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News + PoliticsWill the "growth wars" ever end? Well, maybe not

Will the “growth wars” ever end? Well, maybe not

SPUR's Gabriel Metcalf asks if the growth wars will ever end
SPUR’s Gabriel Metcalf asks if the growth wars will ever end

By Zelda Bronstein

OCTOBER 13, 2014 — Every month, the law firm of Reuben, Junius & Rose hosts a lunchtime forum called the Real Estate Roundtable at the City of Club of San Francisco.

(Regular readers of 48 hills will recall the company’s aggressive representation of the owners of 660 3rd St., who’d illegally converted their industrially zoned property into tech offices, and with principal Andrew Junius’ recent attack on Supervisor Jane Kim’s proposed interim moratorium on PDR-into-office conversions in SoMa.)

The speaker at this month’s forum, which took place on Oct. 9, was Gabriel Metcalf, executive director of SPUR, formerly known as the San Francisco Urban Research Association, the urban think tank. Metcalf’s topic: “Peace in Our Time? Will San Francisco’s Growth Wars Ever End?”

The title alone, with its paraphrase of Neville Chamberlains’ infamous 1938 pronouncement about the Munich Agreement with Germany, was worth the $65 price of admission to the lunch, and 48 hills sent me on assignment.

I’d never been to the City Club; indeed, Berkeley provincial that I am, I’d never heard of it. Opened in 1930, the lavish, 11-story art deco building originally housed the offices of the stock brokers who worked on the trading floor of the adjacent San Francisco Stock Exchange on Pine Street. Its noted architect, Timothy Pflueger, believed that great architecture should have art to match. Accordingly, he commissioned the leftist artist Diego Rivera to create a mural for the stairwell joining the tenth and eleventh floors. The choice was controversial, but according to the City Club’s website, Rivera’s 1931 work, “Riches of California,” became “the centerpiece and the symbol of [the place].”

Diego Rivera at the City Club
Diego Rivera at the City Club

But the whole building is spectacular, including the Main Dining Room on the eleventh floor, where about 50 people gathered for this session of the Roundtable. The back of the program listed representatives of the companies that had signed up for the event. Heading up the roster, which included many of the biggest developers and most prominent attorneys in San Francisco, was 48 hills, followed by my own name.

Well, no

I never did find out whether Metcalf had consciously invoked Chamberlain. But right off he answered the question posed by his talk’s title: “Probably not.”

“I am told,” he said, “that the Coalition of San Francisco Neighborhoods may require any upzoning to be voted on.”

Metcalf then launched into a PowerPoint-supported survey of the city’s slow growth movements. First up was a 1984 page from the Bay Guardian that sported the headline “Is it still your city?” “This,” he said, “has been going on for a long time.”

His big question: why?

The Freeway Revolt
The Freeway Revolt

He partly attributed San Francisco’s persistent grass-roots opposition to development to the traumas resulting from a series of mid-century development disasters: freeway expansion and urban renewal.

Trained as a planner at UC Berkeley, Metcalf dissed his professional forerunners: “The developers came in with their plans and tried to destroy the city.” He illustrated that statement with photos of the catastrophic devastation in the Fillmore and the protests over the demolition of the International Hotel.

“But every city,” he observed, “had freeways and urban renewal….and its reformers that stopped it. By the mid-1970s, no one was doing this any more.” And, he maintained, no one ever would: “Planners in America will never be given power again because they blew it.”

This was where San Francisco’s history went off on its own tangent. “Many cities started growing again….Why should the growth wars in San Francisco have taken such a different course?” Why, unlike in other places in America, did development remain the “dominant political issue”?

“Was urban renewal in San Francisco more devastating than in Boston or Chicago? Is there something different about our activists?”

Seven ways to peace

Confessing that “I don’t totally know the answer,” Metcalf proceeded to offer what he called seven “theories of peace:”

1) The outlook for development is cyclical, actually doubly cyclical, with the business cycle and political cycle moving in tension with each other. During a boom, voters are anti-growth; during a recession, they’re pro-growth. There’s “a brief period when politics will allow building and you can get a loan. Usually when the politics allow [development], you can’t get a loan.” As this theory would indicate, “we’re now in the middle of an anti-growth backlash.”

2) Consensus can be built through careful planning—for example, the Transbay Terminal (not careful enough, it would appear) and Rincon Hill. But such efforts take 10-15 years and longer to reach fruition.

