SFBARF is getting a lot of press for a theory — build and build and build and housing prices will come down — that doesn’t stand up to the facts

SFBARF's Sonia Trauss: Build and build and build and hope (against all evidence) that prices will come down.
SFBARF’s Sonja Trauss: Build and build and build and hope (against all evidence) that prices will come down.

By Zelda Bronstein

FEBRUARY 9, 2015 – Last Monday evening, a new organization with a highrise, pro-growth agenda and a memorable acronym — the San Francisco Bay Area Renters Federation — held a forum at The Lab, a block from the 16th St. BART station. The topic was “The Political Situation: How did housing prices get so high? What can we do about it?”

SFBARF is getting a lot of positive press, in part because the group’s message perpetuates a seductive illusion: The lack of affordable housing is all about a lack of construction.

Here’s how SFBARF describes its mission:

“The cause of our current housing shortage isn’t technological – we know how to build. It’s not financial – investors are clamoring to invest in the Bay Area. It’s not the result of a raw material shortage — unlike the 1940-45 housing crisis when the war effort diverted labor and materials from private efforts, today we have all the laborers and materials we need.

The cause of our current shortage is 100% political.”

The group has one solution: Build and build and build. And hopeagainst all available evidence – that eventually prices for renters will come down.

Advertised as SFBARF’s “first panel discussion,” Monday’s event featured three speakers—Roger Valdez, director of Smart Growth Seattle; Kate Downing, co-founder of Palo Alto Forward; and Michael Cohen, former head of the Real Estate and then the Public Finance Group in the San Francisco City Attorney’s office and director of Gavin Newsom’s Office of Economic and Workforce Development, now a principal at Strada Investment Group.

TechCrunch writer Kim-Mai Cutler moderated.

The crowd of 100-plus attendees mostly comprised young white men, along with a smattering of young women and a few éminences grises such as Tim Colen, Executive Director of the San Francisco Housing Action Coalition, and Mary Jung, a lobbyist for the Board of Realtors and chair of the San Francisco County Democratic Central Committee.

From the start, it was clear that the chief purpose of the event was political mobilization. Speaking first, SFBART founder Sonja Trauss issued a call to action. “What’s different about this political club,” said Trauss, is that “the focus is on neighborhood participation….Where this stuff [big new residential projects] gets blocked is at the small neighborhood meetings about pre-applications.” She urged her listeners to start paying close attention to their neighborhoods. “When you see a hearing notice, take a picture and send it to the [SFBARF] list.”

She asked everyone to look at the mini-leaflet that had been placed on each chair. Its headline read: “Have you ever waited for hours at a public hearing?” According to Trauss, videos of the Planning Commission’s meetings going back to 2006 show that the average wait time for citizens hoping to address that body is one hour and 52 minutes—an excessive duration, she contended, that could be shrunk. Indeed, the Planning Commission process can be hard on anyone who has a day job and wants to speak.

Trauss urged people to attend the Sunshine Ordinance Task Force’s February 17 meeting and to say that the Planning Commission needs to schedule each item at a particular time, adding that she didn’t really expect the commission to do so, but that it was important to show up and speak out.

The need to “change the conversation” around land use in the city was reiterated throughout the evening. In that regard, Trauss struck another resonant theme: the legitimacy of pro-development advocacy, especially when the advocates are new to San Francisco. “Don’t let anyone tell you that you don’t have standing because you haven’t lived here long enough,” she insisted. “You have standing!”

That counsel was echoed by Kate Downing. Palo Alto, Downing observed, is “more small townish” than San Francisco. But it shares the big city’s political character in that until now, public discourse about development has been dominated by people who are over 60, retired, and independently wealthy, and who thus “have the luxury of time to go to meetings.” They’re also people who oppose new housing in the city, which, Downing told me in a Tuesday email, has the biggest job-housing imbalance in the country.

Downing said that through community outreach, Palo Alto Forward had succeeded in publicizing a “counter-narrative” that for the first time brought young people to council meetings dealing with the city’s comprehensive plan.

She also made recommendations about political effectiveness. “You have to give local government face time. Writing things online and posting comments on Facebook are thing we do, but they “don’t actually move anything with government.” Elected officials need to be able to “put names to faces.” Get to know them. (Sound advice.)

Michael Cohen focused on San Francisco, where he works and lives. He said Strada has 850 units in the city under construction or in the planning pipeline.

Mindful of Cohen’s extensive resumé, Cutler asked him if the political climate around development has changed.

Cohen replied by citing a “consistent quandary”:

“We’re very progressive” about culture and lifestyle, but when it comes to the “physical environment,” we’re “spectacularly conservative. We want to be La Jolla or Aspen”—in other words, expensive, gated communities—but “you can’t say that. It has to be wrapped in something else,” namely “progressivism.”

In his view, “the single most important land use debate is whether you believe the laws of supply and demand exist”—an allusion to veteran affordable housing advocate Calvin Welch’s contention that those “laws” don’t apply to San Francisco, a built-out city at the tip of a small peninsula that’s experiencing an apparently infinite demand for housing.

Cohen offered Market-Octavia as an example of major development that preserved neighborhood character. With maximum heights raised to 85 feet, the area has recently gained a thousand new units, “but it feels the same.” “Geary,” he opined, “could handle 85-foot heights.”

Cohen also said that he’s “a huge supporter of the non-profit housing community,” which is “under-funded” and “under-supplied with land” and a fan of inclusionary housing.

The third panelist, Roger Valdez, was the wild man of the group. Valdez described Smart Growth Seattle as a “pro-growth, pro-supply, pro-choice housing organization” that’s funded mostly by developers. He said he’s a former non-profit housing developer who used to work in Seattle’s Office of Neighborhoods.

Valdez dismissed the idea that “the more we build, the more expensive we get,” dubbing it “the Galileo problem”—that is, a refusal to acknowledge empirical reality. In the past decade, he said, Seattle rents have risen only 5%.

The city’s laws allow you to “build up to the envelope.” Though there are “no hooks for community benefits,” there are “a couple of traps”—specifically, the State Environmental Protection Act and the right to appeal approvals of permits. Both allow neighbors to “throw a monkey wrench into what they don’t like.”

He deplored Seattle progressives and “Birkenstock-wearing socialists” who own single-family homes and are “all for Obama’s immigration” but raise their “pitchforks” when proposals for micro-housing are put forward. Their “deep fear of change” leads them to complain that buildings are too tall and lack sufficient parking. He called “zoning” itself “the problem,” contending that it’s an anachronism left over from the twentieth century, devised to separate industrial and residential uses. Drawing on economic orthodoxy — some would say mythology — he assured us we can dispense with zoning because “the market is going to find the equilibrium.”

Valdez also denounced “the social justice beast,” with its demands that “everything has to be equity-focused.” To hear him talk, that creature is currently raging in Seattle, where, he said, all nine councilmembers are up for re-election, and “everyone is trying to out-socialist our socialist [councilmember],” resulting in a “paralyzed” council.

I found Valdez delightful. Not for him the bromides about affordable housing issued by most smart growth proponents. He didn’t even trot out the customary environmental rationales about reducing VMT (Vehicle Miles Traveled) or saving the planet from global warming. Here was the naked truth about the dominant paradigm in U.S. city planning: its fundamental goal is growth, period. Thank you.

Valdez seems to have a bit of a Galileo problem himself.

John Fox, who heads the Seattle Displacement Coalition, has been following the numbers for years. Writing with Carolee Colter, Fox observes that

For the last 35 years, since Seattle came out of its mid-1970s economic bust, periods of accelerated residential development have always directly coincided with more demolition of low-income housing, higher rents, lower vacancy rates, longer waiting lists for subsidized housing, increasing levels of homelessness and higher housing costs for all Seattleites. Each successive wave of growth leaves in its wake a growing divide between rich and poor, white and non-white in our city.

So how does the simple economic maxim of “more supply lowers prices” get turned completely on its ear? In a built-up urban environment, there’s less and less vacant land over time, and the consequence of new development means removal of the existing supply of lower-density housing. Housing that’s older, non-debt-supported and affordable gives way to new, more expensive housing.

Last September, the Seattle Times reported that between 2010 and 2013 alone, rents spiked by nearly 11%–information that doesn’t jibe with Valdez’s claim that they’ve gone up only 5% in the last decade.

All along Kim-Mai Cutler ably moderated in two senses of the word: she kept the conversation lively and on track; and she tempered some immoderate claims.

After Valdez excoriated the “social equity beast,” Cutler marked the “vast” income inequality in the Bay Area and said that “in a market so hot,” inclusionary housing “doesn’t kill development.”

In contrast to Cohen, who said he “wouldn’t touch Airbnb with a 10-foot pole,” Cutler suggested to the audience—most of whom had raised their hands when they were asked how many present were tenants—“as a renter you might find that the short-term rental situation regulation is insufficient.” Her point being that the new law allowing any residence in the city to be rented out to temporary tenants all year long is going to diminish the number of units available to long-term occupants.

And when one questioner referred to the “psuedo-economics” of Welch and former Planning Commission Chair Doug Engmann, and claimed that they are “never challenged by people in the media,” Cutler said, “I take a more nuanced view….It’s not that anyone’s stupid.” Different positions “might make sense in terms of self-interest”—for example, when nonprofits argue for a higher allocation for affordable housing, “even if some of their arguments seem pretty ideological.”

That closing caveat, however, hints at the limits of Cutler’s own judiciousness. The implication is that SFBARF position, which she shares—that we can build our way out of the affordable housing crisis—is not ideological but value-free and politically agnostic.

Certainly it was easy to get that impression at the Lab on Monday evening, because nobody asked the really hard questions.

Where, for example, is the evidence that broad affordability can be achieved in any way other than building genuinely affordable, i.e., way-below-market-rate, housing?

How many new units would it take to house everyone who wants to live in San Francisco?

Wouldn’t that number change the city’s character in a way that, debatably (I’m thinking of the backup of cars coming off the freeway onto Octavia), 1,000 new units haven’t changed the feeling of the Market and Octavia neighborhood? To be precise, wouldn’t all those new units further diminish the qualities that have made the place special? And isn’t that a problem? If not, why not?

And to cite an argument Cutler has made in print, why does everyone who lives in the Bay Area today need to accept responsibility for making changes where they live so that everyone who wants to be here, can, especially at a time when environmental pressures—starting with too much and too little water—are increasing and, it seems, unavoidable?

Sonja Trauss: how about putting those questions front and center of SFBARF’s second panel discussion?

