Sponsored link
Thursday, September 23, 2021

Sponsored link

News + PoliticsWhy market-rate housing makes the crisis worse

Why market-rate housing makes the crisis worse

The city’s own studies show that building luxury units causes more problems than it solves. Why is this not the defining issue in housing policy?

Opponents of market-rate housing have a point, according to a city study: Luxury units do more harm than good
Opponents of market-rate housing have a point, according to a city study: Luxury units do more harm than good

By Tim Redmond

JUNE 15, 2015 – Peter Cohen and Fernando Marti at the Council of Community Housing Organizations have dropped a bombshell on the standard City Hall analysis of affordable housing. In an oped in Sunday’s Examiner, the two explain how market-rate housing construction is NOT the main source of financing for affordable housing.

In fact, they note, the money that market-rate developers pay to subsidize affordable units doesn’t even cover the housing impacts that their projects create.

Let me say that again, because it’s critical (and not easily understood, and should have a profound impact on policies like the Mission Moratorium): If you require less than about 40 percent affordable housing, the net impact of high-end construction is to make the housing market worse.

How is that possible? How could building more housing (at any level) be a net problem for the housing market? Doesn’t more housing trickle down and make things better for everyone?

Well, no – not according to a City Planning Department study that is largely ignored in the debate.

Cohen and Marti mention it, but I want to go into more detail. The document is called a nexus study, and you can read it here. It’s not that complicated: When you build a new luxury housing complex, new resident move into it. For the most part, they result in net additions to the number of people in the city: If the person who buys a new condo moves out of a rental unit, someone else will move into that rental. Quickly.

The people with high disposable incomes who fill those condos or luxury rentals will spend money in town, creating a demand for jobs – restaurant workers, grocery clerks, cops and firefighters, bank tellers … and those people will also need a place to live.

(Sup. Scott Wiener notes that the city’s police force hasn’t kept up with the population growth. Perfect example – bring in 5,000 new wealthy residents, and the city faces pressure to hire more cops to protect them. Those cops cost tax money – but they also need places to live. And that puts pressure on the housing market).

So according to the study, by Keyser Marston Associates, every time the city allows 100 new high-end housing units, it needs to build between 20 and 43 new affordable units – just to keep the housing balance the way it is now. Put the affordable units in the main complex and the impact is lower (because fewer millionaires move in). Built them, as is common, somewhere else and the impact is greater.

In summary, for every 100 market rate condominium units there are 25.0 lower income households generated through the direct impact of the consumption of the condominium buyers and a total of 43.31 households if total direct, indirect, and induced impacts are counted in the analysis.

If the city demands 15 percent affordable set-asides, then every market-rate building adds more demand for affordable housing than it supplies. That means every new building makes the housing crisis worse.

Again: This isn’t me and some crazy leftists saying that. It’s the city’s own studies, done by a respecting economic consulting firm.

If anything, the numbers are way worse than they were when the study was done in 2007. The prices of housing are much higher, the wealth of the new residents much higher, the job-creations demands much higher – and the need for more affordable housing much higher.

We’re probably talking 50 percent here – half of all new units need to be affordable, not to make the crisis better but to keep it from getting even worse.

Market-rate housing not only doesn’t solve the problem – it helps create the problem.

Now, in the case of affordable units, it’s far more likely that they will go to existing residents – people who are currently homeless, or live in substandard conditions, or a packed five to a room. So building affordable housing doesn’t generate the kind of demand that market-rate housing does.

At the debate over the Mission Moratorium, Sup. Scott Wiener argued that stopping market-rate housing would cut off essential funding for below-market rate units.

But the city’s own studies show that that money is sucked up just mitigating the impacts that the luxury housing itself creates. So it creates no net new affordable housing.

Housing activist Calvin Welch points out that the data don’t show any trickle-down effect from building luxury housing: The more we build, the higher housing prices become.

The nexus study suggests one reason why.

Where does affordable housing come from? The two experts explain:

In 2011, at the low-point of market-rate housing production, The City produced (i.e. paid for) 207 affordable housing units, which was 59 percent of all housing built that year! While market-rate development was stalled because of a lack of finance capital from investors (who seem to refuse to finance any construction unless they can be guaranteed at least 25 percent returns on their investment), The City with its public funding sources continued to invest in affordable housing production. By contrast, there were 3,454 housing units built in 2014 of which 490 were affordable housing units, a mere 14 percent of total production. In other words, the “housing balance” was terrible. Affordable housing on balance got worse, not better, as the real estate market boomed.

There are other funding sources for BMR units – not enough, by a long stretch. But it’s not market-rate housing funding an increase in affordable units, and a moratorium on luxury units in the Mission won’t in any way damage affordable housing production, in that or any other neighborhood.

I suspect that will be part of the discussion when this issue comes back in three weeks.

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.
Sponsored link


  1. You miss the point of the article. New housing=new population. If the new folk displace old residents then demand for city services doesn’t change much. But new housing increases the net population and so requires more services.Also, since the new people are rich they buy services from low wage workers, increasing the number requires and therefore looking for housing. So, new housing costs the city money *and* drive the cost of remaining housing.

  2. Hi,
    I’m a Chicago resident and have recently taken interest in this subject specifically. There are proposals for new housing developments throughout the city, many of these are market-rate developments. Numerous studies and evidence, as well as the study referenced in this article, overwhelmingly show that building new market-rate housing developments not only lower the cost of affordable housing, but also increase the supply of affordable housing. Unfortunately for the author of this article, while his intentions may be good – i.e. not making the housing crisis worse, his explanation of the data is entirely misleading and ultimately hurts the very people he’s trying to help.
    I am a liberal/Bernie guy. It’s frustrating to see this type of irrationality on my side of the aisle and I encourage people who fight for causes like the one laid in this article to do their homework and not just for your own credibility’s sake, but also because in this case, your unintended consequence is really hurting poorer and less fortunate people. To make matters worse, many readers of this article may have persuaded by your argument, and some of these folks may also be unknowingly fighting against proposals that would actually benefit those in need.
    Please take my comments with sincerity and seriousness.

  3. It works in Tokyo, where they issue nearly double the number of new building permits as the entire state of California, despite having no remaining open space and just 1/3rd the population. Public housing is just 2.8 percent of the housing stock. Per square foot prices are 1/3rd lower than SF and condos average $460K for 700sf.

  4. The only people claiming a “trickle down” effect on housing are those opposed to housing. I’m a progressive, a life long liberal, I’ve organized, written, published and marched in the streets for racial equality, to stop wars and for LGBT equality but I really feel like my fellow progressives are misguided on the housing issue and insist for propaganda purposes on misrepresenting the issues. Building new housing, at any price level does not “trickle down”, what it does is work to slow rising home costs and rent by addressing the demand in the market. I have not heard anyone say that it will reduce rents or home prices, the only thing that can do that is a shift in the demand for rental units or home ownership (as occurred after the tech bubble burst in the early 00’s when rents did come down for a period of years). However, stopping construction of new units at whatever level does contribute to increased rents and home ownership costs by constricting supply in a high demand market. I wish we lived in a socialist utopia where safe, clean, updated housing was a human right, but we do still live in a capitalist system and the basic rules of it don’t disappear to suit our agendas.

  5. Most of Oakland, San Bruno, Hayward, SSF, and Vallejo are not a “reasonable public transit commute.” Unless you live a 15-minute walk from BART or have someone to drive you to the station every morning or are willing to endure the garbage that is SamTrans or AC Transit or whatever the hell they have in Vallejo.

