Re: [Rescue Muni] Housing

Tom Wetzel (tom.wetzel@beasys.com)
Mon, 15 Feb 1999 09:18:58 -0800

Donald writes:

>> The entire population of California couldn't
>> move to S.F., e.g., because there isn't the room, not to mention any
>> other restraint.
>
>Exactly, that is the reason for the "law" of supply and demand.

There is no such law. This is a myth propagated by political
propaganda.

>Those
>who are willing to pay -- and educate themselves and work hard to earn
>the money to pay -- the most to live in the city get to do so.

You're assuming that income is a function of "hard work." This is not
the case. Many people with low incomes work harder than many people
with very high incomes. The biggest determinant in income size is
whether your have property income. The top 1% of the population
have some hugely disproportionate share of total national income
precisely because of property income, e.g. from owning stocks, bonds,
real estate, businesses. I.e. those who own the economy get the lion's
share of the proceeds. There is no inherent relationship between
income based on ownership and work.

>How else
>would you fairly ration San Francisco's limited space?

The highest prriority should be enabling those who currently
live in a community to continue to do so. To deny that is to
deny self-determination to that community, i.e. you're restricting
their freedom. To make the argument perfectly plain let me lay it
out:

1. Freedom is self-determination.
2. Being able to continue to live where you live if you want to do so
is a basic part of self-determination.
3. Policies that deny the ability of people to continue to live where
they do so now and want to continue to live therefore seriously
diminishes their self-determination.
4. Since freedom is self-determination, such policies seriously
diminish the freedom of the people adversely affected by such
policies.
QED

People who do not currently live in a community clearly have
a less compelling claim on its scarce space. From the point of
view of employers and property owners, of course, they don't see
things that way. Their view is: Priority should be given to those
we are most interested in hiring, i.e. who are best suited to
helping us make profit. But their viewpoint is class-biased.
What I'm pointing out is that there is an inherent conflict of
interests along class lines on land use policy.

>> So there obviously is no asbolute freedom of movement, guaranteed by
>> the Constitution or anything else. If a person doesn't currently have
>> the ability to move to S.F., they don't have the freedom to do so.
>
>But they do have the freedom to try to do so. The Constitution does not
>guarantee success, nor should it. It only guarantees the right to try.

The right to "try" is a nonentity. If Joe loses his arm to an industrial
accident, he can still "try" to move it.
Rights without corresponding powers are meaningless.

>
>I don't mean to sound like an absolutist capitalist here, I'm not. I
>believe the government has a role in modifying capitalism so that
>everyone, especially those who start out with handicaps (physical and
>otherwise), get some chance at living in San Francisco (or whatever else
>they want to try for). But San Francisco is a limited resource, and I
>do believe that the fairest way to distribute the "right" to live in San
>Francisco is to let people compete for it.

You mean "compete" in the capitalist labor market to see who can
get the most income and let those with the most income buy whatever
they can. What if this diminishes the rights of the majority? What
reason is there to think this procedure is even socially
efficient?

>Those who want it most, by
>and large, will get it. Those who don't think it's worth the effort,
>won't. Sure, it's not entirely fair, but it's a lot fairer than any
>kind of non-economic rationing system.

Why?

>
>> What I do claim is that the people who currently live in a community
>> have the right -- even if not a right adequately protected by law
>> (there are what we might call "common law" rights) --
>> to govern that community, to collectively determine its fate as a
>> community.
>
>Sure. Renters have the right to vote and change the law to make it
>harder to own a home in San Francisco. Being two-thirds of the
>population in San Francisco, they have exercised that right. People who
>want to own a home here also have the right to try to find a [legal] way
>around that and get what _they_ want. If there are too few houses for
>all of the people who want to live in San Francisco, there will be a
>competition of some kind -- economic or political -- and somebody will
>lose. Somebody is not going to be treated fairly -- unless, of course,
>we build more housing along a new Third Street rail line.

Building such housing won't solve the problem you have described.
You don't know if the amount that would be created by the current
market forces will be such as to facilitate affordable rents for
those currently living here. I see no reason to think it will.

>
>> To say they have no
>> right to do that is to deny them self-determination, i.e. it is
>> to deny them locational freedom.
>
>I don't think either Andrew or I said that.

Maybe not but I'm drawing out logical consequneces. See my
argument above. You are committed to the logical consequences
of your claims. If you don't like the logical consequences,
that is reason to rethink your claims.

>What we have said is that
>if there is a shortage of supply, there will be a competition, either
>economic or political. We're saying it makes a lot of sense to remove
>some of the intensity out of this competition -- of either form -- by
>building more housing.

And *I* said I'm not opposed to building more housing. I'm just
not in favor of letting the residential builders association do
whatever they want to do. Nor do I see any reason to believe that
"letting the market rip" will "remove some of the intensity out of
this competition", i.e. in a way perceptible to people with working
class incomes.

>
>> This is a strawman argument. From the fact that we do not allow
>> those with lower incomes to be pushed out by those with higher ones,
>> it doesn't follow that we are saying that no one can move here.
>> That simply doesn't follow.
>
>But it does, if all of the current housing is taken up -- which, with
>less than one percent unoccupied, it effectively is.

No it does *not* follow. You're forgetting that each year a certain
percentage of Americans move. So, even if no new housing is built,
there is room for *some* people to move here. And we could build more
housing and so so in such a way as to ensure greater affordability.

>
>> What i'm suggesting is subsidized co-op housing,
>> which at least would provide places at a price they might be able to
>> afford.
>
>No it won't. Who will subsidise it, with what money? Now, new housing
>is being built at no financial cost to the city. Your way, the city
>will, somehow, have to pay for the new housing.

Re-read my proposal. The financing costs and land acquisition costs
would be mostly recouped through the lease income. The city would have
to come up with a level of subsidy to maintain affordability, perhaps.
Given that locational advantages
to businesses cause the high land prices, it doesn't seem unreasonable
to recoup some of that increased land value in commercial taxation.
This is exactly why a downtown transit assessement district is the
appropriate way to subsidize Muni.

You're assuming the current policy has no social costs. But in fact it
does. Whether it has *financial* costs to the city is not the same
thing as its social costs. Social efficiency has to look at total
social costs.

>
>> As it is, they will go where
>> there is the least financial resistance, i.e. where it will cost
>> them least.
>
>As, I submit, would you, if you were building the housing.

If I were a capitalist developer, you mean? Maybe, but I'm not. :)

Tom Wetzel