Fixing the Fear Factor

By Joel P. Engardio

In San Francisco’s most rapidly changing neighborhoods, longtime residents don’t fear social media because it merely wastes time or reduces privacy. They’re scared of being pushed out by highly paid tech workers who move in, drive up prices and alter the community’s character.

As long as these fears persist, there will be voters in San Francisco to fight against market forces and politicians to cater to them.

When developers proposed building 290 market-rate units above the 16th and Mission BART station, they offered to also build 41 below-market-rate units on site and pay for 49 more elsewhere. But protesters said that wasn’t enough – the development must be entirely affordable.

Then politicians started floating populist ideas like a moratorium on new market-rate housing until more affordable housing is built.

Of course, no developer will build at a loss. There’s a hard cost to each “affordable” unit someone has to pay for. Restricting what can be built means nothing gets built, which puts more pressure on limited housing stock and raises prices further.

So here we are in this vicious cycle, at an impasse.

How deep are the roots to our current housing crisis? Some dare to point to 1970s rent control, Prop 13 and a decades-long desire to preserve low density -- it’s just taken until now for all the unintended consequences of those well-intended policies to manifest in full.

Others blame a more recent flood of tech workers who make enough money to outbid everyone else who wants to live in San Francisco.

Few protested when tech companies were courted to boost the local economy after the Great Recession. To justify the millions of dollars in tax breaks, City Hall asked companies to pay for programs to help San Francisco’s less fortunate.

But people who feared the growing tech boom complained the “community benefit agreements” were public relations ploys that amounted to crumbs compared to the lost tax revenues.

They have a point. While a couple million dollars for a neighborhood learning center sounds nice, the tens of millions in taxes companies got out of paying could have bought a lot more.

Without the tax breaks, tech companies might have left San Francisco for somewhere cheaper. But the breaks happened, companies stayed and now lots of tech employees are trying to find a place to live in a city with limited housing supply.

Instead of a lopsided tax-break system, what if those “community benefit agreements” were turned into a bold and meaningful way to address the housing crisis?

City Hall could offer reduced taxes on the condition that companies use half the benefit to subsidize all-affordable floors in new housing developments.

Consider the proposed 10-story development at 16th and Mission. Protestors complain too many units are market-rate and developers say increasing the percentage of affordable units isn't economically feasible.

But what if tech companies paid for additional floors so more units could be affordable? A BART station is the common sense place for 15 or 20 stories of housing and now isn't the time to protest height.

Teachers and firefighters could live on the affordable tech-sponsored floors and developers could still make a profit selling market-rate units to tech employees.

Developers would still have to provide their share of below-market-rate units, where the lowest paid restaurant workers and artists could live.

The tax incentive will attract more tech companies because giving half to housing is better than no tax break at all. Residents will want to encourage tech growth if it means more affordable housing. And the city will generate new revenue from two sources: the influx of companies and the homeowners those companies will help create.

With residents, government and business working together for everyone’s benefit there won’t be reason to fear the next great app.

Also published in San Francisco Examiner March 15, 2015

Source: http://www.sfexaminer.com/sanfrancisco/fix...