Mayor’s housing plan is a complete, utter bust


Mayor Ed Lee and Sup. Jane Kim: Very different visions of housing in SF

 

By Tim Redmond

Mayor Ed Lee has responded to Sup. Jane Kim’s affordable housing proposal with a competing measure that would actually make things worse than they are now.

The mayor likes to talk about consensus and the Chron calls his proposal a “compromise,” but I’ve read the housing measure he’s put forward, and instead of any requirements or rules around the construction of new affordable housing, the measure essentially blocks all challenges to luxury housing projects – with tenants and neighborhood advocates getting nothing in return.

It’s as if Lee has decided that the private market should operate unfettered, while Kim is offering reasonable (actually, fairly moderate) regulations that fit into the concept of traditional city planning.

The two visions are critically important now that there’s a chance that Ellis Act reform is dead at the state level. The mayor has repeatedly put his hopes for controlling evictions and preserving housing diversity on Sacramento and Sen. Mark Leno’s Ellis Act bill. Without that, the city will have to look to local solutions – and Kim’s bill, along with an anti-speculation measure taking shape, are both efforts to use the city’s own authority to set housing policy.

The Lee measure, called “Build Housing Now,” is everything condo developers could ask for. It specifically states that the city can’t adopt any rules to limit or delay new housing (of any sort) in any neighborhood that is part of an Area Plan (that means most of the Eastern part of the city where so much of the new high-end housing is going). That means no design review rules, no new affordable housing mandates – and “no regulation that could prohibit, condition, or otherwise restrict the approval of new market-rate housing units based on a cumulative housing balance ratio or other criteria related to achieving or maintaining a certain ratio of various types of affordability levels of housing on a district-wide or city-wide basis.”

Think about that: The mayor, who talks about the need for affordable housing, wants to ban any efforts to force developers to build more affordable housing.

The measure has some high-sounding language at the beginning, starting with an admission that San Francisco’s tech-driven employment boom has been something of a problem: Between 2007 and 2013, the city saw 51,800 new jobs, and 14,060 new housing units.

Then it goes on to state that the mayor’s proposal to build 30,000 new units by 2020 would “likely curb the price escalation that has resulted” from the housing shortage. But there’s no evidence that building more high-end housing will bring down prices for the rest of us; it never has.

The measure also states that “a majority” of the new units will be “within financial reach of middle-income households.” Since the media price for new one-bedroom condos is well about $750,000, and two people buying that unit with five percent down would be paying $4,200 a month in mortgage and property taxes, or his definition of “middle-income” is something of a stretch. Two people would need a combined income of more than $140,000 a year to afford that one-bedroom unit, which means they don’t have kids; the median household income in San Francisco is about half of that, according to the US Census.

And there is absolutely nothing in the mayor’s proposal that in any way provides new revenue or mandates higher affordability. It’s a joke: the closest it comes is a meaningless statement about the need to seek new funding sources.

You can argue that Kim’s measure, which exempts smaller projects and buildings already in the pipeline, should be stronger; in the past, activists have called for a moratorium on luxury housing until the city meets affordability goals. But apparently a moratorium won’t hold up legally, and this legislation would be the first ever to specifically say that if the city can’t meet it’s goals for housing low and moderate-income people, it can’t keep building for the rich.

And the mayor is saying that’s unreasonable. Not hard to see who’s side he’s on in this debate.

UPDATE: Leno called this afternoon to say he was “very disappointed” in the vote. While he has the opportunity to bring the bill back for reconsideration, that’s unlikely right now, since the deadline for policy committees to report out bills is the end of next week, and the Housing and Community Development Committee doesn’t meet again until after that deadline. It would take a rules waiver, a special meeting, and at least one member agreeing to change his or her vote.

“But we have raised awareness of this issue, and we can look at bringing it back next year,” said Leno, who has often had to introduce bills multiple times but rarely gives up on an important cause. Like this one.

 

 

 

 

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9 Responses to Mayor’s housing plan is a complete, utter bust

  1. Sam says:

    Why do you think that building little or no market-rate housing is somehow magically a solution for those who cannot afford homes in SF?

  2. photothinks says:

    Anyone who argues that our mayors office has not been compromised by large corporate real estate interests including Mayor Lee’s personal friendship with billionaire investor Ron Conway now look pretty foolish. Actions speak louder than words. In fact, these actions now scream. By Mayor Lee’s own decree – developers come first. Low and middle income residents come last.

    David Elliott Lewis

    • Sam says:

      Ed Lee very clearly ran on a pro-growth, pro-jobs, pro-development platform and he got 50% more votes than his nearest rival. A landslide.

      So either you do not accept the majority verdict or you’re a bad loser. Which is it?

      And why are you so obsessed that someone somewhere might be making a few bucks? Isn’t the important thing that homes get built? Clearly those homes are needed because they are all selling. Or do you know better?

      • photothinks says:

        Mayor Lee also campaigned on being inclusive including providing housing for all. Unfortunately, that hasn’t happened. As evidence, I cite the very article I was commenting on.

