SanFransplainer

This Crazy, Old Zoning Trick Probably Won't Solve Your Housing Situation

At some point, technology reporters will figure out that maybe it’s not the best idea to wander off their beat and wade into the roiling torrent of housing affordability and real estate development issues without doing some homework first.  Until then, insecurity and defensiveness will keep giving us gems like Nick Bilton’s “The Housing Market With Nowhere to Go (but Up)” and the latest, from Berkeley-based Business Insider reporter Kyle Russell, “This One Intersection Explains Why Housing Is So Expensive In San Francisco.”

The intersection that’s responsible for all of San Francisco’s problems—because it’s officially the worst—is 10th and Irving, one of many intersections in a large area of San Francisco that is zoned for a maximum of four stories. But many of the buildings only reach two stories! Ipso facto, we should relax zoning regulations to allow developers to build as high as they like, even though they haven’t yet seen fit to do so in a neighborhood that’s not particularly close to San Francisco’s job centers and even farther from the jobs in Silicon Valley. (They are, however, building 89.9% more luxury high rises than we need in the Tenderloin and SOMA, already the densest area of the city.)

Of course, more and less reasonable appeals to deregulate modern urban development have been made at least since the 1961 publication of Jane Jacobs’ “The Death and Life of Modern American Cities,” but a partner at startup investment racket Y Combinator made the argument for the millionth time on Twitter last weekend, so Business Insider was on it.  Publisher Henry Blodget, who turned to journalism after being banned from finance for life after allegedly touting terrible investments during the dot-boom, promoted the post in an all-caps shout as the solution to San Francisco’s housing affordability crisis. Please, SanFransplain it to us!

San Franciscans demanding sunlight in their parks?  “Ridiculous,” declares Blodget.  Of course, there are plenty of New Yorkers fighting against luxury supertowers for billionaires next to Central Park, and regulations mandating structural accommodations for street-level sunlight are as old as the Woolworth Building. While it’s true that median rent in San Francisco is disgruntingly high at $1,493, in Brooklyn it’s nearly twice as much at $2,900 and it’s even worse in Manhattan. The neo-liberal, supply-side development policies of the Giuliani and Bloomberg administrations weren’t able to build a way to affordability there, what makes anyone think it would work differently here?

Russell, who blamed the lack of residential towers on the west side on “a distinct anti-growth culture in San Francisco,” didn’t see fit to mention that San Francisco has been undergoing a building boom for years while many of the same zoning limits probably apply in his own Berkeley neighborhood. He also ignored the low-density suburban sprawl surrounding technology company campuses in Silicon Valley, where he covers “Apple, enterprise startups, semiconductor chip makers, and cloud software.”

Besides real estate and urban development, Russell also doesn’t cover geology.  While we’re looking at maps, here’s one of liquifaction zones during the 1989 Loma Prieta earthquake. The fact that the Funset is built on top of sand dunes doesn’t make it impossible to build tall buildings, but it sure does make it expensive.  A friend and former structural renovator in San Francisco also pointed out to Uptown Almanac that ramps or elevators are required to accomodate tenants with limited mobility, like the elderly and disabled, which isn’t easy in vertical buildings on small lots. So maybe we should hack the building codes, too!  All of which would certainly make it a friendly environment for greedy, rapacious real estate developers while incidentally taking the pressure off affluent municipalities on the Peninsula to build enough housing and transit to serve the corporations they’ve welcomed as neighbors.

To be fair, no one knows a quick fix for any of this, and if they say they do, they’re probably trying to sell you a scam (or shitty tech stocks).  It’s a process that lots of people have been working on for decades, resulting in informed, detailed proposals from the likes of the Council of Community Housing Organizations and the Mayor’s Office.  And the Council has probably already considered Business Insider’s one crazy idea that will fix San Francisco forever.  It’s not even a problem that’s unique to San Francisco, but our beautiful backdrop happens to be a particularly romantic setting for all the drama, so even as many of the same problems beset London, Londoners fly here to watch it play out.

Housing prices in San Francisco may be pushing our lovable hipsters into ever lower-income neighborhoods (and other, far more vulnerable populations even further toward the margins), but in promoting laissez faire development, earthquake-prone structural engineering, ableist housing discrimination and intractible income inequality, the dream of the 1890s will live on in San Francisco if the business trades have anything to say about it.

