Four Reasons to Hate SF Rent Control

San Franciscans love their version of rent control (SFRC). Most other Americans disagree.

Take liberal California. In 1995, the CA legislature passed the Costa-Hawkins act, which outlawed rent control on units built after Feb, 1995. When progressives put a measure on the ballot in 2018 to repeal Costa-Hawkins, only one county supported it (look for the tiny green dot):

Prop 10 (2018) results

Nationally, rent control is actually banned in the majority of states. So, who’s right?

Understanding rent control

SF’s original rent control ordinance was enacted in 1979 on buildings with 5 or more units. It was expanded in 1994 to include 1-4 unit properties. It (supposedly, see below) applies only to structures built before 1980. SFRC allows rents to rise, at most, at 2/3 the rate of inflation per year.

Rent control’s fundamental effect is this: Some renters pay excess rent to subsidize those with sweetheart deals. Landlords have a certain amount they must earn to stay in business. When rents aren’t high enough, landlords disappear, and a crisis ensues.

For example: A landlord must clear $2,000/month rent with 2 units. In a normal rental market, each unit would rent for $1,000. In a rent control situation, one unit may rent for $500, while the other must then rent for $1,500.

It seems unfair to charge two people vastly different prices for the same thing. But that’s only one unpleasant outcome of SFRC. Let’s look at a few others.

Note: It’s important to differentiate SFRC from more moderate versions of rent control, which protect against extreme events while allowing the free market to work. For example, as of 2020, California has a 10% annual cap on rent increases.

SFRC subsidizes the wealthy

I often tweet about my 42 year old physician friend, who we’ll call Dr. X.

Dr. X has rented a studio apartment facing Golden Gate Park since med school. I know Dr. X earned around $450k in 2021, which is, I would guess, about 10 times what the bartender living in the apartment next door earns. Yet, his rent is around half the bartender’s.

Or, take London Breed, America’s highest paid mayor, who enjoyed a total compensation of $435k in 2021. Should the other renters in her building pay extra to subsidize her discounted rent, as they do now?

These, of course, are anecdotal examples. Does SFRC generally benefit wealthier people?

It must, since those who have been in a city longer earn more than new arrivals. For example, a first year guidance counsellor in SF’s public schools made $68k in 2019, but one with 20 years experience earned $107k. Why should that first year worker – doing the same job for less money – also pay more rent?

Progressivism is supposedly about equality. SFRC turns this on its head, subsidizing the high paid law firm partner at the expense of the junior associate with student loans.

SFRC reduces the housing supply

Rent control – at least, SF’s extreme version of it – can be financially disastrous to landlords, who may face unlimited increases in expenses without being able to raise rents.

So, naturally, some landlords take units off the market rather than risk a failing business, using that space in other ways. The most famous study on SFRC was done by three Stanford economists in 2010. They concluded:

In sum, we find that impacted landlords reduced the supply of available rental housing by 15 percent. Consistent with this evidence, we find that there was a 20 percent decline in the number of renters living in impacted buildings, relative to 1990-1994 levels, and a 30 percent decline in the number of renters living in units protected by rent control.

Rent control reduced the number of renters in RC buildings by 30%! This effect isn’t limited to SF. In 1978, for example, landlords actually demolished over 900 apartment units in Santa Monica rather subject them to rent control.

RC has the same effect on new construction. For example, in 2021, St. Paul, MN enacted a rent control ordinance. Permits for new buildings immediately dropped over 80%. How many rental units has SFRC prevented from being built, converted, or otherwise added to the market since 1979/1994, when the current rules were put in place? There’s no way to know, but it must be in the tens of thousands.

But doesn’t Costa-Hawkins prevent rent control on new construction? It was supposed to, but a loophole allows cities to demand RC units in return for zoning variances or other “compensation”. And SF progressives are determined to exploit this- in July 2022, Mayor Breed vetoed legislation that would have allowed thousands of new units to be built all over the city – but only with rent control. Seven Supervisors supported the legislation. One more and her veto would have been overridden.

SFRC reduces housing supply even within single units. Subsidizing any good or service leads to overconsumption. Would a single man with a low income occupy this 3 bedroom apartment alone if paying the market rent? Never.

Thanks to rent control, I finally get to live alone“, wrote Brock Keeling in SF’s Curbed magazine in 2020. That’s good for Brock, I guess, but it again proves the point.

SFRC is widely abused

If SFRC laws were followed by renters, it might be easier to swallow. But as with any free market distortion, abuse is certain to occur. The core problem is this: once your apartment is significantly under the market rent, you’ve got a thing of value you don’t want to give up. Here are some common examples of SFRC fraud.

Leaving the unit vacant

Remember my MD friend Dr. X? He lives and works in Nevada now, only rarely coming back to SF. But why not keep that vacant pied-a-tier when you need a weekend of dim sum and Giants games? I expect he’ll be paying rent there for the rest of his life.

Or, take Stuart Schuffman, AKA “Broke Ass Stuart”, a popular blogger in SF who often writes about his rent controlled apartment. His twitter account states he lives in two locations, SF and NYC. Legally, you only qualify for rent control if you’re living full time in SF. But many bon vivants hang on to their units anyway.

Renting it out and pocketing the difference.

It sounded like typical predatory landlord behavior. A new property owner had doubled the rent of the Castro apartment of Cleve Jones, a longtime AIDS activist. City leaders rallied to his cause. Jones vowed to fight the action.

There was just one problem. Jones wasn’t living in the unit. He’d rented it out, and purchased a home north of the city. After a couple of weeks, and a review by the Rent Board, he agreed to vacate the unit. It was an exhausting episode that distracted city leaders from real problems.

Living for free as a master tenant

Apartments with more than one bedroom often have a master tenant, and sub-tenants who have no direct relationship with the landlord. By law, the master tenant must charge the sub-tenants proportional rent. In practice, when sub-tenants leave and new ones come in over the years, master tenants increase the rents, eventually living rent free in some cases. When the master tenant leaves, a sub-tenant can then often take over as master, continuing the cycle. SF is full of master tenant abuse:

Passing it on to family or friends

I had a friend living in an RC apartment in the Sunset. The building was sold, the original lease was lost, and the new landlord had no idea who the actual tenant was, or the rent she was legally supposed to be paying.

Eventually, my friend moved out, and passed the unit on to a relative. This should have allowed the landlord to raise the rent, but he had no idea who was who. Was my friend’s relative actually the original tenant from decades ago? These are the nightmares rent control brings.

SFRC hinders economic growth and prosperity

Rent control locks an existing population in place. That’s the whole point – kindly grandmothers won’t be “displaced” by young tech workers moving in and increasing rents.

Protecting certain groups, like low income seniors, from dramatic rent increases might be a good thing. Even some conservative states place limits on property tax increases for the elderly, for example.

But there’s a dark side to distorting rents in favor of those who’ve been there the longest, versus those who best fit the city. Urban areas grow in spurts, in unexpected ways, and their population has to flex as well.

Consider San Francisco’s history. It started as a military and religious settlement, then experienced a gold rush, then booms in railroads, shipping, finance, and finally tech. In each of these cases, a new economy created high paying jobs and flooded the city with money. Tying the population from the previous economy to the city would have reduced the benefits of these evolutions.

Conclusion

Historically, rent control has been enacted on a temporary, emergency basis, during wars or natural disasters. When things returned to normal, they were lifted. While government price controls have a natural, naive appeal (who wants the price of anything to rise?), SFRC has made many of the problems it was supposed to fix worse, while making us a less competitive and dynamic city.

Should SF stop building housing?

Building more housing is a popular goal in SF. Our city has fallen behind, the argument goes, and must do more to end the “housing crisis”.

On August 1, 2022, the Chronicle posted an article titled “Here’s why Austin and Seattle are building way more housing than San Francisco“. It was another thump in the drumbeat of media coverage showing SF is a laggard here.

With this piece as a guide, let’s see if more housing really does make sense.

Have we built our share of housing?

The Chronicle article states that:

Yet even when compared to other fast-growing tech hubs like Austin and Seattle, San Francisco’s housing production lags far behind.

Does it? Compare the number of housing units Austin, Seattle, and SF have built per square mile:

From the chart, we see SF is a homebuilding superstar, with 6,900 units/sq mile. To catch up, Seattle would have to double its housing stock, and Austin would have to build four more homes for every one it has now.