    Actually, it’s not pretty simple. Yes, the city is underbuilt – but so is almost everywhere else. You can’t solve all these problems just by attacking them in SF. You have to also go after the NIMBYs in the rest of the Bay Area who refuse to allow new construction in their own cities, too.

  6. “We are never going to build a “ton more housing.””
    And if that is true, the reasons are entirely political. There are plenty of areas were density should be far higher. And this is a a problem that extends to the entire Bay Area. Other cities should be increasing development as well. Plenty of people would live outside of SF proper, but there aren’t many options there either.

    “We have limited space and most of our streets are too narrow to support high-rise buildings.”

    Space is limited, no doubt. Most streets are too narrow to support high-rise buildings? Where did you get that from?

  7. Pure speculation, there is no evidence to support your claim. New housing is being bought up in surprising numbers as investment properties and pieds a terre. The City’s infrastructure can’t handle current loads. It is the height of insanity to sacrifice both our irreplaceable jewel of a city and public policy to this market based religious fervor.

  8. Sorry, markets are articles of religious faith that must be feared and respected lest they unleash their vengeful wrath.

  9. The market has never worked in a dense city as your economic theology holds. In Hong Kong, 29% of the population lives in subsidized housing. There is a reliable rapid transit network. San Francisco has none of that.

  10. Yet cities where the market is actually allowed to work (not San Francisco) have not fared immensely better in terms of affordability of housing. INCLUDING up and coming, desirable, high demand cities. How can this be?

  11. “Markets are theoretical tools that only work as advertised when all things are equal. All things are not equal here.”

    Said nobody ever…except for you.

  12. Each time you post this myth you add another qualifier. How many more before you realize how absurd your logic is?

  13. No, a luxury condo provides a newcomer a place to live that doesn’t involve displacing a family of 5 at an existing unit. Preventing the building of condos, which are demanded by wealthy workers, results in them kicking out residents elsewhere.

  14. Tech workers would love to live in new, expensive apartments. But there are far more workers than new expensive apartments were built. The result? Tech workers have to go apartment hunting for mid-range and low-range apartments, and mid-range and low-range apartments end up costing as much as high end condos in the past. This article is flawed because it does not account for the fact that less luxury condos does not mean less rich people. It just means rich people live where normally lower and middle class families would have.

    If more market rate housing were built, these wealthier individuals would move out of mid-range and low-range housing into the new development (which is what they prefer anyway), reducing demand on these units and causing their prices to fall to affordable levels again for the older units.

    Gentrification of old neighborhoods is driven precisely by a lack of new development. Since not enough new market-rate units are built, existing landlords know they can get wealthy people into their older units at much higher prices. To encourage them to live in them, they redevelop them, etc.

    So either you build new development, or you get gentrification. As much as you wish economics wasn’t real, it is.

  15. Housing is a fungible commodity. I’d be in a condo instead of having displaced a Latino family in the Mission myself.

  16. Show me the math where that pencils out and we can talk. Developers own the government and they expect to make money not pay money.

  17. Evictions and insane prices accelerate gentrification, as I and all my techie friends in the Mission can attest to.

  18. Let developers build 20k luxury condos and use the taxes to build a subway. The market would work just fine here, you are looking at the results of the most regulation crippled market in America and doubling down against all logic and demonstrative evidence.

    Do you think the housing market is rising to increasing equilibrium prices because of magic?

  19. Oh, you’re talking about publicly disclosed donations? That’s cool. Since the donations are publicly disclosed, I’m sure you’ll be able to clearly show everyone which donations to Supervisor Cohen and other public servants have led to specific instances of bending the building code. I mean, this couldn’t just be unfounded, vague innuendo for the sake of making a dumb point on the interwebs, could it?

  20. its not bribery when it’s recorded publicly in discrete donation amounts

    this isn’t about rezoning or the housing crisis either

    look deeper captain.

  21. Uh huh. Bribery: it’s clearly why SF has had tons of parcels surreptitiously rezoned for lots and lots of residential units, thus simultaneously giving developers a profit machine and solving the housing crisis. Oh, wait.

  22. “It’s this kind of braindead addiction to the initiative process that is making SF a dysfunctional laughingstock. Time to be adults and let civil servants do their jobs. You don’t know more than they do, and you need to stop pretending that you do.”

    Well there’s that and the fact that I could drop $$$ in a brown envelope and have any kind of planning commission restriction “reconsidered” in any district.

    I hear district 10 is “wet” with gyms on the 3rd floor on 3rd street.

  23. And the reason there’s an influx of “younger, creative types”? They can’t afford to live where they are anymore.

  24. Right, princess, because the tribunes of “the working class” and “the most vulnerable” can only communicate using high-faultin sunday-go-to-meeting speech.

    J’ACCUSE! The nonprofit cadre, one active in the policy area calls them “The Star Chamber,” is as responsible for the debacle our community faces as the developers and neoliberals are. This is because the nonprofits are put into place precisley to get paid to intercept demands for change from below and mediate them in ways that do not threaten their funders.

    Ultimately, it is the fault of San Francisco residents for disengaging in politics that created space for these leeches to hijack community empowerment in ways that benefit the elites and the nonprofiteers and few others. Politics is not a play date. Mean people abound with their guile and lies. Keep on coming back to the nonprofit well, it works for them.

  25. Nope, it’s you with the bad analogies.

    If a project is bad, like a bridge to nowhere or an ill-advised nuclear plant or whatever, you fucking shouldn’t have direct veto power over it. Because there are already plenty of democratic avenues to block it. The planning department is accountable to the Supervisors, WHO YOU VOTED FOR. If you don’t like what the planning department does, in a healthy, functional democracy you can vote out your supervisor and replace him with someone who makes planning policy more to your liking. Not say “fuck you, elected representatives, I’m just going to hijack planning policy away from you and your experts whenever I don’t like X or Y decision you made – even though your average voter is dumber than a cinder block when it comes to understanding urban planning.”

    It’s this kind of braindead addiction to the initiative process that is making SF a dysfunctional laughingstock. Time to be adults and let civil servants do their jobs. You don’t know more than they do, and you need to stop pretending that you do.

  26. The “moratorium crowd” seem 100% focused on a very small part of SF. I don’t know what drives them… survival? You seem to have that figured out.

    “This is democracy by the lowest common denominator, used only as a NIMBY instrument for micromanaging urban policy in a way that stymies smart development”

    I hate to tell you but that is a good definition of democracy.

    Your opinion of “smart development” may line the pockets of one person and make another homeless. That is precisely why the lowest common denominator exists.

    “I don’t get to vote on who teaches in the SFUSD, or what fertilizer the parks department uses, or what the City Attorney’s legal strategy should be every time someone sues SF – nor should I. And by the same token I shouldn’t get direct veto power over every waterfront development project. It’s fucking stupid.”

    Whoa whoa whoa. You are reaching for some analogies there… not sure what they are but they are not comparable.

    The “same token” you are wishing for doesn’t exist, nor should it for very obvious reasons.

    “Hello San Francisco. I am a stranger. I would like to build a waterfront nuclear power station. Or a monorail. or whatever… it’s fucking stupid but you should not be able to direct veto me.”

    If you’re angry at voters for exercising their democratic right maybe you should live somewhere that doesn’t exist? Attempting to convince people that they are “fucking stupid” doesn’t work.

