Posted on 04/21/2007 12:33:33 PM PDT by WayneLusvardi
San Francisco’s Affordable Housing Shell Game
$28 million affordable housing program in city where 44% are low income persons and average housing cost is $402 per month
by Wayne Lusvardi - The Pasadena Pundit April 21,2007
A shell game is an urban form of street gambling where a person hides a small object underneath one of three nutshells, thimbles or cups and then by sleight of hand shuffles them about while spectators try to guess the final location of the object. The success of the trick by the con man is to keep his mark focused on conspicuous actions to hide the true movements of the object.
Something like this is at work with the recent announcement that the City of San Francisco has launched a $28 million program mostly for the construction of low income housing - (see here: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/04/19/BAG52PBC6J1.DTL&hw=panels+oks+funds+for+public+housing&sn=001&sc=1000). This purported housing affordability program is occurring in a city where by the U.S. Census 44% of the residents are low income and, thus, by definition are already living in affordable housing (see U.S. Census Bureau 2005 American Community Survey online - here http://www.census.gov/). .
How can there be an affordable housing crisis if such a high proportion of San Francisco’s population are low income persons who somehow can afford to live within the City? And how can there be an affordable housing crisis if the U.S. Census Bureau reports that the median housing cost in San Francisco is $402 per month and that for 79% of the population monthly housing costs do not exceed $699? To add to the contradiction between U.S. Census data and what is reported in the media and by academics is the recent report that the poverty rate in San Francisco has declined from about 15% in 1990 to about 10% in 2004 (see An Overview of San Francisco’s Recent Economic Performance, April 3, 2006, p. 8 - here . http://www.sfgov.org/site/uploadedfiles/moed/economic_strat/ExecutiveSummary_EconomicPerformanceReview.pdf).
A key part of the trick is to keep your eye on the median single family home price in San Francisco, usually the bell-weather for the highest in the nation; which is $705,400 according to the 2005 Census Survey (and probably understated at that). What is not so apparent is that the unreported glut in mostly apartment, rental multiplexes, and small homes in old neighborhoods, such as Bayshore-Hunter’s Point, Chinatown, SOMA, Tenderloin District and other scattered pockets, is what puffs up the prices of the homes in the “bourgeoisie” neighborhoods (check out the colored map of San Francisco‘s neighborhoods, especially Map 4 in “Identifying Vulnerable Neighborhoods and Their Preparedness to Disasters” here: www.columbia.edu/~ia2154/4577/Final_Paper_Irene_Avetyan2.pdf).
By flooding the real estate market with un-ending waves of immigrants and newcomers demand for housing outstrips supply and prices spike upwards. Add to this population influx the historically low recent interest rates and about the same monthly mortgage payment prior to 2003 affords a 40% higher valued home. As the saying goes, you can’t go wrong on real estate in California because the market is always going up; despite notorious historical housing market busts. But if you’ve got staying power you can weather the down cycles.
Housing affordability is a ladder. The defining symbol of joining the “middle class” is to be a homeowner rather than a renter. To make it to the first rung of affordability of owner-occupied housing is the trick. This is because once you have climbed onto the bottom rung of the ladder it becomes a wealth escalator where you can build up equity and appreciation because, as the saying goes again, prices always seem to eventually move up. This presumes that the lowest rungs of the single family owner housing ladder are reachable. As everyone knows this has not been the case for the past couple of decades as globalization and the Federal government’s population policies have brought Tsunamis of immigrants mainly to selected neighborhoods carved out for their arrival by a myriad of perverse state and local policies and court decisions, media spectacle urban riots fomented by labor unions and activists, and crime. A glaring example is the recent reaffirmation of San Francisco as an immigration sanctuary - see here: http://business.timesonline.co.uk/tol/business/industry_sectors/retailing/article1684965.ece)
Most of these “landing pad” neighborhoods carved out for newcomers are near wholesale markets where cheap imported goods and services (produce, clothes, toys, tourism, etc.) come flowing into the economy.
As the adult children of the native working class head out into the housing market for the first time they are deterred from looking in old traditional neighborhoods for “fixer” homes by crime, poor schools, and a host of legal and other barriers to entry. The unwritten urban housing policy in the U.S. is that newcomers have first dibs to the housing stock in older neighborhoods close to jobs, wholesale markets, central business districts, and tourist centers. So the homegrown working class in San Francisco has to find housing out in the “burbs” of Tracy, Byron, and Modesto. This is a form of near-compulsory internal exile as a form of punishment no less than other historic exiles of certain population segments (see http://en.wikipedia.org/wiki/Exile). But academics have twisted this exile by use of the term “urban sprawl.”
Freeways get congested, pollution increases, development is pushed outward onto contaminated former military testing grounds, new sources of electricity (“dirty coal”) needs to be imported into the “energy island” of California to meet the demands of urban “sprawl,” and the infamous “urban heat island” effect supposedly is extended outwards. Sprawl is not the cause of these environmental impacts but the symptom of liberal social engineering policies which interfere with the housing market. But once again, the trick of liberal social policy decision makers and the media is to convince you of the opposite.
If housing was truly a free market good those with the most purchasing power would be able to buy “fixer” homes in old close-in neighborhoods and get onto the housing-wealth ladder. This has been given the negatively connoted term “gentrification.” Despite allegations by academics and activists that “gentrification” is causing the housing affordability crisis, it is the opposite. It is the intentional “proletarianization” of housing which is fueling the crisis. Once again the trick by academics, activists, and politicians is to project blame on the wealthy, developers, and NIMBY’S (Not-In-My-Backyard) rather than on interference with real estate market.
The Knowledge Class of academics, technocrats, activists, and the media, want you to keep your eye on the shell and not the pea. And they have got you, the middle class, convinced that there is an affordable housing crisis for the poor in San Francisco when the opposite is the case. They have additionally obtained the moral sanction of liberal and even evangelical churches who believe they are exercising a “prophetic mandate” based on a Biblical and moral “preferential option for the poor” by advocating affordable housing. No mention is ever made that giving the poor and newcomers first preference for older affordable housing is what is driving many of our urban and environmental problems.
So next time you read that some politician or government agency is initiating a housing affordability program in San Francisco turn on your X-ray vision and keep your eyes on the ball. Such programs are mostly expensive symbolic games to keep themselves in power by buying votes at your expense. By any objective measure, San Francisco already has too much preferential affordable housing for the poor that is forcing the homegrown working class into exile in the suburbs.
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
Is your tax on your property based on the fair market value or the subsidized value?
i was surprised when i saw a “low income” hud apartment (looks like a house!) complex that opened recently.
2 bedrooms, one car enclosed garage, humongous living room, two enclosed patios, ... and so on.
and the guy was paying $500/month, living there by himself.
i wondered if many of the tax payers supporting him enjoyed a comparable home?
Sorry, I didn’t get back to you sooner.....its based on “fair” market value.....what it would sell for.
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