What Drives SF’s Gentrification? It’s Not What Many Think

by on November 2, 2021

204 rooms permanent supportive housing, 6th and Stevenson

Don’t Blame New Market Rate Housing

San Francisco’s Board of Supervisors rejected a 495-unit, 24% affordable project last week. The Board did so over fears it would promote Sixth Street “gentrification.” Gentrification is not a ground for a CEQA appeal but that’s what opponents argued and what the vote was about.

Despite the Board’s belief, new market rate housing has not driven San Francisco’s gentrification process.  As I detail in Generation Priced Out: Who Gets to Live in the New Urban America, gentrification has overwhelming occurred in neighborhoods that had little to no new multi-unit development.

Market Rate Housing Has Not Driven SF Gentrification

San Francisco began gentrifying in the late 1970’s. It was entirely unrelated to new market rate housing development. In fact, the massive gentrification of San Francisco through the 1980’s and again during the 90’s dot com boom was accompanied by little new housing; it was instead fueled by increased housing demand pursuing a fixed housing supply.

The city’s failure to build more housing to meet rising demand fueled the gentrification of once affordable neighborhoods.

New market rate housing was part of the gentrification process in the San Francisco Redevelopment Agency’s “urban removal” of SOMA’s Yerba Buena neighborhood.  But this massive demolition and displacement strategy was driven by government, not private developers. The Agency displaced thousands of black residents in the Fillmore without major new development; newly vacant units were occupied by those with higher incomes.

A lot of market rate housing has been built in proximity to San Francisco’s Sixth Street in the past two decades (usually with progressive supervisor support).  Yet Sixth Street remains as far from being “gentrified” as it gets.

Gentrification’s Prerequisites

Gentrification requires certain conditions. Here are the key ones.

Homeownership

I can’t think of a single neighborhood that gentrified without major opportunities for homeownership. I often point to San Francisco’s Tenderloin as a classic example of how denying homeownership helped prevent gentrification.

The gentry want to own, not rent. Deny ownership and you prevent gentrification. San Francisco neighborhoods once widely affordable to low-income and working-class residents—the Haight-Ashbury, Marina, North Beach, Inner Richmond, Noe Valley to name a few—all offered ample homeownership opportunities. Those desiring to live in these neighborhoods bought flats and converted them  to tenancies in common or condos; single family homes long rented to tenants were sold to affluent buyers.

Sixth Street has no homeownership opportunities.  And as noted, new market rate housing nearby has had no gentrifying impact on Sixth Street.

Lack of Strong Zoning Protections

Neighborhoods lacking homeownership can be rezoned to provide it. I describe in The Activist’s Handbook how activists in the 1980’s engaged in a pro-active rezoning to protect the neighborhood; Sixth Street has done the same. The street has been affirmatively rezoned to bans potential new highrise development that could otherwise gentrify the area.

Condo Conversions

Neighborhoods can gentrified if the existing housing stock can be converted to condominiums. But San Francisco addressed this risk as far back as 1980, when it banned condo conversions of buildings over six units. That removed condo conversions as a threat to gentrify Sixth Street.

SRO Hotel Conversions

The destruction of SRO hotels fueled gentrification in Seattle and New York City. It also was the key strategy for the Redevelopment Agency’s complete gentrification of San Francisco’s Yerba Buena neighborhood.

But San Francisco has the nation’s strongest SRO hotel protection laws. The Department of Building Inspection vigorously enforces these protections and city law also allows nonprofit enforcement.

The Tenderloin Housing Clinic, which I head, is the largest operator of Sixth Street SRO’s. All lack the private baths and  large rooms that attract tech workers. A sizable percentage of Sixth Street SRO’s are  either owned by nonprofit groups or leased to nonprofits for permanent supportive housing.

So the SRO housing stock on Sixth Street makes gentrification virtually impossible. Thanks to former Assemblymember Mark Leno, San Francisco’s SRO tenants are even exempted from eviction under the state Ellis Act.

Rent Control

Sixth Street housing not owned or leased by nonprofits is also subject to San Francisco’s rent control and just cause eviction laws. No tenants could be evicted due to the alleged market pressure from 469 Stevenson (and there are a bevy of organizations including my own that would stop efforts to illegally force tenants out).

The Future of Market Rate Housing

Some see the Board’s vote as its rejection of future market rate housing. I disagree. I see it as reflecting inadequate mobilizing and lobbying by project backers. I saw nothing supporting the project prior to the vote. I doubt some supervisors realized how controversial their vote would become, as the project was under the radar.

San Francisco builders should have the right to take support for a 24% affordable, family housing project for granted.  But something fell short in the lobbying effort when the Board majority included frequent backers of market rate housing. With better outreach their votes could have been won.

Assuming the San Francisco Board of Supervisors will automatically approve any market rate project is a big mistake.

Randy Shaw

Randy Shaw is the Editor of Beyond Chron and the Director of San Francisco’s Tenderloin Housing Clinic, which publishes Beyond Chron. Shaw's latest book is Generation Priced Out: Who Gets to Live in the New Urban America. He is the author of four prior books on activism, including The Activist's Handbook: Winning Social Change in the 21st Century, and Beyond the Fields: Cesar Chavez, the UFW and the Struggle for Justice in the 21st Century. He is also the author of The Tenderloin: Sex, Crime and Resistance in the Heart of San Francisco

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