  • Larry Bush

    I wrote this as a post on NextDoor and then on Facebook, and want to add this to the discussion here:
    “I find it a prime case of denial that folks want to look back at the last twenty or more years to put the blame for housing affordability on city building policies, but when confronted with the actual facts of the role of racism in city housing policies they scream and have tantrums.
    Let me suggest how the cause and effect worked.
    In terms of supply and demand, if you eliminate thousands of potential buyers and renters because of their race, the “law of supply and demand” suggests that prices will go down. That’s what happened in San Francisco’s middle class neighborhoods on the west side of town, particularly in new and starter homes. How widespread was it? It included HUD’s own public housing, which allowed African American tenants in only one housing development. It included literally thousands of contracts, notably all the housing built around Stonestown. Did it affect any buyer? In 1958, newly arrived SF Giants great Willie Mayes was unable to find a home to rent until then-mayor George Christopher offered to have him and his family live as guests in his own home.
    Was the language subtle? “”No person other than one of the White Caucasian Race shall rent, lease, use or occupy any building on any lot in said Tract, except for nonwhite, domestic servants employed by either an owner or tenant.”
    How long were those words part of sales contracts? It took a HUD lawsuit in 1998 and state legislation in 2000 to force their removal, because while they were unenforceable under the 1968 Fair Housing Act, they continued to exercise a chilling effect on potential buyers. The covenants could only be removed until then if every single homeowner voted in a community election to remove them — a 100% threshold.
    Was it all under the radar? Consider this headline in 72 point type in the Chronicle in 1963: “I Lived With SF’s Negroes” written by a staff reporter.
    Catherine pegs the time correctly with regards to the Filmore, where even then the redevelopment was dubbed ‘negro removal” and the right to return only was on paper after a lawsuit under federal law (before that it wasn’t even on paper).
    Was it just about Blacks, and just a result of the WWII in-migration? No. After the 1906 earthquake, city officials decided it was a great opportunity to raze Chinatown and force all the Chinese out of that area. That only shifted when Los Angeles saw the opportunity to create a district that would welcome hard working residents, many with small businesses, as an incentive for the local economy that San Francisco realized money was at stake.
    Has it impacted to this day housing options? It created segregated neighborhoods that were off-limits to buyers and renters based on race, and literally thousands of current homeowners found entry homes forty, thirty, and twenty years ago because the demand was restricted to whites by law, not just by custom.
    Today you have a larger pool of buyers and renters because the politics of exclusion was legally nullified.
    But if you want to argue that city building policies of twenty or more years ago affected prices today, you have to consider what racism did to pricing in making housing affordable for white buyers and renters, who today lament the market.
    Are we seeing a new kind of exclusion, this time based on income, and will its impact be just as significant in its effect on our city’s demographics and future? Should we consider that, in light of the past, and include it in our planning? Does requiring a mere 12 percent of new housing in larger new apartments sufficiently meet this challenge, or does it actually worsen it?
    I was glad to see the proposal for 30% affordability made by one poster here, in exchange for lifting height limits. That is what has happened at the Pier 70 project approved by voters as Proposition F last November. It was a rational trade-off for higher limits on the waterfront. Now the Giants are talking the same kind of thing.
    I don’t think totally eliminating height limits would be good, but there can and should be some up zoning along transit corridors along with improved transit and other community needs.
    So supply and demand is a little more complicated and the market forces more obscured than what is implied here in a formula that could fit on a bumper sticker, and is about as useful.”

    • Sam

      “How many new units would it take to house everyone who wants to live in San Francisco?”

      That is the worst question I have ever heard. Why on earth would we ever want to house everyone who thinks they would like to live here?

      We need the people that will add value and fund themselves here. Not losers, misfits and under-employed aspirants,

      • Lordy, someone needs to give your sour self the boot. You add nothing but acrimony to this city and these forums.

      • Thanks. I always suspected that elitism was the basis for the anti-growth sentiment in this city. Your comments confirm my suspicions.

    • W.C. Whiner

      Larry, the old saying is, ‘urban renewal is negro removal.’ Urban renewal was a tragedy.

      I’m not sure what else you are saying, though.

      • Sam

        WC, in 1945 SF was 1% black, when the nation was 12% black.

        Now SF is 6% black. SF has not removed blacks; it has gained them.

        • W.C. Whiner

          Sam, I like you, because you can analyze facts. Problem is, an ideologue learns his own, er, ‘facts’, and for you this is one.

          Get back to us when you know history of US migration.

          • Sam

            People lie, but facts do not.

          • W.C. Whiner

            Sam, you sad little troll, you.

            SF was very, very white before WW2. As a result the labor needs of military production during the war, a lot of black folks moved to the city.

            Your 1945 datum almost certainly is false (I am betting that is 1940’s census number). Eliding 1960, 1980 and 2000 is — at best — disingenuous.

            Get back to us when you know history of US migration.

          • Sam

            WC, the black population of SF has increased six-fold in the last 75 or so years.

            So in what sense are we removing blacks?

            In fact we now have more blacks, Asians and Hispanics than back then. The only race we have removed are whites.

          • W.C. Whiner

            Sam, you’re a troll. Go away.

            I tried to be nice to you, but racism (and homophobia, but let’s not get confused) is a bridge too far.

            The worst thing is, you can’t even do math.

          • Sam

            WC, there is nothing racist about pointing out that the idea of non-whites leaving SF is a myth.

            In fact, what is really racist is accusing anyone who points out that fact as being a racist.

            Look, I don’t care what the racial make-up on this town is because I dont think it matters. It is what it is. Only racists think that a certain quota is somehow the right quota.

            This is not a race issue at all, and I wish people would stop card playing.

          • W.C. Whiner

            Sam, it is racist to pick your endpoints so that it looks like SF white share is constant.

            My folks are ‘white’ but would never have fit into the old-school Irish and Italian SF.

            These things matter.

          • Sam

            WC, I am not picking end points. I am citing statistics. SF is much less white now than it was 50-80 years ago.

            But so what? Why are you obsessing about race?

          • W.C. Whiner

            Sam, I find bad analysis offensive. What was the non-white SF share in 1940, 1950, 1960 and 1960?

          • Guest

            WC, a better question is why do racial statistics matter? They vary wildly in different locations and across different time periods.

            P:ost-racial color-blind people do not fixate on quotas.

          • W.C. Whiner

            Guest, I take it you are whatever may be the dominant ethnicity where you live. As the child of a mother who was stateless for a decade in her youth and a man who was on the last civilian train out of Poland in the 1940s, I can assure you, ethnicity and ‘race’ matter.

          • Guest

            Race matters if you decide that it gives you an angle or an agenda.

            It does not matter in consideration of housing costs in SF, unless you think the government should be imposing racial quotas as a matter of public policy.

            It’s a red herring here and I suspect this “Larry Bush” is trying to hijack the topic for his own racial agenda.

          • W.C. Whiner

            SF urban renewal ended up an anti-black policy, at best. I’ve got little sympathy for the rest of Mr. Bush’s screed, but he is right about that.

            Or you could defend the Geary expressway.

            Let’s hear it.

          • Anon

            Demographics change over time, by intent or by accident. You might dislike that on some personal level, but any policy designed to impose racial quotas would be worse.

            We can discuss SF housing without getting all caught up on race.

        • Sam, you are too quick to the trigger with solipsistic, hard right replies without fact checking. In the 1950 and 1960s the influx of African Americans to the Bay Area war economy pushed SF black population up to around 12%-14%, the high water mark of 13.7% in the 1970 census.

          • Sam

            David, none of that denies my point that in 1945 the black population of SF was trivial.

            So the black population went up a lot and then went down half of that.

            Explain to me why that is significant. How many blacks should we have? Why does that even matter? And why the obsession with race?

          • jch

            Oops. Real facts from David Carlos. Are those allowed here?

        • Y

          In 1945, at the end of the war, the city’s total population was 827,000. Its black population was 32,000, or 3.9%, up from 0.8% in the 1940 census. After that we have 5.6% in 1950, 10% in 1960, 13.4% in 1970, 12.7% in 1980, 10.9% in 1990, 7.8% in 2000, 6.1% in 2010.

          These are not just numbers. They are a proxy of a lot of history, good and bad: The WW2 boom, the Fillmore renaissance, the destruction of the Fillmore, gentrification.

          • Sam

            So what we know from this is that the black population fluctuates over time.

            The biggest trend of recent decades is a growth in the percentage of Asians and Hispanics here, a cycles of blacks coming and going, and a decline in the white population.

            Unless someone believes there are optimal racial quotas, I’m not sure how significant any of this is.

          • Guest

            In the long run, we’re all dead. What’s your excuse for living, Sam, you should be dead by now.

          • Sam

            Point being, things change. Nostalgia for a time when the racial demographics were preferable for you isn’t material.

          • Y

            My point being, you, Sam, were obnoxiously insisting on supposed facts you’d made up, and another point being, when proven false you change the subject, as is your wont, to ‘it all doesn’t matter anyway.’

          • Sam

            No, Y, your data supports my claim, which is SF used to not have many blacks, then it had more blacks, and now it has less blacks but still more than 75 years ago.

            And the point also stands – that none of that really matters because demographics are always changing. There is no magic number of blacks that we need as a city. It just is what it is.

          • Y

            You’re shameless, you know that? I quote you: “in 1945 SF was 1% black, when the nation was 12% black. Now SF is 6% black. SF has not removed blacks; it has gained them.”

          • Sam

            Y, we can quibble over which source has the more accurate data, but your data confirms my categorization i.e. that complaints about there not being enough blacks here ignore the fact that there are far more blacks here now than 75 years ago.

            In any event, the city cannot pass any race-based housing because that is illegal. So the issue is moot, and card-playing here is inappropriate.

          • W.C. Whiner

            It’s not a quibble, Sam. You quoted a false endpoint number for 1945, to say nothing of the very selective choice of endpoint. I called it false, and it was.

            The only card player here is you.

          • Y

            You didn’t quote any source, and that’s not a quibble. You make assertions which are false, at insiste everyone else is stupid because they disagree with your made-up ideas.
            In this case, as has been pointed out, these numbers represent history: the increase of black population in SF during WW2 represented a rare moment when this disadvantaged community was given opportunities for economic advancement. The current decline represents a time when this community, which is still disadvantaged, is losing the opportunities for economic advancement which living in a cenrtal city affords.

          • Sam

            Y and WC, neither of you have offered any data that conflicts with my premise that there are not far more blacks in SF than there were 75 years ago. And so that any claim that blacks are vanishing is disingenuous.

            but a much more important point is why you think it matters what race your neighbors are. Why is that evidently such an issue? And what policies would you like us to pass to ensure that the races in SF stack up exactly as you think they should?

          • Y

            BTW, in 2013 SF was 5.4% black (American Community Survey).

          • W.C. Whiner

            Sam, as I told you yesterday when you posted a false data point about 1945, bad analysis offends me. Posting the wrong number in service of it was ugly, as is your careful choice of endpoint.

            When population share of a historically disadvantaged group changes significantly, it matters.

          • Sam

            Both you guys seem obsessed with pedantic nitpicking over data points when the substantail point remains – there are far more blacks in SF now than 75 years ago. And the only race that has declined in relative terms is whites.

            And WC, those blacks who have left have not vanished. Rather they have made a choice to live somewhere where they clearly prefer to be. I hear, anecdotally, that many are now returning to the south which is much more black-friendly than when it used to be.

            I am sorry but I cannot get excited about policies that seek to conveniently classify us into groups that are set apart and then treated differently. Blacks of all people would understand that. Lose the race card if you want a serious debate about housing in SF.

          • Guest

            It is okay, Spam is not a hater, he is ‘post racial’ except when he is racial.

          • Sam

            My color-blind approach is consistent. That kind of inclusiveness contrasts starkly with the typical leftie who always throw out a race card as soon as he realizes he is losing the debate.

            As if he thinks that can save a losing hand.

        • n.s.

          Sam, you seem to miss the fact that the African-American population in 1970 was 13%. So, if they’re at 6% today, that means more than half of their community has been destroyed in last forty years. And that community continues to shrink by the year, along with the Latino population. I’ve read your posts for months and don’t understand your mantra of “If you can’t afford to live in SF, move.” You don’t know SF history. Yes, rich people have always lived in SF, however there has always been a working class population who (until now) have lived comfortable and productive lives here. The working class and people of color have built communities and added to the cultural vibrancy of the city. I’ve worked in the community for last 35 years for work in social justice and in different arts groups. And it hurts me a lot that so many of the people involved with these institutions and communities are being force out after giving so much. So, Sam what do you give to the community or to SF culture?

          • LEM

            n.s. – cities change. always have. always will.

