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The Agenda, July 27-Aug. 2: Did progressives cause the housing crisis (um, No)….

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… Plus new tenant protections, expanding Medicare, and preserving art space in San Francisco

Tenants rally for Sup. Jane Kim's anti-eviction legislation, which has its first hearing Monday/27
Tenants rally for Sup. Jane Kim’s anti-eviction legislation, which has its first hearing Monday/27

By Tim Redmond

JULY 26, 2015 – If you must read Gabriel Metcalf’s piece on how progressives caused the SF housing crisis (and I suppose you must, since it’s all over social media and since Metcalf is the director of SPUR and people will take this seriously), please do me a favor and also read this.

Oh, and take just ten minutes to watch this.

I was here in the 1980s and 1990s. I was watching, and writing about, and supporting the progressive movement all along. And I can tell you:

The progressives weren’t the Nimbys who opposed housing. In fact, I sat through plenty of Planning Commission and Board of Supervisors meetings when progressives practically begged for more housing. We argued – correctly, as it turns out – that you can’t build huge amounts of new office space and attract tens of thousands of new workers to the city without building any housing for them.

The progressives pushed through the Office-Housing Production Program, which required office developers to pay into a fund for affordable housing. I don’t recall SPUR ever supporting that.

The reason more housing wasn’t built has everything to do with the same reliance on the private sector that is screwing things up today.

In the 1980s, there was a huge influx of speculative investment capital in cities, driving by the deregulation of financial institutions and accelerated-depreciation tax laws, both key parts of the economic agenda of Ronald Reagan. S&Ls were paying unbelievably high interest rates to attract money, and the only way to make that work was to invest the money in projects that returned even higher rates.

And the highest return for that money in many cases was highrise office space in cities like San Francisco.

Not housing; the market for luxury condos that we are seeing now hadn’t developed yet. Housing simply didn’t give investors enough income to justify the cost. So no big developers built housing in San Francisco.

The housing that did get built was typically on a smaller scale – and in many cases, involved destroying something that existed already. The Residential Builders Association members were fond of buying vintage Victorian buildings – frankly, art that can never and will never be replaced – and demolishing them to make boxy multi-unit projects that turned a quick buck. Yes, a lot of people opposed that practice. But really, it was small-time stuff, a few hundred units here and there.

In the early 1990s, nobody was building anything. It was a deep recession. The S&L’s had crashed, costing the taxpayers $500 billion or so. The city didn’t really climb out until the mid-to-late1990s, when the first dot-com boom emerged.

Again: The money was in office buildings for the dot-coms. But we did see some big housing projects get built – largely with the support of progressives like Sup. Chris Daly, who cleared the way for thousands of new units in his Soma district. (He also demanded that developers pay into a community stabilization fund. There was so much money on the table that they put up tens of millions.)

Now, of course, there is in fact resistance to new housing – because the only kind of housing that the private market is building is very-high-end luxury condos and apartments. And there’s actual clear evidence that those condos are making the housing crisis worse. Yes: The city’s own studies show that the kind of housing the private market is now providing – because that’s where the highest return on investment is – leads to displacement and to higher prices.

So yeah: the progressives are against displacement and higher housing costs. But our policies didn’t create the problem. In fact, when many of us tried to limit office development, our goal was to stabilize the housing market – by preventing too much demand when the market was building no supply.

(That’s why some of us also opposed the Twitter tax break – we knew that it would bring thousands more high-paid workers to a city that had no place for them to live.)

Metcalf and others talk about the rules of supply and demand. But if supply and demand work so well in SF, why was no housing built in the 1980s and 1990s?

Because it’s not supply and demand on the ground – it’s supply of investment capital and demand for returns that drives development in this city.

An excess reliance on the private sector to solve all of our problems is one key reason we have a housing crisis. And relying on the private sector to solve it just isn’t going to work.

 

48hillsmedicare

The Healthy California Campaign, which is fighting for “Medicare for All” – that is, and end to private health insurance and a guaranteed public program for everyone in California – holds a mass rally and march Thursday/30 to celebrate the 50th anniversary of Medicare and to push for a rapid expansion of one of the nation’s most effective public programs.

