In San Francisco Ballot Outcomes, Wins for Affordable Housing

COMMENTARY Government Regulation

In San Francisco Ballot Outcomes, Wins for Affordable Housing

Nov 5th, 2015 2 min read
Salim Furth, Ph.D.

Research Fellow, Macroeconomics

Salim is a Research Fellow in Macroeconomics at The Heritage Foundation.

Voters in San Francisco rejected two ballot measures Tuesday that would have raised the cost of living in what is already one of the priciest U.S. cities and approved two ballot measures that offer some hope of expanding the city’s housing supply.

The highest-profile defeat was Proposition F–known by some as the “Airbnb Initiative”–that would have made legal short-term rentals impractical for most potential hosts by, among other things, mandating quarterly reporting, requiring hosts to register as a business, and requiring notifications of all owners of nearby property of registration as a host. It criminalized renting out an unregistered room or assisting anyone to rent out such a room (for example, by unlocking a door). Besides the criminal penalties–up to six months in jail–unregistered renters would be open to civil lawsuits by neighbors, each of whom would have the right to sue for $250 to $1,000 per day plus legal expenses. Proposition F forbid short-term rentals of “Accessory Dwelling Units,” such as in-law apartments, under threat of the same criminal and civil penalties. Voters rejected the regulation 55% to 45%.

Another anti-housing measure, Proposition I, would have placed a moratorium on new building permits in the rapidly changing Mission District for at least 18 months. Although voters in the Mission District approved, with most precincts reporting around 60% of votes in favor of the moratorium, voters elsewhere in the city recognized that a building moratorium in one area would contribute to higher rents everywhere. The proposal was defeated 57% to 43%.

On the positive side of the ledger, voters overwhelmingly approved a waiver to height restrictions, allowing the San Francisco Giants to build a 28-acre mixed-use urban development at Mission Rock, across McCovey Cove from AT&T Park. It’s astounding that it took eight years of negotiations and a ballot measure to allow the Giants to build what San Franciscans desperately need: more space. During that time, Mission Rock has been a parking lot, and people have had fewer options for affordable rents. Organic affordability occurs when permitting is prompt and free from political constraints.

San Franciscans also voted to raise their taxes to fund new affordable housing. If they instead reduced land-use regulation, housing could be organically affordable.

-Salim Furth is a research fellow in macroeconomics at the Heritage Foundation’s Center for Data Analysis. He is on Twitter: @salimfurth.

This piece originally appeared in the Wall Street Journal