Posted on 04/21/2007 12:33:33 PM PDT by WayneLusvardi
San Franciscos Affordable Housing Shell Game
$28 million affordable housing program in city where 44% are low income persons and average housing cost is $402 per month
by Wayne Lusvardi - The Pasadena Pundit April 21,2007
A shell game is an urban form of street gambling where a person hides a small object underneath one of three nutshells, thimbles or cups and then by sleight of hand shuffles them about while spectators try to guess the final location of the object. The success of the trick by the con man is to keep his mark focused on conspicuous actions to hide the true movements of the object.
Something like this is at work with the recent announcement that the City of San Francisco has launched a $28 million program mostly for the construction of low income housing - (see here: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/04/19/BAG52PBC6J1.DTL&hw=panels+oks+funds+for+public+housing&sn=001&sc=1000). This purported housing affordability program is occurring in a city where by the U.S. Census 44% of the residents are low income and, thus, by definition are already living in affordable housing (see U.S. Census Bureau 2005 American Community Survey online - here http://www.census.gov/). .
How can there be an affordable housing crisis if such a high proportion of San Franciscos population are low income persons who somehow can afford to live within the City? And how can there be an affordable housing crisis if the U.S. Census Bureau reports that the median housing cost in San Francisco is $402 per month and that for 79% of the population monthly housing costs do not exceed $699? To add to the contradiction between U.S. Census data and what is reported in the media and by academics is the recent report that the poverty rate in San Francisco has declined from about 15% in 1990 to about 10% in 2004 (see An Overview of San Franciscos Recent Economic Performance, April 3, 2006, p. 8 - here . http://www.sfgov.org/site/uploadedfiles/moed/economic_strat/ExecutiveSummary_EconomicPerformanceReview.pdf).
A key part of the trick is to keep your eye on the median single family home price in San Francisco, usually the bell-weather for the highest in the nation; which is $705,400 according to the 2005 Census Survey (and probably understated at that). What is not so apparent is that the unreported glut in mostly apartment, rental multiplexes, and small homes in old neighborhoods, such as Bayshore-Hunters Point, Chinatown, SOMA, Tenderloin District and other scattered pockets, is what puffs up the prices of the homes in the bourgeoisie neighborhoods (check out the colored map of San Franciscos neighborhoods, especially Map 4 in Identifying Vulnerable Neighborhoods and Their Preparedness to Disasters here: www.columbia.edu/~ia2154/4577/Final_Paper_Irene_Avetyan2.pdf).
By flooding the real estate market with un-ending waves of immigrants and newcomers demand for housing outstrips supply and prices spike upwards. Add to this population influx the historically low recent interest rates and about the same monthly mortgage payment prior to 2003 affords a 40% higher valued home. As the saying goes, you cant go wrong on real estate in California because the market is always going up; despite notorious historical housing market busts. But if youve got staying power you can weather the down cycles.
Housing affordability is a ladder. The defining symbol of joining the middle class is to be a homeowner rather than a renter. To make it to the first rung of affordability of owner-occupied housing is the trick. This is because once you have climbed onto the bottom rung of the ladder it becomes a wealth escalator where you can build up equity and appreciation because, as the saying goes again, prices always seem to eventually move up. This presumes that the lowest rungs of the single family owner housing ladder are reachable. As everyone knows this has not been the case for the past couple of decades as globalization and the Federal governments population policies have brought Tsunamis of immigrants mainly to selected neighborhoods carved out for their arrival by a myriad of perverse state and local policies and court decisions, media spectacle urban riots fomented by labor unions and activists, and crime. A glaring example is the recent reaffirmation of San Francisco as an immigration sanctuary - see here: http://business.timesonline.co.uk/tol/business/industry_sectors/retailing/article1684965.ece)
Most of these landing pad neighborhoods carved out for newcomers are near wholesale markets where cheap imported goods and services (produce, clothes, toys, tourism, etc.) come flowing into the economy.
As the adult children of the native working class head out into the housing market for the first time they are deterred from looking in old traditional neighborhoods for fixer homes by crime, poor schools, and a host of legal and other barriers to entry. The unwritten urban housing policy in the U.S. is that newcomers have first dibs to the housing stock in older neighborhoods close to jobs, wholesale markets, central business districts, and tourist centers. So the homegrown working class in San Francisco has to find housing out in the burbs of Tracy, Byron, and Modesto. This is a form of near-compulsory internal exile as a form of punishment no less than other historic exiles of certain population segments (see http://en.wikipedia.org/wiki/Exile). But academics have twisted this exile by use of the term urban sprawl.
Freeways get congested, pollution increases, development is pushed outward onto contaminated former military testing grounds, new sources of electricity (dirty coal) needs to be imported into the energy island of California to meet the demands of urban sprawl, and the infamous urban heat island effect supposedly is extended outwards. Sprawl is not the cause of these environmental impacts but the symptom of liberal social engineering policies which interfere with the housing market. But once again, the trick of liberal social policy decision makers and the media is to convince you of the opposite.
If housing was truly a free market good those with the most purchasing power would be able to buy fixer homes in old close-in neighborhoods and get onto the housing-wealth ladder. This has been given the negatively connoted term gentrification. Despite allegations by academics and activists that gentrification is causing the housing affordability crisis, it is the opposite. It is the intentional proletarianization of housing which is fueling the crisis. Once again the trick by academics, activists, and politicians is to project blame on the wealthy, developers, and NIMBYS (Not-In-My-Backyard) rather than on interference with real estate market.
