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Friday, July 23, 2021

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UncategorizedThe Agenda: Moratorium at the Board, pricey SROs at...

The Agenda: Moratorium at the Board, pricey SROs at Planning

Plus: Some crucial campaign-reform issues — and what will be the fate of the Ethics Commission? (UPDATED)

Protesters call for a Mission Moratorium at City Hall
Protesters call for a Mission Moratorium at City Hall

By Tim Redmond

JUNE 1, 2015 – The vocal debate that took place at the DCCC last week moves to the Board of Supervisors Tuesday/2 when a Committee of the Whole will hear the Mission moratorium proposal.

The measure needs nine votes to pass, and already, Sups. Scott Wiener and Mark Farrell have come out against it. That means all the remaining members have to vote yes.

There is plenty of political pressure. The mayor doesn’t like the idea at all. The developers, of course, hate it. And groups like SFBARF, which wants to build everywhere until SF looks like Hong Kong, and GrowSF, which wants more infill housing, second units, etc., were present in some numbers last week to make the case against the moratorium.

The Chron came out against the measure, no surprise there, and Sups. David Campos and Scott Wiener had a lively discussion about it on KQED Forum.

Wiener kept repeating the same line that the Chron had: The city needs to keep building more and more housing “at all levels.” As if allowing more private-market construction could possibly be part of that solution.

It won’t: The private market today only builds for the very rich, because that’s where the money is. The city can get housing “at all levels” only through spending public money or strictly regulating what gets built.

Campos said that “government has a role” in this housing crisis. I would go further: Government has the only role. The private market has utterly failed to provide what the city needs.

Not that all new housing has to be publicly funded – but all new housing that isn’t publicly funded has to meet city standards, including way more than the current 12 percent required affordability.

And if it takes a time out to get there, the world won’t end.

That said, the Campos plan has an uphill political struggle. If one, only one, of the uncommitted supes votes no, it’s over, and this winds up on the November  ballot.

Interesting to note that the measure went down at the DCCC – but only narrowly, with some of the more centrist members of that panel voting to support it. There is clearly strong support for this, certainly on the east side of town – and I think some folks on the west side will agree with the argument that the neighborhoods ought to have some say in their fate.

I count five Yes votes — Campos, John Avalos, Eric Mar, Jane Kim, and Norman Yee. We know where Wiener and Farrell are. That leaves London Breed, Malia Cohen, Katy Tang, and Julie Christensen.

Tough for Breed, who will likely face a challenge from tenant advocate Dean Preston. Touch for Christensen, who is facing a challenge from former Sup. Aaron Peskin. People in Cohen’s district are starting to say they want a similar moratorium.

I look forward to the debate. I look forward to someone (please) saying that the private market is not going to build middle-class housing no matter how much upzoning and CEQA reform you do. And I look forward to someone saying that “housing at all levels” is a complete myth, absent serious, strict, and far-reaching government action.

Which, of course, is what the moratorium is about.

The hearing is set for 3pm in the Board chambers.

 

A project that would create new market-rate SRO hotel rooms – testing whether young tech workers will accept SRO conditions and pay well above the standard rate for rooms with shared baths and no kitchens – come before the Planning Commission Thursday/4.

The deal is complicated, but in the end, the developer wants to replace 238 rent-controlled housing units with new units that won’t be under rent control. It’s a screwy deal, and could set a bad precedent for the conversion of low-rent units to high-rent replacements.

UPDATED: My mistake — the conversion of existing SROs is now off the table, and the project is being evaluated on its own, although as BeyondChron reports in an extensive story on the project,

The project sponsor will presumably seek Planning Commission approval of the conversion plan after the project is moving forward, since significant funds have been transferred from the SRO owners to the developer for the conversion. In addition, the original developer who arranged the conversion/replacement housing plan has a second group of SROs ready to go with a similar project.

 

The press attention at the Tuesday BOSA meeting will all be on the Mission Moratorium, but there’s another item that might have a significant political impact: The board will vote on a proposal to impose full financial disclosure requirements on committees that seek to encourage someone to run for office.

That most famous recent example: The “Run Ed Run” committee, which not only urged Mayor Lee to run for a full term, but promoted his candidacy – and never told us who was paying the bills. The bill to expand disclosure to those groups is sponsored by Sups. John Avalos and Eric Mar.

 

The Ethics Commission holds a special hearing on Friday to look at another issue involving the mayor – the role of so-called “candidate controlled committees.” Here’s the rundown from Larry Bush at Friends of Ethics:

The special hearing on candidate-controlled committees brings to San Francisco Bob Stern, author of the state’s Political Reform Act and first head of the state Fair Political Practices Commission. His credentials on ethics, campaign reform and related matters is second to none. Joining on the panel is Corey Cook from USF’s McCarthy Center. At issue is the fact that elected officials can set up committees that accept contributions in any amount and from any source, unlike their own campaign committees, and then act on behalf of the interests of the donors. The major example is the Mayor Ed Lee for San Francisco Committee that has accepted in excess of $600,000 since starting in 2012 with a $25,000 contribution from Ron Conway, who weeks later won Lee’s support for his tax rewrite. The issue before the commission is whether there should be restrictions on some donors, like those with pending financial interests, or a cap like the $500 limit, or no change at all. In 1990, SF voters approved with over 80% support a law that prohibited contributions etc. if the city official had approved a contract, lease, franchise, land use variance special tax benefit or monetary payment. That version puts the onus on the official not to accept the contributions, etc., but doesn’t seem to speak to pending issues. The city’s regular candidate committee law simply bans contributions from contractors or corporations or their officers or directors. So two ways to go, and both have major loopholes.

Oh, and Ethics is going to start talking about a replacement for John St. Croix, who is leaving the job of executive director as of Aug. 27. The commission has been weak for years, and St. Croix never made it a point to push political reform (or to enforce the existing laws with any type of aggressiveness.) The five-member panel has a chance to go in a completely different direction and turn the agency into a leader in the field. Or it could punt, and replace St. Croix with someone who has a similar approach.

The decision is still a ways off, but the public ought to let the commissioners know what type of person the city needs to lead this crucial watchdog agency.

