The price of housing in the city of San Francisco, as anywhere else that doesn’t regulate prices, is the result of market factors. There are only two ways to reduce the prices of homes:
Change the supply curve.
Change the demand curve.
To change the supply curve, you have to do something that makes builders/property owners more willing to add living space to current properties, since the entire city is already built out. Presumably, this would result in more multi-family dwellings replacing single family dwellings. Is this something you want to see San Francisco do?
To change the demand curve, you have to do something that makes people less willing to live in San Francisco than they currently are. For example, you could change the weather so that it’s ungodly hot or uncomfortably cold (while retaining the fog for most of the winter); but do you really want to become New Sacramento? Or, you could make living conditions worse. Generally speaking, I cannot think of any way to turn people off to living in a city that keeps the city equally desirable to live in.
So what did you have in mind? I assure you that, even in California, attempting a socialistic/communistic solution of price-regulation on housing isn’t going to go over well, regardless of how well/poorly it might actually work.
If there was an adequate supply of affordable housing the cost of rentals would come down anyway and rent controls would not be necessary.
That requires a long-term public housing policy to encourage the right kind of housing to be built where it is needed and for the transport infrastructure to be in place to support it.
There is usually a city planning department that does this. But whether the plan is a good one and works, that is another matter. Finance is always a big factor.
And I can guarantee you that any place your housing committee wants to increase density there will be a groundswell of NIMBY fanatics dedicated to keeping the character of their neighborhood exactly as it is. Not to mention that any change in public transportation will bring equally outraged squawks from those whose neighborhoods the new transportation will be coming through. Because that’s San Francisco for ya. Nice place to visit, but the closest I ever got to living there was Corte Madera and man that place is asshole to elbow these days.
Changing the supply curve seems both more practical and desirable than changing the demand curve. I don’t know if the latter is even possible, at least not on purpose.
What I’ve been thinking about is a combination of things: innovative housing models including micro-units for singles, modular housing units which reduces the building costs by a large fraction, spreading the increased density over the whole city, streamlining the permitting process without sacrificing environmental and other considerations (the mayor just issued a directive to make this happen, so that’s something), reducing restrictions on in-law units (now called Accessory Dwelling Units) in single-family homes (the state legislature passed that a few months ago, so that’s another thing), all the while improving Muni service (that’s a tough one) and frequency to get more people out of their cars at least for commuting, and finally education to the residents of the city so they understand why all these things are necessary and desirable. Perhaps what we need most of all is an evangelist, a vocal verbal champion to stir up support from its current tepid torpid levels. There’s precious little discussion that I can see beyond the completely superficial demands for more parking, less traffic, and lower housing prices.
These days most people do jobs based in offices. The computing and communications technology to do these jobs from anywhere has been around for quite some time. Unfortunately, there is a deep conservatism in many organisations that require employees to physically move each day and be stacked on top of each other in huge buildings in the centre of the city. Presumably, so that the boss can keep an eye on them.
This imposes huge strains on a city infrastructure and housing. The more business, the more office workers, the more public transport, parking places and the less space for affordable homes in the centre.
If people could work from home part of the time or at local workspaces that could satisfy all the requirements of an organisation, a lot of the problems of city centres begin to go away. There are some companies that do this, but it takes some thought and good management to make it work. Most are not up to the challenge. But a city can nudge them in the right direction by city planning.
We are still adapting a nineteenth-century model of a city.
That’s an excellent question, and the first answer is “not in San Francisco.” They would have to live in Oakland, or South SF, San Mateo, or points further. Which isn’t fun, but bear in mind that geographically speaking, living in Oakland and commuting to SF is no further than the commutes some people have within the same city. SF is, area wise, a small city. You can live and work within the borders of Dallas, New York, Toronto, Los Angeles, Denver or any number of other cities and have a longer commute than someone who lives in Hayward and works in SF.
So if prices rise in SF you’re de-incentivizing people from living there, and pushing out working class people, which means working class jobs in SF will lack for workers. Which means, of course, that wages for such jobs in SF will have to go up to attract labor, or else they will be unfilled, and the rich people who live there will have to pay more to have their meals served, children taught, and offices cleaned. That’s the price they will have to pay to not have more housing in SF.
People in New York will tell you their transit system is overcrowded and unreliable. Everyone everywhere says that, and it’s probably, to some extent, true. But, again, paying more for better service will simply be something the rich people will have to deal with if they choose an expensive San Francisco with no more than ~800,000 people in it. It can be done, but they’ll have to pay for it, because everything costs something.
The thing about NIMBY, which is what we’re talking about, is that it’s universal and universally the case that people bitching about it do not understand the cost of what they want. You don’t want high density housing? That’s your choice, but don’t bitch and whine when the labor dries up and things are more expensive, because you voted for that. You don’t want the outreach center for poor people? That’s dandy, but when you start seeing homeless folks around, that’s the price you chose to pay, chief. Don’t want to pay for a public transit investment? Fair enough; I hope you enjoy being parked on the 101 because you chose that.
