Putting Market Fundamentalism on Hold

Yes to David Campos’ Market Rate Housing Moratorium

The case against David Campos’ market rate housing moratorium for the Mission seems invariably delivered with a side dish of condescension. I’ll never really know what it’s like to be mansplained to, but it’s got to be something like this collection of unfortunate quotes:

“These people just don’t understand economics.”
“Fuck these people, they can NIMBY themselves to death for all I care.”
“It’s basic supply and demand.”
“The activists and moratorium pushers are just being dramatic.”
“the laws of dynamic natural systems cannot be broken, no matter how emotional we are about them.”
“Limiting housing supply generally raises housing prices, so often backfires.”

So, look. I don’t know if there’s a race thing going on here or what, but the “these people” thing that seems to come up a lot definitely makes me wonder. But setting that aside, when you say things like this you are getting something fundamentally wrong about how the world works.

Please, stop saying things like this, because this is how the world actually works: The economy is not a natural system. It is not an angry, displeased god that must be appeased. It’s not weather. Yes, it has some properties of natural systems. Complexity, for one thing. But it isn’t one itself. It’s a system that people built with laws, courts, taxes and culture. We built it and, using our democracy, we can change how it works, if we choose to. It doesn’t exist apart from government, it exists because of government. Convincing you of the reality of this is outside the scope of this piece but if you’re still skeptical, go read Anat Shenker-Osorio’s Don’t Buy It.

I think the recurrence of this tone is what elicited Supervisor Campos’ Reagan references, which, in turn, are infuriating a lot of people who genuinely care about finding a good solution to this situation. The problem is that for a lot of us who grew up under Reagan, these economic arguments are part of the water in our fishbowls. One reason the proposed moratorium is a good thing is that it’s forcing everyone to really face these assumptions and their increasingly ugly ramifications.

No one is arguing that laws of supply and demand have been suddenly repealed. What we are arguing is that it’s not at all clear that enough supply is possible inside the city. And the stakes couldn’t be higher, because once land is turned into luxury condos, it’s gone. If you don’t believe me, try the arguments of deranged economics-denying hippie Occupier Gabriel Metcalfe. (I’m kidding: he’s the head of SPUR, a great but definitely centrist and developer and market-oriented organization that studies these things) Mr Metcalfe summed it up bluntly like this: “We can’t solve affordable housing or transit access within the limits of any one city.”

One substantive argument against the moratorium is that there’s no obvious endgame. I disagree, but let’s start with what some of the big systemic forces driving this situation are before we get to three directions things could go. The big nasty driving forces are inequality, the state and regional context, and the San Francisco development pipeline.

Start with inequality. If California was some godforsaken European socialist hellscape (you know, where lots of people make roughly $70k a year and people take month long vacations and have time off to take care of their kids and are basically just happy), we wouldn’t be having this problem at the scale we are. Landlords are able to jack rents and developers are building luxury-everything because there’s a large-ish group of people who are willing to pay for it. If we were taxing marginal income above, say, $200k at 80% or something, there’d be a lot fewer people willing to throw this kind of rent around.

Everywhere Else. Mountain View is a lovely place to live! However, judging by the fact that busloads of people are willing to pay vastly more and sit on those busses for 2 or 3 hours a day, San Francisco is a hell of a lot nicer. And nowhere else in California has tried to build anything like it; we’ve had a little infill but the vast majority of the new housing built over the past fifty years has been suburban. Of all the cities in the Bay Area, Oakland probably has the most potential but so far it’s mostly just that — potential.

The Pipeline. The San Francisco project pipeline has been almost the worst of all worlds: it’s been fairly strict about how much gets built, but almost entirely laissez-faire about what gets built. So we’ve had a small pipeline with mostly (or almost all) luxury-everything coming out of it, with some mitigation fees and affordability requirements that aren’t close to solving the problem. The only upside to this situation is that since things haven’t been built out, there’s still time to try something different.

So there are three paths going forward. Option one is stick with the status quo, which clearly isn’t working and I’m not even going to consider. Option two is to build like crazy, and option three is to try something else.

So what does the build like crazy scenario look like? Maybe we could go for Tim Redmond’s ultimate nightmare: full Manhattanification. Manhattan is 67k people per square mile, and SF is only at 18k/sq mi. So we could triple our density and still be less dense than the Big Apple! I really like ideas like this:

But that’s not going to cut it. Try imagining ten story buildings lining the streets of SOMA and you’re closer. And this, ultimately is the biggest of several problems with this scenario: SF would become essentially unrecognizable. You’d have to destroy a lot of awfully lovely neighborhoods. It’d make the racist urban renewal projects of the mid 20th century look like kids playing with blocks.

The other big problem with Build Like Crazy is that I’m just not sure our infrastructure is up for it. Particularly transportation. Even if the region doesn’t keep pulling a Chris Christie, who (insanely) blocked the building of badly needed new tunnels under the Hudson so he could pay for tax cuts for rich New Jerseyans, it’s hard to imagine what kind of transit San Francisco would have to build to make that work. It already takes longer to get downtown from the Sunset than it does from Oakland. And try to imagine the traffic on I-80 near Vacaville the weekend after a big snow, or the 101 through Santa Rosa on a Friday in the summer, if a million more people lived in SF. Some combination of bullet trains and robot cars will hopefully alleviate this eventually, but that’s going to take a long time.

It’s true that Washington DC has managed to bring down rents by building aggressively, which is awesome. But DC has two big advantages: Metro isn’t without its problems, but it is vastly more mass transit infrastructure than SF has been able to build. And, the DC area features Augusts that are so hot and swampy that anyone who lives there and survives inevitably winds up questioning their sanity and making plans to move, usually to San Francisco. I grew up there. I know. This is a big advantage in terms of limiting housing market pressure! (The more serious second difference is that the housing pressures on DC are orders of magnitude different than what’s happening in the Bay Area. There’s no gigantic tech industry creating insane amounts of wealth for relatively few people and a little wealth for a slightly wider group distorting the economy there.)

Which leaves us with the Something Else Scenario, a future that the moratorium could be the first step towards building. I don’t know what that looks like, but I can imagine some of the parts. Aggressive regionalism. A big debate about how we could build a whole bunch more transit. And like a caller said in a debate on housing on KQED this morning: screw balance. Let’s change the SF pipeline so that developers can only build only or mostly below market rate housing. We could try land trusts, we should be building out wickedly advanced models of different scenarios, and going all in on meeting the current latent demand for cohousing and other collaborative housing models. (the impossibility of which was the reason we ended up moving to Oakland) One friend of mine suggested SF suing peninsula cities to pick up the slack, which seems like an excellent idea. Maybe we could start with Palo Alto, for pulling crap like this.

I speculate on what the Something Else scenario looks like statewide (and a lot more) in my novel, and I should really stop writing stuff like this and get back to editing that. But this moratorium is a big deal, and respect to David Campos for getting everyone’s attention. The first thing that debate needs is time. The moratorium is a good start.