Tim Redmond
Tim Redmond has been a political and investigative reporter in San Francisco for more than 30 years. He spent much of that time as executive editor of the Bay Guardian. He is the founder of 48hills.
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214 COMMENTS

  1. The ISIS way might be the way to go. Tear down the system from top to bottom, including the hypocritical “founding documents” established by privileged white men. The current system funnels money extracted from menial lives up to the top. Lives made menial by automation & trade agreements. This trend will continue. Robots will mean fewer jobs. The only way out will be education and big money is behind the boom in sub-prime education loans.

    Islam outlaws usury. But our system depends on it. The Federal Reserve prints money out of thin air to benefit the usurers who are right at the spigot. Facebook owner Zuckerberg got a 0% loan for his mansion. Welfare for the rich. Now wage slaves demand $15/hr. to counter the dollar’s loss of value. The Fed has destroyed over 95% of the dollar’s value since its inception. Prior to the Fed the dollar had its ups and downs but always returned to the norm of its original value, mainly due to the fact that it was redeemable in gold. Housing & start-ups are in a bubble because of 1) the Fed’s fiat money printing, and 2) corrupt government officials whose only aim is to expand the tax base in order to have more money to divert. If they could move every tech company in the world to S.F. & Manhattanize it they would. Mayor (“Dump”) Ed Lee tripled small businesses taxes on cab drivers in order to give Twitter a $100m tax break. Our collective taxes improve streets and parks. These add value to properties & the sellers walk away with the profits as if this increase were entirely of their own efforts. Years of law-abiding citizens fighting crime and slowly improving a neighborhood mean nothing to them. Winner takes all. Each “parklett” is a political giveaway to a restaurant owner, disguised as a public good. These small, but obvious corruptions cumulatively enrich the haves and impoverish the poor. There has been no democracy in the U.S. since Citizens United. Things will get worse until there is open revolt in the streets. Remember, the New Deal happened because of fear of bolshevism. The rich will keep taking until mobs in the street start shedding blood. Why follow the law when Uber’s Kalanick doesn’t have to?

  2. So let me understand. You’ve nominated yourself as the judge upon those “who gives a crap about San Francisco” BFingS.

  3. ‘I only have $100 bills, I’ll get you next time”, and the valet seems to be simpatico. ???

  4. The City played the role of developer when it came time to rebuild the Plaza Hotel at 6th and Howard. Nonprofit developers don’t really build anything themselves, they play the role of coordinating financing and contracting the development process. That role need not be farmed out to a cartel of nonprofits, the City could just as easily take that on in-house.

    The political role that the CCHO/SFIC plays cannot be understated in providing the political cover for neoliberal governance in exchange for their own economic benefits. Success, as measured by the professional progressives is measured in how much funding goes to the nonprofits. Once they get paid, business as usual is permitted, the rest is just for show.

  5. San Francisco’s “Trickle down” housing policy doesn’t work. Why? Because the rich have no interest in serving the needs of the middle class (who made them rich). Most rich people got that way because they don’t share their wealth.

    Here’s a good example of “trickle down” economics and why it only works for the 1% https://www.youtube.com/watch?v=QjT6DbJ3T7I

  6. Learn to read. I never wrote that “every” tech worker is an “opportunistic” bubble worker. I worked in tech for years and I’m actually glad that the current tech workers are able to find work, especially since most are coming out of school with enormous debt. But many of the companies remain unprofitable, propped-up by VC money or large companies that think they may have a long-term objective in mind but really don’t.

    And I have consistently advocated for growing the population of SF to 1.5 million through robust city planning, so I’m hardly a NIMBY.

    That said, the ‘frat house’, Marina-type atmosphere that now permeates the Mission is repulsive. How about moving to a neighborhood and valuing what is there?

    Your final sentence exposes you as an uncivil troll.

  7. Well, if someone doesn’t speak ideas, they will never become reality. My goal is to get people to think about things they ordinarily wouldn’t. Like the fact that there are “far more things in Heaven and Earth than are dreamt of in your philosophies.”

  8. Like who?

    And why does it even matter? I thought the end result was the only thing; as long as whats built is not Lux?

  9. I work in tech and am no newcomer. I’ve been here for 14 years, displaced no one, and earned every cent to acquire what I have. Your assertion that every tech worker is an opportunistic “bubble worker” is naive, uninformed nonsense typical of NIMBYs too imagination-impoverished to consider an archetype outside of their head-in-the-sand thinking.

    Suck a dick, loser.

  10. Many entities could build affordable housing, but the point of housing activists is to ensure that the member nonprofit developers of CCHO are the ones who receive public affordable housing dollars.

    Yeah, I am cynical because I’ve seen the work.

  11. “he point of this exercise is not to build affordable housing, it is t… so that THEY …”

    Ok, I’m failing to see a distinction here. Perhaps you’re trying to tell me that the taxpayers won’t be held responsible (well, City taxpayers; assuming of course that the CCHO crowd uses tax credits to finance *most* of the shortfall, which just shifts the burden to a different set of taxpayers) for the huge costs. This thinking is, to me, the same misguided motives that have given us the ‘Subway to Nowhere’ and the BART Airporter – whose sole beneficiaries are the consultants and contractors.

    So, if your motive is ‘parity’, who or what do you expect to manifest it, if not for the Nonprof Mafia?

    I suppose that we could get For-Prof developers to build it, if we altered height/bulk limits to 3x or 4x current standards. But somehow I don’t thin that would set well with you.

  12. The capital was not in place over the past few decades to build to accommodate triple whammy of foreign capital, speculative tech and the global tech giants sited locally. This is not just a SF problem, but most similar global cities are facing it.

    Who could have said in 1985 that San Francisco would be here today? Not even SPUR’s rosiest boosters.

  13. I don’t really give a damn how people vote. I do care about the displacement of long-time residents to make room for bubble workers, many of whom don’t give a crap about San Francisco.

  14. Let me throw a thought experiment at you. What if we made it 100% so called “luxury” (i.e., market rate) housing, but required all new residents to vote the complete progressive slate.

    There. no more objection to market rate, am I right?

  15. “one-child-per-couple policy”

    Now there’s a Moratorium in the Mission I can get behind. So you’re saying instead of paying the people who are having all the children in this country more welfare and various benefits to have more children, we hit them hard with a financial penalty? Ok, not that the type of thing that’s gonna get politicians who pander to the needy like Campos reelected but ok, let’s go with that.

