Prominent figures from Silicon Valley have turned their attention to reshaping the political dynamics in Solano County, California. With an $800 million financial reservoir, these billionaires aim to build a new city named “California Forever,” promising local prosperity, solar energy, and open spaces. However, their ambitious vision is mired in skepticism and secrecy, compelling them to primarily ensure the votes of a skeptical politicians and leaders.
Jan Sramek, a former Goldman Sachs trader, has emerged as the public face of this courageous endeavor. With a secretive organization known as Flannery Associates LLC, they embarked on an aggressive land acquisition spree, purchasing about 78 square miles in Solano County since 2018. It’s an area stretching from Fairfield to Rio Vista, posing monumental questions for the region.
Backing this venture are Silicon Valley’s crème de la crème, including Laurene Powell Jobs, Reid Hoffman, and Marc Andreessen. The involvement of such luminaries, reported by The New York Times, underscores the heights of their ambitions.
The enigmatic aura surrounding Flannery Associates LLC has spurred efforts by local politicians, particularly two congressmen, to uncover the truth behind the massive land acquisitions. These lawmakers sought to ascertain whether foreign adversaries or investors lurked behind the curtain, especially around the critical Travis Air Force Base. The group’s prolonged secrecy stoked the ire of not only these congressmen but also the FBI and the Department of Treasury. Their secretive actions have come at a considerable cost, both in time and resources.
Polling Public Sentiment
To build anything resembling a city on what is now farmland, the group must initially convince Solano County voters to approve a ballot initiative to allow for urban uses on that land, a protection that has been in place since 1984. In an attempt to gather the support, the project conducted a poll among Solano County residents last month seeking support to building a new city with tens of thousands of new homes, a solar energy farm, and privately-funded parks.
Solano County, with its strategic location between San Francisco and Sacramento, beckons as an ideal ground for development. Its affordability, with a median home sales price of $600,000 last month, seems irresistible. Yet, beneath the surface lies a deep-seated dilemma: the tension between the dire need for housing, especially affordable options, and the reluctance of established communities to welcome new developments.
The Mayor’s Suspicion, Legal Wrangling and Community Sentiment
Mayor Ron Kott suspects older people who make up half of the city’s 10,000 residents won’t appreciate the added congestion and noise, but others might like the improved medical care, nightlife and shopping that a sophisticated city nearby might bring.
“If it’s done correctly, I think there’s a lot of opportunities for the county . . . And so I think from those perspectives it’s good,” Kott said.
“But again, I think you’re giving up a quality of lifestyle that’s kind of unique to this area.”
Princess Washington, mayor pro tempore of Suisun City, represents the prevailing skepticism. She voices concerns about the true purpose of this venture, suspecting that it aims to create a privileged enclave under the guise of addressing housing needs.
“Economic blight is everywhere. So why do you need to spend upwards of a billion dollars to create a brand new city when you have all these other things that can be achieved throughout the Bay Area?” she said.
In her eyes, allocating over a billion dollars to construct an entirely new city appears extravagant, especially when other pressing issues demand attention across the Bay Area.
U.S. Rep. Mike Thompson, who represents much of the county, criticized the project saying that Sramek lacks details and an understanding of the county’s values, but he added that ‘their project is so good and their intentions are so great.’
“The FBI, the Department of Treasury, everyone has been doing work trying to figure out who these people are,” the congressman said.
Flannery Associates LLC further infuriated locals by filing lawsuits against landowners, alleging collusion to fix property prices. This move intensified local resentment and fueled suspicions about the group’s intentions.
Meanwhile, the project developers have assured that Travis Air Force Base’s interests will be safeguarded, and farmers who wish to continue farming on their lands can do so. These gestures, though promising, leave lingering questions about how the proposed city will coexist with existing communities.
The National Housing Quagmire
The United States faces a severe housing crisis, exacerbated by soaring real estate values and increasing rents, particularly during the COVID-19 pandemic. The situation has led to a significant shortage of housing supply, affecting both homebuyers and renters.
The shortage of housing supply can be traced back to the Great Recession, which resulted in a prolonged period of underinvestment in new housing. Despite the evident need for more housing, especially affordable units, various challenges plague the construction industry, such as high inflation, labor shortages, and supply chain disruptions. These factors have not only stifled the pace of new construction but have also inflated costs.
Starting in 2022, the U.S. Federal Reserve began increasing interest rates to counter inflation in the broader economy. This led to a cooling down of the residential real estate market due to higher mortgage rates and a rapid rise in home values. In the second quarter of 2023, the median home sale price decreased by 13.2%, falling from slightly over $479,000 in the fourth quarter of 2022. However, while this decrease in demand has helped slow price growth, it doesn’t address another significant challenge in the U.S. housing market: a substantial shortage of available homes.
While the entire nation grapples with housing shortages, certain states, such as Utah, Idaho, and Colorado, have moved rapidly to authorize new construction. These states, along with thriving Sun Belt destinations like Texas and Florida, lead the charge in developing new housing. Within these states, major metropolitan areas are at the forefront of the housing construction boom.
The researchers’ analysis of data from the U.S. Census Bureau and Zillow, ranking metropolitan areas based on the number of new housing units authorized per 1,000 existing homes in 2022, underscores the significant variation in construction activity across the country, shedding light on where housing solutions are most urgently needed within the larger context of the housing crisis gripping the United States.
Currently, there are only 1.3 million single-family homes available for sale, just 8.1% above the all-time low recorded in February 2022. With millennials now representing the largest group of homebuyers, the scarcity of affordable entry-level homes has intensified competition for housing, leading more young adults to opt for renting. This, in turn, has contributed to the persistent high prices in both the housing sales and rental markets.