      • Larry Bush

        I am saying that for those who see things as simple supply and demand, there is little attention to efforts that reduced the demand rather than increased supply. And I am citing historical record to state that this influenced demand in San Francisco and had an impact on housing prices.
        I would add that this is not something from the remote past, but appears to continue to be operating at a national level today. Consider the information in this current lawsuit:
        “One of the nation’s largest banks discriminates against black, Latino and Asian homebuyers by offering lesser qualified white borrowers higher loan amounts and using hidden racial criteria in one of its loan programs, according to a lawsuit filed this week in federal court in Manhattan. The suit also accuses the bank of steering homebuyers to certain neighborhoods based on their race or ethncity.”
        http://www.propublica.org/article/housing-enforcement-group-sues-mt-bank-for-discrimination?utm_source=et&utm_medium=email&utm_campaign=dailynewsletter&utm_content=&utm_name=

        • Sam

          Larry, if blacks and Hispanics have more trouble getting loans it is because typically their credit scores and incomes are less. It has nothing to do with the color of their skin, which typically isn’t even known to a mortgage banker unless he happens to meet them. Many mortgages are now handled by mail, email and phone. The lender and borrower never even meet.

    • guest

      Requiring new developments to provide 30% of the units as affordable to households under 60% AMI would be a good first step. It might even pass as a ballot measure in 2015 and for sure in 2016. But I’d go further and add another 30% limit on units sold/rented to households making more than 150% of AMI, where virtually all units coming to market are being rented/sold to new residents. A floor of 30% provides a decent supply of relative affordable units coming to market, and a ceiling of 30% limits the number of new high-income households. The remaining 40% of all units constructed would be sold/rented to the largest group of the Bay Area and US population income mix, with 20% of new units sold/rented to households making between 60% and 100% AMI, and 20% for households making between 100-150% AMI.

      This reasonable allocation of units helps build a local community of all income levels, and not just a city or region for the very rich, the very poor and the rest of us paying over 40% of household income for rent or a mortgage payment. Developers are smart. They’ll figure out how to make this allocation work with each of their projects, even if they whine a bit with the modest reduction in their excess profits.

      • Sam

        Since profit margins are typically about 30% on a new project, the only effect of any such policy would be that nothing gets built, housing shortages become more acute, and housing costs rise.

        • Indentured Tenant

          Nonsense. Land prices will adjust and most units wouldn’t be built with granite in the bathrooms and kitchens, recessed lighting throughout and building amenities would be far more modest. You’re a shill for massive displacement of current residents, excessive developer profits and increased land values for existing speculators like yourself, so you’re hardly a biased evaluator of the construction industry. Besides, profits are far, far higher than 30% since most development projects are built with “other people’s money,” meaning the profits for the actual owner are in the hundreds of percent, not double digits. Fortunately for you, HAC and SFBARF, “progressives” don’t understand the difference between debt and equity financing.

          • Sam

            No, easily the biggest cost of a new home is the land and that gets ever more expensive. The fancy kitchens and bathrooms add some to the cost, but not enough to turn an expensive home into a cheap home.

            And so called “affordable housing” isn’t any cheaper to build than market-rate housing. The difference is that the latter has to be subsidized.

            You are correct about one thing, however. A 30% ROI is miserable when you consider that it takes several years from inception to sale, so the annual ROI is low. Without leverage such projects are not viable. But of course that ramps up the risk if things turn down – a risk that their investors bear and the city does not.

            AMI’s cannot go much above 20% without severely impacting the number of new units built, rather in the way that higher tax rates have been shown to lower the total revenue take.

          • W.C. Whiner

            Five RH-2 lots sold in my neighborhood the year before last for $110,000 per zoned unit:
            https://www.redfin.com/CA/San-Francisco/951-Kansas-ST-94107/home/62172449

            These units will not sell for under 220,000 each.

            Facts are stubborn things.

          • LEM

            Land prices will adjust. They will go up as the cost of building increases. All the opposition in SF increases risk. Increased risk means investors require a greater return. This means that only in hot markets will developers even bite, and when they do the market get overheated and prices shoot up. The only beneficiaries are the existing land owners. You know, the one’s who voted for Prop 13 who are protected from these spikes until they sell. They also happen to be the ones funding anti-growth initiatives (co-opting affordable housing activists to support their cause in the name of more BMR units). They do this all while their property values continue to increase.

            So go on, keep being anti-growth. You’re only helping the land oligarchs in this city.

      • W.C. Whiner

        Nothing personal, but this is stupid. All you end up with is a lottery.

        Lotteries are not cool.

        Tax the @#$%! out of the top of the distribution and spend it on housing? That could work. Heck, it did work, in a bigger city (Vienna 1918-34).

        Maybe we should try what actually worked before.

        • Sam

          Taxing cannot work in an area where there are 100 cities within commuting distance.

          That is why Twitter got their deal – because a city just ten miles away – Brisbane – was able to offer a much better deal.

        • Guest

          Economic competition is a lottery.

          • Sam

            No, it is a meritocracy.

          • W.C. Whiner

            This is why I find the US left in general, and San Francisco’s in particular, dispiriting.

            There are more things in heaven and earth, Guest, Than are dreamt of in your philosophy

        • Guest

          Maybe we should try what actually worked before.

          We should demand a NASDAQ crash so that housing prices will fall again. Then we should demand that Wall Street blow up again so that housing prices will fall.

          Maybe we should try what actually worked before!

          • Sam

            Let us know how your demand that the stock market falls works out for you,

          • W.C. Whiner

            > NASDAQ crash so that housing prices will fall again

            1987-1995, not a NASDAQ crash.

            1971-1981, not a NASDAQ crash.

            1939-1948, not a NASDAQ (if there were one) crash.

            1931-1935, A CRASH!

            1915-1919 , not a NASDAQ (if there were one) crash.

            Look, dude: you have a hypothesis. We tested it.

            It is false.

          • Sam

            True, WC, and in fact I made a lot of money by switching from stocks to RE in 1999 and again from stocks to RE in 2001.

            If guest knew that much about the markets, he would be rich, and he is not.

          • Guest

            1987-1995, not a NASDAQ crash.

            There was the savings and loan crash that sucked money out of housing and then there was the earthquake here in SF that put the kibosh on prices for a few years.

            1971-1981, not a NASDAQ crash.

            1971-1981 was the decay of the post-WWII economic boom.

            1939-1948, not a NASDAQ (if there were one) crash.

            Price controls were in place during the war to prevent gouging.

            The NASDAQ is the currently operative financial market that directly impacts what happens here in SF although the NYSE has become increasingly more important. Not to worry, if one falls the other follows suit under these circumstances.

            The common thread is that after Reagan ushered in neoliberal economics in 1982, the real economy has been replaced with the speculative bubble economy and every time a financial bubble inflates, housing prices rise, when bubbles pop and deflate, housing prices suffer.

          • W.C. Whiner

            Changing the story doesn’t help buttress your analysis.

            > the savings and loan crash
            > the earthquake
            > the decay of the post-WWII economic boom.
            > price controls

            The hypothesis is, prices always go up, except when they don’t, when you can always think of a reason.

            Okay.

            > financial bubble inflates, housing prices rise

            This is the closest you have gotten to making sense.

            Not very close, but the closest.

            You’re not helping make local policy, though.

          • Guest

            When these macroeconomic crises happen, marginal demand goes away and nominal demand is crimped by the contraction and housing prices fall. Supply and demand has nothing to do with price decline in these circumstances.

            To suggest otherwise is fantastic.

          • Guest

            Guest, the experience of the last fifty years says that you are 100% wrong.

          • W.C. Whiner

            What ‘macroeconomic crises’? We’re talking about 1987-1995 (boom, bust, boom), 1971-1981 (economic boom, despite inflation), 1939-1948 (boom, postwar bust, boom), 1931-1935 (not THAT is a ‘macroeconomic crisis’) and 1915-1919 (war boom, then bust). To suggest they are involved is fantasy.

          • Guest

            A macroeconomic crisis need not be a full blown depression to be consequential to the housing market.

            Housing prices dropped in the early 2000s and late 2000s due to a collapse of equities and IPO capitalization activity due to a retrenchment of capital.

            As finance has been “liberalized” and deregulated, it has grown to comprise some 40% of the economy. When that sector froths out profits, it inflates a housing bubble as any other sectoral shift would. When that sector retrenches, it drains demand out of the housing market at the margins, hence fall in price.

          • marcos

            Okay, Whiner, here’s the connection between the NASDAQ and SF rents:

            http://cdn.citylab.com/media/img/citylab/legacy/2013/10/22/BXJI0soCMAEmDmD_.jpg

            You Are Wrong, financial profits determine gentrification and housing price increase, they are the dominant factor.

        • guest

          It’s a lottery now, but only those with very high incomes are allowed to play. There is no way the SF residents and their elected politicians will allow 250,000 new housing units in the city over the next 10 years to satisfy the current demand to live in one of the world’s most beautiful and economically dynamic cities. Thus, choices have to be made about the allocation of the units that do get built. Even if Mayor Lee builds his 30,000 units by 2020, if 70% of those are sold/rented to the highest incomes levels, and 30% to the lowest income levels, the city is effectively saying that middle-income groups – the largest of all income groups – is no longer welcomed in the city. I think that’s what they’re doing anyway, but they’ll never admit it.

          Sorry, economic trade-offs are hard. Maybe that’s why so many people like to spout knee-jerk nonsense rather than deal with the very difficult choices economic trade-offs require.

          • Sam

            The mistake is thinking that SF is an island. It is not. Already 500,000 people who work in SF do not live in SF. That could increase.

            So 200,000 richer people arriving here might be counter-balanced by 200,000 poorer people moving to the east bay.

            Everyone wins.

        • 🙂

    • Guest

      Larry, poor blacks do not influence RE values that much because they do not have the capital to move it. What they do do is soak up the low-cost housing which drives up demand at higher price points.

      But that is less a matter about race and more a matter about economic status. You can analyze supply and demand without consideration of race, and invoking race irrelevantly can make you appear to have an agenda of your own.

    • It’s is an interesting premise that San Francisco affordability was the result of past racism, though even if it were true I don’t see how it supports your argument for not completely removing upzoning or for expanded affordable housing which could be better argued from a perspective of basic fairness and preservation of the human environment.

      However, the assertion that affordability was the result of racism is not supported by the facts. Median gross rent in 1949, well before the bulk of the great migration had hit SF (the black populration was 5.6% ), was $41/mo. ($407 in 2014 dollars) Houshold income was $3,923 per year. So rent would have been just 13% of the average family’s gross income. Far cheaper than today’s rental environment. The Bay Area, including San Francisco, like urban areas in much of the rest of the country, was a very cheap place to live, if you had a regular job. One could easily support a family on a single income, and most families had every expectation that they could purchase a house if they wanted to.

      http://www.bayareacensus.ca.gov/counties/SanFranciscoCounty50.htm

      • Sam

        Agreed, vrrmoo, the race argument was gratuitous and not material to the housing dynamics we now have. it’s just that some people see race in everything, whether it is relevant or not.

    • No question the history of housing in San Francisco is a history stained with racism. That racism was often enshrined in law, and reflected in official policies such as the “negro removal” carried out in the Fillmore under the euphemism of “redevelopment”.

      Shamefully, the man who presided over this racist destruction of a neighborhood, Justin Hermann, is still honored today by having his name slapped on Embarcadero Plaza at the foot of Market Street.

      But the more important legacy of this racism today is the continuation of government policies that make it difficult for poor people to find housing. Instead of openly trying to kick the Chinese out of the city, or have clauses in housing covenants restricting their sale or rental to caucasians, today’s discrimination goes by the euphemism of “planning”.

