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

who cannot afford a home in SF?

I think the NIMBY's are stamping on the feet of the affordable housing bigots.

Posted by Guest on Jun. 17, 2014 @ 11:49 am

There are plenty of homes in SF compared to its land size. Few cities in the entire country are as dense as SF. So it's not a supply issue in SF, although there is a supply issue in the rest of the Bay Area where jobs far exceed housing units, pushing up rents and housing prices for everyone.

In SF the best strategy is the marcos strategy. Buy a former rent-controlled apartment. There must be over 150,000 housing units that can be converted from rental units to TICs. Thus, the city only needs more people to buy rental buildings and convert the units to ownership in order to supply more homes for sale. The current tenants had a good ride while it lasted, but everyone knows that being a tenant is one of the lowest forms of human survival, which is why so many former tenants migrate to the US where the home ownership rate is much higher than the countries from where they migrate.

Posted by guest on Jun. 18, 2014 @ 3:42 pm

while claiming to oppose other white male tech workers who do the same thing.

Posted by Guest on Jun. 19, 2014 @ 5:12 am

My strategy is for the City to compete with private speculators to pay market rate to purchase rent controlled units at risk of Ellis for conversion into permanently affordable CLT housing. In order to make this profitable, the barriers need to be raised to increase the cost of eviction and speculation.

Posted by marcos on Jun. 19, 2014 @ 6:58 am

Why aren't you going out and getting funding for it? If your idea was viable, lenders would fund you.

Posted by Guest on Jun. 19, 2014 @ 8:25 am

no new developments would happen.

Those with billions to invest in developments have plenty of other options, including places with no red tape, extortions and restrictive zoning.

You cannot over-regulate land AND have affordable housing.

Posted by Guest on Jun. 17, 2014 @ 11:51 am

"Those with billions to invest in developments have plenty of other options, including places with no red tape, extortions and restrictive zoning."

Sounds like a plan! Might I suggest I-80 east?

Posted by marcos on Jun. 17, 2014 @ 12:15 pm
Posted by Guest on Jun. 17, 2014 @ 12:33 pm

its not that the city construct the housing. its that enough land is zoned to allow that housing to be built. the housing element neither provides the funding mechanisms to make it happen nor does it forbid market rate stuff from being built if affordable housing construction is insufficient to the specified goals.

Posted by MossyBuddha on Jun. 17, 2014 @ 1:06 pm

That will increase shortages and drive up the cost of housing, just as rent control has driven up rents.

The reason housing is expensive is because of SF's housing policies.

Posted by Guest on Jun. 17, 2014 @ 1:21 pm

To the commenter who wrote, "The reason housing is expensive is because of SF's housing policies," that's bullshit. The reason housing is expensive is demand for housing in San Francisco is insatiable, and we're spending too little money to create permanently affordable housing. And simplistic understanding of supply-and-demand doesn't explain San Francisco's complex housing market. 

Posted by steven on Jun. 17, 2014 @ 1:48 pm

Strict rent control deters investors from offering places to rent. That is obvious given the number of Ellis evictions, TIC creations, condo conversions and Airbnb lets.

Strict zoning laws means less units get built.

Why are you in denial about the adverse effects of SF's housing policies?

Posted by Guest on Jun. 17, 2014 @ 2:00 pm

Many times over the past year we've asked you and others to provide the number of rental units constructed (and permitted) in SF compared to Palo Alto, Burlingame, Belmont, Redwood City and other nearby cities that don't have rent control. According to your logic, they should have built (and permitted) far more rental units than SF, but I sure don't see this all of this new construction when I drive down 101, or 280, 880, El Camino Read, Middlefield Rd or Mission Blvd.

In other words, your statement that SF rent control hinders the construction of new apartments is bullcrap. SF has a housing crisis because the other 100 cities in the Bay Area have terrible land use policies that prevent building dense, walkable, bikable, transit-oriented developments that the millennials, empty nesters and hiptsters prefer. SF should be suing these other cities to either step up to collectively build 500,000 housing units or sue the largest employers to force them to relocate hundreds of thousands of jobs outside CA.

SF has done far more to build new housing than almost every other city in the region, yet it remains the whipping girl since developers are frothing at the mouth to build more million dollar condos in SF for recent high-income transplants and foreign investors. The current government is destroying the city's economic diversity (eg, nothing in Kim's legislation will help middle-income households). Until the current mayor and BOS are evicted from office, I doubt anything will change absent another earthquake or another real estate meltdown.

Posted by Guest on Jun. 17, 2014 @ 3:51 pm

cities outside of SF, so your question is obviously directed at someone else.

