San Francisco Does Not Have a Housing Crisis
Let’s get something straight: San Francisco does not have a housing crisis.
That’s right. We don’t. Crises don’t last an entire generation. And San Francisco has been a place where it’s difficult to find and hold on to a home for at least that much time. It’s just particularly acute now.
What San Francisco has is an affordability crisis, which has been caused by a generational housing shortage. And that shortage is caused by supply constraints, which are baked into the City’s politics.
As such, it merits discussing how that happened.
In the years after World War II, San Francisco was a different place, both socially and politically. It has always been a progressive city, but back then, it had a very different collective view of its past and future, and its place in the larger nation:
“I was fortunate to grow up in San Francisco when “The City’ wasn’t so self infatuated and still was an outpost in the Western United States, not connected by jet travel to the east and Midwest and not yet the recipient of migrants from those areas determined to come and create a city of their dreams. It was a big small town in many respects that had grown with a sense of self-sufficiency and ‘can do’ attitude. It was less than 100 years old and had rebuilt itself only 40 years earlier after 1906. It had been a focal point of World War Two and had seen tens of thousands of men and women from the rest of the country pass thru and their way to destiny, and they had seen The City and left their mark, many came back and stayed.”
Soon the city would start to see momentous changes that were different in many ways from those that it had seen before – many for the better, but also for the worse.
From the 1950’s to the 1970’s, San Francisco had a progressive-minded electorate that was governed mostly by business-oriented Republicans, aided by California’s cross-filing laws. Government supported development to the point that a number of projects were entitled which could only be described as grandiose and unsustainable. Among these were projects that involved filling in large portions of San Francisco bay, an elephantine, 50-story corporate headquarters on piers near the Ferry building, and what would have been the world’s largest parking garage. Many were aimed at shaping the city’s scenic waterfront; first into a transport corridor, later toward projects that would cut off views of the bay from the rest of the city. Public umbrage was inevitable.
The first effective movements focused on freeways – by 1959, popular movements were successful in stopping the most egregious efforts, and these activist successes would continue. These successes were recognized by other activists, who wanted to change San Francisco’s political establishment – including Philip and John Burton, and Willie Brown. Anti-growth activists such as Jack and Jane Morrison and Calvin Welch became part of a coalition with Democratic politicians and peace and civil rights activists, which by the mid-1970’s would transform San Francisco politically into a Democratic stronghold. In doing so, they became part of the city’s new political establishment, which holds power to this day. On many levels, they have brought overwhelming good. On others, not so much.
This brings us to a major reason for San Francisco’s affordability crisis – while circumstances for the city have changed, the outlook of much of the city’s political establishment has not. The end result is that San Francisco hasn’t been building enough housing to accommodate even reasonable growth for over a quarter century. Even though the perspectives of many of the city’s elected officials changed over time (most notably Brown), most of the power brokers behind them continue to talk about development as if they were still in the 1950’s. And they still wield considerable power. They are, on the whole, nice people with good intentions. But when they end up being the last and loudest voice in an elected official’s office before a vote, the outcomes are often more bad than good for the city’s present and future.
Brad Paul, former Deputy Mayor for Housing under Burton Democrat Art Agnos and a key voice in the establishment’s anti-development faction, wrote an essay for SPUR on what he saw as the success of Proposition M, the capstone of San Francisco’s current development policy:
After Proposition M passed, the city allocated the annual square footage allowed through a process dubbed the beauty contest. Projects were selected by a competitive review of developer proposals by the city planning commission and a panel of internationally famous architects and urban designers. Several years later Seattle became the second major city to enact an annual limit on high-rise development through a ballot initiative. The whole issue of the annual limit surfaced again, briefly, after Mayor Frank Jordan took office. Several of his advisors floated the idea of repealing Prop. M because it was “hurting economic growth.”
In response, the business/economic affairs specialist for the Chronicle wrote an article about the folly of such an idea. Although he did not support Prop. M when it passed, he argued that it prevented a glut of high-rise buildings from going up at the end of the economic boom of the late eighties. Cities like New York, Los Angeles and Denver that allowed the market to dictate the pace of construction were facing office vacancy rates of 30 percent and more. The only two cities with relatively healthy vacancy rates, 11–13 percent, were San Francisco and Seattle.
Again, things change. Like San Francisco, Seattle has experienced a significant spike in demand for housing in more recent years, due to the influx of new industries. Unlike San Francisco, this time they decided to make new construction easier, not harder. And while housing costs overall still increased, they are nowhere near as unaffordable as San Francisco’s.
New property business models enabled by technology, whether sound or not, complicate the issue and provide grist for the political mill. For instance, if San Francisco had an adequate supply of housing, Airbnb would be at worst a nuisance; instead, in the current climate it’s easily portrayed as an existential threat to the city’s working and professional classes.
The notion that strict permitting controls can prevent a property glut, which has arguably succeeded in San Francisco, brings another functional politics dimension to the table: keeping property expensive is a boon to existing property holders. When backers of the city’s building controls describe the depth of their support, they often leave out the fact that many of their allies simply want to ensure that their own assets – whether a single family home, or a portfolio of income properties – appreciate at a high rate.
Which means that in the current context, much of the high-minded sentiment in favor of building controls, backed publicly by altruistic arguments from lauded, public-spirited veteran activists like Jane Morrison, end up being backed by pure greed.