[Photos: Frank Farm and Zero One]

Comments (23)

Point of order: wouldn’t SanFransplaining be what YOU’RE doing? 

Business Insider is like a for Dummies but on the web. 

the level of bullshit in that tech writer’s screed about Irving Street is so immense. I’m glad someone debunked it.

BTW, you can really tell how old that picture is. Sunset Stationers has moved twice since that photo was taken (that is now a First Republic bank branch), Irving 5 and Dime is closed, and biggest reveal - all those campaign signs posted on city light poles, etc. The progressives decided to ban them because they couldn’t print as many as other campaigns. They did so in the name of “beautification” but it was really just because they weren’t competitive. Oh well.

Old? That’s a picture of our glorious future, with high-rises as far as the eye can see stretching the length of Kirkham!  They wouldn’t be so tall if they didn’t have to build massive parking garages underneath because neighborhood transit could barely handle the existing capacity.

While it’s true that median rent in San Francisco is disgruntingly high at $1,493, in Brooklyn it’s nearly twice as much at $2,900 and it’s even worse in Manhattan. The neo-liberal, supply-side development policies of the Giuliani and Bloomberg administrations weren’t able to build a way to affordability there, what makes anyone think it would work differently here?

Do I even need to point out that you’re drawing a conclusion here without connecting any of the dots?

I agree that building limits in the Sunset aren’t the main problem. Those are long-tail. Public transportation needs to improve, and new business districts need to develop before we worry about those areas.

What IS a problem is the plan for Western SOMA, which limits development to about 5 stories in an area that is right next to downtown, major transportation hubs, freeway access, and without any real “neighborhood charm” that height limits advocates abstractly refer to.

building on sand isn’t easy. a new building with 6 flats (2 1 br 2 2br and 2 3br) opened up on 9th (with a la boulange at street level and underground parking) took a long time to get built and most of that time was spent putting in a state of the art foundation that will survive a good sized quake. the units are nice but cost alot, and it’s on 9th with all those 44s going by and such

Re: suburban sprawl…Major tech companies that build in the Peninsula and South Bay would lease office space in the City if it penciled out. Right now, there just isn’t a lot of available office space in the city, so prices are high. In fact, Vvcancy is at all time low IIRC. Even the giant, unbuilt Transbay Tower is already rumored to be half-leased by Salesforce, while Dropbox has already filled up the unbuilt 222 Second. 

At the same time, many of Peninsula companies’ employees are leaving their jobs because they’re tired of the commute and miss working/lunching/happy-houring in the City. LinkedIn has moved practically their entire non-engineering workforce to the City in the last few years, Salesforce continues to pick up more central parcels, and small startups like BigCommerce are successfully poaching employees at Google bus stops. 

Allow for more construction in places like Western SOMA, and companies like Google, Facebook, Apple (well maybe not Apple), and Yahoo would choose to locate here instead of 40 miles away from where their employees live. 

In closing: No, 10th/Irving is not THE problem plaguing our housing market. It’s a contributing factor, but it’s not what we should be going after. Tackle SOMA, MidMarket, maybe the BART stops on Mission first. Then worry about the outer neighborhoods.

This. I work for Yahoo in the SF office and the list of people who want to work from SF is very, very long. Nobody would commute to Sunnyvale given the option, but most who live in SF don’t want to live in Sunnyvale.

Anyway, regardless San Francisco does need densification, but the place to start is on the major transit corridors (Mission, Van Ness, Geary). Most everyone who writes about housing in San Francisco says this. Also the larger regional issues need to be solved, in particular the absurd density limits on the Peninsula and Silicon Valley which prevent anything close to enough housing being built down there.

Also people protesting random Google employees are basically accomplishing nothing. Some lawyer that bought an apartment building in San Francisco could give a shit about your protest, and he isn’t really the cause, just the symptom. If we went and banned evictions completely it would have at best no effect on the housing supply, or rents.

The other thing that irritates me about this protest: the solution to keeping teachers in the city isn’t protesting random landlords. It’s paying teachers more, much more. Teacher salaries in the city are quite low, even relative to other teachers across the country, yet we have the highest cost of living.

