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How will the Mission housing moratorium affect rents? Supes want to know

May 23, 2015

By Cory Weingberg : bizjournals – excerpt

What’s the latest weapon in the political fight brewing over a proposed temporary halt on Mission District market-rate housing? A call to action from two moderate supervisors – to the city’s chief economist…

Supervisors Mark Farrell and Scott Wiener, who are aligned with Mayor Ed Lee against the Mission’s Supervisor David Campos’ proposed moratorium, said Monday that they want the San Francisco controller’s office to measure citywide economic effects of the proposal…

Egan’s office typically releases studies on legislation deemed to have “a material economic impact” on the city, like the so-called Airbnb law restricting short-term rentals. The report is likely to spell out what Egan’s office has written multiple times: that increasing housing supply puts “downward pressure” on market rents and housing prices, and adds to construction spending in the city.

But how much tangible impact would a moratorium really have on the housing shortage or on people who must move because of rising neighborhood rents? The effects that either side claim likely won’t live up to the amount of political sparring a moratorium will generate…

Campos and advocacy groups like Mission Economic Development Agency are worried that construction could ratchet up land prices as more large sites are bought by market-rate developers instead of being held by the city or nonprofits for all below-market-rate units. They’ve been exasperated by sky-high land prices in the Mission already, like when a developer last summer paid a record price per buildable unit for a 16th Street property.

Affordable housing advocates in the city say the moratorium would have little effect but could mean a big difference for their ability to acquire affordable housing sites.

How to pay for that land acquisition is another story, though presumably a few sites could use money from the mayor’s proposed $250 million housing bond. Affordable housing builders have also struggled to get projects built because state redevelopment funds have evaporated and construction labor costs are rising.

The moratorium, meanwhile, would spur the Planning Department to study new inclusionary requirements or higher fees from market-rate developers to pay for affordable housing. Mission housing advocates like Campos also contend that current market-rate units deliver a meager portion of affordable units – about 7 percent of the units in the pipeline.

“With that pause, it puts everyone on notice from the city to the community activists to the market-rate developer that you have this limited time period to achieve solutions to a particular problem,” said Fernando Marti, co-director of the Council of Community Housing Organizations, which is working with Campos’ office on the legislation…. (more)

RELATED:
Mission moratorium: 5 strategies San Francisco could use to build affordable housing

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