But we should still keep building, right?

The article reaches its conclusion by focusing only on units built recently, between 2015-2021. It shows, correctly, that SF has produced fewer homes over the past few years than other cities.

And, maybe that matters to you. Or maybe you think SF should still build more housing, regardless of the larger environment.

Maybe. But there are considerations you should be aware of. One is cost. From the article:

According to Elmendorf, the point remains that it is extremely expensive to build housing in San Francisco, especially when accounting for labor costs, regulatory requirements, fees and permitting delays.

Right. The higher the density of an area, the more it costs to build there, as the inputs – land, labor, regulatory and permitting issues, etc. become more expensive or complex:

Land costs are obvious – you can get an acre of land in rural America for $2,000, while a single MacDonald’s parking lot in SF costs $11,500,000.

Construction labor costs are especially high in SF, at $90 per hour.

And building up increases costs exponentially – here’s one Bay Area developer explaining how a four story, 26 unit building costs twice as much in both labor and materials per square foot to construct as a single family home.

I link here to a San Jose builder explaining how an 18 story project costs $50M to build in most of the US, $100M in San Jose, and $150M in San Francisco.

Eventually, a place gets so dense that building costs put home prices out of reach for many. At this point – if residents are determined to further ratchet up density – new buildings must be subsidized by tax dollars or other means. Proponents call this “affordable housing”, and it’s a sign your area may be sufficiently populated.

Given that resources are fixed, and that there’s plenty of land for cheap growth in most of the US, it’s hard to conclude building in the very highest density areas maximizes the greater good.

Beyond cost, resources available must be considered, as more housing means more people. Any city planner will tell you that more people must be accompanied by more roads, hospitals, schools, public transportation, etc. For example, when New York City greatly increased its population, without expanding transit, the results were disastrous:

The major cause of subway delays is a factor that basically did not exist 15 years ago: overcrowding. The subway is a victim of its own success and the city’s resurgence. Large crowds slow down trains, which creates more crowding in a vicious circle that takes hours to unwind during every rush.

New York Times, 6/28/2017

There are also natural resources. Seattle and Austin have plenty of water for an increased population, for example. California does not. The vast majority of the renewable energy potential in the US is in the Midwest, and shipping that to the coasts is difficult, as John Oliver explains here.

None of this is to say more housing can’t be built in SF. Responsible growth that attracts responsible people may make sense. But I take issue with those who believe a) we haven’t built our share of housing, and b) some immediate crisis demands an explosion of careless new construction. Call me a GRIMBY (Grow Responsibly In My Backyard).

Did Prop C Deliver?

SF’s massive 2018 tax increase was supposed to fix homelessness. Did it?

“Tent encampments in city parks. Sidewalks strewn with heroin needles & covered in feces. An infectious-disease expert from UC Berkeley found parts of the city are more unsanitary than the slums of some developing countries. Yes on Prop C!”

Marc Benioff, 11/5/2018

“Prop. C suggests that money, alone, is the cure-all to homelessness. It is not. Vote no on C.”

San Francisco Chronicle Editorial Board, 10/1/2018

In 2018, a group of far-left politicians, including Jane Kim, David Campos, Dean Preston, and Hillary Ronen, submitted enough signatures to put the largest tax increase in SF history on the November ballot. Prop C would double SF’s dreaded “gross receipts tax” on businesses with over $50M in revenue. The goal was to vastly expand the budget of SF’s Department of Homelessness and Supportive Housing (HSH). The funds would be divided equally between homeless housing and “services”.

The measure was funded primarily by billionaire and Salesforce CEO Marc Benioff, who said SF’s homeless-filled streets were hurting his business:

“One of the things about being the largest employer in San Francisco is my customers are coming here, my employees are here, & I have never seen as huge an impact on my business as it is with homelessness.”

Prop C’s opponents argued that the bill wouldn’t fix Benioff’s problems, for three main reasons:

Problem 1: Localized homeless spending is self-defeating

Vastly expanding homeless services in a single 47 square mile area only ruins that area, as the world’s drifters and addicts concentrate there. Gavin Newsom, then Lt. Governor, made this clear to anyone who would listen:

“Put another $400 million in the homeless problem and I promise you this: Your problem is going to get a lot worse…It’s not a San Francisco issue; it’s a regional issue.”

Gavin Newsom

Newsom grew up in SF, and was both a supervisor and mayor here. Nobody knew the local homeless situation better than he did. Except, maybe, the head of San Francisco’s homeless services, Jeff Kositsky, who reached the same conclusion in explaining why so many homeless wash up here:

“San Francisco attracts unsheltered people to our City due to a lack of real enforcement and the many amenities we provide to folks.”

Head of San Francisco Homeless Services Jeff Kositsky

Homelessness is a national problem, and must be solved at the federal level, not at a single spot on the map. And if you were going to pick such a spot, the place where a 1BR apartment costs $750,000 to build probably isn’t it.

Problem 2: Lack of flexibility and accountability

A statement from the No on C Coalition

Prop C provided no money or mechanisms for accountability of the funds spent. No auditing, no reporting requirements, no success metrics, no nothing.

Mayor Breed tried to explain that even the current (2018) $300M homeless budget was unaudited and poorly tracked, and more money without accountability was likely to be wasted.

When Jack Dorsey, CEO of Twitter and Square, who would be paying a good deal of the tax, suggested the Yes on C group and Mayor Breed meet to work out this disconnect, Dean Preston reacted with snarky hostility:

Meanwhile, our state senator, Scott Wiener, raised alarm bells about how the money could be used, regardless of changing need:

“These funds would be dedicated in perpetuity to homeless services and housing and could never be used for any other purpose, no matter the circumstances or changing needs.”

Scott Wiener

And David Chiu, then SF’s state assembly rep and now its city attorney, agreed regarding the lack of safeguards, and argued against the measure:

“I agree that businesses should contribute more to the solution, but it needs to happen through a collaborative process that increases our business tax to pay for homeless services with real accountability,” Chiu said. “Until then, I believe that Prop. C is not the right answer for the crisis that all of us see every day.”

David Chiu

Problem 3: Such a large tax would cause businesses to flee the city

Politicians warned against a tax increase of this scale:

“San Francisco’s largest employers, which already pay about half of all business taxes, would see their taxes double overnight.”

Scott Wiener

So did business leaders. Dorsey argued that the tax, which was based mainly on gross revenue, was poorly designed, as smaller companies could face a greater tax burden than larger ones. Meanwhile, Patrick Collison, CEO of Stripe, another major taxpayer in the city, criticized the measure, arguing against both its cost and lack of accountability.

Nonetheless, with millions in funding from Benioff, 60% of voters supported Prop C in the Nov 2018 election. A two-thirds majority is normally required for tax increases under state law, so opponents sued, but on Sept. 9, 2020, the California Supreme court refused to overturn a lower court ruling that the two-thirds law applied only to increases created by governing bodies. Prop C had been placed on the ballot by a signature drive. It thus became law.

The results so far (7/4/22)

With ongoing Prop C funding, HSH’s budget has more than tripled since the first year of the Department’s operations [2016].

HSH budget report

Prop C’s funding was delayed due to legal challenges. However, covid-related federal and state grants to the HSH more than made up for them until the Prop C money began flowing, so the effect was the same:

Source: https://hsh.sfgov.org/about/budget/

FY 22-23 began July 1, 2022, so we’ve had three full years where the HSH budget has averaged $629M, versus $253M for the three years prior. The HSH got their money. Did the warnings above come to pass?

Problem 1 (localized spending makes the problem worse): Proponents of Prop C claimed it would “Bring back the clean, healthy streets that San Franciscans deserve”. But every local knows SF’s homeless problem is worse in 2022 than in 2018 by any measure, from sidewalk tents to open-air drug markets to graffiti. There is no evidence so far that the vast spending increase of the past three years has improved anything.

In a New York Times opinion piece, Benioff argued that providing generous services (SF now provides everything from cash payments to food to healthcare to housing) wouldn’t attract new homeless to our city. As well as failing the common sense test, the homeless themselves will tell you over and over that they do in fact gravitate toward service-rich areas – see links in my post here.

Problem 2 (lack of accountability): Proponents of Prop C angrily denied that lack of accountability could be a problem:

They were very, very wrong.

