A new YIMBY activist group is starting to gain meaningful traction in San Francisco. They were recently featured in the New York Times and they have managed to secure the financial backing of people like Jeremy Stoppelman – co-founder and CEO of Yelp.
(All excerpts in this post were taken from the NY Times.)
Ontario is looking to pass legislation that would allow municipalities in the province to implement something known as inclusionary zoning. If passed and should municipalities decide to use this tool (
A new YIMBY activist group is starting to gain meaningful traction in San Francisco. They were recently featured in the New York Times and they have managed to secure the financial backing of people like Jeremy Stoppelman – co-founder and CEO of Yelp.
(All excerpts in this post were taken from the NY Times.)
Ontario is looking to pass legislation that would allow municipalities in the province to implement something known as inclusionary zoning. If passed and should municipalities decide to use this tool (
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The group is called SF BARF, which stands for SF Bay Area Renters’ Federation. The group, however, supports new development of all kinds. So I think the name is more driven by the fact that the founder, Sonja Trauss, wanted the acronym to be BARF. It speaks to their shit disturbing approach:
“Her group consists of a 500-person mailing list and a few dozen hard-core members — most of them young professionals who work in the technology industry — who speak out at government meetings and protest against the protesters who fight new development. While only two years old, Ms. Trauss’s Renters’ Federation has blazed onto the political scene with youth and bombast and by employing guerrilla tactics that others are too polite to try. In January, for instance, she hired a lawyer to go around suing suburbs for not building enough.”
The impetus for all of this, of course, is San Francisco’s lack of affordability and severe housing shortage. Housing supply is decades behind the city’s population and job growth.
Most people are directing the blame at the tech community for bidding up housing. But there’s clearly growing recognition that housing supply matters.
As a real estate developer, my industry obviously benefits from fewer barriers to building. So let’s get that out there:
“Ms. Trauss’s cause, more or less, is to make life easier for real estate developers by rolling back zoning regulations and environmental rules. Her opponents are a generally older group of progressives who worry that an influx of corporate techies is turning a city that nurtured the Beat Generation into a gilded resort for the rich.”
But let’s also be clear that I don’t believe we should be developing roughshod over our cities. New development should respond to what’s already there and give back.
At the same time, housing supply matters a great deal. A big part of the reason that cities like San Francisco, New York and Vancouver are so expensive is that they’re naturally supply-constrained markets. Geographically, they are either peninsulas or islands.
When you overlay tight land use restrictions, fierce community opposition and/or foreign investment on top of this geography, it should come as no surprise to anyone that demand is outstripping supply.
New supply won’t solve every problem, but I do agree that it is an important part of the solution.
We talk a lot about economic inequality these days. We worry, among other things, that our successful cities are becoming playgrounds for the rich and that housing is becoming increasingly unaffordable for the middle class.
Without negating the importance of things such as attainable housing, I’d like to offer up two, potentially new, perspectives on economic inequality.
The first is an essay by venture capitalist Paul Graham. In it, he rationally unpacks, as he always does, the phenomenon of economic inequality. One of his key points is the distinction between rent seeking degenerate economic inequality and the economic inequality caused by rapid value creation (i.e. Two Stanford students decide to create a new search engine called Google).
“If the rich people in a society got that way by taking wealth from the poor, then you have the degenerate case of economic inequality where the cause of poverty is the same as the cause of wealth. But instances of inequality don’t have to be instances of the degenerate case. If one woodworker makes 5 chairs and another makes none, the second woodworker will have less money, but not because anyone took anything from him.”
Of course, Paul Graham is thinking about this from the perspective of a venture capitalist that funds startups and helps entrepreneurs get rich. But what about the impacts to people who live in a city where the rich are far richer than the poor?
What they found was that cities with high economic inequality – such as New York and San Francisco – actually have lower inequality when it comes to life expectancy.
If you’re rich, it doesn’t matter where you live. The life expectancy of a rich person in New York is roughly the same as a rich person in Detroit. (Though, as to be expected, women generally live longer than men.)