      It is designed to empower privileged NIMBYs, principally wealthy homeowners and longtime residents who demand that everyone else kow-tow to their “quality of life” which means resisting almost any changes to “their” neighborhoods by making it difficult and expensive to build anything new. This benefits them by driving up home prices (nice, if you’re lucky enough to own one and have the option of cashing out for a couple million bucks) and rents (not a problem if you’re ensconced in a rent-controlled unit), while making it tough luck for all newcomers except those wealthy enough to find a place in such a hyper-regulated market.

      And that’s okay with them. According to them, if you’re not already “in”, you’re a second class citizen who doesn’t matter. You don’t deserve to have a place in San Francisco, at least not if it means a shadow in the corner of their local park for an hour or two a day, or a new building occupying some portion of their million-dollar view. Either you’re one of these nouveau-riche “techies” who they look down their noses at, or you’re — heaven forbid! — poor. As Sam says below, “Why on earth would we ever want to house everyone who thinks they would like to live here? We need the people that will add value and fund themselves here. Not losers, misfits and under-employed aspirants.” Music to NIMBY ears.

      • Sam

        The number of economic under-achievers who would move here if SF homes could somehow miraculously made cheap would ensure that the city would be crushed under the seething pile of humanity that would ensue.

        The people we need are those who can contribute to our emerging economy, and not the people who just think it would be “cool” to live here.

  • Sam

    Zelda, it is hardly a new theory that prices rise when demand exceeds supply. Nor that if we artificially suppress supply, through zoning restrictions and NIMBYism, that housing costs will rise.

    Globally, there is a near perfect correlation between housing costs and the extent and strictness of impediments to build new homes.

    The good news is that SF has quite low densities, so we can fix this problem.

    • Guest

      Prices also rise when demand is artificially increased through shenanigans in the finance sector.

      • Sam

        Markets follow human endeavor. They do not create it.

        Those same forces are at work in Detroit, where you can buy a home for a buck.

      • W.C. Whiner

        Guest, you keep saying this, and I keep not getting it. How have prices the last few years risen artificially through shenanigans in finance?

        • Guest

          Demand from foreign capital as noted in the NYT article and demand from capital gains has crowded out demand from wages, even tech wages in most segments of the market.

          The infusion of however many trillion by the Fed into the banking system that then confined the resulting inflation into the stock market and the recycling of those inflation driven equity profits into speculative activity and more inflation in equities is where the artificially increased demand for housing comes from.

          • W.C. Whiner

            > [d]emand from foreign capital

            Can we try to quantify this?

            > demand from capital gains

            ..and define this? What is this?

            > crowded out demand from wages

            I have idea how you even begin to measure this.

            > confined the resulting inflation

            Inflation? Tell me more about this inflation.

            Data would be nice.

            > more inflation in equities is where the artificially increased demand for housing comes from

            Go ahead: correlate equities with housing.

            Make my day.

          • guest

            Whiner:

            When you see a post with “demand from capital gains” you know you’re dealing with someone short of a full loaf. Best to move on rather than encourage more insanity. He’s probably a progressive. They tend to get confused easy.

          • Sam

            You have provided no evidence for such a wild theory, Guest.

          • Guest

            > [d]emand from foreign capital

            Can we try to quantify this?

            No but it is a significant component of demand as is evidenced by studies of foreign capital penetration of the US urban housing market.

            > demand from capital gains

            ..and define this? What is this?

            Proceeds from IPOs and equity appreciation under QE and the Fed’s other “facilities” that have injected cash into the banking system and out into equities and speculation.

            crowded out demand from wages

            I have idea how you even begin to measure this.

            People with IPO and equity gains and foreign millionaires can out-compete most salaried and wage earners in San Francisco.

            > confined the resulting inflation

            Inflation? Tell me more about this inflation.

            When dollars are created, then there is more demand put somewhere in the economy just as in Pettis’ piece, when Spanish and German banks make capital available to Spain, predictable outcomes ensued as to any economic unit that sees an influx of capital. Did you read Pettis’ piece? Did you understand it?

            In these cases the Fed injected trillions in liquidity into the economy and the resulting inflation had to show up somewhere. In this case, equities and assets inflated because that was where the capital injections to the banks found their level.

            Go ahead: correlate equities with housing.

            Fed -> banks -> equities/speculation -> profits and capital influx -> asset appreciation.

          • Sam

            Guest, a clue, speculation is not evidence, logic or proof.

          • W.C. Whiner

            Guest [capital G]: try working out a model.

            Guest [lowercase g]: I ride cap-G Guest because I sympathize with him, but he’s no good if he’s clueless.

          • Guest

            I am not an economist. I read a lot and this is the consensus that I draw from material that appeals to me. The model plays out pretty well. You referred me to Pettis who lays out roughly the same case and now you are just concern trolling.

          • Sam

            Guest, believing only what “appeals to you” is the textbook definition of confirmation bias.

          • Guest

            My epistemology works for me, thanks. These are not matters of belief, they are matters of the intersection of various dynamic systems of history, economics and politics and trying to draw useful data from trends for analysis and prediction. I would be surprised if during the next finance related economic downturn that housing prices fall irrespective of rates production relative to demand.

          • W.C. Whiner

            Cap-G Guest: I’m not concern trolling, I am attacking you from the left. But when you haven’t got the first clue how things work, you don’t notice. Ah, well.

          • Guest

            2. There have been many cases of large capital recycling in history — just in the last 100 years I can think of the recycling of the US trade surplus to Germany and other countries in the 1920s, the petrodollar recycling to Latin America in the 1970s, and the recycling to the US of the Japanese trade surplus in the 1980s and the Chinese trade surplus in the 2000s. These were all accompanied in the recipient country by stock, bond and real estate bubbles and by overconsumption and wasted investment. Have there been cases of large capital recycling that did not end in tears for the recipients? If so, how were they different?

          • Guest

            Guest, show how that relates to SF RE. Show your assumptions and your working.

  • W.C. Whiner

    > build.. [a]nd hope – against all available evidence – that eventually prices.. will come down

    Because 2002-2006 is so very, very far in the past. As I posted here before, not only then but also in 1987-1995, 1971-1981, 1939-1948, 1931-1935 and 1915-1919 did prices come down.

    Against all available evidence except a hundred years of price history, I guess.

    > dominant paradigm in U.S. city planning: its fundamental goal is growth

    If population is going up and if living in cities is nice, then, em, yeah.

    > leaves in its wake a growing divide between rich and poor, white and non-white in our city

    This is the real problem. Everything else is a rounding error compared to it.

    > building genuinely affordable, i.e., way-below-market-rate, housing?

    See above. Nobody in 1939 was looking to build BMR housing — but rents went down.

    > how many new units would it take to house everyone who wants to live in San Francisco?

    At what price? At market price, Ed Lee’s 30,000 probably do it. At fair price, maybe 90,000.

    > Wouldn’t that number change the city’s character

    Which leaves you with a tournament economy, where the winners are whoever got here first.

    Fuck that shit. I was born at Kaiser on Geary — to immigrant parents. The fact that I got here first does not make me special. Immigrants are part and parcel of what make the city special.

    Everyone who wants to live here, should live here.

    • Guest

      How can you put “house everyone who wants to live here” and “at market price” in the same sentence? Nobody can come close to running numbers that predict these economic assertions yet they get repeated and repeated and repeated just like the anti-vaxxers.

      • W.C. Whiner

        Funny thing, I didn’t say that. What I said was, ‘[e]veryone who wants to live here, should live here.’ I am pretty happy with that.

        As for ‘running numbers that predict these economic assertions,’ I did that. Rents in real terms have come down repeatedly in the history of the city, which I carefully pulled for you here:
        http://research.stlouisfed.org/fred2/graph/?g=Z6a

        When your analysis explains real rents coming down in 2002-2006, 1987-1995, 1971-1981, 1939-1948, 1931-1935 and 1915-1919, let’s talk.

        Until then, I am going with supply and demand.

        • Sam

          Yes, WC, you did not say that. But the article did. And that was what I was debunking.

        • guest

          Whiner, please read some history and think a little more about correlation before you post any more fantasy about why rents decreased in various periods:

          2002-2006 – Post stock market crash; Webvan, Pets.com, etc. evaporation; and techies moving back to mom’s basement in Indiana. These types of events will cause rents to trend downward, but hardly very insightful.

          1987-1995 – Post-Reaganomics recession; S&L crash; rapidly falling housing prices and increasing unemployment across the US; SF earthquake. Yeah, rents often will decline when the economy is in the pits. Great insight there.

          1971-1981 – Suburbanization; very high SF vacancy rates and $150-$350 flats available in some great parts of the city. (Those were the days.)

          1939-1948 – Massive exodus of able-bodied US residents to fight a war overseas. Empty houses and empty rental units tend to drive down prices. Duh (except from the progressives who don’t believe this correlation to be true).

          1931-1935 – Huge depression with massive unemployment. If people don’t have money or jobs, rents tend to decline. Another duh.

          1915-1919 – Who the hell cared about CA or the Bay Area at the turn of the century? No one, thus rents and housing prices from that time era are irrelevant. Oh, and another massive war too sending millions of potential renters overseas.

          • W.C. Whiner

            > 2002-2006 – Post stock market crash

            Exactly. 10,000 units get added to supply, 20,000 people (or was it thirty?) leave — et voila.

            > 1987-1995 – Post-Reaganomics recession

            The recession was 7-90 to 3/91.

            > 1971-1981 – suburbanization

            This is why my folks moved to the ‘burbs in 1971.

            Might be worth asking why.

            > 1939-1948 – Massive exodus of able-bodied

            Population of SF 1940: 635k
            Population of SF 1950: 775k

            > 1931-1935 – Huge depression

            Well, yeah. This is the one that fits for you.

            > 1915-1919 – Who the hell cared

            Population of SF 1910: 420k
            Population of SF 1920: 507k

            I mean, I guess a half million people — more than half the population today — is ‘who the hell’.

            Nothing personal, but fuck you innumerate, incurious, uninformed lackwits. You piss me off.

    • Just the facts

      Whiner – You need to update your time lines. I bought a house in the mid-90’s and housing prices didn’t start coming down in SF until maybe late 1992 until early 1996 when they started taking off again. The S&L bust took a couple of years to reach SF, although housing prices did sharply decline in the SW and Texas in the late 1980’s when the oil patch went bust and the S&L’s collapsed.

      1971 to 1981 was the tail end of the suburbanization of the Bay Area. Housing was being built like crazy in Marin, CoCo county, San Jose and the peninsula, with families leaving the congested city for more space and better schools, following the rapid expansion of the US interstate highway system and BART construction. It was a one-time phenomena that doesn’t say much about the current situation other than many of the kids raised in those upscale communities now want to live in urban cities rather than the suburbs where they grew up (which they mostly can’t afford anyway and those communities refuse to add much housing).

      1939-1948 were the war years, the biggest mobilization of people overseas in the history of the US. Again, hardly representative of anything we’re witnessing over the last 30 years.

      1931-35 was a nationwide depression, hardly representative of anything, and in 1915-1918 car ownership wasn’t very extensive unless your family was fairly wealthy. Cars and the subsidized interstate highway system started in the early 1960’s changed everything in the cities and surrounding areas across the US.

      • Sam

        Not really. RE has been gained at about 8% a year on average for 35 years now. It really only went down once, briefly, in 2007-2010. During other recessions it held steady.

        There has been no better to way to get rich in the US than borrowing money to buy property. And I see no sign of that changing. Tens of thousands of SF residents have become millionaires through nothing more than taking a risk and borrowing to buy a home.

