San Francisco's real estate market is crazy right now. You know it, we know it, everybody knows it. Besides the weather in October (reliably nice) and Vernon Davis's hands (reliably soft), the housing market is on the top of San Franciscans' minds right now like nothing else. So that's why it was nice to read this morning's post on Atlantic Cities by SPUR's executive director Gabriel Metcalf about rising rents and housing horror stories. Metcalf cuts through the rhetoric and clearly analyzes what is—and isn't—a solution to the cost of housing. Here are our five take-aways from his piece:
1. Compared to Seattle, we basically suck: "Over the past two decades, San Francisco has produced an average of 1,500 new housing units per year. Compare this with Seattle [...] which has produced about 3,000 units per year over the same time period. While Seattle decided to embrace infill development as a way to save open space at the edge of its region and put more people in neighborhoods where they could walk, San Francisco decided to push regional population growth somewhere else."
2. The Google bus isn't the problem—it's just a symptom: "Railing against Google buses, fancy restaurants or new condos—the visible signs of gentrification—will do nothing to stop San Francisco from becoming more expensive. These are not causes of the rising rents; they are symptoms. The root cause is that many people have chosen to live in San Francisco, and we are now all competing with one another to bid up the rents."
3. If you think building only affordable housing is the answer, you're wrong: "San Francisco needs more affordable housing. The problem is, subsidized, below-market-rate units are too expensive to build to help very many people. It costs around $250,000 in government subsidy per unit [...] Subsidizing affordable homes for 10,000 families comes at a price of tag of $2.5 billion. To subsidize affordable homes for 100,000 people would cost $25 billion. So yes, we should build as much subsidized affordable housing as we can. But [...] it is not a strategy that will have an effect on the housing costs for the vast majority of the people trying to make a go of it in San Francisco."
4. We need to build, oh, about 20,000 more houses in SF before our rents will drop: "Our estimate is that if we could produce 5,000 units a year for a sustained period of time, that would be enough to make a real impact on affordability."
5. Berkeley and Palo Alto need to man up too: "San Francisco can’t do it alone, but it needs to do its part. The three big cities of the region (San Francisco, San Jose, and Oakland) have disproportionately more opportunity and more responsibility to absorb a major percentage of the region’s population growth for the simple reason that they have the room and they have the existing transit infrastructure. But smaller cities should be asked to do their part, too. If San Jose succeeded in becoming more urban, and if smaller cities such as Palo Alto and Berkeley were willing to grow more, some of the pressure would be relieved from San Francisco."