By Marc Salomon
Common sense talking points by developer boosters and lobbyists at SPUR, the Housing Action Coalition and the SF Bay Area Renters’ Association on why we need more market-rate luxury housing simply cannot withstand scrutiny.
Developers would never risk capital to build into a market that is saturated so that the price at sale is lower than the price at construction time, so market-rate housing does not lower the price.
Developers admit that building condo towers won’t make housing prices fall. One of San Francisco’s biggest new developments, 5M, proposes to add more than 900 units in South of Market at Fifth and Mission streets. The developer said that predictions are that prices will continue to increase 2 to 3 percent per year from now until the buildings are finished between 2019 and 2026.
According to the Planning Department, new market-rate housing does not pay its freight, not in infrastructure and not moving forward in property taxes to cover city services over time.
Transit-oriented development only works with reliable rapid transit that is not at capacity. Muni is neither rapid nor reliable and like BART is at capacity, and there are no plans to change that.
Transit-oriented development even with modest parking ratios adds so many new cars that it further snarls transit and endangers cyclists and pedestrians, especially when adjacent to freeways. The 5M project alone would dump 663 cars at Fifth and Mission.
Streamlining and speeding development approvals does not make housing less expensive, the only thing that governs housing price is what the market will bear, not cost to construct.
The capital was never in place over the past few decades to have anticipated and built enough units to satisfy demand from global Internet giants, external capital seeking unoccupied investment units, or the $11 billion in venture capital allocated in The City last year alone. Years of policy could never have built to this.
From 1950 to 2013, San Francisco built two new units for every new resident. Over these 63 years, The City’s population has increased by only 62,085, while we’ve added 115,245 new housing units.
Median household income has roughly doubled from 1950 to 2013. Meanwhile, the median price for an owner-occupied home has increased more than six times.
Nobody can say how many units we need to build over what time to see prices fall by what amount and what policy should be after that.
Developers have well-financed PR. They want you to believe that we have a supply problem so they can keep making more money catering to the high end.
Most of the boosters who dismiss opposition to dense luxury housing as NIMBY live outside of neighborhoods upzoned for density. They are the true NIMBYs.
Marc Salomon is a Mission resident and software engineer.