Affordable Housing Institute : US

Not only is the world urbanizing, so too is America, and as we do, The value of urban land will continue to rise, with consequences that are both logically predictable – Every silver lining has a cloud – and utterly astonishing to those experiencing them, as detailed in this article from The San Francisco Chronicle:

 

It’s urban flight flipped on its head:

 

 

The number of low- and middle-income residents in San Francisco is shrinking as the wealthy population swells, a trend most experts attribute to the city’s exorbitant housing costs.

 

As usual with a certain kind of reportage, the description reverses cause and effect backwards.  It isn’t the exorbitant housing costs that are luring the rich; rather, the rich being lured are raising housing costs, and in the absence of a countervailing price relief valve – more supply, anyone? – the less-rich are priced out. 

 

Many worry it’s increasingly turning San Francisco into an enclave of the rich, where nurses, firefighters, cops, teachers and other professionals aspiring toward homeownership or in need of cheaper rent can no longer afford to stay.

 

As I’ve chronicled elsewhere, workforce housing *is* affordable housing, and is one of Affordable housing’s great unsolved problems. 

 

I’m getting a grip on the problem

 

“A kind of derogatory term for the city would be Disneyland for yuppies,” said Hans Johnson, demographer with the Public Policy Institute of California.  “There is a legitimate public policy concern when a city that many people have lived in for many years and regard as their homes becomes so expensive they can’t afford to live there anymore.”

 

Increasing workforce housing availability is a challenge, one to be met (or not met) at the local level because of the Housing policy innovation inversion. 

 

There’s no question San Francisco’s population is becoming richer:

 

From 2002 to 2006, the number of households making up to $49,000 per year [In real terms, we presume – Ed.] dropped by 7.4%, those earning between $50,000 and $99,999 declined by 4.4%, and those bringing home between $100,000 and $149,999 fell by 3.9%, according to Census Bureau estimates. In polar opposition, the number of households making between $150,000 and $199,999 surged 52.2% and those earning more than $200,000 climbed 40.1%.

 

Certainly, some of the movement can be attributed to people earning their way into higher income classes. But a separate analysis of census data from those who reported moving from San Francisco to elsewhere in the United States confirms the overall trend: The less you make, the more likely you are to leave the city or not move here in the first place.

 

Sucked right out of the city

 

The trend of well-heeled and upwardly mobile young professionals moving into cities across the country, drawn by a newfound affection for the amenities of urban life, is by now well documented. It’s led to many benefits: Cities are revitalizing aging downtowns with new buildings and businesses, people are walking and using transit instead of making long commutes in polluting autos.

 

But it’s also been putting pressure on housing prices for existing stock and, many argue, steering much of the new development toward the high end.

 

I don’t know who you could find to argue that downtown revitalization isn’t pushing development upscale.

 

Oh, no?  You can find a New Yorker to oppose anything!

 

Like Portland, whose anti-sprawl experiment appears to have decreased affordability (Sprawl: the Portland experiment, Part 1 and Part 2), San Francisco isn’t meeting the challenge; if anything, it’s making the problem worse.

 

The worst is you’re priced out

 

Since 2002, the median price for all San Francisco home types has risen 113.5% to $790,000, according to DataQuick Information Systems.  

 

San Francisco’s median income in 2002 was $58,600, and in 2006 it was $91,200.  Thus, in a period when San Francisco’s home prices rose 114%, its median income rose 56%, which by the way is nearly four times as fast as the state’s rise in median income, which was about 15% over the same period.

 

In other words – San Francisco is getting richer faster than the rest of the state, and San Francisco is getting less affordable even as it gets richer.  Restrictive zoning and anti-development regulations act as a pretzel hold, to which some cities respond as if astonished, ‘What, you’re leaving?’  As I wrote two years ago, about my town of Boston:

 

My two brothers live respectively in Providence and Texas, one a near-mover, one a far-mover, both driven by Micawber’s affordable housing rule.

 

Economics made him move from Massachusetts.

 

Him too.

 

Like the New Orleans diaspora, the emigres divide into two groups: far movers, who are remaking their lives, and near­ movers.  For the latter, relocation is merely a commute extension, as their economic locus remains behind.

 

You can work here but you can’t live here any more

 

The same expulsion pressure is pushing middle-income people out of San Francisco:

 

A San Francisco household requires an annual income of $196,878 to afford a median-priced home in the city, according to a February report from the California Budget Project, a liberal research and advocacy group.

 

That means fewer homeowners,

 

Fewer than 4 in 10 city households owned their homes in 2006, 39.3%, the lowest rate among counties in the state.

