USP 580 Housing Policy & Planning
The solution to the housing problem in San Francisco (And beyond) is the Community Development Corporation model, and the newly created arts districts are the perfect lever to make that happen. I spent much of the pandemic meeting with the boards of the arts districts to discuss this proposition, and they all already agreed before I first met with them. Based on the great success of the examples of the Tenderloin Neighborhood Development Corporation and the Chinatown Community Development Center, the other districts now see this model as an ideal solution to bypass many of the barriers to constructing affordable housing, and to empower the community to seize ownership and development of their housing from exploitative landlords and corrupt for-profit developers. This is also widely seen as a way for ordinary people to unionize as a community and exert power over those few local capitalists who historically weald unbridled authority over local policy. This has exciting implications for housing and beyond.
Like most urban policy processes, the arts districts – though new – see few people attending public meetings to discuss the important issues affecting our community today. I saw these new institutions as potential Archimedes levers for the cause of the CDC model so I began attending their public meetings. I was surprised to often find myself the only one attending. I was also surprised to find that they were all already very excited about the potential for launching CDCs in all the districts that don’t already have one. In fact, it was typically the number one priority on the agenda. A common secondary priority was to reopen the now shuttered sex clubs that once dotted all over the city. More on that later.
The reason the Community Development Corporation model is so exciting as an alternative model for housing development, ownership, and administration is that it is a special kind of community-ownership model which is motivated not by maximizing shareholder profit or as a meager form of public relations for a large corporation, but rather as a serious attempt to solve the problem. Legally, a CDC makes decisions on the basis of actually building and providing affordable housing to the community.
Mercy housing in contrast is technically a nonprofit but does very little actual work in the community. I asked the COO if she feels like they are having an impact on the problem. She said, “No, not at all.” Contrast that to the TNDC COO who said, “Yes, absolutely,” and you will immediately see the difference between housing projects as corporate PR versus housing projects intended to actually solve the problem. Other examples like Hope SF or Hope VI are ostensibly nonprofits focused on building housing, but only when it is built on demolished former minority neighborhoods. These non-CDC examples arguably do more harm than good because they legitimize the terrible capitalist housing system while also erasing minorities from the city and having almost no impact on actually solving the problem.
In contrast, TNDC and CCDC have had great success in building lots of affordable units and renting them out to the people who actually need them. That’s why the other districts now see this model as an ideal solution. It also allows them to bypass many of the barriers to constructing housing. One example is that CDCs have first right of refusal for any residential real estate transactions. It is now commonplace to see projects in the Mission where a private developer demolishes a historic building to construct luxury condos instead. Let’s call these types of projects “Gentrification Centers.” The Mission currently has no CDC, and so there is no nonprofit with first right of refusal that can step in and say, “No, actually we don’t want a Gentrification Center, we will take that land instead and build affordable housing.” This is why these models are so attractive to communities plagued by Gentrification Centers.
CDCs also have access to exciting funding sources such as the Low-Income Housing Tax Credit which, while limited, does offer a great deal of funding for these projects as well as empowering CDCs to discriminate against wealthy people. This means they are not just empowered but required to provide affordable housing to those who actually need it, rather than to tech bros and other gentrifiers.
One of the things I’ve been pitching all year is that CDCs should also be selling “housing credits” just like carbon credits, except to offset the cost of housing. They could create a market to allow big tech companies to claim they are “housing neutral” just like they currently claim to be carbon neutral. There are many historically good actors like Marc Benioff, Frieda Kapoor, Merritt Capital, and others who seem likely to want to fund projects this way or even through more traditional debt instruments or via venture philanthropy. The city itself would have a hard time explaining to constituents why it wouldn’t fund these new CDCs directly. I think it would even make sense for them to sue any corporations that are bad actors, requiring them to pay for housing credits if their employees have had a particularly harmful effect on a given community.
Funding CDCs could also become a major strategic part of project proposals. Just imagine if a company like Twitter had been required to offset its impact on the local housing inventory when it moved its headquarters to the Market-Octavia district. Instead, the surrounding community was demolished and replaced with some of the most expensive housing in the world. If there was a Market-Octavia CDC, this would likely have played out very differently.
The really exciting thing about CDCs for all the districts is the fact that they allow a community to seize control of its housing and wrest that housing from greedy capitalists and slum lords. Currently, we have a housing system that pits the wealthy against the workers and treats workers as a resource to be exploited. Landlords try to extract the maximum amount of value out of workers in order to avoid doing any work themselves. A CDC on the other hand is not trying to make a profit, they are trying to do the right thing. This means that they are charging rates people can actually afford and providing affordable housing only to those who actually need it. It’s a radical change from a deeply corrupt and immoral system to a deeply moral alternative.
It also wrests political power away from local merchant associations and other capitalist groups whose aims do not align with the best interests of the people. For example, there is a battle happening right now between the Castro Merchants Association and the Castro Cultural District over whether or not the new racially inclusive pride flags should replace the incumbent flags, or be placed in “separate but equal” locations. I’ll let you guess which group is on which side of this issue. This is emblematic of many of the issues that CDCs will empower communities to confront together. Community development is not about making more money for a few capitalists; it’s about embracing the broader community and doing what the community feels is right for the community. This is supposed to be the role of politics, but sadly we live in a world where money is speech and so politics is owned by the capitalists. In this world of deeply corrupt politics for business, the CDC presents an opportunity to revisit a classic solution to this very problem, the union. I think it’s useful to consider a CDC as a sort of labor union for a neighborhood which can serve as a platform to solve many community development issues beyond just housing.
This is a big part of why the SoMa District and the Castro District both listed reopening the sex clubs as their number two priority after establishing local CDCs, because these historical community institutions were sacrificed on the altar of capitalism by people who wanted to “clean up” the neighborhood and make more money on housing as an investment and more traditional business as an investment. Instead of allowing business to decide what the neighborhood looks like, the community is coming together to tell business what they want the neighborhood to look like.
CDCs have exciting implications for housing and beyond. The reason I came to San Francisco to learn about problems in cities is because though these issues exist everywhere, there is nowhere in world worse than San Francisco. This means that while many things have been tried here, and many of those things might work elsewhere, the solutions we find that do work here will almost certainly work elsewhere. I see Community Development Corporation as the best of these solutions; a really powerful tool that communities everywhere could use to take control not just of housing but also of local business and politics in order to force incumbent political and mercantile institutions to behave in a pro-social way that actually benefits a thriving community rather than displacing and erasing the community to turn a neighborhood into a sterile investment rather than the living, thriving thing it ought to be.