Allow development to proceed without all the myriad of approvals and hearings if it is 100% within the zoning. Disallow discretionary review if a project is 100% within zoning.

These two items would contribute massively towards alleviating the current situation.

Worth pointing out as well that the Sunset (even to my surprise the Inner Sunset) is actually not a popular location for tech people moving to the city because apparently they are all afraid of a little fog or cold air or something. As a result, rents are (for San Francisco) lowish. 

Eh, it’s the commute to downtown/shuttle busses, not the weather. Not to mention they can afford to live near transit/trendiness. Yeah, weather’s probably the smallest contributing factor here now that I think about it.

Well you are right Blodget maybe we shouldn’t blame “tech”, maybe we should balme assholes like your self who promote valueless “tech” like you did last time around.  Remember this is the guy that is banned from equities trading.  Now he is going to tell us about real estate development?

The truth is, people move to San Francisco for its beauty and charm. Its then followed by people who have skill and drive to build industries here. And its been like this F-O-R-E-V-E-R. This also means it drags people with money but it also drags a vibrant service industry. I know people would rather here that its the other way around but it isn’t. Give me one merchant that isn’t happen about the additional foot traffic?

The ever changing eclectic personalities of this city and what makes it different. Just because a particular sector happens to attract more than another isn’t a problem, its a blessing.  Over time it’ll change. Would you rather SF be like Detroit? Its a solid example of a one-trick town.

KevMo: any chance you could have an anymous poll about your readers? Age? Duration? Occupation? Etc?

Jackson, thanks for tackling this one. 

Yes, we can deride Mr. Blodget all we want but if we don’t increase density, throughout the city, how do we address the affordability crisis? What alternate routes should be taken to increase San Francisco’s affordable housing stock?

Also, much of the debate is couched in terms of “us” versus “them.” Who gets to be “us” and who is derided as “them?” Is it based on income? Is it based on San Francisco tenure? Is the voice of someone who moved here in 2009 less legitimate than someone who moved here in 1999? How about the resident born in San Francisco? Does her voice trump all others by virtue of birth? 

P.S. I wouldn’t characterize Jane Jacobs as championing urban development deregulation. Quite the contrary, she advocated developing neighborhoods with explicit regard for their histoical and contemporary contexts. I don’t see her promoting a 20-story high-rise at 10th and Irving.

 The neo-liberal, supply-side development policies of the Giuliani and Bloomberg administrations weren’t able to build a way to affordability there, what makes anyone think it would work differently here?

You’ve been fooled by Giuliani and Bloomberg’s free market rhetoric; the data tells a different story. Neither mayor actually pursued a supply-side development policy. A supply-side development policy would mean allowing at least as much housing supply growth as America at large, which was around 15% between 2000 to 2010. In reality, NYC’s housing stock only grew at a third that rate, and about half as fast as San Francisco! (Yes, you read that right – San Francisco’s housing stock grew at a faster rate than New York’s. Although still not enough to keep up with America at large.) The Giuliani years were a little better – 8.15% from 1990 to 2000 – but still barely half the national housing stuck growth rate.

Also, the average rent in Brooklyn isn’t actually $2,900 (if it were, Brooklyn wouldn’t have a median household income that’s barely $30,000…how could you pay $2,900 in rent each month if you don’t even earn that much?). That’s just the average rent for new leases signed by big brokerages, which is where this data is coming from. It ignores the vast majority of renters who have older leases, many of whom are rent stabilized, as well as tenants living in buildings owned by small landlords in immigrant-heavy Brooklyn neighborhoods like Sunset Park, Sheepshead Bay, Canarsie, etc., whose units aren’t being handled by the big brokerages and thus aren’t counting towards the data.

So anyway, believe what you want to believe about supply and demand – we clearly have different opinions on this, and I know I’m not going to convince you that housing follows the basic laws of supply and demand – but please don’t use New York City as an example of why building lots of new apartments doesn’t help affordability, because when you look past the talking points at the actual numbers, NYC quite obviously never actually tried.