3) Deals that include high levels of affordability are achievable. The examples here are Mission Bay, Trinity Towers, Parkmerced, and the Shipyard. “Many of the equity activists like this template best. Nobody has tried to undo Mission Bay.” (But Mission Bay did not rise up at the expense of an existing neighborhood. It was built on empty land.)

4) “If it gets bad enough, people will accept change.” This, Metcalf said, is something he “hear[s] at cocktail parties.” He cited the new, pro-development Bay Area Renters Federation (BARF).

5) “Win the argument.” Smart growth, the model championed by SPUR and Greenbelt Alliance, prevails. “Not going to happen.”

6) “Lose the argument.”

7) Fashion a “grand bargain,” exemplified by the Downtown Plan. It “stuck until the Downtown was fully built out. What,” Metcalf asked, “would a new grand bargain look like?”

Metcalf then opened up the forum for discussion.

Jeffrey Heller, President of Heller Manus Architects, said that in the 1980s he was visited at SOM (Skidmore, Owings and Merrill) by “a young Sue Hestor” who was then working for Alvin Duskin. Paving the way for Prop. M., Hestor originally proposed that an 80-foot height limit be imposed on the entire city.

I surmised that the point of this anecdote was to demonstrate the draconian nature of the city’s “equity activists.”

Heller then offered his own list of answers to the question, why is San Francisco different?

1) Hippies: they came here seeking quality of life, and they stayed.

2) “Commies”—specifically, Calvin [Welch], who “truly believes that supply and demand does not work” and that “we should be doing only affordable housing.”

3) CEQA (California Environmental Quality Act): “I’m in the trenches,” said Heller. “Can’t do a damned thing.” We “met with [Darrell] Steinberg” about reforming [i.e., eviscerating] CEQA, and he “double-crossed everybody.” Compare New York City, “which doesn’t have CEQA.”

4) Protecting the neighborhoods. “That’s great, but we have a limited supply of land.”

5) The Downtown Plan: “What we did was really a preservation plan,” and ultimately that’s not going to sustain development.

6) “The city’s gone global.” Heller just returned from China. “Everybody who doesn’t want to invest in Europe,” he said, “wants to invest in New York and San Francisco.” That puts “enormous pressure” on our real estate values. “Beijing is horrible; everybody wants to be here for the quality of life. Maybe the hippies are right.”

Metcalf then offered his familiar (to readers of the Chronicle and the SF Biz Times) argument that if you add enough housing, prices will go down. “Even the left, he averred, “would agree.” We could build enough to make that happen. But people think “we shouldn’t, because  protecting the character of the city is more important.” Those prescient hippies again, I thought.

But Metcalf was not about to salute hippies, even in jest. Instead, he trotted out the Kim-Mai Cutler argument: “Can you be a progressive person and think it’s okay to tell other people you can’t be here? I don’t think so. That’s not an ethical stand.” San Francisco voters are “liberal,” so how do they justify that exclusionary attitude?

Junius asked about building affordable housing. “As Jeff said,” Metcalf replied, “many early affordable housing advocates were actual Communists.”

And Metcalf does recognize the city’s affordability crisis. Marking the “failure of public housing,” he noted that the money to renovate Sunnydale, Potrero and Hunters View is $1.9 billion short—and the needed funds aren’t going to come from the federal or state government. He’d like to see the voters pass an affordable housing bond.

Changing Prop. M

Next up was the urban planner and consultant Paul Sedway, who asked about the mayor’s proposal to modify the Prop. M cap, noting that “some of you [here] are intimately involved in this question now.”

Metcalf responded: “There’s a lot of hope that we might have made a little administrative error.” He was referring to the fact that some big office projects have been converted to residences—for example the former AAA office on Van Ness. “A small technical fix would allow a couple of buildings to be constructed.” But that would hardly address the millions of square feet of office space that are either in the planning pipeline or developers’ sights. “A reasonable compromise,” Metcalf proposed, “would raise the cap a bit in exchange for money for affordable housing.” In any case, he said, “you can’t have the kind of system where prices go down.”

The most intriguing comments about Prop. M came from Carl Shannon, managing director of Tishman Speyer’s San Francisco office. From 1987 to 1990, he said, Prop. M was enforced. From 1990 to 2014 the measure had no impact on what got built. Now there’s an incredible “upward pressure on rents” that’s affecting two kinds of tenants very differently.

For the tech industry, Shannon said, rent is “irrelevant. They will pay the highest rents”—whatever it takes to build the facilities needed to attract the best talent. Architects, lawyers and accountants are in a very different boat. “Every law firm in town is looking at moving back office functions out of the city.”

