Many people think that SF should only build 100% affordable housing. Is that economically feasible?
It depends on what you mean by affordable housing. I’m going to define it as special-needs housing, which needs a lot of public investment. No market-rate developer is going to build something like housing for formerly homeless seniors, because they can’t make a profit. So yes, if we made a huge effort and invested billions of dollars, we could house the neediest people.
There’s a fantastic opportunity here if California continues to fund affordable housing with sensible bond programs. During times of economic slowdown, you get much more value out of your affordable housing dollar. Ten years ago, during the previous recession, we’d end a project and were like, “We’re a million dollars under budget! Let’s buy a bunch of solar collectors and a really nice barbecue.” My prediction is that market-rate housing is going to suffer a severe cutback. If we can backfill with affordable housing, we can build a lot of it.
But it’s clear that middle-income workforce housing is also really needed, which some people lump with affordable housing. It’s a tragedy and disgrace that we haven’t been able to build unsubsidized workforce housing. Subsidizing enough of it through inclusionary housing fees on market-rate housing is not economically feasible. The only way to get there is to lower or eliminate the regulatory burden, which is huge.
Developers would gladly build workforce housing that meets certain affordability criteria if they didn’t have to go through the planning, environmental, and public review process. All the live-work housing in West Berkeley was built this way. All that stuff that is not bricks-and-mortar — wind studies, shadow studies, community benefit fees — adds $200,000 to the cost per unit.
You put a tax on cigarettes to discourage smoking; you don’t put a tax on something you want. Why do we have a huge tax on housing?