Housing in Pogoland: Part 2, Failure to foresee

March 29, 2016 | Affordability, Apartments, Homeownership, Housing, NIMBY, Overhousing, Rent control, Rental, San Francisco, US News, Zoning

By: David A. Smith

[Continued from yesterday’s Part 1.]

In Pogoland, otherwise known as San Francisco, the enemy of affordability is us.

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As Conor Friedersdorf discovered to his evident surprise in his recent article (The Atlantic: December 29, 2015), the people being demonized for ‘profiting’ from the housing shortage are in fact those who’d like more affordable housing (for their immigrating workers), while those who say most vehemently they are in favor of affordability are also those who profit most from the current toxic combination of extreme shortages and extreme rent control.

Mr. Friedersdorf believes the beneficiaries know their policies are self-interested, but in my experience people sometimes migrate to self-interest, though a kind of law of political gravity,without the slightest awareness they have done so.

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Just a lucky guess

It’s understandable. Many of them have put the bulk of their net worth into their homes and they don’t want to lose that.

So they engage in NIMBYism under the name of preservationism or environmentalism, even though denying in-fill development here creates pressures for sprawl elsewhere.

In short, when it comes to affordable housing, San Francisco is Pogoland: they have met the enemy and he is us.

2. Failure to foresee is proof of incompetence

San Francisco’s anti-development forces have created a set of land-use and occupancy laws that assure their city will have a permanent shortage of any type of housing, and by extension a severe shortage of any affordable housing. 

AHI blog posts on San Francisco’s self-inflicted housing shortages

July 26, 2010: No such thing as free subsidy, 2 parts, on inclusionary zoning mandates

June 14, 2011: Going the way of Cairo and Mumbai?, 2 parts, about the city’s supply neck-tourniquet

September 19, 2011: Rent control nullification, 2 parts, about the shadow markets

July 16, 2012: Entrepreneurial barracks, 2 parts on private techster dormitories

January 25, 2013: Free parkletting?, about street-side ‘captured spaces’

July 26, 2013: Better off vacant?, 2 parts, on the (un)economics of rent control

October 11, 2013: Invisible private infrastructure, 2 parts, Google buses (before they became targets of hipster rage)

May 5, 2014: San Francisco’s sunset scarcity, 2 parts, down-zoning’s artificial scarcity

February 11, 2015: Antidote to majoritarianism, 2 parts, relocation-payment law struck down

But, say the proponents of rent control or smart growth, we’re just trying to make the city livable, and nobody could see the tech boom. 

That argument, assuming it were made, would be a nice try, but it’s belied by three decades of San Francisco’s experience.

On this issue, the main thing that tech companies have done to fuel rising rents is to create lots of high-paying jobs, employing members of a generation who are more likely than their parents to prefer cities to suburbia.

Some time ago, an Eat24/ Yelp employee, Talia Jane, wrote a lengthy ‘open letter to my CEO’ in which she complained of being unable to pay her rent and necessities (which she chronicled); shortly thereafter she was fired (though not by him), and her CEO added this helpful explanation:

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Ms. Jane, as many commenters observed, could live quite reasonably on the same $15 per hour salary Ms. Jane would earn in Arizona

He also pointed out the reality: rents are high not solely (or even predominantly) because of rising wages, but because of strangulation of new supply:

Techies are not against building affordable units. In fact, cheaper housing in the Bay Area aligns with their interests.

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Mr. Steppleman gets it and is trying to change it

I’ve previously posted how owners of San Francisco rental apartments are Better off leaving them vacant rather than creating a new tenancy that trumps the owner’s right to move members of his extended family into his own multi-apartment property, laws more representative of Cairo or Mumbai than America. 

If the proponents could not foresee the tech boom – which has been four decades in the making (Hewlett-Packard was founded in 1939, Microsoft in 1975, Apple in 1976) – anyone with the slightest interest in such matters could have seen the consequences of rent control, as it had been existing in London since 1919 (RIP 1986), New York City (1948), and Cambridge MA (1971).

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The cause of the ‘temporary emergency’: victorious soldiers parading, London, July, 1919

In every single case, rent control had become progressively more restrictive, even as the ‘temporary emergency’ which led to its creation settled into a state of permanent siege. 

3. Refusal to acknowledge evidence is proof of unreason

When my information changes, I alter my conclusions.  What do you do, sir?

Attributed to John Maynard Keynes

It’s called political science because those who study it are professing to a scientific method, but those who make the laws, or for that matter those who vote for those who make the laws, can choose their votes any way they want, information be demand.  But for those such as Mr. Friedersdorf who are trying to analyze the political environment, discoveries that upend their preconceptions are reported, in a daze as it were, with the clinical precision displayed by George Orwell, whose great 1942 essay Pacifism and the War includes this:

Pacifism. Pacifism is objectively pro-Fascist. This is elementary common sense. If you hamper the war effort of one side you automatically help that of the other. Nor is there any real way of remaining outside such a war as the present one. The idea that you can somehow remain aloof from and superior to the struggle, while living on food which British sailors have to risk their lives to bring you, is a bourgeois illusion bred of money and security.  

I am not interested in pacifism as a ‘moral phenomenon’. If Mr Savage and others imagine that one can somehow ‘overcome’ the German army by lying on one’s back, let them go on imagining it, but let them also wonder occasionally whether this is not an illusion due to security, too much money and a simple ignorance of the way in which things actually happen.

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Looking truth in the eye, first in Spain 1938

Global-search-and-replace downzoning for pacifism, exclusionary for fascist, housing for war, and housing production for war effort, and you will have a cogent analog of my frustration with those who want permanent affordability even as they oppose every increase in housing supply based on the nonsensical illogic, which they do not even design to explicate, that adding more supply displaces current residents.

As I’ve posted in many contexts, self-interest can be guised as environmentalism, concern for green space, ‘smart-growth zoning,’ ‘neighborhood character’, historic or neighborhood preservation,

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The Upright Citizens Brigade is on the case

The homeowners see themselves as upright “preservationists,” protecting the character of their city even as they turn it into a time-capsule for the old and rich.

To borrow the phrasing from Orwell, preservationism is objectively exclusionary and anti-affordability.

As Gabriel Metcalf

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You think apartments just build themselves?

Mr. Metcalf is President and CEO of SPUR, San Francisco Bay Area Planning and Urban Research Association, a ‘member-supported non-profit organization’ (‘urban planning think tank’) that:

– has hit a nerve in San Francisco [with] a premise that is both extremely smart and deeply controversial. 

[He calls] the city’s cost of housing “the single greatest threat to San Francisco” – and, despite the best intentioned efforts of those who want to “preserve the fabric of the city,” he says they have actually made matters worse. 

Any suggestion of increased development is bound to start howls of protests from those still riding the no-growth hobbyhorse, but it is hard to imagine what they disagree with. Finding a rental unit has turned into a blood sport.

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Are you renting to me?  Are you?  ARE YOU?

put it (lavender font) in CityLab earlier this year:

“By the early 1990s it was clear that San Francisco had a fateful choice to make: Reverse course on its development attitudes, or watch America’s rekindled desire for city life overwhelm the openness and diversity that had made the city so special. When San Francisco should have been building at least 5,000 new housing units a year to deal with the growing demand to live here, it instead averaged only about 1,500 a year over the course of several decades.“

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[Continued tomorrow in Part 3.]