San Francisco's Fog Over Growth

http://www.bloombergview.com/articles/2016-01-11/san-francisco-can-t-stand-how-much-it-wants-to-grow

by saeranv • 11 years ago

111 96 11 years ago

It's a shame that when people focus on the bay area's ludicrous housing costs, they tend to speak exclusively of San Francisco and ignore the opportunity to develop Oakland, which has a lot of flat land that is easier to build tall buildings on top of, instead of trying to densify San Francisco's endless peaks and twists.

The author said a potential future for San Francisco is as a "gated community for the rich." That may be the case, perhaps already having been so for a long time. It's unfortunate that an economic juggernaut heralded as the shining center of modern American capitalism is also so inaccessible, but that does not mean the overall solution is by making that place accessible at the expense of more realistic options.

The author compares the density of SF to NYC's Brooklyn. Like Manhattan, San Francisco is owned by the rich and their rules, yet Brooklyn is big and booming. Oakland is prime to take up the role of the Bay's Brooklyn.

Side note: if people want to return to the halcyon days of San Francisco when the wealthy and the workers could live atop the same rock, it will cost a ton of money. Hairdressers, grocery clerks, teachers, and the like will either need massive housing subsidies or comparable salaries to tech workers. That possibility could exist too, if the well-heeled agree to let go of a big chunk of change.

gravity132• 11 years ago

I get the sense Manhattan was established, and then tapped out, hence Brooklyn. Whereas San Francisco is neither of those. San Francisco is the hip place to be (for tech) and Oakland is perceived as the fallback for companies that can't afford to host. Which really surmounts to: I would much rather work in SF than Oakland (I really base my decision on what food & bar options I have around me, though).

ghaff6• 11 years ago

Well, most of Brooklyn probably wasn't all that appealing (for certain values and types of appealing) 15 or 20 years ago either. [1] At any rate, it wasn't gentrified. But Manhattan, in spite of doing a fair bit of development in at least sections of the city, was really expensive so young professionals started "settling" on Brooklyn. At the same time, some areas of Manhattan that were previously, shall we say, rather disreputable were also gentrifying.

So, yes, you'd prefer to live in SF than Oakland but 15 years or so ago, you'd probably have preferred to live in Manhattan than Brooklyn.

[1] http://www.wired.com/2015/09/photos-brooklyn-hipsters/

sethhochberg2• 11 years ago

Parts of Manhattan which are popular with the very wealthy are certainly pretty well tapped out (the West Village comes to mind as a neighborhood with well-protected zoning regulations and lots of low to mid-rise buildings similar to many San Francisco neighborhoods). In other parts of Manhattan though new neighborhoods are being created from underused space (look at the Hudson Yards project, creating thousands of housing and commercial units on top of an active rail yard on the west side of midtown). Dozens of new towers are currently under construction in Manhattan.

I've lived in both SF and NYC and feel like Oakland has much more of a stigma than Brooklyn does simply because of transit access. You can live in SF and enjoy walkable local communities. You can live in Oakland and enjoy walkable local communities. But getting between the two can be a much more arduous process via Bart or bus than the many plentiful subway connections between Manhattan and Brooklyn. Visiting friends, of even the prospect of a commute, between SF and Oakland would have given me much more pause than getting over to Brooklyn. BART and the transbay buses are woefully inadequate for an area which is trying to pitch itself as a region rather than two distinct cities with a bridge between.

danans4• 11 years ago

You may not be aware that Oakland has an amazing and burgeoning food and bar scene, one that has arguably stolen the authenticity crown from San Francisco. Traditional restaurants also are alive and well in Oakland if that's your thing.

Apocryphon• 11 years ago

Your comment seems a few years out of date. SF's rents and COL is notoriously sky-high and has been for the last 3-4 years or so, and the movement to Oakland has also been taking place during that year. Not to mention, Uber, perhaps one of the region's greatest up-and-coming unicorn juggernauts, is going to move to Oakland. The ship has long since sailed towards the East Bay.

