Gentrification as a Threat to Cultural Diversity in San Francisco

Within its 47 square miles, San Francisco is home to numerous thriving ethnic groups and cultural districts. While these neighborhoods host global tourists who come to enjoy the foods, arts, and culture, they have also persisted through generations as living, breathing communities where residents can feel at home with groups they identify with. For example, my friend’s parents lived and raised their family in Chinatown for 50 years and still can’t speak English. Before I became an advocate for affordable housing, San Francisco’s cultural diversity and the topic of gentrification were separate topics in my mind – I didn’t believe one had anything to do with the other.

The lack of affordable housing and the city’s prioritization of profit over people is erasing these communities. The irony is that while the cities rake in huge profits from tourism in these neighborhoods, they don’t provide support for these groups to survive. For example, tourists from all over the world come to enjoy the architecture, art, and cuisine of Japantown and spend money at Japanese-centric businesses, all while the city allocates its shopping districts for new Chipotles, Gaps, and Sephoras. How can Japantown make it if the city’s planners and policy-makers choose businesses that maximize profit rather than preserve the spirit of the residents? Also, these neighborhoods need more affordable housing so that families can move in and sustain the community over the long term. Instead, city planners and policy-makers allocate new housing developments for market-rate luxury units that the average family cannot afford. According to a recent report from the National Low Income Housing Coalition, an individual needs to earn four times the minimum wage to be able to house their family in a two-bedroom market-rate apartment in San Francisco.

San Francisco’s city planners, officials, and policy-makers must understand that their decisions to prioritize profit over people are cannibalizing the city. They cannot keep boasting of San Francisco’s rich diversity, inviting the world to enjoy Chinatown’s New Year’s Parade or the annual Pride Festival while making decisions that essentially erase the communities behind them.

Affordable Housing Sitting Empty?

Given the high rates of homelessness on the streets and the urgent calls for more affordable housing, I was surprised to see the recent news in the San Francisco Chronicle that San Francisco has 305 below-market-rate apartments sitting empty despite having ~20K applicants for those spaces. Affordable housing is available, so why isn’t it being occupied?!

However, we should start by mentioning that the overall San Francisco rental market HAS become more affordable. Rents have come down ~12% since pre-pandemic times, meaning that more individuals who were previously shut out of the rental market can now get housing. However, that doesn’t change the situation for the individuals who still cannot afford the rents. Such individuals need to rely on programs like San Francisco’s below-market-rate housing program to attain housing for their families.

San Francisco requires housing developers to reserve between 15-21% of units at below-market-rate (BMR) for individuals and families earning less than 55% of the area median income. This program is a lifeline for many low-income families and is a model for cities around the Bay Area, but getting occupants into these units is inefficient and getting worse in the current rental market. In the past, the Mayor’s Office of Housing and Community Development (MOHCD) reviewed around five applications before they filled a unit. Now, they review ~31 applications per vacancy as more people drop out of the program to get a better deal elsewhere. It is good news that more applicants can now rent elsewhere but highlights the gross inefficiencies in the review process as the MOHCD wastes time looking at out-of-date applications. A possible solution may be to enforce a penalty for applicants who don’t notify the MOHCD that they have dropped out of the pool, such as prohibiting them from re-applying for the next one or two years.

Reviewing 31 applications instead of the typical five makes an already-long review process six times longer. The review procedure for a BMR unit is much more involved and time-consuming than a simple rental application. The MOHCD office needs to verify the income of every occupant in the new unit to ascertain that they meet the income criteria. The long wait time is not just a burden for the new renters having to wait for housing but also for the building owners who may need the rental income to pay off debts.

Our inability to promptly fill all available BMR units highlights another obstacle in our quest for affordable housing – a slow-moving bureaucracy. In fact, the MOHCD has been compared to PG&E as one of the most inefficient organizations to work with. It is unfortunate that so many units are sitting empty while thousands of families are in such need. Unless the MOHCD figures out how to streamline the process to get families into these affordable units, it just looks like they don’t care.

Inflation: Another Roadblock to Affordable Housing

In recent months, we have seen significant job gains in the Bay Area and unemployment falling to a low 3.4%, comparable to pre-pandemic days. But just as we were looking forward to financial relief for those who lost their jobs and livelihoods during the pandemic, we face another roadblock to affordable housing – inflation.

Inflation has reached 8%, a 40-year high. Inflation cuts into earnings for all workers but has dire consequences for low and middle-income earners. A family that could barely pay for food and housing may no longer be able to meet its basic needs and is thrown back into poverty. Those who don’t have the luxury to work at home may find that the increasing gas prices have left less for food and housing. But inflation is not just about higher gas prices or going to the store and finding that your milk and bananas are a couple of dollars more than you expected – inflation also makes things a lot worse for those seeking affordable housing.

