Vice Impact, February 27th, 2018 | New York is America’s melting pot, and San Francisco is the rainbow city. And yet, they are two of the most expensive places in the country to live, whether you’re renting, buying, or just living. That means that without affordable housing, the very diversity that makes up the cultural foundation of these cities is in peril.
“San Francisco has lost half of our artists in the last 15-20 years,” David Sobel, CEO of San Francisco Housing Corporation, told VICE Impact. “This is the Manhanattan-ization of San Francisco, with new skyscrapers going up downtown that will cater to the highest incomes possible.”
There are policies in place that attempt to balance the development so that, along with luxury high-rises, more affordable housing units are added to the city stock “Thankfully we have an inclusionary housing ordinance,” said Sobel, “that requires developers provide a certain percentage of affordable housing or pay a fee towards affordable housing, but it’s not enough.”
And the Costa Hawkins rental act, which was pushed for by landlord lobbies and passed in the California state legislature in 1995, limits rent control and gives landlords more leverage to raise rents, which many feel contributes to gentrification and displacement. A movement to repeal the bill failed on January 11.
“There’s a huge labor demand here, but no housing. People are living in deplorable conditions. I could tell you horror stories.”
The hearing was packed with upwards of a thousand people on both sides of the issue, and it isn’t only landlords and realtors advocating for limits on rent control. In a study by Stanford economists Rebecca Diamond, Tim McQuade, and Franklin Qian, effects of expanded rent control “likely fueled the gentrification of San Francisco.” Even though those renters in rent-controlled units experienced a benefit, landlords often reduce their supply of available housing, thereby causing rents to rise overall.
Students of urban planning know well the narrative of Robert Moses clearing out neighborhoods on the Lower East Side of Manhattan and across New York to make room for expressways and high rises. They also know of Jane Jacobs, who stood as a strong counterpoint to his philosophy, advocating the importance of diversity of people and work. She spoke of downtown sidewalk culture as crucial to the vitality of the city.
There are development companies that seek to revitalize without gentrifying. How is this done? Through years of investing in a community and listening to their needs.
Today, we see these opposing philosophies still at work, even in the realm of affordable housing. There is still widespread development focused on demolishing and reconstructing, like Bronx Point, the newly approved affordable housing complex in the Bronx. This project will have 1,000 units of permanent affordable housing that will include options for extremely low income. It will also house the Universal Hip Hop Museum. But some Bronx residents are not sold.
“You can disguise luxury real estate by claiming that the ‘Universal Hip-Hop Museum’ will be part of the development. But will it really? And is massive gentrification an adequate trade-off to finally aggregate our regional historical culture?” said Edwin Pagán, Program Manager of the Bronx Culture Collective, which is committed to preserving the cultural DNA of the South Bronx.
The Bronx and a few remaining places in Brooklyn are seen as the last holdouts against gentrification in New York City. Crown Heights, Brooklyn, is mobilizing to resist the same kind of development that took over places like Williamsburg, Bushwick, and long-lost Park Slope.
But there are development companies that seek to revitalize without gentrifying. How is this done? Through years of investing in a community and listening to their needs.
“We come to communities that are economically depressed and have vulnerable populations,” Siris Barrios, Community Liaison for Renaissance Downtowns, which focuses on impact real estate development, told VICE Impact. “We look at the needs of the community and make them part of the process.”
Riverside, Long Island is one of the poorest areas on Long Island, even though it is technically part of the uber-wealthy summer town of Southampton. Renaissance Downtowns opened a storefront in Riverside in 2014 to listen to the needs of the community and to offer services like early childhood programming and leadership training for women. But they still have not put a shovel in the dirt to begin their proposed affordable housing project, which will consist of 2,200 units, half of which will be workforce housing.
“There’s a huge labor demand here,” said Barrios of the East End of Long Island, “but no housing. People are living in deplorable conditions. I could tell you horror stories.”
“We look at the needs of the community and make them part of the process.”
Jumaane Williams, who just announced his bid to run for Lieutenant Governor of New York, expressed that even though he appreciates the efforts of Mayor De Blasio to combat the housing crisis in the city, these efforts need to be evenly distributed throughout the five boroughs, so as not to amplify the segregation that already exists.
Despite the arguments among affordable housing actors on the best way to satisfy the housing needs, one thing is clear: the new tax plan has created uncertainty.
“The tax bill is on everyone’s mind,” said Sobel. “With a lower corporate tax rate, there is widespread concern that it will impact investments in low income housing.”
Before, there were major incentives to invest in low income housing: corporations would be rewarded for such an investment with tax benefits. There was a dollar-for-dollar write-off, so that every dollar they invested in affordable housing, they could write off on their taxes. Sometimes the rate was even more favorable to investors. Now that they’re getting the tax break without the investment, what’s their incentive?
As for the housing stock and homeowners, that situation has also become more precarious.
“Homeowner benefits used to be considered untouchable,” said Sobel. “The country decided a long time ago that being a homeowner is a valuable condition that allows people to do better financially than renting, to feel more grounded in a neighborhood, and to stay in that place longer, bringing stability to a neighborhood.”
To that end, there were tax benefits to homeowners, including an ability to write off interest paid on your mortgage and property tax deductions. The new tax bill caps those deductions at $10,000, which means if you’re in a place (like New York or San Francisco) where the taxes often go much higher than that, there’s no tax write-off.
“This makes these places even less affordable,” said Sobel. “Some say it will bring prices down because fewer people can afford it, but others think these places will just become even wealthier. It could stagnate the inventory of home sales, which could drive up housing prices.”
The San Francisco Housing Development Corporation is a small voice in a sea of loud developers that focuses on keeping people in their homes and encouraging people who were formerly displaced to come back. Established in 1988 primarily by African American community leaders, the goal was to undo some of the damage done to communities by Robert Moses-style redevelopment of the 1960s and 1970s with services like housing development, counseling, financial empowerment, and economic development.
“Our goal is to help people stay in this expensive city,” said Sobel, “or to try to help people come back to the place they used to call home.”
The issue has become a top priority in the unanticipated and hotly contested mayoral race to fill the seat of Mayor Ed Lee, who died at 65 after a term and a half fighting for affordable housing. Candidate Jane Kim lists two of her top three issues pertaining to homelessness, evictions, and housing. And State Senator Mark Leno, another front runner according to Ballotpedia, vows to create 50,000 affordable housing units in San Francisco over the next decade.
“Our goal is to help people stay in this expensive city or to try to help people come back to the place they used to call home.”
In the first two federal budgets proposed by the Trump administration, Sobel says that crucial housing and anti-poverty programs are being slashed. The Community Development Block Grant, HOME Investment Partnership, and other programs have been targeted.
“While these have generally been restored through the budget process,” said Sobel, “there remains grave danger that those programs will not generate the necessary support to retain their important funds and their resulting long-term impact on low- and moderate-income Americans. In addition, the approved budget still contains deep reductions in HUD funding that will likely hurt both urban and rural areas that serve families of extremely low income.”
Advocating for these programs with elected officials, attending local meetings to help shape policy, and thoughtful community planning are all ways ordinary citizens can make a difference.