Photo credit: Sergio Ruiz

How the Bay Area Became America’s Symbol for a Housing Crisis

Tipping Point’s Robert Joseph Interviews Gabe Metcalf of SPUR

Tipping Point
Apr 25, 2016 · 6 min read

Robert Joseph, Senior Program Officer at Tipping Point, recently sat down with Gabriel Metcalf, President and CEO of SPUR, an organization that has promoted good planning and government in the Bay Area through research, education and advocacy for more than 100 years. Robert serves on the board of SPUR Oakland, and asked Gabe for his insight on how the housing market came to be what it is, what we can do to fix it, and how policy change differs from direct service.

Robert Joseph: What are some of the historical factors that led to the limited housing affordability we see today in the Bay Area?

Gabriel Metcalf: In most places, people living in poverty have a hard time finding housing they can afford. But in the Bay Area, even people with middle-class jobs face an affordability crisis. The reason is simple: we stopped building housing. We have supply and demand out of whack. But the reasons behind that fact are complicated. The value change that happened in our society between the post-war, pro-growth boosterism of the 1950s and ’60s and the NIMBYism (“Not In My Back Yard”) of the 1970s was a profound cultural transformation that I don’t think we fully understand yet.

At least some of it stems from the reality that city leaders in the post-war era did some terrible things with their power. Urban renewal and urban highways were national programs — there was an almost universal assumption that tearing down the old city meant progress. You also had cities losing population every single year after WWII. There was this deeply held belief that urban life was to be escaped from, so all the cities that are really expensive today were emptying out then. The low point in population was 1980, according to census numbers. For those who stayed, change came to be equated with destruction. For all of these reasons, there was a backlash against development.

Down-zonings didn’t cause housing supply problems for a long time because the population loss meant few demand pressures. You could downzone without triggering displacement in the 1970s. You could save historical buildings without any negative impact on housing supply.

But then the whole world changed and cities started growing again. The problem is that we have locked in place the rules and culture from these early ’70s preservation movements that today make it really difficult to add housing.

RJ: What repercussions does this have for the lowest-income bracket in a place like San Francisco?

GM: If the Legislative Analyst’s Office is correct that 800,000 households in California either live in subsidized units or receive vouchers, that’s about 6% of all households statewide. It’s taken us since the 1930s to get this much. We had the New Deal, the Great Society, redevelopment in California — all ambitious government programs that created affordable housing, but the overall yield has been small. What’s more, over the last 10 years, California has lost most of its funding for affordable housing as both federal dollars and state redevelopment dollars have gone away.

This means that most people — most middle class people and most poor people — will live in housing found within the market. So if we want to talk about a solution that actually scales up, we have to talk about fixing the housing market itself.

What are poor people doing, de facto? Some are homeless, some are moving back in with their parents or relatives, a lot are living in garages, or doubling up. Many people are driving long distances to live where there are more affordable options — places like Antioch, Pittsburg, Vallejo, Stockton. And then others are leaving the state, as housing refugees all over America.

There is a demand cascade in the housing market. If there is a shortage of luxury high-rise apartments with views, then you move to the top of Russian Hill, but if you can’t afford Russian Hill, then you move to North Beach. If you can’t North Beach, then you move to Duboce Triangle. If you wanted to be in Duboce, but you can’t afford it, then you go to Bernal. Then you go to the Excelsior, then Oakland, then Daly City. It’s this demand cascade that pushes every rung down. You have families in single-room occupancy units in the Tenderloin now and whoever used to be in the Tenderloin is now homeless.

I believe that there is no conflict between maximizing production of market-rate housing and maximizing production of affordable housing. We must do both.

Photo credit: Sergio Ruiz

RJ: San Francisco may be an extreme case, but I imagine this issue is playing out across a number of cities and regions in the U.S. Do you have examples of other places where the housing market functions better?

GM: I think Seattle is a really interesting comparison. It’s similar — huge tech boom, water-constrained, an old city that people love. But Seattle has made a different set of choices, namely to accept more development, more physical change. Over the past 20 years they have produced two to three times as much housing as we have, per capita. As a result, it’s a bit cheaper. It’s not utopia, but their land use politics are virtually the opposite of ours.

Portland is another interesting example, because Oregon has regionalized land use decisions. The region produces plans and every city’s zoning and permitting plan must be consistent with it. They’ve taken away the ability of cities to say no to housing. You can keep your local control over land use as long as you’re building as much as the state says you need to build. If you don’t hit those housing targets, then you don’t have control any more.

RJ: It seems unlikely that public agencies alone will resolve the homelessness issue in San Francisco. How might philanthropy, with greater agility and targeted investment, contribute to a solution?

GM: There is so much that funders can do on a systems level. First of all, we don’t have a unified, by-name database of homeless people. People have been trying for years to have it. Many other cities have one. It’s solvable. I don’t want to trivialize how hard that is. If it wasn’t hard, it already would have been done, but it’s an area that I could see Tipping Point getting involved. It’s to the point where we don’t know if programs like Newsom’s Care Not Cash was successful, or we can’t pull down federal dollars allocated to specific populations like veterans, because we simply don’t have the information we need.

Then there is this theory of a housing ladder that several Tipping Point grantees follow. If you are homeless and you enter the Navigation Center on 16th and Mission, you work with a case manager, and when a slot opens up, you enter an organization like Community Housing Partnership or Catholic Charities. The idea is to support people to get off the streets and provide certain services, then gradually they will rely less and less on that support, until they are fully self-sufficient and can find housing in the market.

In order for this theory to scale, we need to be moving people out of the subsidized units into the un-subsidized portion of the market and be disciplined in tracking and testing. We need to know what happens between stages and what the patterns of exits are: What does it take for somebody to get to the next stage and the stage after that? How do we hold organizations accountable and how many outcomes they can achieve at each level? It’s an empirical question and Tipping Point can be the owner of that knowledge.

We can’t be content with crossing our fingers that clients’ readiness and available housing supply will both grow over time. Policy change can fix the housing market and make housing less expensive — that’s totally within our control at the city level. We need funders to help with those efforts and continue to grow the resources on the subsidized side. This system will take time to understand and refine, and organizations that work in the housing and homelessness space should be upfront about that. If you can’t deal with a longer timeline, you shouldn’t give to the systems-change work.

Tipping Point

1.3 million people in the Bay Area are too poor to meet their basic needs. Without intervention, 7 in 10 people born in poverty will remain in poverty their entire lives. With your help, Tipping Point Community is tipping the odds.

Tipping Point

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We fight poverty by finding and funding the most promising non-profits in the Bay Area. See how we’re changing the odds: www.tippingpoint.org + @tippingpoint

Tipping Point

1.3 million people in the Bay Area are too poor to meet their basic needs. Without intervention, 7 in 10 people born in poverty will remain in poverty their entire lives. With your help, Tipping Point Community is tipping the odds.

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