Mayor’s housing plan: Developers get nice juicy benefit; city gets little or nothing

How the Affordable Housing Density Bonus gives away choice parcels to developers -- who won't actually provide that much affordable housing

Affordable housing and tenant groups that are opposed to the mayor’s plans to upzone much of the city to allow more residential development will be out in force Thursday/28 as the Planning Commission holds its first hearing on the program.

This is the kind of sweeping rezoning that the Mayor's Office has in mind -- and for what?
This is the kind of sweeping rezoning that the Mayor’s Office has in mind — and for what?

The Affordable Housing Density Bonus program could lead to massive displacement as developers evict tenants and tear down existing modest buildings to construct much bigger ones.

The idea, according to the Planning Department, is to allow more density than the current zoning permits on more than 30,000 lots all over town – in exchange for builders adding a few more units of “affordable” housing.

And I put the “affordable” in quotes because most of the new units will not be offered at rates that many San Franciscans can afford, and in some cases the law would allow developers to claim these density bonuses for apartments that aren’t significantly below – and sometimes may be above – market rates.

As we put it back in December,

It’s a gigantic change in planning policy, driven by the idea that the city of the future has to be built by destroying the city of the past. In essence, the proposal is aimed at making San Francisco a better, and possibly more affordable, city for people who are going to move here in the future, at the expense of existing residents.

Planning has made some changes from the original plan. Sup. London Breed has said she would introduce legislation to exempt rent-controlled units, but nobody has seen the bill yet.

And there are thousands of community-based business, corner stores, restaurants, etc. that could be displaced as property owners tear up buildings and replace them with higher-rent spaces.

But one of the most insidious things about this plan is that it gives developers the right to build higher, bigger buildings, with smaller back yards and less open space – and what the city gets in exchange is very little.

In fact, the current plan, based on an analysis by the new coalition San Franciscans for Community Planning, made up of tenants, affordable housers, neighborhood groups, and neighborhood merchants, would significantly reduce the city’s affordability goals.

Affordable housing in this city is linked to the average median household income in town, which is now around $75,000. Low-income housing is geared to people whose incomes are below 50 percent of AMI. Then there’s moderate-income housing, and people who qualify for that can earn as much as 120 percent of AMI.

Much of the housing in the AHDB program is aimed at people with incomes as high as 140 percent of AMI.

The difference is critical to developers. The standard for affordable housing is that nobody pays more than 30 percent of their income in rent. So if you build for a household at 50 percent of AMI – that’s about $38,000 a year – you can only charge about $1,000 a month rent.

Build for a household at 140 percent of AMI, and you can charge $2,850 a month. Big difference to your bottom line.

So of course, developers love the higher AMI levels – and for much of the AHDB program, 140 percent of AMI is just fine. In fact, under the program, only 12 percent of the housing would be restricted to households at 50 to 120 percent of AMI. Another 18 percent would be set aside for households from 121 to 140 percent. And 70 percent would go to people at or above 140 percent.

Oh and by the way: If you demolish a building with four affordable rent-controlled units and build a new one with 10 units, and simply replace some of the affordable units you destroyed, that counts toward the bonus.

Let’s look at that for a second and see how much of a burden this puts on developers, and what the city gets in exchange for very favorable, and profitable, zoning changes.

48hillsmedianrent

If you look at this map of median rents, there are at least 10 neighborhoods where the median rent for a one-bedroom is at or below 140 percent of AMI. That means if you build in those neighborhoods, charging 140 percent is the same as charging market rate. (Granted, the median rents include existing rent-controlled units, and the median rent for vacant apartments may be somewhat higher. But spend some time on Craigslist; in those neighborhoods, rent for a one-bedroom apartment is often below $2,850 a month.) So in many parts of town, the developer gets a bonus – the ability to construct more units in lower-density areas. And the city gets nothing, nothing at all.

Obviously, if you build in the Mission, or Noe Valley, or the Haight, or Potrero, renting a place for just (just?) $2,850 a month means you are losing potential income. But you are also getting obscene rents for the rest of the units.

But many of the most attractive sites for this upzoning might fall in the outer neighborhoods, where new buildings could tower over the existing ones – and the developers would pay nothing for that privilege.

The city’s housing element, the analysis shows, calls for 56.6 of all new affordable housing to be built at 50-120 percent of AMI. In the past seven years, the actual production has been close to 35 percent for the lower end of the income spectrum, so we’re falling behind.

