I almost don’t know what to say about Matt Smith’s SF Weekly piece in favor of Prop. 98. I know Smith gets a little unhinged when it comes to housing issues, but his faith in the free market to lower the price of housing in San Francisco – against all odds and all evidence – is just looney.
He starts off with the typical landlord/libertarian argument against rent control, which is that it screws up the marketplace:
Tens of thousands of other apartments are kept off the market through “hoarding,” as individual tenants remain in cheap and cavernous three-bedrooms, hang on to their old $200-a-month apartments long after they’ve moved in with a spouse, or are otherwise motivated to cling to their leases.
Except that Prop. 98 would allow existing tenants to stay in existing rent-controlled apartments, which lose rent control forever when they’re vacated. So the rent-controlled units would be even more valuable, and the incentive to “hoard” even greater. As would be the incentive for landlords to evict long-term tenants.
But wait, there’s more:
Studies also show that rent control discourages construction of new rental apartments New housing construction fell by one third in the seven years after San Francisco’s rent control law passed in 1979. During the 1990s, meanwhile, the number of rental units actually decreased by 7,500.
Ah, but all newly constructed units are exempt from rent control anyway. So something else must be going on here. Perhaps the number of rental units decreased because developers, who care nothing for the city’s housing needs, realized there’s more money to be made selling condos. It’s the same reasons Lennar Corp. broke its promise to build rental housing in Hunters Point: There’s more money in selling units right now than in renting them.
And, of course, we’re losing rental housing – not to rent control but to condo conversions, another way property owners can make money.
Smith seems to think that without rent control
“it’s reasonable to surmise … that downtown apartment construction would accelerate. Rents would stabilize or decline. …. Businesses would flock to San Francisco, which would have ample new office space and more, cheaper homes for their employees.”
Sounds idyllic, if you want to live in Manhattan, which I don’t.
In fact, Matt Smith’s vision of a “great city” is by nature one that’s constantly growing and ever-more dense. He berates the urban environmentalists:
San Franciscans replaced what had been a metropolitan vision of the future with one best described as suburban. Rather than being a great city, it would instead be a tranquil place to live.
Matt, you have no sense of history. After World War II, the captains of industry who had completely taken over planning and development policy, in the military model of command and control, to make the West Coast war machine work, decided they liked that way of doing business. So a handful of them sat down and planned the future of the Bay Area. Low-cost South of Market housing would be demolished to make way for hotels and a convention center. Following the suburban model, BART would connect outlying bedroom communities with a dense downtown office core. High-rise buildings would hold the economic center of the Pacific Rim. A network of freeways would cross the city in a Los Angeles-style grid.
That’s what the master planners who Smith lauds had in mind. And the people who lived here decided that it wasn’t fair that nobody asked them about it. So they fought back, cutting off the freeways, down-zoning neighborhoods, fighting over-development (which, by the way, hurts city coffers more than it helps) and trying to keep this a decent place to live.
Rapid growth is not always good, not always desirable. Cities are places where people live, and keeping them livable is a noble pursuit.
And when it comes to housing in a city like San Francisco, the market will never, ever solve the problem. I’ve written about this over and over, but here’s the latest.
Regulation – treating housing not just like a fungible commodity but like a necessity of life that the market can’t fairly provide – is the only way to keep San Francisco affordable.