Measuring displacement

It's time for official reports for planned developments that "could lead to significant displacement of existing San Francisco residents."
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EDITORIAL You can't build much of anything substantive in San Francisco without doing an environmental impact report. You can't pass significant legislation without doing an economic impact report. But the most important issue facing San Francisco today is largely ignored by those studies — and is only rarely even discussed as part of the city's economic development and planning policies.

At a press conference and rally Dec. 19, housing activists decried the huge upswing in evictions in San Francisco this year. At least 26 buildings are facing Ellis Act evictions — where every tenant must go so the landlord can sell the place vacant — "and those are just the ones we know about because a tenant has sought help," said Housing Rights Committee organizer Tommi Avicolli Mecca.

In every case, longtime San Franciscans — many of them low-income, disabled, families, or people of color — are being displaced from their homes, and probably from the city. Nobody at City Hall even measures the full numbers year by year, but the Tenants Union reports that Ellis Act evictions have tripled since 2011.

These aren't just random acts by individual property owners; they're part of a much larger trend created by city policies. And they ought to be tracked, measures — and mitigated — the same way environmental or economic impacts are.

Let's call it a Displacement Impact Report.

The outline could be exactly the same as an EIR. A designated city official, either in the City Planning Department or working for the city's economist, would analyze every piece of legislation and every proposed development of more than a certain size to determine if it "could lead to significant displacement of existing San Francisco residents." If the answer is no, the project or bill gets a green light to move forward; if the answer is yes, the sponsor, or the city, has to prepare a DIR.

A DIR would look, for example, at the impact the Twitter tax break would have on Ellis Act evictions. Not an impossible task at all — environmental and economic consultants do this sort of work all the time. You look at how many jobs the tax break will create, how many of those jobs will go to people who are not current SF residents, how much they'll be paid — and what the residential vacancy rate is for apartments and houses in the range they can afford. Add into the mix current plans for housing construction in that range, and plans for low-income housing for people who might be displaced.

Historical data could easily create models for how many new highly paid employees it takes to create one individual or family displacement. It would be at least as accurate as a lot of the economic and environmental models used every day in city and regional planning agencies.

If an environmental impact report turns up significant and unavoidable effects, the project sponsor is required to look at mitigations — and decision-makers can be held accountable for whether that happens. For example, a tax break that is expected to lead to the displacement of 50 low-income San Franciscans would have to be accompanied by the construction of 50 new permanently affordable rental units, or the creation of rent subsidies adequate to protect the vulnerable populations facing the loss of their homes.

Politicians and business leaders routinely complain that some legislation will lead to job losses — but the loss of people's homes isn't in the mix. It should be.

Someone on the Board of Supervisors ought to draft and introduce a bill adding DIRs to the list of requirements before major policy and development changes are approved. It could be the most important bill of 2013.

 

Comments

No, in the end it comes down to latitude and longitude.

Posted by Joseph Thomas on Jan. 20, 2013 @ 11:04 am

SF has limtied supply and near infinite demand. therefore it will always be expensive. That's just the way it is, and it can never be changed.

Building more homes would help, tho.

Posted by Guest on Jan. 20, 2013 @ 11:37 am

The limited supply of space is because of the latitude and longitude.
Build more housing where? In Golden Gate Park?

Posted by Joseph Thomas on Jan. 20, 2013 @ 9:18 pm

Plus there are under-utilized part of the city, particularly in the south-east.

Posted by Guest on Mar. 29, 2013 @ 8:45 am

How many units would need to be build to see downward pressure put on price?

How far down would those units push price?

How long would that downward pressure last?

What would happen afterwards?

And what would the City look like afterwards?

This is little more than demand management for SF residence via systematic destruction of all that attracts people here

Posted by marcos on Mar. 29, 2013 @ 9:36 am

balance and the potential unsatisfied demand. But it is clear that housing costs would be lower by some amount if either supply was higher or demand was lower.

Generalizations about what attarcts people here are rarely helpful because they are highly subjective. You and I probably were attracted to SF for very different reasons.

I have no issue with residential high-rise although they are more suited to some parts of the city (downtown, SOMA, Russian Hill, major traffic and transit arteries) than others.