Kalium3• 11 years ago

It's a shame that when people focus on the bay area's ludicrous housing costs, they tend to speak exclusively of San Francisco and ignore the opportunity to develop Oakland, which has a lot of flat land that is easier to build tall buildings on top of, instead of trying to densify San Francisco's endless peaks and twists.

It doesn't get ignored. The problem is that Oakland costs about as much to develop as SF does with potential revenues that are much lower. It's a terrible business proposition.

pfooti4• 11 years ago

I'm not sure about Oakland's geology, but the part of SF where I live (outer sunset) is more or less just houses on top of sand dunes. I'm no geologist, but I've always wondered how well one could build tall buildings on that kind of ground.

vhold• 11 years ago

Imagine how different San Francisco would be if plans like this had moved forward: https://en.wikipedia.org/wiki/San_Bruno_Mountain#Westbay_Con...

Not only did they want to fill the bay in with the mountain, they wanted to build another Bay Bridge there.

pluckytree• 11 years ago

I agree that part of the motivation for people supporting zoning is to preserve or increase their property values. But I think that people that spend a huge chunk of change on a house should care about preserving the neighborhood they bought into. As an extreme case, without zoning, what if each home lot on your street were turned into a high rise residential or commercial building? I don’t think any homeowner expects nothing to change, but they bought a house hoping that it continues to have a similar quality of life going forward. It’s not all about money. Peace and quiet is important to people, for example. Lack of traffic is important to people. Having one neighbor on each side rather than 100 is important to people.

Retric• 11 years ago

If every house around you is turned into a high-rise then your property values are going to shoot up massively. So, cash out and move. The real question is why can 1x people living in an area decide that 99x people get to move there or not.

In the end Mixed use walkable communities are much better for both peoples health and the environment. You can always move to the middle of Montana if you don't want to live near development, but carving out the hart of city's and saying "FU I have got mine" causes worlds of problems.

rm_-rf_slash2• 11 years ago

Low-rise San Francisco is very pleasant, probably the most pleasant place I could imagine living. It's quite walkable and quiet in the right places. And in a place like that you can know your neighbors. Ironically, people live more segmented lives the higher buildings get.

I also understand why people would want to maintain the quality of life they had when they purchased their house, even if it is at the expense of community at large. As such, there should be a significant property tax to compensate for comfort when housing costs are so high.

Then again, the city and state have bizarre tax laws for property so I could be suggesting a political impossibility for all I know.

geebee2• 11 years ago

That's an excellent point. I live in an R1 neighborhood, but a buddy of mine lives in a SFH in an R2. He would technically be allowed to convert his SFH into two 3bd/2ba apartments, he could sell one of them, and profit so much that he would cover his entire mortgage with lots left over. While he'd still face permit challenges, this has been done (legally, with all required permits) on his block. However, this remains a relatively rare situation in SF.

I gotta say, for a moment there, I was a tad bit jealous that he had this option.

Yeah, truth is, if large sections of SF were rezoned for multi story dwellings, property owners might very well benefit, since the value of their land could substantially increase. I'm not sure how this would all work out, but it certainly seems like a possibility.

This is why I think that SF's opposition to new development isn't really driven by property owners who wish to maximize the dollar value of their asset. I think it's rooted more in a very preservation minded populace (not always such a bad thing), a left-leaning hostility to "greedy" developers (not always unwarranted), and a deep suspicion of redevelopment projects that they worry will tear out the soul of a community and replace it with something corporate and soulless (plenty of that has happened). There's also a tendency to leave good enough alone (prop 13 insulates property owners from the tax burden of massively rising property values, and many people just aren't interested in more money once they're happy. If you live in a neighborhood you like just the way it is, and you can easily afford it, what do you care if you could make more money tearing down your house and building an apartment building? You're more interested in making sure that doesn't happen right next to you).