  27. If I ever needed an affirmation of why 48hills matters – this is it.

    I’m sorry you have to use such accusatory language to defend your issues. Media training would probably go a long way. Also – maybe stay off the blogs?

  28. There is only LUXURY housing in San Francisco …. market rate LUXURY housing and subsidized LUXURY housing. Why should only the special few get the subsidized LUXURY housing ? It’s so unfair and segregated……

  29. @SF4SF – It’s traffic engineers who have observed and documented induced demand, not “the new urbanism crowd.” The main engine behind induced traffic is the multilevel subsidy of automobile transportation, and there is nothing comparable behind gentrification.

    Also, New Urbanism has nothing to do with “dense urban tenements.” Where did you get that idea? Who’s spreading that notion? It’s completely wrong.

  30. @whateversville – I, too, have noticed people slamming New Urbanism, invariably over things that it is not. I don’t know what the source of this meme is, though sometimes it’s accompanied by Glenn Beck’s rhetoric about Agenda 21 (to which it has no connection whatsoever).

  31. Listen, cupcake, you turned the issue from the policy to me because you were out of ideas and now you while like a child when it happens back at your ass. The affordable housing nonprofit that I helped organize just saved the Pigeon Palace from eviction and made it permanently affordable. What organization has your sorry commenting ass helped get off the ground that has saved tenants from eviction, princess?

  32. That’s total bullshit. The moratorium crowd is shot through with people whose only guiding principle is that they hate building, whether it’s to preserve their views, their own property values, or because of a completely stupid idea of San Franciscan exceptionalism – that SF will be “ruined forever” if it’s allowed to become more dense and have taller buildings.

    As for Pier 70, yes, I, like almost everyone else, voted for Prop F. But if anything the fact that Prop F even needed to exist is a symptom of how dysfunctional local governance has become here. First, Pier 70 is just one small piece of the eastern waterfront; developing Pier 70 is hardly a panacea for either the housing supply or the general crappiness of this part of the city. But instead of having a normal planning process whereby the city just has a planning department that solicits public input, then amends height limits and approves projects as it sees fit, instead, every single new Pier [fill in the blank] project is going to have to go through the same stupid, arduous, NIMBY-demagoguing ballot process because of Prop B. This is democracy by the lowest common denominator, used only as a NIMBY instrument for micromanaging urban policy in a way that stymies smart development. We have a planning department for a reason; maybe we should let it do its job? I don’t get to vote on who teaches in the SFUSD, or what fertilizer the parks department uses, or what the City Attorney’s legal strategy should be every time someone sues SF – nor should I. And by the same token I shouldn’t get direct veto power over every waterfront development project. It’s fucking stupid.

  33. “Tons of people go out on Third these days and they have to be coming from somewhere.”

    Work mostly. And yes people do use the T to get to work from Potrero. But Dogpatch now has a lot of new companies there way beyond biosciences.

    “Even more people would hang out around there if we did something about the decrepit, industrial-lined waterfront off Illinois, but noooooooo, instead we have to do things like pass Prop B because god forbid that people build stuff in that area that people will actually want to visit.”

    Wait what? What about Pier 70? Proposition F authorized the $100 million redevelopment of Pier 70 last november? did you vote?

    Totally agree about penalizing on pied-a-terres – New York is working on some legislation

  34. No, “we” don’t need to maximize any single variable in comprehensive urban planning lest the outcome cause more problems for everything else than it solves for housing.

  35. Removing the buyers of luxury apartments from the bidding pool for leases and sales of existing housing *absolutely* lowers the final prices for those existing market rate apartments. How could it possibly not? Gentrification is already utterly complete in all of northern SF, with the exception of protected populations.

    *Everyone* agrees we need more affordable housing. But until there’s a realistic plan to build 10-20K affordable units per year, we also need to maximize market rate construction.

  36. this study completely ignores the surrounding region SF is not a bubble whereby all the new housing needs to be created here. People can live in oakland, san bruno, san leandro, hayward, south SF, vallejo, all places with a reasonable public transit commmute. Those areas are much cheaper. why do the new workers (police, servers, etc) needed to support the new elite, have to live in SF. THey can live in other parts of the Bay Area as well. Most economically savvy and unentitled people would not expect housing to be built and subsidized for them if they couldnt afford it. if i didnt make enough to live in SF< i would move to one of those other areas. SF has some of the most entitled people on the planet. market rate housing is exactly the solution, as long as enough of it gets built. whats the alternative? cutting supply will certainly make this problem even worse. We are in this mess now because NIMBYS and the incompenet BOS and planning DEPT make it so difficult to build that we've underbuilt the city for years. there is a supply and demand problem. Its pretty simple.

  37. Mission Bay doesn’t have all that much in the way of residences. A very large fraction of it is office, hospital, and lab space. It was a gigantic missed opportunity for the city to give in to NIMBYs and not allow 10-20 story buildings instead of 3-4 story buildings there, but that’s another discussion.

    I don’t buy that the Dogpatch has mostly been bought by non-residents. Tons of people go out on Third these days and they have to be coming from somewhere. I doubt most of them are simply coming down from Potrero. Even more people would hang out around there if we did something about the decrepit, industrial-lined waterfront off Illinois, but noooooooo, instead we have to do things like pass Prop B because god forbid that people build stuff in that area that people will actually want to visit.

    If pied-a-terres are really making up a huge component of the market, the city should find ways to penalize them, but as yet nobody in the anti-building camp has provided data that prove it.

  38. Huh?

    “Let’s let our infrastructure deteriorate while we chase international capital and personal political/economic gain” is not “planning.”

  39. I have provided over 100 tenants with a home in one of the 15 housing units I have made available.

    sffoghorn has taken one affordable home out of commission, and made it unaffordable.

  40. The City pays Cohen and Marti to do their work. It turns out that Marti was at a meeting in 2013 held by Campos to hit up Maximus for $250K per nonprofit in order to stand down in opposing 1979 Mission.

  41. The new folks moving into the city who work in the burbs are pushing the SF employees out to burbs, essentially doubling the commute miles and creating congestion, no matter how they are transported. That is what we are seeing now. All those people who used to commute within SF are commuting back and forth from the burbs. It doesn’t matter how they are transported. They are adding to the congestion.

  42. And zero mention of foreign money?

    Fancy expensive condos are being built for rich or soon to be rich developers who are selling them at profit to foreign investors who will in most cases never live here.

    No one here has friends that live in London? or New York? This has been going on since the 80s / 90s.

    I encourage all of you to drive down 3rd street after dark. Look at Mission Bay and Dogpatch. Lots of new buildings. No lights on in 50% of the buildings ever.

    Sadly there is barely a ground floor business in most of the now 3 or 4 year old buildings along 3rd street and Illnois street.

    There are lovely parks though… sadly with no one in them on any given weekend – Yay community?

  43. Business built the home you live in, against the wishes of those who were there long before you

  44. Developers finally rustled up enough money to override residents. That was when there was enough capital at hand to build to the extent you want. Had there been capital available previously, they probably would have only built up slightly, to 6-8 stories. You’d be bitching about that now instead. Business always bitches about regulation and is always proven wrong.

  45. Yeah, probably in a way that would have built things. It’s not developer lobbyists who are protesting every project.

  46. The capital was always there, but political ideology decreed that little should be built, aided and abetted by the usual suspect NIMBYs.

