Affordable Housing for All — Working Together We Can Solve the Bay Area Housing Crisis
The shortage of affordable housing for low, moderate, and even middle income households is at crisis levels in major cities around the world, from Hong Kong to London to New York City. In the Bay Area, the housing crisis may well even be worse. San Francisco is now the most expensive rental market in the United States, with the median rent of a one-bedroom apartment at $3,500 a month and the median house price at 6 times the US median.
The Bay Area’s extraordinary economic growth has contributed substantially to the housing crisis. Between 2011 and 2015, the region added more than 500,000 jobs but added only 65,000 housing units. Not surprisingly, researchers at UC Berkeley found that more than half of low income households are at risk of experiencing gentrification or even eviction (through California’s Ellis Act). For government workers — teachers, firefighters, police, transit workers — and essential service providers — plumbers, electricians, ambulance drivers — that $3,500 monthly rent (if their family could fit in a one bedroom apartment) would take more than 60% their average starting salary. And, a family of four with an income of $85,000 earns too much to qualify for affordable housing program subsidies.
If we do not deal with this housing crisis, the people whose work ensures the wonderful quality of life in the Bay Area will be forced to move elsewhere. Essential services will not be provided, quality of life will decline, and the companies that have created the economic boom will leave too. The housing crisis is everyone’s problem and it will take cross-sector partnerships and broad based community support to make affordable housing for all a reality.
We need to think big and act boldly, which should come naturally to this home of Silicon Valley and some of the greatest thinkers and humanists in the world. And there is much we can learn from other places that have faced similar widespread housing shortages. While New York City still faces an affordability challenge, it has developed a series of successful programs based on the cross-sector partnership model. Beginning in the 1980’s, New York City government seized large numbers of poorly maintained residential properties for non-payment of taxes. It then worked with tenant organizations, community groups, and non-profit and for-profit developers to rehabilitate the buildings and convert them into affordable co-ops and rental units. And this is not an isolated example.
In the 1990’s, New York State and New York City created the Housing New York program. This effort dedicated a significant portion of the payments made by private market rate developers of the publicly owned site now known as Battery Park City to rehabilitate and construct affordable housing units across the NYC in partnership with nonprofit housing developers and owners. Recently, a community organization called Friends of the High Line and the city government under former Mayor Mike Bloomberg worked together to create a phenomenal new park — which is now attracting over 7 million visitors annually, bringing in a massive number of new, market rate apartments, as well as affordable units using the government’s zoning powers. This is also protecting and preserving two thousand units of low income public housing in the neighborhood. And many other similar examples can be found around the country.
Here in the Bay Area, some of the best affordable housing developers in the world — BRIDGE, Mercy Housing, MIDPEN , Resources for Community Development, and others — have created and preserved thousands of units of affordable housing for close to half a century and they will be key partners in a new regional housing plan. Despite their collective best efforts, working on their own, without an overall plan and the full commitment of all the key regional stakeholders — multiple local government elected officials, housing and buildings departments, zoning authorities, state government, the federal government, community leaders, advocates, business leaders, philanthropies, potential long term investors such as pension funds and insurance companies — their preservation and creation efforts is meeting only a fraction of the growing need.
If we all come together, create a cross-sector, regional partnership, collaboratively create a comprehensive, multi-year plan and identify specific projects to implement that plan, we can ensure that future generations will experience an even more beautiful, more prosperous, more inclusive and more just Bay Area. As stewards of the present, I believe that is not only our opportunity, it is our solemn responsibility. So, how do we get this done?
First, we need to bring representatives of all the key stakeholders together at same table. We need the right leadership in place including some entity with convening power to bring everyone together. Certainly, some of the leaders of the Silicon Valley giants and the philanthropies they have helped create and support have that convening authority. And several these leaders are already individually exploring ways that they might help solve our affordable housing crisis. Not only do these leaders have financial resources, a collective genius for innovation and a self-interest to act, they will likely receive strong encouragement and support from the local and national media for this initiative — the San Francisco Chronicle, The New York Times, Wall Street Journal, Huffington Post, Fortune, and SF Curbed, to name just a few — have recognized the severity of our housing crisis and the immediate need to do something about it.
Second, this new regional, cross-sector partnership needs to develop a comprehensive plan using a process that is both inclusive and transparent — and the media can help with this, particularly if we recognize that they are also a stakeholder and needs to be at the table and a member of the partnership. The plan needs to recognize the unique characteristics and culture of the many communities throughout the region. There needs to be close collaboration between the regional partnership and each community; at the same time, every community should recognize its responsibility to contribute to meeting our collective affordable housing needs.
Third, the plan needs to align the partners and the implementation process precisely, as in a value chain. Each one of the many partners — government, communities, developers, business leaders, and philanthropists, among others — have a specific role to play. Partnerships can be very effective but they require collaborative leadership and clear roles and responsibilities. Equally important, the plan must include precise measures of success, documented and audited relentlessly, including locations, numbers of units, affordability levels, quality, and timetables for completion and occupancy.
Fourth, a financial portfolio must be assembled, stacking capital to assure maximum leverage and efficient management of risk. Philanthropic dollars are essential in the beginning, helping to accelerate the process and enabling the partnership to innovate without fear. And we will also need patient long term capital, willing to take reliable but more modest return on their investment and stay invested, guaranteeing affordability is maintained for decades to come.
Finally, and most importantly, the plan should include a wide range of housing solutions, prioritizing home ownership whenever possible, providing existing residents with sweat equity opportunities as much as possible. Governments must step up and make its under-utilized buildings and lands available for affordable housing as the preferred use and aggressively pursue local, state, federal and private subsidies and tax incentives. The plan should include rehabilitation, preservation, and creation of new units. New construction can add to number of affordable units only if we protect and revitalize the affordable units currently available (but imminently threatened by gentrification and market pressures). And we should experiment — both New York and Hong Kong are using modular construction of micro apartments to provide a bridge for younger workers and to free up larger apartments now filled with three or more younger workers for families.
Many of the products and services provided by Silicon Valley companies that we now cannot live without, were barely imaginable twenty years ago. Providing affordable housing for all in the Bay Area is not beyond our collective capacity over the next twenty years. We just need to come together as partners and get it done.