In short, San Franciscans will happily vote against their own economic interests (well, their own asset value maximization) in order to "preserve" what they like about where they live.

While we probably agree that the bay area needs more density, I'd be against tearing out the french quarter in New Orleans, even if that would lower the price of housing there. I personally think that the bay area actually can substantially increase density, both in SF and out, and vastly increase excellent light rail (preferably underground) without tearing down old and interesting neighborhoods, and that the city that would emerge would be a richer and more interesting one.

Truth is, I put "preserve" in quotations, because one of the best qualities of San Francisco has been lost. Interesting people, with a half formed idea that is too strange or misunderstood to be funded as a thing, used to be able to move to SF and give it life. That's largely gone, because it's nearly impossible to live in SF without working so hard to pay the rent that you have no time left for things that nobody understands well enough to pay for. You do have to ask yourself what you're preserving and what you're losing. Interestingly, I actually think this will influence tech as much as the arts. There are now career paths in tech that are lucrative and are available more in SF than anywhere else, but there's certainly a wild, misunderstood, and creative side of tech that nobody will fund because they just don't understand it yet, and that requires the freedom of time to tinker. SF may lose this just as surely as it loses interesting non-tech arts and culture.

In fairness, this has also happened in the vastly more dense and urban city of New York. I found this link about the galapagos art project moving to Detroit very interesting: "You can’t paint at night in your kitchen and hope to be a good artist. It doesn’t work that way… If the core competitiveness of the big apple is culture, but actually being an artist in New York City costs you a full time career in another industry, then the best and brightest – the ones our meritocracy would obviously miss the most - won’t allow their work to suffer just to be among our tall buildings."

http://www.galapagosdetroit.com/whydetroit/

Not sure this will work, but my guess is that Patty Smith was right when she said "New York has closed itself off to the young and the struggling. But there are other cities. Detroit. Poughkeepsie. New York City has been taken away from you. So my advice is: Find a new city."

I'm all for building more density in SF, but finding a new city sounds like good advice.

tptacek2• 11 years ago

People are expected to care about preserving their neighborhoods. But the concerns of existing residents can't possibly be dispositive.

crzwdjk2• 11 years ago

In a democracy, they end up being so, because those are the people who get to vote. One solution is to move some of the planning functions one level up in the government, so people in the Central Valley also get a say in deciding whether SF's zoning is reasonable or not. This is basically what Japan does.

raldi2• 11 years ago

I don't mind that some homeowners seek to block new housing; that's their right, and might be in their best interest.

What I mind is that SF's local media never blames these people for their role in the housing crisis, and that ostensibly progressive organizations stand by their side, even though thwarting change and enriching the establishment at the expense of newcomers is about as far from progressive as you could get.

matkam• 11 years ago

Relevant to this topic, Youtube channel "The School of Life" talks about this issue where people are reluctant to build, causing the housing price to go up. One Reason Homes Cost So Much: https://www.youtube.com/watch?v=dcbjWGj3jBk

As a follow up, the same channel offers some more ideas and broader view solutions. How to Make an Attractive City: https://www.youtube.com/watch?v=Hy4QjmKzF1c

rayiner• 11 years ago

If you want to preserve the character of the surrounding property, buy it.

jey• 11 years ago

Does it even really make sense to "own" land?

One alternative is "Georgism", which is the idea that land is a resource collectively owned by society, but people can temporarily monopolize a piece of land by renting it from society. The rents thus collected go into the society's general fund to pay for public goods like fire stations, healthcare, universal basic income, etc.

https://en.wikipedia.org/wiki/Georgism

davidw• 11 years ago

I'm not sure I buy into the whole thing, but do see some value in land taxes over property taxes in that it is an incentive for density: if you have 10000 square meters you are taxed the same whether you build a single story ranch house with a big yard, or an apartment building.

