours). Even the old gold rush town of Julian has received a face lift, as the gateway to Frontier Land—which remains beyond the reach of the freeway system.

(figure 9 about here)
As seen in Figure 9, the new and improved Yuppie Heaven has even attempted to build its version of the monorail, providing convenient access to the major attractions of the park. In this case it is not an elevated track but a trolley, which is still a work in progress (which has not, apparently, progressed much since 2001). The trolley provides safe access to Tijuana, which is the most popular tourist route. It has been less successful as a commuter alternative to the freeways, although it has extended as far east as Santee and also serves the North County suburbs. When and if it will connect to the Wild Animal Park and to Julian remains to be seen, but it is clear that neither the freeway nor the trolley system has really solved the problem of the vast North City and, especially, North County suburban expansion of the past four decades.

The vast residential warehousing districts, from Sweetwater to Santee, Mira Mesa to Poway and San Marcos to Fallbrook have become an interior valley commuter's nightmare. San Marcos has, at least, attracted medical and educational institutions that provide jobs for local residents, but it seems that land speculation is still the leading industry. Amazingly, North County, particularly the coastal city of Carlsbad, experienced a new building boom in the late-nineties, and it seems likely that the latest round of fires will stimulate further speculation in land-use futures. In some sense, the recurring brush fires, which are nature's way of maintaining grasslands in danger of invasion from coastal or mountain species, have become a more effective market clearing mechanism for the local real estate trade (see Mike Davis 2007 on the brush fires).

Even if Mother Nature destroys the tract houses, however, the problem of the freeway system remains. As early as the Seventies, planning consultants recognized the problem and offered ways of minimizing the damage (Appleyard and Lynch 1974). To the extent that their advice was followed, the efficiency of the freeway system was reduced, but the alternative path of Smart Growth will require increasing housing density along the major transport routes, which is not what the developers are prepared to offer. Ironically, during the doldrums of the early Nineties developers were willing to promise affordable housing in order to secure future development rights, but by the time building was recommencing, during the recovery of 1996-2000, federal and State interest in affordable housing had waned and there were no incentives for providing alternatives to single family dwelling units on estate lots, or in tracts with large structures on small lots, at ridiculous prices. Thus San Diego has become the greatest place where nobody can afford to live.

When I was doing my field research in San Diego in 1992 the Sociology Department at UCSD was searching for new faculty. The department head was surprised when I told him that I was not interested. Even if they had doubled my salary there was no way that I could have bought a house there in 1992, even though the market was depressed and tract homes in the North County were only half a million. Just before the economy tanked again, in 1999, that same house would have sold for twice the price. Thus there is still money to be made in land speculation, but there are no productive enterprises that will justify the cost of living in San Diego.3

Why Growth Control Failed

The failure of environmental and growth control efforts in the 1970s and 1980s should be qualified. The federal, state, and local regulations did result in substantial changes in the process of obtaining building permits, particularly in wetlands and along the coast. The pre-coastal commission housing in La Jolla and elsewhere stands as a stark reminder that the uprising of the Sixties was successful in enforcing the seemingly radical principle that nobody can own the beach (Hogan 2003, p. 88). If we could simply extend that principle to the region between the Atlantic and Pacific coasts we would be well on our way toward a solution to the apparently inevitable speculative growth in land prices.

