Progressive San Francisco Supervisor David Campos intends to propose a 45-day (possibly longer) moratorium on new market-rate housing development in the Mission, saying that a moratorium would curtail the flow of wealthy professionals from displacing long time Latino residents.
Housing advocates both local and national are comparing Campos’ quest for a moratorium to that of Don Quixote’s. They argue, using tools familiar to anyone who took Econ 101, that limiting the supply of housing will only exacerbate the affordability crisis in the Mission by further driving up property values and housing prices and hasten the Latino displacement in that community.
Campos, however, isn’t leading his community on this issue. Rather, he’s just taking his cues from the community. Residents in the Mission are mad as heck, and given little other option, they’re going to make a huge scene. Protesters and housing activists are showing up making it as hard as possible for developers to get market rate housing built in the Mission.
Yesterday, those opposed to market rate development stormed the gates of City Hall. Regardless of whether or not a moratorium is a good idea, local sentiment has reached a fever pitch. Campos would be a political idiot not to propose something as sweeping and dramatic as a moratorium. Before we examine who a moratorium helps and hurts, its worth looking at how the Mission became the Ground Zero for the tech boom, housing affordability, displacement, gentrification, yoga studios replacing taquerias, hipster nonsense, and basically all the issues facing San Francisco today. As many have documented, San Francisco’s population is growing, fueled by a strong local economy, but that growth is outpacing housing development.
That means all these new residents have increasingly less choice about where they’ll roll out their sleeping bag when they get here.
As it turns out, when you look at the city dynamics that existed leading up to this crisis, it looks like the Mission’s fate was predetermined. Let’s start by taking a look at a map of the city. Take a few minutes to orient yourself. Get nice and familiar with it. We’re about to play a game of housing musical chairs.
When asking ourselves the question, “What parts of the city are going to be the ones most likely to absorb new residents,” we need to start by excluding those that have the highest barriers.
The first place new residents can’t move is the part of the city that already has a de facto housing moratorium. By that I mean the nearly two-thirds of the city that’s zoned exclusively for single family homes. Because these neighborhoods are zoned for single family homes it means that an old resident needs to leave in order for a new resident to take his or her place. That sounds like displacement, but it’s not because the owners of these single family homes hold all the cards. They don’t have to move or sell if they don’t want to. They are the most housing-secure populations in the entire city. This much single family housing means that if the population is increasing, but these areas aren’t building any new housing at all, then that the other areas of the city have to pick up the slack.
So what does our map of the city look like for folks moving into the city? There’s an awful lot less of the city that’s prepared to house an increasing city population. The next factor we need to look at is similar to the first, but not the same. It’s neighborhood home ownership rates. Specifically, we’re now looking to exclude neighborhoods that are zoned for more than just single family homes, but whose residents are mostly comprised of homeowners (you know, folks with mortgages) who actually live in the dwellings they own. What’s left of the city when you layer owner occupancy on top of single family zoning? In the interest of full disclosure, the orange represents (roughly) areas where home ownership is over 38 percent, but weren’t zoned exclusively for single family housing. Like the single family areas, the high home ownership areas have a population that can’t be dislodged without their permission. The unobscured parts map above shows the parts of the city that are zoned for increased density and are not occupied by home owners. In short, this is where the apartment buildings are.
Apartment-filled neighborhoods are the most equipped to absorb population increases because they have the capacity to house more people AND the cost to enter is lower. But the relative cost of these areas is important. Not all apartment-centric neighborhoods are priced equally. This is where we start hone in on the Mission specifically. This is what rental prices look like here in the city today(ish). This map shows that basically all the areas in the city where new renters could look for housing pretty universally looking at one bedroom apartments that are over $3,000. There’s some variation in price by neighborhood, but not a ton.
Just as a reference point, $3,000 a month means $36,000 per year. If housing is supposed to be a third of your household income your household needs to make at least $108,000. But it didn’t start out that way. These neighborhoods weren’t always so uniformly expensive. If we look at price increases over the last ten years, we’ll see that certain neighborhoods have always been expensive. The darker the red, the higher the prices have risen over the last ten years. I realize that the first map was rent prices and the second shows sale price increases. Rent and sales prices aren’t the same thing, but they are siblings in the housing cost family.
Since we already said that most of the neighborhoods are close to rent parity with one another, but the prices in some neighborhoods have had to rise much more steeply during that time. If we exclude the neighborhoods that are now over $3000 per month for a one bedroom that have also had historic price increases lower than 30 percent (Admittedly, I’m sort of cherry picking here) this is what’s left: The reason I think it’s appropriate to exclude the neighborhoods that are historically expensive (in green pentagons), is because when we have a new population moving to the city, they are going to be more likely than not to move disproportionately into cheaper areas. That’s going to be especially true if we’re talking about a housing market (like San Francisco’s today) that requires a salary approaching six digits.
At this point, we’ve narrowed the city down to the areas where new residents are most likely to find housing, and frankly there isn’t much left. Now that we have this map, we need to shift our thinking to displacement. Displacement is when a resident cannot afford their apartment (or a similar apartment in the same area) and must move away.
