Sponsored link
Tuesday, April 16, 2024

Sponsored link

News + PoliticsHousingAre yimbys the new progressives? Only in a bizarre Wonderland

Are yimbys the new progressives? Only in a bizarre Wonderland

The supporters of the 'build-at-all-costs' position ignore a half-century of history and the realities of the modern housing market


Why, sometimes I’ve believed as many as six impossible things before breakfast.”

The Queen of Hearts, in Alice’s Adventures in Wonderland

San Francisco yimbys have now declared themselves “as progressive as it gets” in the welcoming pages of the San Francisco Chronicle.  Claiming Rep. Alexandria Ocasio-Cortez as one of their own, they are now, the article claims, engaged in “fighting inequality to protect the most vulnerable.”

Well, not really, actually, fighting but certainly “advancing progressive …policy goals.” The piece, by Bilal Mahmood, who ran for state Assembly in 2022 and lost, explains that in the future will protect the most vulnerable that remain.

What are these yimby “policy goals” and just how progressive are they?

Sen. Scott Wiener with Laura Clark, a yimby leader, at a forum on housing

Going deeper than the self-serving rhetoric in the op-ed, it becomes clear that yimbys are now attempting to consolidate their national and state-wide media and legislative influence into local political power. And in San Francisco that means cloaking deeply reactionary policy as being “progressive” because in San Francisco “progressives” have a set of housing policies that actually do protect the most vulnerable among us.  

Yimby’s are pushing Proposition D, claiming it is an “affordable housing” program, when in fact it undermines existing affordable housing development policies by granting public funding, with no public oversight, to high-density housing developments serving people who earn 140 percent of regional area median income, which exceeds current market rate rents in most of San Francisco.

They are doing so because in San Francisco faith and community based non-profit developers have, over the last 30 years or so, created a permanently affordable housing production program that, in fact, produces hundreds of units a year able to afforded by poor and working people and prioritizes housing the currently un-housed.  Some 40,000 such units have been created using a variety of direct subsidy programs, most locally based, more than has been created in any other Bay Area county.

While this effort falls far short of meeting the actual need for truly affordable housing, yimby’s now want to convert that program into a market-rate development scheme redirecting that public money to for-profit developers.

The New York Times, The Atlantic and countless academics have embraced “yimbyism” with an astounding stream of favorable articles, coverage and comment by columnists. Not since the late 1950s has there been as board of a consensus among academics and the media on urban policy than that which has emerged around the two primary yimby principles: remove all local constraints and build new high density housing in urban areas, letting the market solve the housing crisis by an abundant new supply—and housing costs will drop like a stone and the homeless will find a home in a condo tower.

Like the Queen of Hearts in Wonderland, you must believe the impossible to accept this.

Yimbys and their allies have to overcome the reality that the two most expensive housing markets in the nation are the two most dense cities in the nation: New York and San Francisco, a contradiction at the heart of their argument.  

Like alcoholics who insist that drinking is not the problem but the solution to their problems, yimbys argue that there simply isn’t enough high-density development and that this is because of local governments are under the total control of anti-housing forces who stop approvals of high density housing.

Here in San Francisco this core assertion—the failure to approve critically needed market rate housing—is simply a Big Lie. San Francisco has approved some 104,996 housing units since 1997 (DCP Housing Inventory). In the last seven years alone, it has allowed developers to build more than 150 percent of the market rate units it needed to meet its regional housing goals (while meeting less than half of it regional obligation for affordable housing).

Of  the 19,878 condominiums (the major form of tenure for new construction) built between 2017 and 2021, 96 percent are in highrise towers of 20 units or more, according to the 2021 Housing Inventory (Table 17, page 29).

Only in Wonderland can it be asserted that we are not approving enough high-density market rate housing. Have housing prices and rents fallen in San Francisco as a result of these approvals? Are the un-housed fillings these towers? Again, you have to be the Queen of Hearts living in Wonderland to believe that either is true.