Unfortunately, the various popular revolts that shaped land-use planning in the late twentieth century, beginning with the environmentalist movement of the 1970s and extending into the growth control movements of the 1980s, combined a set of liberal and conservative interests in a classic progressive movement, in which the people opposed the government and the capitalists, who were viewed as the common enemy. Pete Wilson was one of the politicians on the cutting edge of efforts to accommodate environmentalism. He was a member of the Citizen Advisory Committee on Environmental Quality, appointed by President Nixon in May of 1969 and funded by the Rockefeller Brothers. Thus Wilson was one of the first to recognize that development could accommodate environmental regulation, so long as the regulation was procedural rather than substantive. In fact, this new perspective on land use was rooted in the belief that big capital and big government could accommodate the demands of the mainstream environmentalists, who were included in the Environmental Agenda Task Force, which was created by the Citizens Committee in 1972 and likewise funded by the Rockefeller Brothers (Hogan 2003, p. 44). These "grassroots" organizations provided the basis for what Governor Wilson would introduce as the Natural Community Conservation Plan, in an effort to preempt the uncertainty of the Endangered Species Act and the problem of unanticipated listings. Smart growth, as we know it today, is just another chapter of the same book. So long as the developer can anticipate the cost of environmental protection and pass the cost on to the consumer there is no problem with dedicating open space or habitat conservation districts.

The tax revolt of 1978 created additional problems, and the solution passed the burden of infrastructure from the public to the private sector. Thus general plans came to rely on facility management districts which would allow master plan developers to provide all of the services that the city was supposed to provide in the good old days. Actually, this was a popular plan for saving money and assuring that developers absorbed the cost of development. Of course, it not only increased the cost of development but also increased local government dependence on the developer—the only one with the interest and ability to navigate the maze of government regulations. When the government demanded affordable housing, in the building doldrums of 1992, developers were prepared to add the cost of cheap apartments (off-site) to the inflated cost of luxury homes. Thus even the provision of affordable housing had the effect of further increasing housing costs, particularly since the developers continued to focus on the North County coastal suburbs, like Carlsbad, where tract homes might sell for a million dollars.

So long as homes are bought and sold for profit the prices will continue to climb, so that only real estate speculators can afford to buy, and we will continue to build tinder for the wildfires instead of growing avocados. Alternatively, Marx offers a blueprint for affordable housing (if not for communist utopia). Invest extensively in the least valuable lands. In San Diego that means in the Southeast quadrant of the Central City (Logan Heights), in the South Suburbs (National City, Chula Vista, San Ysidro, and South Bay) and in the Southeast area of Indian reservations and wilderness. These are, of course, the areas that speculators have shunned. These are the regions where projected freeways are not built. The Trolley passes blacks on the road to La Mesa and passes Latinos on the way to Tijuana, but the great Southeast—the poorest section of the region, home of the lowest racial caste, in a Western racial system that privileges blacks above Mexicans and Mexicans above Indians—is without service. Here are the neglected population and land resources which might accommodate a new airport, a toll road and all the wonders of smart growth, but it seems that there is no money to be made investing in worthless land. In fact, as Marx explains, investing capital extensively in the least productive lands will ultimately reduce differential rents and, by extension, land prices, which would, of course, undermine the speculation in land-use futures.


1. "June gloom" is legendary in San Diego county. Even in the Midwest we hear about it when it interferes with PGA golf tournaments—see "Fog Clouds Torrey Pines," Journal and Courier, 11 June 2008, page B4, col. 6, and "Open boring? Not this year," 12 June 2008, page B3, cols. 5-6, which begins, "SAN DIEGO—The 'June Gloom' so typical of summer in San Diego"

2. Mike Davis (2003, pp. 66-7, see also endnote 107, p. 365) discusses the segregated North City suburbs.

3. Mike Davis (2003) offers the names and dates of the political history, including the story of the Scripps and the Fletchers, and, more recently, C. Arnold Smith and Ernest W. Hahn, who were critical land speculators or city fathers, who dominated economic development and politics in San Diego history. His is a lively story of corruption and shady business practices, ranging from the Las Vegas mafia to Westgate Park and Jack Murphy Stadium. Yes, even the mob and the football and baseball franchises are part of this highly entertaining and informative account. Hogan (2003) offers a less entertaining but more scrupulously documented story of the recent history, and includes reviews of the urban sociological, planning, and, to a lesser extent, historical literatures. He develops much of the theory upon which this paper builds, and presents details of the machinations of public and private sector planners, particularly between 1992 and 1999, but also, through retrospective accounts by the principals, between 1980 and 1992. Hogan (1997) offers an overview of the theory and much of the data on the economic shift from manufacturing to trade, particularly the speculative trade in land-use futures. Hogan (1997 and 2003) and Davis (2003 and 2007) offer complementary accounts. Hogan (1997) provides data, while Davis provides names (and usually provides dates and sources). In this regard, much to the dismay of historians, Hogan actually makes up names for the central characters, including the suburban cities, in order to protect the land speculators and elected or appointed city government officials (and their employees) from public scrutiny of their private meetings and personal opinions.