        It’s the American dream, and it is ours.

        • W.C. Whiner

          Sam, for the love of all that is holy, please get the facts straight.

          RE in real terms is up ~1% a year the past quarter century:
          http://research.stlouisfed.org/fred2/graph/?g=10ag

          By my math, that’s 1.3% a year, after inflation.

          This is pretty consonant with Shiller’s long-term findings:
          http://www.econ.yale.edu/~shiller/data/Fig3-1.xls

          • Sam

            WC, those returns are in REAL (i.e. after inflation) terms.

            I was talking in nominal terms. Given that the mortgage does not inflate, nominal returns matter because the costs of owning RE do not increase over time.

          • W.C. Whiner

            The nominal number is 4% from 1987, 3% from 1890.

            False assertions of fact destroy discussion.

            Please look up the data before you post.

          • Sam

            WC, the numbers for SF are much higher than the national numbers. Shiller aggregates by area and doesnt produce a figure for SF – only for the Bay Area,

            For instance, one SF home I know is currently worth about ten times what it sold for thirty years ago.

            That annualizes to about 8% per annum, compounded.

            When you invest in RE, as I do, you develop a good sense for long-term returns. On three occasions in the last twenty years, I have sold a building for three times what I paid for it. You can’t do that on returns of 1% a year

          • W.C. Whiner

            Sam, you made a blanket statement about US residential real property. Your number was and is wrong. RE in nominal terms has been up 4% for a quarter century, 3% for a century, and 1% after inflation over both periods.

            The numbers for the city are higher, yes. Since 1987, nominal price returns were 6% overall:
            http://research.stlouisfed.org/fred2/series/ATNHPIUS41884Q

            Property in once-out-of-favor neighborhoods like the Mission probably did see 8% returns and more. ‘RE in the Mission’ is not what you said, though.

            When you invest in RE, as you do, it’s easy to think the trees in which you have invested are the entire forest.

            False assertions of fact destroy discussion.

            Please look up the data before you post.

          • Sam

            WC, I’m talking about the local RE market, rather obviously given the context. I’ve no interest in RE returns in Ohio because I don’t invest there.

            And yes, two of those buildings were in the Mission – the most populous neighborhood in SF and ground zero for the housing wars. That is where the money is.

            SF RE doubles about every ten years or so. You can take that to the bank.

          • W.C. Whiner

            That you were talking about the Mission was anything but obvious to me. I saw ‘RE’ and ‘US’ and not a word about SF or the Mission. Please be more precise.

            SF RE doubles every 10y, except when it doesn’t:
            https://www.dropbox.com/s/shemxzd8umfk0zg/ATNHPIUS41884Q.pdf

          • Runforthehills

            Not in San Francisco!

          • Sam

            WC, the topic here is SF not the US. Real estate is local.

            We cannot build much on the west-side of town nor on the hills, so when we talk about building new homes in SF we are talking about the eastern neighborhoods i.e. Mission, SOMA, Mission Bay etc.

            And RE returns in those relevant areas are what I said they were. But note that they do not go up 7%-8% every year any more than stocks do. You get flat years and banner years. Sometimes it even goes down but not by much. Prime SF was down by no more than 10% in the 2007-2009 fallout.

            But over longer periods, it all evens out. The building I bought in 1997 for 500K was sold in 2004 for 1.1 million. It’s now worth 1.7 million. Not bad for sitting on your ass collecting rent huh?

            The condo I bought in 1998 for 200K is now worth 700K.

          • W.C. Whiner

            The plural of anecdote is not data. The data are quite clear: SF RE doubles every 10y, except when it doesn’t, which over forty years is half the time.

            Going forward, for SF RE to double every decade its price must rise 5% annually in real terms, since inflation looks to be anchored around 2%.

            I hope you’re wrong. A city so expensive only a tiny minority can afford it isn’t a city, it’s a theme park.

          • Sam

            WC, my “doubling every ten years” was in nominal terms, not real terms.

            And sure you can cherry pick a decade when that didn’t happen. But then there will be another decade where they triple. I was citing averages over 30-40 years.

            You may think SF is too expensive but plenty of people do not. Every new home sells and every new rental is rented. Just because you cannot afford these new homes doesn’t mean that there aren’t enough people who can to buy or rent them all.

            A theme park is what SF is now, with an army of people here only because their landlords are compelled to subsidize them. That is not sustainable.

          • W.C. Whiner

            I bring up real returns for two reasons. One, 5% is way out of line with history. Historical long-term real returns here (and almost everywhere) are 1%. You make a bold and outlying prediction.

            Two, 5% SF RE real returns in a 1.5% productivity growth world mean SF will get progressively more expensive relative to national incomes. It isn’t opinion that SF is the most expensive in the US:
            http://blog.zumper.com/2015/02/us-average-rent-january-2015/

            I hope your outlying and bold prediction is wrong. Getting progressively more expensive than the country earns seems a poor recipe for the future.

          • Sam

            WC, yes, in theory SF cannot enjoy outsized RE returns forever. The theory says that we will get reversion to the mean.

            But in small local markets, anything can happen. All around the planet there are these desirable pockets where RE only ever goes up because demand is so high.

            Do you think Switzerland will ever be cheap? Aruba? Monaco? Won’t happen.

            And cities can exhibit that too, if enough people want to be there. Think London, Manhattan, SF, Sydney, Hong Kong, Singapore, Dubai, and so on.

            The thing with RE is that it is all about location. That is why a home that costs a buck in Detroit will cost a million here. Don’t bet on that changing.

          • W.C. Whiner

            Sam, my point is that 5% real returns is an outlying prediction, not an impossible one. High prices can be sustained, but I hope they are not.

            You cite good examples: Switzerland and Monaco. Switzerland is fine: you can rent a 1000sf flat in Zurich for $1,800. Monaco? That flat costs $8,000.

            Monaco is a park for the rich. Zurich is a city.

          • Sam

            WC, how about London then? That is a city ten times the size of SF. And the cheapest new homes for sale there cost about $1,500 a square foot.

            As John Maynard Keynes might have said, homes can stay expensive longer than you stay solvent. And you will die before SF ever becomes cheap again. You were born too late to get a deal here.

          • W.C. Whiner

            Sam, London is a worry. My brother just bought there, and yowza. It’s got to be hard for ordinary earners, and it can’t be great for the city if it keeps up.

            I might die before SF becomes cheap again, but as recently as a few decades back, much of the city was very affordable. Times change.

            As for deals, they are in the eye of the beholder:
            http://research.stlouisfed.org/fred2/graph/?g=10dK
            That’s notional mortgage at average rate, indexed to 100 at 2007Q4. At 2012Q4, it was down to 45. As early as 1981, it was in the 40s.

      • W.C. Whiner

        Jtf, thanks for engaging with the numbers. What I posted was rent, though, since that’s where we’re focused. The BLS has been tracking rents for a hundred years, which is convenient; the best house price indexes go back no more than forty years.

        As for your analysis, the way I read you is, ‘well, supply and demand are not the driving force in market prices because every time they have changed times have been exceptional. What a coincidence!’

        I.. um.. well, I guess I am making fun of you.

        Defending supply and demand is kind of easy that way.

        • Sam

          WC, the only people I know who deny that supply and demand are the key market price determinants typically have an ideological agenda. They are not empiricists who, typically, do not fear outcomes but merely wish to understand them.

  • Y

    Two of the Seattle links need to be fixed (the ones shown as “Writing” and “Seattle Times reports”).

  • Wynette Pugh

    Great article in the NY Times yesterday about how shell companies are vacuuming up housing in NY as investments. This stuff about blame the planner is just a stupid fantasy that there can not possibly the tech community is somehow not to blame for social cleansing of a whole region. What I can’t get over is the name they picked. I mean when I read this on FB, I thought it was satire. It shows how young they are. They probably weren’t even born when barf was a word.

    • Sam

      Wynette, so your point is that the purpose of the tech industry is to socially cleanse neighborhoods?

      Do you have any idea how ridiculous you sound?

  • Indentured Tenant

    The Bay Area added over 100,000 jobs last year and less than 15,000 housing units. Many of the jobs were taken by recent transplants, often straight out of college or grad school. Most of these new hires make far more in salary and benefits, including stock options, than the rest of us. To argue that “demand” or “supply” aren’t factors increasing rents and housing prices is lunacy. And when homeowners enjoying relative low monthly housing costs like Welch, Hestor, Daly, Redmond, Shaw, Ammiano and Peskin spout such nonsense, it comes across as selfish spin rather than thoughtful analysis. The landlord and development community couldn’t be more happy with this prominent, articulate group of lefties spinning a plausible story, guaranteed to increase rents and house prices if their advice is followed.

    A better question for SFBARF is why does the Bay Area allow businesses to expand when there is no vacant housing, especially technology and bio-tech businesses that are causing most of the extreme income inequality in the area? Perhaps they’ll consider a platform requiring companies with more than 250 employees/contractors to build housing for at least 50% of their workforce or they can’t add any more jobs in the Bay Area. There’s plenty of vacant housing and office space in China and Detroit. Hint. Hint.

    SFBARF is a new organization and will need time to find its focus, but Kim-Mai Cutler has done them a great service with her excellent, detailed look at many of the constraints on housing production in the Bay Area. SPUR just opened an office in Oakland following their recent expansion to San Jose, to promote their very effective methods bringing gentrification and higher rents to another part of the Bay Area, with displacements, evictions and ‘pretty streets’ to follow. Since the old housing guard in SF is on its last legs, it’s up to new organizations like SFBARF to instill some vigor into the housing debates since the leftie ideas have been proven bankrupt and very costly to local residents for at least the last 15 years.

    http://techcrunch.com/2014/04/14/sf-housing/

    • Sam

      FaceBook is building some housing in Menlo Park for its new campus.

      But in general, people do not want to live in work camps.

    • LEM

      Great – so you are all for negative economic growth. That’s such a fantastic world view. You may as well join the race-to-the-bottom set in Mississippi or South Carolina with that attitude.

  • Jean

    Where is the water going to come from to accommodate all the new highrise/high-density buildings? We in our apts. have already been asked to cut back 10% of our usage. Footprints of the old industrial buildings downtown housed maybe 4 bathrooms for two or three stories. We now have 50-story buildings going up with 2 -4 units per story each with 1 or two bathrooms (toilets, sinks and showers), dish washers, washing machines, kitchen sinks etc. Seriously folks: how do we accommodate everyone who needs housing and with many many more coming each year in a state with drought/water issues? How much can San Francisco carry?

    • Sam

      Jean, my house has 4 bathrooms. But that doesn’t mean that my family uses any more water than if it had one bathroom. It just means that more people can shower at the same time.

    • W.C. Whiner

      San Francisco uses less water per inhabitant than any other country in California.

      There are a lot of things to think about when it comes to growing the city, including water usage, but water seems low on the list. The more people who live here, the better for water. Your problems aren’t in San Francisco, they’re in San Diego.

      • Guest

        The notion that SF residents use less water per capita than others has no bearing on the requirement that each individual new resident has to water. Irrespective of conservation relative to others, the absolute new demand on a finite resource is what is of concern. There is no free lunch no matter how much we diet.

        The same argument is made for densification on the west side by whiners, that there is excess Muni capacity on the west side lines. What matters is absolute capacity to move people from homes to jobs, not around their own neighborhoods.

    • Charlie

      The CCSF built Hetch-Hetchy for it’s residents. We have plenty of water.
      The problem is that we “share” it with the cities on the Peninsula who waste more of it on lawn watering (lawn grass is an English weed, not suited to our climate). If we restricted H/H water to personal use, everything would be fine, but our PUC and Civic leadership doesnt have the spine to turn the tap off to Silicon Valley & San Mateo County.