  47. So because we cannot build enough new homes to make SF as cheap as Detroit, we should none at all?

  48. Nothing can lower the price of market rate housing short of economic trauma that crimps demand because infrastructure will fail if it had to service both existing residents and the number of people required to see downward pressure on price. Markets are theoretical tools that only work as advertised when all things are equal. All things are not equal here.

  49. Nonsense, had it been in place, then it would have purchased government to rewrite the rules as it did over the past decade when that capital materialized.

  50. If you’ll notice may of my untethered phrases are your’s!

    1) #your’s

    2) Except I am using them according to their actual meanings, whereas you are just tossing them into a word salad regardless of whether it makes any sense. The collective action problem that results from too many people consuming the quasi-common-pool resource of roads is gridlock: driving is nice and fast as long as not very many people are doing it – and unfortunately, the specific nature of how people consume roads means that the most practical way to deal with gridlock is by enacting congestion pricing rather than building 75-lane freeways. Housing is generally not a common-pool resource (unlike non-toll roads, housing is highly excludable), nor do you have any coherent explanation of why adding people in a city amounts to a collective action problem. Ergo, untethered word salad.

    Source of 2018 is the controller in a discussion with Jane Kim also said “No boom without a bust”

    That’s it? No study? No peer review? No input from an urban planner or economist? No specifics at all on how long or how big the downturn will be? Oh OK, I guess an offhand remark from one dude that may or may not have ever actually happened is credible enough to to make housing policy on. While we’re at it, what do Nostradamus and the Mayans have to say about the next 10 years in the Bay Area?

  51. If you’ll notice may of my untethered phrases are your’s!
    I am angry about the market displacing long term residents because they can’t afford to live here, which is why I actively support Mission activists.
    Source of 2018 is the controller in a discussion with Jane Kim also said “No boom without a bust”
    I think the main difference between you and I is that you believe the market can fix our problem, while I think it’s the cause of our problem.

  52. Market rate housing is literally the only thing that will lower the market rate. Existing residents can;t move because of shitty government policy destroying the free market, not because the free market failed.

  53. The author of this article is an idiot, and he has no idea what he is reading. Building market rate housing is the only thing that will prevent and slow down the process of turning native San Franciscans into economic refugees. But whatever, it’s their city they are evicting themselves from.

  54. Like highways, demand for housing by foreign investors and the tech boom, in SF is really really high and possibly insatiable.

    No. This is assertion, not argument. There is no reason to think that actual demand for housing in SF far outstrips the number of nearby jobs available. Whereas the demand for highways is in large part a function of who has a car – and that demand is usually higher than what any reasonably-sized road can handle.

    I would say SF also is highly congestible public resource and there are collective action problems that come from too many people using it at the same time

    You are throwing around phrases like “collective action problems” untethered to things like their actual definitions. In the world of arguments more serious than baked freshman dorm bull sessions, words mean things.

    I don’t think people to be “encouraged” (ie social engineered) to live in smaller and smaller units (unless they want to).

    Nice strawman, but nobody is saying that people should be forced to live somewhere they don’t want to. However, the unrelenting, demand-driven pressure on the housing market means that housing prices will continue to skyrocket if you don’t build up, make the units smaller, add units in places that didn’t previously have them, or some combination of all of the above. Which kinda affects where people are “encouraged” to live. I wonder why you aren’t angry about the market “encouraging” people to leave because they can’t afford to live here?

    The City predicts a downturn in 2018.


    Does the City also think that this downturn will be large enough to cause a substantial fall in housing prices?

  55. Like highways, demand for housing by foreign investors and the tech boom, in SF is really really high and possibly insatiable. I would say SF also is highly congestible public resource and there are collective action problems that come from too many people using it at the same time. I don’t think people to be “encouraged” (ie social engineered) to live in smaller and smaller units (unless they want to). Yes, a life long resident can always, you know, move. Or we can stay and fight this insanity that is destroying SF. Really all we have to do is keep it at bay until the tech bubble bursts. The City predicts a downturn in 2018.

  56. No. The claim that housing expansion is equivalent to highway expansion is unfounded. The effects of highway expansion have been extensively studied by traffic engineers. Those studies show that the demand to drive is already there and really, really high. You could sate it in theory by building a 100-lane freeway, but obviously that would be dumb and cost-prohibitive.

    There are no studies I’m aware of that show that adding housing in a city just causes more and more demand for housing. Moreover, housing is fundamentally different from roads: roads are highly congestible public resources and there are collective action problems that come from too many people using them at the same time (that is, as a good, they get worse the more traffic you have). In a 49-square mile area with a density currently lower than that of Queens, there is lots of unused space that could be used for housing people, reducing some of the congestion pressure encouraging people to live in smaller and smaller units.

    If you don’t want to live in a dense city, you can always, you know, move. To somewhere with lots of nice open space. Unless you’re a gazillionaire, you’ll likely have to move even sooner if you don’t allow density, anyway.

  57. With a bigger tax base from a bigger, denser population (and probably eventually by firing a lot of incompetent Muni management). No city on Earth ever says “damn, we need to spend money to invest in all this infrastructure to keep up with our booming population that thinks we are an attractive place to live. Ehhh, screw it, let’s just solve the problem by not booming.”

  58. Depends. I’m not sure anyone thinks that current address is a valid criterion for allocating new housing, affordable or not. Although someone not having a home at all may be considered more “worthy”.

    Nor do i personally hold any view on the desirability of one person over another purely based on their current zipcode. In that sense, I would not discriminate

  59. The new urbanism crowd often argue against freeway expansion saying building more will “induce demand” if so, the same goes for housing – and SF will never see affordable again, The unbridled pro growth/pro greed folks are fine with that – keeps developers and Ron Conway happy and gives politicians more problems to throw money at but never solve. And the current residents suffer on or are forced to move on. Such a great plan – but so nobil of us to save the world from global warming by cramming everybody into dense urban tenements for the rich. Go new urbanism.

  60. This is how they roll, reptilian like they seek energies raised by others, posit themselves as leaders, gut the content of demands and insert their own agencies’ agendas, and capitalize on that for their own purposes, screwing the original target of outrage.

    We need to delegitimate this scam and these scamsters so that they cannot insert themselves as opportunistic intermediaries that insulate the elites from demands from below by hijacking popular outrage.

    Until they are out of the picture, we will never be able to get a clear shot at corporate power to end this cycle of corruption. I want to make a deck of playing cards that have all of the commuter nonprofiteers faces on them.

  61. It is not legal for affordable housing to turn away newcomers to a neighborhood in favor of existing residents, imbecile.

    Nonprofit housing developers who go for bond money for new construction are favoring displacement of existing residents now in exchange for housing newcomers later.

    And their nonprofit poverty allies are silent on this bait and switch.

  62. That doesn’t answer my question. What specific components of the city are shrinking?

    Sure there are some challenges that come along with success and prosperity. But they are nothing like the challenges that come with failure and poverty. Just ask Detroit.

  63. Been to Muni Pier lately? Can you name one major street or sidewalk that doesn’t need repaving? Have you tried to get on public transit or drive at rush-hour (which is starting earlier and lasting later)? The City can’t even maintain what is here; how is it going to maintain “more?”

  64. Lack of capital controls means that alien capital chases SF real estate and that serialized loans at lower interest rates still facilitate the extreme demand that drives gentrification. It is both chicken and egg.

    Two things can happen at once. Keep on trying to walk and chew gum sometime, you’ll figure it out!

