After Supervisor David Campos last week started suggesting that the Mission neighborhood might need a moratorium on new market-rate housing construction, the debate has been reignited again over whether our housing crisis is a simple problem of supply and demand, or if increasing the supply of market-rate housing isn't going to help prices go down and therefore we need a stronger push for affordable and "middle-class" housing.
From Wiener's perspective: "We have a vocal and influential set of advocates pronouncing that we shouldn’t even bother to build market-produced housing, since, according to them, doing so won’t lower housing costs and may even raise housing costs. This argument, to the extent it succeeds, not only reduces the amount of housing produced in San Francisco but actually slows the production of below-market-rate housing, since market-produced housing, through our inclusionary housing program, is the most significant source of new affordable units coming online."
From Smooke's perspective, the problem is San Francisco's uniqueness as a place for second-home buyers and the ultra-rich, and looking all the way back to 1950, we've actually added "two new units for every new resident!" looking at population growth over the 63-year span to 2013. He notes that "with all this supply, housing’s not getting any cheaper," which is true, however he seems to gloss over the fact that we've likely added 40,000 or 50,000 new residents in the last half decade, and nowhere near enough units for them. We've been building about 2,000 new units per year until this past year, when 4,000 were built and that supply has not even come close to keeping up to addressing our population boom.
There were a lot more families crowded into smaller spaces in the city back in 1950, meaning less housing units were needed overall. The number of persons per household went down 15% in that timeframe, and the number of families with children slid 31% between 1960 and 2010, from 80,000 to 55,000.
Both men make decent points, but herein lies the problem: One of them must be more right than the other. It's just hard to see, in the long-term, who could be proven to have saved the city from $5,000 one-bedrooms and the like when we can't say for certain what will happen to prices once the current pipeline of new, mostly market-rate housing (50,000 units) gets built. Historically, Smooke is right the cost of living in places like Manhattan and SF only ever goes up, it doesn't come down. Housing gets built, more people come and/or buy pied-a-terres because it's a desirable place to be, and the cycle continues.
Oakland Mayor Libby Schaaf is suggesting that developers start building SF's required affordable housing units in Oakland, something which of course runs counter to the below-market-rate policy in the first place, which is to create a diversity of housing types in the city itself.
To Wiener's point, while the policy ideology Campos and Smooke and others are espousing may sound good, it doesn't really pencil without the help of market-rate developers. "One commentator estimates that building enough publicly funded housing to meet our city’s needs (about 100,000 units) would cost around $25 billion. We don’t have those resources, particularly in an era when our state and federal governments have largely withdrawn from funding affordable housing. We need market-produced housing both to meet our significant housing production needs overall as well as to enhance the available resources, through our inclusionary housing ordinance, for subsidized below-market-rate units."
And since the Business Times did their own poll last week that, obviously, leaned heavily in the direction of market-rate development, we'll do our own, just to compare.
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