As the HSH budget doubled, and the Chronicle headline below says it all:

“SF’s [$700M] Homeless Department Has No Oversight”

San Francisco Chronicle, 7/6/22

It goes on to say that -stunningly- it would take a months-long election process and voter approval to even create a commission to oversee the funds. Is enacting a tax, spending the money for years, then thinking about oversight good policy?

Lack of accountability breeds corruption. For example, the organization hired to clean up the Tenderloin was fired in 2022 after egregious findings that workers “sold drugs, slept on the job, harassed residents and generally failed to carry out their duties.” Prop C funnels hundreds of millions of dollars into this same corrupt vortex of shady non-profits and no-bid vendor contracts.

Problem 3 (higher taxes driving businesses away): This is, without question, already happening. As soon as Prop C was found to be legal, Stripe moved its headquarters to Ireland and began actually paying workers to leave SF. And in June, 2022, Square, one of the biggest payers of the new tax, announced it would be leaving as well. Wells Fargo, the city’s second largest employer after Salesforce, abandoned its main SF office tower in April 2022. And Salesforce itself began gradually abandoning SF.

Conclusion (as of July, 2022)

Prop C proponents argue that it’s too soon to tell if the HSH’s enormous budget increases have fixed homelessnees here. Covid and Prop C’s legal challenges, they say, have delayed the wonderful benefits our city will soon enjoy.

It’s a weak argument. After 3+ years, the benefits Benioff promised – tent and needle free streets – show no signs of even beginning to occur. What did the extra billion dollars the HSH spent over that time buy us?

I’ll continue to monitor the situation and update this post. So far, though, the warnings from the No on C crowd, like the one below, seem prescient.

Grading SF Supes – the good, the bought, and the crazy

San Francisco has a very, very extremely left group of people on the Board of Supervisors. And I think in some instances their focus is to not necessarily do what’s best for people in San Francisco, but do what’s best to stay in the good graces of this whole lefty movement.

Mayor London Breed, 11/11/2020

Below I grade San Francisco’s 11 Supervisors as of April, 2022. What makes a good one?

Doing what’s right over virtue signaling – Virtue signaling means statements or actions meant to burnish your persona in unethical ways. It could mean touting achievements that aren’t real, or shedding crocodile tears at a single traffic fatality, why ignoring the hundreds of overdose deaths. Or it could mean taking the side of a legal issue you know to be wrong: the Cleve Jones case is a perfect example – see Mandelman below for details. SF’s 2020 redistricting mess is another – see Asha Safai below.

Independence from special interests – Supes should accept minimal amounts of money from PACs, unions, and other interest groups that seek to buy them. Individual donations, and SF’s generous 6X matching grants, are plenty of money to fund a campaign.

Awareness of our crime and drug issues – Open drug dealing, and many crimes, from retail theft to car and home break-ins, are a pressing issue city leaders should focus on, not ignore.

Respect for our tax dollars – Given SF’s high levels of spending relative other cities, good Supes should be vigilant about spending our money carefully, be on the lookout for ways to save, and speak out on waste and corruption. Rubber stamping a $14B budget each year, without a second thought, is a red flag. A Supe proposing an expensive new idea should also state how they intend to pay for it.

Minimal levels of crazy – It’s no secret that SF attracts more than its share of America’s nut cases, who often drift here after being rejected by their home communities. Sometimes they slip into government. Extreme views, unprofessional behavior, etc. should be minimized.

None of our Supes is perfect. For example, all of them, including first place finisher Stefani, below, voted to recite a speech about our being on “Ohlone land” at the beginning of every BOS meeting. Here’s how regular voters feel about such nonsense:

And there are other such issues. Still, as we’ll see below, there’s tremendous range in quality between our better Supes, and the deplorables at the bottom of the page.

Catherine Stefani (D2). Grade: B+

Prior career: Deputy District Attorney, legislative aide.

Status: Up for re-election, Nov. 2022.

Stefani is an asset to to BOS. For one thing, she has been by far the most vocal opponent of crime in the city. She’s directly refuted the “crime is down” gaslighting other board members have promoted. And while some city leaders encourage drug use under the guise of “harm reduction”, Stefani has spoken out against this practice .

Stefani is also the only current supervisor who’s tried to bring our oversized city spending in line with normal cities. For example, she refused to support our $13.6 billion 2021 budget, calling it, correctly, “fiscally irresponsible”. She’s may be the only Supe who advocates treating tax dollars with respect.

While continuously engaged with the needs of her district, Stefani has refused to stoop to the performative virtue signaling and identity politics that plague the more radical members of the board. And there’s no evidence of corruption or ownership by special interests.

In short, there’s nothing special about Stefani. In Denver or Charlotte she’d be a typical hardworking city leader. But by SF standards, she’s extraordinary. Keep reading.

Matt Dorsey (D5). Grade: B+ (provisional)

Prior career: 20 years SF city communications director, mostly for the city attorney’s office.

Status: Appointed by the mayor to replace Matt Haney, up for re-election, Nov. 2022.

Dorsey is a long time city employee, recovering addict, and HIV+ gay man. He’s not a member of SF’s radical left, so his common sense views are probably similar to yours:

Dorsey and Stefani were the only two members of the BOS to speak out in favor of the Chesa Boudin recall, with Dorsey offering bulletproof reasoning behind his decision. Matt also spent the past couple of years as a comm director for SFPD, providing a needed ally for law enforcement on the BOS.

So, why no ‘A’ rating? While he’s so far proved approachable and engaged with his district, Matt’s only been in office a few weeks. We’ll keep an eye on him, and adjust the rating as needed over the next few months. I’m optimistic.

Ahsha Safai (D11): Grade: C+

Prior career: None known, union director.

Status: Terming out in 2024.

Safai is one of our less prominent Supes, with a Twitter following of only 5,000 or so users, but in many ways he’s better than the extremists on the board. For example, he appears to take crime seriously, especially after viewing this video taken by a quick thinking SF resident. He hasn’t made a career vilifying the police, even partnering with them on occasion.

He’s often on the right side of issues. Consider the 2022 redistricting saga. When radicals didn’t like the new district map, drawn by an independent panel that spent months gathering public input – they attempted to remove 3 members of it and influence the new boundaries. This is deeply troubling, since it allows Supes to subvert the democratic process and choose their own constituents.

Many politicians, including Mayor Breed and our State senator, Scott Wiener, and the media rushed to the aid of the panel and demanded the body be kept independent, as did the more ethical members of the BOS: Safai, Stefani and Mandelman. The deplorables, (see below), including Peskin, Preston, Chan and Haney, attempted to influence the process. Senator Weiner even called out Peskin and Preston by name in a letter.

And Safai has, at times, hinted that he cares about spending your tax dollars.

But he isn’t perfect. Like Haney, Safai appears to be influenced by special interests. His campaign contributions come heavily from construction-related unions and real estate developers. As a result, he’s fought common-sense affordable housing ideas that don’t line his backer’s pockets, such as the modular housing initiative. He also, bizarrely, attended the election night party for recalling Chesa Boudin, despite failing to publicly endorse it. And he’s proposed destructive ideas, like a local “guaranteed income” that rewards those who don’t work, and attracts them to our city.

Still, one of our better Supes.

Rafael Mandelman (D8). Grade: C

Prior career: None known.

Status: Up for re-election: Nov 2022.

Mandelman’s a mixed bag, but let’s start with the good. In some cases, he swats down irresponsible ideas, for example for making Muni free. He’s generally supportive of law enforcement especially after reading my tweets. He behaves professionally, and is not a core member of the band of crazies with failing grades below.

An example of this his good judgement is the implementation of SB 1031 in 2019, which would have required mandatory treatment for some of SF’s mentally ill and drug addicted homeless. Stefani and Mandelman sponsored the legislation, while Ronen, Walton, and Mar managed to kill the bill because, apparently, mandatory treatment for addicts is un-progressive. The bill failed, and the result is the human misery you see on the streets three years later.

Now on to the bad. Mandelman sometimes chooses grandstanding over ethical behavior. Take the case of Cleve Jones. Cleve lost the below-market rent on his apartment when he violated the terms of the contract in all sorts of ways, mainly by moving to Guerneville. In response, the landlord began charging the market rate for the unit, as she’s allowed to.

