Today, Explained - New Dork City

Episode Date: October 26, 2023

Silicon Valley billionaires are battling local residents over plans to build a whole new city in California, part of a global trend of wealthy investors dreaming up cities from scratch. The San Francisco Chronicle’s J.K. Dineen and Sarah Moser from McGill’s New Cities Lab explain. This episode was produced by Avishay Artsy, edited by Matt Collette, fact-checked by Laura Bullard, engineered by Patrick Boyd, and hosted by Noel King. Transcript at vox.com/todayexplained Support Today, Explained by making a financial contribution to Vox! bit.ly/givepodcasts Learn more about your ad choices. Visit podcastchoices.com/adchoices

On Today Explained, we've talked a lot about the problems with cities, their post-pandemic doom loops. As remote work pushes down property values, eventually the taxes collected from those offices and urban retail will also fall. Their crime vibes. I see a lot of people just going and grabbing people's bags, hitting them. It's like they don't care. Their fight to unshrink their shrinking populations with cash and amenities. I had laundry. That was huge. I had laundry. Their fires, their weed frauds, their parking dilemmas, their traffic failures. And yet, most Americans live in cities and love in cities and work in cities and just want them to hashtag do better. Today, a possibly deranged plan in California to build a city from scratch and why it's so tempting to just start over.

Get groceries delivered across the GTA from Real Canadian Superstore with PC Express. Shop online for super prices and super savings. Try it today and get up to $75 in PC Optimum Points. Visit superstore.ca to get started. Today Explained, I'm Noelle King. My co-pilot, J.K. Dineen, is a reporter covering housing and real estate for the San Francisco Chronicle. He's been writing about a literal whodunit that started in 2018 in a rural area located between San Francisco and Sacramento. It starts with some unexpected investment. This mysterious group of investors started paying well over market value in buying up thousands of acres of dry farmland at a time. And this was farmland that's suitable for wheat and barley and alfalfa

and grazing of cattle and especially sheep. And the investors were getting increasingly aggressive. These folks have used strong arm mobster techniques to try to force landowners to sell. And I'm going, come on, guys, you've created a very, very bad atmosphere in Solano County. So that was dividing the community. It was dividing families. In some cases, it made a lot of Solano County. So that was dividing the community. It was dividing families in some

cases. It made a lot of Solano County farmers very rich. Eventually, it caught the attention of two members of Congress, John Garamendi and Mike Thompson, who represent different portions of Solano County. And they were interested in it because of the fact that much of the farmland was surrounding Travis Air Force Base, which is a very important military facility. A lot of the aid going to Ukraine right now is being flown out of that airport. They were concerned with, I mean, is it the Chinese who is really encircling the Air Force Base? Since 2018, a group known as Flannery Associates has bought more than 50,000 acres of farmland near the Air Force Base. Some proposals being considered to protect the farmland include

more disclosure of agricultural land purchases and prohibiting foreign ownership of farms. At that point, pressure was really building. It hit the media. I started writing about it. And the rumors and speculation were running rampant to the point where the investor group finally felt pressured to show their face, to reveal themselves. After weeks of speculation, we now know who's behind a big land buy out of Northern California and what they plan to do with it. It turned out they're not from China. They were not even really real estate people at all. They were, in fact,

a bunch of very successful, wealthy Silicon Valley entrepreneurs and investors. Some of those on the list include billionaire venture capitalist Michael Moritz, the widow of Apple co-founder Steve Jobs, billionaire businesswoman Laureen Powell Jobs, LinkedIn co-founder Reid Hoffman, and Patrick and John Collison, the sibling co-founders of San Francisco-based payment technology company Stripe. Some of the people that the real early investors in Google and PayPal, and that was just a shock because nobody really expected that a bunch of Silicon Valley, Palo Alto billionaires would want to buy a bunch of dry farmland in an obscure corner of Solano County, which isn't really a place that one

