By Calvin Welch, HANC Board
Mayor Breed, her allies in the tech and real-estate sectors of our economy (both of which are facing serious challenges in the Covid era) and their well funded "shock troops", the YIMBYs , are mounting an all out assault on long-term San Francisco pro- affordable housing policies in this Novembers election.
Counter to the prevailing "narrative" dominating the Chronicle's coverage of housing and development issues, San Franciscans have a strong record of supporting 100% truly affordable housing development for working families, the elderly and un-housed San Franciscans. In bond measures, special taxes and ordinances the people of San Francisco and their district elected Supervisors have time and again passed funding measures, density bonuses, and accelerated approvals for 100% affordable housing developments serving both low income and un-housed San Franciscans.
HOUSING INVENTORY
As the federal and state commitment to affordable housing has disappeared, San Franciscans, through a mix of new construction and acquisition of existing buildings has created a permanently affordable housing inventory of over 40,000 units, the most in the 9 Bay Area counties. Well over half of these units serve very low, formerly un-housed and elderly residents. A significant portion serves low and moderate income families. Still others are earmarked for teachers and other entry level public employees performing essential services for all of us. Scores of community and faith based organizations, including HANC, plan, actually design and jointly advocate for these programs.
The use of general obligation bonds for affordable housing, the creation of new taxes on commercial uses dedicated to providing services and housing for the un-housed, the requirement for developers to build middle income affordable BMR units, the creation of "supportive housing" developments and "teacher housing" are just some of the successful innovations these community and faith based groups, working with a district elected Board of Supervisors, have created.
MYTH OF THE NIMBY
Yet the myth of the NIMBY- neighbors standing in the way of unlimited new housing development -continues to be peddled by both national and local media insanely arguing that suppressing opposition to unlimited market rate development will, somehow, "solve homelessness".
The reality is that it is Mayor Breed and her allies that, time and again, frustrate and even oppose initiatives to foster truly affordable housing . Under the slogan of "building housings for all income levels" Mayor Breed and her allies only push new construction as the sole and only strategy to address the "housing crisis". This position of course makes sense to market rate developers who profit mightily by building housing only for the wealthy, for hedge fund managers who increasingly "invest" in flipping real estate, to realtors who make substantial fees first on selling less dense property to developers and then on selling the tiny, expensive units in the new high density buildings.
While "building housing for all income levels" makes a lot of money for those "in the business” the problem is that far fewer "players" make money in the development of "affordable housing." Contractors, building suppliers, and building trade workers earn the same in market rate development as they do in affordable housing development . But the "real money" made by hedge fund managers, realtors and land speculators is only made in the new construction of market rate housing with no limitation on re-sales or use which normally are applied to affordable housing
The irrationality of depending only on new construction as a "solution" to the "housing crisis" is clearly seen in three hard facts that add to the costs of new construction: the "financialization" of the housing market, the never ending increase in the costs of land, labor and materials needed for new construction and that all new market rate construction is exempt from rent control.
The housing market has become "financialized" with huge profits to be made in the constant "churning" of the market through the creation of financial instruments bought and sold on Wall Street by people who have never even thought of actually living in the housing they are buying and selling. At the heart of this is the constant need of new mortgages associated with new construction to keep feeding the frenzy going. This phenomenon was at the heart of the market crash of 2008 and it has only grown since then.
The second hard fact that undermines the policy of total reliance on new construction as the solution to our housing crisis is that San Francisco now is the most expensive place on earth to build in. In an international survey of construction costs reported in the Chronicle last month ("SF regains top spot as earths most expensive city to build in") San Francisco has regained the title as the City with the most expensive housing development costs (earned before Covid in 2019) because of high land costs and a buildings trade shortage of labor resulting in very high labor costs. To continue to push new construction as a solution meets the classic definition of insanity: repeatedly doing the same thing while expecting a different outcome.
The final reason Breed and the Yimbys policies need to be reversed is that all new market construction is exempt from rent control. Only new development of 100% affordable housing has long term price controls.
Increasing new development density simply increases its costs and therefore its final price as high rise development is the most expensive form of housing construction. Moreover, as density increases the cost of the land also increases as land owners understand that the more units that can be built on a lot will yield more profit to the developer, allowing the developer to pay even more for the land.
Finally, high density market rate development means the demolition of lower density housing (and its residents) to make room for the new housing. Replacing affordable existing housing, often times rent controlled, with new, un-price controlled, usually smaller units is not a sustainable model for any neighborhood or city.
All of these issues play out almost at a weekly basis before the Planning Commission and the Board of Supervisors. Breed and her allies proposing deregulation and new market rate construction unaffordable to the people who live in San Francisco and community, tenant and faith based advocates joined by the Supervisors seeking policies that protect existing communities and residents and housing able to be afforded by current residents as well as the un-housed.
NOVEMBER'S BALLOT
This November ballot will have at least four ballot measures proponents claim will address the "housing crisis" facing our City. Two measures define the "crisis" as being amenable to increasing the supply of housing, each positing differing approaches. One, Prop D, supported by Mayor Breed and her YIMBY allies changes the very definition of "affordable housing" making market rate housing, affordable to less than 10% of our current population "affordable" by legal fiat. The other, Prop E, supported by seven Supervisors and a host of community based affordable housing advocates, set minimum affordability levels lower than Breeds and requires larger units to qualify for density bonuses.
Two other measures address other aspects of the "crisis" than mere production.
One (Prop M) would tax vacant residential units, held off the market to increase price, and dedicate that tax to affordable rent assistance for seniors earning half the medium income and the acquisition of housing affordable to folks earning no more than 80% median income (median income in the Bay Area is about $120,000 for a household of four).
The final measure (Prop C) is the creation of a commission to oversee the City's sprawling and ever changing homeless program now totally under the control of Mayor Breed.
HANC will hold its September and October meetings on these issues and hear from proponents and opponents of each measure. It’s a critically important conversation, far too important to leave to the Mayor and the media. Plan to join us on September 8 and October 13. Details on how to join will be sent closer to each meeting.