JULY 14, 2014 — San Francisco politics is full of mythology, and one of the great myths of 2014 is that the progressives, the community activists, the neighborhoods are somehow to blame for the housing crisis.
Not the commercial office developers and the politicians who did their bidding; not the Redevelopment Agency that wiped out thousands of units. Not greed or speculation; no, it’s the fault of the rest of us.
Listen to this video to get a little mythbusting.
As Calvin Welch, who has been watching local politics and housing issues since the 1960s, points out, the same people who want to blame the community were for decades actively pushing policies that put us in the mess we’re in. Nobody wanted to build housing in the 1970s and 1980s; there was too much money in commercial office development. Only the so-called Nimbys pushed for housing – affordable housing mandates for office development, for example. None of the pro-market political leaders wanted to demand that the office developers pay to house all the new workers they were attracting; that was the left, the progressives, who pointed out the crisis coming and demanded action.
Watch a real historian who was there through it all tell you the truth. It’s the best ten minutes you’ll spend all day.
Video by Peter Menchini/Maya Media
Tomorrow: Why San Francisco can’t build itself out of this crisis. In ten minutes.
[…] and “some people” in his piece, he does include a link to a site that criticizes arguments I have made here at […]
Enough give us resolution to housing solutions of “gentrification Thelpa ProS.F and SFAA deciding policies! Endure theories now 30,000 Ed enjoy’s 3’s demolishing existing homes, for high density San Franhattan entangled lobby gentrify! London Breed or Scott for mayor soon when 2020!
You don’t need to watch this past 45 seconds. The very first statistic Calvin quotes…”San Francisco is building 4 times the amount of luxury housing it needs” is a flat out lie. In the 2007/14 Regional Housing Needs Allocation cycle San Francisco permitted (not built) just 86% of the market rate housing needed to meet projected growth. In one 3 month period during that 7 year span, san Francisco did have a blip (probably 1 big project) where it over permitted market rate and that’s the data point Calvin is quoting. Selectively quoting data to obscure the truth is lying in my book.
https://medium.com/@Scott_Wiener/yes-supply-demand-apply-to-housing-even-in-san-francisco-193c1b0c190f
Thank you for posting this video. It is very interesting and it would be interesting to have a counter argument/perspective also presented. It is without a doubt that community activist in San Francisco and New York City stopped destructive “redevelopment” practices of freeway insertion into neighborhoods, the destruction of thriving working class neighborhoods, and the preservation of historic buildings. We should be thankful that we don’t have freeways running through the Haight and the West Village in New York City. These preserving measures did drive up real estate prices as evidenced in both cities. Any property owner should be thanking these community activist!
Can someone please do a report on Prop. 13 and how it impacts the housing market in SF? I feel that it keeps property off the market and contributes to the lack of supply. As landlords get tax subsidies via lower property taxes, they don’t have incentive to sell as their property increases in value. They get a rise in equity which they can leverage via refinancing but their taxes do not increase. So basically they can get tax free capital and further their investment portfolio with artificially low property taxes.
Once again no real data to back up your argument Sam.
Rent control works for those who are in it’s advantage like any economic instrument. That is obvious.
Prices controls are at the hands of those who control them.
You don’t and well it begs the question what are you going to do about it?
Who exactly has this residual concern about rent control? Misguided and misled RE “investors”?
Your contradictions grow more bizarre by the hour.
Wrong again, “Eleen”. The facts are not in dispute here. We all agree on them, more or less. The question is more how to interpret them.
Welch looks at the data and blame corporatism. I look at the same data and blame progressive policies. Why? Because corporations produce and governments take – it’s really that simple.
Rent comtrol doesn’t help the poor. It helps the lucky and the assertive regardless of need. The main beneficiaries are white middle-aged people. The main losers are anyone who moves here and anyone who gets evicted.
Zoning rules and setasides deter construction.
Both policies suppress supply and drive up costs. There is no way around that. If your polices haven’t given us affordable housing after 35 years of trying, why would anyone believe that will change?
No contradictions there. I’ve been entirely consistent. Welch is the one who needs a leap of faith. The truth requires no such deception.
Does anyone know of any specific names of policies that were used in SF’s history?
