Supervisors consider affordable housing half-step

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While the Board of Supervisors today considers placing a measure on the fall ballot that would slow market rate housing projects when affordable housing development drops below 30 percent of total production, it is also slated to quietly approve another item showing San Franciscans actually need more than double that amount of housing.

The 30 percent ballot measure by Sup. Jane Kim is covered by the San Francisco Chronicle this morning, an article that includes Chicken Little quotes from developers and their biggest cheerleaders, who fear the sky will fall if the current flood of luxury housing development is slowed even a little bit.

But those fears are unlikely to materialize given that Kim seems to have steadily weakened her measure since its introduction last month, responding to allies who deceptively warn of a “housing civil war.” The measure doesn’t create the moratorium that many affordable housing advocates have called for, simply a bit more paperwork for developers, and even then it exempts projects with less than 25 units and those bigger developers who file applications by the end of this year.

That sort of tepid approach to building the housing that current San Franciscans actually need belies the official city policy of seeking to build more than 60 percent of new housing for those earning 120 percent of the area median income or below, as spelled out in the Housing Element of the city’s General Plan.

Ironically, the board is scheduled to re-adopt the 2009 version of that plan today. Its approval of that plan in June 2011 was challenged in court by neighborhood groups, and in December the court ruled that the city needed to shore up its analysis of alternatives to comply with the California Environmental Quality Act. That work is now done, so the board today will repeal its 2011 action and re-approve the 2009 Housing Element.

The changes weren’t terribly significant — and besides, the city seems to essentially ignore its Housing Element anyway, even though cities and counties are required by state law to complete them and build their fair share of the affordable housing needed in their region. In rare cases, cities and counties can be fined by the state for not doing so, as was the case with Folsom many years ago when it built only market rate housing.

“Plan for the full range of housing needs in the City and County of San Francisco, especially affordable housing,” reads Policy 1.1 of the Housing Element.

Later in the plan, it spells out just how much housing that should be in San Francisco, based on the Regional Housing Needs Assessment done by the Association of Bay Area Governments: “A total of about 18,880 units, or 61 percent of the RHNA target, must be affordable to households making 120 percent of the area media income (AMI) of less.”

So the supervisors probably shouldn’t stretch too far in patting themselves on the back for a loophole-ridden half-step toward meeting its affordable housing obligations, although we’re happy to see at least some progress in the right direction. 

Comments

More SF resident tech workers commute out of SF than within SF. Aside from Salesforce and Twitter, there are not that many big employers to balance out Genentech, Apple, FB and Google. Twitter required a special bus to handle the incoming commuters.

Posted by marcos on Jun. 18, 2014 @ 10:37 am

I don't believe it.

And anyway, only 10% of SF workers are in tech.

Posted by Guest on Jun. 18, 2014 @ 10:49 am

Most of those smaller firms are not subject to payroll tax and the VC burning startups won't pay any GR tax either.

Posted by marcos on Jun. 18, 2014 @ 11:01 am

Salesforce, Twitter, Zynga etc. are all a decent size. And some other large entities hire a lot of tech guys like Blackrock.

Show your working.

Posted by Guest on Jun. 18, 2014 @ 11:14 am

into dozens of cities, each with their own taxes. If the Bay Area were one urban area and one government, as with other large US cities, then we would all share in those tax revenues.

But of course many of those jobs are located outside of SF precisely because of SF's high taxes and onerous regulations. So SF reaps what it sows.

Posted by Guest on Jun. 18, 2014 @ 6:54 am

city employees is so vast that it requires constant economic growth forever to stand a chance of not going bankrupt.

SEIU needs tech companies and the FIRE industries to survive.

Posted by Guest on Jun. 17, 2014 @ 6:05 pm

seems like a pretty civilized debate, yet you call people who don't agree with you trolls Steven? and you wonder why people act like such shmucks. take a look in the mirror and start there, my friend

Posted by Guest on Jun. 17, 2014 @ 3:49 pm

disagrees with their ideological dogma as a troll.