However, as income levels fall, so does life expectancy. But it falls more in a city like Detroit than it does in New York. In fact, rich cities such as New York and San Francisco are almost model cities in this regard. Why is that?
“The research seems to suggest that living in proximity to the preferences — and tax base — of wealthy neighbors may help improve well-being. New York is not just a city of rich and poor, but also one of walkable sidewalks, a trans-fat ban and one of the most aggressive anti-tobacco agendas of any place in the United States.”
So there you have it. Two, potentially new, ways to think about economic inequality.
), developers would then be required and/or incentivized to include some percentage of affordable housing in their new market rate developments.
Politically, inclusionary zoning tends to be popular. It’s believed to be a way for governments to create new affordable housing using relatively small public subsidies. Not surprisingly though, the development industry generally hates IZ. It’s another cost that needs to be added to the development pro forma – though some municipalities rightly offset these additional costs with additional density, breaks on levies, and so on.
What I always think about when this topic comes up is the broader economic impact of the land use policy. Because I’m suspect that it’s as simple as: mandate affordable housing; get more affordable housing for free. Generally there are always trade-offs.
So here’s some reading material for you all this morning.
In a classic paper (1981) by Yale Professor Robert C. Ellickson – called The Irony of Inclusionary Zoning – he argues that these practices can actually increase general house prices:
As a counterargument Owen Pickford over at The Urbanist argues that IZ simply reduces land prices as a result of the new tax. Land, after all, is the residual claimant. Therefore, he believes it’s an effective affordable housing policy. (I’m not so sure I believe that land prices would decrease in practice.)
There’s also debate about the effectiveness of inclusionary zoning to actually deliver affordable housing at a meaningful scale. City Observatory wrote a post that looked at the total number of units produced (through IZ) across a number of American cities and the results were spotty. It should, however, be noted that not all inclusionary zoning policies are mandatory.
Finally, the Furman Center for Real Estate & Urban Policy at New York University published a housing policy brief back in 2008 that looked at this exact topic. While they admit that the data is scarce, they come to the conclusion that IZ had no meaningful impact on the prices and production of single-family housing in San Francisco, but that IZ seems to have slightly decreased production and slightly increased pricing in the suburbs of Boston.
What this last point suggests is that inclusionary zoning policies are not all created equal. So like all difficult questions, the answer to this one is likely: it depends. If anyone can point me to better data on inclusionary zoning, I would love to see it.
The group is called SF BARF, which stands for SF Bay Area Renters’ Federation. The group, however, supports new development of all kinds. So I think the name is more driven by the fact that the founder, Sonja Trauss, wanted the acronym to be BARF. It speaks to their shit disturbing approach:
“Her group consists of a 500-person mailing list and a few dozen hard-core members — most of them young professionals who work in the technology industry — who speak out at government meetings and protest against the protesters who fight new development. While only two years old, Ms. Trauss’s Renters’ Federation has blazed onto the political scene with youth and bombast and by employing guerrilla tactics that others are too polite to try. In January, for instance, she hired a lawyer to go around suing suburbs for not building enough.”
The impetus for all of this, of course, is San Francisco’s lack of affordability and severe housing shortage. Housing supply is decades behind the city’s population and job growth.
Most people are directing the blame at the tech community for bidding up housing. But there’s clearly growing recognition that housing supply matters.
As a real estate developer, my industry obviously benefits from fewer barriers to building. So let’s get that out there:
“Ms. Trauss’s cause, more or less, is to make life easier for real estate developers by rolling back zoning regulations and environmental rules. Her opponents are a generally older group of progressives who worry that an influx of corporate techies is turning a city that nurtured the Beat Generation into a gilded resort for the rich.”
But let’s also be clear that I don’t believe we should be developing roughshod over our cities. New development should respond to what’s already there and give back.
At the same time, housing supply matters a great deal. A big part of the reason that cities like San Francisco, New York and Vancouver are so expensive is that they’re naturally supply-constrained markets. Geographically, they are either peninsulas or islands.