There were, of course, a number of factors in the decline in SF’s population in the 1960s and 1970s. One was the suburban exodus, sometimes called “white flight,” although in SF’s case, the families that left were not all white. But that’s part of what Calvin is saying: The BAC wanted to turn SF into a corporate HQ city, and have more people live in the suburbs, which is why BART was built (NOT as a San Francisco subway system, like New York or Philly have but as a suburbs-to-downtown feeder). The simultaneous destruction of urban housing in SF and the massive growth of suburban development in the East Bay — and BART — convinced a lot of people to leave the city.
In the 1980s, when I left college, nobody my age wanted to live in the suburbs; we all moved to cities. That was part of the demographic trend that changed, and is changing, urban America. The Energy Crisis that drove gas prices from $20 cents a gallon to $1 a gallon didn’t do much for the burbs, either.
But the overwhelming fact here, which can’t be denied, is that CITY POLICY encouraged the growth of OFFICE BUILDINGS for 30 years, with NO PLANNING AT ALL for where the new workers would live if — and as it turned out, when, they had no interest in the suburbs and wanted to live in the city.
Those of us on the left talked constantly in that era about the need to build housing. At one point, we talked about a plan that said every developer who built a building that created 1000 jobs should have to build 1000 housing units. That, of course, went nowhere — but you get the point. The ones who DIDN’T want to build housing were the developers (more money in offices back then) and the planners who just assumed that the East Bay would handle our housing-jobs imbalance.
That’s why we’re in this mess today.
— Tim Redmond
No, Tim, a “mess” is somewhere like Detroit. What we have here is not a huge failure but a huge success.
But it’s not really a SF success story but rather a Bay Area success story. If Silicon Valley had happened instead in another place., SF would probably be more like Oakland is now, and Oakland would be dire.
On some level I think that is what you really want. You and Welch fawn nostalgically for some bygone age when there were no tower office buildings, not so much technology and some dirty hippy from Ohio who wanted to “find himself” could come here and never grow up. Too bad.
Employers are not in the business of building homes and governments should not be in the business of telling people where to live. Housing is a Bay Area issue and trying to solve it one city at a time is futile.
Finally, every day 500,000 workers commute into SF. Far less go the other way. The burbs provide more homes than jobs. SF, being essentially the downtown of the Bay Area, produces far too few homes for the jobs here. The burbs do not owe us. We owe them. They bail us out of our own NIMBYism.
As for wanting to live in SF, that’s a privilege not a right. Shelter is essential but a bijou apartment in Pacific Heights is not. If you can’t afford SF then move to Oakland. It’s a much shorter commute than a wind-swept shack in the outer Sunset.
Not everyone can afford to live in the world’s favorite city.
Redmond’s “analysis” boils down to “developers-corporations-businesses are devils, leftists-activists-SFCCHO are angels.” Horse shit!
Yes, 1950s BAC wanted a corporate town to service the Pacific Rim. So what? There was no preserving the 1930s or 1940s San Francisco once the war economy was over, ports were containerized and light industry disappeared. Capitalist economies are destructive-constructive, always in flux. BAC and the “urbane regime” DeLeon tracks built a new white collar economy and bulldozed the old.
Given the fact SF was already fully built out residentially by 1950, it made perfect sense (from the BAC perspective) to build BART and put new corporate workers in suburbs where they wanted (at the time) to live anyway. Simultaneously the hippies, lefties and gays drove out the blue collar working stiffs in the Castro, Mission, Haight, Noe Valley, etc. I was there, I saw it.
The 1950s and 1960s SF could not have planned for housing in the city. This is a straw man argument. There was no land. Planning was unsophisticated. There weren’t phalanxes of urbanistas graduating with degrees in architecture and planning. There weren’t the complex bureaucracies nor the legislation. There was just crude, bulldozer “urban renewal.”
Posturing aside, what Redmond and his team are fundamentally pissed off about is that there is a new demographic wave hitting San Francisco. The Techies. The left has tried to put capitalism into a box in SF for decades, but they’ve only partly succeeded, with housing.
Where in America are private property rights as weak as in SF? We should not abandon the SF system for market fundamentalism, that would create chaos— but the reality is that a combination of rent control, land use and planning policy, NIMBYism and housing construction by non-profits and the City has both constricted and partly socialized housing. That’s the left-supply half of the housing problem.