Given sufficient time and space we might consider the disciplinary differences that allow journalists and historians the luxury of reproducing gossip (or personal reminiscence) while preventing sociologists from accurately reporting things that they observe firsthand. Suffice it to say that all three answer to a higher power (e.g., publisher, university, or funding agency administrations, thoroughly ensconced in the bureaucratic maze constructed by their lawyers and accountants). The professions of journalism, history and sociology each subscribe to a specific professional code of conduct, in addition to the code of the lawyers and accountants and the political and economic constraints imposed by public and private administrations. Here we can simply acknowledge these differences without lamenting or rejoicing in the fact that historians and sociologists don't write for our local newspapers and don't have the same background, training, and standards for documenting claims to the truth.

Appleyard, Donald, and Kevin Lynch. 1974. Temporary Paradise? A Look at the Special Landscape of the San Diego Region. A Report to the City of San Diego. Unpublished report located in the Government Documents section of the University of California, San Diego, library.

Comprehensive Planning Organization of the San Diego Region. 1972. “San Diego Region 1970 Census: Subregional Area Data Tables and Computer Maps.” Unpublished report located in the Government Documents section of the University of California, San Diego, library.

Davis, Mike. 2003. "The Next Little Dollar: Private Governments in San Diego," pp. 17-144 in Mike Davis, Kelley Mayhew, and Jim Miller (eds.), Under the Perfect Sun: The San Diego Tourists Never See (NY: New Press)

Davis, Mike. 2007. "Who Really Set the California Fires?" (accessed November 2, 2007).

Harvey, David. 1973. Social Justice and the City. (Baltimore, MD: Johns Hopkins University Press).

Harvey, David. 1989. The Condition of Postmodernity: An Enquiry into the Origins of Cultural Change. (Cambridge, Mass.: Blackwell).

Hogan, Richard. 1990. Class and Community in Frontier Colorado. (Lawrence, KS: University Press of Kansas).

Hogan, Richard. 1997. “Do Citizen Initiatives Affect Growth? The Case of Five San Diego Suburbs,” pp. 249-75 in Dan A. Chekki (ed.), Research in Community Sociology. (New York: JAI Press).

Hogan, Richard. 2003. The Failure of Planning: Permitting Sprawl in San Diego Suburbs, 1970-1999. (Columbus: Ohio State University Press).

Journal and Courier (daily) 2008 (Lafayette, Indiana).

Marx, Karl. 1967 [1867-1894]. Capital: A Critique of Political Economy. 3 vols. (New York: International Publishers).

Mayhew, Kelley. 2003. "Life in Vacationland: The 'Other' San Diego," pp. 271-360 in Mike Davis, Kelley Mayhew, and Jim Miller (eds.), Under the Perfect Sun: The San Diego Tourists Never See (NY: New Press)

Miller, Jim. 2003. "Just Another Day in Paradise? An Episodic History of Rebellion and Repression in America's Finest City," pp. 159-261 in Mike Davis, Kelley Mayhew, and Jim Miller (eds.), Under the Perfect Sun: The San Diego Tourists Never See (NY: New Press)

San Diego Association of Governments (SANDAG). 1990. Regional Housing Needs Statement: San Diego Region. (San Diego: Source Point).

U.S. Census. 1990. "Table 30. 1990 Population and Housing Unit Count." (accessed 6/9/2008)

U.S. Census. 2000. "San Diego County Fact Sheet." (accessed 6/9/2008)

Figure 1. San Diego County Cities, 2001

source: Hogan 2003:xxvi, Base map provided by SANDAG

Figure 2.