  16. I am for a moratorium to plan for greater parity and equity in development moving forward by fixing Eastern Neighborhoods, not to throw money at the nonprofit mafia. The point of this exercise is not to build affordable housing, it is to throw business at CCHO’s members so that THEY can build affordable housing.

  17. You sound so cynical. You’re for this Moritorium, but you don’t seem to like the likely outcome.

    IF CCHO were to acquire all 13 sites (rough guess = $50M? 100M?), and they were to replace X Lux uints with X “Aff” units, then, iirc, that would amt to, what, abt 1500-2000 units? 2000 units @ $500k each would cost a billion dollars to build (plus $50-100M). How long do you think it would take, as “Aff” units, to open the doors to all those 2000?

    I bet, as Lux units, they’d be occupied in under 3 yrs.

    And most of that billion dollars as “Aff” units won’t be recouped. How much to the taxpayers figure its worth to subsidize – as in, thgey’ll never repay that in rent or down payment or monthly payments, ever! – a food truck operator, a substitute teacher, a hotel cleaner? $300,000? $200,000? $100,000? Cuz thats what kind of costs we’re taling about, for someone (other than the lucky recipient).

  18. Again if showing up with good ideas were sufficient, then things would look a lot different. You cannot speak your political desires into reality, that is magical thinking. Language is useful, however, in appealing to people to organize before and for electoral contexts. But there is no shortcut for the hard work of organizing and suasion when and in ways that can count.

  19. Oh I don’t know, we might be pleasently surprised how much the private sector is willing to contribute to the well-being of the community.
    If we’re not, there’s always eminent domain…..

  20. The entire system is corrupt from the founding documents thru present day “interpretations.” Maybe citizens should (be required to) vote on everything, instead of electing representatives who don’t represent. Direct democracy. That should produce fewer and better laws, instead of the endless litigation known as “legislation.” And no more kings, presidents, or prime ministers, thank you very much. No more “deciders.”

  21. You figure out how to replace the four liberals and at least one conservative with progressive justices and that might be an option.

  22. There are no sacred cows in my world. Even Jane Kim has felt my wrath on some issues, most notably the tech tax breaks. The system that requires a person to raise millions to be dogcatcher automatically removes “merit” from the list of qualifications. Public financing of campaigns would be a start, along with no corporate donations allowed. Then maybe we get some engineers and schoolteachers and farmers to run. People who actually know people, instead of lawyers and/or career politicians who use their position as a platform for higher office, and then to get on the board of some multinational corporation.

  23. Yes, planning needs to be much broader than developers, their attorneys, architects and consultants, hence the need to give the community even more power.

  24. Acquiring the 13 sites would make for 100% affordable on those sites with much city $.

    And reconfiguring the inclusionary take would make for even more inclusionary from market rate housing.

    Everyone wins!

  25. Kind of like the way every single one of your posts is nothing but whining about the “#paidwingnuttrolls”?

    Here’s a though: How about at least contributing an opinion to the subject at hand? Is it really that hard for you to do?

  26. A “civilized” species would have a world government. It’s the only rational solution to sectarianism, racism, inequality, and rank stupidity.
    “International business” is just the old aristocracy in new suits. I can’t wait to see the look on the faces of the “Sam’s” as they are swept out
    with the rest of the ossified, reactionary, self-interested burghers.

  27. The focus is on the 13 sites because the care and feeding of the Council of Community Housing Organizations is the one item on the professional progressive political agenda. Pay the toll to CCHO and then the floodgates open to luxury housing. This crew has no problem with luxury condos, they just want their cut a portion of which might get passed onto “the most vulnerable.”

  28. Yeah, but the city has its hands tied, largely by state government. It seems to me like it would be more rational for them to figure out ways to make the rest of the state take notice, since they can’t even get state assemblymen in poorer districts of LA to vote with them in the legislature on this.

  29. I can’t believe all this argument, blather and hot air over 18, er 15 (though one is in SOMA), no – 13 sites that *possibliy* could be bought and then used for “affordable” housing.

    This idea is the ‘student loans’ of housing policy.

    And why now? Is Matt Gonzo gonna pop up again and run agaisnt Ed Lee?

  30. Certainly it’s rational for the city to set the requirements to the ceiling of feasbility.

    Unfortunately, every calculation I’ve seen suggests that ceiling won’t be nearly high enough for your tastes.

  31. How are you going to pay for it, Dave?

    Let me guess – is a hashtag involved?

  32. “Over and over.” That’s all you and the rest of the #paidwingnuttrolls do. Constant whining bullshit. It’d be infuriating if it wasn’t so laughable,

  33. “Again, not my job.”

    Well, you weren’t hired to answer those kinds of questions, no. But the folks SF progressives have touted to represent them (Campos, Avalos, etc.) were, and they can’t answer them either.

  34. Trouble is that, then, Captial was basically national, so FDR could sequester and intimidate. These days Capital is international, and there is no effective mechanism for enforcement or regulation.

    If you want to regulate Biz, I suggest you get a UN together that’s grown a pair. But, barring that, gud luck.

  35. Again, not my job. Maybe we start by electing someone who DOES know how to run an equitable City; or at least has the heart, intelligence, and cajones to try.

  36. The option is not mine to propose. The community can figure this one out so long as the MOH, CCHO and luxury condo developers are kept to the margins of land use policy formulation.

  37. There may be. How do we do that at the local level – or within the framework of the Moritorium’s 45 days, er, two years?

  38. Spoken like an armchair quarterback who doesn’t understand how real estate or the technology industry works. Is the market going to experience a correction? Of course it will. That is inevitable. Will it resemble 2001 and/or 2008? No. First of all, you are conflating two entirely different market corrections of differing severity.

    2001 concerned companies with inflated valuations operating within a technological boom that few understood completely. It was effectively the wild west, with only a scant idea of how anyone could make any money. There was only the promise that it was possible but few companies had a real plan. The companies that survived or emerged had plans. Most of the survivors still exist today and there’s every reason to believe that most of them will continue to exist, provided they adapt with the times. Are there companies that resemble the losers of web 1.0? Definitely. There are a ton of companies that won’t (and, frankly, shouldn’t) survive. But there are some new big players that will not only survive but prosper. And the employees of whomever are left standing will still need housing and they’ll still be outbidding everyone else. Sorry to disappoint you there.