The assertion that opposition of current residents to expanding the supply of housing, especially affordable housing, is the reason we have a housing crisis is demonstrably untrue and rests on another lie: That the city is responsible for the failure to build housing it regularly approves. It turns out that the biggest obstacle to building market-rate housing is market rate developers (the chief allies of the yimbys) responding to “market dynamics.”

As of the fourth quarter of 2020, San Francisco has some 69,453 units in our housing pipeline that have been approved by planning, issued building permits or in the process of applying for them—but only 5,509 are actually under construction.

A major reason for this is that San Francisco has the highest construction costs in the world. And these steeply rising costs have nothing to do with folks slowing approvals. Instead, supply-chain bottle necks and dramatic increase in the price of steel beams, rebar, and concrete, all needed for high density, high-rise construction, are the culprits making new construction a very problematic solution to our housing crisis—a point never, ever, mentioned by yimbys.

It’s the “market” that determines the pace of for-profit development for the simple reason that unless there is a clear profit to be made the housing is not built. As interest rates increase, de-regulated land increases in price, construction costs and materials prices soar, public subsidies look more tempting for these for profit developers and their yimby advocates.

There’s another huge structural issue never addressed by the yimbys simple minded mantra of build, build, build: the financialization of the housing market and the impact that has on vulnerable urban populations.

Yimbys pretend that all the housing that is built in cities will be owned by folks who need housing and those people will live in them. In this Wonderland, hedge fund managers are never mentioned as flippers of housing. Wall street firms never create financial instruments, pool them together and then buy and sell thousands of bundled mortgages resting on mountains of debt.

In Yimby Wonderland the “Great Recession” of 2008 simply never happened. In the real world, by 2016 the issue of corporate control of housing was of such size and import that the United Nations appointed a Special Rapporteur to investigate and report on the problem.

The 2017 report renders laughable the yimby mutterings. Among other things it finds that “housing and commercial real estate have become the “commodity of choice” for corporate finance and the pace at which financial corporations and funds are taking over housing and real estate in many cities is staggering.”

In what sounds like everyday life in every neighborhood of San Francisco the reports states: “In “hedge cities,” prime destinations for global capital seeking safe havens for investments, housing prices have increased to levels that most residents cannot afford, creating huge increases in wealth for property owners in prime locations while excluding moderate- and low-income households from access to homeownership or rentals due to unaffordability. “

The report urges that states no longer be “too deferential to the dynamics of markets” and to take steps to “bring private investment into line with the right to adequate housing” by working ” in collaboration with affected communities” by providing “access to credit” which “allows low-income households to finance construction…”

This sounds remarkably like community efforts here in San Francisco to create a municipal bank, impose restrictions on market excesses, organize community and faith based nonprofit profit housing developers and create, though legislation, new sources of affordable housing financing.

Guess who is absent from each of these initiatives and indeed, opposes measures to accomplish these tasks as being harmful “impediments” to the construction of high-density market rate housing? Yimbys.

Yimbys deplore neighborhood and community-based organizations, endlessly attack their leadership online, disrupt press conferences, and oppose effective advocacy for affordable housing—which often time means opposing high density market rate housing developments.

Even the Chronicle had to admit that the Mission’s getting some 649 units of permanently affordable housing required community based groups led by PODER and others  organizing “fierce community opposition…that derailed market-rate developers in order to satisfy the city’s affordable housing requirement.”

None the less yimbyism continues to thrive at the state and national level as academics and elite media continue to ignore inconvenient facts and fail to study or understand actual community-based efforts to develop affordable housing. Ezra Klein, the New York Time columnist and yimby booster (who says he believes that Gavin Newsom is a politician of “redeeming substance,”) hypes a new yimby variant he calls “supply- side progressivism”.

Ignorant of (or more cynically, ignoring) actual community struggles to increase the supply of affordable housing fought in San Francisco over the last 30 years, like that most recently fought in the Mission, Klein asserts that the “left” only concerns itself (“most of the time”) with programs that aim at “giving people money,” while being “uninterested in the creation of the goods and services they want everyone to have.” And then in a blindingly ignorant assertion he states “…in California… progressives talked often of making housing affordable…but they didn’t talk much about increasing housing supply!”

