The Nimbys and the housing crisis

In my morality play, there are a whole lot worse villains

48hillsmonsterprotest1
Is it Nimbyism to say that more luxury development will drive out existing residents? Is there are case to be made that SF would be better off it it wasn’t the tech hub of the world?

I probably shouldn’t pay too much attention to a story about San Francisco written by a guy who lives in Venice and likes to make fun of student activists. But The Atlantic is taken seriously, and when a piece like this appears, and repeats all the inaccurate claims about the housing crisis, I have to say something.

The writer, Conor Friedersdorf starts off by more-or-less trashing as “propaganda” a theater production done by an after-school program in the city that looks at displacement driven by the tech boom.

He argues that tech companies aren’t the problem:

But I’ll be optimistic that the root of the problem is finally be addressed only if and when the progressives of San Francisco—and low-density peninsula municipalities south of it—stop singling out tech companies for opprobrium and begin to cast preservationist homeowners, the anti-density wing of the environmental movement, and other anti-growth forces as the villains of their morality plays.

We’ve heard this basic line before, over and over, and I’ve spent a lot of time talking about it. And I’ve already talked about the Peninsula cities, which are happy to take in tax money from tech campuses while ignoring the housing impacts – or just outsourcing them to San Francisco.

But the whole thing raises the larger issue that we have to be talking about: Are we going to be slaves to an unregulated economy? Does capitalism work for us – or do we work for it? Is there such a thing as reasonable urban and regional planning, in a national context?

Do the people who live in a city have any right to direct its economic future?

And why do we have to assume, without a single bit of actual, quantitative, non-theoretical evidence, that “lots more new building” will bring down the cost of housing and stop the displacement epidemic in San Francisco? What if that “economics 101” theory about supply and demand – which everyone who has studied economics beyond 101 knows is fraught with assumptions and caveats – turns out not apply in San Francisco in 2015?

 

The whole concept that “Nimbys” are at fault assumes some facts that, as the lawyers say, are not in evidence.

The first is that the opposition to development in many parts of the city is based on greed – that, in other words, people who worry about development in their neighborhoods are motivated by the notion that their property values will rise if they keep others out:

But if the musical’s director aim was to present oversimplified truths for the sake of social justice, the main antagonists shouldn’t have been evil politicians and tech executives—it should have been property owners gleefully watching the value of their biggest assets skyrocket as they aggressively blocked high-density development. Their success has caused much misery.

In my propaganda play, they’d be sympathetic with the plight of the working class, but wouldn’t value them nearly as much as living amidst refurbished Victorians. They’d prevail by tricking economically illiterate activists into allying with them after sneakily tearing the supply-and-demand chapters from their econ textbooks.

We will get to economic literacy in a moment. But first:

I know a lot of the leaders in the neighborhood-preservation world; we sometimes agree and sometimes disagree, and I am not defending all opposition to higher density … but in my experience, it’s rarely driven by a desire for higher property values. Most of the people I talk to aren’t looking to sell their homes and cash out; they want to stay here. That’s why they care.

Criticism of people who want to preserve “neighborhood character” when that means opposing affordable housing, or any more density west of 19th Avenue, is fair game. But I think the preservationists tend to care more about parking, crowds, and their overall quality of life than they do about greedily watching their homes increase in value.

And, of course, anyone who knows real-estate in the city knows that single-family homes won’t go down in value if more high-density housing is built. In fact, a lot of folks worry that more housing of the sort we are building today will increase property values, driving existing residents out

(I am a homeowner in San Francisco, and I am very unhappy about the fact that property values in Bernal Heights are soaring. I don’t want to live around only rich people. I bought a house to live in it, to have a place where I could raise two kids without fearing eviction. I have no desire to sell it. If I did, where would I go? I think I am not that unusual among local homeowners.)

The analysis of the gentleman from Venice profoundly misinterprets the roots of the neighborhood downzoning movement in San Francisco, which go back to the ugly era of redevelopment, in the 1960s and 1970s, when bulldozers tore up entire communities, when the forces of economic growth at any cost (not all that different from the same forces today) decided that San Francisco would be the West Coast Manhattan – and if there were people in the way, they would just have to go.

Justin Herman, the head of the Redevelopment Agency, looked at the low-cost housing in Soma that was in the path of hotels and a convention center and said, famously, “this land is too valuable for poor people to park on it.”

Developers were driving people out of the city at an unprecedented rate. It’s hard to blame the ones who remained – in the Mission, the Haight, the Richmond, the Sunset, West of Twin Peaks, the Excelsior, North Beach, Chinatown, and in plenty of other neighborhoods – for saying: Not me. Not here.

It wasn’t about property values. It was about the ability of people who lived here to be able to stay.

I’m not saying that sentiment from decades ago still makes sense; it often doesn’t. We absolutely need more density in a lot of parts of SF. Some people oppose that, for the wrong reasons, just as they do in the suburban Peninsula cities. But it’s mostly not because of personal greed.

There are, on the other hand, people who care deeply, and almost entirely, about property values. There is massive greed in San Francisco. The people who look to profiteer off the boom tend to be speculators and bad landlords. They also tend to be entirely missing from the neighborhood groups.

In fact, the big residential landlords, who under this particular argument would stand to profit the most from a slowdown in housing construction, are politically almost always in synch with the developers who want to build more housing. They support the same candidates and oppose the same ballot measures. If the big landlords wanted to greedily watch their property values rise, they wouldn’t be supporting the likes of Ed Lee, who wants to allow as much new construction as possible. But that’s where the landlord money goes.

Besides, the worst greedy operators aren’t holding on to assets to watch the prices rise – they’re buying, evicting, and flipping for quick cash.

 

The second fact not in evidence – in fact, the evidence doesn’t exist – is that building a whole lot more housing will bring prices down.

I took Econ 101. I did comparative statics. I studied supply and demand curves. Then I went on to take a dozen more courses in what became my major, and one of the things that I learned, and I have seen over and over again in the past 35 years as I’ve worked as a reporter and covered urban economic issues, is that the stuff in the textbooks doesn’t always relate to the real world.