And then, near the end of the forum, this revelation: Shannon said that he and other office developers had just “sat with [Planning Director] Rahaim and [Director of the Mayor’s Office of Economic and Workforce Development] Rich” and talked about raising the Prop. M cap. “These guys,” he reported, “don’t even want to talk about it. The city attorney doesn’t want to weigh in on this. They’re afraid of the political ramifications from the other side.”

*                      *                  *

I walked out of the room with my head spinning, exasperated by the problematic renditions of political reality and history.

Some of the problems involved errors of fact.

Sue Hestor worked for Duskin on height limits in the early 1970s, not 1980.

The Downtown Plan was no “grand bargain” agreed to by all parties. Devised under Mayor Dianne Feinstein, the biggest booster of unlimited office development in modern San Francisco history, the plan was bitterly opposed by the slow-growth advocates. Passed despite them, it helped lead to Prop. M.

I’m sure the developers’ frustration with Rahaim, Rich, and Herrera is genuine, but it’s at odds with indications that City Hall is seeking ways to lift the annual cap on office development.

The main reason Mission Bay hasn’t sparked protest isn’t that it includes affordable housing but the fact that it didn’t rise up at the expense of an existing neighborhood; it was built on empty land.

Then there was what sounded like red-baiting. On Friday, the day after the forum, I asked Metcalf exactly to whom he was referring when he said that some of the early affordable housing advocates “were actual Communists.”

His response, by email:  That was just a “dumb quip.”  Fair enough, we all do that sort of thing.

Metcalf went on, however:

As I’m sure you know, the early planner[s] and the early housers were very much of the left and very much aligned with various shades of socialism or communism. I knew many of them as I am guessing you did too. They believed that ‘planning’ as a discipline should be not just be about physical planning as it is today, but also ‘economic planning. These were the people that reorganized SPUR into its “modern” form in 1942, and these were the people who fought for public housing.

Metcalf’s version of SPUR’s founding doesn’t jibe with the account provided by the eminent scholar, Chester Hartman, in City for Sale, the classic history of land use politics in San Francisco since the 1950s.

According to Hartman, SPUR was “father[ed]” in 1959 by the Blyth-Zellerbach Committee, which had been formed in 1956 by Blyth, “a prominent stockbroker and director of the Hewlett-Packard electronics firm, Crown-Zellerbach Corporation, and the Stanford Research Institute,” and J.D. Zellerbach, “the pulp and paper magnate.” Hardly socialists or communists—or even liberals.

“SPUR,” Hartman wrote, “was devised to openly generate more ‘citizen’ (meaning business( support for urban renewal in San Francisco.” In fact, from 1959 to 1977 the R in SPUR originally stood for Renewal.

Finally, there was Heller’s nomination of Calvin Welch as a “Commie” and accompanying equation of Communism with a disbelief in the functionality of supply and demand in the San Francisco housing market. Now we’re dealing with ideology as well as facts.

Welch does believe that in San Francisco, supply and demand cannot provide affordable housing –and he’s hardly alone in that view.  There are plenty of mainstream, non-Commie types who agree (one of the most outspoken of them is Doug Engmann, an options trader and venture-capital investor who used to chair the Planning Commission).

Granted, the city’s economist, Ted Egan, says that housing prices would fall if 100,000 new units were built. Can San Francisco’s infrastructure and public services—starting with firefighters and police—and budget really support that kind of growth?

Which brings us to Metcalf’s charge that it’s unethical for progressives to deny anyone who wants to live here the right to do so. I don’t get the connection. But I do get the basic assumption: that unlimited growth is a good, especially in a place that has both too much and too little water. And that’s just the start of the trouble with the “growth is good” agenda.

You have to wonder if the real-estate people in the room – many of them nice people, smart people, not evil people – have any clue what it’s like to be a senior citizen or a person with AIDS or a Latino family evicted from the city because “supply and demand” hasn’t built you an affordable housing unit – and never will. Or to operate a small business in light industry that’s being forced out of  town (and maybe out of business) because tech office developers and the city’s planners think your land is too valuable for blue-collar work.

Thanks to the efforts of the city’s wide-ranging community activists, until people who already live here and have been here for a long time, aren’t forced out by rocketing real estate values and and official dereliction, there will be no peace in our time over the land wars in San Francisco.

On this one, I’m with Metcalf.

 

 

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47 COMMENTS

  1. I enjoyed the wrapup by Ms. Bronstein and comments by all, and have a very long involvement in this subject…The layers are deep and many.