  65. That is some real word salad delivering high quality Underpants Gnomes reasoning. “Step one: assume gentrification!”

    Where does lack of capital controls enter into this model?

  66. They did the math, showed their work, argued with something other than the usual waving of the hands.

  67. Luxury condos accelerate gentrification and they should mitigate those impacts on affordable housing.

  68. He’s too dumb to realize that the easiest way to raise land prices and extract maximum value for the city is…just alter the zoning to allow a lot of really goddamn tall buildings on it. Not throw a bunch of monkey wrenches into the planning process until buyers decide it’s not worth the hassle to build on land that they bought.

  69. Gentrification as a mild form of ethnic cleansing? The people moving in happen to be a different race, not Nazis.

    I don’t think the people who are so deep in the SF alternate reality bubble who are using that description realize how utterly off the mark and offensive it is. You want ethnic cleansing? Go to Iraq or Syria and observe ISIS at work. Take a look at the work the Chinese government is doing in Tibet. Go tour the camps of the Holocaust.

    If you want to continue to compare the changing of the Mission with genocide, please back that up with real research showing a coordinated effort to extinguish a minority or shut up about it. The changing of race and skin color of the neighborhood is a byproduct of who is moving in and out of the neighborhood, not an act of violence as the Missionistas are describing it.

    I think the proponents of the moratorium are trying to ensure their own failure. Not only with flawed logic and defective reasoning but also with offensive comparisons between newcomers moving to a neighborhood and groups of people slaughtering people different from them.

    Get a fucking grip. The Missionistas have been making the same stale argument about gentrification in the Mission since the 1990s. The gentrification can’t happen soon enough if you represent the line of thinking behind the moratorium proponents.

  70. I am advocating negotiating the best business deal for San Franciscans rather than the developers who purchase their politicians in bulk.

  71. The components of the City that saw investment from previous generations but which has gone unmaintained over time and are becoming even more overtaxed as the bubble inflates.

  72. In the age of hypercapitalism and liberalized international capital flows, in high demand areas like San Francisco, NYC, London, etc, development drives gentrification.

  73. Exactly, and not to mention the $11 million that 8-Wash would have created for funding BMR’s

    And since supposedly those rich owners live elsewhere, there would have been little “impact” anyway

  74. That’s odd. I heard that it is gays, whites males and tech workers buying in places like the Mission that drive gentrification

  75. Agree, and nobody can coherently and credibly both support affordable housing AND be a NIMBY at the same time

  76. I never understood why it matters that 8,000 Hispanics have left SF (assuming that it is even true – who can count them?)

    Nobody thinks the homes they live in are now vacant. So if we have 8,000 less Hispanics, then we have 8,000 replacements of other races.

    Why are Hispanics intrinsically more desirable than other races? Why should we preserve their exact allocation on purely racial grounds?

  77. Cohen has produced affordable homes. You have not – rather you have taken one out of commission.

  78. A landlord can be very “discriminating”, as long as he doesn’t do it by race, gender etc. I can certainly not rent to fatties, public sector workers, activists, lawyers and people with warts, with total impunity.

    With selling, it’s not such an issue, and the seller often never meets the buyers. Even so, a seller can take a lower offer if its terms make him feel more comfortable e.g. it’s an all-cash offer and/or with no contingences

  79. I heard that Redmond, Welch, Shaw and Cohen play a bridge foursome together. And take turns to bring the sherry.

    Could just be a scurrilous rumor, however,

  80. Detroit’s automotive bubble popped, the main economic driver of the region crashed and there is now a correction.

    Do you expect that tech, venture capital and alien capital are going to dry up any time soon?

    If that wee to happen, then San Francisco might look more like Detroit than you might have otherwise imagined.

  81. Right, Planning makes the same mistake.

    If development drives gentrification, why is Detroit bulldozing?

  82. Really? So something like 8 Washington; 134 units generating about $3.7 million a year — every year — in RE taxes wouldn’t cover it’s own cost in infrastructure?

  83. The hipsters moved to Williamsburg, Wicker Park, and the Mission before there were condos everywhere. Gentrification is not caused by developers simply deciding to park a bunch of luxury buildings in poor areas with no high-earner demand. Rather, developers chase demand to live in formerly poor areas that are “up and coming,” made so by an influx of younger creative types. The luxury condos get built, like 5 years later.

  84. Uh, maybe you need to find an economics textbook if you don’t understand the meaning of basic terms like “growth” and “bubble”.

  85. Asset bubbles are still growth – they’re just unsustainable growth followed by contraction. What evidence do you have that the current growth is unsustainable and will be all but erased by contraction? Do you know something about the future of the industries that make the Bay Area their home that the rest of the world doesn’t know?

  86. Construction and holding costs are made higher by SF’s byzantine zoning and planning scheme and by community opposition to nearly every project. The capital was always there, it just didn’t make sense to build here; but now the market is so insane large developers are jumping through the hoops anyways. If it were not so expensive to build here in the first place, more would get built, and it would be cheaper.

  87. 1. “This article is good.

    2. I keep hearing people throw around New Urbanism as though it’s an obviously bad thing. Why is that? Diverse, transit-friendly, walkable neighborhoods that “celebrate local history, climate, ecology, and building practice” sounds a lot like what everyone is trying to preserve.

    3. “There would be a discussion of gentrification as a mild form of socio-economic-ethnic cleansing” is incompatible with “The moral argument against displacement needs to be made calmly and rationally”.

    4. Why is “SF is in fact a special case outside the supply demand curve”? There are other desirable, land-constrained cities on earth.

    5. “Will San Franciscans accept the trend lines decimating the black population, down from 14% to just over 3% and shrinking”

    They shouldn’t accept it, no. But, these stats are a bit misleading. The last time the black population in San Francisco was near 14% was in the 70s. It was around 10% in 1990, and it’s steady around 6% in the most recent data I can find (2011, 2012, 2013).

    “accept 8000 Latinos lost in the last 10 years”

    That all seemed to happen before this boom. 8,000 Latinos moved out of the Mission from 2000 to 2010. From 2010-2013 (most recent data), it hasn’t changed much. I’m not denying the trend, but including the first dotcom boom makes things a lot murkier. At the same time, even the MEDA report acknowledges that the Latino population of San Francisco as a whole has actually increased.

    “accept the financial and legal eviction of artists, nonprofits, activists, gays & lesbians, etc.”

    hope not.

    “Will San Franciscans accept an increasingly white, wealthy city”

    Not that white, honestly.

    Non-Latino white population of San Francisco as % of population:

    1990: 46.6%.
    2000: 43.6%
    2010: 41.9%
    2013 (ACS estimates): 41.7%
    Then if we were to assume that every new resident since 2010 is white:
    2014: 45.1%

    Wealthy, though, yeah.

    5. “Since the wealthy, white city of the future isn’t going to care for itself, what will the carbon cost be of expelling workers to Stockton, Vallejo, even Sacramento?”

    That would be an awful commute. We should build more housing so those workers can continue to stay in San Francisco.

  88. Nope, more people are coming here and there is economic activity but the City is not growing. This is a bubble like all other bubbles. Know your history before sounding like an ignorant fool parroting libertarian capitalist talking points.

  89. Government zones the land that sets the price when developers purchase, therefore government holds the keys to extracting as much value from the speculative process as possible. Either this happens at zoning time or at conditional approval time.

    The public holds the keys to profitable development and should leverage them to the hilt instead of saddling San Francisco taxpayers with the burden of subsidizing profitable developers.