The standard caveat in Econ 101 is called “cp.” That stand for “ceteris paribis” – Latin for “other things being equal.” Capitalism works really well in the intro textbooks, because every decision and every action is radically simplified.
In the world of a crazy urban economy like ours, other things typically are not equal: Supply and Demand are driven sometimes by such powerful outside forces that the whole equation thing goes out of whack.

In San Francisco, demand for housing is based in significant part on political decisions. Politicians and developers for years have sought to attract “jobs” – which almost never means jobs for unemployed people who live here. It means projects that will attract new workers who move here from someplace else.

That makes no planning sense at all: You approve projects that will ensure thousands of newcomers will arrive needing a place to live, but you have no place for them to live.

In theory, if the Nimbys would just get out of the way, Econ 101 would work, and the Magic of the Market would solve the problem, as private developers simply built to meet the need. That hasn’t happened in SF in at least half a century.

Why? Because the market is what the more advanced textbooks would call “irregular.” Developers build not to meet the market demand but to meet the demands of their investors. In San Francisco in the 1980s and 1990s, it was highrise office space, not housing, that brought the highest returns to investors (often the newly deregulated Savings and Loans, that were speculating wildly in real estate, ultimately causing a huge crash that costs the US taxpayers more than $100 billion).

In those days, no housing got built. I was here; I was watching. It wasn’t Nimbys who stopped housing construction in SF; it was investment capital.

(Oh, there were a few neighborhood battles in places like the Richmond, where small-time residential builders wanted to tear down vintage Victorian homes and replace them with multi-unit buildings. Which, by the way, were ugly. You could argue either side of that one, but at most, we are talking about a few hundred housing units either way. Nowhere near enough to impact the housing crisis.)

In fact, the people who are now called Nimbys were begging the city to force office developers to build housing. I sat through the meetings, followed the debate. The developers fought the idea all the way.

Today, investment capital gets higher returns with luxury condos. So that’s what is getting built. It’s not Nimbys, or Mayor Lee, or zoning policy that is driving the gold rush of housing for the very rich: It’s international speculative capital.

You can quiet all the Nimbys, stop all neighborhood opposition to development, let the builders go crazy – and still, nobody right now is going to build housing for the working class and middle class without government action and subsidies. The private market isn’t interested in that kind of housing.

Oh, and let’s not forget international demand for high-end housing as a place to park cash. That’s not in the textbooks, either. But it sucks up a huge amount of housing inventory.

They don’t teach that part in Econ 101.

Of course, if we want to go back to the basics, we should talk about the demand side of supply and demand. We have a housing crisis not just because we haven’t built enough housing (the supply side) but because, as a matter of public policy, we have decided to turn San Francisco and the Bay Area into the center of an industry that attracts tens of thousands of high-paid workers. And we did it without any consideration of what it would mean to the people who aren’t in that industry and already live here.

Let’s look for a moment at some of the things that they discuss not in Econ 101 but in the later years, in the senior and graduate seminars, where the students look at real-world problems like fighting unemployment in cities. One of the things they talk about is something called a labor-pool study, which isn’t that complicated: You want to lower the unemployment rate? The first thing you need to do is figure out which existing residents are unemployed. Then you look at what their job skills are. Then you talk about creating jobs that pay a decent living wage and fit with existing job skills – and you talk about training people who lack the skills for jobs that are part of your economic future.

In the case of this tech boom – which started when the mayor said he wanted to fight unemployment – San Francisco did none of that. Instead we created high-paying jobs for people who didn’t live here, with much-heralded spinoff jobs that pay people too little to afford the inflated rent caused by the boom. So: Displacement. Unemployment goes down because the unemployed leave town and are replaced with others.

San Francisco has always been a city of immigrants. Most of the people who live here today were not born here. This is good; this is what makes a city live. There is a political spin that says the Nimbys are against immigrants. So let’s look at that for a second.

Immigrants who come here fleeing oppression don’t tend to displace anyone; they don’t typically arrive with large amounts of money. And these days, they are often unable to survive in this city, because it’s become too expensive. The current policies, which get blamed on Nimbys, are actually anti-immigrant: People who flee to SF need a cheap place to stay, and that no longer exists.

Immigrants who come here with wealth need to understand: You are welcome, too – but you don’t get to kick someone else (often another immigrant, who is not as wealthy) out of his or her home.

 

If I were writing a screenplay with villains, they certainly wouldn’t be tech workers, most of whom have done nothing wrong. They got offered a sweet job in a great city; they just want a place to live. (Well, some of them are assholes; what are you going to do?)

Here’s how I think about the Bad Guys:

There are three categories. One falls in the narrow space between corrupt and clueless.

Was Mayor Lee so stupid that he thought we could offer tech firms a big tax break to move into town, at a time when the Bay Area was already booming with companies whose employees were fighting for housing here, without creating the worst housing crisis in decades? Did he actually think that most of those jobs would go to unemployed San Franciscans? Or was he so infatuated with tech leaders like Ron Conway and their money and campaign support that he did what they wanted with no regard for the consequences?

Did the supervisors who encouraged this boom forget that demand for housing is as much of a factor as supply of housing and ignore economic reality because they were clueless? Or were they corrupted by tech and real-estate money?

Did anybody at City Hall stop to ask the question: Will most San Franciscans be better off if we become the tech hub of the world? If the answer is no, then why do we want to do it?

Were the politicians on the Peninsula who encouraged corporate campuses the bring in tax money – and refused to allow any new housing – ignorant of the regional implications of what they were doing? Or did they know what they were doing and didn’t care?

And there are, of course, the very rich who don’t pay taxes. Most of the new tech wealth falls into that category. They may be following the existing laws, but unlike Warren Buffet, they are doing nothing to change the rules.