It starts at 11am at Frank Ogawa Plaza in Oakland. Info: 800-745-3090 or info@healthycaliforniacampaign.org.

 

 

As if the legal Ellis Act evictions weren’t enough of a problem, the city is also plagued by completely bogus “low-fault” evictions, where tenants are being told to leave for such crimes as leaving a bicycle in the hall or hanging their wash out to dry on a line.

Then there are the bogus evictions, where a landlord insists his daughter or brother wants to move into a unit – and then rents it out again six months later at a higher price.

Sup. Jane Kim’s legislation to protect tenants from these sorts of evictions gets its first hearing at the Land Use and Transportation Committee Monday/27 – and it’s the start of what could be a major battle between tenants and the real-estate industry (and could show which supervisors are on which side).

The bill does a few things, including forcing landlords to let tenants cure and correct minor violations before handing them eviction notices and preventing rent increases when people add roomates (or have a partner or spouse move in, or have kids), which can’t be that controversial. Or so you’d think – we shall see what Sup. Scott Wiener, who often sides with landlords, will say at the hearing.

The other provision would bar any rent increases after a unit has been cleared by owner-move-in or capital-improvement evictions. In other words, you get rid of a long-term tenant by pretending that a family member moved in – and when that person moves out, you can only charge the amount of rent you were charging before the eviction.

The idea is to take the economic incentive out of evicting long-term tenants. But the big landlord groups hate this kind of law, and I expect they’ll be fighting it bitterly.

The hearing starts at 1:30pm in the Board of Supes Chambers.

 

The Board of Supes is poised to put a measure on the fall ballot competing with the fake PG&E-friendly scam that would undermine public power.

The measure, by Sups. John Avalos, Scott Wiener, London Breed and Julie Christensen, would define clean energy in a way that is consistent with state law – and would force PG&E to admit that a significant amount of the power it sells in San Francisco comes from a nuclear power plant.

It comes up Tuesday/28.

 

The Cultural Action Network, a group of artists and activists trying to protect diverse cultural spaces in the city, holds a “CAN Opener” event with food, drinks, and an overview of how to prevent the displacement of the city’s artists. Tuesday/28, 6pm, Mojo Theater, 2490 16th Street.

 

 

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.

112 COMMENTS

  1. So, you counter Metcalf’s well reasoned, balanced, data driven article with a few anecdotes about shady landlords, appeals to ideology, and oversimplifications about investor priorities. Why did I waste my time reading this drivel?

  2. This city’s current mayor and his appointees, with one exception – Bevan Dufty – are enemies to the LGBT community at every level and he has done his best (worst) work against us using our housing as a tool and weapon. He has paved the way for wrongful evictions so innocent people can lose their housing (I’m one of them) for no reason at all and these serial evictors like the John Stewart & Co are getting away with it because the entire system of eviction in SF is unfair from top to toe. The Supervisors…is pretty obvious who hates poor gays and who doesn’t…the infamous Judge Q who is part of the “Leeviction* Machine” (*I’m trademarking this) shouldn’t even be on the bench anymore, and yet he sits. This, even though 9 of his 11 major decisions recently were OVERTURNED and even though he routinely removes innocent people from their homes without meeting them, seeing them, showing up for court at all or asking them questions. His legal assistants talk to the lawyers more than he does…IN SESSION. Not only has Mayor Leeviction* sold the city to whatever bidders he chooses ( to be on the board of after he gets drummed from office), he’s cut off our most important pathway to seeking justice. his appointment to the Human Rights Commission is nothing, if not proof of that. Mike Pappas, who was Lee’s cynical choice to CHAIR the LGBT Advisory Committee was the REAGAN/BUSH Northern California and New Jersey Campaign Director. DOES ANYONE REMEMBER HOW MANY OF OUR FRIENDS DIED WHILE REAGAN TURNED HIS BACK ON US ALL? Well, the guy who helped get him elected is now chairing our Human Rights Commissions chartered committee.

