Housing is a problem everywhere, but nowhere is it as bad as it is in San Francisco. I had an idea a few years ago which inspired me to go back to school and study this issue in depth in order to deploy this potential solution. This is why I chose to move to the city where this problem is worst in order to study this problem and this potential solution.
As a student at SFSU majoring in Urban Studies with minors in Racial Resistance and Queer Ethnic Studies, I learned from leaders in both the non-profit and for-profit housing development sectors as well as the the financial side of the issue, the public policy stream, and the advocacy stream. Together these forces try to improve conditions and ameliorate the housing crisis, with limited success. All of them agree that under the current system, housing everyone is fundamentally impossible by design.
Lots of housing is being built; luxury condos. This displaces the people who already lived in the neighborhood and drives cost of living up. Combining gentrification with tech companies busing rich people into this “new” neighborhood, this can mean the theft of entire communities by wealthy people. Existing culture and history is simply paved over and generations of history are callously erased in the process. This leaves sterile, over-leveraged, unhappy, interchangeable consumers in place of the citizens who made up the local community and its culture. Marginalized people are forced into denser living situations further away. These effects spread. We call this social problem gentrification.
Gentrification is different from development. Gentrification is development which displaces marginalized people from existing communities and replaces them with privileged people. Development is good, but gentrification is bad. Under capitalism there is no way to ethically develop communities in order to provide sufficient housing without displacing people or raising prices for everyone.
“Affordable” vs “affordable”
It’s not possible to build affordable housing that is a good investment. Therefore there are two ways that affordable housing may exist.
There are several different ways the word affordable works with regard to housing. What does it mean for housing to be affordable? It means that the monthly price of the unit is less than 30% of the median income in the same community. Let’s say the median income is $1,000/month. An affordable unit of housing would have to cost less than $300/month.
The problem with the standard definition of affordable housing should be obvious. Even if there is “affordable” housing available, it’s only affordable for the top-half of the income percentiles.
Now let’s talk about the two types of affordable housing.
Capital-A affordable generally means housing that is subsidized by government programs. If I am living in the example community I just gave, and I’m only earning $500/month, then a unit that’s affordable for me would be $150/month. Therefore government programs will pay the difference. If I find a unit that costs $2200/month then the government will pay the remaining $2,050 each month so I can afford the unit. I hope this looks like a ridiculous solution to this problem, because it is.
Little-A affordable means housing whose price is already affordable. Typically this is going to be in depressed communities with a history of redlining and systemic racism. The effect of these low prices is that rich people will take these units and drive the prices in the community up. Thus eliminating any affordable units through gentrification.
The solution seems obvious to me. We need a lot more units, and we need them everywhere.
Why is this still a problem?
As I see it, there are two major fundamental problems — especially in San Francisco — which contribute to gentrification. Officially, we have fines for luxury condo developers who neglect to include affordable units in new construction. These fines are typically about 10% of the cost of building those affordable units. Therefore, almost no one builds affordable units. When they do, residents are often excluded from the building’s amenities and given a separate “poor door” around the corner which accesses the affordable units.
In other cities like Portland, developers of large projects can be required to provide identical units to residents with rents based on their income rather than market prices. This means developers do not have the opportunity to pay tiny fines and skip the affordable units; all the units must be affordable based on the income of the residents.
The second major fundamental problem is the cost per unit to construct affordable housing. Like most cities, the developer industry in San Francisco is an oligopoly with a small number of firms controlling the market and openly colluding to artificially inflate prices and prevent competition. This means the cost per unit to construct affordable housing is now up to a million dollars. This makes those tiny in lieu fees look very attractive to developers who have no rational reason to build affordable units which can never break even.
What would be better?
Everyone deserves dignity and housing. Currently, cities in California are required to investigate the progress they’re making in addressing the unmet need for housing. Unfortunately there is no requirement that they actually do anything about the problem or that they actually meet their housing needs. Consequently, some cities are officially projecting they will meet their current needs in about eight-hundred years.
Solving social problems is hard. It takes a lot of work from a lot of angles, and it takes proposed solutions. I am planning to approach this problem from three angles.
First, we need to build an activist organization devoted to building as much housing as possible.
Second, we need new solutions to dramatically reduce the cost of building housing.
Third, we need powerful and ethically-constrained corporate interests fighting both the market and the political system to accomplish the goal of housing everyone.
What would it look like?
I propose a radical shift to a completely different strategy from what has been tried before. There are several firms attempting to develop modular construction techniques. None of them sells a single unit which is ready to live in. They often sell sections of framing which still need siding, plumbing, and electrical installed.
I propose to manufacture complete units ready to live in.
By building these units inside shipping containers, they can then be dropped in place and even stacked ten stories high. This is what they are designed for; on ships crossing the high seas.
These units would have a front-door and a rear balcony or porch. Simple plumbing and electrical connections allow easy installation of a single unit in a back yard or in a drop-in mid-rise residential tower.
Imagine if Tesla or Solar City were selling apartments instead of cars. You call or go online and make an order, then a team comes to install it. Everything from financing to electrical and plumbing is built in to the process. You have a single point of contact and everything is taken care of.
This allows us to take advantage of dramatic recent progress in ADU deregulation. This policy change allows us to pit NIMBY against NIMBY; every back yard becomes a rental unit which helps bring the prices down.
Another huge opportunity is disaster response. A single cargo ship can hold ten thousand shipping containers. Imagine sending ten thousand homes to the site of a disaster. From ships to trains to trucks, the infrastructure is already in place to cheaply ship these units anywhere in the world.
Lastly, I advocate for a nonprofit community-owned model. Rather than having everyone owning units separately, have the residents own the entire development together. The project could be structured as a land trust or other similar permanent entity, giving full power and control over the building to those who actually live there. This would integrate with a set of responsibilities the residents adopt under a consensus model of resident stewardship.
Part of what’s so exciting about this idea is the fact that there are several different options. The various shapes and sizes of these containers are designed to lock together into large structures. This means we can easily build an extremely strong tower containing lots of different sizes and types of units. These towers are designed to tilt back and forth to extreme angles on a constant basis on cargo ships. This means these structures will be extremely resistant to earth quakes and other environmental problems associated with the ongoing collapse of the biosphere.
We can cheaply build affordable units, and we can also cheaply build luxury units. Combining these in interesting ways lets us create integrated communities consistent with the design principles of new urbanism.
Perhaps most significant is the opportunity to integrate self-contained, closed-loop, off-grid systems. We can easily make these units solar powered. We can easily make these units filter their own drinking water from wells or creeks and integrate septic systems to cleanly and safely dispose of the waste. Creating this integrated housing solution with an eye on permaculture and designing for closed-loop systems-thinking means anyone can live anywhere and get their needs met whether they’re in a desert or a rainforest.
Equally important to the idea of manufacturing these units is the idea of having a nonprofit arm which builds lots of affordable housing units and then manages them. This will allow us to have a widespread impact on the housing crisis while also being our own biggest customer.
One of the most exciting parts of the business model is the idea of “housing credits.” I want to create a new tool for those who want to help solve the housing crisis. Most large companies buy carbon offsets which fund the offsetting of their carbon impact. I want to create housing credits which offset the effects of companies contributing to demographic shifts in communities where their employees displace existing residents.