Affordable housing requirements make sense to me, I don't think they're silly, and I'm glad to see them. But they make only a marginal difference.
The default trajectory for SF is towards pricing out the working class. Rich people can afford to live in SF even with its nosebleed prices, and they will hold a systemic and intractable advantage against the working class over the long term, because, again, real estate is a good, not a moral principle. When things get more expensive, rich people get more of those things.
I'm sure there are cases where this isn't true, but as a general rule, any opposition to new housing in SF concedes ground to wealthy owners at the expense of working-class renters.
If there's a place/time this scenario has played out differently elsewhere in the US, someone, please let me know.
"I'm sure there are cases where this isn't true, but as a general rule, any opposition to new housing in SF concedes ground to wealthy owners at the expense of working-class renters."
You're missing a few critically important pieces of context:
1) The city of SF gives developers two options for the low-income housing set-aside -- they can make a percentage of their units low income, or they can contribute a percentage of the project cost to a city-wide fund.
2) Developers hate both of these options, but they far prefer the latter one (donate to a fund), since it's a fixed cost.
3) Because the city is in competition with these same private developers for land, the low-income housing fund is at a significant disadvantage when it comes to actually building low-income housing. IIRC, the city has only built a few projects in the last decade.
4) As a result of 1-3, most of the community resistance to new construction ends up being about forcing developers to choose the first option (i.e. actually building low-income units). They use the only political leverage they have to compel this choice: the planning process.
5) Many/most skirmishes about permitting get characterized as "NIMBY opposition", when in reality, they're about low-income housing set-asides. It's just easy to point to the zero-influence yahoos who show up to any public meeting, and mischaracterize them as the source of the problem, so developers do this.
Basically what I'm saying is: unless compelled, there's no situation in SF where developers build anything other than luxury units. There's no ROI otherwise; land is too expensive. And they won't build new luxury units into a down market, either, for the same reasons. Low-income housing requirements are the only way this stuff happens.
So I'll turn your question around on you: name one US market that has successfully lowered real estate prices via construction. Even in places canonically held up as examples (e.g. Houston), affordability is maintained by sprawl...which is not an option for San Francisco. For the exact economic reasons you've cited, nobody buys or builds real estate that they know will lose value. That's the fundamental problem with the "build out of it" argument.
> Even in places canonically held up as examples (e.g. Houston), affordability is maintained by sprawl...which is not an option for San Francisco.
We do possess the technology to build higher buildings, rather than simply create sprawl. Housing is expensive enough in SF that said technology could be profitably employed.
This is especially important to consider in much of silicon valley, which has very few high buildings and not much density.
Adding more housing is probably not going to drastically drop prices, but it'll certainly help contain price increases.
Silicon valley is about 60 minutes south of San Francisco by any mode of transportation convenient to low-income people. It's also a different government. So while I agree that there should be more high-density construction in, say, Mountain View, it's a different discussion.
As for higher buildings: I'm not going to argue that we shouldn't raise building heights in SF. I'm just saying that developers aren't going to voluntarily make any of those tall buildings cheaper than market rate. They also won't build more space than they know they can make a comfortable profit on, at current prices.
Again, name a city in the US where construction has lowered real estate prices. Developers don't have any natural incentive to do that.
> Developers don't have any natural incentive to do that.
Unless they're colluding, they'll keep building if it's profitable to do so. And there's a lot of margin for that in SF, especially if they get rid of some of the big obstacles.
There are various articles about 'filtering' and how it's not happening in cities like SF. Here's one - there are probably better ones:
I know SV is a separate entity (entities, actually), but it's obviously very closely related.
People in the US are going to have to figure out density sooner or later. This stuff has knock-on effects all up and down the west coast. Lots of people move here to Bend to escape the bay area, and are driving up local prices...
"Filtering" -- interesting dynamic. So why isn't filtering working in SF?
> "Filtering is the idea that, as new market-rate housing is built, higher-income people move into it, leaving behind older housing stock for lower-income people."
It does, there was an article here a few weeks ago where they had studied gentrification in SF and found that the areas that allowed more new (luxury) apartment construction had less reduction in poor people living in the area compared to the ones that didn't.
name a city in the US where construction has lowered real estate prices.
I watched Seattle build like crazy in the late 90s. It seems like every month a huge skyrise apartment building came online in Belltown. Many thousands of units were added every year. It coincided with a continuing influx of people so I don't think it lowered the absolute price of real estate, but the laws of supply and demand are pretty inviolable. Seattle is pretty affordable by present SF standards, and with much of the same cultural appeal.