We have heard of the stories of skyrocketing home prices during the pandemic, especially in places like Tampa, Florida, and Austin, Texas, which saw yearly appreciation of 43% and 40%, respectively. Though rising interest rates have reduced the numbers of those seeking homes, sellers still don’t have many incentives to lower prices because one house still receives many offers due to lack of supply. The scarcity of housing also drives up the rental costs, with rents increasing nationally by 15.2% on average. 48 out of 50 states saw overall rental increases, with increases as high as 35% in Austin, Texas, and 39% in Portland, Oregon. These increases would be acceptable if incomes grew at the same rate, but lower-income workers’ paychecks have not even remotely kept pace. As a result, affordable housing has become even more out-of-reach. A popular option for thrifty home buyers had been to purchase a fixer-upper, a cheaper home that needs work. But even this is becoming a less attractive choice as inflation increases costs for materials, and supply chain issues make materials challenging to attain.

The solution to the housing plight is and has always been to increase the supply of affordable housing. As we have explored in a previous post, the Association of Bay Area Governments (ABAG) has assigned Bay Area cities the task of building 441,000 new homes and apartments between 2023-2031. Chances are slim they will be able to meet this goal, with a quarter of the cities protesting their quotas for various reasons. Such an enormous task will naturally receive opposition; there is limited space for the many who need affordable housing in the Bay Area. But the mandate is an essential step toward something we have waited a long time for – action.

Bay Area Cities Fight Development Targets

The Association of Bay Area Governments (ABAG) has assigned Bay Area cities the task of building 441,000 new homes and apartments between 2023-2031 to meet the region’s dire need for housing. But chances are slim they will be able to meet this goal. More than a quarter of Bay Area cities are protesting the state’s proposed guidelines, and 27 towns, cities, and counties have filed appeals against the ABAG to reduce their quotas. These appeals are concentrated among the wealthiest communities – 11 of the 18 cities with the highest median household income are requesting the largest quota reductions. These include Saratoga, Los Altos, Los Altos Hill, Palo Alto, and the East Bay cities Alameda, Lafayette, Pleasant Hill, and Marin County.

It is easy to point fingers and accuse those cities of refusing to sacrifice some comforts to make room for others. But some cities have valid arguments. For example, Santa Clara County has argued that their limited infrastructure, including water and sewage, cannot sustain the many units they are being asked to build. They have agreements with cities to acquire land to develop in less dense areas and have claimed that regional planners ignored this fact in their analyses. Other towns like Mill Valley and Dublin have argued that they already put in considerable effort to plan for future growth, only to find that their housing allotment is overwhelmingly more than they can sustain.

California’s goal is simple – to provide enough housing to support every household that wants to live here. If 441,000 families need accommodation, they need to build 441,000 units no matter where in the Bay Area they are. If a city refuses to contribute its share of housing, then another nearby municipality will need to build that much more. Dublin, in particular, feels that it has received the brunt of other city’s unwillingness to yield. Dublin has grown by over 50% and has approved twice more homes than requested in the past ten years. But with the housing allotment asking for another 3,700 homes and dwindling available space, city administrators feel they have not received their due credit for their earlier efforts and think they are being penalized. It is easy to understand their point – the housing mandates don’t feel fair for those that have made efforts to accommodate the requests.

The Bay Area’s largest cities – San Jose, San Francisco, and Oakland – have accepted their development targets and are working to construct more high-rise apartment complexes. These cities have large homeless populations and have had the opportunity to witness the consequences of the housing shortage every day.

Every city is looking out for the interest of its citizens – that is healthy and expected. But in the end, if some cities are unwilling to yield and we can’t build the infrastructure needed to keep talented workers in the Bay Area, then we all lose.

Someone Please Buy My Mansion!

Our CEO Kiai Kim recently showed me an article about a mansion in New Jersey that was initially listed at $39 million but sold at just $4.6 million eight years later – an 88% discount! From 2013 to 2021, the price dropped from $39 million to $25 million and went through more than five rounds of re-adjustments to the current price of $4.6 million. I thought to myself, “Why even wait that long? How can a homeowner have the patience to deal with the upkeep for eight years? And what a massive waste of space to leave a huge house like that empty?”

In San Francisco’s ritzy Cow Hollow neighborhood, a luxury Italian-style mansion sold earlier this year after sitting idle on the market since 2008. The initial asking price was $29.5 million and sold for $17.5 million. The price drop wasn’t as drastic, but the fact that the owner was willing to let the house sit empty for 13 years is just another example of sellers’ unwillingness to compromise.

