Can we make housing prices reasonable?

NKlein82's picture

I'm not asking for cheap, but I am asking for reasonable prices on housing.  I would like to afford to live in this city without having to sell a kidney in order to pay rent this month.  I moved here thinking that paying $1200-1300 for a one bedroom in a bad neighborhood was ridiculous.  I'm starting to realize that I was lucky having that place.  I am looking at apartments now and I am having difficulty finding any place for less than $1500.  How is a student to live and study in San Francisco?  An apartment in San Francisco eats up about half my student loan money for a semester in one month.

Isn't San Francisco supposed to be rent-controlled?  According to the San Francisco Tenants' Union, it is.  The SFTU says that rents can only be increased on an annual basis and only by inflation, but my rent went up over $100 a month last year in the middle of a Great Recession.  According to the SFTU, rent increases were 2% last year and 2.2% this year in the middle of the worst economy our country has seen since a third of it was "ill-housed, ill-clad, ill-nourished."  We should not have to have 25% unemployment like happened during the Great Depression to lower housing prices.

We need to reform rent control.  We need to make this city livable again.  I think that we need to do away with annual increases in rent.  Make this a biennial process.  Allow renters to catch up with the new rent before a landlord raises it again.  In all honesty, I do not see the need for increases of any kind, because in California property taxes barely go up annually so a property owners costs do not increase annually.  Therefore, it does not make sense for rental prices to increase annually.  

One way or another, we as a community need to find a way to get a handle on the ridiculous rental prices in San Francisco.

Galomorro's picture

Yes, Rents are far too High

The cost of living here is horrendous, especially for seniors on limited incomes. The owners of an apartment building are allowed to raise the rent by 2% a year, yet there has been no cost of living raise for Social Security recipients this year. Some of us have been in the same so-called rent-controlled buildings for many years and cannot afford to move to a better place because the cost of moving to a new apartment is far too high. Yet they cannot afford to buy their own homes either. It would be a miracle if seniors and lower-income people could somehow afford to own their own homes. The rents and costs to own are outrageous but no one seems to be able to do anything about it. YES, do away with rent increases and please find a way for people to buy their own homes. When people own their own homes they take better care of the property and get more involved in making the neighborhood and their own yards nicer and safer places to live. And they have all these restrictions on how many people can live in an apartment, that they're not allowed to own a pet, that they can't have a "green" roof garden because the owner doesn't want the expense nor the insurance, and you can't even hang plants over your fire escape railing without getting hassled. How about more TINY houses -- take a look at how the Japanese have been creating livable spaces lately. SF is the city that "doesn't know how." Our quality of life is not improving. Only the rich are able to afford to buy a house, even a very modest one. 

mattgould's picture

Japanese Tiny Houses

Like transitioning from SUVs to hybrids, we need to downsize our idea of liveable space. I know so many students and young people who don't care about the size of their room as long as they can fit a mattress and a few things inside. If developers make this idea of tiny liveable spaces work in a comfortable and affordable way, it could be the wave of the future:

http://www.npr.org/templates/story/story.php?storyId=128953596

NKlein82's picture

Great Idea!

I really like this small Japanese house idea.  It sounded like a good solution for SF when I heard it on NPR last Thursday.  But what can we do lower apartment rental costs?  It seems like apartment owners are making it impossible to live in San Francisco.

Galomorro's picture

Japanese-style tiny houses

A definitely good solution. We need some new tenant-friendly leaders in this city -- ones who don't care only about themselves and their own large mansions -- to make this city friendly and livable for everyone, students, families, seniors, etc. There are more renters than homeowners here so why can't there be some useful laws passed? I just saw a sign in a window for a studio for rent for $1,100. I myself pay $713 for a 9X14 room, having lived there more than 20 years and with steady rent increases. New tenants in this very old building had to pay $900 the last time one was available for the same sized little room with tiny kitchen and bath off to the sides, no deck, no roof access, and no pets allowed. The next time a studio like this is available they'll probably be charging more than this. People in other cities cringe in horror when I tell them how much we have to pay here. Are we now paying more than NYC?

mattgould's picture

#1 / #2

Galomorro, according to this article: http://money.cnn.com/2009/02/19/real_estate/housing_affordability_improves/index.htm?postversion=2009031607

...NYC and SF are ranked #1 and #2 as the least affordable cities. While browsing I also came across someone complaining that Wall Street brokers are the only ones able to buy nice $1m+ nooks in Manhattan, and that SF only has the occasional Internet mogul buying up comparable properties.

I guess you just have to pay more to experience all of the wonderful things these great cities have to offer. Many of my friends live in Oakland or Berkeley and commute out to the city via BART.

DonRoss's picture

Workforce Housing

I think you all make some good points, but actually the rent in the City is tied to the cost of living index, so in some years the landlords can't raise the rents at all. One way to avoid some of this would be to diversify our housing stock - have housing types for all income levels to take pressure off of the entire market. That way we can have a truly balanced City as we had in the past.

Galomorro's picture

Re: workforce housing

Well, if in some years the landlords cannot raise the rents at all, that might explain long ago, before living where I do now, why my rent wasn't raised for at least one year that I can recall. And here I thought it was that maybe the owner didn't need the money and was doing this out of the kindness of her/his heart. This is an excellent idea, Don.

NKlein82's picture

Good Idea, Don!

Chicago came to your realization back in 2003 and San Francisco has not seriously invested in this plan.  It is time for the city and the developer community to start thinking out of the box and not just up.

Zaquex's picture

One Step Forward, Two Steps Back

Board of Supervisors David Chiu suggested to a fee that developers would have to pay in lieu of building affordable housing, but would the money set aside be enough to rival the rising costs of SF's real estate market as space dwindles? Keep in mind that is all because of Palmer/Sixth Street Properties v. Los Angeles 2009, where he sued the city for the law requiring developers provide affordable housing from the start. How are students and families able to live in SF?