    2008 was primarily spurred by the selling of mortgage-backed securities, usually made up of NINA (No Income, No Asset) loans. These ARM-flavored loans were insanely easy to acquire and were often pushed through by brokers eager to meet quotas. A food service worker could lie about their income and get easily approved for a house they couldn’t afford; all it took was one balloon payment to ruin them. Compare this to today’s market: there are very few low (or no) interest loans and requirements are stringent as far as income is concerned. Most buyers these days are those who sat out the 2008 crash, saved their money or those who have simply come into money recently; both varieties are paying all-cash for their properties. This is most definitely a frenzied market but has very few of the same factors that caused the subprime mortgage crisis of a few years ago.

    In other words, if you’re thinking that Snapchat layoffs are going to make apartments $500/month again, you’ve got another thing coming. Take a basic economics class (or don’t sleep through it this time) and talk to us again.

  39. If what you’re saying is true, you should be encouraging the progressives here to just be patient, because the cheap housing they want will come to them.

    That said, rich people keeping their investments in VC and real estate due to low interest rates isn’t a “bubble”. It’s just artificial stimulus. And it will end, but probably not with a bang.

  40. Throngs of children are not SF’s great problem. The anti-eviction folks have cited the declining under-18 population of SF as evidence of the city’s decline. You want to _accelerate_ that?

  41. “”Pausing” the development of housing is not going to magically produce public funds to purchase the land”

    I just find myself wanting to post this over and over again here. Or alternatively, just: “How are you going to pay for it?”

    Over and over.

  42. “Pausing” the development of housing is not going to magically produce public funds to purchase the land, nor will it drop the price of property development itself. Some people seem determined to find this out the hard way. To them, I shrug and say: suit yourselves.

    I own a four-unit building in the Mission and it would line my pockets quite nicely if the moratorium took effect. Housing, which is already rare, will become rarer still, and I could potentially charge whatever the market would bear. Everyone, regardless of their financial status, will continue to fight amongst themselves for an artificially shrunken pool of resources and I will be able to exploit this scarcity as I please. For every newly-developed unit that does not exist, an existing unit will be pressure-priced ever higher due to the abundance of prospective tenants who can afford it and are willing to outbid someone who can’t. As rent income potential goes up, there is an increased, two-pronged temptation for landlords to liberate their shackled cash cows: get rid of the existing tenant, resetting the rental price in the process, or sell to someone else who will. Either way, the landlord profits. So, just checking in with the pro-moratorium peeps: this is what you want, right?

    No one wants to hear this (and I’m certainly not the first to say it) but the over-the-top tenant protections are partially responsible for this unbalanced market. I realize that it’s not popular to imagine landlords as people who also need protections (supposedly, we’re all cartoon villains rubbing our hands together gleefully over a pile of gold coins, right?) but that’s precisely the attitude that makes us feel as though we need to do whatever is necessary to protect ourselves.

    One of my units became vacant recently (don’t get your collective shorts in a twist, I didn’t evict anyone) and, rather than risk getting locked in to a relationship I ultimately don’t want (and can’t extricate myself from), I decided to forgo rental income altogether and turn the unit into an workspace for myself. It ends up costing me a little per month but I’ve come to see that as worth it. I can afford it (at the moment, anyway) and I’m happier with one less stranglehold on my life. Speaking realistically, I’ll probably rent it out again at some point but what does it tell you that I am reluctant to do so? That’s one more rental unit removed from the market because, frankly, I’m scared shitless to place myself at the tender mercies of the housing-starved masses.

    So, go ahead and get this moratorium rolling. Sounds like a great idea.

  43. If I were a multilmillionaire looking to park my cash in something other than boring, low-yield bonds, I’d look at a city with continually rising housing demand, and a population determined to stamp out all increased supply, and say … “JACKPOT”.

  44. In other words, you don’t have the numbers, or even back-of-the-envelope estimates.

  45. I guess my point is I see the economic logic behind the last two bubbles. I didn’t invest during the dot.com bubble due to no revenues for a lot of the IPOs and I didn’t buy during the real estate bubble due to the credit history. I don’t see the numbers here for a large bubble pop. I’m willing to accept your logic if you run through your thesis to show the overvaluation and why. Really.

    And your dismissive well there were cash buys in the last bubble and ARM buys now is pretty off-base. No one is stupid enough to go with an ARM with historical low interest rates since the expectation is that they will go up in 5 years. Do you need me to link articles on how hard it is to get financing these days compared to 10 years ago? If the credit requirements are stricter than people are better prepared to weather any storms.

  46. I’m not saying I don’t sympathize with the sentiment, but CA law preempts local income and cap gains taxes. Good luck changing that.

  47. The rest of the developed world features aspects of social democracy, Northern Europe in particular. Ascribing its virtues to rent control and property restrictions seems an error.

  48. The city budget is pushing $9,000 million a year. What’s the utility of a ceremonial disgorgement around 0.1% of it?

  49. So IOW you cannot explain how SF can tax people and entities who have no presence in SF?

    But sure, you can ask nicely. Let me know how that works out..

  50. You would be surprised with what a bunch of lawyers can accomplish, given a budget and a mandate. Laws were designed to be changed; most have been or will be in their lifetime. “Can’t do” is for Little Minds.

    But let’s start by asking for voluntary contributions from companies and individuals willing to do their part in making the bay Area a better place for all. Which of course would include funding for adequate housing and transportation.

  51. I highly recommend that you look at the stock registers of some leading corporations. The biggest stockholdings are typically Vanguard, Blackrock, Fidelity, State Street etc.

    Those holdings are the combined IRAs, 401Ks and mutual fund holdings of all Americans

    The super rich mostly use offshore hedge funds and you cant touch them

  52. Mary, I do not believe you. Specifically which jurisdictions outside the US have rent control?

  53. Not right now. And SF voters rejected the last two housing bonds and may well reject this year’s one as well.

  54. Most countries in the EU as well as Canada have fairly strict rent control laws , meaning rents can only be raised by the approximate rate of inflation. And home buyers in some places have to commit to holding the property for a relatively long period rather than “flipping” to make a quick profit. I don’t have all the answers, but countries with rent control policies have lower rates of homelessness and crime than the US.