The right-demand half of the “problem” is the dynamic power of capitalism. The Left socialized property in SF but was never able to socialize the economy. Capitalism has created huge surges of new wealth and Techies now fill the office towers and PDR lofts and are pushing the old men with gray ponytails out of their rent-controlled apartments. And the misfits, the poor, the black and brown out of the Mission and Tenderloin.
Welch and Redmond’s Left in SF is bankrupt. Occupy might have been a new New Left, but disintegrated quickly. Progressives have run out of moral vision. Now they’re just protecting turf, principally their housing wins of previous decades, to a lesser extent their transit vision, on life support, and their nonprofit social service empires.
Politics in SF are transactional when not corrupt. The Supes are mostly milquetoast careerists. The Mayor was tapped by power brokers for his innocuous malleability. The bureaucracies run things, piss poorly. We’re on political autopilot, snarled in hypocrisy and absurdity.
What WILL happen soon enough is the winding down of the 60s Redmond-Welch progressives and the coming of age of the Techies. SF WILL look more like Vancouver, Hong Kong, Singapore, etc. because Techies are ok with Spartan boxes and density makes ecological sense.
And soon enough, SF politics will morph, political disruption following economic disruption and invasion, same as it did in the 60s when the ponytail crowd came to town.
Yes, I think your analysis reveals poignantly why the Redmond/Welch faction are in such a hissy state here. It is not logical to oppose market-rate housing as that takes some of the pressure off demand for the existing housing stock. But what it really heralds is a new demographic hegemony in the city.
It won’t be conservative, and techies are socially liberal. But they are more economically conservative and, when they start voting in large numbers, the Progressive influence will decline further.
We already saw this perfectly when Kim beat Walker in the tech-heavy D6. the old guard wanted one of their own – the hapless, hopeless Debra Walker. But the smart young voters of D6 were done with Dalyism and cronyism. Kim was also younger and cuter, which didn’t hurt. Kim is leftish but not a kneejerk socialist.
Likewise with Breed taking over from Mirk.
Mar, Avalos and Campos are al termed out next time and vulnerable from the center. And that has the old leftist guard scared shitless.
It’s not about housing. It’s about voting.
If only it were so easy to delineate the situation decades in the making. I personally believe Welch is a crackpot who uses facts and figures to his advantage. I’m not sure developers are any better. However, I do think that we need more housing in this city. If that means transforming the skyline, so be it.
BTW — here’s the best article I’ve read on the subject:
http://techcrunch.com/2014/04/14/sf-housing/
It’s long read, but worth every word. No easy solution, unfortunately, but that’s life!
All the CATO Institute study shows is a correlation between cities with rent control and higher-than-average market rate rents, especially relative to median rents. Duh. That’s the phenomenon that led to the establishment of rent control. While common sense would dictate that rent control would result in some units being held off the market by financially secure landlords who don’t want the trouble, no study has shown that’s a significant enough number to affect the supply-and-demand set price. Since rent control doesn’t apply to new buildings it shouldn’t have an effect on development.
Everyone is biased from CATO to Welch — except me, I’m not biased. 😉 Better to look at the data than make ad hominem arguments.
I’ve seen estimates that anything between 10,000 and 30,000 rent-controlled units are held off the market in SF. And since almost no units that are exempt from rent control are held off the market, clearly the effect is profound and widespread. Add in the units that are TIC’ed, condo’ed or Airbnb’ed and that effect is even more significant.
And that is really all that Cato is saying i.e. that if you artificially constrain the rent then property owners choose a different use for the building. That reduces supply which drives up rents.
If rent control really worked, then why are there almost no vacancies and a 1BR now costs 4K? Rent control protects some existing renters but only by screwing over everyone else, including new arrivals.
Price controls are for times of war, emergency and natural disaster. They have never worked long-term and they never will.
Finally, although new development is exempt from rent control, there is always a residual concern that they might be later brought under rent control. 2-4 units were also originally made exempt but that was later changed. Throw in insane zoning restrictions and it is clear that new build rentals are inferior to the construction of condos.