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City report finds Mission moratorium would drive up housing costs

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Hundreds of protestors gather at San Francisco City Hall in May 2015 to ask lawmakers to a moratorium on evictions and luxury-priced housing development in the Mission district. The Planning Commission on Thursday adopted interim controls for certain market-rate projects in the Mission. (Mike Koozmin/S.F. Examiner file photo)
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A temporary moratorium on building market-rate housing in the Mission would drive up housing costs citywide and would not prevent the displacement of current residents.

That’s according to a first-of-its-kind report released Thursday by The City’s Office of Economic Analysis that explores the potential results of freezing the development of market-rate homes for 18 months in the Mission.

The moratorium’s proponents say it’s needed to protect longtime residents against rising rents. Recent social and economic changes in the Mission have become a symbol of San Francisco’s housing crisis and the widening gap between lower- and upper-income residents.

The report, requested by supervisors Mark Farrell and Scott Wiener in May, also examines how permanently halting market-rate development in the Mission would upset the cost of living, eviction pressures and funding for below market rate housing.

“This report clearly, from a third party perspective, was adamant that we need to build more housing and not less if we’re going to continue to address the [housing crisis] issue,” Farrell said.

The report comes as an 18-month moratorium on the development of market-rate housing in the Mission is slated to go before San Francisco voters in November. That measure follows an unsuccessful effort by Supervisor David Campos, who represents the Mission, to impose a temporary moratorium earlier this year.

But Campos said that the report “misses the mark” and fails to address that residents are asking for a halt of certain developments to give The City time to preserve land that could be used for below-market-rate housing. When Campos first proposed the moratorium, there were some 13 sites identified for such development.

“The only way that we’re going to be able to have a chance to preserve some of this land is for a pause to happen,” Campos said. “Without a pause, you have a market that will not allow a city agency to be competitive for the purpose of affordable housing.”

While the report acknowledges that the population of Latino residents — who for decades have called the Mission home — has declined by 60 percent since 2000, a short-term moratorium would not impact continued displacement, and an indefinite moratorium would only have some impact.

An 18-month moratorium would also not significantly affect the number of market-rate homes slated for the Mission. Based on the number of such projects in the pipeline in the neighborhood, only up to 807 market-rate units would be affected by a temporary moratorium, whereas more than 15,000 of such units could be removed from fruition in a permanent freeze.

Consequently, a temporary moratorium could make housing costs rise citywide by up to $174 per household annually, while a permanent halt on building market-rate homes could increase annual housing costs by nearly $1,800 per household.

The report also showed that despite the low levels of market-rate housing construction in the Mission, the upper-income population has grown more in the neighborhood than citywide, indicating that market-rate construction does not necessarily drive gentrification to an area.

It was further revealed that most residents who move in San Francisco — 84 percent — already live in The City, also quelling the argument that new market-rate housing draws in more residents. Additionally, 97 percent of new city residents in the upper-income bracket do not move into new housing.

Tim Colen, executive director of the Housing Action Coalition, emphasized that the report backs
up arguments of those opposed to the moratorium by revealing the economic harm it could bestow on The City.

“[The report] appears to refute every claim of proponents of the moratorium,” Colen said. “It will increase displacement, make land more difficult to obtain for affordable housing, and it will raise housing prices.”

In response to Thursday’s report, Campos said he has requested the Budget and Legislative Analyst for the Board of Supervisors to conduct another study examining the continued effects of displacement and developing market-rate housing in the Mission if there is no moratorium.

“We need to have an actual review of what’s happening and a comprehensive analysis, which unfortunately this report does not provide,” he said.

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