Editor's Notes

The only way to preserve the middle class in the upcoming boom is to aggressively protect existing rental housing stock

"San Francisco's economy is moving in the right direction," Mayor Ed Lee told the Examiner last week. "My economic development and job creation policies are setting San Francisco on a path toward economic recovery."

The normally modest mayor is making a rather sweeping statement there — the US economy is improving in general, and I don't think the mayor can take credit for all of it. But he's absolutely correct that he's promoted policies that are aimed at bringing more tech companies in to San Francisco, and over the next few years, they will no doubt create a lot of high-paid jobs for people with specific skills that require a high degree of training and education.

Is that "the right direction" for the city? I lived here the last time that San Francisco was part of a tech boom, and I'm not so sure.

See, bringing all sorts of new wealth into town sounds good on the surface, and for some people — particularly real-estate speculators, landlords and purveyors of high-end services — it is. But in a city that has limited space and nearly unlimited demand for housing, lots of new rich people and lots of high-paid people looking for places to live puts pressure on the existing residents, particularly the poor and the working class. It screws the middle class, too — if you're a teacher or a nurse and you want to buy a house in San Francisco during a boom, you're S.O.L. You can barely afford to rent — and if you're already renting, you're constantly at risk of losing your home, and your ability to live in this city, because your landlord can make more money kicking you out and selling the place as a tenancy in common to someone with more money.

There's no way to build enough new affordable rental housing, or housing that middle-class families can buy, to keep up with the demand. It's impossible. Developers won't do that — there's too much money to be made in high-end housing for anyone in the private marketplace to waste time on anything else.

The only way to preserve the middle class in the upcoming boom that Lee is promoting is to aggressively protect existing rental housing stock — which means preventing condo conversions and TICs and the stuff that gets promoted as "middle-class housing." The only way to prevent massive displacement of people and existing businesses is to regulate space in the city more tightly than anyone has ever done — which will, by its nature, make it harder for the newcomers and new millionaires to find places to live.

That's the tradeoff. That's the fact that Lee and his allies don't seem to want to grasp


It's ridiculous that you still believe that protecting TICs somehow preserves the housing stock in a long-term, sustainable manner. It doesn't. The economics simply don't work. We'd be better off converting ALL the TICs to restore some semblance of reality into our market so that people who want to make a life here can have some chance at maybe buying a home, investing in a community and sticking around. If there's a brief spate of folks converting rentals to condos for sale, I've seen nothing to indicate this would be a massive conversion and, in reality, a city administered bridge to help people who find themselves in a rough spot would be a good thing. Heck, the market is still relatively soft so now's the perfect time to bring more housing to market and provide a modest recalibration of SF's housing costs.

And I speak from experience. When I was younger, my building was sold and I was forced out as the new owner decided he wanted to take over my $400 a month basement unit. At the time, I made $22k a year and, guess what, I managed to find another apartment. This is life.

What continues to confound me when it comes to middle-class housing, however, is that city leaders (including Tim) talk about it, argue about it, and build very, very little of it in middle-class neighborhoods.

Expensive SOMA apartments are generally 1-2 bdrm with some recent 3 bdrms near the ballpark. But these are way out of reach for most of us and aren't family neighborhoods in the San Francisco sense. They are commuter homes for future suburbanites who work on the pennisula. Sure, the lefties can offer more city programs to help a few people get into these buildings but the cost is totally screwy market and another burden on taxpayers, including us middle-class folks.

Here's a novel ideas to keep the middle class in SF - build us homes in which to raise our kids.

Build 3-4 bedroom homes in existing middle-class family neighborhoods - Sunset, Richmond, OMI, Crocker, Sunnyside, Portola, etc... Don't make them super fancy and don't have a 26 year old with an art degree design them as they don't have the same needs as city families and very likely may not have been raised in an urban environment. I appreciate the "urbanist" movement but don't appreciate their "one-size fits all" approach. It doesn't.

To control costs, do four things:
1 - allow the builder to move multiple projects in different neighborhoods through the city process simultaneously and limit the BOS's authority to mettle or stop projects,
2 - determine the home size and the end profit margin with the builder so we get the projects we need for reasonable prices,
3 - Encourage and make easier the purchasing and renovation/building on empty lots or run down homes.

Here's another thing: include garages - most families need a car and "transit-first" doesn't mean "transit-only". Yes, there are people in certain transit-rich, ammenity-rich neighborhoods where families thrive without cars. But most of us don't live in the Mission or Duboce. Our families live in the south/west "L" where some sort of car is needed for many day-to-day errands. We need a place to park the car, unload kids, groceries, etc...

Then get out of the way. Let the builders build. Let the buyers buy. I really doubt most tech millionaires are going to want to abandon SOMA or the Mission or Potrero to join us middle-class families in Crocker, Parkside, Sunset, Richmond, OMI, etc...

Heck, the city could even do this on a geographic basis with incentives in family neighborhoods and Tim's "contain and control" housing policies in the more hip or upscale neighborhoods.

Posted by Becky Bayside on Feb. 22, 2012 @ 10:46 am

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