  55. So let’s get Larry to cough up the $12M, for starters. Not off topic at all. I’m expanding the topic to include all billionaires living in the Greater Bay Area. It’s their civic duty; they may live in Woodside, but nobody parties there, they show off to their friends HERE.

  56. Not at all what I said. I thought only Sam set up straw men so that he/she/it could set them aflame. But thanks for your contribution to solving the housing problem.

  57. SF cannot tax anyone or anything outside of its jurisdiction

    That is why Twitter wanted to move to Brisbane, remember?

  58. No, corporations are mostly owned by institutions i.e. the collective savings, investments and pensions of millions of working Americans

  59. Good luck trying to get rid of that.

    Canada and the UK managed to, but I don’t see it happening here. Does a single member of Congress support it?

  60. Seems a wee bit off-topic, but sure: the linked report shows the ‘Total Economic Impact to City Businesses and Residents’ at $360 million, and ‘Total City Costs’ under $12 million.

  61. No offense, @jthomas09:disqus , but you are absolutely incoherent.

    So you want to kick out the Chevron gas stations, the Apple stores, prevent anyone in San Francisco from using Oracle software (good luck surfing the web after that), stop using Twitter, get rid of the Wells Fargo ATMs.

    Got it!!! Thanks!!!!

  62. Figures don’t lie, but only a liar could figure “ugly, noisy, dirty, crowded, pathogen-laden, polluted, dangerous, and expensive” offers greater safety than, well, anything short of a war-zone.

  63. The America’s Cup has everything to do with public policy, which is ultimately tax policy, especially if taxpayers are stuck with the bill.

  64. Getting people OUT of ugly, noisy, dirty, crowded, pathogen-laden, polluted, dangerous, and expensive cities. Believe it or not, everyone doesn’t want to live like this. And it is unsustainable.

  65. There are many different types of people who invest/speculate in real estate. Some buy a home for the long term to live in a particular location without an intention to sell for decades. Others buy property to rent to earn rental income. Some people buy property thinking that the prices will rise with the intention to sell later on. If the US central bank were to engage in massive interest rate increases to make it harder for people to borrow money it could have an adverse effect on housing prices. I don’t think this will happen. there are other ways the policy makers can impact housing speculation such as increasing down payments required. I have the opinion that there should be some government regulation of housing speculation that involves displacement of large numbers of people.

  66. A company doesn’t have to have a physical address in San Francisco anymore to profit from using our mystique, infrastructure, and human resources to further their takeover of the world. Chevron has gas stations, Apple has stores, and Oracle does whatever they do in San Francisco. Cupertino and the surrounding “slurbs” only exists because of San Francisco. Ditto the East and North Bay. While some of these communities (the wealthier ones) have retained their small-town charm, most are simply bedroom communities for Imperial San Francisco. People not from NorCal have never even heard of San Ramon or Redwood City.

    You want a name? Let’s start with Larry Ellison. And his closest friends. And then everyone in their income bracket, and their friends.

  67. >If I were Emperor I would simply tell Chevron, B of A, Oracle, Apple, Wells Fargo, Twitter

    Chevron already moved to San Ramon.
    B of A already moved to Charlotte
    Apple was never here and is headquartered in Cupertino
    Oracle: Redwood City

    Good luck getting rid of Wells Fargo and Twitter, Emperor.

    You really seem to know your stuff!!

  68. Owner-occupied housing is worth more than rental housing, because owner’s equivalent rent is not taxed.

  69. Another way of putting that is that a home is worth the discounted value of future rent that is saved by living there, with an additional premium for demographic trends and political distortions.

  70. According to Zillow, Redmond’s 94110 home is now officially a luxury home. But he doesn’t want other people having the same luxury that he enjoys even if they are willing to pay the price of entry.

  71. We’ve seen a five-fold increase in SF RE in the last 18 years that I have been following these things.

    Not a bad return for sitting on your tucus.

  72. He wants compulsory relocation of people he doesn’t like.

    Unfortunately for him, those same people vote.

  73. The bulk of the value of owner-occupied residential real estate is the right to live in it. Its characteristics mimic a municipal bond with a carrying cost. Central bank policy can reduce the carrying cost; why must that necessarily lead to speculation?

  74. The sad truth is that government interventions to control population usually end up with bad results, ie a Chinese population of men which outnumber women by 20%. The other sad fact is that the highest areas of population explosion which have occurred, and are probably going to continue to occur are in the poorest areas of the world, such as sub-Saharan Africa, and poorer areas of the Middle East and India. Many people in these societies have a lot of kids because many of them die before they reach adulthood. And yet, in richer countries such as Germany, Italy and Japan the birthrate is so low ( less than one per woman) the countries are turning into geriatric societies.

  75. In France Hollande raised the top rate of income tax to 70%. Hundreds of France’s best and brightest promptly decamped to London, Brussels, Geneva, Frankfurt, Amsterdam and Luxemburg. And now Hollande is lowering taxes and trying to get than back

    Nice slogan; lousy politics.

  76. I continue to be amazed at the money available should I sell. However, since I want to remain here, something keeps telling me to hold on. I’ve seen my property double in value over the last five years. And while an increase would have minimal benefit to me, selling then trying to get back in appears nigh impossible. I’m not going to wait for prices to drop 30-50%.

  77. Why not?

    I mean, the SFHA is a cesspool of incompetence, but there is no law that says it must remain one. Why not public building?

  78. Corporations ultimately don’t pay any tax. They are pass-through vehicles. We pay their tax.

  79. There is always an element of speculation in real estate investment – all areas are impacted by global central bank policy, some more than others. Global warming and weather changes will impact housing values in unpredictable ways – In my opinion San Francisco may be somewhat overvalued at this point. But if you think prices will go up forever, go for it.