That said, how's it work out in practice? You can't tax land in downtown Portland at the same rate you tax it in Harney County, where it's mostly empty desert. But if you tax land outside cities cheaper, maybe that would encourage sprawl towards the cheaper areas?

krapp• 11 years ago

Does it make any more sense to declare that land must be "owned" by society, and that rents should be extracted from it, than that it can be owned and exploited by individuals? The difference between the two seems like semantics to me, in either case the land is still owned.

potatolicious• 11 years ago

The problem with that scheme is that a reasonable implementation of it will still greatly resemble land ownership.

Say I rent a parcel of land from society and pay money each month to do so. I build a building on top and use it.

Under what conditions can I keep using this land, besides paying the rent? Do I lease the land from society for a fixed term, after which the land may be freely rented to someone else? In that case what happens to the building on it that I've invested my own money into?

The problem here is that land by itself is not useful but improvements in combination with the land is, but said improvements are almost always not portable. I can pack up my furniture and move out of my apartment, I can't pack up a building.

So naturally we'll want some way to ensure people who have improved the land can continue using the land - which really starts resembling ownership + property tax at this point.

ZanyProgrammer2• 11 years ago

"preserving the neighborhood they bought into"-That means you're condemning all but the very well to do from every moving in in the future. You've lucked out on life's lottery, to be able to own a house in San Francisco.

rsync3• 11 years ago

... which is sort of an interesting criticism, until you consider that you get a chance to "luck out" every 6-8 years or so when the real estate market crashes.

There have been at least 3 such occasions since the Netscape IPO, and another on it's way. Hope you saved some money.

capkutay• 11 years ago

Zoning is important. The issue is that it is often abused and poorly thought out in San Francisco. For instance, Mission Bay [0] was a rail yard with no inhabitants sitting at the foot of San Francisco, just south of urban SoMa. It was a prime opportunity to make it a dense, metropolitan extension of the city with little voter backlash since there were no residents in the area. Not to mention, it is also the most accessible, commutable part of the city with 2 Caltrain stops and 2 freeway on-ramps. Instead, they made it it a low-rise biotech neighborhood with primarily 40 ft zoning.

There's another development in Downtown SF (SoMa to be exact) where current residents are suing to block the transformation of a PARKING LOT into a housing/office complex with over 200 units of affordable housing[1]. The area is already dense and urban, the building itself is not out of character (there's a 400 ft hotel right next door). It also introduces a lot of much needed open space to Central SoMa. However, some residents in the area are suing, claiming that development would cast shadows on nearby parks (0.08775% and 0.167% of sunlight in winter months) and increase traffic to the area. The lawsuit will probably delay the development for years. It's just sad to see such an irrational attempt to impede the progress of a potentially great city.

0: https://en.wikipedia.org/wiki/Mission_Bay,_San_Francisco

1: http://www.5mproject.com/

kqr2• 11 years ago

Unfortunately there are many examples of this in SF. Over time, this leads to very poor land use. Other examples:

1) Balboa reservoir : people prefer to keep it as an empty parking lot

http://sf.curbed.com/archives/2015/05/08/at_balboa_reservoir...

2) Francisco Reservoir : although there is already a park nearby, they chose to turn this into another park

http://www.sfgate.com/bayarea/article/SF-s-Francisco-Reservo...

Current residents are unfortunately much more vocal than potential future residents or housing advocates.

guelo2• 11 years ago

The main problem is Prop13, in other states property taxes increase and drive people out as land increases in value. In California land owners are locked in forever. OTOH, somehow California ended up with the fastest growing economy in the country. Causation? Correlation? Who knows.

vonmoltke• 11 years ago

OTOH, somehow California ended up with the fastest growing economy in the country.