The AHDB program goals: 12.5 percent of the housing is set for what we might actually call low- and moderate-income people.

So here’s what we are looking at: A plan that would allow massive demolition and displacement, drive a lot more expensive housing construction – and give the city only a relatively small amount of affordable housing in the deal.

How is this good for San Francisco?

  • whateversville

    Some community members assert that additional density and heights, even if accompanied by additional affordability requirements, would create a financial incentive for project sponsors to demolish existing sound housing stock, particularly older units protected by rent control, in order to build larger buildings. Some assert that the State mandated requirement to replace lost rent control units with permanently affordable units (AB 2222) does not provide adequate protections.

    In response to these concerns Supervisor Breed has introduced an amendment that limits the AHBP to projects that will not result in the demolition of a rent controlled unit. Further, the amendment directs the Department to collaborate with community groups, housing activists, housing developers, and others to study the City’s rent control housing supply.Planning Dept.

  • whateversville

    Also, Tim’s rent calculations are off. 140% AMI is the upper limit for sales price. 120% AMI is the limit for rentals. These are the actual limits:

    • Pvt. Hudson

      $518,700 is like 50% bellow market too…

  • Tyro

    I am not sure what is so wrong about tearing down an existing building with a few housing units and replacing it with another, larger building with more housing units. As I’ve said over and over again– if there is a limited number of housing units available without any new ones, then I am either going to buy YOUR home, or I am going to out-bid a family trying to move here that makes less money that I do.

    Another idea, though, would simply be to make SF a place where developers have no desire to develop in. That would entail making the city less desirable. Cleveland has learned to downsize its city, as did many cities in the 60s and 70s, mostly by encouraging highway construction to make cities places that you drove to or drove through, not lived in.

    • Foginacan

      Huh? You can’t buy a home that’s not on the market, so the whole “I’m going to buy YOUR home” is boogie man talk. Outbidding a lower income family? Too late for that, once higher income families *wanted* the same housing stock as low income families (moving into the Bayview for example), then all bets were off. It’s been happening for 20 years. The difference is now you’re flipping he paradigm and suggesting the low income families should be depending on the new developments that are being built for a high end market. It’s a superficial squeeze, based on a superficial premise. We’re still not talking about subsidized housing projects for the Middle Class, nor is that even desirable.

      • Spritely Bill

        We’re not, because the “middle class” cannot afford housing in San Francisco right now.

        • Foginacan

          That doesn’t answer the question of why we’re not talking about working family housing….dedicated, public housing, if that’s what we need. The rest is a scam.

      • Bro, do you even tax lien? (Actually, I don’t think they auction off tax liens out here, but it’s possible and happens all the time in other parts of the country).

        • Foginacan

          A family has to default in that scenario…or be screwed by their lender.
          Fresh development on your block doesn’t protect you from either of those scenarios.

    • Didn’t you get the memo? The number one San Francisco housing priority is to protect any and all rent controlled units, legal or not. Otherwise, none of this makes any sense. Plus, “Affordable Housing” and “Rent Controlled Unit” are synonyms (kind of like how Midwesterners pronounce marry, merry, and Mary). It doesn’t matter how beat up or run down a RC-unit is, it’s the character of The City.

      Btw., Trump is a lock in the Rust Belt. Imagine, if you will, what the Bay Area would be like if Trump got elected. Ha ha!

  • Andy M

    The Breed amendment was adjusted (and planning accepted it) to prevent the destruction of rent-controlled housing in perpetuity. You should print a correction.

    You also fail to mention that the reason this local ordinance is being considered is because of a more aggressive state law. Whether or not we pass this ordinance, developers are allowed to take advantage of the state program. In fact, there are already five developers who have submitted density bonus applications.

    The state law gives localities the opportunity to write local rules about how the density bonus can be implemented. The local program limits the impact of the state law.

    It also doesn’t make demolition any easier. Demolition permits are still required, with all the hearings those entail.

    It’s also much more economical to buy a building and Ellis Act all the existing tenants, than it would be to pursue a demolition and new construction with the density bonus. Especially bc a third of the units in that building must be BMR.

    The program is complicated, so unfortunately it’s very easy to mischaracterize. I would like to give the author the benefit of the doubt, but it’s hard given how many factual errors are in this article. Most of them could have been avoided had he reached out to the Planning Dept for clarification.

