Mayor’s supply-side housing plan advances

But critics point out flaws, setting up key battle at full board

To nobody’s surprise, a committee dominated by conservative supporters of market-rate housing voted to send the mayor’s deeply flawed plan to the full Board of Supes today, after testimony and discussion that showed how little this would do to help the housing crisis.

The plan would allow developers to build with increased density (and make smaller units), giving them more profit and supposedly encouraging (the word, although I don’t even think it’s really a word, that supporters love is “incentivize”) them to build more family-friendly and affordable units.

More market-rate housing drives up property values and rents in low-income communities
More market-rate housing drives up property values and rents in low-income communities

 

A family-friendly unit includes a two-bedroom place with 750 square feet, tiny rooms, and no yard.

Deepa Varma, director of the Tenants Union, put the problem very clearly:

“If I thought this would solve the housing crisis, I would be on the other side,” she said. “This is a way for developers to make more money. You are trying to solve a market crisis with a market solution.”

That about sums it up: The sponsors of this legislation think that if you give away enough to the speculative investors who make a lot of money building market-rate housing in San Francisco, maybe they will throw a few crumbs to the rest of us.

This has never worked, not in the San Francisco housing market, not in the American economy (think supply-side economics), not anywhere.

Jennifer Feiber, who also works at the Tenants Union, explained that tenants who live in below-market-rate units have to report their income every year “and pay the maximum amount they can afford.” On the other hand, developers who get city favors don’t have to disclose anything: “When they say it doesn’t pencil out, we just believe them.”

One of the more interesting aspects of this plan is that it exempts the Tenderloin, on the grounds that more study is needed to make sure that new high-density development won’t drive up prices and rents in a low-income area.

Sup. Aaron Peskin noted that the median income in Chinatown is even lower than in the Tenderloin, and suggested that the bill exempt all areas where the median income is below the city average.

“That’s not something I want to incorporate into HOME SF,” Sup. Katy Tang, who is the lead sponsor on the bill, said.

Peskin: “Is there a policy reason for that?”

Tang had no answer at all, and there was about a minute of silence, before Kate Hartley, deputy director of the Mayor’s Office of Housing, stood up and said that the current bill “provides more opportunity to have income mixing.”

Seriously? Income mixing? Meaning more rich people in low-income areas? That’s pretty alarming, since the evidence clearly shows that moving market-rate housing into low-income areas drives up housing prices for everyone and leads to more evictions.

So there are a lot of amendments that will come up at the full board, but this may be one of those defining votes where the six-five “moderate” majority, the members of whom think the same market forces that got us into the mess can solve it, dominates, and we are all reminded how much we lost in 2016 when the progressives couldn’t hold the board majority.

  • sebra leaves

    These are not on this week’s agenda so there is time to work on those amendments.

  • FunnyBecauseItsTrue

    Tim is so right! Protect the landlords, make sure their investments don’t lose value!

    • playland

      So you think it is OK that modern urban apartments will have “tiny rooms, and no yard”?

      Amnesty International will be all over this when they find out.

      • 4th Gen SF

        I’m undecided on this whole thing, what I am seeing with these 2 bedrooms in 750 square feet & no yard, no light things is hell. Real hell & it means we’re overbuilding, jmho.

        • neighbor

          Um good – because HOmE SF requires that all projects have yards and light. There are incentives for 3 bedroom units. . . . so most of this article is just bluster not based on facts.

        • Dirty Burrito

          Says the guy who invested a bug chunk of money in real estate and is terrified of seeing his investment decline in value

          • 4th Gen SF

            I wish & I’m female…..& your assumptions are hilarious.

          • Dirty Burrito

            Apologies, someone I was arguing with in the recent past revealed that they paid a very inflated, very market rate price for their house in SF, and I thought it was you.

          • 4th Gen SF

            I bought on the downside my friend. Too broke to buy on the upside. Have a beautiful day.

          • Dirty Burrito

            Your definition of downside pales to the sort of reduction in housing costs YIMBYs seek to create.