The wealth that the top 100 tech moguls in the region have accumulated, thanks to Reagan and Bush-era tax laws, would pay for all the affordable housing we need. If that wealth and income were taxed at the level that the rich were taxed under, say, Eisenhower and Nixon, hundreds of billions of dollars would be available for public resources, including housing. Hundreds of billions. Instead, the very rich decide where to put their fortunes – and none of it, none of it, goes for affordable housing. How about Zuckerberg, Benioff, Conway, and the gang put half their net wealth into a fund to build social housing in the Bay Area?

Nah; that ain’t sexy. You don’t get your name on a fancy hospital for that.

 

The other category is what I call the Earthquake Profiteers.

Imagine, for a moment, that the Big One hits – a really Big One, 9.0 or more, and the city of San Francisco is a disaster area. There is no electricity, no transit, water pipes damaged and taps unsafe – and a big supermarket opens up and charges $50 for a quart of drinking water and $20 for a cup of rice. Starving, thirsty children are turned away by armed guards. Parents beg for just a bit of humanity, but no: You got cash, you survive. You don’t, you can die on the streets.

A huge storm hits, with cold hail and rain. A big landlord has plenty of space in a building where people can sleep warm and dry – but it’s $500 a person a night for a cot. The sick, the elderly, people with infants … they are locked out if they can’t afford the tab. Let ‘em die.

Would we, as a city, vilify those people? Would every politician in town call them out? Would the newspapers publish their names in a Hall of Shame? Would the district attorney and the city attorney look for ways to prosecute them? Would the state and local governing bodies instantly pass laws against disaster-profiteering (as, by the way, we did during WWII, when “excess profits” from the war were not only heavily taxes but roundly criticized?) Would every decent human being refuse to have anything to do with them?

I would hope so.

But the people and corporations taking the same sort of advantage of the housing crisis? The speculators, the bad landlords, the evictors? The ones who are making a fortune off the misery of people who have done nothing but try to remain in a city under pressure they did not create, people whose only crime is to be less wealthy than the new arrivals? The political players who represent the interests of these vultures? They are treated, for the most part, as business people just doing what business people do.

And they are allowed to defeat laws that would reign in the profits they destroying other people’s lives, while the political class that runs this city and takes their money says it’s just fine.

The worst Nimbys in the city aren’t even close to that class of villains.

And that’s my morality play.

  • Alfiejr

    is that the Venice in LA or that one on the Adriatic?

    • hiker_sf

      Venice in LA and he’s originally from Orange County, California a good place now because of so many immigrant groups have revitalized many derelict areas, but a pretty shitty place planning-wise. .

  • Kyle Huey

    “Do the people who live in a city have any right to direct its economic future?”

    Do they have any right? Yes. Do they have the sole right? No. San Francisco’s local government is subordinate to the State of California and the United States of America. Thus San Francisco is not allowed to take certain remedies to the housing crisis that have been suggested on this blog, such as abridging the freedom of movement of American citizens and requiring them to “wait in line” in Stockton before they can move here.

    “And why do we have to assume, without a single bit of actual,
    quantitative, non-theoretical evidence, that “lots more new building”
    will bring down the cost of housing and stop the displacement epidemic
    in San Francisco?”

    It’s happening in Seattle right now. http://bikeportland.org/2016/01/04/after-years-of-building-seattle-gets-a-holiday-gift-falling-rents-171524

    “The first is that the opposition to development in many parts of the
    city is based on greed – that, in other words, people who worry about
    development in their neighborhoods are motivated by the notion that
    their property values will rise if they keep others out”

    I agree that NIMBYism is usually not motivated by naked greed (although that does happen on occasion). It’s motivated by a series of concerns (traffic, parking, schools (on the peninsula)) that boil down to “my life is better in some way because other people are excluded from living here.”

    “as a matter of public policy, we have decided to turn San Francisco and
    the Bay Area into the center of an industry that attracts tens of
    thousands of high-paid workers.”

    The Bay Area has been the center of said industry for 50+ years.

    “In the case of this tech boom – which started when the mayor said he
    wanted to fight unemployment – San Francisco did none of that. Instead
    we created high-paying jobs for people who didn’t live here, with
    much-heralded spinoff jobs that pay people too little to afford the
    inflated rent caused by the boom.”

    Correlation does not equal causation. The mayor doesn’t have that much power. Without the “Twitter tax break” (which lasted a year or two before the tax system was overhauled completely) Twitter would have moved to Brisbane and rents would have gone up in the Bayview instead of the Tenderloin. The tech boom was caused by economic and technological forces far beyond the control of Ed Lee.

    “The wealth that the top 100 tech moguls in the region have accumulated,
    thanks to Reagan and Bush-era tax laws, would pay for all the affordable
    housing we need. If that wealth and income were taxed at the level that
    the rich were taxed under, say, Eisenhower and Nixon, hundreds of
    billions of dollars would be available for public resources, including
    housing. Hundreds of billions.”

    Probably not. Federal receipts as a percentage of GDP has been roughly constant at about 17.5% since WWII. https://research.stlouisfed.org/fred2/series/FYFRGDA188S Tax rates were much higher back in the old days but there were a lot more loopholes, so it’s mostly a wash. What is different is what the government is spending its money on. The feds aren’t paying for public housing construction anymore. The money is there, it’s just being spent on other things, like bombing brown people in the middle east.

    Ultimately this piece proposes no solutions (at least, no solutions that can actually be implemented). San Francisco doesn’t have the power to destroy enough demand to solve the housing crisis, and Sacramento has bills to pay so it’s not going to run Silicon Valley out of the state. The crisis simply cannot be solved by attacking the demand side from city hall.

    • Y.

      The Seattle article and the ones linked to it are the only place I’ve seen so far where building has caught up with demand. Not to make things affordable, mind you, but to brake rising prices enough to give speculators a pause. if that continues, building will slow down to let the market “recover” (i.e. for housing to be getting more expensive again.)

      The “no solutions” argument won’t do. That means keeping doing the wrong thing because we don’t know what is the right thing to do. The first step is to acknowledge the problem, and once people start talking about it, solutions will become apparent.

      • wcw

        Speculation is a symptom, not a cause.