It's easier than actually trying to win a debate.

Posted by Guest on Jun. 17, 2014 @ 4:22 pm

i understand that one of the policies is to "SECURE FUNDING AND RESOURCES FOR PERMANENTLY AFFORDABLE HOUSING..." but that's not the same thing as mandating that sufficient funds to build the units spelled out in the AH goals be provided out of city coffers and there's no upside to pretending it does.

i don't argue that we don't need more affordable housing. i also don't buy the selective embrace of economics. the economics of BMR units is quite simple...the value is split by the developer that intends to build and the property owner who sells it. developers will not pay a price higher than their pro-formas tell them is reasonable; BMR units are a cost of doing business and their cost is ordinarily taken out of the land sales price. in high demand areas the developer may choose to suck up more of that cost from their residual land value. in low demand markets the burden is likely to fall more on the seller. you can't raise prices if no one wants your product...

Posted by MossyBuddha on Jun. 18, 2014 @ 1:45 pm

If you have a cheap home it is only because somebody else is subsidizing you.

Posted by Guest on Jun. 18, 2014 @ 3:18 pm

Is Chris Daly still living in Fairfield in a condo?

Posted by Guest on Jun. 17, 2014 @ 9:01 pm

Nope. He's living in one of the two side-by-side foreclosed homes he bought (and is the landlord of the other). The condo is a BMR he bought in San Francisco.

Posted by Guest on Jun. 17, 2014 @ 10:06 pm

and that he took a public subsidy to buy his condo even though his family is wealthy

Posted by Guest on Jun. 18, 2014 @ 1:02 pm

Most tech jobs pay no San Francisco tax. Most tech workers who bring money in from the south are tenants and their higher rents are not subject to San Francisco tax.

Posted by cartierwatches on Jun. 18, 2014 @ 6:37 am

The ration is about five to one. The rest of the Bay Area is subsidizing SF.

Posted by Guest on Jun. 18, 2014 @ 6:56 am

San Franciscans should be careful what they wish for — and vote for.

Because there should be no mystery who’s really to blame for today’s crippling shortage of housing. San Franciscans are, collectively, as an electorate. You need a long memory to think back to 2004, when voters were asked to approve plans for up to 4,000 workforce units that would be built over several years, as part of a plan that would have also included entitlement for 6,000 market-rate units. The measure, Proposition J, went down in flames, losing by nearly 70 percent to 30 percent, with the issue having been characterized as a “giveaway to developers,” and scandalized by market-rate units selling for the then-outrageous sum of $1.5 million.

It’s difficult to avoid the parallels between the distracting arguments that were used to sink Prop. J and Prop. B and C last November. In both cases, we got trapped in the mistaken zero-sum game that building more of one type of housing means building less of another, and that restricting housing development on political grounds is cost-free. It’s anything but free. It helps create the housing shortage that now plays a starring role in driving unaffordability. We fixate on how plans and proposals fall short of a perceived perfect version of San Francisco housing. This requirement for perfection then becomes the enemy of good proposals that, is a large part of the reason why there are few apartments renting below $2,500 per month, or houses selling for much under $1 million.

This is how we ordained it. It’s as simple as that. It changes when voters will it to, by making different political decisions. Until then, when it comes to housing, we have met the enemy, and he is us.

Posted by Guest on Jun. 18, 2014 @ 8:44 am

Either we do exactly what the boosters say or we want the worst of all outcomes.

Posted by marcos on Jun. 18, 2014 @ 2:08 pm
Posted by Guest on Jun. 18, 2014 @ 3:30 pm

home prices and rents in the city. Ideological posturing, NIMBYism, quotas, zoning and of course rent control all diminish supply, deter investment and ensure perpetually expensive homes.

Posted by Guest on Jun. 18, 2014 @ 9:04 am

Yes, the overproduction of market rate luxury housing keeps driving up housing prices in San Francisco.