    Ms. Bronstein either misheard me, or I misspoke. I met Sue Hestor in 1969 or 70, and that was when we dialogued about then proposition M – the 80′ citywide height limit. That was the start of our lifelong disagreement about sustainable urban planning.

  2. Bob –
    “avowed NIMBY”… Seriously, Dude?
    Huh. Avowed by whom?

    Oh. And I have *never* “…complain[ed] that not enough detached single family homes were being built in San Francisco.”
    Never.
    Ever.

    Jeez!

  3. Sam –
    You wrote:
    “…nobody from anyone in your coalition has ever asked me or anyone else I know about my views.”

    Let’s get together, then. How’s about coffee? Tomorrow (Thursday) or Friday OK for you? My local is L’s Caffe or Sugarlump on lower 24th Street between Florida and Bryant.

    On an organizational level, CSFN strongly urges its members’ delegates to vote as the delegates’ associations lean, rather as individuals. Even though individual views are not sought out I’d appreciate hearing from you.

    CSFN is not what I would call “…a self-appointed anti-growth special interest group”
    If one considers our record we certainly aren’t anti-growth, and as to ‘special interest’ – we have many interests. I dare say most if not all of our concerns seem special to those who work on these items.

    Neither CSFN nor any of our member associations has any material gain whatsoever should a governmental decision be made on a matter which we have supported.

    Unlike other organizations CSFN receives no money whatsoever from any government, developers, etc.

    Our officers are not paid staff; all are volunteers – no salary, no wage, no benefits.

    Most of our positions on matters are not opposing growth; most of our positions involve examining existing policy / proposed policy for the matter at hand, asking questions, *lengthy* discussion and finally making decisions.

    Even though CSFN’s members are individual neighborhood associations they are in no way in total agreement with one another on issues.

  4. I am planning on retrofitting our wooden soft story garage with concrete so that we too might have a gondola bay. Oh, sole mio!

  5. Given the rents in SF, it is clear that people hold those of us who provide housing services in the very highest regard, since they are willing to pay us so much for our services.

    If there really was the contempt that you claim then that would not happen. People would move elsewhere ans refuse to pay the going rents.

    And by the way, I quite like my tenants. I’ve had a few bad ones in the past but they are long gone and I learned my lessons about how to choose good ones.

    But hey, if you think being a landlord is easy street, then why don’t you take out a loan and try your hand at it? It might open your eyes in more than a few ways.

  6. According to PriceWaterhouseCoopers, global climate change will hit the catastrophic fan in 20 years. All of this discussion will seem very stupid then, as people living in a waterless SoCal, Arizona, and Nevada seek to move north. There may be an exodus out of San Francisco and the East Bay, too, as the area is scorched by changing weather currents and drought. You can kiss anything built on landfill goodbye, too, as the sea levels rise. So go figure what your real estate will be worth in 10 or 20 years.

  7. Just noticed another favorite argument: What’s mine is mine, because property rights are sacred, and Communism! And what’s yours is mine, because don’t you commie liberals believe in sharing?

  8. The most obvious example of a populist leader in modern times is Reagan, but I don’t think that is where you wanted to go with this.

    Still, at least you admit that it might not be realistic to try and overthrow capitalism. Which of course makes it safe for you to call for that without the slightest risk of being called to implement an alternative.

  9. I’m suggesting that you were having a successful business when you started being a landlord, a part-time (not zero-time), low-risk (not risk-free) venture. The appreciation of the property and the higher rents you can charge (from new tenants anyway) are pure gravy, i.e. ponies, pie, etc.

    You show nothing but contempt for tenants, whatever their situation. You’ll get no sympathy here.

  10. I cannot recall pro-growth advocates losing a debate. Certainly not via the mayoral elections since 1988.

    But it’s good to hear you sticking up for local NA’s.

  11. So exactly what else do you propose to maintain a multiracial and multigenerational city BESIDES building more housing. Seriously, whats your answer outside of “it didnt work in Manhattan and Vancouver”
    Do you propose a lottery? Do you propose a gated city, with no new residents? Or residents which only meet certain criteria?

  12. A populist message would be one that puts San Franciscans in the political drivers’ seat instead of corporations. San Francisco is governed as a colony where our politics are dominated by out-of-towners, either fly-by-night corporations or the exiled east bayesians who comprise the staffs at the nonprofits. The commonality is that voters and residents come last if at all. We are viewed as sources of cash flows to be deployed for political purposes who should receive minimal city services in return.

    Corporations are unaccountable forms and should be chartered only to serve the public benefit. Thus, corporations, for- and non-profit alike should be formally subordinate to residents and voters. This would be a complete inversion of the current corrupt governance model where for-profit and non-profit corporations divide up the pie for themselves and their narrow constituencies.

