Wiener housing bill passes, trusting the market to solve the crisis

Affordable housing advocates pushed for some key amendments, which didn't make the final bill

The biggest policy issue in Sacramento this spring, aside from health care, was almost certainly housing, and with good reason: San Francisco is not the only city that has an affordability crisis. Housing prices are out of control in many of the biggest cities in the state.

Scott Wiener has a lot more faith in the private housing market than I do
Scott Wiener has a lot more faith in the private housing market than I do

The Democrats, who run state government, have offered a modest one-time $3 billion affordable housing bond, which wouldn’t even cover the needs of one city. There has been no plan to offer a permanent, reliable source of money for affordable housing, or limit the loss of existing affordable housing by protecting rent control and stopping evictions.

Instead, it’s mostly been about market-based solutions, about streamlining housing approvals and making it harder for local communities to regulate development.

The state Assembly just passed a bill that would restrict citizen initiatives seek to limit development (including, oddly, commercial development that does nothing to help the housing problem and typically makes it worse.)

But the biggest change may come from Sen. Scott Wiener’s SB 35, which just cleared the Senate. The bill represents the latest stage in the effort to create what is known as “by-right” housing – a system that would turn the approval of many developments into a simple ministerial matter, much like getting a permit to renovate a kitchen or put on a new roof. Under the by-right approach, no Planning Commission would ever consider housing development that meets certain standards. A planner would just stamp a permit, and construction could begin.

It sounds so simple: The state needs a lot of new housing, and building anything in some cities is complicated and time-consuming. That drives up the cost of construction, and thus the cost of housing. Some cities refuse to allow much of any new housing, particularly multi-family housing. Build more and build fast and the problem will get better.

But like the idea we have heard from the oil industry and its fans – drill baby drill– build baby build has some serious drawbacks.

 

The market-lovers and I will always have a big philosophical divide. Like the energy industry, the developers and their allies argue that constant growth is not only good but fundamental to a capitalist society, that we all servants to a force that disrupts and demolished and builds and consumes over and over so fast that we have wrecked the planet and created the greatest unsustainable economic inequality in the modern history of this country.

When I first arrived in this city, a group called San Franciscans for Reasonable Growth, made up of some of the smartest land-use activists around, argued that building too many highrise office buildings and expanding the finance, insurance, real-estate and Pacific Trade industries too fast would wreak havoc on the city’s transportation infrastructure and drive up housing costs, which it did. (The city’s economy would have suffered far more than it did in the late 1980s crash if Prop. M in 1986 hadn’t restored a bit of balance.)

My old friend Sim Van Der Ryn, the legendary architect and planner, once asked me: “Why do we have to have a perpetually adolescent economy?” Why is more always better?

Nobody talk about that much these days.

But back to reality: This city and this state have gone out of their way to attract high-paid workers in tech industry, and there’s not enough housing for all of those workers and the rest of us, so the lower-paid folks (who also do critical jobs, like teaching kids and driving ambulances and fixing the streets, and who make the city’s two biggest industries, health care and hospitality, function every day) have to leave town.

That doesn’t work either.

Wiener argues that

“California’s housing shortage is harming our state’s economy, environment, and quality of life. By not building enough housing, we are driving up evictions and homelessness, pushing people out of our state, and jeopardizing the success of young people.”

So what do we do about it?

It’s hard to argue that cities on the Peninsula can just build tech offices and attract tens of thousands of new workers – and build no housing for them, in essence outsourcing the problem to San Francisco. Wiener’s bill doesn’t bar new office construction until there’s housing available. He didn’t take my suggestion:

Maybe the state Legislature ought to create a process where cities in a dense region that accept giant corporate campuses have to reimburse their neighbors for the housing and traffic impacts that spill over the borders. Then every city that attracts thousands of jobs (for people who don’t already live here) will have no choice but to charge developers and corporations a reasonable fee for their housing and transit impacts.

Instead, his bill assumes there is going to be more office growth and more high-paying jobs that go to people who move here, and that cities won’t force developers to pay for the impacts, so he puts increased pressure on cities to provide market-based solutions.

A loose coalition of social justice, environmental, and affordable housing groups has been meeting for months to talk about the issue. The working group came up with an eight-point framework for thinking about housing policy in California, and much of what’s in that platform is pretty basic and not at all radical.