Sorry, those numbers were from my head, and I was a tiny bit off…here are the actual ones (I was close, but slightly off – here’s a spreadsheet with the exact figurse): NYC housing supply growth from 2000 to 2010 was 5.32%, SF growth was 8.78%, US total housing stock growth was 13.63%. So I exaggerated a little with the magnitudes, but my point still stands – NYC didn’t produce all that much housing, and neither SF nor NYC kept up with national housing stock growth. 

yep.  the lines don’t even add up - like the average in brooklyn for commercial brokerages signing new leases vs the average rent that’s estimated citywide for sf.  like straight up cherry-picking.  $1493!  that’s a good one, there probably isn’t a studio in the city right now for that much.

and if this article is supposed to be a ‘takedown’ of that article about zoning and affordability, it’s way off the mark.  like, it’s indisputable that san francisco’s crazy obstructive neighbors and the process itself serves to drive up the costs of new housing construction, that’s just a fact that noone can possibly deny.  part of the reason that you don’t have people building to existing zoning envelopes in the neighborhoods is that it is very well-known that any sort of proposal is likely to cost so much to get through that you basically have to build luxury in order for it to pencil.  how deep must those pockets be?

Yup.  The “Build Highrises Everywhere!” crowd are so boring and naive.

Another great article. The unwavering entrenched belief systems of half the commentators missed some main points: the realities of ‘how’ affordable housing ever got/gets built.   Do you have the time also to do one about how much speculators are actually buying and driving up both rental and home/condo to buy market? There was a WSJ article a while back that detailed half of homes in oakland actually bought by PE and hedge funds. Maybe that much in brooklyn according to some economic blogs. This isn’t just a bunch of ‘rich people’ moving here. This is a massive bubble created by our fed govt, a trillion in the USA from fleeing chinese capital, and of course trillions in interest free money provided by the FED to the too big to jail Suggestions: the daily links over the past few months on nakedcapitalism.com. Many of Wolf’s articles linked there, but also on his testorsterone pit blog, and the past years of columns by Mike Whitney at counterpunch.org. 

Also, as I think you are going to, there is Michael Hudson, and William Black (the guy that put over a thousand people in jail during the SnL scandal). Jane’s book is a decent neighborhood view of what a great urban neighborhood is. It still is a classic. But there has been a wealth of indepth studies in the past 20 years that detail the real ugliness of how as Hartman says in Selling SF “the history of american cities is the history of Developers profit and relocation” . Crabgrass Frontier, the facts of the FHA loans from FDR to Nixon massively subsidizing whites to move to suburbs;NO loans to anyone else. Family Properties by Satter-chicago history of horrible contract buying relevant to what happened here to blacks and in oakland, as many more. Anyone else interested just look up “urban studies” and add key words for books to get. I recommend buying from Alibris.com. You are buying from small booksellers. And at amazingly low prices. And I know I am beating this to death, but we ARE in a bubble that is going to burst. We ARE going to be in a real depression soon. No honest economist is doubting the burst, but no one can predict what that ‘prick’ in the ballon will be. See Griftopia, Ecconned, It Takes a Pillage…and the now classic  Shock Doctrine to see,ugh, what is going to happen, finally, to us. 

When rich people tell you about their plan to lower housing costs, ignore them.  They don’t want them lowered, and they’re actually proposing ideas that will increase them, but pretending otherwise.What would bring the housing costs down in urban areas is to zone OTHER places for smaller lots, more walkability and less cars.  Housing cost are high because demand for such neighborhoods vastly exceeds supply.  Zone some new developments for 2500-sq-ft lots, mixed use - which is pretty much illegal in the US now - ,and the prices of urban areas will drop since there will be more supply. 

Nothing in this story really refutes the proposition that San Francisco’s problem is one of supply. Being a fully built-out city, as neighborhood activists never tire of pointing out, the only way to build is up. It would be lovely if San Francisco simply let builders build what’s zoned without years of reviews and neighborhood therapy sessions.

Henry Blodget should have had that shit-eating grin wiped off his smug mug when he was banned from the financial industry but nope, he got to fail up and start a horrible trollbaiting shlock of a website like Business Insider, a site with such bad writing it makes Huffington Post look like Pulitzer Prize winners.

Also, that writer (Kyle Russell) is the same toolbag who claimed he was “assaulted” when someone stole his Google Glass at the 16th Street BART so I’d take what that moron says with a big field of salt.

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