    The non-profits have no special information, they have no edge over the rest of we lumpen to know what’s going to work politically. They do get paid largely with tax dollars to work on this stuff when most of us are tied up earning money with which to pay taxes and their salaries. This failed Leninist vanguard model of organizing needs to be consigned to the dustbin of history.

    Yes, capitalism is bad, yes, it would be nice to move beyond capitalism. However if we cannot hold a public park for longer than 2 months, if we cannot organize to stop luxury condo projects, if we cannot keep the D5 seat, then contesting capitalism directly is a bit much.

  13. Judith Berkowitz – avowed NIMBY – well known in these parts for complaining that not enough detached single family homes were being built in San Francisco. She’s basically a huge part of the problem.

  14. SPUR promotes itself as a disinterested good government think tank and that meme gets reproduced faithfully regularly enough that whenever SPUR is mentioned, I call them out on being a developer lobbying operation.

    And the fact that remnants of the left have found refuge in the nonprofit housing mafia does not mean that affordable housing is bad, rather that the particular nature of their ideological approach to doing politics is not going to move us in the direction that they say they want to go no matter how hard they try. If people were going to respond to the leftist message, they would have done so long ago. When offered up a populist message without the leftist baggage, people tend to respond better.

  15. Are you suggesting there is no risk, effort, stress, hassle and time involved in offering housing services?

    Are you suggesting there is no need to provide capital, take on debt and incur financial risk?

  16. Metcalfe has self-identified repeatedly as a socialist.

    Calvin Welch and the SFIC crowd arose out of the New Left. The Affordable Housing mafiosi originated within the radical milieus, leftist and anarchist, but have found a niche as liberal apparatchiks. Eric Mar was a member of a Maoist party as was Mabel Teng.

    The residue of the left in electoral politics is not so much the economic analysis but the Leninist vanguard organizing principles where the tribunes of “the people” have contempt for the lumpen who just don’t get what’s best for them. This foundation is the origin of the San Francisco Information Clearing House, aka the CCHO which posits itself as “The Voice of the Affordable Housing Movement in San Francisco.” Did anyone vote for these people to be our voice or are they just opening up another can of spoiled vanguard on our asses?

    It is not like one need be a Marxist economically to say that there is market failure in San Francisco’s housing market, that the market is not producing housing that meeds community needs and that producing more of the same will not lower housing prices. That argument can be made completely from within capitalist economics.

    And SPUR is not a think tank, they have no truck for good government. SPUR is a developer lobbying shop pure and simple.

  17. OLDFogy, I’m sure you want to stay here as well. I’d like a pony and free pie. But here is a better question. Why should the other residents of this city vote for policies that allow you to live in a place that you cannot afford by approving subsidies for you at the expense of others?

    What economic value do you deliver to the city such that we can see the value and the point of investing in you?

    Why should city policies favor you even if that means depriving the city of a home for someone who wants to move to SF but cannot because there is no availability because people like you are hoarding the housing stock and voting against building new homes?

  18. Based on the neighborhood associations that I have personally encountered, I am yet to see any indication that they reflect the views of people in those neighborhoods. Certainly nobody from anyone in your coalition has ever asked me or anyone else I know about my views.

    From what I have seen they are typically staffed by older, rather parochial people who have their own interests and agendas, and that is typically and consistently a NIMBY viewpoint. And that is why the Planning Commission routinely ignores them they are effectively a self-appointed anti-growth special interest group

    So it doesn’t surprise me that you’re anti-growth, because only anti-growth people would volunteer for such a role. Your last sentence merely confirms what we already know.

  19. I’ve been a resident of San Francisco for 37 years and I’ve been living in a rent-controlled apartment for the past two decades. Also, I am retired. I love my neighborhood (the Church/Market area) and I’m hoping I can stay in this wonderful, amazing, diverse city until I die. From some of the comments I’ve read here — a large number of which are from corporate shills, as far as I can tell — and on other similar sites, it seems that real estate speculators, house flippers. and the over 30% of foreign condo buyers who don’t live in the residences they purchase are hoping that people like me disappear sooner rather that later.

  20. Zelda, I never said I want to limit growth. I don’t believe that the voters have either, except with reference to very specific buildings or locations.

    My question to you is what limit do you propose on building new homes and workplaces? And where you expect the 200,000 new inhabitants of SF that are predicted to move here are going to live if we don’t build enough homes for them?