Among the elements: Link state transportation funding to the construction of affordable housing (not market-rate housing; affordable housing). Provide a permanent source of affordable housing funding to replace what was lost when Gov. Brown abolished redevelopment agencies. Make sure that inclusionary housing policies are legal and enforceable statewide. And:

The stakeholders further agree that, in considering an expedited permitting procedure, the Legislature should discuss the appropriateness and applicability of a safe harbor provision for jurisdictions which make significant progress toward their fair share of affordable housing. Consideration should include whether the project has a significant percentage set aside for deed restricted workforce and affordable housing above and beyond any existing underlying local requirements already in place, such as inclusionary requirement or impact fee.

 

Then they asked Wiener to amend his bill to include a few modest but important changes. The bill, they suggested, should make clear that cities have the right to impose higher affordable housing rules than the (tiny) ten percent that’s in the legislation. The bill should make it clear that “by right” doesn’t include the right to demolish existing rent-controlled housing or existing affordable housing to build something new and bigger.

Weiner declined most of the suggested amendments.

 

So now it’s off to the Assembly, where the affordable housing advocates will continue to work for a better bill. Peter Cohen, co-director of the Council of Community Housing Organizations, notes:

We expected this bill to get through its first house — there is a lot of exuberance in Sacramento for By-Right development. But the details absolutely matter aside from the rhetoric. Several very sensible amendments to SB35 have been proposed by various affordable housing, tenant and environmental organizations to make this streamlining bill reasonable and effective policy. So far most substantive suggestions have been rejected but we look forward to further efforts as the bill goes through the upcoming Assembly process. The stakes are high, and we remain committed to working persistently to get this right.

 

Meanwhile, Assemblymember Phil Ting managed to get through (with just a two-vote margin) a measure that requires San Francisco to apply its existing affordable-housing requirements to developers who want to use the state’s (far more lenient) density bonus law. That’s a bit technical but a big deal – Sup. Katy Tang and Mayor Ed Lee pushed a local density-bonus law in part to make sure developers didn’t take an end run and apply for the right to build more and bigger under the state law.

It’s the opposite of what Wiener is doing. Ting’s bill preserves the right of local communities to demand more affordable housing. Wiener’s is based on the idea that eventually, the market will solve the problem.

I’ve known Scott Wiener for years, and while he of course gets campaign donations from the real-estate industry, I think he really, sincerely, believes that we can build enough market-rate housing to solve the problem and bring down prices. So do some of the Yimby Party folks.

I think our fundamental disagreement is that they have far more faith in late-stage American capitalism than I do.

 

  • danimalssf

    Odd.

    The language of SB35 (https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201720180SB35), sure does seem to say that rent controlled, or otherwise protected properties can’t be demolished to build something new. Read Section 3(7).

    And it sure looks like Section 3.B addresses the situation where local ordinances require higher affordable housing percentages that the law’s 10%.

    Seems pretty disingenuous for you to write that Wiener has “declined most of the suggested amendments” when the 2 in particular you point out were, in fact, included in the bill.

    • PC

      The article cites this proposed amendment:
      “…whether the project has a significant percentage set aside for deed restricted workforce and affordable housing above and beyond any existing underlying local requirements already in place, such as inclusionary requirement or impact fee.”

      SB35 expressly prohibits requiring increased affordable housing above the already-required local inclusionary for projects approved By-Right.

      • danimalssf

        I guess I don’t understand your point.
        My reading of the bill that passed is that it contains items that Tim says it doesn’t. He is the mouth piece for Peter Cohen, who must still have a a bee in his bonnet after Wiener tore his complaints to shreds publicly. Can we please have an honest dialogue? One can have their own opinion as to whether this is good law, but denying the facts is weak-sauce

  • whateversville

    “Wiener’s is based on the idea that eventually, the market will solve the problem.”

    Perhaps a fairer characterization would be that we can’t solve the problem if we pretend market forces don’t exist.

    • sebra leaves

      Free markets do not exist. Manipulated markets may not solve the problem of anything other than sucking more money into the pockets of the ultra rich and the banks. Read the results of Plan Bay Area 2040 and figure out how they middle class will be eliminated by the plan. Either they will be come ultra rich, ultra poor, or leave the city. The high rent units will remain empty as many are now, or they will be filled with transients attempting to grab the brass ring as it slips every higher out of reach.

      • Don Sebastopol

        I have been hearing that the City will have only the rich and poor for at least 50 years and it has not happened yet. Is there any city where is has happened?

        Many high rent units remain empty?

      • SF Sunset Guy

        whateversville didn’t say “free markets”, what was specifically alluded to were “market forces”. Which among other things must include profit motives, and also city requirements – ie, percentages of affordable units, etc.,

  • Don Sebastopol

    He says the housing shortage is harming the State’s economy, environment, and quality of life. How so? Wouldn’t the environment and quality of life be better without adding too many more people?

