In San Francisco, every day brings another argument about housing. I moved to the city in 2018 from Los Angeles, where I had just graduated from college on the border of a neighborhood in transition. During my college years, long-standing Latino-owned businesses shuttered and barcades opened in their place. I read accounts of displacement, of landlords raising rents, sometimes pushing tenants into homelessness.
I was angry with peers who bought acaí bowls and “urban pet provisions” on Highland Park’s York Boulevard, making no effort to patronize stores and restaurants that had been around for decades. I was angry with developers putting up new housing that looked fancy. I blamed them for all the suffering gentrification wrought.
It wasn’t until I moved to the Bay Area that I started hearing a different argument: in San Francisco, at least, it’s a lack of housing at the root of the problem, and more development — including market-rate units — would drive housing costs down. Wealthy homeowners who fight to preserve single-family zoning and progressive groups who lobby against new apartment buildings keep housing costs high.
This argument was disorienting, not least because it came from people who shared my values: that everyone should have a home, that tenants shouldn’t be evicted through no fault of their own, and that housing is too expensive. But as I learned more about San Francisco’s housing crisis, the notion started to make sense.
Now, I am not entirely converted. I still think YIMBY rhetoric can sound callous, and that there’s something to be said for empowering longtime residents to steer their neighborhood’s future. But I also see how processes in SF allow practically anyone, especially with political juice, to derail any new project for any reason, and that our affordability crisis is a consequence of minuscule housing growth over the last 50 years.
The nuances continue to confound me. Luckily, our staff writer Adam Brinklow has been covering housing around here for more than a decade, and has written extensively about what does and does not drive up housing costs.
He’s intimately familiar with the data and has been tracking the arguments between YIMBYs, antigrowth progressives, and others. So I approached him with some of the anti-development talking points I’ve heard before, views that I still hear from my friends and peers all the time. Our edited conversation is below.
Max Harrison-Caldwell: One argument I often hear is that developers only care about maximizing profits, not about local residents or businesses. It seems outlandish to expect that private, financially motivated actors will fix the housing crisis. Where’s the incentive to build housing that working and middle-class people can actually afford?
Adam Brinklow: There’s some truth to this complaint. We live under capitalism, so profits matter. Developers build when sufficient demand for new housing lets them charge enough to meet their bottom line. But if they produce enough to drive down the cost of housing, new housing becomes less profitable, bottom lines shrink, and development slows until demand surges again.
That’s why we don’t have a purely free-market system. If developers want to build plum market-rate units, state and local governments can demand that they commit to subsidized housing as well (known as the inclusionary system). They can also artificially boost the market power of nonprofit affordable housing developers, and create new incentives for developers to keep building even when markets cool off. In fact, San Francisco does all those things right now.
People can argue that these interventions are flawed. But those arguments need to be about this system, not about a hypothetical markets-only system that the current model is specifically designed to avoid. Here’s more on the history of inclusionary housing in San Francisco.
Instead of a system that funnels development through private entities, why not just spend money directly for more public housing?
The problem is there’s not enough public funding to create the volume of housing that SF needs right now. The state is demanding 82,000 new units by 2031, more than half affordable.
Last year’s cost to build a single unit was $1.2 million, no matter if it’s affordable or market-rate. Without a drop of private financing, that would be $98 billion, or nearly seven times SF’s annual budget.
There are other public sources — housing bonds, some state funds, and so on — but they’re nowhere close to what’s needed to bypass private developers. When U.S. politics took a rightward turn in the latter half of the 20th century, the feds more or less shut down the public housing model. In California, Proposition 13 not only nuked the property tax base, it cemented single-family homeownership privilege up and down the state. (Side note: For anyone who lumps YIMBYs in with fiscal conservatives, note that the political group was out in front for Prop 13 reform a few years ago. California voters weren’t having it.)
Until there’s change on the state and federal level, SF has to live with the system at hand, whereby market-rate development generates contributions to affordable development.
And when market-rate development craps out, like in our current slump, the city steps in to suspend fees or offer incentives until markets pick up again. Some people resent these solutions as “giveaways,” but if it’s the most efficient way to build new housing, what else are we supposed to do?
New market-rate housing is rarely — if ever — a social good.
“Social good” is a subjective term. For example, if companies in SF start a hiring surge and developers respond with new housing (even market-rate housing), we could cite any number of social goods: the well-paying jobs for people who build that housing, for example. The taxes and fees that the city puts toward things like transit, and yes, affordable housing. The reduced emissions from fewer people commuting from farther away.
Perhaps a better question would be, does the social good of new development outweigh potential negative impacts? But that’s not something we should guess about, it’s something to study empirically.
Doesn’t new housing raise rents around it?
Here’s where those academic studies come in. Let’s start with one that recognizes there are more people asking a version of your question.
New York University’s Vicki Been and colleagues acknowledge some of these concerns have merit. For example, some new housing probably will drive up prices nearby, and market-rate development alone won’t fix the crisis without subsidized housing. But Been and company conclude that overall, “adding new homes moderates price[s] and therefore makes housing more affordable.”
There is no relevant research that suggests that we can drive down prices by building nothing.
For SF specifically, Harvard University’s Edward Glaeser and Joseph Gyourko of Wharton University write that “binding land-use restrictions” drove up the city’s cost of land and resulted in a 109 percent increase in home prices between 1991 and 2016. The Obama administration released a housing development policy guide in 2016 stating that “housing regulation that allows supply to respond elastically to demand helps [maintain] housing affordability.”
