 So, thank you for joining us here at the Mechanics Institute. I'm Laura Shepard, Director of Events, and we're really pleased to have you here for our program on Give Me Shelter, the Future of Housing in San Francisco, to discuss one of the most critical issues that we face here in the Bay Area. I'm also very pleased to welcome our moderator, John King, Urban Design Critic of the San Francisco Chronicle, and our wonderful panel with James Papas, Christine Johnson, Jonathan Moftacar, and David Rosen. Now, before we begin, I'd like to find out how many of you are new to the Institute. Who's never been here before? Any newcomers? No, all right, well. Looks like everyone knows all about us, so just remember to bring a friend to our next program, and also invite them to come to our free tour of the Mechanics Institute Wednesday at noon, and so we hope that anyone who's watching us on Facebook will come on Wednesday at noon and get a nice introduction to the Mechanics Institute. Also, I'd like to mention that next Wednesday we have another really provocative topic. The author is Morgan Simon in conversation with activist Kath Delaney. Morgan's new book is Real Impact, The New Economics of Social Change. That's on October 26th at 6.30, all about how investment and activism can go together and how finance can go for social good. So please join us for another great conversation next Thursday right here. And now let me introduce our panel and John King. Okay, thanks to all of you for coming to this, and most moderators often will introduce someone by saying so-and-so needs no introduction. In this case, the topic needs no introduction. I mean anyone who lives in the Bay Area or has lived here really going back into the 70s knows that this is an area where the cost of living has continued to be high, that routinely seems to be obscenely and possibly high, and then it keeps going further. The current market study here for San Francisco done by Vanguard Properties, which one of the panelists is with, shows that the median neighborhood value as of this month in Marina Cal Hollow is 1.595 million. In Mission Dolores, it's 1.2 million. In Cole Valley in Haight-Ashbury, it's 1.450 million. Put a very nice flower in your hair. In North Beach, it's down to 1.075 million, and Diamond Heights is a steel at just 830,000. And that's, I believe, condoms. Condoms. Those are condoms. The single family is quite a bit higher. Yes, the single family prices make that look like affordable housing. So, you know, in other words, if there's been a change, I grew up in Walnut Creek and went to UC Berkeley and have been at the Chronicles since the early 90s. I mean it's, you know, what I've seen in San Francisco is that really into the dot-com boom, there were still nooks and crannies where there was reasonably priced housing, you know, certainly for people wanting to just get to the city and be there and see what happened. Those places, you know, have been redefined. It's gone over, you know, now kind of San Leandro or San Pablo, you know, places like that start becoming the new frontier for artists, but they get real expensive, too, and it just goes on and on and on. And so the question becomes what can be done about it, what is being done about it, and then also the flip side, which is, you know, the people who have made the sacrifice to live here in financial things over the last decades, many of them will feel, well, we chose the Bay Area because of how we view the Bay Area, what the Bay Area is, and we don't want to trade that off for, you know, housing draping hillsides or things like that, or 20-story towers marching up Columbus Avenue. So as, again, this is old news. There's such a tension between the desire for affordable housing, the desire for reasonably priced housing so that all types of people can live here versus the but wanting to protect the quality of life and the livability and everything gets very politically charged. So that is going to be the kind of the framework for the topic tonight. Again, something everyone knows, and the Mechanics Institute has pulled together just a terrific quartet of people for the panel. I'm going to give very brief introductions, but first I want to explain the format. There are not formal presentations. I'll be asking each of the panelists one question. They'll spend three or four minutes answering that question. We'll then shift to a general conversation. We'll then shift out to questions from the audience and we'll wrap up at eight. So just to introduce the panel, we're kind of marching this way to the end. Jonathan Moftacar is with Vanguard Properties. They are a group that does a lot of infill development in San Francisco. They also kind of watch the market. They do property management and property management, correct? As well. Property management and just kind of watching the market. And David Paul Rosen, who has an office in Lafayette, he is very much involved in kind of every piece of the pie except working with the hammer out on the construction site. His firm works in deal structuring. It looks at renewable energy and energy efficiency housing. It has advised more than 300 municipalities and other forms of government. It's advice groups like the World Bank and UN Habitat on realms from high policy to financial strategies and things. Christine Johnson kind of comes here under two auspices, though I will be asking her a question from only one of them to begin with. She also has her hand in all sorts of things in the city. She's president of the Board of the San Francisco Housing Development Corporation, which does a lot of work in the southeast area and the western addition. She's on the San Francisco Planning Commission, which is certainly in the middle of all these issues and just about every other issue in the city. And she also, as of March 17th, became the director of the San Francisco Office of Spur, a group that started in San Francisco, but now is San Francisco, San Jose and Oakland. Much more of an explicit regional look. She's running the San Francisco Office. And then last of all is James Pappas, who is a policy planner focused on housing affordability at the Planning Department. He came from the California Housing Partnership Corporation. And one thing that's interesting to me is that I've covered planning either as covering planning or covering City Hall or being the architecture critic going back to the early 90s. And I don't recall a position quite like yours, which kind of leads to the first question, which we're going to start with James and then come this way. And that would be what is the city trying to do in terms in a nutshell? And that's a hard, all these are hard questions in a nutshell. What is the city trying to do to get the creation of housing moving more quickly at different levels? And how does the Planning Department fit into that, but also at the city level? So I think there's a range of things that have been happening. I mean, I think you can see that the volume of housing that's been produced has been increasing in recent years. So that's a good thing. But the mayor has just set a goal of sustaining a higher rate of housing production and has been asking the Planning Department, the Building Department, the various departments that oversee the approvals process and the inspection process for construction to make that process happen faster. And I'm sure many of my colleagues feel like I don't know exactly how we're going to do that because we're responding to a lot of processes that have developed over time and speak to a combination of local and state laws. But we're going to do our best. So there's going to be new attention, as I said, within the Planning Department, the Building Department to those things. I think we've laid groundwork through planning initiatives to create more room for housing in the city, which has been important. We've also created new programs like the Accessory Dwelling Unit Program, ADU, the HOME SF program, which allows for some increases in height and density in exchange for more affordable housing. So we're trying to pursue new policies that will expand all types of housing for a range of people. And then I think we've also seen a commitment to fund affordable housing, which I think for those of us who are concerned about equity, we want to see a range of housing solutions. So we want to make sure that there's sufficient market rate housing coming online. And there's a lot of debate about what that looks like. I would say the most we can produce is what's sufficient, because there's a huge demand. But at the same time, we want to be producing for low and moderate income people who still are going to struggle in the market. And so the bond issue that the Board of Supervisors recently placed on the ballot is an important part of funding that, because I think we're going to need to accept that we're going to have to invest in affordable housing if we want to see the diversity that we have in San Francisco to continue. Christine, you were hired by SPUR to run the San Francisco office. SPUR recently, they have a very good magazine that comes out every month. Every other month. Every other month. The Urbanization. Yeah. And they had a good look at what can you do to create more housing in San Jose, Oakland, and San Francisco. And the introduction by the overall head of SPUR, Gabe Metcalf, quoted from past SPUR policy papers saying there's a housing crisis in San Francisco, going back to 1981. That said, SPUR has really been digging in on this and digging in on this in all the areas you're looking at. Why is this such, why is this such an important issue for a