Increasing the supply of permanently affordable housing is all that progressive San Francisco housers have been talking about for 30 years. And they have brought most San Francisco voters along with them. They have sent, until recently, one elected official to Sacramento after another to demand more funding for affordable housing production.

They wrote and passed the first general obligation bond ever used in the state for the expressed purposed of building new affordable housing. They devised legislation that created a new supply of middle income below-market-rate units to be required of market rate developers (legislation to increase the amount of BMR was consistently opposed by the yimbys).

They devised a tax measure on the biggest corporations in San Francisco to pay for the development of new housing able to be afforded by homeless people. And this year alone they have proposed Proposition E , a density bonus for market rate developers that require significant affordable housing as a necessary condition of getting the density bonus, so much so that the yimbys are suing the measure to keep it off the ballot SF Democratic Socialists of America, clear supporters of progressive housing policy,  have drafted and got on the ballot Proposition M, which will tax vacant units, often times owned by hedge funds and corporations that earmarks 50 percent of the tax to increasing the supply of permanently affordable housing, while providing the other 50 percent for rent subsidies for seniors.

Between 2018 and 2020 San Francisco voters passed four measures raising a combined $1.5 BILLION for the expressed purpose of increasing the supply of affordable housing, with one of the measures— Prop C of 2018—adding an additional $300 million annually, significant portions of which is dedicated to increasing the supply of permanent affordable housing for un-housed San Franciscans. Which is why SF yimbys have placed on the ballot a measure to divert that public subsidy to market rate development.

As mentioned above, yimbyism has created a consensus at the elite media and academic level not seen since the 1950s. That predecessor consensus was built around “urban renewal.” All of the same kinds of academic experts and elite media opinion makers  including SPUR) agreed that the happy convergence of state-mandated entities able to override local zoning and approvals (redevelopment agencies)  using state and federal authority and funding, could, in one massive effort, reverse two decades of urban neglect (the Depression followed by the war saw virtually no urban investment, especially in housing) and produce a new urban core devoted to commerce with the residential uses moved to the country-side, linked to the urban “central business district” by freeways.

A perfect unity was created: freeways linking suburbia to a re-developed central city. What could possibly go wrong?

How the new consensus of the elite around “yimbyism” is to avoid the errors and disasters of the urban renewal period is impossible to see since its advocates take no notice of that history. What is absolutely clear about “yimbyism” is that its advocates have no actual experience with “protecting the vulnerable” in an urban context, and indeed, the core of their policy—the unfettered development of high-density market rate housing—is the primary threat facing vulnerable urban populations.

A very real indication that yimbys learned nothing from the history of urban renewal can be seen in their co-opting of the of the Democratic Socialists of America (DSA) concept of “social housing” as represented by Silicon Valley DSA backed Assembly member Alex Lee’s AB 2053, which died in committee this last June.

What is startling is that DSA also seemed to have learned nothing from the urban development wars of the last century either. The year-long advocacy by yimbys for the bill shows how eager they are to secure public funding for market rate development that threatens existing affordable housing production and how dangerously clueless a California Assembly member who claims to be a socialist is about the issue.

AB 2053 “The Social Housing Act “ (Text ) is co-optation of DSA’s contribution to the current housing policy debate, the confused, abstract, and itself un-historical concept of “social housing”. Based upon a study done in 2018 by an Irish Social Democrat researcher, Saoirse Gowan, and US journalist Ryan Cooper (Social Housing in the United States), “social housing” was quickly adopted by DSA the center piece of its housing policy.

The basic problem with the 2018 study is its total lack of any discussion of lessons learned from any actual urban housing movements or policy debates in the United States over the past fifty years, a rather striking oversight. Indeed, for Gowan and Cooper there is no history of community organizing or policy proposals addressing housing even worthy of mention in their study.

