San Francisco supervisor David Campos believes there's a housing affordability crisis in the Mission, one of the neighborhoods he represents. His plan to address the problem is a moratorium on new market-rate development there.
That flies in the face of conventional economic logic, which says the way to make something more affordable is to supply more of it, not less. Yet Campos isn't a random crackpot — he's the elected representative of people who live in the affected area. And the plan reportedly has the support of "longstanding housing groups in the Mission and beyond." It might be good politics even if it's terrible policy, because municipal institutions systematically privilege the interests of incumbent local residents over the broader needs of the city and the country as a whole.
A key factor here is San Francisco's strict rent control regulations. Soaring rents don't directly affect people who live in rent-controlled apartments in the Mission. They only become a problem when they're forced to move. And one of the big ways that can happen is if a developer gets permission to knock down a building to make room for a larger one. So for people who already live in the Mission — like Campos's constituents — halting development really could save some people from getting priced out of their homes.
But even if the proposal is good for Mission renters in the short term, this kind of policy will be disastrous for the city as a whole in the long run. The basic problem is that the demand for housing is outstripping the supply. The technology sector isn't likely to stop growing any time soon, so the only way to relieve the pressure is to increase supply to meet the demand. When neighborhoods clamp down on development in the way Campos is proposing, it becomes that much harder for the city as a whole to provide adequate housing.
Campos complains that only 7 percent of the 478 new units being planned for the Mission will be offered at below-market rates. But the real problem here is that second number: there isn't nearly enough new housing being constructed. If that number were higher, we could raise the total number of both market-rate and below-market units.
And that would address the affordability crisis in two ways. Obviously, more below-market units would provide people with housing they wouldn't have had otherwise. But, more important, allowing more market-rate housing to be built will keep rents down, which could reduce the number of people in need of below-market accommodations in the first place.