Lots of talk of the business boom, just passing mention of the housing crisis as mayor delivers speech to real-estate industry breakfast

The mayor tells a supportive audience that the boom is making San Francisco great
The mayor tells a supportive audience that the boom is making San Francisco great

By Tim Redmond

SEPTEMBER 24, 2015 – The news that Uber is moving into a building in downtown Oakland has everyone in the world of commercial real estate, tech – and displacement – talking. The move could be good for a city that needs economic development, supporters say – but one expert at UC Berkeley had a warming:

“I hope Oakland doesn’t make the same mistakes San Francisco did,” Miriam Zuk, director of the Urban Displacement Project, told the Chron.

Yes, the word was “mistakes,” as in moving too quickly to attract too many tech companies without first stabilizing existing vulnerable communities and figuring out where the newly arriving, high-paid workers were going to live.

Even the Chron is now recognizing that there’s a serious downside to what Mayor Lee has done; one story calls it a “detour from paradise to parody.”

But there was no talk of mistakes or detours this morning when an ebullient Lee addressed the SF Business Times “Structures” breakfast. In fact, he told the supportive crowd that the city’s in fantastic shape – and he acted as if the housing crisis that is transforming neighborhoods and driving thousands out of their homes is just a random event that has no connection to his economic policies.

The event at the Westin St. Francis attracted some 800 of the city’s developers, builders, investors, brokers architects, real-estate lawyers and others who make money from the industry. Mary Huss, the publisher of the BizTimes, mentioned in her opening remarks that the current boom was creating “tension,” but the mayor laughed it off:

“Tension? What tension?” he said. “The only tension I know is the Giants and the Dodgers.”

He added that, in all of his life in the city, “I am most excited during this time for its past, present, and future.”

More: “It’s a good time for San Francisco. People are working. Cranes are up – I see them.”

Still more: “There are some people who are fearful of change being too fast for them. I believe in change; there is so much going on that is so positive.”

Mayors always like to make upbeat speeches, and this was the perfect venue for Lee to wax positive. But when he came to the problems that nobody can ignore – from the thousands of homeless people on the streets to the lack of affordable housing and the eviction epidemic – he never made any connection to the boom, or the tax breaks and tech-friendly policies that helped create and encourage it.

It was surreal – as if the hyper-gentrification and displacement in the city were the result of an act of God, an earthquake or a tsunami, something that could never have been predicted or addressed and that we only need to respond to after the fact.

Now, of course, today, the mayor is talking about the need to build “balanced communities” and to create more affordable housing. He seemed to be following the lead of the developers, who have always said (and repeated this morning) that the city can simply build its way out of the problem.

He did twice talk about “speculation,” but he addressed it as an afterthought – in any boom, he said, “there is always an invitation to some people who don’t care” – instead of the entirely predictable consequence of the policies of the past five years.

He closed by calling for the creation of “the most inclusive city this planet has ever imagined.”

I can’t imagine how that’s going to happen if we keep going in the same direction. I can’t imagine how anyone who walks the streets of the Mission or Soma and talks to tenants who are either facing eviction or living in mortal fear could say this city is in great shape.

So then Huss turned things over to a panel of developers – John Kilroy of Kilroy Realty (and Flower Mart fame), Alexa Arena of Forest City (the 5M project), Chris Meany of Wilson Meany (Treasure Island), and Lou Vasquez of Build Inc., which mostly does mid-sized residential development. All have major projects underway or in the approval pipeline in the city.

All of them dislike regulations, which they blame for a lot of the city’s problems, and some of them really, really hate the California Environmental Quality Act, which Kilroy called “the most ridiculous law that’s ever been passed.”

That line got some applause.

Meany got even more applause when he said that the city’s major housing problem “is that we have rent control.”

Cory Weinberg, the BizTimes reporter who did a great job moderating the discussion, noted, gently, that there’s an increase in anti-development sentiment, linked to “legitimate pain over displacement.” The developers were having none of that.

It is, Vasquez said, “just fear-mongering.” Arena said it’s “fear and panic.” But they all insisted that market-rate housing development doesn’t cause displacement.

I don’t think they are reading the city’s own studies, which show that building luxury housing actually makes the crisis worse.

But you got a sense of what these folks think is the solution – “our business is a regulated business,” Meany said. “And regulations are dangerous.”

Wow. Good morning to you, too.