associates with tech billionaires. Okay, so tech billionaires, 50,000 acres of what is more or less farmland. It's near a military base. They finally reveal themselves because the pressure's on. The pressure's coming from farmers, ranchers, also Congress by the time it all comes to a head. And what do these people want to do with their 50,000 acres of land? Yeah, so the name of the company is called California Forever, which, you know, sounds like delightful and scary at the same time. And they want to revive the California dream and build this utopian city, walkable, bikeable, densely populated new California city, which they hope will rival the great American cities. The group of investors want to build a megacity, which will offer good-paying jobs, affordable housing, clean energy, sustainable infrastructure, open space, and a healthy environment. They talk a lot about solar farms. They talk a lot about preserving, you know, plenty of open space, at least 10,000 acres. The renderings of the proposed city look like something out of a fictional book.

Streets without cars, children on bikes, people on kayaks, neighbors gathered at their local coffee shop. The renderings of this futuristic California forever city doesn't show any automobiles, which is interesting. It shows a lot of people on bicycles and walking. And the images, by the way, are all AI generated. So there's like some weird things like a girl on a bicycle who only has one foot. I'm sorry. She doesn't have one foot because something bad has happened to her. She has one foot because it's an AI rendering. I was so worried about this woman. She'll be fine. Right now they are saying, you know, we want to build an environmentally friendly, live, work, play, sustainable, green city.

They look at the great neighborhoods in America and they like row houses. They like Boston's Back Bay. They like parts of San Francisco like North Beach or Noe Valley or, you know, like the West Village in New York. All of the places, JK, that they've modeled this city on are very nice. I like the West Village. I like the Back Bay. I like Noé Valley. However, I don't live there. How did local people react when they found out this was the plan to build an entirely new city? I think locals are baffled. I don't know that it's realistic what they're talking about at all. It makes zero sense. There's no mass transit.

There's no water for that. You have cities like Fairfield and Vallejo and Dixon. The people there have been desperate for, especially Fairfield. They have a train station. It's the county seat. They have government jobs and courthouses and they would love to have a developer come to downtown Fairfield and build a nice modern apartment building.

They have been trying to get somebody to do that for years. They could truly do a lot to help Solano County if they cared really about what's going on here. We have a lot that they could invest in and change the face of Fairfield even. We have a whole city block down there. They're welcome to come and develop for a little project to show us what you can do. So the idea that this group of strangers with unlimited resources would come into their county and not invest where they want to do, where they want to build, where they want to develop, where they want to revive their

downtowns, but in a completely isolated, not transit-friendly, dry part of the county that's always been rural and agricultural. And so obviously there's lots and lots of questions about that. Does it seem to you like these concerns from local people are legitimate concerns? Or is this more Northern California, NIMBY, not in my backyard, please don't build houses here? I don't think it is. You know, Solano County is the poorest of the nine Bay Area counties. And so it's not traditional nimbyism in the sense that people want to preserve their views or preserve their kind of low-density suburban community feel. It's not really that kind of place. It's more a mix of working class

towns and farms. You know, I was born of this dirt and they're going to put me in the dirt here when I die. And I said, until that time, I'll be here looking at you. There's two groups of people that are leading the opposition. One is residents of some of the cities like Fairfield, and they just object to the idea of sprawl. I mean, no matter what California Forever says, you know, you're talking about urbanizing, you know, an agricultural area. The other group would be the ranchers themselves, ones that have not sold out, who refuse to sell out, and who very much like ranching in Solano County. How are these investors responding to concerns from the community? What are they saying when people throw all this at them? A lot of the criticism comes from the fact that it was secret for so long. And they're saying, look, we understand you're angry. Please yell at us.

