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I apologize in advance, it’s entirely likely that I’ve misunderstood this article. Is the premise here that “market rate housing” makes housing more affordable

I apologize in advance, it’s entirely likely that I’ve misunderstood this article. Is the premise here that “market rate housing” makes housing more affordable but “affordable housing” does not? I thought affordable housing was cheaper?

anxman 5y ago
No need to apologize, it's precisely this double speak that Preston (and Peskin) use to advance their own political agendas at the expense of vulnerable communities here in SF. There is also a component of semi legally siphoning off public money to hand over to private developers from which said government officials take a rake, but let's ignore this portion (If you're curious though, you can read more here: https://www.sfchronicle.com/projects/2020/sf-city-hall-corruption-who-is-nuru/ https://www.sfchronicle.com/projects/2020/sf-city-hall-corru...). First, in San Francisco, to qualify for "affordable housing", you have to make under the poverty line in San Francisco. That means under 110k for a family of 4. If a builder were to want to build affordable housing to help these populations, it is not financially feasible without the government paying for it b/c one would have to sell or rent this newly built housing at significantly below what they paid for it. So then enter rich white elitists like Preston and Peskin (with ties to the real estate lobby / land owners themselves) who want to enrich themselves by increasing the value of their own land. What do they do? They block all new housing development in San Francisco so the supply is permanently depressed and gate it on building "affordable housing". They package that up as a news story in helping vulnerable communities by making a few affordable homes but in in reality, housing gets more expensive and unaffordable for everyone. Just so a few richly compensated officials can enrich themselves even more, at the expense of the poorest residents.
- truffdog 5y ago
  To be more explicit- first they object to housing unless it is fifteen percent affordable housing. When they get that, it goes to 25 percent. Then to 50. Whatever number is needed to get the project cancelled.
  - wahern 5y ago
    It's a positive feedback loop. The higher the cost of the exactions, the more the market rate of the remaining units in a project grows to cover the price, the fewer overall projects, the greater the uproar about luxury developments.
- newbie789 5y ago
  This is really confusing for me. The author of the article seems to be making the point that affordable housing is inherently expensive and market rate is inherently cheaper. If I were to follow this line of reasoning, I’d find myself advocating for no affordable housing at all. But then I read about the issue actually being about housing supply. I somewhat understand that this article is framed in such a way as to seem like it’s about one individual politician, but the points made here seem to be very black and white about the very concept of affordable housing. It kind of seems that pro- and anti- affordable housing folks are accusing each other of the same thing: valuing their own property value highest. I’m but a humble country bumpkin that grew up in affordable housing and have very little expertise about “doublespeak” but generally speaking I’ve found that when somebody makes and sells something for less, that means that the price is lower (less money required = lower cost).
  - ProfessorLayton 5y ago
    Sadly, it is intentionally confusing, hence the double-speak. The truth is that there's no such thing as conjuring up affordable housing in expensive cities at-will. Expensive housing will be built and subsidized so that it is affordable for some, but not others. - or - Expensive (market rate) housing will be built unsubsidized and it will compete with all other housing stock. If there is little competition, the price will not be affordable, because why would it without competition. Once there's enough housing supply, then new housing stock will be competing with existing housing, and put downward pressure on prices. A third element at play here is that wealthier residents are able to afford housing regardless of price, so the key question existing residents must ask is: Do you want them to compete with you on a likely rent-controlled unit, or do you want them to take a look at the fancy new apartment with all the expensive amenities, and isn't rent controlled. Remember that all housing stock was once new and more expensive before it became affordable to everyone else. This isn't a comment for or against rent control but it is a factor that must be considered. Blocking new housing unless it's "affordable" is just NIMBYism with better optics.
    - deleted 5y ago
      [deleted]
- readflaggedcomm 5y ago
  Just because the author brought race into it doesn't justify it.
