The case for a study of the economic impact of market rate housing

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"SF's rush toward the ultimate highrise" read the headline on the Guardian front page of Sept. 27, 1971. The headline and the graphics by Art Director Louis Dunn illustrated the central point of our bombshell study: that despite the rhapsodies of  the Chamber of Commerce and the big developers, highrise commercial buildings don't produce gushing revenues and they don't pay for themselves.In fact, our exclusive study of the downtown highrise district  found that "for every $10 the district yields to the city treasury, the city has to provide $11 in services.

"Put another way: the highrise district contributes $62.9 million, or 25.2% of all locally generated municipal revenue.  But it costs $67.7 million, or 25.2% of all locally financed expenditures (figures from fiscal 1970.

"This means taxpayers subsidize--35 cents or so on the tax rate in fiscal 1970--the construction and maintenance of our civic monuments--the Bank of America building, the Transamerica building, the Hilton Hotel--and soon, another 23 skyscrapers that will be taller and bulkier and more  expensive than ever for residents and taxpayers."

Project Director Tom Lehner, a San Francisco resident and expert on urban policy from UC-Berkeley's School of Public Policy, made the crucial point: :"This report overturns once and ffor  all, emphatically and conclusively, the conventional wisdom that downtown skyscrapers somehow provide the municipal treasury with its lifeblood.

"Anyone who thinks for a moment about what's happening in New York," Lehner added, "will come to the same conclusion as our study did.  But the air's been so full of propaganda from the Chamber of Commerce and other downtown interests like the Examiner and Chronicle that it's difficult to have a clear thought about the subject."  The economic  fact that taxpayers subsidize highrise development has become gospel and helped provide the ammunition for the slow growth movement on commercial highrises that ultimately won on the Proposition M  initiative in 1986.

Below is the  PDF that shows our study with the Louis Dunn drawings: scroll  through.

http://test.sfbg.com/PDFs/highrise.pdf

Today, the burning issue is the luxury building at 8 Washington and the host of market rate developments already built or in the works and their impact on neighborhoods. And today the city needs a study that can provide the facts on the economic impact of market rate development and how neighborhoods can cope with the impacts in an era of "now new taxes."

Tony Kelly is the president of the Potrero Hill Boosters and one of the most knowledgeable neighborhood activists on the market rate housing front.  He and the Boosters are dealing with the Mission Bay Landrush and the city's plan to flood the Eastern Neighborhoods with market rate housing. His take is most instructive on why a study is needed:

'"During the Eastern Neighborhoods re-zoning in 2008, I saw neighbors who supported development turn into NIMBYs overnight as soon as they realized that building market-rate housing in San Francisco doesn'tpay for itself, or much of anything else.  On Potrero Hill, we spent an entire decade working on neighborhood planning that was supposed to  
give us new parks, new transit lines, and better schools in a part of town that desperately needs all of that.  And then, when the new zoning was finally approved ... ... we found out that none of those improvements made it over the finish line. 


"The impact fees for the new development won't even come close to providing the transit, parks, schools or infrastructure that the new residents need, let alone those of us who are already here in a very underserved part of town.  I shouldn't really have to remind you that the new housing isn't affordable for City residents.  And the Planning  
Department's own study from 2008 confirms that when you build market-rate housing, you create a bigger need for affordable housing - more than you are getting in affordable housing fees or inclusionary units.

" So, with every new market rate housing unit, we are falling further behind on everything the City needs to do to support neighborhoods.  And the increased property taxes are all going to the General Fund, to support services elsewhere in the City.  Who in their right minds, in any neighborhood, would sign up for such a deal?

"Now, on this side of town, we are stuck with development plans that are designed to double the populations of district 10 and district 6 in the next 20 years.  In my neighborhood, Potrero Hill, the population will triple. And now we have to figure out how to support this booming population without much help from City Hall.

"The new condominium projects that the Potrero Boosters Neighborhood Association has already seen in the past few months reveal the consequences of the Eastern Neighborhoods rezoning—thousands of condos and apartments (and thousands more residents) coming to the neighborhood, with very few opportunities for children or families, and not much planning from the City for alternatives to automobiles.  

"We cannot have urban density in our part of this City with suburban ways of living and getting around, and yet, that is what we have, now and in the future.  So in the neighborhoods, we have to plan (and takeaction) to create our own infrastructure, and not simply rely on what the City manages to give us."

