Ed Lee's State of the City: What evictions? What displacement?

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Mayor Ed Lee punctuated his State of the City speech with a nice little quip: "Every San Franciscan deserves a clean, safe place to call home." I agree.

So why, in a speech lasting more than an hour, did the mayor not once mention that thousands of San Franciscans are facing the loss of their homes -- and will be forced out of the city -- because of the same policies that he's proudly promoting?

These things are always self-congratualtory and full of the requisite bullshit. But Lee's description of the State of the City was nothing more than a fantasy to the two-thirds of San Franciscans who live in rental housing, many of whom are living with an unacceptable level of insecurity. Much of the city's rental stock -- and the effectiveness of rent control -- is at risk at speculators are buying up properties, tossing the tenants out with the Ellis Act, and converting them to tenancies in common. This is a massive civic crisis, brought on in part by the boom in tech jobs and the consequent boom in high-paid young people who want to live in a city that has virtually no vacant housing.

We saw this before, under Mayor Willie Brown; we called it the Economic Cleansing of San Francisco. It was awful, and it's happening again.

But you wouldn't know that to hear the mayor completely ignore the issue.

Oh, Lee gave it a toss-off line; gee, the rent is too high, but we can't ignore the laws of supply and demand. Gee, we're going to build 45,000 new housing units, and that will fix everything.

But Lee, of all people, ought to know that housing in San Francisco has never followed the laws of supply and demand. This is a highly irregular market, because demand is essentially unlimited. Housing fills us as fast as you build it. And none of the new housing that's currently under construction or in the pipeline will be affordable to current SF residents who live in rent-controlled units and are at risk for eviction.

When you're evicted under the Ellis Act in San Francisco today, to make room for someone with more money, you wind up having to leave the city. That's the bottom line. And everywhere you turn, tenants are facing that ugly prospect.

The mayor spent much of his time talking about jobs. That's fine; he's proud that the unemployment rate in the city has fallen to 6.5 percent, but he insists he won't rest until everyone has a job. Actually, most economists would say that's impossible; capitalism, by its nature, exists with a structural unemployment rate that rarely falls below 4 percent. In fact, 4 percent is generally considered "full employment."

More important, the overall rate is 6.5 percent, but it's way higher for people without college degrees, for youth, and for African Americans. (It's above 50 percent for transgender people.) The tech boom isn't providing jobs for all of the unemployed current San Francisco residents; a lot of the jobs are going to people who don't live here and are moving here for employment. They are putting pressure on the existing housing stock. That always leads to displacement.

None of this is to say that tech jobs are bad or that we shouldn't have companies that pay high wages locate in San Francisco. What it means is that the city first has to protect its existing vulnerable populations -- and that's not happening.

I would encourage Mayor Lee to talk to the Housing Rights Committee, or the Tenderloin Housing Clinic, or any of the other tenant lawyers who are fighting desperately every day to state off evictions. He'd get a very different picture of the state of the city.

Comments

Yes, whine when you don't get what you want, no matter how it impacts others.

"It's not fair!"

Now stamp your little foot.

Why should two units rent for different amounts because they were rented at different times, or in different places, or have different apartment numbers, or decorated by different people?

You are arguing for price fixing, but only for the benefit of the landlord.

Posted by Guestest on Jan. 31, 2013 @ 3:52 pm

Correlation is not causation.

Ignoring all other economic factors in a complex and volatile market is as silly as labeling all taxes as bad, or all government as bad while ignoring the fact that Somalia is the world's closest example of libertarianism in action.

Land-use statutes, and rental regulation in particular, arise in response to real or perceived abuses. Rent control did not wash up at Ocean Beach on a half shell. Look up the International Hotel for an example of pre-rent control legal abuse.

When the power imbalance is considerable, as in a tight rental market, the powerful use their resources to accrue more power by influencing the interpretation, enforcement and modification of those regulations. Consolidating power in few hands only serves to put the influence of those select few on steroids, with all of the egotism, self-delusion and aggression that implies.

Property holders may change rents at their own discretion with few limitations: They can add an annual increase, use the Ellis Act to evict tenants and then charge the condo tenants more, they can force the tenants out by making the property too unpleasant to live in.

If you have an example of a method by which SF renters may legally reduce rent unilaterally, please reference it.

I do agree with you that building nothing raises prices, but this is only if demand increases - I get the impression that few new residential units are being built in Detroit. Property owners and speculators in SF know they have a cash cow because the demand isn't going to go down until the Big One levels Russian Hill. And then they will cry to FEMA and demand a bailout.

Posted by Guestest on Jan. 31, 2013 @ 12:36 pm

"...but once people are locked in at a rate, the landlord will want to make up that loss by increasing the rent on other unites once they open up. Thus the newest SF residents actually bear the burden of subsidizing renters whose rent has been stabilized..."
The same old anti-rent control Cato Institute balderdash! By the same token that your market-based comments exist, let's add: Landlords will raise the rent to what the market can bear for as many apartments as they can. They will not generally give a break to some because there are no long-term renters in that building. They will simply seek to maximize their income anyway they can. Long-term renters are not subsidizing anyone. And read the ordinance about how landlords can pass on so-called "capital improvements." Costs plus interests amortized.