policy think tank that does a lot of thinking about the larger texture of the region? Why is it worth going back to again and again and again? Sure. So I'd like to start off by saying that SPUR is not new for SPUR. I mean SPUR started after the 1906 earthquake in its first iteration. Its name was the San Francisco Housing Association. And its first output was one of the first zoning codes for San Francisco. And the reason was because there was slap shot housing in San Francisco. They came up after the earthquake and fire. And people felt like they were needed to be separation of uses and better building standards. And since then, housing has been part of the portfolio of all of the iterations of SPUR. So this is not new. I would say in the mid 90s, around 1996, there was a group of board members before SPUR had staff. It was mostly a working board that did all of the work. And they really said now is the time to talk about how can we produce more housing just across the board. And so that really kind of kick-started the 20-year or so phase that we've been in, in really focusing on housing. You referenced the last urbanist issue where President and CEO Gabe Metcalf wrote an introduction. And I like the way that he started it. Essentially, he said, housing is the basis for all of our problems and it's the solution to many of our ills. Without housing for everyone, a roof over everyone's head, we can't solve inequality, we can't solve homelessness. It is something that will destroy the Bay Area, destroy our social fabric, destroy our economy if we are not able to put roofs over people's heads. And so whenever we talk about any of our policy areas in SPUR covers about seven of them, it always comes back to housing. And as a policy think tank, it's one thing to say housing drumpy, but a lot of people do that. But one thing that SPUR is really great at is talking about across the region, why is it that there's not just one solution? Because I think if there were one solution, we would all agree on it, and then it would just happen. But as is the case, it's actually different. And the three cities that we work on are across the region. So real quick, I'll close out with the three cities and kind of what we look at each of them, and then we can get back to the discussion. So I'll start actually in San Jose. So in San Jose, they have a little bit of a different problem. They have a lot of companies that are out there. I mean, that's sort of like the home base of Silicon Valley, which is now have a lot of companies in San Francisco, but for the longest time, that's not how it was. And they have an issue with how do they create more housing when they have such an influx of jobs that has been happening over the past 15 years or so. And they focus much more in their discussions around how to create more housing about fiscalization of land use. And so how it is that their zoning code and other laws make it such that commercial development is much more fiscally prudent sometimes a decision in terms of more revenue for a locality. And so that's been a real challenge for them in terms of how do they spur housing development when commercial development provides so much sort of monetary benefit. So that's been the discussion there. In Oakland, it's a little bit of different circumstance where it's actually like San Francisco where people want to talk about affordability, but they're a step back in terms of, they don't actually have quite yet the development pressures that San Francisco has with a lot of parties who want to invest in Oakland. It's really challenging. The rents and the housing prices do not support the prices that market rate developers would need to get in order to pay the high construction costs and the high land costs. So you actually have a problem where feasibility of housing is a big issue as well as people are talking about the housing that does come online, who is it affordable to? And then San Francisco, again, we have, our discussion really is about affordability. We are a place where people want to invest, we are a place where people want to move and it's about making sure that people aren't displaced and that everyone is able to afford a roof over their heads. So those three areas have different policy sort of tweaks in terms of like why is it that housing isn't being produced and what are the issues that they focus on? And I think Spurt is a really good job of illuminating that. Now, David, this area thinks, oh my gosh, the Bay Area is getting ravaged by housing prices and that's true. But you can go to Boston, you can go to New York, you can go to increasingly places like Washington, D.C., Philadelphia, Seattle, Portland. I mean, it's a different scale, but there are a lot of metropolitan regions being pressured right now. Are there unique aspects to the problems we face here and then to what extent do the resources even exist? Well I think one way to think about how crushing this problem is for our region and put it in some context perhaps nationally, it's not internationally, is to quickly summarize the sort of demographics of the region and to translate that to what people and families can afford to pay and what it costs to buy or rent here. And then as you asked, John, what the resources are that we have available, as James outlined some of the efforts of the city, but looking at this in totality among local government, the state government, which has passed some promising new legislation, the national federal legislation and the private sector. So really quickly, the median income in San Francisco for a family of four, anybody want to take a guess at what that is today? How much? One hundred and fifteen thousand dollars for a family of four. And what that translates into a long-established federal and state policy defining so-called very low-income families, very low-income, at fifty percent of the area median income is a family of four's income of fifty-six thousand dollars. So I'm not sure if you went up to someone on the street and asked them, and they earned fifty-six thousand dollars, did you say, you know, sir or madam, did you know you're very low income? I'm not sure they would have agreed with that statement. Extremely low income, okay, the label, is translated as thirty-five percent of area median income, forty thousand dollars. That's close to three times an SSI level of income when we get down to the homeless or near homeless populations. What those families can afford, a median income family at one fifteen, generally, using underwriting standards of the private sector, can afford a home at about half a million dollars. That's one-third of the median priced home in the city. Or put another way, it would require a one million dollar per unit capital subsidy to render that unit affordable. On the rental side, at fifty percent or half of the median income, the affordable rent's about twelve hundred dollars, maybe eleven hundred dollars. Median rent in the city for two-bedroom is running about three thousand dollars? I would say probably, but higher, depends on new construction. For a two-bedroom? Yeah, somewhere, yeah. So you can see these gaps are critical, and Christine mentioned issue of resources. So what do we have to play with here? The largest historical program of any state in the country was here in California for thirty years, redevelopment, and it produced between half a million, half a billion, and two billion a year in subsidies for the entire state over a thirty-year period. And during a 17-year stretch, the entire state produced ninety-eight thousand affordable units with twenty billion in subsidy, an average of two hundred thousand a door. The new so-called housing trust fund adopted and signed by the governor this year was initially proposed by our firm in 1982, it was a while ago, and it's going to produce about two hundred and fifty million in annual revenue. It's not that we don't have the resources that they're mis-deployed. The last point I want to make here is, does anyone know what the largest housing subsidy in the state and the United States is? Exactly. The mortgage interest rate, property tax deduction, and capital gains exclusion for principal residents. In the state of California, that cost the taxpayers of the state ten billion dollars a year, and is regressively distributed to households earning above a hundred and two hundred thousand a year, twenty-five percent of that amount, almost three billion goes to families earning more than two hundred thousand a year. So if we simply made a slight adjustment of say twenty percent, we could do a budget neutral shift of renewable revenue sources for affordable housing to the tune of the highest level of redevelopment funding in the state's history, two billion a year. That's without dinging the budget a dime. So we do have capital available if we had the political will, and it's worth noting that the much touted, with reason, the much touted housing package just signed by the governor, the cost for some optimism, didn't pretend to touch this very large tax subsidy that's regressively distributed. That'll be tackled after Prop 13 has worked out. Well, Christine raised a very interesting issue, which is the fiscalization of land use. That is not just the San Jose issue. That's a critical problem. We will get to that later. So Jonathan, I have a question at Vanguard. If you look at the Vanguard website, a number of smaller projects in the ten to fifty unit range, up to seventy-five or so, is real quick, what's it like to build in San Francisco in terms of, you know, these are not the towers in Rincon Hill, these are the gas station that's now a