Housing activists have been spending too much time fighting one another and not enough fighting together against their common enemies. But I am hoping that we have just reached an important turning point.
In high-cost cities across the country, it has become commonplace for new real estate development proposals to devolve into ugly fights between anti-displacement activists and YIMBY (Yes In My Back Yard) activists. The anti-displacement activists accuse the YIMBYs of supporting buildings that will push low-income people and people of color out of neighborhoods where they have lived for generations. The YIMBYs push back by accusing anti-displacement activists of harming the very communities they are trying to preserve by blocking the construction of market-rate housing that would lower prices overall.
Nowhere was this split more consequential than in the bitter fight over SB 827, state Sen. Scott Wiener’s proposal for California to override local zoning limits to allow higher density housing near transit. The bill was called “one of the most important ideas in American politics today,” but it died in committee early this year. One of the biggest (but by no means only) points of contention was the question of how seriously to take the risk of displacement. Opponents of the bill argued that without tenant protections and affordable housing requirements, upzoning some neighborhoods would further fuel ongoing displacement. Some supporters responded to this concern by painting tenant advocates as no different from suburban NIMBYs standing in the way of new housing.
This week Sen. Wiener introduced SB 50, which contains essentially the same proposal for increasing density limits around transit but, this time out, the bill includes a set of explicit protections for low-income tenants and even delays implementation in “sensitive communities” where the risk of displacement is greatest.
I will leave it to others to evaluate whether the new bill goes far enough to address displacement concerns (there are critical details to still be resolved), but I find it encouraging to see the new bill acknowledge the need for special protections in areas where the risk of displacement is highest and I think that the kinds of protections proposed seem like the ones most likely to really matter.
I am encouraged because an unfortunate amount of energy has gone into the debate about building in lower-income communities and that has been pulling attention away from the bigger challenge of building more housing in middle-income neighborhoods. So if it turns out that Wiener can succeed in winning support from tenant advocates, I am hoping that will lead to a broader resolution to this fight—one that will be relevant far beyond California.
Whatever its real impact, this change is symbolically important, in part, because I think many YIMBYs remain unsure whether protections against displacement were really necessary to begin with.
The Precautionary Principle
I have argued that new luxury development may contribute to displacement by sending a signal to the market that makes distressed neighborhoods feel safer for higher-income residents and for investors. A lot of thoughtful YIMBYs have taken the time to debate this point with me and to ask me to provide the evidence that proves this is happening. But, sadly for both sides, there simply is not enough research on this point. Researchers at NYU recently reviewed the available evidence and concluded that it is “unclear” whether new buildings drive rents up or down in the immediately surrounding neighborhood.
While the neighborhood-level impact is unclear, at a regional scale the evidence is quite clear: building new housing helps reduce displacement pressure. And this suggests that in most neighborhoods, most of the time, new buildings don’t cause displacement. But many people feel like their own neighborhoods are among the exceptions to that rule; they see a real risk that upscale new buildings could tip the balance in favor of gentrification. What we don’t know is how common those exceptions are or how to reliably identify them.
While we wait for better data on the economics, new survey research is confirming that it is not just organized anti-displacement activists who fear that luxury development is driving rents up—at least in certain neighborhoods. A 2017 paper by Michael Hankenson showed that a majority of renters in high-cost cities would support an outright ban on all building in their own neighborhood. This is true even among tenants who also support dramatic increases in the overall housing stock. Hankenson convincingly argues that this is a sign that these tenants believe that market-rate building in their neighborhood would lead to higher costs and more displacement.
This is not evidence that development actually causes higher rents, just that people think it does. There are plenty of things that are widely believed, which turn out to be untrue, in whole or in part. And given the disproportionate amount of media coverage focused on a few neighborhoods in New York and San Francisco, I wouldn’t be surprised to learn that more people are worried about this than actually face this risk.
Nonetheless, it seems reasonable to think that there are still many communities where this kind of “induced demand” is real and affecting rents at the neighborhood scale.
In the absence of convincing data to the contrary, I am inclined to defer to the lived experience of the people most directly affected by this risk. To significantly reduce displacement pressure overall we need to build more housing somewhere; however, that is a ridiculously long-term strategy to prioritize if you are worrying about eviction next month.
Time and again, American policy elites have talked themselves into believing that they are better qualified to decide what is best for lower-income people and people of color. The communities that bore the brunt of redlining and white flight have paid dearly for the right to be heard this time around. The great majority of tenants in high-cost cities are very worried about displacement and there is no reason not to put their concerns first when we design housing policy.