But given that far more people commute into SF than out of it every day, it is clear that SF has too few homes for the workers it needs, while the burbs have more homes than jobs.

So the other Bay Area cities are bailing out SF's miserable failure at building homes for those who need to be here (as opposed to "want" to be here which is irrelevant)

Posted by Guest on Jun. 17, 2014 @ 4:24 pm

Does SF need to build more density? No - other cities in the Bay Area need to build both more space for housing and business - to reduce commuting in general.

Posted by Richmondman on Jun. 18, 2014 @ 10:07 am

If people want to live in SF and work elsewhere, you cannot stop them unless you want to adopt eastern european type controls.

It seems obvious to me that SF has too little housing relative to the workers it needs. And the burbs have a surplus of housing relative to the workers they need. It's obvious because far, far more people commute into SF than commute out.

Look at any US city and there is heavy density downtown and lighter density as you move out. It is no different in the Bay Area, for which SF is its downtown.

This would not be an issue if we had a single jurisdiction for the Bay Area. This beggar-thy-neighbor nonsense doesn't help.

Posted by Guest on Jun. 18, 2014 @ 10:17 am

You cannot expect to compel citizens to change their laws to allow for developers to construct luxury condos everywhere without mitigating the full range of impacts that these projects have on existing residents.

Posted by marcos on Jun. 18, 2014 @ 10:36 am

set-asides and increased secondary revenues.

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

Perhaps 40% of impacts on a good project are mitigated by impact exactions.

Posted by marcos on Jun. 18, 2014 @ 1:49 pm

In many cases, the impact is minimal because the infrastructure already exists

Posted by Guest on Jun. 18, 2014 @ 3:20 pm

Take the Transportation Sustainability Program and Fee. The total transit needs are divided by the square footage of zoned building envelope and set out as the transit need. Developers balk at paying their full freight, so the number is winnowed down to what is "practicable," that is, what developers tell their bought and paid for politicians they want to pay.

The TSP/TSF discount is like 75% with developers only willing to pony up 25%of the transit impact costs of their projects, both on delay due to parking and crowding due to new warm bodies.

Posted by marcos on Jun. 19, 2014 @ 7:15 am

All the suburban cities you mention while having somewhat less restrictive housing policies than SF still place very onerous restrictions on the supply of new housing.

It is terribly expensive and very difficult to get approval for new housing development in most of the Peninsula municipalities. And, the Peninsula is an extremely unaffordable place, much like San Francisco.

While the comparison does not really give much insight into rent control per se, it does help to prove up the point that if severely restrict housing supply, then you will make housing very expensive.

So, yes, the Bay Area has stupid housing policies that strangle supply and make it very difficult to build new housing, and so the price of housing keeps going up and up throughout the region. Pretty soon, these policies will end up having just the opposite effect of what those who support them hope they would.

Posted by Chris on Jun. 17, 2014 @ 6:53 pm

and new construction is exempt. the cost is high because of very high demand and very tight supply. on top of that we've got construction costs running $500/SF and equity investors demanding 20%+ returns.

Posted by MossyBuddha on Jun. 18, 2014 @ 1:34 pm
Posted by Guest on Jun. 19, 2014 @ 5:11 am

How would you create permanently affordable housing? How much of it would you create? How much money would that cost?

Posted by Guest on Jun. 17, 2014 @ 2:03 pm

There is no such thing as a cheap home in Sf. The cost of the land alone makes every home expensive.

A cheap home costs the same to build as a market-rate home. The only thing that makes it cheap is the subsidy. IOW you get a cheap home because someone else fronts the difference. And why would they do that?

Most estimates i have seen indicate that a BMR home requires a 250K subsidy. So even a billion dollars would only build 4,000 homes.

There will never be the funds to build more than a few BMR homes and Steven knows it. Of course he wants to endlessly tax and confiscate wealth to provide such homes, not realizing that such wealth will simply vanish if such policies were ever enacted.

Posted by Guest on Jun. 17, 2014 @ 2:15 pm

If I have to include 15 BMR units to my 75 unit development it has NO EFFECT on the sale prices of the other units. I will sell the other 60 units for as much as I can get REGARDLESS of what the BRM units sell for. There's no subsidy, other than I get a few million less since I, as the developer, could have sold the BMR units for $1.2 million verses the $550,000 BMR price. GM doesn't charge Cadillac buyers more because GM only makes a tiny profit on small cars and it needs to make up the profit on its larger, fancier cars. No, GM sells the Cadillacs for as much as people will pay for them regardless of how little profit they make on smaller cars.

