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Former SF Mayor Art Agnos demands 40 percent affordable housing

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“How big does SF want to be?”

Realtors Lower Housing Market Sales Forecast Photo by Justin Sullivan/Getty Images

San Francisco’s Mayor-elect London Breed declared in her post-election victory speech last week: “We have to build more housing. We have to build more housing. We have to build more housing.”

The same day, former San Francisco Mayor Art Agnos, who held the office from 1988 to 1992, chimed in with housing opinions of his own via local blog 48 Hills.

The view from Agnos’ perch suggests that San Francisco needs not necessarily more housing, but more affordable housing. He says that the city should hold developers to a new standard for housing subsidized for middle- and working-class people—some 40 percent overall.

How did he reach that conclusion? A few highlights:

  • Agnos asks, “How big does SF want to be? [...] Right now, we are 785,000 people living here. [...] Just how big do we want to build this city to be in population? Two million? Two and a half million? Three million? Four million?”

Note that San Francisco’s current population is actually closer to 884,000.

Is that a lot? Well, assuming a San Francisco city area of a bit less than 47 square miles (always a contentious figure itself), that makes for a population density of about 18,808.5 persons per square mile.

Agnos’ rhetorical query about two million people is actually an odd question, since the state of California anticipates that by 2040 the city will have barely half that many residents.

In any case, that’ll be 42,553 persons per mile. For perspective, Manhattan has a little less than 70,000 residents per mile these days, which is significantly less than other points in its history.

Of course, San Francisco doesn’t have Manhattan’s infrastructure, nor do most San Franciscans want to live in Manhattan 2.0. But at the same time, it’s not an apocalyptic prospect either.

  • On the plight of the middle class, Agnos writes, “We are told there are 37,899 subsidized units in SF. Only 3,382 of those—about nine percent are for qualified moderate or middle-class applicants. A recent housing lottery for 28 new units to replace the old public housing next to Candlestick drew 4,000 applicants.”

It looks like the former mayor’s source on that number comes from a recent San Francisco Magazine story, which cited those same statistics verbatim.

Note that the same article points out that potential buyers and renters of those properties can make 110 to 130 percent of the city’s median area income—$91,200 per year to $107,750 per year for one person in 2018, or up to $153,900 per year for a family of four.

Although that kind of money doesn’t go far in San Francisco—hence the need for subsidized middle class housing at all—it’s worth noting that the immigrants, shoe shiners, and teachers with whom Agnos empathizes in his piece are unlikely to be hit by the paucity of new homes at this price point.

In fact, according to Glassdoor data, some of the people most likely to make that kind of money are, by and large, tech workers.

Pending Home Sales Rise In March
A real estate agent leaves an open house for a home for sale in San Francisco.
Photo by Justin Sullivan/Getty Images
  • Agnos writes, “In my opinion, the Planning Department has become a permit processing department for the developers who have but one incentive: huge profit.”

On the one hand, San Francisco is okaying new construction, particularly new housing, at a much greater rate than it has traditionally, and certainly compared to Agnos’ tenure at City Hall.

However, the city is infamous among developers and construction firms for its long, difficult, and above all costly entitlements process.

In all fairness, the fact that developers continue attempting to build in San Francisco does illustrate that new construction is still a highly profitable endeavor, as Agnos alleges.

  • Agnos also says that San Francisco teachers “can’t afford to buy a home or rent [in SF] at a starting salary of $57,000 a year.”

A San Francisco Unified School District Teacher’s starting salary varies depending on qualifications and some other variables, ranging anywhere from just over $53,000 to roughly $60,500 (before taxes).

In 2016, the median rent on a San Francisco home was around $1,600/month, about 36 percent of the $4,400/month or so that a teacher starting at the lowest pay scale takes home.

However, that $1,600/month figure comes from census estimates that include rent-controlled units and longstanding leases at prices not available to newcomers. Rental sites at the end of 2016 advertised median one-bedroom apartment prices around $3,300/month.

After taxes, housing alone could eat up more than 75 percent of the pay of a hypothetical teacher living alone and trying to rent a market-rate apartment.

  • Given the scale of the problem and the huge amounts of money going into building in SF, Agnos declares: “The mayor must insist that City Hall policy on inclusionary housing match what the neighborhoods have done on the waterfront—40 percent.”

Agnos arrived at that figure by looking at the rates extracted from Pier 70 and Mission Rock developments and insisting that City Hall should play hardball with future building opportunities.

He also suggests, “The mayor must be strong enough to tell developers that if they don’t think they can make money with our newest standards, then step aside.”

However, those waterfront developments with the 40 percent figure are large in scale and contain a lot of office space. Smaller projects—or projects without an office or commercial element—won’t have the same margins and might not be able to afford similar housing plans.

The Agnos principle in that case would seem to be that developers who can’t make it work should “step aside.”

He adds, “Don’t do the project if you think you will lose money.”