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Home Featured The Agenda, May 15-21: Who can afford ‘affordable’ housing?

The Agenda, May 15-21: Who can afford ‘affordable’ housing?

SF's radical income inequality ought to be a factor in discussing "middle class" housing

Take a look at this snapshot of why affordable housing means different things in different parts of town

Two competing affordable housing bills – and another bill that could override both of them to give developers more density – are headed for the Board of Supes this week.

And the discussion comes as the Budget and Legislative Analyst just released a report that looks at median rents and income levels by neighborhood.

When housing is based on "area median income," whose income are we talking about?
When housing is based on “area median income,” whose income are we talking about?

It’s not surprising, but still important to note: The residents of the ten neighborhoods with the lowest median income earned only 33 percent of the money that that the residents of the ten highest-income areas took home.

Take a look at this snapshot of why affordable housing means different things in different parts of town
Take a look at this snapshot of why affordable housing means different things in different parts of town

Think about that in terms of economic inequality, which everyone in San Francisco, including the conservative Democrats, seems to admit is a problem: In the Presidio area, where Sen. Dianne Feinstein and Rep. Nancy Pelosi live, median household income is $164,000. In Chinatown, it’s $21,000.

More: Median household income for White people is $103,000. For Black people, it’s $29,800.

The report shows one of the key problems with the affordable housing bill that Sups. London Breed and Ahsha Safai are promoting: In a lot of neighborhoods, the “middle class” housing that developers would be allowed to build is far too expensive for the residents.

There’s a lot of misinformation going around about the two proposals; the Chron today noted: “One intends to keep middle-class families in a city that’s become increasingly white collar. The other seeks to build more affordable housing for the poor.”

Actually, both include housing for the middle class. The measure by Sups. Aaron Peskin and Jane Kim mandates more affordable housing at all levels: It demands that developers set aside 24 percent of rental units and 27 percent of condos for people who can’t afford market rate. That proposal keeps the current level of housing for lower income people at 15 percent, and adds more on top for the middle class.

Safai and Breed want a lower the total level of affordable housing — 18 percent for rentals and 20 percent for condos – and they add “middle class” housing by taking housing away from people who earn less. They would drop the rate for lower-income people to six percent.

So the real choice is: Do we create middle-class housing by demanding more from developers – or by taking housing away from working-class people?

Let me say this again: Both measures create middle-class housing. One takes the money from developers; one takes the money from low-income housing.

Safai and Breed argue that if you set the mandate too high, then market-rate developers won’t build anything at all – the projects won’t “pencil out” – and we won’t get any new housing.

There are two problems with that argument. One is that we never ask developers to show us their books; as Jennifer Fieber of the SF Tenants Union noted in a recent hearing:

Tenants who live in below-market-rate units have to report their income every year “and pay the maximum amount they can afford.” On the other hand, developers who get city favors don’t have to disclose anything: “When they say it doesn’t pencil out, we just believe them.”

The other problem is that we have clear, convincing, real-time evidence that developers can provide more than 18 percent affordable housing. In the past couple of months, Sup. Hillary Ronen has negotiated two deals in the Mission that require developers to provide 25 and 27 percent below-market-rate housing.

In fact, Kim has worked out numerous other arrangements with developers that require them to comply with higher affordability levels. If the Safai-Breed bill goes through, it would undermine those neighborhood and community-level talks and allow developers to continue making, in the words of Peskin, “a shit-ton of money” without paying their share to the community.

That, of course, is another issue altogether: Building market-rate housing puts a lot of pressure on existing neighborhoods. It’s pretty clear that moving a bunch of rich people into a working-class neighborhood raises rents for everyone, especially for local community-serving businesses.

Which brings us to the total madness of this discussion.

The way the Safai-Breed bill works, developers could build “affordable” housing in parts of town where the below-market units are actually around market rate, meaning they won’t be subsidizing much of anything. The measure is a huge developer giveaway.

