San Francisco is spending $250,000 to create an economic development plan, and that's probably a good thing. The city's economy is changing; development pressure is threatening small businesses and light industry; local people can't find jobs; and more and more residents are working out of town — it's exactly the sort of situation that calls for some intelligent planning.
The current project, sponsored by the Mayor's Office, is the result of a ballot measure approved two years ago that requires the city to measure the economic impact of policy decisions. For the most part, the legislation, by Sup. Michela Alioto-Pier, is aimed at stopping progressive initiatives, but if it gets San Francisco headed in the right economic direction, that will be well worth a quarter million dollars.
See, I've talked to the economist who is heading up the study and to the person in the Mayor's Office who is coordinating it, and I'm afraid that they're coming very close to missing the point.
The final study won't be completed until the end of January, but the Board of Supervisors got a sneak preview a couple weeks ago, complete with a PowerPoint presentation and lots of the kind of talk that seems coherent only to academic economists. (Under "Conclusions," the summary recommends that we "invest in and diversify the engines of innovation in the knowledge sector." Whatever that means.)
The actual research in the preliminary documents seems fairly solid, and the evidence, while not surprising, is still alarming: San Francisco has lost thousands of families, jobs that don't require a college degree are vanishing, and the income gap between the increasingly wealthy high end of the population and the increasingly squeezed middle and working classes is growing.
But missing from the study so far are what I consider the two most important factors in economic development in this city: housing and land use.
I work for a small business, and I have to hire people, and I can tell you that every small businessperson in this town (except the ones who have vast stores of venture capital to spend) is facing the same problem I am: it costs too much to live here. And if their businesses are operating in the eastern neighborhoods, they're also facing the very real prospect that they may lose their leases and their places of business to make room for more million-dollar condos that their employees can't afford, which will fill up with more people who work in Silicon Valley.
Last week I spoke with Ted Egan, the Berkeley economist who is heading up the project for ICF Consulting. He understands that locally owned businesses are the key to the local economy and that replacing imports and expanding exports is a crucial goal. But he also said that "housing outcome isn't on our plate."
That, I guess, is because the city defined the study that way. Jennifer Matz, who is deputy director at the Mayor's Office of Economic and Workforce Development, told me that her office would be coordinating with city planners but that housing and land use were beyond the scope of this report.
If that's the case, it won't be a terribly useful document. SFBG
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