Huh? California is decidedly middle-of-the-pack:

https://en.wikipedia.org/wiki/List_of_U.S._states_by_economi...

erispoe2• 11 years ago

You have a right to your private property. That right does not extend to publicly owned land or land owned by other private parties. When you buy land in the heart of a large metropolitan area in an under-developed neighborhood, it's reasonable to expect that the city will densify and grow around you. Thinking that nothing will change is the unreasonable expectation here. San Francisco has been continuously changing for 150 years, expecting the city to freeze for you as soon ay you buy a piece of property does not make sense.

gmarx• 11 years ago

"would lift U.S. gross domestic product by 9.5 percent"? Really? Over what period of time? If it's one year it's unbelievable. If it's over 50 years, who cares?

raldi2• 11 years ago

I believe the calculation is for when the system approached its new steady state. And why shouldn't one care about the world of fifty years from now? I intend to still be alive, and so will a lot of the people I care about.

Plus it's not like we'd see no improvement whatsoever for 49 years and then WHAM. We'd see gradual returns on this investment every year.

JauntTrooper• 11 years ago

Most recent US GDP: $17.914 trillion.

9.5% of that would yield an additional $1.7 trillion of net goods and services produced by our economy.

For comparison, we spend ~$0.85 trillion on Social Security and ~$0.6 trillion on defense a year.

entee• 11 years ago

The point about people in rent controlled apartments having very little incentive to favor increased density is a different one than I've heard, and a telling one. If between owners and rent-controlled apartments you have a large voting majority, you end up with a large voting majority that has no interest in making the city more welcoming to newcomers.

People often talk about middle class people being driven out of SF, I think it's actually dangerous that even people making well above average wages have trouble affording housing alone. Many tech workers I know earn a decent living but having an apartment to themselves is simply unaffordable.

Yes, yes #richpeopleproblems, and of course we should worry about people further down the income scale, but it's indicative of just how pathological the situation has become that even people who are well off can't afford the city comfortably.

pfooti4• 11 years ago

Legit thought experiment and not a troll, because I'm curious about thinking through this.

What happens if legislation is passed that more or less prevents people from owning property that's not their primary residence? Like: if you don't live in it more than 190 days a year, you pay a really high property tax on it.

I've always thought a big part of the landlord - tenant issues around rent control, fair market housing, and a lot of other stuff all stems from the position that people are allowed to own more homes that they can live in, and derive income from landlording.

There's some obvious issues - not everyone wants to live in a home / apartment that they own (liquidity, mortgage, etc). This could be obviated with some workarounds (and market forces might help out a bit too - I'd imagine real estate could change hands a lot more frequently in that situation).

Anyway. Thoughts?

0xffff22• 11 years ago

Have you ever bought a house? I have. I do not want to go through that process every time I move. Plus, while I have purchased a house before, it ended up being foreclosed on and I certainly couldn't get a mortgage now (and I shouldn't... I can't afford a mortgage). I would be pretty SOL if owning a house was a prerequisite for not being homeless.

How is commercial property treated?

What prevents a company building a huge apartment building, "selling" it to an apartment manager (in the form of a very expensive mortgage) and then having the apartment manager rent out "rooms" in his very large "house" to cover his mortgage?

In short, the longer I think about the idea, the less practical it becomes.

brk• 11 years ago

I've bought a few houses, the process has generally been simple and painless (other than the physical moving of stuff part, which is the same for own vs. rent).

My last few vehicles purchases have involved significantly more paperwork and signatures than my most recent property purchases.

What is it about the process that you've had issues with?

pfooti4• 11 years ago

I have bought a house. I think one reason it's so painful is that it is a relatively rare occurrence which usually represents a huge transfer of wealth. If, on the other hand, home sales were more common and (presumably) for less money per transaction, you could imagine that this process would be simpler.

I'm not super-interested in debating the implementational details of what's obviously a thought experiment - mostly what I'm interested in getting input on is: would home prices go down? would monthly mortgage rates go above or below current rental rates? would there be more or less pressure to build new units?

DrScump5• 11 years ago

[What prevents a company building a huge apartment building, "selling" it to an apartment manager (in the form of a very expensive mortgage) and then having the apartment manager rent out "rooms" in his very large "house" to cover his mortgage?]