With SB 50, instead of trying to shout over the fears of urban tenants, Wiener has clearly decided to listen to people and accept that there may be places where development creates a real risk of increased displacement. Taking that risk seriously does not mean never building, but it may require extra effort to reduce the impact in sensitive neighborhoods. Given our history, it seems far better to do too much than too little to prevent widespread displacement of communities of color.
If you focus on donations to local elections, you might think that our cities were run for the benefit of the real estate industry. But in too many communities if the rate of building is a kind of scorecard, developers are losing badly to the coalition of racially anxious homeowners and economically anxious renters who agree that more building is a threat.
A stable governing majority that supports more housing cannot be won without broad support from tenants at all income levels. We simply won’t win this kind of broad support by trying to convince urban tenants to stop worrying about displacement.
The path to winning a pro-equity, pro-growth majority involves more (not less) investment in fighting displacement. We need to stop fighting each other and start fighting together in the bigger battle. And, in case it is not clear, the bigger battle is supporting development in the 70 to 80 percent of neighborhoods that are not gentrifying.
The Real Culprit
When I first moved to Oakland as a young, white professional, I lived in Rockridge, a middle class, mostly white neighborhood two blocks from a transit station. We lived in a house that we rented. We were pushed out when our landlord decided to sell to a more well-off owner-occupant. We moved to a less expensive and more racially diverse neighborhood. I will take my share of the blame for the resulting increase in prices in our new neighborhood, but we saw few other choices. I can’t get worked up blaming our landlord either—he was retired and needed to cash out. And the people who bought our building were, themselves, probably pushed out of San Francisco.
But this is not one of those stories where no one is to blame. The real cause of the problem was that two blocks from the train station, the zoning only allowed single-family homes. SB 50 would allow someone like our landlord to build a four-story apartment building, or sell to someone who would. If there had been more multi-family buildings near BART, we would probably have been able to afford to stay in Rockridge and the neighborhood we ultimately moved to would be more affordable as a result.
This is where the fight should be. This is the cause of gentrification and this is how we stop it. We need to build more multi-family housing in neighborhoods like Rockridge—middle- and upper middle-income neighborhoods with infrastructure, transit access, good schools, stores, and services. This is where the market wants to build; this is where financing for building would be easiest to obtain; this is where buyers and renters would be easiest to find.
The only thing standing in the way is political will. And maybe that is starting to change.
There are many things standing in the way beyond political will. There are the simple economic laws of supply and demand. As long as demand exceeds supply, housing prices will be high and rising. To keep prices reasonable, more housing needs to be built. If more housing is built, there will be more affordable housing. If the demand for housing by high-end consumers is not met, they’ll buy lower priced housing, prices will go up, and there will be displacement. If the housing needs of high end consumers are met, they’ll leave lower priced locations alone. A wealthy person who buys an expensive condo downtown will not be buying a house in the Mission District. Low-income advocates who oppose building all housing are just creating problems for their constituents.
Your point about the desirability of changing zoning regulations to encourage fewer single family homes is a good one. Another good idea is building on air rights above city-owned property. Another good idea is introducing means testing for rent-controlled units, because there are many people who could afford to pay something closer to a market rent. Another good idea is encouraging—and making permitting simple for—auxiliary dwelling units. Cities like San Francisco should also find ways to grandfather in existing units that may technically not be correctly permitted. We also need to bring back single residence occupancy (SRO) buildings, to help alleviate homelessness. This should include locating some affordable housing and homeless services in wealthy neighborhoods. Right now, the wealthy in areas like Pacific Heights and Russian Hill absorb and provide none of the solutions to the City’s housing challenges. The City should use the money it collects in developer fees to actually build affordable housing, rather than sticking the money into the General Fund.
Yet another idea is making it easier to convert store fronts to residences. I recall seeing one store front on 24th Street in the Mission where the permit paper on the front window included over $100,000 in fees for permits, licenses, and taxes. This is ridiculous. In other words, there should be a variety of solutions tried.
Rick Jacobus is spot on with this point:
“Time and again, American policy elites have talked themselves into believing that they are better qualified to decide what is best for lower-income people and people of color.”
It is good that, finally, the “sensitive communities” conversation is starting. But this move toward giving people self-determination over shaping the future of their communities also has got to be real and substantive rather than just symbolic. Let’s hope this time the policy elites get it right.
This is a really important addition to the ongoing debate about growth and displacement. I appreciate the concept of a precautionary principle on potential displacement.