Kate Pennington of UC Berkeley researched the effects of new housing on home prices and gentrification in San Francisco. Using data from 2003 through 2017, Pennington calculated, like Been, that more housing supply drove down the cost citywide, but also that new market-rate housing could sometimes drive up prices immediately around a new building. However, Pennington also concluded that “policymakers who want to slow displacement and gentrification should accelerate both market-rate and affordable housing construction” — precisely what SF is trying to do.
Notably, no relevant research suggests that we can drive down prices by building nothing.
What about new housing that causes displacement?
A recent large study dispels this idea. But let’s keep going. Your question is like asking if new streets cause crashes. Everyone acknowledges accidents will happen, but we take steps to make roads as safe as possible. In the same vein, San Francisco has protections to insulate renters from displacement risks.
The new SF Housing Element bars demolition of subsidized and rent-controlled housing, for example. California law gives lower-income tenants the right of return on new apartments and promises subsidies if their building is subject to redevelopment. This is why we often see developers and landlords try to buy out tenants instead — an end run around these demands.
There are other types of evictions, but compared with nearly everywhere else, they’re rare in SF. To a person losing their place, of course, it is no comfort that they’re only among the nearly 1,200 unlucky people per year on whom the sword is falling. (That 2022 figure is well below pre-pandemic highs.) Tenant advocates stress that evictions happen in more subtle ways, and the official count is an undercount. Bottom line, however, is that while SF’s myriad protections are not a 100 percent guarantee against eviction, they’re pretty darn close.
I keep hearing about tens of thousands of new market-rate units that are vacant, with speculators leaving them empty.
I swear, six months after I die I’ll be writing a story debunking vacant homes one letter at a time via the Ouija board.
I won’t recap all the reasons this is wrong and abused for cynical political effect, but here’s this: Vacancy rates are actually lowest in new construction. The Census Bureau shows less than a 1 percent vacancy rate in new buildings, but people convince themselves that dark windows must mean empty spaces and greedy speculators. This belief often has a hazy xenophobic tinge to it.
People have nostalgic attachment to the neighborhoods where they grew up. A lot of new development looks the same and changes the character of those neighborhoods.
Does the name Newton Tharp ring a bell? In 1900, Tharp was San Francisco’s official architect, and he moaned that Victorian designs were “dreary and characterless” and a symbol of “swaggering pretension.”
Once the baroque elements of Vics could be mass-produced, critics saw them as symbols of mechanistic decadence, whereas Craftsman designs were seen as honest and refreshing — the simple home a hard-working American carpenter would build without the influence of faux European aesthetics. (Personally, I find the Craftsman style naive, and the anti-Vic arguments of Tharp and his old cronies patronizing.)
We’re to the point now where both Victorians and Craftsmans alike are considered classic styles that foster unique neighborhood character. As for the idea that neighborhoods should be kept as static as possible: Starting when? 1849? 1945? 2002?
In 2019, SF Planning estimated that the median SF renter had occupied their current home since 2005, and owners since 1995. So if you moved into your current joint anytime after that, someone considers you part of the problem.
YIMBYs just want unbridled development with no rules, no safeguards, and no community input.
The last time SF voted to fund public housing in 2020, HAC, SPUR, SF YIMBY, and state Sen. Scott Wiener all supported Prop K, which was designed to fund 10,000 new units of public housing and passed with nearly 75 percent of the vote. One year prior, SF YIMBYs also backed the city’s biggest housing bond of all time. So it does not appear that our most outspoken more-housing advocates are purely married to free-market solutions.
As for development rules, this feels like a false dichotomy: We are not facing a choice between only the status quo forever and “unbridled development” with “no safeguards.” There are a nearly infinite number of ways to tinker with the planning process. Sweeping all of those off the table and declaring them all functionally identical to a) each other, and b) the purest Randian free-market principles, is starkly reactionary.
At the very least, we could find a way to keep higher-earning people out of low-income neighborhoods.
State Assemblymember (and former SF supervisor) Matt Haney recently opined that in most cities, the progressive option is to build more, while the drive to block housing is perceived as conservative and exclusionary. San Francisco has everything backwards.
As we’ve recently discussed, a big part of this inversion is a hangover from 20th-century redevelopment politics, which pitted neighborhoods against City Hall’s grasping and racist “urban renewal” policies.
Most if not all major U.S. cities have a similar dark past, but few seem as haunted as we do. Planning Commission president Rachael Tanner has repeatedly said those kinds of racially motivated schemes aren’t legal anymore, but “this time will be different” is always a tough sell.
In fact, a central tenet of our new Housing Element is an inversion of the dreaded past. It mandates that SF allow new development — especially for low-income residents — in “highly resourced” neighborhoods that have historically resisted development, including Bernal Heights, the Castro, the Haight, and most of the western and northern neighborhoods.
When decades of resistance make housing more unaffordable, poor people, working people, immigrants, and non-white renters are the ones affected first.
Max Harrison-Caldwell is a contributing editor to The Frisc and a student at the UC Berkeley Graduate School of Journalism. Adam Brinklow is a staff writer covering housing and development. He’s lived and worked in San Francisco for over 15 years.
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