    • Pvt. Hudson

      “I would like to give the author the benefit of the doubt…”

      Don’t. Tim, and anti-housing activists like him, ultimately do not want any new construction, 100% affordable or not. They’ll swear up and down that more BMR is “all” they want, but will still come up with every reason imaginable reasons to oppose any project that comes close.

      If they had their way, all no-fault evictions would be prohibited, both OMI and Ellis. Conveniently, they’ll never acknowledge that such strong eviction controls would be unconstitutional.

      This is the problem with the New Left and it’s contemporary progressive descendants; all utopian vision and fiery rhetoric, no substantive organizing. Hell, I’d settle for simple acknowledgement that most of their “goals” require dismantling the the American economic system by force.

      • i’d settle for a couple more cookie-cutter condos and more service on Cal-Train.

  • Donald Dewsnup

    The impact of the 1979 State Law today actually gives broader freedoms for developers to develop SF Parcels regardless of the 250 SF soft sites identified by the 18 month feasibility study conducted by the SF Planning Department.

  • sebra leaves

    Meanwhile they are busy in Sacramento making sure our rights as citizens
    are more limited than ever. AB 1500 just passed to the Senate. AB 1500
    would remove even more rights of citizens to appeal or oppose
    objectionable projects. Details on AB 1500:
    http://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201520160AB1500

    • Kraus

      Yes, heaven forbid that NIMBY citizens such as yourself not be allowed to stop much need supportive and transitional housing developments (e.g. accommodations with supportive services for currently homeless persons and transitional housing for 18-year olds aging out of foster care) that you consider “objectionable”.

  • Rainforester

    How does Andy M know that the “Breed amendment” was amended.

    And why is this not in the legislation as written.

    State law is just an excuse, but I’ll bet Andy M makes money in real estate development. Somehow!

    • Andy M

      Congrats, this is the first time I’ve ever been called out and insulted by name in comments. I know you’re just trolling me, but I can’t resist.
      I went to the Planning Commission’s neighborhood presentation, where they announced that Breed had adjusted her amendment and that her revised amendment was accepted. Had the author called the Planning Dept. he could have confirmed that for you.

      Offering an amendment and having that amendment is HOW you get this kind of thing into “the legislation as written.” It’s just the way the process works. The reason it was spelled out explicitly is in response to neighborhood feedback.

      Believing the state law is “just an excuse” is your choice. But I believe it isn’t because lots of Land Use attorneys are already trying to make $$$ of the Napa case.

      https://www.californialandusedevelopmentlaw.com/2013/07/14/county-could-not-make-density-bonus-conditional-upon-compliance-with-local-affordable-housing-requirements-2/

      I wish I made money in real estate development. Like you, I’m merely a concerned citizen with too much time on his hands.

      • Foginacan

        A few problems with that.
        1) The State law is merely an incentive requirement, it does not require a change to the master plan.

        2) The initial drafts released to the public conflicted with the State law, which prohibits incentives on rent controlled properties. Planning would have never considered these buildings in play if it was about compliance.

        3) Nothing in the State law requires the City to study, or earmark land for potential development.

        4) The State law applies State wide based on a criteria. The plan we’re discussing does not seem to comply, as it is selectively mapping block by block, where the incentive program will be valid.

    • Joel

      This isn’t a conspiracy. The new amendment is even posted online, as are all of the documents related to the AHBP.

      The RC property prohibition wasn’t in the original legislation because there are legitimate arguments for including RC units in the program. For example, 2-3 RC units might preclude development on a property where dozens of BMR units could be built. Many reasonable people would contend that this doesn’t make sense. Planning is trying to establish a replacement equivalency between RC and BMR, but they support this amendment to prevent this issue from killing the program entirely.

  • Foginacan

    Who actually wants this?

    Developers. The City. Maybe the Unions and some Real Estate professionals. Who else?

    Housing advocates duping people into thinking this plan will result in rolling back rents to the 80’s?

    People who don’t like San Francisco and want to reimagine it as another city?

    Seriously, who outside of those categories thinks it’s a solid plan?

    Long term property owners that want less regulations would benefit, and I bet you only a small percentage would support this on a ballot.

    Speaking of which, why isn’t this being put to a referendum?

    • Andy M

      This isn’t being put to a referendum because it’s the result of a state law, which should have been explained in this article.

