Housing crisis

Newsom wants to investigate SF’s housing crisis. That’s where he could start.

In a weird way, I’m pretty glad Governor Gavin Newsom wants the state to investigate his former hometown’s housing approvals process. For starters, if there were indeed any new housing approval issues, many of them occurred when Newsom and his chosen successor, Ed Lee, were running the city.

More specifically, it’s Lee’s determination to convince dozens of tech companies to move here and bring in thousands of well-paid employees – with no idea, no plan and zero discussion of where house them – which was the immediate cause of the latest in this city’s long housing crisis.

The governor should check his own record and actually deal with affordable housing.

But more importantly, a real review — if the state is able to do so — would show that housing development in this city, and other California cities, has a lot more to do with free market failures than it does. any local policy, for example. better or for worse.

I don’t expect a real review. The department, of course, is responding to Newsom, and the whole process will be a political decision to help private developers.

But at least maybe we can push things a bit.

The inquiry (backed by Mayor London Breed) comes just days after the state department of housing and community development has sent the planning department its comments on the city’s housing element project, which is based almost entirely on fantasy.

The state reviews the city’s Regional Housing Needs Assessment, which defines the number of housing units each city is expected to approve and facilitate in each income group.

The letter the state wrote to the city is confusing and includes all sorts of comments about the complexity of the housing application process in San Francisco. The reality is that development approvals take a long time in this city because so many projects are so big and have so little affordable housing, and developers ignore so many significant impacts that residents have no other choice. than to challenge them.

Very little new market-priced housing, which is all that developers are currently building, serves the majority of the population defined by RHNA targets. In fact, San Francisco has approved far more market-priced housing than the RHNA requires, and far less housing for others.

It’s not a bit surprising. Despite what the Yimby like to say, San Francisco doesn’t “build” housing. Private developers build housing.

And here are some numbers the state might want to look at, thanks to my colleague Calvin Welch:

At the end of 2020 (the latest numbers I could find), there were 69,435 approved units in the pipeline, but only 5,509 under construction. Some 33,102 units have been approved in major projects, including 9,119 at Hunters Pt. Shipyard, 4,666 at Parkmerced, 6,457 units at Treasure Island, 2,505 at Pier 70, 1,575 at India Basin and 1,409 at Mission Rock.

Most of these projects are not even close to materializing.

Why? Market conditions change, investors want higher returns than developers can get given the higher cost of construction, and speculative capital goes elsewhere.

There’s nothing the Yimby, or the mayor, or the governor, or the state can’t do about it, as long as they want to rely on the private market to solve our problems.

More from Welch:

Willie Brown administration (1997-2005): 23,851 units approved, 15,210 units built

Gavin Newsom administration (2005-2012) 22,236 units approved, 15,601 built

Ed Lee administration (2013-2018) 26,871 units approved, 19,730 built.

This means that of the three mayors before the current incumbent, Newsom had the lowest number of new homes approved. This, of course, had a lot more to do with market conditions (he was mayor during a major recession) than any of his policies, which makes the government’s argument an embarrassing joke.

Supper. Dean Preston, in an August 11 letter to the Governor’s office, notes that the Governor’s press release says nothing, zero, about affordable housing:

Your press release announcing your review of housing policies and practices says nothing about affordable housing. Instead, you seem to confuse all forms of housing, a prime framing of the luxury housing developer lobby, but not what one would expect from an affordable housing agency. There is certainly a discussion to be had about developing luxury housing in an expensive city like San Francisco, but it would seem odd if that were your priority at a time when most of the working class cannot afford a roof over the roof. above his head.

We recently held a hearing at the Government Audit and Oversight Committee regarding the City’s plan to meet the RHNA’s affordable housing targets. It is clear from the hearing and the presentations from the MOHCD and the Planning Department that there is no plan. During this time, we are meeting 150% of our market rate housing production targets and less than 50% of our affordable housing targets. I hope your investigation will broaden our work to better understand why the planning department and the mayor’s housing office have no plans to meet our affordable housing goals.

The reality is that the city cannot meet its RHNA goals for affordable housing without a massive influx of state money. The price of affordable housing the state needs is at least $19 billion, and the mayor’s office has no plan to close that funding gap.

As Preston notes:

With the governor and state legislature severely underfunding the affordable housing needs of Californians, the decision to investigate San Francisco, apparently not for failing to provide affordable housing – it would be a fair investigation, and one that I conducted – but rather for delays in housing at market rates for the wealthy, is telling. Intentionally or not, it seems that the state’s approach is to grossly underfund affordable housing, while focusing government resources on deregulating the unaffordable housing market. This is neoliberalism at its worst.

I have read the entire letter that the state sent to the city in response to the housing element project.

Among his findings:

The city should assess the impact of the RHNA by income group on socio-economic patterns on a geographic basis (eg, neighborhood, census tract, district), including taking into account any isolation of the RHNA. Based on the results of this analysis, the component should re-evaluate the relevance of targets (e.g., increase low-income targets in affluent areas) and add or modify programs to better improve equitable housing conditions, including including a fair quality of life across the country. community (e.g. place-based anti-displacement and community revitalization strategies).

That’s a lot of world-class bureaucratic bullshit, but what it seems to say is that the city could increase housing affordability by approving more market-driven projects in the city’s wealthier neighborhoods. .

Sure: everyone’s talking about putting low-income housing in “well endowed” areas, i.e. the west side of town. There are a lot of people in these affluent single-family areas who oppose denser affordable housing, and that’s a problem (though supes, including those on the West Side, are pretty clear that housing affordable should go everywhere).

The biggest problem is that none of these projects will provide the level of affordable housing the city needs, in rich areas or poor areas. there is no money to pay for the number of below-market homes the state wants built in San Francisco.

As Sup. Gordon Mar pointed out at a recent hearing that the sought-after “increased density” developers on Taraval Street have created new units that only the wealthy can afford, nothing for working-class families in that community.

This may be something state housing investigators want to address.

The numbers and the economics don’t lie: San Francisco cannot rezone or improve the area to solve this problem. Reducing “barriers” to housing approvals, as the mayor wants to do, will make little more than a tiny bit of difference.

The fact is, the RHNA goals the state wants to impose are impossible for San Francisco to achieve unless Newsom and the Legislature want to send a very large sum of money to the city. Developers will pay for no more than 25% affordable housing, and much of it at levels well above what the city needs, according to the RHNA; they say the price is too high and the projects are no longer “pencil” (although to date no real estate developer has made public the actual financials of the projects, so the rest of us can see if it’s true).

And if no one has an answer to any of this, I don’t see how the planning department can seriously talk about a new housing feature.

Maybe someone from the state is honest enough to say that. I’m not holding my breath.