Kelly's arguments against pellmell market rate housing is particularly strong for the city's new frontier of Mission Bay and the Eastern Neighborhoods, but it applies to every neighborhood and the entire city.  This is why for starters the supervisors need to direct the budget analyst or the city's economist to do a detailed study to help Tony Kelly and the rest of the neighborhoods deal properly with the onslaught of market rate housing.  b3

Editorial on the case against 8 Washington:
>
http://www.sfbg.com/bruce/2012/03/06/editorial-case-ag

Comments

negative doesn't make it true. You offered no proof or evidence, just a forty year old article that, of course, you wrote yourselves.

There have been tens of thousands of market-rate units built in the last 40 years and, werre they not available, house prices and rents would be much more expensive now.

Public housing is no longer an option because of deficits. And in fact "Projects" have become a pejorative term for usuall crime-infested and drug-infested ratholes. They are more usually demolished than built these days.

While voters and taxpayers have become very cynical of any attempts to tax and borrow just to subsidise housing in a place where demand will always exceed supply.

Any builder or architect will tell you that the cheapest way to build housing is to build up, i.e. high rises. And despite your whining, SF is very low-rise - there are almost no high rises outside of downtown. While go to any other US city and you see residential high-rises sprinkled across residential area's.

40 years of SFBG of interventionist policies like zoning regs and rent control have only made the housing crisis worse. Such measures clearly don't help and it's time to rethink housing from the ground up, as it were.

Posted by Guest on Mar. 10, 2012 @ 8:55 am

Most large cities around the world have the same housing issues as SF, including significant numbers of housing speculators distorting the market, and a lack of housing affordability for the vast majority of current and future residents.

If city and state politicians (and activists) would look around outside their tiny fishbowl they might find some interesting approaches that could fit San Franciscos needs for permanent affordable housing for local needs.

For example, back in the early 1960's Singapore dealt with the same housing affordility problems that face San Francisco and the Bay Area. Privare developers refused to build middle-income ownership housing. So the city (state) government created a public agency - Housing and Development Board (HDB) - and built tens of thousands of housing units that were sold and rented to local residents at affordable prices. The housing program evolved over the years. The building architecture evolved over the years. The ownership, transfer, and residency qualifications have evolved over the years. It took a few years for the general public to embrace the publicly built housing, but now it satisfies the majority of housing for the middle and lower income groups.

By all means, San Francisco needs to start a study of just who owns property in San Francsico, how the federal and state tax governments distort the local property market with their generous subsidies to to speculators, and the demographics of the people living in the housing units built since 1980. That's a study about 15 years overdue. But the city should also look at other cities where private developers can not - and will not - build affordable ownership housing for the vast majority of people with household incomes between the 75% AMI to 135% AMI.

The world is a financial mess, as we all know, mostly caused by government rules that benefit the wealthy (multi-billion dollar tax subsidies) and rules that punish the midlde and lower income groups (regressive sales and payroll taxes). Kudos to the Bay Guardian for continuing to shine a light on the dismal state of housing affordability and the complete failure of the free-market system to deliver the most basic of human needs - affordable housing.

Wikipedia:

"Public housing in Singapore as such is not generally considered as a sign of poverty or lower standards of living as compared to public housing in other countries. Although they are generally cheaper than privately-built homes in Singapore, they are built in a variety of quality and finishes to cater to middle and upper middle income groups. Property prices for the smallest public housing can often be higher than privately owned and developed standalone properties (Townhouse, apartment unit etc.) in other developed countries after currency conversion. Even though the majority of residents live in public housing, very few are below the poverty line."

"More than 80% of Singapore's population live in HDB flats, with 95% of them owning their HDB flat. The remainder are rental flats reserved for those who are unable to afford to purchase the cheapest forms of public housing despite financial support."

"There are a large variety of flat types and layouts, catering to a variety of housing budgets. HDB flats were built primarily to provide affordable housing for the masses and their purchase can be financially-aided by the Central Provident Fund. As Singapore developed economically, changing demands has seen more up-market public housing developments catering to those with higher incomes.

