July’s HANC meeting focused on the latest “market based solution” being proposed in Sacramento to address the City's and the State’s “housing crisis”: Gov. Brown’s “by right” proposal and AB2801, a mandatory “density bonus” program that will allow up to a 35% bonus in the size of all housing developments proposed at the local level.
The Tenants Union’s executive director Deepa Varma joined HANC’s Housing and Land use Board member Calvin Welch in discussing the impacts of these proposals on San Francisco. In a word, the impacts would mean “displacement” of existing residents and small businesses. In a any area like San Francisco with virtually no open space and a red hot real estate market, mandatory density bonuses and the development of housing without a public hearing process (that is developing “by right” , not local approval) would most likely mean that existing buildings would be demolished in order to make way for more dense buildings allowed by the new policies.
Ms. Varma pointed to the Mission neighborhood, which is experiencing massive new market rate housing development and a sharp increase in evictions, as a real world example of how high density market rate housing impacts a low income neighborhood.
The dynamic is that with a mandatory density bonus and a state imposed cap on included affordable housing lower than now required in San Francisco with no density bonus, the economics of market rate housing development dramatically shifts so that demolition of existing buildings becomes economically feasible. This is especially the case in neighborhoods that have a large number of buildings that are rent controlled and of medium density, such as the Haight Ashbury.
Given the high prices new apartments able to command in San Francisco's red hot market--prices not limited by rent control--these older rent-controlled building become “targets” for demolition to make way for the new, market-rate high rise buildings.
Pushback at the state level against Gov. Brown's “by right” proposal, which would eliminate most all environmental controls and public hearings on housing development at the local level, has been one of the great unreported stories in California politics. Brown attached the proposal to the budget avoiding any hearing in Sacramento.
Nonetheless, in three months a unique coalition of trade unions, environmental, tenant and community organizations was formed and under the leadership of San Francisco Senator Mark Leno has made real headway against the proposal. In a “lobby day” on August 9th in Sacramento, Leno announced to the coalition that there was a very good chance that the Governors proposal would be withdrawn by the Governor because of increasing legislative opposition created by the coalition's advocacy.
But AB2801, creating a state “density bonus” that would mandate a 35% increase in density for very limited affordability looks sure to pass, ensuring more activity at the local level to scale back the displacement surely to follow.