      I don’t think anyone thinks that this plan will roll back rents. The options are: you can build 100% market rate (or 87% market rate if the current inclusionary housing requirements apply) according to the current zoning, or you can build up to 2 more stories of total units as long as 30% are affordable (the specifics about how many must be middle income vs. low and very low income depend on the project and whether it’s for rent or sale). This program provides more market rate and more affordable housing in places where developers are already allowed to build. You’re right that the program won’t drastically reduce rents, but they will provide actual new BMR units all over the city, and the folks that live in them will benefit.

      • Foginacan

        I think using the State law to explain this is more than a bit of a farce. You are correct that this is the premise they’re using.

        We’re also discussing a fallacy… this whole concept that more units will ease the market has no basis in what we’ve experienced from recent history.

        • rkgwood

          I see why it’s easy to think that, because we see *some* housing getting built, and rents still spiral upward. But consider the fact that in the last 5 years, the Bay Area has added 480,000 private sector jobs and only 50,000 units of housing. Unless each of those new units houses 9.6 income earners AND their dependents, we’re simply not building fast enough. Cities like Seattle that have worked aggressively to increase their housing supply in the face of similar challenges are already seeing rents start to level off.

          I understand that development always includes the risk of displacement. But given the start reality of population growth, nothing is going to help this problem other than massively increased supply *in combination with* strong protections against displacement for existing tenants.

          • Foginacan

            Your attaching housing to job creation, but that’s a fluid number, and we can’t ignore the times when building outpaced local job creation. It also denies the existence of suburbs where people have made their commute for 2 hours each way, and done it for years. It’s a mistake to think the population will increase at this rate, but it’s a bigger mistake to rezone (development takes years) based on a current problem, and redesign neighborhoods which still won’t have the infrastructure to accommodate all these people.

            At least you acknowledge that development can induce displacement. Many don’t. Extending Mission Bay development into the Bayview isn’t going to help families stay in the Bayview. That’s just common sense. Also, I don’t think it’s possible to increase tenant protection much more than we already have.

            Planning isn’t addressing the real problems here, they’re just pushing an agenda.

    • whateversville

      Planning thinks that there are 240 sites that will likely take advantage of this program. If we get to choose what to build on those sites, which of the following seems like it will help San Francisco’s housing shortage the most? Remember:
      1) the state program is already the law
      2) the bright-blue middle income units are affordable for a family of two teachers.
      3) the local program will prevent the destruction of any rent-controlled units.

      • Foginacan

        What are these projections based on? Seriously. It’s an elective plan. In oder to market this crap show, they’ve taken it upon themselves to pick 240 sites, based on…what? It’s to land the City owns, and there’s no basis.

        Can we guess what’s going to happen here? The 240 locations will be strong armed into taking advantage because the City will coerce them through reassessments, and other BS. Real San Franciscans will suffer and doing this will result in displacing longtime residents. Which is exactly what’s happened every time we’ve had a boom in construction.

        • whateversville

          “they’ve taken it upon themselves to pick 240 sites, based on…what?”

          Planning Department staff then identified a subset of these 3,475 parcels that were either vacant or built to 5% or less of their zoned capacity. The number of parcels in the study area that contain existing buildings or are built to greater than 5% of their zoned capacity equals 3,235 parcels. Because the remaining 240 parcels, or “soft sites,” are either vacant or developed to less than 5% of zoned capacity, and are therefore deemed to have the characteristics that make them the most likely to be of sufficient appeal to developers seeking to take advantage of the Local Program.source.

          “Real San Franciscans will suffer and doing this will result in displacing longtime residents.”

          Who are Real San Franciscans? Who decides?

          • Foginacan

            As in, the real San Franciscans who live, rent, own, run businesses in those 240 sites the Planning Department empowered themselves to earmark for option of development. Again, what basis is there to decide they’re using 5% of zoning capacity?

          • rkgwood

            “As in, the real San Franciscans who live, rent, own, run businesses in those 240.” The sites are either literally vacant or drastically underutilized. Seems to me like this is a good way to maximize the potential of underutilized land. Given rent controlled units are off the table, this seems like a win-win.

            “Again, what basis is there to decide they’re using 5% of zoning capacity?” This is fairly straightforward. A single family home on a lot zoned for up to 20 homes, for example.

          • Foginacan

            “Drastically underutilized” according to who?

            You realize there’s no such thing as commercial rent control or historic preservation getting addressed, and there’s commitment that rent control is off the table.