            I found your earlier comment:

            “I have a mortgage on top of my 12k [referring to annual taxes], I’m paying about $4k a month, your expenses are laughable compared to mine. Why didn’t you buy a couple of years ago?”

            That puts the assessed value of your home at $1.01M, which constitutes a “big chunk of money” in my book.

            So what precisely was hilarious about my assumptions? Or was it just that I assumed you’re male?

            I stand by my insinuation that you have much to lose and little to gain from the creation of new housing.

          • 4th Gen SF

            It’s not that much compared to what people are paying today. The fact that you STALKED me is frightening & shows that you’re creepy.

          • Dirty Burrito

            I remembered your comment from a previous article that we both commented on, so I don’t think that constitutes stalking. We had a heated discussion in a different comments section, so when you mentioned having a sizable mortgage it was memorable.

            I questioned your motives, you said my assumptions were hilarious. I thought that was disingenuous, and it prompted me to look for the comment that exonerated me.

            To find your comment again I googled:

            “property tax” mortgage 4thgensf site:48hills.org

            The discussion was the first hit. Yes it took me a few minutes.

            Again, the point is that meaningful housing reform will negatively impact the value of your biggest asset, so you have strong incentive to oppose new construction.

        • Bob Koelle

          I just want to point out how unusual and refreshing it is for someone to state “I’m undecided on this whole thing” regarding any issue online.

      • Ethan

        When Tokyo and Seoul build tiny room apartments and houses I think it’s OK because their rents and home prices aren’t in an insane emergency. They’ve actually let landowners develop their property and kept up supply with demand instead of keeping a death grip on their historic appearance and culture. They’ve embraced change and modernity as the only sane solution that doesn’t condemn most of their millennials to never being able to buy their own home.

        • Dirty Burrito

          Well put.

      • Dirty Burrito

        Personally I can’t imagine living in less than 4000 square feet, so that should probably be the minimum.

  • Don Sebastopol

    What evidence shows that moving market-rate housing into low-income areas drives up
    housing prices for everyone and leads to more evictions?

    Wouldn’t low-income areas already have market rate housing? For most of SF, gentrification included fixing up existing housing. I think rich people move in first, then there is reason to build more housing.

    • neighbor

      If you exempt some areas from this program then – DEVELOPMENT STILL HAPPENS IN THOSE AREAS – but there would be LESS affordable housing and LESS market rate housing. SO all the ideas of removing ares is just politics and bluster but not actually a policy perspective or a concern for housing outcomes.

      • Rosh HoshHosh

        “Affordable” is defined by the city as being between 50% -140% of annual median income. SF’s Bayview neighborhood has an AMI of about $65,000, and SF has an AMI of about $90,000.

        This proposal is coming in on the heels of legislation that greatly reduces the amount of “low” (80%) and “very low” (55%) income BMR units developers were previously required to offer (while simultaneously increasing the mandates for “moderate” (120%) and “middle” (140%) income BMR units).

        I would not like to see this plan pass in the Bayview neighborhood — along with other lower AMI SF neighborhoods — for the simple reason it will more quickly price out long time residents. If developers are allowed to build more units per square foot, than the amount of units available to the “low” and “very low” should be drastically increased (the opposite is occurring).

        http://sf-planning.org/affordable-housing-defined
        http://www.city-data.com/neighborhood/Bayview-District-San-Francisco-CA.html

        • FunnyBecauseItsTrue

          news flash, they’re already priced out. SF is no longer a working class city. SFHs in bayview go for 800k.

          • Rosh HoshHosh

            The Bayview (2015 AMI $65,612) needs more subsidies in the “low” and “very low” brackets. If this proposal becomes legislation, the poor will once again get the fist. It does beg the question: who exactly we are looking out for when implementing housing subsidies?

