By Tim Redmond
NOVEMBER 20, 2014 – You know the housing crisis in San Francisco has gone from insane to absurd when the City Planning Department gets in trouble for posting a video saying we need more housing – and the Atlantic suggests that maybe there’s no solution at all.
Then a reporter from TechChrunch holds a meeting to try to get tech people and housing activists to talk – but decides it has to be private so that it won’t blow up.
And sometimes I just want to pound my head against the wall and say: What is the matter with everyone? Are so many people so blinded by free-market ideology and a lack of historical understanding that they think this is (a) the result of Nimbys and rent control and (b) can’t be solved?
Does anyone really think the activists will give up shouting and protesting and meet for a polite chat while thousands are being thrown out on the streets — and the tech world is doing nothing to help?
I will take a deep breath and try to sort this out.
Put simply: It wasn’t the SF left, or the anti-growth activists, who created this crisis. It was developers, and city officials listening to them, who pretty much ignored the concept of real city planning – who decided that the market should decide what was built.
When the market – or, that is, the international investors who put money into big-city real estate — wanted office buildings, not housing, office buildings got approved. When the rest of us said: You have to build housing, too, we were told that the money wasn’t there. It was going into offices, where the return on investment was higher.
Could the city have said: No, if you build offices and attract new workers, you have to build housing for them? Of course; that’s what city planning and zoning is about.
But no: A generation of mayors and planning commissions refused to do that.
Now, the market says the money is in very-high-end housing. So those who think the market should define city planning say: Okay, maybe if we build enough of that prices will come down.
Never worked before, won’t work now.
In a small city under immense pressure, the market can’t be the defining factor. Actual planning – which means setting policies determining what the city needs, then zoning for those and only those needs – is the only thing that works.
In other words, a city like this needs to have a very public discussion around what we want to become. Nobody ever voted to create a tech headquarters city in Soma; that happened because venture capital people in Silicon Valley wanted the companies they financed nearby, and the tech workers wanted to live here.
In some ways, they had no choice: If you work at Apple, you pretty much can’t live in Cupertino because they build no housing at all. Same for Mountain View and these other Peninsula cities.
And now the tech world needs housing in San Francisco – because the workers want to be near their offices and the companies want to be able to expand very rapidly. But instead of saying that we just need to build all the new housing that the tech world needs right now, we might want to stop and say: Why are we doing this? Who’s going to pay for it? Is there a limit to how many tech companies the city can handle? Is it wrong to even ask that question?
What cities can do
We have every right as a city to say that no new tech office space can be built unless and until the developers (and by pricing, their tenants) agree that first they will pay to build the housing and transit capacity needed for the workforce. We can say that all new housing has to meet the needs of the existing workforce. We can say that some land can only be used for light industry and can never be turned into office space – which means that the property values of those sites will remain low enough that blue-collar businesses can afford the rent.
Is that a transfer of wealth from land and building owners who could get rich by selling out to office developers to local businesses that employ people at decent jobs without advanced degrees? Yes. Is that legitimate, legal city planning policy? Yes.
I had a long conversation with Kim-Mai Cutler, the TechCrunch reporter, this morning. She’s spent a lot of time reading and thinking about urban planning and housing, and it was fun to chat with her. She told me that the story in Re/Code wasn’t quite right – the event she held wasn’t a TechCrunch event, it was just her, as a reporter, trying to get people to come together and talk.
And, she said, because of all the anger and vitriol in the city, she was afraid that if it was public and reporters came, tech folks would be afraid to ask questions or make statements that might be reported out of context.
She and I have a different view of how housing policy should operate; she really believes that we need to build a huge amount of new housing, more than the mayor’s 30,000 units, to make room for the exploding workforce of the tech hub, and she thinks that eventually prices will come down. I think the demand is so insatiable, and the out-of-town investment money so big, that we’ll end up building 50,000 pied a terres and second homes that will do very little to bring prices down to the level where a middle-class worker in one of the city’s biggest industries (government, health care, or hospitality) will be able to afford the rent.
I’ve been arguing that this is a case where the market has failed, and will fail – the market build too much office space in the 1980s, until we slowed it down with Prop. M, and the market is destroying PDR space in the city, and isn’t solving the housing problem. The only workable solutions involve full-scale government regulation and intervention.
It’s tough in a city where it costs as much as $500,000 to build a single unit; it’s worse when investors demand the kind of return that will only happen if that unit sells for $1 million or more.
Of course, if the city used public land, or demanded land as part of any deal to build offices, and then used only nonprofits to build housing, the price would drop below $500K. With even modest subsidies, you could build middle-class housing. And there would be no need to satisfy greedy investors who want those high returns.
