Housing Supply Reduced by Less Than One-Tenth of a Percent: Everybody Panic!

According to the 2013 American Community Survey, San Francisco has 381,000 housing units. The San Francisco Chronicle has found that about 350 of them are used as full-time vacation rentals through Airbnb. This, says the paper, “bolster[s] claims by activists that the service removes scarce housing from the city’s limited inventory.”


Supporters of Airbnb held a rally last October to persuade the city to legalize the service. Flickr photo by Kevin Krejci.

Since they live in one of the least affordable housing markets in the country, San Francisco residents are understandably sensitive to housing affordability. However, they are quick to blame high housing costs on everything but the real culprit. If it’s not Airbnb, it’s the Google, Apple, and Facebook buses taking people to work in Silicon Valley.

The reality is that San Francisco housing was expensive before Silicon Valley high-tech firms started their own bus services to deal with the Bay Area’s ineptly planned transit network. It was expensive long before someone designed a smart-phone app to help vacationers find places to stay in San Francisco. Using 350 homes for vacation rentals hasn’t made housing expensive, particularly as there’s no guarantee that those homes would be occupied by full-time residents if it weren’t for Airbnb.

The Chronicle argues that “a typical year sees just 2,000 new [housing] units added,” so “a few hundred units off the market makes a significant dent.” No, actually, it doesn’t. A much more significant dent comes from the anti-landlord and other regulations that discourage builders from adding more than 2,000 units per year. An even more significant dent comes from the numerous land-use rules in the counties surrounding San Francisco that make sure that only about 16 percent of the land in the nine-county region is available for development.

San Franciscans who truly want more affordable housing should demand that the counties around San Francisco–especially Alameda, Contra Costa, Marin, San Mateo, and Santa Clara counties–all expand their urban-growth boundaries. But that would mean giving up the idea that they can have open space at other peoples’ expense without having to pay a cost themselves.

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11 thoughts on “Housing Supply Reduced by Less Than One-Tenth of a Percent: Everybody Panic!

  1. C. P. Zilliacus

    The Antiplanner wrote:

    This, says the paper, “bolster[s] claims by activists that the service removes scarce housing from the city’s limited inventory.”

    Do these people have any idea about scale? The number of units rented via AirBnB or any other method is so small as to be irrelevant.

    The Chronicle argues that “a typical year sees just 2,000 new [housing] units added,” so “a few hundred units off the market makes a significant dent.” No, actually, it doesn’t. A much more significant dent comes from the anti-landlord and other regulations that discourage builders from adding more than 2,000 units per year. An even more significant dent comes from the numerous land-use rules in the counties surrounding San Francisco that make sure that only about 16 percent of the land in the nine-county region is available for development.

    Spot-on.

    San Franciscans who truly want more affordable housing should demand that the counties around San Francisco–especially Alameda, Contra Costa, Marin, San Mateo, and Santa Clara counties–all expand their urban-growth boundaries. But that would mean giving up the idea that they can have open space at other peoples’ expense without having to pay a cost themselves.

    They may not want to admit it, but the advocates of strong “growth controls” really do want “undesirable” (people and families, often from the grubby middle class) to have to make mega-commutes from places like Sacramento, Stockton and Gilroy.

    San Franciscans who truly want more affordable housing should demand that the counties around San Francisco–especially Alameda, Contra Costa, Marin, San Mateo, and Santa Clara counties–all expand their urban-growth boundaries. But that would mean giving up the idea that they can have open space at other peoples’ expense without having to pay a cost themselves.

    I would assume any such initiative would have to come from the California legislature and governor.

    Overall, a great Antiplanner post!

  2. English Major

    I read the numbers in the linked article differently, and I am not sure that the number of AirBnB spots is only 350.

    In PDX, the number of rentals is over 3000 for AirBnB, and who knows for the tax cheating company known as Vacasa.

    I find it ridiculous that PDX hosts are selling food and liquor to guests without licenses, and taking up prime rental spaces, as well as crowding certain neighborhoods with their cars.

    I often agree with Mr. O’Toole but this time I am concerned that the number of illegal hotels is much higher in SFO.

    BTW- as someone with family in the hospitality business, I lament any reduction in family wage jobs.
    I also don’t want PDX and SFO to turn into Greece when it comes to paying taxes. Tax cheating and scofflaw behavior, along with under-insurance, are the hallmarks of AirBnB and Vacasa.

  3. English Major

    Frank,

    It seems to me your remark implies these things:

    1. No more licenses for food handling/kitchen inspections- anybody can sell home made food made in any kitchen.

    2. No more liquor licenses- I should be able to sell liquor at my garage sale.

    OR

    3. It’s okay to have laws on the books and flout them openly and in collusion with others.

    OR

    A hotel has to follow rules, but I can open my house to paid guests and not follow any rules.

    Am I missing something?

  4. Frank

    Government-issued licenses serve to limit entry to the market and reduce competition. In this technical era of smart phones and Yelp, Google, Urbanspoon, etc, etc, the need for government oversight is highly suspect. Private entities can conduct inspections and issue certificates or “licenses” and with competition among agencies, the potential for graft would be far less than currently exists in government.

    But you’re probably the type of statist who freaks out when a ten-year-old girl sets up a lemonade stand at a garage sale. You would probably report her to the city authorities not only for unlicensed sale of beverages but also her parents for unlicensed retail sales and not collecting sales tax. Perhaps you would even call CPS.

    Or maybe you can get onboard the freedom train and stop fretting about non-issues.

  5. English Major

    Frank, you are wrong about me and a terrible spokesmodel for libertarian principles. I had an honest question for you, but all I got back was snide BS. You drag this blog down with your rudeness. I sometimes visit to consider some of O’Toole’s libertarian principles but I find you as dogmatic as the bike nazis. Sigh.

  6. Frank

    “I had an honest question for you”

    Your “honest question”: “Am I missing something?” Which is a rather snide question.

    “You drag this blog down with your rudeness.”

    And you drag it down with your dogmatic embrace of government intervention in every nook and cranny of every market, large or niche, to protect your family in the hospitality industry, which is all about lobbying government for special licensing and regulations to limit competition and entry to the market.

    Don’t like my rudeness? Too bad. Take your defense of statism elsewhere.

  7. Roundabout

    I stayed in San Francisco for two months in 2003. It seemed to me there were thousands of people on welfare who hung out in the street and panhandled very aggressively. Sometimes they would not let you pass on the sidewalk like a sidewalk troll. I remember reading articles about this group and it seemed like the city was proud of these dependents, and had a very self-righteous stance about their policies that were making the city a magnet for this sub-culture. There were some damn fine historic hotels that were full of these people. You could smell the stench of cigarettes, alcohol and b.o. by just walking past the doorway. I have followed real estate on Zillow and Trulia for the past month in S.F., and there is a lot of crap for sale @ $2000.00 a square foot . Their must be some serious regulations that are keeping those prices that high-

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