Banning Affordable Housing

The irony is that laws to keep poor people out are now keeping wealthy young techies out, and stopping the same neighborhoods from becoming wealthier, and thus better serviced by business and taxes.

Banning Affordable Housing

Capital Thinking · Issue #822 · View online

“San Francisco bans affordable housing,” is the spot-on conclusion of a lovely post by Vadim Graboys (link to twitter).

The post is titled “54% of San Francisco homes are in buildings that would be illegal to build today” with an interactive graph of those homes.

-John H. Cochrane

San Francisco bans affordable housing

John H. Cochrane:

Or, put another way, “To comply with today’s [zoning] laws, 130,748 homes would have to be destroyed, evicting around 310,000 people.”

The latter statistic is fun, but actually severely understates the damage of San Francisco’s (and Palo Alto’s!) zoning laws. The only reason current homes are illegal is that they were built under slightly less restrictive zoning laws.

So that measures how much zoning laws have gotten stricter over time. It does not measure the much larger number of homes and apartments that were never built.

Now, how does San Francisco, ground zero of progressive governance, and a city whose politicians can’t get out of bed in the morning, or sign permission to build anything without saying “affordable housing” about 10 times, in fact “ban affordable housing?”

If your goal is to make housing as expensive as possible, the best way to do it is to require lots of land per home, because land in cities is very expensive. San Francisco does this in a multitude of ways, but I decided to focus on 3 of them:
Minimum lot size: San Francisco mandates that a lot must be at least 2,500 square feet (or 4,000 sqft in some cases) in order to build a home on it. Since a decent single-family home could be built on a 500 sqft lot, and a very nice single-family home can be built on a 1,200 sqft lot, the minimum lot size requirement greatly reduces the amount of homes that could be built in San Francisco and increases the price of each home. 65,974 homes would be illegal to build today because the lot size is too small.
Density limits: San Francisco mandates explicit density limits, from prohibiting apartments entirely (in 76% of the city) to mandating a minimum lot size per apartment (almost everywhere else). The sole reason for these limits is to make housing more scarce and therefore more expensive. San Francisco limits density in many other ways, such as floor-to-area ratio, setback requirements, etc. but to keep things simple, I looked only at the minimum lot size per apartment for this map. 69,499 homes would be illegal to build today because of density limits.
Height limits: When land becomes expensive, developers can still create inexpensive homes by building multiple apartments on the same plot of land. Each apartment has to pay for only a fraction of the land cost, which can make apartments significantly cheaper than single-family homes. The taller the apartment building, the less significant the cost of the land becomes, so San Francisco limits this savings by limiting the height of new buildings to 40 feet in most of the city. 9,066 homes would be illegal to build today because of height limits.
Whenever San Francisco creates a new restriction, homes that already exist are grandfathered in rather than demolished. That’s where all these “homes illegal to build today” come from.

That also is why so much of San Francisco has an ancient housing stock. Many of the houses were built cheaply in an earlier era, and don’t match current needs.

If a house is grandfathered, you can “remodel” it within existing perimeter but you can never tear it down and build something appropriate to today’s realities.

Graboys asks

How can you say San Francisco purposely bans affordable housing? All its leaders constantly talk about building more affordable housing!

and concludes

Sorry to break it to you, but politicians lie.

I think a more nuanced view has better power to explain behavior.

Politicians like government-constructed or government-controlled new housing marked as “affordable” and rationed by politicians.

They just don’t like “developers,” i.e. people in the business of building houses, to build houses and sell them without paying proper homage to politicians.


I notice there’s a building built last year that you claim is illegal to build. How is that possible?

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San Francisco bans affordable housing

Photo credit: John Cochrane