San Francisco’s Housing Shortage & The New Executive Directive

In case you haven’t heard, huge change is coming to San Francisco! On September 27, 2017 Mayor Ed Lee released a statement regarding his city-wide mandate on building 5,000 new residential units each year. Of course, many San Franciscans are torn between embracing new and (more) affordable living and fearing their historical neighborhoods will become nothing more than developments.

While both sides — often referred to as ‘yes in my backyard’ (YIMBY) or ‘not in my backyard’ (NIMBY) — have strong feelings about the new mandate, it’s important to gain a deeper understanding on the matter as a whole.

San Francisco, named the most expensive city to live in by Zumper’s October 2017 National Rent Report, has been dealing with an ongoing “housing crisis” for over a decade. While the surge of renting prices and lack of affordable housing significantly increased during the introduction of high-tech industries, they aren’t entirely to blame.

Business Insider points out that “high home prices, plus high population density, plus low availability has led to San Francisco becoming the most expensive place in the country to rent an apartment…Regulations and the philosophy behind them slowed the city’s response to its population boom. From 2007 to 2014, San Francisco only approved half of the building permits necessary to accommodate its growth.” Basically, without getting into the nitty-gritty, strict zoning regulations and building laws mixed with a high demand for property has contributed to the Bay Area housing crisis.

Another interesting factor that is often overlooked is the equally strong tenant protection laws and controlled rental prices. While fixed rental prices are great for tenants, they often deter homeowners from renting their properties out. When landlords aren’t earning market value but still have to pay out on repairs, insurance, etc., the idea of renting their properties seems a lot less glamorous. This aids in the scarce housing availability, which then becomes a lose-lose for everyone, explains Market Urbanism.

While the housing crisis continues to affect those who own property and those who are looking to rent, the issue goes deeper, oozing its way into the local San Francisco economy. Center for Housing Innovation at UC Berkeley’s Carol Galante states “the current real estate boom risks making the Bay Area’s economy unsustainable. As more people are priced out of the local housing market, they will move further and further afield, or jobs will leave the Bay Area and the region will suffer economically.”

Unfortunately, this rings true to a lot of long-time San Francisco residents. As available housing has become almost unaffordable, lower and middle class workers are slowly being forced out of the Bay Area, including those who work in education, healthcare, labor, and the service industry.