When you overlay tight land use restrictions, fierce community opposition and/or foreign investment on top of this geography, it should come as no surprise to anyone that demand is outstripping supply.
New supply won’t solve every problem, but I do agree that it is an important part of the solution.
We talk a lot about economic inequality these days. We worry, among other things, that our successful cities are becoming playgrounds for the rich and that housing is becoming increasingly unaffordable for the middle class.
Without negating the importance of things such as attainable housing, I’d like to offer up two, potentially new, perspectives on economic inequality.
The first is an essay by venture capitalist Paul Graham. In it, he rationally unpacks, as he always does, the phenomenon of economic inequality. One of his key points is the distinction between rent seeking degenerate economic inequality and the economic inequality caused by rapid value creation (i.e. Two Stanford students decide to create a new search engine called Google).
“If the rich people in a society got that way by taking wealth from the poor, then you have the degenerate case of economic inequality where the cause of poverty is the same as the cause of wealth. But instances of inequality don’t have to be instances of the degenerate case. If one woodworker makes 5 chairs and another makes none, the second woodworker will have less money, but not because anyone took anything from him.”
Of course, Paul Graham is thinking about this from the perspective of a venture capitalist that funds startups and helps entrepreneurs get rich. But what about the impacts to people who live in a city where the rich are far richer than the poor?
What they found was that cities with high economic inequality – such as New York and San Francisco – actually have lower inequality when it comes to life expectancy.
If you’re rich, it doesn’t matter where you live. The life expectancy of a rich person in New York is roughly the same as a rich person in Detroit. (Though, as to be expected, women generally live longer than men.)
However, as income levels fall, so does life expectancy. But it falls more in a city like Detroit than it does in New York. In fact, rich cities such as New York and San Francisco are almost model cities in this regard. Why is that?
“The research seems to suggest that living in proximity to the preferences — and tax base — of wealthy neighbors may help improve well-being. New York is not just a city of rich and poor, but also one of walkable sidewalks, a trans-fat ban and one of the most aggressive anti-tobacco agendas of any place in the United States.”
So there you have it. Two, potentially new, ways to think about economic inequality.
), developers would then be required and/or incentivized to include some percentage of affordable housing in their new market rate developments.
Politically, inclusionary zoning tends to be popular. It’s believed to be a way for governments to create new affordable housing using relatively small public subsidies. Not surprisingly though, the development industry generally hates IZ. It’s another cost that needs to be added to the development pro forma – though some municipalities rightly offset these additional costs with additional density, breaks on levies, and so on.
What I always think about when this topic comes up is the broader economic impact of the land use policy. Because I’m suspect that it’s as simple as: mandate affordable housing; get more affordable housing for free. Generally there are always trade-offs.
So here’s some reading material for you all this morning.
In a classic paper (1981) by Yale Professor Robert C. Ellickson – called The Irony of Inclusionary Zoning – he argues that these practices can actually increase general house prices:
As a counterargument Owen Pickford over at The Urbanist argues that IZ simply reduces land prices as a result of the new tax. Land, after all, is the residual claimant. Therefore, he believes it’s an effective affordable housing policy. (I’m not so sure I believe that land prices would decrease in practice.)
There’s also debate about the effectiveness of inclusionary zoning to actually deliver affordable housing at a meaningful scale. City Observatory wrote a post that looked at the total number of units produced (through IZ) across a number of American cities and the results were spotty. It should, however, be noted that not all inclusionary zoning policies are mandatory.
Finally, the Furman Center for Real Estate & Urban Policy at New York University published a housing policy brief back in 2008 that looked at this exact topic. While they admit that the data is scarce, they come to the conclusion that IZ had no meaningful impact on the prices and production of single-family housing in San Francisco, but that IZ seems to have slightly decreased production and slightly increased pricing in the suburbs of Boston.
What this last point suggests is that inclusionary zoning policies are not all created equal. So like all difficult questions, the answer to this one is likely: it depends. If anyone can point me to better data on inclusionary zoning, I would love to see it.
Brandon Donnelly
Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly.