            There is no such thing as a single family home on a lot zoned for 20 homes.

            What is this, architectural eugenics?

          • Tyro

            Who are you to tell a developer that he’s not allowed to build to what is allowed under the zoning laws with land that he owns?

          • Foginacan

            That’s a strange reply.

            The zoning laws are being revised to accommodate developers, and the map isn’t relegated strictly to developer owned land.

            Do we have to rezone city density to ease restrictions on developers, case by case?

          • whateversville

            I don’t understand your question. If you have 2 apartments on a plot that is zoned for up to 40, it seems straightforward to say that it’s developed below zoning capacity.

            Regardless of what happens, these lots are all subject to the state density bonus. SF’s bonus program is offering incentives to build more affordable housing than would be created under the state program. That’s it. It is not sinister.

          • Foginacan

            If there are 2 apartments, it’s zoned for what it is – 2 apartments. It’s not zoned for 40 apartments. The zoning may designate height limits, and other requirements such as usage, but you’re misunderstanding what that means. If you’re reading it, and thinking that any building that’s not a high rise, built to the height limit, is below zoning capacity, you’re either misreading it or twisting it.

            Why are they subjecting specific lots to the density bonus? Doing so does not comply with the State law, which is not about determining under developed land or under utilized plots. Who are they to decide 2 units is a misuse? It’s one thing to incentivize state wide, and another to point at a house, and say “that’s a waste of land, and the three tenants, and family that owns that house, should vacate it so a high rise can go in it’s place”. And why should developers be handed a list of 240 places and say “yes, you can have the world, if you can nab one of these golden tickets”.

          • whateversville

            “If there are 2 apartments, it’s zoned for what it is – 2 apartments. It’s not zoned for 40 apartments.[… ]If you’re reading it, and thinking that any building that’s not […] built to the height limit, is below zoning capacity, you’re either misreading it or twisting it.”

            I’m sorry, that’s just incorrect. From the planning department:

            Potential development is counted in residential units and in commercial gross square feet. A parcel may have residential, commercial or residential and commercial development capacity depending on the specific combination of zoning and height district. […]

            Once the development potential for residential and commercial space is calculated, information on existing housing units and commercial square footage can be used to calculate the net potential for each parcel. For example, for a parking lot or a one-storey building in an 80-foot height zoning district, most of the potential capacity remains unused or underdeveloped; for two-storey homes in most residential neighborhoods, however, the potential capacity would be considered built out.

            The degree to which a parcel is considered built out is measured as its development “softness” and expressed as a percentage of how much of the parcel’s potential development capacity is utilized, aggregating residential and non-residential uses.

            “Why are they subjecting specific lots to the density bonus? Doing so does not comply with the State law, which is not about determining under developed land or under utilized plots. Who are they to decide 2 units is a misuse? It’s one thing to incentivize state wide, and another to point at a house, and say “that’s a waste of land, and the three tenants, and family that owns that house, should vacate it so a high rise can go in it’s place”. ”

            That’s not what’s going on. The planning department needs to estimate the impact of the program. To do so, they look at the parcels that would be the likeliest to take advantage of the AHBP, and that ends up being 240 sites. Property owners aren’t being forced to redevelop their land. Six stories is not a ‘high rise’.

            And apparently I shouldn’t have even used the 2 vs 40 apartments as an example of underutilization. Planning’s website says outright that those 240 parcels have no housing units.

            “And why should developers be handed a list of 240 places and say ‘yes, you can have the world, if you can nab one of these golden tickets’.”

            The AHBP doesn’t hand developers “the world”, it encourages them to build more affordable housing. The owners of a vacant gas station can already build on that land. They are only required to build 12% affordable. The AHBP requires 30%. How is that not an improvement?

          • Foginacan

            Nothing from the Planning Dept. supports your statement. “Potential capacity would be considered built out”, is what it says. How big are these unbuilt units? You can’t possibly say a height restriction equates a defined number of units. It’s how you’re reading things.

            And you’re incorrect, they have mapped out eligible sites. There is no way to estimate which property owners would feasibly consider developing their properties unless they opt in. The properties on the map have not done so.

          • whateversville

            Re-read the entire sentence. They give an example of what they consider a soft site, then an example of what isn’t. You quoted the latter.

            The number of units that can be built is dependent on height, bulk, and density limits. How big will the units end up being? That depends on the site and what the builder decides to do.

