Report: Market Pressures Displaced Thousands of Working-Class Households

By Thomas K. Pendergast

San Francisco is one of the most expensive and rapidly gentrifying cities in the world, as waves of real estate housing speculation roll through its working-class neighborhoods, according to a recent housing report. 

“Housing Our Workers: Getting to a Jobs-Housing Fit” was released in October. It was put together by the Council of Community Housing Organizations, the San Francisco Labor Council and Jobs With Justice. The report concluded that “market pressures” have displaced thousands of working-class households from the City. 

“The housing affordability crisis is the outcome of a real estate industry that has created the conditions for the gentrification of San Francisco’s working-class neighborhoods, and of the complicity of local public policy in allowing and even incentivizing this speculative behavior,” the report states. “The rapidly increasing costs of housing in San Francisco have risen at a much faster pace than the rate of wage growth for workers. For the industries where workers and unions have fought to win better contracts, this means more and more of those hard-won improvements to incomes are effectively diverted to real estate investors. Throughout our communities, essential workers are devoting an ever-increasing proportion of their incomes just to pay their rent or mortgage.”

The report concludes that only 7% of the workers they studied can afford to rent market-rate housing in San Francisco, and, in many occupations, virtually no workers can afford housing in the city where they work. 

“Over the past decade, the new housing that has been constructed and permitted in our city has been extremely imbalanced and overwhelmingly of one typology: luxury condos and apartments,” said District 4 Supervisor Gordon Mar. “This type of housing – while meeting the needs of single, high-income workers – has been overbuilt. And with pandemic-driven changes to how and where some of us work, demand for high-rise luxury condos cratered over the past two years. And we can see this imbalance playing out even in the Sunset District with three market-rate developments sitting mostly vacant – in one case more than two years after completion – because the units are too expensive and not family-friendly. 

“In contrast, we know there will be overwhelming demand for the two 100% affordable housing developments in the Sunset District pipeline: Shirley Chisholm Village for educators and 2550 Irving for low-income families,” Mar said. “So, if we are to bring needed balance to our city’s housing development and expand housing opportunities for our essential workforce and the people in our community in need of stable and affordable housing, we need to continue to fight for greater public investment, appropriate regulations and equitable land-use policies.”

District 1 Supervisor Connie Chan points out that in the Richmond District, an aging funeral home will be replaced by a 98-unit affordable housing building for senior citizens at 4200 Geary Blvd. 

“The biggest challenge is getting the City to commit funds to the west side to acquire land and build affordable housing projects like these,” said Chan’s legislative aide, Ian Fregosi. “One thing that would help that we have been actively working on is to create our own neighborhood affordable housing developer and advocacy organization on the west side. 

“We really appreciate working with these organizations that have occasionally come out to the Richmond to make Small Sites acquisitions and now to build affordable housing, but we really need our own community developer in the neighborhood that can focus on building and preserving affordable housing on the west side.”

With market rate rents ranging from $3,300 to $4,300 a month for one- and two-bedroom apartments in San Francisco, an individual worker would need to earn $132,000 annually (about 140% of the area median income (AMI), in order to afford to rent a one-bedroom apartment, according to the report.

A family of two adults with two children would need an annual income of $172,000 (129% AMI) to afford a two-bedroom apartment. 

“And yet … the range of workers used for this research has a median annual income of $67,350,” the report states. “That is only half of the income required to afford market-rate housing in San Francisco. The result … is that many worker households are pressed into unstable housing situations, overwhelming rent burdens and overcrowding into inadequately sized homes, or forced into significant commutes from homes far from San Francisco, all of which impacts their health and family.”

Cynthia Gomez is a senior research analyst for Local 2 Unite Here, the hospitality worker’s union in San Francisco and San Mateo counties.

“The market-based housing system is failing a growing range of people,” Gomez said. “Our members are among those who are forced into these kinds of commutes that are fossil-fuel dependent and that are damaging every aspect of their own lives and the lives of their communities. 

“It’s just a terrible thing to have somebody living in Sacramento and commuting into SFO to work, which is an example for some of our members.” 

San Francisco Labor Council Executive Director Kim Tavaglione said the current, more market-based approach is leading the City down the wrong path.

  We really want everyday folks to be able to live in the City and take advantage of all that the City has,” Tavaglione said. “We’re in danger of becoming like a developing nation in San Francisco, in the sense that we’ll have really rich and we’re going to have really poor and not much else in between. That is not a vibrant city. That is not a healthy city. That is a city that’s in jeopardy of losing its identity.

“We know when we have a good mix of folks living in the City, the City functions better.” 

District 5 Supervisor Dean Preston said the causes of gentrification are clear, as are the solutions for housing the working class.

“The question is whether policy makers will continue down the failed path of prioritizing trickle-down housing or whether we, as a city, will … listen to the affordable housing advocates, listen to our workers, listen to voters and do something fundamentally different,” Preston said. “And that’s scale up our efforts to preserve, protect and produce affordable housing, at scale that will solve instead of exacerbate our affordability crisis.”

To download the full report go to sfccho.org/housing-our-workers.

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