And it means, of course, that the residents of those neighborhoods – already suffering from the evictions that are driven in part by market-rate housing and in part by the mayor’s tech boom – will never be able to afford the “affordable” units.

Housing advocates are starting to ask whether the price point for below-market units ought to be based on median income in neighborhoods – which would mean that a unit aimed at “middle-class” people in Chinatown would be priced at a lower level, so that people who currently live in Chinatown might be able to qualify.

The other approach is to leave it as a citywide program, which would allow higher-income people to move into lower-income neighborhoods. That’s already happening, and it’s causing a mess.

But of course, we have the folks who want to build everything, everywhere. From the Chron:

“If we say that one neighborhood is only for one income level or another — whether it’s high or low — then we will create homogenous socioeconomic enclaves,” said Todd David, the executive director of the San Francisco Housing Action Coalition.

Read that sentence a few times, and think about it.

“Homogeneous socioeconomic enclaves.” Isn’t that what we’re creating now, with rich people moving into working-class neighborhoods and driving out the current residents? Is there really any danger that Pacific Heights and the Marina will become less homogeneous? No: The danger is that the Mission and Bayview will lose their working-class residents as richer people move in.

I am all for building affordable housing in wealthy areas. That’s good for everyone (except the rich folks who don’t want poor people living near them, who have in many cases succeeded in blocking affordable housing). But as long as market-rate housing drives up rents in less wealthy parts of town, we need to be sure that those residents – yes, the existing residents, the ones who are already here – get a shot at affordable housing to keep them from being displaced.

And in some parts of town, the Safai-Breed plan would mean 90 percent of neighborhood residents would be unable to afford the affordable housing.

That’s why activists are arguing that housing ought to be priced at a level based on neighborhood income, not citywide income.

There’s another housing plan out there, sponsored by the mayor and Sup. Katy Tang and called HOME-SF. That one gives developers the right to build increased density – that it, more units per lot – in exchange for making some concessions to affordablility.

I have no problem with density; San Francisco is already the third-densest urban area in the US. But the Tang plan would overrule all of the other affordable housing regulations that everyone is working on.

It would also be death to a lot of neighborhood commercial districts, because it would give developers an incentive to demolish low-rise buildings with small businesses on the ground floor, build high-density housing, and then charge much higher rent for that same commercial space.

During the debate on the measure, Peskin asked about this, and Tang noted, correctly, that the state doesn’t allow commercial rent control. On the other hand, this “density bonus” deal is all voluntary; developers can decide to give the city want it wants in exchange for a bonus. Why not tell them that they can agree to keep neighborhood commercial rents at the same level and allow existing tenants back in with the same lease … or they don’t get the bonus?

The biggest problem here is that I don’t think the current board majority is seriously trying to get the best deal for the city. It’s all about “incentives” for developers. And none of them seem to be in need of much incentive at all.

All of this comes down at the Land Use and Transportation Committee Monday/15. There’s a rally at 1pm on the steps of City Hall for affordable housing.


  1. Then what happens to those housing units? If they become affordable housing, that will be a good thing.

  2. California real estate, as exemplified by San Francisco, is an incredible mess! It seems we’ve forgotten that diversity is strength. To strengthen San Francisco right now we need more diversity. That starts with but is not limited to housing. Perhaps what is left of progressive San Francisco can vote to modify city regulations so that diversity is an official policy. With regards to housing, that would mean counter-balancing the detrimental effects of proposition 13 AND nimbyism. That means what Tim discusses in this article and more. For example, we could make it a requirement that to receive ANY tax benefit for owning a home in San Francisco, the owner must be a city resident 51% of the year. Otherwise, those dollars would go to a city affordable housing fund. Another example, city-wide make it illegal for a real estate trust to avoid regular property tax reassessments. There are many ways housing affordability in San Francisco can be dramatically improved. However, that appears to be a conflict of interest for our elected officials because they own real estate in the city or are otherwise beholden to the monied-class.