"From 1974 to 1982, the Housing and Development Board built and marketed middle-income apartments, an activity which became a function of the board after 1982. The trend of building increasingly up-market homes has continued ever since, and in 1999, the HDB started building executive condominiums, public housing aimed at Singaporeans who do not want a HDB flat but might find private property too expensive."

http://en.wikipedia.org/wiki/Public_housing_in_Singapore

A story last week in the NY Times ends with a sentence that will resonate with a few of the Bay Guardian jounalists:

"Tamper with the skyline? To some, that’s as verboten as debating rent control."

http://www.nytimes.com/2012/03/09/us/with-record-san-francisco-housing-p...

Posted by Guest on Mar. 15, 2012 @ 5:41 pm

they've failed.

We built projects, they became crime-infested ratholes, and we had to demolish them.

We did section 8 and there was fraud and abuse. Finally, most LL's won't accept S8 tenants.

We tried rent control and rents went up and up - the only effect is that no new rental housing was built.

Public solutions might work in Europe and Asia. Not here.

Posted by Guest on Mar. 15, 2012 @ 5:56 pm

The rent control lie has been debunked for years. There is no significant difference in rent prices for similar vacant units in SF compared to Marin, Daly City, Burlingame, and points south towards the gold fields of Silicon Valley. If SF vacant units seem a bit higher, it's only because a lot more people think SF is a way cooler place to live than Redwood City or downtown San Mateo.

As far as your lie about the lack of new housing, this issue too has been asked and answered. From the time rent control was established around 1980, please tell us all of the cities in Marin and San Mateo counties that have built more apartments and condos than SF? Maybe Redwood City or Mountain View because they've been paving over baylands and destroying wildlife habitat to build new housing boxes, but as far as building new units within a tight urban environment, not many other cities come close to San Francisco in the number of new housing units built and permitted with its small 7x7 area. So that's lie number two.

Finally, before you respond in a knee jerk fashion next time when you see a chance to spin a few lies, you might want to read the linked article first. The housing built by the government isn't even close to US Section 8 housing, or the typical US public housing projects designed to corral a poor or old people into lots of tiny spaces in one big box with loads of security gates, cameras and guards. Only in the US is public housing similar to prison housing, but there's no reason it has to be like that. Ask Habitat for Humanity. Quoting from the wiki link above:

"In 1980, a quota was introduced to ensure that no particular racial group concentrated together to prevent sectarianism. To prevent social stratification that may lead to social conflict, the **** housing of different income groups are mixed together **** in estates and new towns."

And even though Singapore has a reputation for being one of the most free-market oriented places in the world - similar to Hong Kong - it's interesting they understand housing markets far better than any US politician or US bureaucrat. They've enacted sharp tax increases on non-homeowners and implemented some outright restrictions on foreign ownership.

We can only guess how long it will be (months? years?) before we hear quotes like the following from the mayor and supervisors:

“Singapore has always had open markets and must keep them that way,” Finance Minister Tharman Shanmugaratnam said in the statement. “However, the reality is that investment flows into our property market are now larger than before, and unlikely to recede as long as interest rates remain low. The additional buyer’s stamp duty should help cool investment demand, and avoid the prospect of a major, destabilizing correction further down the road.” December, 2011
http://www.bloomberg.com/news/2011-12-07/singapore-imposes-additional-st...

For all of SF's pretentiousness as some cutting edge city, it's a bit ironic that a socially repressive, politically conservative land-locked city-state like Singapore would understand the economics of housing much better than US politicians who pretend (or lie to us) that middle income families have a fighting chance against the mega-millionaire property speculators.

Even the Wall Street Journal understands that when political viability is dependent on solving acute housing issues, the politicians better act.
http://blogs.wsj.com/searealtime/2011/12/09/singapore-fends-off-foreigne...

Unlike other governments that have credible information about their housing markets - who owns what, at what price level was the purchase, and what is the ownership time period - this type of basic ownership data in the US at the local, state, and federal level is severely lacking, pointing to the need for a thorough examination of the SF and Bay Area housing market.
http://www.bloomberg.com/news/2012-02-23/singapore-s-foreigner-home-dema...