(I live in SF but used to spend lots of time in Seattle)
I lived in Seattle from 2000-2008. Rent (and property values!) went up by -- more than inflation -- nearly every year that I lived there. They skyrocketed by the end of that period. Wikipedia says the population grew by 8% between 2000 and 2010.
I'll give you that Seattle is more affordable than San Francisco...but it's also at least twice the land area of SF, with fewer people and geographic constraints. And the weather is...an acquired taste.
Seattle is not without a strong NIMBY contingent of its own.
None of these places is really keeping up with demand. SF is simply the worst of the worst from that point of view.
I agree completely about the weather. I grew up in western Oregon and I don't know how it's possible to sustain human life further north without an IV of antidepressants!
New York from 1910s-1930s. Manhattan had more people living on it in 1920 than it does right now. During that time there was a ton of construction: prices went from $10/sq ft to $15/sq ft. Then with the market crash, demand for the overbuilt city real estate went down, leading to costs more in the range of $5/sq ft: http://www.millersamuel.com/change-is-constant-100-years-of-...
No, housing prices do not necessarily immediately sink. Developers will only build when they believe they can turn a profit. But you can overbuild during boom times and allow housing prices to correct when demand diminishes.
LOL. I was waiting for someone to confuse an economic crash as an answer to my question. You get a prize for suggesting that the actual Great Depression is an example. Well done!
Obviously, with perfect foresight, few intelligent developers would choose to begin a construction project just before a major economic retraction. But if your suggestion is that we should build now, then wait for economic armageddon to really adjust prices downward, then I guess I can't argue.
I think that it is part of the same conversation. Many of the workers in SV live up here in SF because finding housing in the valley is such a pain. If there was more housing down south, a good chunk of the pressure would be taken off of San Francisco proper.
If building continues at the clip it has for the past 10 years, what do you think is going to happen to the SF real estate market? What I think will happen is that it will be owned almost entirely by wealthy people.
It's already owned entirely by wealthy people. That ship sailed a long time ago. Ripping down tenements and replacing them with luxury condos doesn't do anything to solve that problem.
If you ask me, the best we can do now is improve regional transit to make SF look more like Manhattan, and fight to hold on to whatever low-income property remains on the SF peninsula in the meantime.
You keep arguing against allowing construction because you don't see it as actually lowering housing prices. I don't think adding, say, 1000 units of affordable housing will lower housing prices in SF, but I don't see a reason to be politically opposed to such a proposal. Isn't the fact that it will ease the pressure on continue housing price increases reason enough to allow more development?
Point to the place where I argue against allowing construction.
I'm making a more nuanced point: indiscriminate high-end construction doesn't help, and that's what you get in SF without the kind of planning that people in this debate like to call "NIMBYism".
I'd personally love it if someone were to build 1000 units of affordable housing. The thing is, nobody is gonna do that unless they're forced to do it -- in this town, it takes years of fighting to get a fraction of that number built (for example: NEMA phase II had 52 'affordable' units built, out of a total of 489. Those other 437 units have some of the highest rents in San Francisco.)
So, if no one wants to do it, then where does this idea come from that it's a good idea? What's wrong with allowing the market to determine what kind of housing is going to be built? I'm skeptical about this whole Soviet Russia style concept where somehow the government ought to be involved in building a bunch of crappy, cheap, high-density apartment buildings.
I'm comfortable with the idea that the market will figure out the right amount of housing, and the right price for housing. I'm not saying that there should be no zoning laws, but within whatever zoning laws you have, why not allow it to be a free market? The forces of supply and demand do a good job shaping what supply is provided. Zoning itself may be a big part of the problem as well:
"The artificial upward pressure that zoning places on house prices—primarily by functioning as a supply constraint—also may undermine the market forces that would otherwise determine how much housing to build, where to build, and what type to build, leading to a mismatch between the types of housing that households want, what they can afford, and what is available to buy or rent" ( Jason Furman, Chairman, Council of Economic Advisers)
Perhaps we'd all be better off leaving much more of land use to the market as well.
Actually, if you could build 1000 units of really high end housing in place of, say, 100 units of average, low-density housing, it would still help, because it lessens the pressure on some of the existing housing.
The default trajectory for SF is towards pricing out the working class. Rich people can afford to live in SF even with its nosebleed prices, and they will hold a systemic and intractable advantage against the working class over the long term, because, again, real estate is a good, not a moral principle. When things get more expensive, rich people get more of those things.
I'm sure there are cases where this isn't true, but as a general rule, any opposition to new housing in SF concedes ground to wealthy owners at the expense of working-class renters.
If there's a place/time this scenario has played out differently elsewhere in the US, someone, please let me know.