"You will never see socialism in Beverly Hills"
The first entry in Common Sense, on the most successful program of collective provision in California.
“You will never see socialism in Beverly Hills or in any community where people want to truly better themselves.”
A commenter, under the first post this publication ran.
He is right, in the narrow way that matters least. You will never see the word. No chapter meetings above the boutiques on Rodeo, no reading group working through Capital in Beverly Gardens Park. The word will never be welcome there, and by the end of this I hope the reason is obvious, because the reason is the point. Beverly Hills does not need socialism. It has enjoyed the most successful program of collective provision in California for a century. It simply keeps the membership closed.
Start with the deeds. In 1906, a syndicate that had drilled the local lima bean fields for oil and struck mostly water reorganized itself, with admirable honesty, as the Rodeo Land and Water Company, and began subdividing the future Beverly Hills. The lots were sold as “restricted,” which was the advertising language of the era, and what it advertised was a promise among buyers: no sale or rental to anyone who was not white, domestic servants excepted. A racial covenant looks, from one angle, like a private preference. Look again and it is a cartel: a collective agreement among property owners to protect asset values, binding on every future buyer, enforced not by the homeowners themselves but by the courts. The residents of the new subdivision did not call this socialism. They called it good planning.
Then came the federal layer. When Washington began insuring mortgages in the 1930s, the Federal Housing Administration’s underwriting standards favored exactly these covenanted, “protected” subdivisions, and public credit flowed toward the places that had organized themselves most thoroughly against integration.1 The Supreme Court ended judicial enforcement of the covenants in 1948, in Shelley v. Kraemer, but by then the work was done: four decades of compounding, publicly underwritten value, distributed by race and defended by the state.2 Readers of the Rothstein note last month have seen this machinery up close. Beverly Hills is what it built at the luxury end.
The independence story runs the same direction. Beverly Hills incorporated as its own city in 1914, and it has spent a century cultivating the impression that its separateness is a kind of rugged self-reliance. The record is more entertaining. In 1923, the question of annexation to Los Angeles reached the ballot, and the argument for joining was the argument that built half of modern Los Angeles: the Aqueduct’s water. Eight of the most famous movie stars alive, Mary Pickford and Douglas Fairbanks and Will Rogers among them, campaigned for independence, and independence won. There is a marble monument to them near where Olympic meets Beverly Drive, honoring the stars who saved the little city from the big one. What the monument does not mention is what happened five years later, when Beverly Hills joined the newly formed Metropolitan Water District of Southern California as a founding member, buying into the vast public agency that would carry the Colorado River across the desert to the coastal plain.3 Independence from the city; membership in the collective the moment the collective was building something worth having. Beverly Hills has been drinking socialized water for nearly a century, and sees no contradiction, because there is none. Collective provision was never the objection. Sharing it was.
Two more layers hold the arrangement in place. The federal mortgage interest deduction remains the largest housing subsidy in the United States, and it flows upward by design: the bigger the mortgage, the bigger the public check. And Proposition 13, written into the California constitution in 1978, caps property taxes at one percent of assessed value and lets assessments rise no more than two percent a year until a sale. In a city where houses appreciate like tech stocks, this is a public guarantee of private position. A mansion changing hands for twenty million dollars sits next to an identical one still taxed on its 1975 valuation, drifting up two percent a year while its market value multiplied twenty times over. Means-testing, run in reverse, secured in the constitution of the state. The standard defense of the freeze is the retiree on a fixed income, and the fear was real in 1978, when assessments were chasing a housing boom and pensions were not. It is real now, and in this city its truest face is the Black family home in Leimert Park or the Latino family home in Boyle Heights, held for decades by the families the covenants were written against. But that home and a twenty-million-dollar mansion enjoy identical protection under the current arrangement, and one is the argument while the other is the beneficiary. There are ways to shelter the first without gifting the second, and they get their own entry, because the distance between those two houses is where the whole debate actually lives.
Mike Davis spent a chapter of City of Quartz on Southern California homeowner politics and concluded it was among the most effective grassroots movements in the region’s history: organized, disciplined, and devoted to the single cause of defending home values.4 He was writing about the whole Southland. Beverly Hills is the form perfected. Pooled risk. Protected values. Publicly enforced exclusivity. Water from a shared aqueduct, credit from a shared treasury, position guaranteed by the state constitution. The wealth of Beverly Hills is not the absence of collective provision. It is collective provision, captured.
Which brings us back to the specimen, and to the work it does. “Any community where people want to truly better themselves.” The sentence moralizes a map. It offers the rich place as evidence of virtue and the poor place as evidence of its lack, and in doing so it hides everything this note has described: the covenants, the underwriting manual, the aqueduct, the deduction, the freeze. If Beverly Hills is simply what wanting to better yourself looks like, then no one has to ask who was barred from the bettering, or whose treasury underwrote it. The belief is not idle. It is load-bearing. It converts a century of captured public provision into a parable about character.
Some will read all this and conclude it argues for less government rather than more: strip the subsidies, end the capture, let the market rule. Fine; strip them. But notice what the objection has become. It is no longer that collective provision fails. It is that collective provision works so well the rich secured it for themselves and wrote the arrangements into law. That concession is the entry’s whole point, and a century of compounded advantage does not un-compound on its own.
And here is the sense in which the commenter is simply correct. You will never see socialism in Beverly Hills, for the same reason you will never see a man campaign to open a club he already belongs to. The people inside have no need of the shared version; they secured the members-only version generations ago and wrote its protections into the deeds, the tax rolls, and the state constitution. Socialism works fine in Beverly Hills. It has for a century. The membership committee is just very selective.
Richard Rothstein, The Color of Law: A Forgotten History of How Our Government Segregated America (New York: Liveright, 2017), chs. 4–5 (verify chapter numbers and pages for FHA underwriting preferences and covenant enforcement before publication).
Shelley v. Kraemer, 334 U.S. 1 (1948).
On the 1923 annexation vote and Beverly Hills's founding membership in the Metropolitan Water District (source, vote count, and founding-member status to verify: City of Beverly Hills centennial history and MWD founding records).
Mike Davis, City of Quartz: Excavating the Future in Los Angeles (London: Verso, 1990), ch. 3, “Homegrown Revolution”.