The fact that a developer has to provide BMR units only affects the land value that I'll pay for the buildable lot, but it has NO EFFECT on the price of the non-BMR units. I wish SFBG would go to Facebook postings so we can start to identify and shame the idiots who keep parroting stupid statements like, "market rate buyers subsidize BMR buyers." It ain't true and it's never been true.

Posted by Guest on Jun. 17, 2014 @ 4:03 pm

I said it will cause less projects to happen because the more marginally profitable ones will no longer be profitable if more BMR units have to be built. The reason is obvious - the cost is the same either way but the profits are less the more BMR units there are.

And in the aggregate, if more projects are cancelled, and less market-rate homes are built, then the supply goes down and homes become more expensive.

You cannot extort without limit when investment dollars can go anywhere in the world.

Me? I don't care because I own SF RE and therefore love it when the lefties stifle all competition. It makes my properties more valuable. Keep it up!

Posted by Guest on Jun. 17, 2014 @ 4:28 pm

Perhaps you, SPUR or the Housing Action Coalition can provide numerous examples of projects that never got built because BMR units were required to be added to the project. With hundreds of buildable sites across the city, the list of projects that got cancelled because of BMR requirements should be quite long. Hopefully this long list will be more forthcoming than the data showing which of the other 100 cities in the Bay Area are building far more housing units than SF over the past 15 years.

If a requirement to add 50% BRM units to every construction project over 25 units dries up all housing construction over the next 20 years, we can talk 20 years from now about rejiggering the BMR requirements.

Posted by Guest on Jun. 17, 2014 @ 5:04 pm

because of the city's punitive regulations?

You might as well ask which stocks I haven't invested in because I thought they were over-priced.

What is obvious is that the smaller the profit, the less likely it is that that project will get done. In fact, I'd say we're already at that point. Where if your example to the contrary?

Posted by Guest on Jun. 17, 2014 @ 5:27 pm

And that they will build every project regardless of profit.

I will also guess that he doesn't run a business.

Posted by Guest on Jun. 17, 2014 @ 5:37 pm

we have to do is "tax the rich" and we can afford everything.

Posted by Guest on Jun. 17, 2014 @ 6:06 pm

a higher tax. Either way the provider of the service is subsidizing the consumer of the service.

And if that exceeds a critical point then the service stops. If I'm a landlord, I Ellis. If I am a developer, I build elsewhere. If I am an employer, I hire elsewhere.

Eventually you kill the local economy and we become Detroit. and if you want that, then you can move there now. nobody is stopping you and I guarantee you that nobody will miss you here.

Posted by Guest on Jun. 17, 2014 @ 4:33 pm

This notion that the law of supply and demand does not apply to San Francisco housing is baffling. It applies to everything else, from cars to housing in other places (I wonder why housing in cheap in Detroit?), to diamonds. Why is SF housing different?

To those who believe this, are there any other items that you claim are not subject to the law of supply and demand?

Posted by SFRealist on Jun. 18, 2014 @ 6:02 am

The plan actually does call for the city to secure funding to build more affordable housing, MossyBuddha, and even to be bold and creative in doing so: http://www.sf-planning.org/ftp/general_plan/I1_Housing.html#HOU_ISSUE_4

As to the previous commenters, slowing down market rate development when affordable construction lags have maintain the city's housing mix, rather than simply gentrifying the housing market with new homes that will never, ever become affordable to the vast majority of San Franciscans. San Francisco's current "Build, baby, build" as an affordable housing solution is just an nonsensical as the Republican mantra "Drill, baby, drill" is creating a sustainable energy policy. 

 

Posted by steven on Jun. 17, 2014 @ 1:43 pm

There is no evidence to support that.

Cheap homes require a massive subsidy. Who will provide that if the developers simply decide to invest somewhere that welcomes them?

Posted by Guest on Jun. 17, 2014 @ 1:58 pm

Nope, fewer market rate homes means less profits for developers and if that profit is predicated upon building affordable homes, then developers will become the strongest advocates for building more affordable homes.

Posted by marcos on Jun. 17, 2014 @ 2:10 pm

single poor SF resident find a home.

Investors aren't stupid. They have a target ROI and they can invest it anywhere in the world. We should be begging for them to invest here, as we did with Twitter, rather than deluding ourselves that we can extort money from those who have options.

You play hardball only when you have the upper hand.