The issues of the super-rich are far removed from those of us working-class folks, but I think in these extreme cases, we can also see to some extent what perpetuates the high Bay Area housing prices – the desire to make the highest profit even if it takes years and years to sell. And in the case of the New Jersey mansion (and probably many other homes owned by the uber-wealthy), the house was not even occupied. When sellers are unwilling to budge on the high sale price, it means houses remain unaffordable for that much longer.

The strategy of waiting years hoping that a desirable offer will appear doesn’t always pan out. The New Jersey mansion had earlier been offered a price higher than the final selling price but had refused it, later to realize that they wouldn’t get an offer that high again. Unfortunately, these lessons aren’t apparent until the end – sometimes many years later.

Cob, a Cheaper Alternative to Lumber

We at Care Association have been trying to stay on top of issues concerning affordable housing for lower and middle-class Bay Area residents. We worry about the psychological cost of high rents and the growing rates of homelessness. At the same time, we are also actively participating in the discussion around innovative ways to bring down the costs of new structures.

One of the developments we have been following is the growing interest in cob as a (much!) cheaper alternative to lumber in North America. Cob is a mix of clay-soil, straw, water, and sand, used to build walls that alone are strong enough to support a roof. Cob was used for thousands of years in ancient times throughout Asia, Africa, Europe, South America, and the Middle East. Here in Northern California, the stringent codes regulating seismic strength, fire resistance, and insulation have made cob a tough sell.

Cob’s growing visibility

The soaring housing costs led Bay Area architect John Fordice to revisit cob in the late ’90s to see if he could address those deficiencies. He set up The Cob Research Institute (CRI) in 2008 to ramp up visibility and research efforts into the viability of this cheap and clean alternative. The CRI began working with local university engineering labs to build cob wall prototypes and develop solutions to address its structural weaknesses. They compiled the results of their years of research into a guideline to help others overcome the common hurdles that past cob projects have faced when trying to get approval from their local planning departments.

We are delighted to share that this guideline has been formally approved for inclusion into the International Residential Code (IRC) just this year! It is now accessible to any interested builder as Appendix U, the Cob Construction Appendix, in the 2021 IRC. We were also excited to hear that the appendix was accepted by an overwhelming 93 to 6 majority. A lot of people are as excited about cob as we are!

Remaining obstacles to cob-based housing

Inclusion into the IRC is not a green light to start building cob housing for human habitation, but speeds up the permit process for other types of buildings, like storage units. Nevertheless, it is a very encouraging sign that we are getting closer to the possibility of cob-based homes. Other types of earthen building solutions, such as strawbale and light straw hay, also started as appendices in the IRC and were gradually adopted into local building codes. “Then why hasn’t Care Association started promoting strawbale or light straw hay?” you may ask. Strawbale will result in a sturdy home, but the walls will need to be 2 feet thick to meet the insulation requirements. If we are looking to build at volume, the area requirements will be prohibitive. Cob, we believe, can be as narrow as 12-16 inches with proper insulation. Straw is also difficult to find locally, and there is concern that straw is environmentally unclean.

Cob will result in thinner walls, but we don’t know how thick or thin the final product will be. Cob alone can not pass the requirement for an insulation R-value of 13 in Northern California. In layman’s terms, a cob wall is not “breathable” enough; vapor needs to be able to pass through the wall with some quantifiable measure of ease. The CRI and other organizations are working on this problem. They are researching possible solutions, such as replacing the heavy components of the cob mixture with lighter substitutes, adding more straw/hemp, or wrapping the outside of the cob wall with less dense mixes of clay or straw/hemp. Our CEO, Kiai Kim, has also been attending cob workshops to stay up to date on the latest research and help pose some solutions.

Our vision

Because cob is heavy, the labor costs to build cob structures will be high. If cob gets adopted into Bay Area building codes, our initial vision is to use a volunteer force of builders to provide labor. Luckily, building with cob is easy to learn. The savings from volunteer labor and the cheaper materials will offer an affordable housing solution for those in immediate need.

There are a lot of people rooting for cob. It is non-toxic, can be molded into beautiful shapes, environmentally friendly, and so fire-resistant that some make ovens out of cob. This is a great advantage in this new era of yearly wildfires. (Imagine fleeing a wildfire and returning to see your walls fully intact!) At Care Association, we are thrilled with cob’s newfound recognition and have great hopes for its future adoption, especially with lumber’s skyrocketing costs. With 21st-century engineering advances, perhaps the cob structures that housed our distant ancestors can also provide safe, warm, and affordable places for us to sleep as well.

Homeless Shelters are not Enough

In all honesty, I didn’t give much thought to the issue of affordable Bay Area housing until my brother Ted became homeless. He had received a diagnosis of obsessive-compulsive disorder (OCD), anxiety, and schizophrenia but refused to take his medication. After a particularly bad fight with my mother, he left the mobile home in which they lived, saying that she always opposed anything he wanted to do and felt that the relationship was toxic.

