S.F. middle-class housing bumps the poor

You may disagree with him, but you can't say political analyst David Latterman isn't a shrewd observer of San Francisco. This week, with the Mayor Ed Lee's State of the City speech coming up Friday, he was especially fired up.

"This city is on the brink of change, and everyone feels it," Latterman said. "It's funny, because we don't do change well, and yet the city changes so much. We're always against it and yet it happens."

Latterman's premise is that housing in San Francisco is at a tipping point. This is not exactly a thunderbolt from the heavens. Teresa Ojeda of the San Francisco Planning Department provided statistics that show there are 6,084 units under construction right now, with another 4,739 holding building permits and ready to go.

Place those numbers against the backdrop of previous years. In 2011, feeling the effects of the 2008 recession, the department showed only 348 units completed. Even in the go-go days of 2005, the total number authorized for construction was just 5,571.

"In this city," Latterman says, "you can't talk about housing without it becoming politicized. Affordability and housing is going to be the defining issue. Whoever can control the narrative and get housing built at every level is going to be the winner. The race is on."

So construction is booming. But who's going to benefit?

Even progressive types, like former Mayor Art Agnos, say the target group has shifted. No longer are the poor the main topic.

'Next category up'

"The struggle for poor people is over," he said, "because we don't have a place to build for them. They were priced out a long time ago. We have to maintain our commitment, remodeling public housing, but we need to focus on the next category up."

But not everyone agrees who those people are. There's a lot of talk about the middle-class teachers, firefighters and workers in service industries, but that covers a lot of economic ground.

For example, Doug Shoemaker, president of Mercy Housing California, is overseeing an affordable building in the trendy Mission Bay area. He says it will have 150 family apartments, 20 percent of which will be available to the formerly homeless. He says incomes will range from roughly $13,000 to $50,000. The problem is, by some measures, that's the working poor in San Francisco.

"Middle-income housing is notoriously hard to figure out," Shoemaker says. "The idea is that as the market grows, there will be more opportunities, some affordable. The problem is those opportunities are dwarfed by the fact that gains in the market push those units out of reach."

Meanwhile, moderates say the increase in building can only be a good thing. New construction will encourage current renters and homeowners to move up, clearing space at the lower rungs for others. Everyone moves up, creating room at the bottom.

"Oh, come on," says Agnos. "There is no trickle-down effect. There may be short periods of time when the market leveled out, but overall it goes nothing but up. This area is too small for those normal market rules to work over time."

That may be true, say moderates, but the progressives end up taking the position of fighting new construction regardless. The obvious example was the 8 Washington project that went down at the ballot in November. It might have been a building of high-end condominiums, but it also would have sent millions to the affordable housing fund.

Playing defense

"They're just trying to play defense and block things, and I don't see it," said Latterman. "This idea that these evil capitalists are going to build for millionaires and sell all the rest of us into indentured servitude, c'mon, that ship sailed 15 years ago. We need to build 3,000 to 5,000 units a year to make a dent."

Myrna Melgar, a longtime housing advocate, looks to the megaprojects at Hunters View and Treasure Island for help. She points to a program from the administration of former Mayor Gavin Newsom that loaned middle-income home buyers (earning between $65,000 and $90,000 a year) down payments, with the stipulation that they pay back the money when they sell as well as a percentage of any profit.

Unfortunately, the crash of 2008 depleted those funds.

"At the time we were in conversation with investors to see if we could put together a private loan fund," she said. "Now it's the kind of thing where the tech sector could chime in."

Maybe the new middle class will want to buy the new units, or the city can find a way to revive the down-payment program. There are lots and lots of ideas.

Which is great, because this is a big problem.

We're waiting to hear what you have to say, Mr. Mayor.