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The SF Housing Crisis and Gentrification

The current housing situation in San Francisco is a complex mix of causes and conditions with parts played out by many different actors: landlords, real estate developers, rent controlled renters, at market renters, corporate employers, city planners and law makers to name a few.  The intention of this salon is to step outside the comfort zone of our own familiar identity as a stakeholder in the housing market and consider the motivation behind every role involved and the impact each role has on the bigger picture.  The problems of housing in San Francisco won't be solved by a two hour intellectual discussion, but perhaps we can leave with new perspectives and ideas which will help us better relate to the issue holistically.

Main Questions:

What are some of the causes of the acute housing shortage and skyrocketing prices of both rentals and home prices that has affected the City of San Francisco in the last 3 years?

·  Recent protests have painted the younger tech workers as being responsible for the recent wave of evictions and increasing rents. Are they a fair target in actually being responsible for the housing shortage? Are they a strategic target if the goal is to fix the housing shortage in San Francisco?

·  What obligation, if any, do newcomers to San Francisco (who can afford market rate rents) have to existing residents (who cannot afford market rate rents)?  What can the newcomers do on an individual level to help the situation?

·  What obligation,if any, do the big corporate employers of the newcomers have to the existing residents?  What should those corporations do to help the situation?  Should the degree of help differ based on whether the employer is based within San Francisco vs. outside the city?  What good, if any, are the newcomers and their corporate employers bringing to San Francisco?

·  What obligation does the San Francisco city government have to ensure there are affordable rental opportunities to low- and middle-income people who are being priced out of market rate rentals?

·  What is a fair way to distribute the limited supply of below market rentals?  First come, first served (i.e. long-time San Francisco residents get priority)?  By professions essential to the city’s functions such as teachers, paramedics and muni drivers?  By professions which enrich the city’s culture such as artists, actors, writers, restaurant workers and bar/club staff.  With a diversity emphasis (and, if so, what kind of diversity)?  By pure luck of being at the right place at the right time?

·  The Ellis Act allows landlords to “go out of business” by evicting all renters (below market and at market alike) from the building and selling the units to apartment owners.  What moral obligation does the landlord have to stay in business for the sake of his/her renters?  Does that moral obligation change if the landlord can make a significantly better return on investment in passive investments where he/she no longer has to perform any landlord duties?  What about if the act of selling the units will yield a *huge* profit due to a temporarily hot real estate market?

·  In NYC, landlords usually require that a tenant’s pre-tax yearly earnings are at least 40 times their monthly rent (e.g. $60,000/year salary for a $1,500/month rent) which is essentially 30% of pre-tax earnings or ~50% of post-tax earnings.  In your opinion, what is a “fair” percentage of your income to pay towards rent?

·  How would you define the “character” of San Francisco?  How does it compare to several decades ago?  Where do you see it going on its current trajectory?

·  Should the city allow an increase in housing stock?  If so, which neighborhoods should be the main focus and which neighborhoods should be avoided?

·  What is a fair breakdown of market rate vs. below market rate units in new buildings?

·  Should builders be allowed to get out of hosting below market rate units onsite by paying into a city fund which will create below market rate units elsewhere someday somewhere?

·  Should there be a universal height restriction on new waterfront buildings?  What about in other parts of San Francisco?

·  Do micro-apartments (~220 sq ft), which include an in-unit bathroom and kitchen, offer a reasonable solution to trading off space for a cheaper rent?  (FYI: Some existing SROs in San Francisco are as small as 50 sq ft)

·  Are neighborhoods justified in opposing buildings with reduced (or no) parking spaces?  Will the lack of in-building parking spaces encourage residents to avoid car ownership or will it just congest the on-street parking?

·  Should neighborhood associations have more or less influence on building projects slated for their neighborhoods?

·  What role does our public transportation play in the housing situation? And what changes to it could help the situation?

·  Does the San Francisco housing shortage create opportunities for other Bay Area communities to develop viable, attractive, culturally-diverse neighborhoods (e.g. Temescal, Berkeley, Rockridge, Burlingame)?

Icebreaker Questions:

·  Do the majority of your Bay Area gay friends live in San Francisco or outside of the city?  Has there been a noticeable shift in that distribution over the years?  If so, why is that?

·  What is the breakdown of your San Francisco gay friends who rent vs. own?  What subset are benefiting from rent control?  Or have benefited from below market rate home ownership?

·  If you had to make compromises to reduce your monthly rent, how would you prioritize the following?  Roommate(s)?  Smaller living space?  Less ideal location within San Francisco?  Location outside of San Francisco?

Secondary Questions:

·  Is the gay community doing enough to support gay elders?  Should those charitable efforts be mainly community and health focused?  Or should our charity extend to needs-based rent subsidies for LGBT elders?

·  What about needs-based rent subsidies for LGBT youth?  Or needs-based rent subsidies LGBT individuals somewhere between youth and elder age ranges?

·  California pays a maximum unemployment insurance of $450/week pre-tax (~$1800/month, $23,400/year).  How many months rent should one have in savings in case of a job loss?  How many of your gay friends do you think actually have that kind of rent buffer in savings?