The adult thing to do here would recognize that rental laws must be followed, or to at least wait and see what the Rent Board (which was currently hearing the case) decided. Instead, Mandelman held a “rally” to support Cleve, and to vilify the landlord. I asked Mandelman if he could clarify who is and is not above the law, but he didn’t respond. Shortly thereafter, Jones admitted defeat and gave up the apartment.

And Mandelman’s got other warts, for example he’s championed friendly-sounding tax increases that distort markets and ultimately drive up prices here. His ideas to provide homes and living expenses for anyone who drifts into SF are misguided. And he’s aligned himself with some of our most radical pols, including Chesa Boudin sidekick David Campos. Like Safai, he claimed to have supported the recall of Boudin, but only after the fact. Regrettably, he also supported 2018’s Prop C, which the adults in the room agreed was bad policy.

So not our worst Supe, but certainly not our best.

Myrna Melgar (D7). Grade: D

Prior career: Murky. Some non-profit and city work.

Status: Up for re-election, Nov 2024.

I looked for positive things to say about each of our Supes, and with Melgar, came up empty.

Breaking news! I found something good to say. Melgar declined to vote with the deplorable Supes on SF Prop C, which would have made it practically impossible to recall elected officials, moving her up in the rankings:

And now the bad stuff: She’s aligned with some of the darker forces in local politics. She doesn’t seem to care much about the serious problems plaguing our city. She’s never mentioned our city budget, or spending taxpayer money with care. Crime? Drugs and drug dealers? The sideshows taking over her district some nights? Melgar evades questions about them.

So, what does she care about? Drawings, apparently. Melgar exposed herself as a virtue signaling opportunist by taking part in the recent “Chesa as Mao” non-issue, whereby a picture of DA Chesa Boudin in a Chairman Mao jacket brought crocodile tears to progressive eyes. The adult thing to do would have been to ignore this non-event, and focus on the city’s serious problems, which, as we’ve seen, Melgar just doesn’t seem to care about.

She tends to be slippery, rather than forthright. When asked a direct question, for example, about her advocacy of abolishing the police, she’s refused to answer. She’s also been unprofessional at times, tweeting sarcastically about other supervisors who care about law enforcement. And she’s shown she’s pathetically out of touch with our city, proposing, for example, public electric charging outlets in a city where any such item will be destroyed within days of being installed.

I’m also concerned she may be, um, storing her account passwords on twitter? Hmmm…..

Gordon Mar (D4). Grade: D

Prior career: None known, former Director of the “Chinese Progressive Association”.

Status: Up for re-election, Nov 2022.

Gordon Mar is a generic, cookie cutter, me-too progressive. He’s a big supporter of radicals like David Campos, Dean Preston and Chesa Boudin. He routinely attacks, rather than supports, law enforcement. When I asked him about his support for the DA recall recently, he again blamed the police for crime, not the consequence-free environment progressives have created here.

He’s never seen a tax increase he didn’t like. He doesn’t seem to care about the drugs and crime plaguing SF, unless they can be used for identity politics and virtue signaling ends.

He’s been head of the BOS Budget Committee, but has said not a word about finding efficiencies or bringing spending in line with other cities. Like Walton, he supports the popular cause of the moment, promptly forgetting about it when the next one comes along.

On the other hand, Mar can be found on the right side of certain issues. He called for school board member Allison Collins to resign over her clearly racists comments (perhaps AAPI virtue signaling, but we’ll give him credit). He’s also called for investigations into SF’s ubiquitous corruption. In terms of professionalism, he’s a step up from, say, Connie Chan, below.

Is a D a passing grade?

Connie Chan (D2). Grade: F

Prior Career: City worker, Peskin’s legislative aide.

Status: Up for re-election, Nov 2024.

Connie, bless her heart, isn’t the brightest bulb in the tulip garden. And from this undersized brain comes some interesting thoughts….

…and a weird obsession with plastic bottles. But the endless bleats of racism are what makes her truly unqualified to lead our city. She speaks forcefully against crime…as long as the victim is Asian. The banking system? Racist. Small business issues? That’s racism too. When actual racist acts occur, however, she’s nowhere to be found.

She’s a big supporter of Chesa Boudin, and, true to form, took the “Chesa as Mao” (see Melgar above) incident to absurd theatrical heights, actually sponsoring a pointless BOS resolution to “condemn anti-Asian imagery”. I suppose political cartoons will be banned in “Women Land”. When I called Connie out on this stupidity, she, shockingly turned to the darkest internet trolls, who spend their days harassing anyone they disagree with.

Otherwise, she’s the typical me-too progressive with no real values. For example, she wants to defund the police due to “racial bias” one minute, then demands their help the next.

When an unhinged Hillary Ronen posted and offensive tweet that was condemned by virtually everyone, Connie defended her. She’s endorsed by Jane Kim, and others on the far left. In terms of financial stewardship, Connie doesn’t care much about the $14 billion the city spends per year, unless more of if goes to Asians. For a while she wrote a column for the SF Examiner. The column name, unsurprisingly, was Politically Asian.

I could give Connie a D for dumb, but I think she’s earned our first F grade.

Hillary Ronen (D9). Grade: F

Prior Career: Attorney at non-profit, legislative aide.

Status: Up for re-election, Nov 2024.

Where to begin with this wild-eyed progressive? Ronen’s judgement is atrocious. Take for example, a 75 unit apartment building providing new housing to the Mission. Instead of encouraging its development, Ronen did everything she could to stall the project, eventually claiming a laundromat in the building it would replace was a “historic business“. Her reasoning for battling this new housing? She believed it would “gentrify” the neighborhood.

Another example: It was clear to anyone living in SF that crime was increasing during 2020, but Hillary insisted it was down (she’s flanked here by fellow radicals Dean Preston and Chesa Boudin).

For a taste Hillary’s unique brand of crazy, watch this clip. Here’s another favorite. And a third bit of insanity. It’s endless.

Do you think reciting a speech about San Francisco residents trespassing on “unceeded Ohlone Indian Land” at the beginning of each Board of Supervisors’ meeting is a good use of time? If so, Ronen, and fellow deplorable Peskin, see below, may be the city leaders you’re looking for.

Ronen could care less about victims of crime (especially drug dealing) in our city, but she’s on a lifelong vendetta against the police. Defunding and demoralizing SFPD seems to be about the only thing she cares about. When it comes to city budgets, cutting the police is her only goal.

If an issue exists, Ronen’s on the wrong side of it, from making everything free to taxing empty homes. She promotes the worst in identity politics, failing to support London Breed for Mayor because she was supported by “rich, white men“.

Another prime example of how Ronen weakens our city: Mayor Breed’s original Emergency Declaration to reduce drugs and crime in the Tenderloin, actually had some teeth, as it relied on a greater police presence there. But Ronen prevented this:

“Between now and January, if they use a cent to increase [the San Francisco Police Department budget], we can cancel this order on the spot,” Ronen said. “I’m going to vote to approve this order today, but I’m going to watch this thing like a hawk.”

Hillary Ronen, 12/23/21

The First Amendment? Ronen and fellow deplorable Dean Preston just aren’t fans.

Each time I think Ronen has achieved peak crazy, she outdoes herself. What a mess.

Shamann Walton (D10). Grade: F

Prior career: None known.

Status: Up for re-election: Nov 2022.

Walton can best be summed up by the Chronicle’s 2018 endorsement of him for supervisor. Their best argument? He, uh, “has some good ideas”.

Four years later, Shamann is best know for berating a black Sheriff’s cadet, and attacking him with racial slurs. It’s the sort of behavior that would get you fired as a manager at Wendy’s. The idea that the president of our BOS behaved in such a manner shows just how poor SF’s leadership is.

Beyond this awful event, there’s not much you can say about him. When he appears to care about something, it’s usually around race, or defunding the police, or both. He seems most proud of promoting and passing the KAREN Act, which fines people for calling 911 on Black people. I’m not aware of anyone having been fined since the act was passed.

And he’s got a few other unpleasant ideas, like having SF residents pay Black people “reparations”, despite the fact that there was no slavery in California, or even many Black people in SF before 1940. You can scroll through his press releases here, and see if you think he’s done anything to improve our city.

Walton occasionally brings up important issues, then immediately forgets them. For example, he championed “Vision Zero“, and ambitious plan to end violent crime…for about 5 minutes, until moving on to the Next Thing.