  90. Market rate housing in high demand areas drives gentrification. The Planning Department stipulated to as much when it produced the nexus study.

  91. I read the nexus study when it came out and sat through the approvals process where it was debated. John Rahaim stated unequivocally that market rate housing does not cover its freight, not in infrastructure, not in affordable housing.

  92. Demand is external and stoked by unpredictable circumstances, low interest rates, the rise of profitable tech firms and of aliens with capital to park.

  93. The capital was never in place over the past few decades to have produced the amount of housing required to have seen any downward pressure on price.

  94. Thanks for the troll, but you didn’t address my comment, and the assertions you made are incorrect. Cheers!

  95. Just like Tim’s article and these nexus studies, that has the causal arrow precisely backwards. Demand (i.e., ‘gentrification’) changes first, development responds. No project breaks ground absent demand.

    If market rate housing ‘drives gentrification’, why is Detroit bulldozing?

  96. Increased supply can and does lower prices. Decades of anti-growth polices have made it hard for supply to meet the demand both new and existing residents. At this point the market is so distorted that we can’t build our way to affordability, not overnight – the deficit is too large. However, this doesn’t mean we shouldn’t build anything. The best affordability is abundance.

  97. But when the municipal corporation holds entitlements that are coveted by developers, now, all of a sudden, we’re supposed to let those entitlements go at a discount.

    Whuh? The developer’s “entitlement” to build housing basically comes from their purchase of the land from its previous owner, at market prices (do you have evidence that they are paying substantially less than market prices?). It makes no sense for the city to treat “overcoming our zoning and regulatory hurdles regarding building on land that you bought” as an “entitlement” that should be used to soak developers thoroughly enough to make them not want to develop. If they are refusing to develop under the zoning/regulatory regime you’ve set, one of the following must be true:

    1) They are willing to forgo their profits for a long time, even though they bought the land to develop on and make a profit (NOT LIKELY)
    2) You need to do something to change the zoning/regulatory regime (like, I dunno, make it permissible to build bigger buildings in more places)

  98. Even under Tim Redmond’s probably-inaccurate distillation of the nexus study, the city is growing. I’m not the one here who’s saying it’s growing – Tim is. His whole interpretation is:

    1. An influx of wealthy residents means an increase in local spending on goods and services. “Increase in local spending on goods/services” = increase in output = GROWTH, according to the literal economic definition of such things.
    2. This increase in GDP creates jobs for less wealthy people, many of whom do not yet live in SF.
    3. The new less wealthy people want to live in SF too, but are priced out of the city.
    4. Rather than undertake major measures to increase housing supply and thus stabilize housing prices so that the less-wealthy people can live here too, we should (because, um idk, we just HAVE TO, ok?) prevent 1 from happening at all. That is, let’s just prevent growth.

    Now, I personally agree with Tim that 3 is a big problem. And I don’t even know that 1 and 2 are totally accurate models – but Tim himself seems to think so. But whether or not they are accurate, 4, is definitely wrong. If you believe in an economic model based on wealthy people driving spending and job growth, and if you aren’t just operating out of spite, you should support the opposite of 4 – a massive increase in the housing supply to accommodate people who’d be otherwise priced out by growth.

  99. Now, in the case of affordable units, it’s far more likely that they
    will go to existing residents – people who are currently homeless, or
    live in substandard conditions, or a packed five to a room. So building
    affordable housing doesn’t generate the kind of demand that market-rate
    housing does.

    Not really. It is illegal to discriminate when letting or selling housing.

    This is why so many affordable units are occupied by recent immigrants with nice cars rather than blacks and Latinos who have been on the receiving end of economic and racial discrimination for centuries.

  100. Market rate housing does not address the housing needs of San Franciscans because it does not lower prices. If it did, then existing residents would be able to just move.

    Market rate housing in lower income areas drives gentrification and as such must be mitigated with affordable housing. That is what the nexus study says.

    You are wrong.

  101. Of course you think that Cohen “talks sense,” because he gets paid to give developers a free pass while, by his own admission, promoting policies that produce LESS affordable housing.

  102. The City is seeing an increase in jobs and housing units. That does not mean that the City is growing, rather that two sectors are seeing artificially, externally induced hypertrophy while the rest of the City is, if anything, shrinking.

  103. Housing activist Calvin Welch…

    This ranks right up with “Community Organizer Barack Obama” and “Activist Randy Shaw.”

  104. Raise the inclusionary requirement/in-lieu fees. Tim’s premise presumes that luxury housing being built creates demand for luxury housing. The demand is already there, developers build condos to meet that demand. If no condos are built highly paid workers still move here and displace people in the existing stock. People continued to move here even when the city only added 300 units of market rate housing in 2011. You cannot rationally fight both development and displacement.

  105. That’s odd. So a population increase by your definition is “not growing”. Nice for you to ignore the basic definition of growth. As for your other assertion of “investment units”, do you have the mortgage statistics of whether these new units are being claimed as rental units or owner-occupied? I doubt it. Do you want to compare anecdotal evidence? 6 out of the last 7 purchases in my building are owner-occupied.

  106. When stock or commodities traders want to manipulate a market to the upside they buy a large amount of shares or futures in a security with a fairly limited float and put in large buy orders higher than the current market price. It’s a similar principal to using limited land to build highly priced housing that already has high market bids for the units. Its not a hard concept to understand – extreme swings in prices and manipulation almost aways end badly for everyone and end up hurting most people along the way

  107. There can be no intellectual foundation to the pro moratorium side. The arguments are completely irrational and defy logic. This is why they’re relying wholly on emotion to make their case.

  108. The main flaw here is the idea that nonresidents will move to San Francisco if and only if there is vacant new construction waiting. Not only is the causal arrow backwards, but that also ignores the effect of not building to meet demand from folks with higher incomes: displacement of those with lower ones.

  109. Yes, cities love expensive new homes and rich newcomers because of all the additional taxes they bring, particularly fees, property taxes and of course the sales tax from all the extra money being spent around town, and the payroll taxes from all those extra trickled-down jobs.

    Most cities complain that they cannot attract enough of such profitable revenue-heavy development, and compete hard to get it, even offering incentives and tax breaks. But of course SF has to get all “inverted snobbery” and envious about it.

  110. Cohen usually talks sense. Not sure what he is smoking here. But you can bet he has an angle.

    Of course, higher impact fees would funnel more money to his organization. But Cohen isn’t an idiot and he must understand the risk that 30% or 40% BMR fees would kill a lot of projects, and therefore kill a lot of the affordable projects he wants to see built.

    Maybe he is just seeking another opportunity to be in the spotlight. Can’t blame a guy for trying, not for Redmond’s inability to resist given his endless “war on housing”.

  111. There is a major assumption and flaw in your logic.

    Assuming that we fully believe your stated conversion to trickle-down economics (only took you 35 years) then that does not imply that those extra lower-paid service jobs need to be staffed by people who live in the same affluent neighborhood as the new “luxury” homes.

    Most of the low paid people I casually employ live in Daly City or the East Bay. They don’t live in leafy desirable Dolores Heights where I live. And why should they?