    Or are you expecting the suburbs to keep bailing us out so that privileged incumbents can continue to live in oh-so-cute single family homes with a yard?

  21. You haven’t answered my question about an example of a limit on growth proposal from smart growthers such as Metcalf. Instead, you repeated the unwarranted charge about someone–who, please?–wanting to “freeze” growth.

  22. Calling it a “building binge” is misleading. There is a clear demand for more jobs and more homes, and they cannot be created without construction.

    Moreover, most of that build is happening in the area of the city that can most sustain it i.e. the flat eastern parts which have the freeways, rail lines, water ports and where construction is easier and cheaper.

    We can quibble about how much growth we need. But I do not believe we can reasonably suggest freezing growth in any event, since the city will continue to receive a net migration here. And where will those new people live if we build no new homes and the existing residents do not relocate elsewhere?

    Finally, the voters have elected pro-growth, pro-development mayors for as long as I can remember. Ultimately it is the voters who drive these things and not a few “experts” enjoying a $65 lunch.

  23. Give me one example of a limit on growth suggested by Metcalf or any other smart growth advocate.

    And can we please drop the “you’re against change” slur? That vacuous charge informed the whole opinion section of last weekend’s Chronicle.

    Obviously–to anyone who gives it a second’s thought–some change is good, and some bad.

    Nobody who questions the current building binge is saying, let’s freeze San Francisco, or that the city should be preserved in amber. In fact, we’re asking for plenty of change. Just not the sort that the real estate interests and their allies on the BoS are supporting.

  24. David, if I really was the only voter who supported development, then there would be no war. Your interventionist regressive NIMBY policies would win every day by a clear majority.

    But if we look at way SF residents vote, we see them electing a seemingly never-ending series of mayors who support development, growth and jobs.

    Ask a SF’er about housing and he will sign and whine. But come election time, he will vote for pro-growth Ed Lee over anti-growth John Avalos. Or for Newsom, Brown etc.

    Instead of all this ideological pondering about housing policy, why not simply leave your house and ask people what they want? It will be an education for you.

    The silent majority hold the key, but you never talk to them because you are too busy over-analysing what a few loud-mouths and blow-hards say and do, and they don’t matter ultimately, not least because they don’t ask the voters what they want either.

  25. I do not know of anyone who supports the construction of new homes because they think that will somehow magically cause SF homes to become cheap.

    They support the new build for a much simpler reason. People want new homes.

    But the net effect is to cause RE price inflation to be (probably only slightly) slower than it otherwise would have been. Those who buy these units would otherwise have instead bid for existing homes, leading to displacement and higher prices and rents.

  26. You misread. I said NIMBY’s like them collectively constrain and suppress the supply of homes, thereby also enriching themselves since they have all owned SF RE for a long time.

    Heads they win, tails you lose.

  27. The City already is a Disneyland. It exists now for the very rich and the very poor. Only an 8.1 will solve the City’s development problems. No city; no problems.

  28. On the developer side, the growth wars will never end as long as there is a profit to be made.

    Organized self interest doesn’t sleep, witness Sam. He likely has a healthy stream of rentier income and an ever-growing pile of dough and has so merged with his private property privilege that he’s puffed himself up into a one man ideological army.

    On the grassroots, neighborhood side the growth wars are (as Metcalf points out) cyclical.

    Ordinary people, lacking the resources and the arrogance of a Sam, do give up when they get exhausted, when they age out, when life intervenes. And though the grassroots has organizations like the long-effective CSFN chaired by the inestimable Judy Berkowitz, these orgs don’t have paid staff, don’t have a stream of income and certainly don’t get the media ink of SPUR.

    The nonprofits I’d put into another category. Founded by ideologues on the left, most are on the taxpayer gravy train and welcome “right” development, for their colonized poor. They’re a mixed bag. They make deals– like the Kim-Lee Prop K deal that brokered a temporary peace with the for-profit developers for the promise of a 2015 housing bond.

    The SF development wars are thus institutionally three sided. For-profit, non-profit and neighborhood. But the real war will be for the hearts and minds of the low information public.

    SPUR is selling a vision of “green high density” that makes environmental sense at a superficial level to hipster urbanists with money. SFCHOO “Choo-Choo” sells a vision of massive subsidized housing that moves up, capturing not just the poor but increasingly the middle class. CSFN has a vision of the preservation of the beautiful, imperiled old SF of painted ladies and single family neighborhoods.

    These three visions are politically semi-articulate at the moment. Our laughable political class isn’t debating the three separate, distinct visions, much less forging political platforms or coalitions.