Appointing members of SF’s many city boards is an important part of a supervisor’s job, and Walton shows poor judgement here, for example in nominating cop hater Alex Lemberg to the SF Board of Appeals. Lemberg is a radical attorney who, among other things, files frivolous lawsuits over Twitter posts.

Regarding spending taxpayer money carefully, I see no evidence Walton cares. As far as I can tell, he’s never questioned our budget, or looked for ways to bring it in line with other cities, other than defunding the police, of course. Walton will probably be reelected in 2022, perpetuating SF’s leadership crisis.

Dean Preston (D5). Grade: F

Prior Career: Generally none. A few years working for a law firm long ago.

Status: Up for re-election, Nov 2024.

To call Preston crazy would libel the insane. Where to begin? He’s is not a Republican or Democrat, but a member of the Democratic Socialists of America, a fringe group which, among much other madness, vilifies NATO countries like the US. A taste of his value system:

Preston literally, seriously, wants to eliminate law enforcement in America. No police, no prisons, no consequences for raping a child, or robbing a bank. Think about that.

As the tweet above alludes to, Preston’s in favor of socialist revolution, not improving things via current democratic institutions. He calls government takeover of the private sector “municipalization“. Far from handling citizens’ money with care, Preston finds joy in new taxes of every variety. His wild ideas, like “cancelling rent“, are fortunately not taken seriously by the adults in the room.

Preston is unique in that he sometimes manages to be on *both* wrong sides of an issue. For example, he demanded for a “vacancy tax” on unoccupied homes, then called the perfectly legal actions by Cleve Jones’ landlords to raise his rent when he left his apartment unoccupied “outrageous“.

There are very few ethical depths he won’t sink to, including funding a fake news site promoting himself.

Preston is rich (via other people’s money), lives in a mansion, and likes to trade tech stocks. But he vilifies investors like himself as “speculators“. With a straight face.

Preston’s divided the world into good and evil, with landlords being evil. He advocates for making everything “free“, failing to point out that there is no such thing – somebody has to pay.

Apparently unsure how the law works, Preston’s plan to stop legal evictions was to declare his district an “eviction free zone“.

Bizarrely, while tweeting endlessly about the need for housing (“social housing” in most cases, a code word for government-owned), Preston has done more than anyone to prevent new housing in SF.

Dean’s the king of complaining about current events, without offering solutions. A classic example here, or here, where he promotes “solutions to crime that work” without stating what those might be. Unsurprisingly, he’s on an endless jihad against SFPD, seeking to defund and demoralize them at every turn.

People have had enough of Dean’s schtick, and as I like to say, a rabid racoon could beat him in 2024. But that feels like a long time away.

Aaron Peskin (D3). Grade: F

Prior Career: None known. Former “Environmental Activist“.

Status: Terms out (again), Nov 2024.

Peskin embodies the worst of San Francisco, and humanity generally. He’s a bully. Both on the internet:

And in real life.

Peskin’s also a sleazy double dealer, as this article notes.

After coming to work drunk and abusing his colleagues, you’d think Peskin might understand the need to recall malfunctioning elected officials from time to time. Quite the opposite – he’s created and championed legislation that would make it effectively impossible to recall politicians – denying voters a key element of control over bad actors like him.

I’m in D3, so I admit this one’s personal, but I’ve never seen someone lie like Peskin. I was involved in an attempt to get a lower cost grocery store, a Whole Foods 365, in the old Lombardi Sports building. Polls showed 85% of the neighborhood was in favor of it, but Peskin battled hard to not only to prevent the store, but ban all “chain stores” on Polk St. generally. Here’s what he said on the topic:

“Whole Foods has spent a ridiculous amount of money going door-to-door organizing residents and creating a huge astroturf movement in their favor,” said Peskin.

SF Chronicle, 6/1/2016

The problem is, this was all a lie. A complete fabrication. I was in touch with Whole Foods VP Rob Twyman, who lead the process to get this store approved. No Whole Foods representative went door to door, or spent even a dollar with organizing or “astroturfing”. Peskin wasn’t merely exaggerating here, he was pulling whole narratives out of thin air.

Helped by a radical Planning Commission board that demanded affordable housing in the store, Peskin won, voters lost, and five years later, the building sits empty, decaying, frequently vandalized and broken into.

Peskin shouldn’t be a Supervisor at all – they’re supposed to only server 2 terms, and this is his third, exploiting a loophole that the two terms only had to be “consecutive”. I hope D3’s next Supe is a decent, honest person. Peskin’s set the bar so low that it shouldn’t be a hard thing to accomplish.

Note: Since he’s still in politics, I’ll leave the bit on Matt Haney.

[Fromer Supe, now in State Assembly] Matt Haney (D6). Grade: D-

Prior career: None, maybe a couple of year’s teaching.

Status: In state assembly runoff. His seat is up for re-election Nov, 2022.

I’ve written extensively about Matt here, so I won’t repeat myself, but to summarize: he’s a friendly fellow with bad ideas, who’s largely owned by special interests. He’s done a terrible job managing the Tenderloin, being far more concerned with his career than, for example, fighting for consequences for drug dealers there.

Still, Haney didn’t quite land an F grade. You’ve got to do more than be merely a far-left careerist, corrupted by special interest money, to earn such a rating. You’ve got to be really atrocious (keep reading).

Who is the SF DCCC?

And, why are there so many ‘Cs’?

While there are many informal Democratic party clubs in SF, there’s only one official party branch here, the SFDP. The SFDP holds meetings, raises funds, endorses candidates, etc.

The SFPD is controlled by the San Francisco Democratic County Central Committee (SF DCCC). While SF city elections are non-partisan, a stamp of approval by the party may offer a boost to some political campaigns, as local pol Nancy Tung explains here.

The DCCC is so powerful because it’s able to skirt campaign finance laws that constrain candidates for government office:

Thus, a city or state candidate running for DCCC can collect unlimited amounts from wealthy individuals or corporations – and spend that money to raise his or her profile against opponents for a city or state office who are constrained by limits on the size or source of donations.

SF Chronicle, 4/8/2016

The DCCC has no ethical problem working around these laws. In fact, it appears to have no ethics at all. Consider the flyer it printed below, during the June 2022 election:

You have to look hard to figure out that voting No on Proposition H has nothing to do with Republicans or abortion. It’s to recall SF’s radical District Attorney, Chesa Boudin. It’s clearly meant to deceive, and one can assume that if this is how the DCCCC operates in small matters, it probably behaves the same way in larger ones.

Nationwide, only 29% of people identify as Democrats. Among those with known political affiliations, however, San Francisco voters are overwhelmingly Democrats:

With this wide a swath of voters, it’s worth asking if the SF DCCC represents the city as a whole. Let’s start with the DCCC Executive Committee, which currently consists of eight people. Here are their backgrounds, from their LinkedIn profiles and online bios:

SF DCCC leadership

PersonHistory/Occupation
Honey Mahogany (chair)Drag performer, social worker, community organizer
Leah LaCroixBar Association of SF, BOS clerk, City of SF (former)
Keith BarakaFirefighter, City of SF
Li Miao LovettLegislative Aide, City of SF
Carolina Morales“Strategist” for Chesa Boudin, District Attorney’s office, City of SF
Janice LiCommunity organizer, BART director
Anabel IbanezPolitical Director, United Educators of SF (teacher’s union)

The committee is the rounded out by 22 non-executive members (bottom of page), in which you can find most of SF’s far-left politicians, from Jane Kim (formerly of the Green Party) to David Campos to Hillary Ronen to Faauuga Moliga (recently recalled from the School Board). The rest, like the executive committee, are mostly city employees and union or community organizers.

What jumps out at you? For me, it’s the fact that none of these folks work in the private sector, unlike most Americans. While the world certainly needs government clerks and firefighters, these people, without exception, are the ones who win when taxes go up. Unions and city workers are well represented. But many groups aren’t, from retail store workers to business owners to software engineers to mechanics to doctors and nurses to many industries.

And so, unsurprisingly, the the SF DCCC is out of touch with most SF. Take the recent school board recall. Not only did the SF DCCC vote to oppose it, they actually wrote the defense of that opposition that appeared in voter guides. And voters ignored them, in a landslide.

Similarly, they’ve been strong supporters of our radical District Attorney, Chesa Boudin, who is likely to be recalled by voters on June 7.