  3. Your argument was that BMR beyond some point will stop development. So you’ve disproved your argument by agreeing that even 100% BMR projects don’t stop development because such projects get funded and developed. So more funding sources will be available for projects with less than 100% BMR.

  4. There are studies showing inclusionary zoning has little effect on market prices and that it also facilitates development when it removes uncertainty from the process.

  5. You may live in SF but you’re too cynical to learn what’s going on in SF. SF just planned a new park at 17th & Folsom and is taking responsibility for maintaining and establishing street trees. McLaren park is being upgraded and trees will be part of the project to renovate Civic Center Plaza

  6. Right, because triage is perfectly analogous to housing policy.

    If we applied our housing policy to a shortage of emergency care, long time residents and rich people would be treated first, regardless of severity of condition. Then the rest of the population would have to enter a lottery to get subsidized care, or perhaps rent a hospital bed off a long time resident at extortionate cost. Some groups of residents might share a rented hospital bed so they could afford treatment, while many others would head out of town in search of care.

    Meanwhile city hall would be feverishly debating which socioeconomic classes should win the lottery and implementing price controls on rented hospital beds, while ignoring the fact that there’s a shortage of, say, doctors, among other things. Anyone who suggested training more doctors would be met with derision, with opponents decrying the enormous profits made medical schools. Rich people and long time residents would suggest we are training as many doctors as possible, and even if we were to train more doctors the noise from all the ambulances would be unbearable.

  7. Not really, there’s tons of 3 unit or less buildings all over SF that are not subjected to rent control.

  8. You would qualify for the middle class housing. However, again, you’d have to subject yourself to horrific tedious patronizing meetings for 6 months to a year, tons of paperwork, it’s hell actually. And prices are not going down till another dot flop happens & that’s not happening in the near future.

  9. I’d never qualify for affordable housing. I’m waiting for the government to allow a reasonable amount of market rate housing to be built and prices to go down.

  10. I do know that some we read about in paper were federal grants; Hope VI I think. There have been studies to show that inclusionary programs raise the market price and slow development.

  11. You contradicted your own argument. I get the feeling that’s not uncommon for you to do.

  12. It happened all over SF because the public and people directly involved,(largely public/private/non-profits) wanted it to happen. I don’t know how they were financed anymore than you know how 100% market rate developments were financed.

  13. Not really.

    How many people are needed to support one worker on a auto assembly line? And how much are they paid relative to the assembler?

    How many people are needed to support one astronaut in the Space Station?

    I could go on with more but the point is that classroom teachers require many services/people to support their work. We can debate just how many but more than one per teacher seems reasonable to me.

  14. Typically, taxpayers pay for 100% BMR. Where there is no government subsidy the market rate buyers pay for the BMR units. However, there are charitable organization that can pay for BMR housing.

  15. Seems like its the people who’ve moved here around 5 years ago that have ballooned the City’s tax receipts to where infrastructure is being built/rebuilt and amenities like trees and parks are being added to.

  16. How many people are needed to support one soldier in the field? And how much are those people paid compared to the soldier?

  17. “There may be some point where the percent of BMR’s will stop development altogether.”

    Geez, then we’ve all been lied to. Those developments with 100% BMR units just didn’t happen.

  18. The more BMR housing subsidized by the market, the higher the market rate. For everyone “saved” more are “harmed” and more will need emergency room admission. Of course having to move of the City is not really harm. It is often an improvement in ones standard of living. Leaving is a benefit.

  19. How much will the taxpayers pay me for my “underutilized” property? What is a crisis?

  20. So if not everyone can be saved, then no one should be saved? I’m very glad you aren’t making policy for disaster relief, hospital emergency room admission, or battlefield tactics.

  21. Well perhaps the City should declare a human crisis and find the public interest requires landowners who are underutilizing their property to put it to productive use or sell it back to the State. If I despoil my land to diminish its capacity to support human life, I can be sanctioned and compelled to remediate the damage. I think that applies to underutilized land during a crisis. In a war time crisis, hoarding and profiteering is treason.