  • hiker_sf

    I agree with Tim on his last point. When that knucklehead, now-jailed CEO bought the pharmaceutical company and raised the price of a life-saving pill from $13.50 to $750.00 a dose, everyone went apeshit. But when a scumbag landlord increases rents to outlandish levels knowing full well that people will be displaced, we just sigh and do nothing.

    We need a landlord’s hall of shame.

    • Jon Kozone

      I think the operative difference is the term “life saving”. Shkreli had a drug that people needed to stay alive with no alternative.

      If a San Francisco landlord jacks up the rent then well, it sucks, but you can move somewhere else. And if you can’t afford any other place in San Francisco then, you can’t afford San Francisco; don’t blame a landlord. Tell me about it….I really want to live in Sea Cliff but can’t.

      • Y.

        There’s a difference between wanting to move to a new place and wanting to stay where you already are.

      • hiker_sf

        Wanting to move to Sea Cliff or anywhere else getting evicted from your apartment.

        It’s not like you just move to Modesto and start looking for work there.

      • Dave Abbott

        Yes. Shelter may be a human right and necessity. But a subsidised apartment in one of the most affluent and desirable zip codes in the country is not.

        • jhayes362

          You’re back at it $am, urging “economic cleansing” of San Francisco.

          • Dave Abbott

            No, I am simply pointing out that we cannot all expect to live in a very desirable place that we really cannot afford on the basis that someone else can be compelled into subsidizing you.

  • SFB

    “Will most San Franciscans be better off if we become the tech hub of the world? If the answer is no, then why do we want to do it?”

    It’s possible that the answer might be ‘yes’ though. Just saying.

  • Jon Kozone

    “What if that “economics 101” theory about supply and demand – which everyone who has studied economics beyond 101 knows is fraught with assumptions and caveats – turns out not apply in San Francisco in 2015?”

    -Tim Redmond, Jan 4, 2016

    Actually, hardly anyone disputes the impact:

    “But when you take thousands and thousands of apartments and turn them into tourist rentals, it has an impact on the cost of housing. Hardly anyone disputes that.”

    -Tim Redmond, Jan 4, 2016

    • Dave Abbott

      Supply/Demand does not work in SF except when it suits Redmond to claim that it does.

  • Jon Kozone

    >”In the case of this tech boom – which started when the mayor said he wanted to fight unemployment”

    Right on, Tim. Too many people spread the nonsense that the tech boom started with the Hewlett-Packard garage in 1939…27 miles from SF City Hall.

    Thanks for setting the record straight, Tim. The tech boom was started by Mayor Ed Lee in 2011.

    Also, re:”Was Mayor Lee so stupid that he thought we could offer tech firms a big tax break to move into town”

    Did any companies actually move into town because of that tax deal? Twitter and Zendesk were already here. It’s possible that some did…I’m just wondering if there is any truth to what Tim writes.

    • M. Montrouge

      Redmond likes to give the Mayor all the credit because it’s much simpler to ignore the many other reasons people and companies come to San Francisco, as if demand is only created artificially.

  • M. Montrouge

    “The worst Nimbys in the city aren’t even close to that class of villains.” So is Redmond admitting that NIMBYs are bad, but apparently just not that bad? Will he admit that the motivations behind trying to stop projects like 8 Washington and 75 Howard by so-called “progressives” are motivated by selfish NIMBY concerns?

    Redmond tries to act like he doesn’t ignore economics, yet he never seems to cite economists who can back up his ideas. We can point to what the City Economist has said, what Paul Krugman has said, and what Seattle is putting into action. Progressives only seem to claim that policies like the Mission Moratorium has the backing of the people, yet end up losing by double digits when it finally comes to the polls.

    Maybe if their arguments actually had any logic and and not just ideology, people might actually listen.

    • hiker_sf

      Here is where the word NIMBY fails. I support increased density, including growing SF to 1.5 million people. I live in North Beach and there are a few opportunities if anyone in charge actually had a vision: Bringing the subway to the old Pagoda theater site, close off that small block of Powell, expand the small Marrini park into a beautiful plaza and allow a condo complex or two on the Pagoda site that exceeds the height limits by one or two floors, but with setbacks. Ditto for the intersection of Bay and Columbus – there are 3 corners that could be developed into higher density housing and the corner is just right for a transit hub.

      But I continue to be against allowing 8 Washington to exceed the existing height limits. I have no view to lose and I live on the other side of the hill so it isn’t about me being a NIMBY. For me it is about planning and keeping the waterfront as visually open as possible.

      I also see opportunities in other areas of the city. Because of our joke of a city planning department and having NO politicians with a vision, I believe the best plan would be move denser developments to the western side of the city and watch the ‘in-fill’ of denser developments over time. That worked on Mission and other parts of SOMA.

      • M. Montrouge

        I also live in North Beach and voted against 8 Washington, which is a decision I’ve come to regret. Problem is no matter where you try to build, essentially someone can have that sort of argument, no matter the height. Unfortunately nearly all those locations you’ve mentioned would probably be opposed by the usual suspects of Peskin and Golinger.

        West side would be great for more density, unfortunately they also have NIMBYs there.
        “This year, through his Sloat-Parkside Properties, O’Sullivan is
        preparing to demolish three commercial buildings near Ocean Beach on
        Sloat Boulevard between 46th and 47th Avenue. The
        recently shuttered Roberts Beach Motel will be razed to create a
        five-story building this September. The $30 million project will include
        nonformula retail and restaurant space as well as 56 residential units.
        As Tim Colen, executive director of the Housing Action Coalition, reported to the Examiner in March 2015,
        nearby residents have complained about the project being too large and
        out of character with the neighborhood, even though HAC supports it.
        Seven of the units will be BMR.” http://48hills.org/2015/06/30/up-against-a-serial-evictor/

        • hiker_sf

          I think the jury is still out for what Peskin is going to do. Yes, he did throttle some projects, but he seems a bit more mellow now.

          I think that every member of the BOS should be tasked to meet with community groups to identify potential areas within their districts for higher density development and transit hubs.

          • Jon Kozone

            Unfortunately, I heard from a pretty good source that Lady Peskin doesn’t want a Pagoda station.

