POSSIBLE SOLUTIONS TO THE SAN FRANCISCO HOUSING CRISIS

©Lloyd D Hanford Jr., October 2019

There has been a serious homeless problem in San Francisco for many years. Unquestionably the problem has its root in sociological issues which must be left to the experts in that field to address. However, no matter why there is a homeless problem a key issue is the fact that there are no functioning housing alternatives to living on the street for people who can’t find affordable housing.

The common denominator to the housing problems is a SHORTAGE OF SUPPLY.  In other words, the demand for housing substantially exceeds the available supply. Economics 101 clearly teaches that when demand exceeds supply prices will rise and it is obvious that the greater the gap between supply and demand the faster prices will rise.  This explains why housing costs in San Francisco are so outrageously high that most potential consumers for housing just can’t afford them.. 

In searching for solutions, it is important to figure out how the City got into this position. It is suggested that the cause probably goes back to the 1970’s when anti-high-rise activists (1) made an attempt, via the ballot box, to limit the height of residential buildings to six stories. The ballot initiative failed but following that activity the City down zoned the vast majority of properties to permit a density that was, in many cases, substantially below the previously permitted densities. This decision had the effect of reducing the future, potential supply of housing by up to 50%. Add to that an increasingly difficult permitting process and the addition of new supply became even more problematic and expensive.

The growth of a NIMBY (not in my backyard) philosophy developed making any changes difficult if not impossible. The notion of preserving single family neighborhoods is, under any growth scenario, misguided. In a city like San Francisco with a very limited land area zoning criteria must advance with the times.  The City is now in a position where a cheap single family home costs well over $1,000,000 which means a property tax of over $10,000 per year. These costs keep single family housing well out of range for middle income people let along low-income people. The City can’t afford to preserve single family neighborhoods into the future if there is a desire to have adequate housing for the future population.

The solution to the present housing problems is to provide for a massive increase in housing into the future. In other words, dramatically increase supply to the point where hosing costs become competitive again. The planners need to comprehend that there is a “filtering up” process that comes with a building boom.  As people move into the new housing they vacate the older housing which older housing becomes the supply for the lower end of the economic spectrum.

Some steps to consider include:

  1.  Re-zone the City to permit mufti-family residential development in currently single family and lower density areas.
  2. Increase height limits and allowable densities to create room for major increases to supply.
  3. Change the building codes to eliminate all requirements that do not relate to health and safety such as the requirement to include a percentage of ‘affordable housing units” under the misguided notion that the developer is paying for that housing.  The housing consumer is the one that ends up paying.
  4. Review all architectural requirements that impact building costs such s bulk limits, shadow ordinances etc to make certain that they make a positive contribution to the users of housing and if not, change them.
  5. Remove any prohibitions against tearing down single family housing units.
  6. Reduce the time involved in the permitting process and unless permit application calls for a variance from the permissible criteria eliminate public discussion relative to granting the permit.
  7. Develop innovative zoning districts such as permitting high rise residential development along both streets bordering Golden Gate Park.  Such development would not block views of current housing. Permit high rise development along streets like Broadway (and tops of hills) where the development would not impair any existing view of the Bay from neighboring property etc.
  8. Develop a system for having developers pay the City (not the property seller) for any permit approved, increased density above the currently authorized density before the new zoning was created.  For example, if the old zoning would have permitted 50 housing units and the new zoning and issued permit would allow 100 housing units and he market price of land was (is) say $30,000 per unit the developer seeking a permit to build 100 units would pay the City $1,500,000 for the added 50 units permitted and built. There should be no windfall profit to either the developer buyer or the land seller as a result of increased density. The money received for these development rights could be earmarked for a fund to provide subsidized housing for those in need.
  9. Decontrol (from rent control) all covered housing units, on turnover within five years after turnover. Remove from rent control all remaining housing units covered fifty years from the date of the new zoning.

The foregoing is a broad brush approach to the problem. To devise a workable long term solution a “blue ribbon” committee consisting of architects, engineers, attorneys, developers, financiers, investment bankers, sociologists, economists etc. should be appointed and given a period of two years to study solutions to long term increases in housing supply and make recommendations to the City for the legislation necessary to implement the recommendations. The Committee should avoid any attempts to “dictate” architectural design because that should be left to the architects. One only needs to look at cities like Hong Kong, Singapore Shanghai, Dubai and Abu Dhabi to name a few and wonder why innovative architecture seen there doesn’t appear in San Francisco.

It has taken over forty years for the previous planning failures to bring the City to this point and no solution will bring immediate relief. But, a reasonable goal would be to have a resurgence of residential building within ten years with a goal of achieving a balanced supply/demand situation within the same forty years.

The current attempts to solve the problem by just throwing money at them will not work long term.  The only real solution is to provide for a dramatic increase in housing supply.

(1) See Alvin Duskin Biography (Wikipedia)

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