‘I don't want to become San Francisco’: Urban woes spur state action on housing

Officials in Washington state and Vermont looked at the housing crisis in San Francisco this year and took action to prevent the same thing happening in their states: They effectively banned single-family zoning.

Those new laws are part of a wave of municipal and state efforts to guard against the worst effects of the crunch already on display in California's fourth-largest city as housing costs ballooned nationwide since the pandemic.

The solutions to skyrocketing housing costs all take time to have an effect. But officials are considering everything from mandating that cities zone for greater residential density to allowing duplexes to be built nearly anywhere statewide.

They know that if they don't do something, they could end up like San Francisco and California in general, with rents and home prices that are unaffordable for many residents and intractable waves of homelessness — fueled by drug use and mental health issues in addition to lack of housing — that place a crushing burden on city services and steer residents and businesses away from downtown.

“Every state in the country other than California is saying, ‘I don't want to become California,’ and every other city is like, ‘I don't want to become San Francisco,’” said Jenny Schuetz, a senior fellow on urban economics and housing policy at the Brookings Institution's Metropolitan Policy Program.

While San Francisco's well-documented problems have long been red meat for Republicans and Fox News, they're also inspiring Democrats across the country to spend political capital on tackling housing affordability issues in their own states, namely by increasing the supply of housing.

Fox's relentless focus on the 12-block stretch of downtown San Francisco where drug use and squalor are thickest made it the poster child for Democrats' urban woes. Democrats are also paying attention to other factors: The pandemic further hollowed out the city's downtown as tech workers stayed home, and the spiral shows no signs of abating, with retailers announcing new departures daily and office vacancies still ticking higher.

Meanwhile, the city’s housing costs are beginning to fall but are still 207 percent higher than the national average, making the Bay Area the second-most costly metro area for home ownership in the country and one of the most expensive cities for overall cost of living.

Other factors, like health problems and domestic violence, can also lead to housing instability. But a lack of availability of affordable housing is a primary driver of eviction and, ultimately, homelessness in a state where 30 percent of the nation’s homeless population lives.

“Housing affordability is as severe in San Francisco as anywhere in the country,” said Ben Metcalf, managing director of the Terner Center for Housing Innovation at UC Berkeley. “There is a direct through line between the number of individuals and households experiencing homelessness, and the fact that the rent is too damn high.”

It's all adding up to an alarm bell that Democrats in other states are heeding. They're trying a range of policies — housing, zoning and land use reforms to encourage or even mandate the construction of new homes and greater residential density — to avoid San Francisco's fate.

San Francisco helped inspire a law Washington Gov. Jay Inslee (D) signed last month that prevents cities from enforcing single-family zoning rules. “When I think of San Francisco, I think of it being an example of the most restrictive land use, which results in it only being accessible to people that have significant wealth in order to be there and to live in that city,” said the bill's author, state Rep. Jessica Bateman (D-Olympia).

In Vermont, Gov. Phil Scott (R) signed a law earlier this month that effectively bans single-family zoning statewide. Its author, state Sen. Kesha Ram Hinsdale (D-Chittenden), is a Los Angeles native who said she was inspired by personal experience: Her sister had experienced homelessness for several months, while her father struggled to find affordable housing in the San Francisco suburbs. Much of California, from San Francisco to San Diego, has a “high housing shortage,” according to the National Association of Realtors as of last year, and the U.S. housing market is short 6.5 million homes, according to one recent analysis.

“I look at California as a place where housing instability is just consistently escalating,” Ram Hinsdale said. “When places like San Francisco and liberal bastions in California have held themselves up as the standard for progressive policy, I've always felt like it's a bit of a sham when you think about the many people who experience income inequality in California and can't afford to meet their very basic needs.”

Red states are paying attention, too. Montana Republicans took on the issue of rising home prices by appealing to an anti-California sentiment to drum up support for their suite of housing reform bills the GOP supermajority passed this year.

“I got local pushback every step of the way,” said Montana state Sen. Jeremy Trebas, a Republican who sponsored a housing reform law this session. “It doesn't look like the local governments have done anything to effect change in any useful way. So I think it was our turn to take a crack at it.”

Ram Hinsdale said passing this sort of legislation requires taking on “monied interests” that don’t want to see change.

“I’ve expended a lot of political capital,” she said. “I will probably face repercussions in my next election. It will certainly have political costs for me from the donor class.”

No one is more keenly aware of San Francisco's role as a symbol of housing policy failure than state Sen. Scott Wiener (D), who represents the city in the state Legislature and previously served as a city supervisor. He's championed state laws to streamline permits for affordable housing and end single-unit zoning and is working on a bill this year that would expedite approvals for multi-family housing development as the state continues to encounter local pushback.

“Other states are looking at California and saying, ‘We don't want to be like that, in terms of no one being able to afford a place to live. And let's take action now before it gets bad, as opposed to doing what California is doing, which is to let it fester,'” Wiener said. “Other states are looking at California as a cautionary tale on housing, and I support them doing that as we try to dig out of our hole.”

San Francisco Mayor London Breed is also trying to speed up housing, with a goal set earlier this year to build 82,000 units by 2031 through rezoning, eliminating height restrictions and speeding up permitting. She also unveiled a plan to revitalize the downtown through “flexible zoning,” office-to-housing conversions and additional investments in public transit and public spaces.

San Francisco's new director of economic development, Sarah Dennis Phillips, described it as an "opportunity."

"We are often at the forefront of technology and civil rights here in San Francisco,” she said. “We have the opportunity to be at the forefront of changing urbanism, and perhaps our economic efforts can give guidance to other cities going through urban transitions as well. "

But early signs aren't encouraging: The city has permitted an average of eight new units per month since setting the goal, lower than at any point since the pandemic.

Other elected officials have tried to use San Francisco and California as cautionary tales but have run up against the same political roadblocks to housing policy reform as the Golden State.

Colorado Gov. Jared Polis (D) proposed legislation earlier this year to force local governments to zone for greater residential density and boost multi-family homes but was met with a “firestorm of opposition from local governments," according to Eric Bergman, policy director at Colorado Counties Inc., a nonprofit that helps local Colorado governments work together.

“I don't want us to become like California,” Polis said in a public forum last month.

New York Gov. Kathy Hochul (D) pushed for a housing reform plan that would mandate more housing and give the state new authority to override local zoning laws in the state budget this year but faced opposition from suburban officials that ultimately killed the proposal. New York Assembly Deputy Speaker Phil Ramos (D-Suffolk), who supported the deal, pointed to an exodus of young people unable to afford homes.

“Certainly, that situation [in San Francisco] is what we’re trying to avoid, where affordability isn’t there and young people end up moving out because they just can’t make it,” he said.