In San Francisco, pretty much everyone agrees on one thing: The city’s housing is crazy expensive. Apartment-hunting causes its own form of PTSD. The rent, to put it simply, is too damn high.
Here’s how the parties break down — not just in San Francisco, but in other increasingly popular cities like Seattle, New York City and Washington, D.C.
Just build more housing?
The first camp is mostly composed of anti-gentrification activists and professional low-income housing organizations, who generally view “affordable housing” as something created by the government: either directly owned as public housing, or restricted through the development approval process to people making a certain percentage of the area median income.
The second camp, composed more often of smart growth groups, developers and urban libertarians, believe in “natural affordability”: Prices decline when supply increases. Just the laws of economics. If builders could just be freed to create enough housing, the market would provide enough units to satisfy demand at all income levels.
The divide has existed for many years — sometimes subtly, though, with the different parties talking past each other. Whole books have been written on the natural affordability argument, but it’s usually aimed at a more obvious enemy: the NIMBY types who don’t care much for affordability at all, preferring to keep their neighborhoods quiet and uncrowded.
Lately, however, fights have broken out among these two groups. In San Francisco, the spark was an upstart called the San Francisco Bay Area Renters Federation, or SFBARF, which articulates the supply-side argument in its purest form.
The group, founded early last year by a prep school math teacher named Sonja Trauss, has one single operating principle: Build more. Born out of frustration with a development approval process in which neighborhood groups force developers to scale down their projects, Trauss and a handful of other activists go to community meetings and do just the opposite: They advocate for as much density as possible, no matter how expensive it is.
“We definitely are post-boom, so there’s a little post-apocalyptic utopianism,” Trauss says, half jokingly. “Let’s build the high rises, because when the crash happens, we’ll have so much luxury housing!”
Trauss doesn’t actually think that the market, left to its own devices, will provide new housing that’s affordable. But if developers are building more for rich people, she says, that leaves room in the old housing stock for relatively poor people. “That’s one of the things about being poor; you don’t buy new,” says Trauss. She lives in West Oakland, Calif., where she says there’s plenty of “naturally affordable” housing that’s the same price as the subsidized stuff, just with less paperwork.
SFBARF’s grass-roots approach might be uncommon, but its ideology actually isn’t. The group convened a panel last week with other like-minded figures, including the head of Smart Growth Seattle, who described having to fight Birkenstock-wearing liberals who resist densification measures like micro-unit apartment buildings.
“Everything has to be groovy and equity focused, blah blah blah, but they’ve got their hands on the throat of housing supply,” said Roger Valdez, the group's executive director. "Saying ‘supply' in Seattle makes everyone think of Milton Friedman and Ronald Reagan, and it’s very difficult to make the case."
Also on the panel was Michael Cohen, a San Francisco real estate developer who used to run the city’s Office of Economic and Workforce Development. If the free market hasn’t delivered more affordable housing, he says, it’s only because market dynamics have never been allowed to work as they naturally should.
"The single most important land use debate that goes on in San Francisco is whether you believe that the laws of supply and demand exist,” Cohen said. "People will say 'Michael, you built all these buildings in San Francisco, and it’s still really expensive.’ The problem is, we build 1,200 units a year, and we should be building 8 or 9,000 units a year, and so we will never get to test the premise until we actually overcome that issue."
Wrinkles in the free market
The other housing affordability camp, however, believes that’s just wishful thinking.
Peter Cohen runs the San Francisco Council of Community Housing Organizations, an umbrella group that focuses on the needs of low-income people. He points out that the wrinkles in the supply argument don’t come from regulation: Lots of the newcomers to San Francisco prefer the funky feel of the Mission and the Haight, for example, so building expensive high-rises doesn’t necessarily free up older housing supply for poor people. Plus, market prices don’t just reflect demand from people moving into the city — it’s also speculators and investors who use real estate as a safe place to park capital, or even AirBnb, which incentivizes landlords to rent out their rooms to short-term visitors rather than residents.
That’s why, he says, the city has added twice as much housing for high-income people as it needs since 2007, and only 55 percent of the housing needed for low-income people. Simply building new housing doesn’t necessarily reduce prices, he says, unless the city forces it to do so — which CCHO laid out in a manifesto last fall, responding to the supply-side arguments of SFBARF and others.
"Just upzoning and just building more and creating more supply in and of itself is not a community benefit,” Cohen says. “Doesn’t mean I’m going to oppose it. It just doesn’t have any value.”
Cohen doesn’t bother hiding his disdain for SFBARF, which he thinks is an Astroturf organization backed by the real estate lobby, which often argues that affordable housing requirements make projects unprofitable and therefore unbuildable (Trauss says they take no money from developers). But the tension is more than just philosophical. One of SFBARF’s goals is to speed the development approval process, which affordable housing groups — as well as anti-development NIMBYs — use to bargain for low-income set-asides and other concessions.
“If we become effective, it’s going to be really devastating for them,” Trauss says. “I’m not here to take anything away from people. But this mechanism that people are using, while it benefits their organizations and some of their constituents quite a bit, it’s bad for the rest of us.”
So, ultimately, people with the same goal disagree fundamentally on how to achieve it, which blocks progress toward policies that might make a dent — such as dramatically upzoning in exchange for a substantial provision of affordable housing. In the absence of the kind of public money that used to be available for building social housing directly -- state and federal sources of funding for housing in San Francisco declined by 69 percent since 2008 -- harnessing market demand in some form is the only viable option.
That’s the balance that New York City Mayor Bill de Blasio is trying to strike in his housing plan, which relies heavily on channeling private investment. New York City’s government ownership-and-regulation strategy has produced some 400,000 units of public housing since the 1930s and 1 million rent-controlled apartments, which has been considered a rare success in preserving mixed-income neighborhoods. The state limits how much the city can control prices directly.
But aside from making the inclusion of low-income housing units mandatory, rather than voluntary, de Blasio’s strategy doesn’t radically depart from former mayor Michael Bloomberg’s — which left the city with just as much of a housing crunch as it had before.