      • Magic Michaelson

        “For me it is about planning and keeping the waterfront as visually open as possible.”

        I find it hard to understand how having a “visually open” waterfront is more important than people getting evicted left and right, or landlords and speculators being able to take advantage of people and land due to the reduced supply of housing.

        This is why the NIMBYs *are* kind of evil in their own way (although I completely agree with Tim that they aren’t the worst villains). Because NIMBYs selfishly make marginal concerns their primary issues, to the detriment of thousands of others.

        “I believe the best plan would be move denser developments to the western side of the city and watch the ‘in-fill’ of denser developments over time.”

        This is what Supervisor Katy Tang wants to do with the Affordable Housing Density Bonus program. Tim Redmond, however, recently castigated this program for supposedly resulting in the destruction of rent-controlled units–something that the program would not be able to do due to existing protections.

        Personally, I’m fine with people saying they want limitations on where dense housing gets built for any number of a variety of reasons. But it has to get built somewhere. Objecting to every proposal everywhere isn’t an option anymore–and it feels hypocritical to do that and then claim to be “progressive.”

        • hiker_sf

          I guess you aren’t talking about me. I don’t object to every proposal.

          • Magic Michaelson

            Out of curiousity, what specific proposals do you support? Have there been any housing projects you’ve actively expressed support for?

          • hiker_sf

            While I wince at so many shitty developments we’ve seen, I’ve also supported many and I’m not going to list them all but 75 Howard and Transbay Center are two examples.

            I think everyone needs to compromise, but sheesh, we need a robust master plan that has a target population as its objective. From that we can have sane development that follows infrastructure improvements.

            And if you read my comment above, I support higher density builds in some sections of my own neighborhood. These opportunities exist all over the city.

        • Y.

          “I find it hard to understand how having a ‘visually open’ waterfront is more important than people getting evicted left and right.”
          That’s not a choice. Waterfront buildings are luxury housing, precisely because they have front row views. They are not meant to lower housing prices or prevent evictions, and indeed they don’t.

          Right now there is no option available for lowering housing prices or staving away evictions that is based on building more, and luxury waterfront towers are about the least effective plan out of all the ineffective plans around.

          Why should hundreds of thousands of San Franciscans give up forever the view of the East Bay hills, if it won’t solve the housing crisis?

          • Dave Abbott

            Views are not protected by the SF planning code.

          • wcw

            Monaco has pretty views, too.

          • Y.
          • wcw

            Oo! Oo! I can play this game!

            http://foundsf.org/images/7/7c/Embarcadero-Freeway-near-Vaillancourt-and-Ferry-Bldg_00020004_Chuck-Gould.jpg

            Embarcadero Freeway at apx. Clay Street, Ferry Building hidden at center left, c. 1969, © Chuck Gould, all rights reserved.

            ‘..hundreds of thousands.. view of the East Bay hills..’

          • Y.

            OK, that made me laugh.

            Seriously, though. If you live on Twin Peaks you’re going to be fine.If you live anywhere in the Mission, South of Market , and the lower parts of Potrero, the views are going, going, gone.

            Monaco is full of highrises. Real estate prices there would make a hardened San Franciscan blanch.

          • wcw

            Views east from low elevations in the Mission/South of Market/Pot Hill are already gone. Looking east here’s Mariposa & Texas
            Monaco is not a random example, it is the endgame of policy thinking that begins, ‘there is no option available for lowering housing prices or staving away evictions that is based on building.’

          • Y.

            Monaco has never tried to lower housing prices. It’s a luxury destination and has been so for a very long time. On the other hand, it has plenty of tall apartment buildings, mostly even more expensive than the old ones, by being situated closer to shore.

            Honolulu might be an even better example for what I am trying to pose, in that it has even more aggressive highrise construction than Monaco (and certainly more than SF), much of which is small non-luxury apartments. That hasn’t kept it from being one of the most expensive cities in the U.S.

          • wcw

            Honolulu mostly is lowrise if not single story and detached. There are few highrises off the beach. Its population-weighted density is lower than the Bay Area’s and barely a third of the NYC metro area’s.

            And despite not building particularly densely, it is cheaper than San Francisco, especially so if you adjust for what happens to price levels on islands and in remote areas like Alaska.

          • Dave Abbott

            The wealthy have always preferred living on hills while the flatlands have usually been the preserve of the poor. Same everywhere.

          • Magic Michaelson

            Not true of parts of Los Angeles.

          • Magic Michaelson

            Now hold on a minute…let’s follow your logic here:

            “Waterfront buildings are luxury housing, precisely because they have front row views…”

            ..but if the new projects are built, they then block the views from existing buildings with (per your logic) “luxury” housing. But that causes the units in existing buildings to no longer be luxury. AND they’re in older buildings, so they are already worth less.

            So doesn’t that mean the old luxury housing becomes affordable? AND likely remain rent controlled too?

            It sounds as though building luxury housing on the waterfront causes previously luxury housing to become affordable. So building on the waterfront increases the number of lower-costing housing units, due to both the increase in housing supply AND decreasing the value of the existing units.

            How is that not a win-win for everybody besides existing landlords? Why should we be protecting already rich landlords’ property values?

            Again, priorities.

          • Y.

            No. Not every house that has a view is luxury housing. I’m talking about people in small modest apartments in the city losing their glimpse of the Bay, so that a few people in Rincon tower and the like can get unimpeded panoramas.

          • Magic Michaelson

            But if they lose a view, they lose value, which lowers their price.

            So by objecting to new housing development, you are keeping existing housing more expensive than it should be–both by protecting their views and keeping housing supply limited.

          • Y.

            Nice try.

          • Magic Michaelson

            What’s that supposed to mean? How am I wrong in my logic?

            It is the same logic you’re using, might I add. And I assume we have the same goal of making SF and the Bay Area more affordable to stop displacement. So why not build on the waterfront to both increase supply and reduce rents on existing housing units?

          • Y.