  80. Oddly, this prescription says nothing about the rich, just about large businesses that happen to get lots of press.

    On the merits, Chevron left San Francisco for the sunnier climes of the San Ramon Valley; B of A is in Charlotte; Oracle is in Redwood City; Apple is in Cupertino; Wells Fargo can be in Minneapolis in about five seconds. Of that whole list, only Twitter is committed to San Francisco. This isn’t going to work.

    Let’s try again. Sure, tax the rich: how?

  81. Developers typically look for a 30% ROI. When you consider that is over a few years, it is only a few percent a year. Not much fat to skin there.

    The 12% fee is just a minimum, more like the minimum wage. The city can always ask for more, and often gets it, particularly if they throw in some bones, like zoning flexibility

    As for leverage, the city needs investment dollars more than developers need us. They can build elsewhere. We cannot build here without them.

  82. That 30% was an average. Not all of SF is prime, and places like Pacific Heights were down only 10% while Bayview got hit by 50%

    Always buy prime.

  83. Municipal banks, co-housing, community economic development, eminent domain, squatting, micro-units, and most importantly, resettling the countryside.

  84. I am neither a lawyer nor legislator, but I know it is both legal, possible, and necessary. If I were Emperor I would simply tell Chevron, B of A, Oracle, Apple, Wells Fargo, Twitter, et. al.: “Pay up, or move to Fresno. We don’t need your business. This is an International City. Someone from China or India or Brazil or (shudder) France or Germany will be glad to take your place. Don’t let the door hit you on the way out.”

  85. The current “housing market” hates children.

    Both the prices and design dictate that children aren’t wanted. What child wants to grow up in a sterile glass and steel tower? The Little Monsters want and need LOTS of open space, fresh air, and sunshine, none of which are characteristics of “in-fill,” density, and other terms for vertical sprawl. There are hella more options other than the commonly discussed ones, but progressives are in silos just like their “conservative” counterparts.

  86. Mary, in the last 15 years, SF has been through two major real estate corrections: 2000, after the dotcom crash and 9/11, and 2008, during the great recession. In both cases property values quickly recovered and then exceeded their previous highs. Why? You don’t have to spin half-baked theories of international finance and interest rates to explain. It’s really simple. Growing population vs. lack of increased housing supply = insane real estate prices that are consistently justified by the test of time. Want to change that pattern? Create more housing supply.

  87. The decline was not between 2007-09, but between 2007-11, during which time prices declined an average of 30% in San Francisco. That’s not a small decline.

    But you’re right, prices were propped up by low interest rates and a tech boom. But I tend to think the next crash will be harder than the last, because there’s now a tech bubble concurrent with the real estate bubble, and interest rates can’t stay low forever. They’re going to try to prop things up for the Clintons’ re-election, but I doubt that it can go on that long without a bust.

    The fervor of everyone trying to rationalize how this time will be different underscores the bubble psychology at play. I’m not even talking about you -even rational people these days who understand the way it works, are trying to rationalize why it will be a soft landing and such. When you start hearing that kind of crazy talk, watch out.

  88. The moratorium will probably lose at the ballot box, but if your political skills are anything like your understanding of economics, you should stay away from the forecasting game.

  89. There is not a single number in that response. How many units can this strategy produce? How can it produce them?

  90. There are sufficient profits at hand in luxury development that developers would spend some portion of that working to identify and secure sources of funding for their luxury projects were approval predicated upon affordable housing being funded.

    In business, when you have what they want, then you can set the terms of sale/entitlement in your favor.

  91. Right. We often hear the BS line that “we’ve tried the free market, and it didn’t work,” but that is just progressive propaganda. The well-documented fact is that SF hasn’t been building enough to keep up with population growth. So yes, a moratorium has basically been in effect.

    Tim likes to hold up up zoning and CEQA reform as straw-man proposals for policy reform, but if progressives were at all serious about making housing more affordable, they would be talking about how to make that happen. Never mind the fact that progressives created many of the restrictions that now make home construction to expensive here.

  92. Local anomalies can happen and can persist.

    SF RE currently runs about 12 times average SF family income. But in some desirable cities that ratio can be 20, 30 or 40 times. Typically that happens where it is wealth that is buying limited supply, rather than incomes. And we see 1/3 of all SF RE purchases are currently all-cash.

    I can imagine SF RE reaching 20 times household income as long as affluent demand continues to out-strip restricted supply. Within SF neighborhoods, that ratio could rise considerably higher. There are precedents.

  93. One third of all SF homes are now bought with all cash. Add in the number of homeowners who have no mortgage because they bought years ago and have paid off their mortgages, and we see a relatively unleveraged set of home-owners

    A few recent homeowners who borrowed a lot and who then lose their jobs might hurt in a downturn, but then that has always happened. Interest rates are super low right now and loans are affordable.

    Some developers and serial landlords might fold, but the average SF homeowner will do just fine. Even in 2007-2009, owners of prime SF RE saw only small declines relative to some neighboring non-prime places like Oakland, where RE dropped 50% to 70%.

    Always buy prime locations.

  94. Wrong, as we discovered during the Twitter negotiations. The city was happy take the extra jobs and taxes as soon as it realized that Brisbane would get them instead.

    If the decisions were made on a BayArea basis, such beggar-thy-neighbor spats would not happen.

    Trying to export our problems to neighboring cities rebounds on us dramatically. SF is just the downtown of the BayArea, and too small and dependent to make such aggressive attempts at self-determination

  95. Not if better ROI’s then are available elsewhere as a result.

    All you would achieve then is less housing at all levels, higher housing costs and a continuation of the present policy of rationing housing by price that has worked so well.

  96. But San Francisco is its own jurisdiction, unlike the Mission, right, and it should set its own policies in this regard. the Jobs Housing linkage is hardly beggar thy neighbor, rather it is sound comprehensive urban planning.

  97. Put barriers up between developers and their profits and they’ll find a way to up the percentages significantly to get at those profits.

  98. Ah yes, of course, the model minority always pisses off the left because it gives the lie to the idea that all people of non-whiteness are victims who need to be saved by patronizing sanctimonious white liberals

  99. Don’t forget asians…which is maybe the reason Mary likes the Chinese one-child-per-family poilcy…

  100. Yes, envy is certainly a part of it, as it always is with progressives, along with a liberal dash of class hatred.

    But don’t overlook the political components. Those who buy million dollar homes are probably not going to reliably re-elect race-mongering, success-hating identity politicians like Campos. In fact, Campos would probably have beaten Chiu on the east-side before the demographic changes of recent years, just as Ammiano prevailed before.

