By TIM REDMOND
June 6, 2022

How do you do an environmental review of a proposal that is so far from reality that you can’t take it seriously?

The SF Planning Commission is taking the first step toward the adoption of a new Housing Element, the blueprint for the city’s future policy on what most agree is among the most pressing issues facing San Francisco.

The Planning Department has drafted a new draft document, which you can read here, and the commission will hold a hearing Thursday/8 on the Environmental Impact Report.

For decades, cities like San Francisco have issued new housing elements every ten years, and for decades they haven’t made much difference. The last version, approved in 2014, called for far more affordable housing than the city has funded and approved. Meanwhile, the city has authorized more luxury housing than the state says it needs.

Bills by state Sen. Scott Wiener mandate more housing, but offer no funding for affordable units.

So now there’s an EIR that is supposed to examine the impacts of the plan—but the plan, which is still based on the city complying with the state’s housing mandates, is completely unreliable.

I don’t see how anyone can study the impact of adding 80,000 new housing units to the city, 46,000 of them at below market rate, in the current world of political and financial reality.

The affordable housing would cost $19 billion (at today’s prices, which could easily go up). If the city relies on for-profit developers to provide those units through inclusionary housing, the city would have to allow—and developers would have to build—166,000 new units, 120,000 of them market-rate, over the next eight years.

In other words, the state’s housing mandates for cities in the Bay Area, including San Francisco, are a fantasy.

There’s no way this is ever going to happen, not without massive federal and state support and profound changes to the built and unbuilt environment in the city.

The Draft EIR doesn’t even begin to scratch the surface of what the impacts of adding 160,000 new units, including at current rates enough housing for 252,000 more rich people, whose impact on the city would be immense.

All of the laudable goals of the new housing element, which talks about equity, historical racism, and, amazingly for San Francisco, a fundamental right to housing, become close to impossible under a scenario where private developers build 120,000 new luxury housing units, which would almost certainly require the demolition of vast swaths of existing vulnerable neighborhoods.

The housing plan calls for the city to advocate for a change in the Ellis Act and the Costa Hawkins Act, which is desperately needed—and yet, state Sen. Scott Wiener has never once said that the price for approving all these pro-developer bills is repeal of those laws. Sup. Rafael Mandelman pointed out at a rally against yet another Ellis Act eviction that the state won’t take action until someone powerful in the Legislature makes this the top priority, makes it the most important issue, and forces other reluctant Democrats to go along. Not Wiener. Not the Yimbys.

It also, interestingly, says that the city can use the Prop. I money to fund affordable housing. But the current mayor, who oversees the Planning Department and the budget, refuses to do that.

Plus: Rich people have a much higher impact on the environment than poorer people; they consume vastly more, create more demand for product and services, and add far more to greenhouse gas emissions.

The city is also working on its Climate Plan—which in no way even considers a future with 120,000 new luxury housing units in San Francisco.

The new Housing Element is profoundly important; under state law, it now is supposed to have teeth, to actually guide planning and zoning decisions. And it has such great language and such wonderful goals.

But I don’t see how the Planning Commission can evaluate its impact on the environment when so many of the assumptions are just blue smoke and mirrors that vanish the moment you start to shine a real light on them.

That hearing starts at 1pm.

 

He starts with the idea that San Francisco (and you can apply this model to any California city) requires market-rate developers to include a certain percentage of affordable units in their projects. State laws now allow even more density if the developer slightly increases that percentage.

Verville notes that in the last RHNA cycle, 28 percent the housing built in San Francisco, by all developers, including nonprofits, was affordable.

Then he looks at how many market-rate units it would take to get the city to the state-mandated affordable number.

The math isn’t complicated; it’s just missing from most policy discussions.

The current RHNA rules mandate that San Francisco authorize 82,069 units of new housing in the next eight years. Of those, 46,598 need to be below-market-rate.

The state’s rules include zero funding for any of that affordable housing. San Francisco would need $19 billion to pay for it, data shows.

But lots of developer advocates say it’s fine to allow more market-rate projects, as long as they include some affordable units.

Fine: But at 28 percent affordable, the city would need 166,000 new units—120,000 of them market-rate—to reach the RHNA goals. Under that scenario, San Francisco would wind up with more than three times the number of luxury units than the state says we need.