    • Porfirio666

      YAH-YAH. Keeping housing expensive for poorer people helps the environment.

      • Don Sebastopol

        It is not the income but the number or people and density. It may be true that wealth is better for the environment than poverty. That is true of nations. And I would rather live in a wealthy neighborhood than a slum. It looks like neighborhoods I can’t afford are nicer than mine. It may be a matter of personal preference, but I would rather live in the Seacliff than the Tenderloin.

        • Porfirio666

          Frisco is becoming like Paris. The rich will live at tourist-ground-zero with the tourists, and the maids and mechanics with commute here from the outlying banlieu to serve them. Wiener’s legislation will help keep working folks here in town.

          • Don Sebastopol

            See my reply to Jym. I don’t know what will happen in the future but it has not happened yet. I have been hearing this prediction for 50 years. The maids and mechanics are still here. And we still have their services even if they don’t live in SF. 62% of all workers commute, and higher-paid workers are more likely to commute. Is there any city in the US you can use as an example of what the future holds for SF?

          • Porfirio666

            “The maids and mechanics are still here.” Living in San Francisco? I think not. They’re living out in the banlieu. As I said, just like in Paris.

          • Don Sebastopol

            There are 23,701 personal care and service workers and 5,973 mechanics living in SF. But it is not necessary to live in SF to work in SF; 63.1% of SF workers don’t live in the City. A higher percent of high-wage workers commute than low-wage workers. I have had three different house cleaners over the years; all of them live in the City. All were immigrants. I took my car to a mechanic in the Mission. The owner commuted but his Latino mechanics lived in the City; their children attend Catholic schools. However, services do cost more in SF.

          • Porfirio666

            My point was this: SF is becoming a city of rich folks. And the working-class cannot afford to live here. I blame NIMBYism on this. The Brown plan will hopefully steamline housing construction permits, thereby lowering housing costs. You know, that supply/demand thing?

          • Don Sebastopol

            Over the past decades the City has become more upper middle-class. The average education and incomes have gone up. Employers with blue collar and white collar middle-class jobs left the City to be replaced by employers with higher-skilled higher-paying jobs. Building more units will not likely change that trend. And it could make the City less attractive

            If you look at who is buying below market rate condos, it is mostly young professionals early in their careers. It is not maids and mechanics. If there is a glut of new housing the prices could come down, but not anywhere near “affordable.” Historically, what makes homes more affordable is an economic downturn. Those that still have jobs during a recession have a buying opportunity.

            The “problem” is that the City was attractive to talented young people who move here from other parts of the country. Traditionally they came for the lifestyle. Employers needing higher skilled workers were attracted by the talented labor pool. Over-building could make the City less attractive, killing the goose that laid the golden egg. If you came to SF because you liked the environment, why change it.

            I have noticed a significant increase in the number of children in my owner-occupied single-family neighborhood. Millennials are having babies. The movement from the suburbs to the cities may be reversed as millennials look for single family homes or more space for their growing families. This should help keep condo units more affordable if it reduces the demand.

          • Porfirio666

            Big Don with more hypotheticals. The NIMBYS rule the roust everywhere, and they work to prevent residential construction everywhere. “Let Contra Costa build first”, as you noted above. Well, when no one builds, home prices and rents keep rising, and that hurts everyone.

            Wiener and Gov. Brown understand that.

          • Don Sebastopol

            The only hypothetical is what Millennials will do. There are areas of the country where they are heading to the suburbs, but not in San Francisco yet. It appears that talented young people are still coming to SF despite the cost of living.

            There is some evidence Millennials will do what previous generations have done. There are places to build with little opposition. There is a limit on what people are able and willing to pay, so prices will not keep rising. There are limits.

            Why Millennials Are About to Leave Cities in Droves
            http://fortune.com/2016/03/28/millennials-leaving-cities/

          • Porfirio666

            The move back to the inner city is a global movement among thinking people. How you gonna keep em out on the farm now that they’ve seen Paris. But people like you and Tim R. want to keep cities for oldsters and old-timers.

          • Don Sebastopol

            Urbanization over the centuries is not the same thing as movement to the inner city.

            Where is the inner city? Downtown SF? If so, 95% of people living in SF don’t live in the inner city. If all of SF is the inner city, 89% of people in the Bay Area don’t live in the inner city.

            When surveyed around 70% prefer to live in less as opposed to more dense areas. Families with children tend to prefer single family homes. I am not sure what you mean be keeping cities for oldsters, but many who are getting older look for the conveniences that higher density city living offers. I am considering that for myself. It would free up my single-family home for a family with children.