We expected that, but we had to do it that way. We had to keep it secret, or else the prices of the land would have been driven up even more than they already were. We felt very confident that we could build an amazing project out there. We had to assemble a large landholding, and in order to do that, we had to be quiet about the plant so that we didn't have reckless speculation and tracked home developers coming into the area. Given the California Forever folks the benefit of the doubt, they are a group of people that have created tens and tens and thousands of jobs throughout the Bay Area. And they know firsthand how difficult it is for workers to afford housing in the Bay Area. And so some of them have spent quite a bit of money investing in sort of the YIMBY movement,

the Yes In My Backyard movement, and trying to make it easier, faster, and cheaper to build housing in the Bay Area. They have run into roadblocks in Silicon Valley, in San Francisco, where there is so much opposition to housing. And this report from the governor's office is calling out San Francisco for making things very difficult for people trying to create more housing. So far this year, San Francisco has permitted less than one home per day. And so I think, giving them the benefit of the doubt, there is an honest desire to create a new city that combines maybe the best of American cities, but is also affordable. Okay, so this is not for Laurene Powell Jobs. She does not want to live in this city. This is for the people. Yes, I think the image that they are propagating is one of, you know, middle class, mixed income community. Do you think this is really going to

happen? Do you think this city is really going to get built? The fact that these people have already spent a billion dollars leads you to believe that they're very serious about it. They're rich, but maybe not rich enough to throw away that kind of money. So they are taking this very seriously. Their first big test will be in November of next year when they go before the voters of Solano County to try to get basically permission to build this city in order to go forward. And so they are going to be spending a lot of money over the next

year to try to build community support. And we'll see. They got off to a very bad start, but there is a lot that they could do to win people over. You know, once they start, you know, building gyms and playgrounds and libraries and health clinics, I mean, the amount of money that they have already spent would lead you to believe that they would not have a problem with spending lavishly to make lives of some of the people in Solano County better in order to win support. J.K. Dineen of the San Francisco Chronicle.

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But what about us? We'll always have today explained. I'm Sarah Moser. I'm a professor of urban geography at McGill University, and I conduct research on new cities currently being built from scratch in Southeast Asia, the Middle East, and Africa. So I examined the global phenomenon of new city building as well as individual new city projects. Have you heard about this initiative in California? I have. This is pretty exciting news for someone in my line of work. I've been following the news quite diligently. What do you think as a researcher when you see this?

I'm disturbed by it. I'm disturbed by the secrecy and the scheming, with Saudi princes than what you'd expect from citizens in a democracy. It seems like a big moneymaker. If these secretive billionaires and tech bros are able to change the zoning from agricultural to urban, the land will automatically quadruple in value or more. And so I'm skeptical that anything will be built at all. I mean, they could just sell the land, make their millions, and then just sell it off to a developer and the developer could just make suburbs. There's nothing legally binding them to the plan that they've advertised to date. You said your research focuses on three areas of the world,

which means in those three areas of the world, there's also a push to build new cities. Is that right? This is happening elsewhere? Yeah, this is kind of a global phenomenon right now. There are approximately 200 new cities being built from scratch right now in about 45 to 50 countries. Jakarta is Southeast Asia's biggest capital, and it is also the world's fastest sinking city. But the Indonesian government has a solution, building a new capital from scratch. It's a 2.5 million person new metropolis that's going to be built on the border of Hong Kong and Shenzhen. The Egyptian government are now investing 58 billion US dollars

in constructing the country's entire capital again from scratch. It's very aspirational for emerging economies, which maybe have wealth but not infrastructure. So building a new city is often seen as a way to leapfrog an economy from oil, from manufacturing, from agriculture into new types of economies. New cities are also intended to address all sorts of urban challenges facing cities around the world. Congestion, overcrowding, poor infrastructure, a lack of housing, all of this. So they're really appealing to a lot of countries right now. One of my favorite projects that is endlessly fascinating is Forest City. This is a project being built by China's top property developer in the ocean on artificial land off the coast of Malaysia.

