How Money Meant to Create Housing Could End Up Preventing It
The Chan Zuckerberg Initiative has taken an important step toward solving the Bay Area’s housing crisis. Their funding of the new “Partnership for the Bay’s Future” will help build tens of thousands of affordable homes in a region that desperately needs them.[1]
Economists agree that the only way to reduce housing prices is to produce more housing.[2] Most of the Partnership’s resources, provided through “Investment Fund,” will be spent doing exactly that.
Yet one part of the Partnership’s plan could sabotage its overall mission. In fact, tens of millions of its dollars could be used to stymie the hundreds of millions of other dollars they are spending on housing.
The Partnership plans to allocate $40 million to a “Policy Fund” focused on housing issues. They understand that the housing crisis is not just a monetary question but a political one, one which requires new policy solutions. Yet most of those $40 million will flow through the San Francisco Foundation, a local nonprofit which often funds groups who actively try to stop building.[3]
For instance, the San Francisco Foundation recently provided $40,000 to Calle 24, which then sued to stop a transit-oriented apartment complex in the Mission neighborhood of San Francisco, despite the building’s substantial affordable housing contributions. They claimed, to jeers in the international press, that the current building was a “historic” laundromat. [4] The Foundation also provided $100,000 dollars to the East Bay Community Law Center, which advocates for more rent control, even though over 96% of economist agree that rent controls actually worsen housing shortages.[5] The fact that the Partnership says it will focus on “protecting vulnerable tenants and preserving existing affordable housing,” means that they, and the San Francisco Foundation, will likely end up supporting groups that refuse to allow more construction.
Unfortunately, other tech foundations in the Bay Area may be making the same mistake. Google just promised to help build up to a $1 billion in new homes, but then it promised to give $50 million to nonprofits focused on “homelessness and displacement,” which usually means groups lobbying against new construction.[6]
The Bay Area already has the most restrictive tenancy laws in the nation, the most restrictive rules against displacement, and the most restrictive laws on rent control. The end result is our current, unfortunate situation: the most unaffordable real estate in the nation, caused by the impossibility of building new or denser housing.
Instead of funding groups that try to stop housing construction, the Partnership should look at groups like California YIMBY, which advocate for increasing instead of decreasing the supply of new housing.[7] When the Partnership is supporting local jurisdictions with their grants, they should not support those who promise to keep current housing in place, but those who promise to build more of it.
The Chan Zuckerberg Initiative and the Partnership are right that the Bay Area needs housing policy reform. But they should be careful that their “reform” is not just doubling down on the Bay Area’s current failed “solutions.” Hopefully, all of their housing efforts will be pointed in the same direction: more housing for all.
Judge Glock
Senior Policy Analyst, The Cicero Institute
To learn more and explore related policy issues, visit our website, www.ciceroinstitute.org
[1] Chan Zuckerberg Initiative, “Partnership for the Bay’s Future,” January 24, 2019, https://chanzuckerberg.com/story/a-new-housing-partnership-for-the-bays-future/
[2] Edward Glaeser and Joseph Gyuorko, “The Economic Implications of Housing Supply,” Journal of Economic Perspectives 32, no. 1 (Winter 2018): 3–30, https://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.32.1.3.
[3] San Francisco Foundation, https://sff.org/; Partnership for the Bay’s Future; “Challenger Grants for Housing Protection and Preservation.” https://www.baysfuture.org/challenge-grant-rfp/
[4] Adam Brinklow, “’Historic’ Mission Laundromat Not Historic After All,” CurbedSF, June 11, 2018, https://sf.curbed.com/2018/6/11/17451078/historic-mission-laundromat-2918-mission-review; “Can a New Mayor Fix San Francisco’s Housing and Homelessness Problems?” The Economist, May 31, 2018, https://www.economist.com/united-states/2018/05/31/can-a-new-mayor-fix-san-franciscos-housing-and-homelessness-problems
[5] Darwin BondGraham, “The Fight Over Rent Control,” East Bay Express, October 17, 2018, https://www.eastbayexpress.com/oakland/the-fight-over-rent-control/Content?oid=21443054); University of Chicago IGM Forum “Rent Control,” February 7, 2012, http://www.igmchicago.org/surveys/rent-control
[6] Roland Li and Melia Russell, “Google Puts up $1 Billion to Fight Housing Crisis in its Bay Area Backyard,” San Francisco Chronicle, June 18, 2019, https://www.sfchronicle.com/business/article/Google-puts-up-1-billion-to-fight-housing-crisis-14008557.php?psid=14wd;
[7] California YIMBY, https://cayimby.org/.
