Mayor Lee orders affordable housing push

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Mayor Ed Lee announces new housing directive, standing on a deck at Natoma street housing project flanked by officials.
Photo by Joe Fitzgerald Rodriguez

Mayor Ed Lee stood on the rooftop terrace between high brick walls of the soon-to-be-built Natoma Family Apartments, and in the distance, the buzz and clanks of nearby construction echoed his message of the day: Build, baby, build. 

Today (Wed/18) the mayor announced an executive directive for all San Francisco government departments with a hand in housing development to prioritize construction of affordable units, from completely below market rate (BMR) projects to those that have a mix of BMR and market rate units. 

The Department of Building Inspection, Mayor’s Office of Housing, Planning Department and others involved with approving development will all reorient their priorities towards getting new affordable housing built -- a stark indicator of just how potent this issue has become after months of high-profile evictions and progressive organizing and demonstrations.

“It isn’t always on the private sector, we’ve got to have a stake in the action as well,” Lee told reporters gathered at the Natoma apartment building. 

“(San Francisco) is expensive,” he said, “but we don’t have to accept it. We can do something.”

With the tech-fueled housing crisis pricing out San Franciscans left and right, and Ellis Act evictions surging 170 percent in the last three years, the city is in dire need of housing help. Even the national media has picked up on San Francisco’s rising inequality, even if some local media outlets have been slower to react.  

But as progressives have noted before, you can’t simply build your way out of this crisis, as Lee acknowledged. His directive carries a promise to incentivize an emphasis on middle class housing, which has been particularly lacking in the housing now being built. 

“The other part of this directive is to also get the other departments to work with me and the private sector to build more housing in all the different spectrums, and middle class housing,” Lee said.  

New Housing Project at Natoma street

Mayor's Office of Housing Director Olson Lee speaks to a reporter on the deck of a community garden at the new Natoma Family Apartments, which will open in January. 

City rules will also change to protect current housing stock. Now, when a loss of housing is proposed, it will need to go through the Planning Commission for a discretionary review hearing. The mayor also formed a working group of city department heads to make recommendations to the mayor on how to preserve and create new affordable rental stock in San Francisco.

“It isn’t always on the private sector, we’ve got to have a stake in the action as well,” Lee said.

The promise of more housing in the city almost sounds too good to be true. Will the mayor’s plans reverse San Francisco’s affordable housing crisis? 

Peter Cohen, co-director of the Council of Community Housing Organizations, said it sounded like a step in the right direction. “The proof’s in the pudding, of course,” Cohen told the Guardian. “It’s the kind of directive that I wish, honestly, would come out a year ago. The answer has been, let’s keep building and hope it fixes itself.”

By prioritizing affordable housing and mixed use housing, the mayor is using the leverage of government to get developers to do the right thing. “If developers are pushed to put more units they’ll do it,” Cohen said.

Let’s hope the new push from the mayor has come in time to stunt the crisis. Even at the Natoma property where he made the announcement, the need of San Franciscans for affordable housing was palpable.

The new Natoma affordable housing building has 60 units, and will open in January. How many San Franciscans applied to live there? 2,806. 

Comments

What are the techniques for creating more middle class housing? Does the city set a maximum price at which a new unit can be sold? Are they then built with lower quality materials on lower priced land?

Posted by Guest on Dec. 18, 2013 @ 4:56 pm

BMR housing isn't sub-standard in construction, but it requires money from elsewhere to subsidize it, and that is in very short supply.

The real solution is that many people who want to live here probably should not live here.

Posted by Guest on Dec. 18, 2013 @ 5:12 pm

that limit the maximum price at which a home can be sold. For instance, limited equity cooperatives.

Ignorance and keyboard addiction are an unfortunate, but common, combination.

Posted by Guest on Dec. 18, 2013 @ 5:19 pm

What you are describing there is that a co-operative or trust can buy a home and then set it's own rules.

But they first have to buy a property and they have to pay market price for that.

So if you want to buy my property and set up a co-op, knock yourself out. But first show me your market-rate offer.

Posted by Guest on Dec. 18, 2013 @ 5:28 pm

So clearly, the practice is not illegal.