The Knowledge Class of academics, technocrats, activists, and the media, want you to keep your eye on the shell and not the pea. And they have got you, the middle class, convinced that there is an affordable housing crisis for the poor in San Francisco when the opposite is the case. They have additionally obtained the moral sanction of liberal and even evangelical churches who believe they are exercising a prophetic mandate based on a Biblical and moral preferential option for the poor by advocating affordable housing. No mention is ever made that giving the poor and newcomers first preference for older affordable housing is what is driving many of our urban and environmental problems.
So next time you read that some politician or government agency is initiating a housing affordability program in San Francisco turn on your X-ray vision and keep your eyes on the ball. Such programs are mostly expensive symbolic games to keep themselves in power by buying votes at your expense. By any objective measure, San Francisco already has too much preferential affordable housing for the poor that is forcing the homegrown working class into exile in the suburbs.
I would hate to see what kind of a dump one gets for $400.00 a month in SF.
That must be $402. per person.
No one can take the “housing crisis” in SF seriously unless they talk about rent control, which is the real cause of the high cost of new rentals.
The $402 figure is actually for housing without a mortgage. The figure for housing with mortgages is $2558.
U.S. Census Community Survey reports $402 per month median housing cost in San Francisco - the link at the U.S. Census is too long to post. But check it out. Even at $800 per month, which is more like reality, or say $1,000 per month, is this really an affordable housing crisis? U.S. Census also reaports 28% of San Franciscans are low income (household income below $29,999). So about a third of the populace are low income and by definition must live in affordable housing.
I don’t see in the census data this guy is getting his figure of 44% “low income”. Can anyone help me find this?
Here’s the link to the $402 month housing cost figure from the U.S. Census
The link below from the U.S. Census shows about 26% family poverty in San Francisco
But another link shows 28% low income households (below $24,999 income/year) here:
So the 44% number should be corrected to 28%. But the point still holds. About a third of SF’s populace is low income and by definition must live in affordable housing. Rental listings are not a good indicator of housing costs for units which are never advertised or put on the market for various reasons.
I love SF but I wont live there because of the impending “Big One”. According to a report last night on The Weather Channel, the Marina district is built on landfill and will turn to quicksand. Most of the housing was built years ago when there were no earthquake standards. The fire that devastated The City in 1906 is nothing compared to the fires that will ensue when The Big One hits which will be in the next 10 minutes or 30 years from now.
If you follow the “show more” link under Housing Characteristics, you’ll find the $402 figure is for housing units without a mortgage, of which there are 37,043. For the 85,560 housing units with a mortgage, the median monthly costs are $2,558.
Notwithstanding, the fundamental point you make is a good one. I do wonder to what extent age distribution has an impact, however. For example around 70,000 (corresponding roughly with the “low income” population) SF residents are on Social Security. They may (or may not) be living in some of that older housing in less desireable parts of town which would otherwise be available for younger families. (Don’t tell the liberals or else they’ll propose draconian “assisted suicide” laws to free up “affordable” housing on the cheap!) However, my point is that “snapshot” data may not give a nuanced enough picture, here -— you really need to consider how the population is distributed in terms of stages of life.
The author is wrong about the shell game: After the con man finishes shuffling, the ball isn’t under ANY of the cups - he’s palmed it.
How’s that for an analogy to the SF housing market?
In the places I’ve lived, “low income housing” initiatives (when you really looked into it) were about ensuring housing stock for maids and lawn boys to live in, while ensuring they were “comfortable” enought to stay maids and lawn boys -— and to do this on the public’s nickel.
I can tell you how that figure is realistic. We are apartment owners, and have people paying 1/3 of what the market rent could be, due to rent control. We, as property owners are required to only raise rents at a rate the city allows, which last years was about 1/3 the rate of inflation. It doesn’t take too long for one to get affordable housing, simply by staying in your apartment, your rent increases, far less than inflation. We are forced to subsidize the “poor”. The politicians have figured out that there are far fewer landlords than renters, so they pander to renters. The upside is that through legal means, landlords are able to remove their rental stock from the market and convert them to condominiums, or the lates fad, “TICS” which are “tenancy in COmmon”. Unfortunately, rent control is going to force us to sell, convert, or remove our units from the rental market. In the end, San Franfreako will be left with little or any rental properties, due to the unintended consequences of rent control. It simply does not make economic sense to rent apartments to people in this city. Sure does wreak of a takings clause argument, however the Supreme court heard a case recently, where they denied the claim under the takings clause. I guess the city government is allowed to come into my wallet every month, and force me to subsidize those poor renters. It might be noted, that there are many surgeons on rent control, who pay 500 / month, in a city where their apartment could easily rent for 1500 - 2000 per month. Frankly, we are done with these idiots and are selling our building, probably to a condo conversion corporation.
High crime centers around a skyscraper city core provide two “benefits” to liberal politicians: a body of dependent, low income voters who suck up services conveniently provided by an army of social workers, and who always pull the “D” lever; and a perpetual source of scary crime incidents guaranteed the gentry from even dreaming of moving back close to the core of the city, even with low home prices.
Like the mafia guy who both owned the overloaded truck that ruined the roadway as well as the contract to fix the roadway, politicians reap the rewards of neglecting their cities to death.
Look at all it has done for Detroit, which will now never be rehabilitated. It’s a permanent shell of its former self.
But, but,....
"From each according to his ability, to each according to his needs!"
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
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