Here’s a true local story; I live in Oakville, a suburban (of Toronto) city of 200,000 people, and in the center of it is a famous golf course, Glen Abbey. It was not originally in the center of town - when it was built it was on the north edge - but it is now, so there you go. The course is no longer PGA quality; it’s lovely, but was built a long time ago and it’s not sufficiently challenging for modern pros and lacks the amenities of a true major league course. So its owner wants to redevelop it with some nice midsize housing developments.
NIMBY! A lot of local residents don’t want this. It’s historic! Traffic will go up! Wahhhhh! so they petitioned the city (Oakville styles itself a “Town” but at 200,000 people let’s be honest) to stop the owner from changing it, and right now it’s at an impasse. So I contacted the “Save Glen Abbey” people and asked what the plan was. How much is buying and operating this golf course going to cost me as a taxpayer? This amazing exchange happened, and while I’m paraphrasing, this is the exact number of questions and responses and the central gist is faithfully reproduced:
ME: (Question you see above)
SAVE GLEN ABBEY: Nothing
ME: Huh?
SGA: There is no plan for Oakville to buy Glen Abbey.
ME: Um, then, how will you stop development there?
SGA: The Town will force Clublink to not develop it.
ME: So I’m clear, you are going to force the owner of a golf course to operate a golf course even though they do not want to operate a golf course?
SGA: They will continue operating a world class, profitable golf course.
ME: But… they don’t want to. They want to make more money developing it. Why would they keep operating a golf course if they don’t WANT to?
SGA: They will continue operating a world class, profitable golf course. Their owner is a mean billionaire.* (Yes, really)
ME: It doesn’t matter if he… look, I don’t get it. If the guy who owns my favourite restaurant wanted to retire, and I petitioned Oakville to force him to keep running it, wouldn’t that be unfair:
SGA: They will continue operating a world class, profitable golf course.
The Save Glen Abbey folks, to use a cliche, want to have their cake and eat it, too. They want it to stay a golf course, but oh, THEY don’t want to pony up the money to buy it. They want the owner to keep running it at an opportunity loss. They fail to understand this central truth; you can have what you want but it’s going to cost you. You have to pay the price. It is absolutely, obviously inevitable that if they get their way about Glen Abbey remaining a golf course, one of three things will happen; the Town will have to buy it and operate a golf course for rich people at tremendous cost to the average taxpayer, or Clublink will sue the town for the opportunity cost it’s being unreasonably denied and we’ll pay that way, or Clublink run the golf course into the ground on purpose, resulting in the same thing happening anyway. And no matter which of those three things happens, because keeping it a golf course reduces housing stock, housing prices will be held artificially high. I mean, I don’t support the idea of preserving the golf course AT ALL, but if my fellow Oakvillites want it that way, so be it. But let’s at least be honest; there is a cost to everything. If that is the city they want, great. It’s going to cost hundreds of millions of dollars.
It’s all a balancing act. Where you get into the stupid is that people just want things their way and will not admit the cost.
Rent control decreases the NPV of new construction. Those developers will develop elsewhere or those investors will chose a different vehicle. I am not owed housing in the community of my choosing. Nobody is. If I want a stable housing budget, I can negotiate a longer lease (at a higher rate, of course), buy a place, or move like one in ten Americans do each year. And I’ve already moved from my first place in DC after a series of 7% rent increases. It’s not as bad here as in SF but we still may very well get priced out in the coming years. If so, we’ll move again. Either farther out or elsewhere entirely.
The SF Bay area is a huuuuuuuge job and technology creation engine. Perhaps the best in the world. The most effective way to lower housing costs would be to kill that engine. The second best way would be to ruin the weather.
RickJay, I believe your story utterly just because that’s the way people are. On the other hand, it seems to me to be fair to expect the developer in that case to pay the additional costs to the city for such things as traffic improvements, to ameliorate the increased traffic (and other necessary infrastructure improvements). Also, if he made the development attractive enough to the surrounding neighborhoods, with some nice amenities, rather than just cramming in the maximum number of housing units (I don’t know if he’s doing that, but it would be fairly typical behavior of a developer), many fewer of those residents would object to it.
This would reduce his profits, and therefore his opportunity cost of not developing, and also prove that your adage that you can have what you want but it’s going to cost you goes both ways.
There’s the crux of your problem. Low-income elderly people taking up valuable housing stock. Why do THEY need to be in the city? There’re not taking advantage of the museums and concert halls and parks, not using the shops and restaurants, because they’re old and poor! Relocation, relocation, relocation! Or a huge barge, released into the Pacific.
Also, the Colma area could be re-strategized for high-rise residences. There’d be a pesky vengeful-ghost problem, but folks would be dying to get in.
If you’re 100 years old and your rent controlled housing costs have been the same since since 1940, maybe not, but that’s got to be a negligible percentage of residents.
