EDITOR'S NOTES

By Tim Redmond

› tredmond@sfbg.com

The housing debate is heating up fast, and there are actually political leaders starting to ask the question I've been posing for several years: Why is San Francisco building more market-rate housing?

There are a couple of factors driving this. One is the recent decision by the Board of Supervisors to uphold an environmental appeal on a housing development at 2660 Harrison, which, as we reported last week, has the legal force of barring any future market-rate housing in the eastern neighborhoods until the cumulative impact of future development is analyzed. The other is the ever-looming Eastern Neighborhoods Plan, which is winding its way through the city planning process.

The vision that developers and some city planners and officials have for the area from Rincon Hill to Hunters Point — a giant swath of land that happens to include most of the last blue-collar jobs in San Francisco — involves the construction of as many as 40,000 new high-end housing units.

The problem with that plan, of course, is that so-called market-rate housing is way too expensive for most San Franciscans — and it inevitably drives out the few remaining industrial jobs. It's kind of backward: Instead of trying to create jobs and housing for San Franciscans, we'd be destroying local jobs and creating housing for people from somewhere else.

So the big, scary M word — moratorium — is actually gaining some political traction, and it has the developers and their allies fairly seriously freaked.

Shortly after our editorial hit the newsstands last week, calling on the city planning director to declare a market-rate housing moratorium for the eastern neighborhoods, Gabriel Metcalf, who runs the downtown-friendly San Francisco Urban Planning and Research Association, asked me if he could have some space to respond. His opinion piece is on page 7. You can read his argument yourself, but I'm going to summarize it here quickly so I can tell you why he's wrong.

He has three points: Building in the city combats sprawl (I agree). Building affordable housing is expensive (and it is; this is also a very rich city). And building high-end housing will eventually bring market forces to bear and allow moderate-income people to afford a market-rate unit.

This is the crux of the issue right here, and Metcalf is missing the key point. Increased supply will only bring down costs in a reasonably well-ordered market — and San Francisco's housing market is a creature entirely unto itself, where demand is essentially infinite, supply is by definition limited and nothing except tight government regulation has any hope of bringing down prices.

Only rent control — strong rent control — can keep apartments affordable in this market. And only a public policy that says million-dollar condos are not going to be part of the development mix can force developers to do something different.

Here's the thing: You can make money (without huge public subsidies) building $350,000 units. You can make much, much more money selling them for $1 million, and that's what "market-rate" housing means.

Sure, a moratorium on market-rate housing (until we can figure out what we want to do with the eastern neighborhoods) is a radical idea — but these are radical times, with the future of the city at stake. *