Fighting a War on Two Fronts: Gentrification and Displacement

As San Franciscans watch the vote results trickle in, housing affordability continues to dominate the headlines and the political discourse. Attention continues to focus on the impact of gentrification and displacement on low-income communities and whether or not market-rate development is helpful or harmful.

I believe this kind of thinking represents a false dichotomy rooted in the city’s existing zoning structure that forces all new residents and new development into small pockets of the city that allow multi-unit housing, which them against the existing lower-income residents.

Market-rate Housing is More Like a Vaccine than a Cure

We’ve talked about the San Francisco Housing Wars before (boy, have we ever), and why market-rate housing may not be enough to satisfy current low and middle-income residents. Housing development, as necessary as it is: 1) will not arrive in time to stave off those most at risk of displacement, and 2) it probably won’t ever succeed in bringing prices down. Rather it will only slow the rate at which prices increase.

Even as price increases begin to flatten, thanks to new housing supply, it is almost certainly the case that existing residents’ income is still too low to securely afford housing.

Don’t get me wrong, attacking the cost curve from the top is still a very good thing, because it means things aren’t getting worse. If we don’t produce enough market-rate housing, upper-income people will gobble up all the existing housing that previously served lower-income residents.

Prop I report

Every time housing prices increase, a new cohort of residents now have to turn their attention away from new market-rate housing to lower-cost affordable housing. If prices go from $1,000 per month to $1,100 per month, then all those people who could previously only afford up to $1,000/month no longer can.  We’ve seen this phenomenon in the city’s study on the effect’s of the proposed Mission Moratorium (2015’s Prop I), and the state’s study on the impact of market-rate housing.

state report blurb

If you want to protect the existing stock of affordable housing (i.e. rent controlled units occupied by people paying below market rents), it’s very important to stave off price increases.

So if adding to the housing stock through market-rate development slows (or stops) price increases then the existing affordable housing stock is preserved (i.e. existing affordable housing isn’t turned into market-rate housing through evictions, demolitions, or through the natural churn of tenants).

A War on Two Fronts: Displacement and Gentrification

The process of actual/existing residents losing their ability to live in their historic homes or neighborhoods because of price increases is displacement (if your reading this blog you probably already knew that). Landlords whose apartments were previously affordable can take advantage of the instability of low income populations and lack of vacancy price controls to raise rents, such that a similar low-income family would not be able to replace the one that they just left.

Market-rate housing, unequivocally, is crucial to preventing future displacement. No matter what Tim Redmond says. New market-rate housing diverts higher-income populations away from the existing affordable housing stock. I described the opposite phenomenon in my post If the Development is an Unstoppable Force and the Mission is an Immovable Object, in which new higher-income residents flood the old apartments in the Mission. Without housing development, higher-income populations outbid existing lower-income populations for whatever housing stock exists.

But what if alleviating displacement isn’t the goal? Or rather, what if it isn’t the only goal? I started thinking about this question after Gabriel Medina of the Mission Economic Development Agency (MEDA) strongly opposed the revised plan for the “Beast on Bryant” development, even though it included a much larger land dedication for affordable housing. “It’s better to not build any market-rate in the Mission if you’re not going to build 100 percent affordable… No housing is better than gentrified housing,” Medina said, as quoted in Mission Local.

Many Mission housing advocates have vocally opposed market-rate developments, usually giving the development a catchy, if hyperbolic moniker like the Monster in the Mission, the Beast on Bryant, the Fright on Folsom, and the Titanic Mess on South Van Ness. Their opposition is usually based on the idea that the majority of the units would not be affordable to the existing residents of the neighborhood.

This brings me to the main issue with using market-rate housing construction exclusively: gentrification. Displacement is about individuals, but gentrification is about neighborhoods. It’s when a previously lower-income or minority neighborhood is slowly transformed into a wealthier and whiter one. Here in San Francisco displacement is nested within gentrification. As in, we have gentrification because we have a lot of displacement. This phenomenon is especially noteworthy in the Mission.

Though many refuse to admit itmarket-rate housing development will mitigate displacement. However, it can still propel gentrification.

In the best of circumstances, neighborhood in-migration when coupled with equal housing development can prevent displacement. All the original residents can stay in their apartments, even as the neighborhood grows.

In short, gentrification without displacement looks like this:

gentrification chart

Every new resident changes the neighborhood culture, and character. In high-income neighborhoods, like the Potrero Hill or Telegraph Hill, this produces wails about loss of sunlight or street parking, which should be treated with the appropriate seriousness (none). However, in low-income neighborhoods, this demographic change can alter the political and economic landscape in ways that may not be beneficial to the pre-existing low-income residents. New residents may demand goods or services that are different from those provided by the current retail or commercial environment, causing business turnover. As demographics shift, new residents’ political influence may grow and dilute that of the older residents.

So attacking housing prices from the top, even in the best circumstances, may not be ideal for all existing residents. Gentrification can still occur when the built environment only expands to accommodate new high-income residents.

To combat gentrification and displacement, we have an Inclusionary Housing Policy in San Francisco. It requires developers to provide some on-site affordable housing or pay a fee into the affordable housing trust fund. The point of this policy is to recognize that the current market-rate housing production will not be affordable to low and middle-income San Franciscans.

Inclusionary housing is great. It’s one of the few ways San Francisco can produce new affordable housing. However, it still produces more market-rate housing than it does affordable housing, and thus, can lead to gentrification.

