By Tim Redmond
Aug. 22, 2014 – The California Housing Partnership Corporation isn’t a radical left organization. It’s a quasi-governmental agency created by the state Legislature in 1988 to help coordinate and promote affordable housing development; its board members are appointed by the governor, the speaker of the state Assembly, and the Senate President Pro Tem. Its mission is to help community housing groups better understand financing options and to monitor and advocate for more affordable housing money.
All good stuff. Also nothing that politicians or real-estate developers or bankers could object to.
So when the CHPC puts out a report saying that the housing market in San Francisco has failed, it’s worthy of notice.
The terminology here is important. The report doesn’t say that the city needs more affordable housing; everyone knows that. It says the Market – the vaunted Market, that is supposed to solve the problem on its own without government intervention – not only is out of synch but is a “failure.”
It doesn’t work.
The report concludes that there’s a shortfall of 40,845 homes for the city’s poorest residents. More than 80 percent of low-income households spend more than 30 percent of their income on rent, and 59 percent spend more than half their income on rent.
“Many … families live in unhealthy or unsafe conditions, crowd multiple people into each room, and still pay more than 50 percent of their income on rent,” the report states.
After adjusting for inflation, it notes, median rents have increased by far more than median income.
That, of course, is part of a national trend – the cost of living is increasing far faster than the income level of most people, as the top one percent takes nearly all of the wealth and income of the nation’s economic growth.
It’s particularly striking in SF, where, according to the report, the salary needed to afford market rent is $78,200 – and the salaries of the people who make the city’s economy work, in the biggest industries (health care, hospitality, and government) are often less than half of that.
The policy suggestions contained in the report are pretty predictable: Support Prop. K to ensure (although Prop. K doesn’t really ensure) that 33 percent of all new housing is affordable. Work to limit evictions. Go after Airbnb. All of those things that tenant groups are already talking about and have been talking about for a while.
No mention of Prop. G, the anti-speculation tax, but that may be beyond what this organization can do.
Still: Failure is a big word when it comes to housing markets. And what this non-radical group is confirming is that market-based solutions are a waste of time. You can’t build enough market-rate housing fast enough to have any impact on the prices that most working San Franciscans would have to pay for “market-rate” housing.
The CHPC would like to see more money at the state and federal level for affordable housing, and so would I, and so would pretty much everyone who discusses this issue in San Francisco. Ain’t going to happen any time soon.
So the underlying message of this report is to confirm what the folks on the left have been saying: Tight, effective regulation and profound, dramatic, immediate government action is needed to address a catastrophic market failure.
Good to see Jerry Brown’s appointees are on board with that.