five-story condo building or a five-story apartment. So what does it take in the city of San Francisco to turn that, and I'm sorry for changing the question, but kind of a move. That's right. Yeah. Is it from bare land into, you know, now open? Well, it is quite nuanced, as you might expect, and there is a lot of opportunity there, because many of the established neighborhoods in the city have sites that, like the ones you mentioned, which are gas stations or commercial buildings that are not currently being used to the fullest extent. And so what the city has done and what developers have taken the opportunity to do is to take those sites, those infill sites as we discussed, and convert them into housing. And that's usually five or six stories depending on the zoning, but you could easily say that would be likely in the neighborhoods. Many in the city feel that the neighborhoods should be preserved. And in fact, when you look at the height limits in these neighborhoods, they are in fact lower than Rincón Hill and Soma, et cetera, in order to preserve that fabric. And I think that is usually something most people agree with within San Francisco as far as that context. However, the issue is that you still have to produce a lot of housing. And these sites, which we as Vanguard properties have been involved with, we just finished a 50-unit building off Sixth and Jesse. That's more of a Soma location, but there are plenty in the city as you discuss. They don't actually offer the opportunity to build that many, but to answer that many units in comparison to say Pier 70 or Treasure Island or Hunter's Point Shipyard candlestick, there are 40,000 units currently approved to be built. And the majority of those thousands of units are in fact in areas that are not these infill neighborhoods like Coal Valley, the Marina, the Mission, et cetera. But the challenge is, to answer your question directly, are that neighborhood groups still oppose these sorts of developments, regardless of what city policy and city planners feel as the best for the city, because they may have different goals than the developer and the city in that sense. So that's a very simplistic way of answering that. And we have Sequa, which is a great way for neighborhood groups and people generally opposed to new projects to address their concerns and fight developments. And what you have is lengthy entitlement processes. And for those of you in the room who don't know what entitlement means, that's the general term used to describe allowing a developer to build that five-story 30-unit building on that site. They have to go through those city processes, right? So when you delay that and you add to the review and the architect's fees and whatever other fees are involved, soft costs as they're called, ultimately the developer, in order to take that risk, including market cycles. So for example, they might start that process in a good economy, but if the economy tanks, they can't build that building anymore. So they've now taken on that risk. So they wrap that all up and they want 11, 12, 13, 14, $1,500 a square foot, otherwise they won't build as they won't in Oakland. So it's a challenging prospect. However, there are local developers in San Francisco. And I've heard San Francisco is far more nuanced than LA or New York. I don't know because I haven't worked in those jurisdictions. But there are local developers who are very well versed at how to work the system and how to actually get something done in this city. And those are the ones who you see turning out these projects. But can the time frame, the mayor has a goal of shortening the time frames. Can they be shortened and would that benefit the city as a whole? I think from a city policy perspective, as far as production is concerned, it would. I want to, we're now going to shift to more of a conversation. But first, I'm going to do a quick follow up with you two and then more of the conversation. And I was talking a little bit about this with James, is that on the one hand, the city is really pushing. We need to build a lot more housing and look at all these needs. Look at, you know, you can measure them in so many ways. The flip side is actual projects. You want to fit into the fabric of the neighborhood. There's a lot of definition of what the fabric should be. I hear from architects or developers who say just, you know. The amount of time a design takes to get fiddled with, choose up a lot of time. And that's even if there's no objection to a project. Is there a tension between the policy goals and the kind of quality of the urban fabric concerns? And should there in fact be one because we're building the city that is going to be the city of 20 and 40 years from now? Or do we get so wrapped up in the ideal at the planning level that we trip over ourselves? I'd say off the record, except it's on Facebook. Well, you've probably seen more of this. I mean, I've been at the playing bar in just a little over a year. So I'm sure Christine has been witness to many of these nuanced conversations. So I'll let you take the lead if you want to. Oh, no, I want to hear you say first. Well, I mean, I think there clearly is attention there and there probably needs to be attention there. I mean, we do want to encourage housing production, but we have a long history in the city of being very cautious about our urban form and urban design. I think, you know, if there is an issue that I mean, there may be process points that I don't know all the details of because I don't work directly with urban design. We have some great architects who help review projects. And but I think, you know, maybe even some of them would say, and I'm speaking for myself, but just sort of the conversations that I've heard and what I've seen is that maybe we need to move more towards a form based code where it is clearer what you can do and what you can't. And there's just clearer direction. And so the person who's coming in with a project knows, you know, they've had a clearer sense of what we're looking for. And there is still a lot of room for adjustment that happens through that urban design process or before the commission, and it can get very nuanced and detailed. And, you know, so helping us as staff pull back, be able to pull back from some of that stuff, but providing more guidance for people in the code because there are ambiguous things. There are things that are open to interpretation. And so that's when you get into these kind of time consuming back and forth sort of things. Sure, so I'll follow up quickly there. So for folks, my, you know, I like to always start with first principles like how did we get here? Why is this the case? I like to break it down into two things. The first one is in our charter basically, every department that issues any sort of permit has discretion in whether to issue that permit or revoke it or change it or do anything they want or deny it for any reason at all. And I say that because the way that that translates to the planning department is that there then becomes a culture city-wide, but also in the planning department that if you are going to approve a permit, you wanna make sure that you really thought through all your, you dotted your eyes, crossed your T's, really thought through and used your discretion to make the best decision possible versus in many other cities, the building code is the building code as long as it signs off on X, Y and Z that it says in the building code, check, check, check, here's your permit, here you go. So we have a different culture because of how our city is set up, so that's number one. The second thing is our general plan and our planning code do have a lot of places where it's really ambiguous and sometimes we have even areas that contradict each other. And so again, it just sets up a circumstance where you require that discretion from the department. And because of that, the department wants to get to do a good job, there's a lot of process that comes in terms of review and interpretation and going back and forth before you even get to the commission, which ultimately approves or denies in a hearing or delegates that responsibility to staff for various projects. So I don't know if that's, I hope that's helpful for people in terms of understanding like, why is it that there's so much discretion? Why is it that there's so much ambiguity? Why do things take so long? And I think your question was, what can we do about it? It's kind of, is that kind of the way it should be? Or is that the way that it is and you're flummoxed at how to change it? Yeah, you know, I would say, having seen hundreds of projects even in my time on the commission, I'm not always sure that that's the way it should be. When I look at the outcome of so many of our projects, even especially the ones where there's a lot of agreement and a lot of people feel like they were good decisions, I sometimes question whether or not all of the process was necessary. Some of the things that we see that are good elements, I sort of wonder, is there a train that we can just sort of do a review and write some of these things into our urban design guidelines or into our planning code? Are there things that we can clarify? Do we need to have the same level and round of back and forth just to end up in the same place? Like there are certain building elements and certain design elements and certain ways that buildings interact with the street level that are consistent in all of the projects that people end up being happy with. And I sort of wonder sometimes, can we just write that stuff into our planning code so that it's not having to go around and