(By the way, Cutler did agree with me that the young tech workers aren’t going to move into highrise condos downtown. That’s boring; they want to live in the Mission or the Haight or Noe Valley. The big Google bus stops aren’t in front of the Millenium Towers. And that will be the case no matter how many highrise condos we build. Problem is, there are already people living in the Mission.)
But here’s the larger question about Cutler’s meeting, and an earlier effort by David Campos to get people talking.
It’s never going to happen as long as the epidemic of evictions continues.
What tech can do to help
There are plenty of good people who work for tech companies. Many of them want to be good neighbors, make San Francisco their home and make it a better city. Many of them don’t want to be evil. Many of them worry that the hip cultural community they moving into is being destroyed.
But so far, the folks with the money aren’t helping any local efforts to stop the evictions, which are tearing communities apart. I didn’t see a single tech company or wealthy tech worker put a penny into supporting Prop. G, the anti-speculation tax. With a fraction of the money Mark Zuckerberg is spending on all his Noe Valley property, Prop. G would have won.
I didn’t see any tech leaders testifying for, or supporting, the Campos legislation increasing buyouts for Ellis evictions. The tech-darling mayor wouldn’t even sign the bill; it became law without his signature.
The anger against tech companies comes from the palpable fear that every tenant and every low-income person on the East Side of town feels every day. Mark Benioff seems to realize that; he actually spoke out against the evictions. But he hasn’t done anything to help.
If we can stabilize the existing vulnerable populations and make sure that people who already live here aren’t forced out for new higher-paid workers, then everyone will calm down and we can talk about long-term housing policy. Until then, the war on the streets is going to continue. It just is.
So let’s talk about rent control.
Like zoning policy – and so much else of what cities can do today – rent control as it exists in San Francisco is something of a blunt instrument. It’s far from perfect: People who have lived in an apartment for a long time get a break, but people who just moved here don’t. If the state would allow us to impose real rent control – that is, to maintain the set price even after a tenant moves out – then some of the unfairness would go away. Alas, the state won’t allow that.
Yes: There are tenants who are relatively wealthy who don’t need rent control but still get it. Yes: There are landlords who are less-wealthy who have to accept that burden.
But public policy at the city level is often imperfect – again, the state and federal government won’t allow us to do the things (like a local income tax, a local tax on corporate profits, commercial rent control, and the seizure of vacant property for housing) that would make some of these blunt instruments less necessary.
So we do what we can. Overall, landlords in San Francisco are more wealthy than tenants. Not every single one; there are always exceptions. But overall, that’s a fair rule.
Overall, rent control does something else: It favors people who have been here a long time over people who just got here. And I would like to suggests that that’s just fine.
I know it’s a crazy, radical idea, but at a certain point, in a crisis like this one, you have to give some value to seniority. Unions do it all the time; in fact, seniority is one of the most fundamental tenants of most labor contracts. You’ve been on the job for 20 years, you have more rights than someone who started last week.
And I would say: If you’ve been in San Francisco for 20 years, and helped create and build this community, you have a right to stay here that trumps the right of someone with more money to move in.
The fundamental issue for tech workers – and the politicians who have promoted tech jobs without thinking about housing needs – is this:
You are moving into an existing community. You don’t have the right to force anyone who lives there already to move out.
That means, if you are a decent human being, you will accept that you might not be able to get a sweet flat in the Mission right now. You might have to live in Oakland or Richmond or somewhere else until a place in the city opens up – not by forced eviction but by someone deciding on his or her own to leave, or because the city has built new housing that you can live in. Maybe not in the Mission or Noe Valley, but that’s life. It’s what everyone else in the city has to deal with.
I know the companies want happy workers who want to live in SF near work or a Google bus line, but it’s not fair that a hotel worker – who also has a right to be happy and live near work — has to move to Stockton because someone new with more money came along. And there’s no free luxury bus to take her to work.
Again: This is not about demonizing tech workers. It’s about saying to that industry, which has come to dominate city politics: You have to help this community survive, which means helping control displacement. Right here, right now.
Even if building 30,000 housing units (or however many) would bring prices down, it’s not going to happen overnight. Even if we eliminated CEQA and fast-tracked everything, it would take years to build that much.
Meanwhile, every day another family, another senior, another community member is being forced out. And everyone who cares about this city has to join in that fight.
Here’s an idea for nice meeting: How about Ron Conway and Mark Benioff and all the folks who want to be good tech citizens sit down with the housing activists for a meeting that has one agenda item: How to raise $5 million for a comprehensive housing ballot measure for November that has as its start the use of every possible local policy tool to slow down or halt speculation and evictions. I can think of a lot of activists who would happy to be there.
Because in this dispalcement crisis, doing nothing IS evil.