  22. What is more striking is the number of teachers compared of central office staff; about the same. It looks like about 60% of SFUSD staff are not teachers. I knew some administrators and they make a lot more than teachers.

  23. Starting salaries of SFFD are at $66k. I find it hard to believe that your female cousin can’t find a roommate situation in SF. She can afford $2k a month for rent on her salary….there are lots of roommate situations advertised & even intentional houses (aka roommate communes) for even less. If she wants to live alone…that’s another story till she gets her raises. But she can certainly find a roommate situation on her salary.

  24. We all know your sob story but just wondering why you personally don’t do anything about your own situation? Waiting for the government is not going to help you. The world is DIY. Do it yourself, stop “waiting” for the government to “give” you something because it is never. going. to. happen.

  25. Good to know. I didn’t mean to sound harsh. I think it is great that they are going to provide a bit teacher housing, but I doubt Lee will do much of anything that does more than make himself money, and pleases his owner Ron Conway and his friends.

    It’s just like his suddenly deciding that he is going to try to do something about the impact of Uber and Lyft on traffic. I doubt he will do anything that actually helps.

  26. My comment was tongue-in-cheek. If my previous comments about the hell that IS City Hall weren’t marked as spam , you’d have caught my drift. I’m not excited in the slightest. Fear not as I’m very aware of the toxic entity name Ed Lee

  27. Not only that, but we’re quibbling over which group will get a tiny fraction of the tiny fraction.

  28. Yep lets pit the poor against the working class. This is a pointless insider argument to promote Peskin & Kim as the great crusaders. Stop this bullshit

  29. “The majority of homeowners in Hillsborough could not afford to buy in SF when they were 25 years old.”

    I’d venture the majority of homeowners in Hillsborough would not be able to afford their homes today. Forget when they were 25.

  30. I read in the Chronicle this morning that “over 5000” applicants applied for just 32 units of affordable housing in Alameda. I don’t know what the numbers are like in San Francisco these days, but I can’t imagine it’s much different.

    At the end of the day, none of these proposals provide more than a tiny fraction of the housing needed.

  31. Most young people just starting their careers don’t make much money. It is common for those just starting out to have roommates to be able to live in the City. Often affordable means finding desirable, suitable or acceptable. Fortunately, because of the shifts and trading shifts, firefighters can live almost anyplace. Many commute to find the lifestyle they prefer. I knew one who had a ranch up north who commuted by plane. Currently, around 1,500 government firefighters live in SF.

  32. My 28 year old cousin who just graduated from the SFFD Academy and who is a fledgling SF firefighter commutes to Petaluma because she cannot find affordable housing in SF on her salary.

  33. For some inexplicable reason they are still coming. The Chronicle has run at least 3 stories about the teacher affordability issue. The teachers featured in the articles where young people who came recently, within the past 2 or 3 years. The Black female math teacher who was “homeless” came in 2015. They knew the salary and the cost of living but came anyway.

    The teacher shortage is statewide. There are districts in the Bay Area with higher pay and lower cost housing that have more problems than SF recruiting and retaining teachers. But higher pay would make a big difference for SFUSD.

  34. The stats are from census as of 2015. Some of those teachers leave the City to get to work. I know one who works in Marin, and another in San Mateo County. But over 40% of all who live in SF leave the City to get to work.

    The teacher shortage is statewide. There are districts with higher pay and cheaper housing that have more difficulty recruiting and retaining teachers compared to SF. For some crazy reason, young teachers are still coming, knowing the low pay and the high cost of living.

    Fifty years ago, all the young single teachers I knew had roommates. SF was not affordable back then. All the teachers I know now (some became principals or administrators) have an employed spouse. Often one who make much more than they to.

  35. where do you get the stat that 23k teachers live in SF, seems like awful lot to me, but I could be wrong.