      • Sam

        So you want to turn our commuter belt back into a desert?

        Good luck with that.

        • Charlie

          I didn’t say that. Santa Clara & San Mateo County can issue bonds and invest in desalinization plants for themselves. I bet you they’d ban lawn watering then too….

          • Sam

            Beggar-they-neighbor policies aren’t helpful. We need solutions that help the entire Bay Area, and not to set cities and counties against each other.

          • Guest

            Right, the only time we should pit Bay Area cities against one another is when they are all pit against San Francisco and there is good money to be made.

          • Sam

            The other cities bail out SF by housing 500,000 of our workers. They don’t build too few homes – they build too many and the city benefits from that.

            But the whole beggar-thy-neighbor thing is bad for everyone. There are way too many cities in the Bay Area, and things like Twitter threatening to move to Brisbane would not work anywhere else in the US, where somewhere that close would be part of the same city.

          • San Francisco bails out the region by providing 500,000 jobs to regional residents.

          • Sam

            But SF cannot house those people. It may be in the interest of neighboring cities to piggy-back onto that, but we cannot tell them they are not building enough housing when they build more than they need while we build less and rely on them to make up the difference.

            Downtown (SF) and the burbs needs each other so fighting with each other makes no sense.

          • These people would not live in the suburbs were there no jobs in the city.

          • Sam

            The distinction is moot since voters want more jobs in the city.

            Anyway the burbs are doing a good job of creating jobs too. Silicon Valley did not start in SF.

  • Zelda Bronstein

    Thanks, Y, will see what we can do about that.

    • Redmond’s Dog

      Zelda, you spelled Sonja as Sonia in the photo caption

  • TIM, PLEASE CHANGE THE COMMENT POLICY

    • Guest

      Why? This is a very lively debate.

    • Guest

      Tim says he rarely reads the comments. Marke has a very, VERY active social life and hasn’t had time to make much progress in his day job to-do list. Maybe start your own blog where only the cool kids can post comments? I’ll look forward to reading it.

  • Redmond’s Dog

    Sonja Trauss is a smart passionate young woman with a feisty attitude. Although, I’m not sure how well thought out her ideas are, it’s clear she knows what BARF means and chose the name to get attention. Kinda like barfing on a Google bus to get attention…

    In the SF Business Times article about SFBARF, there were some pertinent facts that Zelda Bronstein doesn’t bring out. Trauss and her nascent org were a tiny rump group till very recently when she got funding from anonymous sources so that Trauss could begin to work full time.

    SFBARF is not a 501c nonprofit. In fact, it doesn’t even have a state of CA nonprofit charter. Legally, that makes it closer to a sole proprietorship, with no requirement to disclose funders. In the SF Business Times article, Trauss was quoted saying, “We are NOT funded by developers.” Really?

    If that is technically true– if Sonja’s paychecks don’t come from corporations or LLCs in the development game– I would strongly suspect SFBARF is funded by SFHAC or by others in the “development community.” After all, Tim Colen was there at SFBARFs kickoff, per Zelda.

    Does that make SFBARF an astro-turf group designed to provide cover for the pols who want the developers money? Will there be hoards shouting Build-Baby-Build! at the City Hall hearings with identical logo identity stickies over their hearts like at the AirBnB hearings?

    Inquiring minds want to know… Zelda, you may need to ask harder questions and dig deeper.

    • Sam

      Dog, it doesn’t take a genius to realize that many many people here think that we should be building more homes than we are doing. That is hardly just a developer demand. In fact those owning land banks in SF might reasonably argue for there NOT to be a massive housing construction program as that would make their commodity less valuable.

      • W.C. Whiner

        Nothing makes raw land more valuable than lots of building nearby.

        • Sam

          Well, I don’t think there is anyone arguing that we shouldn’t build more homes, except for a few extreme NIMBYs. So debates are better employed by discussing where and how to build them, rather than whether.

    • Zelda Bronstein

      R’s D:

      The subject of this story is on what happened at the February 2 panel discussion.

      But yes, the funding behind SFBARF should be investigated. I note that Trauss refused to tell the SF Biz reporter one of the two sources of her income as the group’s full-time organizer (she disclosed that the San Francisco Moderates had given her $10,000–hardly enough to pay the rent, even in West Oakland, where Trauss lives).

      • Why is it that the needs of everyone BUT existing San Francisco residents are given consideration in the public process of rezoning and land use entitlements? Since when does democracy give any consideration to people who might one day decide to become a resident of a place? And since when do the democratic sovereigns of a place become marginalized out of the political process?

        • Sam

          Because most voters do not want SF frozen in time like some theme park for boomers, hippies and losers. We need new blood because of labor shortages in the more dynamic business sectors, and if those people aren’t already here, then we need to be able to bring them here.

          And we need housing for them. The people who just hapen to be here now may not be the folks we need to be here in the future. Turnover keeps a city vibrant and dynamic.

          • Most San Francisco voters want to educate existing San Franciscans to take these high paying jobs before we invite in immigrants to displace them.

          • Sam

            The people already in SF lack the skills to maintain SF as the global leader in the knowledge, sharing and social media economies that are drivers of our success and prosperity.

            That requires people moving here from all over the world, which of course is the way it has always been here.

            The SF voters love the diversity that comes from being a global magnet for talent

  • Y

    I really hope not to hear the false “law of supply and demand” arguments, a.k.a. “it’s simple econ 101”, whether by the ‘build more and prices will drop’ crowds or by the ‘law of supply and demand doesn’t work here’ people. There is a law of supply and demand, it works quite well in modeling housing prices, and it isn’t what a lot of people think it is.

    Demand, in the economic sense, does not mean ‘how much do people want to live in SF’ or ‘how many people want to live in SF.’ It means (indirectly and roughly), ‘how many people are willing to pay a given amount of money for a given amount and quality of housing.’ In a market like SF there is an unusual number of rich people, who dominate the aggregate demand for housing, and thus determine housing prices. Housing prices match the demand for housing by the rich. It does not match the demand for housing by middle-income and lower-income people.

    If we build more housing, it might become worthwhile not only for the $150,000/yr people to live in SF, but also the $125,000/yr people. It’s impossible, in the current climate, to build enough to accomodate the $60,000/yr people as well.

    • W.C. Whiner

      Nothing is impossible. The only question is what it would take.

      Off the top of my head, if you add to Ed Lee’s 30,000 mostly market-rate units (‘below-market rate’ lottery essentially subsumed into the same) another 50,000 dense, small, cheap units, you would go a long way to easing things for the $60k earners.

      If not 50k, then 100k. If not 100k, then 200k. The line is somewhere.

      My guess is, 50k.

      • Y

        I’m skeptical about your numbers, but I wouldn’t swear to mine either. I’d like to see a real, unbiased economic analysis done on this.

        • W.C. Whiner

          Here is what happened to rents in the area in 2002-2006:
          http://research.stlouisfed.org/fred2/graph/?g=YIC

          SF population dropped 30,000 and units increased 10,000. Rental vacancy rates in the MSA went from 5% to 7%.

          From 2010-2013 (ACS 2014 is not out yet), SF population increased 30,000 and units increased by less than 2,000. Rental vacancy rates in the MSA went from 6% to 3%:
          https://www.dropbox.com/s/gdjgf3shvrzntsv/HVS%20data.pdf

          If you want to bring rents down, you need to build the missing 15,000 units (average household size in SF is 2.3), then 40,000 besides (to match the 2002-2006 unit-vs-population mismatch). So, Ed Lee’s 30,000 is roughly one half the unit growth it would take, all else equal, to pressure rents significantly.

          SF was hardly cheap even in 2006, though, and you asked to ease things for $60k earners. Instead of the 60,000 units it would take to pressure rents significantly, I suggested building one third more, 80,000 total. At that point, vacancies would reach unfamiliar levels and your $60k earner would find landlords of low-average housing stock begging him to rent.

          • W.C. Whiner

            Sorry, quick edit: to match the 2002-2006 experience, you need 15,000 to get back to 2010 market levels, then another 25,000 (forgot to think in units/households), so Ed Lee’s 30,000 is roughly three fourths the unit growth it would take to pressure rents. Building 80,000 total is roughly twice that.

        • Guest

          I already showed you the chart that demonstrated that the markets were down so excess equity and speculative profits likewise fell, there was less investment in business and hence fewer jobs, therefore there was less demand at all levels for housing. It had nothing to do with a puny increase in supply and everything to do with a macroeconomic decrease in demand.

          • Sam

            You cannot have a successful economy and cheap housing. They feed on each other.

            Compare SF (global leader of the knowledge economy) with Detroit (bankrupt basket case). Anyone can move to Detroit and buy a house for a buck. And yet people would rather be here and pay 4K a month for a one-bedroom.

            And there is your problem. People want to be here so much that most cannot afford to. It only matters that those whom we need can afford our housing.

          • W.C. Whiner

            In 2002-2006 population was down 30,000 and units 10,000. At 2.3-person households that’s a 50,000-plus person mismatch between supply and demand. That’s 6% of population. That’s not puny; it’s massive. Vacancy rates in the area swelled 40%, from 5% to 7%. Rents went down for four straight years.

            Equity markets did just fine over this period, though, rising about 10% a year off the 2002 trough.

            From 2010-2014 population was up at least 30,000 and units barely moved at all. 4% of population is not puny, either. Vacancy rates in the area have dropped 50%, from 6% to 3%. Rents went up.

            Equity markets did just fine over this period, though, rising about 14% a year the last five years.

            Now, I think there is a place for your argument. However, your argument works through the demand and supply channels. Let’s get that straight, then maybe you can express a policy argument.

          • Y

            WCW, I think the changes in vacancy and in rental prices were not directly connected with each other, but are both connected with the fall and rise of the tech industry since 2000 or so. More tech workers means more demand for housing (hence lower vacancy rate), and also higher income of the average dwelling seeker (hence higher prices).
            As to building more units, consider that for several years now, SF has been adding about 10,000 “information technology” workers every year. Even if you build 10,000 units every year, which is not going to happen, these techies are going to be the ones at the head of the queue.

    • Indentured Tenant

      Not true. Total demand is, in fact, everyone who wants to live in SF, regardless of how much money they currently have to spend on housing. Whether they can all live in SF depends on the total supply of housing. The reason supply and demand curves continue beyond an intersection point is because there *is* demand beyond the point of intersection (which implies more demand at lower price points – the curve slopes downward), just as supply could be higher beyond the intersection point (implying producers will build more if given a higher sales price – the slope curves upward).

      What’s true is there is far more housing demand than supply, not just in SF but the entire Bay Area. Thus, developers will build for the highest income levels since that’s where the most profit is made. But the city could require developers to build for all income levels. Just as the city builds “complete streets,” it can require builders to supply housing for “complete neighborhoods,” which would include a range of price points from low-income to very high income and price points in-between.

      The key point is that developers are ONLY building housing for the very rich since there is out-sized demand even for that fairly narrow demand segment. So far, Mayor Lee and the Board of Supervisors are on-board with this strategy. The issue is whether the city is willing to change course to require a mixture of housing that caters to a much broader segment of the population besides the very rich and the very poor (via affordable housing requirements and city-provided funds).

      When supply is restricted without any countervailing regulations, bad things always happen. The wealthy scarf up the limited supply and the middle- and lower-income segments of society are completely excluded from the market. It’s no different than if GM was the only car manufacturer and was limited to building 10,000 cars per year, but there was demand for 200,000 cars. Of course GM will only supply cars to the people willing to pay the highest prices since that’s where the most profit will be made. That’s SF real estate development economics in a nutshell. Only so many units will be built, so the units built will only be for those able to pay the highest prices. That’s the dynamic that needs to change or Mayor Lee and the BoS will be known forever as the politicians that turned SF into a city where only the very wealthy, fairly wealthy and a few very poor are able to live.