            92,000 x .55 = 50,600 — very low
            92,000 x .8 = 73,600 — low
            92,000 x 1.2 = 110, 400 — moderate
            92,000 x 1.4 = 128,800 — middle

            I don’t know how accurate the city-data.com website is, but it also lists Chinatown AMI ($33,769) — more than double the $15,405 AMI it cites for the Tenderloin. Regardless, I think Peskin is right in alluding that this proposal is not curtailed enough.

            http://www.city-data.com/neighborhood/Chinatown-San-Francisco-CA.html
            http://www.city-data.com/neighborhood/Tenderloin-San-Francisco-CA.html

          • 4th Gen SF

            City-data seems really unreliable, see my previous post. Average rent is $1609 in SF?! LOLOLOLOLOLOL.

            This is a much better survey

            https://www.rentjungle.com/average-rent-in-san-francisco-rent-trends/

          • Rosh HoshHosh

            Thanks for double checking the data 4th Gen. I believe the numbers you cited (from the link I posted) is the average rent paid per capita (although they are not labeled clearly as such).

            If you notice, I refuted what Peskin said — take some solace in that.

          • 4th Gen SF

            Rosh, fwiw, not making fun of you, but of city data’s DATA!! The average rent in SF has been much higher for years! Have a good day.

          • Rosh HoshHosh

            Again, it’s per capita. Your link provides no data for this criteria.

          • Y.

            Rent Jungle looks at new offerings. City-data uses census info, which looks at what people currently pay, including long-term residents of rent-controlled units.

        • 4th Gen SF

          This doesn’t even sound reasonable – this is from city-data (your link)

          Median rent in 2015:
          Chinatown: $689
          San Francisco: $1,609

          $1609 citywide??? Not for more than a decade I think.

          • Jane Hardberry

            Do you know what per capita is?

        • Don Sebastopol

          How will it more quickly price out long-time residents? I have seen studies to show that gentrification slows mobility of low-income minorities compared to areas not being gentrified. But I would guess as prices rise lower-income will stop moving in. If in fact more development raises prices.

          • Rosh HoshHosh

            By reducing their options.

          • Don Sebastopol

            How will building more housing reduce options? In theory increasing housing should reduce prices, or stop them from going up as fast.

          • Rosh HoshHosh

            I’ve laid out the stats I want to bolster my claim and I have no further explanation for you.

          • Don Sebastopol

            I did not see any stats that shows that building more units will reduce options of long-time residents thereby more quickly pricing them out.

          • Jane Hardberry

            Look around you and talk to poor people and do your own one-day study. it’s a lack of common sense that we don’t have time for.

          • Don Sebastopol

            What common sense? How about objective data. Poor people may be slower to leave areas being gentrified than areas not being gentrified. And that may be where there is no new housing being built. People move all the time. 90% of the time it has nothing to do with being Evicted or priced out. Moving back in may be another matter.

          • Jane Hardberry

            “Filtering,” where older housing units trickle down to lower-income families as they age, can happen in the broader metropolitan context. But it can take decades for filtering do deliver truly affordable units to lower-income households. As apartments age, the rent of a typical unit – not in a hot area – declines an average of 0.31 percent per year so even after 30 years, the rent will have fallen by only 9 percent.

          • Don Sebastopol

            Where in SF has filtering happened? Gentrification upgraded older housing in disrepair. That occurred before new housing was built. It seems that increasing prices of old buildings was the cause of new buildings. Trickle up? There are newer buildings in the Bayview that sell/rent for less than older buildings in Noe Valley, Eureka Valley/NOPA/Haight etc.

            I can recall when people I knew were selling their older Eureka Valley and Noe Valley homes and buying newer bigger homes in the suburbs. In one case I know, they sold a “smaller” single family home on Henry for the same price they bought a new home in Westlake. The SF prices came down. But then there was gentrification. Those older rehabbed SF homes are now twice the price (or more) than the suburban homes (with the possible exception of Palo Alto.)