Posted by marcos on Jun. 18, 2014 @ 9:47 am

up housing costs, along with the other factors cited.

Market-rate homes are not being over-built if they are selling. Clearly the demand is there.

Posted by Guest on Jun. 18, 2014 @ 10:01 am

What part of housing supply is inelastic in absolute terms relative to demand are you missing? Capitalist economist Ted Egan got this, why are you so dense? Lemme guess, you are a priest of theoclassical economics or you are paid to pimp for developers?

Posted by marcos on Jun. 18, 2014 @ 10:38 am

It is price-sensitive.

Housing demand is also not inelastic.

But if you believe supply has no effect, then let's remove housing!

Posted by Guest on Jun. 18, 2014 @ 10:51 am

Practically infinite demand means that housing price will go up no matter what policy choices are made. That is the economic definition of inelasticity, price does not respond to increases in supply that the producers are realistically able to deliver. Demand is increasing faster than supply.

If housing is built, not enough will be produced to stop the increase in price.

If housing is not built, price will still increase.

If housing is destroyed, price will still increase.

The economic argument, thus, of increasing supply will mean that rental prices will be $5000 in five years, up from the current $4K instead of the $8K that they would have reached with no new production.

Since fewer than 5% could or would pay $5K, there is no practical difference between rents at $5K or $8K.

Posted by marcos on Jun. 18, 2014 @ 11:14 am

about demand being price-inelastic. I don't think either is true. Demand is infinite only at a certain price point. If every home in SF was 10 million, demand would decline because people would just live elsewhere.

Supply is also responsive to price as a project whose numbers don't crunch because of excessive extortions and fees will simply not be built.

SF RE may well inflate no matter what we do, but that does not mean we should do nothing. If you think that more supply causes higher prices, then you must believe that RE would go down if we destroyed housing, and that makes no sense

Posted by Guest on Jun. 18, 2014 @ 11:29 am

Such a small potential pool of housing units in SF relative to the high potential pool of those able to afford > $5K/mo in housing payment means that supply is inelastic relative to demand, hence, we cannot build our way out the housing crisis.

Unless, of course, the housing crisis means owning land and wanting to realize the highest possible profit out of housing, in which case we can build our way out of your housing crisis.

Posted by marcos on Jun. 18, 2014 @ 12:16 pm

all homes cheap does not imply that we should build nothing.

Posted by Guest on Jun. 18, 2014 @ 12:31 pm

So you admit that housing in San Francisco is not subject to the "laws" of supply and demand!

Posted by marcos on Jun. 18, 2014 @ 12:46 pm

But a market that is massively distorted by government over-regulation can never be 100% efficient.

Posted by Guest on Jun. 18, 2014 @ 12:56 pm

Regulation is not the bottleneck, space and infrastructure in the face of saturated demand are.

Posted by marcos on Jun. 18, 2014 @ 1:11 pm

but regulations prevent that, thereby raising the cost of housing.

QED.

Posted by Guest on Jun. 18, 2014 @ 3:17 pm

Manhattan's built high and has higher prices than San Francisco.

Posted by marcos on Jun. 18, 2014 @ 4:54 pm

built high. You seem to think that SF would be as cheap as Detroit if only we built nothing. Weird.

Posted by Guest on Jun. 18, 2014 @ 5:21 pm

Overproduction of anything NEVER results in higher prices. Period. Go back to school or read any basic economics text.

Posted by Richmondman on Jun. 18, 2014 @ 3:33 pm

to support his bizarre desire to build no new homes in SF. The voters think otherwise and elected a pro-development mayor, and we now see condo towers going up all over town.

marcos = fail.

Posted by Guest on Jun. 18, 2014 @ 3:39 pm

Why will going east help? Doesn't the east bay have NIMBY type folks, counties and cities with all sorts of lovely zoning. Don't go south or north, west is totally out of the question.

Can't go up or out.

Posted by Garrett on Jun. 24, 2014 @ 12:59 pm

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