People are fleeing San Fran, yet the Hollywood Slicky is demanding the city build 82,000 MORE housing units. Businesses are leaving, the downtown is a ghost area and tourists understand the physical risk of going to this city of crime. Would you buy a new home in a location with terrible schools, cars are not allowed on the main streets, open drug markets with cops looking on? Or buy a condo with homeless living in the lobby and in the doorway—and spend hundreds a month extra to park your car?
“Lenders see record high apartment vacancy rates and San Francisco’s crime and drug problems and are staying on the sidelines. San Francisco cannot change this perception without showing lenders that it is ending its notorious process of discretionary housing approvals.
This means the Planning Commission, Board of Appeal or Board of Supervisors would no longer have the power to kill projects that meet applicable zoning laws.
In four years, Sacramento will take over complete authority on zoning and permitting. Units will be built because of a mandate. Yet, you can not mandate people live in a crime and drug ridden slum. Or can you?
IS SAN FRANCISCO’S NEW HOUSING MARKET DEAD?
by Randy Shaw, Beyond Chron, 2/6/23
Mayor and Planners Celebrate Housing Element Passage
City Must Adopt “By Right” Approvals
Last week San Francisco became one of the few cities to meet the state deadline for its Housing Element. San Francisco’s plan allows for 82,000 new units over the next eight years. The city’s past building experience says that the city is unlikely to reach this goal, but optimists believe the state-mandated target will force the city to reform its costly and glacial housing approval process.
I decided to talk with some builders last week to see if they shared this optimism. They did not. I heard the same troubling refrain: Lenders see the market for new housing in San Francisco as dead. They don’t know who will move into new housing and they are not encouraged by what they see happening on the streets of the city.
We need to listen to lenders. The national foreclosure crisis of 2009-10 showed that when lenders don’t provide money, housing doesn’t get built.
Regardless of demand.
San Francisco’s housing market is in a much worse place today. In 2009 and 2010 there was a huge unmet demand for housing. Local builders were being unfairly penalized for a national crisis that had little impact in San Francisco.
Today, the days of a seemingly never-ending flood of tech workers eager to buy or rent in SOMA, Mid-Market or Downtown are gone. This group now primarily work at home. And they are not coming back soon.
San Francisco will soon respond to the crisis by reducing the city’s inclusionary housing requirements and other fees. That will help. But more radical reforms are needed.
San Francisco must approve housing “by right.”
Lenders see record high apartment vacancy rates and San Francisco’s crime and drug problems and are staying on the sidelines. San Francisco cannot change this perception without showing lenders that it is ending its notorious process of discretionary housing approvals.
This means the Planning Commission, Board of Appeal or Board of Supervisors would no longer have the power to kill projects that meet applicable zoning laws.
By Right Approvals
Does the city enacting right approvals sound politically impossible? Maybe so. But who ever thought three years ago that the city’s downtown would have the nation’s highest office vacancy rate?
A radical change in San Francisco’s housing demand requires a radical openness to new strategies.
I describe in Generation Priced Out how Seattle dramatically outbuilds San Francisco because housing that meets applicable zoning is approved as of right. Seattle’s Planning Commission focuses on planning, not on hearing from neighbors and citywide anti-housing activists opposing projects. Nor can Seattle councilmembers stop housing.
Enacting “by right” approvals is complicated in San Francisco by the many zoning districts that use the discretionary conditional use process. For example, developers in parts of the Tenderloin that meet certain criteria can build thirteen stories rather than the standard eight. To avoid discretionary approvals on these projects the city will have to rezone areas to establish standard limits. Since building under state density bonus laws already preempts local zoning the conditional use process is not as controversial as it sounds.
Lenders will not be satisfied with San Francisco making changes around the edges. The city needs a radical change in how it gets housing built.
Crime and Drugs
If you think that all the stories about San Francisco’s open air drug markets and retail crimes do not affect lenders, I suggest you talk to some. Lenders see and read these stories and decide that their money is not safe in San Francisco.
I don’t recall ever hearing that from lenders during past economic downturns. It confirms what many have been saying for some time: the city’s open air drug markets hurt the entire city economy, not just the areas where dealers operate.
Build Only Affordable Housing?
Does lenders refusal to back market rate projects open the door to San Francisco exclusively building 100% affordable housing?
With what funds? Whenever I hear a supervisor talk about a potentially great affordable housing site I ask: do they think funding for affordable housing is unlimited? If so we wouldn’t have a homelessness and affordability crisis.
Affordable projects cost $500-750K a door. Add up all the local sources and then tell me that San Francisco has the funding to build 82,000 units at 100% affordable.
Let’s stop playing make believe on affordable housing.
The Board knows that making reforms around the edges will leave the city tens of thousands of units short of its 82,000 goal.
Is that what San Francisco voters want?
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