    Your stats analysis is incomplete, it doesn’t account for changes in which individual teachers are living here. What is more important is to track how many new teachers move to SF and/or how many new teachers SF is able to hire each year.

    The net of it is, if you’ve lived here for 5+ years, your probably in a rent controlled place and aren’t subject to the crazy market, if you’ve moved here within the last 5 years, may god have mercy on you.

  36. New teachers aren’t moving here. SFUSD has had trouble starting school on time for the past few years, problem getting worse.

  37. Translation from EdSpeak to reality: Ed Lee has found a way to distract from his corruption by throwing a very large bone to some supporter, while creating the illusion that he is actually addressing a very real problem. Don’t get too excited.

  38. I’m not, in spite of what some think, a “progressive.” But yes, it is parasitic. People are taking advantage of an influx of overpaid workers who may well be out of work in a few years. They won’t be able to pay the sky high rents (or enjoy the other overpriced status symbols they think are necessary for a good life) and either move to where ever the next boom is, or more likely, run home to mommy and daddy. Then the landlords will probably declare “bankruptcy,” after having shielded as much of their profits as possible.

  39. hundreds of brand new units sit empty and unrented because new arrivals to SF and current residents cannot afford the market rate rents

    This would seem to be a curious claim to anyone not familiar with San Francisco Progressives. Outside of that group ‘market rate’ means just that; what the market will bear. So apartments wouldn’t be sitting empty because nobody could afford them. Certainly new units, not subject to rent control, would be rented at what people CAN afford and then adjusted upward as conditions permit.

    Within the SF Progressive community ‘market rate’ is a synonym for ‘parasitic’ and everything must be done to hurt those who build such projects; any resulting downturn in affordable housing construction is just collateral damage. The primary objective is to punish those who wish to build new housing.

  40. Even if that teacher housing was built tomorrow, it would be a drop in the bucket. There are 23K teachers living in SF, 10K work for the government. SFUSD has around four thousand teachers.

    Interesting that according to SFUSD, 70% of teacher live in SF. That is compared to 38% for the average SF workers. SF is more affordable for teachers?

  41. Some developers can provide more than 18% depending on a lot of factors; the size of the development being an important factor. The problem is that as the percent BMR goes up, development slows. At least that was the finding in a study of inclusionary housing done several years ago. But maybe slowing development is a good thing. I vote for 50% BMR.

  42. Median may not be a good metric for policy. It includes those not in the market to buy. The majority of homeowners in Hillsborough could not afford to buy in SF when they were 25 years old.

    What evidence is there that building market rate housing causes higher rents? You have the cause and effect backwards. Higher rents cause building market rate housing. It is true that higher income people moving into a neighborhood raises rents. It is called gentrification. That has occurred without building new housing.

    There may be some point where the percent of BMR’s will stop development altogether. In general, it is not that a higher BMR percent will stop development; but It will slow it down. (which may be a good thing). There may be some locations where the factors will pencil out, even at 30% BMR. For example, scale is a factor. The more total units the more it will pencil out.

  43. not to worry. Mayor Lee has earmarked funds for teacher housing . Should be in effect by 2022. WAY TO GO SAN FRANCISCO !

  44. San Francisco’s Budget and Legislative Analyst provides hard data in revealing the median incomes for the people who actually live in these various neighborhoods. Allowing developers and speculators to ignore this critical data moving forward is foolish. In San Francisco, Austin, Los Angeles, NYC, Paris, and London we see the gutting of communities and neighborhoods and the cookie cuttterfication of cities. Further proof: the affordable housing crisis where our teachers, firefighters, police, workers and artists cannot afford current rents. Further proof: our growing homeless population.

  45. Tenants who live in below-market-rate units have to report their income every year “and pay the maximum amount they can afford.”