The law. (Zoning)

VintageCool2• 11 years ago

My opinion is that San Francisco's housing problems are at root a case of demand vastly exceeding supply. The solution is to produce more housing. This would happen naturally when demand exceeds supply, except that San Francisco has an excess of regulations that prevent construction of new homes and new apartments and a strong political coalition opposed to the construction of new housing.

Adding more restrictions on housing helps no one.

pfooti4• 11 years ago

I don't doubt that demand exceeds supply. San Francisco also is not really a representative sample of US (or global) home ownership vs rental and so on.

All that aside, I don't really see the line of argument that links my proposed idea to "more restrictions". My initial thinking was something like (basically): current market forces (especially in SF) favor the consolidation of ownership in the hands of the few people who can afford the large capital investment required to build new housing.

IOW: home prices are ridiculously high at least in part because the future value of rent extraction makes these homes good long-term investments for people who don't live there. See also: removing units from rental for AirBnB service in the long-term (sources differ on how many units in SF are lost to permanent AirBnB hotel status, but they seem to all agree that at least some are off the market for this reason).

So, what happens if this element of the market is removed? I know, I know: it's central to capitalism, I'm becoming a communist, etc etc. What happens when the supply - demand relationship is between residents and other residents? Do home prices trend upwards? Does the current bloc of owners and rent-controlled residents stop acting to fight against further expansion?

chimeracoder• 11 years ago

What happens if legislation is passed that more or less prevents people from owning property that's not their primary residence? Like: if you don't live in it more than 190 days a year, you pay a really high property tax on it.

That already exists in a way - there's the concept of a primary residence tax deduction, which is (more or less) what the name sounds like.

It varies widely by jurisdiction, (not just country, but state and local government as well), but the idea of trying to differentiate residents from landlords in tax policy is nothing new.

AnimalMuppet• 11 years ago

If you do that, you'll get more single-owner homes, and less rental units, but you'll kill the ability to have apartment buildings (or, at most, one per owner). More single dwellings and less apartment buildings doesn't sound like the path to "more affordable housing".

dublinben• 11 years ago

You can own an apartment. It's called a condo.

narrator• 11 years ago

Being a Bay Area native, my opinion is that the push back to increased growth is due to the horrible traffic situation. More people means traffic gets worse, muni gets more crowded, commutes get longer. The only people who want growth are real estate developers and recent transplants who are fine with not trying to actually go anywhere besides home and work.

There's a point where the congestion starts to lower quality of life drastically and people would rather deal with high rents then being stuck in traffic for hours or stuffed into a filled to the gills muni, bart or caltrain with people coughing up flem around them.

Getting to work in downtown is awful when there's a Giants game going on and they wanted to eliminate pier 30 parking and put another stadium in there? I'm glad that got shot down. San Francisco is full. Get over it.

api• 11 years ago

Too bad transportation infrastructure is completely verboten in America.

New York has it grandfathered in (was built before the car era) and New York does not have this problem. The simple reality is that cars don't scale beyond a certain density because, well, cars can't pass through other cars. Cars work fine for light to medium density but beyond that you must either build trains or stop growing. (Or waste billions and countless hours every day with millions of people stuck in traffic.)

tsunamifury• 11 years ago

My favorite part is that SF has gotten it in its head that being car-unfriendly (planned closing of Market St) is a great idea, while not improving public transit at all.

AlexWest• 11 years ago

People who want to move here (for opportunities or work) by definition do not have an established life here, are not part of our community, do not have family and friends they have known for years based here, and have not worked to contribute to making San Francisco what it is. I am not overly concerned about how hard it may be for them to arrive.

wmil• 11 years ago

It's interesting that SF can be so pro-immigration on the national level, but so anti-immigration on the municipal level.

cgy1• 11 years ago

Because it's somehow become socially acceptable to hate on whites and Asians.

San Francisco's Fog Over Growth

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