 

and fewer young families:

 

Sarah and Mike Northrop, both 32, lived in San Francisco for seven years, most recently renting an Inner Sunset apartment. She’s a physical therapist and he’s an engineer, and together they make between $100,000 and $150,000 a year. But they spent more than two years looking for a place to buy in the city and couldn’t find anything in their price range that was big enough for them and their two daughters.

 

As prices rise in a city, how rich is poor rises with it.  At some people, city-dwellers can afford to be childless; they can’t afford to have children.  So they move to the suburbs:

 

Last year, they expanded their search beyond city limits and closed on a three-bedroom home with a garage and backyard in Pacifica.

 

“We love the city,” said Sarah Northrop, adding that she misses the cultural events, parks and easy walking to shops and entertainment. “I would have done anything to stay.”

 

 

Except not reproduce.

 

Lest you think that the phenomenon is merely a homeownership conversion bubble:

 

Rents have also climbed rapidly. In the first quarter, San Francisco was, as always, the most expensive Bay Area city for renters, according to RealFacts of Novato. The average for all apartment types stood at $2,326 in the first quarter, up nearly 25% from 2002 and 14.4% from a year ago.

 

Monicqua Brown, a union carpenter, lived in San Francisco her whole life, until rising rent forced her out of her Bayview apartment about five years ago.

 

The only San Francisco neighborhood that she could afford was the Tenderloin - a nonstarter with her two young daughters.

 

Urban policy that forces aspiring and ambitious young couples to choose whether to be city-dwellers or parents risks starving our cities of just the talent they need to reinvent themselves and remain globally competitive.

 

Instead, she found a two-bedroom apartment in Richmond, near the El Cerrito border, for about $500 less per month. It means a drive across the Bay Bridge each weekday for her job.

 

The social consequences for a city where moderate- and low-income families can’t get by are manifold. Many believe it’s the primary reason San Francisco has the fewest children per capita of any major metropolitan area in the United States.

 

As I’ve written in Zoning oneself blue in the states?, the correlation between development restrictions and shrinking population is so powerful, so multi-dimensional, and so just plain logical as to be undeniable.

 

I’ll hold my breath until you agree with me

 

In 2006, a group of Potrero Hill parents concerned about declining public school ranks surveyed families that had left San Francisco to find out why they had done so. Fifty-three percent cited the schools;

 

School quality is a function of local real estate taxes, which in turn of a function of urban demography. 

 

For most of the decade, San Francisco Unified School District has lost an average of 800 students per year, which has meant losing an additional $4 million in state and federal funds each time.

 

It also means fewer teachers required, and fewer new schools. 

 

“So we offer less for kids in terms of programs and classes,” said Mark Sanchez, president of the San Francisco Board of Education. “It definitely hits us hard.”

 

 

That’s questionable logic.

 

No, dude, it’s totally logical

 

Most calculations show that adding school-age children costs a locality money in the short run, because they cost more to educate than the new families generate in taxes.   Financially, if not politically, San Francisco could fix its schools.  The real reason?

 

70% blamed housing costs.

 

High housing prices are also a key reason that among 2,227 sworn police officers in San Francisco, only 675 live in the city, a little more than 30%, said Gary Delagnes, president of the San Francisco Police Officers Association.

 

I’ve written previously about the social importance of workforce housing and problems of long commutes.  It’s one of the reasons affordable housing is directly related to healthy communities.

 

The nightmare consequence of this would be an evening earthquake that shuts down BART and bridges, blocking two-thirds of the city’s police officers and large percentages of other first responders from quickly attending to life-threatening building collapses, injuries or fires.

 

Housing that’s out of reach in the city also promotes suburban sprawl —

 

A common myth exploded by Bob Bruegman, as I posted in Sprawl: everything you know is wrong, but the other consequences are right on:

 

– makes it more difficult for companies, schools, hospitals and nonprofits to attract or hang on to workers, and decreases San Francisco’s economic and cultural diversity.

 

David and Arianna Orleans, 37 and 36, have been searching for a home they can afford in San Francisco for more than a year. They both have lived here at least a decade and currently rent an apartment in the Inner Richmond.

 

He’s an insurance broker, and she’s a teacher.  They’re Giants fans and members of the zoo society. They spend weekends visiting the Ferry Building, Ocean Beach or Crissy Field. Their 2-year-old son loves to ride the cable cars.

 

“Maybe we could live on that concrete island, honey”

 

But, given the housing prices they’ve seen and the worrisome state of the public school system, David Orleans said there’s a good chance they will have to move to a more affordable suburb.

“San Francisco is such a great city, and we wish there was room just for an average middle-class family,” he said. “Not everyone can make venture-capital money.”

 

“It’s not very healthy for the city’s social fabric or the city’s economy,” said Roberta Achtenberg, an economic development consultant who focuses on workforce housing.

 

In short, Affordable housing is essential for modern cities.

 

Housing required

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