If the Democratic Party in SF were a fringe group, like the Green Party or the Libertarians, I wouldn’t expect their membership to reflect the city as a whole. But 86% of voters with a known political affiliation here are Democrats, I’m surprised at how much it doesn’t.

For an idea of how Democratic Party leadership looks in a normal city, consider Denver. Local DP leadership consists of a city employee and a life long activist, sure, but also James Reyes, a gay Latino software engineer, and Adrian Felix, also gay and minority, who works in the communications industry.

Does the SFDP, or SF DCCC matter? An increasing number of voters are foregoing party affiliation, with 135,000 voters not registering for one with the city. So the answer is probably “less every year”. However, it is a good idea to be aware of who they are, and, when voting, whether local Democrats represent you.

The case against Matt Haney

Matt Haney, currently SF District 6 Supervisor, is running for CAs’s District 17 assembly seat. As a career politician, you’ll likely see his name on future ballots as well. In this post I explain why I’ll never vote for him, and why you shouldn’t either. But let’s start with the positives.

Matt is a fresh-faced, Bay Area kid with a law degree from Stanford. He projects a wholesome image of kittens, baseball, and mom, though his aggressive history of deleting tweets and friends when they threaten his political ambitions suggests this is carefully groomed. Still, he seems like a friendly and approachable guy, offering to meet anyone for coffee, for example.

But Matt’s radical, irresponsible views, his capture by special interests, and his history of misguided political actions make him a dangerous liability for San Francisco. Let’s look at a few.

Matt’s leadership of District 6 has been a disaster

Under Matt’s watch, District 6, home of the Tenderloin, has devolved from merely bad, to a crime-ridden hell on earth in parts. Much of that is due to drugs, with dealers selling death in plain sight.

Narcotics dealers, most from Honduras, work openly in Matt’s district

No less than 1,310 people have died of overdoses, mostly in Matt’s district, in 2020-21. In fact, it’s gotten so bad that Mayor Breed has had to declare a state of emergency in Matt’s district.

But Matt’s far-left political views on crime have been an obstacle to cleaning up D6. For example, far from demanding jail time for the dealers above, Matt actually wants those already incarcerated back on the streets!

He’s got an endless stream of tweets like this. There’s no evidence his views have changed recently.

One of the key drivers of increasing crime was the passage of Prop 47, which essentially ends criminal prosecution for thefts under $950. Living in a high crime area, you’d think Matt might have opposed this unfortunate measure. But he gave it his full support.

What accounts for Matt’s views here? You can probably thank his radical father Craig Haney, a psychology professor at UC Santa Cruz who’s devoted his life to fighting against incarceration for law breakers. Like Matt, he never quite explains the deterrent for criminal behavior in a post-prison world.

Matt will argue that much of the decline of his district is out of his control. While that may be true, he does have control over his Twitter account, which he can use to influence policy. And his Tweet history shows a disregard for the rising problems in D6. It’s not what’s there, necessary, it’s what’s missing. While other politicians talk in no uncertain terms about the dire state of his district, Matt blames things like systemic racism and offers no ideas for improving it.

I did uncover a rare statement from Matt accepting the unfortunate state of D6:

That was two years ago. How have things progressed since? Before voting for Matt, head over Larkin and Turk streets, and see what he’s done to the place. Should we elect a politician who wants to fail up?

Matt created SF’s school renaming debacle – a global embarassment

As I type, SF is in the midst of recalling three radical school board members, and one of the main reasons is an expensive effort to rename many of our schools. But it wasn’t the current board who decided to cancel history. It was Matt Haney.

In 2016, Matt decided George Washington High had to be renamed. Sure, Washington had won the Revolutionary War and led the founding of America, but what had he done for us lately? Matt was out having beers with the bros when he decided Washington should be written out of history, for having owned slaves.

Of course, once you burn one witch at the stake, you start to see witches everywhere. Matt decided it was time to rename more schools, and in 2018 co-authored a resolution to decide who to cancel next.

And so began a disastrous effort to rename as many as 40 of SF’s schools that made SF a global laughingstock, culminating in an attempt to cancel even Barbara Boxer, our liberal US Senator until 2016.

Matt is owned by special interests

Over half of Matt’s campaign contributions have come from interest groups:

Much of this is organized labor money. While unions themselves aren’t necessarily bad things, politicians who are bought and paid for by them are. Organized labor is no different from other interest groups – they attempt to influence public officials to direct more resources from the general population to them.

A picture’s worth a thousand words here:

I go into more detail on this topic here, so I won’t repeat myself, but look at the image above and ask yourself – if elected, will Matt be acting in the interests of all his constituents, or of the groups above?

A fine example of the corruption that occurs with this brand of politics: Matt accepted, then had to return, three large political donations from builders with business pending by the city. Vote for pols that avoid capture by these groups.

Matt has no real life experience, and seems to hate people who have

Your elected leaders aren’t going to fight for you if they can’t relate to what you’re going through. But Matt hasn’t had many core life experiences – kids, life, a career – and this results in poor values and decision making.

Take careers, for example. Matt’s never had a job in the real world – he’s always been a taker, never a maker. And he despises anyone who’s done otherwise:

There’s just so much that’s reckless and wrong here. First, most of those evil “millionaires” are older folks who’ve saved money while working, and have no way of earning more.

Second, CA’s top tax rate is 12.3% – already the highest in the country. Tripling that would create a combined state and federal income tax burden of 75%, and that’s before the many other taxes – property, sales, etc. – and fees the government charges. It would hollow out California of the entrepreneurs, entertainment and industry leaders, etc. that drive its growth. Matt imagines that high earners would remain selflessly in California to provide their “billions to unemployed people”. In fact, folks are already leaving for lower tax states.

Matt has no understanding of tax burdens, since he’s never really had to pay them. Compare to Bilal Mahmood, who’s running against him for the AD 17 seat as I write. Some of Mahmood’s ideas are just as unpleasant as Matt’s, but at least he’s achieved real-world success as an entrepreneur and scientist.

The result? Matt refers to Mammood, derisively, as “the millionaire”:

Matt deleted his tweet here (from 2/4/22 at 9PM), after I replied to it, but it was about Bilal bringing up, correctly, Matt’s capture by special interests.

Who does Matt blame for SF’s out of control crime? It’s those awful millionaires again:

Owning a home is another example of Matt’s distain for those with experience. If you’ve ever had to battle to save for a down payment, or accept the adult risks and responsibilities of homeownership, you’re likely going to have a more complete view of life than someone who never has.

Matt, again, doesn’t have this experience – he’s always been a renter. Nothing wrong with that, as long as you respect those who do have it. But Matt sees this inexperience as a badge of pride:

Why? What insight does not having ever owned property buy you? Whereas most people tout their real world achievements, Matt seems to glorify in his lack of them. This inexperience doesn’t make him a better politician – it just gives him an incomplete view of his constituents’ lives.

Matt lacks the balanced views every politician should have

Liberal or conservative, good politicians understand that government is about tradeoffs. Spending has to be balanced against tax burden. The cost of incarceration has to be balanced against the cost of crime. Regulation has to be balanced against the economic dynamism that creates wealth and jobs. Inequality has to be balanced against incentives to excel.

Perhaps Matt’s defining characteristic is his lack of this balance, more than any other politician I can think of. His economic platform is to spend and spend and spend some more, with never a tweet about the cost of these programs. When you do that, you wind up with six million dollar/year toilets, one of Matt’s signature achievements. Here’s another example:

Doesn’t this sound nice? In fact, despite spending more than twice as much per pupil as normal school districts, SFUSD is in a severe financial crisis. Feel good, irresponsible thoughts like this are not what you want to see in elected officials.

Similarly, Matt insists on making everything free, free, free, without noting the cost to citizens. Whether this is a cynical ploy for votes, as he kind of admits here, or he if really feels this way, it’s again an irresponsible way to promote government programs.

When it comes to crime, as I’ve noted above, he takes the same half-blind view of the world. Crime is never the criminal’s fault. It’s always society, or meanie millionaires, or the Easter Bunny, but personal accountability doesn’t exist in MattWorld. There’s no balance, no shades of grey. Someone else is to blame for that bank you robbed. Period.

Matt hasn’t cared about the jobs he’s run for

To outsiders, it may have seemed odd for Matt to run for SF School Board in 2012. He wasn’t a product of SF schools, and he didn’t have kids. But locals understood – he was mainly using SFUSD as a jumping off point for a political career.