The only high-rise I don't like is the one at the end of Ven Ness on the waterfront.

Posted by Guest on Mar. 29, 2013 @ 10:43 am

Estimate high low and midrange, the back of a cocktail napkin numbers would be sufficient.

Posted by marcos on Mar. 29, 2013 @ 3:02 pm

towers on the east-side of the city would reduce the average home price in SF from the current 10 times average family income to about six times.

Bad for people like you who bought when supply was tighter. Good for anyone wanting to buy.

For every person that wants an ageing Victorian wood house, there's another who wants a modern condo with thermal efficiency, sweeping views and a relatively maintenance-free lifestyle.

Posted by Guest on Mar. 29, 2013 @ 3:16 pm

Care to share your back of the envelope calculations that led to that?

Posted by marcos on Mar. 29, 2013 @ 4:22 pm

important point here is the principle. More supply = lower price, for the same level of demand.

Suppose this. Tomorrow I invent a new process that converts clay into gold. The world is suddenly flooded with cheap gold. You do not need a formula to know that would mean a lower gold price, because it is intuitively obvious. And not knowing the precise level to which it would fall to doesn't mean it will not fall.

Takling that analogy further, gold is currently $1600 an oz. and costs about half that to mine. If it suddenly cost, say, $100 an oz to manufacture, then that would be the trend point for the price of gold.

In SF, the price of land provides that same lower point. Building high mitigates the cost of that land but, even so, there is a minimum below which SF RE cannot go. I'd put that at 40% to 60% of current values, for a variety of reasons.

Posted by Guest on Mar. 29, 2013 @ 4:57 pm

Inelastic supply and inelastic demand mean that there is no way that housing production could meaningfully slow the rate of increase of much less push down prices. The only thing that will do that (again) is an earthquake or to try something new, a North Korean nuke strike.

Posted by marcos on Mar. 29, 2013 @ 5:17 pm

That's easy to prove, as you yourself have lamented that poor young gays from other parts of the country are coming here in far less numbers because they cannot afford the housing here. That is inelasticity.

Many factors go into RE prices but clearly supply is one. If the supply increases the price goes down or, as you note, at least goes up less. Either way, building more housing would make SF RE more affordable than it otherwise would be.

But of course you, me and thousands of other property investors will never let that happen. That said, at least i am not hypocritical about it. I do not want new supply because it will make my SF RE worth less than it otherwise would be. I do not dress up that self-serving prejudice in political terms.

I have a vested interest in wanting SF RE to be pricey. So do you. Nuff said.

Posted by Guest on Mar. 29, 2013 @ 5:37 pm

They still WANT to come and that is inelastic demand. The fact that they cannot afford to move here does not diminish demand.

Posted by marcos on Mar. 29, 2013 @ 6:18 pm

housing is elastic because nobody is compelled to move to SF, nor to stay here is it is too expensive for them.

New build would help more of them to come here or stay here, at the margin. But SF will always be pricey and, ultimately, some people who might have moved here a generation ago, will elect to go some place else.

NIMBY'ism and affordable housing are inherently contradictory to each other.

Posted by Guest on Mar. 29, 2013 @ 5:42 pm

You could produce all the jobs you want but housing is a headache here. Thousands and thousands of jobs but very little housing. Some of the housing classes you need to build from what I have read. Very low income, low income, workforce, moderate income, high income, senior, family, SRO, BMR, market rate, no income and disable hosing. You only have some much space, NIMBY, green space, open space and people want their views.

Yet keep in mind people will have kids, people will come here for the thousands of jobs or whatever reason, then you have people like me who are born here.

Posted by Garrett on Apr. 30, 2013 @ 12:28 pm

This is just expected that there will always be residents who will be displaced, especially if real estate prices are going up and there is always a positive profit if the building owner will sell it up. I was working on a case a long time ago about medical malpractice law, when the same client was asked to leave his current place because of this current issue. What was good with his situation is that he was given ample time and the building owner was transparent enough to let him and the rest of the tenants about the reason.

Posted by Mitchell Sexner on Sep. 16, 2013 @ 12:07 am

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