The only way that could possibly happen is if the city allowed wholesale demolition of existing neighborhoods, on a scale that would greatly exceed the redevelopment scandals of the 1950s and 1960s.

And even then, unless most of the units were sold as investment properties and never occupied, it’s hard to believe the developers could make enough profit on that scale, in that short a time, that anything resembling that level of construction could actually happen.

The numbers don’t lie: Building adequate affordable housing by allowing new market-rate housing isn’t going to work.

Verville has done the calculations for the state as a whole: Assuming 23 percent affordabililty, the state would need 6 million new units to meet the RHNA affordable-housing goals.

 

 

 

Again: Nobody with any sense believes there’s any way this will happen. The state could eliminate all zoning, repeal CEQA, give developers the green light to demolish everything, bulldoze neighborhoods, destroy every low-income community in the state—and still, we won’t see 750,000 new housing units a year.

Then add in the interesting fact that San Francisco, like a lot of California cities, has actually lost population in the past decade, particularly in the past few years, and that the state is losing and may continue to lose population.

Hardly anyone talks about demolition when they talk at the state level  (and even, to an extent, at the local level) about RHNA goals. In some parts of the state, there’s some undeveloped vacant land that could be new housing, but in San Francisco, that’s pretty scarce: Building something new in this town almost always means taking away something that’s already here.

There are, indeed, a number of large lots that can accommodate housing, like the old Schlage Lock Factory on Tunnel Avenue. But there are nowhere near enough for 166,000 new units.

To reach that goal, or even a small fraction of it, will require either demolishing existing industrial space, that provides blue-collar jobs (and in many ways is necessary for the functioning of the city) or demolishing existing housing.

At a recent supes committee hearing, several board members pretty much agreed: San Francisco can’t accommodate the state’s mandates without accepting bulldozers into the neighborhoods.

I had a conversation some years ago with the former head of SPUR, and he told me that he didn’t understand why so many San Franciscans thought buildings were more important than people; that is, why can’t we just tear down existing buildings and make bigger ones to accommodate more residents?

Two flaws here: One is that more density doesn’t mean more affordability. If demolishing existing housing was guaranteed to create more affordable housing, it would be a much easier choice.

The other: In a housing crisis, the most valuable affordable housing is existing affordable housing. Encourage demolition, and pretty soon developers will start to tear down not just single-family homes on the West Side of town but four-unit rent-controlled buildings with tenants who will have to leave.

We can try to limit that—but then, as with the Ellis Act and Costa Hawkins, the real-estate industry will no doubt get the state Legislature to make it impossible for cities to protect existing tenants. And the Scott Wieners of the world, whose policies would create this nightmare, will wring their hands and say there’s nothing they can do.

Wiener has said he supports repealing the Ellis Act. That’s a safe position because he also knows it’s never going to happen—unless he and the other Democrats in leadership make it clear that there will be no new developer-friendly housing bills, none, until cities are allowed to protect their existing vulnerable communities.

That is not something that any San Francisco representative in Sacramento is saying right now.

The real-estate industry is one of the three most powerful forces in the California Legislature (the other two are oil/gas and telecom). Does anyone seriously think that tenants will get protection from demolition and eviction? (You heard anything about ending fracking in California or imposing an oil-severance tax recently)?

The other element that is missing from all of this discussion: Putting a lot of luxury housing in vulnerable neighborhoods leads to gentrification and displacement. Even if existing residential tenants have rent control, commercial spaces don’t (again, Sacramento: The state bans cities from imposing commercial rent control).

You put a bunch of rich people in a low-income neighborhood and they will want fancier coffee and fancier restaurants and clothing stores, and soon the existing places that offer cheap fare will be gone. Then residential landlords will see property values rising and either sell or try to get rid of their tenants … it’s a classic cycle, and it’s been well-documented over many years.

You can’t put 120,000 new luxury housing units in San Francisco without creating massive displacement—not unless the state Legislature gives the city the ability to protect residential and commercial tenants, and that’s not part of the deal.

The message from the data is clear: Either the RHNA goals, and the legislation behind them, are completely faulty and impossible, and the people who promoted them are delusional … or the state is going to need to put up very large sums of money for affordable housing … or this whole RHNA process is a scam to allow more for-profit real-estate development and speculation that will never lead to more affordable housing.

You want to take a guess?