    It is the demographic implications of gentrification that really scares the left, because it condemns them to being even more irrelevant than they already are.

  101. Greg, maybe people are “pissed” that they can’t afford the home or location they would like. But it does not follow from that that they believe building no new homes is the solution. In fact it is not building enough new homes that has caused the very problem that they are pissed about.

    So how will doing more (or rather, even less) of the same help?

    Oh, and who is going to pay the tens of thousands it would take to even put this on the ballot and promote it?

  102. We should add children to all the other classes of people that progressives hate:

    People who create jobs
    People who employ others
    People who pay a lot of tax
    People who build homes
    People who provide housing
    People who don’t use city services
    People who work in the private sector
    People who are successful
    People who buy homes
    People who support the police
    White people
    Christians
    Anyone who lives in the suburbs
    And of course tech workers

  103. There is always a negotiation between the city and the developers, where the city tries to extort the most, and a compromise is reached.

    There is a limit to the extortion, and that is down to the quality and persuasiveness of the city negotiators. It is not a matter of passing some inflexible law or limit that will simply drive away crucial investent

  104. For-profit developers have produced around 1,700 above-moderate-income units per year since 2007. In that span, the city has a housing deficit of around 3,000 units per year – and that’s market rate, with nothing for anyone else.

    What is the math that produces more housing at something approaching the order of magnitude of the problem?

  105. The city makes money from Twitter not moving to Brisbane even if Twitter doesn’t pay a penny in tax. That is why cities love to compete for business, jobs and investment

  106. It only make sense if done across the entire Bay Area. Beggar-thy-neighbor policies between different Bay Area cities and counties is counter-productive.

  107. We already go there for the money and we get it. Driving the money men out of town will mean fewer new BMR homes

    You are so anxious to stick it to all the constituencies that you personally hate that you never think about the people who would be denied new homes as a result.

    But why care? You already have yours.

  108. [B]arriers that make profits difficult or impossible? If that is not some nonstandard use of the word ‘barrier’, the result would be zero private development. Private developers are not in the business of losing money.

    This bridge will produce zero moderate and lower income housing.

  109. The result will be obvious. Developers will get a better ROI elsewlere, and we will see fewer new homes at all levels in SF.

    Unless you want to set the city back decades (and you probably do) then the idea is a non-starter.

  110. The Jobs Housing linkage was put out in the 1990s and office developers resisted it mightily.

    That was back when the allegedly anti-housing Left (love how Tim capitalizes the worship word) supported building housing along with office space.

  111. All of Tim’s roads end up with more cash for CCHO. Office fees, the jobs housing linkage, right, would generate a few tens of millions of dollars each year when the office market is hot. The only thing operating at the same order of magnitude as the problem are the for-profit developers. That is where we need to go for the money.

  112. The developers don’t want to pay BMR fees but they do, and that pays for most of the new BMR homes in the city. Take that away and we see fewer BMR homes, fewer market-rate homes, higher rents and more evictions. Not surprising that the DCCC rejected it and that the Supes will.

    The reality is that we have had a de facto moratorium for decades now, because so little housing has been built at any level. We can all see the results. How do you like them apples?

  113. ” what should we do to bridge the gap?”

    Put barriers between developers and their profits and let them figure out how to generate the cash to finance the moderate and lower income housing we need if they can’t figure out how to build it themselves.

  114. You can’t seriously pick one of the least desirable urban areas for comparison to San Francisco simply because Mary used the term “urban areas,’ can you?

    Doesn’t Philly have like an area four times the size of San Francisco in urban wasteland and abandoned homes that could be had and fixed upfor a few tens of thousands of dollars.

  115. >”You are going to create X jobs for people who don’t live here. You are paying Y in taxes (which is less than what it takes to house and provide water, sewer, fire, police, parks, schools, etc. for X people). Settle the difference or don’t build here.”

    Interesting idea. Every other jurisdiction on planet earth considers job creation to be a good thing, a net positive for the economy. Because those jobs support people and in turn those people support local businesses and pay taxes.

    Not sure if San Francisco can get away with declaring job creation as a negative for the local economy and charge the job creators for the harm they are doing.

    But you can try, I guess.

  116. Tim overlooks the fact that most new affordable housing is built with money from the fees on market-rate homes. Take away market rate homes and that source of funding goes away too. The two are inextricably linked

    So we do need housing “at all levels” because the expensive stuff pays for the cheap stuff. Campos and Tim have no plan to replace that funding. They just want to see fewer successful people move to SF because they don’t like white people and they don’t like successful people, and fear they won’t vote the way that Redmond and Campos want them to vote

  117. ..and fewer by so much, it is a little disturbing: San Francisco is approaching a 0.5-child-per-couple policy.

  118. There is more than a hint of wishful thinking there.

    You probably could have afforded to buy a few years ago, but decided to carry on renting instead. Obviously that was a dumb move and so now you endlessly wish for a crash.

    Understandable, perhaps, but of limited political utility for the rest of us.

    But you are right this moratorium idea will fail. Building nothing is what got us here in the first place.

  119. SF already has less kids per population than any other US city.

    The reality is that there are some people living in SF who probably shouldn’t be here on economic grounds. But they aren’t kids. They’re adults with a sense of entitlement who need subsidies.

  120. A complete crash of the urban housing market may not occur, but a pullback in prices is likely. A “bubble” implies little or no underlying value, and real estate almost always has some value unless it is in an uninhabitable area. The Federal Reserve, as well as the other central banks around the world are well aware of the explosion in US city housing prices, and the prices in other cities such as London. It is partly a hangover of the excessive loose money policies of the last five years, which is itself an extreme response to the subprime mortgage crash. They will raise rates, but slowly and in an incremental fashion, probably not until early 2016, and they will keep a close eye on the housing markets. They might be able to stabilize interest rates without a collapse, they might not.