San Diego County, with Cities and Highways Indicated

Source: Hogan (2003)

Figure 3. Percent Black Population in 1990 Major Statistical areas in San Diego County

source: Hogan 2003:xxvi, Base map provided by SANDAG

Figure 4. Percent Hispanic Population in 1990 Major Statistical Areas in San Diego County

source: Hogan 2003:xxvii, Base map provided by SANDAG

Table 1

San Diego County Population and Housing Growth by Decade, 1940-2000

year population growth* housing units growth *

1940 289,348 100,245
1950 556,808 92% 181,440 81%
1960 1,033,011 86% 339,442 87%
1970 1,357,854 31% 450,798 33%
1980 1,861,846 37% 720,346 60%
1990 2,498,016 34% 946,420 31%
2000 2,813,833 13% 1,040,149 10%

source: U.S. Census, Table 30. 1990 Population and Housing Unit Count; 2000 figures from San Diego County Fact Sheet. (accessed 6/9/2008)

* growth is percent increase over previous decade

Figure 5.

Freeways and Large (600,000 square foot) Shopping Centers in San Diego County in1960

Source: Hogan (2003)

Figure 6.

Freeways and Large (600,000 square foot) Shopping Centers in San Diego County in 1970

Source: Hogan (2003)

Figure 7.

Freeways and Large (600,000 square foot) Shopping Centers in San Diego County in 1980

Source: Hogan (2003)

Figure 8

Freeways in San Diego County 2001, Under Construction Indicated with Broken Lines

source: Hogan (2003)

Table 2

Population, Population Increase and Percent Increase per Decade for Major Statistical Areas in San Diego County, 1960-1990*
Area 1960 1970 1980 1990 1960-1990
Central 451,507 473,718 495,493 584,537

22,211 21,775 89,044 133,030

4.9% 4.6% 18.0% 29.5%
North 175,954 288,430 436,352 596,995

City 112,476 147,922 160,643 421,041

63.9% 51.2% 36.8% 239.3%
South 87,736 139,009 195,563 255,351

Suburb 51,273 56,554 59,788 167,615

58.4% 40.7% 30.6% 191.0%
East 162,973 228,115 331,350 437,207

Suburb 65,142 103,235 105,857 274,234

40.0% 45.3% 31.9% 168.3%
North 147,468 220,326 388,979 616,793

County 72,858 168,653 227,814 472,325

49.4% 76.5% 58.6% 320.3%
East 7,373 8,256 14,109 19,036

County 883 5,853 4,927 11,663

12.0% 70.9% 34.9% 158.2%
County 1,033,011 1,357,854 1,861,846 2,509,919

Total 324,843 503,992 648,073 1,476,908

31.4% 37.1% 34.8 143.0%
Source: Comprehensive Planning Organization, San Diego Region 1970 Census: Subregional Area Data Tables and Computer Maps, April 1972, Table 2 (60-70 figures); SANDAG, Population and Housing Report, June, 1990, p. 9 (80-90 figures)
* For each area, the first row reports population for year indicated in column; the second row reports population increase since previous decade (or in last column for entire three decades); the third row reports percent population increase (for decade or entire period).

Figure 9.

Yuppie Heaven, 2001, with Light Rail Indicated

Source: Hogan (2003)
About the Author
Richard Hogan is associate professor of sociology at Purdue University. His work encompasses community studies, such as Class and Community in Frontier Colorado (University Press of Kansas, 1990) and The Failure of Planning: Permitting Sprawl in San Diego Suburbs, 1970-1999 (Ohio State University Press, 2003), and studies of race, class and gender inequality, such as "Was Wright Wrong? High Class Jobs and the Professional Earnings Advantage" (Social Science Quarterly, 86, 3 (September 2005):645-663. He is currently working on a book on Reconstruction (1868-1876) Georgia.

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