And so, between 2012 to 2018, Matt tweeted dutifully about students in SF, as if he actually cared. But the minute he was elected to D6, these tweets stopped.

Maybe things would be different with his election to the Board of Supervisors. Maybe Matt truly cared about improving D6. But skeptics were proven right when, halfway into his term, he attempted to jump ship, for a vacant state CA assembly seat.

To an extent, there’s nothing wrong with political ambition. But few local pols have used elected positions this blatantly as temporary stops toward something else. What job will he be looking for as he serves in state assembly?

It’s time to hold Matt responsible.

Let’s look one more time at that tweet above. Matt’s asked us to hold him responsible for the state of District 6:

It’s time to do just that. In the Feb 15, 2022 special election and on future ballots, give Matt Haney a pass, and focus on candidates with mature, responsible ideas, who aren’t captured by special interests.

How Unions Prevent Affordable Housing In San Francisco

Wednesday, July 6, 2022. A Tuesday like any other. Doctors were seeing patients. Retail workers were ringing up customers. Drywall installers were hurriedly finishing interiors on newly built homes.

Actually, no. The drywall installers, or rather the SF Drywall Latherers union, was down at City Hall, throwing its weight around. July 6 was a SF Board of Supervisors Rules Committee meeting. The place where supes propose measures that may wind up on election ballots. Marie Harubiell graciously live tweeted the proceedings.

There were a number of building related items on the docket, and our drywall latherers, as well as other building trade reps, wanted to make sure it was restricted to union labor. But packing BOS meetings was just the beginning.

And odd goal

Building houses in SF – actually apartments, since there’s no more room for actual houses – is a key goal of local politicians. In fact, they often seem to be in competition to see who can commit to building the most units.

But it’s a strange goal, if you think about it. Unlike schools or public safety, attracting thousands of new residents to your city doesn’t improve the quality of life of existing ones – in fact, it reduces the amount of land, roads, water, electricity, etc. available per person.

While some pols may be motivated by a genuine, heartfelt desire to “house the world”, I’d like to suggest a different explanation – that their goal isn’t to build housing at all, but to benefit the special interests that fund their elections and keep them in power. There’s plenty of evidence that this is the case. The special interests in question are organized labor.

Mayor Breed, for example, was elected only with the help of SF’s unions, which in turn rewarded her with money and votes. And the 2022 State Assembly special election has been a battle of unions, with the two main candidates, Matt Haney and David Campos, proudly advertising the influence organized labor has over them.

With this in mind, let’s look at a tweet from Haney about those 100,000 housing units he claims he wants to build:

Is the goal more homes, or funding organized labor?

One answer might be “both” – isn’t building housing while employing folks a win/win? Aren’t jobs at good wages a positive thing?

Well, jobs at fair wages certainly are. But, arguably, unions have taken wages far beyond fair here. For example, a New York Times article titled “Why Does It Cost $750,000 to Build Affordable Housing in San Francisco?“, found that construction workers here earn $90 per hour – $200k/year with a little overtime. That’s about the same as the average physician.

Not only do high labor costs reduce affordability, they prevent some projects from being built at all. Read this article: Bay Area’s largest housing development appears dead. What killed this project? Greedy developers? Zoning laws? City bureaucracy? Nope.

Lennar had run into strong opposition from building trades after refusing to sign a project-wide labor agreement that would have made it an all-union development. The Contra Costa Building Trades Council sought an agreement that was consistent with the city’s Concord First policy, which requires that developers hire 40% Concord residents, pay prevailing wages, hire and train veterans, and commit to approved apprenticeship programs.

The cost of union labor?

The developers said that agreeing to an all-union job site would make the project infeasible, raising construction costs by $542 million and cutting the project’s profit margin from 17% to a loss.

So much for increasing housing stock.

For another example, listen to Michael Cheng, who, in 2017, was building a high rise in San Jose. The total cost of the building, without high end finishes, was $80M. Building somewhere less expensive than San Jose might decrease labor costs by $20-30M, but building in San Francisco would increase them by the same amount. So an $80M San Jose building would cost as little as $50M to construct in a less expensive area, and at least double that in SF, mainly due to labor.

To build homes with inflated labor costs, housing must often be subsidized by taxpayers. Pols have a friendly name for this, “affordable housing“, but there’s nothing affordable about it. It’s simply paid for by increased taxes and enormous amounts of borrowing, benefiting a lucky few lottery winners who get sweetheart deals. Affordable housing is, in effect, a transfer of funds from taxpayers like you to unions and their workers.

Don’t want to use union labor? Prepare to be blackmailed. As attorney and former SF Chronicle columnist noted in a piece entitled, “How a Few Unions Are Hijacking Environmental Law”:

…leveraging the threat of CEQA litigation has been the longstanding strategy of an association of four building trade unions — that demand high-priced no-bid contracts from developers in exchange for an agreement to stand down on meritless CEQA claims.

Robery Selna, 7/3/22

If you’ve made it this far, congratulations! You know more than most people about why housing is so expensive. Let’s test your knowledge with a headline from Heather Knight’s column in today’s Chronicle:

A new S.F. housing complex for homeless people was faster, cheaper to build. So why isn’t it being replicated?

What do you think happened here? If you said: “Someone found a way to build housing with less labor, but the unions are preventing more from being built”, you’re right! From the article:

Another big key to making Tahanan less expensive and faster to build is that it’s composed of modular units crafted at a factory in Vallejo, trucked over the Bay Bridge and assembled like a big Lego project. The factory is unionized, but San Francisco building and trades groups don’t like the building method because it leaves them out. That’s prompted many members of the Board of Supervisors to be leery about approving future modular projects… 

The building was built with union labor, it just didn’t line the right pockets, turning off city leaders. Do they really care about housing affordability? If there’s a more blatant example of how special interests control city government, I don’t know it.

Next time you hear a local pol say, “Let’s create more housing!”, keep in mind that houses don’t get politicians elected in San Francisco – unions do.

Should we buy the Hammer Killer a home in SF?

San Francisco spends a fortune on “homeless services”. It’s worth asking how this money is being spent, and on whom. We got a sliver of insight into that today due to the opening of a new “Linkage Center” in the Tenderloin, which will provide an array of services – food, beverages, showers, help with finding housing – to the homeless.

Local TV station KTVU did a piece on the opening, featuring 65 year old Ivan Von Staich, who wasn’t happy with the services offered:

On the first morning the facility opened its doors, people filtered in and out. Ivan Von Staich said he’s frustrated because he’s ineligible for housing because technically he has friends he can stay with. “They need to get more housing support for these people and get them off the streets, that’s what I’m trying to do,” said Von Staich. “That’s why I went in there. I’m 65 years old, I’m a senior citizen, so, I’m trying to get some assistance.”

Who is Ivan Von Staich, and does San Francisco owe him a house? We might consider a few factors here: Did he grow up in SF? What circumstances caused him to be homeless? How did he contribute to society during his 65 years?

A little googling answers those questions. Von Staich’s name, age, and circumstances match that of the “Hammer Killer”, who in 1983 beat and shot a man to death while attempting to kill his wife. He also threatened the life of the judge who sentenced him.

San Quentin prison. Von Staich’s home for the past few years.

In 2012 the OC Register quoted Deputy District Attorney Ray Armstrong as saying:

[The crimes] Von Staich committed in Orange County were “carried out in a particularly heinous and cruel manner,” and that Von Staich continues to blame others for his actions, “undermining his alleged feelings of remorse and acceptance of full responsibility.”

Von Staich remained incarcerated until 2021, when he was released from San Quentin, and apparently drifted to where the services were – San Francisco.

Von Staich has done his time, apparently, and may no longer be a danger to society. But he has no connection with San Francisco, and made life choices that left him without savings or a career. Is it reasonable to ask our city to support him for the next 30 years? It’s hard to imagine why.

Libraries & SF’s Out of Control City Spending

With some expenses, it’s easy to tell if you’re being ripped off- you just shop around. If one gas station is charging $20 for a gallon of gas, vs $5 elsewhere, it’s clearly offering a raw deal.

But what about city government? For example, how do you know if the San Francisco Public Library system’s $172M FY 20-21 budget is too high, or too low? If your tax dollars are being treated with respect, or if waste and maybe even corruption are likely at play? Is there a way to “comparison shop”?