          • Porfirio666

            Upper-middle-class college kids are like salmon. They come to the big city for fun, but come mating (spawning) time, they always move back to the Dreaded Suburbs to raise their little guppies.

            This had always been the case. Now, they stay in the Big Town, and it is the mechanics and maids who have to live in the balnlieu.

  • Don Sebastopol

    I am sure many people choose to leave town for better cheaper housing, but we still have teachers and health care workers: 23,000 teachers and 28,000 Health Care workers. And higher-paid workers are more likely to commute than lower-paid workers. On average SF workers commute less and live closer to work than workers in many other Bay Area cities.

    • What is the source of your commuting-worker assertions?

      • Stephen Nestel

        Common sense. Why commute to a low paid job if it available locally?

      • Don Sebastopol

        Census data. https://onthemap.ces.census.gov/

        For example 50% of SF workers live within 10 miles of work compared to 35% of Concord workers. 62% of all SF workers commute. 57% of the lowest income workers commute.

        But the data does not tell you about the number of people in worker’s household or the living conditions. I would guess most low-wage workers are not the only wage earner in the household or the primary wage earner.

        A few months back the Chronicle did a survey of Valencia street restaurant workers. 65% lived in SF, meaning only 35% commuted. And higher paid workers were more likely to commute than lower paid workers.

  • Porfirio666

    All California coastal counties have acute housing shortages because the NIMBYs take control at the local level. Wiener’s bill should be welcomed by all.

    • Don Sebastopol

      NIMBY’s should be welcomed by all.

      • Porfirio666

        They already are. Locals Rule, everywhere. That’s why insufficient housing is built everywhere, housing shortages are everywhere, and rents are high everywhere. Love your reactionary conservatism though!

        • Don Sebastopol

          According to the State, SF is not in the top ten counties when it comes to housing shortage. Alameda, Contra Costa, and Santa Clara are. Let them build first. I really don’t oppose more housing on the east side or even some increased density along commercial streets. I do want to maintain the quality of life in my neighborhood, however. So not in my backyard.

          • Porfirio666

            Let other people build first. Another NIMBY battle cry! Love your orthodoxy. You and Tim Redmond both.

  • Stephen Nestel

    Goodbye to small towns and human scale development. Imposing high density housing without restrictions will destabilize communities. Who will build the supporting infrastructure of schools, water, sewer and parks? The build baby build mentality will only work while there are people willing to pay for these things.

    • curiousKulak

      “Who will build the supporting infrastructure”

      Great point. But I hear nothing about that from either side. One side sez “let ’em build”; the other sez “build more but make ’em cheaper”. No one seems to be thinking about what we do when we increase the population by 20-50-100%.

      Shouldn’t there be planning for X number of people, and their homes and jobs and public amenities (schools, parks, transpo). Only then do we decide we want X number of rich people, Y number of workers, K number of poor people.

      Doesn’t it seem that under the current dialogue, we’ll end up deciding on Q numbers of cheap units and then we’ll have the discussion about how to pay for all the other crap.

    • Your list of “supporting infrastructure” has a glaring omission: transit.

  • Clayton Smith

    This is typical “privatized profits, while socializing the losses (often unseen costs). It seems to work all the time. This is why the middle class is in such a predicament. The wealthy can insolate themselves from many of these costs, while the wage earning middle (working) class cannot. So, the middle class either departs for more affordable pastures, or is taxed into poverty. The government of California is now firmly in the hands of the big corporations and the public sector labor unions. It will be milked dry. Because of the outsized uncontrolled immigration from the third world, largely people with no sense of political protest, the indigenous people of California will either leave, cease being able to afford to reproduce themselves and maintain any semblance of family life, descend into peonage and drug and alcohol addiction, or get a government job and feed on the carcass of the once great state of California. IMO the only solution, and its a long shot, is to radically divide the state into smaller, more self-governable units, leaving the growing nightmare of the urban overgrowth large cities to fend for themselves. I am certain that a state composed of the northern coastal counties of Marin, Sonoma, Napa, Mendocino, etc. would find innovative ways to maintain their quality of life, while facing the challenges of a prosperous dynamic future.

  • LR Silver

    SB35 could have been written by the building industry. It requires communities to build a certain amount of housing and ties their hands when it comes to managing streamlined development. Talk about getting rolled over!

  • Bob Koelle

    Interesting how Tim uses an analogy to the oil industry. That’s a perfect example of a commodity that responds rapidly in price to production changes, spiking or crashing every few years based on scarcity or glut. Then he rejects the analogy, and I’m not sure if he adequately explains why, other than the notion that the market forces themselves are illegitimate whether they work or not, because of their inherent destructiveness.