around every single time to end up in the same place? So I sometimes wonder about that. But I do think that we have a special fabric in San Francisco because of the level of community engagement we have. And there's sometimes when I don't know that that's the reason why we have such a housing backlog, we just mentioned there's 40,000 units that have been entitled, approved, ready to go in the ground and there's other reasons why they haven't been constructed. And most of the city doesn't even build to the allowable zoning, let alone talking about upzonings. So there's a lot of other reasons other than that piece. And now, conversation, talking about the need is more apparent. James talked a little bit about the mayor with the executive order and trying to move things along. David talked about some of the changes in Sacramento. I mean, do the four of you sense that there are shifts in terms of the need for housing to become more, is housing becoming more of a practical urgency to get it built than the, gee, we really need to do something. In other words, do you, do the four of you see changes that are likely to really kind of build up some momentum? I'm gonna say no. I mean, I've been at this for 37 years. And we had the same conversations in 1980 and we had the same affordability gaps and we had the same lack of resources. We had a president who cut HUD's budget by two thirds and he created something called homelessness for the first time and who as governor de-institutionalized the mentally ill and contributed to another component of the homeless problem. I think in San Francisco specifically, which geographically, right, is landlocked. I mean, we have no place to go but up. Let's be blunt about that. No place to go but up. Now LA actually is also, believe it or not, an entirely built city and they have no place to go but up. So, you know, John's concern about do we lose some of the character of the city. James has commented about form-based code which I think deserves maybe some unpacking if folks aren't clear about that. And Christine's, you know, wonderful summary of the challenge. I mean, having worked in about 300 jurisdictions, I'm not sure there is, with the exception of maybe New York, a place that's a bit more difficult than San Francisco. I mean, there are good ways to address this. The land use and circulation element in Santa Monica I would suggest is a model. The idea of a form-based code that, well, we kind of get the heightened bulk and the setbacks and we just agree that these are gonna be the heightened bulk and setback standards that we'll accept and we might step it up for an affordability incentive and we can calibrate that economically and we know how to do that. And that would eliminate a ton of the back and forth and the uncertainty that the worst part of the complexity and length of the process from a developer's perspective is uncertainty. We can inject some certainty into the process. That will help a lot. And Jonathan? Yeah, you had mentioned in one of your sample questions that you sent to us, the mission moratorium. And I wanna start off by answering your question directly, which is I agree in the sense that I don't see a great urgency on the part of anybody within the realm of the city and addressing this quote unquote crisis. You do see efforts like the Mission Housing Moratorium. One of the interesting points about that. And just real quick, this was the ballot measure a year or two ago to essentially ban new market rate housing in the Mission District. Correct. Or have a moratorium on it. Right. And one of the things that the city did is the economist put out a report analyzing the potential effects of limiting new market rate construction, which is what the proponents of this moratorium had in mind. It was, the intention would be that any new production in the mission would be only below market rate or something of the like, but predominantly below market rate. And the economist in fact proved this to be an inaccurate assumption that this would prevent evictions or it would perhaps lower the cost of housing or whatever other goals there might have been. I think with a neighborhood like the Mission continuing with this example, the tide has already changed because as the market report states, the price per foot is already $1,000 as a median and of course could be quite higher as an average in certain instances. So how do we make address this urgent situation? And that's really a matter of opinion and I think you'd get probably hundreds of them. I don't know, but I'm just kind of curious. Do you see neighborhood people saying, you know, I wish it was two stories shorter, but geez, I worry about where my kid's gonna live. So go ahead and build it. Maybe this will bring things down or realistically when it comes to specific projects, is it as tough as it's ever been? I think the planning effort is too specific to the neighborhoods and not looking at the overall goals of the city. So that I think what you could achieve in these neighborhoods is somewhat more height and certainly in areas that have a transportation network. For example, on Mission Street between 16th and 24th, you have hardly any new housing in a very transit-rich area. The existing zoning is between six and eight stories. Could that be 12 stories? Could it be double? I don't know. You'd have to look at that. The city is looking at up-zoning the hub which is right around market and Venice and there is potential to add hundreds of units in that location. So I do agree in the sense that cities are vertical and I do think that cities do change and I believe that San Francisco's existing framework of planning helps to protect the character of the neighborhoods. I don't think that that's at risk, but I think the urgency here is looking at how we can add ultimately more units, thousands more units. There were 20,000 units in the last five years and a lot of that in SOMA. As an example, the rental prices have gone down about 5% in areas like SOMA with production. So if the production was something like 40,000 units, would that have allowed rental prices to come down 10%, 15%? That's a question. Can I, I wanna make a plea here for children. Of the largest 100 metropolitan regions in the United States, which municipality has the lowest percentage of children living in it? Anybody know what that percentage is? Of the population? 11%. And so the challenge with new construction is the market produces virtually zero units with more than two bedrooms, which are insufficient to house families. And I gave you the stats on what a median family, earning 115 grand can afford. It's a million short of the median priced home. So I'd like the housing discussion here and the affordability challenge to also embrace the particular challenge of housing families with children. Not to say there aren't other special needs groups in the elderly, development and disabled, the homeless and others. But I think that often gets left out, John, when we're talking about production. I think that's one point we should focus on here. And I think the other issue here is this notion of being so landlocked, we really are between a rock and hard place, literally, in San Francisco. I don't envy you, your job on the commission and nor yours at the department. And if San Francisco's can agree on what that, through the general plan, right, what the ultimate population is gonna be, then we're just gonna have to deal with that. And because we are landlocked and because we have an end game of production, we're gonna have to address the issue of long-term affordability through subsidies. There really isn't another way to do it because the production will not solve the crisis and affordability for those at 80, 50 and 30%. I mean, it'll only be at the very edges and it'll be the very top edges. So if rents go down 5% in Mission Bay, great. Right, 3,500 to 3,200. And I just gave you the economics of that. So one myth that we have is that production will solve the problem of affordability and it will only do so at the very narrowest of margins of the top end. So let me ask so, should we be looking at this as a San Francisco issue? I mean, my wife and I lived in the inner sunset in the early 90s. We wanted to buy a house. We didn't wanna buy a house in the fog. So we looked in Petrel Hill and Bernal Heights and then, you know, and Glen Park and we were kind of seeing houses that kind, we kinda liked, we could kind of afford. Somebody said, oh, you should check out North Berkeley. We got a really nice little bungalow in North Berkeley. We've lived happily ever since. I got a job at the Chronicle and I'm at work in half an hour. I mean, is there a way to think about this regionally or is the issue that every municipality sees itself as unique, that Lafayette sees it, okay, well, this is an issue that's Lafayette's. Walnut Creek sees it that way. Marin County certainly sees it that way. I mean, shouldn't we be thinking about, you know, that this is a regional issue? Yeah. So yes, and it's funny. I think that actually of the, however many hundreds of cities there are in the nine counties of the Bay Area, a good deal of them have leadership that are, that do think regionally about this and they do think that this is something that you have, we have to be creating housing all across the board for all of our residents across the region. The problem is that doesn't translate into individual decisions that are made by individual municipalities with their own zoning codes, their own planning codes, their own sets of advocates and neighborhood groups and others who engage in the process. So the idea of regionalism