The lessons of countless community struggles against urban renewal are not mentioned. The discussion of housing policy in the paper is at 30,000 feet, oddly absent of any discussion of history or political detail of the countess local and community battles around housing.

For example, while the paper never mentions that the Black Panther Party’s Ten Point Program includes two (four and ten) that directly relate to housing and housing policy and that sparked scores of community based efforts to restructure housing policy at the local level in many major cities in the United States ( including San Francisco, Oakland and Los Angles) it spends an inordinate amount of space discussing housing policy in Vienna, Finland and Sweden, whose homogenous and overwhelmingly white combined population (17.5 million) is less than half of the wildly heterogeneous and totally mixed population of California.

None of those three countries had state power handed over to the private sector for-profit developers, as happened in the United States under urban renewal. Nor did they have the history of popular resistance to that effort and the necessary politicalization of housing development that resulted. It is hard to imagine three less typical “case studies” to base a US housing policy on than Vienna, Finland, and Sweden.

For Gowan and Cooper and for Assemblymember Lee,” social housing” means producing housing that is “economically integrated” that includes both poor and wealthy people in the same building with internal subsidies between the two.

For Gowan and Cooper “the worst social ill in American cities” is “concentrated poverty” which produces “higher crime…drug abuse, gang violence, and a host of other problems.” A major cause of this “concentrated poverty” is “poor only public housing,” that is housing programs that only target the poor.

The argument is clear if wrongheaded: it is as important to eliminate “concentrated poverty” in housing programs by designing in “economic integration” as it was to eliminate “slums and blight” by designing urban renewal programs. The intent of both programs is not to bring housing rights and resources to poor communities, but to disperse them, to bring higher class residents, culture and economic activity to “enlighten” a culture of poverty, an incredibly condescending and reactionary formulation.  By ignoring urban history, they repeat it.

“Social housing” is simply the term used in Great Britain and the European Union for “affordable housing” and can take many forms from publicly built and managed housing developments to rent subsidy programs to publicly funded limited equity and co-op owned housing. These programs almost universally include income limits for residents just as they do in the US. It is interesting to note that the Thatcher government did in public housing in Britain by making a similar argument: that it was insufficiently economically integrated and that current residents needed to be “empowered” to own the public assets privately, opening up a wave of speculation that lured most residents to sell their units ending its affordability forever.

But for Gowan and Cooper, social housing must include two essential qualities: It must result in new construction, and the buildings must be economically integrated to avoid the ills of “concentrated poverty.” They argue that rent control and inclusionary zoning are simply unacceptable because rent control discourages new construction (a bogus argument usually advanced by the real estate industry and certainly not the case when new construction is explicitly exempted as in San Francisco) and inclusionary zoning usually contains specific income limits, and thus risk producing “concentrated poverty.”

In a recent panel discussion in which Peter Cohen, then co-director of the Council of Community Housing Organizations and Lee participated,  Lee stated that he was “bored” with housing programs that had Area Median Income limits on participation, a position at odds with the SF DSA branch as their Proposition M limits recipients of the vacant unit tax proceed to assisting household earning no more than 80 percent AMI. It seems that there is a rather significant “county option” in DSA as to what is a truly “socialist” housing program.

AB 2053 was initially endorsed by several yimby front organizations and then quickly co-sponsored by yimby-endorsed Scott Weiner in the state Senate. At its heart the bill, as introduced, was all that yimbys have demanded in Sacramento: It would have created a state wide agency (“California Housing Authority”) able to overrule or ignore local housing policy and issue debt for new housing construction. And like their previous state victories, it was linked to regional housing targets as the agency’s “core mission” was to “produce and acquire social housing developments for the purpose of eliminating the gap between housing production and regional housing needs assessment targets and to preserve affordable housing.”

From the start the measure goes way off track. Note the agency “core mission” is not to INCREASE the supply of affordable housing but to “preserve” it, that is, not necessarily increase it at all. Instead, the core mission is to make sure that counties meet their “housing needs assessment targets”. These targets are overwhelmingly market-rate units and thus AB 2053 sees “social housing” as being overwhelmingly “market rate.”