            Yes. They’ve mapped out eligible sites. They identified the 240 that seem likely to take advantage of the AHBP over a twenty year period. Some of them will. Some of them won’t. Whoever owns the land gets to decide. Nobody is forced to do anything.

            You seem very determined to dislike this program, but I still don’t understand why.

          • Foginacan

            Again, the site’s capacity does not equate zoning. Planning can only recognize permitted zoning and zoning limitations, they can’t use predictive or creative methodologies. The number of units which *can* be built is a limit, not a requirement, and not even a feasible or logistical possibility.

            They’re not supposed to be determining how many apartments can fit on a plot of land, because development doesn’t actually work that way. This should be obvious…but apparently it’s not to you. Where do you live? Could somebody look at the plot line of where you live on a map and calculate how many more units could go inside your residence or how to multiply the use? Have you been in a lot of San Francisco homes? Are you aware how idiosyncratic the structures are and why?

            I don’t want the Planning Dept. putting their thumb on owners and tenants that resist their plan. They should not be picking targets, and there are ways they can make disrupt current use.

          • whateversville

            “The number of units which *can* be built is a limit, not a requirement,”

            yes, my point exactly.

            “They’re not supposed to be determining how many apartments can fit on a plot of land”

            OK, this is where I lose you. Why not? If they’re analyzing the effects of a policy change, why shouldn’t they estimate its potential impact?

            Regardless, you realize they already did that, for the entire city?

            “Could somebody look at the plot line of where you live on a map and calculate how many more units could go inside your residence or how to multiply the use?”

            Yes. Here’s the map. My place is on a lot currently zoned RH-2. You can build up to 2 units. My building is old, so, there are already 4.

            But the AHBP only applies to zoning districts that have specified density limits. If my building were on a plot zoned RM-3, for example, then right now it would have a density limit of 1 unit per 400 square feet of the lot, so it couldn’t have more than 6 units under the current zoning code, even if the height and bulk limits allowed for it.

            “I don’t want the Planning Dept. putting their thumb on owners and tenants that resist their plan.”

            What do you imagine will happen? There are no thumbs. If people don’t want to build on their land, they don’t have to. If people don’t want to use the AHBP or the State density bonus program, they don’t have to.

          • Foginacan

            That wasn’t your point at all. And entire neighborhoods are blue that flat out would be destroyed as a result. Again, it’s either a misread on your part, or a conclusion you’ve come to from misleading info out of Planning.

            Pointing to a lot and and divvying it up in 400 sqft. increments is not how development works. Planning has led you astray once again.

            Planning has been using enforcement to promote political agendas. This equates eminent domain, not an offer a land owner can’t refuse. We are not talking about strictly revising limits to make rezoning easier upon request, or complying with the State requirements to incentivize projects

            Why do you think this will make San Francisco better? You are being duped.

          • whateversville

            “That wasn’t your point at all.”

            I’ve said several times that nobody is being forced to do anything.

            “And entire neighborhoods are blue that flat out would be destroyed as a result.”

            No neighborhoods are being “destroyed”. It is very hard to demolish anything in San Francisco. This law doesn’t make it any easier.

            “Again, it’s either a misread on your part, or a conclusion you’ve come to from misleading info out of Planning.”

            I’ve been quoting and linking to documents. You just keep insisting—somewhat condescendingly, I might add—that I’m wrong. If I’m misreading something, prove it.

            “Pointing to a lot and and divvying it up in 400 sqft. increments is not how development works.”

            No, it isn’t. All I’m saying is that the zoning regulations limit both the size of a building and the maximum number of dwelling units per lot.

            “Planning has been using enforcement to promote political agendas.”

            Where?

            “Why do you think this will make San Francisco better? “

            It results in more affordable housing being built, at no expense to the taxpayer.

            “Let me also say it again, the more development the less affordable the City has become.”

            You’re confusing cause and effect. The entire region has not built enough housing. People have been saying this for a long time.

            “It’s just how it has worked over the last 40 years, and that’s with restrictions, and heavy regulations.”

            Because if we don’t build housing, and a lot of people move here, the city becomes unaffordable. This is not surprising. You have liberal economists saying that restrictive zoning worsens inequality and increases segregation.

            “You’re advocating the final nail on the coffin and don’t even realize it.”

            Try to honestly consider the possibility that you are wrong.

          • Foginacan

            You’re simply parroting the plan sponsors own propaganda, literally linking back to it. It’s nonsense.