·  With the exception of a few lucky souls who receive generous pensions, most retirees experience an income significantly lower than what they enjoyed during their final working years.  What strategies can a recent retiree take to fit San Francisco rent into their new, smaller budget?  What is a feasible retirement age anyway?  Are there work environment or societal factors beyond an individual’s control which might dictate a retirement age for him?

·  Should the city restrict a landlord’s right to “go out of business” in any way?  If so, what type of restrictions should be applied?

·  Should the city require the landlord to compensate a former tenant evicted under the Ellis Act?  If so, what is a fair amount of compensation?

·  If you were a landlord, what kind of return on investment from rental income would you require to stay in the landlord business versus cashing out and investing your money somewhere else?  (FYI: The average yearly return for the S&P 500 over the past 10 years was 7%)

·  Should new building projects (e.g. 8 Washington, Golden Gate Warriors Stadium complex) be put to public vote? What type of projects are best suited for public votes vs. going through the existing city building committees?

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  • Richard S.

    Fascinating article on "new SF neighborhoods"- another angle to the ever evolving SF housing landscape

    March 23, 2014

    • Adam J. B.

      "A rose by any other name would smell as sweet"?

      March 23, 2014

  • A former member
    A former member

    Thanks for organizing this meeting. Interesting topic and the discussion was enlightening.

    1 · March 8, 2014

  • A former member
    A former member

    Hi Lee, Patrick Adam and Richard. It was great to see you again. I enjoyed the very stimulating discussion, and liked the back and forth you encouraged. Great job! Look forward to the next one! Have a great night.

    4 · March 5, 2014

    • Lee R.

      Good to see you too -- appreciated your comments and participation.

      2 · March 6, 2014

    • Patrick

      Sushant, thanks for your participation and I really appreciate the thoughtfulness and engagement of your comments and contributions to the group. Hope to see you next month!

      1 · March 6, 2014

  • Pete

    I enjoyed the discussion and the people in my group. Thanks to the organizers for putting together an interesting program.

    2 · March 6, 2014

  • Joel

    Lively, intelligent conversations

    2 · March 5, 2014

  • Lorenzo

    Something is not quite right here and I fear that we are parroting conventional wisdom when we talk about a "housing crisis.". How much does location preference have to do with this? Is everyone trying to live in the Market Street corridor,the Castro and the Mission? What about Bayview, Hunters Point, Excelsior, Park Merced, Daly City? Historically, housing booms lead to the development of less desirable neighborhoods and opportunities for people to move up economically and gay people often lead the way in being those pioneers. Sorry that I will miss this discussion.

    2 · March 4, 2014

    • Lee R.

      You have a point, AND prices have increased the city over, not just in the corridor. That doesn't mean that I think this is necessarily a "bad thing" but it IS true the city over. See <;;­ Scroll down to find rentals and price/sq. ft. in middle of the page.

      March 5, 2014

  • Brian

    I've missed a million of these, and I hope to be there tomorrow night. I do miss these salons.

    March 4, 2014

  • Adam J. B.

    "Even some tech entrepreneurs and programmers say they are being priced out. They are competing with co-workers who got in early on a tech start-up, or started one of their own, and have seemingly unlimited money at their disposal." []
    Wow, you know it's a crazy real estate market when even the tech salarymen (who haven't benefited from a generous IPO) are being priced out! Will this be the death of bootstrap entrepreneurs who won't be able to innovate since they have to worry about paying the rent?

    March 2, 2014

  • Devon R.

    I'm hoping to make it but I have a friend come in from out of town. I'm gona have to play it by ear though I'm gone RVSP I'm not coming.

    1 · February 28, 2014

  • Adam J. B.

    Looking forward to having more constructive dialogue than this recent event!

    February 26, 2014

    • Adam J. B.

      "The less unequal cities tend to be essentially overgrown suburbs". Well that would definitely kill the character of San Francisco!

      February 23, 2014

  • Patrick

    The topic also begs the class issues and/or "class war" issues that are being bantered about. Tom Perkins et al (the 1% is under attack) the Google Glass crowd (hmmm, there is a pejorative word for them i think ). Is Tom Perkins the new Leona Helmsley and the techies the new Wall Streeters (that everyone loves to hate)? Or is it all overdone -- meaning most techies are just the new Microserfs -- a few make it big but most toil away long hours and are just part of the new middle class.

    1 · February 19, 2014

  • A former member
    A former member

    GREAT topic!!

    1 · February 19, 2014

  • Adam J. B.

    Here's an interesting article giving advice about how to improve public transportation for the San Francisco to Silicon Valley commute based on what's working well in the Manhattan-to-Connecticut commute (with some good urban development suggestions mixed in):

    1 · February 19, 2014

  • Lee R.

    A very complex issue embodying issues of economics, city societal structure and the difficult term "fairness". It's an opportunity to look at the complexities and the multiple facets of these problems before heading to simplified political reactions or sound-bite solutions.

    3 · February 19, 2014

  • Jason H.

    Tenants lawyer. Just gave a presentation on gentrification and the Ellis act last night.

    1 · February 19, 2014

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