To make the point absolutely clear, Section 64724 (a) states “in all its operation the authority seeks to achieve revenue neutrality over the long term.” The bill defines “revenue neutrality” as “a system in which all monetary expenditures that result from the development and operation of social housing owned by the authority are returned to the authority through rents, payments on leasehold mortgaged, or other subsidies.” (64672).  So “revenue neutrality” uses a “system” that is the same as a capitalist bank which is an odd formulation for any kind of socialist, but easily embraced by a yimby.

What makes this social housing legislation work to make the entire operation “revenue neutral” is “rent and mortgage cross-subsidization,” the true heart of Lee’s social housing concept. The legislation defines cross-subsidization” as “a system in which below-cost rents and leasehold mortgages of certain units are balanced by above cost payments on other units within the same multi-unit property so as to ensure the property’s overall revenue meets development and operational costs.”

It is clear that in San Francisco for example, the Community Land Trust has worked well dealing with keeping existing tenants in an existing building when the building is threatened with being sold and the tenants evicted. In most cases tenants of these buildings pay varying amounts in rent depending on the length of time each spent in the building given the fact that rents are “de-controlled” when a tenant leaves. It is equally clear that these various rents payments do act as an internal “subsidy” allowing the CLT to get a commercial mortgage at a rate that will keep most tenets at the present rent payments.

But the CLT buys the building with a public subsidy, paying market price. Since the subsidy does not have to be paid back, the CLT can structure a new mortgage for less than it paid for the building, passing the savings back to the tenants in the form of existing or near existing rents and saving them from being evicted.

How “cross-subsidization” would work in the saving of an existing buildings when the market purchase price has to be fully repaid is unclear. The legislation allows for some tenants to be removed so the assumption appears to be that the poorer tenants leave, the better off stay.

The “core mission” of the authority is not to expand affordable housing by the acquisition of existing buildings but to “close the gap” on meeting regional housing goals in each jurisdiction, which means new construction. How “cross subsidization” works in new construction is a mystery. Other than an embrace of an ethics rarely found in real estate, what program elements motivate an “above market” housing shopper to pay more for a similar unit in a new building than a low-income resident would pay in the same building? The bill offers some sweeteners as suggestions: above market owners can lease out the unit (perhaps on Airbnb?) while the lower income tenant must prove continued residence. The bill offers high income owners the right to sell their publicly developed unit for an amount that includes not only the original price, any capital improvement, inflation AND a “reasonable return on investment.”

It seems then that the primary inducement for cross-subsidization is the same as it is for any real-estate investment: Profit—a truly odd formulation for a socialist, even one from Silicon Valley.

But the real indication that nothings has been learned by Assembly “socialists” or yimbys from the hard lessons of urban real estate development wars and the battle with urban renewal can be found in section 64742 of the bill. In that section are the priorities to be used by the authority in “acquiring or reacquiring property”—the true “business end” of the legislation. Five priorities are listed, but only one has the possibility of meeting the scale of development needed to close the “gap” between what is built by the private sector and what is required in the regional housing targets for all of the state’s counties.

The four that, if achieved, would produce land and housing far below the necessary level set in the legislation are acquiring existing affordable and rent controlled units “in danger of losing affordability status,” buying “parcels at risk of becoming unaffordable,” “surplus public properties,” and “parcels near transit.”

Note that two don’t even attempt to expand affordable housing but simply preserve it. Most large cities have programs to do the same thing and this simply duplicates them but would then establish a “revenue neutral” policy that currently is not the case in San Francisco. Acquiring “parcels near transit” would be, if funded, potentially land for a large number of units, especially in San Francisco and other urban areas with transit and none in the posh suburbs of many legislators in Sacramento. It would also mean a major wave of evictions and demolitions as most transit lines serve existing residential neighborhoods.

