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Monday, June 24, 2013

Fuck startups -- and corporate personhood

I got no problem with startups. I like small businesses and people who build them. I get why some folks could be mad at the "Fuck Your Startup" graffiti in the Mission. But James Temple's defense -- that startups are the same as immigrants and transgender people -- is more than offensive:

Last month, a group of gentrification protesters unleashed their rage on a piñata of a Google Bus, an act that seemed at once sadly impotent and uncomfortably close to violence.

If the tag on Valencia had read "F- immigrants," or that piñata was made to represent a transvestite, would San Francisco's famously progressive citizens be posing next to it or clapping along?
Ummm... immigrants are people. Transvestites are people. Google is a corporation. No matter what the Supreme Court says, there's actually a difference.

It makes me so crazy when I read this shit:

So short of some radical plan that allots housing units by skill type or bans tech companies, our only option for solving the part of this problem that we can is to make housing more affordable. We can do that in three basic ways: Build more, set aside a greater portion as affordable and protect the existing stock.
Can you say "clueless?"

We can't "build more" to solve the problem. Historical data is clear: There has never, ever been a time when new construction of market-rate housing has brought prices down. Never. Demand in this city is nearly infinite; as the slogan of the old Redevelopment Agency put it, "Omnes voluant habitate in Urbe San Francisco." Everyone wants to live in San Francisco. The only thing that works is strict, tight regulation -- and regulation that protects existing residents against wealthier newcomers.

Set aside a greater portion as affordable? The city's general plan says it should be more than 60 percent. We never get beyond about 18 percent. Protect existing stock? That means preventing the evictions that are happening because so many better-paid tech workers are moving into town.

I wasn't so into smashing the Google Bus pinata, either. But you have to understand the anger, the rage, of a community under assault.


  1. Hi Tim,

    I'm curious what historical data you mentioned in the affordable-housing part of the post. The data I've seen implies that the net gain of housing stock can have a big impact on prices.

    Check out the Case-Schiller condo price Index for SF: It has not risen every year; in fact it's fallen many years. And compare that to SF's Housing Inventory report (page 15 of the PDF): The run-up in prices in 2005-2008 were preceded by lower construction in 04-05, and the decline in prices after that matched up with a big increase in housing construction.

    Of course there are other factors at work, such as the economy's effect on demand. But housing supply is positively correlated with changes in prices, and it seems likely that the relationship is causal.

    1. In San Francisco, mortgage interest rates have much more influence over housing prices than supply which might have some minor influence at the margins. Note how the ratcheting up of by the fed of target rates in the mid 2000s correlates with a smoothing down of the rate of price increase in the years between the boom and the crisis of 2008:

      The fact remains that none of the boosters can provide rudimentary economic analysis that shows how many units we'd need to see built per year over how many years to see what level of depression in price (or decrease in the rate of price increase), how long that would last and what would we do once that stopped working?

      The proper liberal response to economic bubbles is counter cyclical, not pro cyclical. Once the fed began feeding rather than drawing down bubbles, our current structural economic problems began. We've got to remember that Real Estate is the local presence of the Wall Street monster along with Finance and Insurance. Two an be outsourced, RE by definition is fixed and permanent in situ.

  2. The ups and downs of housing prices in San Francisco are always around the margins; we could build 100,000 new units and none of them would be affordable to the median working family in San Francisco. This housing market is so unusual that only tight government regulation can make it at all feasible.

  3. But the poverty fetishists are at least half of the problem. Their desire to help "the most vulnerable" can happen one of two ways. They can go it alone and rage against anyone who makes more than they do, in which case we'll see $0.15 on the $1 in non-luxury housing. Or they can build a coalition with those who are not as housing challenged but still are paying too much with a broader affordability spectrum and get closer to $0.50 or more per $1 in non-luxury.

    The SFTU nixed the Community Land Trust model of buying up rent controlled apartments for conversion into permanently affordable limited equity condos that could be bought or rented for affordable prices over time, although having commenced this program 10 years ago and purchased during the price dip would have markedly increased the supply of permanently affordable housing. I still remember Rene Cazanave busting a vein in his forehead when we discussed this at the CLT Task Force a decade ago: "YOU WANT NO INCOME LIMITS!!!" As if a range of incomes means all incomes.

    At the rate things are going, with the inability of the affordable housing mafia to adapt to changing circumstances and the rate of deterioration of affordability to all but the unrich combined with Tim Colen's patrons throwing money at lobbying and satiating the nonprofits like it was going out of style, the die has been cast, we're going to continue to lose and lose.

    The only people on the "progressive" side for which this is not a problem are the mostly middle class, mostly white college educated people who get paid to administer the poverty nonprofit complex.

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