The reason that so little of it is built, is that developers understandably don't want to -they make less money! If nobody forces them to build BMR housing, they won't build it.

But let's be clear about this. They still make money. Wages and materials, the real cost of making housing, have gone up roughly with inflation since Prop 13. But real estate prices have gone through the roof. So the bulk of the increase in cost is purely speculative.

What the city would do if it had the political will, is mandate that *all* new housing is built BMR, and set prices to give developers a reasonable profit but nothing more. NOTE: I'm not interested in debating with trolls about what constitutes "reasonable." Reasonable is what the community decides, not the market.

Would developers still come? Sure they would. Would some snub the city out of spite? Of course. Others would step in, as long as there's a buck to be made. That's the beauty of the market. Markets have their place, you know. :)

All it takes is some visionary leadership and political will, both of which are lacking in room 200.

Posted by Greg on Dec. 18, 2013 @ 11:54 pm

subsidy that those BMR's offer, and because those who live there should not personally profit from that.

That has nothing to do with any ability to cap the profit an individual makes on a home they pay market price for.

You want socialized control of the building and housing businesses but that is not going to happen anywhere in the US, nor anywhere in the west that i know of.

You cannot build a lot of BMR's because they are very expensive to build. We get most BMR's because developers agree to build anyway despite that extortion.

Finally, if we stop building market-rate housing, those buyers will demand more TIC's from existing stock, meaning more Ellis evictions.

You really are clueless about this stuff, aren't you?

Posted by Guest on Dec. 19, 2013 @ 7:01 am

BMRs are not a "subsidy." There's a tendency on the right to misuse that term.

Socialized control of housing costs is actually being tried in Latin America right now, with a good deal of success, in that it's doing what it's supposed to do. Countries like Venezuela and Argentina are, in fact, "in the west."

BMRs are no more expensive to build than market-rate housing. The building costs the same to build. It's just that profits are limited.

Buyers may or may not demand more TICs; I fail to see the automatic connection here. But even if it were true, they can demand all they want. There will be no more TIC conversions for the next 10 years.

Fundamentally, though, your post fails to refute anything I said. The legal framework is there. We just need different leadership. Is it hard to bring about? Yes. But the nature of all progressive struggles is that they're uphill. By definition. If they don't push the envelope, then they're not all that progressive, are they? Some of the fights seem impossible to win. And yet progressive causes do advance. The arc of history may be long, but it bends in our direction.

Posted by Greg on Dec. 19, 2013 @ 12:40 pm

You won't win any debates by suggesting that we should be more like some third world basketcase banana republic that you wouldn't be seen dead in.

Moving on, yes of course BMR homes are subsidized. Maybe subsidized by the government, or by a developer, or by those who pay for the opportunity cost. but you cannot have a free lunch unless someone else pays too much for their lunch.

Factual error. Greg, there can be no more condo conversions for 10 years. TIC conversions can happen without limit.

But I agree with you about one thing. The legal framework is there now for you to build an unlimited number of BMR's as long as you can come up with the money. But of course the money isn't there.

And you can buy any existing building and turn it into a land trust, co-op or whatever other quasi-socialist type of housing you want. But FIRST you have to pay a market price to buy that building, and that is what you cannot get around legally.

Posted by Guest on Dec. 19, 2013 @ 1:03 pm

unsubsidized limited equity housing development with limits on resale prices.

There may be others in San Francisco. There certainly are in other places in the USA.

Mayor Lee's rhetoric implies non-profit community development corporation development, not the crumb for-profit system.

There's plenty of money for this. One aircraft carrier or a month's worth of QE should cover it.

Posted by Guest on Dec. 19, 2013 @ 1:38 pm

well established principle for such schemes.

However, that only applies to the small minority of homes that are either funded and built that way, or are pre-owned homes that have already been bought at a market value.

Greg's wet dream of an idea is really government control of the price of all housing, and nobody in the free world would ever support that outside of certain exceptional cases.

I am willing to bet my last dollar that Greg lives in a home that was built by a speculator and is managed by a risk-taking capitalist.