But the “priority” for the California Housing Authority that should grab our attention is “Underutilized parcels or redevelopment of underutilized parcels with affordability covenants or rent controlled units.” The bill defines “underutilized parcel” as “a parcel of property upon which is built a structure that contains fewer units permissible under local zoning regulations.”

This is a rather disingenious definition as the state as recently pre-empted all local zoning classifications with mandatory density bonuses which render ALL residences in existing zones being ones that “contain fewer units” than allowed.

Thus the stage is set for a new period of “urban renewal,” this time under the banner of “social housing” being developed by a state agency. Indeed the actual language—“redevelopment of underutilized parcels”—is the same as used in the urban renewal period. And being a state housing authority, just like the old redevelopment agency created and finally killed by state law in 2012, it has the right of “eminent domain” or the ability to condemn private property with the ruling of a single judge; no jury, no trial.

Housing developed using public money in San Francisco does not have to be “revenue neutral.” Indeed, the only way truly affordable housing can be produced is if the public money used in its development does not have to be repaid. Affordable housing development must pay market rates for land, labor, professional services (architects, engineers, lawyers, etc.) and building materials. The community-designed affordable housing system in San Francisco uses public money, mainly locally generated—allocations from the general fund, development fees on office developers, general obligation bonds, fees on hotel and condo conversions, large real estate transfers—to “write-down” those fixed market costs so that monthly rents or mortgage payments are able to be afforded by lower income households defined by area median income. The public development subsidy makes costs affordable only if it is a true subsidy, not to be repaid.

Based upon these proven policies and programs, San Francisco’s DSA Supervisor, Dean Preston, authored a local “Housing Stability Fund” ordinance, which specifically funded the development of social housing, and which was not linked to new construction regional housing targets, did not require the housing to be revenue neutral, limited it to being 100 percent affordable to households earning no more than 80 percent of area median income, does not require “cross-subsidization” and no “reasonable rate of return on investment” when an owner sells a unit purchased with public funds.

As the private, for-profit housing market sees its costs dramatically rising, its allies, the yimbys, have turned to seeking public funding of market rate development at both the state (AB 2053) and the local levels (Prop. D) . Aided by a willing chorus of elite opinion makers and careerist state legislators and ignoring the hard-won success of local community and neighborhood housing advocates, yimby are transforming themselves into “progressives” to legitimize the raid on public funding.

In some cases, it has resulted in naive and inexperienced politicians being willingly enlisted in their Alice in Wonderland formulations. So, are the yimbys the new “progressives? Certainly one California Assembly “socialist” seems to believe so. And so, too, does at least one socialist congressmember from New York City.

But unless, like the Queen of Hearts, you are able to believe at least six impossible things before breakfast, it’s hard to see how the advocacy for endless market rate development and the necessary displacement, demolition and despair it causes is progress.

48 Hills welcomes comments in the form of letters to the editor, which you can submit here. We also invite you to join the conversation on our FacebookTwitter, and Instagram


Federal official tells SF to fix ongoing problems at ‘uninhabitable’ Plaza East public housing

But despite successful organizing campaign, repairs haven't started.

Watch: Legendary DJ Paulette gives us juicy nightlife history on Music Book Club

'Welcome to the Club' details more than 30 years of UK house music history and her own fascinating story.

Hilarious performances whisk you up a shaky ’39 Steps’

San Francisco Playhouse lampoons a ripe Hitchcock—but you may want to binge your noir beforehand.

More by this author

What the March election really meant—and where the city goes from here

Big tech money and low progressive turnout carried the day—but what if there's a real mayor's race in November?

Lies, damn lies, and the new ‘report’ on San Francisco government

Ignore the realities of SF politics. Ignore a wide-ranging corruption scandal. Just go after district elections. That's what the Rose Institute, funded by Michael Moritz, is doing.

Robotaxis are an existential threat to SF’s public transit system

The Breed Administration is ignoring perhaps the most dangerous impact of the new autonomous vehicles.
Sponsored link
Sponsored link

You might also likeRELATED