The next few years were very stressful. We would plead with Ted to come back, but he always refused. I was constantly wondering where he was, whether he ate lunch, whether he found a place to sleep away from the cold in the winter, and whether he was able to escape the baking heat in the summer. Another question I grappled with was whether I should move out of the Bay Area. If I could afford a tiny studio for him, then we would worry a lot less. But I already had to pay a mortgage on my current home, and at today’s prices, even a tiny Bay Area studio would be twice more than what we paid for the house in the early 2000s.

Fortunately, Ted didn’t go completely silent. Once a month, he would call back and allow us to take him to dinner. I asked him so many questions over these dinners and learned a bit about how the homeless get their basic needs met. Before Ted left home, I always thought that homeless people could just go to shelters and get food, showers, and safe places to sleep. This is true, but only if they can get a bed at all. The shelter that Ted attended most often would allow people to assemble starting at 3 pm, hold a random lottery at 4 pm, and then let the winners in at 5 pm. Unfortunately, the number of those seeking refuge increases in the winter, so the chances of getting a bed become slim. In San Francisco, the number of homeless without beds is around 6,800, but officials say the estimate is closer to 18,000 (!) as the pandemic has incurred heavy job losses.

My brother often slept on bus 22, a 24-hour bus route in Santa Clara County nicknamed “Hotel 22” because of the large numbers of homeless people that use it as overnight housing. Unfortunately, like the shelter, this option became less reliable in the winter. So every afternoon became a race to find a place to sleep for the night. Many nights he ended up sneaking back into an empty bedroom in my mother’s house through an open window and then climbing back out in the morning. He was fortunate to have this option, but many homeless don’t.

As if the homeless don’t have enough to worry about already, there is also a high incidence of theft. It is not uncommon to fall asleep only to find that what little you have is gone. This is an issue on the bus as well as in the shelters. We once had to replace Ted’s entire suitcase with fresh clothes, toiletries, and cash. We also had to replace his phone five times.

We finally got Ted to move in after trying many things, including having my mother move back in with me. But I believe what ultimately worked was installing a new treadmill in the garage. Ted’s biggest fear is getting cancer or diabetes, so he runs every day for an hour. After his gym canceled his membership and stopped letting him enter (because his disheveled state was disturbing customers), I purchased a treadmill. He started to come over more and more often until he decided it was more trouble to leave than to stay.

I am beyond relieved that he is back home, but it troubles me that he couldn’t get proper support. Shouldn’t Ted have been able to find a place to sleep if he wanted? Returning home is not an option for many of the homeless. So many are evicted, some children, and many leave toxic situations or families that cannot properly care for them. And with the Bay Area housing prices skyrocketing, the problem will only worsen as a growing number of homeless compete for a fixed number of beds. Nobody should have to battle through a frigid night … not even once.

The Silent Victims of Unaffordable Housing

The shelter-in-place mandates introduced during the pandemic have strained many individuals who find themselves with a lot less personal space at home than they enjoyed before Covid. As a result, we have seen a disturbing increase in domestic violence, so much so that some local domestic violence shelters have had to turn people away for lack of space. However, this is not a new story for many Bay Area families; we have seen this phenomenon for years caused by another culprit: Bay Area housing prices. We have heard the painful accounts of those forced to stay with abusive partners and divorcees forced to live with their exes because they cannot afford to rent or buy another residence.

One demographic that has been particularly affected by the high rents is young adults, often nicknamed the “Boomerang Generation” because of the large percentage of them who have returned home to live with parents. This arrangement can be beneficial, with children saving on rent while also contributing to the family’s finances. In healthy families, parents continue to foster independence in their adult children, respecting their privacy and choices. Parents that do not respect boundaries, on the other hand, can psychologically cripple their children for years to come.

Helicopter parents may not stop their controlling ways when adult children move home. Early-career adult children suddenly find themselves with a lot more freedom and many more choices to make, particularly regarding their future careers and family. For example, they may need to try various jobs before finding their fit. They may need to meet a lot of the “wrong” type of guy or girl before they meet the “right” one. Trial-and-error is necessary and healthy. Living at home means that parents will be privy to their children’s choices, and the overprotective ones will nag, maybe harass, and even physically assault their children into choosing what they think is best. Children in such situations become demoralized, lose self-confidence, and harbor long-term resentment against their parents. They are also victims of a type of domestic violence for which there is no shelter.

Bay Area home prices have imprisoned many within the same walls as their abusers. Even though the cost of a San Francisco studio has dropped to $1,895 during the pandemic, that is still too much for many young adults who barely make above minimum wage. And for those who have no recourse but to return home to controlling parents, the only solution is to find a way to set clear boundaries (which is often easier said than done) or stand to suffer. It is a sad situation. Every individual should have the right to get out of harm’s way.