    All we’ve got is Chiu-Campos, both shilling for votes on fake, minor housing legislation. And we’ve got the radicals vs the Realtors with “Choo-Choo” trying to pass G and the Realtors swamping mailboxes with glossy hit pieces. And Kim making deals with Lee. And Airbnb and Salesforce money everywhere in the background.

    So the development wars will continue, like all wars, in a fog. I hope the wars don’t destroy San Francisco. I hope the City doesn’t become any one of many potential Disneylands.

  29. “The theory isn’t that if you build homes that home prices will decline.”
    Oh yes it is, and how. It’s how the City has been selling new residential construction to the public.

    “In areas or times of strong demand, building more homes can accompany higher prices, but even so the prices are still lower than they otherwise would be.”
    I say if all this building hasn’t happened pigs would fly. Prove me wrong.

  30. Vancouver had a massive influx of rich Honkongers preparing boltholes for the 1997 handover to the People’s Republic of China, and taking advantage of Canada’s much more liberal immigration policies. The current turmoil in Hong Kong, and China in general, means this will continue.

    I spent every weekend the first half of the year visiting open houses for 3+BR single-family homes. You could hear a lot of Chinese, and not a little Russian, but the U.S.’ immigration rules are unlikely to be loosened to the same point as Canada’s, even for investors.

    Investors are not necessarily a problem for affordability. Real estate prices in London have gone through the roof, driven by Middle Eastern and Russian tycoons, as well as sovereign wealth funds from places like Norway, but rents have not risen to the same extent.

  31. The theory isn’t that if you build homes that home prices will decline. In areas or times of strong demand, building more homes can accompany higher prices, but even so the prices are still lower than they otherwise would be.

    The supply/demand balance is the biggest determinant of price and SF suffers a permanent excess of demand because it is desirable but also because of NIMBY land use rules. It is fallacious to point out the Vancouver example because, had they not built those extra homes, their RE prices would have been even higher.

    And of course new build generally does not displace anyone anyway. It’s adding new population.

    Cities like SF and Vancouver are new, and populated almost exclusively by relative newcomers. so if Asians and Europeans are buying our homes, that is hardly a new thing. It’s been happening since forever, and actually adds to our diversity.

  32. Where is the proof that densification will lower housing prices in a city that doesn’t have much room to expand out? Vancouver has pursued densification since the 90s and they now have the highest housing prices in North America, higher than residents make. Here’s one article from the New Yorker:
    http://www.newyorker.com/magazine/2014/05/26/real-estate-goes-global

    “When price-to-income or price-to-rent ratios get out of whack, it’s often a sign of a housing bubble. But the story in Vancouver is more interesting. Almost by chance, the city has found itself at the heart of one of the biggest trends of the past two decades—the rise of a truly global market in real estate.” The article talks about how it doesn’t have the same attraction of a place like SF, but prices are still rising out of reach of the people who actually live there. When high-cost housing is proven to be a lucrative investment, it just keeps going up.

    And here’s a ten-year study that was done on that relationship:
    http://blogs.ubc.ca/vancouverhousingdensification/conclusion/

    “From our produced maps, the relationship between density of total housing units, household income, and property values has weakened between 1996 and 2006. We observed that between the two independent variables total dwellings had the weakest relationship with housing prices. However, if the city of Vancouver were to have been right with their densification strategy then we should have observed a negative, or indirect, coefficient for total dwelling in relation to housing prices in 2006.”

    I want to live in a city that can continue to be multiracial and multigenerational. I have lived through a few cycles here and seen neighborhoods destroyed and populations wiped out by poor planning where there is money to be made.

  33. It’s a decent question. In many markets the supplier of the product or service artificially constrains supply to drive up the marginal price. You see OPEC cutting supply when the oil price drops, for instance.

    But in the case of SF there is no need for developers to do that because SF NIMBYs like Welch and Hestor and Redmond do their work for them, constraining supply so that real estate developers and investors can make more money.

    Then again, of course, Hestor, Welch and Redmond already own real estate in SF so they win both ways.

    But yes, to your broader question, there is a sweet spot where more supply drives down prices thereby deterring more supply. In a free market, we would always be at that price parity point but, as things are, we will never see it.

    And that is why SF RE is such a great investment.

  34. As was explained, and you ignored, many of those alleged 30% of new homes are in fact rented out, meaning that SF residents do live in them.

    Not that it matters either way.

  35. “Metcalf then offered his familiar (to readers of the Chronicle and the SF Biz Times) argument that if you add enough housing, prices will go down.”