sort of breaks down when everyone has to make their own decisions within their own boundaries and because of Prop 13 and other constraints, there is a lot more for an individual municipality to consider than just are we creating enough housing? So, you know, I think we need to think about a regional governance system before we can think about how can we truly collaborate regionally? We can have goals, but again, every city has to do their own thing because that's the way that we're structured. So it's a little bit challenging. I think people think regionally, but they act locally. And I just want to add, we had a presentation actually to the housing production in the 90s and 2000s is about half what it was in the 70s. So this production regionally, regionally. And a lot of the production that has occurred was, you know, especially in the 80s, 90s was in that kind of outer parts of the Bay Area, outer Contra Costa, Solano County. And San Francisco has actually really stepped up production in the 2000s, but we had very little housing production throughout most of the 80s and 90s. However, the region now has dropped off as well. And so I think we need to recognize this sort of broad regional trend and think about how we can encourage other cities and work for these either through regional governance or just mechanisms that are gonna push us to do what we need to do. But the flip side of the current situation is that what we can actually control is here. And we do need to, I think, model appropriate housing policy for the region because we are still one of the leaders for, you know, people look to us, although I think sometimes they look to us and they're like, oh, San Francisco, you know. But I think, you know, we are obviously one of the major cities and so we have to set a tone. So I think across a range of housing policies, that's what we're trying to do more and more at the planning department. But I fully agree with Christine that we need more effective regional systems and state systems. Well, you know, the three mayors, right, of the three largest cities in the region, couldn't agree more on this issue. And have been very proactive in their own cities to try to effectuate affordable housing strategy and greater production. But again, I think looking over decades, and you know, Spur goes back, as Christine rightfully reminds us to 1906, but looking back over the decades of debate, and it is definitely seen as a regional issue, John, and we have state legislation that dates from the 70s that declares it a regional issue. We have ABAC, the Association of Bay Area Governments, which forecasted a need for 187,000 new units in the nine county bay area from 2014 to 2022. But the fact of the matter is, of the 140 odd jurisdictions in the nine counties, they're gonna go their own way. And I think the notion that we're gonna see individual cities give up their sovereign rights over building permits is a pipe dream. So what can we do about that if we accept that and maybe I'm more pessimistic than my colleagues? But if that's at least a concern, one issue would be what we've started to do in Sacramento, which is, look, if you're gonna have, say, a form-based code, or you're gonna have a general plan with designated densities, and you come along and propose to build within those density limits, you're entitled. No questions asked. And if the jurisdiction denies the permit, you have a right to sue the jurisdiction. That would be a big advance, commonly known as, as-of-right, correct? As-of-right deal. That would be a huge advance, but it requires state legislation. Well, we kind of have that. You could do it here, I guess, to a degree. Yeah, so the Housing Accountability Act, which passed in 2014 and was strengthened this year in the package of housing bills, allows developers to sue cities that deny housing projects. So how does it work, Christine, given the citizen input process that you unpacked for us a few minutes ago? Well, it's really challenging. It's actually happening right now. So as a city planning commissioner, we often have hearings where the city attorney who sits kind of below the dais on the left will fur her brow and look at us and shake her finger. Well, she's a shaker finger. That doesn't happen. But what happens is, whenever we have a commission hearing, and there's a project before us that, let's say, has 15 units, and we start saying, well, we think there's too much shade or we don't like it, let's shave it back maybe 10 feet on this side and 10 feet on that side, and then the result is a loss of units. The city attorney will say, Housing Accountability Act, we are in legal jeopardy when we shave off projects or use our discretion to change a project that would result in a reduction of units, and that's state law. Right, right. The other state law provision is the housing element law, which provides for this regional housing needs. And invest the state housing community on the department with the power to invalidate a city's general plan if it is found in non-compliance with regional housing need production. This statute dates to the 70s. How often has it been used? Never. Never, never. And so putting T into that, that's a, and maybe we should look at the 2014 act, Christine, and you know, folks like you and Spur, wearing your planning commission hat and policy hat can strengthen the effectiveness of that statute. But I think, John, looking at the housing element law with giving some real state power, I'm giving this crisis to at least provide this as a bright authority as an alternative to the notion of regional government. Let's flip this around though a little bit. I mean, it does get back to people will say, I am in the Bay Area because of this wonderful mix of open space, because San Francisco has these unique neighborhoods. You know, the notion of quality of life is very different than the notion of quantitative need. One reason for all the process in San Francisco is the sense back in the 60s and 70s that the fabric of the city that made it a distinct place was under threat from urban renewal, from towers, from insensitive development in neighborhoods. Now you can, and also places like Berkeley have certainly done this. I mean, you can quarrel with it, but that's a very solid argument. I mean, realistically, you know, there are a lot of state parks you could also in the Bay Area say, do we really need that many general hillsides? You know, I mean, how does the undeniable crisis make inroads against the process and the passionate feelings that, well, we want this place to have the unique aspect it does. Well, yeah, if I could, if I may. One of the points that organizations like SPUR and others similar to it make is that the greatest opportunity to preserve the environment is densification of urban centers as opposed to urban sprawl, which used to be more of the framework and probably still is the framework in other states. And so where do you do that? Well, we have plenty of opportunity. We have opportunity in San Jose. We have opportunity in Oakland. We have opportunity in San Francisco. As Christine mentioned, there are 40,000 units approved in San Francisco. Why are people not building those units? So that's an opportunity. Why are, what can be done in Oakland to encourage residential developers to build? And they have started to in the cycle, but late. But this does get to what David had mentioned that we also want different types of housing. You know, I mean, it's, you know, the reason I'm raising this is that it's so, and this is the reason we're in the bind we're in. It is so tough. I mean, I, you know, just real quick and then I want to finish this up and then go to the shorter questions. It was striking with A-Bag and the... Are there short questions? No, I mean, that's the thing. It's not an easy issue. You know, the whole issue of Planned Bay Area, which is a pretty well-meaning but fairly innocuous effort to start trying to think about regionally, how do you do this? The way it was being depicted as stack-and-pack housing are going to blank at the hillsides of the Tri Valley. And, you know, it's tough. I mean, it does run into this real challenge of people saying, why do I need density? I think, you know, when I think about San Francisco and I'm from San Francisco and so I've seen it, you know, 40 years of its evolution, I think when I think of density here, I think of sort of intensifying what makes San Francisco great. I don't think of destroying it. And, you know, I think there's a lot that we can do through design, through good planning where even if a neighborhood shifts to having more six, eight, 10-story buildings, it can still be contextual, it can still add to the fabric or where higher rises are going in that can also be done in a way that works. So, you know, when you think of Barcelona or Paris, which are very similar in size to San Francisco and they're more than double the density, two to three times San Francisco's density, so I really don't think a denser place is a less livable place. And I think we sometimes confuse quality of life with a lifestyle. People are used to a certain way of, oh, there's more parking or there, I mean, that's a lifestyle. It doesn't necessarily mean it's the only way to live or the best way to live. So I think we have to be open to thinking about how to square those things. And I would just make a last mention of something that sort of goes back to one of your previous questions of do people perceive this as a crisis and as a going, you know, again, keeping the commissioner hat on. We sit up there for like 12 hours every Thursday, so you see a lot of stuff. You