It'll be curious to see if the main foreign absentee speculators buying SF and Bay Area property are similar to the speculators buying up Singapore housing. These are some of the countries where the most new multi-millionaires are being minted, so it makes sense they'd throw some of their millions around into real estate speculation in high demand cities like SF, London, Kuala Lumpur, West LA, Manhattan, et al:

"Buyers from China overtook Malaysians for the first time, making up 28 percent of foreign buyers last year from 20 percent in 2010, DTZ said. Indonesians and Indians are also among the dominant groups of buyers from abroad in 2011, with the four nationalities making up 77 percent of transactions among non- Singaporeans, up from 73 percent in 2010, DTZ said."

Posted by Guest on Mar. 18, 2012 @ 3:15 pm

The main reason it has failed is that the focus has been on controls and handouts, rather than allowing the market to adjust as it does in 995 of America. Even Manhattan has largely abolished rent stabilisation, and of course allows highrises.

Boston also abolished rent control and then saw a big rise in construction. London got rid of it's form of rent control thrity years ago. And so on.

All over the world, rent control goes away, public projects are demolished or privatized, and it is understood that the government cannot manage the problem. Yet SF persists in this dated idea that housing can be micro-managed.

Now, personally I don't mind if SF housing costs keep going up. I bought 25 years ago, and sitting on fat tax-free gains, have a low mortgage and stupid cheap property taxes. So I have a real vested interest in little construction, and want the massive imbalance between supply and demand continuing.

But purely as a matter of public policy, management by bureaucrats is a dismal failure, and you only have to travel down the peninsula or across Marin to see homes of a far superior quality, and happier residents.

SF is broke.

Posted by Guest on Mar. 19, 2012 @ 6:29 am

Isnt it great that in all other SF neighborhoods, there were adequate muni lines and all other things necessary to completely support a fully functioning neighborhood BEFORE there was anyone living there?

The SFBG is so behind the curve on this issue, its not even close to funny.
Support the 1%, the THD, the EOP, the Boston partners real estate interests - oh and all while touting studies FORTY years old - proudly!
Stupid people are too stupid to even know how stupid they are.

Posted by Grig on Mar. 10, 2012 @ 12:01 pm

This article raises very important problems with housing in San Francisco in 2012, which are of interest to every global investor.
Viktor O. Ledenyov

Posted by Viktor O. Ledenyov on Mar. 11, 2012 @ 7:13 am

He's more concerned with New York, London, Zurich and Hong Kong.

Posted by Anonymous on Mar. 11, 2012 @ 9:08 am

Banks love them those fat juicy interest income streams, the riskier the investment, the higher the income stream, especially when the TIC shareholder takes the brunt of any loss.

Posted by marcos on Mar. 11, 2012 @ 10:43 am

makes little sense.

Nor does the homeowner "take the brunt of any loss" else banks wouldn't be losing billions thru foreclosures.

Posted by Anonymous on Mar. 11, 2012 @ 11:36 am

The Planning Department admits that new market rate housing does not cover its immediate infrastructure costs nor does their property taxes cover the cost of providing city services to those new market rate units.

There is no dispute over this.

Posted by marcos on Mar. 11, 2012 @ 9:24 am

If market-rate housing made a loss nobody would built it.

And that would mean that BMR housing makes even more of a loss.

Posted by Anonymous on Mar. 11, 2012 @ 11:37 am

Market rate housing makes profits for developers but costs the City and existing San Franciscans in unfunded infrastructure, city services and in a City that encourages new housing development, the equity from tens of thousands who have purchased recently.

Those profits are used to game the political system such that any elected official who crosses the development imperative does so at the risk of their political future.

Posted by marcos on Mar. 11, 2012 @ 5:34 pm

millions in new tax revenue can ever be deemed a net loss unless of course you have a skewed agenda and wish to see everything that way.

But I know you own in SF and so totally understand your NIMBY'ism. Any new build devalues your investment - we get that.

Posted by Gregorio on Mar. 11, 2012 @ 5:48 pm

The Planning Department says that the new tax revenue generated by market rate housing is not sufficient to fund the city services that new residents require based on what it currently costs to fund city services per capita.

New Taxes / New Residents < Cost to provide City services per San Francisco resident.

The Planning Department says that the fees paid by new market rate housing is not sufficient to fund the additional infrastructure required for new residents.

New Impact Fees / New Residents < Cost to provide City Infrastructure

Posted by marcos on Mar. 11, 2012 @ 6:34 pm

marginal costs versus standalone costs. A lot of folks make that rookie error.

Posted by Gregorio on Mar. 12, 2012 @ 6:20 am

marcos is correct, and the Planning Department has said so publicly a number of times.