So the project's intended for about 700,000 residents. It's basically an investment vehicle for Chinese investors, particularly investors who maybe can't get into the market in London or, you know, Australia or Vancouver. They're going to secondary markets like Malaysia or Thailand or Cambodia to buy investment condos. With many properties bought as investments, there are concerns about low occupancy rates. For now, the sound of silence fills the air. Another project I think is really intriguing is the line in Saudi Arabia. This is an urban mega development that is unprecedented

in scale and budget and ambition. It's basically a linear city that's 170 kilometers long in one single skyscraper. So the skyscraper is 200 meters wide, 500 meters tall, and 170 kilometers long. And so 9 million people are supposed to fit into this long, endless skyscraper. Residents have access to all their daily needs within five-minute walk neighborhoods. And the line's infrastructure makes it possible to travel end-to-end in 20 minutes with no need for cars, resulting in zero carbon emissions. It's not likely to happen as they claim it's going to happen because it would require the entire global production of steel

working simultaneously to build this project. It would take the entire global production of mirror glass to create this project. The entire project is supposed to be covered in mirror glass. This futuristic city that he is planning to invest half a trillion dollars in it. What if it goes wrong? It could bankrupt the country. So we'll see what happens. It's at the very early stages. They're moving Earth around right now. It sounds like a total white elephant project to a lot of people,

and it may very well be that. These are really high-risk projects, you know, like these are like startups. They're like startup cities. And as we know, startups fail all the time. But it's one thing to kind of have your little garage startup fail. It's another thing to dedicate land and water to projects that are very risky. So I see a lot of red flags. What are some of the mistakes that get made? What commonly happens or commonly enough for you to say, there's a reason that we're all so cautious about brand new cities from scratch? Well, the money. It's really hard to get a steady stream of money that will see a project through from the beginning to the end. These things take time. Investors often don't have the patience to wait for several decades while they lay the foundations for the city. Before they can start building buildings, they have to build a sewage system and all sorts of unsexy things, right? There's also politics. Politics can change. A new political

party can come into power and not feel invested in these projects at all. Like the capital city of Malaysia is called Putrajaya. And that's a master plan city started in the 1990s. And you have to basically get a constitutional amendment to change anything about the master plan. It's really set in stone. But market forces are kind of invisible there. You can't change anything in the city based on market forces. If people want to live in a certain area, you can't densify without a parliamentary kind of debate. So yeah, I mean, I would say it needs to be flexible, but not too flexible, because the next political party might completely end the project. It is very tempting if you live in an American city and you're dealing with really high housing costs, you're dealing with, in a lot of cases, really bad infrastructure.

It's really tempting to think that starting over from scratch is the best idea? If that's not it, if it just is too perilous and it tends to not end well, what is a better solution? You know, there are all sorts of great solutions happening right now in the U.S. and abroad. There's initiatives to get rid of single-family home zoning that, you know, everyone knows these sort of sprawling, endless suburbs eat up so much land. If they allow duplexes or triplexes or condominiums to be built on that land, we actually don't have a shortage of land. So it's very conservative zoning policies that's leaving us in this bind. I think we need to find ways to put money into the purse of the government. Billionaires have been very successful over the past decades in avoiding paying their fair share

of tax. And that's kind of starving the public purse. So some of the people involved in this, some of the venture capitalists involved in this California project have actively campaigned against even modest tax increases for billionaires. And that to me is really disturbing. And I think one of the reasons why our infrastructure is so bad. There's no magic solution to creating good cities. It involves all citizens getting together, everybody saying their piece, incrementally working towards solutions. Right now, we need housing. We need it desperately and urgently. And we need more radical policy that can fix that. I don't think we need new cities. That adds a lot of complication and opportunities for rich people to just make money. I don't think it's

going to address the housing crisis in California. We just need policy changes. And that is hard, unsexy work. And somebody needs to do that. And I think collectively we can get there. That was Sarah Moser. She runs the New Cities Lab at McGill. Today's episode was produced by Avishai Artsy. It was edited by Matthew Collette. Based in the Bay Area, Matthew knows nothing about this project. It was fact-checked by Laura Bullard. Patrick Boyd is our engineer.

I'm Noelle King, and this is Today Explained.