    Condo and housing prices in urban areas are not going to increase 20% per year in perpetuity – it is not possible. And there are many other environmental factors which may lead people to realize that building a home in close proximity to an ocean shoreline is not a wise long term strategy. Over most of human history people did not build cities or homes on the shorelines of oceans – oceans were considered dangerous areas to stay away from. This is true of both the Eastern shorelines as well as the Pacific coast.

  121. Seems to me the problem is all the highly paid people working here.

    What if we capped everyone’s pay at the level of the BoS, i.e. $100,000. Then no one would be able to afford Lux housing, and the market would only build for food truck operators and pot shop clerks.

  122. Lux units cost $600k – with 35% profit go for … $800k. Ok, build 20 of those

    BMR units cost $500k – sell to people who can’t afford $100k in rent. Ok, build … wait, how many of those??

  123. 4th option: Increase urban density for all, not just the wealthy and poor. How: Build 80 BMR units 20 ‘luxury units.’

  124. There was property purchased with cash then too, and there is property being purchased with ARMs now, as well as with down payments falling far short of 20%. But even 20% will get burned through quickly. That’s especially true when the bubble psychology reverses itself and more people want to sell to cut their losses, especially that international money you’re talking about. But why am I even arguing this point? I believe this is a bubble. You obviously don’t, and there’s not much I can do (or want to do) to convince you otherwise. If there’s anything that we can learn from previous bubbles, it’s that the closer we get to the end, the louder everyone will scream that this time it’s different.

    As for wishing for it… meh, I’m ambivalent about whether it’s a good or bad thing overall. On balance it probably needs to happen, but how I “feel” about it doesn’t change the reality of the situation one way or the other. As for falling harder on the poor… temporarily, yes. Not sure if you noticed, but I said exactly that in my comments. Long term though, it’s hard to say how a big crash would affect the poor and middle class. It depends on the political response, and that depends largely on how the victims of the crash themselves behave.

  125. How are homes that are being purchased with all cash or buttressed with at least 20% down going to mirror the 5/1 ARM crash?

    There’s international money all over the place. Have you seen real estate prices in London, Paris, NYC, Taipei, Hong Kong? If there’s a crash of the sort you envision it will be due to a Depression which will fall harder on the poor. But go ahead and keep on wishing for it….

  126. Sounds to me like you’re just the kind of “investor” these developers are looking for. Please, buy one of these new condos. I’m sure you’ll make a million.

  127. Two issues surface immediately:
    1) It is hard to think of a better designed disincentive to bringing jobs into the city and county of San Francisco.
    2) It is double dipping….unless we don’t charge RE taxes that are also earmarked for the same water, fire, police, etc… Do you want to create X jobs in San Francisco? Then pay $Y for the city services that your employees will consume. Then pay them a salary so that they can also pay for those same services.
    That plan basically says that we will charge new businesses for city services but instead use the money to build housing. Great plan if you don’t mind being disingenuous.

  128. We basically have three options as I see it: 1. Allow urban density to increase, as it’s doing today, 2. Try and stop urbanization and bring back the era of suburban sprawl and freeway building (just think, the grand, glorious 70’s all over again!!), or 3. Commence with a cull of the human population. Which is your preference, Tim?

  129. @disqus_n200GvQmya:disqus – According to the case packet posted last week on the Planning Commission website, the hotel conversion portion of the project is no longer being pursued.

  130. Part of me thinks this whole debate is academic. This is going to lose at the board, and then go on to win overwhelmingly at the ballot, because people are pissed. Hopefully (probably) along with a whole new board.

    But at the same time, interest rates will soon rise, the housing bubble will burst, and we’ll also be seeing a concurrent burst of the tech bubble. It’ll make 2001 and 2008 look like child’s play. Condos that are going for 1.4 million today will go for $700,000 (500K on short sales). And many of those “high-end” 800 sq ft glass boxes they’re building will sit half empty because the market won’t be there any more. What a joke to build cages for people and market them as “high end.”

    The joke is on the suckers who are lining up to buy them right now in the bubble economy. Billionaires fooling “high end” wage slaves into thinking that they too can become paper millonaires -that being rich is about riding your fixie to your 70-hour/week job from your glass box condo and noshing on some doggie treat from Craftsman and Wolves. Of course the developers are laughing their way to the bank.

    Here’s hoping they’ll lose billions when the crash hits. Of course they can afford to lose billions. Somehow when those guys go bankrupt they still stay rich. The suckers who’ll be left holding the bag will make out worse. They’ll lose mere hundreds of thousands, but they can’t afford it as much. 10 years of ruined credit and having to sell their used Teslas for a third of the cost will be their penalty.

    Of course worst of all will be the folks who are getting evicted right now. Those are the people I really feel for, because they were never part of this stupid game. They’re just trying to get by. That’s the real sad part about this. By the time the game-players get their come-uppance, a tremendous amount of damage will have been done to the neighborhoods.

  131. Sure; a fine policy. Wanting a better tuned apparatus to regulate commercial development seems like it should cross whatever nebulous left/right divides exist, too. Who doesn’t want smart growth?

    Again, though, the big next step is missing: how much can you actually charge (for corporations moving to, say, mid-Market a few years ago, that number seems to have been negative), how much does the city end up taking in, and what can the city actually do with the money?

  132. One thing we do is something that the Left has suggested for many year: Force commercial developers who build offices, and big corporations who move into SF, to build or pay housing commensurate with the need they are creating. Pencil it out: You are going to create X jobs for people who don’t live here. You are paying Y in taxes (which is less than what it takes to house and provide water, sewer, fire, police, parks, schools, etc. for X people). Settle the difference or don’t build here.

  133. The city can get housing “at all levels” only through spending public money or strictly regulating what gets built.

    Campos said that “government has a role” in this housing crisis. I would go further: Government has the only role. The private market has utterly failed to provide what the city needs.

    Not that all new housing has to be publicly funded – but all new housing that isn’t publicly funded has to meet city standards, including way more than the current 12 percent required affordability.

    This is right, or close enough. There is, however, a very big next step missing.

    How many units for people with moderate and lower incomes can the city produce strictly regulating what gets built? How many units for folks with moderate and lower incomes does the city need? And if, as seems almost certain, the number needed dwarfs by a large multiple the number the city can produce strictly regulating what gets built, what should we do to bridge the gap?

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