know. Your place is secure in heaven, okay. Oh, man. Doing that duty, yeah. I will not call myself a martyr, but others may. Well, I thought you just weren't, no. So I'll give a quick example of like the way I see the culture in San Francisco changing. That's gonna be helpful for this discussion about quality of life versus lifestyle. And I don't know how many of you are familiar with the YMB movement, but one of the sort of heads of that movement, Laura Clark, often comes to planning commission hearings. And recently she has declared a vendetta against single family home zoning and I won't get into it, but what I will say is that at one point she made a public comment that basically went into all of the reasons why RH1 or single family home zoning is bad and needs to go away. And in previous years, you could totally imagine what the following public comment or what it said, something to the effect of that person wants to destroy the city, something to the effect of this person wants to destroy our way of life. They want to Manhattan, I, Sanford. You can go through the litany of responses that someone else may come behind, but that's not what happened. Someone came behind who started off by saying, I totally disagree with her. I think that there is a place for single family homes in San Francisco, but then qualified if I say, but I do believe that we need to create housing or in a crisis, we need to be, basically putting roofs over people's heads. And I think that that qualification is a symptom of a cultural shift in San Francisco. That's really important. And I mentioned before that we can create thousands and thousands of units without a single more up zoning. I think we should be doing some. I think there's places where we could be denser, but there's a lot of areas where the heights are 40 or 60 feet and the buildings in those areas are nowhere near that. And you could get in units all across the board without really changing a lot of our neighborhoods in terms of their character and their feel and how people feel living there. Can I add a comment? Super quick. LA upzoned these long corridors right in LA, these long arterial boulevards and expected with the up zoning, these were commercial strips, one story, a budding single family and neighborhoods that are low density, typical to what you see in LA. And what happened was nothing. And the reason for that was the expectations of the property owners of those single story retail strips for their value were way out of whack with what the market was prepared to provide. And it was a case of, you know, the zoning was in place, but the market was nowhere near able to deliver. And so I wanna ask, we're gonna have two round robin, real quick response from each and then go to questions. One thing is, each of you just real quick, what would you say is the biggest misconception about the housing crisis in San Francisco in the Bay Area? For me, that's an easy answer, which is that the tech sector causes it. I believe if it weren't the tech sector, it would be the finance sector or the healthcare sector or some sector. Any strong city has a strong economic base and it doesn't necessarily have to be the tech sector as I mentioned. That would be the answer. Yeah, David. Production will solve our affordability crisis. Christine. That not producing housing will keep neighborhoods affordable. Well, I'm just gonna, yeah. And mine was gonna be the combination of these two. Well, I thought we just combined. And they, I don't think they cancel each other out. Oh yeah, oh yeah. So I think that people underestimate how badly we've underproduced housing and how much of a difference we could make, especially for the sort of middle income people if we were producing more. But I think David's absolutely right that to reach people in that low end of the income spectrum, the market's gonna solve everything is not gonna solve everything. Okay. And then the second question, we'll start there and come this way. If there's like kind of a single change you could make and you're allowed to have two if you want. But basically one or two simple changes. You are the czar of San Francisco or the czar of the Bay Area. You can do whatever is needed here to really make a dent in this. What would it be? So I'm gonna cop out on this a little bit and just say that I think broadly what I would love to see is a little, is more alignment between just bringing together of what we say we want in our outcomes and our actions in terms of policy, investment, et cetera. Because I think as you've heard tonight there is a lot of confusion and sort of mixed signals. And I think if we could really think about our approach on a range of issues and how that's, where is that getting us? That's really the thing that I think would drive a lot of change and reconsidering of all these little things. I could rattle off different things that I think we should do. But honestly, I mean to me that's the missing piece is we're not really thinking where do we wanna get to and does this align with where we wanna get to? And Christine, real simple, boom. Boom, I'm taking two. First one is a requirement that cities maximize their current zoning, whatever that may be. And the second is that we broaden our revenue base for subsidizing affordable housing so that we don't have to focus as much on extraction from new development as the only way to fund affordable housing. Okay, so I get two. You got two. The first is absolutely with Christine that we have to restructure and redistribute the current subsidies that we're spending on housing to make it more progressive at the extremely low and very low in commands. We talked about California. The picture in Washington is much worse. It's 185 billion a year for the mortgage interest property tax deduction and it's much more regressively distributed. And the second would be, this is third rail stuff, right? But we really have to address Prop 13 because I made a short comment about Christine's notion of San Jose and fiscalization. This is a statewide problem. It's not a San Jose problem. And what it really means is that cities cannot afford to permit housing because the fiscal impact of producing housing from a city government perspective is negative cash flow. And as anyone who tries to run a business understands you cannot run a business with negative cash flow. So what that has caused us to do as a state is over retail the state. Although online gambling, what? Online buying is now, Amazon is changing that model and we're seeing malls dying as a result. But those two issues redistributing what we currently spend on housing to make it more progressive and having the political courage as a state to solve this quagmire that we're in as a result of Prop 13. I think my answer will be local, more so San Francisco and probably reiterate a couple of points, which is that the planning process I believe is a deterrent to production. And I would seek to have the typical timeline of two to three years maybe on average. I don't know what the average is, Christine might, but I would say six months to a year. And I realized that in the current framework that's highly unlikely. But that would, I think, be a great solution since I am the housing czar at the moment. And the second would be once again, cities are about verticality. And when you're in an area like the Bay Area, which does have its beautiful natural preserves, which we do intend to keep and we will keep thanks to those people in the 60s and 70s who spearheaded those efforts, we must accommodate population growth because people have a right to be here just as you and I are here. How do you do that? You have to densify cities. And I'm not saying build 25 story structures in Coal Valley, I'm saying allow for a greater density, two to three stories in neighborhoods like Coal Valley, you know, five to 10 more stories in neighborhoods like I mentioned on the mission corridor between 16th and 24th. You have to allow people to build units or production because as Christine mentioned, affordable housing and David is a very complicated process to an extraction from developers has actually in a way curtailed production because there's a lot of uncertainty on the part of a developer as far as what can be built when the percentages are changing that sort of thing. I'm getting a little too complicated. So anyhow, I'll give it back to you. Wait a minute, that way he got seven. No, that was seven. It was a little bit of long winded second one. But so basically time limit, if it's not approved with any, if it's not settled within six months to a year, I would say you just get your project, fix 13. Well, and change the revenue stack. We need more capital to render housing affordable because it is a myth. Okay, so prop 13 and we need the fiscal juice to make this work, John. Otherwise we're wasting our time here because we're not gonna even touch the problem without that level of capital investment. Think about things in a more rational way and have people see things in the middle. Good luck in today's America. Just align, you know, state what you want to achieve and see if things can align to that. And Christine, just to maximize zoning and broaden the revenue base for affordable housing. So nobody said convert regional parks to mobile home parks. Oh, just wanna keep that clear. Oh, stop, wait, go ahead. Not too late. Okay, so we have about 20 minutes for questions. And, you know, I wanna thank all the panelists right now. I could have blathered on even more than I did. I smiled once or twice, just remembering entertaining stories I wasn't gonna tell. So we've got a microphone back here, but