            If you block the view of the Bay to a whole neighborhood, that won’t make any of it more affordable. Beach front panoramic views will make a building more expensive. That’s how it is, for whatever reason.

  • Tyro

    I my experience, we have a couple of issues: one is outright hostility to the idea of new people and more people moving into the city. It’s less about property values and more about not wanting more people to arrive, or at least only having people arrive that are perfect substitutes/replacements of the well off people already there. Next is simply a refusal to accept the reality that population increases, areas become more popular, people move, and we need to create housing to accommodate them.

    People are provincial. It’s the same in Podunkville, Alabama with a guy giving you the up and down and asking, “You ain’t from ’round here, are you?” to the aging “community activist” worried that more housing will bring in more bicycling commuters and outdoor cafes disturbing the “neighborhood character.”

    • Bob

      Thank you! My term for this is the urban hillbilly. SF is full of them. Most of our most seasoned anti housing activists are great examples.

      • Jon Kozone

        Take a Donald Trump speech, substitute “tech workers” in place of “Muslims” and “Mexicans” and you have a ready made Redmond article.

    • wcw
      • Earl D.

        Finally got around to reading this. A marvellous blog post. I think the term open access city (immigrants are taking our jobs) vs. closed access city (rich people are taking our houses) is insightful.

        • wcw

          Agreed. I stumbled across it searching for something else and was struck by its empathy and intuition. The writer has been looking at housing a lot. I wish Tim would pick up the phone and talk to him.

      • whateversville

        I thought this was particularly good:

        “Because, think about what happens if you do live in a rotten neighborhood and you manage to do all the hard community work to make it somewhat functional. In a city as desperate for housing as New York or Los Angeles, the minute that neighborhood becomes safe, the lots that hold those $100,000 duplexes will be worth $500,000, and the neighborhood will gentrify. Here again, we can see how people’s own legitimate experiences lead them to the wrong conclusions. What could be more infuriating? If you belonged to that neighborhood? If you had organized and fought and probably even put yourself in danger to do what probably at times seemed nearly impossible, and make your neighborhood livable again? And immediately all these high priced outsiders come in and take that away from you? I cannot imagine the anger I would feel. And yet, the only natural response one would feel is the response that created the unwinnable situation to begin with. Get these damn developers out of my city. The only natural response is the response that dooms the marginalized populations of that city to the choice of living in fear and distress or escaping.”

    • hiker_sf

      Yes and regardless of what the free marketeers commenting here say, is isn’t just progressives that hate change. It is most everyone, regardless of political leaning.

  • Tyro

    There’s another thing worth adding: cities need to plan for the far future, for people that aren’t in the city today and will be in the city tomorrow. Maintaining a city is a multi generational project. Working groups plan infrastructure that won’t be available for 10-20 years or more. To be honest, most local activists showing up at the zoning board meeting to decry a new apartment building don’t have that perspective: they’re concerned about how many people will be on the sidewalk and how much street parking will be available next year, not how to house and move people for the next 50 years.

    • Bob

      Most of the people who show up to planning commission hearings to lobby against building/s will be long gone in the next 30 years – much less the next 50.
      We’re a city which is not ashamed to be focusing on the micro

      • Dave Abbott

        Yep. All those who were displaced from the Fillmore or SOMA decades ago are all long gone now, but those who benefit from the new infrastructure are still here. Redmond’s mindless knee-jerk opposition to all change and his self-serving desire to see SF preserved as of the day he arrived there are transparent.

  • Bob

    I won’t even comment on the ridiculousness of the disaster porn Tim posits (other than to guffaw at the idea of people dying of cold in temps around the low 40s and how often does it hail?) ..
    I never thought I would read the following words on this blog, much less that they would be uttered by Tim: ” We have a housing crisis not just because we haven’t built enough housing (the supply side)” – things are changing

  • Dave Abbott

    Tim, you claim to not care that your modest Bernal Heights home is worth north of a million dollars, because you don’t want to sell it and do not want to move.

    However, you have an asset that could be sold to pay for a comfortable retirement, or care home or medical fees, or to give your two children a big fat inheritance.

    If you really don’t care about your property value why not put it in a charitable trust? The trust would allow you and your wife to live out your days in it, but then the asset would accrue to the charity which could do good works with it.

    By signing away any future entitlement to the capital value of your real estate windfall, you could much more credibly duck allegations that you’re not a NIMBY for selfish, greedy reasons.

  • Whether or not Tim (or any author) owns a house that has appreciated or not doesn’t take away from the points in this article. I owned a house in the midwest that I sold at a loss in 2010. Does that make me an idiot? (Well, yeah, it probably does).

    What’s more offensive (on both sides) is the effect that this housing crisis will have on current and future residents. Did your apartment burn down? Gotta leave. Did your landlord sell the property to someone who doesn’t want a tenant? Gotta leave. Did your kids not graduate from Harvard or Stanford and land a sweet tech job? They gotta go.

    This is all about lack of political will to create housing and transit. That’s why there’s outrage. But overall, this article is better than others

    • Dave Abbott

      Is your argument based on the idea that anyone who was once here somehow has a lifetime estate? On somebody else’s dime if needs be?

      While we crowd out the higher value folks who wants to move here?

      • Municipal D1

        Trust me, that’s not the argument. SF failed to build enough. It needs to build more, or lose employers (which is not going to happen anytime soon). It (as well as the Peninsula, esp. Palo Alto, Mountain View, and Cupertino) took jobs and neglected housing. Now there’s mass displacement to areas like the Central Valley. I’m as much a broken record I that as Tim is.

  • sojourner_7

    “Suppose there was a law that if you opened a new supermarket you had to sell 15% of your groceries to low-income people at far-below market prices to improve their access to good nutrition. “

    • If the market had driven up food prices to the point where low-income people were starving, I would be all in favor of that. Wouldn’t you?