      • W.C. Whiner

        There aren’t enough of the ‘very rich’ (top 0.1%) to make a market for private development, and they do their own, besides. Developers in SF mostly target mass affluence, the top percent or two.

        This is the problem with requiring a mix of housing: there aren’t enough of the mass affluent, either. Grafting ever-more-complicated rules onto private development slightly enlarges the pool of winners of the below-market-rate lottery. Tournaments strike me as poor housing policy.

        The city should build its own housing, and lots of it. It’s really too bad about the SFHA’s long history of incompetence and corruption.

        • Sam

          Yes, presumably “Indentured Tenant” is sufficiently poor that anyone who can afford a million dollar condo is super rich by his standard. The difference between being a millionaire and a billionaire is lost on someone with nothing, but it is still real enough.

          The city could build more housing if the voters agreed to give them more money. But the cost of building enough affordable housing to house everyone who wants to be here is astronomical, and the voters won’t agree.

          The good news is that not everyone who works in SF needs to live in SF, and already more than 500,000 of them live elsewhere. That trend must continue given that RE in SF will never be cheap, and it is naive to think that is possible. “Indentured” is naive.

          • W.C. Whiner

            There is no reason that San Francisco can’t have a healthier mix of housing cost, absent supply restriction. If the city can’t build itself, still my preferred solution, it could certainly rezone some well-chosen plots for very small, very high density units and find a partner. The lure of profit is very strong.

          • Sam

            The city does have a mix of housing. In fact SF does a better job of building BMR homes for the poor than any other US city.

            What SF doesn’t do, and realistically cannot do, is build subsidized housing for the middle class, because there are effectively an infinite number of those who would live here or move here if there were affordable housing.

            Price is how we control the population and maintain liveability. There is no other way in a free society.

          • W.C. Whiner

            It probably is unrealistic to expect the city to build enough housing. I see that as a verdict based on the electorate and the politicians they’ll elect and on the SFHA’s long history of corruption and incompetence.

            Price is one way to ration scarcity. An alternative is to provide abundance via social democracy.

          • Sam

            An “abundance” of housing enough to make it cheaper would suck in tens of thousands more people who aspire to live in Sf but currently cannot afford it.

            And that will drive prices right back up again.

            Our goal is not to make SF cheap but to ensure that the people we have here are the people we want to have here.

          • W.C. Whiner

            Abundance would bring in more people, we agree. The city should be bigger. There’s plenty of room.

            Your goal as an investor is not to sell your properties cheap. My goal as a resident is to live in a city I love, not in some creepy, unaffordable theme park.

            Speaking of creepy, ‘the people we want to have here’? I don’t want to know. Please don’t tell us.

          • Sam

            WC, here is no rational reason for public pollicy to favor you being here just because you would like to be here. The question is always – what does you being here do for the rest of us? What have you done for us lately?

            The kind of people we need here are those best suited to the economic direction we are talking. We need those who can contribute to the growth of the local economy. We don’t need people who jut think it would be “cool” to live here.

          • W.C. Whiner

            Funny, I asked so nicely, too.

            Public policy absolutely should favor people being here just because they want to be. I’d much rather the city be full of people who liked it enough to move here than be full of lottery winners and legacies.

            Public policy has no place for economic eugenics. Cities are made up of all sorts, certainly including those who think it is cool to live there.

          • Sam

            WC, the issue isn’t who you’d prefer to see here or who I would. That’s subjective and everyone will give a different answer.

            But then I don’t ask anyone to subsidize my housing costs here, so it is nobody else’s business if I am here. But if you need a subsidy to be able to afford to live here, then those paying that subsidy are entitled to demand what they are getting back from their investment.

            And you wanting to be here, by itself, does not convince those whom you are asking to pay the difference.

            So yes, given that we can only subsidize a limited number of people, it matters who they are and what they give back.

          • Public policy should favor the interests of residents of a jurisdiction and now allow for the well resourced to buy democracy out from under the electorate by coopting resistance with public contracts to activists or by spending overwhelming amounts of money to purchase candidates.

          • Sam

            Guest, policies that freeze a city in time and discourage new residents will create a dead city.

            Most voters are not NIMBYs and rightly reject such isolationist policies.

          • W.C. Whiner

            Sam, you may not ask for housing subsidies, but you receive them: the mortgage interest deduction alone dwarfs all other direct housing subsidies.

            It’s awful policy, of course, but I assume you take your deduction like everyone else who itemizes.

          • Sam

            WC, I take the mortgage deduction in the same way that Redmond takes his Prop 13 subsidy. Why aren’t you criticizing him for that.

            And in fact the mortgage interest deduction only applies to your PPR and one other home. After that, it doesn’t exist except insofar as you can offset it against rent.

            Even so, the voters always support the mortgage subsidy because they recognize that home ownership is good for the nation. Why are you good for the city?

          • W.C. Whiner

            Sam, you claimed nobody subsidizes your housing. That was false: you take your deduction, your property taxes are limited, and on and on. Please don’t make false claims to score rhetorical points.

            Ad hominems don’t impress. Try fact and reasoning.

          • Sam

            I still pay tax so the fact that I do not pay an egregious amount of tax not does amount to a subsidy in the same way as you are demanding for people for no reason other than that they just happen to be here now.

            And since two thirds of Americans own their own home, we are really just cross-subsidizing each other. I’d be happy to lose the mortgage deduction in return for lower rates of tax.

          • W.C. Whiner

            A tax subsidy is a subsidy.

            And the idea of paying an egregious amount of tax in the US is laughable. Videlicet:
            http://www.oecd.org/ctp/tax-policy/taxing-wages-tax-burden-trends-latest-year.htm

            US taxes are only 3/5ths of Germany’s, and Germans are hardly dumping tea into harbors.

            If all Americans made the same money and owned the same home, you would be right about a cross-subsidy. Instead, most Americans own modest homes and don’t even itemize. That’s who’s subsidizing us in San Francisco, Sam: Middle America. Aunt Millie.

            I’m not going to turn down free money, but I don’t pretend it’s anything other than totally unfair.

          • Sam

            Fairness is a highly subjective notion. But what is clear is that the mortgage interest deduction is untouchable. The voters love it because almost everyone either owns a home or want to own one. So the current situation is the one the voters want to have.

            And again, if the voters want to pay more tax, they can enact that via the polls and the politicians they elect. Typically that does not happen. Meanwhile, every local affordable housing bond in the last nine years has failed. The people know what they want.

  • 4th gen SF’er

    I don’t think we can or should build to the sky like NYC. We have earthquakes. Real ones, and super-quakes which in the 1906 earthquake moved a fence 6 feet in the North Bay. These earthquakes are called Supershear Earthquakes. Scientists believe the 1906 one was a Supershear Earthquake:

    “The magnitude is 7.7 based on seismic waves but 7.9 based on the geodetic measurements.”
    http://news.stanford.edu/news/2006/january11/agu_beroza-011106.html

    Loma Prieta in 1989 was 6.9 and it did a lot of damage but was not a Supershear.

    Supershear earthquakes are deadlier than deadly
    https://ericfdiaz.wordpress.com/super-shear-earthquakes-deadlier-than-deadly/

    • GarySFBCN

      Another difference: NYC actually has summer. We don’t. The shade from the high rises in NYC is comforting in the hot days of summer. Here, excess shade can mean turning on the heater – in August.

      • Guest

        But but but “livability!” “urban density!” “suburban sprawl!” “vibrant, VIBRANT!”

      • Sam

        Shade is welcome during the day in the summer months. It really depends how you look at it. Generally speaking, people who choose to live in cities are not so concerned about the lack of wide open spaces and herds of buffalo everywhere.

        We already have high-rise buildings here. They cost more to build because of the quake risk, but the technology is there to make them safe.

        The policy of upzoning along transit corridors is well established city planning everywhere, as has been successfully implemented in the eastern neighborhoods.

        • Guest

          Yep, there are plenty of condo owners in the condo desert along Mission in Eastern SOMA who are making the sidewalks “vibrant” during the cool, shady windy months of summer. Sometimes the “eyes on the street” from these new vibrant San Franciscans is overwhelming.

        • marcos

          The policy of upzoning along transit corridors has not led to lower rents or fewer autos, TOD is a failure.

          • Sam

            It wasn’t designed to do that. It was designed to put new homes where we already have the infrastructure to facilitate that.

            TOD is working in the sense that it is the best option. Nobody expected it to create cheap homes.

          • Guest

            Bait, meet switch.

          • Sam

            The TOD debate is over, done and dusted.

            You lost.

    • George_w

      Yes, clearly some of the cities with the highest earthquake risks have some of the lowest heights and densities of highrises. I am thinking of places like: Taipei (worlds tallest building), Tokyo, Shanghai, Malaysia – Lets continue to let the facts of science stay out of our arguments. Why bother when we have such strong arguments to make based on emotion.

      • Guest

        Those cities are not surrounded by water on three sides and freeway bottlenecks that prohibit suburban first responders from first responding.

        These buildings will probably not collapse in a quake, but there is a strong chance that they will be rendered useless, red tagged, and will need to be dismantled. That should be fun.

        • Sam

          Wishing harm on others just to satisfy your NIMBY wet dream is sick.

          • Guest

            Don’t worry, sheep’s bladders can be used to predict earthquakes. You’ll be just fine.

          • Sam

            Oh, I know I’ll be just fine, but keep wishing death on your neighbors. It’s really attractive.

        • demay@gmail.com

          So first it was about the buildings falling down, now its about the ability to have first responders on scene. Can you name a single highrise in SF or anywhere in the world which has failed due to an earthquake? Where was the majority of damage to building structural integrity? Was it downtown? Or was it in the marina.
          On what do you base your statement of “strong chance that they will be rendered useless” other than your personal opinion which has no connection with reality?

          • Sam

            Fantasy dreams of death and destruction are all that marcos has left now that the city and its voters have shot down his regressive discredited zero-growth NIMBY non-policies.

          • Guest

            Nobody said that buildings would fall down. You are trolling at posts not made.

          • Guest

            I am sure that buildings covered in plate glass going up 100 stories will be just fine beneath when exposed to shearing forces. Just fine. Developers will do the absolute minimum required under code. Blowing the tolerance by small amounts on elevator and power dependent structures can bear large consequences.

          • Sam

            Guest, self-serving guesses are not science. You need a better argument against upzoning than your death and destruction fantasies.

  • yermom72

    The most shocking thing is that this group actually named themselves “BARF” on purpose.

    At least there is some truth in advertising!

  • Runforthehills

    Thanks for turning me on to this group! I think I’ll make a donation to the cause!

  • KnowsBetter

    Go ahead, dismiss this group as astroturf. It’s not surprising many of you would.

    Progressives remain blind to the fact that there are a lot of residents in SF who aren’t driven entirely by a resentment of recent transplants, who genuinely want the opportunity to live in a dense, walkable city, who want to have more choices as to where they can live within that city, and who honestly don’t care that much about your endless complaints over a possible four extra additional minutes of shade per day on that vacant lot next door.

    This is why the left in SF will continue to decrease in influence – even with demographics who might otherwise be sympathetic to other positions you hold. Unlike Sam, I actually don’t say this with any particular glee.

    • Guest

      These BARFers are all from the East Bay and newcomers with no attachment to the City.

      • Sam

        The Bay Area is the real city. SF is just a downtown neighborhood.