Posted by Guest on Dec. 19, 2013 @ 2:10 pm

See? This is why you never win an argument Greg. You want us to follow Venezuela's lead in regards to housing costs? Why the hell should we copy anything that Venezuela does in regards to money? Let's follow a government economic policy from a socialist country that has an annual inflation rate of 54%. Riiiiiigggghhhhtttt.....

Posted by Guest on Dec. 19, 2013 @ 10:26 pm
Posted by Guest on Dec. 20, 2013 @ 7:21 am

Your ideas have no support or traction with the voters.

Posted by Guest on Dec. 19, 2013 @ 7:02 am

I agree with 86% of the respondents that government should be doing more to make the city more affordable.

Posted by Greg on Dec. 19, 2013 @ 12:31 pm

If you ask people whether they would like cheaper stuff, they'll say yes. You might as well ask if they want free money.

Everyone wants a free lunch, something for nothing, and a cheap home in an expensive town. Not happening.

Posted by Guest on Dec. 19, 2013 @ 12:58 pm

The question was not about whether housing is too expensive. The question was about whether GOVERNMENT should actually make it cheaper. Most of the knee-jerk free market trolls on this website would likely answer "no" to the question "Do you think it is the role of government to make housing cheaper?"

So no, not everyone. Just 86% agree with me.

Posted by Greg on Dec. 19, 2013 @ 2:36 pm

the government could do something to make housing cheaper. That doesn't mean that they think the government can do that, should do that or even that such a thing is ultimately desirable.

What we have in SF is too many people chasing too few homes. Econ 101 tells you that means higher prices. If instead there were a way of making homes cheaper (which there is not) then that would mean even more people coming here.

IOW the solution, if it were possible, would simply make the problem worse.

By the way, I'd like a Mercedes for ten bucks. Can you fix that for me?

Posted by Guest on Dec. 19, 2013 @ 2:47 pm

The problem is obvious. BMR housing is heavily subsidized, which means that the city really cannot build much of it at all if it has to pay for it out of the general fund. Or even out of bonds which voters are often reluctant to approve.

That is why most BMR homes are built by the private sector as a by-product of for-profit, market -rate homes. That's a private/public partnership that works.

The cost of building an affordable home for everyone who wants one is so enormous that it's not even worth considering seriously. And even if we could, it would suck in thousands more low-income residents with a "me too" attitude.

The real solution is to stop thinking that San Francisco is a place that everyone who wants to can afford. And to recognize that we are not an island - there is a huge hinterland surrounding us and many parts of that are considerably cheaper than SF.

So yes, Lee is right that we should build more homes. But we can never build enough homes such that the average shmo who wants to can live here.

Not everyone can afford to live in the world's favorite city.

Posted by Guest on Dec. 18, 2013 @ 5:11 pm

did.

Government is not good at regulating the free market. Price controls don't work and everyone knows the hierarchy of all the departments named here are in the pockets of developers - and civil service rules protect them from ever losing their jobs for it.

Sorry progs - you can't have it both ways. Gentrification is rising housing prices are not going away, ever.

Posted by Guest on Dec. 18, 2013 @ 5:16 pm

profit from gentrification and NIMBY'ism even while they whine about it.

Posted by Guest on Dec. 18, 2013 @ 5:25 pm

all of this BMR housing better not affect my living room view, or my overly sentimental revisionist history nostalgia for the old San Francisco.

Posted by Guest on Dec. 19, 2013 @ 7:36 am

developments. Partly because the market-price buyers do not want to live next to low-rent neighbors. And partly because the HOA fees, property taxes and other expenses are not discounted.

Best to put all the BMR's somewhere more suitable, like the Tenderloin or in the far south-east of the city.

Posted by Guest on Dec. 19, 2013 @ 7:48 am

@all of this BMR housing
Hahahaha thank you!

Posted by Guest on Dec. 25, 2013 @ 9:35 pm

This is a real scoop for everybody. This is an interesting blog page. I do hope you could do some more post. Good job!

Posted by vipin on Dec. 22, 2013 @ 9:01 pm

Let's start huge BMR program right next to Ed Lee's house in Glenn Park. I'm sure he and his neighbors would love that.

Posted by Guest on Dec. 26, 2013 @ 2:28 pm

Build them in Bayview.

Posted by Guest on Dec. 26, 2013 @ 6:23 pm

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