It only demonstrates steps taken backwards when it comes to keeping a diverse array of people (with different incomes).

http://abclocal.go.com/kgo/story?section=news/local/san_francisco&id=7214597

hsparks's picture

yes, SF (even in a recssion) is far more expensive than New York

yes- we are now paying more for rent than New Yorkers.

If you go on craigslist and search for apartments for $1000 on the Upper West Side, there are a number of one bedroom apartments advertised on tree lined streets-- in San Francisco $1000 to $1500 will rent a soggy basement illegal studio unit in the outer sunset with a landlord who will stipulate no overnight guests for more than one night (what is an adult in a relationship who doesn't want to live full time with the person they are dating supposed to do) -- and the same landlord, while handing out an application may also stipulate that they will need to access storage in your very tiny unit with black mold-- and people continue to put up with this!!

$2,500 in New York, will get you a two bedroom apartment in a doorman building, with parking, and laundry in your apartment in the upper East Side. In San Francisco, you would probably have to live in a studio in a highrise in Soma to have the same amenities, otherwise, you're way out again, in the fog, at the mercy of a slumlord who may also have cultural biases that will force you to look for another over priced apartment with fewer amenities once your lease expires-- and when this happens, you will feel grateful because you will have stayed in this totally restrictive and soul sucking environment six months to a year longer than you could really stand it without having a mental breakdown because it was too expensive to break the lease.

Brooklyn is another story, because it's now trendy, which means, if you live in the Bay Area and want a Brooklyn lifestyle equivalent, you might as well move to the East Bay, where there are better deals anyway.

bobbyh's picture

Middle income housing

The problem lies in the City's policy on housing.  There are strict requirements for providing "affordable housing" units that developers must include in their mix when bringing new units to market.  Unfortunately, that housing is not for the middle class and is limited to people earning some % of the median area income (I have seen them mostly at 50% of median income).  As the San Francisco median income is $89,450 for a three-person household, that's less than $45,000 of income for a 3 person household in order to qualify.  Now that's great that we provide housing for those folks who are struggling, but what about the middle class?  Why don't we have middle income housing requirements?  

What we have now is a system where the low income folks have a policy to help them get housing, the rich have a wide array of options to consider, but those of us in the middle are pretty much excluded from the market!  In fact, the low income housing requirements actually make it worse for the middle class because developers just increase the price of the market rate units to make up for the low income units--making affordable middle class housing that much more out of reach. 

We need to have a new City policy on the middle class here in San Francisco and I think it starts with "middle income housing" requirements.  One idea is to split the current affordable housing requirements between low income and middle income criteria.  Whatever it is, we need to make a change soon because middle class households are fleeing the City fast. 

NoeValleyRes's picture

How do we bring people back?

According to foreclosureradar.com, there have been over 25,000 Notice of Defaults filed in the state of California. Daily on the news, in the paper, and online homeowners talk about their home being foreclosed on. There have been answers thrown out from every which side on why foreclosures are occurring. From lenders being irresponsible to homeowners getting in over their heads. Blame who you want, but the reality is that families that once had 2 incomes and lived comfortably are now barely surviving off of one income.

In any case, it is indisputable that the housing crisis has been at the forefront in the last 2 years, but what now? For those who have lost homes and for those who are now no longer living in San Francisco, how to we bring them back?

gcotter's picture

Means Testing

We will never have enough affordable housing until we have means testing for rent controlled spaces.  Too many people who live in rent controlled apartments make enough money to pay market rate but why should they?  They have a nice rent controlled apartment.  And if they get laid off, so what?  They have enough in savings to keep their rent controlled apartment until they find a new job.  

Rent control is supposed to help low income people find and keep a low rent apartment so that their low wage jobs will allow them housing.  Instead, hipsters get into low rent places, get jobs in high tech where they make big bucks, and end up keeping the low rent places out of the hands of the people who were meant to be served by rent control.

This not only hurts the landlord who has to pay motrgage, taxes, maintenance, etc., but it leaves fewer and fewer places for minimum wage earners to live.

For rent control to meet its goal, rent controlled units should only be available to low wage earners or seniors etc.  And, if the low wage earners get promoted and make more money, then at some point they should lose that low rent and start paying more until they pay market rate.

Every time a rent controlled apartment lease is renewed, the renter should be required to show a copy of his income tax filing if he wants to continue to qualify for rent control.  No proof of qualification for a controlled rent means that the apartment rent can be raised.  This protects those who need rent control but can release more apartments into the market rent pool.

jot21's picture

Yes rents are high

Rents are high because earning opportunities in SF are high. Workers are willing to pay a premium to not have to commute. Sadly seniors have to compete with the workforce. They could cut there rent in 1/2 by moving to South San Francisco if they need to save money. As long as we have high paying jobs in SF rents will stay high. Like West LA not everybody can afford to live here. You might say you have to earn the right to live in such a desirable city. Most of my friends in the East Bay would love to move here but they don't earn enough to buy or rent in SF. Sad but true.
jot21's picture

Rent Control

It is too bad that rent control is not limited to poor people. It is shocking to see wealthy people living in rent controlled apartments in Pacific Heights, Nob Hill, Russian Hill and Telegraph Hill. I think that wealthy people (anyone making a$100,000 a year) should not be allowed to benefit from rent control. We means test Medi-Cal and General Assistance why not rent control.
EllenS's picture

Rent control important for All!

75% of San Franciscans rent.  Rent control protections are meager enough and being whittled away by landlords and their lobbyists every year.  We fought long and hard to win rent control here in SF - restricting it to low-income people wd eliminate any effective political base for rent control. 

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