    That’s disingenuous, but a good talking point. Would developers (or any business people) really want to continue creating more supply, past the point of glutting the market and depressing prices? If 100K new units will depress prices [which btw I don’t believe they will], better to build 50,000 expensive units, and claim that you’re working as fast as you can to create affordability.

  36. “IOW, it is not in this city’s interests to be a kind of Colonial Williamsburg for hippies or a theme park for experimental artists.”

    Is it in the city’s interests to be a kind of corporatist theme park instead? That is what we have now. When you have an occasional swarm of visitors that is one thing, but, when it becomes an everyday nightmare for the folks that live and work here, you are going to get backlash from the residents. Recent reports that up to 30% of some of the new condos are not occupied by full-time residents proves what many of us have suspected for some time. Building market rate housing is not the solution to the housing needs of the residents of San Francisco.

  37. It is reassuring to know that red baiting never died; in fact, it is alive and well among certain elite circles (and a bizarrely impaired omnipresent internet commenter) in San Francisco.

    At least, the City Club had the good sense to preserve its Diego Rivera mural, unlike the Rockefellers who destroyed theirs.

    Keep them coming, Ms. Bronstein. I always thought the SPUR was short for spurious.

  38. Oh. Oh dear and oh my!
    I certainly do hope that folks don’t lay out actual money for these SPUR roundtables!

    If Metcalf states his revisionist SPUR history often enough and without being corrected, it’ll become *the* history. He is dreadfully confused about his own organization, as the author here pointed out.

    It comes as no surprise then that he fashions a statement out of whole cloth about my organization, Coalition for (not ‘of’) San Francisco Neighborhoods, of which he knows exactly nothing.

    CSFN is an ‘umbrella’ organization whose 48 member groups are the neighborhood associations across the city.

    Wrongheaded, unreliable and frankly ridiculous misstatements about CSFN have abounded for years; former SFWeekly columnist Matt Smith was particularly adept at conjuring statements and attitudes.

    At any rate this is to say that his statement
    “I am told,” he said, “that the Coalition of [sic] San Francisco Neighborhoods may require any upzoning to be voted on.”
    is patently gossip. It would be interesting to know who ‘told’ him this, if indeed such a person exists.

    Although now that he has put the thought out there perhaps we should explore it.

    – Judith Berkowitz, President
    Coalition for San Francisco Neighborhoods (CSFN)

  39. Zelda, you are the best new journalist in the area in quite a while, both in investigative quality and in engaging writing. Thank you very much.

  40. When Metcalf says that “it’s unethical for progressives to deny anyone who wants to live here the right to do so”, he isn’t saying that “unlimited growth is a good”, which is the equivalence that you implied. Rather, he is saying that the population of this city should not be frozen in time, such that those who are here now must be here in the future even if that means that nobody new can afford to move here.

    He is saying that the city changes over time, so the kind of people we need living and working here will also change. SF no longer needs the huge number of industrial and manufacturing people we needed a few decades ago as those jobs have gone. But also back then we didn’t have the people who could do the knowledge work that now dominates our economy.

    Such a transition could happen even if the overall population did not change, and no new homes were built, as long as we had the ability to migrate people in and out, not forcibly, but through natural attrition and migration. Except that policies like rent control and NIMBY and use rules inhibit that, drive up prices, suppress vacancy rates and turnover, and impede mobility

    So I believe what Metcalf is arguing against is sclerosis, opposing the idea that living in SF is a lottery won by the current incumbents at any cost, including pulling up the drawbridge on newcomers and preserving the folks who just happen to be here for historical reasons. IOW, it is not in this city’s interests to be a kind of Colonial Williamsburg for hippies or a theme park for experimental artists.

    This would be true in any event but is even more true when SF is really not a city in any ordinary sense, but merely the downtown for a much larger urban area – the Bay Area. New York doesn’t think of Manhattan as a separate entity and nor does Hong Kong island. Planning should take into account the hinterland. It’s not necessary even for people who work in SF to live in SF, and the suburbs have built hundreds of thousands of homes for SF workers at no cost to SF – did we even thank them?. Those who find our “Manhattan” too expensive can live a few miles and minutes away in Oakland, for half the price or less.

    Our current policies favor those who just happen to be here due to a histrical coincidence over those whom we really need to be here. And that’s a problem. I suspect that if the Bay Area were one jurisdiction, we would not have half of these problems. We have dozens of petty fiefdoms instead of one coherent entity that can do real planning.

    And that is why we have a war, but it is a phoney war between cities that should be co-operating not competing.

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