    I helped organize a panel for the commonwealth club about non-profits who serve the LGBT community having to leave SF because of developers helping to shoot rents through the ceiling and Pappas tried to maneuver his ‘friend’ from SPUR onto the panel. I was the only person who knew who they were, their history and that they were part of the problem and so I objected. I was then threatened by Pappas with my removal from my mayoral appointment (Gavin Newsom apptd me) and after five years of service to this city and county’s most in need, I spent my final months trying to get anyone to help me stave off Pappas and his threat. Theresa Sparks did nothing and all the mayoral staff supported his appointment and so I got NO help.

    Housing is a HUMAN RIGHT. It’s SHELTER. This mayor has confounded our human rights by appointing an enemy to our community (and the Greek Orthodox community – just Google him and be amazed) named Mike Pappas to chair a chartered committee that is tasked with protecting our human right and he has filled our path with obstacles at every other level.

    Evict Mayor Ed Leeviction and we can get to work until then, don’t expect much.

    • Housing is not a human right until people organize to make it a human right.

      Whining that Ed Lee needs to be evicted does nothing towards that.

      The only reason why the developers are winning is that “the left” has refused to take stock of its failures and recalibrate to win.

      • The whole point of it being a right is that one shouldn’t….I”m talking to a foghorn here….hmmm. OK! You’re right!

      • The whole point of a right is that it is expressly enumerated and descended from a common set of universal principles. There is no such derivation for your theoretical human right to housing. Keep on whining and laying guilt trips on people, sure beats organizing to make housing a human right.

    • “are enemies to the LGBT community”

      Just what LGBT community are you speaking of?

      It is not as if sexual orientation or gender portends any unity above and beyond the immediate connection.

      The left fails when it puts diverse people in narrow groups of the left’s construction based on oppression and expects that there will magically be unity and harmony towards emancipation and affirmative aspiration.

      What if they threw a working class and everyone skipped?

  3. Any “history” of housing development in the 80s and 90s that ignores the Sunlight Ordinance and the Historical Review Initiative is just an attempt to whitewash history. No mention of the hundreds of lawsuits brought by Sue Hestor, the Telegraph Hill Dwellers, Randy Shaw, Aaron Peskin, Calvin Welch and others. How about Tim Redmond’s own editorializing against the evil “greedy developers” and their efforts to build much-needed housing. How many thousands of words were spent in those crusades?

    I read The Guardian in the 90s Tim. I remember what you and Bruce Brugman said. You might be able to fool these newcomers, but you can’t fool me.

    • http://www.sfbg.com/40/03/news_condo_attack.html

      “The point was that the Bay Guardian was, and would always be, a
      newspaper by and for the neighborhoods, against greedy developers and
      their City Hall allies, and for the PRESERVATION [emphasis mine] of one of the world’s
      great cities.”

      “But there’s a more dramatic step that ought at least to be considered:
      Why not enact a five-year ban on all new market-rate housing in San
      Francisco? Just stop the development, right now, until this city can
      sort out its priorities, plan for a sustainable future, and figure out
      what kind of a community the residents want to build.”

      Googling for Tim Redmond and “greedy developer” give me 2,010 hits. This is a pretty rich mine here, I am sure.

      Still trying to claim that you were in favor of building more market rate housing there Tim?

    • “San Francisco’s Board of Supervisors has just passed legislation that
      creates a development ban in the city’s Mission District. The ban
      satisfies Hestor’s decades-old fight to stanch construction in San
      Francisco. The Mission measure is drafted along the lines of last fall’s
      failed Proposition L ballot initiative. It places a one-year moratorium
      on the construction of new lofts and tourist hotels, requires that
      large commercial projects receive special permissions, and bans all
      apartment construction unless one-quarter of the units in a building are
      rented at a subsidized rate. The measure effectively prohibits housing
      not built by politically connected nonprofit builders, or by private
      developers with the political juice to obtain government-subsidized
      financing.”