Posted by Tony Kelly on Mar. 12, 2012 @ 9:27 am

Marcos is correct? I doubt that, somehow.

I susect the problem is that they assume that a full infrastructural laod has to be applied to every new resident. But does that make sense? Should we include an individual's share of the new Bay bridge cost, for instance? Why? It's going to be there whether I move to SF or not.

Plus it assumes that a new build unit will be bought by someone who isn't already here. Dubious.

Moreover. buyers of pricey new untis consume less in city services than, say, a homeless person arriving by Greyhound and sleeping rough.

So yes, lies, damn lies and statistics can be used to "prove" anything.

Posted by Gregorio on Mar. 12, 2012 @ 10:05 am

Marcos has admitted multiple times on this very forum that one of his main drivers when it comes to opposing new market rate housing is that it could potentially depress the value of his own condo.
I really think thats all that needs to be said about him.

Posted by Vibral on Mar. 11, 2012 @ 10:27 am

Why should San Franciscans support developer enrichment by entitling new luxury condos if it drives down our equity, if it doesn't pay its infrastructure freight and won't cover the costs through property taxes of providing city services over the long run?

Let them build transit oriented development in Newark, let them build transit oriented development in San Leandro, let them build transit oriented development in Union City!

Posted by marcos on Mar. 11, 2012 @ 10:40 am

In other words... Not In My backyard. Thanks for confirming my post. Cheers.

Posted by Vibral on Mar. 11, 2012 @ 11:19 am

screw anyone else who doesn't. He cares far more about his home equity than he does about the housing crisis - just like every other so-called "activist".

Redmond, Welch, Hestor, Daly etc. are all on the RE gravy train so don't ever want it to stop. The rest is just fluff and bluster.

Hypocritical and pathetic.

Posted by Anonymous on Mar. 11, 2012 @ 11:40 am

Nope, I'm saying that the public should not subsidize private developer profit in order to build housing that few San Franciscans can afford and which costs the rest of us.

Posted by marcos on Mar. 11, 2012 @ 12:06 pm

If someone buys a home in San Francisco, are they then not a "san franciscan" - someone who lives in San Francisco?
Who is this "us" vs "them" ?
Right now it seems like the us is people who have homes, and the them is people who are seeking to buy.

You're proving the point.

Posted by Greg on Mar. 11, 2012 @ 12:16 pm

I'm saying that in a democracy, the electorate takes care of itself first. Since government can't provide the basics of public services on a reliable basis, then we need to get them to do that first before we overload them with more burdens and not enough resources to pay for them.

Otherwise, existing San Franciscans lose public services, lose infrastructure and lose equity while housing developers get richer and richer. This is not about new San Franciscans as much as it is about existing real estate developers extracting profits from existing San Franciscans.

Posted by marcos on Mar. 11, 2012 @ 5:31 pm

the "electorate" routinely support Prop 13 and are comfortable with the existing balance between developers' rights to build and municipalities' rights to meddle and perform social engineering.

Posted by Gregorio on Mar. 11, 2012 @ 5:46 pm

It helps old ones. I pay 20x the property taxes of my neighbors who owned when Prop 13 was passed. Everyone who bought a home in the past 15 years has been majorly screwed by Prop 13. It's so wonderful that some people on the same block pay $600 a year in property taxes while others pay $17,000. That makes a huge amount of sense.

Posted by Guest on Mar. 11, 2012 @ 6:01 pm

Since that means that two renters on the same street pay vastly different rents?

Posted by Gregorio on Mar. 12, 2012 @ 10:06 am
Yes

I do oppose rent control, at least how it's practiced in San Francisco.

Prop 13 is a travesty. There is room for tax relief for elders without penalizing those who buy a house more recently. There's no reason one home on the same block should pay 10% of what another home of equal resale value should pay.

And don't even get me started on the manipulation of trusts. The number of single-family and condo homes in San Francisco owned by trusts where the trustee is in a nursing home or dead is huge - and the heirs are still benefiting from that owner's Prop 13 exemption, meaning they're raking in pure profit from renting these homes out. It's disgusting. I doubt, when Prop 13 was passed, that the voters knew that their grandchildren would be able to pay the same property tax their grandparents were paying nearly 1/3 of a century ago while renting those properties out for profit.

