Supervisors Mark Farrell and Scott Wiener Announce Release of New Economic Impact Report on the Proposed Mission Moratorium

SAN FRANCISCO – Today, Supervisors Mark Farrell and Scott Wiener announced the release of the City’s new economic impact report on the proposed “Mission Moratorium” that they publicly called for at a Board of Supervisors meeting back in June. The report can be found in full here: http://sfcontroller.org/Modules/ShowDocument.aspx?documentid=6742.

Supervisors Mark Farrell and Scott Wiener Announce Release of New Economic Impact Report on the Proposed Mission Moratorium

SAN FRANCISCO – Today, Supervisors Mark Farrell and Scott Wiener announced the release of the City’s new economic impact report on the proposed “Mission Moratorium” that they publicly called for at a Board of Supervisors meeting back in June. The report can be found in full here: http://sfcontroller.org/Modules/ShowDocument.aspx?documentid=6742.

“Facts do not lie, and this new economic impact report on the proposed Mission Moratorium provides solid evidence that the moratorium would do far more harm than good for the Mission and for San Francisco,” said Supervisor Mark Farrell. “We need real solutions to our housing crisis – like building more housing at all income levels and streamlining the permitting and entitlement process for new housing.  This report should give pause for any supporters of the moratorium to reassess what they are really trying to accomplish.”

“This detailed report makes clear that stopping new housing will not prevent evictions or reduce the cost of housing in San Francisco,” said Supervisor Scott Wiener. “Instead, it will make our pressure cooker housing market even worse. We need to build new housing across all income levels to prevent displacement of existing residents.”

Supervisor Farrell and Wiener specifically asked the City’s Chief Economist to report and provide an analysis on what the effects of a moratorium on market-rate housing in the Mission District, including:

•    The effect the moratorium will have on housing and rental prices in the Mission and citywide
•    The effect on the City’s efforts to produce more new housing at all income levels
•    The effect the moratorium will have on eviction and buy-out pressures for tenants and homeowners
•    A detailed break-down on the amount of resources that the City would lose for affordable housing production

The report finds that that the proposed moratorium would cause housing prices and rents to rise in San Francisco. And, as a direct result of the moratorium, home-seekers at every income level would likely find fewer affordable units in the private market. The report also clearly finds that the prohibition of new market-rate housing would lead to a direct loss of affordable housing units and funding for affordable housing, which is provided through the City’s inclusionary housing program. In terms of eviction pressures, the proposed moratorium would likely have little to no impact in either discouraging or encouraging evictions.

“If the moratorium passes this November, we’ll see higher housing prices, less affordable housing, fewer resources to build new affordable housing, and a windfall for property owners who will see their property values rise,” said Supervisor Mark Farrell.  “Unfortunately, the leaders behind the moratorium have offered the policy as a solution to stop gentrification, evictions, and as a way to build more affordable housing – this report clarifies that these claims will never materialize.”

Furthermore, the report also examined a range of potential benefits that could accrue from a market-rate housing moratorium, including preventing gentrification and indirect displacement, and preserving sites for affordable housing. However, the report clearly finds that none of the potential proposed benefits would ever be likely to materialize. Much has been discussed about “new” residents moving to the Mission, but the report finds no evidence that new market-rate housing induces upper-income migrants to move to San Francisco. On the contrary, the report found that 84% of new housing was instead occupied by households that were already living in San Francisco.

Many of the proponents of the moratorium have claimed that new market-rate housing construction contributes to displacement by raising the values of nearby properties. However, the report finds that new market-rate housing, in the Mission and across the City, tends to reduce, rather than raise, the value of nearby properties.

Additionally, proponents of the moratorium have claimed that we need a “pause” on new market-rate housing in the mission to preserve sites for affordable housing, but the report clearly finds it unlikely that a moratorium would induce a property owner to sell their land for affordable housing. The report finds that if the moratorium passed that housing prices may well continue to rise during that period, making market-rate development more profitable after the moratorium period than it was before. Over the long-term, the report concludes that the strategy of using a market rate housing moratorium to create sites for affordable housing is likely to be significantly more costly than alternative approaches.

Even though the Mission has changed considerably over time, the neighborhood’s housing supply has not. From 1970 to 2000, the Mission actually saw a net decline in housing units, while the City added 36,000 units during the same period. Only since 2000 has appreciable amounts of new housing has been built in the Mission, with the housing supply only growing by about 193 units per-year. And, according to Planning Department data, new housing in the Mission over the 2001-2013 period has been split roughly 50:50 between market-rate and affordable housing.

Supervisor Farrell plans to hold a hearing on new report at the September 23, 2015 Budget and Finance Committee meeting.

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