      http://www.sfweekly.com/sanfrancisco/love-in-times-of-choler/Content?oid=2142318

  4. I agree Tim. I have often thought that there should be a standard, something like no new offices if the city vacancy rate falls below 2.5%. But I have to say that this tech boom is a lot more than downtown office space-start ups are everywhere. Even cafe’s, apartments converted to offices, etc. Jobs=housing demand and I don’t see how people in the 80’s could have predicted a spike this in jobs that went this high some 30 years later. This situation isn’t about what people should have done in the 80’s it is about recent failed city leadership. Lee has been more interested in sports venues then housing and he only seemed to change a little when the 8 Washington moratorium was approved. Still, his petty and vindictive mind has closed off people trying to make change in the Mission, or when they have tried to make change in housing policy (AirBnB), etc. And instead of engaging the community he tries to stick his ideas down their throat (Julie Christensen’s appointment is an example of that). Now we have 5 pending moratoriums. Metcalf is simply writing yet another Conway related treatise in their mission to destroy progressives in SF.

  5. I am disappointed; I was hoping for an intelligent rebuttal to (or synthesis with) Gabriel Metcalf’s points. First, I think everyone is in agreement that the City should invest what it can on the welfare of the neediest families (lottery-allocated subsidized housing and inclusionary zoning requirements). However, it is unrealistic to expect the city to produce enough lottery housing for the median-income household. The Mayor’s Office of Housing and SF Housing Authority command only 10% of the units in the city (source: MOH, SFHA, total); the median household currently lives in rent-controlled units or are Prop 13-protected owned homes, not in subsidized housing. Only 35% of new construction in the past decade is income-restricted (source: Housing Balance Report). It would be great if the city owned enough subsidized housing that the median household could expect to obtain a unit, but we are nowhere near that goal and there is not enough public funding to realistically achieve that goal. Therefore, it is necessary to also create policies that leverage the private market to house the average household. Private market prices matter; we cannot simply neglect the private market and pat ourselves on the back for the construction of a small percentage of subsidized housing units.

    Gabriel’s main point, which Tim completely ignored, is that regulations affect what will be built. You cannot simply blame the market for not constructing much housing; you have to also ask what policies disincentivize suppliers from constructing enough housing during a boom. When evaluating policies such as discretionary review, inclusionary zoning, and height limits, one must examine not only their benefits but also their costs. If low height limits cause only 13 lots to be available to build apartment buildings in the Mission, then perhaps it’s time to expand the number of parcels that are allowed a height above 40ft. If discretionary review causes residential projects to be much riskier and less likely to be built, then perhaps it would be worthwhile to create deterministic rules to allow a developer to construct some kinds of housing without risky discretionary review.

    Let’s try to find some common ground. We need subsidized housing for the poor. We also need policies that encourage the market to build enough housing for the median.

    • Your premise is incorrect. The capital was not in place over the past three decades to have financed the level of housing production required to have averted the housing crisis.

      The proof is obvious, as once the capital became available, developers use the promise of future profits to purchase municipal government and rig the rules to expand the developable envelope in Market Octavia and Eastern Neighborhoods.

      Tim’s hand wringing rejoinder hardly demolishes the low hanging fruit of Metcalfe’s piece of work.

    • Yes, I agree. I think some of the affordable housing will come from the existing housing stock. The ADU ordiance in D3 and D8 is a good start but they aren’t going to make them affordable–just market rate. What a waste! Lots of zoning things, higher densities and density bonuses, the removal of expensive parking requirements, get rid of some FAR requirements. It is too bad that we couldn’t get the Mission moratorium. It could have been a creative and exciting time dealing with all of these issues. If we zone something for high density housing I don’t understand why SF requires hearings. They could write a good design document and let staff negotiate the design.

      • D3 and D8 can get a Mission Moratorium in 2016. Let’s win the one on the ballot then create new ones.

      • Yeah! Let’s stop building everywhere and then watch the housing crisis magically disappear!

      • This is precisely the goal of these “activists” – stop building and people will stop coming here:
        1) because we’ve basically built nothing and that stopped the current influx
        2) Because I read it on the internet.

      • The only reason I can see the moratorium being a good idea is if the goal is to tank the value of available parcels in the mission and hope the owners/developers sell them to the city cheaper. Problem is, as we can see from the city’s recent acquisition of the S. Van Ness parcel for $18.5 million, the city doesn’t have anywhere near the resources to acquire and develop the supposed 13 remaining available spots, even with the housing bond.

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