        It is the failure to do BayArea-wide planning that has leds to most of these problems.

        • Guest

          Such a regionalist! I bet you’re a vibrant urbanist too!

          • Sam

            Petty fiefdoms squabbling with each other is not the way to build a successful metropolis liek the Bay Area.

            Balkanization has failed.

  • sfparkripoff

    Someone (most likely SPUR) is bankrolling this woman and her phony “grassroots” SFBARF. Their goal is to, “organize renters to endorse new building projects at neighborhood meeting and hearings.”

    They are meeting with the press SFExaminer http://www.sfexaminer.com/sanfrancisco/pro-development-activist-group-barf-agitates-for-more-housing/Content?oid=2907973

    they are creating petitions http://sfbarf.nationbuilder.com/1333goughst

    Facebook Pages https://www.facebook.com/BARentersFed

    Typical for SPUR to use non-profits and other phony “grassroots” organizations to push their agenda. This is the same way that SPUR hijacked the SFMTA with Prop E back in 1999. http://www.spur.org/publications/article/2000-01-01/victory-muni-reform

    If you go to their website they are even posting SPUR announcements http://trauss.com/index.html

  • M

    The best solution to making more affordable housing is to build in Oakland. They have lots of available land, including an empty military base.

    • Sam

      Yeah, it would not surprise me if by 2050 Oakland has more people than SF.

      It’s not just all that land. But also it’s mostly low-rise with abandoned buildings and lots, ripe for development.

      Then you have the best communications in the Bay Area, with an airport, sea port, Amtrak, more BART stations than SF and a slew of freeways.

      And it’s cheap. With better weather. Did I mention cheap?

      A lot of people who are whining about wanting to be subsidized to live in SF would be better off living in the Brooklyn of the Bay Area.

      They just need to fix their crime problem, which of course gentrification will also fix as the bad guys get driven out to Stockton.

      • George_w

        That is quite simply, ridiculous. Oakland would have to add roughly 13k people every year for the next 35 years to just meet SF’s current population – and that would be assuming that SF population completely stagnates at its current number.
        SF has ridiculous politics and a loud set of provincial, change averse baby boomers with nothing left to do but say no to everything, but OAK has all that and then some. The politics are more extreme, the crime is more extreme, and there is already an existing population that feels that the current influx is already ruining its culture.
        I dont know if someone is imping this particular person, but i couldnt disagree more.

        • Sam

          Sure, Oakland has some real issues, but it is those issues that make it cheap. And it is far easier to build 100,000 new homes in Oakland than SF.

          I don’t know if it will happen. I am just saying it could and probably should. And it would take some of the pressure off SF, which is housing many people who would be better suited to Oakland.

          • Guest

            Yeah, 6% of the population is still black, right?

          • Sam

            I wouldn’t know. I am color blind and post racial.

      • Guest

        Oakland resents being called the “Next Brooklyn”. Something about all that unpleasant displacement going on in the big B, plus gentrification, high rents and passive-aggressive, city-sponsored pushing out of black and brown people. When your home is no longer your home after the real estate speculators are done with their magic.

        http://nextcity.org/features/view/oakland-gentrification-libby-schaaf-tech-industry-inequality-foreclosures

        • Sam

          I don’t really care what Oakland resents. The question here is what role Oakland must play in helping to house the million new people who will be moving to the Bay Area in the next 35 years.

          And I think Oakland can more than carry its weight by building on its under-utilized land.

          Meanwhile Oakland is only one third white, so any racial migrations that happen as its housing stock is expanded and improved can easily be accommodated. Demographics are always changing and people adapt/

      • 4th gen SF’er

        FWIW, Stockton home prices are skyrocketing too. I’m not sure but possibly Antioch might be the last place in the SFBA that will be home to the poor, but not completely sure.

  • granny gear

    The traffic is already abominable.

    • marcos

      Hope you are doing well, granny gear.

  • Aaron Goodman

    WATER it’s the primary issue
    TRANSPORTATION is the second
    We don’t have a world class system and you need to build it before you Buil Build Build

    Preservation is not even discussed by Trauss and is the most environmental solution.

    and building affordable housing means alternative methods UNTRIED In SF like co-op housing

    Last is infrastructure the city is at capacity
    Sonja and BARF and SPUR and SFHAC ignore that issue

    • Sam

      Sf is far better off for water than the rest of CA, so the problem you cite is a relative one.

      And by building high near downtown the transit impact is minimized. People can walk to work if they want. The Central Subway and HSR will all help and the SE corner of Sf is under-utilized and over-engineered in terms of infrastructure.

      Co-op housing is cute but really doesn’t scale. Unless you mean the way co-ps work in NYC.

      The city is not at capacity at all. 200,000 more people are moving here by 2040 and we can make this work, but not by being negative and nihilistic.

    • LEM

      Aaron – the MOST environmental solution would be to build 100 story towers all over the Bay Area, use the water from the central valley for people in the cities (instead of almonds), and encourage the millions of people who would live here to do so rather than sprawling cities in the southeast and desert where they need air conditioning, heat, and drive their cars to get a cup of coffee.

      We live in the most ideal climate for humans – Bay Area residents’ carbon footprint is much lower than Houstonians yet our decision to limit development means many find choose to live in “lower cost” areas. I put that in quotes because it’s lower cost to them, but we all pay a price in the long run.

      • marcos

        Yeah, Hong Kong style 100 story towers dependent upon power for heating and cooling on a seismic zone with no measurable transit penetration for most of the Bay Area. Brilliantly environmental!

  • A debate is no problem. Do you want to do it in March or April? 3 on 3 probably. Pick your other 2. If I understand correctly, one of your q.s “Should US cities have open borders, or should we institute a system of internal passports?” And you want to take the side of de facto internal passport system.

    Email me at your convenience. We can set up a date.

    • Guest

      There is a system of internal passports.

      Passports take the form of voter registration cards to have a say in the making of public policy.

      Passports take the form of dollar bills that get you into the house you can afford if you can afford a home in SF.

      Who are you that you think you can involve yourself in other people’s politics, deprive us of our own self determination in order to meet your needs? Citizens United?

      • Sam

        Sonja makes excellent points and speaks for more San Franciscans than your negative NIMBYism ever could. She is trying to get housing built. You are just whining and criticizing.

        • Guest

          Sonja speaks for developers and lives in Oakland, she speaks for no San Francisco residents.

    • Tenant Peon

      Sonja, don’t waste your time engaging with the so-called “progressives.” Most of them are homeowners who want the rest of us to remain tenant peons forever controlled by paternalistic landlords, and most don’t want any more middle-income ownership housing that might reduce the value of their own homes. Their policies are failures and typical of people everywhere who want to close the gates after they’ve moved-in. The dinosaurs died off because they couldn’t adapt to changing conditions and so too will the “regressives” soon enough. Focus on creating the world you want to live in and don’t worry about a bunch of aging ex-hippies who benefited from being born before 1975, but think they’re so special because they moved to SF before you did.

      • Sam

        So true. The good news is that these boomer regressive NIMBYs are dying off, going senile or moving away.

        In another decade or so, they will be an even more ineffective rump and rabble, and the future of this city will be in the hands of a more optimistic, less self-absorbed and less entitled generation.

        A pox on Welch, Hestor and the nattering nabobs of NIMBYism.

      • Guest

        Has Sonja offered you tenant peons $100K for a down payment that you’ll need no matter what housing is produced in the SF assuming that the markets remain goosed?

  • Aaron Goodman

    Sam is wrong again, water is the primary concern, and secondary systems being an important part of building the proper sized and scaled infrastructural changes, before you build build build housing to no end.

    With a drought, and SF is as much in a drought as LA. We use the same water supply, unless Sam happens to drink water from a cola bottle or some well from the moon…

    Infrastructure means, power, sewage, transit, and amenities. If we build 6,000 units per SFBARF, and you have lets say 1,000 people try to squeeze into the Balboa Bart Station, or the local Ocean Ave. public Library, or even the renovated Balboa Pool, when completed, or even lets say in the am all 6,000 people take a crap at 7-8am, we need water and systems to hold and transport all that crap, and even the newest technologies take materials to produce, and all the current infrastructure does not provide the needed scaled and sized infrastructure for what Sonja would like to see built. Does that mean we go ahead and build it anyways, do we have to solve all issues with a “build-it-and-they-will-come” attitude of the real estate industry? No we don’t.

    There is a limit to systems, ecologically, socially, and physically. We have reached a limit, and communities and citizens are fed up with the plan and pave the city over again attitude..

    We live here, and as community members its not aok to just state anyone can come on in and jump in the pool. There is a limit called occupancy, and it has been reached. Boarding a packed BART or MUNI train is enough of an indicator each day.

    • Sam

      Aaron, you sound like one of those Green Party types. There are 200,000 more people moving to SF, and a million moving to the Bay Area, in the next few decades. Burying your head in the sand and moaning that we can’t do anything or change is the height of negativism and paranoia.

      Maybe some of the people who are here now need to move somewhere cheaper and more suitable to make way for the new people that we really need?

      • Guest

        Sam, you sound like one of those Libertarian Party types. There are billions of dollars in underinvested infrastructure in SF, not enough to serve the existing population and no plans on how to serve the people the boosters insist move here to new housing they are profiting off of. Burying your head in the sand and moaning that we can’t do anything or change is the height of negativism and paranoia.

        Maybe some of the people who are want to move here need to move somewhere with infrastructure suitable to their suburban lifestyles to make way for the the people who make San Francisco what it is?

        • Sam

          Except that I wasn’t the one advocating doing nothing. That was Aaron, who appears passive and helpless in the fact of change.

          I advocate growth and expansion as the solution to the city’s needs. Not apathy and inaction.

          • Guest

            Except that you are the one advocating doing nothing. You are Spam, who appears passive and helpless in the face of the power of the market.

            I advocate a conservative approach, of pegging growth to the ability of the infrastructure to accommodate it. Not ideological wishful thinking.

          • Sam

            Of course you are conservative. You’re a NIMBY.

            I am advocating a large expansion of transit-oriented housing development in the city, to minimize the alleged infrastructure issue, and a pro-business expansion of the economy so that we can fund services and programs.

          • Guest

            Transit infrastructure is at capacity, more people are driving in San Francisco than ever, thanks for playing.

          • Sam

            The city government and the voters appear to prefer my view, and that is all that matters.

          • Guest

            Either the infrastructure is there and financed or it is not, that is a technical matter not a political matter.

          • Sam

            The infrastructure is essentially there in the places where the development is taking place. That is what transit-oriented development means.

          • Guest

            The infrastructure along transit lines happens to be along freeway lines, all of which are severely over capacity. You can’t increase intensity along transit corridors when transit is at capacity without increasing the intensity of transit along these corridors. There is nothing on the agenda to increase transit capacity, just moving some deck chairs around the Titanic.

          • Sam

            If true not my experience) then working hours can be staggered. The capacity is there.

  • Kind of ironic this is written by someone who owns a home in Berkeley. For anyone who actually wants to watch the forum, click the link.

  • LEM

    San Francisco “progressives” who claim laws of supply-demand do not work in SF are just as detached from reality as climate change denialists on the right (actually more so because it’s future has some unknowns). We need to build more housing. MUCH more. We need more than 100,000 units, though, to bend the price curve towards affordability. Evidence exists EVERYWHERE that as supply increases and vacancy rates go up, rents moderate or come down. Boston, New York, Houston, everywhere.

    SF has been underbuilding for decades, and attempts at controlling the market (rent control, density restrictions, lawsuits) have only made the rich-poor divide wider.

    BUILD HOUSING NOW

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