Posted by Guest on Jan. 29, 2013 @ 12:45 am

Typically owners will choose tenants who push the envelope of what the market will bear and will not consider anyone who may become a long term tenant. Only 6-figure, transient, 20-something, IT workers need apply.

Posted by Guest on Jan. 29, 2013 @ 1:20 am

Good bets are visiting academics, foreign contract workers and short-term holiday lets.

Why risk getting a lifer?

Posted by Guest on Jan. 29, 2013 @ 7:27 am

Exactly. When tech bubble 2.0 bursts and all of these carpetbagger "knowledge workers" (up there with "job creators" for euphemistic weaseliness) find their jobs exported, they will still have mortgages on all of those condos that they will suddenly be unable to pay. The suburbia-bred hipsters now whining about the grittiness of the Mission will whine that they are the new victim class in a city they hadn't even seen in the truly gritty days of the 1980s and 1990s.

The SF real estate mafia will buy up the foreclosures and short sales, hold them long enough to further inflate the market, then sell them on to the next wave of tourists enamored of Disneyland by the Bay - I'm guessing it will be wealthy visitors who use a second/third/eighth home in 941xx as cocktail party capital.

When there is less than 50 square miles to work with and a plutocracy-friendly political class, it takes little effort to tailor an already existing municipal mythology to the one percenters. One percent of seven billion people is still 87 times the current population of the City, so there is hardly a worry of running out of customers. Throw in the ten percenter wannabes who buy a timeshare or honeymoon here or get a vacation rental to hobnob with their bosses and there will be no problem filling up units. Of course, these people will not be paying taxes here, nor will they be participating in the local economy other than hiring leisure services provided by people who have to commute in from Richmond.

Give up now and just rename San Francisco "Celebration" - the West Coast's little bit of Florida.

Posted by Guestest on Jan. 31, 2013 @ 10:48 am

No need to change any policies or laws, right?

Posted by anon on Jan. 31, 2013 @ 4:37 pm

If you call that a bargain.

Posted by Guestest on Jan. 31, 2013 @ 5:49 pm

Did you miss the boat because you didn't want to take a risk? That's why you rent.

Posted by Guest on Jan. 31, 2013 @ 6:11 pm

pushing to change the condo conversion lottery rules?

Posted by Eddie on Jan. 31, 2013 @ 8:47 pm

Unless the market won't bear it in which case the landlord eats the difference or goes out of business.

Posted by marcos on Jan. 29, 2013 @ 12:42 pm

So you admit that rent control causes evictions?

Posted by anon on Jan. 29, 2013 @ 12:53 pm

Of course it does. If a landlord can't make a profit in a building with longterm tenants, Ellis or OMI is the only option. And it will happen even sooner with small time landlords who can't afford to stay in the rental business.

Posted by Another Guest on Jan. 30, 2013 @ 1:51 pm
Posted by Guest on Jan. 30, 2013 @ 2:11 pm

You might even be willing to pay extra rent to keep him away, but that's not allowed under rent control.

Posted by Another Guest on Jan. 30, 2013 @ 2:22 pm

higher rent. One strategy for a landlord could be to indicate that he may be forced to Ellis a building unless rents are raised by a certain percentage. In theory that's a form of extortion but, in practice, if all parties are happy with the new deal, it shouldn't be a problem.

Posted by anon on Jan. 30, 2013 @ 3:14 pm

It would be a big problem for the Landlord when the tenant decides to go to the rent board and get a refund of the illegal rent increase and all subsequent increases.

Posted by Another Guest on Jan. 30, 2013 @ 3:30 pm
Posted by anon on Jan. 30, 2013 @ 4:31 pm

It won't work because it's illegal under rent control.

Posted by Another Guest on Jan. 30, 2013 @ 5:06 pm

But I'm not going to give away all my secrets

Posted by Guest on Jan. 30, 2013 @ 5:29 pm

Rent control does not prevent landlords from increasing rents periodically to cover inflation, nor does it keep them raising it to market rate on vacant units. It only restricts them raising it to market price for existing tenants.

If a landlord can't make it at the originally negotiated rate plus modest annual increases, they really shouldn't be in the business. Elders and the handicapped have to contend with little to no CoLA on their measly Social Security, so able-bodied capitalists should just suck it up and quit whining that they aren't getting a pony.

Posted by Guestest on Jan. 31, 2013 @ 6:07 pm

Lee never met a tax increase he didn't like.

When will City employees stop stealing from us??

Posted by Guest on Jan. 28, 2013 @ 6:09 pm

Short, but you called out Mayor Lee on a point that definitely needs addressing.