    This quote by Jennifer Fieber is inaccurate, according to the 2013 Inclusionary Procedures Manual. For ownership units, the BMR household can have infinite income increases and continue to live in the unit. For rental units, the BMR household must continue to have an income below the BMR income limit, but the rent does not adjust to be the “maximum amount they can afford.” The rent is set according to a formula that does not depend on the individual household.

    The other problem is that we have clear, convincing, real-time evidence that developers can provide more than 18 percent affordable housing.

    This was actually a question which the Planning Commission asked at the April 27th Planning Commission Meeting. The Inclusionary Housing recommendation anticipates future housing feasibility, not to the land prices that individual developers were able to obtain in the past. In particular, the Controller’s TAC report recommended to roll back land prices to 2012 levels but considered it unrealistic to roll back land prices further than that.As for the HOME-SF discussion, why is it that every time Tim Redmond criticizes HOME-SF, he never actually compares the local bill to the state law (2015-11, 2015-12, 2016-01, 2016-02, 2017-05-08, and this article). Same with Calvin Welch (2016-05, 2016-06, 2017-05). Only once (2015-12) did Tim even mention the state law in the same article, and even there he did not mention how AHBP differed from the state law. The fact is, HOME-SF is specifically designed to be an improvement over the State Density Bonus. HOME-SF is limited in scope to those parcels that the City believes would qualify for the State Density Bonus, it provides more deed-restricted units than both the state law and PC 415 provides, and it lists a fixed number of zoning waivers so that developers don’t get creative in asking for waivers. Tim Redmond and Calvin Welch have criticized HOME-SF many times, but I have never seen them do so honestly. They both seem to pretend that the State Density Bonus doesn’t exist. What exactly would Tim and Calvin prefer as a local alternative to the state law?

    The biggest problem here is that I don’t think the current board majority is seriously trying to get the best deal for the city. It’s all about “incentives” for developers. And none of them seem to be in need of much incentive at all.

    Tim continues to misunderstand the reason that we need to respect economic feasibility studies. We have a shortage of housing in San Francisco. I don’t mind whether housing is built publicly or privately, but currently almost all non-park land is privately owned. If the inclusionary housing requirements are set too high, then fewer private landowners will sell to developers because they will instead decide to keep collecting rents on the existing building or parking lot. We should incentivize landowners to develop housing because that is the way to get more housing.

  46. I am a 64 y/o native daughter . this is all too little too late. there is no middle class here any longer as they’ve been driven out . this talk of developers setting aside units for middle class is bogus. No one can afford to live in this congested warzone (density has ruined the quality of life once enjoyed by all residents) unless they are wealthy. Don’t get me wrong, there have always been wealthy folks residing in San Francisco (don’t call it Frisco) but there was economic diversity and working class , say it loud say it proud, also thrived. just get over it . There is no longer any “there” .

  47. So you are in favor of economic segregation? Keep the poors in bay view and out of pac heights? Seems like something you could team up with Paul Ryan on and get passed nationally.

  48. The map reveals the income “microclimates” of SF. Ignore it at your peril supervisors, planners and developers.

  49. Here is hard data from a current study by San Francisco’s Budget and Legislative Analyst; it reveals the median incomes for the people who actually live in these various neighborhoods. It’s bizarre that others promote the clear cutting of existing neighbors and residents so that the developers who don’t now and never will live in these communities will make EVEN MORE $$$$$. That supervisors like Tang, Safai, Breed and Cohen are sacrificing their own constituents to give developers and speculators the bonus of height and density increases is unacceptable. There is a current glut of “market rate” rental housing that has come to market in the past 1-2 years; hundreds of brand new units sit empty and unrented because new arrivals to SF and current residents cannot afford the market rate rents. SF and our electeds MUST compel developers to build more truly affordable housing for San Franciscans making $30K to $100K annually. Prop C passed with the support of 73% of SF voters.

  50. Tim uses “takes money from developers” as a dog whistle, what he really means is “makes housing more expensive for new comers and keeps them away”.

    I also DGAF how much money a developer makes as long as we can get 5k units per year built in this city.

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