      • sojourner_7

        I would want them fed, the choice would be if it is the responsibility of the grocery store company or government to carry the cost. That quote was from yesterday’s LA Times Op-Ed..

        http://www.latimes.com/opinion/op-ed/la-oe-0104-galles-affordable-housing-court-case-20160104-story.html

        • Yep, and if the government taxed the rich and the profiteers at a reasonable level, the gov’t could do that. Since we can’t seem to handle that in the USA these days, we have no choice but to make the ones profiting from development pay for affordable housing. Me, I would raise taxes to Eisenhower-era levels, including for corporations, include a tax on wealth, tax capital gains at the same rate as income, and pour the money into urban housing development. Better option. Since Congress won’t do that, we do what we can in cities.

          • wcw

            Why not advocate for that, then? Pouring money into urban housing development would actually help people. Policies that ration housing just change a few names on the eviction notices.

          • M. Montrouge

            Because the NIMBYs in the progressive coalition aren’t down with building more period.

          • Dave Abbott

            Redmond cannot credibly be both an advocate for affordable housing and a NIMBY. But since he is not willing to sacrifice either of those contradictory values, he has to write bizarre articles and maintain weird viewpoints to try and bridge the incompatible

  • Greg

    Tim claims to have taken Econ classes, but this statement shows he didn’t learn much:
    “”And why do we have to assume, without a single bit of actual, quantitative, non-theoretical evidence, that “lots more new building” will bring down the cost of housing and stop the displacement epidemic in San Francisco? What if that “economics 101” theory about supply and demand – which everyone who has studied economics beyond 101 knows is fraught with assumptions and caveats – turns out not apply in San Francisco in 2015?”

    Will we ever “stop” displacement? No. Absolutes are meaningless in this discussion. We should be trying to reduce displacement. Like unemployment, it never goes to zero.

    Does supply and demand “not apply in SF in 2015”? Again, a fundamental misunderstanding of economics. In the long run, we reach an equilibrium price at the intersection of supply and demand. Nothing you do today will bring down prices in a massive way today. The goal is to build enough supply to moderate prices in the long run. That is what Seattle has done and what we could do here if people like Tim would get out of the way of development. Build more now, get lower prices in the future. Build less now, have higher prices in the future. Those are the only real options.

    • M. Montrouge

      Never mind that the city economist Ted Egan already did a study that showed that it would take 100,000 new units to lower housing costs, and also did a report to show that the moratorium wouldn’t work.

      Also, where is Redmond’s own evidence?

      • wcw

        No, that’s not right. The city estimated in 2012 that ‘the addition of 100,000 new housing units would reduce housing prices for a low-income household to a similar extent as a $75,000 down-payment subsidy..’

        Source: http://sf-moh.org/modules/showdocument.aspx?documentid=5808 [PDF, February 13, 2012 Land Use & Economic Development Committee Hearing on Middle Income Housing]

        This number is roughly as useful as the state study modeling demand by county if home prices had grown with the rest of the US: not at all. However, to the extent the number has value, it should not be misquoted.

        • M. Montrouge

          You didn’t include the entire section.

          “Alternatively, increasing the supply of market rate housing in the city would put downward pressure on all housing units. Based on the past relationship between housing supply and price, the addition of 100,000 new housing units would reduce housing prices for a low-income household to a simila extent as a $75,000 down-payment subsidy, i.e. 25% of the market would become affordable. Of course, this would occur without housing subsidy.”

          I merely said that it would lower housing costs. The report says it would have downward pressure on market rate housing, making 25% affordable. The point being that building more would help stabilize costs, and ultimately that Redmond was making up stuff as usual.

          • wcw

            The ‘addition’ quote says in 30 words what the full quote says in 70.

            Not specifying what the city study sought makes it sound as if 95,000 new units would not lower costs. Usually it is the supply-and-demand-doesn’t work crowd that does that.

  • jhayes362

    I’m a homeowner and I do not oppose more density in SF because it will boost the value of my home. In fact, I’m not so sure that it will. I’m concerned about added density because I’d like to stay and the economic policies — or lack of them — promoted by Ed Lee are harming the quality of life here. Certainly international investors, greedy landlords, real estate agents, and some politicians are profiting handsomely from the boom, but I certainly don’t see SF getting better as a result of it.

    Recently, Matier & Ross reported on a public opinion poll showing a drop in Lee’s favorable ratings and a boost in his negatives, which I believe were approaching 50%. Based on that, I think there may be some other people who agree with me.

    • Dave Abbott

      That is an entirely subjective assessment. Many of us think that SF is getting better and are thrilled to live in what is the global HQ for the dynamic knowledge, sharing and social economies.

      And Lee is now in his third term having won two easy re-elections, and has four more years.

      Doesn’t seem to a rational observer that you are winning these debates. But at least you are accruing some juicy RE inflation so you’ll end up just fine either way.

      • jhayes362

        Yes it is subjective, but it’s based on values. You, $am, want all low income people forced out of SF and oppose efforts to support both social and economic diversity. You have one value $am. It’s the market and by that standard, everything is hunky dory.

        As for Lee’s situation, he wento China and paid a visit to Rose Pak. The following comes from Matier & Ross:

        “I told him he was being isolated by his staff and that he is being completely controlled,” Pak said. “Not even his friends or department heads can get in to talk with him.”

        Pak says she warned Lee that unless there is a turnaround in the administration, he should brace himself for more setbacks in the next round of Board of Supervisors elections in November.

        “He could be seen as a lame duck for the next four years,” Pak said.

        As for the mayor’s reaction?

        “He felt the meeting went really well,” said spokeswoman Christine Falvey. “Rose and the mayor have been close for decades, and he wanted to wish her well.”

        Pak is admittedly a biased observer, but no more biased than you are in favor of Ed Lee. And Pak is probably closer to the facts.

        • Dave Abbott

          The left never had a good thing to say about Pak until she fell out with Lee. Values, my ass.

          I do support economic diversity. I just don’t think that every neighborhood of what is in any event a very small city needs to have every economic level equally represented.

          • jhayes362

            You don’t support economic diversity. You’ve advocated the upzoning of the Mission, probably the last working class neighborhood in SF. You’ve endorsed gentrification, a way to create an economically more homogeneous and upscale citizenry at the expense of working class housing and jobs. Yes, values are important, and yours center on money, $am.