Given that the city is a generally expensive place with rapidly increasing costs, which neighborhoods have residents who are most (and least) able to bare those increases?
The first thing I wanted to look at was areas with families living in poverty. I’m not saying “not living in poverty = able to afford housing,” because it doesn’t in San Francisco. There are a lot of folks not living in poverty that have been locked out of the housing market. However, families living in poverty are going to be less able to survive rapidly increasing housing costs than families who aren’t living in poverty. There are other ways to try to measure the ability of residents to pay their rents. You could look at areas where residents are paying over 50 percent of their income to housing, or at which areas have apartments that are over crowded, but it all pretty much says the same thing. If we exclude the neighborhoods where at the fewest residents are living below 200 percent of the poverty line (i.e. the most affluent — as they are less likely to be displaced), we get a city that looks like this:
So what have we learned so far (besides the fact that I have crazy awesome Paint skillz)?
There are roughly only four areas in the city where where the residents are prime candidates for displacement. They’re lower-income renters in apartment buildings where housing costs have been more rapidly rising rapidly.
So why has the Mission beat the Western Addition, SOMA, and the Tenderloin in the contest to become the spokes-‘hood for gentrification and displacement?
It may be because the Mission is pretty unique, even by San Francisco standards (where every neighborhood is special). It’s the only area in the city where the majority of the population is a Latino, and as such it has a great food scene. In Supervisor David Campos, the community has a representative who loudly advocates on their behalf. It also has a ton of public art.
But there’s something that it doesn’t have that the other three neighborhoods do: affordable housing. Compared to its similarly situated sister neighborhoods, the Mission is an affordable housing desert. Given the totality of factors facing Mission residents, it should come as no surprise that (1) they’re facing high rates of displacement, and (2) they’re really upset about it. The San Francisco’s rising population is a fire hose and the Mission is trying to drink from it alone.
Now that we know how the Mission came to shoulder most of the burden that is our rising population, I want to focus on Supervisor Campos’ proposed market rate housing moratorium. For the record, I think development moratoriums (moratoria?) are a uniformly bad idea. The current crisis was caused because we haven’t increased the supply to keep pace with the population. (But that’s a problem several decades in the making, and it may be even longer in the unmaking). No amount of housing approved today is going to stop the displacement taking place in the Mission, which is the problem those residents face right now.
Housing development (at every level) is the best policy solution for lowering housing costs in the long term, which is socially and economically beneficial for the city as a whole. But being generally beneficial, doesn’t mean that every group or individual actually benefits. The people in the Mission have disproportionately incurred the cost of rising population, and the medicine that’s been prescribed is going to cure some future person. So in supporting a moratorium, the people that stormed City Hall are using their political agency to put some of that cost on the people that stand to benefit from the phenomena (rising housing costs and property values) that’s driving them from the community. They don’t care about development because its not going to solve their problem.
Some have been quick to accuse the folks in the Mission of being socialist economic sore losers who don’t understand that their proposals that will only exacerbate their problem. “A tech bro living in a luxury condo, is a tech bro who isn’t outbidding you on your apartment,” is the common refrain.
I would discourage that way of thinking for two reasons because:
(1) there’s already a ton of distortion in this market. Remember the first map we looked at — the one that showed two thirds of the city is zone for single family homes? That kind of zoning isn’t all that different from what David Campos is proposing. The Mission is already among the densest neighborhoods in the city. If the law of supply and demand were working properly, we would see development shift to the western neighborhoods that are much less dense and where prices are still lower (see the cost maps above); and
(2) As I’ve already pointed out, the individual residents in the Mission are incurring an actual economic cost and they’re using all the political tools available to them to make life difficult for those that they perceive as imposing those costs upon them. Therefore discouraging the imposition of future cost. The residents in the Mission are behaving in their own rational self interest, and what’s more Ayn Rand than that?
I, personally, wish that Campos proposed raising the density in the rest of the city to equal the density in his. Likewise, I hope that any of the Supervisors who votes against the moratorium also votes to increase the density in their own districts to meet that of Supervisor Campos’.
So if development is an unstoppable force and the Mission is an unmovable object, what happens next?
If Campos’ initiative fails at the Board of Supervisors, it will probably end up as a ballot initiative. I sort of see the moratorium as the act of an understandably desperate population. If the initiative passes, Mission residents will continue to face rapidly rising costs and imminent displacement, but they’re going to take more of the city down with them.
The proposed moratorium is a starting point. They’re saying that if we want the Mission to be part of the solution we’re going to need to give the current residents more of the benefit. That sounds like an invitation to negotiate to me.
Instead of forcing market-rate development, which will ultimately be too expensive, down the throats of the Mission’s residents and have them shut it down completely, we need to come to the table with a policy solution (maybe stricter affordable housing mandates for development in the Mission, emergency rental assistance for existing residents, and upzoning wealthier neighborhoods) that will garner the political support of all its constituents. I don’t know what that political solution should be, but that wasn’t the point of this post. My point is that it’s possible to think a moratorium is bad (which I do), but also understand why it’s not a completely irrational response to the current circumstances.