by Randy Shaw on March 31, 2025 (BeyondChron.org)
Groups urge support for Venice Dell
Housing Economics Must Change
Seven years before Abundance swept the nation I released a book arguing that the housing policies of progressive, “blue” cities failed to provide affordability for the working and middle-class (See Generation Priced Out: Who Gets to Live in the New Urban America, UC Press). Many cities and states have since pursued abundance by eliminating zoning restrictions and other procedural barriers. But new housing production has often not followed.
Why? The economics of building new market rate housing no longer pencil out. And Trump’s tariffs are about to make the economics even worse.
That’s why YIMBYs and other pro-housing advocates need to aggressively focus on the fiscal barriers to new housing. If housing is to be built in blue cities, reforms such as reducing or ending builder impact fees and securing tax incentives may be necessary.
Consider what’s happening in the cities commonly cited for needing abundant housing.
San Francisco
San Francisco is the longtime poster child for progressive cities whose failure to build housing has priced out the working and middle-class. I wrote the first of what became an avalanche of books criticizing the city’s housing policies. San Francisco’s State Senator Scott Wiener has since led efforts to revolutionize statewide housing policies. Partially as a result of state density bonuses and other legislation, San Francisco currently has over 72,000 entitled housing units in the pipeline.
That’s a huge number of housing units not being built. Why?
Some builders paid too much for land whose value has diminished post-pandemic. Others, most notably the massive Parkmerced project, failed to build when the time was right.
But the chief reason for 72,000 unbuilt units is the economics of development no longer pencil out. And won’t without some major city policy changes.
I wrote in February 2023, “Lenders see the market for new housing in San Francisco as dead. They don’t know who will move into new housing and they are not encouraged by what they see happening on the streets of the city.” See “Is San Francisco’s New Housing Market Dead?”
In October 2023 I wrote a story stating, “If builders believed they could make money San Francisco would not have tens of thousands of entitled units not under construction.” Yet San Francisco’s 2024 mayoral campaign was waged as if anti-housing NIMBYs were still holding back the city’s housing production. As if fiscal challenges were not the real cause of the lack of development.
Abundance policy has won in San Francisco. But building has not happened.
What could jump start new housing development? Lower interest rates would make a huge difference but that’s controlled by the Federal Reserve.The most impactful but also controversial reform that could be applied locally would be to end or restrict inclusionary housing, at least in some neighborhoods.
San Francisco reduced its top inclusionary percentage to 15% but that made no difference. I’ve always supported inclusionary housing but have become less enamored of it after seeing how few units actually come on-line. Plus San Francisco’s below market rate program suffers from excessive vacancy lengths, which cost builders money. This vacancy problem—caused by the process the city uses to fill vacancies— has persisted for years despite protests. With many San Francisco projects using state density bonuses that require affordable units, the need for citywide inclusionary housing laws is less clear.
San Francisco could also boost production by offering tax credits for entitled projects in priority neighborhoods. But given the city’s budget crisis and the politics of the issue, tax breaks to market-rate builders are likely off the table.
Absent some reform that addresses the fiscal barriers. expect little new market-rate housing in San Francisco for at least the next three years.
Los Angeles
Los Angeles’ problem pursuing abundance in political.
My book describes the over the top opposition from affluent Venice homeowners to a planned affordable housing project. The Venice Dell project offers 120 units of low-income and homeless housing to a neighborhood whose residents have pushed to get unhoused people off their streets.
It turns out that Venice homeowners don’t want low-income people anywhere in their neighborhood. In a project greenlighted in 2017 and approved by the City Council in 2021 and 2022, ground has still not broken.
The Los Angeles Times editorialized last week in a piece whose title says it all: “Stop finding ways to kill the Venice Dell homeless housing project and get it built instead.”
Among the villains here is Mayor Karen Bass. After running as a pro-abundance candidate, Bass too often gives in to NIMBYs. Calling her “woefully silent” on Venice Dell, the Times states, “Distancing herself from this debate (for whatever political reasons) instead of supporting an already approved project only makes it more difficult to build homeless housing in the face of any kind of opposition that crops up.”
Los Angeles has not embraced abundance. The city continues to have among the nation’s worst affordability and homelessness crisis.
New York City
I wrote a story in 2015 (!) about NIMBY opposition to affordable senior housing on city-owned land in the upscale Nolita neighborhood ( “NIMBYism Hits NYC“). My book describes the struggle around what is known as the Haven Green or Elizabeth Street Garden development.
It’s a case study of affluent neighborhoods opposing affordable housing.
Six years ago last week I did a book event with the courageous Councilmember Margaret Chin who backed the project and the key developer, Habitat for Humanity, New York City and Westchester County. Incredibly, ground still has not broken on this desperately needed affordable project.
Haven Green is likely the most contested senior housing development in modern United States history. Opponents are wealthy, famous, and have used all their clout to stop this project in the courts, streets, media and among politicians. Its approval was ultimately granted by New York’s highest court, yet new legal challenges are still allowed to block the project.
New York City recently became the City of Yes. Open New York and other groups have spearheaded a lot of rezoning progress But Nolita’s desperately needed senior and LGBT project to still be in limbo—the latest delay caused by a February lawsuit.
As with Venice Dell, we can’t have abundance if wealthy neighbors are continually granted the power to block affordable housing in their neighborhoods.
Oakland
“The city promised that the measure would allow it to spend $350 million on construction and rehabilitation of up to 2,400 affordable housing units over the next six years”—“Oakland voters approved a tax to improve streets in 2022. Nothing has happened,” SF Chronicle, March 25, 2025.
Why has Oakland not moved forward on building 2400 desperately needed affordable housing units? The economics don’t work.
Building the housing requires floating bonds that the city’s downgraded credit rating has not allowed. Oakland’s financial problems prevents the city from adding to its affordable housing supply.
To be clear, abundance advocates necessarily target zoning and procedural delays. But unless we also fix the economics of construction, affordability will not come to progressive cities that need it most.
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 new book is the revised and updated, The Tenderloin: Sex, Crime and Resistance in the Heart of San Francisco. His prior books include Generation Priced Out: Who Gets to Live in the New Urban America. 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.