          • Greg

            The Mission is the last working class neighborhood in SF? Tell that to Bayview, hunters point, portola, excelsior, visitacion valley, etc, etc.

          • LetThemEatPanCake

            “I just don’t think that every neighborhood of what is in any event a very small city needs to have every economic level equally represented.”

            Of course you don’t. And hence the Mission’s longstanding Latino community–for example– just needs to get over itself, embrace the inevitable change, and be thankful it had a good run.

            There’s really no difference between this mindset and belief in Manifest Destiny.

            Like so many in the build, build, build crew you simply do not actually value, or care about the future of, the utterly priceless, beautiful, unique and phenomenally culturally significant community built with the blood, sweat, and tears of the Latino community.

            What’s happening in the Mission is nothing short of Neo-colonialism and your viewpoint is in essence a neocolonialist viewpoint.

    • Tyro

      Well, here’s the thing, and it’s pretty basic: people are either going to live in new housing that is available to them, or they will buy up anything in sight that they can find in an effort to live in SF if nothing else is available. If 10,000 new people move in, those 10,000 people can either live in new construction available for them, or they can move to one of the existing units. By moving to one of the existing units, they either displace 10,000 people already living in the city or outbid people who would have otherwise been able to buy house they wanted if one of those 10,000 didn’t put up more cash to beat them out. Your choice.

      • sfister

        Sorry, too logical. Does not jibe with fauxgressive agenda.

      • Bob

        These truths get said a thousand times but we still have people denying that more housing is necessary.

  • Matt

    Hello,

    Something to consider is that in practice NIMBYism, like most political functions in our politics, privileges the advantaged and the powerful. Are long time non-rich residents of the Mission really even NIMBY’s? NIMBYs in the way upper middle class white suburban residents are NIMBY’s opposing a Tax Credit funding low income apartment complex being proposed down the street? I don’t think they’re the same thing. The power dynamics and motivations are very, very different.

  • brookse32

    Tim, this is an excellent essay, but it has one important error in it; your accepting the notion of a housing shortage.

    U.S. Census data consistently shows, during both boom and bust periods, that there are always thousands of vacant units in San Francisco.

    Currently there are enough vacant units in San Francisco to house every homeless person in the city.

    The only shortage, the only lack of ‘supply’, is in -affordable- housing, which the developers and their speculator backers refuse to build.

    They instead build buildings with units priced at the maximum rent/mortgage which they can claim on paper housing consumers will pay, and then they sell those buildings to the next speculator based on that -predicted- unit pricing.

    No one has to actually -live- in the units for this speculative flipping to work, as long as each successive buyer believes that they can convince the next buyer that this hypothetical unit price can be raised higher still.

    Many of these speculators even know that the high unit price is not legitimate, and they just play that pricing game anyway, because all of the other speculators are also playing the same game, and as long as everyone keeps doing so, properties can be bought and sold for the rest of eternity, continuously going up in price, based on completely imaginary housing prices.

    The whole thing is just a shell game that is played like Monopoly and is not real.

    And it creates a city in which there are tens of thousands of housing units in which no one actually lives..

  • Proglidyte

    I guess someone has to defend them; why not Tim?

  • Carl

    I want to come at this from sort of a different angle. Most will probably disagree, but as a design/art-minded person, basically the only thing I care about in this discussion is aesthetics. This sort of thing only seems to get brought up these days around the issue of people having their views blocked.

    What I want SF to be is a city full of beautiful architecture & buildings. Fashion, in most cases, over function for me. I am a lifelong San Franciscan and I welcome new people moving here and like what they are bringing. What I don’t want is developments built in a rush, of a poor quality, which degrade the aesthetic beauty of the city, either in the name of ‘affordability’ or whatever else.

    Many of the new developments, like those along Market are not amazing timeless buildings, but are basically agreeable to me. The problem we have had in the past is the kinds of complexes that get thrown up – cheaply built & ugly.

    I think you can have very good looking buildings that are not high-end, though high-end helps. But I don’t know how to screen for this. How do you tell the Supes, the Planning Department, etc ‘Just approve great looking buildings’? We know them when we see them, but most of us would not know how to describe what passes muster. Even if I get ahold of a rendering in advance of a project, I can look at it and guess, but can’t tell what the build quality will be (can you somehow intuit this from the stated cost of the project in planning documents?).

    Does anyone else care about this or have ideas for how to even control for this? What I don’t want to see is cheap plaster and brushed aluminum all over the place – I would rather just keep SF how it is if that’s what development is going to mean.

  • MKR

    Whatever happened to the concept of urban planning with cooperation between city and local leaders and business and corporate leaders? It used to be common in the US and it still is common in most civilized countries in the world. So if some big technology (or other type of company) wants to have its headquarters in San Francisco the mayor and local planning officials say something like “Great, we’d love to have you. But since we would like to avoid the massive volatility in housing prices, displacement, and social disruption to the middle class who live in the area, we’d like to solicit bids from developers and start working on projects for luxury housing as well as subsidized housing before you come here. It would only delay your locating here by a year or two, as developers can put up buildings very quickly now. ”
    That way there doesn’t have to be hostility, conflict and extreme volatility in the housing market. Over time, city property values are likely to rise as a greater percentage of the population of the world are moving to cities. But having your house double in value in two years is not necessarily advantageous to most people. Extreme movements in real estate values, like extreme movements in stock prices, are not usually advantageous in the long run.
    Its possible to have compromise if people want it.

  • Jon Schwark

    So, Yeah…

  • LetThemEatPanCake

    The defeat of 8 Washington can not possibly be explained merely by NIMBYism, or anti-densityism, and/or people not wanting their views blocked.

    The whole City voted overwhelming against it, not just neighbors most affected. Many people voted against 8 Washington because it was Port property and they believed that the Port and the City can’t give away the store and get nothing but obscenely expensive luxury units and so little for the public good.

    So y’all need to stop using the opposition to 8 Washington as an example of NIMBYism. If it were just NIMBYism it never would have won so handily citywide.

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