  112. Thanks for the laugh and mental midgetry this morning, Che Salaverry!
    1) Great start by acknowledging that cities change!
    2) OK, might also want to talk about how since this is a national trend, how have other cities successfully weathered it without turning into the pitchforks at city hall movement that is SF. Seattle might be a good example. Seattle has built roughly twice the amount of housing SF has in recent years despite having 20% less of the population. DC would work as well.
    3) You lose me when you ask for calm and rational while referring to ethnic cleansing (might want to ask a Serb if this applies) – good call on the burning ramparts part though! Maybe add something like “rockets red glare, bombs bursting in air”.. oh wait.. never mind
    4) Totally agree that mad made conflict is the same as global weather patterns, and their expression on a small and varied topography e.g. things we have no control over
    5) Definitely don’t mention that the Latino population of SF has actually risen citywide, just not in the mission. Might want to compare and contrast the existing city of wealth and poverty extremes with the future city of wealth and poverty extremes
    6) Whats the current carbon cost of SF shifting its housing burdens to the burbs (more people commute into SF for work today than commute out)
    Interesting that youve been able to prove that these commuters all drive “beater cars and pickups” – Maybe the offset their costs by making moonshine?

    Right with you on that foundation!

  113. Which is the real point, though distaste for government is confused. Government is the tool people use to solve collective action problems.

  114. Bulldoze SOMA? New street grids? It seems to me that Miss/How/Fols/Harri/Bry Sts are capable of holding larger buildings. And if you bulldoze, then there goes your PDR.

    However, I do think there are areas that could accommodate your ‘1.5M’ new residents. And there are places that should probably be left alone; your architecturally significant areas like some parts of Noe/ EV/ HA/ HV/ NOPA/ Rich/ Sun/ Mar/ PH/ and core northeast. I would suggest Western Addition, Cent Waterfront, BV, HP, VisValley and perhaps Outer Miss corridor. Not that there aren;’t problems with any/all these. But doubling the population really means 4-5x the pop in concentrated locations, and leaving some of the ‘charm’ intact – for historical/aesthetic if not ‘tourista’ purposes.

    But, ‘bulldoze’ all you want. Paris did that 150 years ago, and look what that did? ‘Stinkin suburbs’ anyone?

  115. Don’t for get the 1% transfer tax the County of San Francisco levies on all real estate sales over $1M.

  116. In this instance, when higher income people spend money in a community, that “rising tide” does not “raise all boats,” make the poor wealthier as trickle down theory posits. This is simply describing the multiplier effect in a community.

  117. There is no moratorium and there is not going to be a moratorium any time soon.

    Don’t you realize that you’ve been cheated, had, manipulated by ethically conflicted operators out for their own interests?

  118. There is no moratorium movement. There are poverty services and affordable housing rackets that demand to be paid in order to stand down from opposing projects.

  119. In any case, remind everyone again why it makes sense to hold the city’s growth hostage until industrial capitalism in the United States can be suitably reformed to your liking. Because you can totally fix the second problem on a reasonable timescale by doing the first, obvs.

  120. [I never implied that anything needed to be dismantled. ]

    [We supposedly need our tourist industry]

    “Supposedly” = welp, other people say that we need this, but I dunno, maybe we really don’t. i.e., implying that it could well be better to have no tourist industry than a tourist industry. If you don’t want people to think that you think crazy stuff, maybe stop typing words that suggest that you think crazy stuff?

  121. I never implied that anything needed to be dismantled. But I understand that in your world of ‘binary-think’, there are only two options. Because fixing something is impossible.

  122. Hey, I wasn’t the guy who implied that it would be pretty cool if we just dismantle an entire industry because its jobs don’t pay enough anyway. After all, the low-wage workers in the SF hospitality industry could achieve prosperity once we destroy their employers by simply getting other jobs at — hey look over there, it’s Halley’s Comet!

  123. An inconvenient truth for you is the “gurgling stew of unfounded claims” is based upon the suffering that is the reality of many people.

    It is people like you who are delusion grasping onto the Utopian myth that the marketplace economy is going to save us all.

    Apart from your smarmy bullshit, I agree with the development of SOMA, etc., but I’d like to see a more radical approach, such as an entire section of SOMA bulldozed to create a new street grids and infrastructure necessary to cope with tens of thousands new residents.

  124. v. disappointed. I was expecting there to be at least one well-thought-out reply before getting one that was a gurgling stew of unfounded claims, utopian denial of economic reality, and a desire to get out of the current mess by the tried-and-true solution of just making lots of people poorer.

    49 square miles is a gigantic amount of space to put people in, and only a very silly person who has never been to another major city would think that SF streets are mostly “too narrow” to support taller buildings. But I’d settle for at least finishing building out SOMA with a nice bunch of 50-story towers, instead of having the vertical space wasted by the likes of Costco, Sports Authority, Best Buy, and Bed Bath and Beyond. It’d be a good start.

  125. We are never going to build a “ton more housing.” We have limited space and most of our streets are too narrow to support high-rise buildings.

    The moratorium is more than a break from building for planning. It is the assertion of a political force, one that is needed to counter the disastrous trajectory of having a city government run by venture capitalists. It is also a vehicle to convey displeasure and disgust for our mayor and his policies. Since he won’t listen to those who don’t have money, this is a good way to get his attention.

    We supposedly need our tourist industry, but we have an economic reality in which the success in tourism has created profits for very few, and created thousands of low-wage jobs, with many workers being subsidized by government, such as food stamps. Ditto for the tech industry, where more money is allotted to the 5% who make a hell of a lot of money for the 1%. but the services needed by the 5% create these same low-paying jobs that require government subsidies.

    Create an economic ecosystem that does not depend upon government subsidies of working people and I’ll support it. But for now, I support putting the breaks on this nonsense.

    Finally, those who have dire warnings about the moratorium are too sounding a bit ridiculous. The sky won’t fall.

  126. Nice, except half of these questions presuppose their conclusions (which, um, is one reason most people who know stuff about public policy find the pro-moratorium side so intellectually laughable, not just because there is no piece of paper that spells out the case). Most of these issues (gentrification, a changing ethnic balance, the environmental cost of pricing people out of a city) are legitimate concerns shared by many if not most anti-moratorium people – it’s just that there are almost no good reasons to support the ultimate policy prescription of a housing moratorium as the answer to those issues. The way you prevent poor people from contributing to additional exurban sprawl, carbon emissions, bridge traffic, etc. is to build a ton more housing so they don’t have to leave in the first place, not turn their neighborhoods into shrinking gated islands surrounded by ever wealthier people.

  127. But it’s not worth it if this trickling down creates demand for ‘jobs’ don’t pay sufficient wages to live a fulfilling life without having government assistance.

  128. Someone in the SF housing moratorium movement needs to write a bulletproof, 800 word mini-white paper condensing the most salient social, economic and environmental arguments against development. The Examiner op-ed by Marti & Cohen is a step in the right direction, but nowhere near enough.

    Marti & Cohen are confusing. Who ever heard of a “nexus study” or has the time to read it? Does it make sense except to bureaucrats in 2008 when it was released? Tim Redmond in 48Hills tries to turn it into red meat political language, but his rushed, deadline erred prose isn’t concise either.

    Weiner, Farell, MOHCD, SFHAC and SFBARF will soon counterattack. And the rentier trolls are already frothing on the comment boards. So the moratorium remains for the time being a passionate affair without a cool, reasoned foundational argument.

    Here’s what a foundation argument might look like…

    One: There would be a brief history of postwar abandonment of the cities for the suburbs, with Federal and State governments underwriting the mass movement. A backgrounder on urban redlining, block busting, racist deed covenants, white flight, etc. which turned the SF Mission from a working class Irish-German to working class Latino enclave.