Posted by Guest on Jun. 17, 2014 @ 2:22 pm

You trolls regularly say that SF housing policies discourage development, but if that were true, then why are they building huge new market rate projects just as fast as the city will allow? Why? Because San Francisco has an insatiable demand for housing, so prices will keep going up, and therefore it's far more attractive to build here than in the developer-friendly suburbs (not to mention the sheer natural beauty and cultural cache of this city). And guess what? If you make them build more affordable housing as a cost of doing business here, they will. And if you put a moratorium on market rate development until more affordable housing is built, then we'll see more affordable housing. San Francisco will always have the upper hand with developers if we stand tall and get off our knees. 

Posted by steven on Jun. 17, 2014 @ 3:04 pm

Those condo towers are going up because even with the city's extortions and delays, the optimal ROI can be achieved.

But make that worse and they will build anywhere, including places like Dubai and Hong Kong where no questions get asked.

If we want SF to attract those dollars, we need to make it profitable for them to come here rather than go there.

You seem to think that SF is the only game in town. And perhaps for you it is. But not for those with disposable funds to invest. They can go anywhere.

Posted by Guest on Jun. 17, 2014 @ 3:15 pm

The world is awash in capital so we don't need bankers, speculators or developers with their crocodile tears telling us they'll move away and take their precious investments dollars to Hong Kong, Singapore, London or Dubai with them. There's in insatiable demand for housing in SF ("everybody's favorite city"). The question is whether the city will start demanding developers build a "complete city" that houses people of ALL income ranges or merely a city for the rich and a small percentage of relatively poor people. Once the city starts demanding that developers build for the entire income spectrum there will be plenty of investment money to build them.

The city is actually far better off shunning the the developers who only build for the wealthy. Let them go live and build in New York and Singapore and Shanghai and London or Dubai. The city doesn't need any more economic rapists. When companies like Apple, Google, HP, Oracle, Facebook, Yahoo and dozens of other financial and employment behemoths move from California, the state and Bay Area will once again be truly wonderful places to live. Until then, it's an economic rape that is destroying the middle and lower income families.

Posted by Guest on Jun. 17, 2014 @ 4:18 pm

then that is nobody's problem but yours.

We're not going to destroy the economy of the Bay Area just so you can afford to live in a place where you have no right to be in the first place.

Posted by Guest on Jun. 17, 2014 @ 4:31 pm

Get rid of major employers and watch a huge hole appear in San Francisco's budget. What will you cut when revenue collapses?

"The city is actually far better off shunning the the developers who only build for the wealthy. Let them go live and build in New York and Singapore and Shanghai and London or Dubai. The city doesn't need any more economic rapists. When companies like Apple, Google, HP, Oracle, Facebook, Yahoo and dozens of other financial and employment behemoths move from California, the state and Bay Area will once again be truly wonderful places to live. Until then, it's an economic rape that is destroying the middle and lower income families.

Posted by Guest on Jun. 17, 2014 @ 5:27 pm

SF has always been a relatively expensive city long before the tech companies set up shop in the 1980's. The city and Bay Area will do just fine - actually, much better - when they finally leave. The high cost of government is partly the result of high land values and obscene wages paid to the techsters and their high-priced enablers like lawyers, financiers and marketeers. Once they've all moved to Singapore, Shanghai, London and Dubai, a much better economic balance will return for everyone, rich, poor and middle-income alike.

Posted by Guest on Jun. 17, 2014 @ 5:59 pm

Expand on this.

"The high cost of government is partly the result of high land values and obscene wages paid to the techsters and their high-priced enablers like lawyers, financiers and marketeers. "

Posted by Guest on Jun. 17, 2014 @ 6:49 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. All we're left with is to get our few percent out of their in-San Francisco purchases, although there is probably a bus service from their suburban campuses to local malls so that needn't spend a cent in the City.

Posted by marcos on Jun. 17, 2014 @ 5:59 pm

They all pay lots and lots of property taxes.

One could argue that they actually pay more than their share because they bought in the last few years. Under the madness of Prop 13, recent buyers pay a lot more in property tax while old line SF families drastically underpay because they've been in their houses for years.

Posted by SFRealist on Jun. 18, 2014 @ 6:07 am

SF collects far more in payroll taxes from people who work in Sf but live elsewhere, than it loses from folks who live in SF and work outside the city.

Five workers commute into SF for every one who commutes out.

Posted by Guest on Jun. 18, 2014 @ 6:55 am

#hijack. The issue at hand was taxation from SF resident tech workers, not of non-SF resident tech workers who commute in.

Posted by marcos on Jun. 18, 2014 @ 9:48 am

Bay Area is balkanized.

Moreover, it is not clear that more tech workers commute out of SF rather than into SF.

Posted by Guest on Jun. 18, 2014 @ 10:02 am

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