Happily, San Francisco has an almost direct equivalent. San Jose, just 30 miles south, mirrors SF in all respects that might influence the cost of its libraries. Some examples:

(2021 figures)San FranciscoSan Jose
Population.9M1M
Average household Income$96,925$96,662
Median Home Sales Price$1,285,000$1,250,000

With labor, real estate, geography, and every other factor that might influence library system cost identical, you’d think system budgets would be about the same as well. But they’re shockingly different:

San Jose’s budget is only $49M, less than 1/3 of SF’s. And when you compare these numbers to other, more moderate cities, things only get worse.

Take Houston. With a population of 2.3M, its FY 2020 library system budget was $42M. Let’s compare the per-citizen library spending of each city:

Rich, liberal, high-tax San Jose, and moderate, lower tax Houston seem to present a reasonable range of library spending: about $20 to $50 per person, per year. SF’s $200 cost is an extreme outlier.

Moreover, libraries are in decline, with fewer and fewer people visiting each year. It should be obvious that the internet has replaced much of their two reasons to exist: information and entertainment. SF’s main branch has become more a homeless shelter than a functioning library in recent years, as evidenced by this video. Despite this, the SFPL system budget has exploded, from $62M in 2007 to more than triple that today.

Proponents of SFPL’s enormous budgets will respond with all the wonderful things the system does, from author events to workshops on writing college essays. But does your library system really need Drag Queen Story Hour? Or Lion Dances?

Your tax dollars at work.

Other cities seem to agree that such things are a waste of taxpayer funds. As far a corruption, I know of no cases where the SFPL has used their budgets illegally. But we’ve seen enough illegal activity in other city departments to give me a preference toward keeping spending in line with those of other cities.

I don’t have a grudge against libraries. They’re just a visible, easy to understand example of SF’s poor financial management. The extra $150/year you’re paying for unneeded library services is repeated over many departments, resulting in SF’s enormous $14B/year budget, the most per capita of any city in the world.

Why San Francisco Can’t Be Fixed

The era of big government is over.

Bill Clinton, 1996 State of the Union address

Big government may have been over at the federal level in the 1990s, but in San Francisco, it was just getting started.

Over the last 25 years, SF’s city budget has mushroomed from $3 billion to $14 billion. Much of that money has flowed not just to city operations, but into the private and non-profit sectors. The problem: so many organizations are getting a cut of that money that reforming the system – for example, bringing spending in line with other cities – is probably impossible. Attempt any change, and those feeding off the gravy train will use their money, votes and influence to neutralize you.

Who are these interests? Let’s take look at a few.

The Media

It’s a stretch to say SF owns the local print media, but it’s less of a stretch every year. Since 1994, the city has allocated money for ads to newspapers around the city. This was only a small portion of a paper’s revenue during the glory days of print media, but with the decline of subscriptions and other ad revenue, city money has become increasingly important. Along with policies like requiring fictitious business notices (see pages 13 and 14 here) local government is keeping local papers afloat.

A ad paid for by the city in the Aug 21 SF Examiner

As a result, most media in the city tows the party line, rarely criticizing elected officials. To see why, consider the case of the Marina Times, which does excellent reporting on corruption in our city. As you can see by flipping its pages, the city is also the paper’s largest advertiser. So it was only a matter of time before some supervisors hatched a plan to eliminate funding for it.

Happily, The Times had enough allies on the Board that the effort failed, but not every publication is so lucky. So don’t expect much criticism from these outlets on the city or its leaders. And if you run for office on a platform of smaller government, expect to be crucified in the local print media.

Small Businesses

When Mayor Ed Lee died in 2017, the Chronicle published a heart warming piece on his love of local restaurants:

In 2012, Brenda Buenviaje of Brenda’s French Soul Food received a grant from the Mayor’s Office to upgrade the facade of her business. When the work was completed, Lee held a press conference at the restaurant to highlight the money being invested by the city to improve the Tenderloin neighborhood.

A mayor’s office handing out cash payments to businesses is hugely problematic. For one thing, it disadvantages competitors that don’t get funds. For another, it invites corruption. The mayor funnels money to your business, and at election time, you return the favor.

And the grants keep coming – Mayor Breed created $11 million more of them just last week. While these may fall under the label of “covid relief”, the conflicts of interest are there all the same.

It gets worse. Designating your company a “legacy business” means you get cash payments from the city forever. Step back and ask yourself – how could giving a taxi company this designation possibly be in the public interest? There’s no benefit, and endless scope for corruption.

Not only does the legacy business get $500 per employee per year of city funds, the landlord that leases space to them gets a payoff of $4.50 per square foot. According to the city, 7,500 businesses qualify for the subsidy, not including their landlords. Imagine running for city office on a platform to end this graft. Your opponent is sure to be flooded with votes and donations from those who benefit.

Money comes in the form of loans as well as grants. Take Yoshi’s, a branch of the famous Oakland jazz club that opened here in 2008. By 2009:

Things looked pretty bleak until last month, when the San Francisco Redevelopment Agency gave Yoshi’s – a centerpiece of the city’s ambitious plan to revive the once-swinging Fillmore District – a $1.5 million emergency loan. It came on top of a $1.3 million loan the agency gave the club in September, and the original $4.4 million long-term loan it provided to Yoshi’s to develop the 28,000-square-foot space on the ground floor of the Fillmore Heritage Center, a 12-story condo tower that also houses the 1300 on Fillmore restaurant and a small jazz museum.

SF Chronicle, Jan 10, 2009
Yoshi’s San Francisco. Now closed.

Eight million dollars. For one business! Yoshi’s went bust in 2014, and these loans were never repaid. The SFRA was actually funded by the state in this case, but the SF Board of Supervisors made the deal and authorized the funds.

Nonprofit Organizations

Donors of all gifts accepted by the City should be disclosed, and consistent with existing law, anonymous donations should be prohibited.

Sept 24, 2020 Office of the Controller report on nonprofit gifts to city employees

The city bankrolls hundreds of nonprofit organizations in what amounts to a second, shadow government. These corporations do everything from managing city-run housing to “homeless services” (a lot of those), running youth centers, managing museums, etc.

While many of these organizations may do good work, financial transparency rules for them are weaker than for the city itself, which makes them ripe for corruption. Take the nonprofit, city funded “San Francisco Parks Alliance”, for example. While it was supposed to be using city funds for services within our parks, in reality, the Department of Public Works head Mohammed Nuru used it as his personal piggy bank. This case only came to light due to a Federal investigation – local city leaders, including the mayor, who accepted a $5,600 gift from Nuru, don’t look too hard at nonprofit spending.

The point here again, is that any politician hoping to reign in these expenses is certain to be opposed by the thousands of people these entities employ.

Taxis

The City – your tax dollars – owns the taxi industry at this point. It will spend a stunning $39,300,000 on taxi services in 2021, up from $32,300,000 just 3 years before, according to the newest SFMTA budget:

I’ve written much more on the many ways the city keeps taxis afloat in the era of ride sharing. Once again, imagine you’re a politician who runs on a platform of cleaning up the MTA by getting out of the taxi business. Your opponent will quickly be awash in union money and votes.

Unions

With city leaders funnelling money to so many aspects of our city, it’s worth wondering who’s controlling them. And it’s no exaggeration to say that many of our local pols are bought and paid for by Big Labor. Take this campaign ad from District 6 supervisor Matt Haney, for example:

In return, unions often control the debate at City Hall. Here’s an older but still relevant example:

Unions and their front groups wrote the bill, massaged politicians and rallied supporters for the benefit of Big Labor. 

SF Examiner, San Francisco: City government by and for unions, 2014

Imagine, again, trying to reform the system. Look at the sheer number of icons in Matt Haney’s ad above. Or, look at who’s financing Dean Preston, SF’s District 5 Supervisor:

Union’s aren’t inherently good or bad; like any special interest they merely pit a small group of society against the greater good. For an example of union power, read this Chronicle article on the failure of the Bay Area’s largest housing development. The problem? Developers were forced to usse union labor, which demanded too much money to get the project built.

Conclusion

As well as the interests above, anyone wanting to reform city government will be battling the city’s 40,000 well paid workers. Reform may not be impossible, but it would take a concerted effort by more people than benefit from the endless tributaries of city money flowing from its coffers.