Posted by Guest on Mar. 13, 2012 @ 1:02 pm

Was government able to provide the basics of public services reliably when you purchased your condo? Did that affect your choice to buy or not to buy?

Posted by Greg on Mar. 11, 2012 @ 6:41 pm

New housing in general goes to new residents because something on the order of 10% of San Franciscans can afford to purchase given incomes and housing prices. Existing residents don't change the equation of tax revenue for services if we move as we are already factored in.

Posted by marcos on Mar. 11, 2012 @ 7:13 pm

So basically, you and your bf dont count because you were already here...
A very convenient setup. How unfortunate for anyone else who had the poor luck to come to SF after you.
Basic tenet of I've got mine and I will work to make sure you dont get yours still applies. AKA Nimby.

Posted by Greg on Mar. 11, 2012 @ 8:12 pm

Nonsense. The housing both of us have occupied since we've lived here was all built decades ago, the infrastructure has supported it for decades and the costs of providing public services to the number of residents had been factored into the City budget.

The issue here is GROWING the City by ADDING residential units which means that MORE people are going to put MORE load on systems that are not growing fast enough to cover their freight.

That means that existing San Franciscans will see a rawer deal on our infrastructure being maintained, as resources will be diverted to making more infrastructure that likewise will not be maintained under increments to revenue which cannot keep up.

It will also mean that existing San Franciscans will see City services decrease because slightly more resources will have to provide services for more than slightly more new residents.

And adding new ownership units when housing prices are flagging and there are almost 2000 foreclosures under way means that anyone who purchased over the past 10 years and holds a mortgage will be put in danger of joining the foreclosure parade.

The only interests this benefits are the developers, new residents are playing housing investment roulette in a very uncertain market.

Posted by marcos on Mar. 11, 2012 @ 9:35 pm

Exactly. You got yours, and you'll be making sure that no one else gets theirs.
I get it. Loud and clear.

Also, you're pretty much saying you don't support adding housing of any kind until these magical improvements to infrastructure you personally feel are necessary, happen.

So again, thanks for proving my point.
Next up: how people who can afford to buy now in SF use more in city services and infrastructure than average.

Posted by Greg on Mar. 11, 2012 @ 10:24 pm

Idiot. The Planning Department determines what infrastructure is necessary and admits that their zoning plans with fees and exactions will not cover the costs to provide that infrastructure.

The same thing happens with residential, the numbers are run and the results are what they are--growth does not come for free and those making a profit off of growth use those dollars to shift the costs of growth from their balance sheets onto ours. Buying government is cheaper than paying your freight.

We moved here when San Francisco's population was static. We are in a bubble now and the proper approach to a bubble while one is inflating are countercyclical policies, policies that check rather than stoke the inflation of the bubble.

That this real estate bubble takes place amidst economic collapse everywhere else in the US economy does not alter the fact that this is a bubble. Indeed, the lack of attractive investment opportunities in the rest of the demand sapped economy means that all the more capital is inflating the SF real estate and internet time sponge economy bubbles which here are interrelated.

The fact that enormous pools of capital inflate bubbles does not mean that the underlying economic actors are sound and sustainable.

Posted by marcos on Mar. 11, 2012 @ 10:48 pm

What is it you say all the time? When they cant attack you for the merit of what you write, they resort to ad hominem attacks?

Posted by Greg on Mar. 12, 2012 @ 6:19 am

would sell your condo and go back to renting. You don't though, of course, because you know and i know that SF RE is pricey because of demand and the strangth of the local economy.

Even as close by as Oakland has seen 50% RE drops but here in Sf, it's barely a flicker.

People buy SF RE because it 's both a home and an investment.

Posted by Gregorio on Mar. 12, 2012 @ 6:25 am

In the US, absent independent wealth, home ownership constrains labor mobility through adding additional burdens to moving.

Posted by marcos on Mar. 12, 2012 @ 9:20 am

and they are less likely to own anyway. anyway, if you're looking for an avenue to attack home ownership, I think you're going to have to do better than that.

Posted by Gregorio on Mar. 12, 2012 @ 10:02 am

somehow wrong?

In fact, it's the other way about. We build new housing because of the unsatisfied demand. Those people are coming anyway - we're just quibbling over where they live.

