To be a more diverse and affordable city, San Francisco must start with housing. To hit ambitious goals of 150,000 new homes by 2050— one-third of them affordable, as mandated by the voters in 2014 — it needs to get cracking, but there are many forces pushing in the opposite direction these days.
In a new report, city planners lay out three ways to hit the 150,000 goal, which is based on an executive directive first handed down by the late mayor Ed Lee in 2017.
One is to mainly build on the city’s eastern side, continuing a pattern that has transformed South of Market, Mission Bay, and the central waterfront in recent years, but has left about 70% of the city, zoned for single-family housing, practically untouched.
A second scenario is to build densely along transit corridors throughout the city, following main Muni lines west to the beach, for example, but with heights likely capped around eight stories.
The third scenario would allow single-family housing across the city to be converted into multifamily housing, but it would not allow height increases. Neighborhoods like the Richmond, Sunset, and Excelsior would become denser, but not taller.
The report weighs the pros and cons of each scenario and says the best path forward might require a combination. It does not choose a favorite, but it drops some hints.
‘More parts of the city’
The report emphasizes that growth must promote racial and economic diversity, not gentrification. For more than a generation, the haves have had the day in San Francisco. From 1990 to 2015, the city’s population of people making more 120% of than the average median income has grown by 80,000. The population making less than that has declined by 29%.
The policies that shaped today’s San Francisco were often rooted in racism and exclusion and have kept nearly all the city’s affordable housing on the eastern side, according to the report.
So when the authors write that “segregated housing patterns can only be addressed by concerted efforts to create more diverse housing opportunities in more parts of the city,” it’s a signal that more neighborhoods need to build their fair share.
The goal of 150,000 units by 2050 would almost certainly push SF’s population over 1 million. This effort began in earnest with the late Ed Lee, who issued a directive of 5,000 new units a year in 2017. Mayor London Breed has kept it on the front burner.
Ambitious? It’s more than double the annual rate at which San Francisco has built homes this century. Realistic? Not if many neighborhoods, as they have been for decades, remain fiercely opposed to rezoning and to affordable housing.
Building = A lot of money
NIMBYism isn’t the only obstacle. Even if every San Franciscan embraced affordable development in their neighborhoods, building costs — labor, materials, city fees, land, and more — are exorbitant. Last year, our city had the dubious distinction of the highest construction costs in the world, according to a report from construction consultancy Turner & Townsend.
“Affordable” doesn’t apply to construction. Using data from 2017 to 2019, the Planning Department report calculates the cost of an affordable housing unit at $693,000, which must be cobbled together from a variety of sources.
The planning department’s estimates are unfortunately in line with most projects, says Sam Moss, executive director of nonprofit affordable housing builder Mission Housing Development: “The amount of dollars per unit we’re dealing with is simply not sustainable.”
The city has been providing about $260,000, or 37%, of the costs per unit. Can it provide more? The report says the city is spending a record $517 million in the current fiscal year on affordable housing, and yes, there’s more cash coming. Last November, citizens approved a $600 million affordable housing bond, and if 2018’s Prop. C — an extra tax on the city’s richest corporations — ever escapes a court fight, an estimated $300 million a year would start to flow to combat homelessness, much of it earmarked for housing.
But these are still drops in the bucket. The $600 million bond, for example, is expected to produce all of 2,800 homes (either through building, buying, or rehabbing).
New District 5 supervisor Dean Preston campaigned last fall with a pledge to build 10,000 new affordable units over 10 years. He told the SF Chronicle that the $600 million bond could be applied, and acknowledged a lot more money would be necessary.
Another obstacle to affordable housing is the difficulty of building market-rate housing. Cost, of course, is a problem. The reliance on big projects is another. Two of the projects expected to fill SF’s housing needs with up to 20,000 units (roughly a quarter would be priced as affordable) are the Hunters Point Shipyard and Treasure Island, both with toxic legacies that put future development in question.
Another problem is politicians becoming more hostile to market-rate development — Preston being a leading example — which puts more burden on heavily subsidized affordable housing to solve the housing crisis.
But if the affordable funding streams — like Prop. C’s corporate tax, or fees paid by housing and office developers — are tied to economic prosperity, what happens when the city (not to mention the region, state, or country) plunges into recession?
“I am definitely concerned that funding for affordable housing is at risk because of the economy,” says Kristy Wang, community planning policy director of the urban planning think tank SPUR. “All of our funding sources are connected to the broader economy and the mood [and] circumstances of the voters, whether from business taxes, inclusionary [units] from market-rate housing development, or linkage fees from commercial development or property taxes.”
In the Financial District yesterday, the 171-year-old Tadich Grill on California Street was packed with the power-lunch crowd, and, about 168 years younger, The Bird had a line down the sidewalk of New Montgomery for its fried chicken sandwiches. We might not see these scenes much longer.
Local public transport is losing ridership; more and more people are working from home. No more shows, concerts, or ball games for the time being. Schools are shutting down.
Politicians from 1 Dr. Carlton B. Goodlett Place to Washington, DC are scrambling to put together emergency relief. The leading edge of very bad news is already upon us.
We depend on tourism and conferences, and there have already been 235,000 hotel-night cancellations. (The loss of hotel revenue is going to hit our arts funding, too, at a time when the city is struggling to keep its artists.)
The goal of 5,000 units per year has only been met once, in 2016, in the past four decades. Whatever one thinks of that number (some people question whether the city should grow at all), there’s no doubt a perfect storm of conditions must come together for San Francisco to build what it needs for the lower- and middle-income residents, not to mention the completely unsheltered and most vulnerable. Right now, the winds are blowing in the wrong direction.
Planning Department staff were scheduled to discuss the report at Thursday’s Planning Commission meeting, but that’s been postponed for at least a week. Only essential business is on the agenda due to the coronavirus emergency.
Alex Lash is editor in chief of The Frisc.