So when Mission Activists protest development, even development that has significant onsite affordable housing, like the recently approved Beast on Bryant, they do so because they see every new project as further transforming the neighborhood. With that, I can’t disagree. I can argue that not building housing is worse, because it expedites displacement and gentrification. But I cannot say that building market-rate housing will not lead to gentrification.

Density Equity Could Turn Growing Pains into Economic Gain

Is gentrification the best case scenario? No.

Baked into our exercise is an assumption that higher-income people can only move into lower-income neighborhoods.

Here in San Francisco, much of the ire in response to the rapid gentrification has been directed at young people who work in tech, because they’re higher-income apartment dwellers who arrived more recently. In truth, there were few areas in which they could move.

San Francisco is only 46ish miles, but two-thirds of that space is zoned for single-family housing (i.e. no multi-unit buildings). Despite our status as the second-densest city in the US, that density is concentrated in a few areas.

Residential_Density

That means 66% of the surface of our city is basically off-limits to new residents. If the city would allow multi-unit development in this (often transit-accessible) single-family districts (I’m looking at you, West Portal), then all the residents wouldn’t need to move into SOMA or the Mission.

pig in python

This concept is called Density Equity. It’s a term I first heard used by Planning Commissioner Cindy Wu, used in regards to the 5M development. I don’t know if she would define it this way, but “Density Equity” basically means that as a city grows, each part should grow with it. The low-income and minority areas should not be made to shoulder all of the city’s growth.

As I’ve written before, the city’s growth is relegated to a few areas in the city. Growth-spread more evenly across the city (or region, for that matter) could provide an economic boost to each neighborhood. More residents would be living, working, and shopping in those areas. It would also allow each neighborhood to grow a little more slowly. Uneven growth requires that certain areas grow more rapidly. Because housing takes a long time to plan and build, rapid population growth concentrated in one neighborhood can cause displacement and gentrification.

That’s exactly the dynamic in San Francisco. As of mid-2015, there were about 1564 housing units in the developments in the District 9, which includes the Mission. Meanwhile, the  Districts 1 and 4 (on the Westside) only have about 333 on the horizon. That means District 9 has 4.6 times as many units in the pipeline as Districts 1 and 4. That’s density inequality. To only further underscore that point, the Districts east of the Mission (6 and 10) are growing even more unequally. The have over 40,000 units in the pipeline.

densit vs non dense

So, on one hand I understand Medina’s position. In the absence of economic power, it’s perfectly rational for the folks in the Mission to use political power to extract as many concessions as possible. On the other hand, opposing any and all market-rate housing, doesn’t seem like it has much of an end game.

Rather than oppose market-rate housing, I wish Mission activists would protest the zoning wall that prevents would-be apartment dwellers from living on the West side.

Neighborhood Feudalism

Why aren’t neighborhood activists clamoring for more housing in less dense neighborhoods? Neighborhood activism in San Francisco got its start as an anti-development movement. In the past, San Francisco’s political machinery was run by business and labor; as embodied in Mayor Joseph Alioto. His aggressively pro-growth agenda generated a strong backlash from folks on the left who rightly saw the redevelopment of SOMA and the Western Addition as a racist tool to displace low-income minorities. Meanwhile, folks on the right feared “Manhattan-ization” would diminish their quality of life. With an emphasis on hyper local-control and community input, neighborhood slow-growth activism turned neighborhoods into mini city-states, with activist power-brokers pulling up the drawbridge more often than not. The slow-growth movement successfully capped annual office development  and prohibiting development that cast shadows on city parks.

As applied to housing, slow-growth policies have led to displacement and gentrification among renters in low-income and minority neighborhoods, while spurring rapid price appreciation among home-owners in wealthier and whiter ones.

Despite the divergence of interests, the left/right anti-development alliance still exists. Employing phrases like “people over profits,” slow growth activists decry housing development as capitalism run rampant. That kind of thinking would upend capitalism only to replace it with feudalism; where most of the city’s housing is available to very few and what little affordable housing is doled by powerful intermediaries.

oliver

That’s why we’re seeing many more density-equity inspired proposals from “moderate” supervisors who operate outside of this coalition.

Though they haven’t yet employed the language of density-equity or the social justice implications, several Supervisors have proposals that are on the right track. Supervisor Farrell requested a report on the economic impact of zoning restrictions. Supervisors Wiener, Christensen, and Peskin (not considered a “moderate”) proposed accessory-dwelling unit legislation. Most notably, Katy Tang’s Affordable Housing Bonus Program is the first real heroic step toward density-equity that I’ve seen. It’s the first proposal that would actually incentivize affordable housing creation in neighborhoods that have very little. Instead of displacement and gentrification, we could have low and middle income families moving into rich enclaves like Pacific Heights, Telegraph Hill, and West Portal.

The YIMBY movement has emerged in opposition to the anti-growth policies for which many (but not all, and not consistently) of the “progressives” on the Board of Supervisors have vocally advocated. Most of the pro-housing activism has focused getting support for individual housing developments, but recently it’s turned its eye to bigger prizes.  SFBARF is suing the leafy-suburb of Lafayette for blocking housing development.

And last week,  Greg Ferenstein, a writer, put forward a proposal that Kim-Mai Cutler, another writer, described as a Hail Mary:

kim-mai cutler

It’s a radical plan to upzone the entire city for multi-unit dwellings, which is the first step to a more equally dense future. I’m excited for it, and to see how well it does. However, a ballot initiative of that scope and magnitude requires severing the slow-growth movement from the political left. That’s a feat that can only be accomplished if the pro-housing movement 1) takes fear of gentrification seriously, and 2) embraces density-equity as a tool of social justice.

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