we're gonna start with this man in the front. One, two, three. And keep your questions short and then I'll kind of steer them unless you have curious. Seems like all the problems and solutions are related to about one third of San Francisco. The south, maybe the northeast side of San Francisco. Nothing on the other side of Twin Peaks. Nothing past Bernal Hill. Everything is in the Mission and Soma and Baby Dog Patch. But nothing out in the sunset. There's no problems in the sunset. There's no solutions in the sunset. There are no homeless in the sunset. Or Pacific Heights, or, you know. Okay, the question. Yes. Or was it more a statement? So, does someone have the ability to move some of the solutions out of the Mission District to a different part of San Francisco? Well, Katie Tang had proposed in the, I believe her district is the sunset. Is that right? Yeah, I've never heard of her district before. Yeah, she had proposed Home SF, which has now actually passed, which allows developers on commercial corridors, correct me if I'm mistating this, to build two to three stories additional. These are areas where there's, you know, a major transit line like the light rail or the buses in order to densify those commercial corridors on the western side of the city. She actually did a pretty extensive planning process where she identified specific, I believe you call them soft sites, where you identify the potential for specific developments and housing to be built on sites like a one-story bank, for example, building a little retail shop to where you would have the retail, but then you would have housing built on top, keeping the retail fabric as well. So there has been an effort on her part, but I agree with you in the sense that it has not been a concerted effort. It's not the southern part of the city, per se, that I've heard of. There are odds and ends developments, and the developers, they don't see a lot of money to be made in those neighborhoods. So they're not pushing for it either. So it's sort of like the problem with Oakland is that if they can't justify the rents or the four sale amounts, they just, they're not, they're going to focus on the North Beach or the Marina, you know. But the other odd thing with that, that the slight densification heading more towards zoning as of right, or building as of right, took about two years or so. It was at first rebuffed, not just by the sunset, but they had the alliance of a number of progressives on the east side of the city who saw a tactical advantage to going after the mayor and the housing department. And only when it was then kind of changed and moved and modified and beefed up to kind of a more pure thing that it passed, and there's been one project approved. So it's a start, a small start. I'm waiting, let's, oh, okay. Go here and then we'll come back. Okay. You haven't mentioned anything about the trade unions. What effect are the trade unions having in the cost of development and in their support for more housing or are they a hindrance to you as a developer, Mr. Vanguard? Well, cities like San Francisco are very much trade union friendly, of course. I think it's just a part of the puzzle. I don't think it necessarily, I mean, it does affect the cost of construction certainly, but that's just part of, I don't see that as a problem to answer your question necessarily, yeah. Are there, I'm just curious. I mean, we've heard that the mayor's office of housing struck a deal with some of the unions to do modular construction on a homeless housing development. But there's been resistance to modular, which potentially can lower costs because you're assembling part of the building off-site, right? And then transporting it in. So, I mean, do you have any thoughts on that, but are there ways that we could bring costs down by striking appropriate deals with labor where we still have good labor standards, but. Or is that another third rail in the sense of? Well, the quantitative answer to your question is about 15 to 25% cost increase of hard costs to pay for prevailing wages. But that said, San Francisco is largely a union town, and so it's sort of like that old jazz tune, compared to what. If you go to areas where it's really a condition of public funding to use prevailing wages or federal Davis Bacon standards, then you do see this incremental cost difference. So I think you're sort of left with the kinds of negotiations that James described in San Francisco. Actually, I got two questions. The first part is, what is the projection of new population increase to San Francisco in the same next five years? Well, in the 2014 to 2022 period, the city of San Francisco is tasked by ABAD with providing about 47, 48,000 units of housing, which equates to a population increase of about 120,000 people, 100,000 people. And I think we need to keep in mind it's a little bit of a self-fulfilling prophecy. I mean, the more that we don't build housing, it makes it more and more expensive and it limits who can be here, right? So I mean, we can set these goals for ourselves, but it does kind of... Well, what is the population of the city right now? 870. 870 for almost 900,000 people. And so at one point it was down below 700,000. Yeah, 780. Oh, it was, okay, so it didn't go down as much as others. In the 50s, right? Well, I think what 780 was, no, I think it was only 80s. I think it was down to about 680 or something. It was just below in 1980, was its low point. And then it's been coming rebounding since 1980. And your second question. What is, I know city government is spending a lot of money on homeless problem. Seems like that problem is becoming bigger instead of lesser. So what is the city doing with all that money? I heard some place say it was half a billion a year. Wow, this is getting into essay questions here. I mean, that's such a huge issue itself. I mean, you know, I would just direct you to, we have a new department of homelessness and supportive housing. And the idea there is to kind of coordinate better the funding. I mean, not that it was being poorly used before necessarily, but it was going through a lot of different channels. I mean, I've heard a figure much less than what you've said, but still a lot around 200 million or so. 280 million. 280, so about half of what you mentioned, but still a lot. And it is going through a lot of different department of public health. Yeah, so I would look to them, they're coming out with a plan. I may have already been released that it's out for a five year plan to reduce homelessness. So that's at least could give you a sense of how it's being used and what the goals are. I also have two questions. Two is a popular number today. One is for Christine, and the other one is for the man in the middle. His name might be David, but that's a guess. David. It is. My name is David as well. I'll start with you. You said that the answer to these problems is production. And you also offered a limited bunch of ways that we could increase production. And the main thing was to make more progressive all the incentives we have. And you offered easy solutions like getting rid of the mortgage deduction and revoking Proposition 13. I didn't hear anything that you mentioned that sounded like something the city of San Francisco could do and I wish you'd go into that a little bit. That's number one. Okay, so I feel a little bit like I need to correct the record here, but maybe just going to your question. San Francisco is already stretching the limit. When we look at the city policy with regard to development impact fees for affordable housing and inclusionary housing obligations on developers for new production, we're almost at the head of the class nationally. San Francisco was the first city in the state post redevelopment to pass a voter approved bond to replace some, not all, but some of the lost tax income and revenue that previously was going into affordable housing. The Hope SF program is another land value capture mechanism. I actually did not say that production was the solution. I actually said, I said that production is not going to address the affordability crisis. It's a bit tough to, I think the homeless issue, San Francisco, it's a very tough problem and it's a critical, it's a measure of who we are as a nation and as a community. I just returned, we do energy and housing work in Europe. I just returned from Brussels, Amsterdam and The Hague. I saw no homeless person, not a single one. I talked to them and it's just we as a society provide for them, not only shelter, but the services of them. And it was just shameful. But the city is really doing quite a lot, which is frustrating, right? Because we've produced more housing than we have in, I don't know, in history, John, but in certainly in the last 40, 50 years. I mean, this has been the most production, certainly in the last 35 years, San Francisco has seen. And guess what? We have record prices and record rents. So the notion of production is gonna solve our price problem is a fool's errand here. You know, what could the city do? I suppose we could turn to the voters and talk about a permanent source for affordable housing rather than periodic bond measures. But you know, how much blood can we extract from the stone? I mean, we have other needs in the city as well. Yeah, that's actually a good point. And the quick question for Christine. I can yell it. No, no. Oh, Christine, you said that your solution, or one solution you proposed, was that the city should be required to maximize their zoning envelope. The, I just wondered how you do that. Do you tell people with single family homes we're going to charge you a lot