The Other, Unsexy San Francisco Housing Vote Last Week

The Unsexy San Francisco Housing Vote No One's Talking About

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Updated on October 6th, 2020

Last week, voters said yes to more affordable housing and people in D.C. started murmuring about bailouts again. This week, poverty and housing are on the congressional agenda, civil rights groups try to up the ante on fixing Fannie Mae and Freddie Mac, and the GOP candidates take their chances with reporters at Fox News. Also: Ants build cool stuff.

What do Teachers Have To Do with My House?

Last week, voters in San Francisco adopted a pro-housing initiative and turned their backs on two ideas that would have made it even more expensive to live in one of the nation’s most expensive cities.
The Mission moratorium would have temporarily banned most residential construction in an effort to slow gentrification. Critics had argued the plan would make housing even more expensive. Voters also rejected limits on Airbnb (with the help of an $8 million campaign).
Less sexy but more important. City residents voted to spend $310 million to build or rehab thousands of affordable housing units, some of which will be used for teachers.

Wait – the city has to provide housing for its own employees? People with jobs, health care and college degrees? Crazy, but true.

In greater San Francisco, a typical home costs more than $1 million. A typical teacher earns less than $67,000. Beginning teachers start at $52,559 and can hope to earn $86,412, the high point on the pay scale.
Let’s see, 20 percent down on a $1 million house with a 30-year loan at 3.8 percent… that’s $3,728 a month, about 67 percent of a typical teacher’s income.
So what? San Francisco has been expensive for a long time, so why the hubbub now? Turns out a lot of Bay Area teachers have been around a while and living in rent-controlled apartments. As a younger generation of instructors moves in, they have to rent at market rates.
“As the rent-controlled teachers retire, they’re being replaced with people in a much more precarious situation,” said Matthew Hardy, a spokesman for United Educators of San Francisco, which represents area teachers. “This is a tale of two cities. There’s incredible opulent wealth and there’s stunning poverty that’s developing.”

Young teachers are living three or more to an apartment and, not surprisingly, turnover is high. Last year, some schools saw 25 percent of their classroom staff leave.
It’s not just San Francisco. The problem is so dire nationwide that the Department of Housing and Urban Development has a good neighbors program to help municipal employees buy homes. In McDowell County, W.Va., where a lack of available housing has led to chronic teacher vacancies, the American Federation of Teachers has partnered with the community to tear down two abandoned stores and build apartments for educators and others.
“Affordable housing is an issue for a growing number of educators. It’s important for educators to create roots in the communities where they teach,” AFT President Randi Weingarten told Redfin.
Elsewhere. Voters in Boulder, Co., rejected an anti-housing measure that would have given tiny communities veto power over new development, a type of hyper-local planning that CityLab has called “mega-NIMBYism at work”. Seattle will spend $900 million in property taxes to improve walkability and transit. Texas voters cut property taxes.

What’s Washington Up To Now?

Not much (as usual when it comes to housing) and that’s not good. Remember Fannie Mae and Freddie Mac? The mortgage giants and wards of the state are making money and have repaid their bailout in spades. But taxpayers aren’t out of the woods, as Freddie reminded us last week.
The company reported a quarterly loss due to up-and-down interest rates, which has some people freaked out. But the mortgage business is always volatile and Fannie and Freddie generally are profitable, so what’s the problem?
After the financial collapse, we passed a law forcing the companies to shrink down. They did, which means now they have no cash cushion to tap when times get tough.
Bailout II, anyone? Congress and the White House are in no rush to fix this complicated mess, even though everyone–mortgage lenders, housing advocates, Wall Street–agrees it needs fixing. Another bailout could be inevitable. In the meantime, the limbo will only make it harder for people to get loans.
“The future ability for millions of creditworthy working people to secure conventional mortgage loans, become homeowners, and build wealth is in jeopardy,” said John Taylor, CEO of the NCRC, an affordable housing coalition. Stay tuned.

Etc.

Coincidence? We don’t think so. Baby boomers were the big winners in last month’s employment report, with most job gains going to people 55 and older. So we’re not surprised that homebuilders are upbeat about sales in retirement–er, “adult”–communities. Builder confidence in the 55-plus market rose last quarter and has been in positive territory since early last year.
What about the rest of us? Not so good. First-time buyers fell to 32 percent, the lowest since 1987, the National Association of Realtors reported.
Foreclosure update. The share of distressed property sales fell in August to 9.3 percent. At their peak, in January 2009, they made up 32.4 percent of home sales, says CoreLogic.
The child care is too #$%@ high! In a huge number of places, child care costs more than rent. For two-child families, child care costs nearly three times rent in Binghamton, NY, says the Economic Policy Institute.
Walking to Wegman’s. When a grocery store moves into a food desert, do people eat better? Not really.
Tiny house: $2 million for 180 square feet. ‘Nuff said.
There’s a new builder in town. “Squirming mats of fire ants” and your house.
What do you want to know? Lorraine.woellert@redfin.com

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Lorraine Woellert

Lorraine is enjoying her first real job after a career in journalism. She’s based in Washington, D.C., where she writes about housing and the economy. Before joining Redfin, Lorraine was at Bloomberg News reporting on politics, financial mayhem, housing and the economy. Her dream home is a top-floor loft with a pool, friendly neighbors and a terrace for throwing parties. Everyone's invited. Redfin is a full-service real estate brokerage that uses modern technology to make clients smarter and faster. For more information about working with a Redfin real estate agent to buy or sell a home, visit our "Why Redfin?," page.

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