    Two: There would be a backgrounder on the “new urbanista” movement that has brought suburbanites back to newly trendy cities, especially cities with historical social, cultural and environmental amenities like San Francisco.

    Three: There would be a discussion of gentrification as a mild form of socio-economic-ethnic cleansing: for the most part no one dies—except the elderly, the sick, the very poor—unless you consider Antioch or Stockton a form of death. The moral argument against displacement needs to be made calmly and rationally, as well as from the burning ramparts.

    Four: The economic arguments. That developer gentrification creates economic monoculture; gated communities accessible only to select, high income demographic tranches. That the Econ 101 fundamentalists are wrong; SF is in fact a special case outside the supply demand curve; one metaphor to explore is micro-climates, the neighborhood weather patterns that trump global patterns. Into this category would go the Marti-Cohen article, rewritten for clarity; the video by Calvin Welch, re-shot with fact checking, academic support and a more convincing spokesperson.

    Five: The social arguments. Will San Franciscans accept the trend lines decimating the black population, down from 14% to just over 3% and shrinking, accept 8000 Latinos lost in the last 10 years, accept the financial and legal eviction of artists, nonprofits, activists, gays & lesbians, etc.? Will San Franciscans accept an increasingly white, wealthy city, a real and noticeable loss of diversity as California becomes more of a melting pot? If so, who will cook, clean, build, care for, teach, police or fight fires? What will it cost to repress the social rage, and will it boil over destructively if we become a 1 million inhabitant city of wealth and poverty extremes?

    Six: The environmental arguments. Since the wealthy, white city of the future isn’t going to care for itself, what will the carbon cost be of expelling workers to Stockton, Vallejo, even Sacramento? Who will build mass transit to replace thousands of beater cars and pickups flowing in each day? What will the freeways and bridges look like?

    Bottom line, the SF moratorium movement needs much more than an op-ed here and an article there. It needs an intellectual foundation.

  129. So y’all know that isn’t *actually* what the nexus analysis study says, right?

    The author of this article claims that building one more unit of market-rate housing increases demand more than it increases supply. This is wrong. This is not what the study indicates. And the author is bad at math.

  130. I think you’re trying to say is that the article is impenetrable gobbledygook. True. Extra demerits because it is impenetrable gobbledygook written not by “experts,” but by special interests who have a professional stake in a specific outcome.

  131. Saw the article, read the summary, and am a bit perplexed.

    The article makes assumptions that people know what the “nexus” approach is (they never explain – in either case). Personally, I don’t know. So I find it a poor use of reasoning to support a debunking.

    The report seems – in my mind – to make a major error in assumptions. In determining “disposable income”, they calculate an income, subtract tax/fica deductions, and then call that your “disposable income’. Yet they’ve already determined your housing costs but include that in ‘disposable’ when it is anything but! To me, ‘disposable income’ is what I have left over after paying the necessities – and housing is sure one of those necesoes to sities – and subtracts from what gets gjob-creating spending! (I would add student loans to the mix, but … I don’t want to rain on the TAC, heavily weighted with “affordable housing” and non-profit developer-types parade.)

    Just bringing up the true amt of ‘disposable income’ cuts the direct/indirect/induced impacts 50%! (student loans probably halves it again. I know my 30yo niece, who earns $100k, with $150k in loans and $1600 paying as a roommate, has v little left to ‘dispose’ of).

    Additionally, the report assumes that all additional services are performed by new residents. Excuse me! Wasn’t Ed Lees point about bringing in new jobs was to cure the almost 10% Unemployment rate of a few years ago (down to <5% now)! Some of those jobs will be filled by current residents, and th report ignores that.

    Seems to me this report of the 'demand' for new "affordable" units (written by "affordable housing" developers for the most part) is over inflated.

  132. Tim writes:
    “The people with high disposable incomes who fill those condos or luxury rentals will spend money in town, creating a demand for jobs – restaurant workers, grocery clerks, cops and firefighters, bank tellers”

    Good to see Tim finally embracing trickle down economics, although I suspect that it was just a temporarily convenience.

    But Ronald Regan could not have explained it better.

    But here’s another idea. If those condos will result in a greater need for city services then we should invent something called ‘Property Taxes’. Let’s charge, perhaps, 1.19% of the condo’s value. So that someone buying a $3 million condo will pay the city about $36,000 a year. That ought to make a dent.

    Pretty radical, no?

  133. A significant factor that the two ‘experts’ conveniently leave out is that the inclusionary fee is usually eligible for Federal matching: https://www.hudexchange.info/home/ . I believe that there are state and private matching opportunities as well. I remember reading somewhere that the final matching multiplier winds up being about 2.5x. So it could make a big difference in their analysis if they hadn’t chosen to ignore it.

    Here is something from the Op-Ed that Tim conveniently skips over:

    “market-rate developer fees are only a small part, one that varies greatly depending on the booms and busts of the economy — the bulk comes from property tax increment, hotel and business taxes (the Prop C Housing Trust Fund), and jobs-housing linkage fees on commercial development”

    So what are the sources that the two experts refer to? Property taxes? Business taxes? Market rate housing doesn’t boost those two important sources that they refer to?

  134. The Council of Community Housing Organizations not only backed both the Eastern Neighborhoods plan and Prop C, they declined to organize to stop EN and organized to pass Prop C.

    What does it mean that it takes years for these people to realize their errors?

    And what does it mean that once they figure out what was apparent at the time, they avoid any introspection.

    Contrition and apologies are, of course, out of the question.

    How many families were displaced because the CCHO’s only interest is setting up extortion toll booths to drive money to them.

    The provision of affordable housing is purely incidental to getting paid.

    These are the people who sandbagged the moratorium in exchange for possible access to some of the upcoming housing bond.

    They were wrong, wrong, wrong and wronger before they were right.

  135. Leave aside the interesting assumption underlying the nexus study that no nonresident will move to San Francisco unless there is vacant new construction waiting. The real headline should focus on this from the conclusion:

    The Jobs Housing Impact fee is at 11% to 13% of the supported nexus amount and the
    Inclusionary Housing Program requirement is at 41% to 52% of the supported nexus amount;
    therefore, the combined affordable housing mitigations would not exceed nexus even if there
    were 100% overlap in the jobs counted in the two nexus analyses.

Comments are closed.

Sponsored link

Top reads

Robots in the crash pad: The twisted takeover of the Red Victorian Hotel

How Haight Ashbury countercultural ideals were distorted by a tech "co-living" experiment, and a trans performance community was displaced.

A new dark-money group with GOP support seeks to raise crime fears

A misleading mailer attacking the record of DA Chesa Boudin hits the streets—but who paid for it?

The mystery of Jean Chang Kan Fung, 84, dead after an encounter with CHP

Grandmother disappeared after cops dropped her at a grocery store far from home. She washed up dead in the water off Pacifica.

More by this author

While people sit in jail cells, SF courts delay criminal trials

Judges hear civil cases while violating the law and delaying the right to a speedy trial for criminal defendants, public defender says.

A car-free JFK Drive in Golden Gate Park is finally close to reality

But there are some complicated equity issues that will require a lot more discussion.

Should SF ban the no-knock warrants that lead to Breonna Taylor’s death?

Plus: Juvenile justice, small-business rent relief, and a 'beach-to-the-Bay' bike path. That's The Agenda for Sept. 20-26.
Sponsored link

You might also likeRELATED