Posted by Gregorio on Mar. 12, 2012 @ 6:22 am

With rent control, they are not necessarily coming anyway as existing residents cannot be evicted. There is nothing "wrong" per se with increasing population. There is something "wrong" with shifting the costs of increasing population onto existing residents on the east side who are already poorly served by existing City services and infrastructure.

That shifts the moral hazard from developers onto existing residents and encourages more economically reckless activity from those who have sought such unearned economic rent from government using high profits from previous development.

By shifting moral hazard for poor choices onto hundreds of thousands, developers risk a backlash from those existing residents who cannot afford to subsidize their tremendous profits and who have the power of the ballot to stop this insanity.

Posted by marcos on Mar. 12, 2012 @ 8:19 am

yet did SF become what it is today because some policy wonk in a cheap suit planned it? Of course not. Cities are organic and spontaneous creations - they don't get micro-managed because they can't be micro-managed.

Any new build adds to social costs, in theory, assuming of course that the buyer isn't already here, which you don't appear to allow for.

But a wealthy new owner isn't going to need a homeless shelter, a city-run soup kitchen or endless ER visits to the General Hospital. If rich folks weren't a net gain to cities, cities wouldn't try so hard to attract them.

Posted by Gregorio on Mar. 12, 2012 @ 10:10 am

The Planning Department did not run the numbers on new residential paying their freight on City services and infrastructure where the destitute purchased luxury condos.

What we're seeing here are the development boosters expecting San Francisco's beleaguered taxpayers to subsidize the development activities of the 1% often to create luxury housing for the 1% and those economically close to them.

I bet you supported TARP and the bank bailouts as well.

Posted by marcos on Mar. 12, 2012 @ 11:09 am

You're trying to conjure up a scenario where the poor are subsidizing the rich. Appealing to you as a good class warrior, I'm sure. But unfortunately, groundless.

The benefits of attracting more wealthy people here (assuming that they are not already here which of course you ignore) go way beyond the tax revenues from such a project. They extend to the construction jobs, the support jobs, the associated retail development, and the extra vitality given to a neighborhood that can be quiet at night.

This is why cities all over the planet pursue these projects and these HNWI's.

Moreover, these new residents will spend a lot, bring in sales tax revenues, while not putting much extra load on city services because, as stated, they won't be using SFUSD nor showing up at the SFGH ER, nor riding a loss-mkaing muni system.

So your lame attempt to try and claim that they are being subsidized by homeless people, students and nurses is, well, laughable. Not that that stops you of course, except now there are folks here to call you out on it.

Posted by Guest on Mar. 12, 2012 @ 11:26 am

It is not my argument, it is the Planning Department's argument. Given the complete regulatory capture of that department by developers and their bankster lenders, if anything, their case for the gap is understated.

It is the ideology of the crack fiend that places the short term high of construction over the long term costs of the addiction to luxury condos.

The Mission is plenty vibrant now. Vibrant in this case is boosterese for "more people who live here now, only with more disposable income."

Posted by marcos on Mar. 12, 2012 @ 11:46 am

made a math error and that this new development will bring in more than it takes, then you'd do a 180 and support it?

Of course not. You're just looking for any argument you can find to support what is basically pure unadulterated, self-interested NIMBY'ism.

Luckily, most people recognise that a population with higher incomes is good for the city, your envy politics notwithstanding.

Posted by Guest on Mar. 12, 2012 @ 12:06 pm

If an independent analyst produced a report that showed the true costs that market rate housing imposes on San Franciscans would you do a 180 and oppose new luxury condos? Of course not, you'd be singing for your supper all the same.

Posted by marcos on Mar. 12, 2012 @ 12:43 pm

whatever arcane theory you seek to impose, it will always be cheaper than subsidized BMR housing.

Oh, and does your "analyst" take into account the value of the affordable housing setasides that come with market-rate housing?

Didn't think so.

Posted by Guest on Mar. 12, 2012 @ 12:59 pm

They are YOUR analysts at the Planning Department, not mine, and they are conservative analysts.

The City is required by the state to produce two units of BMR for every one luxury unit. Luxury condos currently produce fewer than one unit of BMR per five units of luxury.

Posted by marcos on Mar. 12, 2012 @ 1:57 pm

Why don't you ask one of your "experts"?

Posted by Guest on Mar. 12, 2012 @ 2:06 pm