Solving San Francisco’s Housing Crisis

First things first, don’t believe everything you read about San Francisco’s “high cost of housing.”

From NY with Love
San Francisco is experiencing the same dissolution of soul that has plagued New York. It is no mystery to me why no young creative person outside of the gilded technology sector would choose to live there.

Bloggers refer to “new tech proletariat’s” who want to live in San Francisco so they may enjoy all the cultural offerings there. Might I ask when they are going to do this with the responsibility to pay $2000 per month rent for their studio apartment? The sad irony is that their very presence in San Francisco in the first place with their ability to pay $2000 for a room is undermining via death by a thousand cuts, the very magnetism and accessibility that has long developed San Francisco as an attractive place to live. The only people who are enjoying the fruits of their highly pressurized presence there are the entrenched economic elites who own the real estate they occupy.

Being a native NYer who has resided in LA, I am happy that LA has been consistently able to receive America’s creative and intelligent young people with open arms even if they are not children of the 1 percent. It is one of the conditions that makes living here a joy. All the journalism run by the the same few major corporations keep reporting that San Francisco is a growing city and a city on the move. Whenever I am there, which is frequently, this only seems to apply to the wealthiest and most technologically elite of that city. Everyone else is just miserable.

Emerging 1%
There’s something about the way billionaires are minted these days – they’re increasingly young and their companies are more ethereal than ever – that makes me think there’ll be a series of comeuppances, burst bubbles, lurching realignments. Is anyone going to continue using Twitter once corporate interests start rotting out its core? Are venture capital firms just going to pump up another, slightly different, brilliant tech start-up? There seem to be fewer and fewer winners in this zero sum game.

The atmosphere of Ayn Rand style free markets plus the giddy pace of technological innovation seems dangerously blind. Gone are the days of responsible privilege. I think the country will be abused to the point where socialist ideas take hold again. What would happen if all the disenfranchised workers in San Francisco started striking? That’s my advice to non-billionaire residents of that beautiful city. Stop going to work and see how Silicon Valley likes it.


Taxation Riches
The Facebook IPO alone was a tax bonanza for California and its municipalities. Every new tech company started or expanded and every tech employee is pumping tremendous amount of tax revenue into the coffers of San Francisco and California.

Did you check the annual property tax payments of these new condos? Astronomical. That – and that alone – is more than enough “responsibility” by the tech industry. The residents of San Francisco can vote on what to do with all that excess tax revenue. Want to buy green space? Do it. Want to go back in time and allow open heroin dealing in the Mission, run away crime, blight and grime? Do it.

I have a feeling, that the vast majority of the population of San Francisco is delighted with the tech boom, the accompanying tax revenue bonanza, and the clean up of the social garbage of “70s and 80s San Francisco”. I doubt very much that the population of San Francisco at large laments the exodus of the prostitutes, pimps, armed robbers, heroin dealers and the traffic clogging demonstration. And I bet that many like the new restaurants, clubs, clean streets, reduced crime, new buildings, etc. And more importantly, they feel so much better than the cities that didn’t change. As the residents of Detroit, Camden, Flint, Philadelphia if they’d like a tech boom there or if they prefer the artists and crime and dirt that they have now.

Systematized Control
My impression is that a main cause of insane housing prices and rents in San Francisco is not tech millionaires (how many of them can there be, compared to 800,000 residents of the city?) but San Francisco’s emotional aversion to building new housing units, units that will be – yes – condos, due to the land shortage. Rent controls sound populist but prevent renovations and contribute to the general dinginess. For more and better housing and lower prices, city residents will have to accept that real estate developers will make profits.

Note also that Google and Yahoo and Genentech run the best transit systems in the Bay area, systems that – unlike the filthy, overcrowded, slow city MUNI system – carry people from where they live to where they work, and synchronize with the BART and Caltrain systems.

Spurring Change
The problems San Francisco has with housing costs aren’t new, unique to San Francisco, or reducible to anything so simple as the tech boom. There are a lot of accusations and rhetoric flying around, but I really wish we might give more attention to the people and organizations who’ve have been carefully studying the highly complex San Francisco land-use/housing situation for decades, and proposing well-thought-through solutions. I’d particularly recommend the work of non-profit SPUR (formerly San Francisco Planning & Urban Research, which dates to 1910. They do excellent events and publications examining urban affairs in the Bay Area.

SPUR’s “A Housing Strategy for San Francisco” (2nd ed. 2006) gathered some of their key reports/recommendations on housing affordability:

1) Zoning for more housing.
2) Rethinking parking requirements.
3) Improving the permit approval process.
4) Housing above retail.
5) Secondary units. (also known as “in-laws” or Accessory Dwelling Units).
(to get these, go to this page, search on “Reports” to get these and more).

Progress on affordability, and almost any urban issue, requires considering many factors, in this case zoning, permitting processes, building standards, construction methods, financing practices; the thicket of federal, state & local laws; etc. Finger pointing and reductive narratives like “tech elites vs. others” don’t get us far. This is an intriguing social problem, the weirdly wealthy dominating the desirable places on the planet. The pure free market will not lead to any sort of sustainable situation.

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