            Example… the Victorians alongside Precita, including one corner of the Park that includes retail. The only reason they’re on the map is because they’re some of the most valuable, development rich, cash cow properties in the area. And anyone who looks at Precita and thinks “What a poor use of space, we’d help working families if we replaced these with 6 story modern condos” is a detriment to these communities, and an enemy of San Francisco.

            This isn’t our first time at this rodeo. San Francisco has been through in much smaller doses. It’s not a mystery, is a horror story.

          • whateversville

            “Example… the Victorians alongside Precita, including one corner of the Park that includes retail.”

            The only reason they’re on that map is because they’re zoned NC-1. They have rent-controlled units. They’re not eligible.

            “You’re simply parroting the plan sponsors own propaganda, literally linking back to it. It’s nonsense.”

            Point to something that is wrong. Point to any actual evidence.

          • Foginacan

            What you said is wrong. The evidence is on those Precita properties, not unused, gas station type properties, but prime park side real estate.

            We’re only now being assured rent control units are exempt… but why are they still on the map?

          • Foginacan

            Let me also say it again, the more development the less affordable the City has become. It’s just how it has worked over the last 40 years, and that’s with restrictions, and heavy regulations. You’re advocating the final nail on the coffin and don’t even realize it.

  • Kyle Huey

    “But there is good news on that front: rents in Seattle, Denver, and Washington, DC appear to be easing significantly. In what a local business paper describes as an “alarming deterioration” —though renters probably have different words for it—the average Seattle rent fell by $59 in the last quarter of 2015, following a long period of rapid increases. Not coincidentally, vacancies also increased by a full percentage point. The Puget Sound Business Journal reports that landlords have reason to worry that things aren’t going to get any “better” for them: another 21,600 units of housing under construction should hold down rent growth into the coming year, too.

    It’s the same story in Denver. After a surge of new construction, vacancy rates shot up from 5 to 6.8 percent in the fourth quarter of 2015. As a result, median rents—which had grown by nearly $250 a month from the first to the third quarter of the year—fell by $7 in the last quarter.

    The examples of Seattle and Denver ought to be a model for other cities seeing a surge of central-city housing demand. There is an alternative to the never-ending upward prices of regions like the San Francisco Bay Area, and it involves allowing housing supply to meet demand.”

    http://cityobservatory.org/in-some-cities-the-housing-construction-boom-is-starting-to-pay-off/

    • wcw

      The cities that had the smallest rent gains in 2015 were Richmond, Va.; Washington, D.C.; and Baltimore. Echoing other reports, Yardi says Washington’s rent gains have been held back because of the large amount of new supply in its market, while Baltimore still lacks job growth.

      Source: http://www.multifamilyexecutive.com/business-finance/yardi-matrix-reports-64-rent-growth-in-2015_o

      Under our most optimistic scenario.. [which] might be the most likely scenario, given that the homeownership rate shows little sign of stopping its decline.. some 2.9 million renter households will be created over the next five years, 6 million over the next decade.. roughly 600,000 new renter household units per year, which is well above the 350,000-unit long-term annual average for U.S. multifamily supply. If this scenario comes to pass, then not only is the current level of development not going to create oversupply but unless new construction increases, there will be a chronic undersupply. That could produce continued outsize rent growth and exacerbate the problem of affordability that is reaching crisis proportions in some markets.

      Source: http://www.yardimatrix.com/Media/Downloads/FileID/52 [email required]

      • Kyle Huey

        And the Bay Area’s production is roughly on par with Baltimore, despite the enormous gap in the strength of the local job markets.

    • Y.

      Except developers are holding back until prices go back up. What else would you expect?
      Can you show a causal connection between the increase in vacancy rate and the drop in housing prices?

  • wcw

    Why Has Regional Income Convergence in the U.S. Declined?
    Peter Ganong and Daniel Shoag⇤
    January 2015

    Abstract
    The past thirty years have seen a dramatic decline in the rate of income convergence
    across states and in population flows to wealthy places. These changes coincide with (1)
    an increase in housing prices in productive areas, (2) a divergence in the skill-specific
    returns to living in those places, and (3) a redirection of unskilled migration away from
    productive places. We develop a model in which rising housing prices in wealthy areas
    deter unskilled migration and slow income convergence. Using a new panel measure of
    housing supply regulations, we demonstrate the importance of this channel in the data.
    Income convergence continues in less-regulated places, while it has mostly stopped in
    places with more regulation.
    JEL Codes: E24, J23, J24, R14, R23, R52
    Keywords: Convergence, Regulation, Land Use, Migration, Housing Prices

    http://scholar.harvard.edu/files/shoag/files/ganongshoagjan2015.pdf

    Hat tip: Jason Furman, https://www.whitehouse.gov/sites/default/files/page/files/20160128_three_challenges_us_labor_market_slides.pdf

    Thanks, Obama.