However, I think you missed an opportunity to suggest some solutions to this problem. If you want to improve life in SF for the most vulnerable, it's not enough to just say that Lee is ignoring the issue. By listing at least a few possible plans of action, you could be putting a lot more pressure on Lee to respond with specifics. By keeping it vague, you allow Lee to remain vague. Yes?

Posted by Snoozers on Jan. 28, 2013 @ 10:11 pm

about some wild left-wing policies that the voters have rejected by electing Lee.

Posted by Guest on Jan. 29, 2013 @ 7:25 am

What about cooperative housing, and while we're at it,
employee-owned businesses?

Posted by Troll Killer on Jan. 30, 2013 @ 3:01 pm

Business and properties can all be purchased and then run as a co-op.

What are you waiting for?

Posted by anon on Jan. 30, 2013 @ 3:12 pm

The National Association of Housing Cooperatives (NAHC) represents all cooperatives within the United States who are members of the organization. This organization is a nonprofit, national federation of housing cooperatives, mutual housing associations, other resident-owned or controlled housing, professionals, organizations, and individuals interested in promoting the interests of cooperative housing communities. NAHC is the only national cooperative housing organization, and aims to support and educate existing and new cooperative housing communities as the best and most economical form of home ownership.

Posted by Troll Killer on Jan. 30, 2013 @ 3:08 pm

Buy my house and turn it into a commune for freaks and losers. Nothing is stopping you.

Posted by anon on Jan. 30, 2013 @ 3:17 pm

Inane policies (and comments) created by carpetbagging no-nothings
like you prevent all true progress in this world.

Go home, and crawl back under your bridge.

Posted by Troll Killer on Jan. 30, 2013 @ 4:01 pm

Sorry, that's "Know-Nothings."
I am not malware.....

Posted by Troll Killer on Jan. 30, 2013 @ 4:16 pm
Posted by anon on Jan. 30, 2013 @ 4:30 pm

Grow up.

The question was: alternatives to current housing planning.
One answer is: cooperatives.

Posted by Troll Killer on Jan. 30, 2013 @ 5:24 pm

existing law, and yet you do not.

Posted by Guest on Jan. 30, 2013 @ 5:28 pm

This is not about me.
I live in Seacliff.

Posted by Troll Killer on Jan. 30, 2013 @ 8:54 pm

Point is, whining that something isn't happening when you could up and do it yourself is lazy talk.

Posted by Guest on Jan. 31, 2013 @ 1:20 pm

How do you know I don't belong to one?
Or that I need to belong to one?
Cooperative housing is a group answer to a problem,
not a personal business venture.

What makes you so insecure that you must attack people instead
of following the rules of debate?

Posted by Troll Killer on Jan. 31, 2013 @ 3:44 pm

not those who think everything should be done by "other people"..

Posted by Guest on Jan. 31, 2013 @ 3:48 pm

Again, how do you know I am not a member of a co-op,
and or haven't help "set-up" one, or more?
Again, why the anger?
Somebody step on your hamster?

Posted by Troll Killer on Jan. 31, 2013 @ 5:05 pm

someone else should get things done.

Posted by Guest on Jan. 31, 2013 @ 5:23 pm

Projection is a common trait in delusional paranoids.
I suggest you seek professional help, and lay off the sauce.....

Posted by Troll Killer on Jan. 31, 2013 @ 5:31 pm

build what you are saying others should build?

Posted by Guest on Jan. 31, 2013 @ 6:08 pm

And who the "f" are you I should
have to prove anything to you?
Where is YOUR evidence of doing anything constructive?

Posted by Troll Killer on Jan. 31, 2013 @ 7:32 pm

the makeup of its inhabitants.

Posted by Eddie on Jan. 30, 2013 @ 4:14 pm

999 Lakeshore Drive in Chicago is a cooperative owned by a bunch of losers and freaks?

Posted by Troll Killer on Jan. 30, 2013 @ 4:26 pm
Posted by anon on Jan. 30, 2013 @ 4:33 pm

You are not familiar with a lot of things: Google, Wikipedia, dictionaries, history, economics, common courtesy, San Francisco/West Coast culture, ethics, etc., etc.....

Posted by Troll Killer on Jan. 31, 2013 @ 7:53 am
Posted by Guest on Jan. 31, 2013 @ 3:47 pm

My reference is that 999 Lakeshore Drive is
a housing cooperative full of rich people,
not "losers and freaks."
Again, it's called "Google."

Posted by Troll Killer on Jan. 31, 2013 @ 7:37 pm
Posted by anon on Jan. 29, 2013 @ 9:09 am

People moved in, they don't out. There are legions of people hoarding rental units and the rest of us who didn't come here in 1970s had to fight for the remaining 2.5% vacancy to get a place. This is just wrong. Get rid of rent control.

And stop with this fantasy about Ellis eviction being a problem. The number of Ellis Act evictions have dropped significantly.

Posted by Guest on Jan. 29, 2013 @ 9:32 am