Developers Aren’t Going to Solve the Housing Crisis in San Francisco

4 11 2014

In a recently released report, [] takes on and debunks several of the “supply-side” arguments made about the housing crisis, and offers an alternative list of practical and immediate solutions, including preserving existing rental stock (YES ON G!).  Read the full report here.


(Photo credit: Joseph Smooke)


Affordability for working class people in San Francisco isn’t going to come from letting profit-driven developers have their way. After months of research and interviews by a journalist who has worked as a developer and on housing policy, this feature dismantles the arguments driving housing policy in the City and offers real solutions instead of “trickle-down” approaches.

San Francisco is the epicenter for America’s changing economy. The gap between rich and poor in the US is growing as the middle class and manufacturing sector are being squeezed out. A recent study equates San Francisco’s income gap with Rwanda’s. City living is ideal for young professionals and, increasingly, the suburban elite. American cities need to look at smarter ways to thrive and not simply rely on the invisible hand to provide housing for working class America.

“It’s a complicated issue and you just can’t quote Adam Smith in your Economics 101 textbook to say that’s going to solve the problem,” says Venture Capitalist and original member of the Pacific Stock Exchange, Doug Engmann. He’s referring to laws of supply and demand, which dictate that price equilibrium will be reached when quantity demanded by consumers matches the quantity produced by suppliers. “You have to understand how they work in special situations and you have to look at the situation that we’re in,” says Engmann during an interview in his financial district office.

This feature debunks supply-side arguments myth by myth and gives recommendations for solutions. Upzoning won’t solve the housing crisis. Luxury demand by techies is the most dominant factor driving up prices. No matter how low building costs dip or how streamlined the process becomes, as long as that luxury demand dominates, developers won’t prioritize the housing needs of working class people.