rahimnathwani 5y ago
Affordable housing: control prices on a subset of the housing stock, and leave the rest to the market. Market rate housing: let developers build housing if it's profitable for them to do so. The former results in some members of a favoured class getting cheap access to housing, whilst preserving/increasing the value of the remaining 'market rate' housing. The latter seeks to allocate housing based on willingness to pay, whilst increasing the housing stock to stop/reverse the trend of price increases. The way people use the word 'affordable' wrt to housing makes it sound like it's an intrinsic property of the houses. When it actually refers to a non-market allocation mechanism. 'Affordable housing' sounds better than 'price caps allocated to a lucky subset of the folks we deem deserving'.
- newbie789 5y ago
  > The former results in some members of a favoured class getting cheap access to housing, whilst preserving/increasing the value of the remaining 'market rate' housing. To clarify, the favored class here are people at or near the poverty line? And their existence drives up prices for anybody else?
  - rahimnathwani 5y ago
    Not necessarily people near the poverty line. You could be earning 6 figures and still be eligible. There's a lottery system which is 'fair' for some definition of fair, but doesn't solve the problem, which is limited housing supply, and doesn't help all who want to live here.
    - newbie789 5y ago
      That’s awful that the supply is so small. It would be great if there was a big enough supply of affordable housing such that they could do away with the unfair lottery.
      - rahimnathwani 5y ago
        A big enough supply of ANY housing would make housing affordable. 'Affordable' isn't an intrinsic property of a house. It's an outcome of the allocation system.
simonw 5y ago
The problem is when people block the development of ANY new housing on the basis that it's "not affordable housing". Adding market rate housing is better than adding no housing at all.
- ashtonkem 5y ago
  And unfortunately in order to have cheap market rate housing, you need to have built a ton of luxury housing a few decades ago. Today’s luxury flats are tomorrow’s aging affordable units, even if SF fixed it’s zoning rules it will take a while before housing prices stabilize.
flaque 5y ago
The gist is that is significantly harder to build “affordable” housing (where prices are kept artificially low). So if you mandate only affordable housing, then you help a few people, but restrict the overall housing market, which makes rent prices go up for most people. (To be clear, affordable housing isn’t bad; but restricting the supply of housing by building 100 affordable units instead 80,000 market rate ones is)
- newbie789 5y ago
  Why is it not possible to build more than 100 affordable units? Do “market rate” houses generate 800x the revenue? That’s an enormous chasm in profitability that should be addressed. I couldn’t imagine being forced to build a house wherein for every dollar I I recoup, my neighbor recoups eight hundred of them.
  - flaque 5y ago
    It’s more that many people who don’t want to build more housing use “affordable housing” as a way to do so. If they build a few “affordable” units, it’s a way to still seem like you’re pro-housing. To be clear, I think most pro-affordable housing folks genuinely would like to build lots of affordable housing.
    - newbie789 5y ago
      This position is precisely why I’m baffled. The general consensus here is genuinely that anybody who says they want affordable housing is telling on themselves that they actually, in fact, do not want affordable housing? There is genuinely no scenario in which a person can actually want the construction of affordable units? This honestly sounds like some wild mental gymnastics in order to justify… keeping property values higher. Just like many are accusing the other side of doing.
      - flaque 5y ago
        > There is genuinely no scenario in which a person can actually want the construction of affordable units? Not at all, I'm saying Preston in particular has historically ran on the construction of affordable units, and then worked to block them throughout his time in office.
presentation 5y ago
The problem is that developers won’t build affordable housing unless they’re heavily incentivized to do so (why take a big risk to build something if you won’t profit from it, developers usually aren’t charities) but in practice lots of development get blocked for not having enough affordable units while simultaneously not being nearly subsidized enough to incentivize it. In fact SF’s permitting process is so arcane and silly that just thinking about developing anything will cost you millions in legal fees, let alone the insanely high price of the land, so the payoff better be good. In practice people crying for 100% affordable housing are in reality demanding that nothing gets built at all.