      • grumpish says:

        Mayor Lee got that high of a vote because of voter fraud.

        • Sam says:

          If you have any evidence for that wild allegation, I suggest that you take it to the DA. Given that Lee got 50% more votes than the second place Avalos, it would have taken voter fraud on a massive scale to make that difference.

          And given that the final result reflected the various opinion polls that had been done, there is no reason to believe your claim.

  3. The inveterate reference to the high cost of housing in San Francisco–with my emphasis being on the word “housing”–sustains the fiction that what costs so much in the SF real estate market is the building component, yet I’m confident that any serious discussant would agree that what’s so expensive in the Bay Area is not exorbitant labor or building materials costs, but is the extraordinarily high value of land . . . location, location, location.

    In the absence of making that distinction (that it is land values which account for the preponderance of the relatively high price of Bay Area real estate), the justice vs property rights muddle errs consistently on the side of the 1% and the aspirants to being part of the top fifty percent.

    Land, unlike housing, is not made. Ownership of it constitutes a monopoly. The value of land arises with the growth of community, ergo the value of land belongs to community as a conservative property right. To give to private parties that which was generated by community is in the truest sense of the words a profligate giveaway at least as appalling as the taking from individuals the value which individuals as individuals have contributed to community.

    When Jane Kim, Ed Lee, Tim Redmond, Sam, photolinks, and I unite to institute public policy which socializes land values, we will find that our seemingly divergent interests are harmonized.

    Ed Lee can tell business and developers, “Build without penalty (tax) for building.”

    Jane Kim can tell the median (and below) income earners, “All that high price of land values will be used to operate MUNI fare free, amply fund the schools, substitute for the sales tax and state income tax (for those at median income and below).”

    Tim Redmond can write about how the speculative price of real estate in San Francisco is abolished and that land values here are now a public utility.

    Sam can revel in the knowledge that the free-loading land value owners such as myself are thrown back on our earned income from work and capital investment (not land investment); and that building developers are no longer taxed for their labor, the materials they use, or for the finished product they create: actual housing.

    photolinks can rejoice that Richard Blum and the 1% are deprived of the unearned income from the mere ownership of nature which makes them the 1%.

  4. Sam says:

    Wait, you want to nationalize land? Too bad about that pesky takings clause huh?

    Anyone who has been a landlord or developer knows that their income is anything but “unearned”.

    • Tim, are you listening? Sam nearly understands the proposal to turn land values into a public utility. If you wish to promote public ownership, do it right and do it big. Socialize/nationalize/make public revenue of the value of land.

      Sam, you’re the one I actually want on board with this one precisely because you appear to truly understand the economic logic. Lee, Kim and Redmond may follow it if you trace it out for them. But the idea is not to nationalize land. That would lead to command-style disposition of land by either politburo-type techno fascists or well-intentioned social do-gooders out to tear down the market’s strength (liberal fascists).

      First, as it applies to land values, “that pesky takings clause” presumes that when the the value of land created by community is retrieved by its creator that something has been taken which the interloper has a right to. “Creation confers ownership” is a sound rule. The owner of land doesn’t create land’s value. The growth of community does.Land values are the one case where the current takings clause actually supports the kingly extortion of value from the creator of value. It extorts the community. In any meaningful sense, the king/owner-of-land extorts the community when he demands that the community or members of it pay him for a value created by the community.

      Second, the proposal is to fully reward the building owner and developer by removing all taxes levied upon the building, upon its construction, and upon the building materials. Each of those represents earned income. However, the value of the location itself is not a value earned by its owner. The value of land rises (or falls) irrespective of the owner. Instead, the growth of community accounts for the value of “location, location, location.”
      The proposal is to nationalize/socialize land values, not to socialize land. There is a real and important difference. In fact, we do want a real market for land use. To establish that market for land use we need to eliminate the ability to hoard land without paying its opportunity cost for non-use. To understand this point one needs to recognize that there is an essential difference between land and stuff made by people. People don’t make land. They do make stuff. If the owner of land doesn’t have to pay its value to the creator of that value, then the owner of land can ignore the market demand for land and hoard it, waiting for its price to change because of changes in the community. This contrasts markedly with the value of something made by individuals or associations of individuals. If an individuals withholds building a house from the community, someone else will respond to the market demand and build the house. The essential point is that land cannot be made. Ownership of comparatively desirable locations is a natural (natural as in Nature) monopoly.

      Third, to pay for courts, fire protection, public education (or vouchers), roads, etc. something has to be taxed. Which is the more intrusive tax? A tax on my labor or business, or a tax upon community-generated land values? Which do you support nationalizing? The value of work or the value of land. There are those, of course, who favor taxing a bit of labor and a bit of land values. But consider this: in a revenue neutral scenario every tax dollar not retrieved from the community-generated value of land must necessarily be retrieved from labor and capital either directly by a tax on earnings or indirectly by a tax whenever individuals or business spend their earned income .

      check out leonphat(dot)com

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