San Francisco Chronicle - (Sunday)
Governmentrun ‘social housing’ could soften affordability crisis
Public Housing 2.0 could be coming to California.
For decades, cities across the United States have been moving away from public housing, tearing down or privatizing federally owned developments that are often isolated, mismanaged and deteriorating from lack of investment.
Now there is a growing movement to get the government back into the housing development game. Except this time the model is called “social housing,” and advocates say it has more in common with European or Asian models than the checkered legacy of U.S. public housing.
Two Bay Area lawmakers, Assembly Members Alex Lee of San Jose and Buffy Wicks of Berkeley, have introduced the Social Housing Act of 2021. The law would create a California Housing Authority, which would develop residential buildings to house the poor as well as middleincome households whose rent payments would help subsidize their neighbors.
“The biggest difference I would say from American public housing and what we strive for with social housing
is not restrict it to poor folks,” Lee said, adding that the vision of mixedincome social housing means you can crosssubsidize for posterity and perpetuity.
Social housing is also gaining traction on the local level. Berkeley City Council Member Terry Taplin has asked staff to study the feasibility of social housing. In San Francisco, Supervisor Dean Preston has introduced a ballot measure that would authorize 10,000 units of social housing. And Oakland Councilwoman Carroll Fife has said she is interested in studying it for her city.
While the idea is in its infancy, Taplin said he wants to pursue “innovative housing solutions” that don’t rely on the private market because the market “has failed to guarantee housing.”
“When there was public housing, we didn’t do the work to maintain it and make sure that everyone was living in safe conditions and we let a lot of that housing stock fall into disrepair,” he said. “But that doesn’t mean we can’t try to figure out a better way.”
While the details are vague as to how social housing will be structured, financed and implemented, there is widespread agreement across political lines that the current system is broken.
The result is that housing production in the Bay Area largely caters to the extreme ends of the economic spectrum. On the one hand, Bay Area nonprofits build thousands of units for lowincome residents using a complicated array of financing sources including tax credits, bonds and some city and state money. While these groups are successful at developing subsidized housing, the projects often face neighborhood opposition, take more than five years to develop and cost upward of $700,000 a unit. Housing proposals at both the Balboa Reservoir and Schlage Lock factory property have taken more than a decade to plan and gain approvals for construction.
Meanwhile, nonsubsidized housing is so expensive and difficult to build that developers can only make it profitable by catering to highwage earners. Even with rents down 24% because of the pandemic, the average onebedroom in San Francisco rents for $2,650, 44% higher than Seattle and 27% more than Los Angeles. The average home price is $1.4 million.
Wicks pointed to Singapore, where 82% of residents live in mixedincome housing estates built by the government and then sold to residents on a 99yearlease. She also wants to study Vienna, which has 220,000 municipal housing units, a quarter of the capital’s entire housing stock. There, social housing, built on governmentowned land and operated by outside groups, is mixedincome with 50% lowincome residents.
“If you have statewide housing, it’s not impacted by the market,” she said. “The state can dictate what the rents are.”
While the idea is gaining traction among affordable housing advocates, it’s also met with cynicism by those who argue that the U.S. public sector has a poor track record building and owning housing. Those critics say the last 30 years have proven that private nonprofits are more effective and efficient than the government at housing management and development. Multiple public housing authorities, including San Francisco’s, have been taken over by other government agencies due to corruption and incompetence.
Modeling social housing after Europe and Asia could be tough, because in the countries where it has worked have very different attitudes toward government than we have in the U.S., according to Barry Zigas, a housing policy expert who has worked in both the public and private sectors for 40 years.
“These are countries where government support of basic human necessities is a given,” he said. “It’s not a controversial proposition. That is not the case here.”
For now the concept of social housing seems to be popular among the two factions of the region’s landuse politics, embraced by both the YIMBY movement, which supports all new housing development, and the progressives, which tends to favor affordable housing but not marketrate development.
For social housing to work, the public authority would likely have to be able to bypass some of the local planning processes that make projects so timeconsuming and expensive. For instance, state agencies such as the University of California are exempt from local zoning and planning rules, which allows them to build dorms and academic buildings far faster than the private sector can.
“If we put social housing through the same rigamarole that we put nonprofit affordable housing through, it wouldn’t address the underlying shortage problem,” said San Francisco YIMBY Executive Director Laura Foote.
While Foote said she would love to see the creation of a state social housing authority that could overrule local rules, she thinks legislation has a better chance of passing if cities more receptive to dense development could opt into the program, while other cities opt out. Former HUD Secretary Henry Cisneros, a developer and former mayor of San Antonio, thinks that a California Housing Authority would be helpful — not as a replacement for the current nonprofit tax credit model, but in addition to it.
“The California case is so special. The need there is so great. There is such great wealth and rising incomes. Areas like San Francisco and Silicon Valley are paying the price in outmigration, in the loss of jobs, in traffic from people having to make longdistance commutes,” he said. “It’s negatively impacting the larger economy. If some of that need can be filled with pure public housing, I would encourage it.”
Derek Sagehorn, author of housing equity nonprofit East Bay for Everyone’s paper, titled “California Housing Corporation: The Case for a Public Sector Developer,” said that one reason past public housing efforts have failed is that they have only served a narrow swath of the poorest residents.
“Politicians will work harder to represent those neighborhoods if they aren’t relegated to a corner of a city and focused specifically on the poor,” he said. “Having that broader coalition means you have more people that are invested in it.”