anxman 5y ago

No need to apologize, it's precisely this double speak that Preston (and Peskin) use to advance their own political agendas at the expense of vulnerable communities here in SF. There is also a component of semi legally siphoning off public money to hand over to private developers from which said government officials take a rake, but let's ignore this portion (If you're curious though, you can read more here: https://www.sfchronicle.com/projects/2020/sf-city-hall-corruption-who-is-nuru/ https://www.sfchronicle.com/projects/2020/sf-city-hall-corru...). First, in San Francisco, to qualify for "affordable housing", you have to make under the poverty line in San Francisco. That means under 110k for a family of 4. If a builder were to want to build affordable housing to help these populations, it is not financially feasible without the government paying for it b/c one would have to sell or rent this newly built housing at significantly below what they paid for it. So then enter rich white elitists like Preston and Peskin (with ties to the real estate lobby / land owners themselves) who want to enrich themselves by increasing the value of their own land. What do they do? They block all new housing development in San Francisco so the supply is permanently depressed and gate it on building "affordable housing". They package that up as a news story in helping vulnerable communities by making a few affordable homes but in in reality, housing gets more expensive and unaffordable for everyone. Just so a few richly compensated officials can enrich themselves even more, at the expense of the poorest residents.

truffdog 5y ago
To be more explicit- first they object to housing unless it is fifteen percent affordable housing. When they get that, it goes to 25 percent. Then to 50. Whatever number is needed to get the project cancelled.
- wahern 5y ago
  It's a positive feedback loop. The higher the cost of the exactions, the more the market rate of the remaining units in a project grows to cover the price, the fewer overall projects, the greater the uproar about luxury developments.
newbie789 5y ago
This is really confusing for me. The author of the article seems to be making the point that affordable housing is inherently expensive and market rate is inherently cheaper. If I were to follow this line of reasoning, I’d find myself advocating for no affordable housing at all. But then I read about the issue actually being about housing supply. I somewhat understand that this article is framed in such a way as to seem like it’s about one individual politician, but the points made here seem to be very black and white about the very concept of affordable housing. It kind of seems that pro- and anti- affordable housing folks are accusing each other of the same thing: valuing their own property value highest. I’m but a humble country bumpkin that grew up in affordable housing and have very little expertise about “doublespeak” but generally speaking I’ve found that when somebody makes and sells something for less, that means that the price is lower (less money required = lower cost).
- ProfessorLayton 5y ago
  Sadly, it is intentionally confusing, hence the double-speak. The truth is that there's no such thing as conjuring up affordable housing in expensive cities at-will. Expensive housing will be built and subsidized so that it is affordable for some, but not others. - or - Expensive (market rate) housing will be built unsubsidized and it will compete with all other housing stock. If there is little competition, the price will not be affordable, because why would it without competition. Once there's enough housing supply, then new housing stock will be competing with existing housing, and put downward pressure on prices. A third element at play here is that wealthier residents are able to afford housing regardless of price, so the key question existing residents must ask is: Do you want them to compete with you on a likely rent-controlled unit, or do you want them to take a look at the fancy new apartment with all the expensive amenities, and isn't rent controlled. Remember that all housing stock was once new and more expensive before it became affordable to everyone else. This isn't a comment for or against rent control but it is a factor that must be considered. Blocking new housing unless it's "affordable" is just NIMBYism with better optics.
  - deleted 5y ago
    [deleted]
readflaggedcomm 5y ago
Just because the author brought race into it doesn't justify it.

rahimnathwani 5y ago

Affordable housing: control prices on a subset of the housing stock, and leave the rest to the market. Market rate housing: let developers build housing if it's profitable for them to do so. The former results in some members of a favoured class getting cheap access to housing, whilst preserving/increasing the value of the remaining 'market rate' housing. The latter seeks to allocate housing based on willingness to pay, whilst increasing the housing stock to stop/reverse the trend of price increases. The way people use the word 'affordable' wrt to housing makes it sound like it's an intrinsic property of the houses. When it actually refers to a non-market allocation mechanism. 'Affordable housing' sounds better than 'price caps allocated to a lucky subset of the folks we deem deserving'.

newbie789 5y ago
> The former results in some members of a favoured class getting cheap access to housing, whilst preserving/increasing the value of the remaining 'market rate' housing. To clarify, the favored class here are people at or near the poverty line? And their existence drives up prices for anybody else?
- rahimnathwani 5y ago
  Not necessarily people near the poverty line. You could be earning 6 figures and still be eligible. There's a lottery system which is 'fair' for some definition of fair, but doesn't solve the problem, which is limited housing supply, and doesn't help all who want to live here.
  - newbie789 5y ago
    That’s awful that the supply is so small. It would be great if there was a big enough supply of affordable housing such that they could do away with the unfair lottery.
    - rahimnathwani 5y ago
      A big enough supply of ANY housing would make housing affordable. 'Affordable' isn't an intrinsic property of a house. It's an outcome of the allocation system.

simonw 5y ago

The problem is when people block the development of ANY new housing on the basis that it's "not affordable housing". Adding market rate housing is better than adding no housing at all.

ashtonkem 5y ago
And unfortunately in order to have cheap market rate housing, you need to have built a ton of luxury housing a few decades ago. Today’s luxury flats are tomorrow’s aging affordable units, even if SF fixed it’s zoning rules it will take a while before housing prices stabilize.

flaque 5y ago

The gist is that is significantly harder to build “affordable” housing (where prices are kept artificially low). So if you mandate only affordable housing, then you help a few people, but restrict the overall housing market, which makes rent prices go up for most people. (To be clear, affordable housing isn’t bad; but restricting the supply of housing by building 100 affordable units instead 80,000 market rate ones is)

newbie789 5y ago
Why is it not possible to build more than 100 affordable units? Do “market rate” houses generate 800x the revenue? That’s an enormous chasm in profitability that should be addressed. I couldn’t imagine being forced to build a house wherein for every dollar I I recoup, my neighbor recoups eight hundred of them.
- flaque 5y ago
  It’s more that many people who don’t want to build more housing use “affordable housing” as a way to do so. If they build a few “affordable” units, it’s a way to still seem like you’re pro-housing. To be clear, I think most pro-affordable housing folks genuinely would like to build lots of affordable housing.
  - newbie789 5y ago
    This position is precisely why I’m baffled. The general consensus here is genuinely that anybody who says they want affordable housing is telling on themselves that they actually, in fact, do not want affordable housing? There is genuinely no scenario in which a person can actually want the construction of affordable units? This honestly sounds like some wild mental gymnastics in order to justify… keeping property values higher. Just like many are accusing the other side of doing.
    - flaque 5y ago
      > There is genuinely no scenario in which a person can actually want the construction of affordable units? Not at all, I'm saying Preston in particular has historically ran on the construction of affordable units, and then worked to block them throughout his time in office.

presentation 5y ago

The problem is that developers won’t build affordable housing unless they’re heavily incentivized to do so (why take a big risk to build something if you won’t profit from it, developers usually aren’t charities) but in practice lots of development get blocked for not having enough affordable units while simultaneously not being nearly subsidized enough to incentivize it. In fact SF’s permitting process is so arcane and silly that just thinking about developing anything will cost you millions in legal fees, let alone the insanely high price of the land, so the payoff better be good. In practice people crying for 100% affordable housing are in reality demanding that nothing gets built at all.