Our three-point plan to save San Francisco - Page 2

A radical new approach to affordable housing isn't just an option anymore — it's imperative
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HOMELESS OR $100,000

The housing plans coming out of the Mayor's Office right now are aimed primarily at two populations: the homeless people who have lost all of their discretionary income due to Newsom's Care Not Cash initiative, and people earning in the neighborhood of $100,000 a year who can't afford to buy homes. For some time now, the mayor has been diverting affordable-housing money to cover the unfunded costs of making Care Not Cash functional; at least that money is going to the truly needy.

Now Newsom's housing director, Matt Franklin, is talking about what he recently told the Planning Commission is a "gaping hole" in the city's housing market: condominiums that would allow people on the higher end of middle income to become homeowners.

At a hearing Sept. 17, Doug Shoemaker of the Mayor's Office of Housing told a Board of Supervisors committee that the mayor wants to see more condos in the $400,000 to $600,000 range — which, according to figures presented by Service Employees International Union Local 1021, would be out of the reach of, say, a bus driver, a teacher, or a licensed vocational nurse.

Newsom has put $43 million in affordable-housing money into subsidies for new home buyers in the past year. The Planning Department is looking at the eastern neighborhoods as ground zero for a huge new boom in condos for people who, in government parlance, make between 120 and 150 percent of the region's median income (which is about $90,000 a year for a family of four).

In total, the eastern neighborhoods proposal would allow about 7,500 to 10,000 new housing units to be added over the next 20 years. Downtown residential development at Rincon Hill and the Transbay Terminal is expected to add 10,000 units to the housing mix, and several thousand more units are planned for Visitacion Valley.

The way (somewhat) affordable housing will be built in the eastern part of town, the theory goes, is by creating incentives to get developers to build lower-cost housing. That means, for example, allowing increases in density — changing zoning codes to let buildings go higher, for example, or eliminating parking requirements to allow more units to be crammed into an available lot. The more units a developer can build on a piece of land, the theory goes, the cheaper those units can be.

But there's absolutely no empirical evidence that this has ever worked or will ever work, and here's why: the San Francisco housing market is unlike any other market for anything, anywhere. Demand is essentially insatiable, so there's no competitive pressure to hold prices down.

"There's this naive notion that if you reduce costs to the market-rate developers, you'll reduce the costs of the unit," Calvin Welch, an affordable-housing activist with more than three decades of experience in housing politics, told the Guardian. "But where has that ever happened?"

In other words, there's nothing to keep those new condos at rates that even unionized city employees — much less service-industry workers, nonprofit employees, and those living on much lower incomes — can afford.

In the meantime, there's very little discussion of the impact of increasing density in the nation's second-densest city. Building housing for tens of thousands of new people means spending hundreds of millions of dollars on parks, recreation centers, schools, police stations, fire stations, and Muni lines for the new neighborhoods — and that's not even on the Planning Department's radar. Who's going to pay for all that? Nothing — nothing — in what the mayor and the planners are discussing in development fees will come close to generating the kind of cash it will take to make the newly dense areas livable.

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