This article was posted on Tuesday, Mar 01, 2016

Welcome to the New Year.  We said farewell to 2015, which we greeted we optimism.  But along the way, our small businesses continued to be pummeled by successive legislative assaults from our elected officials. 

The bright spots came from our show of force and determination at several hearings in Sacramento and from our participation in legal actions in the courts.  Last November, San Francisco voters turned a Board of Supervisors that had already been quite hostile to our interests even more predictably so by electing Aaron Peskin to his former seat in District 3.  But even before Mr. Peskin’s return, the horrid “Kim 2.0” legislation, approved very much to our disappointment by all 11 supervisors, put untenable restrictions on us.  We’ve been meeting with our partner groups to discuss strategies for asserting our rights in the face of this assault.  So cheery and seasonal! 

An Entirely Predictable Housing Shortage

The local press and politicians agree that we have a “housing crisis.”  Bu the crisis they are referring to is actually the predictable shortage of available housing that has developed over the years due to economic and political forces over which we rental property owners had no control.  There are more people who want to live in San Francisco than there are available homes – not a new situation.  Also predictable is where blame for the shortage is being placed.  Blame the techies, who’ve been attracted to well-paying jobs.  Right!  Blame them for wanting to work to better themselves.  Blame the “greedy developers” who charge “exorbitant prices” for homes they building.  And of course, blame us – “greedy landlords” for wanting a reasonable return on our investments and the ability to manage our rentals free of draconian regulations.

The nerve of those tech workers; they live here and some even commute to other nearby communities to work!  By bus!  To compound this, some of them come here as singles and form families!  While it is true that some existing businesses have been forced out, tech employers and employees have revitalized buildings that were nearly empty – buildings that housed businesses that left many years ago.

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The “crisis claque” also ignores the fact that over 265,000 people commute into San Francisco to work and about 103,000 San Francisco residents work outside the city.  This is the natural order of life in the Unites States, where about a quarter of the nation’s workers commute.  Some of San Francisco’s tech employers are beginning to realize that one day soon, they won’t be able to attract the talented people they need because it has become too expensive to live here.  So they’re expanding into other, more welcoming communities. 

Why Is It So Expensive to Build Here?

At a housing task force convened by Mayor Lee, in which SPOSFI will participate, developers stated and no one disputed that the cost of building a unit of housing has increased from $400,000 to $800,000 in just four years.  The planning and approval process alone takes an average of four years, with no guarantee that approvals will be granted and that the homes will actually be built.  For developers, the stakes can change at any time if political decisions after the percentage of “affordable” units they, and ultimately the market-rate purchasers, are required to fund. 

And What About Us?

For years, SPOSFI has decried the ever-shifting, eroding environment for rental property owners.  Since rent control was introduced in 1979 – with an ordinance that has been amended over 100 times since – we now operate in an upside-down world where we have almost no ability to increase our revenue; can never terminate a business relationship without our renter’s consent; and can’t use the property for anything other than serving the renters we already have.  In many cases, we can’t even use the property for our own homes!  No wonder we want renters who won’t stay very long – or no renters at all.

San Franciscans and their Mayor, the Board of Supervisors and the Planning Department need to stop waggling accusing fingers at builders and owners and start making laws that are fair to everyone.  Happy New Year! 

Noni Richen is President of SPOSFI.  Reprinted with permission of the Small Property Owners of San Francisco Institute (SPOSFI) News.  For more information on becoming a member of SPOSFI or to send a tax-deductible donation, please visit their website at or call (415) 647-2419.