  • Greg

    Tim “lies more than Trump” Redmond: nice article. So many lies I can’t even count them all. I like the sub headline: “gives away choice parcels to developers”. Ummm… back in the real world you need to first own or at least have possession of something to give it away. Get a clue.

    • AlbertoRogers

      The best propaganda has an element of truth. Tim is bad at propaganda.

  • AlbertoRogers

    Rents are coming down in Seattle and landlords are worried.

    http://www.bizjournals.com/seattle/morning_call/2015/12/report-finds-alarming-deterioration-of-seattle.html
    Seattle is building twice as many units as San Francisco. Adding supply, even market rate perish the thought, does stabilize housing costs across all affordability levels.

    • goodmaab

      Shot of reality – does anybody understand “capacity” in terms of what the city can actually hold? What is the breaking point of a city? And who is actually focused on the issue? with lacking co-investment at a faster and more efficient level in infrastructure and amenities in SF, the plans for density, will not correct later on the problems of traffic, over-used and abused parks and playgrounds, and the lacking size of public infrastructure, sewer, water, transit, pools, libraries, schools etc.

      • AlbertoRogers

        Shot of NIMBY dystopia more like. Paris is way more dense than San Francisco and you don’t hear people saying that’s a terrible place to visit.

        • alisonsfca

          Right, and our transit system and parks certainly rival anything one would find in Paris…

        • goodmaab

          Its easy to throw a blanket “NIMBY” to anyone who critiques the current issues of over-densification, when we ask simple questions of method, and how the city is working all the levers behind the scenes, its a public benefit and working systems question. Currently the system is not working, why should it continue without real efforts to fix it? Paris is not the same as SF, SF is limited land wise, and needs to or should already have a world class transit system around and through the ENTIRE city. Its not much of a reality check to ask that the city do more than just the central subway… There are other areas of the city requiring change, and the city ignored it with the TIDF taxation… So where’s the moolah to fix it now? You cannot rely on bonds, and taxation consistently…

          • AlbertoRogers

            Just as easy to throw around the “greedy developer” moniker. SF is not a dense city. Over half of it is single family homes! Mission Street our most transit served corridor is 2 stories over retail and anyone daring to go higher is being lambasted. I do agree that we need to find a better way to pay for needed infrastructure….the current method of taxing newcomers and giving existing residents Prop 13 and rent control protections is not working.

          • goodmaab

            Agree that there is room to grow, and I see lots of sites in the Mission, the Excelsior, the sunset, ocean ave etc. Single story buildings with little character and lousy street-frontage. There is plenty of opportunity for developers to make a handsome profit. I don’t agree with developments all being bad, some are actually quite good, and are improvements, others should be sent back to the drawing boards, as to new-comers and old-timers, laws change, on both ends of the stick, so we should do justice and ensure Prop 13 is revisited along with rent-control and the rules statewide as well as locally. We got a flat tire, and we need to fix it for everyone’s sake…

        • SF4SF

          Thanks – I’m proud of the NIMBY label. I just want to change it to NIMCY (not in my city). Nimby’s are long time residents that built this city and love it.

          • AlbertoRogers

            I respect your honesty. You’re wrong, you’re ignorant, but you are not a hypocrite like many of our civic leaders.

    • Y.

      …and if prices show a sign of dropping, construction slows down until they go up again.

  • Greg

    Great job! You delayed a plan to build more affordable housing (see article below) and instead we get more of what you’ve been pushing for for years — ABSOLUTELY NOTHING. I guess I should thank Tim and Campos. Their years of blocking every development at every turn — even ones that are creating more affordable housing just means higher and higher prices. A good thing for existing home owners like Tim and me. If you’re not already a home owner, sorry. Less housing to go around means more displacement of those who can’t afford insane prices.

    http://missionlocal.org/2016/01/sf-delays-controversial-housing-law-amidst-opposition-cries-of-ethnic-cleansing/