of money unless you put on the second and third story? What, I mean, you can't do that. So what are you talking about? And then, because I'm never gonna get this mic again. Well, somebody tell me why all you guys are talking about five-story conveniently and maximizing certain obvious kinds of zoning areas when the UBC now allows you to have five-stories over a reinforced concrete box. Why aren't you talking about six-stories? We're talking casually. I mean, we're just using that as a round, as an easy number. So six is a big number. Oh, yeah. Yeah. Okay, quick thing. We won't get into the details, but there is something to construction methods where you get it above a certain story. It's not five, it's more like seven or eight. And then you start going into a different construction method and there's a different cost associated with that. So there is a line where cheaper, more expensive. And then just to quickly get to your question about maximizing zoning. No, I don't think you need to necessarily have a requirement. Like, you must demolish your single family home and rebuild it with three units. But we have all kinds of permits at all times of people coming in and saying, I want to extend my house. I want to put on an extra story. I want to blow out the back. I want to excavate beneath. And I think that it would be fairly easy for the city to have incentives financially or through the planning code or otherwise to say, well, if you're going to expand your building in that way, we want to incentivize you to add an extra unit, to add an ADU. I think you can't force people to do things, but you can create a system where one choice is easier than the other. Yeah, we glossed over that, but I do think for San Francisco, the accessory dwelling unit approach could produce, you know, I don't know, has that sense been done? Yeah, I mean, 660 ADUs are currently under... And maybe explain to the group what ADUs are. Yes, accessory dwelling units. Grannie units in the backyard. Yeah, basically. So, granny use in the backyard, all across the country. Or the basement. Yeah, all across the country, people tend to think of them as backyard cottages, but actually in San Francisco, the majority of accessory dwelling units that are permitted are existing space within the existing multi-unit buildings. So think if you've ever been into an apartment building where maybe half of the second floor was storage, you can have potentially two or three accessory dwelling units. But is it hundreds, Christine, or thousands that could be built? I mean, oh, the capacity. What's the capacity? That's my question. Yeah, I think the capacity is quite large. In the last year or two, we've had 600. That's where Christine was running. Vancouver, Canada has done quite wonderful things with accessory dwelling units. And so I think that is actually something the city could do. And that's a great way, if I may just comment on that, to maintain existing neighborhood character, but add potentially more units. And so that's a win-win. And more of those types of programs where you can keep Coal Valley looking like Coal Valley, but allow more people to live in Coal Valley within the existing framework would be great. One question. On the demand side, do you think cities are too aggressively courting new businesses like Mountain View would say, oh, you know, you could create a huge office park, but expect people to live in Sunnyvale and San Francisco would say the same thing. It's like people could commute from East Bay, but if there isn't enough coordination across the different counties, it's gonna be a kind of a lose-lose situation. Okay, I'll start. Then everyone else, I'll keep it super short. So yes, we mentioned fiscalization and land use, and that's a real thing. So there are real incentives for local cities to want to have commercial development and sort of economic engines coming to their cities versus having a lot of housing, right? So that's a real incentive problem that we have. But on the flip side, here's one thing that I would say in favor of some of the cities who sometimes do say things like that. It's not great regionally, but history has shown us that economic engines are how you get nice things, right? We're talking about high-speed rail coming through the Bay Area up from LA. We have billions of dollars in at least in San Francisco of infrastructure development, the trans-Bay terminal, potentially talking about a second trans-Bay crossing. All of these things happen because there's an economic engine that is being serviced that people who live here will also benefit from. So there's sort of a mixed bag of incentives that cities have, but I do think that the pendulum has swung a little bit too far in terms of too many localities going for that gold ring of building the economic engine over putting rules over people's heads. Can I add to that, John, briefly? Super quick, because we've got a lot of questions. I liked Sam Ricardo's comment about not offering subsidies and incentives to Amazon to locate their headquarters in San Jose. He just wasn't gonna play that game. He viewed the game of economic development or smokestack chasing, if you will, through tax subsidies at the end of the day, a losing proposition for cities. I think probably this is about the last question. So following up on that regional question about the benefits that accrue to the region from the businesses being incended to locating the region and how we solve the broader development problem, I recently heard about a public private group. I don't know if Spur was involved with 30 to 50 regional leaders and business leaders trying to arrive at a sort of grand bargain on housing regionally. Have you heard about that, any of you? And- Is this the Casa strategy? Is this the Silicon Valley? You know, it was discussed at the recent business time, San Francisco Structures Symposium when the mayor spoke about his housing goals. And so my question is, have you heard of it? And then secondarily, I guess, what do you think its chances for success are? Because I've heard at least a couple of you mentioned tonight that you didn't think asking individual bearing municipalities to give up any of their sovereign rights was even worth discussing. But it seems to me that there may be some working groups working on that because it seems to me it's a regional issue, not just a city of San Francisco issue. Thank you. Yeah, I haven't heard of anything, but I think I agree with what was mentioned here before, which is that state legislation is ultimately going to be the most powerful because ABAC, Association of Bay Area Governments, as you mentioned, does have goals of housing production, but there are no teeth. There's nothing forcing anybody to do anything. Scott Wiener, for example, proposed something at the state level to hold cities individually accountable that do not produce housing. And cities like Hildsburg, for example. So I don't know about that, but I would reiterate state level legislation would be the most powerful. I think you are referring to the CASA strategy. So, yeah. So that's an initiative that was talked about for a long time, it really kicked off this year. And there are, I don't know if it's 30, but there are a lot of groups involved. SPUR is one of the collaborators. You have Bay Area Council, Silicon Valley Leadership Group, a lot of the affordable housing groups and a lot of the housing equity groups and equity groups are involved as well. And they've had a few meetings. And yeah, they are trying to see what are some regional strategies. For example, everyone sort of came with their memo with their ideas and now it's sort of being baked into one set of CASA strategies. There's tax incentives. There's regional governance incentives. There's a lot of different ideas that people have. You could propose a general obligation bond for the nine county region and put that to the voters. And I'm not a pollster, I mean if there's a moment where there's an appetite for something like that, it might be now. Now that said, one of the new statutes passed in Sacramento and some of the governor was a housing bond for the state, which will be on the ballot next year. So I'm not sure we want them to be competing with one another, but again, I think regionalism is, I think it's really very problematic. I mean to really give up those sovereign rights. And if there are fiscal strategies that multiple jurisdictions can contribute to without hurting their own general fund, okay, sure. But that's effectively enlarging the pie. You're not gonna ask Emeryville or Elcerita to give up some of their general fund revenue to go fund Hayward. That's not gonna happen. Yeah, I think we're just about eight o'clock, so we should probably wrap up. I'm a history major and so all these things that I listen to, I think of all these entertaining stories, including the lost opportunity for strong regional government in the 1970s that came and went because people wanted things to be perfect rather than start. But I wanna thank you all for being here. This is a terrific panel. I could have had any one of them for 90 minutes and we'd still be coming up short on topics. So I wanna thank you all for being here. I wanna thank all four of you for being here, Jonathan, David, Christine, and James. And I wanna thank the Mechanics Institute for putting this on and even having wine for you guys in the back. Thank you. Thank you for this incredibly informative panel. And I also wanna thank Mechanics Institute member, Michael St. James, for initiating this idea and the panel. So if you're watching, Michael, thank you and see you at the next program.