      • Don Sebastopol

        30% affordable requirement should slow development. There also seems to be an economy of scale. I recall a developer survey on the density bonus thing. And that was not 30% affordable. For projects with less than 40 units it was not economically feasible. For over 60 units it was. It also depended on where in the City. I don’t recall if these were rentals or condos.

    • Jane Hardberry

      The state tracks how well cities perform on the goal of providing housing affordable to all income levels. Between 2007 and 2014, fully 99 percent of the Bay Area’s need for high-end units was met. Conversely, building permits lagged far behind need for low- and moderate-income units.

      • Don Sebastopol

        I assume by high-end you mean market rate housing and by low-income you mean subsidized below market rate units. That may be true. So what?

        I am not sure what the Bay Area’s “need” means. How is an area’s need determined?

  • neighbor

    You didn’t even mention that the program REQUIRES 30% of the units be affordable. Isn’t that the goal of the progressives —- remember Prop K?

    • Don Sebastopol

      How many building applications are there with the 30% BMR requirement? How many rentals versus condos?

    • Jane Hardberry

      Please define affordable. There are many definitions of affordable which include numbers that are NOT affordable – to most of us.

      • FunnyBecauseItsTrue

        Do you know anything about this legislation? No one is arguing about the term “affordable housing” except for you and its a term widely used by both “sides” of this disagreement.

        If you really don’t know what it means, “affordable housing” refers to housing that gets sold/rented at a below market rate to people that meet various income requirements and the housing has various requirements and protections that are enumerated in the laws of the city. Its a technical term with no context or connotation.

  • Alex

    “One of the more interesting aspects of this plan is that it exempts the Tenderloin, on the grounds that more study is needed to make sure that new high-density development won’t drive up prices and rents in a low-income area.”

    Uh studios on O’Farrell are now pushing $2,000, and the single 1-bedroom in my building currently rents for $3,200…does that seem like low-income?

    • Jane Hardberry

      “affordable rent” and “low income unit” should be banished from the English language as undefined and undefinable.

  • Dirty Burrito

    “This has never worked, not in the San Francisco housing market, not in the American economy (think supply-side economics), not anywhere.”

    This is simply untrue.

    • Kraus

      Exactly it’s entirely false — Tim Redmond doesn’t even understand the history of his own (adopted) City.

      It worked quite well from post-WWII until the 70’s — when we started implementing anti-housing-creation policies (Prop 13, CEQA-applied-to-infill-housing, rent control, excessive/expensive project review, down-zoning, exclusionary zoning, onerous “impact fees” etc.) that continue to make it increasingly expensive/difficult to produce adequate amounts of housing.

      Between 1945 and 1979 in SF, on average, we created 32K housing units per decade.

      From 1980 until the present we’ve been averaging 19.5K units per decade.

      Housing productivity over the past 37 years has dropped nearly 40% — despite ever-increasing population/demand — because of the anti-housing regulatory regime supported by Tim and his ilk.

      Is there any wonder that this has ultimately “blossomed” into a full-blown housing crisis?

  • Jane Hardberry

    Income mixing. That’s SO important because those nasty poor people get up to no good when they all live together. They do things like sharing food and childcare! How un-free-market they are, those pathetic limited poor people. We need to make sure they have stingy materialistic main-stream upwardly mobile privileged, wealth-inheriting Big Brother-type neighbors who can be role models and help them move up in this world!

    • FunnyBecauseItsTrue

      Or you know, we could look at what has actually happened in other cities when you have a high density of people living in poverty living near each other (https://en.wikipedia.org/wiki/Cabrini%E2%80%93Green_Homes) and see that living like that is in no ones best interest. And maybe you could also look at places with successful income mixing, and how they have the highest rates of upward economic mobility as measured by moving from the bottom quintile of wealth to the top quintile of wealth. Another way to look at this is from general life expectancy terms, poor people in poor zip codes tend to live shorter lives than poor people in rich zip codes. But all that research is silly when you have a pseudo marxist narrative you hang your hat on, and when you don’t actually care about the quality of life of poor people.